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 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 (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 (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 to 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, Holders (as defined in the Trust Agreement) of Certificates evidencing Percentage Interests (as defined in the Trust Agreement) aggregating at least 25%; 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 the Company; 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 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 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 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 Account, on behalf of the Issuer 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 of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas CEHE or an Affiliate thereof, any failure on the part of Duke Energy CarolinasCEHE, 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 CarolinasCEHE, 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 shall: (i) materially and adversely affect the rights of the Holders and 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 ServicerCEHE, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasCEHE, 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 (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 material respect when made, which has a material adverse effect on the Holders 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 Servicer; 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 at least a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Texas 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 successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor AgreementsAgreement; provided, however however, that the Indenture Trustee shall not Trustee’s obligation to give a Termination Notice upon instruction of the Texas Commission unless is subject to and dependent upon satisfaction of the Rating Agency Condition is satisfiedin connection therewith. In addition, upon a Servicer Default described in Section 7.01(a), the Holders Issuer and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to (x) apply to the Commission or a state district court of appropriate jurisdiction for an order located in Travis County, Texas, for sequestration and payment to the Trustee of revenues arising with respect to the Storm Recovery System Restoration Property, (y) foreclose on or otherwise enforce the Lien on and security interests in the System Restoration Property and (z) apply to the Texas Commission for an order that amounts arising from the System Restoration Charges be transferred to a separate account for the benefit of the Holders, 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 System Restoration Property, SRC Collections, 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 7.027.04; 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 System Restoration 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 System Restoration 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 System Restoration Property, SRC Collections 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 System Restoration 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 System Restoration 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 CEHE as Servicer shall not terminate Duke Energy CarolinasCEHE’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 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 (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 (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 to 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, Holders (as defined in the Trust Agreement) of Certificates evidencing Percentage Interests (as defined in the Trust Agreement) aggregating at least 25%; 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 the Company; 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 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 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 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 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 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: (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 deliver to the Collection Account on behalf Indenture Trustee for deposit in any of the Issuer Trust Accounts or the Certificate Distribution Account any required remittance that shall continue payment or to direct the Indenture Trustee or the Trustee to make any required distributions therefrom, which failure continues unremedied for a period of five three Business Days after written notice of such failure is received by the Servicer from the Issuer 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; (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 (other than as set forth in clause (a)) 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 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 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 (with a copy to the Indenture Trustee) 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 to the Trustee and the Indenture Trustee, by a Responsible Officer the Noteholders or Certificateholders, as applicable, evidencing not less than 25% of the ServicerOutstanding Amount of the Notes or 25% of the beneficial interest in the Issuing Entity; (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; or (d) the failure by NH Credit as Servicer to engage a replacement Backup Servicer within one hundred eighty days after the date that SST is terminated as Backup Servicer, unless SST is terminated as Backup Servicer pursuant to Section 2.3 of the Backup Servicing Agreement, in which case a Backup Servicer will no longer be required, notwithstanding anything in the Basic Documents to the contrary; 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 to any Backup Servicer that is engaged at that time (and to the Indenture Trustee and the Trustee if given by the Holders) (a “Termination Notice”Noteholders), 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 AgreementsAgreement; provided, however however, that the Indenture Trustee shall Backup Servicer, acting as Successor Servicer, may not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon be terminated for a Servicer Default described set forth in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives8.1(b) 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 PropertySeller or under Section 8.1(d). On or after the receipt by the Servicer and any Backup 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 PropertyCertificates, the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in (a) the Backup Servicer, or if no Backup Servicer is then engaged (b) the Indenture Trustee or such Successor Servicer as may be appointed under Section 7.028.2; and, without limitation, the Indenture Trustee is and the 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 termination of such Termination Noticethe Servicer, 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 Servicer, the Issuer Indenture Trustee 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 of: (i) 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 and (ii) all Receivable Files. 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 such transfer, including the costs of transferring the Storm Recovery Property Records Receivable Files to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such its succession as Servicer pursuant to this Section 7.01 Servicer, 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 written notice of the occurrence of a Servicer Default, the Trustee shall not terminate Duke Energy Carolinas’s rights or obligations under give written notice thereof to the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)Rating Agencies.

