Common use of Servicer Default Clause in Contracts

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Consumers Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy CarolinasConsumers Energy, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasConsumers Energy, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor ServicerConsumers Energy, as the case may be, by the Issuer, the Commission Issuer (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasConsumers Energy, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerServicer or Consumers Energy; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallmay (if it is actually known by a Responsible Officer of the Indenture Trustee), or shall upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the CommissionSecuritization Bonds, subject to the terms of the Intercreditor AgreementsAgreement, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Securitization Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Securitization Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Securitization Bonds, the Storm Recovery Securitization Property, the Storm Recovery Securitization Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Securitization Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Securitization Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Securitization Property or the Storm Recovery Securitization Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Securitization Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Securitization Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements Agreement to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Consumers Energy Carolinas as Servicer shall not terminate Duke Energy CarolinasConsumers Energy’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: (a1) any failure by the Servicer (i) to remit deliver to the Indenture Trustee or the Indenture Administrator, as the case may be, for deposit in the Trust Accounts any payment required by the Basic Documents to which the Servicer is a signatory or (ii) in the event that daily deposits into the Collection Account on behalf are not required, to deliver to the Administrator any payment required by the Basic Documents, which failure in case of the Issuer any required remittance that shall continue either clause (i) or (ii) continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer Owner Trustee, the Indenture Trustee, the Indenture Administrator or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) Administrator or five Business Days after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b2) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants other term, covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it the Servicer is a partysignatory, which failure shall (i) materially and adversely affect the rights of the Holders Indenture Trustee, on behalf of the Noteholders, or the Noteholders and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the Indenture Trustee, the Indenture Administrator, the Eligible Lender Trustee or the Administrator or (B) to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy and to the Indenture Trustee) , the Indenture Administrator and the Eligible Lender Trustee by the Noteholders representing at least a majority of the Outstanding Amount of the Notes; provided, however, that any breach of Sections 3.1, 3.2, 3.3 or to 3.4 shall not be deemed a Servicer Default so long as the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform in compliance with its repurchase and reimbursement obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer3.5; or (e3) an Insolvency Event occurs with respect to the Servicer; or (4) any failure by the Servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a third-party servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallor the Indenture Administrator, upon receiving or the written instruction Noteholders of either (i) Holders Notes evidencing at least a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Servicer (and to the Indenture Trustee, the Indenture Administrator and the Owner Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 3.5 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed4.2) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction Agreement. As of the Commission unless effective date of termination of the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination NoticeServicer, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, Notes or the Storm Recovery Property, the Storm Recovery Charges Trust Student Loans or otherwise, shall, without further action, pass to and be vested in the Indenture Administrator or such Successor Servicer successor servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise5.2. The predecessor Servicer shall cooperate with the Successor Servicersuccessor servicer, the Issuer Indenture Administrator and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer successor servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesa Trust Student Loan. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses, including, without limitation, any costs or expenses (including reasonable attorneys’ associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the successor servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the successor servicer to service the Trust Student Loans properly and effectively, costs reasonably allocable to specific employees and overhead, legal fees and expenses) , accounting and financial consulting fees and expenses, costs or expenses associated with the transfer of all servicing files and costs of amending the Agreement, if necessary, incurred in connection with transferring the Storm Recovery Property Records Trust Student Loan Files to the Successor Servicer successor servicer and amending this Servicing Agreement and the Intercreditor Agreements any other Basic Documents to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer (other than the Indenture Administrator acting as the Servicer under this Section 5.1) upon presentation of reasonable documentation of such costs and expenses. Termination If the predecessor Servicer (other than the Indenture Administrator) does not pay such reimbursement within thirty (30) days of Duke Energy Carolinas as its receipt of an invoice therefor, such reimbursement shall be an expense of the Issuer and the successor servicer shall be entitled to receive such reimbursement from amounts on deposit in the Collection Account. Upon receipt of notice of the occurrence of a Servicer Default, the Owner Trustee shall not terminate Duke Energy Carolinas’s rights or obligations under give notice thereof to the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Rating Agencies.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Consumers Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy CarolinasConsumers Energy, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasConsumers Energy, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor ServicerConsumers Energy, as the case may be, by the Issuer, the Commission Issuer (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasConsumers Energy, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerServicer or Consumers Energy; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallmay (if a Responsible Officer of the Indenture Trustee has received written notice of such Servicer Default), or shall upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the CommissionSecuritization Bonds, subject to the terms of the Intercreditor AgreementsAgreement, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law Statute (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Securitization Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Securitization Bonds, the Storm Recovery Securitization Property, the Storm Recovery Securitization Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Securitization Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Securitization Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Securitization Property or the Storm Recovery Securitization Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Securitization Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Securitization Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements Agreement to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Consumers Energy Carolinas as Servicer shall not terminate Duke Energy CarolinasConsumers Energy’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five (5) Business Days after the earlier of the date on which (i) written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt is received by the Servicer to the Commissionand (ii) or after discovery of such failure is actually known by a Responsible Officer of the Servicer;; or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in clause (a) of this Section 7.01(a) or Section 7.01(c)7.01) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue unremedied for a period of 60 sixty (60) days after the earlier of the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Servicer by the Issuer, Issuer or the Commission (in each case, with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or and (B) such failure is discovered actually known by a Responsible Officer of the Servicer;; or (c) any failure in any material respect by the Servicer duly to perform its obligations under Section 4.01(b) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five (5) Business Days;; or (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a any material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 sixty (60) days after the earlier of the date on which (iA) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer Issuer, the Indenture Trustee, or the Indenture Trustee Commission (with a copy of such notice being provided promptly upon receipt by the Servicer to the CommissionIndenture Trustee), or (iiB) such failure is discovered actually known by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shallTrustee, acting under the Indenture may, or, upon receiving the written instruction of either (i) the Holders evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) and the Commission, subject to the terms written instruction of the Intercreditor AgreementsCommission (acting on behalf of Customers), shall, in each case by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations of the Servicer under this Agreement (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) ). The appointment of any successor Servicer shall be subject to the terms and provisions of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law Act (or any of their representatives) shall be entitled to (i) apply to the Commission or a the court of appropriate jurisdiction for an order Franklin County, Kentucky, for sequestration and payment of revenues arising with respect to the Storm Cost Recovery Property, (ii) foreclose on or otherwise enforce the lien and security interests in any Cost Recovery Property and (iii) exercise any other rights and remedies available to the Holders and the Indenture Trustee under the Act or under any other applicable law. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Cost Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Cost Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Cost Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Cost Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Cost Recovery Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ attorney’s fees and expenses) incurred in connection with transferring the Storm Cost Recovery Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Kentucky Power as Servicer shall not terminate Duke Energy CarolinasKentucky Power’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any In case one or more of the following events of default by the Servicer (each, a “"Servicer Default”") shall occur and be continuing, that is to say: (ai) any failure by the Servicer to remit to the Collection Account on behalf Trustee any payment required to be made under the terms of this Agreement which continues unremedied for a period of three Business Days; or (ii) failure duly to observe or perform in any material respect any other of the Issuer any required remittance that shall covenants or agreements set forth in this Agreement, the breach of which has a material adverse effect and which continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 sixty days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Servicer by the IssuerTrustee; or (iii) a decree or order of a court or agency or supervisory authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the Commission winding-up or liquidation of its affairs, shall have been entered against the Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of sixty days; or (with a copy iv) the Servicer shall consent to the Indenture Trustee) appointment of a conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee of or (B) such failure is discovered by a Responsible Officer relating to all or substantially all of the Servicer;its property; or (cv) the Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any failure applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations; or (vi) the Servicer attempts to assign its right to servicing compensation hereunder (other than any payment by the Servicer duly of any portion of the Servicing Fee to the Seller as provided in a separate side letter between the Seller and the Servicer) or the Servicer attempts to sell or otherwise dispose of all or substantially all of its property or assets or to assign this Agreement or the servicing responsibilities hereunder or to delegate its duties hereunder or any portion thereof except, in each case as otherwise permitted herein; or (vii) the Servicer ceases to be qualified to transact business in any jurisdiction where it is currently so qualified, but only to the extent such non-qualification materially and adversely affects the Servicer's ability to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation hereunder; or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, and in each and every such case, so long as the a Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsTrustee, by notice then given in writing to the Servicer (and shall with respect to the Indenture Trustee if given a payment default by the HoldersServicer pursuant to Section 8.01(i) (a “Termination Notice”)and, upon the occurrence and continuance of any other Servicer Default, may, and, at the written direction of Certificateholders evidencing not less than 25% of the Voting Rights shall, in addition to whatever rights the Trustee on behalf of the Certificateholders may have under Section 7.03 and at law or equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under in and to the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders Mortgage Loans and the Indenture Trustee as financing parties under proceeds thereof without compensating the Storm Recovery Law (or any of their representatives) shall be entitled to apply to Servicer for the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Propertysame. On or after the receipt by the Servicer of a Termination Noticesuch written notice, all authority and power of the Servicer under this Servicing Agreement, Agreement whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges Mortgage Loans or otherwise, shall, without further action, shall pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitationthe Trustee. Upon written request from the Trustee, the Indenture Trustee is hereby authorized and empowered to Servicer shall prepare, execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, place in the Trustee's possession all Mortgage Files relating to the related Mortgage Loans, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Noticenotice of termination, whether to complete the transfer and endorsement or assignment of the Storm Recovery Property Records Mortgage Loans and related documents, or otherwise, at the Servicer's sole expense. The predecessor defaulting Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the its responsibilities and rights of the predecessor Servicer under this Servicing Agreementhereunder including, including without limitation, the transfer to the Successor Servicer such successor for administration by it of all Storm Recovery Property Records and all cash amounts that which shall at the time be held credited by the predecessor defaulting Servicer for remittance, to the Custodial Account or shall Escrow Accounts or thereafter be received by it with respect to the Storm Recovery Mortgage Loans or any related REO Property (provided, however, that the defaulting Servicer shall continue to be entitled to receive all amounts accrued or owing to it under this Agreement on or prior to the Storm Recovery Charges. As soon as practicable after receipt by the Servicer date of such Termination Noticetermination, the Servicer whether in respect of Advances, Servicing Advances, accrued and unpaid Servicing Fees or otherwise, and shall deliver the Storm Recovery Property Records continue to be entitled to the Successor Servicerbenefits of Section 7.04, notwithstanding any such termination, with respect to events occurring prior to such termination). In case a Successor Servicer is appointed as a result The Trustee shall not have knowledge of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring Default unless a Responsible Officer of the Storm Recovery Property Records to the Successor Trustee has actual knowledge or unless written notice of any Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid Default is received by the predecessor Servicer upon presentation of reasonable documentation of Trustee at its Corporate Trust Office and such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights notice references the Certificates, the Trust Fund or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)this Agreement.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a1) any failure by the Servicer (i) to remit deliver to the Indenture Trustee or the Indenture Administrator, as the case may be, for deposit in the Trust Accounts any payment required by the Basic Documents to which the Servicer is a signatory or (ii) in the event that daily deposits into the Collection Account on behalf are not required, to deliver to the Administrator any payment required by the Basic Documents, which failure in case of the Issuer any required remittance that shall continue either clause (i) or (ii) continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer Owner Trustee, the Indenture Trustee, the Indenture Administrator or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) Administrator or five Business Days after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b2) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants other term, covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it the Servicer is a partysignatory, which failure shall (i) materially and adversely affect the rights of the Holders Indenture Trustee, on behalf of the Noteholders, or the Noteholders and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the Indenture Trustee, the Indenture Administrator, the Eligible Lender Trustee or the Administrator or (B) to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy and to the Indenture Trustee) , the Indenture Administrator and the Eligible Lender Trustee by the Noteholders representing at least a majority of the Outstanding Amount of the Notes; provided, however, that any breach of Sections 3.1, 3.2, 3.3 or to 3.4 shall not be deemed a Servicer Default so long as the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform in compliance with its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer3.5; or (e3) an Insolvency Event occurs with respect to the Servicer; or (4) any failure by the Servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a third-party servicer; or (5) any failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification or accountants' letter when and as required under Article VII (including, without limitation, any failure by the Servicer to identify any Subcontractor "participating in the servicing function" within the meaning of Item 1122 of Regulation AB), which continues unremedied for fifteen (15) calendar days after the date on which such information, report, certification or accountants' letter was required to be delivered; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallor the Indenture Administrator, upon receiving or the written instruction Noteholders of either (i) Holders Notes evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Servicer (and to the Indenture Trustee, the Indenture Administrator and the Owner Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 3.5 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed4.2) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction Agreement. As of the Commission unless effective date of termination of the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination NoticeServicer, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, Notes or the Storm Recovery Property, the Storm Recovery Charges Trust Student Loans or otherwise, shall, without further action, pass to and be vested in the Indenture Administrator or such Successor Servicer successor servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise5.2. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer successor servicer and the Indenture Trustee Administrator in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer successor servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesa Trust Student Loan. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses, including, without limitation, any costs or expenses (including reasonable attorneys’ associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the successor servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the successor servicer to service the Trust Student Loans properly and effectively, costs reasonably allocable to specific employees and overhead, legal fees and expenses) , accounting and financial consulting fees and expenses, costs or expenses associated with the transfer of all servicing files and costs of amending the Agreement, if necessary, incurred in connection with transferring the Storm Recovery Property Records Trust Student Loan Files to the Successor Servicer successor servicer and amending this Servicing Agreement and the Intercreditor Agreements any other Basic Documents to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer (other than the Indenture Administrator acting as the Servicer under this Section 5.1) upon presentation of reasonable documentation of such costs and expenses. Termination If the predecessor Servicer (other than the Indenture Administrator) does not pay such reimbursement within thirty (30) days of Duke Energy Carolinas as its receipt of an invoice therefor, such reimbursement shall be an expense of the Issuer and the successor servicer shall be entitled to receive such reimbursement from amounts on deposit in the Collection Account. Upon receipt of notice of the occurrence of a Servicer Default, the Issuer shall give notice thereof to the Indenture Trustee and the Rating Agencies. Notwithstanding the foregoing, the Servicer shall not terminate Duke Energy Carolinas’s rights or be deemed to have breached its obligations to service the Trust Student Loans, nor will a Servicer Default be deemed to have occurred under the Sale Agreement (except rights thereunder deriving from its rights as this Section 5.1, if the Servicer hereunderis rendered unable to perform such obligations, in whole or in part, by a force outside the control of the parties hereto (including, without limitation, acts of God, acts of war or terrorism, fires, earthquakes, hurricanes, floods and other material natural or man made disasters); provided, that the Servicer shall be required to diligently undertake all actions necessary to resume the performance of its duties hereunder as soon as practicable following the termination of such business interruption or, if necessary and appropriate in its reasonable judgment to enable the proper servicing of the Trust Student Loans, to transfer servicing, either temporarily or permanently, to another servicer.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas VEPCO or an Affiliate thereof, any failure on the part of Duke Energy CarolinasVEPCO, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasVEPCO, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor ServicerVEPCO, as the case may be, by the Issuer, the Commission Issuer (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission)Trustee, or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerServicer or VEPCO; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) the Holders evidencing of a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsDeferred Fuel Cost Bonds, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law Deferred Fuel Cost Statute (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Deferred Fuel Cost Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Deferred Fuel Cost Bonds, the Storm Recovery Deferred Fuel Cost Property, the Storm Recovery Charges Deferred Fuel Cost Charge or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Deferred Fuel Cost Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Deferred Fuel Cost Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Deferred Fuel Cost Property or the Storm Recovery ChargesDeferred Fuel Cost Charge. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Deferred Fuel Cost Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable fees, costs and expenses (including reasonable attorneys’ fees and expensesexpenses and any court costs) incurred in connection with transferring the Storm Recovery Deferred Fuel Cost Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid and/or reimbursed by the predecessor Servicer upon presentation of reasonable documentation of such fees, costs and expenses. Termination of Duke Energy Carolinas VEPCO as Servicer shall not terminate Duke Energy CarolinasVEPCO’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas Progress or an Affiliate thereof, any failure on the part of Duke Energy CarolinasProgress, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasProgress, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Servicer or Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor ServicerProgress, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasProgress, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerServicer or Duke Energy Progress; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) by the Commission, subject to the terms of the Intercreditor AgreementsAgreement, by (ii) notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor AgreementsAgreement; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements Agreement to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Progress as Servicer shall not terminate Duke Energy CarolinasProgress’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: (a) any failure by the Servicer to remit deliver to the Collection Account on behalf Trustee for deposit in any of the Issuer Trust Accounts or the Certificate Distribution Account any required remittance payment or to direct the Trustee to make any required distributions therefrom that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer Owner Trustee or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible an Authorized Officer of the Servicer;; or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyDocument, which failure shall (i) materially and adversely affect the rights of either the Holders Certificateholders or Noteholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture TrusteeA) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Owner Trustee or the Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy and to the Indenture Trustee) Owner Trustee and the Trustee by the Issuer Holders of Notes evidencing not less than 25% of the Outstanding Amount of the Notes or Holders of Certificates evidencing not less than 25% of the Indenture Trustee outstanding Certificate Balance, as applicable (with a copy or for such longer period, not in excess of 120 days, as may be reasonably necessary to remedy such notice being default; provided promptly upon receipt by that such default is capable of remedy within 120 days and the Servicer delivers an Officers' Certificate to the CommissionOwner Trustee and the Trustee to such effect and to the effect that the Servicer has commenced or will promptly commence, and will diligently pursue, all reasonable efforts to remedy such default), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (ec) an Insolvency Event occurs with respect to the ServicerServicer or any successor; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallTrustee, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing a majority not less than 25% of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Servicer and the Owner Trustee (and to the Indenture Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed7.2) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery PropertyAgreement. On or after the receipt by the Servicer of a Termination Noticesuch written notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery BondsNotes, the Storm Recovery Property, Certificates or the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in the Trustee or such Successor successor Servicer as may be appointed under Section 7.028.2; and, without limitation, the Indenture Trustee is and the Owner Trustee are hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Noticenotice of termination, whether to complete the transfer and endorsement of the Storm Recovery Property Records Receivables and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer Trustee and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesa Receivable. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ fees and expenses' fees) incurred in connection with transferring the Storm Recovery Property Records Receivable Files to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination Upon receipt of Duke Energy Carolinas as notice of the occurrence of a Servicer Default, the Owner Trustee shall not terminate Duke Energy Carolinas’s rights or obligations under give notice thereof to the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Rating Agencies.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five (5) Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas APCo or an Affiliate thereof, any failure on the part of Duke Energy CarolinasAPCo, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasAPCo, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(aclause (a) or (c) of this Section 7.01(c)7.01) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue unremedied for a period of 60 sixty (60) days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor ServicerAPCo, as the case may be, by the Issuer, the Commission Issuer (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasAPCo, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer an officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days;(5) days; or (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 sixty (60) days after the date on which (iA) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (iiB) such failure is discovered by a Responsible Officer an officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerServicer or APCo; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallmay (if it is actually known by a Responsible Officer of the Indenture Trustee), or shall upon receiving the written instruction of either (i) Holders evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the CommissionConsumer Rate Relief Bonds, subject to the terms of the any Intercreditor AgreementsAgreement, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the any Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Securitization Law (or any of their representatives) shall be entitled to (i) apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery CRR Property, (ii) foreclose on or otherwise enforce the lien and security interests in any CRR Property and (iii) apply to the Commission for an order that amounts arising from the CRR Charges be transferred to a separate account for the benefit of the Secured Parties, in accordance with the Securitization Law. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Consumer Rate Relief Bonds, the Storm Recovery CRR Property, the Storm Recovery CRR Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery CRR Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery CRR Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery CRR Property or the Storm Recovery CRR Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery CRR Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ attorney’s fees and expenses) incurred in connection with transferring the Storm Recovery CRR Property Records to the Successor successor Servicer and amending this Servicing Agreement and the any Intercreditor Agreements Agreement to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas APCo as Servicer shall not terminate Duke Energy CarolinasAPCo’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur occurs and be is continuing: (a) any failure by the Servicer to remit to the Collection Account Trustee, on behalf of the Issuer Issuer, any required remittance that shall continue continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Trustee; or (b) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyAgreement, which failure shall failure: (i) materially and adversely affect affects the Transferred Securitization Property or the rights of the Holders and Securitization Bondholders, and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have failure has been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Servicer by the Issuer, the Commission (with a copy to the Indenture Trustee) Issuer or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) after discovery of such failure is discovered by a Responsible Officer an officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove proves to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Issuer or the Securitization Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have thereof has been delivered given to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy or after discovery of such notice being provided promptly upon receipt failure by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer an officer of the Servicer, as the case may be; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shallTrustee, upon receiving with the written instruction consent of either (i) the Holders evidencing of a majority of the Outstanding Amount outstanding principal amount of the Storm Recovery Securitization Bonds or (ii) the Commissionof all Series, but subject to the terms provisions of the Intercreditor AgreementsAgreement, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “"Termination Notice”), ") may terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the obligation under Section 7.02 6.04 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described specified in Section 7.01(a)6.01(a) above, the Holders Issuer and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission MPSC or a any court of appropriate competent jurisdiction for an order for sequestration and payment to the Trustee of revenues arising with respect to the Storm Recovery Transferred Securitization Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Transferred Securitization Property, the Storm Recovery related Securitization Charges or otherwise, shall, upon appointment of a successor Servicer pursuant to Section 6.04, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Securitization Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer Trustee and the Indenture Trustee Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Transferred Securitization Property or the Storm Recovery related Securitization Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Securitization Property Records Documentation to the Successor successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery Securitization Property Records Documentation to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 6.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Consumers as Servicer shall not terminate Duke Energy Carolinas’s Consumers' rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Agreement.

