EXHIBIT 10.2
Execution Copy
________________________________________________________________________________
________________________________________________________________________________
TRANSITION PROPERTY SERVICING AGREEMENT
BETWEEN
SCE FUNDING LLC
NOTE ISSUER
AND
SOUTHERN CALIFORNIA EDISON COMPANY
SERVICER
DATED AS OF DECEMBER 11, 1997
________________________________________________________________________________
________________________________________________________________________________
TABLE OF CONTENTS
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ARTICLE I. Definitions.................................................... 1
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Section 1.01. Definitions............................................ 1
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Section 1.02. Other Definitional Provisions.......................... 8
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ARTICLE II. Appointment and Authorization................................. 9
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Section 2.01. Appointment of Servicer; Acceptance of Appointment..... 9
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Section 2.02. Authorization.......................................... 9
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Section 2.03. Dominion and Control Over the Transition Property...... 9
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ARTICLE III. Billing Services............................................. 10
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Section 3.01. Duties of Servicer..................................... 10
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Section 3.02. Servicing and Maintenance Standards.................... 11
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Section 3.03. Certificate of Compliance.............................. 11
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Section 3.04. Annual Report by Independent Public Accountants........ 12
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ARTICLE IV. Services Related to True-Up Adjustments....................... 12
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Section 4.01. Periodic True-Up Adjustments........................... 12
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Section 4.02. Limitation of Liability................................ 16
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ARTICLE V. The Transition Property........................................ 17
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Section 5.01. Custody of Transition Property Records................. 17
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Section 5.02. Duties of Servicer as Custodian........................ 17
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Section 5.03. Instructions; Authority to Act......................... 19
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Section 5.04. Custodian's Indemnification............................ 19
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Section 5.05. Effective Period and Termination....................... 19
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Section 5.06. General Indemnification of Note Trustee , Certificate
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Trustee and Delaware Trustee........................ 19
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ARTICLE VI. The Servicer.................................................. 20
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Section 6.01. Representations and Warranties of Servicer............. 20
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Section 6.02. Indemnities of Servicer; Release of Claims............. 22
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Section 6.03. Merger or Consolidation of, or Assumption of the
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Obligations of, Servicer............................ 23
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Section 6.04. Limitation on Liability of Servicer and Others......... 23
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Section 6.05. Southern California Edison Company Not to Resign as
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Servicer............................................ 24
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Section 6.06. Servicing Compensation................................. 24
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Section 6.07. Compliance with Applicable Law......................... 25
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Section 6.08. Access to Certain Records and Information Regarding
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Transition Property................................. 25
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Section 6.09. Appointments........................................... 25
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Section 6.10. No Servicer Advances................................... 26
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Section 6.11. Remittances............................................ 26
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ARTICLE VII. Default...................................................... 27
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Section 7.01. Servicer Default....................................... 27
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Section 7.02. Appointment of Successor............................... 28
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Section 7.03. Waiver of Past Defaults................................ 29
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Section 7.04. Notice of Servicer Default............................. 29
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ARTICLE VIII. Miscellaneous Provisions.................................... 29
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Section 8.01. Amendment.............................................. 29
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Section 8.02. Protection of Title to Trust........................... 31
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Section 8.03. Notices................................................ 31
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Section 8.04. Assignment............................................. 31
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Section 8.05. Limitations on Rights of Others........................ 32
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Section 8.06. Severability........................................... 32
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Section 8.07. Separate Counterparts.................................. 32
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Section 8.08. Headings............................................... 32
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Section 8.09. Governing Law.......................................... 32
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Section 8.10. Assignment to Note Trustee............................. 32
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Section 8.11. Nonpetition Covenants.................................. 32
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Section 8.12. Limitation of Liability................................ 33
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Exhibits and Schedules
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Exhibit A Form of Monthly Servicer's Certificate
Exhibit B Form of Certificate of Compliance
Exhibit C Form of Routine Annual True-Up Mechanism Advice Letter
Exhibit D Form of Anniversary True-Up Mechanism Advice Letter
Exhibit E Form of Quarterly Servicer's Certificate
Schedule 4.01(a) Expected Amortization Schedule
Schedule 6.01(f) Proceedings
Annexes
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Annex I Servicing Procedures
Schedule 6 to
Annex I Calculation of Aggregate Remittance Amount
▇▇▇▇▇ ▇▇ Routine Quarterly True-Up Mechanism Advice Letters
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TRANSITION PROPERTY SERVICING AGREEMENT dated as of December
11, 1997, between SCE FUNDING LLC, a Delaware limited liability
company (the "Note Issuer"), and SOUTHERN CALIFORNIA EDISON
COMPANY, a California corporation, as Servicer (the "Servicer").
RECITALS
A. Pursuant to the Statute and the Financing Order, the Seller and
the Note Issuer are concurrently entering into the Sale Agreement pursuant to
which the Seller is selling to the Note Issuer the Transition Property created
pursuant to the PU Code, the Financing Order and the Issuance Advice Letter
described in such agreement, and the Seller may sell other Transition Property
to the Note Issuer pursuant to Subsequent Sale Agreements.
B. In connection with its ownership of the Transition Property and in
order to collect the associated FTA Charges, the Note Issuer desires to engage
the Servicer to carry out the functions described herein. The Servicer
currently performs similar functions for itself with respect to its own charges
to its customers and for others. In addition, the Note Issuer desires to engage
the Servicer to act on its behalf in obtaining True-Up Adjustments from the
CPUC. The Servicer desires to perform all of these activities on behalf of the
Note Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
Definitions
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Section 1.01. Definitions. Whenever used in this Agreement, the
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following words and phrases shall have the following meanings:
"Actual FTA Payments" means the actual FTA Payments received by the
Servicer attributable to a particular Billing Period.
"Advice Letter" means any filing made to the CPUC by the Servicer on
behalf of the Note Issuer with respect to the FTA Charges or any True-Up
Adjustment in the form of an advice letter, including an Issuance Advice Letter,
a Routine Annual True-Up Mechanism Advice Letter, an Anniversary True-Up
Mechanism Advice Letter, a Routine Quarterly True-Up Mechanism Advice Letter or
a Non-Routine True-Up Mechanism Advice Letter.
"Aggregate Remittance Amount" has the meaning set forth in Annex I
hereto.
"Agreement" means this Transition Property Servicing Agreement,
together with all Exhibits, Schedules, Annexes and Attachments hereto, as the
same may be amended and supplemented from time to time.
"Anniversary True-Up Mechanism Advice Letter" means an Advice Letter
filed with the CPUC at least fifteen days prior to the Financing Order
Anniversary Date in respect of a True-Up Adjustment, substantially in the form
of Exhibit D hereto. Any True-Up Adjustment required as a result of the
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Anniversary True-Up Mechanism Advice Letter will become effective on the date
specified by the CPUC in accordance with the Financing Order.
"Annual Accountant's Report" has the meaning set forth in Section
3.04.
"Annual Adjustment Filing Date" means each December 15, from and
including December 15, 1998 to and including the last December 15 preceding the
Retirement of the Notes; provided, however, that if any such day is not a
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Servicer Business Day, "Annual Adjustment Filing Date" shall mean the Servicer
Business Day immediately preceding such day.
"Applicable ESP" means, with respect to each Customer, the ESP, if
any, providing "direct access" service to that Customer.
"Billing Period" means a Servicer Month.
"Bills" means each of the regular monthly bills, the summary bills,
the opening bills and the closing bills issued to Customers or ESPs by Southern
California Edison Company on its own behalf and in its capacity as Servicer.
"Capital Subaccount" has the meaning set forth in the Indenture.
"Certificate of Compliance" has the meaning set forth in Section 3.03.
"Certificate Trustee" means the Person acting as certificate trustee
under the Trust Agreement.
"Collection Period" means the Servicer Month immediately preceding the
respective Remittance Date.
"Collections Curves" means the Daily Collections Curve together with
the Monthly Collections Curve.
"Consolidated ESP Billing" has the meaning set forth in Annex I
hereto.
"CPUC" means the California Public Utilities Commission or any
successor governmental agency that has regulatory authority over the True-Up
Adjustments contemplated by the Statute.
"CPUC Regulations" means all regulations, rules, tariffs and laws
applicable to public utilities or ESPs, as the case may be, and promulgated by,
enforced by or otherwise within the jurisdiction of the CPUC.
"Customers" means existing and future Residential Customers and Small
Commercial Customers.
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"Daily Collections Curve" has the meaning set forth on Schedule 6 to
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Annex I hereto.
"Daily Remittance" has the meaning set forth in Section 6.11(b).
"Delaware Trustee" means the Person acting as Delaware trustee under
the Trust Agreement.
"ESP" means an alternative energy service provider who has entered
into an ESP Service Agreement with the Seller.
"ESP Service Agreement" means an agreement between an ESP and the
Seller for the provision of "direct access" service to customers in accordance
with CPUC Decision ▇▇-▇▇-▇▇▇.
"Estimated FTA Payments" means the sum of the amounts remitted with
respect to a Billing Period during the six months following such Billing Period
based on the Collections Curves.
"Excess Remittance" means the amount, if any, calculated for a
particular Remittance Date, by which all Estimated FTA Payments remitted to the
Collection Account on and prior to such Remittance Date with respect to the FTA
Charges billed to Customers during the seventh preceding Billing Period exceed
Actual FTA Payments received by the Servicer attributable to such Billing
Period.
"Expected Amortization Schedule" means Schedule 4.01(a) hereto, as the
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same may be amended from time to time pursuant to Section 4.01(a).
"Financing Order" means the order of the CPUC, Decision 97-09- 056,
issued as of September 3, 1997, which became effective on October 9, 1997.
"Financing Order Anniversary Date" means September 3 of each year.
"FTA Charges" means the charges permitted to be levied upon the
Customers pursuant to the Financing Order.
"FTA Collections" means FTA Payments received by the Servicer which
are remitted to the Collection Account.
"FTA Effective Date" means the date on which the initial FTA Charges
go into effect pursuant to the terms of the Financing Order and the first
Issuance Advice Letter.
"FTA End Date" means, depending on the context in which used, either:
(i) the date on which specific FTA Charges end because such FTA Charges have
been replaced with revised FTA Charges; or (ii) the FTA Termination Date.
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"FTA Payments" means the payments made by Customers based on the FTA
Charges.
"FTA Start Date" means, depending on the context in which used,
either: (i) the FTA Effective Date; or (ii) the date on which specific revised
FTA Charges go into effect to replace previously existing FTA Charges.
"FTA Termination Date" means the date on which the FTA Charges will
cease to be billed pursuant to the terms of the Financing Order, provided that
the Notes and the Certificates shall have been paid in full.
"Infrastructure Bank" means the California Infrastructure and Economic
Development Bank or any successor in interest.
"Indenture" means the Indenture dated as of December 11, 1997, between
the Note Issuer and the Note Trustee, as the same may be amended and
supplemented from time to time.
"Initial Transition Property" means the Transition Property described
in the Sale Agreement.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable Federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Issuance Advice Letter" means an Advice Letter submitted to the CPUC
in connection with and immediately prior to the issuance of a Series of Notes,
which Advice Letter becomes effective five Business Days after filing pursuant
to the terms of the Financing Order. The first Issuance Advice Letter will
establish the initial FTA Charges, and subsequent Issuance Advice Letters will
modify the FTA Charges to support the issuance of additional Series of Notes.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind.
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"Losses" has the meaning assigned to that term in Section 5.04.
"Monthly Collections Curve" has the meaning set forth on Schedule 6 to
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Annex I hereto.
"Monthly Servicer's Certificate" means a certificate, substantially in
the form of Exhibit A hereto, completed and executed by a Responsible Officer of
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the Servicer pursuant to Section 3.01(b)(i).
"Non-Routine True-Up Adjustment" has the meaning set forth in Section
4.01(c)(i).
"Non-Routine True-Up Mechanism Advice Letter" means an Advice Letter
filed with the CPUC in accordance with the Financing Order with respect to any
Non-Routine True-Up Adjustment, pursuant to which the related Non-Routine True-
Up Adjustment generally will become effective at the beginning of the first
Quarter that is at least 90 days after filing.
"Note Issuer" means SCE Funding LLC, a Delaware limited liability
company.
"Note Trustee" means the Person acting as trustee under the Indenture,
its successors in interest and any successor trustee under the Indenture.
"Officer's Certificate" means a certificate signed by a Responsible
Officer.
"Opinion of Counsel" means one or more written opinions of counsel who
may be employees of or counsel to the party providing such opinion(s) of
counsel, which counsel shall be acceptable to the party receiving such
opinion(s) of counsel.
"Overcollateralization Subaccount" has the meaning set forth in the
Indenture.
"Payment Date" means, with respect to any Series or Class, each March
25, June 25, September 25 and December 26 of each year, provided that if any
such date is not a Business Day, the Payment Date shall be the Business Day
immediately succeeding such date.
"Principal Balance" means, as of any Payment Date, the sum of the
outstanding principal amount of each Series of Notes.
"Projected Principal Balance" means, as of any Payment Date, the sum
of the projected outstanding principal amount of each Series of Notes for such
Payment Date set forth in the Expected Amortization Schedule.
"PU Code" means the California Public Utilities Code, as amended from
time to time.
"Quarter" means each calendar quarter, specifically:
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January 1 to and including March 31;
April 1 to and including June 30;
July 1 to and including September 30; and
October 1 to and including December 31.
"Quarterly Servicer's Certificate" means a certificate, substantially
in the form of Exhibit E hereto, completed and executed by a Responsible Officer
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of the Servicer pursuant to Section 4.01(d)(ii).
"Remittance Date" means the twentieth day of each calendar month or,
if such day is not a Business Day, the next succeeding Business Day, commencing
on January 20, 1998.
"Remittance Shortfall" means the amount, if any, calculated for a
particular Remittance Date, by which Actual FTA Payments received by the
Servicer attributable to FTA Charges billed to Customers during the seventh
preceding Billing Period exceed all Estimated FTA Payments remitted to the
Collection Account on and prior to such Remittance Date with respect to such
Billing Period.
"Required Capital Level" means, as of any Payment Date, the sum of 0.5
percent of the initial principal amount of each then-outstanding Series of Notes
issued pursuant to the Indenture prior to that Payment Date, less $100,000 in
the aggregate for all Series of Notes.
"Required Overcollateralization Level" means, as of any Payment Date,
the amount required to be on deposit in the Overcollateralization Subaccount as
specified in each Series Supplement.
"Reserve Subaccount" has the meaning set forth in the Indenture.
"Residential Customers" means the existing and future residential
consumers of electricity, as identified in the Financing Order, located in the
service territory in which the Seller provided electricity services as of
December 20, 1995.
"Responsible Officer" means the chairman of the board, the chief
executive officer, the president, the vice chairman of the board, any vice
president, the treasurer, any assistant treasurer, the secretary, any assistant
secretary or the controller of the Servicer.
"Retirement of the Notes" means the day on which the final
distribution is made to the Note Trustee in respect of the last outstanding
Note.
"Routine Annual True-Up Mechanism Advice Letter" means an Advice
Letter filed with the CPUC at least fifteen days prior to the end of each
calendar year in respect of an annual True-Up Adjustment, substantially in the
form of Exhibit C hereto. The Routine Annual True-Up Mechanism Advice Letter
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will become effective on the first calendar day of the next calendar year.
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"Routine Quarterly True-Up Mechanism Advice Letter" means an Advice
Letter filed with the CPUC at least fifteen days prior to the end of each of the
first three Quarters of each calendar year in respect of a quarterly True-Up
Adjustment as specified in Annex II hereto. The Routine Quarterly True-Up
Mechanism Advice Letter will become effective on the first calendar day of the
next Quarter. The Servicer shall file Routine Quarterly True-Up Mechanism
Advice Letters with respect to a Series of Notes only if so specified on Annex
II hereto.
"Sale Agreement" means the Transition Property Purchase and Sale
Agreement dated as of the date hereof between Southern California Edison Company
and the Note Issuer, as amended and supplemented from time to time.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"Seller" means Southern California Edison Company and its successors
in interest to the extent permitted under the Sale Agreement.
"Series Supplement" has the meaning set forth in the Indenture.
"Servicer" means Southern California Edison Company, as the servicer
of the Transition Property, and each successor to Southern California Edison
Company (in the same capacity) pursuant to Section 6.03 or 7.02.
"Servicer Business Day" means any Business Day on which the Servicer's
offices in the State of California are open for business.
"Servicer Default" means an event specified in Section 7.01.
"Servicer Month" means each of the periods created by dividing the
calendar year into twelve consecutive periods of approximately 21 Servicer
Business Days each.
"Servicing Fee" means the fee payable on each Payment Date to the
Servicer for services rendered during the period from, but not including, the
preceding Payment Date to and including the current Payment Date, determined
pursuant to Section 6.06.
"Small Commercial Customers" means the existing and future small
commercial consumers of electricity, as identified in the Financing Order,
located in the service territory in which the Seller provided electricity
services as of December 20, 1995.
"Statute" means Chapter 854, California Statutes of 1996 and Chapter
275, California Statutes of 1997, as amended from time to time.
"STO" means the California State Treasurer's Office, as agent for sale
of the Certificates.
"Subsequent Sale Agreement" has the meaning assigned to that term in
the definition of Subsequent Transition Property.
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"Subsequent Sale Date" means any date on which Subsequent Transition
Property is to be sold to the Note Issuer pursuant to a Subsequent Sale
Agreement.
"Subsequent Transition Property" means any transition property (as
defined in Section 840 of the PU Code) created under the PU Code and the
Financing Order and specifically described in the related Issuance Advice Letter
and sold to the Note Issuer by the Seller pursuant to an agreement substantially
similar to the Sale Agreement (a "Subsequent Sale Agreement") .
"Termination Notice" has the meaning assigned to that term in Section
7.01.
"Transition Costs" has the meaning assigned to that term in Section
840(f) of the PU Code.
"Transition Property" means the Initial Transition Property and, from
and after the applicable Subsequent Sale Date therefor, any Subsequent
Transition Property.
"Transition Property Records" has the meaning assigned to that term in
Section 5.01.
