EXHIBIT 10.3
FORM OF SERVICING AGREEMENT
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INTANGIBLE TRANSITION PROPERTY SERVICING AGREEMENT
between
ILLINOIS POWER SECURITIZATION LIMITED LIABILITY COMPANY,
Grantee
and
ILLINOIS POWER COMPANY,
Servicer
Dated as of December ___, 1998
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TABLE OF CONTENTS
ARTICLE I
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . . . . . .4
ARTICLE II
Appointment and Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 2.01. Appointment of Servicer; Acceptance of Appointment. . . . . . .5
SECTION 2.02. Authorization . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 2.03. Dominion and Control Over the Intangible Transition Property. .5
ARTICLE III
Billing Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.01. Duties of Servicer. . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.02. Servicing and Maintenance Standards . . . . . . . . . . . . . .9
SECTION 3.03. Certificate of Compliance . . . . . . . . . . . . . . . . . . 10
SECTION 3.04. Annual Report by Independent Public Accountants . . . . . . . 11
SECTION 3.05. Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
Services Related to Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.01. Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.02. Limitation of Liability . . . . . . . . . . . . . . . . . . . 17
SECTION 4.03. Monitoring of Third-Party Collectors. . . . . . . . . . . . . 18
ARTICLE V
The Intangible Transition Property . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.01. Custody of Intangible Transition Property Records . . . . . . 23
SECTION 5.02. Duties of Servicer as Custodian . . . . . . . . . . . . . . . 23
SECTION 5.03. Instructions; Authority to Act. . . . . . . . . . . . . . . . 26
SECTION 5.04. Custodian's Indemnification . . . . . . . . . . . . . . . . . 26
SECTION 5.05. Effective Period and Termination. . . . . . . . . . . . . . . 27
SECTION 5.06. General Indemnification of Indenture Trustee and Delaware
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VI
The Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.01. Representations and Warranties of Servicer. . . . . . . . . . 28
SECTION 6.02. Indemnities of Servicer; Release of Claims. . . . . . . . . . 31
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SECTION 6.03. Merger or Consolidation of or Assumption of the Obligations
of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.04. Limitation on Liability of Servicer and Others. . . . . . . . 33
SECTION 6.05. Illinois Power Not to Resign as Servicer. . . . . . . . . . . 34
SECTION 6.06. Servicing Compensation. . . . . . . . . . . . . . . . . . . . 34
SECTION 6.07. Compliance with Applicable Law. . . . . . . . . . . . . . . . 35
SECTION 6.08. Access to Certain Records and Information Regarding
Intangible Transition Property. . . . . . . . . . . . . . . . 36
SECTION 6.09. Appointments. . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.10. No Servicer Advances. . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.11. Remittances . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.12. Compliance with Servicing Standard; Changes in ICC Tariffs. . 38
ARTICLE VII
Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.01. Servicer Default. . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.02. Appointment of Successor. . . . . . . . . . . . . . . . . . . 41
SECTION 7.03. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . 42
SECTION 7.04. Notice of Servicer Default. . . . . . . . . . . . . . . . . . 43
ARTICLE VIII
Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.02. Maintenance of Records. . . . . . . . . . . . . . . . . . . . 45
SECTION 8.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.04. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.05. Limitations on Rights of Others . . . . . . . . . . . . . . . 46
SECTION 8.06. Severability. . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.07. Separate Counterparts . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.08. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.10. Assignments to Note Issuer and Indenture Trustee. . . . . . . 47
SECTION 8.11. Nonpetition Covenants . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.12. Limitation of Liability . . . . . . . . . . . . . . . . . . . 48
SECTION 8.13. Final Termination . . . . . . . . . . . . . . . . . . . . . . 49
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EXHIBITS AND SCHEDULES
Exhibit A Form of Monthly Servicer's Certificate
Exhibit B Form of Certificate of Compliance
Exhibit C Form of Amendatory Tariff
Exhibit D Form of Quarterly Servicer's Certificate
Schedule 4.01(a) Expected Amortization Schedule
Schedule 6.01(f) No Proceedings
ANNEXES
Annex I - Servicing Procedures
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INTANGIBLE TRANSITION PROPERTY SERVICING AGREEMENT dated as of
December ___, 1998, between ILLINOIS POWER SECURITIZATION LIMITED LIABILITY
COMPANY, a Delaware limited liability company (the "Grantee"), and ILLINOIS
POWER COMPANY, an Illinois corporation, as Servicer (the "Servicer").
RECITALS
A. Pursuant to the Funding Law and the 1998 Transitional Funding Order,
the Grantee and the Note Issuer are concurrently entering into the Sale
Agreement, pursuant to which the Grantee is selling the 1998 Intangible
Transition Property to the Note Issuer, and the Grantee may sell Subsequent
Intangible Transition Property to the Note Issuer pursuant to Subsequent Sale
Agreements.
B. In connection with its ownership of the Intangible Transition
Property and in order to collect the IFCs, the Grantee 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 may in the future perform such functions for others. In
addition, the Grantee desires to engage the Servicer to act on its behalf in
making Adjustments. The Servicer desires to perform all of these activities
on behalf of the Grantee.
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.
(a) Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to them in that certain Indenture (including Appendix A
thereto) dated as of the date hereof between the Note Issuer and Xxxxxx Trust
and Savings Bank, as the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time (the "INDENTURE").
(b) Whenever used in this Agreement, the following words and phrases
shall have the following meanings:
"AGREEMENT" means this Intangible Transition Property Servicing
Agreement, together with all Exhibits, Schedules, Annexes and Attachments
hereto, as the same may be amended, supplemented and otherwise modified from
time to time.
"ALTERNATIVE REMITTANCE REQUIREMENT" means, with respect to any
Third-Party Collector, that such Third-Party Collector is obligated to remit
payments more frequently than under the Fifteen-Day Remittance Option or the
Seven-Day Remittance Option.
"ANNUAL ACCOUNTANT'S REPORT" has the meaning set forth in Section 3.04.
"AMENDATORY TARIFF" means an amendment to any Tariff substantially in
the form of Exhibit C.
C.
"CERTIFICATE OF COMPLIANCE" has the meaning set forth in Section 3.03.
"DAILY REMITTANCE" has the meaning set forth in Section 6.11(a).
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"FIFTEEN-DAY REMITTANCE OPTION" means, with respect to any Third-Party
Collector, the option set forth in the 1998 Initial Tariff to remit IFCs
(whether or not collected from customers) within fifteen days of billing by
the Servicer.
"IFC CUSTOMER CLASS" has the meaning set forth in Annex I.
"INTANGIBLE TRANSITION PROPERTY RECORDS" has the meaning assigned to
that term in Section 5.01.
5.01.
"LOSSES" has the meaning assigned to that term in Section 5.04.
"MONTHLY SERVICER'S CERTIFICATE" has the meaning assigned to that term
in Section 3.01(b)(i).
"OFFICER'S CERTIFICATE" means a certificate signed by a Responsible
Officer.
"RETIREMENT OF THE NOTES" means the day on which the final distribution
is made to the Indenture Trustee in respect of the last Outstanding Notes.
"SERVICER DEFAULT" has the meaning assigned to that term in Section 7.01.
"SERVICING STANDARD" means the obligation of the Servicer to calculate,
collect, apply, remit and reconcile proceeds of the Intangible Transition
Property, including IFC Payments, and all other Note Collateral for the
benefit of the Note Issuer and the Holders (i) with the same degree of care
and diligence as the Servicer applies with respect to payments owed to it for
its own account, (ii) in accordance with all applicable procedures and
requirements established by the ICC for collection of electric utility
tariffs and (iii) in accordance with the other terms of this Agreement.
"SEVEN-DAY REMITTANCE OPTION" means, with respect to any Third-Party
Collector, the option set forth in the 1998 Initial Tariff to remit IFC
Payments within seven days of such Third-Party Collector's receipt from
Customers.
"TERMINATION NOTICE" has the meaning assigned to that term in
Section 7.01.
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"THIRD-PARTY COLLECTOR" means each third-party, including each Applicable
ARES, which, pursuant to any Tariff, any other tariffs filed with the ICC, or
any agreement with Illinois Power, is obligated to remit IFCs or IFC Payments to
Illinois Power.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) Non-capitalized terms used herein which are defined in the Public
Utilities Act shall, as the context requires, have the meanings assigned to such
terms in the Public Utilities Act, but without giving effect to amendments to
the Public Utilities Act after the date hereof which have a material adverse
effect on the Note Issuer or the Holders.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) The words "hereof," "herein," "hereunder" and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section, Schedule, Exhibit, Annex
and Attachment references contained in this Agreement are references to
Sections, Schedules, Exhibits, Annexes and Attachments in or to this Agreement
unless otherwise specified; and the term "including" shall mean "including
without limitation."
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter forms of such terms.
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ARTICLE II
APPOINTMENT AND AUTHORIZATION
SECTION 2.01. APPOINTMENT OF SERVICER; ACCEPTANCE OF APPOINTMENT.
Subject to Section 6.05 and Article 7, the Grantee appoints the Servicer, and
the Servicer accepts such appointment, to perform the Servicer's obligations
pursuant to this Agreement on behalf of and for the benefit of the Grantee 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 Intangible Transition Property, the Servicer shall be and is authorized
and empowered by the Grantee to (a) execute and deliver, on behalf of itself
and/or the Grantee, as the case may be, any and all instruments, documents or
notices, and (b) on behalf of itself and/or the Grantee, as the case may be,
make any filing and participate in proceedings of any kind with any
governmental authorities, including with the ICC. The Grantee shall furnish
the Servicer with such documents as have been prepared by the Servicer for
execution by the Grantee, and with such other documents as may be in the
Grantee's possession, as necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder. Upon the
Servicer's written request, the Grantee 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 INTANGIBLE TRANSITION
PROPERTY. Notwithstanding any other provision herein, the Grantee shall have
dominion and control over the Intangible Transition Property, and the Servicer,
in accordance with the terms hereof, is acting solely
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as the servicing agent and custodian for the Grantee with respect to the
Intangible Transition Property and the Intangible Transition Property
Records. The Servicer shall not take any action that is not authorized by
this Agreement, that is not consistent with its customary procedures and
practices, or that shall impair the rights of the Grantee in the Intangible
Transition Property, in each case unless such action is required by
applicable law.
