UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 22, 2016
Commission |
|
Registrant; State of Incorporation; |
|
IRS Employer |
333-209196-01 |
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC (Delaware) 299 First Avenue North St. Petersburg, Florida 33701 704-382-3853 |
|
81-0977581 |
333-209196 |
|
DUKE ENERGY FLORIDA, LLC (Depositor and Sponsor) (Florida) 299 First Avenue North St. Petersburg, Florida 33701 704-382-3853 |
|
59-0247770 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01. Other Events.
On the date hereof, Duke Energy Florida Project Finance, LLC (the Issuing Entity) issued the Series A Senior Secured Bonds as described in the Preliminary Prospectus dated June 15, 2016 and the Prospectus dated June 15, 2016. In connection with this issuance, Duke Energy Florida, LLC and the Issuing Entity are filing the exhibits listed in Item 9.01(d) below.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
|
Description of Exhibit |
4.1 |
|
Indenture, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee and Securities Intermediary |
5.1 |
|
Opinion of Hunton & Williams LLP with respect to legality |
8.1 |
|
Opinion of Hunton & Williams LLP with respect to federal tax matters |
23.1 |
|
Consent of Hunton & Williams LLP (included as part of its opinions filed as Exhibit 5.1 and Exhibit 8.1) |
99.1 |
|
Nuclear Asset-Recovery Property Servicing Agreement, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC, as servicer |
99.2 |
|
Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC, as seller |
99.3 |
|
Administration Agreement, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC, as administrator |
99.5 |
|
Opinion of Hunton & Williams LLP with respect to constitutional matters |
99.6 |
|
Opinion of Shutts & Bowen LLC with respect to Florida constitutional matters |
99.7 |
|
Series Supplement, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and The Bank of New York Mellon Trust Company, National Association, as Indenture Trustee |
99.8 |
|
Intercreditor Agreement, dated as of June 22, 2016, among SunTrust Bank, The Bank of New York Mellon Trust Company, National Association, Duke Energy Florida Receivables LLC, Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC | ||
|
| ||
|
| ||
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
President, Chief Financial Officer and Treasurer |
|
| ||
|
DUKE ENERGY FLORIDA, LLC | ||
|
| ||
|
| ||
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
Senior Vice President, Tax and Treasurer |
Dated: June 22, 2016
EXHIBIT INDEX
Exhibit No. |
|
Description of Exhibit |
4.1 |
|
Indenture, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and The Bank of New York Mellon Trust Company, N.A., as Indenture Trustee and Securities Intermediary |
5.1 |
|
Opinion of Hunton & Williams LLP with respect to legality |
8.1 |
|
Opinion of Hunton & Williams LLP with respect to federal tax matters |
23.1 |
|
Consent of Hunton & Williams LLP (included as part of its opinions filed as Exhibit 5.1 and Exhibit 8.1) |
99.1 |
|
Nuclear Asset-Recovery Property Servicing Agreement, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC, as servicer |
99.2 |
|
Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC, as seller |
99.3 |
|
Administration Agreement, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC, as administrator |
99.5 |
|
Opinion of Hunton & Williams LLP with respect to constitutional matters |
99.6 |
|
Opinion of Shutts & Bowen LLC with respect to Florida constitutional matters |
99.7 |
|
Series Supplement, dated as of June 22, 2016, by and between Duke Energy Florida Project Finance, LLC and The Bank of New York Mellon Trust Company, National Association, as Indenture Trustee |
99.8 |
|
Intercreditor Agreement, dated as of June 22, 2016, among SunTrust Bank, The Bank of New York Mellon Trust Company, National Association, Duke Energy Florida Receivables LLC, Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC |
Exhibit 4.1
Execution Version
INDENTURE
by and between
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC,
Issuer
and
THE BANK OF NEW YORK MELLON
TRUST COMPANY, NATIONAL ASSOCIATION,
Indenture Trustee and Securities Intermediary
Dated as of June 22, 2016
TABLE OF CONTENTS
|
|
Page | |
|
|
| |
ARTICLE I |
DEFINITIONS AND RULES OF CONSTRUCTION; INCORPORATION BY REFERENCE |
9 | |
SECTION 1.01. |
Definitions and Rules of Construction |
9 | |
SECTION 1.02. |
Incorporation by Reference of Trust Indenture Act |
9 | |
|
| ||
ARTICLE II |
THE NUCLEAR ASSET-RECOVERY BONDS |
9 | |
SECTION 2.01. |
Form |
9 | |
SECTION 2.02. |
Denominations: Nuclear Asset-Recovery Bonds Issuable in Series |
10 | |
SECTION 2.03. |
Execution, Authentication and Delivery |
11 | |
SECTION 2.04. |
Temporary Nuclear Asset-Recovery Bonds |
12 | |
SECTION 2.05. |
Registration; Registration of Transfer and Exchange of Nuclear Asset-Recovery Bonds |
12 | |
SECTION 2.06. |
Mutilated, Destroyed, Lost or Stolen Nuclear Asset-Recovery Bonds |
14 | |
SECTION 2.07. |
Persons Deemed Owner |
15 | |
SECTION 2.08. |
Payment of Principal, Premium, if any, and Interest; Interest on Overdue Principal; Principal, Premium, if any, and Interest Rights Preserved |
15 | |
SECTION 2.09. |
Cancellation |
16 | |
SECTION 2.10. |
Outstanding Amount; Authentication and Delivery of Nuclear Asset-Recovery Bonds |
16 | |
SECTION 2.11. |
Book-Entry Nuclear Asset-Recovery Bonds |
20 | |
SECTION 2.12. |
Notices to Clearing Agency |
21 | |
SECTION 2.13. |
Definitive Nuclear Asset-Recovery Bonds |
21 | |
SECTION 2.14. |
CUSIP Number |
22 | |
SECTION 2.15. |
Letter of Representations |
22 | |
SECTION 2.16. |
Tax Treatment |
22 | |
SECTION 2.17. |
State Pledge |
22 | |
SECTION 2.18. |
Security Interests |
22 | |
|
| ||
ARTICLE III |
COVENANTS |
24 | |
SECTION 3.01. |
Payment of Principal, Premium, if any, and Interest |
24 | |
SECTION 3.02. |
Maintenance of Office or Agency |
24 | |
SECTION 3.03. |
Money for Payments To Be Held in Trust |
24 | |
SECTION 3.04. |
Existence |
26 | |
SECTION 3.05. |
Protection of Collateral |
26 | |
SECTION 3.06. |
Opinions as to Collateral |
27 | |
SECTION 3.07. |
Performance of Obligations; Servicing; SEC Filings |
27 | |
SECTION 3.08. |
Certain Negative Covenants |
30 | |
SECTION 3.09. |
Annual Statement as to Compliance |
31 | |
SECTION 3.10. |
Issuer May Consolidate, etc., Only on Certain Terms |
31 | |
SECTION 3.11. |
Successor or Transferee |
33 | |
SECTION 3.12. |
No Other Business |
34 | |
SECTION 3.13. |
No Borrowing |
34 | |
SECTION 3.14. |
Servicers Obligations |
34 | |
SECTION 3.15. |
Guarantees, Loans, Advances and Other Liabilities |
34 | |
SECTION 3.16. |
Capital Expenditures |
34 | |
SECTION 3.17. |
Restricted Payments |
34 | |
SECTION 3.18. |
Notice of Events of Default |
35 | |
SECTION 3.19. |
Further Instruments and Acts |
35 | |
SECTION 3.20. |
Inspection |
35 | |
SECTION 3.21. |
Additional Series |
35 | |
SECTION 3.22. |
Sale Agreement, Servicing Agreement, Intercreditor Agreement and Administration Agreement Covenants |
36 | |
SECTION 3.23. |
Taxes |
39 | |
SECTION 3.24. |
Notices from Holders |
39 | |
SECTION 3.25. |
Volcker Rule |
39 | |
|
| ||
ARTICLE IV |
SATISFACTION AND DISCHARGE; DEFEASANCE |
39 | |
SECTION 4.01. |
Satisfaction and Discharge of Indenture; Defeasance |
39 | |
SECTION 4.02. |
Conditions to Defeasance |
41 | |
SECTION 4.03. |
Application of Trust Money |
42 | |
SECTION 4.04. |
Repayment of Moneys Held by Paying Agent |
43 | |
|
| ||
ARTICLE V |
REMEDIES |
43 | |
SECTION 5.01. |
Events of Default |
43 | |
SECTION 5.02. |
Acceleration of Maturity; Rescission and Annulment |
45 | |
SECTION 5.03. |
Collection of Indebtedness and Suits for Enforcement by Indenture Trustee |
45 | |
SECTION 5.04. |
Remedies; Priorities |
47 | |
SECTION 5.05. |
Optional Preservation of the Collateral |
49 | |
SECTION 5.06. |
Limitation of Suits |
49 | |
SECTION 5.07. |
Unconditional Rights of Holders To Receive Principal, Premium, if any, and Interest |
50 | |
SECTION 5.08. |
Restoration of Rights and Remedies |
50 | |
SECTION 5.09. |
Rights and Remedies Cumulative |
50 | |
SECTION 5.10. |
Delay or Omission Not a Waiver |
50 | |
SECTION 5.11. |
Control by Holders |
50 | |
SECTION 5.12. |
Waiver of Past Defaults |
51 | |
SECTION 5.13. |
Undertaking for Costs |
51 | |
SECTION 5.14. |
Waiver of Stay or Extension Laws |
52 | |
SECTION 5.15. |
Action on Nuclear Asset-Recovery Bonds |
52 | |
|
| ||
ARTICLE VI |
THE INDENTURE TRUSTEE |
52 | |
SECTION 6.01. |
Duties of Indenture Trustee |
52 | |
SECTION 6.02. |
Rights of Indenture Trustee |
54 | |
SECTION 6.03. |
Individual Rights of Indenture Trustee |
56 | |
SECTION 6.04. |
Indenture Trustees Disclaimer |
56 | |
SECTION 6.05. |
Notice of Defaults |
56 | |
SECTION 6.06. |
Reports by Indenture Trustee to Holders |
57 | |
SECTION 6.07. |
Compensation and Indemnity |
58 | |
SECTION 6.08. |
Replacement of Indenture Trustee and Securities Intermediary |
59 | |
SECTION 6.09. |
Successor Indenture Trustee by Merger |
60 | |
SECTION 6.10. |
Appointment of Co-Trustee or Separate Trustee |
60 | |
SECTION 6.11. |
Eligibility; Disqualification |
61 | |
SECTION 6.12. |
Preferential Collection of Claims Against Issuer |
62 | |
SECTION 6.13. |
Representations and Warranties of Indenture Trustee |
62 | |
SECTION 6.14. |
Annual Report by Independent Registered Public Accountants |
62 | |
SECTION 6.15. |
Custody of Collateral |
62 | |
|
| ||
ARTICLE VII |
HOLDERS LISTS AND REPORTS |
63 | |
SECTION 7.01. |
Issuer To Furnish Indenture Trustee Names and Addresses of Holders |
63 | |
SECTION 7.02. |
Preservation of Information; Communications to Holders |
63 | |
SECTION 7.03. |
Reports by Issuer |
63 | |
SECTION 7.04. |
Reports by Indenture Trustee |
64 | |
|
| ||
ARTICLE VIII |
ACCOUNTS, DISBURSEMENTS AND RELEASES |
64 | |
SECTION 8.01. |
Collection of Money |
64 | |
SECTION 8.02. |
Collection Account |
65 | |
SECTION 8.03. |
General Provisions Regarding the Collection Account |
68 | |
SECTION 8.04. |
Release of Collateral |
69 | |
SECTION 8.05. |
Opinion of Counsel |
70 | |
SECTION 8.06. |
Reports by Independent Registered Public Accountants |
70 | |
|
| ||
ARTICLE IX |
SUPPLEMENTAL INDENTURES |
71 | |
SECTION 9.01. |
Supplemental Indentures Without Consent of Holders |
71 | |
SECTION 9.02. |
Supplemental Indentures with Consent of Holders |
72 | |
SECTION 9.03. |
Commission Condition |
74 | |
SECTION 9.04. |
Execution of Supplemental Indentures |
75 | |
SECTION 9.05. |
Effect of Supplemental Indenture |
76 | |
SECTION 9.06. |
Conformity with Trust Indenture Act |
76 | |
SECTION 9.07. |
Reference in Nuclear Asset-Recovery Bonds to Supplemental Indentures |
76 | |
|
| ||
ARTICLE X |
MISCELLANEOUS |
76 | |
SECTION 10.01. |
Compliance Certificates and Opinions, etc. |
76 | |
SECTION 10.02. |
Form of Documents Delivered to Indenture Trustee |
76 | |
SECTION 10.03. |
Acts of Holders |
78 | |
SECTION 10.04. |
Notices, etc., to Indenture Trustee, Issuer and Rating Agencies |
79 | |
SECTION 10.05. |
Notices to Holders; Waiver |
79 | |
SECTION 10.06. |
Conflict with Trust Indenture Act |
81 | |
SECTION 10.07. |
Successors and Assigns |
81 | |
SECTION 10.08. |
Severability |
81 | |
SECTION 10.09. |
Benefits of Indenture |
81 | |
SECTION 10.10. |
Legal Holidays |
81 | |
SECTION 10.11. |
GOVERNING LAW |
81 | |
SECTION 10.12. |
Counterparts |
81 | |
SECTION 10.13. |
Recording of Indenture |
81 | |
SECTION 10.14. |
No Recourse to Issuer |
82 | |
SECTION 10.15. |
Basic Documents |
82 | |
SECTION 10.16. |
No Petition |
82 |
SECTION 10.17. |
Securities Intermediary |
83 |
SECTION 10.18. |
Rule 17g-5 Compliance |
83 |
SECTION 10.19. |
Submission to Non-Exclusive Jurisdiction; Waiver of Jury Trial |
83 |
SECTION 10.20. |
Certain Tax Laws |
84 |
EXHIBITS
Exhibit A Form of Nuclear Asset-Recovery Bonds
Exhibit B Form of Series Supplement
Exhibit C Servicing Criteria to be Addressed by Indenture Trustee in Assessment of Compliance
APPENDIX
Appendix A Definitions and Rules of Construction
TRUST INDENTURE ACT CROSS REFERENCE TABLE
TRUST INDENTURE ACT |
|
INDENTURE SECTION | ||
310 |
(a)(1) |
|
|
6.11 |
|
(a)(2) |
|
|
6.11 |
|
(a)(3) |
|
|
6.10(b)(i) |
|
(a)(4) |
|
|
Not applicable |
|
(a)(5) |
|
|
6.11 |
|
(b) |
|
|
6.11 |
311 |
(a) |
|
|
6.12 |
|
(b) |
|
|
6.12 |
312 |
(a) |
|
|
7.01 and 7.02 |
|
(b) |
|
|
7.02(b) |
|
(c) |
|
|
7.02(c) |
313 |
(a) |
|
|
7.04 |
|
(b)(1) |
|
|
7.04 |
|
(b)(2) |
|
|
7.04 |
|
(c) |
|
|
7.03(a) and 7.04 |
|
(d) |
|
|
Not applicable |
314 |
(a) |
|
|
3.09, 4.01 and 7.03(a) |
|
(b) |
|
|
3.06 and 4.01 |
|
(c)(1) |
|
|
2.10, 4.01, 8.04(b) and 10.01(a) |
|
(c)(2) |
|
|
2.10, 4.01, 8.04(b) and 10.01(a) |
|
(c)(3) |
|
|
2.10, 4.01, 4.02 and 10.01(a) |
|
(d) |
|
|
2.10, 8.04(b) and 10.01 |
|
(e) |
|
|
10.01(a) |
|
(f) |
|
|
10.01(a) |
315 |
(a) |
|
|
6.01(b)(i) and 6.01(b)(ii) |
TRUST INDENTURE ACT |
|
INDENTURE SECTION | ||
|
(b) |
|
|
6.05 |
|
(c) |
|
|
6.01(a) |
|
(d) |
|
|
6.01(c)(i), 6.01(c)(ii) and SECTION 6.01(c)(iii) |
|
(e) |
|
|
5.13 |
316 |
(a) (last sentence) |
|
|
Appendix A definition of Outstanding |
|
(a)(1)(A) |
|
|
5.11 |
|
(a)(1)(B) |
|
|
5.12 |
|
(a)(2) |
|
|
Not applicable |
|
(b) |
|
|
5.07 |
|
(c) |
|
|
Appendix A definition of Record Date |
317 |
(a)(1) |
|
|
5.03(a) |
|
(a)(2) |
|
|
5.03(c)(iv) |
|
(b) |
|
|
3.03 |
318 |
(a) |
|
|
10.06 |
|
(b) |
|
|
10.06 |
|
(c) |
|
|
10.06 |
THIS CROSS REFERENCE TABLE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART OF THIS INDENTURE.
This INDENTURE, dated as of June 22, 2016, is by and between DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, a Delaware limited liability company, and THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, in its capacity as trustee for the benefit of the Secured Parties and in its separate capacity as a securities intermediary.
In consideration of the mutual agreements herein contained, each party hereto agrees as follows for the benefit of the other party hereto and each of the Holders:
RECITALS OF THE ISSUER
The Issuer has duly authorized the execution and delivery of this Indenture and the creation and issuance of one or more Series of Nuclear Asset-Recovery Bonds issuable hereunder, which will be of substantially the tenor set forth in a Series Supplement for each Series. Each such Series of Nuclear Asset-Recovery Bonds will be issued only under a separate Series Supplement to this Indenture duly executed and delivered by the Issuer and the Indenture Trustee.
Each Series of Nuclear Asset-Recovery Bonds shall be non-recourse obligations and shall be secured by and payable solely out of the proceeds of the Series Property and the other Series Collateral as provided herein. If and to the extent that such proceeds of the Series Property and the other Series Collateral are insufficient to pay all amounts owing with respect to a Series of Nuclear Asset-Recovery Bonds, then, except as otherwise expressly provided hereunder, the Holders shall have no Claim in respect of such insufficiency against the Issuer or the Indenture Trustee, and the Holders, by their acceptance of the Nuclear Asset-Recovery Bonds, waive any such Claim.
All things necessary to (a) make the Nuclear Asset-Recovery Bonds, when executed by the Issuer and authenticated and delivered by the Indenture Trustee hereunder and duly issued by the Issuer, valid obligations, and (b) make this Indenture a valid agreement of the Issuer, in each case, in accordance with their respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Issuer, in consideration of the premises herein contained and of the purchase of Nuclear Asset-Recovery Bonds by the Holders and of other good and lawful consideration, the receipt and sufficiency of which are hereby acknowledged, and to secure, equally and ratably without prejudice, priority or distinction, except as specifically otherwise set forth in this Indenture, the payment of the Nuclear Asset-Recovery Bonds, the payment of all other amounts due under or in connection with this Indenture (including all fees, expenses, counsel fees and other amounts due and owing to the Indenture Trustee) and the performance and observance of all of the covenants and conditions contained herein or in the Nuclear Asset-Recovery Bonds, has hereby executed and delivered this Indenture and by these presents does hereby and by one or more Series Supplements will convey, grant, assign, transfer and pledge, in each case, in and unto the Indenture Trustee, its successors and assigns forever, for the benefit of the Secured Parties of the related Series, all and singular the property described in one or more Series Supplements (such property with respect to a particular Series herein referred to as Series
Collateral and all such property, collectively, hereinafter referred to as the Collateral). Each Series Supplement will more particularly describe the obligations of the Issuer secured by the applicable Series Collateral.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED between the parties hereto that all Nuclear Asset-Recovery Bonds are to be issued, countersigned and delivered and that all of the Collateral is to be held and applied, subject to the further covenants, conditions, releases, uses and trusts hereinafter set forth, and the Issuer, for itself and any successor, does hereby covenant and agree to and with the Indenture Trustee and its successors in said trust, for the benefit of the Secured Parties, as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION; INCORPORATION BY REFERENCE
SECTION 1.01. Definitions and Rules of Construction. Capitalized terms used but not otherwise defined in this Indenture shall have the respective meanings given to such terms in Appendix A, which is hereby incorporated by reference into this Indenture as if set forth fully in this Indenture. Not all terms defined in Appendix A are used in this Indenture. The rules of construction set forth in Appendix A shall apply to this Indenture and are hereby incorporated by reference into this Indenture as if set forth fully in this Indenture.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the Trust Indenture Act, that provision is incorporated by reference in and made a part of this Indenture. The following Trust Indenture Act terms used in this Indenture have the following meanings:
indenture securities means the Nuclear Asset-Recovery Bonds.
indenture security holder means a Holder.
indenture to be qualified means this Indenture.
indenture trustee or institutional trustee means the Indenture Trustee.
obligor on the indenture securities means the Issuer and any other obligor on the indenture securities.
All other Trust Indenture Act terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.
ARTICLE II
THE NUCLEAR ASSET-RECOVERY BONDS
SECTION 2.01. Form. The Nuclear Asset-Recovery Bonds and the Indenture Trustees certificate of authentication shall be in substantially the forms set forth in Exhibit A,
with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or by the related Series Supplement and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing the Nuclear Asset-Recovery Bonds, as evidenced by their execution of the Nuclear Asset-Recovery Bonds.
The Nuclear Asset-Recovery Bonds shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing the Nuclear Asset-Recovery Bonds, as evidenced by their execution of the Nuclear Asset-Recovery Bonds.
Each Nuclear Asset-Recovery Bond shall be dated the date of its authentication.
SECTION 2.02. Denominations: Nuclear Asset-Recovery Bonds Issuable in Series. The Nuclear Asset-Recovery Bonds of each Series shall be issuable in the Authorized Denominations specified in the applicable Series Supplement.
The Nuclear Asset-Recovery Bonds shall, at the election of and as authorized by a Responsible Officer of the Issuer, and set forth in a Series Supplement, be issued in one or more Series (each of which may be comprised of one or more WALs), and shall be designated generally as the Series { } Senior Secured Nuclear Asset-Recovery Bonds of the Issuer, with such further particular designations added or incorporated in such title for the Nuclear Asset-Recovery Bonds of any particular Series or WAL as a Responsible Officer of the Issuer may determine. Each Series of Nuclear Asset-Recovery Bond shall bear the designation so selected for the Series or WAL to which it belongs. All Nuclear Asset-Recovery Bonds of a Series shall be identical in all respects except for the denominations thereof, the Holder thereof, the numbering thereon and the legends thereon, unless such Series of Nuclear Asset-Recovery Bonds are comprised of one or more WALs, in which case all of such Series of Nuclear Asset-Recovery Bonds of the same WAL shall be identical in all respects except for the denominations thereof, the Holder thereof, the numbering thereon, the legends thereon and the CUSIP number thereon. All Nuclear Asset-Recovery Bonds of a Series and of a particular WAL shall be in all respects equally and ratably entitled to the benefits hereof without preference, priority or distinction on account of the actual time or times of authentication and delivery, all in accordance with the terms and provisions of this Indenture.
Each Series of Nuclear Asset-Recovery Bonds shall be created by the Series Supplement authorized by a Responsible Officer of the Issuer, which Series Supplement shall specify and establish the terms and provisions of such Series, including the following (which terms and provisions may differ as between WALs):
(a) designation of the Series and, if applicable, the WALs thereof;
(b) the principal amount of the Series (and, if more than one WAL is issued, the respective principal amounts of such WALs);
(c) the Bond Interest Rate of the Series and, if applicable, each WAL thereof or the formula, if any, used to calculate Bond Interest Rate or Bond Interest Rates for the Series and, if applicable, each WAL thereof;
(d) the Payment Dates for the Series and, if applicable, each WAL thereof;
(e) the Scheduled Payment Dates for the Series, and if applicable, for each WAL thereof;
(f) the Scheduled Final Payment Date(s) of the Series, and if applicable, for each WAL thereof;
(g) the Final Maturity Date(s) of the Series, and if applicable, for each WAL thereof;
(h) the issuance date for the Series;
(i) the Authorized Denominations for the Series;
(j) the Expected Sinking Fund Schedule(s) for the Series;
(k) the place or places for the payment of interest, principal and premium, if any;
(l) any additional Secured Parties;
(m) the identity of the Indenture Trustee;
(n) the Nuclear Asset-Recovery Charges for the Series and the Series Collateral;
(o) whether or not the Nuclear Asset-Recovery Bonds are to be Book-Entry Nuclear Asset-Recovery Bonds and the extent to which Section 2.11 should apply; and
(p) any other terms of the Series of Nuclear Asset-Recovery Bonds (or WALs thereof) that are not inconsistent with the provisions of this Indenture and as to which the Rating Agency Condition is satisfied.
SECTION 2.03. Execution, Authentication and Delivery. The Nuclear Asset-Recovery Bonds shall be executed on behalf of the Issuer by any of its Responsible Officers. The signature of any such Responsible Officer on the Nuclear Asset-Recovery Bonds may be manual or facsimile.
Nuclear Asset-Recovery Bonds bearing the manual or facsimile signature of individuals who were at any time Responsible Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of the Nuclear Asset-Recovery Bonds or did not hold such offices at the date of the Nuclear Asset-Recovery Bonds.
At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Nuclear Asset-Recovery Bonds executed by the Issuer to the Indenture Trustee pursuant to an Issuer Order for authentication; and the Indenture Trustee shall
authenticate and deliver the Nuclear Asset-Recovery Bonds as in this Indenture provided and not otherwise.
No Nuclear Asset-Recovery Bond shall be entitled to any benefit under this Indenture or related Series Supplement or be valid or obligatory for any purpose, unless there appears on such Nuclear Asset-Recovery Bond a certificate of authentication substantially in the form provided for therein executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Nuclear Asset-Recovery Bond shall be conclusive evidence, and the only evidence, that such Nuclear Asset-Recovery Bond has been duly authenticated and delivered hereunder.
SECTION 2.04. Temporary Nuclear Asset-Recovery Bonds. Pending the preparation of Definitive Nuclear Asset-Recovery Bonds pursuant to Section 2.13, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, Temporary Nuclear Asset-Recovery Bonds that are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Nuclear Asset-Recovery Bonds in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture and the related Series Supplement as the officers executing the Nuclear Asset-Recovery Bonds may determine, as evidenced by their execution of the Nuclear Asset-Recovery Bonds.
If Temporary Nuclear Asset-Recovery Bonds are issued, the Issuer will cause Definitive Nuclear Asset-Recovery Bonds to be prepared without unreasonable delay. After the preparation of Definitive Nuclear Asset-Recovery Bonds, the Temporary Nuclear Asset-Recovery Bonds shall be exchangeable for Definitive Nuclear Asset-Recovery Bonds upon surrender of the Temporary Nuclear Asset-Recovery Bonds at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the Holder. Upon surrender for cancellation of any one or more Temporary Nuclear Asset-Recovery Bonds, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver in exchange therefor a like principal amount of Definitive Nuclear Asset-Recovery Bonds of authorized denominations. Until so delivered in exchange, the Temporary Nuclear Asset-Recovery Bonds shall in all respects be entitled to the same benefits under this Indenture as Definitive Nuclear Asset-Recovery Bonds.
SECTION 2.05. Registration; Registration of Transfer and Exchange of Nuclear Asset-Recovery Bonds. The Issuer shall cause to be kept a register (the Nuclear Asset-Recovery Bond Register) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Nuclear Asset-Recovery Bonds and the registration of transfers of Nuclear Asset-Recovery Bonds. The Indenture Trustee shall be Nuclear Asset-Recovery Bond Registrar for the purpose of registering the Nuclear Asset-Recovery Bonds and transfers of Nuclear Asset-Recovery Bonds as herein provided. Upon any resignation of any Nuclear Asset-Recovery Bond Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Nuclear Asset-Recovery Bond Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as Nuclear Asset-Recovery Bond Registrar, the Issuer will give the Indenture Trustee prompt written notice
of the appointment of such Nuclear Asset-Recovery Bond Registrar and of the location, and any change in the location, of the Nuclear Asset-Recovery Bond Register, and the Indenture Trustee shall have the right to inspect the Nuclear Asset-Recovery Bond Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to rely conclusively upon a certificate executed on behalf of the Nuclear Asset-Recovery Bond Registrar by a Responsible Officer thereof as to the names and addresses of the Holders and the principal amounts and number of the Nuclear Asset-Recovery Bonds (separately stated by Series, and if applicable by WAL).
Upon surrender for registration of transfer of any Nuclear Asset-Recovery Bond at the office or agency of the Issuer to be maintained as provided in Section 3.02, provided that the requirements of Section 8-401 of the UCC are met, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Holder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Nuclear Asset-Recovery Bonds in any Authorized Denominations, of the same Series (and, if applicable, WAL) and aggregate principal amount.
At the option of the Holder, Nuclear Asset-Recovery Bonds may be exchanged for other Nuclear Asset-Recovery Bonds in any Authorized Denominations, of the same Series (and, if applicable, WAL) and aggregate principal amount, upon surrender of the Nuclear Asset-Recovery Bonds to be exchanged at such office or agency as provided in Section 3.02. Whenever any Nuclear Asset-Recovery Bonds are so surrendered for exchange, the Issuer shall, provided that the requirements of Section 8-401 of the UCC are met, execute, and, upon any such execution, the Indenture Trustee shall authenticate and the Holder shall obtain from the Indenture Trustee, the Nuclear Asset-Recovery Bonds that the Holder making the exchange is entitled to receive.
All Nuclear Asset-Recovery Bonds issued upon any registration of transfer or exchange of other Nuclear Asset-Recovery Bonds shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Nuclear Asset-Recovery Bonds surrendered upon such registration of transfer or exchange.
Every Nuclear Asset-Recovery Bond presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by: (a) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder thereof or such Holders attorney duly authorized in writing, with such signature guaranteed by an institution that is a member of: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee; and (b) such other documents as the Indenture Trustee may require.
No service charge shall be made to a Holder for any registration of transfer or exchange of Nuclear Asset-Recovery Bonds, but the Issuer or the Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge or any fees or expenses of the Indenture Trustee that may be imposed in connection with any registration of transfer or exchange of Nuclear Asset-Recovery Bonds, other than exchanges pursuant to Section 2.04 or Section 2.06 not involving any transfer.
The preceding provisions of this Section 2.05 notwithstanding, the Issuer shall not be required to make, and the Nuclear Asset-Recovery Bond Registrar need not register, transfers or exchanges of any Nuclear Asset-Recovery Bond that has been submitted within 15 days preceding the due date for any payment with respect to such Nuclear Asset-Recovery Bond until after such due date has occurred.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Nuclear Asset-Recovery Bonds. If (a) any mutilated Nuclear Asset-Recovery Bond is surrendered to the Indenture Trustee or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Nuclear Asset-Recovery Bond and (b) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Nuclear Asset-Recovery Bond Registrar or the Indenture Trustee that such Nuclear Asset-Recovery Bond has been acquired by a Protected Purchaser, the Issuer shall, provided that the requirements of Section 8-401 of the UCC are met, execute, and, upon the Issuers written request, the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Nuclear Asset-Recovery Bond, a replacement Nuclear Asset-Recovery Bond of like Series, WAL and principal amount, bearing a number not contemporaneously outstanding; provided, however, that, if any such destroyed, lost or stolen Nuclear Asset-Recovery Bond, but not a mutilated Nuclear Asset-Recovery Bond, shall have become or within seven days shall be due and payable, instead of issuing a replacement Nuclear Asset-Recovery Bond, the Issuer may pay such destroyed, lost or stolen Nuclear Asset-Recovery Bond when so due or payable without surrender thereof. If, after the delivery of such replacement Nuclear Asset-Recovery Bond or payment of a destroyed, lost or stolen Nuclear Asset-Recovery Bond pursuant to the proviso to the preceding sentence, a Protected Purchaser of the original Nuclear Asset-Recovery Bond in lieu of which such replacement Nuclear Asset-Recovery Bond was issued presents for payment such original Nuclear Asset-Recovery Bond, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Nuclear Asset-Recovery Bond (or such payment) from the Person to whom it was delivered or any Person taking such replacement Nuclear Asset-Recovery Bond from such Person to whom such replacement Nuclear Asset-Recovery Bond was delivered or any assignee of such Person, except a Protected Purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Nuclear Asset-Recovery Bond under this Section 2.06, the Issuer and/or the Indenture Trustee may require the payment by the Holder of such Nuclear Asset-Recovery Bond of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee and the Nuclear Asset-Recovery Bond Registrar) in connection therewith.
Every replacement Nuclear Asset-Recovery Bond issued pursuant to this Section 2.06 in replacement of any mutilated, destroyed, lost or stolen Nuclear Asset-Recovery Bond shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Nuclear Asset-Recovery Bond shall be found at any time or enforced by any Person, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Nuclear Asset-Recovery Bonds duly issued hereunder.
The provisions of this Section 2.06 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Nuclear Asset-Recovery Bonds.
SECTION 2.07. Persons Deemed Owner. Prior to due presentment for registration of transfer of any Nuclear Asset-Recovery Bond, the Issuer, the Indenture Trustee, the Nuclear Asset-Recovery Bond Registrar and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any Nuclear Asset-Recovery Bond is registered (as of the day of determination) as the owner of such Nuclear Asset-Recovery Bond for the purpose of receiving payments of principal of and premium, if any, and interest on such Nuclear Asset-Recovery Bond and for all other purposes whatsoever, whether or not such Nuclear Asset-Recovery Bond be overdue, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.08. Payment of Principal, Premium, if any, and Interest; Interest on Overdue Principal; Principal, Premium, if any, and Interest Rights Preserved.
(a) The Nuclear Asset-Recovery Bonds shall accrue interest as provided in applicable Series Supplement at the applicable Bond Interest Rate, and such interest shall be payable on each applicable Payment Date. Any installment of interest, principal or premium, if any, payable on any Nuclear Asset-Recovery Bond that is punctually paid or duly provided for on the applicable Payment Date shall be paid to the Person in whose name such Nuclear Asset-Recovery Bond (or one or more Predecessor Nuclear Asset-Recovery Bonds) is registered on the Record Date for the applicable Payment Date by check mailed first-class, postage prepaid, to the Person whose name appears as the Registered Holder (or by wire transfer to an account maintained by such Holder) in accordance with payment instructions delivered to the Indenture Trustee by such Holder, and, with respect to Book-Entry Nuclear Asset-Recovery Bonds, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Nuclear Asset-Recovery Bond unless and until such Global Nuclear Asset-Recovery Bond is exchanged for Definitive Nuclear Asset-Recovery Bonds (in which event payments shall be made as provided above) and except for the final installment of principal and premium, if any, payable with respect to such Nuclear Asset-Recovery Bond on a Payment Date, which shall be payable as provided below.
(b) The principal of each Nuclear Asset-Recovery Bond of each Series (and, if applicable, WAL) shall be paid, to the extent funds are available therefor in the Collection Account for such Series, in installments on each Payment Date specified in the applicable Series Supplement; provided, that installments of principal not paid when scheduled to be paid in accordance with the Expected Sinking Fund Schedule shall be paid upon receipt of money available for such purpose, in the order set forth in the Expected Sinking Fund Schedule. Failure to pay principal in accordance with such Expected Sinking Fund Schedule because moneys are not available pursuant to Section 8.02 to make such payments shall not constitute a Default or Event of Default under this Indenture; provided, however, that failure to pay the entire unpaid principal amount of the Nuclear Asset-Recovery Bonds of a Series or WAL upon the Final Maturity Date for the Nuclear Asset-Recovery Bonds of such Series or WAL shall constitute an Event of Default under this Indenture as set forth in Section 5.01. Notwithstanding the foregoing, the entire unpaid principal amount of the Nuclear Asset-Recovery Bonds of any Series shall be due and payable, if not previously paid, on the date on which an Event of Default
shall have occurred and be continuing, if the Indenture Trustee or the Holders of any Series of Nuclear Asset-Recovery Bonds representing a majority of the Outstanding Amount of the related Series of Nuclear Asset-Recovery Bonds have declared such Nuclear Asset-Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02. All payments of principal and premium, if any, on such Nuclear Asset-Recovery Bonds shall be made pro rata to the Holders entitled thereto unless otherwise provided in the applicable Series Supplement. The Indenture Trustee shall notify the Person in whose name a Nuclear Asset-Recovery Bond is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects that the final installment of principal of and premium, if any, and interest on such Nuclear Asset-Recovery Bond will be paid. Such notice shall be mailed no later than five days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Nuclear Asset-Recovery Bond and shall specify the place where such Nuclear Asset-Recovery Bond may be presented and surrendered for payment of such installment.