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 (each, a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the 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 Evergy Missouri West or an Affiliate thereof, any failure on the part of Duke Energy CarolinasEvergy Missouri West, 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 CarolinasEvergy Missouri West, 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 ServicerEvergy Missouri West, 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 CarolinasEvergy Missouri West, as the case may be, by the Indenture Trustee (acting at the written direction of the Holders) 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 (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 sixty (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 acting at the written direction of such notice being provided promptly upon receipt by the Servicer to the Commission), or (iiHolders) after 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 Evergy Missouri West; 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 Securitized Utility Tariff Bonds 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 AgreementsSecuritized Utility Tariff Bonds, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the HoldersBondholders) (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 appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; providedServicer, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedsubject to compliance with Section 7.02. 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 MPSC for sequestration and payment of revenues arising with respect to the Storm Recovery Securitized Utility Tariff Property: (i) the Holders of any Securitized Utility Tariff Bonds and any Indenture Trustee or representative thereof as beneficiaries of any statutory or other Lien permitted by the Securitization Law; (ii) the Issuer or its assignees; or (iii) pledgees or transferees, including transferees under Section 393.1700.5.(1)(c) of the Securitization Law, of the 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’ attorney’s 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 Evergy Missouri West as Servicer shall not terminate Duke Energy CarolinasEvergy Missouri West’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 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 ServicerTrustee; (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 ServicerServicer by the Trustee, Duke Energy Carolinas the LPSC (with a copy to the Trustee) or the Issuer or after discovery of such failure by an affiliate officer of Duke Energy Carolinas, acting as Successor the 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) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five 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 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 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 (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 and under by notice then given in writing to the Intercreditor Agreements; provided, however the Indenture Trustee shall not give Servicer (a “Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedNotice”). 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) Bondholders and the Trustee 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 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 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 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 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 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. 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 Cleco Power’s rights as a Servicer shall not terminate Duke Energy CarolinasCleco Power’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 (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 Public Service Company of New Mexico or an Affiliate thereof, any failure on the part of Duke Energy CarolinasPublic Service Company of New Mexico, 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 CarolinasPublic Service Company of New Mexico, 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 Public Service Company of Duke Energy Carolinas, acting as Successor ServicerNew Mexico, 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 CarolinasPublic Service Company of New Mexico, 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 Public Service Company of New Mexico; 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 CommissionSeries A Bonds, subject to the terms of the Intercreditor Agreementsany intercreditor agreement executed in connection with any additional energy transition 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 Energy Transition Act (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 Series 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 Series A Bonds, the Storm Recovery Series Property, the Storm Recovery Series 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 Energy 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 Energy 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 Series Property or the Storm Recovery Series Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Energy 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’ fees and expenses) incurred in connection with transferring the Storm Recovery Energy 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 Public Service Company of New Mexico as Servicer shall not terminate Duke Energy CarolinasPublic Service Company of New Mexico’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 deliver to the Collection Account on behalf Indenture Trustee for deposit in any of the Issuer Trust Accounts or the Certificate Distribution Account any required remittance that shall continue payment or to direct the Indenture Trustee or the Trustee to make any required distributions therefrom, which failure continues unremedied for a period of five three Business Days after written notice of such failure is received by the Servicer from the Issuer 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; (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 (other than as set forth in clause (a)) 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 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 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 (with a copy to the Indenture Trustee) 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 to the Trustee and the Indenture Trustee, by a Responsible Officer the Noteholders or Certificateholders, as applicable, evidencing not less than 25% of the ServicerOutstanding Amount of the Notes or 25% of the beneficial interest in the Issuing Entity; (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; or (d) the failure by NH Credit as Servicer to engage a replacement Backup Servicer within one hundred eighty days after the date that SST is terminated as Backup Servicer, unless SST is terminated as Backup Servicer pursuant to Section 2.3 of the Backup Servicing Agreement, in which case a Backup Servicer will no longer be required, notwithstanding anything in the Basic Documents to the contrary; 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 to any Backup Servicer that is engaged at that time (and to the Indenture Trustee and the Trustee if given by the Holders) (a “Termination Notice”Noteholders), 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 AgreementsAgreement; provided, however however, that the Indenture Trustee shall Backup Servicer, acting as Successor Servicer, may not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon be terminated for a Servicer Default described set forth in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives8.1(b) 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 PropertySeller or under Section 8.1(d). On or after the receipt by the Servicer and any Backup 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 PropertyCertificates, the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in (a) the Backup Servicer, or if no Backup Servicer is then engaged (b) the Indenture Trustee or such Successor Servicer as may be appointed under Section 7.028.2; and, without limitation, the Indenture Trustee is and the 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 termination of such Termination Noticethe Servicer, 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 Servicer, the Issuer Indenture Trustee 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 of: (i) 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 and (ii) all Receivable Files. 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 such transfer, including the costs of transferring the Storm Recovery Property Records Receivable Files to the Successor Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such its succession as Servicer pursuant to this Section 7.01 Servicer, 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 written notice of the occurrence of a Servicer Default, the Trustee shall not terminate Duke Energy Carolinas’s rights or obligations under give written notice thereof to the Sale Agreement (except rights thereunder deriving from its rights as Rating Agencies and the Servicer hereunder)Counterparties.