ARTICLE III
BILLING SERVICES
SECTION 3.01. DUTIES OF SERVICER. The Servicer, as agent for the
Grantee, shall have the following duties:
(a) DUTIES OF SERVICER GENERALLY. The Servicer's duties in general
shall include management, servicing and administration of the Intangible
Transition Property (including maintaining records of the cumulative total of
IFCs and verifying that such amount has not exceeded the dollar amount of
Intangible Transition Property established by the ICC pursuant to a Funding
Order); on or before the date of issuance of any Series of Notes, filing
with the ICC the filing required by Section 18-107(c)(1) of the Funding Law
to perfect the lien of the Indenture Trustee in the Intangible Transition
Property; making such filings and initiating such proceedings with the ICC as
may be required to ensure that the dollar amount of Intangible Transition
Property authorized by the Funding Orders is adequate for the payment in full
of all principal of and interest on the Notes; obtaining meter reads,
calculating usage, billing, collections and posting of all payments in
respect of the Intangible Transition Property; responding to inquiries by
Customers, the ICC or any federal, local or other state governmental
authorities with respect to the Intangible Transition Property;
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delivering Bills to Customers and ARES, investigating and handling
delinquencies, processing and depositing collections and making periodic
remittances; furnishing periodic reports to the Grantee, the Note Issuer, the
Indenture Trustee and the Rating Agencies; and taking all necessary action in
connection with Adjustments as set forth herein. Certain of the duties set
forth above may be performed by ARES pursuant to ARES Service Agreements.
The Servicer shall be allowed to perform its duties hereunder either directly
or by or through agents, attorneys, custodians, nominees or (with prior
written notice to the Rating Agencies) by delegating all or a portion of its
duties to any third parties; PROVIDED, however, that, notwithstanding any
such delegation of duties, the Servicer shall remain liable for the
performance of all its duties and obligations pursuant to the terms of this
Agreement and the other Basic Documents and such delegation shall not relieve
the Servicer of its liability and responsibility with respect to such duties
or obligations. The fees and expenses of any such persons to whom the
Servicer may delegate duties shall be as agreed between the Servicer and such
third parties from time to time, and, except for such fees and expenses which
are expressly reimbursable hereunder, such third-party fees and expenses
shall be payable solely by the Servicer out of its Servicing Fee and neither
the Grantee nor any assignee thereof shall have any responsibility therefor.
Anything to the contrary notwithstanding, the duties of the Servicer set
forth in this Agreement shall be qualified in their entirety by any ICC
Regulations as in effect at the time such duties are to be performed.
Without limiting the generality of this Section 3.01(a), in furtherance of
the foregoing, the Servicer shall also have, and shall comply with, the
duties and responsibilities relating to data acquisition, usage and xxxx
calculation, billing, customer service functions, collections, payment
processing and remittance set forth in Annex I hereto, including without
limitation payment of all Allocable IFC Revenue Amounts described therein.
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(b) REPORTING FUNCTIONS.
(i) MONTHLY SERVICER'S CERTIFICATE. On or before the tenth calendar
day of each month (or, if such date is not a Servicer Business Day, on the
next Servicer Business Day), the Servicer shall prepare and deliver to the
Grantee, the Note Issuer, the Indenture Trustee and the Rating Agencies a
written report substantially in the form of EXHIBIT A hereto (a "Monthly
Servicer's Certificate") setting forth certain information relating to IFC
Payments received by the Servicer during the immediately preceding Billing
Period.
(ii) NOTIFICATION OF LAWS AND REGULATIONS. The Servicer shall
immediately notify the Grantee, the Note Issuer, the Indenture Trustee and
the Rating Agencies in writing of any laws or ICC Regulations hereafter
promulgated that have a material adverse effect on the Servicer's ability
to perform its duties under this Agreement.
(iii) OTHER INFORMATION. Upon the reasonable request of the Grantee,
the Note Issuer, the Indenture Trustee or any Rating Agency, the Servicer
shall provide to the Grantee, the Note Issuer, Indenture 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
Intangible Transition Property to the extent it is reasonably available to
the Servicer, as may be reasonably necessary and permitted by law, to
enable the Grantee, the Note Issuer, the Indenture Trustee or the Rating
Agencies to monitor the Servicer's performance hereunder. In addition, so
long as any of the Notes of any Series are outstanding, the Servicer shall
provide the Grantee, the Note
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Issuer and the Indenture Trustee, within a reasonable time after written
request therefor, any information available to the Servicer or reasonably
obtainable by it that is necessary to calculate the IFCs applicable to
each class of Customer.
(iv) PREPARATION OF REPORTS TO BE FILED WITH THE SEC. The Servicer
shall prepare any reports required to be filed by the Grantee or the Note
Issuer under the securities laws, including a copy of each Quarterly
Servicer's Certificate described in Section 4.01(c)(ii), the annual
Certificate of Compliance described in Section 3.03, and the Annual
Accountant's Report described in Section 3.04.
SECTION 3.02. SERVICING AND MAINTENANCE STANDARDS. On behalf of the
Grantee, the Servicer shall (i) manage, service, administer and make
collections in respect of the Intangible Transition Property with reasonable
care and in accordance with the Servicing Standard and applicable law,
including all applicable ICC 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; (ii)
follow customary standards, policies and procedures for the industry in
performing its duties as Servicer; (iii) use all reasonable efforts,
consistent with its customary servicing procedures, to enforce, and maintain
rights in respect of, the Intangible Transition Property; (iv) comply with
all laws and regulations applicable to and binding on it relating to the
Intangible Transition Property, (v) make all required submissions and provide
all required notifications to the ICC with respect to any Adjustments, and
(vi) maintain facilities sufficient to enable the servicer to post IFC
Payments to customer accounts within two Servicer Business Days of receipt of
payment by the Servicer, in accordance with Annex I hereto. The Servicer
shall be responsible for the imposition, collection and remittance of IFCs in
accordance with Annex I hereto,
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the inclusion of IFCs in all Bills, and the deduction of IFCs from tariffed
charges and all other charges from which the IFCs are to be deducted and
stated separately, including, without limitation, all charges under any
contracts with Customers who would, but for such contract, be paying
Applicable Rates, where such contract provides that the Customer will pay an
amount each billing period to the Grantee or the Note Issuer, or to the
Servicer, equal to the amount of IFCs that would have been billed if the
services provided under such contract were subject to Applicable Rates. 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
ofthe Intangible Transition Property, which, in the Servicer's judgment, may
include the taking of legal action. Without limiting the foregoing, if the
Servicer determines at any time that the aggregate dollar amount of IFCs to
be imposed is reasonably likely to exceed the maximum dollar amount of
Intangible Transition Property authorized by the 1998 Transitional Funding
Order and any Subsequent Funding Orders to be imposed and collected and any
Notes remain outstanding, the Servicer shall make a good faith effort to take
any and all subsequent regulatory action with the ICC to obtain an order
expressly authorizing a larger dollar amount of Intangible Transition
Property in an amount sufficient to pay such Notes in full.
SECTION 3.03. CERTIFICATE OF COMPLIANCE. The Servicer shall deliver
to the Grantee, the Note Issuer, the Indenture Trustee and the Rating
Agencies on or before September 30 of each year, commencing September 30,
1999 to and including the September 30 succeeding the Retirement of the
Notes, an Officer's Certificate substantially in the form of EXHIBIT B hereto
(a "Certificate of Compliance"), stating that: (i) a review of the activities
of the Servicer during the twelve months ended the preceding June 30 (or, in
the case of the first Certificate of Compliance to be delivered on or before
September 30, 1999, the period of time from the date of this Agreement until
June 30,
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1999) and of its performance under this Agreement has been made under such
officer's supervision, and (ii) to such 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 September 30,
1999, the period of time from the date of this Agreement until June 30,
1999), or, if there has been a default in the fulfillment of any such
material obligation, specifying each such material default known to such
officer and the nature and status thereof.
SECTION 3.04. ANNUAL REPORT BY INDEPENDENT PUBLIC ACCOUNTANTS.
(a) The Servicer, at its own expense in consideration of the Servicing
Fee paid to it, shall cause a firm of independent certified public
accountants (which may provide other services to the Servicer or Illinois
Power) to prepare, and the Servicer shall deliver to the Grantee, the Note
Issuer, the Indenture 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 Grantee, the Note Issuer, the Indenture Trustee and the Rating
Agencies, on or before September 30 of each year, beginning September 30,
1999 to and including the September 30 succeeding the Retirement of the
Notes, to the effect that such firm has performed certain procedures in
connection with the Servicer's compliance with its obligations under this
Agreement during the preceding twelve months ended June 30 (or, in the case
of the first Annual Accountant's Report to be delivered on or before
September 30, 1999, the period of time from the date of this Agreement until
June 30, 1999), identifying the results of such procedures and including any
exceptions noted. If such accounting firm requires the Indenture Trustee to
agree or consent to the procedures performed by such firm, the Grantee shall
direct the Note Issuer to direct the
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Indenture Trustee in writing to so agree; it being understood and agreed
that the Indenture Trustee will deliver such letter of agreement or consent
in conclusive reliance upon the direction of the Note Issuer, and the
Indenture Trustee will not make any independent inquiry or investigation as
to, and shall have no obligation or liability in respect of the sufficiency,
validity or correctness of such procedures.
(b) The Annual Accountant's Report shall also indicate that the
accounting firm providing such report is independent of the Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
SECTION 3.05. OBLIGATIONS. The Servicer acknowledges and agrees that
to the fullest extent permitted by applicable law, its obligations under this
Agreement shall remain in effect notwithstanding any breach of the State
Pledge, whether or not contested, or subsequent invalidation of the Funding
Law or any Funding Order and/or any tariff or tariffs filed in connection
therewith, and that no such breach of the State Pledge or invalidation shall
act to excuse the Servicer from liability for any failure to perform its
covenants hereunder, including but not limited to its obligation to remit
IFCs and equivalent amounts for the benefit of the Holders, on account of any
legal inability stemming from such breach of the State Pledge or invalidation.