Servicer Default. If any one or more of the following events ----------------- (a “"Servicer Default”") shall occur and be continuing: (a) any failure by the Servicer to remit to deposit in the Collection Account on behalf of the Note Issuer any required remittance that shall continue unremedied for a period of five three Business Days after written notice of such failure is received by the Servicer from the Note Issuer or the Indenture Note Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b) any failure on the part of the Servicer or, so long as or the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy CarolinasSeller, as the case may be, duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or Duke Energy Carolinas, the Seller (as the case may be, ) set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders Noteholders or Certificateholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, the Seller (as the case may be, ) by the Issuer, the Commission Note Issuer or (with a copy to the Indenture TrusteeB) or to the Servicer or Duke Energy Carolinas, the Seller (as the case may be, ) by the Indenture Note Trustee or (B) such failure is discovered by a Responsible Officer the Holders of Notes evidencing not less than 25 percent of the Servicer;Outstanding Amount of the Notes of all Series; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Note Issuer or the Certificateholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Note Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the ServicerNote Trustee; or (ed) an Insolvency Event occurs with respect to the ServicerServicer or the Seller; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallNote Trustee, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing a majority not less than 25 percent of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms Notes of the Intercreditor Agreementsall Series, by notice then given in writing to the Servicer (and to the Indenture Note Trustee if given by the HoldersNoteholders) (a “"Termination Notice”), ") may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointedhereof) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), each of the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) following shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order CPUC for sequestration and payment of revenues arising with respect to the Storm Recovery Transition Property: (1) the Certificateholders and the Certificate Trustee as beneficiary of any statutory lien permitted by the PU Code; (2) the Note Issuer or its assignees; or (3) pledgees or transferees, including transferees under Section 844 of the PU Code, of the Transition Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery BondsNotes, the Storm Recovery Transition Property, the Storm Recovery FTA Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Note Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Transition Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Note Issuer and the Indenture Note Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Transition Property or the Storm Recovery FTA Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery Transition Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more Any of the following events will constitute a default of the Servicer (a “Servicer Default”) shall occur and be continuing: as that term is used herein: (ai) any the failure by in a material respect of the Servicer to remit to the Collection Account on behalf comply with or perform any provision of the Issuer this Agreement or any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement other Related Document (other than as provided in Section 7.01(aany Related Document relating solely to a Segregated Series of Notes), and such default continues for more than thirty (30) or Section 7.01(c)) 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 60 days after the earlier of the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, is delivered by the Issuer, Lessor or the Commission (with a copy to the Indenture Trustee) or Trustee to the Servicer or Duke Energy Carolinasthe Servicer has actual knowledge thereof; (ii) an Event of Bankruptcy occurs with respect to the Servicer; (iii) the failure of the Servicer to make any payment when due from it hereunder or under any of the other Related Documents (other than any Related Document relating solely to a Segregated Series of Notes) or to deposit any Collections received by it into a Collateral Account when required under the Related Documents and, as the case may bein each case, by the Indenture Trustee such failure continues for 5 Business Days; or (Biv) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) if any representation or warranty made by the Servicer in this Servicing Agreement any Related Document (other than any Related Document relating solely to a Segregated Series of Notes) is inaccurate or incorrect or is breached or is false or misleading in any material respect as of the date of the making thereof or any schedule, certificate, financial statement, report, notice, or other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect writing furnished by or on the Holders and which material adverse effect continues unremedied for a period behalf of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), Lessor or the Trustee pursuant to any Related Document (iiother than any Related Document relating solely to a Segregated Series of Notes) such failure is discovered by a Responsible Officer false or misleading in any material respect on the date as of which the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; thenfacts therein set forth are stated or certified, and the circumstance or condition in each and every caserespect of which such representation, so long warranty or writing was inaccurate, incorrect, breached, false or misleading in any material respect, as the Servicer Default case may be, shall not have been remedied, eliminated or otherwise cured for thirty (30) days after the Indenture Trustee shall, upon receiving earlier of (x) the written instruction of either (i) Holders evidencing a majority date of the Outstanding Amount receipt of written notice thereof from the Storm Recovery Bonds Lessor or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing Trustee to the Servicer and (and to y) the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of date the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction learns of the Commission unless the Rating Agency Condition is satisfiedsuch circumstance or condition. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result event of a Servicer Default, all reasonable costs and expenses the Lessor shall (including reasonable attorneys’ fees and expensesi) incurred in connection with transferring notify the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation Trustee of such costs and expenses. Termination Servicer Default in accordance with Section 8.8 of Duke Energy Carolinas as Servicer shall not the Base Indenture, (ii) request the direction of the Trustee to terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)in accordance with Section 8.7(c) of the Base Indenture and (iii) request the consent of the Trustee to replace the Servicer in accordance with Section 8.7(c) of the Base Indenture and Section 3.6 of the Collateral Agency Agreement.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerServicer or Duke Energy Carolinas; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) by the Commission, subject to the terms of the Intercreditor AgreementsAgreement, by (ii) notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor AgreementsAgreement; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements Agreement to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a1) any failure by the Servicer (i) to remit deliver to the Indenture Trustee or the Indenture Administrator, as the case may be, for deposit in the Trust Accounts any payment required by the Basic Documents to which the Servicer is a signatory or (ii) in the event that daily deposits into the Collection Account on behalf are not required, to deliver to the Administrator any payment required by the Basic Documents, which failure in case of the Issuer any required remittance that shall continue either clause (i) or (ii) continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer Owner Trustee, the Indenture Trustee, the Indenture Administrator or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) Administrator or five Business Days after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b2) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants other term, covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it the Servicer is a partysignatory, which failure shall (i) materially and adversely affect the rights of the Holders Indenture Trustee, on behalf of the Noteholders, or the Noteholders and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the Indenture Trustee, the Indenture Administrator, the Eligible Lender Trustee or the Administrator or (B) to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy and to the Indenture Trustee) , the Indenture Administrator and the Eligible Lender Trustee by the Noteholders representing at least a majority of the Outstanding Amount of the Notes; provided, however, that any breach of Sections 3.1, 3.2, 3.3 or to 3.4 shall not be deemed a Servicer Default so long as the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform in compliance with its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer3.5; or (e3) an Insolvency Event occurs with respect to the Servicer; or (4) any failure by the Servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a third-party servicer; or (5) any failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification or accountants' letter when and as required under Article VII (including, without limitation, any failure by the Servicer to identify any Subcontractor "participating in the servicing function" within the meaning of Item 1122 of Regulation AB), which continues unremedied for fifteen (15) calendar days after the date on which such information, report, certification or accountants' letter was required to be delivered; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallor the Indenture Administrator, upon receiving or the written instruction Noteholders of either (i) Holders Notes evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Servicer (and to the Indenture Trustee, the Indenture Administrator and the Owner Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 3.5 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed4.2) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction Agreement. As of the Commission unless effective date of termination of the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination NoticeServicer, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, Notes or the Storm Recovery Property, the Storm Recovery Charges Trust Student Loans or otherwise, shall, without further action, pass to and be vested in the Indenture Administrator or such Successor Servicer successor servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise5.2. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer successor servicer and the Indenture Trustee Administrator in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer successor servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesa Trust Student Loan. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses, including, without limitation, any costs or expenses (including reasonable attorneys’ associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the successor servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the successor servicer to service the Trust Student Loans properly and effectively, costs reasonably allocable to specific employees and overhead, legal fees and expenses) , accounting and financial consulting fees and expenses, costs or expenses associated with the transfer of all servicing files and costs of amending the Agreement, if necessary, incurred in connection with transferring the Storm Recovery Property Records Trust Student Loan Files to the Successor Servicer successor servicer and amending this Servicing Agreement and the Intercreditor Agreements any other Basic Documents to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer (other than the Indenture Administrator acting as the Servicer under this Section 5.1) upon presentation of reasonable documentation of such costs and expenses. Termination If the predecessor Servicer (other than the Indenture Administrator) does not pay such reimbursement within thirty (30) days of Duke Energy Carolinas as its receipt of an invoice therefor, such reimbursement shall be an expense of the Issuer and the successor servicer shall be entitled to receive such reimbursement from amounts on deposit in the Collection Account. Upon receipt of notice of the occurrence of a Servicer Default, the Issuer shall promptly give notice thereof to the Indenture Trustee, the Indenture Administrator and the Rating Agencies. Notwithstanding the foregoing, the Servicer shall not terminate Duke Energy Carolinas’s rights or be deemed to have breached its obligations to service the Trust Student Loans, nor will a Servicer Default be deemed to have occurred under the Sale Agreement (except rights thereunder deriving from its rights as this Section 5.1, if the Servicer hereunderis rendered unable to perform such obligations, in whole or in part, by a force outside the control of the parties hereto (including, without limitation, acts of God, acts of war or terrorism, fires, earthquakes, hurricanes, floods and other material natural or man made disasters); provided, that the Servicer shall be required to diligently undertake all actions necessary to resume the performance of its duties hereunder as soon as practicable following the termination of such business interruption or, if necessary and appropriate in its reasonable judgment to enable the proper servicing of the Trust Student Loans, to transfer servicing, either temporarily or permanently, to another servicer.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas Progress or an Affiliate thereof, any failure on the part of Duke Energy CarolinasProgress, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasProgress, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Servicer or Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor ServicerProgress, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasProgress, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer Issuer, the Commission or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerServicer or Duke Energy Progress; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds Bonds, or (ii) by the Commission, subject to the terms of the Intercreditor AgreementsAgreement, by and providing notice then given in writing to the Servicer (and to the Indenture Trustee Commission if such instructions are given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor AgreementsAgreement; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements Agreement to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Progress as Servicer shall not terminate Duke Energy CarolinasProgress’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If The occurrence of any one or more of the following events shall constitute a Servicer default (each, a “Servicer Default”) shall occur and be continuing:): (a) any failure by the Servicer (or, for so long as Conn Appliances is the Servicer, Conn Appliances) to remit make any payment, transfer or deposit under this Agreement or any other Servicer Transaction Document or to provide the Monthly Servicer Report to the Collection Account Indenture Trustee to make such payment, transfer or deposit or any withdrawal on behalf of or before the Issuer any required remittance that shall continue unremedied for a period of date occurring five (5) Business Days after written notice of the date such failure payment, transfer or deposit is received by the Servicer from the Issuer required to be made or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinasgiven, as the case may be, duly under the terms of this Agreement or any other Servicer Transaction Document (or in the case of a payment, transfer, deposit, instruction or notice to observe be made or given with respect to perform any Interest Period, by the related Payment Date); (b) any representation, warranty or statement made by the Servicer in any Servicer Transaction Document or any certificate, report or other writing delivered by the Servicer proves to be incorrect in any material respect any covenants or agreements as of the time when made; provided, if inaccuracy is contained in a Monthly Servicer or Duke Energy CarolinasReport, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is such inaccuracy shall be a party, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue Servicer Default solely if such inaccuracy continues unremedied for a period of 60 days two (2) Business Days after the date on which (A) the Servicer has actual knowledge thereof or on which written notice of such failurethereof, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by on the part of the Servicer (or, for so long as the Servicer is Conn Appliances, Conn Appliances) to duly observe or perform any representation, warranty, covenants or agreements (other than those that are Servicer Defaults pursuant to perform its obligations under another clause of this Section 4.01(b2.06) in of the time and manner Servicer set forth thereinin this Agreement or any other Servicer Transaction Document, which failure continues unremedied for a period of five Business Days; thirty (d30) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) the Servicer has actual knowledge thereof or on which written notice thereof, requiring the same to be remedied, shall have been delivered given to the Servicer (with a copy to by the Indenture Trustee, the Issuer, the Receivables Trust, or the Receivables Trust Trustee and such representation, warranty or statement has an Adverse Effect; (d) the Servicer shall become the subject of any bankruptcy, insolvency or similar event, or shall voluntarily suspend payment of its obligations; (e) for so long as Conn Appliances is the Servicer, the failure of Consolidated Parent to maintain Consolidated Net Worth of at least the sum of $400,000,000; (f) for so long as Conn Appliances is the Servicer, a breach by the Consolidated Parent of any ABL Financial Covenant; (g) at any time that Conn Appliances is Servicer, a final judgment or judgments for the payment of money in excess of $10,000,000 (net of insurance coverage that has denied by an insurer of the Servicer, if any exists) in the aggregate shall have been rendered against the Issuer or Conn Appliances and the Indenture Trustee same shall have remained unsatisfied and in effect, without stay of execution, for a period of thirty (with a copy of such notice being provided promptly upon receipt by 30) consecutive days after the Servicer to period for appellate review shall have elapsed; (h) the Commission), Sponsor or (ii) such failure is discovered by a Responsible Officer of the Servicer’s corporate rating falls below B3/B-; or (ei) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer of Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)occurs.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five (5) Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas AEP Texas or an Affiliate thereof, any failure on the part of Duke Energy CarolinasAEP Texas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasAEP Texas, as the case may be, set forth in this Servicing Agreement (other than as provided in clause (a) of this Section 7.01(a) or Section 7.01(c)7.01) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue unremedied for a period of 60 sixty (60) days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor ServicerAEP Texas, as the case may be, by the Issuer, the Commission Issuer (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasAEP Texas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer an officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days;(5) days; or (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 sixty (60) days after the date on which (iA) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (iiB) such failure is discovered by a Responsible Officer an officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerServicer or AEP Texas; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallmay, or shall upon receiving the written instruction of either the PUCT (iacting on behalf of Customers) or of Holders evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsSystem Restoration Bonds, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement Agreement. The appointment of any successor Servicer shall be subject to the terms and under provisions of the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Securitization Law (or any of their representatives) shall be entitled to (i) apply to the Commission or a district court of appropriate jurisdiction for an order ▇▇▇▇▇▇ County for sequestration and payment of revenues arising with respect to the Storm Recovery Transition Property, (ii) foreclose on or otherwise enforce the lien and security interests in any Transition Property and (iii) apply to the PUCT for an order that amounts arising from the System Restoration Charges be transferred to a separate account for the benefit of the Secured Parties, in accordance with the Securitization Law. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery System Restoration Bonds, the Storm Recovery Transition Property, the Storm Recovery System Restoration Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Transition Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Transition Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Transition Property or the Storm Recovery System Restoration Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Transition Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ attorney’s fees and expenses) incurred in connection with transferring the Storm Recovery Transition Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas AEP Texas as Servicer shall not terminate Duke Energy Carolinas’s AEP Texas’ rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (each a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account cause all payments by or on behalf of Customers, including all Charge Collections (from whatever source), received by the Issuer Servicer to be deposited into the Allocation Account as provided in Section 5.11 or any failure to cause the Allocation Agent to transfer to the Bond Trustee any required remittance Daily Remittance and cause other amounts received from Collateral to be deposited to the Collections Account pursuant to Section 3.03 hereof that shall continue unremedied for a period of five (5) Business Days after written notice of such failure is received by the Servicer from the Bond Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Bond Trustee; or (b) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyAgreement, which failure shall failure: (i) materially and adversely affect affects the Restructuring Property or the rights of the Holders and Bondholders, and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have failure has been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Servicer by the Bond Issuer, the Commission (with a copy to Authority, the Indenture Trustee) Allocation Agent, the Administrator or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Bond Trustee or (B) after discovery of such failure is discovered by a Responsible Officer an officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove proves to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Bond Issuer or the Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have thereof has been delivered given to the Servicer (with a copy to the Indenture Trustee) by the Issuer Bond Issuer, the Authority or the Indenture Bond Trustee (with a copy or after discovery of such notice being provided promptly upon receipt failure by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer an officer of the Servicer, as the case may be; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Bond Trustee shallmay, or shall upon receiving the written instruction of either the Authority (iacting on behalf of Customers) or the Holders evidencing of a majority of the Outstanding Amount outstanding principal amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsBonds, by notice then given in writing to the Servicer (and to the Indenture Bond Trustee if given by the HoldersBondholders) (a “Termination Notice”), ) may terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the obligation under Section 7.02 6.04 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a)Default, the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) interested person shall be entitled to apply to the Commission or a any court of appropriate jurisdiction for an order in New York for sequestration and payment of revenues arising with respect to the Storm Recovery Restructuring Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Restructuring Property, the Storm Recovery Charges Charge or otherwise, shall, upon appointment of a successor Servicer pursuant to Section 6.04, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Bond Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Restructuring Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Bond Trustee, the Bond Issuer and the Indenture Trustee Allocation Agent in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Restructuring Property or the Storm Recovery ChargesCharge. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Restructuring Property Records Documentation to the Successor successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery Restructuring Property Records Documentation to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 6.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur occurs and be is continuing: (a) any failure by the Servicer to remit to the Collection Account Account, on behalf of the Issuer Issuer, any required remittance by the date that shall continue such remittance must be made that continues unremedied for a period of five (5) Servicer Business Days after the date on which written notice of such failure is received by thereof shall have been given to the Servicer from and the LPSC by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, to duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c(c)) or any other Basic Document to which it is a partyparty in such capacity, which failure shall failure (i) materially and adversely affect affects the Storm Recovery Property or the timely collection of the Storm Recovery Charges or the rights of the Holders and Storm Recovery Bondholders, and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, thereof shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Servicer by the IssuerIndenture Trustee (acting at the written direction of the Majority Holders), the Commission LPSC (with a copy to the Indenture Trustee) or to the Issuer or after discovery of such failure by a Servicer or Duke Energy CarolinasResponsible Officer, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure in any material respect by the Servicer duly to perform its obligations under Section 4.01(b) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five (5) Servicer Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove proves to have been incorrect in a any material respect when made, which has a material adverse effect on the Holders Issuer or the Storm Recovery Bondholders, and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, thereof shall have been delivered given to the Servicer by the Issuer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy acting at the written direction of the Majority Holders) or after discovery of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Servicer Responsible Officer of Officer, as the Servicercase may be; or (e) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, shall upon receiving the written instruction of either the Majority Holders and with the Issuer’s prior written consent (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”which shall not be unreasonably withheld), terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 hereof and the obligation under Section 7.02 7.04 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement by notice then given in writing to the Servicer (a “Termination Notice”). The appointment of any Successor Servicer shall be subject to the terms and under provisions of the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a)Default, the Holders Storm Recovery Bondholders and the Indenture Trustee as financing parties under (acting at the Storm Recovery Law (or any written direction of their representativesthe Majority Holders) shall be entitled to (i) apply to the Commission or a court 19th Judicial District Court for the Parish of appropriate jurisdiction for an order East Baton Rouge, Louisiana, for sequestration and payment to the Indenture Trustee of revenues arising with respect to the Storm Recovery Property, (ii) foreclose on or otherwise enforce the Lien on and security interests in the Storm Recovery Property and (iii) apply to the LPSC for an order that amounts arising from the Storm Recovery Charges be transferred to a separate account for the benefit of the Storm Recovery Bondholders, in accordance with the Securitization Act. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the related Storm Recovery Charges or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 7.04, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer Indenture Trustee and the Indenture Trustee Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records Documentation and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the related Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records Documentation to the Successor Servicer. In case If a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records Documentation to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Otherwise, all costs and expenses (including attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Documentation to the Successor Servicer and amending this Agreement to reflect the succession as Servicer other than pursuant to this Section shall be paid by the party incurring such costs and expenses. Termination of Duke Energy Carolinas SWEPCO’s rights as a Servicer shall not terminate Duke Energy CarolinasSWEPCO’s rights or obligations in its individual capacity under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (each, a “"Servicer Default”") shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account applicable Trustee, on behalf of the Issuer Issuer, any funds actually collected as part of the Storm-Recovery Property and required remittance to be remitted pursuant to Section 4.03 with respect to any Series of Storm-Recovery Bonds that shall continue continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer and the Commission from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;applicable Trustee; or (b) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyAgreement, which failure shall failure: (i) materially and adversely affect affects the Storm-Recovery Property or the rights of the Holders and Bondholders, and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have failure has been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Servicer by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture applicable Trustee or (B) after discovery of such failure is discovered by a Responsible Officer an officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove proves to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Issuer or the Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have thereof has been delivered given to the Servicer (with a copy to the Indenture Trustee) by the Issuer Issuer, the Commission or the Indenture applicable Trustee (with a copy or after discovery of such notice being provided promptly upon receipt failure by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer an officer of the Servicer, as the case may be; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving at the written instruction direction of either (i) the Holders evidencing of a majority of the Outstanding Amount of the Storm Storm-Recovery Bonds of any Series or (ii) by the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “"Termination Notice”"), terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 and the obligation under Section 7.02 7.04 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement Agreement. In addition, upon a Servicer Default, the Issuer and under the Intercreditor Agreements; provided, however applicable Trustee shall be entitled to apply to the Indenture Commission or any court of competent jurisdiction for sequestration and payment to the applicable Trustee of revenues arising with respect to the applicable Storm-Recovery Property. The Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Storm-Recovery Property, the Storm related Storm-Recovery Charges or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 7.04, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture each Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Storm-Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, each Trustee and the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Storm-Recovery Property or the Storm related Storm-Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Storm-Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Storm-Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas FPL as Servicer shall not terminate Duke Energy Carolinas’s FPL's rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)or any other Basic Document to which FPL is a party.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five (5) Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas OPCo or an Affiliate thereof, any failure on the part of Duke Energy CarolinasOPCo, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasOPCo, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(aclause (a) or (c) of this Section 7.01(c)7.01) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue unremedied for a period of 60 sixty (60) days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor ServicerOPCo, as the case may be, by the Issuer, the Commission Issuer (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasOPCo, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer an officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days;(5) days; or (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 sixty (60) days after the date on which (iA) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (iiB) such failure is discovered by a Responsible Officer an officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerServicer or OPCo; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallmay (if it is actually known by a Responsible Officer of the Indenture Trustee), or shall upon receiving the written instruction of either (i) the Holders evidencing not less than a majority of the Outstanding Amount of the Storm Phase-In-Recovery Bonds or (ii) the CommissionBonds, subject to the terms of the any Intercreditor AgreementsAgreement, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the any Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Securitization Law (or any of their representatives) shall be entitled to (i) apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Phase-In-Recovery Property, (ii) foreclose on or otherwise enforce the lien and security interests in any Phase-In-Recovery Property and (iii) apply to the Commission for an order that amounts arising from the Phase-In-Recovery Charges be transferred to a separate account for the benefit of the Secured Parties, in accordance with the Securitization Law. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Phase-In-Recovery Bonds, the Storm Phase-In-Recovery Property, the Storm Phase-In-Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Phase-In-Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Phase-In-Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Phase-In-Recovery Property or the Storm Phase-In-Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Phase-In-Recovery Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ attorney’s fees and expenses) incurred in connection with transferring the Storm Phase-In-Recovery Property Records to the Successor successor Servicer and amending this Servicing Agreement and the any Intercreditor Agreements Agreement to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas OPCo as Servicer shall not terminate Duke Energy CarolinasOPCo’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account Indenture Trustee on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Trustee; or (b) any failure on the part of by the Servicer or, so long as the Transferor and the Servicer is Duke Energy Carolinas or an Affiliate thereofare the same Person, any failure on the part of Duke Energy CarolinasTransferor, as the case may beapplicable, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinasthe Transferor, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the Transferred Environmental Control Property or the rights of the Holders Environmental Control Bondholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, failure shall have been given to the Servicer, Duke Energy Carolinas the PSCWV or an affiliate of Duke Energy Carolinas, acting as Successor Servicerthe Transferor, as the case may be, by the IssuerIssuer or the Indenture Trustee or after discovery of such failure by an officer of the Servicer, the Commission (with a copy to PSCWV or the Indenture Trustee) or to the Servicer or Duke Energy CarolinasTransferor, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Issuer or the Environmental Control Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, thereof shall have been delivered given to the Servicer (with a copy to by the Issuer, the PSCWV or the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shallTrustee, upon receiving as assignee of the written instruction Issuer, may, or at the direction of either (i) Holders evidencing the Environmental Control Bondholders of a majority of the Outstanding Amount principal amount of the Storm Recovery Environmental Control Bonds of all Series or (ii) by the Commission, subject to the terms of the Intercreditor AgreementsPSCWV, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), ) shall terminate all the Servicer’s rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the Servicer’s obligation under Section 7.02 6.04 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under Agreement. In addition, upon a Servicer Default described in Section 6.01(a), the Intercreditor Agreements; provided, however Issuer or the Indenture Trustee may apply to the PSCWV or any court of competent jurisdiction to order the sequestration and payment of Environmental Control Charge Collections arising with respect to the Transferred Environmental Control Property for the benefit of the Environmental Control Bondholders, the Issuer, the Indenture Trustee, and any other assignee and financing parties (each as defined in the Statute). The Trustee shall not give a Termination Notice upon instruction of the Commission PSCWV unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Transferred Environmental Control Property, including the Storm Recovery Charges Environmental Control Charges, or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 6.04, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete including, but not limited to, completing the transfer of the Storm Recovery Transferred Environmental Control Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer Indenture Trustee and the Indenture Trustee Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be are then held by the predecessor Servicer for remittanceremittance to the Collection Account or the Transferor, or shall that are thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesit. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Transferred Environmental Control Property Records Documentation to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery Environmental Control Property Records Documentation to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Mon Power as Servicer shall not terminate Duke Energy CarolinasMon Power’s rights or obligations as Transferor under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Transfer Agreement.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas Progress or an Affiliate thereof, any failure on the part of Duke Energy CarolinasProgress, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasProgress, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Progress or an affiliate of Duke Energy CarolinasProgress, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasProgress, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Progress as Servicer shall not terminate Duke Energy CarolinasProgress’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: (a) : any failure by the Servicer to remit to the Collection Account for any Series on behalf of the Issuer any required remittance that shall continue unremedied for a period of five (5) Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer an officer of the Servicer; (b) any ; orany failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas EGSI or an Affiliate affiliate thereof, any failure on the part of Duke Energy CarolinasEGSI, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasEGSI, as the case may be, set forth in this Servicing Agreement (other than as provided in clause (a) of this Section 7.01(a) or Section 7.01(c)7.01) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue unremedied for a period of 60 sixty (60) days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor ServicerEGSI, as the case may be, by the Issuer, the Commission Issuer (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasEGSI, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer an officer of the Servicer; (c) any ; orany failure by the Servicer duly to perform its obligations under Section 4.01(b) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d5) days; or any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 sixty (60) days after the date on which (iA) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (iiB) such failure is discovered by a Responsible Officer an officer of the Servicer; or (e) an oran Insolvency Event occurs with respect to the ServicerServicer or EGSI; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shall, shall upon receiving the written instruction of either the PUCT (iacting on behalf of Customers) or of Holders evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Transition Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreementsall Series, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “"Termination Notice”"), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Securitization Law (or any of their representatives) shall be entitled to (i) apply to the Commission or a district court of appropriate jurisdiction for an order ▇▇▇▇▇▇ County, Texas for sequestration and payment of revenues arising with respect to the Storm Recovery Transition Property, (ii) foreclose on or otherwise enforce the lien and security interests in any Transition Property and (iii) apply to the PUCT for an order that amounts arising from the Transition Charges be transferred to a separate account for the benefit of the Secured Parties, in accordance with the Securitization Law. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Transition Bonds, the Storm Recovery Transition Property, the Storm Recovery Transition Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Transition Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Transition Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Transition Property or the Storm Recovery Transition Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Transition Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ attorney's fees and expenses) incurred in connection with transferring the Storm Recovery Transition Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas EGSI as Servicer shall not terminate Duke Energy Carolinas’s EGSI's rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: (a1) any failure by the Servicer (i) to remit deliver to the Indenture Trustee or the Indenture Administrator, as the case may be, for deposit in the Trust Accounts any payment required by the Basic Documents to which the Servicer is a signatory or (ii) in the event that daily deposits into the Collection Account on behalf are not required, to deliver to the Administrator any payment required by the Basic Documents, which failure in case of the Issuer any required remittance that shall continue either clause (i) or (ii) continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer Owner Trustee, the Indenture Trustee, the Indenture Administrator or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) Administrator or five Business Days after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b2) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants other term, covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it the Servicer is a partysignatory, which failure shall (i) materially and adversely affect the rights of the Holders Indenture Trustee, on behalf of the Noteholders, or the Noteholders and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the Indenture Trustee, the Indenture Administrator, the Eligible Lender Trustee or the Administrator or (B) to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy and to the Indenture Trustee) , the Indenture Administrator and the Eligible Lender Trustee by the Noteholders representing at least a majority of the Outstanding Amount of the Notes; provided, however, that any breach of Sections 3.1, 3.2, 3.3 or to 3.4 shall not be deemed a Servicer Default so long as the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform in compliance with its repurchase and reimbursement obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer3.5; or (e3) an Insolvency Event occurs with respect to the Servicer; (4) any failure by the Servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a third-party servicer; or (5) any failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification or accountants' letter when and as required under Article VII (including, without limitation, any failure by the Servicer to identify any Subcontractor "participating in the servicing function" within the meaning of Item 1122 of Regulation AB), which continues unremedied for fifteen (15) calendar days after the date on which such information, report, certification or accountants' letter was required to be delivered, then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallor the Indenture Administrator, upon receiving or the written instruction Noteholders of either (i) Holders Notes evidencing at least a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Servicer (and to the Indenture Trustee, the Indenture Administrator and the Owner Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 3.5 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed4.2) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction Agreement. As of the Commission unless effective date of termination of the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination NoticeServicer, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, Notes or the Storm Recovery Property, the Storm Recovery Charges Trust Student Loans or otherwise, shall, without further action, pass to and be vested in the Indenture Administrator or such Successor Servicer successor servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise5.2. The predecessor Servicer shall cooperate with the Successor Servicersuccessor servicer, the Issuer Indenture Administrator and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer successor servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesa Trust Student Loan. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses, including, without limitation, any costs or expenses (including reasonable attorneys’ associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the successor servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the successor servicer to service the Trust Student Loans properly and effectively, costs reasonably allocable to specific employees and overhead, legal fees and expenses) , accounting and financial consulting fees and expenses, costs or expenses associated with the transfer of all servicing files and costs of amending the Agreement, if necessary, incurred in connection with transferring the Storm Recovery Property Records Trust Student Loan Files to the Successor Servicer successor servicer and amending this Servicing Agreement and the Intercreditor Agreements any other Basic Documents to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer (other than the Indenture Administrator acting as the Servicer under this Section 5.1) upon presentation of reasonable documentation of such costs and expenses. Termination If the predecessor Servicer (other than the Indenture Administrator) does not pay such reimbursement within thirty (30) days of Duke Energy Carolinas as its receipt of an invoice therefor, such reimbursement shall be an expense of the Issuer and the successor servicer shall be entitled to receive such reimbursement from amounts on deposit in the Collection Account. Upon receipt of notice of the occurrence of a Servicer Default, the Owner Trustee shall not terminate Duke Energy Carolinas’s rights or obligations under give notice thereof to the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Rating Agencies.