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 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 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 ServicerTrustee; (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 party, which failure shall failure (i) materially and adversely affect affects the Energy Transition Property or the timely collection of the Energy Transition Charges or the rights of the Holders and Energy 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, thereof shall have been given to the Servicer, Duke Energy Carolinas Servicer by the Trustee or the Issuer (with a copy to the Trustee) or after discovery of such failure by an affiliate officer of Duke Energy Carolinas, acting as Successor the 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 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 material respect when made, which has a material adverse effect on the Holders Energy 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 by the Issuer (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 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”), and under the Trustee shall comply with the 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 Energy Transition Bondholders and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) 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 Trustee of revenues arising with respect to the Storm Recovery Energy Transition Property, (ii) foreclose on or otherwise enforce the Lien on and security interests in the Energy Transition Property and (iii) apply to the LPSC for an order that amounts arising from the Energy Transition Charges be transferred to a separate account for the benefit of the Energy Transition 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 Energy Transition Property, the Storm Recovery Energy Transition Charges or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 7.04 and pursuant to the provisions of the Intercreditor Agreement, 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 Energy 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 and the Intercreditor 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 Energy Transition Property or the Storm Recovery Energy Transition Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Energy 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 Energy 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 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. All costs and expenses (including attorneys’ fees and expenses) incurred in connection with transferring the Energy Transition Property Documentation to the Successor Servicer and amending this Agreement or the Intercreditor Agreement to reflect the succession as Servicer other than pursuant to this Section 7.01 shall be paid by the party incurring such costs and expenses. Termination of Duke Energy Carolinas Cleco Power’s rights as a Servicer shall not terminate Duke Energy CarolinasCleco Power’s rights or obligations under the Sale Agreement or the Intercreditor 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 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 Indenture Trustee for deposit in the Collection Account on behalf of the Issuer or Reserve Account any required remittance that shall continue payment or to direct the Indenture Trustee to make any required payment or distribution therefrom, which failure continues unremedied for a period of five 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 a copy of such notice being provided promptly upon receipt ii) to the Seller or the Servicer, as the case may be, and to the applicable Owner Trustee and Indenture Trustee by the Servicer to the Commission) or after discovery Holders of such failure by Notes evidencing not less than a Responsible Officer majority of the Servicer;Notes, acting as a single Class, (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 holders of Notes evidencing not less than 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 majority of the Servicer;Notes, acting together as a single Class; 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; thenprovided, however, that (A) if any delay or failure of performance referred to in clause (a) above shall have been caused by force majeure or other similar occurrences, the five Business Day grace period referred to in such clause (a) shall be extended for an additional 60 calendar days and (B) if any delay or failure of performance referred to in each clause (b) above shall have been caused by force majeure or other similar occurrences, the 90 day grace period referred to in such clause (b) shall be extended for an additional 60 calendar days. Upon receipt of notice of the occurrence of a Servicer Default, the Indenture Trustee shall give prompt written notice thereof to the Rating Agencies. At any time when a Servicer Default set forth in clauses (a) through (c) above has occurred 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 at least a majority of the Outstanding Amount of the Storm Recovery Bonds 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 or Reserve Account) for a specified period or permanently. Upon any such waiver of a past default, the Holders 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 (each, a “Servicer Default”) shall occur and be continuing: (a) any failure by the Servicer to remit to the Collection Account on behalf of the 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 PG&E or an Affiliate thereof, any failure on the part of Duke Energy CarolinasPG&E, 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 CarolinasPG&E, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(aclause (a) or Section 7.01(c)of this Section 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 ServicerPG&E, 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 CarolinasPG&E, 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 (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 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 PG&E; 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 Recovery Bonds 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 AgreementsBonds, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the HoldersBondholders) (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 appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; providedServicer, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedsubject to compliance with Section 7.02. 