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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 1, 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 and Monitoring of Third-Party Collectors .12
SECTION 4.01. Adjustments . . . . . . . . . . . . . . . . . . . . .12
SECTION 4.02. Limitation of Liability . . . . . . . . . . . . . . .16
SECTION 4.03. Monitoring of Third-Party Collectors. . . . . . . . .17
ARTICLE V
The Intangible Transition Property . . . . . . . . . . . . . . . . . . . .22
SECTION 5.01. Custody of Intangible Transition
Property Records . . . . . . . . . . . . . . . .22
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. . . . . . . . . . .26
SECTION 5.06. General Indemnification of Indenture
Trustee and Delaware Trustee . . . . . . . . . .27
ARTICLE VI
The Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 6.01. Representations and Warranties of Servicer. . . . . .27
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SECTION 6.02. Indemnities of Servicer; Release of Claims. . . . . .31
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. . . . . . . . . . . . .33
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. . . . . . . . . . . . . . . . . . . . . . .47
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 1,
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 I
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.
"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.
"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.
7
(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
8
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,
9
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 of
the 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 Closing Date until June 30,
1999) and
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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 Closing Date 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 Closing Date 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 Indenture
11
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
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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
23
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 Property 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
calculated and adjusted in accordance with the provisions hereof and that such
amounts as so adjusted from time to time 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.
30
SECTION 6.02. INDEMNITIES OF SERVICER; RELEASE OF CLAIMS.
(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
31
for any grant of Intangible Transition Property to the Grantee), the Servicer
releases and discharges 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 6.03. 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
32
of Counsel either (A) stating that, in the opinion of such counsel, all
filings to be made by the 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 and (iv) the Servicer shall have given
the Rating Agencies prior written notice of such merger or consolidation.
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. Subject to the provisions of
Sections 6.03, Illinois Power shall not resign from the obligations and duties
hereby imposed on it as Servicer
33
under this Agreement unless either (a) the Servicer determines that the
performance 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. Illinois Power shall not terminate the
Administration Agreement prior to the repayment in full of all Notes.
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
34
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 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
35
noncompliance with any law that the Servicer is contesting in good faith in
accordance with its customary standards and procedures.
SECTION 6.08. ACCESS TO CERTAIN RECORDS AND INFORMATION REGARDING
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
36
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 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 or accompanying 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
37
transfer of immediately available funds equal to the Aggregate Remittance
Amount for the applicable Billing Period to the General Subaccount of the
Collection Account.
(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 instructed in writing by the Note Issuer, the
Servicer, on behalf of the Note Issuer, 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
38
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 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
39
evidencing not less than twenty-five percent (25%) of the Outstanding Amount
of the Notes of all Series; or
(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 the Rating Agencies (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,
40
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 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
41
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 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
42
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 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
43
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 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
44
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.
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
45
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.
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.
46
SECTION 8.08. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 8.09. GOVERNING LAW. This Agreement shall be construed in
accordance with the 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
47
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 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
48
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 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 COMPANY
By: Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President - Finance
ILLINOIS POWER SECURITIZATION
LIMITED LIABILITY COMPANY,
Grantee
By: /s/ Xxxx X. Xxxxxx
----------------------------
Name: Xxxx X. Xxxxxx
Title: Manager
Acknowledged and Accepted:
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Delaware Trustee
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Name Xxxxx X. Xxxxx
---------------------------------------
Title: Vice President
---------------------------------------
XXXXXX TRUST AND SAVINGS BANK,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ E. Xxx Xxxxxxxxx
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Name: E. Xxx Xxxxxxxxx
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Title: Vice President
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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 Servicer shall make
remittances to the new account or institution only upon at least five Business
Days prior notice of such change from the Note Issuer.
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