Servicer Default. If any one or more Any of the following events shall constitute a default of both the Master Servicer and each Servicer (but only in their respective capacities as such) (each a “Servicer Default”) shall occur and be continuingas that term is used herein: (ai) the failure in a material respect of the Master Servicer or any failure Servicer to comply with or perform any provision of this Base Lease or any other Related Document with respect to any Group VII Series of Notes, and such default continues for more than thirty (30) days after the earlier of (x) the date written notice is delivered by the Lessor or the Trustee to the Master Servicer or any Servicer and (y) the date on which the Master Servicer or any Servicer has actual knowledge thereof; (ii) an Event of Bankruptcy occurs with respect to the Master Servicer or any Servicer; (iii) the failure of the Master Servicer or any Servicer to remit make any payment when due from it hereunder or under any of the other Related Documents with respect to any Group VII Series of Notes or to deposit any Collections with respect to Group VII Vehicles received by it into the applicable Collection Account when required under the Related Documents with respect to any Group VII Series of Notes and, in each case, such failure continues for five (5) Business Days; or (iv) if any representation or warranty made by the Master Servicer or any Servicer in any Related Document with respect to any Group VII Series of Notes is inaccurate or incorrect or is breached or is false or misleading in any material respect as of the date of the making thereof or any schedule, certificate, financial statement, report, notice, or other writing furnished by or on behalf of the Issuer Master Servicer or any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) Lessor or after discovery the Trustee pursuant to any Related Document with respect to any Group VII Series of such failure by a Responsible Officer of the Servicer; (b) Notes is false or misleading in any failure material respect on the part date as of which the Servicer orfacts therein set forth are stated or certified, so long as and the Servicer is Duke Energy Carolinas circumstance or an Affiliate thereofcondition in respect of which such representation, warranty or writing was inaccurate, incorrect, breached, false or misleading in any failure on the part of Duke Energy Carolinasmaterial respect, as the case may be, duly to observe shall not have been eliminated or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement otherwise cured within thirty (other than as provided in Section 7.01(a30) or Section 7.01(c)) 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 60 days after the earlier of (x) the date on which (A) of the receipt of written notice thereof from the Lessor or the Trustee to the Master Servicer or any Servicer and (y) the date the Master Servicer or any Servicer has actual knowledge of such failure, requiring circumstance or condition. On and following the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting Servicing Transfer Date (as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) defined in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Back-Up Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the CommissionAgreement), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs all authority, power, duties and obligations, in each case only with respect to the Servicer; then, Back-Up Servicing Obligations (as defined in the Back-Up Servicing Agreement) relating solely to the Group VII Series of Notes and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority Group VII Collateral of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Master Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the each Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Base Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery PropertySeries 2010-3 Notes, any other outstanding Group VII Series of Notes, each related Series Supplement, the Group VII Master Lease, the other Related Documents and the Back-Up Servicing Agreement shall pass to, be vested in and/or be assumed by, as applicable, the Back-Up Servicer. On or and after the receipt by Action Notice Effective Date (as defined in the Servicer Back-Up Disposition Agent Agreement) all authority, power, duties and obligations, in each case only to the extent relating solely to the Group VII Series of a Termination NoticeNotes and the Group VII Collateral, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bondsduties set out in Exhibit A of the Back-Up Disposition Agent Agreement under the heading “Duties after the Action Notice Effective Date”, of the Master Servicer and each Servicer under the Base Indenture with respect to the Series 2010-3 Notes, any other outstanding Group VII Series of Notes, each related Series Supplement, the Storm Recovery PropertyGroup VII Master Lease, the Storm Recovery Charges or otherwise, shall, without further action, other Related Documents and the Back-Up Disposition Agent Agreement shall pass to and be vested in such Successor Servicer and/or be assumed by, as may be appointed under Section 7.02; and, without limitationapplicable, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorneyBack-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 Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Up Disposition Agent.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account Indenture Trustee on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Trustee; or (b) any failure on the part of by the Servicer or, so long as the Transferor and the Servicer is Duke Energy Carolinas or an Affiliate thereofare the same Person, any failure on the part of Duke Energy CarolinasTransferor, as the case may beapplicable, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinasthe Transferor, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the Transferred Environmental Control Property or the rights of the Holders Environmental Control Bondholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, failure shall have been given to the Servicer, Duke Energy Carolinas the PSCWV or an affiliate of Duke Energy Carolinas, acting as Successor Servicerthe Transferor, as the case may be, by the IssuerIssuer or the Indenture Trustee or after discovery of such failure by an officer of the Servicer, the Commission (with a copy to PSCWV or the Indenture Trustee) or to the Servicer or Duke Energy CarolinasTransferor, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Issuer or the Environmental Control Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, thereof shall have been delivered given to the Servicer (with a copy to by the Issuer, the PSCWV or the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shallTrustee, upon receiving as assignee of the written instruction Issuer, may, or at the direction of either (i) Holders evidencing the Environmental Control Bondholders of a majority of the Outstanding Amount principal amount of the Storm Recovery Environmental Control Bonds of all Series or (ii) by the Commission, subject to the terms of the Intercreditor AgreementsPSCWV, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), ) shall terminate all the Servicer’s rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the Servicer’s obligation under Section 7.02 6.04 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under Agreement. In addition, upon a Servicer Default described in Section 6.01(a), the Intercreditor Agreements; provided, however Issuer or the Indenture Trustee may apply to the PSCWV or any court of competent jurisdiction to order the sequestration and payment of Environmental Control Charge Collections arising with respect to the Transferred Environmental Control Property for the benefit of the Environmental Control Bondholders, the Issuer, the Indenture Trustee, and any other assignee and financing parties (each as defined in the Statute). The Trustee shall not give a Termination Notice upon instruction of the Commission PSCWV unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Transferred Environmental Control Property, including the Storm Recovery Charges Environmental Control Charges, or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 6.04, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete including, but not limited to, completing the transfer of the Storm Recovery Transferred Environmental Control Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer Indenture Trustee and the Indenture Trustee Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be are then held by the predecessor Servicer for remittanceremittance to the Collection Account or the Transferor, or shall that are thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesit. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Transferred Environmental Control Property Records Documentation to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery Environmental Control Property Records Documentation to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Potomac Edison as Servicer shall not terminate Duke Energy CarolinasPotomac Edison’s rights or obligations as Transferor under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Transfer Agreement.