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 Property: (i) the holders of any Recovery Bonds and any Indenture Trustee or representative thereof as beneficiaries of any statutory or other Lien permitted by the Wildfire Financing Law; (ii) the Issuer or its assignees; or (iii) pledgees or transferees, including transferees under Section 850.4 of the Wildfire Financing Law, of the 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 Fixed 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 Fixed 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’ attorney’s 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 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 PG&E as Servicer shall not terminate Duke Energy CarolinasPG&E’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 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 Ameren Missouri or an Affiliate thereof, any failure on the part of Duke Energy CarolinasAmeren Missouri, 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 CarolinasAmeren Missouri, 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 ServicerAmeren Missouri, 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 CarolinasAmeren Missouri, as the case may be, by the Indenture Trustee (acting at the written direction of the Holders) 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 (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 sixty (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 acting at the written direction of such notice being provided promptly upon receipt by the Servicer to the Commission), or (iiHolders) after 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 Ameren Missouri; 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 Securitized Utility Tariff Bonds 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 AgreementsSecuritized Utility Tariff Bonds, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the HoldersBondholders) (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 appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; providedServicer, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedsubject to compliance with Section 7.02. 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 MoPSC for sequestration and payment of revenues arising with respect to the Storm Recovery Securitized Utility Tariff Property: (i) the Holders of any Securitized Utility Tariff Bonds and any Indenture Trustee or representative thereof as beneficiaries of any statutory or other Lien permitted by the Securitization Law; (ii) the Issuer or its assignees; or (iii) pledgees or transferees, including transferees under Section 393.1700.5.(1)(c) of the Securitization Law, of the 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’ attorney’s 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 Ameren Missouri as Servicer shall not terminate Duke Energy CarolinasAmeren Missouri’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 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 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 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 (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 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 (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 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: (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 to the Collection Account Account, on behalf of the Issuer 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 of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas CEHE or an Affiliate thereof, any failure on the part of Duke Energy CarolinasCEHE, 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 CarolinasCEHE, 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 shall: (i) materially and adversely affect the rights of the Holders and 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 ServicerCEHE, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasCEHE, 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 (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 material respect when made, which has a material adverse effect on the Holders 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 Servicer; 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 at least a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the Texas 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 successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor AgreementsAgreement; provided, however however, that (i) the Indenture Trustee shall not Trustee’s obligation to give a Termination Notice upon instruction of the Texas Commission unless is subject to and dependent upon satisfaction of the Rating Agency Condition is satisfiedin connection therewith, and (ii) the Trustee shall comply with the applicable provisions of the Intercreditor Agreement. In addition, upon a Servicer Default described in Section 7.01(a), the Holders Issuer and the Indenture Trustee as financing parties under the Storm Recovery Law (or any of their representatives) shall be entitled to (x) apply to the Commission or a state district court of appropriate jurisdiction for an order located in Travis County, Texas, for sequestration and payment to the Trustee of revenues arising with respect to the Storm Recovery System Restoration Property, (y) foreclose on or otherwise enforce the Lien on and security interests in the System Restoration Property and (z) apply to the Texas Commission for an order that amounts arising from the System Restoration Charges be transferred to a separate account for the benefit of the Holders, 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 System Restoration Property, SRC Collections, 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 7.027.04 and pursuant to the applicable provisions of the Intercreditor Agreement; 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 System Restoration 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 and the Intercreditor Agreement, including the transfer to the Successor successor Servicer for administration by it of all Storm Recovery System Restoration 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 System Restoration Property, SRC Collections 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 System Restoration 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 System Restoration Property Records to the Successor successor Servicer and amending this Servicing Agreement and or 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 CEHE as Servicer shall not terminate Duke Energy CarolinasCEHE’s rights or obligations under the Sale Agreement or the Intercreditor 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 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 Liberty or an Affiliate thereof, any failure on the part