(c) If interest on the Nuclear Asset-Recovery Bonds of any Series is not paid when due, such defaulted interest shall be paid (plus interest on such defaulted interest at the applicable Bond Interest Rate to the extent lawful) to the Persons who are Holders on a subsequent Special Record Date, which date shall be at least 15 Business Days prior to the Special Payment Date. The Issuer shall fix or cause to be fixed any such Special Record Date and Special Payment Date, and, at least ten days before any such Special Record Date, the Issuer shall mail to each affected Holder a notice that states the Special Record Date, the Special Payment Date and the amount of defaulted interest (plus interest on such defaulted interest) to be paid.
SECTION 2.09. Cancellation. All Nuclear Asset-Recovery Bonds surrendered for payment, registration of transfer or exchange shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Nuclear Asset-Recovery Bonds previously authenticated and delivered hereunder that the Issuer may have acquired in any manner whatsoever, and all Nuclear Asset-Recovery Bonds so delivered shall be promptly canceled by the Indenture Trustee. No Nuclear Asset-Recovery Bonds shall be authenticated in lieu of or in exchange for any Nuclear Asset-Recovery Bonds canceled as provided in this Section 2.09, except as expressly permitted by this Indenture. All canceled Nuclear Asset-Recovery Bonds may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time.
SECTION 2.10. Outstanding Amount; Authentication and Delivery of Nuclear Asset-Recovery Bonds. The aggregate Outstanding Amount of Nuclear Asset-Recovery Bonds that may be authenticated and delivered under this Indenture shall not exceed the aggregate of the amount of Nuclear Asset-Recovery Bonds that are authorized in the Financing Order, together with any Subsequent Financing Order, if any, but otherwise shall be unlimited.
Nuclear Asset-Recovery Bonds of a new Series may at any time be executed by the Issuer and delivered to the Indenture Trustee for authentication and thereupon the same shall be authenticated and delivered by the Indenture Trustee upon Issuer Request and upon delivery
by the Issuer to the Indenture Trustee of the following (and if applicable, subject further to the requirements of Section 3.21):
(a) Issuer Action. An Issuer Order authorizing and directing the authentication and delivery of the Nuclear Asset-Recovery Bonds by the Indenture Trustee and specifying the principal amount of Nuclear Asset-Recovery Bonds to be authenticated.
(b) Authorizations. Copies of (i) the Financing Order or Subsequent Financing Order, as applicable, which shall be in full force and effect and be Final, (ii) certified resolutions of the Managers or Member of the Issuer authorizing the execution and delivery of the Series Supplement and the execution, authentication and delivery of the Series of Nuclear Asset-Recovery Bonds and (iii) a Series Supplement duly executed by the Issuer.
(c) Opinions. An opinion or opinions, portions of which may be delivered by one or more counsel for the Issuer, portions of which may be delivered by one or more counsel for the Servicer, and portions of which may be delivered by one or more counsel for the Seller, dated the Series Closing Date, in each case subject to the customary exceptions, qualifications and assumptions contained therein, to the collective effect, that (i) all conditions precedent provided for in this Indenture relating to (A) the authentication and delivery of the Issuers Series of Nuclear Asset-Recovery Bonds and (B) the execution of the related Series Supplement to this Indenture dated the Series Closing Date have been complied with, (ii) the execution of the Series Supplement to this Indenture dated the Series Closing Date is permitted by this Indenture, (iii) such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto and any other requisite documents, and with respect to the execution and filing of any filings with the Commission, the Secretary of State of the State of Delaware or the Florida Secured Transaction Registry pursuant to the Nuclear Asset-Recovery Law and the Financing Order or Subsequent Financing Order, as applicable, financing statements and continuation statements, as are necessary to perfect and make effective the Lien and the perfected security interest created by this Indenture and applicable Series Supplement, and, based on a review of a current report of a search of the appropriate governmental filing office, no other Lien that can be perfected solely by the filing of financing statements under the applicable Uniform Commercial Code ranks equal or prior to the Lien of the Indenture Trustee in the Series Collateral, and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make effective such Lien, together with the other Opinions of Counsel described in Sections 9(c) through 9(i) of the Underwriting Agreement for such Series (other than Sections 9(g) and 9(h) thereof) relating to the Issuers Nuclear Asset-Recovery Bonds.
(d) Authorizing Certificate. An Officers Certificate, dated the Series Closing Date, of the Issuer certifying that (i) the Issuer has duly authorized the execution and delivery of this Indenture and the related Series Supplement and the execution and delivery of the Series of Nuclear Asset-Recovery Bonds and (ii) the related Series Supplement is in the form attached thereto and complies with the requirements of Section 2.02.
(e) The Collateral. The Issuer shall have made or caused to be made all filings with the Commission and the Florida Secured Transaction Registry pursuant to the Financing Order or Subsequent Financing Order, as applicable, and the Nuclear Asset-Recovery
Law and all other filings necessary to perfect the Grant of the Series Collateral to the Indenture Trustee and the Lien of this Indenture and the related Series Supplement, including but not limited to UCC Financing Statements in Delaware or Florida as applicable.
(f) Series Supplement. A Series Supplement for the Series of Nuclear Asset-Recovery Bonds applied for, which shall set forth the provisions and form of the Nuclear Asset-Recovery Bonds of such Series (and, if applicable, each WAL thereof).
(g) Certificates of the Issuer and the Seller.
(i) An Officers Certificate from the Issuer, dated as of the Series Closing Date:
(A) to the effect that (1) the Issuer is not in Default under this Indenture and that the issuance of the Nuclear Asset-Recovery Bonds of such Series will not result in any Default or in any breach of any of the terms, conditions or provisions of or constitute a default under the Financing Order or any Subsequent Financing Order, as applicable, or any indenture, mortgage, deed of trust or other agreement or instrument to which the Issuer is a party or by which it or its property is bound or any order of any court or administrative agency entered in any Proceeding to which the Issuer is a party or by which it or its property may be bound or to which it or its property may be subject and (2) all conditions precedent provided in this Indenture relating to the execution, authentication and delivery of the Nuclear Asset-Recovery Bonds of such Series have been complied with;
(B) to the effect that: the Issuer has not assigned any interest or participation in the Series Collateral except for the Grant contained in this Indenture and the related Series Supplement; the Issuer has the power and right to Grant the Series Collateral to the Indenture Trustee as security hereunder and thereunder; and the Issuer, subject to the terms of this Indenture, has Granted to the Indenture Trustee a first priority perfected security interest in all of its right, title and interest in and to such Series Collateral free and clear of any Lien arising as a result of actions of the Issuer or through the Issuer, except Permitted Liens;
(C) to the effect that the Issuer has appointed the firm of Independent registered public accountants as contemplated in Section 8.06;
(D) to the effect that the respective Sale Agreement, Servicing Agreement, Administration Agreement and Intercreditor Agreement are, to the knowledge of the Issuer (and assuming such agreements are enforceable against all parties thereto other than the
Issuer and Duke Energy Florida), in full force and effect and, to the knowledge of the Issuer, that no party is in default of its obligations under such agreements; and
(E) certifying that the Nuclear Asset-Recovery Bonds of such Series have received the ratings from the Rating Agencies if required by the Underwriting Agreement for such Series as a condition to the issuance of such Nuclear Asset-Recovery Bonds.
(ii) An officers certificate from the Seller, dated as of the Series Closing Date, to the effect that:
(A) in the case of the Series Property identified in the Bill of Sale for such Series, immediately prior to the conveyance thereof to the Issuer pursuant to the Sale Agreement for such Series: the Seller was the original and the sole owner of such Property, free and clear of any Lien; the Seller had not assigned any interest or participation in such Series Property and the proceeds thereof other than to the Issuer pursuant to the Sale Agreement for such Series; the Seller has the power, authority and right to own, sell and assign such Series Property and the proceeds thereof to the Issuer; the Seller has its chief executive office in the State of Florida; and the Seller, subject to the terms of the Sale Agreement for such Series, has validly sold and assigned to the Issuer all of its right, title and interest in and to such Series Property and the proceeds thereof, free and clear of any Lien (other than Permitted Liens) and such sale and assignment is absolute and irrevocable and has been perfected;
(B) in the case of the Series Property identified in the Bill of Sale, immediately prior to the conveyance thereof to the Issuer pursuant to the Sale Agreement for such Series, the attached copy of the Financing Order or Subsequent Financing Order, as applicable, creating such Series Property is true and complete and is in full force and effect; and
(C) the Required Capital Level has been deposited or caused to be deposited by the Seller with the Indenture Trustee for crediting to the Capital Subaccount for such Series.
(h) Certificate or Letter of Independent Firm. One or more certificates or letters, addressed to the Issuer, of a firm, Independent of the Issuer, Seller, Servicer or any Affiliate to the effect that (i) such firm is Independent with respect to the Issuer within the meaning of this Indenture and (ii) it has performed procedures as instructed by the addressees of such certificate or letter.
(i) Requirements of Series Supplement. Such other funds, accounts, documents, certificates, agreements, instruments or opinions as may be required by the terms of the Series Supplement.
(j) Other Requirements. Such other documents, certificates, agreements, instruments or opinions as the Indenture Trustee may reasonably require.
SECTION 2.11. Book-Entry Nuclear Asset-Recovery Bonds. Unless the Series Supplement provides otherwise, all of the Nuclear Asset-Recovery Bonds shall be issued in Book-Entry Form, and the Issuer shall execute and the Indenture Trustee shall, in accordance with this Section 2.11 and the Issuer Order, authenticate and deliver one or more Global Nuclear Asset-Recovery Bonds, evidencing the Nuclear Asset-Recovery Bonds, which (a) shall be an aggregate original principal amount equal to the aggregate original principal amount of the Nuclear Asset-Recovery Bonds to be issued pursuant to the Issuer Order, (b) shall be registered in the name of the Clearing Agency therefor or its nominee, which shall initially be Cede & Co., as nominee for The Depository Trust Company, the initial Clearing Agency, (c) shall be delivered by the Indenture Trustee pursuant to such Clearing Agencys or such nominees instructions and (d) shall bear a legend substantially to the effect set forth in Exhibit A to the Form of Series Supplement.
Each Clearing Agency designated pursuant to this Section 2.11 must, at the time of its designation and at all times while it serves as Clearing Agency hereunder, be a clearing agency registered under the Exchange Act and any other applicable statute or regulation.
No Holder of Nuclear Asset-Recovery Bonds issued in Book-Entry Form shall receive a Definitive Nuclear Asset-Recovery Bond representing such Holders interest in any of the Nuclear Asset-Recovery Bonds, except as provided in Section 2.13. Unless (and until) certificated, fully registered Nuclear Asset-Recovery Bonds (the Definitive Nuclear Asset-Recovery Bonds) have been issued to the Holders pursuant to Section 2.13 or pursuant to the Series Supplement relating thereto:
(i) the provisions of this Section 2.11 shall be in full force and effect;
(ii) the Issuer, the Servicer, the Paying Agent, the Nuclear Asset-Recovery Bond Registrar and the Indenture Trustee may deal with the Clearing Agency for all purposes (including the making of distributions on the Nuclear Asset-Recovery Bonds and the giving of instructions or directions hereunder) as the authorized representative of the Holders;
(iii) to the extent that the provisions of this Section 2.11 conflict with any other provisions of this Indenture, the provisions of this Section 2.11 shall control;
(iv) the rights of Holders shall be exercised only through the Clearing Agency and the Clearing Agency Participants and shall be limited to those established by law and agreements between such Holders and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the Letter of Representations, unless and until Definitive Nuclear Asset-Recovery Bonds are issued pursuant to Section 2.13, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal of and interest on the Book-Entry Nuclear Asset-Recovery Bonds to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be taken based upon instruction or directions of the Holders evidencing a specified percentage of the Outstanding Amount of Nuclear Asset-Recovery Bonds, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from the Holders and/or the Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Nuclear Asset-Recovery Bonds and has delivered such instructions to a Responsible Officer of the Indenture Trustee.
SECTION 2.12. Notices to Clearing Agency. Unless and until Definitive Nuclear Asset-Recovery Bonds shall have been issued to Holders pursuant to Section 2.13, whenever notice, payment or other communications to the holders of Book-Entry Nuclear Asset-Recovery Bonds is required under this Indenture, the Indenture Trustee, the Servicer and the Paying Agent, as applicable, shall give all such notices and communications specified herein to be given to Holders to the Clearing Agency.
SECTION 2.13. Definitive Nuclear Asset-Recovery Bonds. If (a) (i) the Issuer advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities under any Letter of Representations and (ii) the Issuer is unable to locate a qualified successor Clearing Agency, (b) the Issuer, at its option, advises the Indenture Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency or (c) after the occurrence of an Event of Default hereunder, Holders holding Nuclear Asset-Recovery Bonds aggregating a majority of the aggregate Outstanding Amount of Nuclear Asset-Recovery Bonds of all Series maintained as Book-Entry Nuclear Asset-Recovery Bonds advise the Indenture Trustee, the Issuer and the Clearing Agency (through the Clearing Agency Participants) in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of the Holders, the Issuer shall notify the Clearing Agency, the Indenture Trustee and all such Holders in writing of the occurrence of any such event and of the availability of Definitive Nuclear Asset-Recovery Bonds to the Holders requesting the same. Upon surrender to the Indenture Trustee of the Global Nuclear Asset-Recovery Bonds by the Clearing Agency accompanied by registration instructions from such Clearing Agency for registration, the Issuer shall execute, and the Indenture Trustee shall authenticate and deliver, Definitive Nuclear Asset-Recovery Bonds in accordance with the instructions of the Clearing Agency. None of the Issuer, the Nuclear Asset-Recovery Bond Registrar, the Paying Agent or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions. Upon the issuance of Definitive Nuclear Asset-Recovery Bonds, the Indenture Trustee shall recognize the Holders of the Definitive Nuclear Asset-Recovery Bonds as Holders hereunder without need for any consent or acknowledgement from the Holders.
Definitive Nuclear Asset-Recovery Bonds will be transferable and exchangeable at the offices of the Nuclear Asset-Recovery Bond Registrar.
SECTION 2.14. CUSIP Number. The Issuer in issuing any Nuclear Asset-Recovery Bonds may use a CUSIP number and, if so used, the Indenture Trustee shall use the CUSIP number provided to it by the Issuer in any notices to the Holders thereof as a convenience to such Holders; provided, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Nuclear Asset-Recovery Bonds and that reliance may be placed only on the other identification numbers printed on the Nuclear Asset-Recovery Bonds. The Issuer shall promptly notify the Indenture Trustee in writing of any change in the CUSIP number with respect to any Nuclear Asset-Recovery Bond.
SECTION 2.15. Letter of Representations. The Issuer shall comply with the terms of each Letter of Representations applicable to the Issuer.
SECTION 2.16. Tax Treatment. The Issuer and the Indenture Trustee, by entering into this Indenture, and the Holders and any Persons holding a beneficial interest in any Nuclear Asset-Recovery Bond, by acquiring any Nuclear Asset-Recovery Bond or interest therein, (a) express their intention that, solely for the purposes of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purposes of state, local and other taxes, the Nuclear Asset-Recovery Bonds qualify under applicable tax law as indebtedness of the Member secured by the respective Series Collateral and (b) solely for the purposes of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Nuclear Asset-Recovery Bonds are outstanding, agree to treat the Nuclear Asset-Recovery Bonds as indebtedness of the Member secured by the respective Series Collateral unless otherwise required by appropriate taxing authorities.
SECTION 2.17. State Pledge. Under the laws of the State of Florida in effect on the date hereof, pursuant to Section 366.95(11) of the Nuclear Asset-Recovery Law, the State of Florida has pledged to agree and work with the Holders, the Indenture Trustee, other Financing Parties that the State of Florida will not (a) alter the provisions of Section 366.95(11) of the Nuclear Asset-Recovery Law which make the Charges imposed by the Financing Order or Subsequent Financing Order, as applicable, irrevocable, binding, and nonbypassable charges; (b) take or permit any action that impairs or would impair the value of the Property or revises the Nuclear Asset-Recovery Costs for which recovery is authorized; (c) or except as authorized under the Nuclear Asset-Recovery Law, reduce, alter, or impair Charges that are to be imposed, collected, and remitted for the benefit of the Holders, the Indenture Trustee and other Financing Parties until any and all principal, interest, premium, Financing Costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the Nuclear Asset-Recovery Bonds have been paid and performed in full.
The Issuer hereby acknowledges that the purchase of any Nuclear Asset-Recovery Bond by a Holder or the purchase of any beneficial interest in a Nuclear Asset-Recovery Bond by any Person and the Indenture Trustees obligations to perform hereunder are made in reliance on such agreement and pledge by the State of Florida.
SECTION 2.18. Security Interests. The Issuer hereby makes the following representations and warranties. Other than the security interests granted to the Indenture Trustee pursuant to this Indenture in the applicable Series Supplement, the Issuer has not pledged,
granted, sold, conveyed or otherwise assigned any interests or security interests in the Collateral and no security agreement, financing statement or equivalent security or Lien instrument listing the Issuer as debtor covering all or any part of the Collateral is on file or of record in any jurisdiction, except such as may have been filed, recorded or made by the Issuer in favor of the Indenture Trustee on behalf of the Secured Parties in connection with this Indenture. This Indenture and the applicable Series Supplement constitute a valid and continuing lien on, and first priority perfected security interest in, the Series Collateral in favor of the Indenture Trustee on behalf of the Secured Parties, which lien and security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors rights generally or by general equitable principles, whether considered in a proceeding at law or in equity and by an implied covenant of good faith and fair dealing. With respect to all Series Collateral, this Indenture, together with the related Series Supplement, creates a valid and continuing first priority perfected security interest (as defined in the UCC) in such related Series Collateral, which security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors rights generally or by general equitable principles, whether considered in a proceeding at law or in equity and by an implied covenant of good faith and fair dealing. The Issuer has good and marketable title to the Collateral free and clear of any Lien of any Person other than Permitted Liens. All of the Collateral constitutes Property or accounts, deposit accounts, investment property or general intangibles (as each such term is defined in the UCC), except that proceeds of the Collateral may also take the form of instruments. The Issuer has taken, or caused the Servicer to take, all action necessary to perfect the security interest in the Series Collateral granted to the Indenture Trustee, for the benefit of the Secured Parties. The Issuer has filed (or has caused the Servicer to file) all appropriate financing statements in the proper filing offices in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Series Collateral granted to the Indenture Trustee for each related Series. The Issuer has not authorized the filing of and is not aware, after due inquiry, of any financing statements against the Issuer that include a description of the Collateral other than those filed in favor of the Indenture Trustee. The Issuer is not aware of any judgment or tax lien filings against the Issuer. The Collection Account for each Series (including all subaccounts thereof) constitutes a securities account within the meaning of the UCC. The Issuer has taken all steps necessary to cause the Securities Intermediary of each such securities account to identify in its records the Indenture Trustee as the Person having a security entitlement against the Securities Intermediary in such securities account, no Collection Account is in the name of any Person other than the Indenture Trustee, and the Issuer has not consented to the Securities Intermediary of the Collection Account for each Series to comply with entitlement orders of any Person other than the Indenture Trustee. All of the Collateral constituting investment property has been and will have been credited to the Collection Account for each Series or a subaccount thereof, and the Securities Intermediary for the Collection Account for each Series has agreed to treat all assets credited to the Collection Account for each Series as financial assets within the meaning of the UCC. Accordingly, the Indenture Trustee has a first priority perfected security interest in the Collection Account for each Series, all funds and financial assets on deposit therein, and all securities entitlements relating thereto. The
representations and warranties set forth in this Section 2.18 shall survive the execution and delivery of this Indenture and the issuance of any Nuclear Asset-Recovery Bonds, shall be deemed re-made on each date on which any funds in the Collection Account for each Series are distributed to the Issuer as provided in Section 8.04 or otherwise released from the Lien of the Indenture and may not be waived by any party hereto except pursuant to a supplemental indenture executed in accordance with Article IX and as to which the Rating Agency Condition has been satisfied.
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Premium, if any, and Interest. The principal of and premium, if any, and interest on the Nuclear Asset-Recovery Bonds shall be duly and punctually paid by the Issuer, or the Servicer on behalf of the Issuer, in accordance with the terms of the Nuclear Asset-Recovery Bonds and this Indenture and the applicable Series Supplement; provided, that, except on a Final Maturity Date of a Series or WAL or upon the acceleration of a Series of Nuclear Asset-Recovery Bonds following the occurrence of an Event of Default, the Issuer shall only be obligated to pay the principal of such Nuclear Asset-Recovery Bonds on each Payment Date therefor to the extent moneys are available for such payment pursuant to Section 8.02. Amounts properly withheld under the Code, the Treasury regulations promulgated thereunder or other tax laws by any Person from a payment to any Holder of interest or principal or premium, if any, shall be considered as having been paid by the Issuer to such Holder for all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer shall initially maintain in St. Petersburg, Florida an office or agency where Nuclear Asset-Recovery Bonds may be surrendered for registration of transfer or exchange. The Issuer shall give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency. The Issuer hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes, and the Corporate Trust Office of the Indenture Trustee shall serve as the offices provided above in this Section 3.02. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders may be made at the office of the Indenture Trustee located at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in Section 8.02(a), all payments of amounts due and payable with respect to any Nuclear Asset-Recovery Bonds that are to be made from amounts withdrawn from the Collection Account pursuant to Section 8.02(d) shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from the Collection Account for payments with respect to any Nuclear Asset-Recovery Bonds shall be paid over to the Issuer except as provided in this Section 3.03 and Section 8.02.
Each Paying Agent shall meet the eligibility criteria set forth for any Indenture Trustee under Section 6.11. The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section 3.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with respect to the Nuclear Asset-Recovery Bonds in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;
(b) give the Indenture Trustee unless the Indenture Trustee is the Paying Agent, the Commission and the Rating Agencies written notice of any Default by the Issuer of which it has actual knowledge in the making of any payment required to be made with respect to the Nuclear Asset-Recovery Bonds;
(c) at any time during the continuance of any such Default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;
(d) immediately, with notice to the Rating Agencies, resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Nuclear Asset-Recovery Bonds if at any time the Paying Agent determines that it has ceased to meet the standards required to be met by a Paying Agent at the time of such determination; and
(e) comply with all requirements of the Code, the Treasury regulations promulgated thereunder and other tax laws with respect to the withholding from any payments made by it on any Nuclear Asset-Recovery Bonds of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and, upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheatment of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Nuclear Asset-Recovery Bond and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer upon receipt of an Issuer Request; and, subject to Section 10.14, the Holder of such Nuclear Asset-Recovery Bond shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, at the request of the Issuer, shall, at the expense of the Issuer, cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The Indenture Trustee may also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of such repayment (including mailing notice of such repayment to Holders whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).
SECTION 3.04. Existence. The Issuer shall keep in full effect its existence, rights and franchises as a limited liability company under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the other Basic Documents, the Nuclear Asset-Recovery Bonds, the Collateral and each other instrument or agreement referenced herein or therein.
SECTION 3.05. Protection of Collateral. The Issuer shall from time to time execute and deliver all such supplements and amendments hereto and all filings with the Commission, the Secretary of State of the State of Delaware or the Florida Secured Transaction Registry pursuant to the Financing Order and any Subsequent Financing Order, as applicable, or to the Nuclear Asset-Recovery Law and all financing statements, continuation statements, instruments of further assurance and other instruments, and shall take such other action necessary or advisable, to:
(a) maintain or preserve the Lien (and the priority thereof) of this Indenture and each Series Supplement or carry out more effectively the purposes hereof;
(b) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;
(c) enforce any of the Collateral;
(d) preserve and defend title to the Collateral and the rights of the Indenture Trustee and the Holders in such Collateral against the Claims of all Persons, including a challenge by any party to the validity or enforceability of the Financing Order or any Subsequent Financing Order, the Series Property or any proceeding relating thereto and institute any action or proceeding necessary to compel performance by the Commission or the State of Florida of any of its obligations or duties under the Nuclear Asset-Recovery Law, the State Pledge, or the Financing Order or any Subsequent Financing Order; and
(e) pay any and all taxes levied or assessed upon all or any part of the Collateral.
The Indenture Trustee is specifically permitted and authorized, but not required to file financing statements covering the Collateral, including financing statements that describe the Collateral as all assets or all personal property of the Issuer and/or reflecting Section 366.95(5)(b) of the
Nuclear Asset-Recovery Law. The Indenture Trustee shall not be responsible for filing any such financing statements.
SECTION 3.06. Opinions as to Collateral.
(a) Within 90 days after the beginning of each calendar year beginning with the calendar year beginning January 1, 2017, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel of the Issuer either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents, and with respect to the execution and filing of any filings with the Commission, the Secretary of State of the State of Delaware or the Florida Secured Transaction Registry pursuant to the Nuclear Asset-Recovery Law and the Financing Order and any Subsequent Financing Order, financing statements and continuation statements, as are necessary to maintain the Lien and the perfected security interest created by this Indenture and the Series Supplements and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to maintain such Lien. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any filings with the Commission, the Secretary of State of the State of Delaware or the Florida Secured Transaction Registry, financing statements and continuation statements that will, in the opinion of such counsel, be required within the 12-month period following the date of such opinion to maintain the Lien and the perfected security interest created by this Indenture and all Series Supplements.
(b) Prior to the effectiveness of any amendment to the applicable Sale Agreement or the applicable Servicing Agreement, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer either (i) stating that, in the opinion of such counsel, all filings, including UCC financing statements and other filings with the Commission, the Secretary of State of the State of Delaware or the Florida Secured Transaction Registry pursuant to the Nuclear Asset-Recovery Law or the applicable Financing Order have been executed and filed that are necessary fully to preserve and protect the Lien of the Issuer and the Indenture Trustee in the Series Property and the Series Collateral, respectively, and the proceeds thereof, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (ii) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such Lien.
SECTION 3.07. Performance of Obligations; Servicing; SEC Filings.
(a) The Issuer (i) shall diligently pursue any and all actions to enforce its rights under each instrument or agreement included in the Collateral and (ii) shall not take any action and shall use its best efforts not to permit any action to be taken by others that would release any Person from any of such Persons covenants or obligations under any such instrument or agreement or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except, in each case, as expressly provided in this Indenture, the applicable Series Supplement, the applicable Sale Agreement, the applicable Servicing Agreement, the applicable Intercreditor Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons selected with due care to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee herein or in an Officers Certificate shall be deemed to be action taken by the Issuer. Initially, the Issuer has contracted with the Servicer to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its obligations and agreements contained in this Indenture, the applicable Series Supplement, the other Basic Documents and the instruments and agreements included in the Collateral, including filing or causing to be filed all filings with the Commission, the Secretary of State of the State of Delaware or the Florida Secured Transaction Registry pursuant to the Nuclear Asset-Recovery Law or the applicable Financing Order, all UCC financing statements and all continuation statements required to be filed by it by the terms of this Indenture, the applicable Series Supplement, the applicable Sale Agreement and the applicable Servicing Agreement in accordance with and within the time periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer Default under the Servicing Agreement for such Series, the Issuer shall promptly give written notice thereof to the Indenture Trustee, the Commission and the Rating Agencies and shall specify in such notice the response or action, if any, the Issuer has taken or is taking with respect to such Servicer Default. If a Servicer Default shall arise from the failure of the Servicer to perform any of its duties or obligations under the Servicing Agreement with respect to the Series Property, the Series Collateral or the Series Charges, the Issuer shall take all reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination to the Servicer and the Rating Agencies of the Servicers rights and powers pursuant to Section 7.01 of the applicable Servicing Agreement, the Indenture Trustee may and shall, at the written direction either (a) of the Holders evidencing a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of such Series, or (b) of the Commission, appoint a successor Servicer (the Successor Servicer), and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Issuer. A Person shall qualify as a Successor Servicer only if such Person satisfies the requirements of the applicable Servicing Agreement and the applicable Intercreditor Agreement. If, within 30 days after the delivery of the notice referred to above, a new Servicer shall not have been appointed, the Indenture Trustee may petition the Commission or a court of competent jurisdiction to appoint a Successor Servicer. In connection with any such appointment, Duke Energy Florida may make such arrangements for the compensation of such Successor Servicer as it and such successor shall agree, subject to the limitations set forth in Section 8.02 and in the Servicing Agreement.
(f) Upon any termination of the Servicers rights and powers pursuant to the Servicing Agreement for such Series, the Indenture Trustee shall promptly notify the Issuer, the Holders and the Rating Agencies. As soon as a Successor Servicer is appointed, the Indenture Trustee shall notify the Issuer, the Holders and the Rating Agencies of such appointment, specifying in such notice the name and address of such Successor Servicer.
(g) The Issuer shall (or shall cause the Sponsor to) post on its website (which for this purpose may be the website of any direct or indirect parent company of the Issuer) and, to the extent consistent with the Issuers and the Sponsors obligations under applicable law, file with or furnish to the SEC in periodic reports and other reports as are required from time to time under Section 13 or Section 15(d) of the Exchange Act, the following information (other than any such information filed with the SEC and publicly available to investors unless the Issuer specifically requests such items to be posted) with respect to each Series of the Outstanding Nuclear Asset-Recovery Bonds, in each case to the extent such information is reasonably available to the Issuer:
(i) statements of any remittances of Charges made to the Indenture Trustee (to be included in a Form 10-D or Form 10-K, or successor forms thereto);
(ii) a statement reporting the balances in the Collection Account for such Series and in each subaccount of the Collection Account for such Series as of all Payment Dates (to be included on the next Form 10-D filed) and as of the end of each year (to be included on the next Form 10-K filed);
(iii) the Semi-Annual Servicers Certificate as required to be submitted pursuant to the Servicing Agreement (to be filed with a Form 10-D, Form 10-K or Form 8-K, or successor forms thereto);
(iv) the Monthly Servicers Certificate as required to be submitted pursuant to the Servicing Agreement;
(v) the text (or a link to the website where a reader can find the text) of each filing of a True-Up Adjustment and the results of each such filing;
(vi) any change in the long-term or short-term credit ratings of the Servicer assigned by the Rating Agencies;
(vii) material legislative or regulatory developments directly relevant to the Outstanding Nuclear Asset-Recovery Bonds (to be filed or furnished in a Form 8-K); and
(viii) any reports and other information that the Issuer is required to file with the SEC under the Exchange Act, including but not limited to periodic and current reports related to a Series of Nuclear Asset-Recovery Bonds consistent with the disclosure and reporting regime established in Regulation AB.
Notwithstanding the foregoing, nothing herein shall preclude the Issuer from voluntarily suspending or terminating its filing obligations as Issuer with the SEC to the extent permitted by applicable law. Any such reports or information delivered to the Indenture Trustee for purposes of this Section 3.07(g) is for informational purposes only, and the Indenture Trustees receipt of such reports or information shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuers compliance with any of its covenants hereunder (as to which the Indenture Trustee is entitled to conclusively rely on an Officers Certificate).
(h) The Issuer shall direct the Indenture Trustee to post on the Indenture Trustees website for investors (based solely on information set forth in the Semi-Annual Servicers Certificate) with respect to each Series of the Outstanding Nuclear Asset-Recovery Bonds, to the extent such information is set forth in the Semi-Annual Servicers Certificate, a statement showing the balance of each Series of Outstanding Nuclear Asset-Recovery Bonds that reflects the actual payments made on the Nuclear Asset-Recovery Bonds during the applicable period.
The address of the Indenture Trustees website for investors is https://gctinvestorreporting.bnymellon.com. The Indenture Trustee shall immediately notify the Issuer, the Holders and the Rating Agencies of any change to the address of the website for investors.
(i) The Issuer shall make all filings required under the Nuclear Asset-Recovery Law relating to the transfer of the ownership or security interest in the Nuclear Asset-Recovery Property other than those required to be made by the Seller or the Servicer pursuant to the Basic Documents.
SECTION 3.08. Certain Negative Covenants. So long as any Nuclear Asset-Recovery Bonds are Outstanding, the Issuer shall not:
(a) except as expressly permitted by this Indenture and the other Basic Documents, or in connection with the issuance of Additional Series, sell, transfer, convey, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Collateral, unless in accordance with Article V;
(b) claim any credit on, or make any deduction from the principal or premium, if any, or interest payable in respect of, the Nuclear Asset-Recovery Bonds (other than amounts properly withheld from such payments under the Code, the Treasury regulations promulgated thereunder or other tax laws) or assert any claim against any present or former Holder by reason of the payment of the taxes levied or assessed upon any part of the Collateral;
(c) terminate its existence or dissolve or liquidate in whole or in part, except in a transaction permitted by Section 3.10;
(d) (i) permit the validity or effectiveness of this Indenture or the other Basic Documents to be impaired, or permit the Lien of this Indenture and the Series Supplements to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Nuclear Asset-Recovery Bonds under this Indenture except as may be expressly permitted hereby, (ii) permit any Lien (other than the Lien of this Indenture or the Series Supplements) to be created on or extend to or otherwise arise upon or burden the Collateral or any part thereof or any interest therein or the proceeds thereof (other than tax liens arising by operation of law with respect to amounts not yet due) or (iii) permit the Lien of any Series Supplement not to constitute a valid first priority perfected security interest in the related Series Collateral;
(e) elect to be classified as an association taxable as a corporation for U.S. federal income tax purposes or otherwise take any action, file any tax return or make any
election inconsistent with the treatment of the Issuer, for U.S. federal income tax purposes and, to the extent consistent with applicable state tax law, state income and franchise tax purposes, as a disregarded entity that is not separate from the sole owner of the Issuer;
(f) change its name, identity or structure or the location of its chief executive office, unless at least ten Business Days prior to the effective date of any such change the Issuer delivers to the Indenture Trustee (with copies to the Rating Agencies) such documents, instruments or agreements, executed by the Issuer, as are necessary to reflect such change and to continue the perfection of the security interest of this Indenture and the Series Supplements;
(g) take any action that is subject to a Rating Agency Condition without satisfying the Rating Agency Condition;
(h) except to the extent permitted by applicable law, voluntarily suspend or terminate its filing obligations with the SEC as described in Section 3.07(g); or
(i) issue any debt obligations other than the Nuclear Asset-Recovery Bonds permitted by this Indenture.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will deliver to the Indenture Trustee, the Commission and the Rating Agencies not later than March 31 of each year (commencing with March 31, 2017), an Officers Certificate stating, as to the Responsible Officer signing such Officers Certificate, that:
(a) a review of the activities of the Issuer during the preceding 12 months ended December 31 (or, in the case of the first such Officers Certificate, since the date hereof) and of performance under this Indenture has been made; and
(b) to the best of such Responsible Officers knowledge, based on such review, the Issuer has in all material respects complied with all conditions and covenants under this Indenture throughout such 12-month period (or such shorter period in the case of the first such Officers Certificate), or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to such Responsible Officer and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall (A) be a Person organized and existing under the laws of the United States of America or any State, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form and substance satisfactory to the Indenture Trustee, the performance or observance of every agreement and covenant of this Indenture and the Series Supplements on the part of the Issuer to be performed or observed, all as provided herein and in the Series Supplements, and (C) assume all obligations and succeed to all rights of the Issuer under each Sale
Agreement, Servicing Agreement and each other Basic Document to which the Issuer is a party;
(ii) immediately after giving effect to such merger or consolidation, no Default, Event of Default or Servicer Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with respect to such merger or consolidation;
(iv) the Issuer shall have delivered to Duke Energy Florida, the Indenture Trustee and the Rating Agencies an opinion or opinions of outside tax counsel (as selected by the Issuer, in form and substance reasonably satisfactory to Duke Energy Florida and the Indenture Trustee, and which may be based on a ruling from the Internal Revenue Service (unless the Internal Revenue Service has announced that it will not rule on the issues described in this paragraph)) to the effect that the consolidation or merger will not result in a material adverse U.S. federal or state income tax consequence to the Issuer, Duke Energy Florida, the Indenture Trustee or the then-existing Holders;
(v) any action as is necessary to maintain the Lien and the perfected security interest in the Collateral created by this Indenture and the Series Supplements shall have been taken as evidenced by an Opinion of Counsel of external counsel of the Issuer delivered to the Indenture Trustee; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officers Certificate and an Opinion of Counsel of external counsel of the Issuer each stating that such consolidation or merger and such supplemental indenture comply with this Indenture and the Series Supplements and that all conditions precedent herein provided for in this Section 3.10(a) with respect to such transaction have been complied with (including any filing required by the Exchange Act).