ARTICLE IV
SERVICES RELATED TO ADJUSTMENTS AND MONITORING OF THIRD-PARTY COLLECTORS
SECTION 4.01. ADJUSTMENTS. From time to time, until the Retirement of
the Notes, the Servicer shall identify the need for Adjustments and shall
take all reasonable action to obtain and implement such Adjustments, all in
accordance with the following:
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(a) EXPECTED AMORTIZATION SCHEDULE. The initial Expected Amortization
Schedule is attached hereto as SCHEDULE 4.01(a). In connection with the Note
Issuer's issuance of any additional Series of Notes after the Closing Date,
the Servicer, on or prior to the Series Issuance Date therefor, shall revise
the Expected Amortization Schedule to add the requisite information for each
new Series of Notes and set forth, as of each Payment Date through the
scheduled Retirement of the Notes, the aggregate principal amounts of the
Notes of all Series, including such additional Series, expected to be
outstanding on such Payment Date. The Servicer shall also, in accordance
with the requirements (if any) set forth in any Series Supplement or Trust
Issuance Certificate and otherwise in a manner reasonably acceptable to the
Grantee, revise the Expected Amortization Schedule to reflect any required
prepayments on account of the receipt of Allocable IFC Revenue Amounts or any
other required or permitted prepayments affecting such schedule. If the
Expected Amortization Schedule is revised as set forth above, the Servicer
shall send a copy of such revised Expected Amortization Schedule to the
Grantee, the Note Issuer, the Indenture Trustee and the Rating Agencies
promptly thereafter.
(b) ADJUSTMENTS
(i) ADJUSTMENTS AND FILINGS. Within the month following the
end of each Reconciliation Period, the Servicer shall: (A) update
the data and assumptions underlying the calculation of the IFCs,
including revenue from Applicable Rates for each class of
Customers, projected electricity usage during the next Applicable
Period for each such class and including interest and estimated
expenses and fees of the Grantee and the Note Issuer to be paid
during such period, and the rate of delinquencies and write-offs;
(B) determine the Required Debt Service and Debt
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Service Billing Requirement for the next Applicable Period based on
such updated data and assumptions; (C) determine the IFCs to be
allocated to each class of Customers during the next Applicable
Period based on such Debt Service Billing Requirement and the terms
of the applicable Funding Orders and the Tariffs filed pursuant
thereto (including, without limitation, the terms requiring that if
the forecasted revenues from Applicable Rates for any customer
class are projected to be less then the IFCs allocated to that
class, the deficiency will be ratably allocated to other classes);
(D) make all required notice and other filings with the ICC to
reflect the revised IFCs, including any Amendatory Tariffs required
under Section 18-104(k) of the Funding Law if the resulting IFCs
for any class of Customer will exceed an amount per kilowatt-hour
greater than the amount per kilowatt-hour authorized for such class
of Customer in the applicable Funding Order; and (E) take all
reasonable actions and make all reasonable efforts to effect such
Adjustment and to enforce the provisions of the Funding Law which
limit the ICC's authority to review any such Amendatory Tariff.
(ii) In the case of any Adjustment, the Servicer shall
implement the revised IFCs, if any, as of the next Adjustment Date.
(c) REPORTS.
(i) NOTIFICATION OF AMENDATORY TARIFF FILINGS AND
ADJUSTMENTS. Whenever the Servicer files an Amendatory Tariff with
the ICC or implements revised IFCs with notice to the ICC but
without filing an Amendatory Tariff or revisions to a Tariff as
contemplated by any applicable Funding Order, the Servicer
14
shall send a copy of such filing or notice (together with a copy of
all notices and documents which, in the Servicer's reasonable
judgment, are material to the adjustments effected by such
Amendatory Tariff, revised Tariff or notice) to the Grantee, the
Note Issuer, the Indenture Trustee and the Rating Agencies
concurrently therewith.
(ii) QUARTERLY SERVICER'S CERTIFICATE. Not later than five
Servicer Business Days prior to each Payment Date, the Servicer
shall deliver a written report substantially in the form of EXHIBIT
D hereto (the "Quarterly Servicer's Certificate") to the Grantee,
the Note Issuer, the Indenture Trustee and the Rating Agencies.
(iii) REPORTS TO CUSTOMERS.
(A) After each revised IFC has gone into effect pursuant
to a Adjustment, the Servicer shall, to the extent and in the
manner and time frame required by applicable ICC Regulations,
if any, cause to be prepared and delivered to Customers any
required notices announcing such revised IFCs.
(B) In addition, at least once each year, the Servicer
shall (to the extent that it does not include the notice
described below in the Bills regularly sent to Customers)
cause to be prepared and delivered to Customers a notice
stating, in effect, that the IFCs are owned by the Grantee or
any assignee thereof and not Illinois Power. Such notice
shall be included either as an insert to or in the text of the
Bills delivered to such Customers or shall be delivered to
Customers by electronic means or such other means as the
15
Servicer or the Applicable ARES may from time to time use to
communicate with their respective customers.
(C) Except to the extent that applicable ICC Regulations
make the Applicable ARES responsible for such costs or the
Applicable ARES has otherwise agreed to pay such costs, the
Servicer shall pay from its own funds all costs of preparation
and delivery incurred in connection with clauses (A) and (B)
above, including but not limited to printing and postage costs
as the same may increase or decrease from time to time.
(iv) ARES REPORTS. The Servicer shall provide to the Rating
Agencies, upon request, any publicly available reports filed by the
Servicer with the ICC (or otherwise made publicly available by the
Servicer) relating to ARES and any other non-confidential and
non-proprietary information relating to ARES reasonably requested
by the Rating Agencies.
SECTION 4.02. LIMITATION OF LIABILITY.
(a) The Grantee and the Servicer expressly agree and acknowledge that:
(i) In connection with any Adjustment, the Servicer is acting
solely in its capacity as the servicing agent hereunder.
(ii) Neither the Servicer nor the Grantee 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 the Amendatory Tariffs required by
Section 4.01 in a timely and correct manner or other breach by the
Servicer of its
16
duties under this Agreement), by the ICC in any way related to the
Intangible Transition Property or in connection with any
Adjustment, the subject of any filings under Section 4.01, any
proposed Adjustment, or the approval of any revised IFCs.
(iii) The Servicer shall have no liability whatsoever relating
to the calculation of any revised IFCs, including as a result of
any inaccuracy of any of the assumptions made in such calculation
regarding expected energy usage volume and the rate of
delinquencies and write-offs, so long as the Servicer has acted in
good faith and has not acted in a grossly negligent manner in
connection therewith, nor shall the Servicer have any liability
whatsoever as a result of any Person, including the Holders, not
receiving any payment, amount or return anticipated or expected or
in respect of any Note generally, except only to the extent that
the same is caused by the Servicer's gross negligence, willful
misconduct, bad faith, or reckless disregard of its obligations and
duties under this Agreement.
(b) Notwithstanding the foregoing, this Section 4.02 shall not relieve the
Servicer of liability for any misrepresentation by the Servicer under Section
6.01 or for any breach by the Servicer of its other obligations under this
Agreement.
SECTION 4.03. MONITORING OF THIRD-PARTY COLLECTORS. From time to time,
until the Retirement of the Notes, the Servicer shall, in accordance with the
Servicing Standard, implement such procedures and policies as are necessary to
ensure that the obligations of all Third-Party Collectors to remit IFC Payments
are properly enforced in accordance with the terms and provisions of the
Tariffs. Such procedures and policies shall include the following:
17
(a) MAINTENANCE OF RECORDS AND INFORMATION. In addition to any actions
required by ICC Regulations or other applicable law, the Servicer shall:
(i) maintain adequate records for promptly identifying and
contacting each such Third-Party Collector (including any ARES) and
for monitoring whether such Third-Party Collector is subject to the
Seven-Day Remittance Option, the Fifteen-Day Remittance Option, or
the Alternative Remittance Requirement;
(ii) maintain records of end-user Customers which are billed
by Third-Party Collectors to permit prompt reversion to
dual-billing in the event of default by a Third-Party Collector;
(iii) create and periodically update a record of the current
short-term and long-term unsecured debt ratings, if any, of each
Third-Party Collector which is responsible for billing IFCs
directly to end-user Customers and is obligated to remit IFC
Payments whether or not actually collected from end-user Customers
(and, where the IFC payment obligations of any Third-Party
Collector are guaranteed by another entity, the ratings of such
other entity);
(iv) create and periodically update, for each Third-Party
Collector which is responsible for billing IFCs directly to
end-user Customers and has elected the Fifteen-Day Remittance
Option or is otherwise obligated to remit IFCs whether or not IFC
Payments are actually collected from end-user Customers, estimates
of one month's estimated IFC collections and, in the case of any
such Third-Party Collector which does not have an unsecured debt
rating of at least BBB- or the equivalent,
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maintain a deposit or comparable credit security equal to such one
month's estimated IFC Collections as provided in the Tariffs.
The Servicer shall update the records described in clauses (iii) and (iv)
above no less frequently than (A) monthly in the case of any such
Third-Party Collector with expected monthly IFC xxxxxxxx of greater than
or equal to $5,000,000 and (B) quarterly in each other case.
(b) MONITORING OF PERFORMANCE AND PAYMENT. In addition to any actions
required by ICC Regulations or other applicable law, the Servicer shall
undertake to do the following:
(i) The Servicer shall require each Third-Party Collector
which has elected the Fifteen-Day Remittance Option or is otherwise
obligated to remit IFC Payments whether or not actually collected
from end-user Customers to pay all undisputed and disputed IFCs
billed to such Third-Party Collector, in accordance with the
provisions of the 1998 Initial Tariff and each Subsequent Tariff.
The Service shall monitor payment compliance for each Third-Party
Collector which has elected the Fifteen-Day Remittance Option or is
otherwise obligated to remit IFC Payments whether or not actually
collected from end-user Customers.
(ii) The Servicer shall, for each Third-Party Collector which
is responsible for billing IFCs directly to end-user Customers and
has elected the Seven-Day Remittance Option or is otherwise liable
to make IFC Payments only to the extent of collections actually
received from end-user Customers, compare (x) actual IFC
Collections from such Third-Party Collector to (y) estimated IFC
Collections therefrom. Such comparisons shall be made no less
frequently than:
19
(A) Every five Servicer Business Days, in the case of any
such Third-Party Collector with expected monthly IFC xxxxxxxx of
greater than or equal to $5,000,000;
(B) Monthly in the case of any such Third-Party Collector
with expected monthly IFC xxxxxxxx of less than $5,000,000 but
greater than or equal to $1,000,000; and
(C) Quarterly in each other case.
If the discrepancy between actual IFC Collections and estimated IFC
Collections from any such Third-Party Collector, in the reasonable
judgment of the Servicer based upon historical experience and any
other information reasonably available thereto, indicates an actual or
impending default in such Third-Party Collector's remittance of IFC
Collections, the Servicer shall promptly notify such Third-Party
Collector in an attempt to determine the source of discrepancy. If,
following such notice, the source of any material discrepancy cannot
be identified, the Servicer shall, in accordance with ICC Regulations
and other applicable law and the Servicing Standard, take such steps
as it reasonably determines are necessary to verify whether or not the
applicable Third-Party Collector is in default.