Servicer Default. If any one or more Each of the following events (is a “"Servicer Default”) shall occur and be continuing": (a) any failure by the Servicer (or the Seller, so long as TMCC is the Servicer) to remit deliver to the Relevant Trustee for deposit in the Collection Account, Payahead Account on behalf of the Issuer or Reserve Fund any required remittance that shall continue payment or to direct the Relevant Trustee to make any required payment or distribution therefrom, which failure continues unremedied for a period of five three Business Days after discovery of the failure by an officer of the Servicer or written notice of such failure is received (i) by the Servicer (or the Seller, so long as TMCC is the Servicer) from the Issuer Owner Trustee or the Indenture Trustee or (with ii) to the Seller or the Servicer, as the case may be, and to the applicable Owner Trustee and Indenture Trustee by the Holders of Notes evidencing not less than 25% of the Class A Notes, acting as a copy single Class, excluding for purposes of such notice being calculation and action all Securities held or beneficially owned by TMCC, TAFR LLC or any of their Affiliates (provided promptly upon receipt that such event will not be a Servicer Default if (A) such failure or delay is caused by an event of force majeure, (B) does not continue for more than 10 Business Days, (C) during such period the Servicer uses all commercially reasonable efforts to perform its obligations under this Agreement and (D) the Servicer provides to the Commission) or after discovery Owner Trustee, Indenture Trustee, Seller and Securityholders prompt notice of such failure by or delay that includes a Responsible Officer description of the Servicer's efforts to remedy such failure or delay); (b) any failure on the part of by the Servicer or, so long as or the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy CarolinasSeller, as the case may be, duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or Duke Energy Carolinas, the Seller (as the case may be, ) set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyAgreement, which failure shall (i) materially and adversely affect the rights of the Holders Certificateholder or Noteholders and (ii) shall continue unremedied for a period of 60 90 days after the date on which (A) written notice of such failurefailure is received (i) by the Servicer (or the Seller, requiring so long as TMCC is the same to be remedied, shall have been given Servicer) from the Owner Trustee or the Indenture Trustee or (ii) to the Servicer, Duke Energy Carolinas Seller or an affiliate of Duke Energy Carolinas, acting as Successor the Servicer, as the case may be, and to the Owner Trustee and Indenture Trustee by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer holders of Notes evidencing not less than 25% of the Servicer;Class A Notes, acting together as a single Class, excluding for purposes of such calculation and action all Securities held or beneficially owned by TMCC, TAFR LLC or any of their Affiliates; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period occurrence of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, . At any time when a Servicer Default has occurred and in each and every caseis continuing, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shall, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing a majority not less than 51% of the Outstanding Amount of the Storm Recovery Bonds Class A Notes acting as a single Class, excluding for purposes of such calculation and action all Securities held or (ii) the Commissionbeneficially owned by TMCC, subject to the terms TAFR LLC or any of the Intercreditor Agreementstheir Affiliates, by notice then given in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 7.02 hereof and the obligation under rights set forth in Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed7.04 hereof) of the Servicer under this Servicing Agreement and under Agreement. By the Intercreditor Agreements; providedsame required vote, however the Indenture Trustee shall not give a Termination Notice upon instruction of Noteholders specified in the Commission unless the Rating Agency Condition is satisfied. In addition, upon a prior sentence may waive any such Servicer Default described (other than a default in Section 7.01(a)the making of any required deposits or payments from or to the Collection Account, the Holders Reserve Account or Payahead Account) for a specified period or permanently. Upon any such waiver of a past default, such default shall cease to exist, and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) Servicer Default arising therefrom shall be entitled deemed to apply have been remedied for every purpose of this Agreement. No such waiver shall extend to the Commission any subsequent or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On other default or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, impair 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 Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)right consequent thereto.

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account any Bond Trustee on behalf of the an Issuer any required remittance that shall continue unremedied for a period of five three Business Days after written notice of such failure is received by the Servicer from the such Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Bond Trustee; or (b) any failure on the part of by the Servicer or, so long as the Seller and the Servicer is Duke Energy Carolinas or an Affiliate thereofare the same Person, any failure on the part of Duke Energy CarolinasSeller, as the case may beapplicable, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinasthe Seller, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders Intangible Transition Property and (ii) continue unremedied for a period of 60 30 days after the date on which (A) written notice of such failure, requiring the same to be remedied, failure shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor Servicerthe Seller, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) any Issuer or to any Bond Trustee or after discovery of such failure by an officer of the Servicer or Duke Energy Carolinasthe Seller, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on any of the Holders Issuers or the Transition Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, thereof shall have been delivered given to the Servicer (with a copy to the Indenture Trustee) by the any Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicerany Bond Trustee; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, Bond Trustees, as assignees of the Indenture Trustee shallapplicable Issuers, upon receiving the written instruction with respect to Holders of either (i) Holders evidencing a majority of the Outstanding Amount outstanding principal amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsTransition Bonds, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “"Termination Notice”), ") may terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the obligation under Section 7.02 6.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under with respect to all the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedIssuers. In addition, upon a Servicer Default described in Section 7.01(a6.01(a), each of the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) following shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order PUC for sequestration and payment of revenues arising with respect to the Storm Recovery Serviced Intangible Transition Property: (i) each Issuer or its assignees or (ii) pledgees or transferees, including transferees under the Statute, of the Serviced Intangible Transition Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing AgreementAgreement with respect to the Issuers, whether with respect to the Storm Recovery Bonds, the Storm Recovery Serviced Intangible Transition Property, the Storm Recovery related Intangible Transition Charges or otherwise, shall, upon appointment of a successor Servicer pursuant to Section 6.02, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture each Bond Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Intangible Transition Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer Bond Trustees and the Indenture Trustee Issuers in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Serviced Intangible Transition Property or the Storm Recovery related Intangible Transition Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Intangible Transition Property Records Documentation to the Successor successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery Intangible Transition Property Records Documentation to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke PECO Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s PECO Energy's rights or obligations as Seller under any of the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Agreements.