(b) Except as specifically provided herein, the Issuer shall not sell, convey, exchange, transfer or otherwise dispose of any of its properties or assets included in the Collateral, to any Person, unless:
(i) the Person that acquires the properties and assets of the Issuer, the conveyance or transfer of which is hereby restricted, (A) shall be a United States citizen or a Person organized and existing under the laws of the United States of America or any State, (B) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form and substance satisfactory to the Indenture Trustee, the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein and in the Series Supplements, (C) expressly agrees by means of such supplemental indenture that all right, title and interest so sold, conveyed, exchanged, transferred or otherwise disposed of shall be subject and subordinate to the rights of Holders, (D) unless otherwise provided in the supplemental indenture referred to in Section 3.10(b)(i)(B), expressly agrees to indemnify, defend and hold harmless the Issuer and the Indenture Trustee against and from any loss, liability or expense arising under or related to this Indenture,
the Series Supplements and the Nuclear Asset-Recovery Bonds, (E) expressly agrees by means of such supplemental indenture that such Person (or if a group of Persons, then one specified Person) shall make all filings with the SEC (and any other appropriate Person) required by the Exchange Act in connection with the Collateral and the Nuclear Asset-Recovery Bonds and (F) if such sale, conveyance, exchange, transfer or disposal relates to the Issuers rights and obligations under the Sale Agreement for such Series or the Servicing Agreement for such Series, assumes all obligations and succeeds to all rights of the Issuer under the Sale Agreement for such Series and the Servicing Agreement for such Series, as applicable;
(ii) immediately after giving effect to such transaction, no Default, Event of Default or Servicer Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with respect to such transaction;
(iv) the Issuer shall have delivered to Duke Energy Florida, the Indenture Trustee and the Rating Agencies an opinion or opinions of outside tax counsel (as selected by the Issuer, in form and substance reasonably satisfactory to Duke Energy Florida, and which may be based on a ruling from the Internal Revenue Service) to the effect that the disposition will not result in a material adverse U.S. federal or state income tax consequence to the Issuer, Duke Energy Florida, the Indenture Trustee or the then-existing Holders;
(v) any action as is necessary to maintain the Lien and the perfected security interest in the Collateral created by this Indenture and the Series Supplements shall have been taken as evidenced by an Opinion of Counsel of external counsel of the Issuer delivered to the Indenture Trustee; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officers Certificate and an Opinion of Counsel of external counsel of the Issuer each stating that such sale, conveyance, exchange, transfer or other disposition and such supplemental indenture comply with this Indenture and the Series Supplements and that all conditions precedent herein provided for in this Section 3.10(b) with respect to such transaction have been complied with (including any filing required by the Exchange Act).
SECTION 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.
(b) Except as set forth in Section 6.07, upon a sale, conveyance, exchange, transfer or other disposition of all the assets and properties of the Issuer in accordance with Section 3.10(b), the Issuer will be released from every covenant and agreement of this Indenture and the other Basic Documents to be observed or performed on the part of the Issuer with respect
to the Nuclear Asset-Recovery Bonds and the Property immediately following the consummation of such acquisition upon the delivery of written notice to the Indenture Trustee from the Person acquiring such assets and properties stating that the Issuer is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any business other than financing, purchasing, owning, administering, managing and servicing the Property and the other Collateral and the issuance of the Nuclear Asset-Recovery Bonds in the manner contemplated by the Financing Order and any Subsequent Financing Order and this Indenture and the other Basic Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Nuclear Asset-Recovery Bonds and any other indebtedness expressly permitted by or arising under the Basic Documents.
SECTION 3.14. Servicers Obligations. The Issuer shall enforce the Servicers compliance with and performance of all of the Servicers material obligations under the Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except as otherwise contemplated by the Sale Agreement, the Servicing Agreement or this Indenture, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring anothers payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. Other than the purchase of Series Property from the Seller on a Series Closing Date, the Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).
SECTION 3.17. Restricted Payments. Except as provided in Section 8.04(c), the Issuer shall not, directly or indirectly, (a) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to any owner of an interest in the Issuer or otherwise with respect to any ownership or equity interest or similar security in or of the Issuer, (b) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or similar security or (c) set aside or otherwise segregate any amounts for any such purpose; provided, however, that, if no Event of Default shall have occurred and be continuing or would be caused thereby, the Issuer may make, or cause to be made, any such distributions to any owner of an interest in the Issuer or otherwise with respect to any ownership or equity interest or similar security in or of the Issuer using funds distributed to the Issuer pursuant to Section 8.02(e)(xi) to the extent that such distributions would not cause the balance of the Capital Subaccount to decline below the Required Capital Level. The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Indenture and the other Basic Documents.
SECTION 3.18. Notice of Events of Default. The Issuer agrees to give the Indenture Trustee, the Commission and the Rating Agencies prompt written notice of each Default or Event of Default hereunder as provided in Section 5.01, and each default on the part of the Seller or the Servicer of its obligations under the Sale Agreement or the Servicing Agreement, respectively.
SECTION 3.19. Further Instruments and Acts. Upon request of the Indenture Trustee, the Issuer shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture and to maintain the first priority perfected security interest of the Indenture Trustee in the Collateral.
SECTION 3.20. Inspection. The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee and any representative of the Commission, during the Issuers normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited annually by Independent registered public accountants, and to discuss the Issuers affairs, finances and accounts with the Issuers officers, employees and Independent registered public accountants, all at such reasonable times and as often as may be reasonably requested. The Indenture Trustee and the Commission shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder. Notwithstanding anything herein to the contrary, the preceding sentence shall not be construed to prohibit (a) disclosure of any and all information that is or becomes publicly known, or information obtained by the Indenture Trustee from sources other than the Issuer, provided such parties are rightfully in possession of such information, (b) disclosure of any and all information (i) if required to do so by any applicable statute, law, rule or regulation, (ii) pursuant to any subpoena, civil investigative demand or similar demand or request of any court or regulatory authority exercising its proper jurisdiction, (iii) in any preliminary or final prospectus, registration statement or other document a copy of which has been filed with the SEC, (iv) to any affiliate, independent or internal auditor, agent, employee or attorney of the Indenture Trustee having a need to know the same, provided that such parties agree to be bound by the confidentiality provisions contained in this Section 3.20, or (v) to any Rating Agency or (c) any other disclosure authorized by the Issuer.
SECTION 3.21. Additional Series.
(a) On the basis of the Financing Order or any Subsequent Financing Order, the Issuer may, in its sole discretion, acquire additional and separate Series Collateral and issue one or more Additional Series that are backed by such separate additional Series Collateral. Any Additional Series may include terms and provisions unique to that Additional Series.
(b) The Issuer shall not issue additional Nuclear Asset-Recovery Bonds if the Additional Series would result in the then-current ratings on any Outstanding Series of Nuclear Asset-Recovery Bonds being reduced or withdrawn.
(c) In addition to all applicable requirements of Section 2.10 hereof, the following conditions must be satisfied in connection with any Additional Series:
(i) the Rating Agency Condition for the Series A Bonds shall have been satisfied and such new Series of Bonds shall be rated AAA by S&P and Fitch;
(ii) each Additional Series shall have recourse only to the assets pledged in connection with such Additional Series, shall be nonrecourse to any of the Issuers other assets and shall not constitute a claim against the Issuer if cash flow from the pledged assets is insufficient to pay such Additional Series in full;
(iii) the Issuer has delivered to the Indenture Trustee and each Rating Agency then rating any series of Outstanding Nuclear Asset-Recovery Bonds an Opinion of Counsel of a nationally recognized firm experienced in such matters to the effect that after such issuance, in the opinion of such counsel, if the Seller were to become a debtor in a case under the United States Bankruptcy Code (Title 11, U.S.C.), a federal court exercising bankruptcy jurisdiction and exercising reasonable judgment after full consideration of all relevant factors would not order substantive consolidation of the assets and liabilities of the Issuer with those of the bankruptcy estate of the Seller and that there has been a true sale of the Series Property with respect to such Additional Series, subject to the customary exceptions, qualifications and assumptions contained therein;
(iv) the Issuer has delivered to the Indenture Trustee an Officers Certificate from the Issuer certifying that the Additional Series shall have the benefit of a True-Up Adjustment;
(v) the transaction documentation for such Additional Series provides that holders of the Nuclear Asset-Recovery Bonds of such Additional Series will not file or join in the filing of any bankruptcy petition against the Issuer;
(vi) if the holders of the Nuclear Asset-Recovery Bonds of any Additional Series are deemed to have any interest in any of the Series Collateral pledged under a Series Supplement (other than the Series Supplement related to such Additional Series, if any), the Holders of such Nuclear Asset-Recovery Bonds must agree that any such interest is subordinate to the claims and rights of the holders of such other related Series of Nuclear Asset-Recovery Bonds;
(vii) the Additional Series shall have its Collection Account; and
(viii) the Additional Series shall bear its own trustee fees and servicer fees and a pro rata portion of fees due under the Administration Agreement.
SECTION 3.22. Sale Agreement, Servicing Agreement, Intercreditor Agreement and Administration Agreement Covenants.
(a) The Issuer agrees to take all such lawful actions to enforce its rights under the Sale Agreement for such Series, the Servicing Agreement for such Series, the Intercreditor Agreement for such Series, the Administration Agreement and the other Basic Documents, and
to compel or secure the performance and observance by the Seller, the Servicer, the Administrator and Duke Energy Florida of each of their respective obligations to the Issuer under or in connection with the Sale Agreement for such Series, the Servicing Agreement, for such Series the Intercreditor Agreement for such Series, the Administration Agreement and the other Basic Documents in accordance with the terms thereof. So long as no Event of Default occurs and is continuing, but subject to Section 3.22(f), the Issuer may exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale Agreement, the Servicing Agreement, the Intercreditor Agreement and the Administration Agreement; provided, that such action shall not adversely affect the interests of the Holders in any material respect.
(b) If an Event of Default occurs and is continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing) of the Holders of a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all WALs affected thereby or the Commission, shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller, Duke Energy Florida, the Administrator and the Servicer, as the case may be, under or in connection with the Sale Agreement for such Series, the Servicing Agreement for such Series, the Intercreditor Agreement for such Series and the Administration Agreement, including the right or power to take any action to compel or secure performance or observance by the Seller, Duke Energy Florida, the Administrator or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale Agreement for such Series, the Servicing Agreement for such Series, the Intercreditor Agreement for such Series and the Administration Agreement, and any right of the Issuer to take such action shall be suspended.
(c) Except as set forth in Section 3.22(d), the Administration Agreement, the Sale Agreement for such Series, the Servicing Agreement for such Series and the Intercreditor Agreement for such Series may be amended in accordance with the provisions thereof, so long as the Rating Agency Condition is satisfied in connection therewith, at any time and from time to time, without the consent of the Holders of the Nuclear Asset-Recovery Bonds, but with the acknowledgement of the Indenture Trustee; provided, that the Indenture Trustee shall provide such consent upon receipt of an Officers Certificate of the Issuer evidencing satisfaction of such Rating Agency Condition, an Opinion of Counsel of external counsel of the Issuer evidencing that such amendment is in accordance with the provisions of such Basic Document and satisfaction of the Commission Condition (as described in Section 9.03 hereof, or alternatively, if applicable, Section 13(b) of the Administration Agreement, Section 6.01(b) of the Sale Agreement or Section 8.01(b) of the Servicing Agreement).
(d) Except as set forth in Section 3.22(e), if the Issuer, the Seller, Duke Energy Florida, the Administrator, the Servicer or any other party to the respective agreement proposes to amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, waiver, supplement, termination or surrender of, the terms of the Sale Agreement, the Administration Agreement, the Servicing Agreement or the Intercreditor Agreement, or waive timely performance or observance by the Seller, Duke Energy Florida, the Administrator, the Servicer or any other party under the Sale Agreement, the Administration Agreement, the Servicing Agreement or the Intercreditor Agreement, in each case in such a way as would materially and adversely affect the interests of any Holder of Nuclear Asset-Recovery
Bonds, the Issuer shall first notify the Rating Agencies of the proposed amendment, modification, waiver, supplement, termination or surrender and shall promptly notify the Indenture Trustee, the Commission and the Holders of the Nuclear Asset-Recovery Bonds in writing of the proposed amendment, modification, waiver, supplement, termination or surrender and whether the Rating Agency Condition has been satisfied with respect thereto (or, pursuant to an Issuer Request, the Indenture Trustee shall so notify the Holders of the Nuclear Asset-Recovery Bonds on the Issuers behalf). The Indenture Trustee shall consent to such proposed amendment, modification, waiver, supplement, termination or surrender only if the Rating Agency Condition is satisfied and only with the (i) prior written consent of the Holders of a majority of the Outstanding Amount of Nuclear Asset-Recovery Bonds of each Series or WAL materially and adversely affected thereby and (ii) satisfaction of the Commission Condition (as described in Section 9.03 hereof, or alternatively, if applicable, Section 13(b) of the Administration Agreement, Section 6.01(b) of the Sale Agreement or Section 8.01(b) of the Servicing Agreement). If any such amendment, modification, waiver, supplement, termination or surrender shall be so consented to by the Indenture Trustee or such Holders, the Issuer agrees to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as shall be necessary or appropriate in the circumstances.
(e) If the Issuer or the Servicer proposes to amend, modify, waive, supplement, terminate or surrender, or to agree to any amendment, modification, supplement, termination, waiver or surrender of, the process for True-Up Adjustments, the Issuer shall notify the Indenture Trustee and the Holders of the Nuclear Asset-Recovery Bonds and, when required, the Commission in writing of such proposal (or, pursuant to an Issuer Request, the Indenture Trustee shall so notify the Holders of the Nuclear Asset-Recovery Bonds on the Issuers behalf) and the Indenture Trustee shall consent thereto only with the prior written consent of the Holders of a majority of the Outstanding Amount of Nuclear Asset-Recovery Bonds of each Series or WAL affected thereby and only if the Rating Agency Condition and Commission Condition have been satisfied with respect thereto.
(f) Promptly following a default by the Seller under the Sale Agreement for such Series, by the Administrator under the Administration Agreement or by any party under the Intercreditor Agreement for such Series, or the occurrence of a Servicer Default under the Servicing Agreement for such Series, and at the Issuers expense, the Issuer agrees to take all such lawful actions as the Indenture Trustee may request to compel or secure the performance and observance by each of the Seller, the Administrator or the Servicer, and by such party to the Intercreditor Agreement, of their obligations under and in accordance with the Sale Agreement for such Series, the Servicing Agreement for such Series, the Administration Agreement and the Intercreditor Agreement for such Series, as the case may be, in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with such agreements to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of any default by the Seller, the Administrator or the Servicer, respectively, thereunder and the institution of legal or administrative actions or Proceedings to compel or secure performance of their obligations under the Sale Agreement for such Series, the Servicing Agreement for such Series, the Administration Agreement or the Intercreditor Agreement for such Series, as applicable.
SECTION 3.23. Taxes. So long as any of the Nuclear Asset-Recovery Bonds are Outstanding, the Issuer shall pay all taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, business, income or property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental charges would, after any applicable grace periods, notices or other similar requirements, result in a Lien on the Collateral; provided, that no such tax need be paid if the Issuer is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and if the Issuer has established appropriate reserves as shall be required in conformity with generally accepted accounting principles.
SECTION 3.24. Notices from Holders. The Issuer shall promptly transmit any notice received by it from the Holders to the Indenture Trustee.
SECTION 3.25. Volcker Rule. The Issuer is structured so as not to be a covered fund under the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the Volcker Rule.
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.01. Satisfaction and Discharge of Indenture; Defeasance.
(a) This Indenture shall cease to be of further effect with respect to the Nuclear Asset-Recovery Bonds of any Series, and the Indenture Trustee, on reasonable written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Nuclear Asset-Recovery Bonds of such Series, when:
(i) Either:
(A) all Nuclear Asset-Recovery Bonds of such Series theretofore authenticated and delivered (other than (1) Nuclear Asset-Recovery Bonds that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.06 and (2) Nuclear Asset-Recovery Bonds for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in the last paragraph of Section 3.03) have been delivered to the Indenture Trustee for cancellation; or
(B) either (1) the Scheduled Final Payment Date has occurred with respect to all Nuclear Asset-Recovery Bonds of such Series not theretofore delivered to the Indenture Trustee for cancellation or (2) the Nuclear Asset-Recovery Bonds of such Series will be due and payable on their respective Scheduled Final Payment Dates within one year, and, in any such case, the Issuer has irrevocably deposited or caused to be irrevocably deposited in trust with the
Indenture Trustee (i) cash and/or (ii) U.S. Government Obligations that through the scheduled payments of principal and interest in respect thereof in accordance with their terms are in an amount sufficient to pay principal, interest and premium, if any, on the Nuclear Asset-Recovery Bonds of such Series not theretofore delivered to the Indenture Trustee for cancellation, Ongoing Financing Costs and all other sums payable hereunder by the Issuer with respect to the Nuclear Asset-Recovery Bonds of such Series when scheduled to be paid and to discharge the entire indebtedness on the Nuclear Asset-Recovery Bonds of such Series when due;
(ii) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer with respect to such Series; and
(iii) the Issuer has delivered to the Indenture Trustee and the Commission an Officers Certificate, an Opinion of Counsel of external counsel of the Issuer and (if required by the Trust Indenture Act or the Indenture Trustee) an Independent Certificate from a firm of registered public accountants, each meeting the applicable requirements of Section 10.01(a) and each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to the Nuclear Asset-Recovery Bonds of such Series have been complied with.
(b) Subject to Section 4.01(c) and Section 4.02, the Issuer at any time may terminate (i) all its obligations under this Indenture with respect to the Nuclear Asset-Recovery Bonds of any Series (Legal Defeasance Option) or (ii) its obligations under Section 3.04, Section 3.05, Section 3.06, Section 3.07, Section 3.08, Section 3.09, Section 3.10, Section 3.12, Section 3.13, Section 3.14, Section 3.15, Section 3.16, Section 3.17, Section 3.18 and Section 3.19 and the operation of Section 5.01(c) with respect to the Nuclear Asset-Recovery Bonds of any Series (Covenant Defeasance Option). The Issuer may exercise the Legal Defeasance Option with respect to any Series of the Nuclear Asset-Recovery Bonds notwithstanding its prior exercise of the Covenant Defeasance Option with respect to such Series.
If the Issuer exercises the Legal Defeasance Option with respect to any Series, the maturity of the Nuclear Asset-Recovery Bonds of such Series may not be accelerated because of an Event of Default. If the Issuer exercises the Covenant Defeasance Option with respect to any Series, the maturity of the Nuclear Asset-Recovery Bonds of such Series may not be accelerated because of an Event of Default specified in Section 5.01(c).
Upon satisfaction of the conditions set forth herein to the exercise of the Legal Defeasance Option or the Covenant Defeasance Option with respect to any Series of the Nuclear Asset-Recovery Bonds, the Indenture Trustee, on reasonable written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of the obligations that are terminated pursuant to such exercise.
(c) Notwithstanding Section 4.01(a) and Section 4.01(b), (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen
Nuclear Asset-Recovery Bonds, (iii) rights of Holders to receive payments of principal, premium, if any, and interest, (iv) Section 4.03 and Section 4.04, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.03) and (vi) the rights of Holders as beneficiaries hereof with respect to the property deposited with the Indenture Trustee payable to all or any of them, each shall survive until the Nuclear Asset-Recovery Bonds of the Series as to which this Indenture or certain obligations hereunder have been satisfied and discharged pursuant to Section 4.01(a) or Section 4.01(b). Thereafter the obligations in Section 6.07 and Section 4.04 with respect to such Series shall survive.
SECTION 4.02. Conditions to Defeasance. The Issuer may exercise the Legal Defeasance Option or the Covenant Defeasance Option with respect to any Series of the Nuclear Asset-Recovery Bonds only if:
(a) the Issuer has irrevocably deposited or caused to be irrevocably deposited in trust with the Indenture Trustee (i) cash and/or (ii) U.S. Government Obligations that through the scheduled payments of principal and interest in respect thereof in accordance with their terms are in an amount sufficient to pay principal, interest and premium, if any, on the Nuclear Asset-Recovery Bonds of such Series not therefore delivered to the Indenture Trustee for cancellation and Ongoing Financing Costs and all other sums payable hereunder by the Issuer with respect to the Nuclear Asset-Recovery Bonds of such Series when scheduled to be paid and to discharge the entire indebtedness on the Nuclear Asset-Recovery Bonds of such Series when due;
(b) the Issuer delivers to the Indenture Trustee a certificate from a nationally recognized firm of Independent registered public accountants expressing its opinion that the payments of principal of and interest on the deposited U.S. Government Obligations when due and without reinvestment plus any deposited cash will provide cash at such times and in such amounts (but, in the case of the Legal Defeasance Option only, not more than such amounts) as will be sufficient to pay in respect of the Nuclear Asset-Recovery Bonds of such Series (i) principal in accordance with the Expected Sinking Fund Schedule therefor, (ii) interest when due and (iii) Ongoing Financing Costs and all other sums payable hereunder by the Issuer with respect to the Nuclear Asset-Recovery Bonds of such Series;
(c) in the case of the Legal Defeasance Option, 95 days after the deposit is made and during the 95-day period no Default specified in Section 5.01(e) or Section 5.01(f) occurs that is continuing at the end of the period;
(d) no Default has occurred and is continuing on the day of such deposit and after giving effect thereto;
(e) in the case of an exercise of the Legal Defeasance Option, the Issuer shall have delivered to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer stating that (i) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date of execution of this Indenture, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Nuclear Asset-Recovery Bonds of such Series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such
legal defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such legal defeasance had not occurred;
(f) in the case of an exercise of the Covenant Defeasance Option, the Issuer shall have delivered to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer to the effect that the Holders of the Nuclear Asset-Recovery Bonds of such Series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred;
(g) the Issuer delivers to the Indenture Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent to the Legal Defeasance Option or the Covenant Defeasance Option, as applicable, have been complied with as required by this Article IV;
(h) the Issuer delivers to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer to the effect that: (i) in a case under the Bankruptcy Code in which Duke Energy Florida (or any of its Affiliates, other than the Issuer) is the debtor, the court would hold that the deposited moneys or U.S. Government Obligations would not be in the bankruptcy estate of Duke Energy Florida (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations); and (ii) in the event Duke Energy Florida (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations) were to be a debtor in a case under the Bankruptcy Code, the court would not disregard the separate legal existence of Duke Energy Florida (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations) and the Issuer so as to order substantive consolidation under the Bankruptcy Code of the Issuers assets and liabilities with the assets and liabilities of Duke Energy Florida or such other Affiliate; and
(i) the Rating Agency Condition shall have been satisfied with respect to the exercise of any Legal Defeasance Option or Covenant Defeasance Option.
Notwithstanding any other provision of this Section 4.02, no delivery of moneys or U.S. Government Obligations to the Indenture Trustee shall terminate any obligation of the Issuer to the Indenture Trustee under this Indenture or the applicable Series Supplement or any obligation of the Issuer to apply such moneys or U.S. Government Obligations under Section 4.03 until principal of and premium, if any, and interest on the Nuclear Asset-Recovery Bonds of such Series shall have been paid in accordance with the provisions of this Indenture and the Series Supplement.
SECTION 4.03. Application of Trust Money. All moneys or U.S. Government Obligations deposited with the Indenture Trustee pursuant to Section 4.01 or Section 4.02 shall be held in trust and applied by it, in accordance with the provisions of the Nuclear Asset-Recovery Bonds and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Holders of the particular Nuclear Asset-Recovery Bonds for the payment of which such moneys have been deposited with the Indenture Trustee, of
all sums due and to become due thereon for principal, premium, if any, and interest; but such moneys need not be segregated from other funds except to the extent required herein or in the Servicing Agreement or required by law. Notwithstanding anything to the contrary in this Article IV, the Indenture Trustee shall deliver or pay to the Issuer from time to time upon Issuer Request any moneys or U.S. Government Obligations held by it pursuant to Section 4.02 that, in the opinion of a nationally recognized firm of Independent registered public accountants expressed in a written certification thereof delivered to the Indenture Trustee (and not at the cost or expense of the Indenture Trustee), are in excess of the amount thereof that would be required to be deposited for the purpose for which such moneys or U.S. Government Obligations were deposited; provided, that any such payment shall be subject to the satisfaction of the Rating Agency Condition.
SECTION 4.04. Repayment of Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture or the Covenant Defeasance Option or Legal Defeasance Option with respect to any Series of Nuclear Asset-Recovery Bonds, all moneys with respect to such Series then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.03 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default. Event of Default with respect to any Series means any one or more of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest on any Nuclear Asset-Recovery Bond when the same becomes due and payable (whether such failure to pay interest is caused by a shortfall in Charges received or otherwise), and such default shall continue for a period of five Business Days;
(b) default in the payment of the then unpaid principal of any Nuclear Asset-Recovery Bond of any Series on the Final Maturity Date for such Series, or, if applicable, any WAL on the WAL Maturity Date for such WAL;
(c) default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than defaults specified in Section 5.01(a) or Section 5.01(b)), and such default shall continue or not be cured, for a period of 30 days after the earlier of (i) the date that there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25 percent of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of a Series, a written notice specifying such default and requiring it to be remedied and stating that such notice is a Notice of Default hereunder or (ii) the date that the Issuer has actual knowledge of the default;
(d) any representation or warranty of the Issuer made in this Indenture, a Series Supplement or in any certificate or other writing delivered pursuant hereto or a Series Supplement or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured, within 30 days after the earlier of (i) the date that there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least twenty-five (25) percent of the Outstanding Amount of the Nuclear Asset-Recovery Bonds, a written notice specifying such incorrect representation or warranty and requiring it to be remedied and stating that such notice is a Notice of Default hereunder or (ii) the date the Issuer has actual knowledge of the default;
(e) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Collateral in an involuntary case or proceeding under any applicable U.S. 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 of the Issuer or for any substantial part of the Collateral, or ordering the winding-up or liquidation of the Issuers affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days;
(f) the commencement by the Issuer of a voluntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case or proceeding under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Collateral, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of action by the Issuer in furtherance of any of the foregoing;
(g) any act or failure to act by the State of Florida or any of its agencies (including the Commission), officers or employees that violates the State Pledge or is not in accordance with the State Pledge; or
(h) any other event designated as such in a Series Supplement.
The Issuer shall deliver to a Responsible Officer of the Indenture Trustee and to the Rating Agencies, within five days after a Responsible Officer of the Issuer has knowledge of the occurrence thereof, written notice in the form of an Officers Certificate of any event (i) that is an Event of Default under Section 5.01(a), Section 5.01(b), Section 5.01(f), Section 5.01(g) or Section 5.01(h) or (ii) that with the giving of notice, the lapse of time, or both, would become an Event of Default under Section 5.01(c), Section 5.01(d) or Section 5.01(e), including, in each case, the status of such Default or Event of Default and what action the Issuer is taking or proposes to take with respect thereto. An Event of Default with respect to one Series of Nuclear Asset-Recovery Bonds will not trigger an Event of Default with respect to any other Outstanding Series of Nuclear Asset-Recovery Bonds.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default (other than an Event of Default under Section 5.01(g)) should occur and be continuing with respect to any Series, then and in every such case the Indenture Trustee or the Holders representing a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of such Series may declare the Nuclear Asset-Recovery Bonds of such Series to be immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee and the Commission if given by Holders), and upon any such declaration the unpaid principal amount of the Nuclear Asset-Recovery Bonds of such Series, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Holders representing a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of such Series, by written notice to the Issuer, the Commission and the Indenture Trustee, may rescind and annul such declaration and its consequences if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:
(i) all payments of principal of and premium, if any, and interest on all Nuclear Asset-Recovery Bonds of all Series due and owing at such time as if such Event of Default had not occurred and was not continuing and all other amounts that would then be due hereunder or upon the Nuclear Asset-Recovery Bonds if the Event of Default giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses; provided, that, the Indenture Trustee shall not be obligated to pay or advance any sums hereunder from its own funds after an Event of Default, disbursements and advances of the Indenture Trustee and its agents and counsel; and
(b) all Events of Default with respect to such Series, other than the nonpayment of the principal of the Nuclear Asset-Recovery Bonds of such Series that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) If an Event of Default under Section 5.01(a) or Section 5.01(b) has occurred and is continuing, subject to Section 10.16, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and, subject to the limitations on recourse set forth herein, may enforce the same against the Issuer or other obligor upon the Nuclear Asset-Recovery Bonds of such Series and collect in the manner provided by law out of the property of the Issuer or other obligor upon the Nuclear Asset-Recovery Bonds of
such Series wherever situated the moneys payable, or the Series Collateral and the proceeds thereof, the whole amount then due and payable on the Nuclear Asset-Recovery Bonds of such Series for principal, premium, if any, and interest, with interest upon the overdue principal and premium, if any, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest, at the respective rate borne by the Nuclear Asset-Recovery Bonds of such Series or the applicable WAL of such Series and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.
(b) If an Event of Default (other than Event of Default under Section 5.01(g)) occurs and is continuing, the Indenture Trustee shall, as more particularly provided in Section 5.04, proceed to protect and enforce its rights and the rights of the Holders, by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture and each Series Supplement or by law, including foreclosing or otherwise enforcing the Lien of the Collateral securing the Nuclear Asset-Recovery Bonds or applying to the Commission or a court of competent jurisdiction for sequestration of revenues arising with respect to the Property.
(c) If an Event of Default under Section 5.01(e) or Section 5.01(f) has occurred and is continuing, the Indenture Trustee, irrespective of whether the principal of any Nuclear Asset-Recovery Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section 5.03, shall be entitled and empowered, by intervention in any Proceedings related to such Event of Default or otherwise:
(i) to file and prove a claim or claims for the whole amount of principal, premium, if any, and interest owing and unpaid in respect of the Nuclear Asset-Recovery Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith) and of the Holders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on behalf of the Holders in any election of a trustee in bankruptcy, a standby trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Holders and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Holders allowed in any judicial proceeding relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Holders to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Holders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith.
(d) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Nuclear Asset-Recovery Bonds or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Holder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this Indenture, or under any of the Nuclear Asset-Recovery Bonds of any Series, may be enforced by the Indenture Trustee without the possession of any of the Nuclear Asset-Recovery Bonds of any Series or the production thereof in any trial or other Proceedings relative thereto, and any such action or proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Nuclear Asset-Recovery Bonds of such Series.
SECTION 5.04. Remedies; Priorities.
(a) If an Event of Default (other than an Event of Default under Section 5.01(g)) shall have occurred and be continuing with respect to a Series, the Indenture Trustee may do one or more of the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Nuclear Asset-Recovery Bonds of such Series or under this Indenture with respect thereto, whether by declaration of acceleration or otherwise, and, subject to the limitations on recovery set forth herein, enforce any judgment obtained, and collect from the Issuer or any other obligor moneys adjudged due, upon the Nuclear Asset-Recovery Bonds;
(ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Series Collateral;
(iii) exercise any remedies of a secured party under the UCC, the Nuclear Asset-Recovery Law or any other applicable law and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Nuclear Asset-Recovery Bonds of such Series;
(iv) at the written direction of the Holders of a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of such Series, either sell the Series Collateral or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law, or elect that the Issuer maintain possession of all or a portion of the Series Collateral pursuant to Section 5.05 and continue to apply the Nuclear Asset-Recovery Charge Collection as if there had been no declaration of acceleration; and
(v) exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller, the Administrator or the Servicer under or in connection with, and pursuant to the terms of, the Sale Agreement, the Administration Agreement or the Servicing Agreement;
provided, however, that the Indenture Trustee may not sell or otherwise liquidate any portion of the Series Collateral following such an Event of Default, other than an Event of Default described in Section 5.01(a) or Section 5.01(b), with respect to a Series unless (A) the Holders of 100 percent of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of such Series consent thereto, (B) the proceeds of such sale or liquidation distributable to the Holders are sufficient to discharge in full all amounts then due and unpaid upon the Nuclear Asset-Recovery Bonds of such Series for principal, premium, if any, and interest after taking into account payment of all amounts due prior thereto pursuant to the priorities set forth in Section 8.02(e) or (C) the Indenture Trustee determines that the Series Collateral will not continue to provide sufficient funds for all payments on the Nuclear Asset-Recovery Bonds of such Series as they would have become due if the Nuclear Asset-Recovery Bonds had not been declared due and payable, and the Indenture Trustee obtains the written consent of Holders of at least two-thirds of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of such Series. In determining such sufficiency or insufficiency with respect to clause (B) above and clause (C) above, the Indenture Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Series Collateral for such purpose, at Issuers expense.
(b) If an Event of Default under Section 5.01(g) shall have occurred and be continuing, the Indenture Trustee, for the benefit of the Secured Parties of the related Series, shall be entitled and empowered, to the extent permitted by applicable law, to institute or participate in Proceedings necessary to compel performance of or to enforce the State Pledge and to collect any monetary damages incurred by the Holders or the Indenture Trustee as a result of any such Event of Default, and may prosecute any such Proceeding to final judgment or decree. Such remedy shall be the only remedy that the Indenture Trustee may exercise if the only Event of Default that has occurred and is continuing is an Event of Default under Section 5.01(g).
(c) If the Indenture Trustee collects any money pursuant to this Article V, it shall pay out such money in accordance with the priorities set forth in Section 8.02(e).
SECTION 5.05. Optional Preservation of the Collateral. If the Nuclear Asset-Recovery Bonds of any Series have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of all or a portion of the related Series Collateral. It is the desire of the parties hereto and the Holders that there be at all times sufficient funds for the payment of principal of and premium, if any, and interest on the Nuclear Asset-Recovery Bonds, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Series Collateral. In determining whether to maintain possession of the Series Collateral or sell or liquidate the same, the Indenture Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Series Collateral for such purpose.
SECTION 5.06. Limitation of Suits. No Holder of any Nuclear Asset-Recovery Bond of any Series shall have any right to institute any Proceeding, judicial or otherwise, to avail itself of any remedies provided in the Nuclear Asset-Recovery Law or to avail itself of the right to foreclose on the Series Collateral or otherwise enforce the Lien and the security interest on the Series Collateral with respect to this Indenture and the related Series Supplement, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder previously has given written notice to the Indenture Trustee of a continuing Event of Default with respect to such Series;
(b) the Holders of a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of such Series have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and
(e) no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Holders of a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all Series;
it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders, each representing less than a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all Series, the
Indenture Trustee in its sole discretion may file a petition with a court of competent jurisdiction to resolve such conflict or determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.07. Unconditional Rights of Holders To Receive Principal, Premium, if any, and Interest. Notwithstanding any other provisions in this Indenture, the Holder of any Nuclear Asset-Recovery Bond shall have the right, which is absolute and unconditional, (a) to receive payment of (i) the interest, if any, on such Nuclear Asset-Recovery Bond on the due dates thereof expressed in such Nuclear Asset-Recovery Bond or in this Indenture or (ii) the unpaid principal, if any, of the Nuclear Asset-Recovery Bonds on the Final Maturity Date or WAL Maturity Date therefor and (b) to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture Trustee or any Holder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Holder, then and in every such case the Issuer, the Indenture Trustee and the Holders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Holders shall continue as though no such Proceeding had been instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of the Indenture Trustee or any Holder to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Indenture Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Holders, as the case may be.