(iii) The Servicer shall, consistent with its customary billing
practices, xxxx each Third-Party Collector who is obligated to pay
IFCs on behalf of end-user Customers for all IFCs owed by such
end-user Customers served thereby in accordance with the billing
cycle otherwise applicable to such end-user Customers.
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(c) ENFORCEMENT. The Servicer shall, in accordance with the terms of
the 1998 Initial Tariff and each Subsequent Tariff, ensure that each
Third-Party Collector remits the undisputed portions of the IFCs or IFC
Payments which it is obligated to remit to the Servicer and remits payment of
the disputed amount under protest (or makes some other suitable and agreeable
financial arrangements) pending a hearing on the matter. In the event of any
default by any Third-Party Collector, the Servicer shall enforce all rights
set forth in, and take all other steps permitted by, the 1998 Initial Tariff
or any Subsequent Tariff or other ICC Regulations as it determines, in
accordance with the Servicing Standard, are reasonably necessary to ensure
the prompt payment of IFCs by such Third-Party Collector and to preserve the
rights of the Holders with respect thereto, including, where appropriate,
taking such steps as it is permitted to take under applicable law to
terminate the right of any Third-Party Collector to xxxx and collect IFCs or
petitioning the ICC to impose such other remedies or penalties as may be
available under the circumstances. In the event any disputed IFCs billed are
resolved in favor of a Third-Party Collector and the Servicer becomes liable
for the payment of interest in respect of IFCs paid under protest or any
other penalty, the Servicer agrees that it will pay such interest or penalty
from the Servicing Fee paid to it or its other funds and shall not deduct
such interest or penalty amounts from IFC Collections.
(d) CREDIT AND COLLECTION POLICIES.
(i) The Servicer shall, to the full extent permitted under
the 1998 Funding Order or any Subsequent Funding Order, as
applicable, impose such terms with respect to credit and collection
policies applicable to Third-Party Collectors as may be reasonably
necessary to prevent the then current rating of the Notes from
being downgraded. The Servicer shall, in accordance with and to
the extent permitted by
21
Section 16-118(b) of the Public Utilities Act and the terms of the
1998 Funding Order and any subsequent Funding Order, include and
impose the above-described terms in all tariffs filed under Section
16-118(b) of the Public Utilities Act which would allow ARES or
other utilities to issue single bills to Illinois Power's Customers
for services provided by such ARES or other utility and services
provided by Illinois Power. The Servicer shall periodically review
the need for modified or additional terms based upon, among other
things, (i) the relative amount of IFC Payments received through
Third-Party Collectors relative to the Debt Service Billing
Requirement, (ii) the historical payment and default experience of
each ARES and (iii) such other credit and collection policies to
which the ARES are subject, and will set out any such modified or
additional terms in a supplemental tariff filed with the ICC.
ARTICLE V
THE INTANGIBLE TRANSITION PROPERTY
SECTION 5.01. CUSTODY OF INTANGIBLE TRANSITION PROPERTY RECORDS. To
assure uniform quality in servicing the Intangible Transition Property and to
reduce administrative costs, the Grantee revocably appoints the Servicer, and
the Servicer accepts such appointment, to act as the agent of the Grantee, the
Note Issuer and the Indenture Trustee as custodian of any and all documents and
records that the Grantee shall keep on file, in accordance with its customary
procedures, relating to the Intangible Transition Property, including copies of
each Funding Order and all Tariffs relating thereto, and all documents filed
with the ICC in connection with any Adjustment (collectively, the
22
"Intangible Transition Property Records"), which are hereby constructively
delivered to the Note Issuer, as transferee of the Grantee (or, in the case
of the Subsequent Intangible Transition Property, will as of the applicable
Subsequent Sale Date be constructively delivered to the Note Issuer, as
transferee of the Grantee) with respect to all Intangible Transition Property.
SECTION 5.02. DUTIES OF SERVICER AS CUSTODIAN.
(a) SAFEKEEPING. The Servicer shall hold the Intangible Transition
Property Records on behalf of the Grantee, the Note Issuer and the Indenture
Trustee, and maintain such accurate and complete accounts, records and
computer systems pertaining to the Intangible Transition Property Records as
shall enable the Grantee to comply with this Agreement and the Sale
Agreement, and as shall enable the Note Issuer to comply with the Sale
Agreement and the Indenture. Except with respect to the commingling of IFC
Collections expressly permitted hereunder, the Servicer shall keep all of the
Intangible Transition Property separate and apart from its other assets, and
shall maintain records with respect to the Intangible Transition Property
(including all IFC Collections) in a manner that facilitates the
identification and segregation of such assets from those of the Servicer.
The Servicer shall, in accordance with the remittance procedures described in
Annex I hereto, maintain records sufficient to permit the IFC Collections to
be accounted for separately from the funds with which they may be commingled,
so that the dollar amounts of IFC Collections commingled with the Servicer's
funds may be properly identified and traced. 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 Grantee, the Note Issuer, the
Indenture Trustee and the Rating Agencies any failure on its part to hold the
Intangible Transition Property Records and
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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
Grantee, the Note Issuer or the Indenture Trustee of the Intangible
Transition Property Records. The Servicer's duties to hold the Intangible
Transition Poperty Records on behalf of the Grantee, the Note Issuer and the
Indenture Trustee set forth in this Section 5.02, to the extent such
Intangible Transition Property Records have not been previously transferred
to a successor Servicer pursuant to Article VII, shall terminate three years
after the earlier of the date on which (i) the Servicer is succeeded by a
successor Servicer in accordance with Article VII hereof and (ii) no Notes of
any Series are Outstanding.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall maintain
the Intangible Transition Property Records at 000 Xxxxx 00xx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, or at such other office as shall be specified to the Grantee,
the Note Issuer and the Indenture Trustee by written notice at least 30 days
prior to any change in location. The Servicer shall permit the Grantee, the
Note Issuer and the Indenture Trustee or their respective duly authorized
representatives, attorneys or auditors to inspect, audit and make copies of
and abstracts from the Servicer's records regarding the Intangible Transition
Property and the IFCs (including all the Intangible Transition Property
Records), at such times during normal business hours as the Grantee, the Note
Issuer or the Indenture Trustee shall reasonably request and which do not
unreasonably interfere with the Servicer's normal operations. Nothing in
this Section 5.02(b) shall affect the obligation of the Servicer to observe
any applicable law (including any ICC 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).
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(c) DEFENDING INTANGIBLE TRANSITION PROPERTY AGAINST CLAIMS. The
Servicer shall institute any action or proceeding necessary to compel
performance by the ICC or the State of Illinois of any of their obligations
or duties under the Funding Law, any Funding Order or any Tariff 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 or judicial invalidation of, the Amendatory Act, the Funding
Law or any Funding Order or the rights of holders of Intangible Transition
Property, or the promulgation of any ICC Regulations, by legislative action
or otherwise, that would be adverse to the Grantee, the Note Issuer or any
Holders. The Servicer shall continue to impose IFCs (or equivalent amounts),
collect IFCs (or equivalent amounts), and remit IFCs (or equivalent amounts),
in accordance with this Agreement and to ensure that the IFCs (or equivalent
amounts) are deducted from Illinois Power's Applicable Rates and other
charges in accordance with the Basic Documents continuing until the
Retirement of the Notes, in each such case unless otherwise prohibited by law
or by any court or regulatory order in effect at such time. The Servicer
shall advance its own funds in order to institute any actions or proceedings
described above, PROVIDED, HOWEVER, that the costs of any such action or
proceeding shall be payable from IFC Collections as an Operating Expense in
accordance with the priorities set forth in Section 8.02(d) of the 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 Indenture may be delayed (it being
understood that the Servicer may be required to advance its own funds to
satisfy its obligations hereunder).
25
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 Intangible Transition Property
Records upon its receipt of written instructions signed by a Responsible
Officer of the Indenture Trustee.
SECTION 5.04. CUSTODIAN'S INDEMNIFICATION. The Servicer as custodian
shall indemnify the Grantee, the Note Issuer, the Delaware Trustee, the
Indenture Trustee and the Holders and each of their respective officers,
directors, employees and agents for, and defend and hold harmless each such
Person from and against, any and all liabilities, obligations, losses,
damages, payments and claims, and reasonable costs or expenses, of any kind
whatsoever (collectively, "Losses") that may be imposed on, incurred by or
asserted against any such Person as the result of any improper act or
omission in any way relating to the maintenance and custody by the Servicer,
as custodian, of the Intangible Transition Property Records; PROVIDED,
HOWEVER, that the Servicer shall not be liable for any portion of any such
amount resulting from the willful misconduct, bad faith or gross negligence
of the Grantee, the Note Issuer, the Delaware Trustee, the Indenture Trustee
or any Holders.
Indemnification under this Section shall survive resignation or removal
of the Indenture Trustee or the Delaware Trustee and shall include reasonable
out-of-pocket fees and expenses of investigation and litigation.
SECTION 5.05. 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. 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
26
terminated under Section 7.01, the appointment of such Servicer as custodian
shall be terminated by the Indenture Trustee or by the Holders of Notes
evidencing not less than twenty-five percent (25%) of the Outstanding Amount
of the Notes of all Series in the same manner as the Indenture Trustee or
such Holders may terminate the rights and obligations of the Servicer under
Section 7.01.
SECTION 5.06. GENERAL INDEMNIFICATION OF INDENTURE TRUSTEE AND
DELAWARE TRUSTEE. The Servicer agrees to indemnify and hold harmless the
Indenture Trustee and the Delaware Trustee and their respective directors,
officers, employees and agents from and against any and all Losses incurred
by or asserted against any such Person as a result of or in connection with
the transactions contemplated by this Agreement or any other Basic Document,
other than any Loss incurred by reason or result of the gross negligence or
willful misconduct of the Indenture Trustee or the Delaware Trustee;
PROVIDED, HOWEVER, that the foregoing indemnity is extended to the Indenture
Trustee and the Delaware Trustee solely in their respective capacities as
trustees and not for the benefit of the Holders or any other Person. The
obligations of the Servicer set forth herein shall survive the termination of
this Agreement or the earlier resignation or removal of the Indenture Trustee
under the Indenture or the Delaware Trustee under the Trust Agreement.