Servicer Default. If any one or more Any of the following events will constitute a default of the Master Servicer (a “Servicer Default”) shall occur and be continuingas that term is used herein: (ai) the failure of the Master Servicer to comply with or perform any failure provision of this Agreement or any other Series 2010-3 Related Document that has a Lease Material Adverse Effect with respect to the Master Servicer, the Lessor or any Lessee, and such default continues for more than thirty (30) consecutive days after the earlier of the date written notice is delivered by the Servicer to remit Lessor or the Trustee to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Master Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible date an Authorized Officer of the Master Servicer obtains actual knowledge thereof; (ii) an Event of Bankruptcy occurs with respect to the Master Servicer; (iii) the failure of the Master Servicer to make any payment when due from it hereunder or under any of the other Series 2010-3 Related Documents or to deposit any Collections received by it into a Collateral Account when required under the Series 2010-3 Related Documents and, in each case, such failure continues for five (5) consecutive Business Days after the earlier of (a) the date written notice is delivered by the Lessor or the Trustee to the Master Servicer or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Authorized Officer of the Servicer;Master Servicer obtains actual knowledge thereof, except to the extent that failure to remain in such compliance would not reasonably be expected to result in a Lease Material Adverse Effect with respect to the Lessor; or (civ) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; if (dI) any representation or warranty made by the Master Servicer relating to the Series 2010-3 Collateral in this Servicing Agreement any Series 2010-3 Related Document is inaccurate or incorrect or is breached or is false or misleading as of the date of the making thereof or any schedule, certificate, financial statement, report, notice, or other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered writing relating to the Servicer (with a copy to Series 2010-3 Collateral furnished by or on behalf of the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Master Servicer to the Commission)Lessor or the Trustee pursuant to any Series 2010-3 Related Document is false or misleading on the date as of which the facts therein set forth are stated or certified, or (iiII) such failure is discovered by inaccuracy, breach or falsehood has a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs Lease Material Adverse Effect with respect to the Servicer; thenLessor, and (III) the circumstance or condition in each and every caserespect of which such representation, so long warranty or writing was inaccurate, incorrect, breached, false or misleading, as the Servicer Default case may be, shall not have been remedied, eliminated or otherwise cured for at least thirty (30) consecutive days after the Indenture Trustee shall, upon receiving earlier of (x) the written instruction of either (i) Holders evidencing a majority date of the Outstanding Amount receipt of written notice thereof from the Lessor or the Trustee to the Master Servicer and (y) the date an Authorized Officer of the Storm Recovery Bonds Master Servicer obtains actual knowledge of such circumstance or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedcondition. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result event of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer Trustee, acting pursuant to this Section 7.01 9.22(d) of the Series 2010-3 Supplement, shall have the right to replace the Master Servicer as servicer. For the avoidance of doubt, with respect to any Servicer Default, if the event or condition giving rise (directly or indirectly) to such Servicer Default ceases to be paid by the predecessor continuing(through cure, waiver or otherwise), then such Servicer upon presentation of reasonable documentation of such costs Default will cease to exist and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations will be deemed to have been cured for every purpose under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Series 2010-3 Related Documents.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account Indenture Trustee on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Trustee; or (b) any failure on the part of by the Servicer or, so long as the Seller and the Servicer is Duke Energy Carolinas or an Affiliate thereofare the same Person, any failure on the part of Duke Energy CarolinasSeller, as the case may beapplicable, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinasthe Seller, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the Environmental Control Property or the rights of the Holders Environmental Control Bondholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, failure shall have been given to the Servicer, Duke Energy Carolinas the PSCWV or an affiliate of Duke Energy Carolinas, acting as Successor Servicerthe Seller, as the case may be, by the IssuerIssuer or the Indenture Trustee or after discovery of such failure by an officer of the Servicer, the Commission (with a copy to PSCWV or the Indenture Trustee) or to the Servicer or Duke Energy CarolinasSeller, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Issuer or the Environmental Control Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, thereof shall have been delivered given to the Servicer (with a copy to by the Issuer, the PSCWV or the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shallTrustee, upon receiving as assignee of the written instruction Issuer, may, or at the direction of either (i) Holders evidencing the Environmental Control Bondholders of a majority of the Outstanding Amount principal amount of the Storm Recovery Environmental Control Bonds of all Series or (ii) by the Commission, subject to the terms of the Intercreditor AgreementsPSCWV, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), ) shall terminate all the Servicer’s rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the Servicer’s obligation under Section 7.02 6.04 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under Agreement. In addition, upon a Servicer Default described in Section 6.01(a), the Intercreditor Agreements; provided, however Issuer or the Indenture Trustee may apply to the PSCWV or any court of competent jurisdiction to order the sequestration and payment of Environmental Control Charge Collections arising with respect to the Environmental Control Property for the benefit of the Environmental Control Bondholders, the Issuer, the Indenture Trustee, and any other assignee and financing parties (each as defined in the Statute). The Trustee shall not give a Termination Notice upon instruction of the Commission PSCWV unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Environmental Control Property, including the Storm Recovery Charges Environmental Control Charges, or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 6.04, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete including, but not limited to, completing the transfer of the Storm Recovery Environmental Control Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer Indenture Trustee and the Indenture Trustee Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be are then held by the predecessor Servicer for remittanceremittance to the Collection Account or the Seller, or shall that are thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesit. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Environmental Control Property Records Documentation to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery Environmental Control Property Records Documentation to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Mon Power as Servicer shall not terminate Duke Energy CarolinasMon Power’s rights or obligations as Seller under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Agreement.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a1) any failure by the Servicer (i) to remit deliver to the Indenture Trustee or the Indenture Administrator, as the case may be, for deposit in the Trust Accounts any payment required by the Basic Documents to which the Servicer is a signatory or (ii) in the event that daily deposits into the Collection Account on behalf are not required, to deliver to the Administrator any payment required by the Basic Documents, which failure in case of the Issuer any required remittance that shall continue either clause (i) or (ii) continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer Owner Trustee, the Indenture Trustee, the Indenture Administrator or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) Administrator or five Business Days after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b2) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants other term, covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it the Servicer is a partysignatory, which failure shall (i) materially and adversely affect the rights of the Holders Indenture Trustee, on behalf of the Noteholders, or the Noteholders and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the Indenture Trustee, the Indenture Administrator, the Eligible Lender Trustee or the Administrator or (B) to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy and to the Indenture Trustee) , the Indenture Administrator and the Eligible Lender Trustee by the Noteholders representing at least a majority of the Outstanding Amount of the Notes; provided, however, that any breach of Sections 3.1, 3.2, 3.3 or to 3.4 shall not be deemed a Servicer Default so long as the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform in compliance with its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer3.5; or (e3) an Insolvency Event occurs with respect to the Servicer; (4) any failure by the Servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a third-party servicer; or (5) any failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification or accountants' letter when and as required under Article VII (including, without limitation, any failure by the Servicer to identify any Subcontractor "participating in the servicing function" within the meaning of Item 1122 of Regulation AB), which continues unremedied for fifteen (15) calendar days after the date on which such information, report, certification or accountants' letter was required to be delivered, then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallor the Indenture Administrator, upon receiving or the written instruction Noteholders of either (i) Holders Notes evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Servicer (and to the Indenture Trustee, the Indenture Administrator and the Owner Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 3.5 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed4.2) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction Agreement. As of the Commission unless effective date of termination of the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination NoticeServicer, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, Notes or the Storm Recovery Property, the Storm Recovery Charges Trust Student Loans or otherwise, shall, without further action, pass to and be vested in the Indenture Administrator or such Successor Servicer successor servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise5.2. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer successor servicer and the Indenture Trustee Administrator in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer successor servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesa Trust Student Loan. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses, including, without limitation, any costs or expenses (including reasonable attorneys’ associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the successor servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the successor servicer to service the Trust Student Loans properly and effectively, costs reasonably allocable to specific employees and overhead, legal fees and expenses) , accounting and financial consulting fees and expenses, costs or expenses associated with the transfer of all servicing files and costs of amending the Agreement, if necessary, incurred in connection with transferring the Storm Recovery Property Records Trust Student Loan Files to the Successor Servicer successor servicer and amending this Servicing Agreement and the Intercreditor Agreements any other Basic Documents to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer (other than the Indenture Administrator acting as the Servicer under this Section 5.1) upon presentation of reasonable documentation of such costs and expenses. Termination If the predecessor Servicer (other than the Indenture Administrator) does not pay such reimbursement within thirty (30) days of Duke Energy Carolinas as its receipt of an invoice therefor, such reimbursement shall be an expense of the Issuer and the successor servicer shall be entitled to receive such reimbursement from amounts on deposit in the Collection Account. Upon receipt of notice of the occurrence of a Servicer Default, the Issuer shall give notice thereof to the Indenture Trustee and the Rating Agencies. Notwithstanding the foregoing, the Servicer shall not terminate Duke Energy Carolinas’s rights or be deemed to have breached its obligations to service the Trust Student Loans, nor will a Servicer Default be deemed to have occurred under the Sale Agreement (except rights thereunder deriving from its rights as this Section 5.1, if the Servicer hereunderis rendered unable to perform such obligations, in whole or in part, by a force outside the control of the parties hereto (including, without limitation, acts of God, acts of war or terrorism, fires, earthquakes, hurricanes, floods and other material natural or man made disasters); provided that the Servicer shall be required to diligently undertake all actions necessary to resume the performance of its duties hereunder as soon as practicable following the termination of such business interruption or, if necessary and appropriate in its reasonable judgment to enable the proper servicing of the Trust Student Loans, to transfer servicing, either temporarily or permanently, to another servicer.

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: : (a) any failure by the Master Servicer to remit deliver to the Collection Account on behalf Trustee for deposit in any of the Issuer Trust Accounts or the Certificate Distribution Account any required remittance payment or to direct the Trustee to make any required distributions therefrom (other than a Monthly Advance required to be made from its own funds) that shall continue unremedied for a period of five [three] Business Days after written notice of such failure is received by the Master Servicer from the Issuer Owner Trustee or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible an Authorized Officer of the Master Servicer; ; or (b) failure by the Master Servicer to make any required Servicing Advance which failure continues unremedied for a period of [30] days, or failure on the part of the Master Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any other covenants or agreements of the Master Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyDocument, which failure shall shall: (i) materially and adversely affect the rights of either the Holders Certificateholders or Noteholders and (ii) continue unremedied for a period of 60 [30] days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given given: (A) to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Master Servicer by the Issuer, Owner Trustee or the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered to the Master Servicer and to the Owner Trustee and the Trustee by a Responsible Officer the Holders of Notes evidencing not less than [66 2/3]% of the Servicer; Current Principal Amount of the Notes or Holders of Certificates evidencing not less than [66 2/3]% of the outstanding Certificate Balance, as applicable (or for such longer period, not in excess of [30] days, as may be reasonably necessary to remedy such default; provided that such default is capable of remedy within [30] days and the Master Servicer delivers an Officers' Certificate to the Owner Trustee and the Trustee to such effect and to the effect that the Master Servicer has commenced or will promptly commence, and will diligently pursue, all reasonable efforts to remedy such default); or (c) any failure by of the Master Servicer duly to perform pay any Monthly Advance required to be made from its obligations under own funds pursuant to Section 4.01(b) in the time and manner set forth therein, which failure 3.15 that continues unremedied for a period of five one Business Days; Day; or (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerMaster Servicer or any successor; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallTrustee, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing a majority not less than [66 2/3]% of the Outstanding Current Principal Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Master Servicer and the Owner Trustee (and to the Indenture Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed6.2) of the Master Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery PropertyAgreement. On or after the receipt by the Master Servicer of a Termination Noticesuch written notice, all authority and power of the Master Servicer under this Servicing Agreement, whether with respect to the Storm Recovery BondsNotes, the Storm Recovery Property, Certificates or the Storm Recovery Charges Mortgage Loans or otherwise, shall, without further action, pass to and be vested in the Trustee or such Successor successor Master Servicer as may be appointed under Section 7.027.2; and, without limitation, the Indenture Trustee is and the Owner Trustee are hereby authorized and empowered to execute and deliver, on behalf of the predecessor Master 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 Noticenotice of termination, whether to complete the transfer and endorsement of the Storm Recovery Property Records Mortgage Loans and related documents, or otherwise. The predecessor Master Servicer shall cooperate with the Successor successor Master Servicer, the Issuer Trustee and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Master Servicer under this Servicing Agreement, including the transfer to the Successor successor Master Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Master Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesa Mortgage Loan. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ fees and expenses' fees) incurred in connection with transferring the Storm Recovery Property Records Mortgage Files to the Successor successor Master Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Master Servicer pursuant to this Section 7.01 shall be paid by the predecessor Master Servicer upon presentation of reasonable documentation of such costs and expenses. Termination Upon receipt of Duke Energy Carolinas as notice of the occurrence of a Servicer Default, the Owner Trustee shall not terminate Duke Energy Carolinas’s rights or obligations under give notice thereof to the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Rating Agencies.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to deposit in the Collection Deposit Account on behalf of the Issuer any required remittance that shall continue payment or to direct the Indenture Trustee to make any required distributions therefrom, which failure continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer Owner Trustee or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b) any failure on the part of by the Servicer or, so long as or the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy CarolinasSeller, as the case may be, duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or Duke Energy Carolinas, the Seller (as the case may be, ) set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyDocument, which failure shall (i) materially and adversely affect the rights of the Holders Certificateholders or Noteholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, the Seller (as the case may be, ) (A) by the Issuer, the Commission (with a copy to the Indenture Trustee) Owner Trustee or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered to the Servicer or the Seller (as the case may be) and the Indenture Trustee by a Responsible Officer the Holders of Notes, evidencing not less than 25% of the Servicer;Outstanding Amount of the Notes, or if the Notes are no longer Outstanding, Certificateholders of Certificates evidencing Percentage Interests aggregating not less than 25% of the Certificates; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period occurrence of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerSeller, the Servicer or Chrysler Residual Holdco LLC; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shall, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointedhereof) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery PropertyAgreement. On or after the receipt by the Servicer of a Termination Noticesuch written notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery BondsNotes, the Storm Recovery Property, the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such Successor successor Servicer as may be appointed under Section 7.028.02; and, without limitation, the Indenture Trustee is and the Owner Trustee are hereby authorized and empowered to execute and deliver, on behalf for the benefit 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 Noticenotice of termination, whether to complete the transfer and endorsement of the Storm Recovery Property Records Receivables and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer Indenture Trustee and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesany Receivable. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ fees and expensesfees) incurred in connection with transferring the Storm Recovery Property Records Receivable Files to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Any successor Servicer (including the Indenture Trustee as Servicer successor Servicer) shall not terminate Duke Energy Carolinas’s rights or provide the Seller in writing with such information as is reasonably requested by the Seller to comply with its reporting obligations under the Sale Agreement (except rights thereunder deriving from its rights as Exchange Act with respect to such Servicer. Upon receipt of notice of the occurrence of a Servicer hereunder)Default, the Owner Trustee shall give notice thereof to the Rating Agencies.