"True-Up Adjustment" means each adjustment to the FTA Charges made
pursuant to the terms of the Financing Order and in accordance with Section 4.01
hereof or in connection with the conveyance to the Note Issuer of Subsequent
Transition Property.
"Trust Agreement" means the Amended and Restated Declaration and
Agreement of Trust dated as of December 11, 1997, among the Infrastructure Bank,
the Delaware Trustee and the Certificate Trustee, as the same may be further
amended and supplemented from time to time.
"Trust Officer" means any officer assigned to the Corporate Trust
Office, including any managing director, vice president, assistant vice
president, assistant treasurer, assistant secretary or any other officer of the
Note Trustee customarily performing functions similar to those performed by any
of the above designated officers and having direct responsibility for the
administration of this Agreement, and also, with respect to a particular matter,
any other officer, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
Section 1.02. Other Definitional Provisions.
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(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
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(c) The words "hereof," "herein," "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section,
Schedule, Exhibit, Annex and Attachment references contained in this
Agreement are references to Sections, Schedules, Exhibits, Annexes and
Attachments in or to this Agreement unless otherwise specified; and the
term "including" shall mean "including without limitation."
(d) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter forms of such terms.
ARTICLE II.
Appointment and Authorization
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Section 2.01. Appointment of Servicer; Acceptance of Appointment.
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Subject to Section 6.05 and Article 7, the Note Issuer hereby appoints the
Servicer, and the Servicer hereby accepts such appointment, to perform the
Servicer's obligations pursuant to this Agreement on behalf of and for the
benefit of the Note Issuer in accordance with the terms of this Agreement and
applicable law. This appointment and the Servicer's acceptance thereof may not
be revoked except in accordance with the express terms of this Agreement.
Section 2.02. Authorization. With respect to all or any portion of
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the Transition Property, the Servicer shall be, and hereby is, authorized and
empowered by the Note Issuer to (a) execute and deliver, on behalf of itself
and/or the Note Issuer, as the case may be, any and all instruments, documents
or notices, and (b) on behalf of itself and/or the Note Issuer, as the case may
be, make any filing and participate in proceedings of any kind with any
governmental authorities, including with the CPUC. The Note Issuer shall furnish
the Servicer with such documents as have been prepared by the Servicer for
execution by the Note Issuer, and with such other documents as may be in the
Note Issuer's possession, as necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder. Upon the written
request of the Servicer, the Note Issuer shall furnish the Servicer with any
powers of attorney or other documents necessary or appropriate to enable the
Servicer to carry out its duties hereunder.
Section 2.03. Dominion and Control Over the Transition Property.
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Notwithstanding any other provision herein, the Servicer and the
Note Issuer agree that the Note Issuer shall have dominion and control over the
Transition Property, and the Servicer, in accordance with the terms hereof, is
acting solely as the servicing agent and custodian for the Note Issuer with
respect to the Transition Property and the Transition Property Records. The
Servicer hereby agrees that it shall not take any action that is not authorized
by this Agreement, that is not consistent with its customary procedures and
practices, or that shall impair the rights of the Note Issuer in the Transition
Property, in each case unless such action is required by law or court or
regulatory order.
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ARTICLE III.
Billing Services
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Section 3.01. Duties of Servicer. The Servicer, as agent for the Note
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Issuer, shall have the following duties:
(a) Duties of Servicer Generally. The Servicer's duties in general
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shall include management, servicing and administration of the Transition
Property; obtaining meter reads, calculating usage, billing, collections
and posting of all payments in respect of the Transition Property;
responding to inquiries by Customers, the CPUC, or any federal, local or
other state governmental authorities with respect to the Transition
Property; delivering Bills to Customers and ESPs, investigating
delinquencies, processing and depositing collections and making periodic
remittances; furnishing periodic reports to the Note Issuer, the Note
Trustee, the Certificate Trustee, the Infrastructure Bank and the Rating
Agencies; and taking action in connection with True-Up Adjustments as set
forth herein. Certain of the duties set forth above may be performed by
ESPs pursuant to ESP Service Agreements. Anything to the contrary
notwithstanding, the duties of the Servicer set forth in this Agreement
shall be qualified in their entirety by any CPUC Regulations as in effect
at the time such duties are to be performed. Without limiting the
generality of this Section 3.01(a), in furtherance of the foregoing, the
Servicer hereby agrees that it shall also have, and shall comply with, the
duties and responsibilities relating to data acquisition, usage and bill
calculation, billing, customer service functions, collections, payment
processing and remittance set forth in Annex I hereto.
(b) Reporting Functions.
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(i) Monthly Servicer's Certificate. On or before each Remittance
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Date, the Servicer shall prepare and deliver to the Note Issuer, the
Note Trustee, the Certificate Trustee, the Infrastructure Bank and the
Rating Agencies a written report substantially in the form of Exhibit
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A hereto (a "Monthly Servicer's Certificate") setting forth certain
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information relating to FTA Payments received by the Servicer during
the Collection Period preceding such Remittance Date.
(ii) Notification of Laws and Regulations. The Servicer shall
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immediately notify the Note Issuer, the Note Trustee, the Certificate
Trustee, the Infrastructure Bank and the Rating Agencies in writing of
any laws or CPUC Regulations hereafter promulgated that have a
material adverse effect on the Servicer's ability to perform its
duties under this Agreement.
(iii) Other Information. Upon the reasonable request of the
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Note Issuer, the Note Trustee, the Certificate Trustee, the
Infrastructure Bank or the Rating Agencies, the Servicer shall provide
to such Note Issuer, Note Trustee, Certificate Trustee, Infrastructure
Bank or the Rating Agencies, as the case may be, any public financial
information in respect of the Servicer, or any material information
regarding the Transition Property to the extent it is reasonably
available to the
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Servicer, as may be reasonably necessary and permitted by law for the
Note Issuer, the Note Trustee, the Certificate Trustee, the
Infrastructure Bank or the Rating Agencies to monitor the performance
by the Servicer hereunder. In addition, so long as any of the Notes of
any Series are outstanding, the Servicer shall provide the Note
Issuer, the Note Trustee and the Certificate Trustee, within a
reasonable time after written request therefor, any information
available to the Servicer or reasonably obtainable by it that is
necessary to calculate the FTA Charges applicable to each class of
Customer.
(iv) Preparation of Reports to be Filed with the SEC. The
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Servicer shall prepare any reports required to be filed by the Note
Issuer under the securities laws, including a copy of each Quarterly
Servicer's Certificate described in Section 4.01(d)(ii), the annual
Certificate of Compliance described in Section 3.03, and the Annual
Accountant's Report described in Section 3.04.
Section 3.02. Servicing and Maintenance Standards. On behalf of the
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Note Issuer, the Servicer shall (a ) manage, service, administer and make
collections in respect of the Transition Property with reasonable care and in
accordance with applicable law, including all applicable CPUC Regulations and
guidelines, using the same degree of care and diligence that the Servicer
exercises with respect to similar assets for its own account and, if applicable,
for others; (b) follow customary standards, policies and procedures for the
industry in performing its duties as Servicer; (c) use all reasonable efforts,
consistent with its customary servicing proce dures, to enforce, and maintain
rights in respect of, the Transition Property; and (d) comply with all laws and
regulations applicable to and binding on it relating to the Transition Property.
The Servicer shall follow such customary and usual practices and procedures as
it shall deem necessary or advisable in its servicing of all or any portion of
the Transition Property, which, in the Servicer's judgment, may include the
taking of legal action.
Section 3.03. Certificate of Compliance. The Servicer shall deliver to
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the Note Issuer, the Note Trustee, the Certificate Trustee, the Infrastructure
Bank and the Rating Agencies on or before September 30 of each year, commencing
September 30, 1998 to and including the Septem ber 30 succeeding the Retirement
of the Notes, an Officer's Certificate substantially in the form of Exhibit B
hereto (a "Certificate of Compliance"), stating that: (i) a review of the
activities of the Servicer during the twelve months ended the preceding June 30
(or, in the case of the first Certificate of Compliance to be delivered on or
before September 30, 1998, the period of time from the date of this Agreement
until June 30, 1998) and of its performance under this Agreement has been made
under such officer's supervision, and (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all of its
obligations in all material respects under this Agreement throughout such twelve
months (or, in the case of the Certificate of Compliance to be delivered on or
before September 30, 1998, the period of time from the date of this Agreement
until June 30, 1998), or, if there has been a default in the fulfillment of any
such material obligation, specifying each such material default known to such
officer and the nature and status thereof.
11
Section 3.04. Annual Report by Independent Public Accountants.
-----------------------------------------------
(a) The Servicer shall cause a firm of independent certified public
accountants (which may provide other services to the Servicer or the
Seller) to prepare, and the Servicer shall deliver to the Note Issuer, the
Note Trustee, the Certificate Trustee, the Infrastructure Bank and the
Rating Agencies, a report addressed to the Servicer (the "Annual
Accountant's Report"), which may be included as part of the Servicer's
customary auditing activities, for the information and use of the Note
Issuer, the Note Trustee, the Certificate Trustee and the Infrastructure
Bank on or before September 30 of each year, beginning September 30, 1998
to and including the September 30 succeeding the Retirement of the Notes,
to the effect that such firm has performed certain procedures in connection
with the Servicer's compliance with its obligations under this Agreement
during the preceding twelve months ended June 30 (or, in the case of the
first Annual Accountant's Report to be delivered on or before September 30,
1998, the period of time from the date of this Agreement until June 30,
1998), identifying the results of such procedures and including any
exceptions noted. In the event such accounting firm requires the Note
Trustee or the Certificate Trustee to agree or consent to the procedures
performed by such firm, the Note Issuer shall direct the Note Trustee or
the Certificate Trustee in writing to so agree; it being understood and
agreed that the Note Trustee or the Certificate Trustee, as the case may
be, will deliver such letter of agreement or consent in conclusive reliance
upon the direction of the Note Issuer, and neither the Note Trustee nor the
Certificate Trustee will make any independent inquiry or investigation as
to, and shall have no obligation or liability in respect of the
sufficiency, validity or correctness of such procedures.
(b) The Annual Accountant's Report shall also indicate that the
accounting firm providing such report is independent of the Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
ARTICLE IV.
Services Related to True-Up Adjustments
---------------------------------------
Section 4.01. Periodic True-Up Adjustments. From time to time, until
----------------------------
the Retirement of the Notes, the Servicer shall identify the need for True-Up
Adjustments and shall take all reasonable action to obtain and implement such
True-Up Adjustments, all in accordance with the following:
(a) Expected Amortization Schedule. The initial Expected Amortization
-------------------------------
Schedule is attached hereto as Schedule 4.01(a). In connection with the
----------------
issuance by the Note Issuer of any additional Series of Notes after the
Closing Date, the Servicer, on or prior to the Series Issuance Date
therefor, shall revise the Expected Amortization Schedule to add the
requisite information for each new Series of Notes and set forth, as of
each Payment Date through the scheduled Retirement of the Notes, the
aggregate principal amounts of the Notes of all Series, including such
additional Series, expected to
12
be outstanding on such Payment Date. If the Expected Amortization Schedule
is revised as set forth above, the Servicer shall send a copy of such
revised Expected Amortization Schedule to the Note Issuer, the Note
Trustee, the Certificate Trustee, the Infrastructure Bank and the Rating
Agencies promptly thereafter.
(b) Routine True-Up Adjustments and Annual Filings.
----------------------------------------------
(i) Routine Annual True-Up Adjustments and Filings.
----------------------------------------------
(1) Each year on or immediately before the Annual Adjustment
Filing Date, the Servicer shall: (A) estimate collections
through the December 31 immediately following such Annual
Adjustment Filing Date and through November 30 of the year
following the year of such Annual Adjustment Filing Date; (B)
update the assumptions underlying the FTA Charges, including
energy usage volume, the rate of delinquencies and write-offs,
estimated expenses and fees of the Note Issuer, the Trust and the
Infrastructure Bank to the extent not fixed, and the Collections
Curves; (C) determine the revised FTA Charges that, together with
the funds on deposit in the Reserve Subaccount, would restore:
(1) the Principal Balance to the Projected Principal Balance, (2)
the balance in the Overcollateralization Subaccount to the
Required Overcollateralization Level and (3) the balance in the
Capital Subaccount to the Required Capital Level, in each case
within twelve months after such revised FTA Charges go into
effect (and with respect to any True-Up Adjustments occurring
after the last Scheduled Maturity Date for any Class of a Series,
determine the revised FTA Charges that would be sufficient to
retire the unpaid Principal Balance within the earlier of (x) a
date which is not more than three months after the Scheduled
Maturity Date and (y) the last Final Maturity Date for any Class
of such Series); (D) file a Routine Annual True-Up Mechanism
Advice Letter with the CPUC, substantially in the form attached
hereto as Exhibit C, to notify the CPUC of the FTA Charges for
---------
the coming year; and (E) take all reasonable actions and make all
reasonable efforts to secure such True-Up Adjustment and to
enforce the provisions of the Statute which obligate the CPUC to
approve rates at levels sufficient to recover the FTA Payments in
accordance with the Expected Amortization Schedule.
(2) Each year on or immediately before August 19, which is
the date that is fifteen days before the Financing Order
Anniversary Date (or if such date is not a Servicer Business Day,
on the Servicer Business Day immediately preceding such date),
the Servicer shall: (A) if found to be necessary by the CPUC or
if otherwise determined by the Servicer in its sole judgment to
be required, estimate collections through the end of the Quarter
in which the Financing Order Anniversary Date occurs; (B) if
found to be necessary by the CPUC or if otherwise determined by
the
13
Servicer in its sole judgment to be required, update the
assumptions underlying the FTA Charges, including energy usage
volume, the rate of delinquencies and write-offs, and estimated
expenses and fees of the Note Issuer, the Trust and the
Infrastructure Bank to the extent not fixed; (C) if found to be
necessary by the CPUC or if otherwise determined by the Servicer
in its sole judgment to be required, determine the revised FTA
Charges that, together with the funds on deposit in the Reserve
Subaccount, would restore: (1) the Principal Balance to the
Projected Principal Balance, (2) the balance in the
Overcollateralization Subaccount to the Required
Overcollateralization Level and (3) the balance in the Capital
Subaccount to the Required Capital Level, in each case within
twelve months after such revised FTA Charges go into effect (and
with respect to any True-Up Adjustments occurring after the last
Scheduled Maturity Date for any Class of a Series, determine the
revised FTA Charges that would be sufficient to retire the unpaid
Principal Balance within the earlier of (x) a date which is not
more than three months after the Scheduled Maturity Date and (y)
the last Final Maturity Date for any Class of such Series); (D)
file an Anniversary True-Up Mechanism Advice Letter with the
CPUC, substantially in the form attached hereto as Exhibit D; and
---------
(E) take all reasonable actions and make all reasonable efforts
to secure the resulting True-Up Adjustment (if such an adjustment
is sought by the Servicer or found to be necessary by the CPUC)
and to enforce the provisions of the Statute which obligate the
CPUC to approve rates at levels sufficient to recover the FTA
Payments in accordance with the Expected Amortization Schedule.
(3) In the case of a True-Up Adjustment pursuant to a
Routine Annual True-Up Mechanism Advice Letter, the Servicer
shall implement the revised FTA Charges, if any, as of the first
day of the following calendar year.
(4) In the case of a True-Up Adjustment found to be
necessary by the CPUC or otherwise determined by the Servicer in
its sole judgment to be required, pursuant to an Anniversary
True-Up Mechanism Advice Letter, the Servicer shall implement the
revised FTA Charges, if any, on the date specified by the CPUC in
accordance with the Financing Order.
(ii) Routine Quarterly True-Up Adjustments. If the Issuance
-------------------------------------
Advice Letter with respect to a Series of Notes provides that the
Servicer will file Routine Quarterly True-Up Mechanism Advice Letters,
then the Servicer shall make such filings in accordance with the
procedures set forth in Annex II hereto. On each Series Issuance
Date, the Servicer and the Note Issuer shall amend Annex II to specify
in detail the Servicer's obligations to perform routine quarterly
True-Up Adjustments, if any, with respect to the new Series of Notes
issued on such Series Issuance Date.
14
(c) Non-Routine True-Up Adjustments.
-------------------------------
(i) Whenever the Servicer determines that the existing model for
calculating the FTA Charges should be amended or revised, subject to
the consent of the Note Issuer under the conditions set forth in
Section 3.17 of the Indenture, the Servicer shall file a Non-Routine
True-Up Mechanism Advice Letter with the CPUC designating the
adjustments to the model and any corresponding adjustments to the FTA
Charges (collectively, a "Non-Routine True-Up Adjustment").
(ii) The Servicer shall take all reasonable actions and make all
reasonable efforts to secure any Non-Routine True-Up Adjustments.
(iii) The Servicer shall implement any resulting adjustments to
the model and any resulting revised FTA Charges as of the first day of
the Quarter which begins at least 90 days after the Non-Routine True-
Up Mechanism Advice Letter is filed.
(d) Reports.
-------
(i) Notification of Advice Letter Filings and True-Up
-------------------------------------------------
Adjustments. Whenever the Servicer files an Advice Letter with the
-----------
CPUC, the Servicer shall send a copy of such filing (together with a
copy of all notices and documents which, in the Servicer's reasonable
judgment, are material to the adjustments effected by such Advice
Letter) to the Note Issuer, the Note Trustee, the Certificate Trustee,
the Infrastructure Bank and the Rating Agencies concurrently
therewith. If any True-Up Adjustment requested in any such Advice
Letter filing does not become effective on the applicable date as
provided by the Financing Order, the Servicer shall notify the Note
Issuer, the Note Trustee, the Certificate Trustee , the Infrastructure
Bank and the Rating Agencies by the end of the second Servicer
Business Day after such applicable date.
(ii) Quarterly Servicer's Certificate. Not later than the
--------------------------------
Remittance Date immediately prior to each Payment Date, the Servicer
shall deliver a written report substantially in the form of Exhibit E
---------
hereto (the "Quarterly Servicer's Certificate") to the Note Issuer,
the Note Trustee, the Certificate Trustee, the Infrastructure Bank and
the Rating Agencies.