ARTICLE VI
THE SERVICER
SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF SERVICER. The
Servicer makes the following representations and warranties, as of the
Closing Date, as of each Subsequent Sale Date relating to the sale of
Subsequent Intangible Transition Property pursuant to a Subsequent Sale
Agreement, and as of such other dates as expressly provided in this Section
6.01, on which the
27
Grantee is deemed to have relied in entering into this Agreement. The
representations and warranties shall survive the execution and delivery of
this Agreement, the transfer of this Agreement to the Note Issuer pursuant to
the Sale Agreement and the pledge thereof to the Indenture Trustee pursuant
to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Servicer is duly organized and
validly existing as a corporation in good standing under the laws of the
state of its incorporation, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the requisite power, authority and legal right to service the Intangible
Transition Property and to hold the Intangible 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
Intangible Transition Property as required by this Agreement) shall require
such qualifications, licenses or approvals (except where the failure to so
qualify would not be reasonably likely to have a material adverse effect on
the Servicer's business, operations, assets, revenues or properties or
adversely affect the servicing of the Intangible Transition Property).
(c) POWER AND AUTHORITY. The Servicer has the requisite 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 the Servicer by all necessary corporate action.
28
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Servicer enforceable in accordance with its terms,
subject to applicable insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws relating to or affecting creditors' rights
generally from time to time in effect and to general principles of equity
(including, without limitation, 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,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Servicer, or any indenture, agreement or other
instrument to which the Servicer is a party or by which it shall be bound; (ii)
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument; or
(iii) violate any law or any 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.
(f) NO PROCEEDINGS. Except as set forth on Schedule 6.01(f), there are no
proceedings or investigations pending or, to the Servicer's knowledge,
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 Grantee
or, to the Servicer's knowledge, any other Person: (i) asserting the invalidity
of this Agreement, or any of the other Basic Documents or the Notes, (ii)
seeking to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by this Agreement or any of the other Basic
29
Documents, (iii) seeking any determination or ruling that could reasonably be
expected to materially and adversely affect the performance by the Servicer
of its obligations under, or the validity or enforceability of this
Agreement, any of the other Basic Documents or the Notes, or (iv) relating to
the Servicer and which could reasonably be expected to adversely affect the
Federal or state income tax attributes of the Notes.
(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
Servicer's execution and delivery of this Agreement, the Servicer's performance
of the transactions contemplated hereby or the Servicer's fulfillment 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 IV hereof.
(h) CALCULATIONS AND ASSUMPTIONS. The calculations and assumptions used
by the Servicer in calculating the IFCs in effect from time to time are
reasonable and made in good faith.
(i) REPORTS AND CERTIFICATES. Each report and certificate delivered in
connection with a Tariff will constitute a representation and warranty by the
Servicer that each such report or certificate, as the case may be, is true and
correct; PROVIDED, HOWEVER, that to the extent any such report or certificate is
based in part upon or contains assumptions, forecasts or other predictions of
future events, the representation and warranty of the Servicer with respect
thereto will be limited to the representation and warranty that such
assumptions, forecasts or other predictions of future events are reasonable
based upon historical performance and other pertinent information.
SECTION 6.2. INDEMNITIES OF SERVICER; RELEASE OF CLAIMS.
30
(a) The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Servicer under this Agreement.
(b) The Servicer shall indemnify the Grantee, the Note Issuer, the
Indenture Trustee, the Delaware Trustee and the Holders and each of their
respective officers, directors, employees and agents for, and defend and hold
harmless each such Person from and against, any and all Losses that may be
imposed on, incurred by or asserted against any such Person as a result of (i)
the Servicer's willful misconduct, bad faith or gross negligence in the
performance of its duties or observance of its covenants under this Agreement or
its reckless disregard of its obligations and duties under this Agreement, or
(ii) the Servicer's breach of any of its representations or warranties in this
Agreement.
(c) For purposes of Section 6.02(b), in the event of the termination of
the rights and obligations of Illinois Power (or any successor thereto pursuant
to Section 6.03) as Servicer pursuant to Section 7.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer pursuant to Section 7.02.
(d) Indemnification under Section 6.02 shall survive any repeal of,
modification of, supplement to, or judicial invalidation of, the Funding Law or
any Funding Order, shall survive the resignation or removal of the Indenture
Trustee or the Delaware Trustee or the termination of this Agreement and shall
include reasonable out-of-pocket fees and expenses of investigation and
litigation (including reasonable attorneys' fees and expenses incurred by any
indemnified party).
(e) Except to the extent expressly provided in this Agreement or the other
Basic Documents (including, without limitation, the Servicer's claims with
respect to the Servicing Fee, reimbursement for costs incurred pursuant to
Section 5.02(c) and the payment of the consideration for any grant of Intangible
Transition Property to the Grantee), the Servicer releases and discharges
31
the Grantee, the Note Issuer, the Delaware Trustee and the Indenture Trustee
and each of their respective officers, directors and agents (collectively,
the "Released Parties") from any and all actions, claims and demands
whatsoever, whenever arising, which the Servicer, in its capacity as Servicer
or otherwise, shall or may have against any such Person relating to the
Intangible Transition Property or the Servicer's activities with respect
thereto other than any actions, claims and demands arising out of the willful
misconduct, bad faith or gross negligence of the Released Parties.
SECTION 6.3. 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, or, with respect to its obligations as
Servicer, 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
Grantee, the Note Issuer, the Indenture Trustee and the Rating Agencies an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption complies
with this Section and that all conditions precedent provided for in this
Agreement relating to such transaction have been complied with and (iii) the
Servicer shall have delivered to the Grantee, the Note Issuer, the Indenture
Trustee and the Rating Agencies an Opinion of Counsel either (A) stating that,
in the opinion of such counsel, all filings to be made by the
32
Servicer, including filings with the ICC pursuant to the Funding Law, have
been executed and filed that are necessary to preserve and protect fully the
interests of the Grantee in the Intangible 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. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (i), (ii)
and (iii) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
SECTION 6.04. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Neither
the Servicer nor any of the directors or officers or employees or agents of
the Servicer shall be liable to the Grantee, the Note Issuer, the Indenture
Trustee, the Delaware Trustee, the Holders or any other Person, except as
provided under this Agreement, 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 such person against any liability that would otherwise be
imposed by reason of willful misconduct, bad faith or gross negligence in the
performance of the Servicer's duties or by reason of reckless disregard of
the Servicer's obligations and duties. The Servicer and any director or
officer or employee or agent of the Servicer may rely in good faith on the
advice of counsel reasonably acceptable to the Indenture Trustee or on any
document of any kind, PRIMA FACIE properly executed and submitted by any
Person, respecting any matters arising under this Agreement.
SECTION 6.05. ILLINOIS POWER NOT TO RESIGN AS SERVICER. Subject to the
provisions of Sections 6.03, Illinois Power shall not resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
unless either (a) the Servicer determines that the performance
33
of its duties under this Agreement shall no longer be permissible under
applicable law (disregarding any breach of the State Pledge that is being
contested or subsequent invalidation of the Funding Law, any Funding Order
and/or any Tariff or Tariffs filed in connection therewith), or (b) the
Rating Agency Condition shall have been satisfied and, in either such case,
to the extent required under any Funding Order, the ICC shall have approved
such resignation. Notice of any such determination permitting Illinois
Power's resignation shall be given to the Grantee, the Note Issuer, the
Indenture 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 shall be
evidenced by an Opinion of Counsel to such effect delivered to the Grantee,
the Note Issuer and the Indenture Trustee concurrently with or promptly after
such notice. No such resignation shall become effective until a successor
Servicer shall have assumed Illinois Power's responsibilities and obligations
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 a fee (the "Servicing Fee") quarterly on
each Payment Date in an amount (i) equal to $540,000 for so long as IFCs are
billed concurrently with charges or otherwise billed to Customers or (ii) not to
exceed $3,240,000 if IFCs are not billed concurrently with charges otherwise
billed to Customers but, instead, are billed separately to Customers. The
Servicer shall also be entitled to retain as additional compensation (i) any
interest earnings on IFC Payments received by the Servicer and invested by the
Servicer pursuant to Section 6(d) of Annex I hereto during each Collection
Period prior to remittance to the Collection Account and (ii) all late payment
charges, if any, collected from Customers or ARES. So long as the Servicer is
billing Customers for charges
34
for electric service or any Applicable Rates, the Servicer will xxxx IFCs to
such Customers concurrently with such other charges and such Applicable Rates.
(b) The Servicer shall receive, in accordance with Section 8.02 of the
Indenture, the Servicing Fee set forth in Section 6.06(a) above on each Payment
Date in accordance with the priorities set forth in Section 8.02(d) of the
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) Except as provided in Section 5.02(c), the Servicer shall be required
to pay from its own account all expenses incurred by it in connection with its
activities hereunder (including any fees to and disbursements by accountants,
counsel, or any other Person, any taxes imposed on the Servicer and any expenses
incurred in connection with reports to Holders) out of the compensation retained
by or paid to it pursuant to this Section 6.06, and shall not be entitled to any
extra payment or reimbursement therefor.
SECTION 6.07. COMPLIANCE WITH APPLICABLE LAW. The Servicer covenants
and agrees, in servicing the Intangible Transition Property, to comply with
all laws applicable to, and binding upon, the Servicer and relating to such
Intangible Transition Property the noncompliance with which would have a
material adverse effect on the value of the Intangible 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.
35
SECTION 6.08. ACCESS TO CERTAIN RECORDS AND INFORMATION REGARDING
INTANGIBLE TRANSITION PROPERTY. The Servicer shall provide to the Grantee,
the Note Issuer, the Indenture Trustee and the Holders access to the
Intangible Transition Property Records in such cases where the Grantee, the
Note Issuer, the Indenture Trustee and the Holders 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 offices of the Servicer. Nothing in this Section shall
affect the Servicer's obligation to observe any applicable law (including any
ICC 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. The Servicer may at any time appoint any
Person to perform all or any portion of its obligations as Servicer
hereunder; PROVIDED, HOWEVER, that, unless such person is Illinova
Corporation or a wholly-owned subsidiary thereof, the Rating Agency Condition
shall have been satisfied in connection therewith; PROVIDED FURTHER that the
Servicer shall remain obligated and be liable to the Grantee, the Note
Issuer, the Indenture Trustee and the Holders for the servicing and
administering of the Intangible 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 Intangible Transition Property; and PROVIDED FURTHER,
HOWEVER, that nothing herein (including, without limitation, the Rating
Agency Condition) shall preclude the execution by the Servicer of an ARES
Service Agreement with any ARES pursuant to applicable ICC Regulations. The
fees and expenses of such Person shall be as agreed between the
36
Servicer and such Person from time to time and none of the Grantee, the Note
Issuer, the Indenture Trustee, the Holders or any other Person shall have any
responsibility therefor or right or claim thereto. No such appointment shall
constitute a Servicer resignation under Section 6.05.