SECTION 5.11. Control by Holders. The Holders of a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all Series (or, if less than all Series or WALs are affected, the affected Series or WAL or WALs) shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Nuclear Asset-Recovery Bonds of such Series or WAL or WALs or exercising any trust or power conferred on the Indenture Trustee with respect to such Series or WAL or WALs; provided, that:
(a) such direction shall not be in conflict with any rule of law or with this Indenture or any Series Supplement and shall not involve the Indenture Trustee in any personal liability or expense;
(b) subject to other conditions specified in Section 5.04, any direction to the Indenture Trustee to sell or liquidate any Series Collateral shall be by the Holders representing 100 percent of the Outstanding Amount of the Nuclear Asset-Recovery Bonds in the affected Series;
(c) if the conditions set forth in Section 5.05 have been satisfied and the Indenture Trustee elects to retain the Series Collateral pursuant to Section 5.05, then any direction to the Indenture Trustee by Holders representing less than 100 percent of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of the affected Series to sell or liquidate the Series Collateral shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction;
provided, however, that the Indenture Trustees duties shall be subject to Section 6.01, and the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Holders not consenting to such action. Furthermore and without limiting the foregoing, the Indenture Trustee shall not be required to take any action for which it reasonably believes that it will not be indemnified to its satisfaction against any cost, expense or liabilities.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the acceleration of the maturity of the Nuclear Asset-Recovery Bonds of all Series as provided in Section 5.02, the Holders representing a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of an affected Series, with the written consent of the Commission, may waive any past Default or Event of Default and its consequences except a Default (a) in payment of principal of or premium, if any, or interest on any of the Nuclear Asset-Recovery Bonds or (b) in respect of a covenant or provision hereof that cannot be modified or amended without the consent of the Holder of each Nuclear Asset-Recovery Bond of all Series or WALs affected. In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders shall be restored to their former positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Nuclear Asset-Recovery Bond by such Holders acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.13 shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Holder, or group of Holders, in each case holding in the aggregate more than ten percent of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of a Series or (c) any suit instituted by any Holder for the enforcement of the payment of (i) interest on any Nuclear Asset-Recovery Bond on or after the due dates expressed in such Nuclear Asset-Recovery Bond and in this Indenture or (ii) the unpaid principal, if any, of any Nuclear Asset-Recovery Bond on or after the Final Maturity Date or WAL Maturity Date therefor.
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon or plead or, in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
SECTION 5.15. Action on Nuclear Asset-Recovery Bonds. The Indenture Trustees right to seek and recover judgment on the Nuclear Asset-Recovery Bonds or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the Lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Holders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Collateral or any other assets of the Issuer.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) The Indenture Trustee may not be relieved from liability for its own negligent action, its own bad faith, its own negligent failure to act or its own willful misconduct, except that:
(i) this Section 6.01(c) does not limit the effect of Section 6.01(b);
(ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it hereunder.
(d) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to Section 6.01(a), Section 6.01(b) and Section 6.01(c).
(e) The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated from other funds held by the Indenture Trustee except to the extent required by law or the terms of this Indenture, the Sale Agreement, the Servicing Agreement or the Administration Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayments of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section 6.01 and to the provisions of the Trust Indenture Act.
(i) In the event that the Indenture Trustee is also acting as Paying Agent or Nuclear Asset-Recovery Bond Registrar hereunder, the protections of this Article VI shall also be afforded to the Indenture Trustee in its capacity as Paying Agent or Nuclear Asset-Recovery Bond Registrar.
(j) Except for the express duties of the Indenture Trustee with respect to the administrative functions set forth in the Basic Documents, the Indenture Trustee shall have no obligation to administer, service or collect Property or to maintain, monitor or otherwise supervise the administration, servicing or collection of the Charges.
(k) Under no circumstance shall the Indenture Trustee be liable for any indebtedness of the Issuer, the Servicer or the Seller evidenced by or arising under the Nuclear Asset-Recovery Bonds or the Basic Documents.
(l) Commencing with March 15, 2017, on or before March 15th of each fiscal year ending December 31, so long as the Issuer is required to file Exchange Act reports, the Indenture Trustee shall (i) deliver to the Issuer a report (in form and substance reasonably satisfactory to the Issuer and addressed to the Issuer and signed by an authorized officer of the Indenture Trustee) regarding the Indenture Trustees assessment of compliance, during the preceding fiscal year ended December 31, with each of the applicable servicing criteria specified on Exhibit C as required under Rule 13a-18 and Rule 15d-18 under the Exchange Act and Item 1122 of Regulation AB and (ii) deliver to the Issuer a report of an Independent registered public accounting firm reasonably acceptable to the Issuer that attests to and reports on, in accordance with Rule 1-02(a)(3) and Rule 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act, the assessment of compliance made by the Indenture Trustee and delivered pursuant to Section 6.01(l)(i).
SECTION 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may conclusively rely and shall be fully protected in relying on any document believed by it to be genuine and to have been signed or presented by the proper person. The Indenture Trustee need not investigate any fact or matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may require and shall be entitled to receive an Officers Certificate or an Opinion of Counsel, which counsel may be an employee of or counsel to the Issuer or the Seller and which shall be reasonably satisfactory to the Indenture Trustee, or, in the Indenture Trustees sole judgment, external counsel of the Issuer (at no cost or expense to the Indenture Trustee) that such action is required or permitted hereunder. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder. The Indenture Trustee shall give prompt written notice to the Issuer, in which case the Issuer shall then give prompt written notice to the Rating Agencies, of the appointment of any such agent, custodian or nominee to whom it delegates any of its express duties under this Indenture; provided, that the Indenture Trustee shall not be obligated to give such notice (i) if the Issuer or the Holders have directed the Indenture Trustee to appoint such agent, custodian or nominee (in which event the Issuer shall give prompt notice to the Rating Agencies of any such direction) or (ii) of the appointment of any agents, custodians or nominees made at any time that an Event of Default on account of non-payment of principal or interest on the Nuclear Asset-Recovery Bonds or bankruptcy or insolvency of the Issuer has occurred and is continuing.
(d) The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers; provided,
however, that the Indenture Trustees conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Nuclear Asset-Recovery Bonds shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to take any action or exercise any of the rights or powers vested in it by this Indenture or any other Basic Document, or to institute, conduct or defend any litigation hereunder or thereunder or in relation hereto or thereto, at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture and each Series Supplement or otherwise, unless it shall have received security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred.
(g) The Indenture Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
(h) Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request or an Issuer Order.
(i) Whenever in the administration of this Indenture the Indenture Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officers Certificate.
(j) The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Indenture Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Indenture Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer, and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.
(k) In no event shall the Indenture Trustee be responsible or liable for special, indirect or consequential loss or damage of any kind whatsoever (including loss of profit) irrespective of whether the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(l) In no event shall the Indenture Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by,
directly or indirectly, forces beyond its control, including strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, it being understood that the Indenture Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Nuclear Asset-Recovery Bonds and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee. Any Paying Agent, Nuclear Asset-Recovery Bond Registrar, co-registrar or co-paying agent or agent appointed under Section 3.02 may do the same with like rights. However, the Indenture Trustee must comply with Section 6.11 and Section 6.12.
SECTION 6.04. Indenture Trustees Disclaimer.
(a) The Indenture Trustee shall not be responsible for and makes no representation (other than as set forth in Section 6.13) as to the validity or adequacy of this Indenture or the Nuclear Asset-Recovery Bonds, it shall not be accountable for the Issuers use of the proceeds from the Nuclear Asset-Recovery Bonds, and it shall not be responsible for any statement of the Issuer in this Indenture or in any document issued in connection with the sale of the Nuclear Asset-Recovery Bonds or in the Nuclear Asset-Recovery Bonds other than the Indenture Trustees certificate of authentication. The Indenture Trustee shall not be responsible for the form, character, genuineness, sufficiency, value or validity of any of the Collateral (or for the perfection or priority of the Liens thereon), or for or in respect of the Nuclear Asset-Recovery Bonds (other than the certificate of authentication for the Nuclear Asset-Recovery Bonds) or the Basic Documents, and the Indenture Trustee shall in no event assume or incur any liability, duty or obligation to any Holder, other than as expressly provided in this Indenture. The Indenture Trustee shall not be liable for the default or misconduct of the Issuer, the Seller or the Servicer under the Basic Documents or otherwise, and the Indenture Trustee shall have no obligation or liability to perform the obligations of such Persons.
(b) The Indenture Trustee shall not be responsible for (i) the validity of the title of the Issuer to the Collateral, (ii) insuring the Collateral or (iii) the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. The Indenture Trustee shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture or any of the other Basic Documents. The Indenture Trustee shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral.
SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing with respect to any Series, the Indenture Trustee shall mail to each Rating Agency, to the Commission and each Holder of Nuclear Asset-Recovery Bonds of all Series notice of the Default within ten Business Days after actual notice of such Default was received by a Responsible Officer of the
Indenture Trustee (provided that the Indenture Trustee shall give the Rating Agencies prompt notice of any payment default in respect of the Nuclear Asset-Recovery Bonds). Except in the case of a Default in payment of principal of and premium, if any, or interest on any Nuclear Asset-Recovery Bond, the Indenture Trustee may withhold the notice of the Default if and so long as a committee of its Responsible Officers in good faith determines that withholding such notice is in the interests of Holders. In no event shall the Indenture Trustee be deemed to have knowledge of a Default unless a Responsible Officer of the Indenture Trustee shall have actual knowledge of a Default or shall have received written notice thereof.
SECTION 6.06. Reports by Indenture Trustee to Holders.
(a) So long as Nuclear Asset-Recovery Bonds are Outstanding and the Indenture Trustee is the Nuclear Asset-Recovery Bond Registrar and Paying Agent, upon the written request of any Holder or the Issuer, within the prescribed period of time for tax reporting purposes after the end of each calendar year, the Indenture Trustee shall deliver to each relevant current or former Holder such information in its possession as may be required to enable such Holder to prepare its U.S. federal income and any applicable local or state tax returns. If the Nuclear Asset-Recovery Bond Registrar and Paying Agent is other than the Indenture Trustee, such Nuclear Asset-Recovery Bond Registrar and Paying Agent, within the prescribed period of time for tax reporting purposes after the end of each calendar year, shall deliver to each relevant current or former Holder such information in its possession as may be required to enable such Holder to prepare its U.S. federal income and any applicable local or state tax returns.
(b) On or prior to each Payment Date or Special Payment Date therefor, the Indenture Trustee will deliver to each Holder of the Nuclear Asset-Recovery Bonds on such Payment Date or Special Payment Date and the Commission a statement as provided and prepared by the Servicer, which will include (to the extent applicable) the following information (and any other information so specified in the Series Supplement for such Series) as to the Nuclear Asset-Recovery Bonds with respect to such Payment Date or Special Payment Date or the period since the previous Payment Date, as applicable:
(i) the amount of the payment to Holders allocable to principal, if any;
(ii) the amount of the payment to Holders allocable to interest;
(iii) the aggregate Outstanding Amount of the Nuclear Asset-Recovery Bonds, before and after giving effect to any payments allocated to principal reported under Section 6.06(b)(i);
(iv) the difference, if any, between the amount specified in Section 6.06(b)(iii) and the Outstanding Amount specified in the related Expected Sinking Fund Schedule;
(v) any other transfers and payments to be made on such Payment Date or Special Payment Date, including amounts paid to the Indenture Trustee and to the Servicer; and
(vi) the amounts on deposit in the Capital Subaccount and the Excess Funds Subaccount, after giving effect to the foregoing payments.
(c) The Issuer shall send a copy of each of the Certificate of Compliance delivered to it pursuant to Section 3.03 of the Servicing Agreement and the Annual Accountants Report delivered to it pursuant to Section 3.04 of the Servicing Agreement to the Commission, the Rating Agencies, the Indenture Trustee and to the Servicer for posting on the 17g-5 Website in accordance with Rule 17g-5 under the Exchange Act. A copy of such certificate and report may be obtained by any Holder by a request in writing to the Indenture Trustee.
(d) The Indenture Trustee may consult with counsel and the advice or opinion of such counsel with respect to legal matters relating to this Indenture and the Nuclear Asset-Recovery Bonds shall be full and complete authorization and protection from liability with respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. Any reasonable legal fees incurred by the Indenture Trustee shall be payable to the Indenture Trustee from amounts hold in the Collection Account in accordance with the provisions set forth in Section 8.02(e).
SECTION 6.07. Compensation and Indemnity. The Issuer shall pay to the Indenture Trustee from time to time reasonable compensation for its services. The Indenture Trustees compensation shall not, to the extent permitted by law, be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Trustees agents, counsel, accountants and experts. The Issuer shall indemnify and hold harmless the Indenture Trustee and its officers, directors, employees and agents against any and all cost, damage, loss, liability, tax or expense (including reasonable attorneys fees and expenses) incurred by it in connection with the administration and the enforcement of this Indenture, each Series Supplement and the other Basic Documents and the Indenture Trustees rights, powers and obligations under this Indenture, each Series Supplement and the other Basic Documents and the performance of its duties hereunder and thereunder and obligations under or pursuant to this Indenture, each Series Supplement and the other Basic Documents other than any such tax on the compensation of the Indenture Trustee for its services as Indenture Trustee. The Indenture Trustee shall notify the Issuer as soon as is reasonably practicable of any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim, the Indenture Trustee may have separate counsel, and the Issuer shall pay the reasonable fees and expenses of such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustees own willful misconduct, negligence or bad faith.
The payment obligations to the Indenture Trustee pursuant to this Section 6.07 shall survive the discharge of this Indenture and Series Supplements or the earlier resignation or removal of the Indenture Trustee. When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(e) or Section 5.01(f) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable U.S. federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee and Securities Intermediary.
(a) The Indenture Trustee may resign at any time upon 30 days prior written notice to the Issuer subject to Section 6.08(c). The Holders of a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds may remove the Indenture Trustee by so notifying the Indenture Trustee not less than 31 days prior to the date of removal and may appoint a successor Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture Trustee or its property;
(iv) the Indenture Trustee otherwise becomes incapable of acting; or
(v) the Indenture Trustee fails to provide to the Issuer any information reasonably requested by the Issuer pertaining to the Indenture Trustee and necessary for the Issuer or the Sponsor to comply with its respective reporting obligations under the Exchange Act and Regulation AB and such failure is not resolved to the Issuers and the Indenture Trustees mutual satisfaction within a reasonable period of time.
Any removal or resignation of the Indenture Trustee shall also constitute a removal or resignation of the Securities Intermediary.
(b) If the Indenture Trustee gives notice of resignation or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee and Securities Intermediary.
(c) A successor Indenture Trustee shall deliver a written acceptance of its appointment as the Indenture Trustee and as the Securities Intermediary to the retiring Indenture Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee and Securities Intermediary, as applicable, under this Indenture and the other Basic Documents. No resignation or removal of the Indenture Trustee pursuant to this Section 6.08 shall become effective until acceptance of the appointment by a successor Indenture Trustee having the qualifications set forth in Section 6.11. Notice of any such appointment shall be promptly given to each Rating Agency by the successor Indenture Trustee. The successor Indenture Trustee shall mail a notice of its succession to Holders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.
(d) If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the Nuclear Asset-Recovery Bonds may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee fails to comply with Section 6.11, any Holder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture Trustee pursuant to this Section 6.08, the Issuers obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Indenture Trustee; provided, however, that, if such successor Indenture Trustee is not eligible under Section 6.11, then the successor Indenture Trustee shall be replaced in accordance with Section 6.08. Notice of any such event shall be promptly given to each Rating Agency by the successor Indenture Trustee.
In case at the time such successor or successors by merger, conversion, consolidation or transfer shall succeed to the trusts created by this Indenture any of the Nuclear Asset-Recovery Bonds shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver the Nuclear Asset-Recovery Bonds so authenticated; and, in case at that time any of the Nuclear Asset-Recovery Bonds shall not have been authenticated, any successor to the Indenture Trustee may authenticate the Nuclear Asset-Recovery Bonds either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force that it is anywhere in the Nuclear Asset-Recovery Bonds or in this Indenture provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the trust created by this Indenture or the Collateral may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the trust created by this Indenture or the Collateral, and to vest in such Person or Persons, in such capacity and for the benefit of the Secured Parties, such title to the Collateral, or any part hereof, and, subject to the other provisions of this Section 6.10, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Holders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08. Notice of any such appointment shall be promptly given to each Rating Agency and to the Commission by the Indenture Trustee.
(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Collateral or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then-separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or its attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee shall at all times satisfy the requirements of Section 310(a)(1) of the Trust Indenture Act, Section 310(a)(5) of the Trust Indenture Act and Rule 3a-7 of the Investment Company Act. The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and shall have a long-term debt rating from each of S&P and Fitch in one of its generic rating categories that signifies investment grade. The Indenture Trustee shall comply with Section 310(b) of the Trust Indenture Act, including the optional provision permitted by the second sentence of Section 310(b)(9) of the Trust Indenture
Act; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the Trust Indenture Act any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The Indenture Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship listed in Section 311(b) of the Trust Indenture Act. An Indenture Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 6.13. Representations and Warranties of Indenture Trustee. The Indenture Trustee hereby represents and warrants that:
(a) the Indenture Trustee is a national banking association validly existing and in good standing under the laws of the United States of America; and
(b) the Indenture Trustee has full power, authority and legal right to execute, deliver and perform its obligations under this Indenture and the other Basic Documents to which the Indenture Trustee is a party and has taken all necessary action to authorize the execution, delivery and performance of obligations by it of this Indenture and such other Basic Documents.
SECTION 6.14. Annual Report by Independent Registered Public Accountants. The Indenture Trustee hereby covenants that it will cooperate fully with the firm of Independent registered public accountants performing the procedures required under Section 3.04 of the Servicing Agreement, it being understood and agreed that the Indenture Trustee will so cooperate in conclusive reliance upon the direction of the Issuer, and the Indenture Trustee makes no independent inquiry or investigation to, and shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures.
SECTION 6.15. Custody of Collateral. The Indenture Trustee shall hold such of the Collateral (and any other collateral that may be granted to the Indenture Trustee) as consists of instruments, deposit accounts, negotiable documents, money, goods, letters of credit and advices of credit in the State of New York. The Indenture Trustee shall hold such of the Collateral as constitute investment property through the Securities Intermediary (which, as of the date hereof, is The Bank of New York Mellon Trust Company). The initial Securities Intermediary hereby agrees (and each future Securities Intermediary shall agree) with the Indenture Trustee that (a) such investment property shall at all times be credited to a securities account of the Indenture Trustee, (b) the Securities Intermediary shall treat the Indenture Trustee as entitled to exercise the rights that comprise each financial asset credited to such securities account, (c) all property credited to such securities account shall be treated as a financial asset, (d) the Securities Intermediary shall comply with entitlement orders originated by the Indenture Trustee without the further consent of any other Person, (e) the Securities Intermediary will not agree with any Person other than the Indenture Trustee to comply with entitlement orders originated by such other Person, (f) such securities accounts and the property credited thereto shall not be subject to any Lien or right of set-off in favor of the Securities Intermediary or anyone claiming through it (other than the Indenture Trustee) and (g) such agreement shall be
governed by the internal laws of the State of New York. Terms used in the preceding sentence that are defined in the UCC and not otherwise defined herein shall have the meaning set forth in the UCC. Except as permitted by this Section 6.15 or elsewhere in this Indenture, the Indenture Trustee shall not hold Collateral through an agent or a nominee.
ARTICLE VII
HOLDERS LISTS AND REPORTS
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of Holders. The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after the earlier of (i) each Record Date with respect to each Series and (ii) six months after the last Record Date with respect to each Series, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders of such Series as of such Record Date, and (b) at such other times as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than ten days prior to the time such list is furnished; provided, however, that, so long as the Indenture Trustee is the Nuclear Asset-Recovery Bond Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to Holders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Holders received by the Indenture Trustee in its capacity as Nuclear Asset-Recovery Bond Registrar. The Indenture Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.
(b) Holders may communicate pursuant to Section 312(b) of the Trust Indenture Act with other Holders with respect to their rights under this Indenture or under the Nuclear Asset-Recovery Bonds. In addition, upon the written request of any Holder or group of Holders of any Series or of all Outstanding Series of Nuclear Asset-Recovery Bonds evidencing at least 10 percent of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of that Series or of all Series, as applicable, the Indenture Trustee shall afford the Holder or Holders making such request a copy of a current list of Holders for purposes of communicating with other Holders with respect to their rights hereunder; provided, that the Indenture Trustee gives prior written notice to the Issuer of such request.
(c) The Issuer, the Indenture Trustee and the Nuclear Asset-Recovery Bond Registrar shall have the protection of Section 312(c) of the Trust Indenture Act.
SECTION 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) so long as the Issuer or the Sponsor is required to file such documents with the SEC, provide to the Indenture Trustee and the Commission, within 15 days after the
Issuer is required to file the same with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may from time to time by rules and regulations prescribe) that the Issuer or the Sponsor may be required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) provide to the Indenture Trustee and the Commission and file with the SEC, in accordance with rules and regulations prescribed from time to time by the SEC, such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to all Holders described in Section 313(c) of the Trust Indenture Act) and the Commission, such summaries of any information, documents and reports required to be filed by the Issuer pursuant to Section 7.03(a)(i) and Section 7.03(a)(ii) as may be required by rules and regulations prescribed from time to time by the SEC.
Except as may be provided by Section 313(c) of the Trust Indenture Act, the Issuer may fulfill its obligation to provide the materials described in this Section 7.03(a) by providing such materials in electronic format.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year and will promptly notify the Indenture Trustee regarding any change in fiscal year.
SECTION 7.04. Reports by Indenture Trustee. If required by Section 313(a) of the Trust Indenture Act, within 60 days after March 30 of each year, commencing with March 30, 2017, the Indenture Trustee shall mail to each Holder as required by Section 313(c) of the Trust Indenture Act a brief report dated as of such date that complies with Section 313(a) of the Trust Indenture Act. The Indenture Trustee also shall comply with Section 313(b) of the Trust Indenture Act; provided, however, that the initial report if required to be so issued shall be delivered not more than 12 months after the initial issuance of each Series of the Nuclear Asset-Recovery Bonds.
A copy of each report at the time of its mailing to Holders shall be filed by the Servicer with the SEC and each stock exchange, if any, on which the Nuclear Asset-Recovery Bonds are listed. The Issuer shall notify the Indenture Trustee in writing if and when the Nuclear Asset-Recovery Bonds are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money. Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this
Indenture and the other Basic Documents. The Indenture Trustee shall apply all such money received by it as provided in this Indenture within two (2) Business Days. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Collateral, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, subject to Article VI, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Collection Account.
(a) Prior to the Series Closing Date for the first Series issued hereunder, the Issuer shall open or cause to be opened with the Securities Intermediary located at the Indenture Trustees office, or at another Eligible Institution, one or more segregated trust accounts in the Indenture Trustees name for the deposit of Nuclear Asset-Recovery Charge Collections for each Series of Bonds and all other amounts received with respect to the Series Collateral servicing such Series of Bonds (each a Collection Account and collectively, the Collection Accounts). The Indenture Trustee shall hold each Collection Account for the benefit of the related Holders, the Indenture Trustee and the other persons indemnified hereunder. There shall be established by the Indenture Trustee in respect of each Collection Account three subaccounts: a general subaccount (the General Subaccount); an excess funds subaccount (the Excess Funds Subaccount); a capital subaccount (the Capital Subaccount) and, together with the General Subaccount and the Excess Funds Subaccount, the Subaccounts). For administrative purposes, the Subaccounts may be established by the Securities Intermediary as separate accounts. Such separate accounts will be recognized individually as a Subaccount and collectively as the Collection Account. Prior to or concurrently with the issuance of each Series of Nuclear Asset-Recovery Bonds, the Member shall deposit into the Capital Subaccount for such Series an amount equal to the Required Capital Level. All amounts in the Collection Account for such Series not allocated to any other subaccount shall be allocated to the General Subaccount for such Series. Prior to the initial Payment Date for each Series, all amounts in the Collection Account for such Series (other than funds deposited into the Capital Subaccount for such Series up to the Required Capital Level) shall be allocated to the General Subaccount for such Series. All references to a Collection Account shall be deemed to include reference to all subaccounts contained therein. Withdrawals from and deposits to each of the foregoing subaccounts of the Collection Account shall be made as set forth in Section 8.02(d) and Section 8.02(e). The Collection Account for such Series shall at all times be maintained in an Eligible Account and will be under the sole dominion and exclusive control of the Indenture Trustee, through the Securities Intermediary, and only the Indenture Trustee shall have access to the applicable Collection Account for the purpose of making deposits in and withdrawals from the applicable Collection Account in accordance with this Indenture. Funds in a Collection Account shall not be commingled with any other moneys. All moneys deposited from time to time in the Collection Account for such Series, all deposits therein pursuant to this Indenture and all investments made in Eligible Investments as directed in writing by the Issuer with such moneys, including all income or other gain from such investments, shall be held by the Securities Intermediary in the Collection Account for such Series as part of the Series Collateral as herein provided. The Securities Intermediary shall have no liability in respect of losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or its date of
redemption or the failure of the Issuer or the Servicer to provide timely written investment direction.
(b) The Securities Intermediary hereby confirms that (i) each Collection Account is, or at inception will be established as, a securities account as such term is defined in Section 8-501(a) of the UCC, (ii) it is a securities intermediary (as such term is defined in Section 8-102(a)(14) of the UCC) and is acting in such capacity with respect to such accounts, (iii) the Indenture Trustee for the benefit of the Secured Parties is the sole entitlement holder (as such term is defined in Section 8-102(a)(7) of the UCC) with respect to such accounts and (iv) no other Person shall have the right to give entitlement orders (as such term is defined in Section 8-102(a)(8)) with respect to such accounts. The Securities Intermediary hereby further agrees that each item of property (whether investment property, financial asset, security, instrument or cash) received by it will be credited to the applicable Collection Account and shall be treated by it as a financial asset within the meaning of Section 8-102(a)(9) of the UCC. Notwithstanding anything to the contrary, the State of New York shall be deemed to be the jurisdiction of the Securities Intermediary for purposes of Section 8-110 of the UCC, and the Collection Accounts (as well as the securities entitlements related thereto) shall be governed by the laws of the State of New York.
(c) The Indenture Trustee shall have sole dominion and exclusive control over all moneys in the applicable Collection Account through the Securities Intermediary and shall apply such amounts therein as provided in this Section 8.02.
(d) Nuclear Asset-Recovery Charge Collections shall be deposited in the applicable General Subaccount as provided in Section 6.11 of the Servicing Agreement. All deposits to and withdrawals from the Collection Account, all allocations to the subaccounts of the Collection Account and any amounts to be paid to the Servicer under Section 8.02(e) shall be made by the Indenture Trustee in accordance with the written instructions provided by the Servicer in the Monthly Servicers Certificate or the Semi-Annual Servicers Certificate.
(e) On each Payment Date for any Series of Bonds, the Indenture Trustee shall apply all amounts on deposit in the applicable Collection Account, including all Investment Earnings thereon, in accordance with the Semi-Annual Servicers Certificate, in the following priority:
(i) payment of the Indenture Trustees fees, expenses and outstanding indemnity amounts shall be paid to the Indenture Trustee (subject to Section 6.07) in an amount not to exceed the amount set forth in the Series Supplement;
(ii) payment of the Servicing Fee with respect to such Payment Date, plus any unpaid Servicing Fees for prior Payment Dates shall be paid to the Servicer;
(iii) payment of the allocable share of the Administration Fee for such Payment Date shall be paid to the Administrator and the Independent Manager Fee for such Payment Date shall be paid to the Independent Managers, and in each case with any unpaid Administration Fees or Independent Manager Fees from prior Payment Dates;
(iv) payment of all other ordinary periodic Operating Expenses for such Payment Date not described above shall be paid to the parties to which such Operating Expenses are owed;
(v) payment of Periodic Interest for such Payment Date with respect to such Series, including any overdue Periodic Interest (together with, to the extent lawful, interest on such overdue Periodic Interest at the applicable Bond Interest Rate), with respect to the Nuclear Asset-Recovery Bonds shall be paid to the Holders of Nuclear Asset-Recovery Bonds;
(vi) payment of the principal required to be paid on the Nuclear Asset-Recovery Bonds of the Series on the WAL Maturity Date or as a result of an acceleration upon an Event of Default shall be paid to the Holders of Nuclear Asset-Recovery Bonds;
(vii) payment of Periodic Principal for such Payment Date, including any previously unpaid Periodic Principal, with respect to the Nuclear Asset-Recovery Bonds shall be paid to the Holders of Nuclear Asset-Recovery Bonds, pro rata if there is a deficiency;
(viii) payment of the allocable share of any other unpaid Operating Expenses (including any such amounts owed to the Indenture Trustee but unpaid due to the limitation in Section 8.02(e)(i)) and any remaining amounts owed pursuant to the Basic Documents shall be paid to the parties to which such Operating Expenses or remaining amounts are owed;
(ix) replenishment of the amount, if any, by which the Required Capital Level exceeds the amount in the Capital Subaccount as of such Payment Date shall be allocated to the Capital Subaccount;
(x) the Return on Invested Capital then due and payable shall be paid to Duke Energy Florida;
(xi) the balance, if any, shall be allocated to the Excess Funds Subaccount; and
(xii) after the Nuclear Asset-Recovery Bonds have been paid in full and discharged, and all of the other foregoing amounts are paid in full, together with all amounts due and payable to the Indenture Trustee under Section 6.07 or otherwise, the balance (including all amounts then held in the Capital Subaccount and the Excess Funds Subaccount), if any, shall be paid to the Issuer, free from the Lien of this Indenture and the applicable Series Supplement.
All payments to the Holders of the Nuclear Asset-Recovery Bonds pursuant to Section 8.02(e)(v), Section 8.02(e)(vi) and Section 8.02(e)(vii) shall be made to such Holders pro rata based on the respective amounts of interest and/or principal owed, unless, in the case of a Series of Nuclear Asset-Recovery Bonds comprised of two or more WALs, the Series Supplement provides otherwise. Payments in respect of principal of and premium, if any, and interest on any WAL of Nuclear Asset-Recovery Bonds will be made on a pro rata basis among all the Holders of such WAL. In the case of an Event of Default, then, in accordance with
Section 5.04(c), in respect of any application of moneys pursuant to Section 8.02(e)(v) or Section 8.02(e)(vi), moneys will be applied pursuant to Section 8.02(e)(v) and Section 8.02(e)(vi), as the case may be, in such order, on a pro rata basis, based upon the interest or the principal owed.
(f) If on any Payment Date, or, for any amounts payable under Section 8.02(e)(i), Section 8.02(e)(ii), Section 8.02(e)(iii) and Section 8.02(e)(iv), on any Business Day, funds on deposit in the General Subaccount are insufficient to make the payments contemplated by Section 8.02(e)(i), Section 8.02(e)(ii), Section 8.02(e)(iii), Section 8.02(e)(iv), Section 8.02(e)(v), Section 8.02(e)(vi), Section 8.02(e)(vii), Section 8.02(e)(viii) and Section 8.02(e)(iv), the Indenture Trustee shall (i) first, draw from amounts on deposit in the Excess Funds Subaccount, and (ii) second, draw from amounts on deposit in the Capital Subaccount, in each case, up to the amount of such shortfall in order to make the payments contemplated by Section 8.02(e)(i), Section 8.02(e)(ii), Section 8.02(e)(iii), Section 8.02(e)(iv), Section 8.02(e)(v), Section 8.02(e)(vi), Section 8.02(e)(vii) and Section 8.02(e)(viii). In addition, if on any Payment Date funds on deposit in the General Subaccount are insufficient to make the allocations contemplated by Section 8.02(e)(ix), the Indenture Trustee shall draw any amounts on deposit in the Excess Funds Subaccount to make such allocations to the Capital Subaccount.
(g) On any Business Day upon which the Indenture Trustee receives a written request from the Administrator stating that any Operating Expense payable by the Issuer (but only as described in Section 8.02(e)(i), Section 8.02(e)(ii), Section 8.02(e)(iii) and Section 8.02(e)(iv)) will become due and payable prior to the next Payment Date, and setting forth the amount and nature of such Operating Expense, as well as any supporting documentation that the Indenture Trustee may reasonably request, the Indenture Trustee, upon receipt of such information, will make payment of such Operating Expenses on or before the date such payment is due from amounts on deposit in the General Subaccount, the Excess Funds Subaccount and the Capital Subaccount, in that order and only to the extent required to make such payment.
SECTION 8.03. General Provisions Regarding the Collection Account.
(a) So long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Collection Account for each Series shall be invested in Eligible Investments and reinvested by the Indenture Trustee upon Issuer Order; provided, however, that such Eligible Investments shall not mature or be redeemed later than the Business Day prior to the next Payment Date or Special Payment Date for the related Series or WAL, if applicable, for the Nuclear Asset-Recovery Bonds. All income or other gain from investments of moneys deposited in the Collection Account for the relevant Series shall be deposited by the Indenture Trustee in such Collection Account, and any loss resulting from such investments shall be charged to the Collection Account for the relevant Series. The Issuer will not direct the Indenture Trustee to make any investment of any funds or to sell any investment held in any Collection Account unless the security interest Granted and perfected in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment or sale, if requested by the Indenture Trustee, the Issuer
shall deliver to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer (at the Issuers cost and expense) to such effect. In no event shall the Indenture Trustee be liable for the selection of Eligible Investments or for investment losses incurred thereon. The Indenture Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or its date of redemption or the failure of the Issuer or the Servicer to provide timely written investment direction. The Indenture Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of written investment direction pursuant to an Issuer Order.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any way be held liable by reason of any insufficiency in the Collection Account resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustees failure to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give written investment directions for any funds on deposit in the Collection Account to the Indenture Trustee by 11:00 a.m. New York City time (or such other time as may be agreed by the Issuer and Indenture Trustee) on any Business Day or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Nuclear Asset-Recovery Bonds but the Nuclear Asset-Recovery Bonds shall not have been declared due and payable pursuant to Section 5.02, then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in such Collection Account in Eligible Investments specified in the most recent written investment directions delivered by the Issuer to the Indenture Trustee; provided, that if the Issuer has never delivered written investment directions to the Indenture Trustee, the Indenture Trustee shall not invest or reinvest such funds in any investments.
(d) The parties hereto acknowledge that the Servicer may, pursuant to the Servicing Agreement, select Eligible Investments on behalf of the Issuer.
(e) Except as otherwise provided hereunder or agreed in writing among the parties hereto, the Issuer shall retain the authority to institute, participate and join in any plan of reorganization, readjustment, merger or consolidation with respect to the issuer of any Eligible Investments held hereunder, and, in general, to exercise each and every other power or right with respect to each such asset or investment as Persons generally have and enjoy with respect to their own assets and investment, including power to vote upon any Eligible Investments.
SECTION 8.04. Release of Collateral.
(a) So long as the Issuer is not in default hereunder and no Default hereunder would occur as a result of such action, the Issuer, through the Servicer, may collect, sell or otherwise dispose of written-off receivables, at any time and from time to time in the ordinary course of business, without any notice to, or release or consent by, the Indenture Trustee, but only as and to the extent permitted by the Basic Documents; provided, however, that any and all proceeds of such dispositions shall become Collateral and be deposited to the General Subaccount immediately upon receipt thereof by the Issuer or any other Person, including the Servicer. Without limiting the foregoing, the Servicer, may, at any time and from time to time
without any notice to, or release or consent by, the Indenture Trustee, sell or otherwise dispose of any Collateral previously written-off as a defaulted or uncollectible account in accordance with the terms of the Servicing Agreement and the requirements of the proviso in the preceding sentence.
(b) The Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the Lien of this Indenture, or convey the Indenture Trustees interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture. No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustees authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys. The Indenture Trustee shall release property from the Lien of this Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer Request accompanied by an Officers Certificate, an Opinion of Counsel of external counsel of the Issuer (at the Issuers cost and expense) and (if required by the Trust Indenture Act) Independent Certificates in accordance with Section 314(c) of the Trust Indenture Act and Section 314(d)(1) of the Trust Indenture Act meeting the applicable requirements of Section 10.01.
(c) The Indenture Trustee shall, at such time as there are no Nuclear Asset-Recovery Bonds Outstanding for the related Series and all sums payable to the Indenture Trustee pursuant to Section 6.07 or otherwise have been paid, release any remaining portion of the Series Collateral that secured the Nuclear Asset-Recovery Bonds for the related Series from the Lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds or investments then on deposit in or credited to the Collection Account for such Series.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive at least seven days notice when requested by the Issuer to take any action pursuant to Section 8.04, accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, as a condition to such action, an Opinion of Counsel of external counsel of the Issuer, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Nuclear Asset-Recovery Bonds or the rights of the Holders in contravention of the provisions of this Indenture and any Series Supplement; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Collateral. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.