(iii) Reports to Customers.
--------------------
(A) After each revised FTA Charge has gone into effect
pursuant to a True-Up Adjustment, the Servicer shall, to the
extent and in the manner and timeframe required by applicable
CPUC Regulations, if any, cause to be prepared and delivered to
Customers a notice announcing such revised FTA Charges.
15
(B) In addition, at least once each year, to the extent
permitted by CPUC Regulations, the Servicer shall cause to be
prepared and delivered to Customers a notice stating, in effect,
that the Transition Property and the FTA Charges are owned by the
Note Issuer and not the Seller. Such notice shall be included
either as an insert to or in the text of the Bills delivered to
such Customers or shall be delivered to Customers by electronic
means or such other means as the Servicer or the Applicable ESP
may from time to time use to communicate with their respective
customers.
(C) Except to the extent that applicable CPUC Regulations
make the Applicable ESP responsible for such costs, the Servicer
shall pay from its own funds all costs of preparation and
delivery incurred in connection with clauses (A) and (B) above,
including but not limited to printing and postage costs as the
same may increase or decrease from time to time.
(iv) ESP Reports. The Servicer shall provide to the Rating
-----------
Agencies any publicly available reports filed by the Servicer with the
CPUC (or otherwise made publicly available by the Servicer) relating
to ESPs and any other non-confidential and non-proprietary information
relating to ESPs reasonably requested by the Rating Agencies.
Section 4.02. Limitation of Liability.
-----------------------
(a) The Note Issuer and the Servicer expressly agree and acknowledge
that:
(i) In connection with any True-Up Adjustment, the Servicer is
acting solely in its capacity as the servicing agent hereunder.
(ii) Neither the Servicer nor the Note Issuer is responsible in
any manner for, and shall have no liability whatsoever as a result of
any action, decision, ruling or other determination made or not made,
or any delay (other than any delay resulting from the Servicer's
failure to file the applications required by Section 4.01 in a timely
and correct manner or other breach by the Servicer of its duties under
this Agreement), by the CPUC in any way related to the Transition
Property or in connection with any True-Up Adjustment, the subject of
any filings under Section 4.01, any proposed True-Up Adjustment, or
the approval of any revised FTA Charges and the scheduled adjustments
thereto.
(iii) The Servicer shall have no liability whatsoever relating
to the calculation of any revised FTA Charges and the scheduled
adjustments thereto, including as a result of any inaccuracy of any of
the assumptions made in such calculation regarding expected energy
usage volume and the rate of delinquencies and write-offs, so long as
the Servicer has acted in good faith and has not acted in a grossly
negligent manner in connection therewith, nor shall the Servicer have
any liability whatsoever as a result of any Person, including the
Noteholders or
16
the Certificateholders, not receiving any payment, amount or return
anticipated or expected or in respect of any Note or Certificate
generally, except only to the extent that the same is caused by the
Servicer's gross negligence, willful misconduct or bad faith.
(b) Notwithstanding the foregoing, the Servicer hereby acknowledges
that the terms of this Section 4.02 are not intended to, and shall not,
relieve the Servicer of liability for any misrepresentation by the Servicer
under Section 6.01 or for any breach by the Servicer of its other
obligations under this Agreement.
ARTICLE V.
The Transition Property
-----------------------
Section 5.01. Custody of Transition Property Records. To assure
--------------------------------------
uniform quality in servicing the Transition Property and to reduce
administrative costs, the Note Issuer hereby revocably appoints the Servicer,
and the Servicer hereby accepts such appointment, to act as the agent of the
Note Issuer and the Note Trustee as custodian of any and all documents and
records that the Seller shall keep on file, in accordance with its customary
procedures, relating to the Transition Property, including copies of the
Financing Order and Advice Letters relating thereto and all documents filed with
the CPUC in connection with any True-Up Adjustment (collectively, the
"Transition Property Records"), which are hereby constructively delivered to the
Note Trustee, as pledgee of the Note Issuer (or, in the case of the Subsequent
Transition Property, will as of the applicable Subsequent Sale Date be
constructively delivered to the Note Trustee, as pledgee of the Note Issuer)
with respect to all Transition Property.
Section 5.02. Duties of Servicer as Custodian.
--------------------------------
(a) Safekeeping. The Servicer shall hold the Transition Property
-----------
Records on behalf of the Note Issuer and maintain such accurate and
complete accounts, records and computer systems pertaining to the
Transition Property Records as shall enable the Note Issuer to comply with
this Agreement and the Indenture. In performing its duties as custodian
the Servicer shall act with reasonable care, using that degree of care and
diligence that the Servicer exercises with respect to comparable assets
that the Servicer services for itself or, if applicable, for others. The
Servicer shall promptly report to the Note Issuer and the Note Trustee any
failure on its part to hold the Transition Property Records and maintain
its accounts, records and computer systems as herein provided and promptly
take appropriate action to remedy any such failure. Nothing herein shall
be deemed to require an initial review or any periodic review by the Note
Issuer or the Note Trustee of the Transition Property Records. The
Servicer's duties to hold the Transition Property Records on behalf of the
Note Issuer set forth in this Section 5.02, to the extent such Transition
Property Records have not been previously transferred to a successor
Servicer pursuant to Article VII, shall terminate three years after the
earlier of the date on which (i) the Servicer is succeeded by a successor
Servicer in accordance with Article VII hereof and (ii) no Notes of any
Series are outstanding.
17
(b) Maintenance of and Access to Records. The Servicer shall maintain
------------------------------------
the Transition Property Records at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ or at such other office as shall be specified to the Note Issuer
and the Note Trustee by written notice at least 30 days prior to any change
in location. The Servicer shall make available for inspection to the Note
Issuer and the Note Trustee or their respective duly authorized
representatives, attorneys or auditors the Transition Property Records at
such times during normal business hours as the Note Issuer or the Note
Trustee shall reasonably request and which do not unreasonably interfere
with the Servicer's normal operations. Nothing in this Section 5.02(b)
shall affect the obligation of the Servicer to observe any applicable law
(including any CPUC Regulations) prohibiting disclosure of information
regarding the Customers, and the failure of the Servicer to provide access
to such information as a result of such obligation shall not constitute a
breach of this Section 5.02(b).
(c) Release of Documents. Upon instruction from the Note Trustee, the
--------------------
Servicer shall release any Transition Property Records to the Note Trustee,
the Note Trustee's agent or the Note Trustee's designee, as the case may
be, at such place or places as the Note Trustee may designate, as soon as
practicable.
(d) Defending Transition Property Against Claims. The Servicer shall
--------------------------------------------
institute any action or proceeding necessary to compel performance by the
CPUC or the State of California of any of their obligations or duties under
the PU Code, the Financing Order or any Advice Letter, and the Servicer
agrees to take such legal or administrative actions, including defending
against or instituting and pursuing legal actions and appearing or
testifying at hearings or similar proceedings, as may be reasonably
necessary to block or overturn any attempts to cause a repeal of,
modification of or supplement to the Statute or the Financing Order or the
rights of holders of Transition Property by legislative enactment, voter
initiative or constitutional amendment that would be adverse to
Certificateholders. The costs of any such action shall be payable from FTA
Collections as an Operating Expense in accordance with the priorities set
forth in Section 8.02(d) of the Indenture. The Servicer's obligations
pursuant to this Section 5.02 shall survive and continue notwithstanding
the fact that the payment of Operating Expenses pursuant to Section 8.02(d)
of the Indenture may be delayed (it being understood that the Servicer may
be required to advance its own funds to satisfy its obligations hereunder).
Section 5.03. Instructions; Authority to Act. For so long as any
------------------------------
Notes remain outstanding, the Servicer shall be deemed to have received proper
instructions with respect to the Transition Property Records upon its receipt of
written instructions signed by a Trust Officer of the Note Trustee.
Section 5.04. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Note Issuer, the Trust, the Certificate Trustee, the
Delaware Trustee, the Note Trustee, the Infrastructure Bank, the STO, the
Noteholders and the Certificateholders and each of their respective officers,
directors, employees and agents for, and defend and hold harmless each
18
such Person from and against, any and all liabilities, obligations, losses,
damages, payments, claims, costs or expenses of any kind whatsoever
(collectively, "Losses") that may be imposed on, incurred by or asserted against
any such Person as the result of any improper act or omission in any way
relating to the maintenance and custody by the Servicer, as custodian, of the
Transition Property Records; provided, however, that the Servicer shall not be
-------- -------
liable for any portion of any such amount resulting from the willful misconduct,
bad faith or gross negligence of the Note Issuer, the Trust, the Certificate
Trustee, the Delaware Trustee, the Note Trustee, the Infrastructure Bank, the
STO, the Noteholders or the Certificateholders, as the case may be.
Indemnification under this Section shall survive resignation or
removal of the Note Trustee, the Delaware Trustee or the Certificate Trustee and
shall include reasonable fees and expenses of investigation and litigation.
Section 5.05. Effective Period and Termination. The Servicer's
--------------------------------
appointment as custodian shall become effective as of the Closing Date and shall
continue in full force and effect until terminated pursuant to this Section. If
any Servicer shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of any Servicer shall have
been terminated under Section 7.01, the appointment of such Servicer as
custodian shall be terminated by the Note Trustee or by the Holders of Notes
evidencing not less than 25 percent of the Outstanding Amount of the Notes of
all Series in the same manner as the Note Trustee or such Holders may terminate
the rights and obligations of the Servicer under Section 7.01.
Section 5.06. General Indemnification of Note Trustee, Certificate
----------------------------------------------------
Trustee and Delaware Trustee. The Servicer hereby agrees to indemnify and hold
----------------------------
harmless the Note Trustee, the Certificate Trustee and the Delaware Trustee and
their respective directors, officers, employees and agents from and against any
and all Losses incurred by or asserted against any such Person as a result of or
in connection with the transactions contemplated by this Agreement or any Basic
Document, other than any Loss incurred by reason or result of the gross
negligence or willful misconduct of the Note Trustee, the Certificate Trustee or
the Delaware Trustee, as the case may be; provided, however, that the foregoing
-------- -------
indemnity is extended to the Note Trustee, the Certificate Trustee and the
Delaware Trustee solely in their respective capacities as trustees and not for
the benefit of the Noteholders, the Certificateholders or any other Person. The
obligations of the Servicer set forth herein shall survive the termination of
this Agreement or the earlier resignation or removal of the Note Trustee under
the Indenture or the Certificate Trustee or Delaware Trustee under the Trust
Agreement.
ARTICLE VI.
The Servicer
------------
Section 6.01. Representations and Warranties of Servicer. The
------------------------------------------
Servicer makes the following representations and warranties, as of the Closing
Date, as of each Subsequent Sale Date relating to the sale of Subsequent
Transition Property pursuant to a Subsequent Sale Agreement, and as of such
other dates as expressly provided in this Section 6.01, on which the Note Issuer
and the Note Trustee are deemed to have relied in entering into this Agreement
19
relating to the servicing of the Transition Property. The representations and
warranties shall survive the execution and delivery of this Agreement and the
pledge thereof to the Note Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly organized
------------------------------
and validly existing as a corporation in good standing under the laws of
the state of its incorporation, with the power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the requisite power, authority and legal right to service
the Transition Property and to hold the Transition Property Records as
custodian.
(b) Due Qualification. The Servicer is duly qualified to do business
-----------------
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in, all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the servicing
of the Transition Property as required by this Agreement) shall require
such qualifications, licenses or approvals (except where the failure to so
qualify would not be reasonably likely to have a material adverse effect on
the Servicer's business, operations, assets, revenues, properties or
prospects or adversely affect the servicing of the Transition Property).
(c) Power and Authority. The Servicer has the requisite power and
-------------------
authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement have been
duly authorized by the Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
------------------
binding obligation of the Servicer enforceable in accordance with its
terms, subject to applicable insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing), regardless of
whether considered in a proceeding in equity or at law.
(e) No Violation. After giving effect to the release of the lien of
------------
the Trust Indenture dated as of October 1, 1923, between Southern
California Edison Company and ▇▇▇▇▇▇ Trust and Savings Bank and Pacific-
Southwest Trust and Savings Bank (▇.▇. ▇▇▇▇▇▇▇, successor trustee), as
trustees, as amended and supplemented, the consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws of the Servicer, or
any indenture, agreement or other instrument to which the Servicer is a
party or by which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument; nor violate any law or
any order, rule or regulation applicable to the Servicer of any court or of
any Federal or state regulatory
20
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
(f) No Proceedings. Except as set forth on Schedule 6.01(f), there
--------------
are no proceedings or investigations pending or, to the Servicer's best
knowledge, threatened before any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties involving or relating to
the Servicer or the Note Issuer or, to the Servicer's knowledge, any other
Person: (i) asserting (A) the invalidity of this Agreement, or (B) the
invalidity of the Indenture, the Trust Agreement, any of the other Basic
Documents or the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture, the Trust
Agreement or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, the Trust Agreement, any
of the other Basic Documents or the Notes or the Certificates or (iv)
relating to the Servicer and which might adversely affect the Federal or
state income tax attributes of the Notes or the Certificates.
(g) Approvals. No approval, authorization, consent, order or other
---------
action of, or filing with, any court, Federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the execution and delivery by the Servicer of this
Agreement, the performance by the Servicer of the transactions contemplated
hereby or the fulfillment by the Servicer of the terms hereof, except those
that have been obtained or made and those that the Servicer is required to
make in the future pursuant to Article IV hereof.
(h) Collections Curves. Each Collections Curve used in connection
------------------
with Schedule 6 to Annex I hereto is accurate in all material respects, and
----------
the future delivery of each revised Collections Curve shall constitute a
representation and warranty that each such revised Collections Curve is
accurate in all material respects.
(i) Premises. The premises set forth in Schedule 6 to Annex I hereto
-------- ----------
are reasonable based upon historical performance and will be reasonable as
they change from time to time.
(j) Reports and Certificates. Each report and certificate delivered
------------------------
in connection with an Advice Letter will constitute a representation and
warranty by the Servicer that each such report or certificate, as the case
may be, is true and correct; provided, however, that to the extent any such
-------- -------
report or certificate is based in part upon or contains assumptions,
forecasts or other predictions of future events, the representation and
warranty of the Servicer with respect thereto will be limited to the
representation and warranty that such assumptions, forecasts or other
predictions of future events are reasonable based upon historical
performance.
21
Section 6.02. Indemnities of Servicer; Release of Claims.
------------------------------------------
(a) The Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Servicer under
this Agreement.
(b) The Servicer shall indemnify the Note Issuer, the Trust, the Note
Trustee, the Certificate Trustee, the Delaware Trustee, the Infrastructure
Bank, the STO, the Seller, the Noteholders and the Certificateholders and
each of their respective officers, directors, employees and agents for, and
defend and hold harmless each such Person from and against, any and all
Losses that may be imposed on, incurred by or asserted against any such
Person as a result of (i) the Servicer's willful misconduct, bad faith or
gross negligence in the performance of its duties or observance of its
covenants under this Agreement or the Servicer's reckless disregard of its
obligations and duties under this Agreement or (ii) the Servicer's breach
of any of its representations or warranties in this Agreement.
(c) For purposes of Section 6.02(b), in the event of the termination
of the rights and obligations of Southern California Edison Company (or any
successor thereto pursuant to Section 6.03) as Servicer pursuant to Section
7.01, or a resignation by such Servicer pursuant to this Agreement, such
Servicer shall be deemed to be the Servicer pending appointment of a
successor Servicer pursuant to Section 7.02.
(d) Indemnification under Sections 6.02(b) and 6.02(c) shall survive
the resignation or removal of the Note Trustee, the Delaware Trustee or the
Certificate Trustee or the termination of this Agreement and shall include
reasonable fees and expenses of investigation and litigation (including
reasonable attorneys fees and expenses).
(e) Except to the extent expressly provided for in this Agreement or
the other Basic Documents (including, without limitation, the Servicer's
claims with respect to the Servicing Fee, reimbursement for any Excess
Remittance, reimbursement for costs incurred pursuant to Section 5.02(d)
and the payment of the purchase price of Transition Property), the Servicer
hereby releases and discharges the Note Issuer and the Trust and each of
their respective officers, directors and agents (collectively, the
"Released Parties") from any and all actions, claims and demands
whatsoever, whenever arising, which the Servicer, in its capacity as
Servicer or Seller, shall or may have against any such Person relating to
the Transition Property or the Servicer's activities with respect thereto
other than any actions, claims and demands arising out of the willful
misconduct, bad faith or gross negligence of the Released Parties.
Section 6.03. Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, Servicer. Any Person (a) into which the Servicer may be merged
------------------------
or consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party or (c) which may succeed to the properties and
assets of the Servicer substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Servicer hereunder, shall be the successor to the Servicer under this
Agreement without further
22
act on the part of any of the parties to this Agreement; provided, however, that
-------- -------
(i) immediately after giving effect to such transaction, no Servicer Default and
no event which, after notice or lapse of time, or both, would become a Servicer
Default shall have occurred and be continuing, (ii) the Servicer shall have
delivered to the Note Issuer, the Note Trustee and the Rating Agencies an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption complies
with this Section and that all conditions precedent provided for in this
Agreement relating to such transaction have been complied with and (iii) the
Servicer shall have delivered to the Note Issuer, the Note Trustee and the
Rating Agencies an Opinion of Counsel either (A) stating that, in the opinion of
such counsel, all filings to be made by the Servicer, including filings with the
CPUC pursuant to the PU Code, have been executed and filed that are necessary to
preserve and protect fully the interests of the Note Issuer in the Transition
Property and reciting the details of such filings or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interests. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii) and (iii) above shall be conditions to the consummation of the
transactions referred to in clauses (a), (b) or (c) above.