SECTION 6.10. NO SERVICER ADVANCES. The Servicer shall not make any
advances of interest or principal on the Notes.
SECTION 6.11. REMITTANCES.
(a) Subject to clause (b) below, on each Servicer Business Day, the
Servicer shall remit to the General Subaccount of the Collection Account the
total IFC Payments collected by the Servicer from or on behalf of Customers on
the second preceding Servicer Business Days (the "Daily Remittance"), which
Daily Remittance shall be determined according to the procedures set forth in
Annex I. Prior to each remittance to the General Subaccount of the Collection
Account pursuant to this Section, the Servicer shall provide written notice to
the Indenture Trustee of each such remittance (including the exact dollar amount
to be remitted).
(b) Notwithstanding the foregoing clause (a), unless a Servicer Default
has occurred and is continuing or if the Rating Agency Condition is not
satisfied, during any period in which the Servicer maintains a short-term
rating of A-1 or better by Standard & Poor's, P-1 or better by Moody's, (if
rated by Duff & Xxxxxx) D-1 or better by Duff & Xxxxxx and (if rated by Fitch
IBCA) F-1 or better by Fitch IBCA, the Servicer shall no longer be required
to make Daily Remittances, and, in lieu thereof, the Servicer shall, on each
Monthly Remittance Date, cause to be made a wire transfer of immediately
available funds equal to the Aggregate Remittance Amount for the applicable
Billing Period to the General Subaccount of the Collection Account.
37
(c) The Servicer agrees and acknowledges that it holds all IFC Payments
collected by it for the benefit of the Grantee or the Note Issuer, as
applicable, and that all such amounts shall be remitted by the Servicer in
accordance with this Section without any surcharge, fee, offset, charge or other
deduction except for late fees permitted by Section 6.06. The Servicer shall
not make any claim to reduce its obligation to remit all IFC Payments collected
by it in accordance with this Agreement except for late fees permitted by
Section 6.06.
(d) Unless otherwise directed to do so by the Note Issuer, the Servicer
shall be responsible for selecting Eligible Investments in which the funds in
the Collection Account shall be invested pursuant to Section 8.03 of the
Indenture.
SECTION 6.12. COMPLIANCE WITH SERVICING STANDARD; CHANGES IN ICC TARIFFS.
The Servicer shall, with respect to its duties hereunder, comply at all times
with the Servicing Standard, and, so long as any of the Notes are outstanding,
shall not initiate any material changes with respect to its policies and
procedures pertaining to credit (including requirements for deposits from
Customers), billing, collections (including procedures for disconnection of
service for non-payment) and restoration of service after disconnection, and
shall not, except as required by applicable law, initiate any changes in any ICC
tariffs relating to the foregoing which are reasonably likely to materially and
adversely affect the Servicer's ability to make timely recovery of amounts
billed to Customers. Notwithstanding the foregoing, the Servicer may, in its
own discretion, waive any late payment charge or any other fee or charge
relating to delinquent payments, if any, and may waive, vary or modify any terms
of payment of any amounts payable by a Customer, in each case, if such waiver or
action (a) would be in accordance with the Servicer's customary practices or
those of any successor Servicer with respect to comparable assets that it
services for itself, (b) would not
38
materially adversely affect the Holders and (c) would comply with applicable
law. In addition, the Servicer may write off any amounts that it deems
uncollectible in accordance with its customary practices.
ARTICLE VII
DEFAULT
SECTION 7.01. SERVICER DEFAULT. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit in the Collection Account on
behalf of the Grantee any required remittance that shall continue unremedied for
a period of three Business Days after written notice of such failure is received
by the Servicer from the Grantee, the Note Issuer or the Indenture Trustee or
after discovery of such failure by a Responsible Officer of the Servicer; or
(b) any failure on the part of the Servicer or Illinois Power, as the case
may be, duly to observe or to perform in any material respect any other covenant
or agreement of the Servicer or Illinois Power (as the case may be) set forth in
this Agreement (including Section 4.01) or any other Basic Document to which it
is a party, which failure shall (i) materially and adversely affect the rights
of the Holders and (ii) continue unremedied for a period of 30 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 or Illinois Power (as the case may be)
by the Grantee or the Note Issuer or (B) to the Servicer or Illinois Power (as
the case may be) by the Indenture Trustee or by the Holders of Notes evidencing
not less than twenty-five percent (25%) of the Outstanding Amount of the Notes
of all Series; or
39
(c) any representation or warranty made by the Servicer in this Agreement
shall prove to have been incorrect when made, which has a material adverse
effect on the Grantee, the Note Issuer or the Holders and which material adverse
effect continues unremedied for a period of 60 days after the date on which
written notice thereof requiring the same to be remedied, shall have been
delivered to the Servicer by the Grantee, the Note Issuer or the Indenture
Trustee; or
(d) an Insolvency Event occurs with respect to the Servicer or Illinois
Power; then, and in each and every case, so long as the Servicer Default
shall not have been remedied, either the Indenture Trustee, or the Holders of
Notes evidencing not less than twenty-five percent (25%) of the Outstanding
Amount of the Notes of all Series, by notice (a "Termination Notice") then
given in writing to the Servicer (and to the Indenture Trustee if given by
the Holders) may terminate all the rights and obligations (other than the
obligations set forth in Section 6.02 hereof) 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 ICC for
sequestration and payment of revenues arising with respect to the Intangible
Transition Property: (1) the Holders and the Indenture Trustee as
beneficiaries of the lien provided under Section 18-107(c) of the Funding
Law; (2) the Grantee or its assignees; (3) the Note Issuer; or (4) pledges or
transferees of the Intangible Transition Property. On or after the receipt
by the Servicer of a Termination Notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Notes, the
Intangible Transition Property, the IFCs or otherwise, shall, without further
action, pass to and be vested in such successor Servicer as may be appointed
under Section 7.02; and, without limitation, the Indenture Trustee is
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
40
things necessary or appropriate to effect the purposes of such Termination
Notice, whether to complete the transfer of the Intangible Transition
Property Records and related documents, or otherwise. The predecessor
Servicer shall cooperate with the successor Servicer, the Grantee, the Note
Issuer and the Indenture Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the successor Servicer for administration by it of
(i) 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 Intangible Transition Property or the IFCs, and (ii) any and all
Intangible Transition Property Records. All reasonable out-of-pocket costs
and expenses (including attorneys' fees and expenses) incurred in connection
with transferring the Intangible 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.
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 Servicing Fee, until a successor Servicer shall have
assumed in writing the obligations of the Servicer hereunder as described
below. In the event of the Servicer's termination hereunder, the Note Issuer
shall appoint a successor Servicer with the Grantee'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
acceptable to the Grantee and the Note Issuer and provide prompt notice of
such assumption to the Indenture Trustee and the
41
Rating Agencies. If within 30 days after the delivery of the Termination
Notice, the Note Issuer shall not have obtained such a new Servicer, the
Indenture Trustee may petition the ICC 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 and ICC
Regulations to perform the duties of the Servicer, (ii) the Rating Agency
Condition shall have been satisfied and (iii) such Person enters into a
servicing agreement with the Grantee 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 of
all Series may, on behalf of all Holders, waive in writing any default by the
Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to the
Collection Account in accordance with this Agreement, which waiver shall
require the consent of all Holders. 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 Grantee, the Note Issuer, the Indenture Trustee and the Rating
Agencies, promptly after having obtained
42
knowledge thereof, but in no event later than five Business Days thereafter,
written notice in an Officer's 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).
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.01. AMENDMENT.
(a) This Agreement may be amended in writing by the Servicer and the
Grantee with five Business Days' prior written notice given to the Rating
Agencies and the prior written consent of the Indenture Trustee, but without
the consent of any of the Holders or Holders, 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
Holders; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Officer's Certificate delivered to the Grantee, the Note Issuer, the Delaware
Trustee and the Indenture Trustee, adversely affect in any material respect
the interests of any Holder.
This Agreement may also be amended in writing from time to time by the
Servicer and the Grantee with prior written notice given to the Rating
Agencies and the prior written consent of the Indenture Trustee and the prior
written consent of the Holders of Notes evidencing not less than a majority
of the Outstanding Amount of the Notes of all Series, 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
Holders; PROVIDED, HOWEVER, that no such amendment
43
shall (a) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, IFC Collections, or the timing of adjustments to IFCs,
or (b) reduce the aforesaid percentage of the Outstanding Amount of the
Notes, the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes.
Promptly after the execution of any such amendment and the requisite
consents, the Grantee shall furnish written notification of the substance of
such amendment to the Note Issuer, the Indenture Trustee and each of the Rating
Agencies.
It shall not be necessary for the consent of Holders pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.
Prior to its consent to any amendment to this Agreement, the Indenture
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 Indenture Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Indenture Trustee's own rights, duties,
indemnities or immunities under this Agreement or otherwise.
(b) Notwithstanding Section 8.01(a) or anything to the contrary in this
Agreement, the Servicer and the Grantee may amend Annex I to this Agreement in
writing with prior written notice given to the Indenture Trustee and the Rating
Agencies, but without the consent of the Indenture Trustee, any Rating Agency or
any Holder, solely to address changes to the Servicer's method of calculating
IFC Payments received as a result of changes to the Servicer's current
computerized customer information system; PROVIDED that any such amendment shall
not have a material adverse effect on the Holders.
44
SECTION 8.02. MAINTENANCE OF RECORDS. The Servicer shall maintain
accounts and records as to the Intangible Transition Property accurately and
in accordance with its standard accounting procedures and in sufficient
detail to permit reconciliation between IFC Payments received by the Servicer
and IFC Collections from time to time deposited in the Collection Account.