SECTION 8.06. Reports by Independent Registered Public Accountants. As of the date hereof, the Issuer shall appoint a firm of Independent registered public accountants of recognized national reputation for purposes of preparing and delivering the reports or certificates of such accountants required by this Indenture and the Series Supplements. In the event such firm requires the Indenture Trustee to agree to the procedures performed by such firm, the Issuer shall direct the Indenture Trustee in writing to so agree, it being understood and agreed that the Indenture Trustee will deliver such letter of agreement in conclusive reliance upon the direction of the Issuer, and the Indenture Trustee makes no independent inquiry or investigation to, and
shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures. Upon any resignation by, or termination by the Issuer of, such firm, the Issuer shall provide written notice thereof to the Indenture Trustee and shall promptly appoint a successor thereto that shall also be a firm of Independent registered public accountants of recognized national reputation. If the Issuer shall fail to appoint a successor to a firm of Independent registered public accountants that has resigned or been terminated within 15 days after such resignation or termination, the Indenture Trustee shall promptly notify the Issuer of such failure in writing. If the Issuer shall not have appointed a successor within ten days thereafter, the Indenture Trustee shall promptly appoint a successor firm of Independent registered public accountants of recognized national reputation; provided, that the Indenture Trustee shall have no liability with respect to such appointment. The fees of such Independent registered public accountants and its successor shall be payable by the Issuer.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Holders.
(a) Without the consent of the Holders of any Nuclear Asset-Recovery Bonds but with prior notice to the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property, including the Collateral, at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the Lien of this Indenture and the Series Supplements, or to subject to the Lien of this Indenture and the Series Supplements additional property;
(ii) to evidence the succession, in compliance with the applicable provisions hereof, of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Nuclear Asset-Recovery Bonds;
(iii) to add to the covenants of the Issuer, for the benefit of the Secured Parties, or to surrender any right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture, including any Series Supplement, that may be inconsistent with any other provision herein or in any supplemental indenture, including any Series Supplement, or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that (A) such action shall not, as evidenced by an Opinion of Counsel of external counsel of the Issuer,
adversely affect in any material respect the interests of the Holders of the Nuclear Asset-Recovery Bonds and (B) the Rating Agency Condition shall have been satisfied with respect thereto;
(vi) to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Nuclear Asset-Recovery Bonds and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI;
(vii) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the Trust Indenture Act and to add to this Indenture such other provisions as may be expressly required by the Trust Indenture Act;
(viii) to qualify the Nuclear Asset-Recovery Bonds for registration with a Clearing Agency;
(ix) to satisfy any Rating Agency requirements;
(x) to set forth the terms of any Series that has not theretofore been authorized by a Series Supplement; or
(xi) to authorize the appointment of any fiduciary for any WAL required or advisable with the listing of any WAL on any stock exchange and otherwise amend this Indenture to incorporate changes requested or required by any government authority, stock exchange authority or fiduciary or any WAL in connection with such listing.
The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Nuclear Asset-Recovery Bonds, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Nuclear Asset-Recovery Bonds under this Indenture; provided, however, that (i) such action shall not, as evidenced by an Opinion of Counsel of nationally recognized counsel of the Issuer experienced in structured finance transactions, adversely affect in any material respect the interests of the Holders and (ii) the Rating Agency Condition shall have been satisfied with respect thereto.
SECTION 9.02. Supplemental Indentures with Consent of Holders. The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior notice to the Rating Agencies and with the consent of the Holders of a majority of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of each Series or WAL to be affected, by Act of such Holders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Nuclear Asset-Recovery Bonds under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Nuclear Asset-Recovery Bond of each Series or WAL affected thereby:
(i) change the date of payment of any installment of principal of or premium, if any, or interest on any Nuclear Asset-Recovery Bond of such Series or WAL, or reduce the principal amount thereof, the interest rate thereon or premium, if any, with respect thereto;
(ii) change the provisions of this Indenture and the related applicable Series Supplement relating to the application of collections on, or the proceeds of the sale of, the Collateral to payment of principal of or premium, if any, or interest on the Nuclear Asset-Recovery Bonds of such Series or WAL, or change any place of payment where, or the coin or currency in which, any Nuclear Asset-Recovery Bond of such Series or WAL or the interest thereon is payable;
(iii) reduce the percentage of the Outstanding Amount of the Nuclear Asset-Recovery Bonds or of a Series or WAL thereof, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;
(iv) reduce the percentage of the Outstanding Amount of the Nuclear Asset-Recovery Bonds required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Series Collateral pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 or any provision of the other Basic Documents similarly specifying the rights of the Holders to consent to modification thereof, except to increase any percentage specified herein or to provide that those provisions of this Indenture or the other Basic Documents referenced in this Section 9.02 cannot be modified or waived without the consent of the Holder of each Outstanding Nuclear Asset-Recovery Bond affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest, principal or premium, if any, due on any Nuclear Asset-Recovery Bond on any Payment Date (including the calculation of any of the individual components of such calculation) or change the Expected Sinking Fund Schedule or Final Maturity Date of Nuclear Asset-Recovery Bonds;
(vii) decrease the Required Capital Level with respect to any Series;
(viii) permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Collateral or, except as otherwise permitted or contemplated herein, terminate the Lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Nuclear Asset-Recovery Bond of the security provided by the Lien of this Indenture;
(ix) cause any material adverse U.S. federal income tax consequence to the Seller, the Issuer, the Managers, the Indenture Trustee or the then-existing Holders; or
(x) impair the right to institute suit for the enforcement of the provisions of this Indenture regarding payment or application of funds.
It shall not be necessary for any Act of Holders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section 9.02, the Issuer shall mail to the Rating Agencies a copy of such supplemental indenture and to the Holders of the Nuclear Asset-Recovery Bonds to which such supplemental indenture relates either a copy of such supplemental indenture or a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Commission Condition. Notwithstanding anything to the contrary in this Section 9.01 or 9.02, no indenture or indentures supplemental to this Indenture, nor any waiver required by Section 5.12 hereof, shall be effective except upon satisfaction of the conditions precedent in this Section 9.03.
(a) At least 15 days prior to the effectiveness of any such Supplemental Indenture or other action and after obtaining the other necessary approvals set forth in Section 9.02 (except that the consent of the Indenture Trustee may be subject to the consent of the Holders if such consent is required or sought by the Indenture Trustee in connection with such Supplemental Indenture) or prior to the effectiveness of any waiver of a default approved by the Holders of a majority of the Outstanding Amount of all Series of Nuclear Asset-Recovery Bonds as provided in Section 5.12, the Servicer shall have delivered to the Commissions Staff Director of Accounting & Finance written notification of any proposed amendment, which notification shall contain:
(i) a reference to Docket No. 150148-EI;
(ii) an Officers Certificate stating that the proposed Supplemental Indenture has been approved by all parties to this Indenture or alternatively, the waiver of default has been approved by the Holders of a majority of the Outstanding Amount of Nuclear Asset-Recovery Bonds of all Series; and
(iii) a statement identifying the person to whom the Commission is to address any response to the proposed Supplemental Indenture or to request additional time.
(b) If the Commission or an authorized representative of the Commission, within 15 days (subject to extension as provided in Section 9.03(c)) of receiving a notification complying with Section 9.03(a), shall have delivered to the office of the person specified in Section 9.03(a)(iii) a written statement that the Commission might object to the proposed Supplemental Indenture, or to the waiver of default, then, subject to clause (d) below, such
proposed amendment or modification, or the waiver of default, shall not be effective unless and until the Commission subsequently delivers a written statement that it does not object to such proposed Supplemental Indenture.
(c) If the Commission or an authorized representative of the Commission, within 15 days of receiving a notification complying with Section 9.03(a), shall have delivered to the office of the person specified in Section 9.03(a)(iii) a written statement requesting an additional amount of time not to exceed thirty days (or, in the case of a waiver of default, 15 days) in which to consider such proposed Supplemental Indenture, then such proposed Supplemental Indenture shall not be effective if, within such extended period, the Commission shall have delivered to the office of the person specified in clause (d) below a written statement as described in subparagraph (iii), unless and until the Commission subsequently delivers a written statement that it does not object to such proposed Supplemental Indenture.
(d) If (A) the Commission or an authorized representative of the Commission, shall not have delivered written notice that the Commission might object to such proposed Supplemental Indenture, or the waiver of default, within the time periods described in subparagraphs (iii) or (iii), whichever is applicable, or (B) the Commission or authorized representative of the Commission, has delivered such written notice but does not within 60 days of the delivery of the notification in (a) above, provide subsequent written notice confirming that it does in fact object and the reasons therefore or advise that it has initiated a proceeding to determine what action it might take with respect to the matter, then the Commission shall be conclusively deemed not to have any objection to the proposed amendment or modification or waiver of default, as the case may be, and such amendment or modification or waiver of default, as the case may be, may subsequently become effective upon satisfaction of the other conditions specified in Section 9.01 or 9.02.
(e) Following the delivery of a statement from the Commission or an authorized representative of the Commission to the Servicer under subparagraph (iii), the Servicer and the Issuer shall have the right at any time to withdraw from the Commission further consideration of any proposed Supplemental Indenture, modification or waiver of default.
(f) For the purpose of this Section 9.03, an authorized representative of the Commission means any person authorized to act on behalf of the Commission, as evidenced by an Opinion of Counsel (which may be the general counsel) to the Commission.
(g) For the avoidance of doubt, this Section shall not apply to Series Supplements prepared in accordance with Section 9.01(a)(x).
SECTION 9.04. Execution of Supplemental Indentures. In executing any supplemental indenture permitted by this Article IX or the modifications thereby of the trust created by this Indenture, the Indenture Trustee shall be fully protected in relying upon an Opinion of Counsel stating that the execution of such supplemental indenture is authorized and permitted by this Indenture and all conditions precedent, if any, provided for in this Indenture relating to such supplemental indenture or modification have been satisfied. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustees own rights, duties, liabilities or immunities under this Indenture or
otherwise. All fees and expenses in connection with any such supplemental indenture shall be paid by the requesting party.
SECTION 9.05. Effect of Supplemental Indenture. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to each Series or WAL of Nuclear Asset-Recovery Bonds affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Holders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.06. Conformity with Trust Indenture Act. Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act.
SECTION 9.07. Reference in Nuclear Asset-Recovery Bonds to Supplemental Indentures. Nuclear Asset-Recovery Bonds authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Nuclear Asset-Recovery Bonds so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Nuclear Asset-Recovery Bonds.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officers Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel the amendment is authorized and permitted and all such conditions precedent, if any, have been complied with and (iii) (if required by the Trust Indenture Act) an Independent Certificate from a firm of registered public accountants meeting the applicable requirements of this Section 10.01, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.
(b) Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the Lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 10.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officers Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited.
(c) Whenever the Issuer is required to furnish to the Indenture Trustee an Officers Certificate certifying or stating the opinion of any signer thereof as to the matters described in Section 10.01(b), the Issuer shall also deliver to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuer of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to Section 10.01(b) and this Section 10.01(c), is ten percent or more of the Outstanding Amount of the Nuclear Asset-Recovery Bonds, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officers Certificate is less than the lesser of (A) $25,000 or (B) one percent of the Outstanding Amount of the Nuclear Asset-Recovery Bonds.
(d) Whenever any property or securities are to be released from the Lien of this Indenture other than pursuant to Section 8.02(e), the Issuer shall also furnish to the Indenture Trustee an Officers Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.
(e) Whenever the Issuer is required to furnish to the Indenture Trustee an Officers Certificate certifying or stating the opinion of any signatory thereof as to the matters
described in Section 10.01(d), the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities with respect thereto, or securities released from the Lien of this Indenture (other than pursuant to Section 8.02(e)) since the commencement of the then-current calendar year, as set forth in the certificates required by Section 10.01(d) and this Section 10.01(e), equals 10 percent or more of the Outstanding Amount of the Nuclear Asset-Recovery Bonds, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officers Certificate is less than the lesser of (A) $25,000 or (B) one percent of the then Outstanding Amount of the Nuclear Asset-Recovery Bonds.
(f) Notwithstanding any other provision of this Section 10.01, the Indenture Trustee may (A) collect, liquidate, sell or otherwise dispose of the Nuclear Asset-Recovery Property and the other Collateral as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Collection Account as and to the extent permitted or required by the Basic Documents.
SECTION 10.02. Form of Documents Delivered to Indenture Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of a Responsible Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous. Any such certificate of a Responsible Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer or the Issuer stating that the information with respect to such factual matters is in the possession of the Servicer or the Issuer, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuers compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustees right to rely conclusively upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
SECTION 10.03. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agents duly appointed in writing, and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the Act of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 10.03.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.
(c) The ownership of Nuclear Asset-Recovery Bonds shall be proved by the Nuclear Asset-Recovery Bond Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Nuclear Asset-Recovery Bonds shall bind the Holder of every Nuclear Asset-Recovery Bond issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Nuclear Asset-Recovery Bond.
SECTION 10.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies. Any notice, report or other communication given hereunder shall be in writing and shall be effective (i) upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (ii) upon receipt when sent by an overnight courier, (iii) on the date personally delivered to an authorized officer of the party to which sent or (iv) on the date transmitted by facsimile or other electronic transmission with a confirmation of receipt in all cases, addressed as follows:
(a) in the case of the Issuer, to Duke Energy Florida Project Finance, LLC at 299 First Avenue North, St. Petersburg, Florida 33701, Attention: Managers, Telephone: (980) 373-8659;
(b) in the case of the Indenture Trustee, to the Corporate Trust Office;
(c) in the case of Fitch, to Fitch Ratings, 33 Whitehall Street, New York, New York 10004, Attention: ABS Surveillance, Telephone: (212) 908-0500, Facsimile: (212) 908-0355;
(d) in the case of S&P, to Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business, Structured Credit Surveillance, 55 Water Street, New York, New York 10041, Telephone: (212) 438-8991, Email: servicer_reports@standardandpoors.com (all such notices to be delivered to S&P in writing by email); and
(e) in the case of the Commission, Florida Public Services Commission, 2450 Shumard Oak Blvd., Tallahassee, Florida, 32399-0850, Attention: Staff Director of Accounting & Finance.
Each party hereto may, by notice given in accordance herewith to the other party or parties hereto, designate any further or different address to which subsequent notices, reports and other communications shall be sent.
SECTION 10.05. Notices to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Holder affected by such event, at such Holders address as it appears on the Nuclear Asset-Recovery Bond Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Holder shall affect the sufficiency of such notice with respect to other Holders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Indenture Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event of Holders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder and shall not under any circumstance constitute a Default or Event of Default.
SECTION 10.06. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.
The provisions of Sections 310 through 317 of the Trust Indenture Act that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.
SECTION 10.07. Successors and Assigns. All covenants and agreements in this Indenture and the Nuclear Asset-Recovery Bonds by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors.
SECTION 10.08. Severability. Any provision in this Indenture or in the Nuclear Asset-Recovery Bonds 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 remainder of such provision (if any) or the remaining provisions hereof (unless such construction shall be unreasonable), and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.09. Benefits of Indenture. Nothing in this Indenture or in the Nuclear Asset-Recovery Bonds, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Holders, and any other party secured hereunder, and any other Person with an ownership interest in any part of the Collateral, any benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 10.10. Legal Holidays. In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Nuclear Asset-Recovery Bonds or this Indenture) payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.
SECTION 10.11. GOVERNING LAW. This Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law and Sections 9-301 through 9-306 of the NY UCC), and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws; provided, that the creation, attachment and perfection of any Liens created hereunder in Property, and all rights and remedies of the Indenture Trustee and the Holders with respect to the Property, shall be governed by the laws of the State of Florida.
SECTION 10.12. Counterparts. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
SECTION 10.13. Recording of Indenture. If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel at the Issuers cost and expense (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to
the Indenture Trustee or, if requested by the Indenture Trustee, external counsel of the Issuer) to the effect that such recording is necessary either for the protection of the Holders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.
SECTION 10.14. No Recourse to Issuer. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Nuclear Asset-Recovery Bonds or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (a) the Issuer, other than from the Series Collateral, (b) any owner of a membership interest in the Issuer (including Duke Energy Florida) or (c) any shareholder, partner, owner, beneficiary, agent, officer or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including Duke Energy Florida) in its respective individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed in writing. Notwithstanding any provision of this Indenture or any Series Supplement to the contrary, Holders shall look only to the Series Collateral with respect to any amounts due to the Holders hereunder and under the Nuclear Asset-Recovery Bonds and, in the event such Series Collateral is insufficient to pay in full the amounts owed on the Nuclear Asset-Recovery Bonds, shall have no recourse against the Issuer in respect of such insufficiency. Each Holder by accepting a Nuclear Asset-Recovery Bond specifically confirms the nonrecourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Nuclear Asset-Recovery Bonds.
SECTION 10.15. Basic Documents. The Indenture Trustee is hereby authorized to execute and deliver the Servicing Agreement and to execute and deliver any other Basic Document that it is requested to acknowledge, including, upon receipt of an Issuer Request, the Intercreditor Agreement, so long as the Intercreditor Agreement is substantially in the form of the Intercreditor Agreement dated as of June 22, 2016 and does not materially and adversely affect any Holders rights in and to any Collateral or otherwise hereunder. Such request shall be accompanied by an Opinion of Counsel of external counsel of the Issuer, upon which the Indenture Trustee may rely conclusively with no duty of independent investigation or inquiry, to the effect that all conditions precedent for the execution of the Intercreditor Agreement have been satisfied. The Intercreditor Agreement shall be binding on the Holders.
SECTION 10.16. No Petition. The Indenture Trustee, by entering into this Indenture, and each Holder, by accepting a Nuclear Asset-Recovery Bond (or interest therein) issued hereunder, hereby covenant and agree that they shall not, prior to the date that is one year and one day after the termination of this Indenture, acquiesce, petition or otherwise invoke or cause the Issuer or any Manager to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any bankruptcy or insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the dissolution, winding up or liquidation of the affairs of the Issuer. Nothing in this Section 10.16 shall preclude, or be deemed to estop, such Holder or the Indenture Trustee (a) from taking or omitting to take any action prior to such date in (i) any case or proceeding voluntarily filed or commenced by or on behalf of the Issuer under or pursuant to any such law or (ii) any involuntary case or proceeding pertaining to the Issuer that is filed or commenced by or on
behalf of a Person other than such Holder and is not joined in by such Holder (or any Person to which such Holder shall have assigned, transferred or otherwise conveyed any part of the obligations of the Issuer hereunder) under or pursuant to any such law or (b) from commencing or prosecuting any legal action that is not an involuntary case or proceeding under or pursuant to any such law against the Issuer or any of its properties.
SECTION 10.17. Securities Intermediary. The Securities Intermediary, in acting under this Indenture, is entitled to all rights, benefits, protections, immunities and indemnities accorded to The Bank of New York Mellon Trust Company, National Association, in its capacity as Indenture Trustee under this Indenture.
SECTION 10.18. Rule 17g-5 Compliance.
(a) The Indenture Trustee agrees that any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Indenture Trustee to any Rating Agency under this Indenture or any other Basic Document to which it is a party for the purpose of determining or confirming the credit rating of the Nuclear Asset-Recovery Bonds or undertaking credit rating surveillance of the Nuclear Asset-Recovery Bonds shall be provided, substantially concurrently, to the Servicer for posting on a password-protected website (the 17g-5 Website). The Servicer shall be responsible for posting all of the information on the 17g-5 Website.
(b) The Indenture Trustee will not be responsible for creating or maintaining the 17g-5 Website, posting any information to the 17g-5 Website or assuring that the 17g-5 Website complies with the requirements of this Indenture, Rule 17g-5 under the Exchange Act or any other law or regulation. In no event shall the Indenture Trustee be deemed to make any representation in respect of the content of the 17g-5 Website or compliance by the 17g-5 Website with this Indenture, Rule 17g-5 under the Exchange Act or any other law or regulation. The Indenture Trustee shall have no obligation to engage in or respond to any oral communications with respect to the transactions contemplated hereby, any transaction documents relating hereto or in any way relating to the Nuclear Asset-Recovery Bonds or for the purposes of determining the initial credit rating of the Nuclear Asset-Recovery Bonds or undertaking credit rating surveillance of the Nuclear Asset-Recovery Bonds with any Rating Agency or any of its respective officers, directors or employees. The Indenture Trustee shall not be responsible or liable for the dissemination of any identification numbers or passwords for the 17g-5 Website, including by the Servicer, the Rating Agencies, a nationally recognized statistical rating organization (NRSRO), any of their respective agents or any other party. Additionally, the Indenture Trustee shall not be liable for the use of the information posted on the 17g-5 Website, whether by the Servicer, the Rating Agencies, an NRSRO or any other third party that may gain access to the 17g-5 Website or the information posted thereon.
SECTION 10.19. Submission to Non-Exclusive Jurisdiction; Waiver of Jury Trial. Each of the Issuer and the Indenture Trustee hereby irrevocably submits to the non-exclusive jurisdiction of any New York State court sitting in The Borough of Manhattan in The City of New York or any U.S. federal court sitting in The Borough of Manhattan in The City of New York in respect of any suit, action or proceeding arising out of or relating to this Indenture and the Nuclear Asset-Recovery Bonds and irrevocably accepts for itself
and in respect of its respective property, generally and unconditionally, jurisdiction of the aforesaid courts. Each of the Issuer and the Indenture Trustee irrevocably waives, to the fullest extent that it may effectively do so under applicable law, trial by jury.
SECTION 10.20. Certain Tax Laws. In order to comply with applicable tax laws, rules and regulations (inclusive of directives, guidelines and interpretations promulgated by competent authorities) in effect from time to time to which a foreign financial institution, issuer, trustee, paying agent, holder or other institution is or has agreed to be subject related to the Basic Documents, the Issuer agrees (a) to provide to the Indenture Trustee sufficient information about Holders or other applicable parties and/or transactions (including any modification to the terms of such transactions) so as to enable the Indenture Trustee to determine whether it has tax-related obligations under such applicable tax laws, rules and regulations (inclusive of directives, guidelines and interpretations promulgated by competent authorities) and (b) that the Indenture Trustee shall be entitled to make any withholding or deduction from payments under the Basic Documents to the extent necessary to comply with such applicable tax laws, rules and regulations (inclusive of directives, guidelines and interpretations promulgated by competent authorities) for which the Indenture Trustee shall not have any liability.
{SIGNATURE PAGE FOLLOWS}
IN WITNESS WHEREOF, the Issuer, the Indenture Trustee and the Securities Intermediary have caused this Indenture to be duly executed by their respective officers thereunto duly authorized and duly attested, all as of the day and year first above written.
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | |
|
as Issuer | |
|
| |
|
| |
|
By: |
/s/ Stephen G. De May |
|
|
Name: Stephen G. De May |
|
|
Title: President, Chief Financial Officer and Treasurer |
|
| |
|
| |
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, | |
|
as Indenture Trustee and as Securities Intermediary | |
|
| |
|
| |
|
By: |
/s/ Mitchell L. Brumwell |
|
|
Name: Mitchell L. Brumwell |
|
|
Title: Vice President |
Signature Page to
Indenture
STATE OF NORTH CAROLINA |
) |
| |
COUNTY OF MECKLENBURG |
) |
The foregoing instrument was acknowledged before me this 20th day of June, 2016, by Stephen G. De May, President, Chief Financial Officer and Treasurer of Duke Energy Florida Project Finance, LLC, a Delaware limited liability company, on behalf of the company.
|
/s/ Patricia C. Ross |
|
Patricia C. Ross, Notary Public |
{Seal} |
State of North Carolina, County of Mecklenburg |
|
My Commission Expires: 10-17-2019 |
|
Acting in the County of Mecklenburg |
STATE OF ILLINOIS |
) |
|
ss. |
COUNTY OF COOK |
) |
The foregoing instrument was acknowledged before me this 20th day of June, 2016, by Mitchell Brumwell, Vice President of THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as Indenture Trustee and Securities Intermediary, on behalf of the bank.
|
/s/ Diane Mary Woertz |
|
Diane Mary Woertz, Notary Public, |
|
State of Illinois |
|
No. 458360 |
|
Qualified in Cook County |
|
Certificate Filed in Cook County |
|
Commission Expires 02/28/2018 |
EXHIBIT A
FORM OF NUCLEAR ASSET-RECOVERY BOND
See attached.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OR ENTITY IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. { } |
${ } |
WAL Designation { } |
CUSIP No.: { } |
THE PRINCIPAL OF THIS SERIES { }, WAL { } SENIOR SECURED NUCLEAR ASSET-RECOVERY BOND, (THIS NUCLEAR ASSET-RECOVERY BOND) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NUCLEAR ASSET-RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE SERIES COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS NUCLEAR ASSET-RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.10(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE PAYMENT IN FULL OF THIS NUCLEAR ASSET-RECOVERY BOND, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY
PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF FLORIDA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS NUCLEAR ASSET-RECOVERY BOND.
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC
SERIES { } SENIOR SECURED NUCLEAR ASSET-RECOVERY BONDS, WAL { }
BOND |
|
ORIGINAL |
|
SCHEDULED |
|
FINAL |
| |
{ } |
% |
$ |
{ } |
|
{ }, 20{ } |
|
{ }, 20{ } |
|
Duke Energy Florida Project Finance, LLC, a limited liability company created under the laws of the State of Delaware (herein referred to as the Issuer), for value received, hereby promises to pay to { }, or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified below or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date determined as provided below and ending on or before the Final Maturity Date shown above and to pay interest, at the Bond Interest Rate shown above, on each { } and { } or, if any such day is not a Business Day, the next Business Day, commencing on { }, 20{ } and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each, a Payment Date), on the principal amount of this Nuclear Asset-Recovery Bond. Interest on this Nuclear Asset-Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of { }. Such principal of and interest on this Nuclear Asset-Recovery Bond shall be paid in the manner specified below.
The principal of and interest on this Nuclear Asset-Recovery Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Nuclear Asset-Recovery Bond shall be applied first to interest due and payable on this Nuclear Asset-Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Nuclear Asset-Recovery Bond, all in the manner set forth in the Indenture.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Nuclear Asset-Recovery Bond
shall not be entitled to any benefit under the Indenture referred to below or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Responsible Officer.
Date: { }, 20{ } |
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||
|
as Issuer | ||
|
| ||
|
| ||
|
By: |
|
|
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
INDENTURE TRUSTEES
CERTIFICATE OF AUTHENTICATION
Dated: { }, 20{ }
This is one of the Series { }, WAL { } Senior Secured Nuclear Asset-Recovery Bonds, designated above and referred to in the within-mentioned Indenture.
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, | ||
|
as Indenture Trustee | ||
|
| ||
|
| ||
|
By: |
|
|
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
This Senior Secured Nuclear Asset-Recovery Bond, Series { }, WAL { } is one of a duly authorized issue of Series { } Senior Secured Nuclear Asset-Recovery Bonds of the Issuer (herein called the Series { } Bonds), which Bonds are issuable in one or more Series, which Series are issuable in one or more WALs. The Series { } Bonds consist of { } WALs, including the WAL { } Series { } Senior Secured Nuclear Asset-Recovery Bonds, which include this Senior Secured Nuclear Asset-Recovery Bond (herein called the WAL { } Nuclear Asset-Recovery Bonds), all issued and to be issued under that certain Indenture dated as of June [ ], 2016 (as supplemented by the Series Supplement (as defined below), the Indenture), between the Issuer and The Bank of New York Mellon Trust Company, National Association, in its capacity as indenture trustee (the Indenture Trustee, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the Securities Intermediary, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Bonds. For purposes herein, Series Supplement means that certain Series Supplement dated as of { , 20 } between the Issuer and the Indenture Trustee. All terms used in this WAL { } Nuclear Asset-Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.
All WALs of Series { } Bonds are and will be equally and ratably secured by the Series Collateral pledged as security therefor as provided in the Indenture.
The principal of this WAL { } Nuclear Asset-Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account for the Series { } Bonds are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Sinking Fund Schedule that is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Series { } Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this WAL { } Nuclear Asset-Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Bonds representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Nuclear Asset-Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the WAL { } Nuclear Asset-Recovery Bonds shall be made pro rata to the Holders of the WAL{ } Nuclear Asset-Recovery Bonds entitled thereto based on the respective principal amounts of the WAL { } Nuclear Asset-Recovery Bonds held by them.
Payments of interest on this WAL { } Nuclear Asset-Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by check mailed first-class, postage prepaid, to the Person whose name appears as the Registered Holder of this WAL { } Nuclear Asset-Recovery Bond (or one or more Predecessor Nuclear Asset-Recovery Bonds) on the Nuclear Asset-Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that (a) upon application to the Indenture Trustee by any Holder owning a Global Nuclear Asset-Recovery Bond evidencing this WAL { } Nuclear Asset-Recovery Bond not later than the applicable Record Date, payment will be made by wire transfer to an account maintained by such Holder, and (b) if this WAL { } Nuclear Asset-Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Nuclear Asset-Recovery Bond evidencing this WAL { } Nuclear Asset-Recovery Bond unless and until such Global Nuclear Asset-Recovery Bond is exchanged for Definitive Nuclear Asset-Recovery Bonds (in which event payments shall be made as provided above) and except for the final installment of principal and premium, if any, payable with respect to this WAL { } Nuclear Asset-Recovery Bond on a Payment Date, which shall be payable as provided below. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Nuclear Asset-Recovery Bond Register as of the applicable Record Date without requiring that this WAL { } Nuclear Asset-Recovery Bond be submitted for notation of payment. Any reduction in the principal amount of this WAL { } Nuclear Asset-Recovery Bond (or any one or more Predecessor Nuclear Asset-Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this WAL { } Nuclear Asset-Recovery Bond and of any Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then-remaining unpaid principal amount of this WAL { } Nuclear Asset-Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed no later than five days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this WAL { } Nuclear Asset-Recovery Bond and shall specify the place where this WAL { } Nuclear Asset-Recovery Bond may be presented and surrendered for payment of such installment.
The Issuer shall pay interest on overdue installments of interest at the Bond Interest Rate to the extent lawful.
This WAL { } Nuclear Asset-Recovery Bond is a nuclear asset-recovery bond as such term is defined in the Nuclear Asset-Recovery Law. Principal and interest due and payable on this WAL { } Nuclear Asset-Recovery Bond are payable from and secured primarily by Series Property created and established by the Financing Order obtained from the Florida Public Service Commission pursuant to the Nuclear Asset-Recovery Law. Series Property consists of the rights and interests of the Seller in the Financing Order, including the right to impose, bill, collect and receive Series Charges, the right to obtain True-Up Adjustments and all revenue, collections, claims, rights to payments, payments, moneys and proceeds arising out of the rights and interests created under the Financing Order.
Under the laws of the State of Florida in effect on the date hereof, pursuant to Section 366.95(11) of the Nuclear Asset-Recovery Law, the State of Florida has pledged to agree and work with the Holders, the Indenture Trustee, other Financing Parties that the State of Florida will not (a) alter the provisions of Section 366.95(11) of the Nuclear Asset-Recovery Law which make the Charges imposed by the Financing Order or Subsequent Financing Order irrevocable, binding, and nonbypassable charges; (b) take or permit any action that impairs or would impair the value of Property or revises the Nuclear Asset-Recovery Costs for which recovery is authorized; (c) or except as authorized under the Nuclear Asset-Recovery Law, reduce, alter, or impair Charges that are to be imposed, collected, and remitted for the benefit of the Holders, the Indenture Trustee and other Financing Parties until any and all principal, interest, premium, Financing Costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related Nuclear Asset-Recovery Bonds have been paid and performed in full.
The Issuer and Duke Energy Florida hereby acknowledge that the purchase of this Nuclear Asset-Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.
As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this WAL { } Nuclear Asset-Recovery Bond may be registered on the Nuclear Asset-Recovery Bond Register upon surrender of this WAL { } Nuclear Asset-Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by, (a) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holders attorney duly authorized in writing, with such signature guaranteed by: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee, and (b) such other documents as the Indenture Trustee may require, and thereupon one or more new Nuclear Asset-Recovery Bonds of Authorized Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this WAL { } Nuclear Asset-Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Section 2.04 or Section 2.06 of the Indenture not involving any transfer.
Each Holder, by acceptance of a WAL { } Nuclear Asset-Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the WAL { } Nuclear Asset-Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (a) any owner of a membership interest in the Issuer (including Duke Energy Florida) or (b) any shareholder, partner, owner, beneficiary, agent, officer or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including Duke Energy Florida) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a WAL { } Nuclear Asset-Recovery Bond specifically confirms the nonrecourse nature of these obligations and waives and
releases all such liability. The waiver and release are part of the consideration for issuance of the WAL { } Nuclear Asset-Recovery Bonds.
Prior to the due presentment for registration of transfer of this WAL { } Nuclear Asset-Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this WAL { } Nuclear Asset-Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this WAL { } Nuclear Asset-Recovery Bond and for all other purposes whatsoever, whether or not this WAL { } Nuclear Asset-Recovery Bond be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Nuclear Asset-Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Holders representing a majority of the Outstanding Amount of all Nuclear Asset-Recovery Bonds at the time outstanding of each Series or WAL to be affected and upon the satisfaction of the Rating Agency Condition and Commission Condition. The Indenture also contains provisions permitting the Holders representing specified percentages of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all Series, on behalf of the Holders of all the Nuclear Asset-Recovery Bonds, with the consent of the Commission, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this WAL { } Nuclear Asset-Recovery Bond (or any one of more Predecessor Nuclear Asset-Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this WAL { } Nuclear Asset-Recovery Bond and of any WAL { } Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this WAL { } Nuclear Asset-Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Nuclear Asset-Recovery Bonds issued thereunder, but with the satisfaction of the Commission Condition.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on a Nuclear Asset-Recovery Bond of a Series and (b) certain restrictive covenants and the related Events of Default of a Series, upon compliance by the Issuer with certain conditions set forth in the Indenture, which provisions apply to this WAL { } Nuclear Asset-Recovery Bond.
The term Issuer as used in this WAL { } Nuclear Asset-Recovery Bond includes any successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders under the Indenture.
The WAL { } Nuclear Asset-Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.
This WAL { } Nuclear Asset-Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law and Sections 9-301 through 9-306 of the NY UCC), and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws; provided, that the creation, attachment and perfection of any Liens created under the Indenture in Property, and all rights and remedies of the Indenture Trustee and the Holders with respect to the Property, shall be governed by the laws of the State of Florida.
No reference herein to the Indenture and no provision of this WAL { } Nuclear Asset-Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this WAL { } Nuclear Asset-Recovery Bond at the times, place and rate and in the coin or currency herein prescribed.
The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any WAL { } Nuclear Asset-Recovery Bond, by acquiring any WAL { } Nuclear Asset-Recovery Bond or interest therein, (a) express their intention that, solely for the purpose of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the WAL { } Nuclear Asset-Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Series Collateral and (b) solely for purposes of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the WAL { } Nuclear Asset-Recovery Bonds are outstanding, agree to treat the WAL { } Nuclear Asset-Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Series Collateral unless otherwise required by appropriate taxing authorities.
ABBREVIATIONS
The following abbreviations, when used above on this Nuclear Asset-Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM |
|
as tenants in common |
TEN ENT |
|
as tenants by the entireties |
JT TEN |
|
as joint tenants with right of survivorship and not as tenants in common |
UNIF GIFT MIN ACT |
|
(Custodian) |
|
|
Custodian (minor) |
|
|
Under Uniform Gifts to Minor Act ( ) |
|
|
(State) |
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
|
(name and address of assignee) |
the within WAL { } Nuclear Asset-Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer said WAL { } Nuclear Asset-Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.
|
| ||
Dated: |
|
|
|
|
Signature Guaranteed: | ||
|
| ||
|
| ||
The signature to this assignment must correspond with the name of the registered owner as it appears on the within WAL { } Nuclear Asset-Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.
NOTE: Signature(s) must be guaranteed by an institution that is a member of: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee.
EXHIBIT B
FORM OF SERIES SUPPLEMENT
See attached.
This SERIES SUPPLEMENT, dated as of { , 20 } (this Supplement), is by and between DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, a limited liability company created under the laws of the State of Delaware (the Issuer), and The Bank of New York Mellon Trust Company, National Association (Bank), in its capacity as indenture trustee (the Indenture Trustee) for the benefit of the Secured Parties under the Indenture dated as of June 22, 2016, by and between the Issuer and The Bank of New York Mellon Trust Company, National Association, in its capacity as Indenture Trustee and in its separate capacity as a securities intermediary (the Indenture).
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that the Issuer and the Indenture Trustee may at any time enter into an indenture supplemental to the Indenture for the purposes of authorizing the issuance by the Issuer of a Series of the Nuclear Asset-Recovery Bonds and specifying the terms thereof. The Issuer has duly authorized the creation of a Series of the Nuclear Asset-Recovery Bonds with an initial aggregate principal amount of ${ } to be known as Series { }Senior Secured Nuclear Asset-Recovery Bonds (the Series { } Nuclear Asset-Recovery Bonds), and the Issuer and the Indenture Trustee are executing and delivering this Supplement in order to provide for the Series { } Nuclear Asset-Recovery Bonds.