of Duke Energy CarolinasLiberty, 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 CarolinasLiberty, 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 ServicerLiberty, 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 CarolinasLiberty, as the case may be, by the Indenture Trustee (acting at the written direction of the Holders) 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 (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 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 acting at the written direction of such notice being provided promptly upon receipt by the Servicer to the Commission), Holders) 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 Liberty; 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 Securitized Utility Tariff Bonds 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 AgreementsSecuritized Utility Tariff Bonds, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the HoldersBondholders) (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 appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreements; providedServicer, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfiedsubject to compliance with Section 7.02. 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 MPSC for sequestration and payment of revenues arising with respect to the Storm Recovery Securitized Utility Tariff Property: (i) the Holders of any Securitized Utility Tariff Bonds and any Indenture Trustee or representative thereof as beneficiaries of any statutory or other Lien permitted by the Securitization Law; (ii) the Issuer or its assignees; or (iii) pledgees or transferees, including transferees under Section 393.1700.5.(1)(c) of the Securitization Law, of the 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’ attorney’s 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 Liberty as Servicer shall not terminate Duke Energy CarolinasLiberty’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 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; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas Florida or an Affiliate thereof, any failure on the part of Duke Energy CarolinasFlorida, 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 CarolinasFlorida, 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 ServicerFlorida, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy CarolinasFlorida, 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 Florida; 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 Series A Bonds or (ii) by the Commission, 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 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 Nuclear Asset-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 Series 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 Series A Bonds, the Storm Recovery Series Property, the Storm Recovery Series 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 Nuclear Asset-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 Nuclear Asset-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 Series Property or the Storm Recovery Series Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Nuclear Asset-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 Nuclear Asset-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 Florida as Servicer shall not terminate Duke Energy CarolinasFlorida’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 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 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 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 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 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 orSeller, so long as NMAC is the Servicer is Duke Energy Carolinas or an Affiliate thereof, Servicer) to deliver to the Relevant Trustee for deposit in any failure on of the part of Duke Energy Carolinas, as the case may be, duly to observe Accounts any required payment or to perform in direct the Relevant Trustee to make 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 thereinrequired distributions therefrom, which failure continues unremedied for a period of five Business Days; Days after (di) any representation or warranty made receipt by the Servicer in (or the Seller, so long as NMAC is the Servicer) of written notice of such failure given by the Owner Trustee or the Indenture Trustee, (ii) receipt by the Servicer (or the Seller, so long as NMAC is the Servicer), the Owner Trustee or the Indenture Trustee of written notice of such failure given by Holders of Notes evidencing not less than a majority of the Outstanding Amount or, if no Notes are Outstanding, Holders of Certificates evidencing not less than a majority of the aggregate Certificate Balance, or (iii) discovery of such failure by any officer of the Servicer; provided, however, that a failure under 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 clause (a) that continues unremedied for a period of 60 ten Business Days or less will not constitute a Servicer Default if such failure was caused by force majeure or other similar occurrence; (b) any failure by the Servicer (or the Seller, as long as NMAC is the Servicer) to duly observe or perform in any material respect any other covenants or agreements of the Servicer (or the Seller, as long as NMAC is the Servicer) set forth in this Agreement (including its obligation to purchase Receivables pursuant to Section 4.06), which failure shall materially and adversely affect the rights of the Certificateholders or the Noteholders and shall continue unremedied for a period of 90 days after giving of written notice of the date on which failure to (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to or the Seller, as long as NMAC is the Servicer) by the Owner Trustee 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) the Servicer (or the Seller, as long as NMAC is the Servicer) and the Owner Trustee or the Indenture Trustee by Holders of Notes evidencing not less than a majority of the Outstanding Amount or, if no Notes are Outstanding, Holders of Certificates evidencing not less than a majority of the Certificate Balance; provided, however, that a failure under this clause (b) that continues unremedied for a period of 150 days or less will not constitute a Servicer Default if such failure is discovered was caused by a Responsible Officer of the Servicerforce majeure or other similar occurrence; or (ec) the occurrence of 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 shall, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the CommissionNotes, subject to the terms acting together as a single Class