SECTION 8.03. NOTICES. All demands, notices and communications upon
or to the Servicer, the Grantee, the Note Issuer, the Indenture Trustee or
the Rating Agencies under this Agreement shall be in writing and personally
delivered, sent by overnight mail or sent by telecopy or other similar form
of rapid transmission, and shall be deemed to have been duly given upon
receipt (a) in the case of the Servicer, to Illinois Power Company, 000 Xxxxx
00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; (b) in the case of the Grantee, to
Illinois Power Securitization Limited Liability Company, c/o Illinois Power
Company, 000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; (c) in the case of
the Note Issuer, to Illinois Power Special Purpose Trust, c/o First Union
Trust Company, National Association, as Delaware Trustee, One Xxxxxx Square,
000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate
Trust Administration; (d) in the case of the Indenture Trustee, at the
Corporate Trust Office; (e) in the case of Moody's, to Xxxxx'x Investors
Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000; (f) in the case of Standard & Poor's, to Standard & Poor's
Corporation, 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of
Asset Backed Surveillance Department; (g) in the case of Fitch IBCA, to Fitch
IBCA, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention: ABS
Surveillance; or (h) in the case of Duff & Xxxxxx, to Xxxx & Xxxxxx Credit
Rating Co., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Asset-Backed Monitoring Group; or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
45
SECTION 8.04. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 6.03 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 OTHERS. The provisions of this
Agreement are solely for the benefit of the Servicer and the Grantee and, to
the extent provided herein or in the Basic Documents, the Note Issuer, the
Indenture Trustee and the Holders, and 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 Intangible 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.
46
SECTION 8.09. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 8.10. ASSIGNMENTS TO NOTE ISSUER AND INDENTURE TRUSTEE. The
Servicer acknowledges and consents to the assignment of any or all of the
Grantee's rights and obligations hereunder to the Note Issuer pursuant to the
Sale Agreement, and the collateral assignment of any or all of the Note
Issuer's rights and obligations hereunder to the Indenture Trustee pursuant
to the Indenture. The Servicer agrees that the Note Issuer and the Indenture
Trustee, as assignees, shall, subject to the terms of the Basic Documents,
have the right to enforce this Agreement on behalf of the Holders and to
exercise directly all of the Grantee's rights and remedies under this
Agreement (including without limitation, the right to give or withhold any
consents or approvals of the Grantee to be given or withheld hereunder).
After the Grantee transfers its rights and obligations hereunder to the Note
Issuer pursuant to the Sale Agreement, any duty the Servicer owes to the
Grantee and the Note Issuer hereunder shall be fully performed if such duty
is performed for the benefit of the Note Issuer alone. The Note Issuer and
the Indenture Trustee on behalf of the Holders shall all be expressly deemed
third-party beneficiaries of this Agreement.
SECTION 8.11. NONPETITION COVENANTS. Notwithstanding any prior
termination of this Agreement or the Indenture, but subject to the ICC's
right to order the sequestration and payment of revenues arising with respect
to the Intangible Transition Property notwithstanding any bankruptcy,
reorganization or other insolvency proceedings with respect to the debtor,
pledgor or transferor of the Intangible Transition Property pursuant to any
applicable Funding Order or other applicable law, the Servicer shall not,
prior to the date which is one year and one day after the
47
termination of the Indenture, acquiesce, petition or otherwise invoke or
cause the Grantee, the Note Issuer or the Delaware Trustee to invoke or join
with them in provoking the process of any court or governmental authority for
the purpose of commencing or sustaining a case against the Grantee, the Note
Issuer or the Delaware Trustee 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 Grantee,
the Note Issuer or the Delaware Trustee or any substantial part of the
property of the Grantee, the Note Issuer or the Delaware Trustee, or ordering
the winding up or liquidation of the affairs of the Grantee, the Note Issuer
or the Delaware Trustee.
SECTION 8.12. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is acknowledged and
accepted by First Union Trust Company, National Association ("First Union"),
not individually or personally but solely as Delaware Trustee on behalf of
the Note Issuer, and by Xxxxxx Trust and Savings Bank ("Xxxxxx"), not
individually or personally but solely as Indenture Trustee on behalf of the
Holders, in each case in the exercise of the powers and authority conferred
and vested in it, (b) the representations, undertakings and agreements herein
made by the Delaware Trustee on behalf of the Note Issuer, and by the
Indenture Trustee on behalf of the Holders, are made and intended not as
personal representations, undertakings and agreements by First Union and
Xxxxxx, respectively, but are made and intended for the purpose of binding
only the Note Issuer and the Holders, respectively, (c) nothing herein
contained shall be construed as creating any liability on First Union or
Xxxxxx, individually or personally, to perform any covenant either expressed
or implied contained herein, except in their respective capacities as
Delaware Trustee and Indenture Trustee, all such liability, if any, being
expressly waived by the parties who are signatories to this Agreement and by
any Person claiming by, through or under such parties and (d) under no
circumstances shall First Union or Xxxxxx, be
48
personally liable for the payment of any indebtedness or expenses of the Note
Issuer or the Holders, respectively, or be personally liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Delaware Trustee or the Indenture Trustee, respectively,
under this Agreement; PROVIDED, HOWEVER, that this provision shall not
protect First Union or Xxxxxx against any liability that would otherwise be
imposed by reason of willful misconduct, bad faith or gross negligence in the
performance of their respective duties under this Agreement.
SECTION 8.13. FINAL TERMINATION. Except for those obligations which are
expressly provided herein to survive the termination of this Agreement, and
unless this Agreement is previously terminated in accordance with Section 7.01,
the obligations of the Servicer and of the Grantee shall terminate upon the
payment to the Indenture Trustee, and corresponding distribution to the Holders,
of all amounts required to be paid or distributed to them pursuant to this
Agreement, the Notes and the Indenture.
49
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
ILLINOIS POWER SECURITIZATION
LIMITED LIABILITY COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
ILLINOIS POWER COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Acknowledged and Accepted:
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in
its individual capacity but
solely as Delaware Trustee
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
XXXXXX TRUST AND SAVINGS BANK,
not in its individual capacity
but solely as
Indenture Trustee
By:
-----------------------------------
Name:
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Title:
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50
ANNEX I
TO
SERVICING AGREEMENT
The Servicer agrees to comply with the following servicing procedures:
SECTION 1. DEFINITIONS.
(a) Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Servicing Agreement.
(b) Whenever used in this Annex I, the following words and phrases shall
have the following meanings:
"APPLICABLE MDMA" means with respect to each Customer, the meter data
management agent providing meter reading services for that Customer's account.
"BILLED IFCS" means the amounts of IFCs billed to Customers, whether
billed directly to such Customers by the Servicer or indirectly through an
Applicable ARES pursuant to Consolidated ARES Billing.
"CONSOLIDATED ARES BILLING" means the billing option available to
Customers served by an ARES pursuant to which such ARES will be responsible for
billing and collecting all charges to Customers electing such billing option,
including the IFCs, all in accordance with applicable ICC Regulations.
"IFC CUSTOMER CLASS" means the separate classes of Customers for IFC
billing purposes set forth in any Tariffs.
"LEVELIZED PAYMENT PLAN" means a billing plan offered by the Servicer
which, if elected by a Customer, provides for monthly charges to such Customer
on its Bills which are calculated as 1/12th of the amount billed (or which would
have been billed to the Customer based on actual usage) during the preceding
twelve months, with the Customer being charged or credited (as the case may be),
at the time billing to the Customer under the Levelized Payment Plan terminates,
for the difference between the amounts billed to the Customer pursuant to the
Levelized Payment Plan and the amount that would have been billed to the
Customer based on actual usage.
"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.
SECTION 2. DATA ACQUISITION.
(a) INSTALLATION AND MAINTENANCE OF METERS. Except to the extent that an
ARES is responsible for such services pursuant to an ARES Service Agreement, the
Servicer shall cause to
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be installed, replaced and maintained meters in such places and in such
condition as will enable the Servicer to obtain usage measurements for each
Customer at least once every Billing Period.
(b) METER READING. At least once each Billing Period, the Servicer shall
obtain usage measurements from the Applicable MDMA for each Customer; PROVIDED,
HOWEVER, that the Servicer may determine any Customer's usage on the basis of
estimates in accordance with applicable ICC Regulations.
(c) COST OF METERING. Neither the Grantee nor the Note Issuer shall be
obligated to pay any costs associated with the metering duties set forth in this
Section 2, including, but not limited to, the costs of installing, replacing and
maintaining meters, nor shall the Grantee or the Note Issuer be entitled to any
credit against the Servicing Fee for any cost savings realized by the Servicer
or any ARES 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 ICC Regulations) at least once each
Billing Period and shall determine therefrom each Customer's individual IFCs to
be included on such Customer's Xxxx; PROVIDED, HOWEVER, that in the case of
Customers served by an ARES under the Consolidated ARES Billing option, the
Applicable ARES, rather than the Servicer, may determine such Customer's
individual IFCs to be included on such Customer's Bills based on billing factors
provided by the Servicer, and, in such case, the Servicer shall deliver to the
Applicable ARES such billing factors as are necessary for the Applicable ARES to
calculate such Customers' respective IFCs as such charges may change from time
to time pursuant to Adjustments.
SECTION 4. BILLING.
The Servicer shall implement the IFCs as of the Closing Date and shall
thereafter xxxx each Customer or the Applicable ARES for the respective
Customer's outstanding current and past due IFCs accruing through December 31,
2008, or such longer period during which the Notes may remain outstanding, all
in accordance with the following:
(a) FREQUENCY OF BILLS; BILLING PRACTICES. In accordance with the
Servicer's then-existing Servicer Policies and Practices for its own charges, as
such Servicer Policies and Practices may be modified from time to time, the
Servicer shall generate and issue a Xxxx to each Customer, or, in the case of a
Customer who has elected Consolidated ARES Billing, to the Applicable ARES, for
such Customer's respective IFCs once every applicable Billing Period, at the
same time, with the same frequency and on the same Xxxx as that containing the
Servicer's own charges to such Customer or ARES, as the case may be. In the
event that the Servicer makes any material modification to these practices, it
shall notify the Grantee, the Note Issuer, the Indenture Trustee, and the Rating
Agencies prior to the effectiveness of any such modification; PROVIDED, HOWEVER,
that the Servicer may not make any modification that will materially adversely
affect the Holders.
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(b) FORMAT.
(i) Each Xxxx to a Customer shall contain the charge corresponding
to the respective IFCs owed by such Customer for the applicable Billing Period.
The IFCs and related credits shall each appear as a separate line-item on each
Xxxx.