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account any Bond Trustee on behalf of the an Issuer any required remittance that shall continue unremedied for a period of five three Business Days after written notice of such failure is received by the Servicer from the such Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Bond Trustee; or (b) any failure on the part of by the Servicer or, so long as the Seller and the Servicer is Duke Energy Carolinas or an Affiliate thereofare the same Person, any failure on the part of Duke Energy CarolinasSeller, as the case may beapplicable, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinasthe Seller, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders Intangible Transition Property and (ii) continue unremedied for a period of 60 30 days after the date on which (A) written notice of such failure, requiring the same to be remedied, failure shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor Servicerthe Seller, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) any Issuer or to any Bond Trustee or after discovery of such failure by an officer of the Servicer or Duke Energy Carolinasthe Seller, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on any of the Holders Issuers or the Transition Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, thereof shall have been delivered given to the Servicer (with a copy to the Indenture Trustee) by the any Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicerany Bond Trustee; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, Bond Trustees, as assignees of the Indenture Trustee shallapplicable Issuers, upon receiving the written instruction with respect to Holders of either (i) Holders evidencing a majority of the Outstanding Amount outstanding principal amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsTransition Bonds, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “"Termination Notice”), ") may terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the obligation under Section 7.02 6.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under with respect to all the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedIssuers. In addition, upon a Servicer Default described in Section 7.01(a6.01(a), each of the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) following shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order PUC for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).Serviced Intangible

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur occurs and be is continuing: (a) any failure by the Servicer to remit to the Collection Account Trustee, on behalf of the Issuer Issuer, any required remittance that shall continue continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer and the BPU from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Trustee; or (b) any failure on the part of by the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyAgreement, which failure shall failure: (i) materially and adversely affect affects the Transferred BGS Bondable Transition Property or the rights of the Holders and BGS Transition Bondholders, and (ii) continue continues unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have failure has been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Servicer by the Issuer, the Commission (with a copy to the Indenture Trustee) BPU or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) after discovery of such failure is discovered by a Responsible Officer an officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove proves to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Issuer or the BGS Transition Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have thereof has been delivered given to the Servicer (with a copy to the Indenture Trustee) by the Issuer Issuer, the BPU or the Indenture Trustee (with a copy or after discovery of such notice being provided promptly upon receipt failure by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer an officer of the Servicer, as the case may be; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallmay, or shall upon receiving the written instruction of either the BPU (iacting on behalf of Customers) or the Holders evidencing of a majority of the Outstanding Amount outstanding principal amount of the Storm Recovery BGS Transition Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreementsall Series, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) Holders (a “"Termination Notice”), ") may terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the obligation under Section 7.02 6.04 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a)Default, the Holders Issuer and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission BPU or a any court of appropriate competent jurisdiction for an order for sequestration and payment to the Trustee of revenues arising with respect to the Storm Recovery Transferred BGS Bondable Transition Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Transferred BGS Bondable Transition Property, the Storm Recovery Charges related BGS Transition Bond Charge or otherwise, shall, upon appointment of a successor Servicer pursuant to Section 6.04, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery BGS Bondable Transition Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer Trustee and the Indenture Trustee Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Transferred BGS Bondable Transition Property or the Storm Recovery Chargesrelated BGS Transition Bond Charge. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery BGS Bondable Transition Property Records Documentation to the Successor successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery BGS Bondable Transition Property Records Documentation to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 6.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas PSE&G as Servicer shall not terminate Duke Energy Carolinas’s PSE&G's rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Agreement.

Servicer Default. If any one The Borrower, the Servicer, each Lender, the Equityholder, and the Facility Agent hereby agree that upon the occurrence and during the continuation of a Servicer Default, the Facility Agent in its sole discretion may (or more at the written request of the following events Required Lenders, shall), by written notice to the Servicer (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all of the rights rights, obligations, power and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) authority of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery PropertyAgreement. On or and after the receipt by the Servicer of a Servicer Termination Notice, all authority and power of the Servicer under Notice pursuant to this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice6.01(b), the Servicer shall deliver continue to perform all servicing and other functions under this Agreement and any other applicable Transaction Documents until the Storm Recovery Property Records date specified in the Servicer Termination Notice (as such notice may be updated in writing by the Facility Agent and/or the Required Lenders, as applicable) or, if no such date is specified in such Servicer Termination Notice, until a date mutually agreed upon by the Servicer, the Borrower, the Facility Agent and/or the Required Lenders, and shall be entitled to receive, to the Successor Servicerextent of funds available therefor pursuant to Section 2.04, any Servicing Fees therefor accrued until such date. In case After such date, the Servicer agrees that it shall (i) terminate its activities as Servicer hereunder in a Successor manner that the Servicer is appointed as a result of a Servicer Default, all reasonable costs reasonably believes (in consultation with and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records subject to the Successor Servicer and amending this Servicing Agreement and direction of the Intercreditor Agreements Facility Agent and/or the Required Lenders, including without limitation under any applicable power of attorney) will facilitate the transition of the performance of such activities to reflect such succession as a successor Servicer pursuant to this Section 7.01 shall be paid by Agreement, (ii) remain subject to the predecessor Servicing Standard, (iii) take all necessary or appropriate actions to facilitate the transfer of all relevant information and documents to any such successor Servicer upon presentation of and cooperate therewith to effect such transfer in an expeditious manner and (iv) use commercially reasonable documentation of efforts to assist the successor Servicer in assuming such costs and expenses. Termination of Duke Energy Carolinas obligations, in each case, until such time as a successor Servicer shall not terminate Duke Energy Carolinasassume each and all of the Servicer’s rights obligations hereunder and under any other Transaction Document or obligations under other instrument authorized or required thereby and agree to manage, service and administer the Sale Agreement (except rights thereunder deriving from its rights as Collateral Portfolio on the Servicer hereunder)terms and subject to the conditions set forth herein.

Servicer Default. If The occurrence of any one or more of the following events shall constitute a Servicer default (each, a “Servicer Default”) shall occur and be continuing:): (a) any failure by the Servicer (or, for so long as Conn Appliances is the Servicer, Conn Appliances) to remit make any payment, transfer or deposit under this Agreement or any other Servicer Transaction Document or to provide the Monthly Servicer Report to the Collection Account Trustee to make such payment, transfer, or deposit or any withdrawal on behalf or before the date occurring five (5) days after the date such payment, transfer, deposit, instruction or notice is required to be made or given, as the case may be, under the terms of this Agreement or any other Servicer Transaction Document (or in the Issuer case of a payment, transfer, deposit, instruction or notice to be made or given with respect to any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received Interest Period, by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicerrelated Payment Date); (b) any failure on the part of the Servicer (or, for so long as the Servicer is Duke Energy Carolinas or an Affiliate thereofConn Appliances, any failure on the part of Duke Energy Carolinas, as the case may be, Conn Appliances) to duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyServicer Transaction Document, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue continues unremedied for a period of 60 thirty (30) days after the earlier of discovery by the Servicer or the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Servicer by the IssuerTrustee, the Commission (with a copy to Receivables Trust, the Indenture Trustee) Receivables Trust Trustee or to the Issuer; or the Servicer or Duke Energy Carolinasshall assign its duties under this Agreement, except as the case may be, permitted by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the ServicerArticle II; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth thereinrepresentation, which failure continues unremedied for a period of five Business Days; (d) any representation warranty or warranty certification made by the Servicer in this Servicing Agreement or any other Basic Servicer Transaction Document or in any certificate delivered pursuant to this Agreement or any other Servicer Transaction Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders made and which material adverse effect continues unremedied for a period of 60 thirty (30) days after the date on which (i) the Servicer has actual knowledge thereof or on which written notice thereof, requiring the same to be remedied, shall have been delivered given to the Servicer (with a copy to the Indenture Trustee) by the Issuer Trustee, the Issuer, the Receivables Trust or the Indenture Trustee Receivables Trust Trustee; (with a copy of such notice being provided promptly upon receipt by d) the Servicer to shall become the Commission), subject of any Event of Bankruptcy or shall voluntarily suspend payment of its obligations; (iie) such failure for so long as Conn Appliances is discovered by a Responsible Officer of the Servicer, the failure of Consolidated Parent to maintain Consolidated Net Worth of at least the sum of $250,000,000; or (ef) an Insolvency Event occurs with respect to at any time that Conn Appliances is Servicer, a final judgment or judgments for the Servicer; then, payment of money in excess of $7,500,000 in the aggregate shall have been rendered against the Issuer or Conn Appliances and the same shall have remained unsatisfied and in each and every caseeffect, so long as the Servicer Default shall not have been remediedwithout stay of execution, the Indenture Trustee shall, upon receiving the written instruction for a period of either thirty (i30) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or consecutive days after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer period for appellate review shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)have elapsed.

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: (a) any failure by the Servicer to remit deliver to the Collection Account on behalf Trustee for deposit in any of the Issuer Trust Accounts any required remittance payment or to direct the Trustee to make any required distributions therefrom that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer Owner Trustee or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible an Authorized Officer of the Servicer;; or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyDocument, which failure shall (i) materially and adversely affect the rights of either the Holders Certificateholders or Noteholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture TrusteeA) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Owner Trustee or the Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy and to the Indenture Trustee) Owner Trustee and the Trustee by the Issuer Holders of Notes evidencing not less than 25% of the Outstanding Amount of the Notes (or the Indenture Trustee (with a copy for such longer period, not in excess of 120 days, as may be reasonably necessary to remedy such notice being default; provided promptly upon receipt by that such default is capable of remedy within 120 days and the Servicer delivers an Officers' Certificate to the CommissionOwner Trustee and the Trustee to such effect and to the effect that the Servicer has commenced or will promptly commence, and will diligently pursue, all reasonable efforts to remedy such default), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (ec) an Insolvency Event occurs with respect to the ServicerServicer or any successor; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallTrustee, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing a majority not less than 25% of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Servicer and the Owner Trustee (and to the Indenture Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed7.2) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery PropertyAgreement. On or after the receipt by the Servicer of a Termination Noticesuch written notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery BondsNotes, the Storm Recovery Property, Certificates or the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in the Trustee or such Successor successor Servicer as may be appointed under Section 7.028.2; and, without limitation, the Indenture Trustee is and the Owner Trustee are hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Noticenotice of termination, whether to complete the transfer and endorsement of the Storm Recovery Property Records Receivables and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer Trustee and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesa Receivable. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ fees and expenses' fees) incurred in connection with transferring the Storm Recovery Property Records Receivable Files to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination Upon receipt of Duke Energy Carolinas as notice of the occurrence of a Servicer Default, the Owner Trustee shall not terminate Duke Energy Carolinas’s rights or obligations under give notice thereof to the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Rating Agencies.

Servicer Default. If The occurrence of any one or more of the following events (shall constitute a “Servicer Default”) shall occur and be continuing: (a) failure to make any failure by payment, transfer or deposit on or before the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five date occurring three Business Days after written notice the date of such failure payment, transfer, deposit, instruction, or notice is received by the Servicer from the Issuer required to be made or given hereunder or pursuant to the Indenture Trustee (with a copy of such and notice being provided promptly upon receipt by the Servicer thereof has been given to the Commission) or after discovery of such failure by a Responsible Officer of the ServicerServicer in writing; (b) any failure on the part an Event of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly Bankruptcy occurs with respect to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure representation, warranty or certification made by the Servicer duly hereunder or in any certificate delivered hereunder shall prove to have been incorrect when made, has a Material Adverse Effect and continues to be incorrect in any material respect for a period of 30 days after the first to occur of (i) the date on which written notice of such incorrectness shall have been given to the Servicer by the Indenture Trustee or the Majority Holders or (ii) the date on which the Servicer becomes aware of the incorrectness (provided, that, the Indenture Trustee shall not be obligated to determine materiality for purposes of this Section 7.1(c)); (d) failure to observe or perform its obligations under Section 4.01(b) in any material respect any other covenant or agreement of the time Servicer hereunder which materially and manner set forth therein, which failure adversely affects the rights of the Noteholders and continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 30 days after the date on which earlier of (i) written notice thereof, requiring the same to be remedied, shall have been delivered to date the Servicer (with a copy to the Indenture Trustee) by the or Issuer or receives notification in writing of such failure from the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by or the Servicer to the Commission), Majority Holders or (ii) the Servicer learns of such failure (provided, that, the Indenture Trustee shall not be obligated to determine materiality for purposes of this Section 7.1(d)); and (e) the Servicer’s Tangible Net Worth at the end of any calendar quarter is discovered by less than $35,000,000. The Servicer will notify the Depositor, the Owner Trustee, the Indenture Trustee, the Back-Up Servicer and each Rating Agency of any Servicer Default under this Section 7.1, no later than five (5) Business Days after a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes obtains actual knowledge of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)event.

Servicer Default. If any one or more Each of the following events shall constitute a servicer default (each, a “"Servicer Default”) shall occur and be continuing:"): (a) any failure by the Master Servicer to remit make any payment, deposit or transfer required to be made under the Collection Account on behalf terms of the Issuer any required remittance that shall continue this Master Agreement which continues unremedied for a period of five two (2) Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days Day after the date on upon which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, received by the Issuer, Master Servicer from the Commission Purchaser; or (with a copy to b) failure on the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer part of the Servicer; (c) any failure by the Master Servicer duly to observe or perform its obligations under Section 4.01(b) in any material respect any other of the time and manner set forth therein, covenants or agreements on the part of the Master Servicer in this Master Agreement which failure continues unremedied for a period of forty-five Business Days; (d45) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereofof such failure, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) received by the Issuer Master Servicer from the Purchaser; or (c) a decree or order of a court or agency or supervisory authority having jurisdiction in the Indenture Trustee premises for the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Master Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of sixty (with a copy of such notice being provided promptly upon receipt 60) days; or (d) consent by the Master Servicer to the Commission)appointment of a conservator, receiver or (ii) such failure is discovered by a Responsible Officer liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings relating to the ServicerMaster Servicer or to all or substantially all of its property; or (e) the Master Servicer's admission in writing of its inability to pay its debts generally as they become due, filing of a petition to invoke any applicable insolvency or reorganization statute, making of an Insolvency Event occurs with respect assignment for the benefit of its creditors, or voluntarily suspending payment of its obligations; or (f) a court of competent jurisdiction shall have found that the Master Servicer or any of its senior executive officers has committed an act of civil fraud; or (g) the Master Servicer or any of its principal officers shall have been convicted of a felony, or shall have been convicted of any criminal act related to the Master Servicer’s lending or mortgage selling or servicing activities. (h) the Master Servicer consummates a transaction that results in a Change of Control; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either or (i) Holders evidencing the Master Servicer ceases to be a majority cooperative association in good standing under the laws of the Outstanding Amount District of Columbia or any state of the Storm Recovery Bonds or United States for a period of thirty (ii30) the Commission, subject to the terms of the Intercreditor Agreements, days following notice thereof by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate governmental authority having jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in over such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)determination.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five 5 Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas KGS or an Affiliate thereof, any failure on the part of Duke Energy CarolinasKGS, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy CarolinasKGS, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 30 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor ServicerKGS, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasKGS, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five 5 Business Days;; or (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Securitized Utility Tariff Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a Holders)(a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Securitization Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for of sequestration and payment of revenues arising with respect to the Storm Recovery Securitized Utility Tariff Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Securitized Utility Tariff Bonds, the Storm Recovery Securitized Utility Tariff Property, the Storm Recovery Securitized Utility Tariff Charges or otherwise, shall, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Securitized Utility Tariff Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Securitized Utility Tariff Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Securitized Utility Tariff Property or the Storm Recovery Securitized Utility Tariff Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Securitized Utility Tariff Property Records to the Successor successor Servicer. In case a Successor successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Securitized Utility Tariff Property Records to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas KGS as Servicer shall not terminate Duke Energy CarolinasKGS’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Servicer Default. If any one or more Each of the following events shall constitute a servicer default (each, a “Servicer Default”) shall occur and be continuing:): (a) any failure by the Master Servicer to remit make any payment, deposit or transfer required to be made under the Collection Account on behalf terms of the Issuer any required remittance that shall continue this Master Agreement which continues unremedied for a period of five two (2) Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days Day after the date on upon which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, received by the Issuer, Master Servicer from the Commission Purchaser; or (with a copy to b) failure on the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer part of the Servicer; (c) any failure by the Master Servicer duly to observe or perform its obligations under Section 4.01(b) in any material respect any other of the time and manner set forth therein, covenants or agreements on the part of the Master Servicer in this Master Agreement which failure continues unremedied for a period of forty-five Business Days; (d45) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereofof such failure, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) received by the Issuer Master Servicer from the Purchaser; or (c) a decree or order of a court or agency or supervisory authority having jurisdiction in the Indenture Trustee premises for the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Master Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of sixty (with a copy of such notice being provided promptly upon receipt 60) days; or (d) consent by the Master Servicer to the Commission)appointment of a conservator, receiver or (ii) such failure is discovered by a Responsible Officer liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings relating to the ServicerMaster Servicer or to all or substantially all of its property; or (e) the Master Servicer’s admission in writing of its inability to pay its debts generally as they become due, filing of a petition to invoke any applicable insolvency or reorganization statute, making of an Insolvency Event occurs with respect assignment for the benefit of its creditors, or voluntarily suspending payment of its obligations; or (f) a court of competent jurisdiction shall have found that the Master Servicer or any of its senior executive officers has committed an act of civil fraud; or (g) the Master Servicer or any of its principal officers shall have been convicted of a felony, or shall have been convicted of any criminal act related to the Master Servicer’s lending or mortgage selling or servicing activities. (h) the Master Servicer consummates a transaction that results in a Change of Control; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shall, upon receiving the written instruction of either or (i) Holders evidencing the Master Servicer ceases to be a majority cooperative association in good standing under the laws of the Outstanding Amount District of Columbia or any state of the Storm Recovery Bonds or United States for a period of thirty (ii30) the Commission, subject to the terms of the Intercreditor Agreements, days following notice thereof by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate governmental authority having jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in over such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)determination.