Section 6.04. Limitation on Liability of Servicer and Others. Neither
----------------------------------------------
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be liable to the Note Issuer, the Note Trustee, the
Infrastructure Bank, the STO, the Noteholders, the Trust, the Certificate
Trustee, the Delaware Trustee, the Certificateholders or any other Person,
except as provided under this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the
-------- -------
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misconduct, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director or officer or
employee or agent of the Servicer may rely in good faith on the advice of
counsel reasonably acceptable to the Note Trustee or on any document of any
kind, prima facie properly executed and submitted by any Person, respecting any
matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be related to or incidental to its duties to service the Transition Property in
accordance with this Agreement, and that in its opinion may involve it in any
expense or liability.
Section 6.05. Southern California Edison Company Not to Resign as
---------------------------------------------------
Servicer. Subject to the provisions of Section 6.03, Southern California
--------
Edison Company shall not resign from the obligations and duties hereby imposed
on it as Servicer under this Agreement except upon either (a) a determination
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law or (b) satisfaction of the following: (i) the
Rating Agency Condition shall have been satisfied, (ii) the CPUC shall have
approved such resignation and (iii) notice of such resignation shall have been
given to the Infrastructure Bank. Notice of any such determination permitting
the resignation of Southern California Edison Company shall be communicated to
the Note Issuer, the Note Trustee, the Certificate Trustee, the Infrastructure
23
Bank and the Rating Agencies at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Note Issuer, the Note Trustee and the
Certificate Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until a successor Servicer shall have assumed
the responsibilities and obligations of Southern California Edison Company in
accordance with Section 7.02.
Section 6.06. Servicing Compensation.
----------------------
(a) In consideration for its services hereunder, until the Retirement
of the Notes, the Servicer shall receive a fee (the "Servicing Fee")
quarterly on each Payment Date in an amount equal to (i) one-fourth of 0.25
percent of the outstanding Principal Balance (before giving effect to
payments made on such date) for so long as FTA Charges are included as a
line item on Bills otherwise sent to Customers or (ii) one-fourth of 1.50
percent of the outstanding Principal Balance (before giving effect to
payments made on such date) if FTA Charges are not included as a line item
on Bills otherwise sent to Customers but, instead, are billed separately to
Customers. The Servicer also shall be entitled to retain as additional
compensation (i) any interest earnings on FTA Payments received by the
Servicer and invested by the Servicer pursuant to Section 6(d) of Annex I
hereto during each Collection Period prior to remittance to the Collection
Account and (ii) all late payment charges, if any, collected from Customers
or ESPs.
(b) The Servicing Fee set forth in Section 6.06(a) above shall be paid
to the Servicer by the Note Trustee, on each Payment Date in accordance
with the priorities set forth in Section 8.02(d) of the Indenture, by wire
transfer of immediately available funds from the Collection Account to an
account designated by the Servicer. Any portion of the Servicing Fee not
paid on such date shall be added to the Servicing Fee payable on the
subsequent Payment Date.
(c) Except as provided in Section 5.02(d), the Servicer shall be
required to pay from its own account all expenses incurred by it in
connection with its activities hereunder (including any fees to and
disbursements by accountants, counsel, or any other Person, any taxes
imposed on the Servicer and any expenses incurred in connection with
reports to Noteholders and Certificateholders) out of the compensation
retained by or paid to it pursuant to this Section 6.06, and shall not be
entitled to any extra payment or reimbursement therefor.
Section 6.07. Compliance with Applicable Law. The Servicer covenants
------------------------------
and agrees, in servicing the Transition Property, to comply with all laws
applicable to, and binding upon, the Servicer and relating to such Transition
Property the noncompliance with which would have a material adverse effect on
the value of the Transition Property; provided, however, that the foregoing is
-------- -------
not intended to, and shall not, impose any liability on the Servicer for
noncompliance with any law that the Servicer is contesting in good faith in
accordance with its customary standards and procedures.
24
Section 6.08. Access to Certain Records and Information Regarding
---------------------------------------------------
Transition Property. The Servicer shall provide to the Noteholders, the Note
-------------------
Trustee, the Certificate Trustee, the Infrastructure Bank and the STO access to
the Transition Property Records in such cases where the Noteholders, the Note
Trustee, the Certificate Trustee, the Infrastructure Bank and the STO shall be
required by applicable law to be provided access to such records. Access shall
be afforded without charge, but only upon reasonable request and during normal
business hours at the respective offices of the Servicer. Nothing in this
Section shall affect the obligation of the Servicer to observe any applicable
law (including any CPUC Regulation) prohibiting disclosure of information
regarding the Customers, and the failure of the Servicer to provide access to
such information as a result of such obligation shall not constitute a breach of
this Section.
Section 6.09. Appointments. The Servicer may at any time appoint any
------------
Person to perform all or any portion of its obligations as Servicer hereunder;
provided, however, that the Rating Agency Condition shall have been satisfied in
-------- -------
connection therewith; provided further that the Servicer shall remain obligated
-------- -------
and be liable to the Note Issuer, the Note Trustee, the Certificate Trustee and
the Noteholders for the servicing and administering of the Transition Property
in accordance with the provisions hereof without diminution of such obligation
and liability by virtue of the appointment of such Person and to the same extent
and under the same terms and conditions as if the Servicer alone were servicing
and administering the Transition Property; and provided further, however, that
-------- -------
nothing herein (including, without limitation, the Rating Agency Condition)
shall preclude the execution by the Servicer of an ESP Service Agreement with
any ESP pursuant to applicable CPUC Regulations. The fees and expenses of such
Person shall be as agreed between the Servicer and such Person from time to time
and none of the Note Issuer, the Note Trustee, the Noteholders or any other
Person shall have any responsibility therefor or right or claim thereto. Any
such appointment shall not constitute a Servicer resignation under Section 6.05.
Section 6.10. No Servicer Advances. The Servicer shall not make any
--------------------
advances of interest or principal on the Notes or the Certificates.
Section 6.11. Remittances.
-----------
(a) Subject to clause (b) below, on each Remittance Date, the Servicer
shall cause to be made a wire transfer of immediately available funds equal
to the Aggregate Remittance Amount for the applicable Collection Period to
the General Subaccount of the Collection Account. Prior to each remittance
to the General Subaccount of the Collection Account pursuant to this
Section, the Servicer shall provide written notice to the Note Trustee of
each such remittance (including the exact dollar amount to be remitted).
(b) Notwithstanding the foregoing clause (a), during any period in
which there exists the occurrence and continuance of a Servicer Default,
the failure to satisfy the Rating Agency Condition or the failure of the
Servicer to maintain a short-term rating of A-1 or better by Standard &
Poor's and P-1 or better by ▇▇▇▇▇'▇, the Servicer shall remit to the
General Subaccount of the Collection Account the total FTA Payments
estimated
25
to have been received by the Servicer from or on behalf of Customers on a
given Servicer Business Day in respect of all previously Billed FTA Charges
within two Servicer Business Days of receipt thereof by the Servicer (the
"Daily Remittance"). On or before each Remittance Date during any period
described in this clause (b), the Servicer shall calculate the amount of
any Remittance Shortfall or Excess Remittance attributable to the prior
Collection Period and (A) if a Remittance Shortfall exists, the Servicer
shall make a supplemental remittance to the General Subaccount of the
Collection Account on such Remittance Date in the amount of such Remittance
Shortfall, or (B) if an Excess Remittance exists, the Servicer shall reduce
the amount of each Daily Remittance (beginning with the Daily Remittance
occurring on the Remittance Date) by the outstanding amount of such Excess
Remittance until the balance of the Excess Remittance has been reduced to
zero.
(c) The Servicer agrees and acknowledges that it holds all FTA
Payments collected by it for the benefit of the Note Issuer and that all
such amounts will be remitted by the Servicer in accordance with this
Section without any surcharge, fee, offset, charge or other deduction
except (i) as set forth in clause (b) above or clause (d) below and (ii)
for late fees permitted by Section 6.06. The Servicer further agrees not to
make any claim to reduce its obligation to remit all FTA Payments collected
by it in accordance with this Agreement except (i) as set forth in clause
(b) above or clause (d) below and (ii) for late fees permitted by Section
6.06.
(d) If there is an Excess Remittance, the Servicer shall be entitled
either (i) to reduce the amount which the Servicer remits to the General
Subaccount of the Collection Account on such Remittance Date by the amount
of such Excess Remittance, the amount of such reduction becoming the
property of the Servicer or (ii) immediately to be paid from the Collection
Account or any subaccount therein the amount of such Excess Remittance,
such payment becoming the property of the Servicer. If there is a
Remittance Shortfall, the amount which the Servicer remits to the General
Subaccount of the Collection Account on such Remittance Date will be
increased by the amount of such Remittance Shortfall, such increase coming
from the Servicer's own funds.
ARTICLE VII.
Default
-------
Section 7.01. Servicer Default. If any one of the following events
----------------
(a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit in the Collection Account
on behalf of the Note Issuer any required remittance that shall continue
unremedied for a period of three Business Days after written notice of such
failure is received by the Servicer from the Note Issuer or the Note
Trustee or after discovery of such failure by an officer of the Servicer;
or
26
(b) any failure on the part of the Servicer or the Seller, as the case
may be, duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or the Seller (as the case may be)
set forth in this Agreement (including Section 4.01) or any other Basic
Document to which it is a party, which failure shall (i) materially and
adversely affect the rights of Noteholders or Certificateholders and (ii)
continue unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given (A) to the Servicer or the Seller (as the case may be) by the Note
Issuer or (B) to the Servicer or the Seller (as the case may be) by the
Note Trustee or by the Holders of Notes evidencing not less than 25 percent
of the Outstanding Amount of the Notes of all Series; or
(c) any representation or warranty made by the Servicer in this
Agreement shall prove to have been incorrect when made, which has a
material adverse effect on the Note Issuer or the Certificateholders and
which material adverse effect continues unremedied for a period of 60 days
after the date on which written notice thereof, requiring the same to be
remedied, shall have been delivered to the Servicer by the Note Issuer or
the Note Trustee; or
(d) an Insolvency Event occurs with respect to the Servicer or the
Seller;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Note Trustee, or the Holders of Notes evidencing not
less than 25 percent of the Outstanding Amount of the Notes of all Series, by
notice then given in writing to the Servicer (and to the Note Trustee if given
by the Noteholders) (a "Termination Notice") may terminate all the rights and
obligations (other than the obligations set forth in Section 6.02 hereof) of the
Servicer under this Agreement. In addition, upon a Servicer Default described
in Section 7.01(a), each of the following shall be entitled to apply to the CPUC
for sequestration and payment of revenues arising with respect to the 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 Agreement, whether with respect to the Notes, the Transition Property, the
FTA 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 Note Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
Termination Notice, whether to complete the transfer of the Transition Property
Records and related documents, or otherwise. The predecessor Servicer shall
cooperate with the successor Servicer, the Note Issuer and the Note Trustee in
effecting the termination of the responsibilities and rights of the predecessor
Servicer under this Agreement, including the transfer to the successor Servicer
for administration by it of all cash amounts that shall at the time be held by
the predecessor Servicer for remittance, or shall thereafter be received by it
with respect to the Transition Property or the FTA Charges. All reasonable
costs and expenses (including attorneys fees and expenses) incurred in
connection
27
with transferring the Transition Property Records to the successor Servicer and
amending this Agreement to reflect such succession as Servicer pursuant to this
Section shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses.
Section 7.02. Appointment of Successor.
------------------------
(a) Upon the Servicer's receipt of a Termination Notice pursuant to
Section 7.01 or the Servicer's resignation or removal in accordance with
the terms of this Agreement, the predecessor Servicer shall continue to
perform its functions as Servicer under this Agreement, and shall be
entitled to receive the requisite portion of the Servicing Fee, until a
successor Servicer shall have assumed in writing the obligations of the
Servicer hereunder as described below. In the event of the Servicer's
termination hereunder, the Note Issuer shall appoint a successor Servicer
with the Note Trustee's prior written consent thereto (which consent shall
not be unreasonably withheld), and the successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Note Issuer
and the Note Trustee. If within 30 days after the delivery of a
Termination Notice, the Note Issuer shall not have obtained such a new
Servicer, the Note Trustee may petition the CPUC or a court of competent
jurisdiction to appoint a successor Servicer under this Agreement. A
Person shall qualify as a successor Servicer only if (i) such Person is
permitted under CPUC Regulations to perform the duties of the Servicer,
(ii) the Rating Agency Condition shall have been satisfied and (iii) such
Person enters into a servicing agreement with the Note Issuer having
substantially the same provisions as this Agreement.
(b) Upon appointment, the successor Servicer shall be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating
thereto placed on the predecessor Servicer and shall be entitled to the
Servicing Fee and all the rights granted to the predecessor Servicer by the
terms and provisions of this Agreement.
Section 7.03. Waiver of Past Defaults. The Holders of Notes
-----------------------
evidencing not less than a majority of the Outstanding Amount of the Notes of
all Series may, on behalf of all Noteholders, waive in writing any default by
the Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to the Collection
Account in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
Section 7.04. Notice of Servicer Default. The Servicer shall deliver
--------------------------
to the Note Issuer, the Note Trustee, the Certificate Trustee, the
Infrastructure Bank, the STO and the Rating Agencies, promptly after having
obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice in an Officers' Certificate of any event which with
the giving of notice or lapse of time, or both, would become a Servicer Default
under Section 7.01(a) or (b).
28
ARTICLE VIII.
Miscellaneous Provisions
------------------------
Section 8.01. Amendment.
---------
(a) This Agreement may be amended in writing by the Servicer and the
Note Issuer with five Business Days' prior written notice given to the
Rating Agencies and the prior written consent of the Note Trustee, but
without the consent of any of the Noteholders or Certificateholders, to
cure any ambiguity, to correct or supplement any provisions in this
Agreement or for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions in this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as
-------- -------
evidenced by an Officer's Certificate delivered to the Note Issuer and the
Note Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
This Agreement may also be amended in writing from time to time by the
Servicer and the Note Issuer with prior written notice given to the Rating
Agencies and the prior written consent of the Note Trustee and the prior
written consent of the Holders of Notes evidencing not less than a majority
of the Outstanding Amount of the Notes of all Series, for the purpose of
adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholders; provided, however, that no
-------- -------
such amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, FTA Collections or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes, the Holders of
which are required to consent to any such amendment, without the consent of
the Holders of all the outstanding Notes.
Promptly after the execution of any such amendment and the requisite
consents, the Note Issuer shall furnish written notification of the
substance of such amendment to the Note Trustee and each of the Rating
Agencies.
It shall not be necessary for the consent of Noteholders pursuant to
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the
substance thereof.
Prior to its consent to any amendment to this Agreement, the Note
Trustee shall be entitled to receive and conclusively rely upon an Opinion
of Counsel stating that such amendment is authorized or permitted by this
Agreement. The Note Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Note Trustee's own rights, duties or
immunities under this Agreement or otherwise.
(b) Notwithstanding Section 8.01(a) or anything to the contrary in
this Agreement, the Servicer and the Note Issuer shall amend Annex I to
this Agreement in writing with prior written notice given to the Note
Trustee and the Rating Agencies, but
29
without the consent of the Note Trustee, any Rating Agency or any
Noteholder or Certificateholder, to address changes to the Servicer's
method of calculating FTA Payments received as a result of changes to the
Servicer's current computerized customer information system, as
contemplated by Section 6(e)(iii) of Annex I hereto; provided that any such
--------
amendment shall not have or cause a material adverse effect on the
Certificateholders.
Section 8.02. Protection of Title to Trust.
----------------------------
(a) The Servicer shall maintain accounts and records as to the
Transition Property accurately and in accordance with its standard
accounting procedures and in sufficient detail to permit reconciliation
between FTA Payments received by the Servicer and FTA Collections from time
to time deposited in the Collection Account.
(b) The Servicer shall permit the Note Trustee and its agents at any
time during normal business hours, upon reasonable notice to the Servicer
and to the extent it does not unreasonably interfere with the Servicer's
normal operations, to inspect, audit and make copies of and abstracts from
the Servicer's records regarding the Transition Property and the FTA
Charges. Nothing in this Section 8.02(b) shall affect the obligation of
the Servicer to observe any applicable law (including any CPUC Regulation)
prohibiting disclosure of information regarding the Customers, and the
failure of the Servicer to provide access to such information as a result
of such obligation shall not constitute a breach of this Section 8.02(b).
Section 8.03. Notices. All demands, notices and communications upon
-------
or to the Servicer, the Note Issuer, the Note Trustee, the Infrastructure Bank,
the STO, the Certificate Trustee or the Rating Agencies under this Agreement
shall be in writing and personally delivered, sent by overnight mail or sent by
telecopy or other similar form of rapid transmission, and shall be deemed to
have been duly given upon receipt (a) in the case of the Servicer, to Southern
California Edison Company, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, (b) in the case of the Note Issuer, to SCE Funding
LLC, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of
Treasurer, (c) in the case of the Note Trustee, at the Corporate Trust Office,
(d) in the case of the Infrastructure Bank, to California Infrastructure and
Economic Development Bank, c/o California Trade and Commerce Agency, at ▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of Executive Director, (e)
in the case of the Certificate Trustee, to Bankers Trust Company of California,
N.A., c/o Bankers Trust Company, Corporate Trust and Agency Services, at Four
Albany Street, New York, NY 10006, Attention of Structured Finance Group, (f) in
the case of the STO, to the California State Treasurer's Office, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of Deputy Treasurer, (g) in the
case of Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., ABS Monitoring Department,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (h) in the case of Standard &
Poor's, to Standard & Poor's Corporation, ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Surveillance Department, (i) in the
case of Fitch, to Fitch Investors Service, L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of Commercial Asset-Backed Securities, (j) in the case
of Duff & ▇▇▇▇▇▇, to ▇▇▇▇ & ▇▇▇▇▇▇ Credit
30
Rating Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of Asset-
Backed Monitoring Group, or (k) as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
Section 8.04. Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 6.03 and as provided in the
provisions of this Agreement concerning the resignation of the Servicer, this
Agreement may not be assigned by the Servicer.