(ii) In the case of each Customer that has elected Consolidated ARES
Billing, the Servicer shall deliver to the Applicable ARES itemized charges for
such Customer setting forth such Customer's IFCs and related credits, each as a
separate line-item.
(iii) The Servicer shall conform to such requirements in respect of
the format, structure and text of Bills delivered to Customers and ARES as
applicable ICC Regulations shall from time to time prescribe. To the extent
that Xxxx format, structure and text are not prescribed by the Public Utilities
Act or by applicable ICC Regulations, the Servicer shall, subject to clauses (i)
and (ii) above, determine the format, structure and text of all Bills in
accordance with its reasonable business judgment, its Servicer Policies and
Practices with respect to its own charges and prevailing industry standards.
(c) ALLOCATIONS OF IFCS. IFCs and related credits shall be deducted from
all amounts constituting Applicable Rates and from all charges to Customers from
which IFCs must be deducted pursuant to the Funding Orders, whether or not such
Applicable Rates or charges are computed on a cents per kilowatt hours basis,
according to some other usage-based calculation, on a fixed basis, or in any
other fashion or by any combination of the foregoing. If the IFC calculated for
any Customer for any Billing Period exceeds the amount of its otherwise
Applicable Rates, then the Xxxx to such Customer shall reflect an IFC and
related credit each equal to the total amount of such Applicable Rates.
(d) DELIVERY. 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 followed by the Servicer with respect to its own charges
to its customers or (ii) by any other means, whether electronic or otherwise,
that the Servicer may from time to time use to present its own charges to its
customers. In the case of Customers that have elected Consolidated ARES
Billing, the Servicer shall deliver all Bills to the Applicable ARES by such
means as are prescribed by applicable ICC Regulations, or if not prescribed by
applicable ICC Regulations, by such means as are mutually agreed upon by the
Servicer and the Applicable ARES and are consistent with ICC Regulations. The
Servicer or an ARES, as applicable, shall pay from its own funds all costs of
issuance and delivery of all Bills, including but not limited to printing and
postage costs as the same may increase or decrease from time to time.
SECTION 5. CUSTOMER SERVICE FUNCTIONS.
The Servicer shall handle all Customer inquiries and other Customer service
matters according to the same procedures it uses to service Customers with
respect to its own charges.
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SECTION 6. COLLECTIONS; PAYMENT PROCESSING; REMITTANCE.
(a) COLLECTION EFFORTS, POLICIES, PROCEDURES.
(i) The Servicer shall use reasonable efforts to collect all Billed
IFCs from Customers and Third-Party Collectors (including ARES) as and when the
same become due and shall follow such collection procedures as it follows with
respect to comparable assets that it services for itself or others, including
with respect to the following:
(A) The Servicer shall prepare and deliver overdue notices to
Customers and ARES in accordance with applicable ICC
Regulations and Servicer Policies and Practices.
(B) The Servicer shall apply late payment charges to outstanding
Customer and ARES balances in accordance with applicable ICC
Regulations. All late payment charges and interest collected
shall be payable to and retained by the Servicer as a component
of its compensation under the Agreement, and the Note Issuer
shall have no right to share in the same.
(C) The Servicer shall deliver verbal and written final notices of
delinquency and possible disconnection in accordance with
applicable ICC Regulations and Servicer Policies and Practices.
(D) The Servicer shall adhere to and carry out disconnection
policies in accordance with the Public Utilities Act and
applicable ICC Regulations and Servicer Policies and Practices.
(E) The Servicer may employ the assistance of collection agents to
collect any past-due IFCs in accordance with the applicable ICC
regulations and Servicer Policies and Practices and the
Tariffs.
(F) The Servicer shall apply Customer and ARES deposits to the
payment of delinquent accounts in accordance with applicable
ICC Regulations and Servicer Policies and Practices and
according to the priorities set forth in Section 6(b)(ii),
(iii) and (iv) of this Annex I.
(ii) The Servicer shall not waive any late payment charge or any
other fee or charge relating to delinquent payments, if any, or waive, vary or
modify any terms of payment of any amounts payable by a Customer, in each case
unless such waiver or action: (A) would be in accordance with the Servicer's
customary practices or those of any successor Servicer with respect to
comparable assets that it services for itself and for others; (B) would not
materially adversely affect the rights of the Holders; and (C) would comply with
applicable law; PROVIDED, HOWEVER, that notwithstanding anything in the
Agreement or this Annex I to the contrary, the Servicer is authorized
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to write off any Billed IFCs, in accordance with its Servicer Policies and
Practices, that have remained outstanding for 180 days or more.
(iii) The Servicer shall accept payment from Customers and
Third-Party Collectors in respect of Billed IFCs in such forms and methods
and at such times and places as it accepts for payment of its own charges.
The Servicer shall accept payment from ARES in respect of Billed IFCs in such
forms and methods and at such times and places as the Servicer and each ARES
shall mutually agree in accordance with applicable ICC Regulations, and the
Servicer shall give prompt written notice to the Rating Agencies of any such
agreements.
(b) PAYMENT PROCESSING; ALLOCATION; PRIORITY OF PAYMENTS.
(i) The Servicer shall post all payments received to Customer
accounts as promptly as practicable, and, in any event, substantially all
payments shall be posted no later than (A) one Servicer Business Day after
receipt by the Servicer if payment is made directly to the Servicer by a
Customer, (B) two Servicer Business Days after receipt by a Thirty-Party
Collector (other than an ARES or another electric utility) acting as agent for
the Servicer, or (C) two Servicer Business Days after receipt by the Servicer
from an ARES or another electric utility.
(ii) Subject to clause (iii) below, the Servicer shall apply
payments received to each Customer's or Applicable ARES' account in proportion
to the charges contained on the outstanding Xxxx to such Customer or Applicable
ARES.
(iii) Any amount collected by the Servicer that represent partial
payments of the total Xxxx to a Customer or ARES shall be allocated to amounts
owed to the Note Issuer and Illinois Power, regardless of age, pro rata in
proportion to their respective percentages of the total amount of their combined
outstanding charges on such Xxxx.
(iv) The Servicer shall hold all over-payments for the benefit of
the Note Issuer and Illinois Power and shall apply such funds to future Xxxx
charges in accordance with clauses (ii) and (iii) above as such charges become
due.
(v) For Customers on a Levelized Payment Plan, the Servicer shall
treat IFC Payments received from such Customers as if such Customers had been
billed for their respective IFCs in the absence of the Levelized Payment Plan;
partial payment of a Levelized Payment Plan payment shall be allocated according
to clause (iii) above and overpayment of a Levelized Payment Plan payment shall
be allocated according to clause (iv) above.
(c) ACCOUNTS; RECORDS.
The Servicer shall maintain accounts and records as to the Intangible
Transition Property accurately and in accordance with its standard accounting
procedures and in sufficient detail (i) to permit reconciliation between
payments or recoveries with respect to the Intangible Transition Property and
the amounts from time to time remitted to the Collection Account in respect
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of the Intangible Transition Property and (ii) to permit the IFC Collections
held by the Servicer to be accounted for separately from the funds with which
they may be commingled, so that the dollar amounts of IFC Collections commingled
with the Servicer's funds may be properly identified and traced.
(d) INVESTMENT OF IFC PAYMENTS RECEIVED.
Prior to remittance on the applicable Monthly Remittance Date (or, to
the extent remittances are required more frequently under the Indenture, prior
to each Daily Remittance) the Servicer may invest IFC Payments received at its
own risk and for its own benefit, and such investments and, so long as the
Servicer complies with its obligations under the immediately preceding section
(c), such funds shall not be required to be segregated from the other investment
and funds of the Servicer.
(e) CALCULATION OF COLLECTIONS
(i) For purposes of Section 6.11 of the Agreement and Section 6(g)
of this Annex, the IFC Payments collected by the Servicer on any Servicer
Business Day shall be the sum of (A) the IFC Payments posted to Customer
accounts of the Servicer on the second preceding Servicer Business Day in
accordance with Section 6(b) of this Annex and (B) any Allocable IFC Revenue
Amounts, determined in accordance with Section 6(f) of this Annex, received by
the Servicer on such second preceding Servicer Business Day.
(ii) All calculations of collections shall be made in good faith.
(f) ALLOCABLE IFC REVENUE AMOUNTS
(i) The Servicer shall monitor Illinois Power's receipt of any
fixed payments of transition charges under Section 16-108(h) of the Public
Utilities Act, and shall, concurrently with such receipt, set aside and allocate
for the benefit of the Grantee and the Note Issuer, as proceeds of the
Intangible Transition Property, an amount with respect to each Customer equal to
the product of (a) the IFC which is then in effect for such Customer at the time
of receipt TIMES (b) the total number of kilowatt-hours utilized to compute the
amount of such fixed transition charges.
(ii) The Servicer shall monitor Illinois Power's receipt of any
revenues derived from condemnation proceedings or FERC stranded cost recoveries
or any other amounts which reflect compensation for lost revenues which would
otherwise have been attributable to Applicable Rates (collectively, "LOST
REVENUE RECOVERIES"), and shall, concurrently with the receipt thereof, set
aside and allocate for the benefit of the Grantee and the Note Issuer, as
proceeds of the Intangible Transition Property, an amount equal to (a) the total
dollar amount of such Lost Revenue Recoveries TIMES (b) a fraction, (1) the
numerator of which equals the weighted average of the IFCs applicable to all
classes of Customers the revenues from which are included in the calculation of
such Lost Revenue Recoveries and (2) the denominator of which equals the
weighted average of the Applicable Rates charged to such Customers, with such
weighted averages to be in each case calculated based
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on the respective IFCs and Applicable Rates applicable to such classes for the
most recent calendar year then ended.
(iii) All amounts set aside pursuant this Section 6(f) shall
constitute Allocable IFC Revenue Amounts, shall comprise part of the Intangible
Transition Property, and shall be remitted to the Indenture Trustee in
accordance with the other provisions of this Servicing Agreement and the
Indenture.
(g) REMITTANCES.
(i) The Note Issuer shall cause to be established the Collection
Account in the name of the Indenture Trustee in accordance with the Indenture.
(ii) The Servicer shall make remittances to the Collection Account
in accordance with Section 6.11 of the Agreement.
(iii) In the event of any change of account or change of institution
affecting the Collection Account, the Note Issuer shall provide written notice
thereof to the Servicer by the earlier of: (A) five Business Days from the
effective date of such change, or (B) five Business Days prior to the next
Monthly Remittance Date, if any.
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