Servicer Default. If any one or more Each of the following events (is a “"Servicer Default”) shall occur and be continuing": (a) any failure by the Servicer (or the Seller, so long as TMCC is the Servicer) to remit deliver to the Relevant Trustee for deposit in the Collection Account, Payahead Account on behalf of the Issuer or Reserve Fund any required remittance that shall continue payment or to direct the Relevant Trustee to make any required payment or distribution therefrom, which failure continues unremedied for a period of five three Business Days after discovery of the failure by an officer of the Servicer or written notice of such failure is received (i) by the Servicer (or the Seller, so long as TMCC is the Servicer) from the Issuer Owner Trustee or the Indenture Trustee or (with ii) to the Seller or the Servicer, as the case may be, and to the applicable Owner Trustee and Indenture Trustee by the Holders of Notes evidencing not less than 25% of the Class A Notes, acting as a copy single Class, excluding for purposes of such notice being calculation and action all Securities held or beneficially owned by TMCC, TAFR LLC or any of their Affiliates (provided promptly upon receipt that such event will not be a Servicer Default if (A) such failure or delay is caused by an event of force majeure, (B) does not continue for more than 10 Business Days, (C) during such period the Servicer uses all commercially reasonable efforts to perform its obligations under this Agreement and (D) the Servicer provides to the Commission) or after discovery Owner Trustee, Indenture Trustee, Seller and Securityholders prompt notice of such failure by or delay that includes a Responsible Officer description of the Servicer's efforts to remedy such failure or delay); (b) any failure on the part of by the Servicer or, so long as or the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy CarolinasSeller, as the case may be, duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or Duke Energy Carolinas, the Seller (as the case may be, ) set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyAgreement, which failure shall (i) materially and adversely affect the rights of the Holders Certificateholders or Noteholders and (ii) shall continue unremedied for a period of 60 90 days after the date on which (A) written notice of such failurefailure is received (i) by the Servicer (or the Seller, requiring so long as TMCC is the same to be remedied, shall have been given Servicer) from the Owner Trustee or the Indenture Trustee or (ii) to the Servicer, Duke Energy Carolinas Seller or an affiliate of Duke Energy Carolinas, acting as Successor the Servicer, as the case may be, and to the Owner Trustee and Indenture Trustee by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer holders of Notes evidencing not less than 25% of the Servicer;Class A Notes, acting together as a single Class, excluding for purposes of such calculation and action all Securities held or beneficially owned by TMCC, TAFR LLC or any of their Affiliates; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period occurrence of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, . At any time when a Servicer Default has occurred and in each and every caseis continuing, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shall, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing a majority not less than 51% of the Outstanding Amount of the Storm Recovery Bonds Class A Notes acting as a single Class, excluding for purposes of such calculation and action all Securities held or (ii) the Commissionbeneficially owned by TMCC, subject to the terms TAFR LLC or any of the Intercreditor Agreementstheir Affiliates, by notice then given in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 7.02 hereof and the obligation under rights set forth in Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed7.04 hereof) of the Servicer under this Servicing Agreement and under Agreement. By the Intercreditor Agreements; providedsame required vote, however the Indenture Trustee shall not give a Termination Notice upon instruction of Noteholders specified in the Commission unless the Rating Agency Condition is satisfied. In addition, upon a prior sentence may waive any such Servicer Default described (other than a default in Section 7.01(a)the making of any required deposits or payments from or to the Collection Account, the Holders Reserve Account or Payahead Account) for a specified period or permanently. Upon any such waiver of a past default, such default shall cease to exist, and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) Servicer Default arising therefrom shall be entitled deemed to apply have been remedied for every purpose of this Agreement. No such waiver shall extend to the Commission any subsequent or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On other default or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, impair 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 Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)right consequent thereto.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account Indenture Trustee on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Trustee; or (b) any failure on the part of by the Servicer or, so long as the Seller and the Servicer is Duke Energy Carolinas or an Affiliate thereofare the same Person, any failure on the part of Duke Energy CarolinasSeller, as the case may beapplicable, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinasthe Seller, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the Environmental Control Property or the rights of the Holders Environmental Control Bondholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, failure shall have been given to the Servicer, Duke Energy Carolinas the PSCWV or an affiliate of Duke Energy Carolinas, acting as Successor Servicerthe Seller, as the case may be, by the IssuerIssuer or the Indenture Trustee or after discovery of such failure by an officer of the Servicer, the Commission (with a copy to PSCWV or the Indenture Trustee) or to the Servicer or Duke Energy CarolinasSeller, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Issuer or the Environmental Control Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, thereof shall have been delivered given to the Servicer (with a copy to by the Issuer, the PSCWV or the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shallTrustee, upon receiving as assignee of the written instruction Issuer, may, or at the direction of either (i) Holders evidencing the Environmental Control Bondholders of a majority of the Outstanding Amount principal amount of the Storm Recovery Environmental Control Bonds of all Series or (ii) by the Commission, subject to the terms of the Intercreditor AgreementsPSCWV, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), ) shall terminate all the Servicer’s rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the Servicer’s obligation under Section 7.02 6.04 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under Agreement. In addition, upon a Servicer Default described in Section 6.01(a), the Intercreditor Agreements; provided, however Issuer or the Indenture Trustee may apply to the PSCWV or any court of competent jurisdiction to order the sequestration and payment of Environmental Control Charge Collections arising with respect to the Environmental Control Property for the benefit of the Environmental Control Bondholders, the Issuer, the Indenture Trustee, and any other assignee and financing parties (each as defined in the Statute). The Trustee shall not give a Termination Notice upon instruction of the Commission PSCWV unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Environmental Control Property, including the Storm Recovery Charges Environmental Control Charges, or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 6.04, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete including, but not limited to, completing the transfer of the Storm Recovery Environmental Control Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer Indenture Trustee and the Indenture Trustee Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be are then held by the predecessor Servicer for remittanceremittance to the Collection Account or the Seller, or shall that are thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesit. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Environmental Control Property Records Documentation to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery Environmental Control Property Records Documentation to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Potomac Edison as Servicer shall not terminate Duke Energy CarolinasPotomac Edison’s rights or obligations as Seller under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Agreement.

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur occurs and be is continuing: (a) any failure by the Servicer to remit to the Collection Account Trustee, on behalf of the Issuer Issuer, any required remittance that shall continue continues unremedied for a period of five Business Days after written notice of such failure the date it is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer required to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;be paid; or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) 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 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to observe or perform its obligations under Section 4.01(b) in any material respect any other covenant or agreement of the time and manner Servicer set forth thereinin this Servicing Agreement or any other Basic Document to which the Servicer is a party, which failure failure: (i) materially and adversely affects the Transferred Bondable Transition Property or the rights of the Transition Bondholders; and (ii) continues unremedied for a period of sixty days after written notice of such failure has been given to the Servicer by the Issuer, the Trustee or the Holders of not less than twenty-five Business Days;percent of the Outstanding principal balance of the Transition Bonds of all Series and Classes, acting together as a single class, or after discovery of such failure by an officer of the Servicer, as the case may be; or (dc) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove proves to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Issuer or the Transition Bondholders and which material adverse effect continues unremedied for a period of 60 sixty days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have thereof has been delivered given to the Servicer (with a copy to the Indenture Trustee) by the Issuer Issuer, the Trustee or the Indenture Trustee (with Holders of not less than twenty-five percent of the Outstanding principal balance of the Transition Bonds of all Series and Classes, acting together as a copy single class, or after discovery of such notice being provided promptly upon receipt failure by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer an officer of the Servicer, as the case may be; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shallTrustee, upon receiving with the written instruction consent of either (i) the Holders evidencing of a majority of the Outstanding Amount principal balance of the Storm Recovery Transition Bonds or (ii) the Commissionof all Series and Classes, subject to the terms of the Intercreditor Agreementsvoting together as a single class, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “"Termination Notice”"), may terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the obligation under Section 7.02 6.04 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a)because of a failure to make required remittances, the Holders Issuer and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall each be entitled to apply to the Commission BPU or a any court of appropriate competent jurisdiction for an order for sequestration and payment to the Trustee of revenues arising with respect to the Storm Recovery Transferred Bondable Transition Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Transferred Bondable Transition Property, the Storm Recovery Charges related Transition Bond Charge or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 6.04, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Bondable Transition Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer Trustee and the Indenture Trustee Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Transferred Bondable Transition Property or the Storm Recovery Chargesrelated Transition Bond Charge. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Bondable Transition Property Records Documentation to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ ' fees and expenses) incurred in connection with transferring the Storm Recovery Bondable Transition Property Records Documentation to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 6.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas JCP&L as Servicer shall not terminate Duke Energy Carolinas’s JCP&L's rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Agreement.

Servicer Default. If The occurrence or existence of any one or more of the following events (or conditions shall constitute a “Servicer Default”) shall occur and be continuing: (ai) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer; (b) any failure on the part of the Servicer or, to remit when due any payment or deposit required hereunder (including any deposit to the Trust Account required pursuant to Section 3.06 hereof) within five (5) Business Days of the time period so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any required; (ii) failure on the part of Duke Energy Carolinasthe Servicer to submit when due a Servicer's Report or an Asset Base Certificate and, as in either such case, such failure continues for three (3) Business Days after the case may be, duly due date thereof; (iii) failure on the part of the Servicer to submit when due any report or certificate required pursuant to the provisions of Section 5.01 or Section 6.04 hereof (other than those reports specifically referred to in clause (ii) above) and such failure continues unremedied for fifteen (15) days; (iv) failure on the part of the Servicer to observe or to perform in any material respect any covenant or agreement (other than those covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth that are otherwise specifically addressed in this Servicing Agreement (other than as provided Section 7.01) contained in Section 7.01(a) any Loan Document, such breach or Section 7.01(c)) failure materially or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect affects the rights of the Holders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the IssuerPurchaser, the Commission (with a copy to the Indenture Trustee) Agent or to the Servicer any Lender, and such breach or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer; (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Daysthirty (30) days after the earlier to occur of (A) the date on which an officer of the Servicer has actual knowledge of such failure or breach, and (B) the date on which written notice thereof requiring the same to be remedied shall have been given to the Servicer by the Purchaser, the Agent or any Lender; (dv) any representation or warranty made by of the Servicer made in this Servicing Agreement or Agreement, any other Basic Loan Document or in any certificate, report, financial statement or other writing delivered pursuant hereto shall prove to be incorrect as of the time when the same shall have been incorrect in a material respect when made, which has a material adverse effect on inaccuracy would materially or adversely affect the Holders and which material adverse effect continues rights of the Purchaser, the Agent or any Lender and, if such breach is capable of cure, such inaccuracy remains unremedied for a period of 60 thirty (30) days after the earlier to occur of (A) the date any officer of the Servicer has knowledge of such incorrect representation, or (B) the date on which (i) written notice thereof, thereof requiring the same to be remedied, remedied shall have been delivered given to the Servicer (with a copy to the Indenture Trustee) by the Issuer Purchaser, the Agent or any Lender; provided, however, that the representations and warranties set forth in clauses (c), (d), (e), (i) and (j) of Section 2.01 shall not have the benefit of the thirty (30) day cure period set forth above; (vi) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Servicer or the Indenture Trustee Parent Guarantor in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization, or other similar law (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commissionincluding, without limitation, any Insolvency Law), or (iiB) such failure is discovered by an involuntary decree or order adjudging the Servicer a Responsible Officer bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment, or composition of or in respect of the Servicer; or Servicer or the Parent Guarantor under any applicable law (e) an including, without limitation, any Insolvency Event occurs with respect to the Servicer; thenLaw), and in each and every caseor appointing a custodian, so long as receiver, liquidator, sequestrator or other similar official of the Servicer Default shall not have been remediedor the Parent Guarantor or of any substantial part of its property of either, or ordering the Indenture Trustee shallwinding up or liquidation of the affairs of the Servicer and, upon receiving in the written instruction case of either (iA) Holders evidencing or (B), such decree or order shall continue unstayed and in effect for a majority period of sixty (60) days; (vii) the commencement by the Servicer or the Parent Guarantor of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization, or other similar law (including, without limitation, any Insolvency Law), or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Servicer or the Parent Guarantor to the entry of a decree or order for relief in respect of the Outstanding Amount Servicer or the Parent Guarantor in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization, or other similar law (including, without limitation, any Insolvency Law) or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it either to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, sequestrator or similar official of the Storm Recovery Bonds Servicer or the Parent Guarantor or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the inability by the Servicer or the Parent Guarantor to pay its debts generally as they become due, or the taking of corporate action by the Servicer in furtherance of any such action or the filing of an involuntary petition in bankruptcy and the continuance of such petition undismissed for a period of sixty (ii60) consecutive days; (viii) the Commission, subject Tangible Net Worth of the Parent Guarantor and its Consolidated subsidiaries (measured as of the end of each fiscal quarter based on the most recent financial statements delivered pursuant to the terms of the Intercreditor Agreements, Credit Agreement) is less than Three Hundred Million Dollars ($300,000,000); (ix) the occurrence of either of the following: (A) (i) a default by notice then given in writing to the Servicer has occurred and is continuing due to failure to make any payment when due (and beyond the applicable grace period with respect thereto, if any) with respect to Indebtedness which, individually or in the Indenture Trustee if given by the Holders) aggregate, exceeds Five Million Dollars (a “Termination Notice”$5,000,000), terminate all (ii) the rights Servicer shall have notice or actual knowledge of such default and obligations (iii) either (A) the holder(s) of such Indebtedness have exercised remedies against the obligor (including limiting borrowings or advances) or have caused the Servicer to retain or employ a restructuring or crisis manager or specialist (other than the obligations set forth in Section 6.02 and Parent Guarantor's independent public accountants or financial advisors) or (B) such default shall not have been (x) cured or (y) temporarily waived by the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointedapplicable holder(s) of such Indebtedness within twenty (20) Business Days after the later of such default or the expiration of any applicable grace period and, in any event, with respect to any waiver, such default shall not have been permanently waived within ninety (90) days after the later of such default or the expiration of any applicable grace period; or (B) (i) any default by the Servicer under this Servicing Agreement has occurred and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising continuing with respect to the Storm Recovery Property. On observance or performance (beyond the applicable grace period with respect thereto, if any) of any agreement or covenant relating to Indebtedness, which individually or in the aggregate, exceed Twenty-Five Million Dollars ($25,000,000) or contained in any instrument or agreement evidencing, securing or relating thereto or any other event or condition shall occur or condition exist, the effect of which default or other event or condition is to cause, or permit, the holder or holders of such Indebtedness (or trustee or agent on behalf of such holders) to cause such Indebtedness to become due prior to its stated maturity, (ii) the Servicer shall have notice or actual knowledge of such default and (iii) either (A) the holder(s) of such Indebtedness have exercised remedies against the Servicer (including limiting borrowings or advances for more than fifteen (15) Business Days) or have caused the Servicer to retain or employ a restructuring or crisis manager or specialist (other than the Parent Guarantor's independent public accountants or financial advisors), or B) such default shall not have been (x) cured or (y) temporarily waived by the applicable holder(s) of such Indebtedness within sixty (60) days after the receipt by later of such default or the expiration of any applicable grace period and, in any event, with respect to any waiver, such default shall not have been permanently waived within ninety (90) days after the later of such default or the expiration of any applicable grace period; or (x) the ratio (measured as of the end of each fiscal quarter based on the most recent financial statements delivered pursuant to the terms of the Credit Agreement) of (i) Funded Debt to (ii) Tangible Net Worth, in each case for the Parent Guarantor and its Consolidated subsidiaries (measured as of the end of each fiscal quarter), shall exceed 4 to 1; (xi) the ratio (measured as of the end of each fiscal quarter based on the most recent financial statements delivered pursuant to the terms of the Credit Agreement) of (A) for the rolling four-quarter period ending on the last day of each calendar quarter, the sum of (i) Earnings Available for Fixed Charges, plus (ii) depreciation, to (B) Fixed Charges for such period, in each case for the Parent Guarantor and its Consolidated Subsidiaries, is less than 1.5 to 1; (xii) an Asset Base Deficiency exists, and such condition is not remedied within twenty (20) days; (xiii) except as permitted under this Agreement, the Servicer assigns its rights or obligations under this Agreement; (xiv) a Change of a Termination Notice, all authority and power Control of the Servicer under this Servicing Agreementshall have occurred without the consent of Majority Lenders; (xv) the Servicer shall cease to be engaged in whole or substantially in whole in the container management business; (xvi) the occurrence of either of the following: (A) (i) a default by CAI or any of its Subsidiaries has occurred and is continuing due to failure to make any payment when due (beyond the applicable grace period with respect thereto, whether if any) with respect to Indebtedness which, individually or in the aggregate, exceeds Two Million Dollars ($2,000,000), (ii) the Servicer shall have notice or actual knowledge of such default and (iii) either (A) the holder(s) of such Indebtedness have exercised remedies against the obligor (including limiting borrowings or advances) or have caused CAI or any of its Subsidiaries to retain or employ a restructuring or crisis manager or specialist (other than CAI's independent public accountants or financial advisors) or (B) such default shall not have been (x) cured or (y) temporarily waived by the applicable holder(s) of such Indebtedness within ten (10) Business Days after the later of such default or the expiration of any applicable grace period and, in any event, with respect to any waiver, such default shall not have been permanently waived within ninety (90) days after the later of such default or the expiration of any applicable grace period; or (B) (i) any default by CAI or any of its Subsidiaries has occurred and is continuing with respect to the Storm Recovery Bondsobservance or performance (beyond the applicable grace period with respect thereto, if any) of any agreement or covenant relating to Indebtedness, which individually or in the aggregate, exceed Two Million Dollars ($2,000,000) or contained in any instrument or agreement evidencing, securing or relating thereto or any other event or condition shall occur or condition exist, the Storm Recovery Propertyeffect of which default or other event or condition is to cause, or permit, the Storm Recovery Charges holder or otherwise, shall, without further action, pass to and be vested in holders of such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, Indebtedness (or trustee or agent on behalf of such holders) to cause such Indebtedness to become due prior to its stated maturity, (ii) the predecessor Servicer, as attorney-in-fact Servicer shall have notice 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 actual knowledge of such Termination Notice, whether default and (iii) either (A) the holder(s) of such Indebtedness have exercised remedies against CAI or any of its Subsidiaries (including limiting borrowings or advances for more than fifteen (15) Business Days) or have caused CAI or any of its Subsidiaries to complete the transfer of the Storm Recovery Property Records and related documentsretain or employ a restructuring or crisis manager or specialist (other than CAI's independent public accountants or financial advisors), or otherwise. The predecessor Servicer B) such default shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held not have been (x) cured or (y) temporarily waived by the predecessor Servicer for remittanceapplicable holder(s) of such Indebtedness within sixty (60) days after the later of such default or the expiration of any applicable grace period and, or shall thereafter be received by it in any event, with respect to any waiver, such default shall not have been permanently waived within ninety (90) days after the Storm Recovery Property later of such default or the Storm Recovery Charges. As soon as practicable after receipt expiration of any applicable grace period; or (xvii) any breach of any covenant incorporated by reference by application of the Servicer provisions of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)6.12 hereof.