or, if no Notes are Outstanding, Holders of Certificates evidencing not less than a majority of the Intercreditor AgreementsCertificate Balance, by notice then 56 (Nissan 2014-A Sale and Servicing Agreement) given in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee if given by the HoldersNoteholders) and the Administrator (a “Termination Notice”), and the Administrator will provide notice thereof to each Rating Agency pursuant to Section 1(a)(i)(K) and Section 1(d) of the Administration Agreement) 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 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, Certificates or the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such 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 Servicer, the Issuer Servicer and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including including, without limitation, 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 remittancedeposit, or shall have been deposited by the predecessor Servicer, in the Accounts or thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt Receivables that shall at that time be held by the predecessor Servicer and the delivery of such Termination Notice, the Servicer shall deliver Receivable Files and the Storm Recovery Property Records to related accounts and records maintained by the Successor predecessor 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 Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 8.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Notwithstanding the foregoing, in the event the predecessor Servicer is the Indenture Trustee, the original Servicer hereunder shall reimburse the Indenture Trustee for all reasonable costs and expenses as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under described in the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)immediately preceding sentence.

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 Bondable Transition Property or the rights of the Holders and 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) 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 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 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 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 6.04 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 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 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 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 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 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 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 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 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 and be continuing: (a) any failure by the Servicer to remit to the appropriate 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 of the Servicer; (b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Carolinas DTE Electric or an Affiliate thereof, any failure on the part of Duke Energy CarolinasDTE Electric, 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 CarolinasDTE Electric, 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 (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 ServicerDTE Electric, 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 CarolinasDTE Electric, 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) of this Servicing Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five (5) 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 sixty (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 DTE Electric; 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 (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 AgreementsSecuritization 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 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 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 DTE Electric as Servicer shall not terminate Duke Energy CarolinasDTE Electric’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 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: (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 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 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 orSeller, so long as NMAC is the Servicer is Duke Energy Carolinas or an Affiliate thereof, Servicer) to deliver to the Relevant Trustee for deposit in any failure on of the part of Duke Energy Carolinas, as the case may be, duly to observe Accounts any required payment or to perform in direct the Relevant Trustee to make 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 thereinrequired distributions therefrom, which failure continues unremedied for a period of five Business Days; Days after (di) any representation or warranty made receipt by the Servicer in (or the Seller, so long as NMAC is the Servicer) of written notice of such failure given by the Owner Trustee or the Indenture Trustee, (ii) receipt by the Servicer (or the Seller, so long as NMAC is the Servicer), the Owner Trustee or the Indenture Trustee of written notice of such failure given by Holders of Notes evidencing not less than a majority of the Outstanding Amount or, if no Notes are Outstanding, Holders of Certificates evidencing not less than a majority of the aggregate Certificate Balance, or (iii) discovery of such failure by any officer of the Servicer; provided, however, that a failure under 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 clause (a) that continues unremedied for a period of 60 ten Business Days or less will not constitute a Servicer Default if such failure was caused by force majeure or other similar occurrence; (b) any failure by the Servicer (or the Seller, as long as NMAC is the Servicer) to duly observe or perform in any material respect any other covenants or agreements of the Servicer (or the Seller, as long as NMAC is the Servicer) set forth in this Agreement (including its obligation to purchase Receivables pursuant to Section 4.06), which failure shall materially and adversely affect the rights of the Certificateholders or the Noteholders and shall continue unremedied for a period of 90 days after giving of written notice of the date on which failure to (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to or the Seller, as long as NMAC is the Servicer) by the Owner Trustee 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) the Servicer (or the Seller, as long as NMAC is the Servicer) and the Owner Trustee or the Indenture Trustee by Holders of Notes evidencing not less than a majority of the Outstanding Amount or, if no Notes are