Section 8.05. Limitations on Rights of Others. The provisions of
-------------------------------
this Agreement are solely for the benefit of the Servicer and the Note Issuer
and, to the extent provided herein or in the Basic Documents, the Trust, the
Note Trustee, the Certificate Trustee, the Noteholders, the Certificateholders,
the Infrastructure Bank and the STO, and nothing in this Agreement, whether
express or implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Transition Property or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
Section 8.06. Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 8.07. Separate Counterparts. This Agreement may be executed
---------------------
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 8.08. Headings. The headings of the various Articles and
--------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 8.09. Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the State of California, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
Section 8.10. Assignment to Note Trustee. The Servicer hereby
--------------------------
acknowledges and consents to the collateral assignment of any or all of the Note
Issuer's rights and obligations hereunder to the Note Trustee and to the further
assignment of the Note Trustee's rights and obligations under the Indenture to
the Certificate Trustee.
Section 8.11. Nonpetition Covenants. Notwithstanding any prior
---------------------
termination of this Agreement or the Indenture, but subject to the CPUC's right
to order the sequestration and payment of revenues arising with respect to the
Transition Property notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to the debtor, pledgor or transferor of the
Transition Property pursuant to Section 843(e) and (g) of the PU Code, the
Servicer shall not, prior to the date which is one year and one day after the
termination of the
31
Indenture with respect to the Note Issuer, acquiesce, petition or otherwise
invoke or cause the Note Issuer or the Trust to invoke the process of any court
or governmental authority for the purpose of commencing or sustaining a case
against the Note Issuer or the Trust under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Note Issuer or
the Trust or any substantial part of the property of the Note Issuer or the
Trust, or ordering the winding up or liquidation of the affairs of the Note
Issuer or the Trust.
Section 8.12. Limitation of Liability. It is expressly understood
-----------------------
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Bankers Trust Company of California, N.A., not individually or
personally but solely as Note Trustee on behalf of the holders of the Notes, in
the exercise of the powers and authority conferred and vested in it, (b) the
representations, undertakings and agreements herein made by the Note Trustee on
behalf of the holders of the Notes are made and intended not as personal
representations, undertakings and agreements by Bankers Trust Company of
California, N.A., but are made and intended for the purpose of binding only the
holders of the Notes, (c) nothing herein contained shall be construed as
creating any liability on Bankers Trust Company of California, N.A.,
individually or personally, to perform any covenant either expressed or implied
contained herein, except in its capacity as Note Trustee, all such liability, if
any, being expressly waived by the parties who are signatories to this Agreement
and by any Person claiming by, through or under such parties and (d) under no
circumstances shall Bankers Trust Company of California, N.A., be personally
liable for the payment of any indebtedness or expenses of the holders of the
Notes or be personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Note Trustee
under this Agreement; provided, however, that this provision shall not protect
-------- -------
Bankers Trust Company of California, N.A. against any liability that would
otherwise be imposed by reason of willful misconduct, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement.
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
SCE FUNDING LLC,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Title: Vice President and Treasurer
SOUTHERN CALIFORNIA EDISON COMPANY,
by /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------
Title: Vice President and Treasurer
Acknowledged and Accepted:
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A., not in
its individual capacity but solely
as Note Trustee,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
▇▇▇▇▇ ▇▇▇▇▇▇
Assistant Secretary
33
EXHIBIT A
Form of Monthly Servicer's Certificiate
---------------------------------------
Page 1 of 3 Today's Date
Monthly Servicer's Certificate
(to be delivered pursuant to Section 3.01(b)(i) of
the Transition Property Servicing Agreement on or before each Remittance Date)
Southern California Edison Company, as Servicer
--------------------------------------------------------------------------------
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK SPECIAL PURPOSE TRUST
SCE-1
--------------------------------------------------------------------------------
Pursuant to the Transition Property Servicing Agreement dated as of [ ], 1997
(the "Transition Property Servicing Agreement") between Southern California
Edison Company, as Servicer, and SCE Funding LLC, as Note Issuer, the Servicer
does hereby certify as follows:
Collection Period: ________________
Remittance Date: __________
a. FTA Payments estimated to have been received by the Servicer
attributable to RESIDENTIAL CUSTOMERS during this Collection Period:
b. FTA Payments estimated to have been received by the Servicer
attributable to SMALL COMMERCIAL CUSTOMERS during this Collection Period:
c. Remittance Shortfall attributable to RESIDENTIAL
CUSTOMERS for this Collection Period:
d. Remittance Shortfall attributable to SMALL COMMERCIAL
CUSTOMERS for this Collection Period:
e. Excess Remittance attributable to RESIDENTIAL
CUSTOMERS for this Collection Period:
f. Excess Remittance attributable to SMALL COMMERCIAL
CUSTOMERS for this Collection Period:
The Aggregate Remittance Amount remitted by the Servicer to the Collection
Account for this Collection Period is (a + b + c + d - e - f):
----------------
================
Capitalized terms used in this Monthly Servicer's Certificate have their
respective meanings set forth in the Transition Property Servicing Agreement.
In WITNESS HEREOF, the undersigned has duly executed and delivered this
Monthly Servicer's Certificate this ________ day of _________, 1997.
SOUTHERN CALIFORNIA EDISON COMPANY, as Servicer
By
-----------------------------------
Title
--------------------------------
Page 2 of 3 Today's Date
Monthly Servicer's Certificate
(to be delivered pursuant to Section 3.01(b)(i) of
the Transition Property Servicing Agreement on or before each Remittance Date)
Southern California Edison Company, as Servicer
--------------------------------------------------------------------------------
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK SPECIAL PURPOSE TRUST
SCE-1
--------------------------------------------------------------------------------
Pursuant to the Transition Property Servicing Agreement dated as of [ ], 1997
(the "Transition Property Servicing Agreement") between Southern California
Edison Company, as Servicer, and SCE Funding LLC, as Note Issuer, the Servicer
does hereby certify as follows:
Collection Period: ________________
RESIDENTIAL:
1.For this Collection Period:
a.Sales at the current FTA charge
b.Current FTA Charge
c.Sales at the previous FTA charge
d.Previous FTA charge
e.Billed FTA not accounted for in prior periods
f.Billed FTA Charges (a x b + c x d + e)
g.Collection Curve
Month 1 Estimated Collections
Month 2 Estimated Collections
Month 3 Estimated Collections
Month 4 Estimated Collections
Month 5 Estimated Collections
Month 6 Estimated Collections
▇.▇▇▇▇▇ (sum of all d above)
i.Estimated FTA Payments (f x h)
2.Aggregate Remittance amount for this Collection Period:
Collection
Period Collection Percent Billed FTA Charges Remittance Amounts
(A) (B) (C) (B x C)
-------- -------------------- -------------------- --------------------
a.Month 6 Estimated Collections
b.Month 5 Estimated Collections
c.Month 4 Estimated Collections
d.Month 3 Estimated Collections
e.Month 2 Estimated Collections
f.Month 1 Estimated Collections
--------------------
====================
3.For the ____________ Collection Period
a.Estimated FTA Payments
b.Actual FTA Payments
c.If (a > b), (a - b) equals Excess Remittance
d.If (b > a), (b - a) equals Remittance Shortfall
Page 3 of 3 Today's Date
Monthly Servicer's Certificate
(to be delivered pursuant to Section 3.01(b)(i) of
the Transition Property Servicing Agreement on or before each Remittance Date)
Southern California Edison Company, as Servicer
--------------------------------------------------------------------------------
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK SPECIAL PURPOSE TRUST
SCE-1
--------------------------------------------------------------------------------
Pursuant to the Transition Property Servicing Agreement dated as of [ ], 1997
(the "Transition Property Servicing Agreement") between Southern California
Edison Company, as Servicer, and SCE Funding LLC, as Note Issuer, the Servicer
does hereby certify as follows:
Collection Period: ________________
SMALL COMMERCIAL:
1.For this Collection Period:
a.Sales at the current FTA charge
b.Current FTA Charge
c.Sales at the previous FTA charge
d.Previous FTA charge
e.Billed FTA not accounted for in prior periods
f.Billed FTA Charges (a x b + c x d + e)
g.Collection Curve
Month 1 Estimated Collections
Month 2 Estimated Collections
Month 3 Estimated Collections
Month 4 Estimated Collections
Month 5 Estimated Collections
Month 6 Estimated Collections
▇.▇▇▇▇▇ (sum of all d above)
i.Estimated FTA Payments (f x h)
2.Aggregate Remittance amount for this Collection Period:
Collection
Period Collection Percent Billed FTA Charges Remittance Amounts
(A) (B) (C) (B x C)
-------- -------------------- -------------------- --------------------
a.Month 6 Estimated Collections
b.Month 5 Estimated Collections
c.Month 4 Estimated Collections
d.Month 3 Estimated Collections
e.Month 2 Estimated Collections
f.Month 1 Estimated Collections
--------------------
====================
3.For the ____________ Collection Period
a.Estimated FTA Payments
b.Actual FTA Payments
c.If (a > b), (a - b) equals Excess Remittance
d.If (b > a), (b - a) equals Remittance Shortfall
EXHIBIT B
Form of Certificate of Compliance
---------------------------------
EXHIBIT B
CERTIFICATE OF COMPLIANCE
The undersigned hereby certifies that he/she is the duly elected and
acting ___________ of [NAME OF SERVICER], as servicer (the "Servicer") under the
Transition Property Servicing Agreement dated as of December 11, 1997 (the
"Servicing Agreement") between the Servicer and SCE Funding LLC (the "Note
Issuer") and further that:
1. A review of the activities of the Servicer and of its performance
under the Servicing Agreement during the twelve months ended June 30, ____ has
been made under the supervision of the undersigned pursuant to Section 3.03 of
the Servicing Agreement; and
2. To the best of the undersigned's knowledge, based on such review,
the Servicer has fulfilled all of its material obligations in all material
respects under the Servicing Agreement throughout the twelve months ended June
30, , except for those material defaults in the fulfillment of material
obligations listed on Annex A hereto.
Executed as of this ____ day of ______________, ____.
[NAME OF SERVICER]
By:_______________________________
Name:
Title:
ANNEX A
TO
CERTIFICATE OF COMPLIANCE
LIST OF SERVICER DEFAULTS
The following material defaults known to the undersigned occurred during the
year ended June 30, ____:
Nature of Default Status
EXHIBIT C
Form of Routine Annual True-Up Mechanism Advice Letter
------------------------------------------------------
[LETTERHEAD OF SOUTHERN CALIFORNIA EDISON]
_______________, 1997
ADVICE ________-E
(U 338-E)
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
ENERGY DIVISION
SUBJECT: Annual Fixed Transaction Amounts Charge (FTAC)True-Up
Mechanism Advice Filing
Pursuant to California Public Utilities Commission (Commission) Decision No. 97-
09-056 (D.97-09-056), Ordering Paragraph No. 14, Southern California Edison
Company (Edison or Company), an Edison International company, as servicer of the
Rate Reduction Bonds (RRBs) and on behalf of SCE Funding LLC is required to
apply for adjustment to FTACs at least 15 days before the end of each calendar
year. Edison hereby transmits for filing the following changes in its tariffs
schedules. The revised tariff sheets are listed on Attachment A and are
attached hereto.
PURPOSE
-------
This filing establishes revised FTACs for rate schedules for residential and
eligible small commercial customers. During the rate-freeze period, changes in
the FTACs will be offset by equal and offsetting changes in the residual
Competition Transition Charge (CTC) component of customers' rates.
BACKGROUND
----------
In Decision No. ▇▇-▇▇-▇▇▇, the Commission authorized Edison to file routine
True-UP Mechanism Advice Letters on an annual basis, at least 15 days before the
end of the calendar year. Routine Advice Letter filings are those where Edison
uses the methodology found reasonable by the Commission in Decision No. 97-09-
056 to revise existing FTACs.
Using the methodology approved by the Commission in Decision No. ▇▇-▇▇-▇▇▇ this
Filing modifies the variables used in the FTAC calculation and provides the
resulting modified FTACs. Table I shows the revised assumptions for each of the
variables used in calculating the FTACs for residential and small commercial
customers. The assumptions underlying the current FTACs
ADVICE ________-E -2- _______________, 1997
(U 338-E)
were filed in Advice 1272-E, as authorized by Decision No. ▇▇-▇▇-▇▇▇. Appendix 1
shows the revised payment schedule.
--------------------------------------------------------------------------------
TABLE 1
INPUT VALUES FOR FTACS
--------------------------------------------------------------------------------
Eligible Small
Residential Commercial
Customers Customers
--------------------------------------------------------------------------------
Monthly kWh sales:
--------------------------------------------------------------------------------
December
--------------------------------------------------------------------------------
January
--------------------------------------------------------------------------------
February
--------------------------------------------------------------------------------
March
--------------------------------------------------------------------------------
April
--------------------------------------------------------------------------------
May
--------------------------------------------------------------------------------
June
--------------------------------------------------------------------------------
July
--------------------------------------------------------------------------------
August
--------------------------------------------------------------------------------
September
--------------------------------------------------------------------------------
October
--------------------------------------------------------------------------------
November
--------------------------------------------------------------------------------
Percent of residential customers' and
eligible small customers' billed
amounts expected to be uncollected
--------------------------------------------------------------------------------
Percent of billed amounts collected in
current month
--------------------------------------------------------------------------------
Percent of billed amounts collected in
second month after billing
--------------------------------------------------------------------------------
Percent of billed amounts collected in
third month after billing
--------------------------------------------------------------------------------
Percent of billed amounts collected in
fourth month after billing
--------------------------------------------------------------------------------
Percent of billed amounts collected in
fifth month after billing
--------------------------------------------------------------------------------
Average rates in effect at June 1996 12.70 c/kWh 13.43 c/kWh
--------------------------------------------------------------------------------
For This Series
--------------------------------------------------------------------------------
Quarterly deposit to
Overcollateralization Subaccount $307,875
--------------------------------------------------------------------------------
Quarterly Servicing Fee as percent of
RRB outstanding balance .0625%
--------------------------------------------------------------------------------
Quarterly trustee and ongoing
transaction expenses
--------------------------------------------------------------------------------
Expected RRB outstanding balance as of
12/31/98
--------------------------------------------------------------------------------
Undercollection of principal to be
reflected in the new FTACs
--------------------------------------------------------------------------------
Reserve Subaccount balance to be
reflected in the new FTACs
--------------------------------------------------------------------------------
Difference between Overcollateralization
Subaccount balance and required
overcollateralization level to be reflected
in the new FTACs
--------------------------------------------------------------------------------
Difference between Capital Subaccount balance
and required capital level to be reflected in
the new FTACs
--------------------------------------------------------------------------------
Table II shows the FTACs calculated for residential and eligible small
commercial customers. The FTA calculations are shown in Appendix 1.
------------------------------------------------
TABLE II
------------------------------------------------
Residential Customer FTAC c/kWh
------------------------------------------------
ADVICE ________-E -3- _______________, 1997
(U 338-E)
--------------------------------------------------------------
Eligible Small Commercial Customer FTAC c/kWh
--------------------------------------------------------------
Attached are proposed changes to Part I of Edison's Preliminary Statement to
show FTACs to be effective January 1, [year].
EFFECTIVE DATE
--------------
In accordance with Decision No. ▇▇-▇▇-▇▇▇, routine True-Up Mechanism Advice
Letters for annual FTAC adjustments shall be filed at least 15 days before the
end each calendar year and these adjustments to FTACs shall be effective at the
beginning of the next calendar year. No Commission resolution is required.
Therefore, these FTACs shall be effective January 1, [year] through December 31,
[year].
NOTICE
------
Copies of this filing are being furnished to the parties on the attached service
list and to parties to A.▇▇-▇▇-▇▇▇. In accordance with Public Utilities Code
(S)491, notice to the public is hereby given by filing and keeping this filing
open for public inspection at the Company's corporate headquarters.
Enclosures
cc: CPUC, SF - Attn: ▇▇▇▇ ▇▇▇▇▇▇, Energy Division
CPUC, SF - Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
CPUC, SF - Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Energy Division
CPUC, SF - Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Energy Division
EXHIBIT D
Form of Anniversary True-Up Mechanism Advice Letter
---------------------------------------------------
[LETTERHEAD OF SOUTHERN CALIFORNIA EDISON]
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Manager
Pricing Design and Tariffs
--------------------------------------------------------------------------------
______________, 1997
ADVICE ________-E
(U 338-E)
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
ENERGY DIVISION
SUBJECT: Anniversary Fixed Transition Amounts Charge
(FTAC) True-Up Mechanism Advice Filing
Pursuant to California Public Utilities Commission (Commission) Decision No. 97-
09-056 (D.97-09-056), Ordering Paragraphs Nos. 14 and 16, Southern California
Edison Company (Edison or Company), an Edison International company, as servicer
of the Rate Reduction Bonds (RRBs) and on behalf of the SCE Funding LLC is
required to file a True-Up Mechanism Advice Letter at least 15 days before each
anniversary of the issuance of the financing order.
PURPOSE
-------
This Filing establishes that the FTACs currently in effect are adequate to
service the Rate Reduction Bonds, that no event of default has occurred and is
continuing on the Rate Reduction Bonds, and that no adjustments to the FTACs are
required at this time.
BACKGROUND
----------
In D.▇▇-▇▇-▇▇▇, in accordance with Public Utilities (PU) Code Section 841(e),
the Commission ordered Edison to file True-Up Mechanism Advice Letters at least
15 days before each anniversary of the issuance of the financing order, stating
whether an adjustment to the FTACs is necessary.
Table I shows the RRB principal balance and the balances in the Collection
Account subaccounts as of June 25, ____. The assumptions underlying the current
FTACs were filed in Advice 1272-E, as authorized by D.▇▇-▇▇-▇▇▇.
-2-
ADVICE_____-E ________, 1997
(U 338-E)
--------------------------------------------------------------------------------
TABLE I
RRB PRINCIPAL BALANCE AND COLLECTION ACCOUNT SUBACCOUNT BALANCES
--------------------------------------------------------------------------------
Scheduled RRB Principal Balance
--------------------------------------------------------------------------------
RRB Principal Balance
--------------------------------------------------------------------------------
Reserve Subaccount Balance
--------------------------------------------------------------------------------
Required Overcollateralization Level
--------------------------------------------------------------------------------
Overcollateralization Subaccount Balance
--------------------------------------------------------------------------------
Required Capital Level
--------------------------------------------------------------------------------
Capital Subaccount Balance
--------------------------------------------------------------------------------
EFFECTIVE DATE
--------------
In accordance with Decision No. ▇▇-▇▇-▇▇▇ and PU Code Section 841(e), the
Commission shall determine on the anniversary of issuance of this financing
order, whether adjustments to the FTACs are required, with the resulting
adjustments to the FTACs, if necessary, to be implemented within 90 days of this
anniversary date.