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: (a) any failure by the Servicer to remit to the Indenture Trustee for deposit into the Series 2003-1 Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Trustee; or (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in clause (a) of this Section 7.01(a) or Section 7.01(c)7.01) or any other Basic Document to which it is a partyparty in such capacity, which failure shall (i) materially and adversely affect the rights of the Holders Series 2003-1 Bondholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, Servicer by the Issuer, the Commission Issuer (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer an officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days;; or (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Series 2003-1 Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (iA) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (iiB) such failure is discovered by a Responsible Officer an officer of the Servicer; or (e) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shallmay, or shall upon receiving the written instruction of either the PUCT (iacting on behalf of the Customers) Holders or of the Series 2003-1 Bondholders evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Series 2003-1 Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the HoldersSeries 2003-1 Bondholders) (a “"Termination Notice”), ") terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement Agreement, subject to the terms of any intercreditor agreement to which the Issuer and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedServicer are parties. In addition, upon a Servicer Default described in Section 7.01(a), the Holders Series 2003-1 Bondholders and the Indenture Trustee as financing parties under the Storm Recovery Securitization Law (or any of their representatives) shall be entitled to to, at the expense of the Issuer (i) apply to the Commission or a district court of appropriate jurisdiction Travis County, Texas for an order for sequestration and sequestra▇▇▇▇ ▇nd payment of revenues arising with respect to the Storm Recovery Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges or otherwise, shall, without further action, pass to and be vested in such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).the

Servicer Default. If any one or more of the following events (each, a “"Servicer Default”") shall occur and be continuing: (a) any Any failure by the any Servicer to remit deposit into the applicable Settlement Account or other account as required in this Agreement any proceeds or payment required to be so delivered under the Collection Account on behalf terms of the Issuer any required remittance this Agreement that shall continue unremedied for a period of five one (1) Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Day; or (b) Any failure by any failure on Servicer to deliver any certificate or Monthly Servicing Report within one (1) Business Day after the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas date such certificate or an Affiliate thereof, any failure on the part of Duke Energy CarolinasReport, as the case may be, is required to be delivered; or (c) Failure on the part of any Servicer duly to observe or to perform in any material respect any other covenants or agreements of the such Servicer or Duke Energy Carolinas, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyRelated Agreement, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue unremedied for a period of 60 fifteen (15) days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas such Servicer by any Borrower or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) Custodian or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;CSFB; or (cd) A breach of any failure by the representation or warranty of any Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure hereunder that continues unremedied for a period of five one (1) Business Days; (d) any representation or warranty made by Day after the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period earlier of 60 days after the date on which (i) such Servicer obtains knowledge thereof or on which written notice thereof, requiring the same to be remedied, of such failure thereof shall have been delivered given to the Servicer such Servicer; (e) The occurrence of an Event of Bankruptcy with a copy respect to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the any Servicer; or (ef) Any assignment by any Servicer of its duties or rights hereunder except as specifically permitted hereunder, or any attempt to make such an Insolvency Event occurs with respect to the Servicerassignment; then, and in each and every case, so long as the a Servicer Default shall not have been remedied, the Indenture Trustee shallCSFB, upon receiving the written instruction of either (i) Holders evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commissionin addition to any other remedies it may have, subject to the terms of the Intercreditor Agreements, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination Notice”), may terminate all of the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions of such Servicer as Servicer until a Successor Servicer is appointed) servicer of the Servicer applicable Receivables under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Each Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply its pro rata share of its respective Monthly Servicing Fee for the number of days in the Collection Period prior to the Commission or a court effective date of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery Propertyits termination. On or after the receipt by a Servicer and the Servicer effective date of a Termination Noticewritten notice of termination from CSFB, all authority and power of the such Servicer under this Servicing Agreement, whether with respect to the Storm Recovery Bonds, the Storm Recovery Property, the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in such Successor a successor Servicer as may be appointed under Section 7.0213.2; provided, however, that such successor Servicer shall have no liability with respect to any obligation which was required to be performed by the predecessor Servicer prior to the date such successor Servicer becomes Servicer or any claim of a third party based on any alleged action or inaction of such predecessor Servicer as Servicer; and, without limitation, the Indenture Trustee CSFB is hereby authorized and empowered to execute and deliver, on behalf of the such 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 Noticenotice of termination, whether to complete the transfer and endorsement of the Storm Recovery Property Records applicable Receivables and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Issuer successor Servicer and the Indenture Trustee CSFB in effecting the termination of the responsibilities and rights of the such predecessor Servicer as servicer of the applicable Receivables under this Servicing Agreement, including (x) the transfer to the Successor such successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts funds that shall at the time be held or should have been held by the such predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or applicable Receivables and all funds in an account related to such Receivables and the Storm Recovery Charges. As soon as practicable after receipt related documents and statements held by it hereunder and (y) the delivery to such successor Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records all files and records concerning and relating to the Successor applicable Receivables and a computer tape in readable form containing all information necessary to enable such successor Servicer to service the applicable Receivables and the related Receivable Files in such predecessor Servicer's possession. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ fees and expenses' fees) incurred in connection with transferring the Storm Recovery Property Records Receivable Files and any other related documents and instruments to the Successor any successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 13.1 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas as In addition, any successor Servicer shall be entitled to payment from the immediate predecessor Servicer for reasonable transition expenses incurred in connection with acting as successor Servicer, and to the extent not so paid, such payment shall be made pursuant to the Custodial Agreement. The predecessor Servicer shall grant CSFB and the successor Servicer reasonable access to such predecessor Servicer's premises at such predecessor Servicer's expense. If requested by CSFB the successor Servicer shall modify or terminate Duke Energy Carolinas’s rights any arrangements relating to (i) the applicable Lock-Box with the Lock-Box Bank or obligations (ii) the Lock-Box Agreement, and direct the applicable Obligors to make all payments under the Sale Agreement applicable Receivables directly to such successor Servicer at the predecessor Servicer's expense (except rights thereunder deriving from its rights as in which event such successor Servicer shall process such payments directly, or, through a lock-box with a lock-box bank at the Servicer hereunderdirection of CSFB.).

Servicer Default. If any one or more of the following events (a “"Servicer Default”") shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account Bond Trustee on behalf of the Issuer any required remittance that shall continue unremedied for a period of five three Business Days after written notice of such failure is received by the Servicer from the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer of the Servicer;Bond Trustee; or (b) any failure on the part of by the Servicer or, so long as the Transferor and the Servicer is Duke Energy Carolinas or an Affiliate thereofare the same Person, any failure on the part of Duke Energy CarolinasTransferor, as the case may beapplicable, duly to observe or to perform in any material respect any covenants other covenant or agreements agreement of the Servicer or Duke Energy Carolinasthe Transferor, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders Intangible Transition Property and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, failure shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor Servicerthe Transferor, as the case may be, by the Issuer, Issuer or the Commission (with a copy to the Indenture Trustee) Bond Trustee or to after discovery of such failure by an 250 officer of the Servicer or Duke Energy Carolinasthe Transferor, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;; or (c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days; (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders Issuer or the Transition Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, thereof shall have been delivered given to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the ServicerBond Trustee; or (ed) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, the Indenture Trustee shallBond Trustee, upon receiving as assignee of the written instruction Issuer, with the consent of either (i) Holders evidencing of a majority of the Outstanding Amount outstanding principal amount of the Storm Recovery Transition Bonds or (ii) the Commission, subject to the terms of the Intercreditor Agreementsall Series, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a “"Termination Notice”), ") may terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 5.02 hereof and the obligation under Section 7.02 6.02 to continue performing its functions as Servicer until a Successor successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedAgreement. In addition, upon a Servicer Default described in Section 7.01(a6.01(a), each of the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) following shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order PUC for sequestration and payment of revenues 251 arising with respect to the Storm Recovery Serviced Intangible Transition Property: (i) the Issuer or its assignees or (ii) pledgees or transferees, including transferees under the Statute, of the Serviced Intangible Transition Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing AgreementAgreement with respect to the Issuer, whether with respect to the Storm Recovery Bonds, the Storm Recovery Serviced Intangible Transition Property, the Storm Recovery related Intangible Transition Charges or otherwise, shall, upon appointment of a successor Servicer pursuant to Section 6.02, without further action, pass to and be vested in such Successor successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Bond Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-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 Storm Recovery Intangible Transition Property Records Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor successor Servicer, the Issuer Bond Trustee and the Indenture Trustee Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor 252 Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Serviced Intangible Transition Property or the Storm Recovery related Intangible Transition Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Intangible Transition Property Records Documentation to the Successor successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all All reasonable costs and expenses (including reasonable attorneys’ attorneys fees and expenses) incurred in connection with transferring the Storm Recovery Intangible Transition Property Records Documentation to the Successor successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas West Penn as Servicer shall not terminate Duke Energy Carolinas’s West Penn's rights or obligations as Transferor under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Transfer Agreement.

Servicer Default. If any one or more of the following events (a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to deposit in the Collection Deposit Account on behalf of the Issuer any required remittance that shall continue payment or to direct the Indenture Trustee to make any required distributions therefrom, which failure continues unremedied for a period of five Business Days after written notice of such failure is received by the Servicer from the Issuer Owner Trustee or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission) or after discovery of such failure by a Responsible Officer an officer of the Servicer;; or (b) any failure on the part of by the Servicer or, so long as or the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy CarolinasSeller, as the case may be, duly to observe or to perform in any material respect any other covenants or agreements of the Servicer or Duke Energy Carolinas, the Seller (as the case may be, ) set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a partyDocument, which failure shall (i) materially and adversely affect the rights of the Holders Certificateholders or Noteholders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer, Duke Energy Carolinas Servicer or an affiliate of Duke Energy Carolinas, acting as Successor Servicer, the Seller (as the case may be, ) (A) by the Issuer, the Commission (with a copy to the Indenture Trustee) Owner Trustee or to the Servicer or Duke Energy Carolinas, as the case may be, by the Indenture Trustee or (B) such failure is discovered to the Servicer or the Seller (as the case may be) and the Indenture Trustee by a Responsible Officer the Holders of Notes, evidencing not less than 25% of the Servicer;Outstanding Amount of the Notes, or if the Notes are no longer Outstanding, Certificateholders of Certificates evidencing Percentage Interests aggregating not less than 25% of the Certificates; or (c) the Net Credit Loss Percentage with respect to any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days;Collection Period exceeded 8.00%; or (d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period occurrence of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer or the Indenture Trustee (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commission), or (ii) such failure is discovered by a Responsible Officer of the Servicer; or (e) an Insolvency Event occurs with respect to the ServicerSeller, the Servicer or Chrysler Residual Holdco LLC; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shall, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing not less than a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Commission, subject to the terms of the Intercreditor AgreementsNotes, by notice then given in writing to the Servicer (and to the Indenture Trustee, Backup Servicer and the Owner Trustee if given by the HoldersNoteholders) (a “Termination Notice”), may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a Successor Servicer is appointed7.03 hereof) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Storm Recovery PropertyAgreement. On or after the receipt by the Servicer of a Termination Noticesuch written notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Storm Recovery BondsNotes, the Storm Recovery Property, the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in the Backup Servicer or such Successor successor Servicer as may be appointed under Section 7.028.02; and, without limitation, the Indenture Trustee is and the Owner Trustee are hereby authorized and empowered to execute and deliver, on behalf for the benefit 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 Noticenotice of termination, whether to complete the transfer and endorsement of the Storm Recovery Property Records Receivables and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Backup Servicer or other successor Servicer, the Issuer Indenture Trustee and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the Successor Backup Servicer or other successor Servicer for administration by it of all Storm Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittancedeposit, or shall thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Chargesany Receivable. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Records to the Successor Servicer. In case a Successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with transferring the Storm Recovery Property Records to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 Transition Costs shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Transition Costs not reimbursed by the predecessor Servicer pursuant to the immediately preceding sentence will be paid in accordance with Section 5.05(a)(ii)(C). Any successor Servicer (including the Backup Servicer as Servicer successor Servicer) shall not terminate Duke Energy Carolinas’s rights or provide the Seller in writing with such information as is reasonably requested by the Seller to comply with its reporting obligations under the Sale Agreement (except rights thereunder deriving from its rights as Exchange Act with respect to such Servicer. Upon receipt of notice of the occurrence of a Servicer hereunder)Default, the Indenture Trustee shall give notice thereof to the Rating Agencies.