Outstanding, Holders of Certificates evidencing not less than a majority of the Certificate Balance; provided, however, that a failure under this clause (b) that continues unremedied for a period of 150 days or less will not constitute a Servicer Default if such failure is discovered was caused by a Responsible Officer of the Servicerforce majeure or other similar occurrence; or (ec) the occurrence of 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 shall, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the CommissionNotes, subject to the terms acting together as a single Class or, if no Notes are Outstanding, Holders of Certificates evidencing not less than a majority of the Intercreditor AgreementsCertificate Balance, by notice then given in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee if given by the HoldersNoteholders) and the Administrator (a “Termination Notice”), and the Administrator will provide notice thereof to each Rating Agency pursuant to Section 1(a)(i)(K) and Section 1(d) of the Administration 56 (Nissan 2013-C Sale and Servicing Agreement) Agreement) 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 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, Certificates or the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such 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 Servicer, the Issuer Servicer and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including including, without limitation, 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 remittancedeposit, or shall have been deposited by the predecessor Servicer, in the Accounts or thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt Receivables that shall at that time be held by the predecessor Servicer and the delivery of such Termination Notice, the Servicer shall deliver Receivable Files and the Storm Recovery Property Records to related accounts and records maintained by the Successor predecessor 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 Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 8.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Notwithstanding the foregoing, in the event the predecessor Servicer is the Indenture Trustee, the original Servicer hereunder shall reimburse the Indenture Trustee for all reasonable costs and expenses as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under described in the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)immediately preceding sentence.

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 or cause to be delivered to the Collection Account on behalf Relevant Trustee for deposit in any of the Issuer Accounts any required remittance that shall continue payment or to direct the Relevant Trustee to make any required distributions therefrom, which failure continues unremedied for a period of five ten Business Days after (i) receipt by the Servicer of written notice of such failure is received given by the Servicer from the Issuer or the Indenture Trustee or Holders of Notes evidencing not less than a majority of the Outstanding Amount, acting together as a single class, or, if no Notes are Outstanding, Holders of Certificates evidencing not less than a majority of the Certificate Balance or (with a copy of such notice being provided promptly upon receipt by the Servicer to the Commissionii) or after discovery of such failure by a Responsible an Authorized 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 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 including its obligation to purchase Receivables pursuant to Section 7.01(a) or Section 7.01(c4.06)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders Securityholders and (ii) shall continue unremedied for a period of 60 90 days after receipt by the date on which (A) Servicer of written notice of such failure, requiring the same to be remedied, shall have been failure 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 Holders of Notes evidencing not less than a Responsible Officer majority of the Servicer; Outstanding Amount, acting together as a single class, or, if no Notes are Outstanding, Holders of Certificates evidencing not less than a majority of the Certificate Balance; provided, however, that a failure under this clause (cb) 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 that continues unremedied for a period of five Business Days;150 days or less will not constitute a Servicer Default if such failure was caused by force majeure or other similar occurrence; or 55 (NAROT 20[ ]-[ ] Sale and Servicing Agreement) (dc) 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 Servicer; 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 a majority of the Outstanding Amount of the Storm Recovery Bonds or (ii) the CommissionNotes, subject to the terms acting together as a single Class or, if no Notes are Outstanding, Holders of Certificates evidencing not less than a majority of the Intercreditor AgreementsCertificate Balance, by notice then given in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee if given by the HoldersNoteholders) and the Administrator (a “Termination Notice”), and the Administrator will provide notice thereof to each Rating Agency pursuant to Section 1(d) of the Administration Agreement) 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 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, Certificates or the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such 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 Servicer, the Issuer Servicer and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including including, without limitation, 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 remittancedeposit, or shall have been deposited by the predecessor Servicer, in the Accounts or thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt Receivables that shall at that time be held by the predecessor Servicer and the delivery of such Termination Notice, the Servicer shall deliver Receivable Files and the Storm Recovery Property Records to related accounts and records maintained by the Successor predecessor 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 Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 8.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Notwithstanding the foregoing, in the event the predecessor Servicer is the Indenture Trustee, the original Servicer hereunder shall reimburse the Indenture Trustee for all reasonable costs and expenses as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under described in the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)immediately preceding sentence.