NOTICE
------
In accordance with PU Code Section 491, notice to the public is hereby given by
filing and keeping the Advice Filing open for public inspection at the Company's
corporate headquarters.
Since this Filing is made pursuant to Decision No. ▇▇-▇▇-▇▇▇, further notice in
accordance with General Order No. 96-A, Section III, Paragraph G, is not
necessary. However, copies of this Filing are being furnished to the Interested
Parties on the attached service list and to parties to A.▇▇-▇▇-▇▇▇. Address
change requests should be directed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇.
Enclosures
cc: CPUC, SF - Attn: ▇▇▇▇ ▇▇▇▇▇▇, Energy Division
CPUC, SF - Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
CPUC, SF - Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Energy Division
CPUC, SF - Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Energy Division
EXHIBIT E
Form of Quarterly Servicer's Certificate
----------------------------------------
Page 1 of 2 Today's Date
Quarterly Servicer's Certificate
(to be delivered pursuant to Section 4.01(d)(ii) of
the Transition Property Servicing Agreement on or before each Remittance Date)
Southern California Edison Company, as Servicer
-------------------------------------------------------------------------------
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK SPECIAL PURPOSE TRUST
SCE-1
-------------------------------------------------------------------------------
Pursuant to the Transition Property Servicing Agreement dated as of [ ],
1997 (the "Transition Property Servicing Agreement") between Southern
California Edison Company, as Servicer, and SCE Funding LLC, as Note Issuer,
the Servicer does hereby certify as follows:
Collection Periods: _________ through ____________
Distribution Date: _______________
1. As of this Payment Date
a. Required Overcollateralization Level
b. Required Capital Level
c. Outstanding principal balance of Series 1997-1 Notes
i. prior to giving effect to any payments made on this Payment Date
ii. per Expected Amortization Schedule
2. Amounts available for distribution this Payment Date:
a. Remittances for Month1 Collection Period
b. Remittances for Month2 Collection Period
c. Remittances for Month3 Collection Period
d. Net Earnings on Collection Account
e. General Subacount Balance (sum of a through d above)
f. Reserve Subaccount Balance
g. Overcollateralization Subaccount Balance
h. Capital Subaccount Balance
i. Collection Account Balance (sum of e through h above)
3. Distribution of amounts remitted:
a. Note, Delaware, Certificate Trustee Fees
b. Servicing Fees
c. Quarterly Administration Fees
d. Operating Expenses (up to a maximum of $100,000.00)
e. Quarterly Interest
f. Principal Due and Payable
g. Quarterly Principal
▇. Operating Expenses in excess of those in d above
i. Deposit to Overcollateralization Subaccount (up to required level)
k. Released to the Note Issuer: Net earnings on Collection Account
l. Released to the Note Issuer upon Series retirement: Overcollateralization
Subaccount
m. Released to the Note Issuer upon Series retirement: Capital Subaccount
Balance
n. Deposit to Reserve Account
o. Released to the Note Issuer upon Series retirement: Collection Account
---------------
TOTAL
===============
4. For this Payment Date
a. Withdrawal, if any, from Reserve Subaccount
b. Withdrawal, if any, from Overcollateralization Subaccount
c. Withdrawal, if any, from Capital Subaccount
Page 2 of 2 Today's Date
QUARTERLY SERVICER'S CERTIFICATE
(to be delivered pursuant to Section 4.01(d)(ii) of
the Transition Property Servicing Agreement on or before each Remittance Date)
Southern California Edison Company, as Servicer
--------------------------------------------------------------------------------
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK SPECIAL PURPOSE TRUST
SCE-1
--------------------------------------------------------------------------------
Pursuant to the Transition Property Servicing Agreement dated as of [ ], 1997
(the "Transition Property Servicing Agreement") between Southern California
Edison Company, as Servicer, and SCE Funding LLC, as Note Issuer, the Servicer
does hereby certify as follows:
Collection Periods: _________ through ____________
Distribution Date: _______________
5. FOR THIS PAYMENT DATE
a. Current Payment Date
b. Prior Payment Date*
c. 30/360 Days in Interest Accrual Period (a-b)
6. INTEREST DUE AND PAYABLE AS OF THIS PAYMENT DATE
Principal Amount
(before giving
effect to any
payments) Note Interest Rate Interest Due*
(A) (B) (A x B x 4c / 360)
--------------- ----------------- ------------------
a. Class A-1
b. Class A-2
c. Class A-3
d. Class A-4
e. Class A-5
f. Class A-6
g. Class A-7
7. PRINCIPAL AMOUNT AS OF THIS PAYMENT DATE
Difference Between
Outstanding
Principal Amount Principal Amount
(before giving and Amount Shown
effect to any (after giving effect to on Expected
payments) Principal Payment any payments) Amortization
(A) (B) (A - B) Schedule
--------------- ----------------- ----------------------------------------------
a. Class A-1
b. Class A-2
c. Class A-3
d. Class A-4
e. Class A-5
f. Class A-6
g. Class A-7 ----------------------
Total $ -
----------------------
Projected outstanding balance of Series 1997-1 $ -
8. ENDING BALANCE THIS PAYMENT DATE:
a. Reserve Subaccount
b. Overcollateralization Subaccount
c. Capital Subaccount
* or Series Issuance Date in the case of the first payment date.
SCHEDULE 4.01(A)
EXPECTED AMORTIZATION SCHEDULE
------------------------------
OUTSTANDING PRINCIPAL BALANCE
---------------------------------------------------------------------------------------
PAYMENT DATE CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 CLASS A-5 CLASS A-6
------------ ------------ ------------ ------------ ------------ ------------ ------------
Series Issuance
Date........................ $246,300,000 $307,251,868 $247,840,798 $246,030,125 $360,644,658 $739,988,148
Mar. 1998..................... 233,946,234 307,251,868 247,840,798 246,030,125 360,644,658 739,988,148
June 1998..................... 168,997,335 307,251,868 247,840,798 246,030,125 360,644,658 739,988,148
Sept. 1998.................... 90,521,184 307,251,868 247,840,798 246,030,125 360,644,658 739,988,148
Dec. 1998..................... 0 307,251,868 247,840,798 246,030,125 360,644,658 739,988,148
Mar. 1999..................... 0 236,721,177 247,840,798 246,030,125 360,644,658 739,988,148
June 1999..................... 0 187,492,228 247,840,798 246,030,125 360,644,658 739,988,148
Sept. 1999.................... 0 128,971,996 247,840,798 246,030,125 360,644,658 739,988,148
Dec. 1999..................... 0 60,951,868 247,840,798 246,030,125 360,644,658 739,988,148
Mar. 2000..................... 0 0 247,840,798 246,030,125 360,644,658 739,988,148
June 2000..................... 0 0 195,613,979 246,030,125 360,644,658 739,988,148
Sept. 2000.................... 0 0 133,803,734 246,030,125 360,644,658 739,988,148
Dec. 2000..................... 0 0 62,492,666 246,030,125 360,644,658 739,988,148
Mar. 2001..................... 0 0 0 246,030,125 360,644,658 739,988,148
June 2001..................... 0 0 0 193,862,722 360,644,658 739,988,148
Sept. 2001.................... 0 0 0 132,583,324 360,644,658 739,988,148
Dec. 2001..................... 0 0 0 62,222,791 360,644,658 739,988,148
Mar. 2002..................... 0 0 0 0 360,644,658 739,988,148
June 2002..................... 0 0 0 0 308,049,532 739,988,148
Sept. 2002.................... 0 0 0 0 246,682,598 739,988,148
Dec. 2002..................... 0 0 0 0 176,567,449 739,988,148
Mar. 2003..................... 0 0 0 0 114,327,016 739,988,148
June 2003..................... 0 0 0 0 61,360,183 739,988,148
Sept. 2003.................... 0 0 0 0 0 739,988,148
Dec. 2003..................... 0 0 0 0 0 670,255,597
Mar. 2004..................... 0 0 0 0 0 608,060,054
June 2004..................... 0 0 0 0 0 554,713,399
Sept. 2004.................... 0 0 0 0 0 493,339,630
Dec. 2004..................... 0 0 0 0 0 423,955,597
Mar. 2005..................... 0 0 0 0 0 361,783,962
June 2005..................... 0 0 0 0 0 308,048,831
Sept. 2005.................... 0 0 0 0 0 246,667,779
Dec. 2005..................... 0 0 0 0 0 177,655,597
Mar. 2006..................... 0 0 0 0 0 115,517,428
June 2006..................... 0 0 0 0 0 61,391,525
Sept. 2006.................... 0 0 0 0 0 0
Dec. 2006..................... 0 0 0 0 0 0
Mar. 2007..................... 0 0 0 0 0 0
June 2007..................... 0 0 0 0 0 0
Sept. 2007.................... 0 0 0 0 0 0
Dec. 2007..................... 0 0 0 0 0 0
PAYMENT DATE CLASS A-7 SERIES 1997-1
------------ ------------ --------------
Series Issuance
Date........................ $314,944,403 $2,463,000,000
Mar. 1998..................... 314,944,403 2,450,646,234
June 1998..................... 314,944,403 2,385,697,335
Sept. 1998.................... 314,944,403 2,307,221,184
Dec. 1998..................... 314,944,403 2,216,700,000
Mar. 1999..................... 314,944,403 2,146,169,309
June 1999..................... 314,944,403 2,096,940,360
Sept. 1999.................... 314,944,403 2,038,420,128
Dec. 1999..................... 314,944,403 1,970,400,000
Mar. 2000..................... 314,944,403 1,909,448,132
June 2000..................... 314,944,403 1,857,221,313
Sept. 2000.................... 314,944,403 1,795,411,068
Dec. 2000..................... 314,944,403 1,724,100,000
Mar. 2001..................... 314,944,403 1,661,607,334
June 2001..................... 314,944,403 1,609,439,931
Sept. 2001.................... 314,944,403 1,548,160,533
Dec. 2001..................... 314,944,403 1,477,800,000
Mar. 2002..................... 314,944,403 1,415,577,209
June 2002..................... 314,944,403 1,362,982,083
Sept. 2002.................... 314,944,403 1,301,615,149
Dec. 2002..................... 314,944,403 1,231,500,000
Mar. 2003..................... 314,944,403 1,169,259,567
June 2003..................... 314,944,403 1,116,292,734
Sept. 2003.................... 314,944,403 1,054,932,551
Dec. 2003..................... 314,944,403 985,200,000
Mar. 2004..................... 314,944,403 923,004,457
June 2004..................... 314,944,403 869,657,802
Sept. 2004.................... 314,944,403 808,284,033
Dec. 2004..................... 314,944,403 738,900,000
Mar. 2005..................... 314,944,403 676,728,365
June 2005..................... 314,944,403 622,993,234
Sept. 2005.................... 314,944,403 561,612,182
Dec. 2005..................... 314,944,403 492,600,000
Mar. 2006..................... 314,944,403 430,461,831
June 2006..................... 314,944,403 376,335,928
Sept. 2006.................... 314,944,403 314,944,403
Dec. 2006..................... 246,300,000 246,300,000
Mar. 2007..................... 184,194,745 184,194,745
June 2007..................... 129,682,197 129,682,197
Sept. 2007.................... 68,280,823 68,280,823
Dec. 2007..................... 0 0
SCHEDULE 6.01(f)
Proceedings
-----------
1. Petition for writ of review filed with the California Supreme Court by The
Utility Reform Network on November 24, 1997.
ANNEX I
TO
SERVICING AGREEMENT
The Servicer agrees to comply with the following servicing procedures:
SECTION 1. DEFINITIONS.
-----------
(a) Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Transition Property Servicing Agreement dated as
of December 11, 1997 (the "Agreement"), to which this Annex I is attached.
(b) Whenever used in this Annex I, the following words and phrases
shall have the following meanings:
"Aggregate Remittance Amount" has the meaning set forth in Section
---------------------------
6(e)(i) of this ▇▇▇▇▇ ▇.
"Applicable MDMA" means with respect to each Customer, the meter data
---------------
management agent providing meter reading services for that Customer's account.
"Billed FTA Charges" means the amounts billed to Customers pursuant to
------------------
the FTA Charges, whether billed directly to such Customers by the Servicer or
indirectly through an ESP pursuant to Consolidated ESP Billing or Full
Consolidated ESP Billing.
"Closing Bill" means the final bill issued to a Customer at the time
------------
service is terminated.
"Consolidated ESP Billing" means the billing option available to
------------------------
Customers served by an ESP pursuant to which such ESP will be responsible for
billing and collecting all charges to Customers electing such billing option,
including the FTA Charges, and will become obligated to the Servicer for such
billed FTA Charges, all in accordance with applicable CPUC Regulations.
"Estimation Template" means the template shown on Schedule 6 to this
------------------- ----------
Annex I, which template is used to calculate the FTA Payments estimated to have
been received by the Servicer during any Collection Period.
"Full Consolidated ESP Billing" means the billing option available to
-----------------------------
Customers served by an ESP, if such option is approved by the utility with
respect to such ESP, pursuant to which such ESP performs the same tasks it would
perform under Consolidated ESP Billing, incurs the same responsibilities as
under Consolidated ESP Billing and, in addition, calculates all
utility charges to Customers, including the FTA Charges, from billing factors
provided by the utility and the Servicer.
"Level Pay Plan" means a level payment plan offered by the Seller,
--------------
which, if elected by a Customer, provides for level monthly Bill charges to such
Customer by estimating the amount that the Customer would pay during a year
(based on the Customer's actual usage during the prior year), then charging the
Customer 1/11th of that amount for each of eleven months, with quarterly
adjustments if necessary. In the twelfth month, the payments made by such
Customer during the preceding eleven months are reconciled with the amount owed
by such Customer for actual usage during the level pay period, and the Customer
is given a credit or billed for the difference, as appropriate, based on such
reconciliation.
"Net Write-Off Percent" means the number (expressed as a percent)
---------------------
allocable to a particular Billing Period equal to: (i) the amount by which
Write-Offs attributable to such Billing Period exceed Write-Off recoveries
attributable to such Billing Period, divided by (ii) the total billed revenue
attributable to the current Billing Period.
"Servicer Policies and Practices" means, with respect to the
-------------------------------
Servicer's duties under this ▇▇▇▇▇ ▇, the policies and practices of the Servicer
applicable to such duties that the Servicer follows with respect to comparable
assets that it services for itself or others.
"Variables" means the following variables underlying the Daily
---------
Collections Curves:
(i) the 30-day outstanding billed revenue;
(ii) the 60-day outstanding billed revenue;
(iii) the 90-day outstanding billed revenue (which may be solved for
in accordance with applicable Servicer Policies and Practices);
(iv) the 120-day outstanding billed revenue (which may be solved for
in accordance with applicable Servicer Policies and Practices);
(v) the 150-day outstanding billed revenue (which may be solved for in
accordance with applicable Servicer Policies and Practices); and
(vi) the estimated Net Write-Off percentage for each class of
Customers.
"Write-Offs" means write-offs of Billed FTA Charges that remain unpaid
by Customers or ESPs as of 180 days after the issuance of the Closing Bills
containing such charges.
2
SECTION 2. DATA ACQUISITION.
----------------
(a) Installation and Maintenance of Meters. Except to the extent that
--------------------------------------
an ESP is responsible for such services pursuant to an ESP Service Agreement,
the Servicer shall cause to be installed, replaced and maintained meters in such
places and in such condition as will enable the Servicer to obtain usage
measurements for each Customer every Servicer Month.
(b) Meter Reading. At least once each Servicer Month, the Servicer
-------------
shall obtain usage measurements from the Applicable MDMA for each Customer;
provided, however, that the Servicer may determine any Customer's usage on the
-------- -------
basis of estimates in accordance with applicable CPUC Regulations.
(c) Cost of Metering. The Note Issuer shall not be obligated to pay
----------------
any costs associated with the metering duties set forth in this Section 2,
including, but not limited to, the costs of installing, replacing and
maintaining meters, nor shall the Note Issuer be entitled to any credit against
the Servicing Fee for any cost savings realized by the Servicer or any ESP as a
result of new metering and/or billing technologies.
SECTION 3. USAGE AND BILL CALCULATION.
--------------------------
The Servicer shall obtain a calculation of each Customer's usage
(which may be based on data obtained from such Customer's meter read or on usage
estimates determined in accordance with applicable CPUC Regulations) at least
once each Servicer Month and shall determine therefrom each Customer's
individual FTA Charge to be included on such Customer's Bill; provided, however,
-------- -------
that in the case of Customers served by an ESP under the Full Consolidated ESP
Billing option, the Applicable ESP, rather than the Servicer, shall determine
such Customers' individual FTA Charges to be included on such Customers' Bills
based on billing factors provided by the Servicer, and the Servicer shall
deliver to the Applicable ESPs such billing factors as are necessary for the
Applicable ESPs to calculate such Customers' respective FTA Charges as such
charges may change from time to time pursuant to the True-Up Adjustments.
SECTION 4. BILLING.
-------
The Servicer shall implement the FTA Charges as of the FTA Effective
Date and shall thereafter bill each Customer or the Applicable ESP for the
respective Customer's outstanding current and past due FTA Charges accruing
through the FTA Termination Date, all in accordance with the following:
(a) Frequency of Bills; Billing Practices. In accordance with the
-------------------------------------
Servicer's then-existing Servicer Policies and Practices for its own charges, as
such Servicer Policies and Practices may be modified from time to time, the
Servicer shall generate and issue a Bill to each Customer, or, in the case of a
Customer who has elected Consolidated ESP Billing, to the Applicable ESP, with
respect to such Customer's respective FTA Charge once every 27 to 33
3
days, at the same time, with the same frequency and on the same Bill as that
containing the Servicer's own charges to such Customer or ESP, as the case may
be. In the event that the Servicer makes any material modification to the
Servicer Policies and Practices for its own charges, it shall notify the Note
Issuer, the Note Trustee, the Certificate Trustee, the Infrastructure Bank and
the Rating Agencies as soon as practicable, and in no event later than 60
Business Days after such modification goes into effect; provided, however, that
-------- -------
the Servicer may not make any modification that will materially adversely affect
the Certificateholders.