All terms used in this Supplement that are defined in the Indenture, either directly or by reference therein, have the meanings assigned to them therein, except to the extent such terms are defined or modified in this Supplement or the context clearly requires otherwise. In the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Supplement shall govern.
GRANTING CLAUSE
With respect to the Series { } Nuclear Asset-Recovery Bonds, the Issuer hereby Grants to the Indenture Trustee, as Indenture Trustee for the benefit of the Secured Parties of the Series { } Nuclear Asset-Recovery Bonds, all of the Issuers right, title and interest (whether now owned or hereafter acquired or arising) in and to (a) the Series Property created under and pursuant to the Financing Order and the Nuclear Asset-Recovery Law, and transferred by the Seller to the Issuer on the date hereof pursuant to the Sale Agreement (including, to the fullest extent permitted by law, the right to impose, bill, collect and receive the Series Charges, the right to obtain periodic adjustments to the Series Charges, and all revenue, collections, claims, rights to payments, payments, money and proceeds arising out of the rights and interests created under the Financing Order), (b) all Series Charges related to the Series Property, (c) the Sale Agreement and the Bill of Sale executed in connection therewith and all property and interests in property transferred under the Sale Agreement and the Bill of Sale with respect to the Series Property and the Series { } Nuclear Asset-Recovery Bonds, (d) the Servicing Agreement, the Administration Agreement, the Intercreditor Agreement and any subservicing, agency, administration or collection agreements executed in connection therewith, to the extent related to the foregoing Series Property and the Series { } Nuclear Asset-Recovery Bonds, (e) the Collection Account for the Series { } Nuclear Asset-Recovery Bonds, all subaccounts thereof
and all amounts of cash, instruments, investment property or other assets on deposit therein or credited thereto from time to time and all financial assets and securities entitlements carried therein or credited thereto, (f) all rights to compel the Servicer to file for and obtain periodic adjustments to the Series Charges in accordance with Section 366.95(2)(c)2.d. and Section 366.95(2)(c)4. of the Nuclear Asset-Recovery Law and the Financing Order, (g) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, whether such claims, demands, causes and choses in action constitute Series Property, accounts, general intangibles, instruments, contract rights, chattel paper or proceeds of such items or any other form of property, (h) all accounts, chattel paper, deposit accounts, documents, general intangibles, goods, instruments, investment property, letters of credit, letters-of-credit rights, money, commercial tort claims and supporting obligations related to the foregoing, and (i) all payments on or under, and all proceeds in respect of, any or all of the foregoing (the Series { } Collateral), it being understood that the following do not constitute Series { } Collateral: (x) cash that has been released pursuant to the terms of the Indenture, including Section 8.02(e)(x) of the Indenture and, following retirement of all Outstanding Series { } Nuclear Asset-Recovery Bonds, pursuant to Section 8.02(e)(xii) of the Indenture, (y) amounts deposited with the Issuer on the Series Closing Date, for payment of costs of issuance with respect to the Series { } Nuclear Asset-Recovery Bonds (together with any interest earnings thereon) or (z) proceeds from the sale of the Series { } Nuclear Asset-Recovery Bonds required to pay the purchase price for the Series Property and paid pursuant to the Sale Agreement for such Series and upfront Financing Costs, it being understood that such amounts described in clause (x) and clause (y) above shall not be subject to Section 3.17 of the Indenture. For the avoidance of doubt, any Series Property created with respect to an Additional Series shall not be Series { } Collateral.
The foregoing Grant is made in trust to secure the Secured Obligations equally and ratably without prejudice, priority or distinction, except as expressly provided in the Indenture, to secure compliance with the provisions of the Indenture with respect to the Series { } Nuclear Asset-Recovery Bonds, all as provided in the Indenture and to secure the performance by the Issuer of all of its obligations under the Indenture. The Indenture and this Supplement constitute a security agreement within the meaning of the Nuclear Asset-Recovery Law and under the UCC to the extent that the provisions of the UCC are applicable hereto.
The Indenture Trustee, as indenture trustee on behalf of the Secured Parties of the Series { } Nuclear Asset-Recovery Bonds, acknowledges such Grant and accepts the trusts under this Supplement and the Indenture in accordance with the provisions of this Supplement and the Indenture.
SECTION 1. Designation. The Series { } Nuclear Asset-Recovery Bonds shall be designated generally as the Nuclear Asset-Recovery Bonds{, and further denominated as WALs { } through { }}.
SECTION 2. Initial Principal Amount; Bond Interest Rate; Scheduled Final Payment Date; Final Maturity Date; Required Capital Level. The Series { } Nuclear Asset-Recovery Bonds {of each WAL} shall have the initial principal amount, bear interest at the rates per annum (the Bond Interest Rate) and shall have the Scheduled Final Payment Dates and the Final Maturity Dates set forth below:
Weighted |
|
Initial |
|
Bond |
|
Scheduled |
|
Final |
| |
{ } |
|
$ |
{ } |
|
{ } |
% |
{ }, 20{ } |
|
{ }, 20{ } |
|
{ } |
|
$ |
{ } |
|
{ } |
% |
{ }, 20{ } |
|
{ }, 20{ } |
|
{ } |
|
$ |
{ } |
|
{ } |
% |
{ }, 20{ } |
|
{ }, 20{ } |
|
{ } |
|
$ |
{ } |
|
{ } |
% |
{ }, 20{ } |
|
{ }, 20{ } |
|
The Bond Interest Rate shall be computed on the basis of a 360-day year of twelve 30-day months.
The Required Capital Level for the Series { } Nuclear Asset-Recovery Bonds shall be equal to { }% of the initial principal amount thereof.
SECTION 3. Authentication Date; Payment Dates; Expected Sinking Fund Schedule for Principal; Periodic Interest; Book-Entry Nuclear Asset-Recovery Bonds; Waterfall Caps.
(a) Authentication Date. The Series { } Nuclear Asset-Recovery Bonds that are authenticated and delivered by the Indenture Trustee to or upon the order of the Issuer on { } (the Series Closing Date) shall have as their date of authentication { }.
(b) Payment Dates. The Payment Dates for the Series { } Nuclear Asset-Recovery Bonds are { } and { } of each year or, if any such date is not a Business Day, the next Business Day, commencing on { }, 20{ } and continuing until the earlier of repayment of the Series { } Nuclear Asset-Recovery Bonds in full and the Final Maturity Date.
(c) Expected Sinking Fund Schedule for Principal. Unless an Event of Default shall have occurred and be continuing, on each Payment Date, the Indenture Trustee shall distribute to the Holders of record as of the related Record Date amounts payable pursuant to Section 8.02(e) of the Indenture as principal, in the following order and priority: {(1) to the holders of the Series { }, WAL { } Nuclear Asset-Recovery Bonds, until the Outstanding Amount of such Series { }, WAL { } Nuclear Asset-Recovery Bonds thereof has been reduced to zero; (2) to the holders of the Series { }, WAL { }Nuclear Asset-Recovery Bonds, until the Outstanding Amount of such Series { }, WSL { } Nuclear Asset-Recovery Bonds thereof has been reduced to zero; (3) to the holders of the Series { }, WAL { } Nuclear Asset-Recovery Bonds, until the Outstanding Amount of such Series { }, WAL { } of Nuclear Asset-Recovery Bonds thereof has been reduced to zero; and (4) to the holders of the Series { }, WAL { } Nuclear Asset-Recovery Bonds, until the Outstanding Amount of such Series { }, WAL { } of Nuclear Asset-Recovery Bonds thereof has been reduced to zero; provided, however, that in no event shall a principal payment pursuant to this Section 3(c) on any WAL on a Payment Date be greater than the amount necessary to reduce the Outstanding Amount of such WAL of Nuclear Asset-Recovery Bonds to the amount specified in the Expected Sinking Fund Schedule that is attached as Schedule A hereto for such WAL and Payment Date}.
(d) Periodic Interest. Periodic Interest will be payable on {each WAL of} the Series { } Nuclear Asset-Recovery Bonds on each Payment Date in an amount equal to one-half of the product of (i) the applicable Bond Interest Rate and (ii) the Outstanding Amount of the {related WAL of} Series { } Nuclear Asset-Recovery Bonds as of the close of business on the preceding Payment Date after giving effect to all payments of principal made to the Holders of the {related WAL of} Series { } Nuclear Asset-Recovery Bonds on such preceding Payment Date; provided, however, that, with respect to the initial Payment Date, or if no payment has yet been made, interest on the outstanding principal balance will accrue from and including the Series Closing Date to, but excluding, the following Payment Date.
(e) Book-Entry Nuclear Asset-Recovery Bonds. The Series { } Nuclear Asset-Recovery Bonds shall be Book-Entry Nuclear Asset-Recovery Bonds, and the applicable provisions of Section 2.11 of the Indenture shall apply to the Series { } Nuclear Asset-Recovery Bonds.
(f) Waterfall Caps. The amount payable with respect to the Series { } Nuclear Asset-Recovery Bonds pursuant to Section 8.02(e)(i) of the Indenture shall not exceed ${ } annually.
SECTION 4. Authorized Denominations. The Series { } Nuclear Asset-Recovery Bonds shall be issuable in denominations of {$2,000 and integral multiples of $1,000 in excess thereof, except for one bond, which may be a smaller denomination} (the Authorized Denominations).
SECTION 5. Delivery and Payment for the Series { } Nuclear Asset-Recovery Bonds; Form of the Series { } Nuclear Asset-Recovery Bonds. The Indenture Trustee shall deliver the Series { } Nuclear Asset-Recovery Bonds to the Issuer when authenticated in accordance with Section 2.03 of the Indenture. The Series { } Nuclear Asset-Recovery Bonds {of each WAL} shall be in the form of Exhibit{s} { } hereto.
SECTION 6. Ratification of Indenture. As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture, as so supplemented by this Supplement, shall be read, taken and construed as one and the same instrument. This Supplement amends, modifies and supplements the Indenture only insofar as it relates to the Series { } Nuclear Asset-Recovery Bonds.
SECTION 7. Counterparts. This Supplement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument.
SECTION 8. Governing Law. This Supplement shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law and Sections 9-301 through 9-306 of the NY UCC), and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws; provided, that, except as set forth in Section 8.02(b) of the Indenture, the creation, attachment and perfection of any Liens created under the Indenture in Property, and all
rights and remedies of the Indenture Trustee and the Holders with respect to the Property, shall be governed by the laws of the State of Florida.
SECTION 9. Issuer Obligation. No recourse may be taken directly or indirectly by the Holders with respect to the obligations of the Issuer on the Series { } Nuclear Asset-Recovery Bonds, under the Indenture or this Supplement or any certificate or other writing delivered in connection herewith or therewith, against (a) any owner of a beneficial interest in the Issuer (including Duke Energy Florida) or (b) any shareholder, partner, owner, beneficiary, officer, director, employee or agent of the Indenture Trustee, the Managers or any owner of a beneficial interest in the Issuer (including Duke Energy Florida) in its individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed. Each Holder by accepting a Series { } Nuclear Asset-Recovery Bond specifically confirms the nonrecourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series { } Nuclear Asset-Recovery Bonds.
SECTION 10. Indenture Trustee Disclaimer. The Indenture Trustee is not responsible for the validity or sufficiency of this Supplement or for the recitals contained herein.
SECTION 11. Submission to Non-Exclusive Jurisdiction; Waiver of Jury Trial. Each of the Issuer and the Indenture Trustee hereby irrevocably submits to the non-exclusive jurisdiction of any New York State court sitting in The Borough of Manhattan in The City of New York or any U.S. federal court sitting in The Borough of Manhattan in The City of New York in respect of any suit, action or proceeding arising out of or relating to this Supplement and the Series { } Nuclear Asset-Recovery Bonds and irrevocably accepts for itself and in respect of its respective property, generally and unconditionally, jurisdiction of the aforesaid courts. Each of the Issuer and the Indenture Trustee irrevocably waives, to the fullest extent that it may effectively do so under applicable law, trial by jury.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Supplement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||
|
as Issuer | ||
|
|
| |
|
|
| |
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
|
|
| |
|
THE BANK OF NEW YORK MELLON TRUST | ||
|
as Indenture Trustee and as Securities Intermediary | ||
|
|
| |
|
|
| |
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
SCHEDULE A
TO SERIES SUPPLEMENT
EXPECTED SINKING FUND SCHEDULE
OUTSTANDING PRINCIPAL BALANCE
Date |
|
WAL { } |
|
WAL { } |
|
WAL { } |
|
WAL { } |
Series Closing Date |
|
${ } |
|
${ } |
|
${ } |
|
${ } |
{ }, 20{ } |
|
${ } |
|
${ } |
|
${ } |
|
${ } |
{ }, 20{ } |
|
${ } |
|
${ } |
|
${ } |
|
${ } |
{ }, 20{ } |
|
${ } |
|
${ } |
|
${ } |
|
${ } |
EXHIBIT { }
TO SERIES SUPPLEMENT
FORM OF {Series { } WAL { } OF} NUCLEAR ASSET-RECOVERY BONDS
{ }
EXHIBIT C
SERVICING CRITERIA TO BE ADDRESSED
BY INDENTURE TRUSTEE IN ASSESSMENT OF COMPLIANCE
Regulation AB |
|
Servicing Criteria |
|
Applicable Indenture |
|
|
General Servicing Considerations |
|
|
1122(d)(1)(i) |
|
Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements. |
|
|
1122(d)(1)(ii) |
|
If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third partys performance and compliance with such servicing activities. |
|
|
1122(d)(1)(iii) |
|
Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained. |
|
|
1122(d)(1)(iv) |
|
A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements. |
|
|
1122(d)(1)(v) |
|
Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information. |
|
|
|
|
Cash Collection and Administration |
|
|
1122(d)(2)(i) |
|
Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements. |
|
X |
1122(d)(2)(ii) |
|
Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel. |
|
X |
1122(d)(2)(iii) |
|
Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements. |
|
|
1122(d)(2)(iv) |
|
The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements. |
|
X |
1122(d)(2)(v) |
|
Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, federally insured depository institution with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) under the Exchange Act. |
|
|
1122(d)(2)(vi) |
|
Unissued checks are safeguarded so as to prevent unauthorized access. |
|
|
1122(d)(2)(vii) |
|
Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are: (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. |
|
|
|
|
Investor Remittances and Reporting |
|
|
1122(d)(3)(i) |
|
Reports to investors, including those to be filed with the SEC, are maintained in accordance with the transaction agreements and applicable SEC requirements. Specifically, such reports: (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the SEC as required by its rules and regulations; and (D) agree with investors or the trustees records as to the total unpaid principal balance and number of pool assets serviced by the servicer. |
|
|
1122(d)(3)(ii) |
|
Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements. |
|
X |
1122(d)(3)(iii) |
|
Disbursements made to an investor are posted within two business days to the servicers investor records, or such other number of days specified in the transaction agreements. |
|
X |
Regulation AB |
|
Servicing Criteria |
|
Applicable Indenture |
1122(d)(3)(iv) |
|
Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements. |
|
X |
|
|
Pool Asset Administration |
|
|
1122(d)(4)(i) |
|
Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents. |
|
X |
1122(d)(4)(ii) |
|
Pool assets and related documents are safeguarded as required by the transaction agreements. |
|
|
1122(d)(4)(iii) |
|
Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements. |
|
|
1122(d)(4)(iv) |
|
Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the servicers obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents. |
|
|
1122(d)(4)(v) |
|
The servicers records regarding the pool assets agree with the servicers records with respect to an obligors unpaid principal balance. |
|
|
1122(d)(4)(vi) |
|
Changes with respect to the terms or status of an obligors pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents. |
|
|
1122(d)(4)(vii) |
|
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. |
|
|
1122(d)(4)(viii) |
|
Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entitys activities in monitoring delinquent pool assets, including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment). |
|
|
1122(d)(4)(ix) |
|
Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents. |
|
|
1122(d)(4)(x) |
|
Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligors pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements. |
|
|
1122(d)(4)(xi) |
|
Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. |
|
|
1122(d)(4)(xii) |
|
Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicers funds and not charged to the obligor, unless the late payment was due to the obligors error or omission. |
|
|
1122(d)(4)(xiii) |
|
Disbursements made on behalf of an obligor are posted within two business days to the obligors records maintained by the servicer, or such other number of days specified in the transaction agreements. |
|
|
1122(d)(4)(xiv) |
|
Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements. |
|
|
1122(d)(4)(xv) |
|
Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements. |
|
|
APPENDIX A
DEFINITIONS AND RULES OF CONSTRUCTION
A. Defined Terms. The following terms have the following meanings:
17g-5 Website is defined in Section 10.18(a) of the Indenture.
Account Records is defined in Section 1(a)(i) of the Administration Agreement.
Act is defined in Section 10.03(a) of the Indenture.
Additional Series means issuance by the Issuer of any series of Nuclear Asset-Recovery Bonds issued after the date hereof, that will be undertaken only if (i) such issuance has been authorized by the Commission, (ii) the Rating Agency Condition has been satisfied and it is a condition of issuance for each Series of Nuclear Asset-Recovery Bonds that the new Series receive a rating or ratings as required by the Financing Order or a Subsequent Financing Order, (iii) the Issuer has delivered to the Indenture Trustee an Opinion of Counsel of a nationally recognized firm experienced in such matters to the effect that after such issuance, in the opinion of such counsel, if either or both of Duke Energy Florida or the Seller were to become a debtor in a case under the United States Bankruptcy Code (Title 11, U.S.C.), a federal court exercising bankruptcy jurisdiction and exercising reasonable judgment after full consideration of all relevant factors would not order substantive consolidation of the assets and liabilities of the Issuer with those of the bankruptcy estate of Duke Energy Florida or the Seller, subject to the customary exceptions, qualifications and assumptions contained therein.
Administration Agreement means the Administration Agreement, dated as of the date hereof, by and between Duke Energy Florida and the Issuer.
Administration Fee is defined in Section 2 of the Administration Agreement.
Administrator means Duke Energy Florida, as Administrator under the Administration Agreement, or any successor Administrator to the extent permitted under the Administration Agreement.
AES means an alternative energy supplier which is authorized by law to sell electric service to a customer using the transmission or distribution system of Duke Energy Florida.
Affiliate means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, control when used with respect to any specified Person means the power to direct the management and policies of such specified Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms controlling and controlled have meanings correlative to the foregoing.
Amendatory Schedule means a revision to service riders or any other notice filing filed with the Commission in respect of the Nuclear Asset-Recovery Rate Schedule pursuant to a True-Up Adjustment.
Annual Accountants Report is defined in Section 3.04(a) of the Servicing Agreement.
Authorized Denomination means, with respect to any Nuclear Asset-Recovery Bond, the authorized denomination therefor specified in the Series Supplement, which shall be at least $2,000 and, except as otherwise provided in the Series Supplement, integral multiples of $1,000 in excess thereof, except for one Nuclear Asset-Recovery bond which may be of a smaller denomination.
Bankruptcy Code means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.).
Basic Documents means the Indenture, each Series Supplement, the Certificate of Formation, the LLC Agreement, the Administration Agreement, and, with respect to each Series, the applicable Sale Agreement, Bill of Sale, Servicing Agreement, Intercreditor Agreement, Letter of Representations, Underwriting Agreement and all other documents and certificates delivered in connection therewith.
Bill of Sale means a bill of sale substantially in the form of Exhibit A to the Sale Agreement delivered pursuant to Section 2.02(a) of the Sale Agreement.
Billed Nuclear Asset-Recovery Charges means the amounts of Nuclear Asset-Recovery Charges billed by the Servicer.
Billing Period means the period created by dividing the calendar year into 12 consecutive periods of approximately 21 Servicer Business Days.
Bills means each of the regular monthly bills, summary bills, opening bills and closing bills issued to Customers by Duke Energy Florida in its capacity as Servicer.
Bond Interest Rate means, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, the rate at which interest accrues on the Nuclear Asset-Recovery Bonds of such Series or WAL, as specified in the applicable Series Supplement.
Book-Entry Form means, with respect to any Nuclear Asset-Recovery Bond, that such Nuclear Asset-Recovery Bond is not certificated and the ownership and transfers thereof shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture and the Series Supplement pursuant to which such Nuclear Asset-Recovery Bond was issued.
Book-Entry Nuclear Asset-Recovery Bonds means any Nuclear Asset-Recovery Bonds issued in Book-Entry Form; provided, however, that, after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive Nuclear Asset-Recovery Bonds are to be issued to the Holder of such Nuclear Asset-Recovery
Bonds, such Nuclear Asset-Recovery Bonds shall no longer be Book-Entry Nuclear Asset-Recovery Bonds.
Business Day means any day other than a Saturday, a Sunday or a day on which banking institutions in St. Petersburg, Florida, Charlotte, North Carolina or New York, New York are, or DTC or the Corporate Trust Office is, authorized or obligated by law, regulation or executive order to be closed.
Capital Contribution means the amount of cash contributed to the Issuer by Duke Energy Florida as specified in the LLC Agreement.
Capital Subaccount is defined in Section 8.02(a) of the Indenture.
Certificate of Compliance means the certificate referred to in Section 3.03 of the Servicing Agreement and substantially in the form of Exhibit E to the Servicing Agreement.
Certificate of Formation means the Certificate of Formation filed with the Secretary of State of the State of Delaware on January 5, 2016 pursuant to which the Issuer was formed.
Charge means any nuclear asset-recovery charges as defined in Section 366.95(1)(j) of the Nuclear Asset-Recovery Law that are authorized by the Financing Order or any Subsequent Financing Order.
Claim means a claim as defined in Section 101(5) of the Bankruptcy Code.
Clearing Agency means an organization registered as a clearing agency pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant means a securities broker, dealer, bank, trust company, clearing corporation or other financial institution or other Person for whom from time to time a Clearing Agency effects book entry transfers and pledges of securities deposited with such Clearing Agency.
Code means the Internal Revenue Code of 1986.
Collateral is defined in the preamble of the Indenture.
Collection Account is defined in Section 8.02(a) of the Indenture for such Series.
Collection in Full of the Charges means the day on which the aggregate amounts on deposit in the General Subaccount and the Excess Funds Subaccount are sufficient to pay in full all the Outstanding Nuclear Asset-Recovery Bonds and to replenish any shortfall in the Capital Subaccount.
Collection Period means any period commencing on the first Servicer Business Day of any Billing Period and ending on the last Servicer Business Day of such Billing Period.
Commission means the Florida Public Service Commission.
Commission Condition means the satisfaction of any precondition to any amendment or modification to or action under any Basic Documents through the obtaining of Commission consent or acquiescence, as described in the related Basic Document.
Commission Regulations means any regulations, including temporary regulations, promulgated by the Commission pursuant to Florida law.
Company Minutes is defined in Section 1(a)(iv) of the Administration Agreement.
Corporate Trust Office means the office of the Indenture Trustee at which, at any particular time, its corporate trust business shall be administered, which office as of the date hereof is located at BNY Mellon Global Corporate Trust, 10161 Centurion Parkway North, Jacksonville, Florida 32256; Telephone: 904-998-4714; Facsimile: 904-645-1930, or at such other address as the Indenture Trustee may designate from time to time by notice to the Holders of Nuclear Asset-Recovery Bonds and the Issuer, or the principal corporate trust office of any successor trustee designated by like notice.
Covenant Defeasance Option is defined in Section 4.01(b) of the Indenture.
Customer means any existing or future customer (including individuals, corporations, other businesses, and federal, state and local governmental entities) receiving transmission or distribution service from Duke Energy Florida or its successors or assignees under Commission-approved rate schedules or under special contracts, even if such customer elects to purchase electricity from an AES following a fundamental change in regulation of public utilities in Florida.
Daily Remittance is defined in Section 6.11(a) of the Servicing Agreement.
Default means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.
Definitive Nuclear Asset-Recovery Bonds is defined in Section 2.11 of the Indenture.
Delaware UCC means the Uniform Commercial Code as in effect on the Series Closing Date in the State of Delaware.
DTC means The Depository Trust Company.
Duke Energy Florida means Duke Energy Florida, LLC, a Florida limited liability company.
Eligible Account means a segregated non-interest-bearing trust account with an Eligible Institution.
Eligible Institution means:
(a) the corporate trust department of the Indenture Trustee or a subsidiary thereof, so long as any of the securities of the Indenture Trustee has a credit rating from each Rating Agency in one of its generic rating categories that signifies investment grade; or
(b) a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank) (i) that has either (A) a long-term issuer rating of AA- or higher by S&P, A2 or higher by Moodys and AA or higher by Fitch, if rated by Fitch, or (B) a short-term issuer rating of A-1+ or higher by S&P, P-1 or higher by Moodys and F1 or higher by Fitch, if rated by Fitch, or any other long-term, short-term or certificate of deposit rating acceptable to the Rating Agencies, and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation.
If so qualified under clause (b) of this definition, the Indenture Trustee may be considered an Eligible Institution for the purposes of clause (a) of this definition.
Eligible Investments means instruments or investment property that evidence:
(a) direct obligations of, or obligations fully and unconditionally guaranteed as to timely payment by, the United States of America;
(b) demand or time deposits of, unsecured certificates of deposit of, money market deposit accounts of, bank deposit products of or bankers acceptances issued by, any depository institution (including, but not limited to, bank deposit products of the Indenture Trustee, acting in its commercial capacity) incorporated or organized under the laws of the United States of America or any State thereof and subject to supervision and examination by U.S. federal or state banking authorities, so long as the commercial paper or other short-term debt obligations of such depository institution are, at the time of deposit, rated at least A-1 and P-1 or their equivalents by each of S&P and Moodys and, if Fitch provides ratings thereon by Fitch, or such lower rating as will not result in the downgrading or withdrawal of the ratings of the Nuclear Asset-Recovery Bonds;
(c) commercial paper (including commercial paper of the Indenture Trustee, acting in its commercial capacity, and other than commercial paper of Duke Energy Florida or any of its Affiliates), which at the time of purchase is rated at least A-1 and P-1 or their equivalents by each of S&P and Moodys or such lower rating as will not result in the downgrading or withdrawal of the ratings of the Nuclear Asset-Recovery Bonds;
(d) investments in money market funds having a rating in the highest investment category granted thereby (including funds for which the Indenture Trustee or any of its Affiliates is investment manager or advisor) from Moodys, S&P and Fitch, if rated by Fitch;
(e) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or its agencies or instrumentalities, entered into with Eligible Institutions;
(f) repurchase obligations with respect to any security or whole loan entered into with an Eligible Institution or with a registered broker/dealer acting as principal and that meets the ratings criteria set forth below:
(i) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any such broker/dealer being referred to in this definition as a broker/dealer), the unsecured short-term debt obligations of which are rated at least P-1 by Moodys, A-1+ by S&P and, if Fitch provides a rating thereon, F-1+ by Fitch at the time of entering into such repurchase obligation; or
(ii) an unrated broker/dealer, acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least P-1 by Moodys, A-1+ by S&P and, if Fitch provides a rating thereon, F-1+ by Fitch at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company; and
(g) any other investment permitted by each of the Rating Agencies;
in each case maturing not later than the Business Day preceding the next Payment Date or Special Payment Date, if applicable (for the avoidance of doubt, investments in money market funds or similar instruments that are redeemable on demand shall be deemed to satisfy the foregoing requirement). Notwithstanding the foregoing: (1) no securities or investments that mature in 30 days or more shall be Eligible Investments unless the issuer thereof has either a short-term unsecured debt rating of at least P-1 from Moodys or a long-term unsecured debt rating of at least A1 from Moodys and also has a long-term unsecured debt rating of at least A from S&P; (2) no securities or investments described in clauses (b) through (d) above that have maturities of more than 30 days but less than or equal to 3 months shall be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least A1 from Moodys and a short-term unsecured debt rating of at least P-1 from Moodys; and (3) no securities or investments described in clauses (b) through (d) above that have maturities of more than 3 months shall be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least A1 from Moodys and a short-term unsecured debt rating of at least P-1 from Moodys.
Event of Default is defined in Section 5.01 of the Indenture.
Excess Funds Subaccount is defined in Section 8.02(a) of the Indenture.
Exchange Act means the Securities Exchange Act of 1934.
Expected Sinking Fund Schedule means, with respect to any WAL, the expected sinking fund schedule related thereto set forth in the applicable Series Supplement.
Federal Book-Entry Regulations means 31 C.F.R. Part 357 et seq. (Department of Treasury).
Federal Funds Rate means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Servicer from three federal funds brokers of recognized standing selected by it.
Final means, with respect to the Financing Order or Subsequent Financing Order, that the Financing Order has become final, that the Financing Order is not being appealed and that the time for filing an appeal thereof has expired.
Final Maturity Date means, with respect to each Series of WAL of Nuclear Asset-Recovery Bonds, the final maturity date therefor as specified in the applicable Series Supplement.
Financing Costs means all financing costs as defined in Section 366.95(1)(e) of the Nuclear Asset-Recovery Law allowed to be recovered by Duke Energy Florida under the Financing Order.
Financing Order means the financing order issued by the Commission to Duke Energy Florida on November 19, 2015, Docket No. 150148-EI, authorizing the creation of the Nuclear Asset-Recovery Property.
Financing Party means any and all of the following: the Holders, the Indenture Trustee, Duke Energy Florida, collateral agents, any party under the Basic Documents, or any other person acting for the benefit of the Holders.
Fitch means Fitch Ratings or any successor thereto. References to Fitch are effective so long as Fitch is a Rating Agency.
Florida Secured Transactions Registry means the centralized database in which all initial financing statements, amendments, assignments, and other statements of charge authorized to be filed under Chapter 679 of the Florida statutes.
Florida UCC means the Uniform Commercial Code as in effect on the Series Closing Date in the State of Florida.
General Subaccount is defined in Section 8.02(a) of the Indenture for such Series.
Global Nuclear Asset-Recovery Bond means a Nuclear Asset-Recovery Bond to be issued to the Holders thereof in Book-Entry Form, which Global Nuclear Asset-Recovery Bond shall be issued to the Clearing Agency, or its nominee, in accordance with Section 2.11 of the Indenture and the Series Supplement.
Governmental Authority means any nation or government, any U.S. federal, state, local or other political subdivision thereof and any court, administrative agency or other instrumentality or entity exercising executive, legislative, judicial, regulatory or administrative functions of government.
Grant means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, grant, transfer, create, grant a lien upon, a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture and the Series Supplement. A Grant of the Collateral shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.
Holder means the Person in whose name a Nuclear Asset-Recovery Bond is registered on the Nuclear Asset-Recovery Bond Register.
Indemnified Losses is defined in Section 5.03 of the Servicing Agreement.
Indemnified Party is defined in Section 6.02(a) of the Servicing Agreement.
Indemnified Person is defined in Section 5.01(f) of the Sale Agreement.
Indenture means the Indenture, dated as June 22, 2016, by and between the Issuer and The Bank of New York Mellon, a National Association, as Indenture Trustee and as Securities Intermediary.
Indenture Trustee means The Bank of New York Mellon Trust Company, National Association, a national banking association, as indenture trustee for the benefit of the Secured Parties, or any successor indenture trustee for the benefit of the Secured Parties, under the Indenture.
Independent means, when used with respect to any specified Person, that such specified Person (a) is in fact independent of the Issuer, any other obligor on the Nuclear Asset-Recovery Bonds, the Seller, the Servicer and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director (other than as an independent director or manager) or person performing similar functions.
Independent Certificate means a certificate to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and consented to by the Indenture Trustee, and such certificate shall state that the signer has read the definition of Independent in the Indenture and that the signer is Independent within the meaning thereof.
Independent Manager is defined in Section 4.01(a) of the LLC Agreement.
Independent Manager Fee is defined in Section 4.01(a) of the LLC 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 specified Person or any substantial part of its property in an involuntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the date hereof or thereafter, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or ordering the winding-up or liquidation of such specified Persons 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 specified Person of a voluntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the Series Closing Date or thereafter, or the consent by such specified Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such specified Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or the making by such specified Person of any general assignment for the benefit of creditors, or the failure by such specified Person generally to pay its debts as such debts become due, or the taking of action by such specified Person in furtherance of any of the foregoing.
Intercreditor Agreement means the Intercreditor Agreement, dated as of the date hereof, by and among the Issuer, the Indenture Trustee, Duke Energy Florida and the parties to the accounts receivables sale program of Duke Energy Florida Receivables LLC, and any subsequent such agreement.
Interim True-Up Adjustment means either an Optional Interim True-Up Adjustment made in accordance with Section 4.01(b)(ii) of the Servicing Agreement or a Non-standard True-Up Adjustment made in accordance with Section 4.01(b)(iii) of the Servicing Agreement.
Investment Company Act means the Investment Company Act of 1940.
Investment Earnings means investment earnings on funds deposited in the Collection Account net of losses and investment expenses.
Issuer means Duke Energy Florida Project Finance, LLC, a Delaware limited liability company, named as such in the Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the Trust Indenture Act, each other obligor on the Nuclear Asset-Recovery Bonds.
Issuer Documents is defined in Section 1(a)(iv) of the Administration Agreement.
Issuer Order means a written order signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or Paying Agent, as applicable.
Issuer Request means a written request signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or Paying Agent, as applicable.
Legal Defeasance Option is defined in Section 4.01(b) of the Indenture.
Letter of Representations means any applicable agreement between the Issuer and the applicable Clearing Agency, with respect to such Clearing Agencys rights and obligations (in its capacity as a Clearing Agency) with respect to any Book-Entry Nuclear Asset-Recovery Bonds.
Lien means a security interest, lien, mortgage, charge, pledge, claim or encumbrance of any kind.
LLC Agreement means the Amended and Restated Limited Liability Company Agreement of Duke Energy Florida Project Finance, LLC, dated as of June 10, 2016.
Losses means (a) any and all amounts of principal of and interest on the Nuclear Asset-Recovery Bonds not paid when due or when scheduled to be paid in accordance with their terms and the amounts of any deposits by or to the Issuer required to have been made in accordance with the terms of the Basic Documents or the Financing Order or Subsequent that are not made when so required and (b) any and all other liabilities, obligations, losses, claims, damages, payments, costs or expenses of any kind whatsoever.
Manager means each manager of the Issuer under the LLC Agreement.
Member has the meaning specified in the first paragraph of the LLC Agreement.
Monthly Servicers Certificate is defined in Section 3.01(b)(i) of the Servicing Agreement.
Moodys means Moodys Investors Service, Inc.. References to Moodys are effective so long as Moodys is a Rating Agency.
Non-standard True-Up Adjustment means any Non-standard True-Up Adjustment made pursuant to Section 4.01(b)(iii) of the Servicing Agreement.
NRSRO is defined in Section 10.18(b) of the Indenture.
Nuclear Asset-Recovery Bond Register is defined in Section 2.05 of the Indenture.
Nuclear Asset-Recovery Bond Registrar is defined in Section 2.05 of the Indenture.
Nuclear Asset-Recovery Bonds means all Series of the nuclear asset-recovery bonds issued under the Indenture.
Nuclear Asset-Recovery Charge Collections means Charges actually received by the Servicer to be remitted to the Collection Account.
Nuclear Asset-Recovery Charge Payments means the payments made by Customers based on the Charges.
Nuclear Asset-Recovery Costs means (i) the balance of the Crystal River Unit 3 Regulatory Asset as of December 31, 2015 as allowed under the Financing Order minus (ii) $35,894,547.00, which, pursuant to the Commissions Final Order PSC-16-0138-FOF-EI issued on April 5, 2016, shall not be included in, recovered or further trued up as part of the Crystal River Unit 3 Regulatory Asset, plus (iii) carrying charges accruing at 6.0% per annum on the balance of the Crystal River Unit 3 Regulatory Asset (adjusted as described in (ii) above) from December 31, 2015 through the date hereof.
Nuclear Asset-Recovery Law means the laws of the State of Florida adopted in May 2015 enacted as Section 366.95, Florida Statutes.
Nuclear Asset-Recovery Property Records is defined in Section 5.01 of the Servicing Agreement.
Nuclear Asset-Recovery Rate Class means one of the seven separate rate classes to whom Charges are allocated for ratemaking purposes in accordance with the Financing Order.
Nuclear Asset-Recovery Rate Schedule means the Tariff sheets to be filed with the Commission stating the amounts of the Charges, as such Tariff sheets may be amended or modified from time to time pursuant to a True-Up Adjustment.
NY UCC means the Uniform Commercial Code as in effect on the date hereof in the State of New York.