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 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 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 Servicer (or the Seller, so long as NMAC is the Servicer) to remit deliver to the Collection Account on behalf Relevant Trustee for deposit in any of the Issuer Accounts any required remittance that shall continue payment or to direct the Relevant Trustee to make any required distributions therefrom, which failure continues unremedied for a period of five three Business Days after (i) receipt by the Servicer (or the Seller, so long as NMAC is the Servicer) of written notice of such failure is received given by the Owner Trustee or the Indenture Trustee, (ii) receipt by the Servicer from (or the Issuer Seller, so long as NMAC is the Servicer), the Owner Trustee or the Indenture Trustee (with a copy of written notice of such notice being provided promptly upon receipt failure given by Holders of Notes evidencing not less than 25% of the Servicer to the CommissionOutstanding Amount, or (iii) or after discovery of such failure by a Responsible Officer any officer of the Servicer; (b) any failure on the part of by the Servicer or(or the Seller, so as long as NMAC is the Servicer is Duke Energy Carolinas or an Affiliate thereof, any failure on the part of Duke Energy Carolinas, as the case may be, Servicer) to duly to observe or to perform in any material respect any other covenants or agreements of the Servicer (or Duke Energy Carolinasthe Seller, as long as NMAC is the case may be, Servicer) set forth in this Servicing Agreement (other than as provided in including its obligation to purchase Receivables pursuant to Section 7.01(a) or Section 7.01(c4.06)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders Certificateholders or the Noteholders and (ii) shall continue unremedied for a period of 60 90 days after the date on which (A) giving of written notice of such failurethe failure to (i) the Servicer (or the Seller, requiring the same to be remedied, shall have been given to as long as NMAC is 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 Owner Trustee or 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 the Servicer (or the Seller, as long as NMAC is discovered the Servicer) and the Owner Trustee or the Indenture Trustee by a Responsible Officer Holders of Notes evidencing not less than 25% of the ServicerOutstanding Amount or Holders of Certificates evidencing not less than 25% of the Certificate Balance; or (ec) the occurrence of 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 shall, upon receiving or the written instruction Holders of either (i) Holders Notes evidencing a majority of the Outstanding Amount of the Storm Recovery Bonds Notes (but excluding for purposes of such calculation and action all Notes held or (ii) beneficially owned by the CommissionIssuer, subject to the terms Seller, the Servicer or any of their Affiliates unless all of the Intercreditor AgreementsNotes are held or beneficially owned by the Issuer, the Seller, the Servicer or any of their Affiliates), acting together as a single Class, by notice then given in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee if given by the HoldersNoteholders) and the Administrator (a “Termination Notice”), and the Administrator will provide notice thereof to each Rating Agency pursuant to Section 1(a)(i)(L) and Section 1(e) of the Administration Agreement) 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 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, Certificates or the Storm Recovery Charges Receivables or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such 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 Servicer, the Issuer Servicer and the Indenture Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including including, without limitation, 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 remittancedeposit, or shall have been deposited by the predecessor Servicer, in the Accounts or thereafter be received by it with respect to the Storm Recovery Property or the Storm Recovery Charges. As soon as practicable after receipt Receivables that shall at that time be held by the predecessor Servicer and the delivery of such Termination Notice, the Servicer shall deliver Receivable Files and the Storm Recovery Property Records to related accounts and records maintained by the Successor predecessor 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 Servicer and amending this Servicing Agreement and the Intercreditor Agreements to reflect such succession as Servicer pursuant to this Section 7.01 8.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Carolinas Notwithstanding the foregoing, in the event the predecessor Servicer is the Indenture Trustee, the original Servicer hereunder shall reimburse the Indenture Trustee for all reasonable costs and expenses as Servicer shall not terminate Duke Energy Carolinas’s rights or obligations under described in the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder)immediately preceding sentence.

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.