(b) Format.
------
(i) Each Bill to a Customer shall contain the charge corresponding to
the respective FTA Charge owed by such Customer for the applicable Billing
Period. Unless the Servicer's billing system cannot do so, the FTA Charge shall
appear as a separate line-item on each Bill.
(ii) In the case of each Customer that has elected Consolidated ESP
Billing, the Servicer shall deliver to the Applicable ESP itemized charges for
such Customer setting forth such Customer's FTA Charge as a separate line-item.
In the case of Customers served under Full Consolidated ESP Billing, the
Servicer shall request that the Applicable ESPs set forth such Customers' FTA
Charges as separate line-items.
(iii) The Servicer shall conform to such requirements in respect of
the format, structure and text of Bills delivered to Customers and ESPs as
applicable CPUC Regulations shall from time to time prescribe. To the extent
that Bill format, structure and text are not prescribed by the PU Code or by
applicable CPUC Regulations, the Servicer shall, subject to clauses (i) and (ii)
above, determine the format, structure and text of all Bills in accordance with
its reasonable business judgment, its Servicer Policies and Practices with
respect to its own charges and prevailing industry standards.
(c) Delivery. The Servicer shall deliver all Bills to Customers (i)
--------
by United States Mail in such class or classes as are consistent with the
Servicer Policies and Practices followed by the Servicer with respect to its own
charges to its customers or (ii) by any other means, whether electronic or
otherwise, that the Servicer may from time to time use to present its own
charges to its customers. In the case of Customers that have elected
Consolidated ESP Billing, the Servicer shall deliver all Bills or charges to the
Applicable ESPs by such means as are prescribed by applicable CPUC Regulations,
or if not prescribed by applicable CPUC Regulations, by such means as are
mutually agreed upon by the Servicer and the Applicable ESP and are consistent
with CPUC Regulations. The Servicer or an ESP, as applicable, shall pay from
its own funds all costs of issuance and delivery of all Bills, including but not
limited to printing and postage costs as the same may increase or decrease from
time to time.
4
SECTION 5. CUSTOMER SERVICE FUNCTIONS.
--------------------------
The Servicer shall handle all Customer inquiries and other Customer
service matters according to the same procedures it uses to service Customers
with respect to its own charges.
SECTION 6. COLLECTIONS; PAYMENT PROCESSING; REMITTANCE.
-------------------------------------------
(a) Collection Efforts, Policies, Procedures.
----------------------------------------
(i) The Servicer shall use reasonable efforts to collect all
Billed FTA Charges from Customers and ESPs as and when the same become due and
shall follow such collection procedures as it follows with respect to comparable
assets that it services for itself or others, including with respect to the
following:
(A) The Servicer shall prepare and deliver overdue notices
to Customers and ESPs in accordance with applicable CPUC
Regulations and Servicer Policies and Practices.
(B) The Servicer shall apply late payment charges, if any,
to outstanding Customer and ESP balances in accordance with
applicable CPUC Regulations. All late payment charges and
interest collected shall be payable to and retained by the
Servicer as a component of its compensation under the
Agreement, and the Note Issuer shall have no right to share
in the same.
(C) The Servicer shall deliver oral and written past-due and
shut-off notices in accordance with applicable CPUC
Regulations and Servicer Policies and Practices.
(D) The Servicer shall adhere to and carry out disconnection
policies and termination of Consolidated ESP Billing or Full
Consolidated ESP Billing, as applicable, in accordance with
PU Code (S) 779.2, CPUC Decision ▇▇-▇▇-▇▇▇ and applicable
CPUC Regulations and Servicer Policies and Practices.
(E) The Servicer may employ the assistance of collections
agents in accordance with applicable CPUC Regulations and
Servicer Policies and Practices.
(F) The Servicer shall apply Customer and ESP deposits to
the payment of delinquent accounts in accordance with
applicable CPUC Regulations and Servicer Polices and
Practices and according to the priorities set forth in
Section 6(b)(ii), (iii) and (iv) of this ▇▇▇▇▇ ▇.
5
(G) In the case of Customers served by Full Consolidated ESP
Billing, the Servicer shall use reasonable efforts to
collect from the Applicable ESPs all Billed FTA Charges
owing on such Customers' accounts with the same frequency
and according to the same standard of care that the Servicer
exercises with respect to collections from ESPs under
Consolidated ESP Billing and from Customers directly.
(ii) The Servicer shall not waive any late payment charge or any other
fee or charge relating to delinquent payments, if any, or waive, vary or modify
any terms of payment of any amounts payable by a Customer, in each case unless
such waiver or action: (A) would be in accordance with the Servicer's customary
practices or those of any successor Servicer with respect to comparable assets
that it services for itself and for others; (B) would not materially adversely
affect the rights of the Certificateholders; and (C) would comply with
applicable law; provided, however, that notwithstanding anything in the
-------- -------
Agreement or this Annex I to the contrary, the Servicer is authorized to write
off any Billed FTA Charges, in accordance with its Servicer Policies and
Practices, that remain outstanding for 180 days after issuance of a Closing
Bill.
(iii) The Servicer shall accept payment from Customers in respect of
Billed FTA Charges in such forms and methods and at such times and places as it
accepts for payment of its own charges. The Servicer shall accept payment from
ESPs in respect of Billed FTA Charges in such forms and methods and at such
times and places as the Servicer and each ESP shall mutually agree in accordance
with applicable CPUC Regulations.
(b) Payment Processing; Allocation; Priority of Payments.
----------------------------------------------------
(i) The Servicer shall post all payments received to Customer and ESP
accounts as promptly as practicable, and, in any event, substantially all
payments shall be posted no later than two Servicer Business Days after receipt.
(ii) Subject to clause (iii) below, the Servicer shall apply payments
received to each Customer's or ESP's account in proportion to the outstanding
charges owed by such Customer or ESP.
(iii) Any amounts collected by the Servicer that represent partial
payments of the total Bill to a Customer or ESP shall, subject to applicable
CPUC Regulations, be allocated as follows: (A) first to amounts owed to the Note
Issuer and the Seller (including any late fees and interest charges), regardless
of age, in proportion to their respective percentages of the total amount of
their combined outstanding charges on such Bill; then (B) to all other
outstanding amounts owed to parties other than the Note Issuer and the Seller.
(iv) The Servicer shall hold all over-payments for the benefit of the
Note Issuer and the Seller and shall apply such funds to future Bill charges in
accordance with clauses (ii) and (iii) above as such charges become due.
6
(v) For Customers on a Level Pay Plan, the Servicer shall treat FTA
Payments received from such Customers as if such Customers had been billed for
their respective FTA Charges in the absence of the Level Pay Plan. Partial
payment of a Level Pay Plan payment shall be allocated according to clause (iii)
above, and overpayment of a Level Pay Plan payment shall be allocated according
to clause (iv) above.
(c) Accounts; Records.
-----------------
The Servicer shall maintain accounts and records as to the Transition
Property accurately and in accordance with its standard accounting procedures
and in sufficient detail to permit reconciliation between payments or recoveries
with respect to the Transition Property and the amounts from time to time
remitted to the Collection Account in respect of the Transition Property.
(d) Investment of FTA Payments Received.
-----------------------------------
Prior to remittance on the applicable Remittance Date, the Servicer
may invest FTA Payments received at its own risk and for its own benefit, and
such investments and funds shall not be required to be segregated from the other
investments and funds of the Servicer.
(e) Calculation of Collections; Determination of Aggregate Remittance
-----------------------------------------------------------------
Amount.
------
(i) On or before each Remittance Date, the Servicer shall calculate,
in accordance with Schedule 6, the total FTA Payments estimated to have been
----------
received by the Servicer from or on behalf of Customers during the prior
Collection Period in respect of all previously Billed FTA Charges, increased or
decreased, as applicable, by (A) the amount of any Remittance Shortfall
calculated for such Remittance Date or (B) the amount of any Excess Remittance
calculated for such Remittance Date (collectively, the "Aggregate Remittance
Amount").
(ii) At the end of each year, on or before the Annual Adjustment Date
in accordance with Section 4.01(b)(i)(1) of the Agreement, the Servicer shall
update the Variables underlying the Daily Collections Curve in Schedule 6 and
----------
shall revise such curve to reflect the updated Variables. The Servicer shall
use the revised Daily Collections Curve to update the Monthly Collections Curve.
(iii) The Servicer and the Note Issuer acknowledge that the Servicer
has undertaken to make certain changes to its current computerized customer
information system, which changes, when functional, would affect the Servicer's
method of calculating the FTA Payments estimated to have been received by the
Servicer during each Collection Period as set forth in Schedule 6 hereto.
----------
Should these changes to the computerized customer information system become
functional during the term of the Agreement, the Servicer and the Note Issuer
agree that they shall review the procedures used to calculate the FTA Payments
estimated to have been received, as set forth on Schedule 6, in light of the
----------
capabilities of such new system and shall
7
amend this Annex I in writing to make such modifications and/or substitutions to
such procedures and to clause (ii) above as may be appropriate in the interests
of efficiency, accuracy, cost and/or system capabilities; provided, however,
-------- -------
that the Servicer may not make any modification or substitution that will
materially adversely affect the Certificateholders. As soon as practicable, and
in no event later than 60 Business Days after the date on which all Customer
accounts have been converted for billing under such new system, the Servicer
shall notify the Note Trustee, the Certificate Trustee, the Infrastructure Bank
and the Rating Agencies of the same.
(iv) All calculations of collections, each update of the Variables and
any changes in procedures used to calculate the FTA Payments pursuant to this
Section 6(e) shall be made in good faith, and in the case of any update pursuant
to clause (ii) or any change in procedures pursuant to clause (iii), in a manner
reasonably intended to provide estimates and calculations that are at least as
accurate as those that would be provided on the Closing Date utilizing the
initial Variables and procedures.
(f) Remittances.
-----------
(i) The Note Issuer shall cause to be established the Collection
Account in the name of the Note Trustee in accordance with the Indenture.
(ii) The Servicer shall make or cause to be made remittances to the
Collection Account in accordance with Section 6.11 of the Agreement.
(iii) In the event of any change of account or change of institution
affecting the Collection Account, the Note Issuer shall provide written notice
thereof to the Servicer by the earlier of: (A) five Business Days from the
effective date of such change, or (B) five Business Days prior to the next
Remittance Date.
8
SCHEDULE 6
TO
ANNEX I
Calculation of FTA Payments Received
------------------------------------
Subject to Section 6(e)(iii), the following model shall be used to determine the
FTA Payments estimated to have been received by the Servicer during each
Collection Period.
I. PREMISES
1. The FTA Charges for each Series or Class of Certificates go into
effect on the closing date for such Series or Class of Certificates.
2. Customer billing is conducted on a Servicer Monthly basis, and each
Servicer Month contains 21 billing cycles.
3. Collections attributable to Bills issued during any Billing Period can
be estimated using a collections receipt curve for each class of
Customers (each such curve, as the same may be revised from time to
time, a "Monthly Collections Curve") based on the following model:
MONTHLY COLLECTIONS CURVE*
(Residential Customers)
Cumulative collection Day 0 0
percentage of Day 30 44.97%
total Billed FTA Day 60 88.82%
Charges for any given Day 90 96.59%
Billing Day 120 98.55%
Period Day 150 99.50%
Day 180 99.50%
Days lapsed since first day
of the Billing Period
* EXAMPLE ONLY. ACTUAL MONTHLY COLLECTIONS CURVES TO BE PROVIDED BY
SERVICER AND REVISED FROM TIME TO TIME IN ACCORDANCE WITH THE
AGREEMENT.
I-6-1
MONTHLY COLLECTIONS CURVE*
(Small Commercial Customers)
Cumulative collection Day 0 0
percentage of Day 30 42.31%
total Billed FTA Day 60 91.44%
Charges for any given Day 90 96.92%
Billing Day 120 98.67%
Period Day 150 99.66%
Day 180 99.66%
Days lapsed since first day
of the Billing Period
* EXAMPLE ONLY. ACTUAL MONTHLY COLLECTIONS CURVES TO BE PROVIDED BY
SERVICER AND REVISED FROM TIME TO TIME IN ACCORDANCE WITH THE
AGREEMENT.
4. The Monthly Collections Curves historically have not varied materially
over the course of the year.
5. The Monthly Collections Curves are composed of a summation of
historical daily collections receipts curves for each class of
Customers (each such historical daily collections receipts curve, as
the same may be revised from time to time, a "Daily Collections
Curve").
6. The Daily Collections Curves and the Monthly Collections Curves were
calculated in accordance with Attachment A to this Schedule 6 to this
------------ ----------
Annex I.
7. The Variables underlying the Daily Collections Curves will be reviewed
annually and revised as necessary to reflect updated data.
II. ESTIMATION TEMPLATE
Where:
M\\n\\ = a Collection Period
A = percentage collected of the total Billed FTA Charges
billed during the current Billing Period
B = percentage collected of the total Billed FTA Charges
billed during the Billing Period prior to the current
Billing Period
C = percentage collected of the total Billed FTA Charges
billed during the Billing Period two periods prior to
the current Billing Period
D = percentage collected of the total Billed FTA Charges
billed during the Billing Period three periods prior
to the current Billing Period
I-6-2
E = percentage collected of the total Billed FTA Charges
billed during the Billing Period four periods prior
to the current Billing Period
F = percentage collected of the total Billed FTA Charges
billed during the Billing Period five periods prior
to the current Billing Period
Then:
FTA Payments estimated to have been received during a Collection
Period (prior to any adjustment for a Remittance Shortfall or Excess
Remittance) equal Z, as shown in the Estimation Template below.
I-6-3
ESTIMATION TEMPLATE
FTA PAYMENTS ESTIMATED TO HAVE BEEN RECEIVED
BY THE SERVICER DURING THE COLLECTION PERIOD OF M\\n\\
(1) RESIDENTIAL CUSTOMERS
---------------------
----------------------------------------------------------------------------------------------
COLLECTION COLLECTION BILLED FTA ESTIMATED
PERIOD (M\\n\\) PERCENT CHARGES COLLECTIONS
(R) (S) (T) (S x T)
----------------------------------------------------------------------------------------------
M\\n-5\\ F\\n-5\\ X\\n-5\\ (F\\n-5\\)(X\\n-5\\)
+
M\\n-4\\ E\\n-4\\ X\\n-4\\ (E\\n-4\\)(X\\n-4\\)
+
M\\n-3\\ D\\n-3\\ X\\n-3\\ (D\\n-3\\)(X\\n-3\\)
+
M\\n-2\\ C\\n-2\\ X\\n-2\\ (C\\n-2\\)(X\\n-2\\)
+
M\\n-1\\ B\\n-1\\ X\\n-1\\ (B\\n-1\\)(X\\n-1\\)
+
M\\n\\ A\\n\\ X\\n\\ (A\\n\\)(X\\n\\)
---------------------------
TOTAL: Z\\(residential)\\
===========================
(2) SMALL COMMERCIAL CUSTOMERS
--------------------------
----------------------------------------------------------------------------------------------
COLLECTION COLLECTION BILLED FTA ESTIMATED
PERIOD (M\\n\\) PERCENT CHARGES COLLECTIONS
(R) (S) (T) (S x T)
----------------------------------------------------------------------------------------------
M\\n-5\\ F\\n-5\\ X\\n-5\\ (F\\n-5\\)(X\\n-5\\)
+
M\\n-4\\ E\\n-4\\ X\\n-4\\ (E\\n-4\\)(X\\n-4\\)
+
M\\n-3\\ D\\n-3\\ X\\n-3\\ (D\\n-3\\)(X\\n-3\\)
+
M\\n-2\\ C\\n-2\\ X\\n-2\\ (C\\n-2\\)(X\\n-2\\)
+
M\\n-1\\ B\\n-1\\ X\\n-1\\ (B\\n-1\\)(X\\n-1\\)
+
M\\n\\ A\\n\\ X\\n\\ (A\\n\\)(X\\n\\)
---------------------------
TOTAL: Z\\(small commercial)\\
===========================
(3) ESTIMATED FTA PAYMENTS
----------------------
Z\\(residential)\\ + Z\\(small commercial)\\ = Z
I-6-4
(4) NOTES
-----
1. THE BILLED FTA CHARGES (T) FOR MULTIPLE PRIOR BILLING PERIODS WILL BE ZERO
DURING THE PHASE-IN OF THE FTA CHARGES FOLLOWING THE FTA EFFECTIVE DATE.
SIMILARLY, THE BILLED FTA CHARGES FOR MULTIPLE SUCCEEDING BILLING PERIODS
WILL BE ZERO DURING THE PHASE-OUT OF THE FTA CHARGES FOLLOWING THE FTA
TERMINATION DATE.
2. THE COLLECTION PERCENT (S) IS THE COLLECTION PERCENT IN EFFECT AT THE TIME
THE FTA CHARGES WERE BILLED BASED ON THE MONTHLY COLLECTIONS CURVE THEN IN
EFFECT.
I-6-5
ATTACHMENT A
TO
SCHEDULE 6
TO
ANNEX I
Calculation of Collections Curves
---------------------------------
I. DOMESTIC AND GS-1 PAYMENT PATTERNS ANALYSIS
Southern California Edison Company ("Edison") performed a payment
patterns analysis for both the Domestic and GS-1 rate classes to determine when
collections were typically received from customers. The two-year historical
average of billed revenue received by Day 30 and by Day 60 for the two rate
groups is shown in Table 1 below. As Table 1 shows, on average, 80 percent of
all payments are received by Day 30 and 95 percent are received by Day 60.