Officers Certificate means a certificate signed by a Responsible Officer of the Issuer under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, and delivered to the Indenture Trustee.
Ongoing Financing Costs means the Financing Costs described as such in the Financing Order, including Operating Expenses and any other costs identified in the Basic
Documents; provided, however, that Ongoing Financing Costs do not include the Issuers costs of issuance of the Nuclear Asset-Recovery Bonds.
Operating Expenses means all unreimbursed fees, costs and out-of-pocket expenses of the Issuer, including all amounts owed by the Issuer to the Indenture Trustee (including indemnities, legal, audit fees and expenses) or any Manager, the Servicing Fee, the Administration Fee, legal and accounting fees, Rating Agency fees, any Regulatory Assessment Fees and related fees (i.e. website provider fees) and any franchise or other taxes owed by the Issuer, including on investment income in the Collection Account.
Opinion of Counsel means one or more written opinions of counsel, who may, except as otherwise expressly provided in the Basic Documents, be employees of or counsel to the party providing such opinion of counsel, which counsel shall be reasonably acceptable to the party receiving such opinion of counsel, and shall be in form and substance reasonably acceptable to such party.
Optional Interim True-Up Adjustment means any Optional Interim True-Up Adjustment made pursuant to Section 4.01(b)(ii) of the Servicing Agreement.
Outstanding means, as of the date of determination, all Nuclear Asset-Recovery Bonds theretofore authenticated and delivered under the Indenture, except:
(a) Nuclear Asset-Recovery Bonds theretofore canceled by the Nuclear Asset-Recovery Bond Registrar or delivered to the Nuclear Asset-Recovery Bond Registrar for cancellation;
(b) Nuclear Asset-Recovery Bonds or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Nuclear Asset-Recovery Bonds; and
(c) Nuclear Asset-Recovery Bonds in exchange for or in lieu of other Nuclear Asset-Recovery Bonds that have been issued pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Nuclear Asset-Recovery Bonds are held by a Protected Purchaser;
provided, that, in determining whether the Holders of the requisite Outstanding Amount of the Nuclear Asset-Recovery Bonds or any Series or WAL thereof have given any request, demand, authorization, direction, notice, consent or waiver under any Basic Document, Nuclear Asset-Recovery Bonds owned by the Issuer, any other obligor upon the Nuclear Asset-Recovery Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding (unless one or more such Persons owns 100% of such Nuclear Asset-Recovery Bonds), except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Nuclear Asset-Recovery Bonds that the Indenture Trustee actually knows to be so owned shall be so disregarded. Nuclear Asset-Recovery Bonds so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgees right so to act with respect to such Nuclear Asset-Recovery Bonds and that the pledgee is not the Issuer, any other obligor upon the Nuclear
Asset-Recovery Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons.
Outstanding Amount means the aggregate principal amount of all Nuclear Asset-Recovery Bonds, or, if the context requires, all Nuclear Asset-Recovery Bonds of a Series or WAL, Outstanding at the date of determination.
Paying Agent means, with respect to the Indenture, the Indenture Trustee and any other Person appointed as a paying agent for the Nuclear Asset-Recovery Bonds pursuant to the Indenture.
Payment Date means, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, the dates specified in the applicable Series Supplement; provided, that if any such date is not a Business Day, the Payment Date shall be the Business Day succeeding such date.
Periodic Billing Requirement means, for any Remittance Period, the aggregate amount of Charges calculated by the Servicer as necessary to be billed during such period in order to collect the Periodic Payment Requirement on a timely basis.
Periodic Interest means, with respect to any Payment Date, the periodic interest for such Payment Date as specified in the Series Supplement.
Periodic Payment Requirement for any Remittance Period means the total dollar amount of Nuclear Asset-Recovery Charge Collections reasonably calculated by the Servicer in accordance with Section 4.01 of the Servicing Agreement as necessary to be received during such Remittance Period (after giving effect to the allocation and distribution of amounts on deposit in the Excess Funds Subaccount at the time of calculation and that are projected to be available for payments on the Nuclear Asset-Recovery Bonds at the end of such Remittance Period and including any shortfalls in Periodic Payment Requirements for any prior Remittance Period) in order to ensure that, as of the last Payment Date occurring in such Remittance Period, (a) all accrued and unpaid principal of and interest on the Nuclear Asset-Recovery Bonds then due shall have been paid in full on a timely basis, (b) the Outstanding Amount of the Nuclear Asset-Recovery Bonds is equal to the Projected Unpaid Balance on each Payment Date during such Remittance Period, (c) the balance on deposit in the Capital Subaccount equals the Required Capital Level and (d) all other fees and expenses due and owing and required or allowed to be paid under Section 8.02 of the Indenture as of such date shall have been paid in full; provided, that, with respect to any Semi-Annual True-Up Adjustment or Interim True-Up Adjustment occurring after the date that is one year prior to the last Scheduled Final Payment Date for the Nuclear Asset-Recovery Bonds, the Periodic Payment Requirements shall be calculated to ensure that sufficient Nuclear Asset-Recovery Charges will be collected to retire the Nuclear Asset-Recovery Bonds in full as of the next Payment Date.
Periodic Principal means, with respect to any Payment Date, the excess, if any, of the Outstanding Amount of Nuclear Asset-Recovery Bonds over the outstanding principal balance specified for such Payment Date on the Expected Sinking Fund Schedule.
Permitted Lien means the Lien created by the Indenture.
Permitted Successor is defined in Section 5.02 of the Sale Agreement.
Person means any individual, corporation, limited liability company, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or Governmental Authority.
Predecessor Nuclear Asset-Recovery Bond means, with respect to any particular Nuclear Asset-Recovery Bond, every previous Nuclear Asset-Recovery Bond evidencing all or a portion of the same debt as that evidenced by such particular Nuclear Asset-Recovery Bond, and, for the purpose of this definition, any Nuclear Asset-Recovery Bond authenticated and delivered under Section 2.06 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Nuclear Asset-Recovery Bond shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Nuclear Asset-Recovery Bond.
Premises is defined in Section 1(g) of the Administration Agreement.
Proceeding means any suit in equity, action at law or other judicial or administrative proceeding.
Projected Unpaid Balance means, as of any Payment Date, the sum of the projected outstanding principal amount of each WAL of Nuclear Asset-Recovery Bonds for such Payment Date set forth in the Expected Sinking Fund Schedule.
Property means all nuclear asset-recovery property as defined in Section 366.95(1)(l) of the Nuclear Asset-Recovery Law created pursuant to the Financing Order or a Subsequent Financing Order and under the Nuclear Asset-Recovery Law, including the right to impose, bill, collect and receive the Charges authorized under the Financing Order and to obtain periodic adjustments of the Charges and all revenue, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests specified in Section 366.95(1)(l)1., regardless of whether such revenues, collections, claims, rights to payment, payments, money, or proceeds are imposed, billed, received, collected, or maintained together with or commingled with other revenues, collections, rights to payment, payments, money, or proceeds.
Protected Purchaser has the meaning specified in Section 8-303 of the UCC.
Rating Agency means, with respect to any WAL of Nuclear Asset-Recovery Bonds, any of Moodys, S&P or Fitch that provides a rating with respect to the Nuclear Asset-Recovery Bonds. If no such organization (or successor) is any longer in existence, Rating Agency shall be a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, notice of which designation shall be given to the Indenture Trustee and the Servicer.
Rating Agency Condition means, with respect to any action, at least ten Business Days prior written notification to each Rating Agency of such action, and written confirmation from each of S&P and Moodys to the Servicer, the Indenture Trustee and the Issuer that such action will not result in a suspension, reduction or withdrawal of the then current rating by such Rating Agency of any WAL of Nuclear Asset-Recovery Bonds; provided, that, if,
within such ten Business Day period, any Rating Agency (other than S&P) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (a) the Issuer shall be required to confirm that such Rating Agency has received the Rating Agency Condition request and, if it has, promptly request the related Rating Agency Condition confirmation and (b) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five Business Days following such second request, the applicable Rating Agency Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agencys right to review or consent).
Record Date means one Business Day prior to the applicable Payment Date.
Registered Holder means the Person in whose name a Nuclear Asset-Recovery Bond is registered on the Nuclear Asset-Recovery Bond Register.
Regulation AB means the rules of the SEC promulgated under Subpart 229.1100 Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123.
Regulatory Assessment Fee means any assessment fee due to the Commission pursuant to Section 350.113, Florida Statutes.
Reimbursable Expenses is defined in Section 2 of the Administration Agreement and Section 6.06(a) of the Servicing Agreement.
Released Parties is defined in Section 6.02(d) of the Servicing Agreement.
Remittance Period means, with respect to any True-Up Adjustment, the period comprised of 6 consecutive Collection Periods beginning with the Collection Period in which such True-Up Adjustment would go into effect, from the Series Closing Date to the first Scheduled Payment Date, and for each subsequent period between Scheduled Payment Dates.
Required Capital Level means, with respect to any Series of Nuclear Asset-Recovery Bonds, the amount specified as such in the Series Supplement therefor.
Requirement of Law means any foreign, U.S. federal, state or local laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority or common law.
Responsible Officer means, with respect to: (a) the Issuer, any Manager or any duly authorized officer; (b) the Indenture Trustee, any officer within the Corporate Trust Office of such trustee (including the President, any Vice President, any Assistant Vice President, any Secretary, any Assistant Treasurer or any other officer of the Indenture Trustee customarily performing functions similar to those performed by persons who at the time shall be such officers, respectively, and that has direct responsibility for the administration of the Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred to because of such officers knowledge and familiarity with the particular subject); (c) any
corporation (other than the Indenture Trustee), the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer or any other duly authorized officer of such Person who has been authorized to act in the circumstances; (d) any partnership, any general partner thereof; and (e) any other Person (other than an individual), any duly authorized officer or member of such Person, as the context may require, who is authorized to act in matters relating to such Person.
Return on Invested Capital means, for any Payment Date with respect to any Remittance Period, the sum of (i) rate of return, payable to Duke Energy Florida, on its Capital Contribution equal to the rate of interest payable on the longest maturing WAL of Nuclear Asset-Recovery Bonds plus (ii) any Return on Invested Capital not paid on any prior Payment Date.
S&P means Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business. References to S&P are effective so long as S&P is a Rating Agency.
Sale Agreement means the Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated as of the date hereof, or any subsequent Nuclear Asset-Recovery Property Purchase and Sale Agreement relating to another Series of Nuclear Asset-Recovery Bonds by and between the Issuer and Duke Energy Florida, and acknowledged and accepted by the Indenture Trustee.
Scheduled Final Payment Date means, with respect to each Series of Nuclear Asset-Recovery Bonds, the date when all interest and principal is scheduled to be paid with respect to that applicable Series in accordance with the Expected Sinking Fund Schedule, as specified in the Series Supplement. For the avoidance of doubt, the Scheduled Final Payment Date with respect to any Series shall be the last Scheduled Payment Date set forth in the Expected Sinking Fund Schedule relating to such Series. The last Scheduled Final Payment Date means the Scheduled Final Payment Date of the latest maturing WAL of a Series of Nuclear Asset-Recovery Bonds.
Scheduled Payment Date means, with respect to each Series or WAL of Nuclear Asset-Recovery Bonds, each Payment Date on which principal for such Series or WAL is to be paid in accordance with the Expected Sinking Fund Schedule for such Series or WAL.
SEC means the Securities and Exchange Commission.
Secured Obligations means the payment of principal of and premium, if any, interest on, and any other amounts owing in respect of, the Nuclear Asset-Recovery Bonds and all fees, expenses, counsel fees and other amounts due and payable to the Indenture Trustee.
Secured Parties means the Indenture Trustee, the Holders and any credit enhancer described in a Series Supplement.
Securities Act means the Securities Act of 1933.
Securities Intermediary means The Bank of New York Mellon Trust Company, National Association, a national banking association, solely in the capacity of a securities
intermediary as defined in the NY UCC and Federal Book-Entry Regulations or any successor securities intermediary under the Indenture.
Seller is defined in the preamble to the Sale Agreement.
Semi-Annual Servicers Certificate is defined in Section 4.01(c)(ii) of the Servicing Agreement.
Semi-Annual True-Up Adjustment means each adjustment to the Nuclear Asset-Recovery Charges made in accordance with Section 4.01(b)(i) of the Servicing Agreement.
Semi-Annual True-Up Adjustment Date means the first billing cycle of March and September of each year, commencing in July 1, 2016.
Series means any series of Nuclear Asset-Recovery Bonds.
Series A Bonds means the Series A Senior Secured Nuclear Asset-Recovery Bonds issued by the Issuer on June 22, 2016.
Series Charges means Charges for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Closing Date means the date on which a Series of the Nuclear Asset-Recovery Bonds are originally issued in accordance with Section 2.10 of the Indenture and the respective Series Supplement.
Series Collateral means Collateral for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Property means Property for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Supplement means an indenture supplemental to the Indenture in the form attached as Exhibit B to the Indenture that authorizes the issuance of Nuclear Asset-Recovery Bonds.
Servicer means Duke Energy Florida, as Servicer under the Servicing Agreement.
Servicer Business Day means any day other than a Saturday, a Sunday or a day on which banking institutions in St. Petersburg, Florida, Charlotte, North Carolina or New York, New York are authorized or obligated by law, regulation or executive order to be closed, on which the Servicer maintains normal office hours and conducts business.
Servicer Default is defined in Section 7.01 of the Servicing Agreement.
Servicer Policies and Practices means, with respect to the Servicers duties under Exhibit A to the Servicing Agreement, 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 and, if applicable, others.
Servicing Agreement means the Nuclear Asset-Recovery Property Servicing Agreement, dated as of the date hereof, or any subsequent Nuclear Asset-Recovery Property Servicing Agreement relating to another Series of Nuclear Asset-Recovery Bonds by and between the Issuer and Duke Energy Florida, and acknowledged and accepted by the Indenture Trustee.
Servicing Fee is defined in Section 6.06(a) of the Servicing Agreement.
Servicing Standard means the obligation of the Servicer to calculate, apply, remit and reconcile proceeds of the Property, including Nuclear Asset-Recovery Charge Payments, and all other Collateral for the benefit of the Issuer and the Holders (a) with the same degree of care and diligence as the Servicer applies with respect to payments owed to it for its own account, (b) in accordance with all applicable procedures and requirements established by the Commission for collection of electric utility tariffs and (c) in accordance with the other terms of the Servicing Agreement.
Special Payment Date means the date on which, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, any payment of principal of or interest (including any interest accruing upon default) on, or any other amount in respect of, the Nuclear Asset-Recovery Bonds of such Series or WAL that is not actually paid within five days of the Payment Date applicable thereto is to be made by the Indenture Trustee to the Holders.
Special Record Date means, with respect to any Special Payment Date, the close of business on the fifteenth day (whether or not a Business Day) preceding such Special Payment Date.
Sponsor means Duke Energy Florida, in its capacity as sponsor of the Nuclear Asset-Recovery Bonds within the meaning of Regulation AB.
State means any one of the fifty states of the United States of America or the District of Columbia.
State Pledge means the pledge of the State of Florida as set forth in Section 366.95(11) of the Nuclear Asset-Recovery Law.
Subaccounts is defined in Section 8.02(a) of the Indenture.
Subsequent Financing Order means, a financing order of the Commission under the Nuclear Asset-Recovery Law issued to Duke Energy Florida subsequent to the Financing Order.
Successor means any successor to Duke Energy Florida under the Nuclear Asset-Recovery Law, whether pursuant to any bankruptcy, reorganization or other insolvency
proceeding or pursuant to any merger, conversion, acquisition, sale or transfer, by operation of law, as a result of electric utility restructuring, or otherwise.
Successor Servicer is defined in Section 3.07(e) of the Indenture.
Tariff means the most current version on file with the Commission of July 1, 2016.
Tax Returns is defined in Section 1(a)(iii) of the Administration Agreement.
Temporary Nuclear Asset-Recovery Bonds means Nuclear Asset-Recovery Bonds executed and, upon the receipt of an Issuer Order, authenticated and delivered by the Indenture Trustee pending the preparation of Definitive Nuclear Asset-Recovery Bonds pursuant to Section 2.04 of the Indenture.
Termination Notice is defined in Section 7.01 of the Servicing Agreement.
True-Up Adjustment means any Semi-Annual True-Up Adjustment or Interim True-Up Adjustment, as the case may be.
Trust Indenture Act means the Trust Indenture Act of 1939 as in force on the Series Closing Date, unless otherwise specifically provided.
UCC means the Uniform Commercial Code as in effect in the relevant jurisdiction.
Underwriters means the underwriters who purchase Nuclear Asset-Recovery Bonds of any Series from the Issuer and sell such Nuclear Asset-Recovery Bonds in a public offering.
Underwriting Agreement means the Underwriting Agreement, dated June 15, 2016, by and among Duke Energy Florida, the representatives of the several Underwriters named therein and the Issuer.
U.S. Government Obligations means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and that are not callable at the option of the issuer thereof.
WAL means any one of the groupings of Nuclear Asset-Recovery Bonds of a Series differentiated by sinking fund schedule, interest rate or sinking fund schedule, as specified in the Series Supplement.
WAL Maturity Date means, with respect to any WAL of Nuclear Asset-Recovery Bonds, the maturity date therefor, as specified in the Series Supplement therefor.
Weighted Average Days Outstanding means the weighted average number of days Duke Energy Floridas monthly bills to Customers remain outstanding during the calendar year preceding the calculation thereof pursuant to Section 4.01(b)(i) of the Servicing Agreement.
B. Rules of Construction. Unless the context otherwise requires, in each Basic Document to which this Appendix A is attached:
(a) All accounting terms not specifically defined herein shall be construed in accordance with United States generally accepted accounting principles. To the extent that the definitions of accounting terms in any Basic Document are inconsistent with the meanings of such terms under generally accepted accounting principles or regulatory accounting principles, the definitions contained in such Basic Document shall control.
(b) The term including means including without limitation, and other forms of the verb include have correlative meanings.
(c) All references to any Person shall include such Persons permitted successors and assigns, and any reference to a Person in a particular capacity excludes such Person in other capacities.
(d) Unless otherwise stated in any of the Basic Documents, in the computation of a period of time from a specified date to a later specified date, the word from means from and including and each of the words to and until means to but excluding.
(e) The words hereof, herein and hereunder and words of similar import when used in any Basic Document shall refer to such Basic Document as a whole and not to any particular provision of such Basic Document. References to Articles, Sections, Appendices and Exhibits in any Basic Document are references to Articles, Sections, Appendices and Exhibits in or to such Basic Document unless otherwise specified in such Basic Document.
(f) The various captions (including the tables of contents) in each Basic Document are provided solely for convenience of reference and shall not affect the meaning or interpretation of any Basic Document.
(g) The definitions contained in this Appendix A apply equally to the singular and plural forms of such terms, and words of the masculine, feminine or neuter gender shall mean and include the correlative words of other genders.
(h) Unless otherwise specified, references to an agreement or other document include references to such agreement or document as from time to time amended, restated, reformed, supplemented or otherwise modified in accordance with the terms thereof (subject to any restrictions on such amendments, restatements, reformations, supplements or modifications set forth in such agreement or document) and include any attachments thereto.
(i) References to any law, rule, regulation or order of a Governmental Authority shall include such law, rule, regulation or order as from time to time in effect, including any amendment, modification, codification, replacement or reenactment thereof or any substitution therefor.
(j) The word will shall be construed to have the same meaning and effect as the word shall.
(k) The word or is not exclusive.
(l) All terms defined in the relevant Basic Document to which this Appendix A is attached shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein.
(m) A term has the meaning assigned to it.
|
Exhibit 5.1 |
|
HUNTON & WILLIAMS LLP 200 PARK AVENUE
TEL 212 309 1000 |
|
|
|
FILE NO: 34085.005006 |
June 22, 2016
Duke Energy Florida, LLC
Duke Energy Florida Project Finance, LLC
299 First Avenue North
St. Petersburg, Florida 33701
Re: Duke Energy Florida, LLC
Registration Statement on Form SF-1
Ladies and Gentlemen:
We have acted as special counsel to Duke Energy Florida, LLC (DEF) and Duke Energy Florida Project Finance, LLC, a Delaware limited liability company (the Company), in connection with the preparation of the Registration Statement filed on Form SF-1 (Registration Nos. 333-209196 and 333-209196-01) filed on January 29, 2016 and as amended by Amendment No. 1 filed on February 9, 2016, Amendment No. 2 filed on March 31, 2016, Amendment No. 3 filed on May 3, 2016, Amendment No. 4 filed on May 26, 2016 and Amendment No. 5 filed on June 2, 2016 (collectively, the Registration Statement) with the Securities and Exchange Commission (the Commission) under the Securities Act of 1933, as amended (the Securities Act), including the prospectus therein (the Prospectus), relating to the registration of up to $1,314,000,000 of Series A Senior Secured Bonds (the Bonds) of the Company. The Bonds will be issued in an aggregate principal amount of $1,294,290,000 under an Indenture (the Base Indenture) between the Company and The Bank of New York Mellon Trust Company, National Association, as indenture trustee (the Indenture Trustee), as supplemented by a Series Supplement (the Series Supplement and, together with the Base Indenture, the Indenture) between the Company and the Trustee, the form of each of which has been filed as an exhibit to the Registration Statement.
This opinion letter is being delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
We are familiar with the proceedings taken by the Company in connection with the authorization, issuance and sale of the Bonds. In rendering the opinions expressed below, we have examined and relied upon copies of the Registration Statement and the exhibits filed therewith, and the form of Indenture. We have also examined originals, or copies of originals certified to our satisfaction, of such agreements, documents, certificates and statements of government officials and other instruments, and have examined such questions of law and
June 22, 2016
Page 2
have satisfied ourselves as to such matters of fact, as we have considered relevant and necessary as a basis for this opinion. We have assumed (i) the genuineness of all signatures, (ii) the authenticity of all documents submitted to us as originals and (iii) the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. In delivering the opinions expressed below, we have relied without independent verification, as to factual matters, on certifications and other written or oral statements of governmental and other public officials and of officers and representatives of the Company, DEF, the underwriters of the Bonds and the Indenture Trustee.
Based on the foregoing, and subject to the qualifications and limitations hereinafter set forth, we are of the opinion that:
1. The Company is a limited liability company validly existing and in good standing under the laws of the State of Delaware;
2. The Company has limited liability company power and authority to execute and deliver the Indenture, to authorize and issue the Bonds and to perform its obligations under the Indenture and the Bonds; and
3. The Bonds are validly issued and binding obligations of the Company.
Our opinion is subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer and other similar laws relating to or affecting creditors rights generally and to general equitable principles (regardless of whether considered in a proceeding in equity or at law), including concepts of commercial reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief.
We express no opinion herein as to the law of any jurisdiction other than the law of the State of New York and the Limited Liability Company Act of the State of Delaware.
We hereby consent to (i) the filing of this opinion letter as an exhibit to the Registration Statement and to all references to us included in or made a part of the Registration Statement and (ii) the posting of a copy of this opinion letter to an internet website required under Rule 17g-5 under the Securities Exchange Act of 1934 and maintained by DEF for the purpose of complying with such rule. In giving the foregoing consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the SEC thereunder. This opinion is limited to the matters stated in this letter, and no opinion may be implied or inferred beyond the matters expressly stated in this letter. This opinion is given as of the date hereof, and we assume no obligation to advise you after the date hereof of facts or
June 22, 2016
Page 3
circumstances that come to our attention or changes in the law, including judicial or administrative interpretations thereof, that occur which could affect the opinions contained herein.
Very truly yours,
/s/ Hunton & Williams LLP
13936/08408
Exhibit 8.1
|
HUNTON & WILLIAMS LLP RIVERFRONT PLAZA, EAST TOWER 951 EAST BYRD STREET RICHMOND, VIRGINIA 23219
TEL 804 · 788 · 8200 |
|
|
|
File No: 34085.5006 |
June 22, 2016
Duke Energy Florida, LLC
Duke Energy Florida Project Finance, LLC
299 First Avenue North
St. Petersburg, Florida 33701
Duke Energy Florida Project Finance, LLC
NUCLEAR ASSET-RECOVERY BONDS
Ladies and Gentlemen:
We have acted as special United States federal income tax counsel to Duke Energy Florida, LLC a Florida limited liability company (DEF), and Duke Energy Florida Project Finance, LLC, a Delaware limited liability company (the Issuer), in connection with the Registration Statement on Form SF-1 (File Nos. 333-209196 and 333-209196-01) (the Registration Statement) filed on January 29, 2016 and as amended by Amendment No. 1 filed on February 9, 2016, Amendment No. 2 filed on March 31, 2016, Amendment No. 3 filed on May 3, 2016, Amendment No. 4 filed on May 26, 2016 and Amendment No. 5 filed on June 2, 2016 with the Securities and Exchange Commission pursuant to the Securities Act of 1933, including the prospectus therein (the Prospectus) included as part of the Registration Statement, relating to the registration thereunder of the Issuers Series A Senior Secured Bonds (the Bonds). The Bonds will be issued in an aggregate principal amount of $1,294,290,000, pursuant to an Indenture among the Issuer, as issuer, and The Bank of New York Mellon Trust Company, National Association (BNY), as indenture trustee and securities intermediary, together with a Series Supplement between the Issuer and BNY establishing the form and terms of such Bonds (collectively the Indenture). Capitalized terms used and not defined herein have the respective meanings ascribed to them in the Prospectus. You have requested our opinion regarding certain U.S. federal income tax matters.
We have reviewed the Registration Statement, including the Prospectus, as part of the Registration Statement (collectively, the Offering Documents), relating to the Bonds, and the basic documents (as defined in the Prospectus, and together with the Offering Documents, the Transaction Documents).
We are familiar with the proceedings taken by DEF and the Issuer in connection with the authorization, issuance and sale of the Bonds. As to any facts material to the opinions expressed
herein, we have relied, without independent verification, upon certificates and statements and representations and warranties of officers and other representatives and agents of DEF, the Issuer, BNY and other parties and signatories to the Transaction Documents and their related exhibits and of public officials.
In rendering this opinion letter, except for the matters that are specifically addressed in the opinions expressed below, with your permission we have assumed, and are relying thereon without independent investigation, (i) the authenticity of all Transaction Documents submitted to us as originals or as copies thereof, and the conformity to the originals of all Transaction Documents submitted to us as copies, (ii) the genuineness of signatures, (iii) the legal capacity of natural persons signing the basic documents, (iv) the necessary entity formation and continuing existence in the jurisdiction of formation, and the necessary licensing and qualification in all jurisdictions, of the parties to all basic documents, (v) the necessary entity authorization, execution, delivery and enforceability (as limited by bankruptcy and other insolvency laws) of the basic documents, and the necessary entity power and authority with respect thereto, (vi) that each of the parties and signatories to the basic documents have complied and will comply (without waiver) with all of the provisions and representations and certifications of such basic documents, (vii) that the Issuer and the other parties and signatories to the basic documents have conducted and will conduct their activities only as provided in the Transaction Documents, (viii) that there has been no mutual mistake of fact or misunderstanding, fraud, duress or undue influence in connection with any Transaction Document and (ix) that there is not any other agreement that modifies or supplements the agreements expressed in any Transaction Document to which this opinion letter relates and that renders any of the opinions expressed below inconsistent with such Transaction Document as so modified or supplemented. Finally, we have assumed that the Financing Act is valid and that the financing order (as defined in the Prospectus) is valid, complies with Florida law, is in full force and effect and is final and non-appealable.
In rendering this opinion letter, except for the matters that are specifically addressed in the opinions expressed below, we have made no inquiry, have conducted no investigation and assume no responsibility with respect to (a) the accuracy of and compliance by the parties thereto with the representations, financial calculations, warranties, covenants, certifications and assumptions as to factual matters contained in any Transaction Document or otherwise provided to us or (b) the conformity of the underlying assets and related documents to the requirements of any agreement to which this opinion letter relates.
Based upon the foregoing and based upon, in particular, Revenue Procedure 2005-62, 2005-2 C.B. 507, and subject to the qualifications, representations, warranties, covenants, certifications, financial calculations and assumptions stated herein and in the Transaction Documents, we are of the opinion that if (i) all of the parties and signatories to the Transaction
Documents comply (without waiver) with all of the provisions of the Indenture and the other Transaction Documents prepared and executed in connection with such transaction and (ii) the Bonds are issued as described in the Transaction Documents and not as part of another transaction or series of transactions that would require the Issuer, DEF, any investor or any other participant to treat such transaction or transactions as subject to the disclosure, registration or list maintenance requirements of section 6011, 6111 or 6112 of the Internal Revenue Code, as amended (the Code), then, in each case below, solely for United States federal income tax purposes:
1. the issuance of the Bonds will be a qualifying securitization within the meaning of Revenue Procedure 2005-62;
2. the Bonds will be characterized as obligations of DEF for United States federal income tax purposes as expressly set forth in section 6.02 of Revenue Procedure 2005-62;
3. the Issuer will not be subject to federal income tax as an entity separate from DEF (the Issuers sole member); and
4. DEF will not be treated as recognizing gross income upon the issuance of the Bonds.
You should be aware that the above opinions represent our conclusions as to the application of existing law to the transaction described above. There can be no assurance, however, that contrary positions will not be taken by the Internal Revenue Service or that existing law, regulations, administrative rules and practice will not change. Any such change might be retroactive and might affect the opinions set forth above. We also caution you that our opinions depend upon the facts, qualifications, representations, warranties, covenants, certifications, financial calculations, assumptions and Transaction Documents to which this letter refers, which are subject to change, reinterpretation and misunderstanding. Our conclusion could differ if these items on which we have relied are, become or are found to be, different. No opinion has been sought, and none has been given, concerning the tax consequences of the transaction described herein or of the acquisition, ownership, or disposition of the Bonds under the laws of any state, locality or foreign jurisdiction.
These opinions are rendered as of the date hereof, speak only as of the date hereof and are based on the current provisions of the Code and the Treasury Regulations issued or proposed thereunder, revenue rulings, revenue procedures and other published releases of the Internal Revenue Service and current case law, any of which can change at any time. We undertake no obligation to update this opinion letter after the date hereof or advise you of changes in the event there is any change in legal authorities, facts, qualifications, representations, warranties,
covenants, certifications, financial calculations, assumptions or Transaction Documents on which this opinion letter is based (including the taking of any action by any party or signatory to the basic documents or any amendments to any basic document pursuant to any opinion of counsel or a waiver), or any inaccuracy in any of these items upon which we have relied in rendering this opinion letter, unless we are specifically engaged to do so.
In rendering this opinion letter, other than as expressly stated above, we do not express any opinion concerning any law other than the federal income tax laws of the United States, including without limitation the Code, Treasury Regulations promulgated thereunder and administrative and judicial interpretations thereof, all of which are subject to change. We do not express any opinion herein with respect to any matter not specifically addressed in the opinions expressed above, including without limitation, (i) any statute, regulation or provision of law of any state, county, municipality or other political subdivision or any agency or instrumentality thereof, (ii) the securities laws of any jurisdiction or (iii) the tax laws of any jurisdiction (other than the federal income tax laws of the United States and only as specifically described in the opinions above). Additional issues may exist that could affect the United States federal tax treatment of the transaction that is the subject of this opinion letter, and this opinion letter does not consider or provide a conclusion with respect to any such additional issues.
We are furnishing this opinion letter to you and this opinion letter is not to be relied on, circulated, quoted or otherwise referred to for any other purpose. We hereby consent, however, to (a) the posting of a copy of this opinion letter to an internet website required under Rule 17g-5 under the Securities Exchange Act of 1934, as amended, and maintained by DEF solely for the purpose of complying with such rule and (b) the filing of this opinion letter as Exhibit 8.1 to the Registration Statement and the incorporation thereof in the Registration Statement and the use of our name under the captions Material U.S. Federal Income Tax Consequences and Legal Matters in the Prospectus. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder by the Commission.
|
Very truly yours, |
|
|
|
|
|
/s/ Hunton & Williams LLP |
02674/03352/14086
Exhibit 99.1
NUCLEAR ASSET-RECOVERY PROPERTY SERVICING AGREEMENT
by and between
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC,
Issuer
and
DUKE ENERGY FLORIDA, LLC,
Servicer
Acknowledged and Accepted by
THE BANK OF NEW YORK MELLON
TRUST COMPANY, NATIONAL ASSOCIATION, as Indenture Trustee
Dated as of June 22, 2016
TABLE OF CONTENTS
|
|
Page | |
|
|
| |
ARTICLE I |
DEFINITIONS AND RULES OF CONSTRUCTION |
1 | |
Section 1.01. |
Definitions and Rules of Construction |
1 | |
|
|
| |
ARTICLE II |
APPOINTMENT AND AUTHORIZATION |
2 | |
Section 2.01. |
Appointment of Servicer; Acceptance of Appointment |
2 | |
|
|
| |
Section 2.02. |
Authorization |
2 | |
|
|
| |
Section 2.03. |
Dominion and Control Over the Series Property |
2 | |
|
|
| |
ARTICLE III |
ROLE OF SERVICER |
2 | |
Section 3.01. |
Duties of Servicer |
2 | |
|
|
| |
Section 3.02. |
Servicing and Maintenance Standards |
5 | |
|
|
| |
Section 3.03. |
Annual Reports on Compliance with Regulation AB |
6 | |
|
|
| |
Section 3.04. |
Annual Report by Independent Registered Public Accountants |
7 | |
|
|
| |
ARTICLE IV |
SERVICES RELATED TO TRUE-UP ADJUSTMENTS |
7 | |
Section 4.01. |
True-Up Adjustments |
7 | |
|
|
| |
Section 4.02. |
Limitation of Liability |
10 | |
|
|
| |
ARTICLE V |
THE NUCLEAR ASSET-RECOVERY PROPERTY |
11 | |
Section 5.01. |
Custody of Nuclear Asset-Recovery Property Records |
11 | |
|
|
| |
Section 5.02. |
Duties of Servicer as Custodian |
11 | |
|
|
| |
Section 5.03. |
Custodians Indemnification |
13 | |
|
|
| |
Section 5.04. |
Effective Period and Termination |
13 | |
|
|
| |
Section 5.05. |
Alternative Energy Suppliers |
13 | |
|
|
| |
ARTICLE VI |
THE SERVICER |
14 | |
Section 6.01. |
Representations and Warranties of Servicer |
14 | |
|
|
| |
Section 6.02. |
Indemnities of Servicer; Release of Claims |
16 | |
|
|
| |
Section 6.03. |
Binding Effect of Servicing Obligations |
18 | |
|
|
| |
Section 6.04. |
Limitation on Liability of Servicer and Others |
19 | |
|
|
| |
Section 6.05. |
Duke Energy Florida Not to Resign as Servicer |
20 | |
|
|
| |
Section 6.06. |
Servicing Compensation |
20 | |
|
|
| |
Section 6.07. |
Compliance with Applicable Law |
22 | |
|
|
| |
Section 6.08. |
Access to Certain Records and Information Regarding Series Property |
22 | |
|
|
| |
Section 6.09. |
Appointments |
22 | |
|
|
| |
Section 6.10. |
No Servicer Advances |
22 | |
Section 6.11. |
Remittances |
22 | |
|
|
| |
Section 6.12. |
Maintenance of Operations |
23 | |
|
|
| |
ARTICLE VII |
DEFAULT |
23 | |
Section 7.01. |
Servicer Default |
23 | |
|
|
| |
Section 7.02. |
Appointment of Successor |
25 | |
|
|
| |
Section 7.03. |
Waiver of Past Defaults |
26 | |
|
|
| |
Section 7.04. |
Notice of Servicer Default |
26 | |
|
|
| |
Section 7.05. |
Cooperation with Successor |
26 | |
|
|
| |
ARTICLE VIII |
MISCELLANEOUS PROVISIONS |
26 | |
Section 8.01. |
Amendment |
26 | |
|
|
| |
Section 8.02. |
Maintenance of Accounts and Records |
28 | |
|
|
| |
Section 8.03. |
Notices |
28 | |
|
|
| |
Section 8.04. |
Assignment |
29 | |
|
|
| |
Section 8.05. |
Limitations on Rights of Others |
29 | |
|
|
| |
Section 8.06. |
Severability |
30 | |
|
|
| |
Section 8.07. |
Separate Counterparts |
30 | |
|
|
| |
Section 8.08. |
Governing Law |
30 | |
|
|
| |
Section 8.09. |
Assignment to Indenture Trustee |
30 | |
|
|
| |
Section 8.10. |
Nonpetition Covenants |
30 | |
|
|
| |
Section 8.11. |
Limitation of Liability |
30 | |
|
|
| |
Section 8.12. |
Rule 17g-5 Compliance |
31 | |
|
|
| |
Section 8.13. |
Indenture Trustee Actions |
31 | |
EXHIBITS
Exhibit A |
Servicing Procedures |
Exhibit B |
Form of Monthly Servicers Certificate |
Exhibit C |
Form of Semi-Annual Servicers Certificate |
Exhibit D |
Form of Servicer Certificate |
Exhibit E |
Form of Certificate of Compliance |
Exhibit F |
Expected Amortization Schedule |
APPENDIX
Appendix A |
Definitions and Rules of Construction |
This NUCLEAR ASSET-RECOVERY PROPERTY SERVICING AGREEMENT, dated as of June 22, 2016, is by and between DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, a Delaware limited liability company, as Issuer, and DUKE ENERGY FLORIDA, LLC, a Florida limited liability company, as servicer, and acknowledged and accepted by THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as Indenture Trustee.