TABLE 1
-------------------------------------------------------------------
PERCENT OF BILLED REVENUE RECEIVED BY:
===================================================================
CUSTOMER
GROUP DAY 30 DAY 60 DAY 120
===================================================================
DOMESTIC 78.55% 95.59% 99.50%
-------------------------------------------------------------------
GS-1 83.03% 95.57% 99.66%
-------------------------------------------------------------------
The data in Table 1 show the revenue received by Day 30 and Day 60. In
order to estimate the revenue received each day before Day 30 and between Day 30
and Day 60, two analyses were performed. For a typical month, specifically July
1996, the time lags between bill presentation and receipt of payments were
tracked. From this data and the data in Table 1, a payment pattern curve was
determined.
Limited data exists for the payment patterns beyond Day 60. The historical
write-off percentages for the Domestic and GS-1 rate groups are quite small
(0.50 percent and 0.34 percent, respectively), which write-offs historically
occurred 120 days after the account closed. Thus, the payment patterns between
Day 60 and Day 120 are estimated by assuming a straight line payment pattern
from 95.59 percent at Day 60 to 99.50 percent at Day 120 for Domestic customers.
For GS-1 customers the straight line is assumed from 95.57 percent at Day 60 to
99.66 percent at Day 120. Recently, Edison's write-off policy changed from Day
120 to Day 180. Since no historical information is available with respect to
collections between Day 120 and Day 180, they are assumed to be zero.
The final payment patterns analysis is shown in Table 2, which
represents the Daily Collections Curves. This table shows the percent of
revenue received each day, from the
I-6-A-1
day after the bill is sent out to the day that any uncollected amounts are
written off for Domestic and GS-1 rate groups. The fourth column of the table
shows the weighted average of the two rate groups.
II. DETERMINING AGGREGATE COLLECTIONS
The study described above shows the average time lag from the time
when a given day's bills are presented to the time Edison receives payment.
Assuming that this payment pattern is the same for bills sent on each day of the
month and that the billed amounts for a given month are spread evenly over each
day of the month, the daily payments received as a percent of the monthly amount
billed can be determined for each day's billing. The payments received for each
day can be summed to determine the cumulative payments received on each day from
Day 1 through Day 210. Day 210 is the day when the bills sent on the last day
of the month are written off. The amount of FTA Payments that Edison has
received on any given day can be determined by multiplying the Billed FTA
Charges for any given Billing Period by the percentage of payments received.
Table 3 shows the daily FTA Payments expected to have been received by
the Servicer and represents the Monthly Collections Curves. Each of the numbers
shown in Table 3 is a percent of the total billed amount for the given month.
Column One shows the calendar days. Assuming a 30-day month, the first bill of
the month is sent out on Day 0 and the last bill of the month is sent out on Day
29. The Table continues until Day 210 at which time the last payment (in
respect of bills sent on Day 29) is either received or written off. Column Two
shows the cumulative FTA Payments expected to have been received by the Servicer
for each day.
I-6-A-2
Table 2
Percent of Billed Revenue Received
Domestic and GS-1 Customers
Calendar Domestic GS-1 Weighted Avg
Days
1 0.20% 0.22% 0.20%
2 0.64% 0.52% 0.63%
3 2.17% 1.20% 2.01%
4 4.93% 2.07% 4.47%
5 10.91% 3.38% 9.71%
6 15.20% 6.44% 13.81%
7 20.23% 10.91% 18.75%
8 24.47% 14.42% 22.87%
9 26.05% 17.24% 24.64%
10 28.04% 20.68% 26.87%
11 32.37% 23.71% 30.99%
12 36.82% 27.33% 35.31%
13 39.68% 32.14% 38.48%
14 44.69% 37.85% 43.61%
15 49.23% 42.09% 48.10%
16 52.13% 45.56% 51.09%
17 53.40% 49.71% 52.81%
18 55.39% 53.38% 55.07%
19 59.07% 57.54% 58.83%
20 62.06% 62.29% 62.10%
21 65.89% 67.28% 66.11%
22 68.82% 70.03% 69.02%
23 70.03% 71.86% 70.32%
24 70.74% 73.94% 71.25%
25 72.72% 75.44% 73.16%
26 74.35% 77.04% 74.77%
27 75.51% 78.98% 76.06%
28 77.05% 80.99% 77.68%
29 77.92% 82.16% 78.59%
30 78.55% 83.03% 79.26%
31 78.95% 83.86% 79.73%
32 80.03% 84.50% 80.74%
33 80.51% 85.08% 81.24%
34 81.38% 85.93% 82.10%
35 82.96% 86.93% 83.59%
36 83.98% 87.68% 84.57%
37 84.51% 88.34% 85.12%
38 84.71% 88.93% 85.38%
39 85.29% 89.50% 85.96%
40 86.08% 90.07% 86.72%
41 86.65% 90.67% 87.29%
42 87.12% 91.33% 87.79%
43 87.74% 91.83% 88.40%
44 88.47% 92.11% 89.05%
45 88.76% 92.37% 89.33%
46 89.31% 92.63% 89.84%
47 89.91% 92.86% 90.38%
48 90.62% 93.15% 91.02%
49 91.48% 93.52% 91.80%
50 92.56% 93.78% 92.76%
51 92.91% 94.00% 93.09%
52 93.07% 94.17% 93.24%
53 93.25% 94.34% 93.42%
54 93.64% 94.53% 93.78%
55 94.32% 94.75% 94.39%
56 94.81% 95.01% 94.84%
57 95.27% 95.20% 95.26%
58 95.43% 95.33% 95.41%
59 95.43% 95.43% 95.43%
60 95.59% 95.57% 95.59%
Table 2 cont.
Percent of Billed Revenue Received
Domestic and GS-1 Customers
Calendar Domestic GS-1 Weighted Avg
Days
61 95.65% 95.64% 95.65%
62 95.72% 95.71% 95.72%
63 95.78% 95.77% 95.78%
64 95.85% 95.84% 95.85%
65 95.91% 95.91% 95.91%
66 95.98% 95.98% 95.98%
67 96.04% 96.05% 96.04%
68 96.11% 96.12% 96.11%
69 96.17% 96.18% 96.18%
70 96.24% 96.25% 96.24%
71 96.30% 96.32% 96.31%
72 96.37% 96.39% 96.37%
73 96.43% 96.46% 96.44%
74 96.50% 96.52% 96.50%
75 96.57% 96.59% 96.57%
76 96.63% 96.66% 96.64%
77 96.70% 96.73% 96.70%
78 96.76% 96.80% 96.77%
79 96.83% 96.87% 96.83%
80 96.89% 96.93% 96.90%
81 96.96% 97.00% 96.96%
82 97.02% 97.07% 97.03%
83 97.09% 97.14% 97.09%
84 97.15% 97.21% 97.16%
85 97.22% 97.27% 97.23%
86 97.28% 97.34% 97.29%
87 97.35% 97.41% 97.36%
88 97.41% 97.48% 97.42%
89 97.48% 97.55% 97.49%
90 97.54% 97.62% 97.55%
91 97.61% 97.68% 97.62%
92 97.67% 97.75% 97.69%
93 97.74% 97.82% 97.75%
94 97.80% 97.89% 97.82%
95 97.87% 97.96% 97.88%
96 97.93% 98.02% 97.95%
97 98.00% 98.09% 98.01%
98 98.07% 98.16% 98.08%
99 98.13% 98.23% 98.15%
100 98.20% 98.30% 98.21%
101 98.26% 98.36% 98.28%
102 98.33% 98.43% 98.34%
103 98.39% 98.50% 98.41%
104 98.46% 98.57% 98.47%
105 98.52% 98.64% 98.54%
106 98.59% 98.71% 98.61%
107 98.65% 98.77% 98.67%
108 98.72% 98.84% 98.74%
109 98.78% 98.91% 98.80%
110 98.85% 98.98% 98.87%
111 98.91% 99.05% 98.93%
112 98.98% 99.11% 99.00%
113 99.04% 99.18% 99.07%
114 99.11% 99.25% 99.13%
115 99.17% 99.32% 99.20%
116 99.24% 99.39% 99.26%
117 99.30% 99.46% 99.33%
118 99.37% 99.52% 99.39%
119 99.43% 99.59% 99.46%
120 99.50% 99.66% 99.53%
Table 2 cont.
Percent of Billed Revenue Received
Domestic and GS-1 Customers
Calendar Domestic GS-1 Weighted Avg
Days
121 99.50% 99.66% 99.53%
122 99.50% 99.66% 99.53%
123 99.50% 99.66% 99.53%
124 99.50% 99.66% 99.53%
125 99.50% 99.66% 99.53%
126 99.50% 99.66% 99.53%
127 99.50% 99.66% 99.53%
128 99.50% 99.66% 99.53%
129 99.50% 99.66% 99.53%
130 99.50% 99.66% 99.53%
131 99.50% 99.66% 99.53%
132 99.50% 99.66% 99.53%
133 99.50% 99.66% 99.53%
134 99.50% 99.66% 99.53%
135 99.50% 99.66% 99.53%
136 99.50% 99.66% 99.53%
137 99.50% 99.66% 99.53%
138 99.50% 99.66% 99.53%
139 99.50% 99.66% 99.53%
140 99.50% 99.66% 99.53%
141 99.50% 99.66% 99.53%
142 99.50% 99.66% 99.53%
143 99.50% 99.66% 99.53%
144 99.50% 99.66% 99.53%
145 99.50% 99.66% 99.53%
146 99.50% 99.66% 99.53%
147 99.50% 99.66% 99.53%
148 99.50% 99.66% 99.53%
149 99.50% 99.66% 99.53%
150 99.50% 99.66% 99.53%
151 99.50% 99.66% 99.53%
152 99.50% 99.66% 99.53%
153 99.50% 99.66% 99.53%
154 99.50% 99.66% 99.53%
155 99.50% 99.66% 99.53%
156 99.50% 99.66% 99.53%
157 99.50% 99.66% 99.53%
158 99.50% 99.66% 99.53%
159 99.50% 99.66% 99.53%
160 99.50% 99.66% 99.53%
161 99.50% 99.66% 99.53%
162 99.50% 99.66% 99.53%
163 99.50% 99.66% 99.53%
164 99.50% 99.66% 99.53%
165 99.50% 99.66% 99.53%
166 99.50% 99.66% 99.53%
167 99.50% 99.66% 99.53%
168 99.50% 99.66% 99.53%
169 99.50% 99.66% 99.53%
170 99.50% 99.66% 99.53%
171 99.50% 99.66% 99.53%
172 99.50% 99.66% 99.53%
173 99.50% 99.66% 99.53%
174 99.50% 99.66% 99.53%
175 99.50% 99.66% 99.53%
176 99.50% 99.66% 99.53%
177 99.50% 99.66% 99.53%
178 99.50% 99.66% 99.53%
179 99.50% 99.66% 99.53%
180 99.50% 99.66% 99.53%
Table 3
RESIDENTIAL
Cumulative
Calendar FTA Charge
Days Collections
1 0.000
2 0.000
3 0.001
4 0.003
5 0.006
6 0.011
7 0.018
8 0.026
9 0.035
10 0.044
11 0.055
12 0.067
13 0.081
14 0.095
15 0.112
16 0.129
17 0.147
18 0.166
19 0.185
20 0.206
21 0.228
22 0.251
23 0.274
24 0.298
25 0.322
26 0.347
27 0.372
28 0.398
29 0.424
30 0.450
31 0.476
32 0.502
33 0.529
34 0.554
35 0.578
36 0.601
37 0.622
38 0.643
39 0.662
40 0.682
41 0.700
42 0.716
RESIDENTIAL
Cumulative
Calendar FTA Charge
Days Collections
43 0.732
44 0.747
45 0.760
46 0.773
47 0.785
48 0.797
49 0.807
50 0.818
51 0.827
52 0.835
53 0.842
54 0.850
55 0.857
56 0.864
57 0.871
58 0.877
59 0.883
60 0.888
61 0.894
62 0.899
63 0.904
64 0.909
65 0.913
66 0.917
67 0.921
68 0.925
69 0.929
70 0.932
71 0.935
72 0.938
73 0.941
74 0.944
75 0.946
76 0.949
77 0.951
78 0.953
79 0.955
80 0.956
81 0.958
82 0.959
83 0.960
84 0.961
85 0.962
86 0.963
RESIDENTIAL
Cumulative
Calendar FTA Charge
Days Collections
87 0.964
88 0.965
89 0.965
90 0.966
91 0.967
92 0.967
93 0.968
94 0.969
95 0.969
96 0.970
97 0.971
98 0.971
99 0.972
100 0.972
101 0.973
102 0.974
103 0.974
104 0.975
105 0.976
106 0.976
107 0.977
108 0.978
109 0.978
110 0.979
111 0.980
112 0,980
113 0.981
114 0.982
115 0.982
116 0.983
117 0.984
118 0.984
119 0.985
120 0.986
121 0.986
122 0.987
123 0.987
124 0.988
125 0.988
126 0.989
127 0.989
128 0.990
129 0.990
130 0.991
RESIDENTIAL
Cumulative
Calendar FTA Charge
Days Collections
131 0.991
132 0.992
133 0.992
134 0.992
135 0.993
136 0.993
137 0.993
138 0.994
139 0.994
140 0.994
141 0.994
142 0.994
143 0.995
144 0.995
145 0.995
146 0.995
147 0.995
148 0.995
149 0.995
150 0.995
151 0.995
152 0.995
153 0.995
154 0.995
155 0.995
156 0.995
157 0.995
158 0.995
159 0.995
160 0.995
161 0.995
162 0.995
163 0.995
164 0.995
165 0.995
166 0.995
167 0.995
168 0.995
169 0.995
170 0.995
171 0.995
172 0.995
173 0.995
174 0.995
RESIDENTIAL
Cumulative
Calendar FTA Charge
Days Collections
175 0.995
176 0.995
177 0.995
178 0.995
179 0.995
180 0.995
181 0.995
182 0.995
183 0.995
184 0.995
185 0.995
186 0.995
187 0.995
188 0.995
189 0.995
190 0.995
191 0.995
192 0.995
193 0.995
194 0.995
195 0.995
196 0.995
197 0.995
198 0.995
199 0.995
200 0.995
201 0.995
202 0.995
203 0.995
204 0.995
205 0.995
206 0.995
207 0.995
208 0.995
209 0.995
210 0.995
Table 3
SMALL COMMERCIAL
Cumulative
Calendar FTA Charge
Days Collections
1 0.000
2 0.000
3 0.001
4 0.001
5 0.002
6 0.005
7 0.008
8 0.013
9 0.019
10 0.026
11 0.034
12 0.043
13 0.053
14 0.066
15 0.080
16 0.095
17 0.112
18 0.130
19 0.149
20 0.170
21 0.192
22 0.215
23 0.239
24 0.264
25 0.289
26 0.315
27 0.341
28 0.368
29 0.395
30 0.423
31 0.451
32 0.479
33 0.507
34 0.535
35 0.563
36 0.590
37 0.616
38 0.641
39 0.665
40 0.688
41 0.710
42 0.731
SMALL COMMERCIAL
Cumulative
Calendar FTA Charge
Days Collections
43 0.751
44 0.769
45 0.786
46 0.802
47 0.816
48 0.829
49 0.841
50 0.852
51 0.861
52 0.869
53 0.876
54 0.883
55 0.890
56 0.896
57 0.901
58 0.906
59 0.910
60 0.914
61 0.918
62 0.922
63 0.926
64 0.929
65 0.932
66 0.935
67 0.937
68 0.940
69 0.942
70 0.944
71 0.946
72 0.948
73 0.949
74 0.951
75 0.952
76 0.953
77 0.955
78 0.956
79 0.957
80 0.958
81 0.959
82 0.960
83 0.961
84 0.962
85 0.963
86 0.963
SMALL COMMERCIAL
Cumulative
Calendar FTA Charge
Days Collections
87 0.964
88 0.965
89 0.966
90 0.966
91 0.967
92 0.968
93 0.968
94 0.969
95 0.970
96 0,970
97 0,971
98 0.972
99 0.972
100 0.973
101 0.974
102 0.974
103 0.975
104 0.976
105 0.976
106 0.977
107 0.978
108 0.979
109 0.979
110 0.980
111 0.981
112 0.981
113 0.982
114 0.983
115 0.983
116 0.984
117 0.985
118 0.985
119 0.986
120 0.987
121 0.987
122 0.988
123 0.989
124 0.989
125 0.990
126 0.990
127 0.991
128 0.991
129 0.992
130 0.992
SMALL COMMERCIAL
Cumulative
Calendar FTA Charge
Days Collections
131 0.993
132 0.993
133 0.994
134 0.994
135 0.994
136 0.995
137 0.995
138 0.995
139 0.995
140 0.996
141 0.996
142 0.996
143 0.996
144 0.996
145 0.996
146 0.996
147 0.997
148 0.997
149 0.997
150 0.997
151 0.997
152 0.997
153 0.997
154 0.997
155 0.997
156 0.997
157 0.997
158 0.997
159 0.997
160 0.997
161 0.997
162 0.997
163 0.997
164 0.997
165 0.997
166 0.997
167 0.997
168 0.997
169 0.997
170 0.997
171 0.997
172 0.997
173 0.997
174 0.997
SMALL COMMERCIAL
Cumulative
Calendar FTA Charge
Days Collections
175 0.997
176 0.997
177 0.997
178 0.997
179 0.997
180 0.997
181 0.997
182 0.997
183 0.997
184 O.997
185 0.997
186 0.997
187 O.997
188 0.997
189 0.997
190 0.997
191 0.997
192 0.997
193 0.997
194 0.997
195 0.997
196 0.997
197 0.997
198 0.997
199 0.997
200 0.997
201 0.997
202 0.997
203 0.997
204 0.997
205 0.997
206 0.997
207 0.997
208 0.997
209 0.997
210 0.997
ANNEX II
TO
SERVICING AGREEMENT
SECTION 1. Routine Quarterly True-Up Adjustments. (a) The Servicer
--------------------------------------
shall not perform any routine quarterly True-Up Adjustments for the SCE Funding
LLC Notes, Series 1997-1.