RECITALS
WHEREAS, pursuant to the Nuclear Asset-Recovery Law and the Financing Order, Duke Energy Florida, in its capacity as seller, and the Issuer are concurrently entering into the Sale Agreement pursuant to which the Seller is selling and the Issuer is purchasing certain Property created pursuant to the Nuclear Asset-Recovery Law and the Financing Order described therein;
WHEREAS, in connection with its ownership of the Series Property relating to the Series A Bonds and in order to collect the associated Series Charges, the Issuer desires to engage the Servicer to carry out the functions described herein and the Servicer desires to be so engaged;
WHEREAS, the Issuer desires to engage the Servicer to act on its behalf in obtaining True-Up Adjustments from the Commission and the Servicer desires to be so engaged;
WHEREAS, the Nuclear Asset-Recovery Charge Collections for the Series A Bonds may be commingled with other funds collected by the Servicer; and
WHEREAS, certain parties may have an interest in such commingled collections, and such parties will have entered into the Intercreditor Agreement, which allows Duke Energy Florida to allocate the collected, commingled funds according to each partys interest;
WHEREAS, the Commission or its attorney will enforce this Servicing Agreement for the benefit of the Customers.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.01. Definitions and Rules of Construction. Capitalized terms used but not otherwise defined in this Servicing Agreement shall have the respective meanings given to such terms in Appendix A, which is hereby incorporated by reference into this Servicing Agreement as if set forth fully in this Servicing Agreement. Not all terms defined in Appendix A are used in this Servicing Agreement. The rules of construction set forth in Appendix A shall apply to this Servicing Agreement and are hereby incorporated by reference into this Servicing Agreement as if set forth fully in this Servicing Agreement, however for purposes of this
Servicing Agreement, unless otherwise indicated herein, the terms Series Charges, Series Closing Date, Series Collateral and Series Property mean the Series Charges, Series Closing Date, Series Collateral and Series Property for the Series A Bonds..
ARTICLE II
APPOINTMENT AND AUTHORIZATION
Section 2.01. Appointment of Servicer; Acceptance of Appointment. The Issuer hereby appoints the Servicer, and the Servicer hereby accepts such appointment, to perform the Servicers obligations pursuant to this Servicing Agreement on behalf of and for the benefit of the Issuer or any assignee thereof in accordance with the terms of this Servicing Agreement and applicable law as it applies to the Servicer in its capacity as servicer hereunder. This appointment and the Servicers acceptance thereof may not be revoked except in accordance with the express terms of this Servicing Agreement.
Section 2.02. Authorization. With respect to all or any portion of the Series Property, the Servicer shall be, and hereby is, authorized and empowered by the Issuer to (a) execute and deliver, on behalf of itself and/or the Issuer, as the case may be, any and all instruments, documents or notices, and (b) on behalf of itself and/or the Issuer, as the case may be, make any filing and participate in proceedings of any kind with any Governmental Authority, including with the Commission. The Issuer shall execute and deliver to the Servicer such documents as have been prepared by the Servicer for execution by the Issuer and shall furnish the Servicer with such other documents as may be in the Issuers possession, in each case as the Servicer may determine to be necessary or appropriate to enable it to carry out its servicing and administrative duties hereunder. Upon the Servicers written request, the 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 Series Property. Notwithstanding any other provision herein, the Issuer shall have dominion and control over the Series Property, and the Servicer, in accordance with the terms hereof, is acting solely as the servicing agent and custodian for the Issuer with respect to the Series Property and the Nuclear Asset-Recovery Property Records for the Series A Bonds. The Servicer shall not take any action that is not authorized by this Servicing Agreement, that would contravene the Commission Regulations or the Financing Order, that is not consistent with its customary procedures and practices or that shall impair the rights of the Issuer or the Indenture Trustee (on behalf of the Holders) in the Series Property, in each case unless such action is required by applicable law or court or regulatory order.
ARTICLE III
ROLE OF SERVICER
Section 3.01. Duties of Servicer. The Servicer, as agent for the Issuer, shall have the following duties:
(a) Duties of Servicer Generally.
(i) The Servicers duties in general shall include: management, servicing and administration of the Series Property; calculating consumption, billing the Series Charges, collecting the Series Charges from Customers and posting all collections, responding to inquiries by Customers, the Commission or any other Governmental Authority with respect to the Series Property or Series Charges; investigating and handling delinquencies (and furnishing reports with respect to such delinquencies to the Issuer), processing and depositing collections and making periodic remittances; furnishing periodic and current reports to the Issuer, the Commission, the Indenture Trustee and the Rating Agencies; making all filings with the Commission and taking such other action as may be necessary to perfect the Issuers ownership interests in and the Indenture Trustees first priority Lien on the Series Property; making all filings and taking such other action as may be necessary to perfect and maintain the perfection and priority of the Indenture Trustees Lien on all Series Collateral; selling as the agent for the Issuer, as its interests may appear, defaulted or written off accounts in accordance with the Servicers usual and customary practices; taking all necessary action in connection with True-Up Adjustments as set forth herein; and performing such other duties as may be specified under the Financing Order to be performed by it. Anything to the contrary notwithstanding, the duties of the Servicer set forth in this Servicing Agreement shall be qualified in their entirety by any Commission Regulations, the Financing Order and the U.S. federal securities laws and the rules and regulations promulgated thereunder, including Regulation AB, as in effect at the time such duties are to be performed. Without limiting the generality of this Section 3.01(a)(i), 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, consumption and bill calculation, billing, customer service functions, collections, posting, payment processing and remittance set forth in Exhibit A. Any processing and depositing of collections, making of periodic remittances and furnishing of periodic reports set forth in this Section 3.01(a)(i) shall be subject to the provisions of the Intercreditor Agreement.
(ii) Commission Regulations Control. Notwithstanding anything to the contrary in this Servicing Agreement, the duties of the Servicer set forth in this Servicing Agreement shall be qualified and limited in their entirety by the Nuclear Asset-Recovery Law, the Financing Order and any Commission Regulations as in effect at the time such duties are to be performed.
(b) Reporting Functions.
(i) Monthly Servicers Certificate. On or before the last Servicer Business Day of each month, the Servicer shall prepare and deliver to the Issuer, the Indenture Trustee, the Commission and the Rating Agencies a written report substantially in the form of Exhibit B (a Monthly Servicers Certificate) setting forth certain information relating to Nuclear Asset-Recovery Charge Payments in connection with the Series Charges received by the Servicer during the Collection Period preceding such date; provided, however, that, for any month in which the
Servicer is required to deliver a Semi-Annual Servicers Certificate pursuant to Section 4.01(c)(ii), the Servicer shall prepare and deliver the Monthly Servicers Certificate no later than the date of delivery of such Semi-Annual Servicers Certificate.
(ii) Notification of Laws and Regulations. The Servicer shall immediately notify the Issuer, the Indenture Trustee, and the Rating Agencies in writing of any Requirement of Law or Commission Regulations hereafter promulgated that have a material adverse effect on the Servicers ability to perform its duties under this Servicing Agreement.
(iii) Other Information. Upon the reasonable request of the Issuer, the Indenture Trustee, the Commission or any Rating Agency, the Servicer shall provide to the Issuer, the Indenture Trustee, the Commission or such Rating Agency, as the case may be, any public financial information in respect of the Servicer, or any material information regarding the Series Property to the extent it is reasonably available to the Servicer, as may be reasonably necessary and permitted by law to enable the Issuer, the Indenture Trustee, the Commission or the Rating Agencies to monitor the performance by the Servicer hereunder. In addition, so long as any of the Series A Bonds are outstanding, the Servicer shall provide the Issuer, the Commission and the Indenture Trustee, within a reasonable time after written request therefor, any information available to the Servicer or reasonably obtainable by it that is necessary to calculate the Series Charges applicable to each Nuclear Asset-Recovery Rate Class.
(iv) Preparation of Reports. The Servicer shall prepare and deliver such additional reports as required under this Servicing Agreement, including a copy of each Semi-Annual Servicers Certificate described in Section 4.01(c)(ii), the annual statements of compliance, attestation reports and other certificates described in Section 3.03 and the Annual Accountants Report described in Section 3.04. In addition, the Servicer shall prepare, procure, deliver and/or file, or cause to be prepared, procured, delivered or filed, any reports, attestations, exhibits, certificates or other documents required to be delivered or filed with the SEC (and/or any other Governmental Authority) by the Issuer or the Sponsor under the U.S. federal securities or other applicable laws or in accordance with the Basic Documents, including filing with the SEC, if applicable and required by applicable law, a copy or copies of (A) the Monthly Servicers Certificates described in Section 3.01(b)(i) (under Form 10-D or any other applicable form), (B) the Semi-Annual Servicers Certificates described in Section 4.01(c)(ii) (under Form 10-D or any other applicable form), (C) the annual statements of compliance, attestation reports and other certificates described in Section 3.03 and (D) the Annual Accountants Report (and any attestation required under Regulation AB) described in Section 3.04. In addition, the appropriate officer or officers of the Servicer shall (in its separate capacity as Servicer) sign the Sponsors annual report on Form 10-K (and any other applicable SEC or other reports, attestations, certifications and other documents), to the extent that the
Servicers signature is required by, and consistent with, the U.S. federal securities laws and/or any other applicable law.
(c) Opinions of Counsel. The Servicer shall obtain on behalf of the Issuer and deliver to the Issuer, the Commission and the Indenture Trustee:
(i) promptly after the execution and delivery of this Servicing Agreement and of each amendment hereto, an Opinion of Counsel from external counsel of the Issuer either (A) to the effect that, in the opinion of such counsel, all filings, including filings with the Florida Secured Transactions Registry and the Secretary of State of the State of Delaware, that are necessary under the UCC and the Nuclear Asset-Recovery Law to fully preserve, protect and perfect the Liens of the Indenture Trustee in the Series Property have been authorized, executed and filed, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) to the effect that, in the opinion of such counsel, no such action shall be necessary to preserve, protect and perfect such Liens; and
(ii) within 90 days after the beginning of each calendar year beginning with the first calendar year beginning more than three months after the date hereof, an Opinion of Counsel, which counsel may be an employee of or counsel to the Issuer or the Servicer and which shall be reasonably satisfactory to the Indenture Trustee, or, in the Indenture Trustees sole judgment, external counsel of the Issuer, dated as of a date during such 90-day period, either (A) to the effect that, in the opinion of such counsel, all filings, including filings with the Florida Secured Transactions Registry and the Secretary of State of the State of Delaware, have been authorized, executed and filed that are necessary under the UCC and the Nuclear Asset-Recovery Law to fully preserve, protect and perfect the Liens of the Indenture Trustee in the Series Property, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) to the effect that, in the opinion of such counsel, no such action shall be necessary to preserve, protect and perfect such Liens.
Each Opinion of Counsel referred to in Section 3.01(c)(i) or Section 3.01(c)(ii) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve, protect and perfect such interest or Lien.
Section 3.02. Servicing and Maintenance Standards. The Servicer will monitor payments and impose collection policies on Customers, as permitted under the Financing Order and the rules of the Commission. On behalf of the Issuer, the Servicer shall: (a) manage, service, administer, bill, collect, receive and post collections in respect of the Series Property with reasonable care and in material compliance with each applicable Requirement of Law, including all applicable Commission 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 standards, policies and procedures in performing its duties as Servicer that are customary in the electric distribution industry; (c) use all reasonable efforts, consistent with its customary servicing procedures, to enforce, and maintain rights in
respect of, the Series Property and to bill, collect, receive and post the Series Charges; (d) comply with each Requirement of Law, including all applicable Commission Regulations and guidelines, applicable to and binding on it relating to the Series Property; (e) file all reports with the Commission required by the Financing Order; (f) file and maintain the effectiveness of UCC financing statements filed with the Florida Secured Transaction Registry with respect to the property transferred under the Sale Agreement; and (g) take such other action on behalf of the Issuer to ensure that the Lien of the Indenture Trustee on the Series Collateral remains perfected and of first priority. 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 Series Property, which, in the Servicers judgment, may include the taking of legal action, at the Issuers expense but subject to the priority of payments set forth in Section 8.02(e) of the Indenture.
Section 3.03. Annual Reports on Compliance with Regulation AB.
(a) The Servicer shall deliver to the Issuer, the Indenture Trustee, the Commission and the Rating Agencies, on or before the earlier of (a) March 31 of each year or (b) with respect to each calendar year during which the Issuers annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, the date on which such annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, certificates from a Responsible Officer of the Servicer (i) containing, and certifying as to, the statements of compliance required by Item 1123 of Regulation AB, as then in effect, and (ii) containing, and certifying as to, the statements and assessment of compliance required by Item 1122(a) of Regulation AB, as then in effect. These certificates may be in the form of, or shall include the forms attached as Exhibit D and Exhibit E, with, in the case of Exhibit D, such changes as may be required to conform to the applicable securities law.
(b) The Servicer shall use commercially reasonable efforts to obtain, from each other party participating in the servicing function, any additional certifications as to the statements and assessment required under Item 1122 or Item 1123 of Regulation AB to the extent required in connection with the filing of the annual report on Form 10-K; provided, however, that a failure to obtain such certifications shall not be a breach of the Servicers duties hereunder. The parties acknowledge that the Indenture Trustees certifications shall be limited to the Item 1122 certifications described in Exhibit C of the Indenture.
(c) The initial Servicer, in its capacity as Sponsor, shall post on its or its parent companys website and cause the Issuer to file with or furnish to the SEC, in periodic reports and other reports as are required from time to time under Section 13 or Section 15(d) of the Exchange Act, the information described in Section 3.07(g) of the Indenture to the extent such information is reasonably available to the Sponsor.
(d) Except to the extent permitted by applicable law, the Issuer shall not voluntarily suspend or terminate its filing obligations as issuing entity with the SEC as described in Section 3.03(c).
Section 3.04. Annual Report by Independent Registered Public Accountants.
(a) The Servicer shall cause a firm of Independent registered public accountants (which may provide other services to the Servicer or the Seller) to prepare annually, and the Servicer shall deliver annually to the Issuer, the Indenture Trustee, the Commission and the Rating Agencies on or before the earlier of (i) March 31 of each year, beginning March 31, 2017, or (ii) with respect to each calendar year during which the Issuers annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, the date on which such annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, a report (the Annual Accountants Report) that attests to, and reports on, the assessment of compliance made by the Servicer and delivered pursuant to Section 3.03. Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.
(b) The Annual Accountants Report delivered pursuant to Section 3.04(a) shall also indicate that the accounting firm providing such report is independent of the Servicer in accordance with the rules of the Public Company Accounting Oversight Board and shall include any attestation report required under Item 1122(b) of Regulation AB, as then in effect. The costs of the Annual Accountants Report shall be reimbursable as an Operating Expense under the Indenture.
ARTICLE IV
SERVICES RELATED TO TRUE-UP ADJUSTMENTS
Section 4.01. True-Up Adjustments. From time to time, until the Collection in Full of the Charges for the Series A Bonds, the Servicer shall identify the need for Semi-Annual True-Up Adjustments, Optional Interim True-Up Adjustments and Non-standard 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 Sinking Fund Schedule. The Expected Sinking Fund Schedule for the Series A Bonds is attached hereto as Exhibit F. If the Expected Sinking Fund Schedule is revised, the Servicer shall send a copy of such revised Expected Sinking Fund Schedule to the Issuer, the Indenture Trustee, the Commission and the Rating Agencies promptly thereafter.
(b) True-Up Adjustments.
(i) Semi-Annual True-Up Adjustments and Filings. At the beginning of Duke Energy Floridas billing cycle that is at least three months but no longer than six months following Duke Energy Floridas first complete billing cycle after the Series Closing Date, and for Duke Energy Floridas billing cycle every six months thereafter, and at least every three months after the Scheduled Final Payment Date for the latest maturing WAL, the Servicer shall: (A) update the data and assumptions underlying the calculation of the Series Charges, including projected electricity consumption during the next Remittance Period for each Nuclear Asset-Recovery Rate Class and including Periodic Principal, interest and estimated expenses and fees of the Issuer to be paid during such period, the Weighted Average Days Outstanding and write-offs; (B) determine the Periodic
Payment Requirements and Periodic Billing Requirement for the next Remittance Period based on such updated data and assumptions; (C) determine the Series Charges to be allocated to each Nuclear Asset-Recovery Rate Class during the next Remittance Period based on such Periodic Billing Requirement and the terms of the Financing Order, the Tariff and any other tariffs filed pursuant thereto; (D) make all required public notices and other filings with the Commission to reflect the revised Series Charges, including any Amendatory Schedule; and (E) take all reasonable actions and make all reasonable efforts to effect such Semi-Annual True-Up Adjustment and to enforce the provisions of the Nuclear Asset-Recovery Law and the Financing Order; provided, that, in the case of any Semi-Annual True-Up Adjustment following the Scheduled Final Payment Date for the latest maturing WAL of the Series A Bonds, the Semi-Annual True-Up Adjustment will be calculated to ensure that the Series Charges are sufficient to pay the Series A Bonds in full on the next Payment Date. The Servicer shall implement the revised Series Charges, if any, resulting from such Semi-Annual True-Up Adjustment as of the Semi-Annual True-Up Adjustment Date.
(ii) Optional Interim True-Up Adjustments and Filings. No later than 60 days prior to the first day of the applicable monthly billing cycle, the Servicer shall: (A) update the data and assumptions underlying the calculation of the Series Charges, including projected electricity consumption during the next Remittance Period for each Nuclear Asset-Recovery Rate Class and including Periodic Principal, interest and estimated expenses and fees of the Issuer to be paid during such period, the rate of delinquencies and write-offs; (B) determine the Periodic Payment Requirement and Periodic Billing Requirement for the next Remittance Period based on such updated data and assumptions; and (C) based upon such updated data and requirements, project whether existing and projected Nuclear Asset-Recovery Charge Collections together with available fund balances in the Excess Funds Subaccount, will be sufficient (x) to make on a timely basis all scheduled payments of Periodic Principal and interest in respect of each Outstanding WAL of Series A Bonds during such Remittance Period, (y) to pay other Ongoing Financing Costs on a timely basis and (z) to maintain the Capital Subaccount at the Required Capital Level. If the Servicer determines that Series Charges will not be sufficient for such purposes, the Servicer shall, no later than the date described in the first sentence of this Section 4.01(b)(ii): (1) determine the Series Charges to be allocated to each Nuclear Asset-Recovery Rate Class during the next Remittance Period based on such Periodic Billing Requirement and the terms of the Financing Order, the Tariff and other tariffs filed pursuant thereto; (2) make all required public notices and other filings with the Commission to reflect the revised Series Charges, including any Amendatory Schedule; and (3) take all reasonable actions and make all reasonable efforts to effect such Optional Interim True-Up Adjustment and to enforce the provisions of the Nuclear Asset-Recovery Law and the Financing Order.
(iii) Non-standard True-Up Adjustments and Filings. In the event that the Servicer determines that a Non-standard True-Up Adjustment is required at
anytime to be effective simultaneously with a base rate change that includes any change in the cost allocation among customers used in determining the Series Charges, such True-Up Adjustment to go into effect simultaneously with any changes to Duke Energy Floridas other base rates the Servicer shall promptly (A) recalculate the Series Charges to reallocate the Series Charges among customers in accordance with the procedures for Non-standard True-Up Adjustments set forth in the Financing Order; (B) initiate a proceeding with the Commission to determine new allocation factors and make all required public notices and other filings with the Commission to implement the revised Series Charges in a timely manner, including the filing of any revised Amendatory Rider necessary to begin the billing of such revised Series Charges; and (C) take all reasonable actions and make all reasonable efforts to effect such Non-standard True-Up Adjustment and to enforce the provisions of the Nuclear Asset-Recovery Law and the Financing Order. The Servicer shall implement the revised Series Charges, if any, resulting from such Non-standard True-Up Adjustment on the Non-standard True-Up Adjustment date. For the avoidance of doubt, no Semi-Annual True-Up Adjustment or Optional Interim True-Up Adjustment shall be considered a Non-standard True-Up Adjustment solely because Series Charges are allocated under such Semi-Annual True-Up Adjustment or Optional Interim True-Up Adjustment in the same manner as in a preceding Non-standard True-Up Adjustment.
(c) Reports.
(i) Notification of Amendatory Schedule Filings and True-Up Adjustments. Whenever the Servicer files an Amendatory Schedule with the Commission or implements revised Series Charges with notice to the Commission without filing an Amendatory Schedule if permitted by the Financing Order, the Servicer shall send a copy of such filing or notice (together with a copy of all notices and documents that, in the Servicers reasonable judgment, are material to the adjustments effected by such Amendatory Schedule or notice) to the Issuer, the Indenture Trustee and the Rating Agencies concurrently therewith. If, for any reason any revised Series Charges are not implemented and effective on the applicable date set forth herein, the Servicer shall notify the Issuer, the Indenture Trustee and each Rating Agency by the end of the second Servicer Business Day after such applicable date.
(ii) Semi-Annual Servicers Certificate. Not later than five Servicer Business Days prior to each Payment Date or Special Payment Date, the Servicer shall deliver a written report substantially in the form of Exhibit C (the Semi-Annual Servicers Certificate) to the Issuer, the Indenture Trustee, the Commission and the Rating Agencies, which shall include all of the following information (to the extent applicable and including any other information so specified in the Series Supplement) as to the Series A Bonds with respect to such Payment Date or Special Payment Date or the period since the previous Payment Date, as applicable:
(A) the amount of the payment to Holders allocable to principal, if any;
(B) the amount of the payment to Holders allocable to interest;
(C) the aggregate Outstanding Amount of the Series A Bonds, before and after giving effect to any payments allocated to principal reported under Section 4.01(c)(ii)(A);
(D) the difference, if any, between the amount specified in Section 4.01(c)(ii)(C) and the Outstanding Amount specified in the Expected Sinking Fund Schedule;
(E) any other transfers and payments to be made on such Payment Date or Special Payment Date, including amounts paid to the Indenture Trustee and to the Servicer; and
(F) the amounts on deposit in the Capital Subaccount and the Excess Funds Subaccount, after giving effect to the foregoing payments.
(iii) Reports to Customers.
(A) After each revised Series Charge has gone into effect pursuant to a True-Up Adjustment, the Servicer shall, to the extent and in the manner and time frame required by any applicable Commission Regulations, cause to be prepared and delivered to Customers any required notices announcing such revised Series Charges.
(B) The Servicer shall comply with the requirements of the Financing Order with respect to the filing of the Nuclear Asset-Recovery Rate Schedule to ensure that the Series Charges are separate and apart from the Servicers other charges and appear as a separate line item on the Bills sent to Customers.
Section 4.02. Limitation of Liability.
(a) The 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) None of the Servicer, the Issuer or the Indenture Trustee 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 Servicers failure to make any filings required by Section 4.01 in a timely and correct manner or any breach by the Servicer of its duties under this Servicing Agreement that adversely affects the Series Property or the True-Up Adjustments), by the Commission in any way
related to the Series 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 Series Charges and the scheduled adjustments thereto.
(iii) Except to the extent that the Servicer is liable under Section 6.02, the Servicer shall have no liability whatsoever relating to the calculation of any revised Series 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 consumption volume and the Weighted Average Days Outstanding, write-offs and estimated expenses and fees of the Issuer, so long as the Servicer has acted in good faith and has not acted in a negligent manner in connection therewith, nor shall the Servicer have any liability whatsoever as a result of any Person, including the Holders, not receiving any payment, amount or return anticipated or expected or in respect of any Series A Bond.
(b) Notwithstanding the foregoing, this Section 4.02 shall not relieve the Servicer of liability for any misrepresentation by the Servicer under Section 6.01 or for any breach by the Servicer of its other obligations under this Servicing Agreement.
ARTICLE V
THE NUCLEAR ASSET-RECOVERY PROPERTY
Section 5.01. Custody of Nuclear Asset-Recovery Property Records. To assure uniform quality in servicing the Series Property and to reduce administrative costs, the Issuer hereby revocably appoints the Servicer, and the Servicer hereby accepts such appointment, to act as the agent of the Issuer 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 Series Property, including copies of the Financing Order and Amendatory Schedules relating thereto and all documents filed with the Commission in connection with any True-Up Adjustment and computational records relating thereto (collectively for the Series A Bonds, the Nuclear Asset-Recovery Property Records), which are hereby constructively delivered to the Indenture Trustee, as pledgee of the Issuer with respect to all Series Property.
Section 5.02. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Nuclear Asset-Recovery Property Records on behalf of the Issuer and the Indenture Trustee and maintain such accurate and complete accounts, records and computer systems pertaining to the Nuclear Asset-Recovery Property Records as shall enable the Issuer and the Indenture Trustee, as applicable, to comply with this Servicing Agreement, the Sale 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 Issuer, the Indenture Trustee, the Commission and the Rating Agencies any failure on its part to hold the Nuclear Asset-Recovery 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 Issuer or the
Indenture Trustee of the Nuclear Asset-Recovery Property Records. The Servicers duties to hold the Nuclear Asset-Recovery Property Records set forth in this Section 5.02, to the extent the Nuclear Asset-Recovery Property Records have not been previously transferred to a successor Servicer pursuant to ARTICLE VII, shall terminate one year and one day after the earlier of (i) the date on which the Servicer is succeeded by a successor Servicer in accordance with ARTICLE VII and (ii) the first date on which no Series A Bonds are Outstanding.
(b) Maintenance of and Access to Records. The Servicer shall maintain the Nuclear Asset-Recovery Property Records at 550 South Tryon Street, Charlotte, North Carolina 28202 or at its facility located at Iron Mountain, 3125 Parkside Drive, Charlotte, North Carolina 28208 and Iron Mountain, 4758 Oak Fair Boulevard, Tampa, Florida 33610, or at such other office as shall be specified to the Issuer, the Commission and the Indenture Trustee by written notice at least 30 days prior to any change in location. The Servicer shall make available for inspection, audit and copying to the Issuer, the Commission and the Indenture Trustee or their respective duly authorized representatives, attorneys or auditors the Nuclear Asset-Recovery Property Records at such times during normal business hours as the Issuer, the Commission or the Indenture Trustee shall reasonably request and that do not unreasonably interfere with the Servicers normal operations. Nothing in this Section 5.02(b) shall affect the obligation of the Servicer to observe any applicable law (including any Commission Regulation) prohibiting disclosure of information regarding 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 Indenture Trustee in accordance with the Indenture, the Servicer shall release any Nuclear Asset-Recovery Property Records to the Indenture Trustee, the Indenture Trustees agent or the Indenture Trustees designee, as the case may be, at such place or places as the Indenture Trustee may designate, as soon as practicable. Nothing in this Section 5.02(c) shall affect the obligation of the Servicer to observe any applicable law (including any Commission Regulation) prohibiting disclosure of information regarding 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(c).
(d) Defending Series Property Against Claims. To the extent not undertaken by the Seller pursuant to Section 4.08 of the Sale Agreement, the Servicer shall negotiate for the retention of legal counsel and such other experts as may be needed to institute and maintain any action or proceeding, on behalf of and in the name of the Issuer, necessary to compel performance by the Commission or the State of Florida of any of their obligations or duties under the Nuclear Asset-Recovery Law and the Financing Order, and the Servicer agrees to assist the Issuer and its legal counsel in taking 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 attempt to block or overturn any attempts to cause a repeal of, modification of or supplement to the Nuclear Asset-Recovery Law or the Financing Order, or the rights of holders of Series Property by legislative enactment, constitutional amendment or other means that would be adverse to Holders or any series of additional Nuclear Asset-Recovery Bonds. In any proceedings related to the exercise of the power of eminent domain by any municipality to acquire a portion of Duke Energy Floridas
electric distribution facilities, the Servicer will assert that that the court ordering such condemnation must treat such municipality as a successor to Duke Energy Florida under the Nuclear Asset-Recovery Law and the Financing Order. The costs of any such action shall be payable as an Operating Expense in accordance with the priorities set forth in Section 8.02(d) of the Indenture and any additional indenture. The Servicers 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 of the Indenture and any supplemental indenture may be delayed; provided, that, the Servicer is obligated to institute and maintain such action or proceedings only if it is being reimbursed on a current basis for its costs and expenses in taking such actions in accordance with Section 8.02 of the Indenture and any additional indenture, and is not required to advance its own funds to satisfy these obligations.
Section 5.03. Custodians Indemnification. The Servicer as custodian shall indemnify the Issuer, any Independent Manager and the Indenture Trustee (for itself and for the benefit of the Holders) and each of their respective officers, directors, employees and agents for, and defend and hold harmless each such Person from and against, any and all liabilities, obligations, losses, damages, payments and claims, and reasonable costs or expenses, of any kind whatsoever (collectively, Indemnified Losses) that may be imposed on, incurred by or asserted against each such Person as the result of any negligent act or omission in any way relating to the maintenance and custody by the Servicer, as custodian, of the Nuclear Asset-Recovery 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 Issuer, any Independent Manager or the Indenture Trustee, as the case may be.
Indemnification under this Section 5.03 shall survive resignation or removal of the Indenture Trustee or any Independent Manager and shall include reasonable out-of-pocket fees and expenses of investigation and litigation (including reasonable attorneys fees and expenses).
Section 5.04. Effective Period and Termination. The Servicers appointment as custodian shall become effective as of the Series Closing Date and shall continue in full force and effect until terminated pursuant to this Section 5.04. If the Servicer shall resign as Servicer in accordance with the provisions of this Servicing Agreement or if all of the rights and obligations of the Servicer shall have been terminated under Section 7.01, the appointment of the Servicer as custodian shall be terminated effective as of the date on which the termination or resignation of the Servicer is effective. Additionally, if not sooner terminated as provided above, the Servicers obligations as custodian shall terminate one year and one day after the date on which no Series A Bonds are Outstanding. Duke Energy Florida shall not resign as Servicer if such resignation does not satisfy the Rating Agency Condition or without consent of the Commission.
Section 5.05. Alternative Energy Suppliers. So long as any of the Series A Bonds are Outstanding, the Servicer shall take reasonable efforts to assure that no AES bills or collects Series Charges on behalf of the Issuer unless required by applicable law or regulation and, to the extent permitted by applicable law or regulation, the Rating Agency Condition is satisfied. If an AES does bill or collect Series Charges on behalf of the Issuer, upon the reasonable request of the Issuer, the Commission, the Indenture Trustee, or any Rating Agency,
the Servicer shall take reasonable steps to assure that such an AES provides to the Issuer, the Commission, the Indenture Trustee or the Rating Agencies, as the case may be, any public financial information in respect of such AES, or any material information regarding the Series Property to the extent it is reasonably available to such AES, as may be reasonably necessary and permitted by law for the Issuer, the Commission, the Indenture Trustee or the Rating Agencies to monitor such AES performance hereunder. In addition, so long as any of the Series A Bonds are Outstanding, Servicer will use commercially reasonable efforts to ensure that such AES provide to the Issuer and to the Indenture Trustee, within a reasonable time after written request therefor, any information available to the AES or reasonably obtainable by it that is necessary to calculate the Series Charges.
ARTICLE VI
THE SERVICER
Section 6.01. Representations and Warranties of Servicer. The Servicer makes the following representations and warranties, as of the Series Closing Date, and as of such other dates as expressly provided in this Section 6.01, on which the Issuer, the Indenture Trustee and the Commission (for the benefit of the Customers) are deemed to have relied in entering into this Servicing Agreement relating to the servicing of the Series Property. The representations and warranties shall survive the execution and delivery of this Servicing Agreement, the sale of the Series Property and the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is duly organized, validly existing and is in good standing under the laws of the state of its organization, with requisite power and authority to own its properties, to conduct its business as such properties are currently owned and such business is presently conducted by it, to service the Series Property and hold the records related to the Series Property, and to execute, deliver and carry out the terms of this Servicing Agreement and the Intercreditor Agreement.
(b) Due Qualification. The Servicer is duly qualified to do business, is 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 Series Property as required under this Servicing Agreement) requires such qualifications, licenses or approvals (except where a failure to qualify would not be reasonably likely to have a material adverse effect on the Servicers business, operations, assets, revenues or properties or to its servicing of the Series Property).
(c) Power and Authority. The execution, delivery and performance of the terms of this Servicing Agreement and the Intercreditor Agreement have been duly authorized by all necessary action on the part of the Servicer under its organizational or governing documents and laws.
(d) Binding Obligation. Each of this Servicing Agreement and the Intercreditor Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable against the Servicer in accordance with its respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting creditors rights generally from time to time in effect and to general principles of
equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated by the Servicing Agreement and the Intercreditor Agreement do not conflict with, result in any breach of or constitute (with or without notice or lapse of time) a default under the Servicers organizational documents or any indenture or other agreement or instrument to which the Servicer is a party or by which it or any of its property is bound, result in the creation or imposition of any Lien upon the Servicers properties pursuant to the terms of any such indenture or agreement or other instrument (other than any Lien that may be granted in favor of the Indenture Trustee for the benefit of Holders under the Basic Documents) or violate any existing law or any existing order, rule or regulation applicable to the Servicer of any Governmental Authority having jurisdiction over the Servicer or its properties.
(f) No Proceedings. To the Servicers knowledge, there are no proceedings or investigations pending or, to the Servicers knowledge, threatened against the Servicer before any court, federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or its properties: (i) seeking to prevent issuance of the Series A Bonds or the consummation of the transactions contemplated by this Servicing Agreement or any of the other Basic Documents, or, if applicable, any supplement to the Indenture or amendment to the Sale Agreement; (ii) 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 against the Servicer of, this Servicing Agreement or any of the other Basic Documents or, if applicable, any supplement to the Indenture or amendment to the Sale Agreement; or (iii) relating to the Servicer and which might materially and adversely affect the treatment of the Series A Bonds for federal or state income, gross receipts or franchise tax purposes;
(g) Approvals. No governmental approvals, authorizations, consents, orders or other actions or filings with any Governmental Authority are required for the Servicer to execute, deliver and perform its obligations under the Servicing Agreement except those that have previously been obtained or made, those that are required to be made by the Servicer in the future pursuant to Article IV or the Intercreditor Agreement and those that the Servicer may need to file in the future to continue the effectiveness of any financing statements; and
(h) Reports and Certificates. Each report and certificate delivered in connection with any filing made to the Commission by the Servicer on behalf of the Issuer with respect to the Series Charges or True-Up Adjustments will constitute a representation and warranty by the Servicer that each such report or certificate, as the case may be, is true and correct in all material respects; provided, however, that, to the extent any such report or certificate is based in part upon or contains assumptions, forecasts or other predictions of future events, the representation and warranty of the Servicer with respect thereto will be limited to the representation and warranty that such assumptions, forecasts or other predictions of future events are reasonable based upon historical performance (and facts known to the Servicer on the date such report or certificate is delivered).
The Servicer, the Indenture Trustee and the Issuer are not responsible 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 Servicers failure to make any filings with the Florida Commission required by this Servicing Agreement in a timely and correct manner or any breach by the Servicer of its duties under the Servicing Agreement that adversely affects the Series Property or the True-Up Adjustments), by the Florida Commission in any way related to the Series Property or in connection with any True-Up Adjustment, the subject of any such filings, any proposed True-Up Adjustment or the approval of any revised Series Charges and the scheduled adjustments thereto. Except to the extent that the Servicer otherwise is liable under the provisions of this Servicing Agreement, the Servicer shall have no liability whatsoever relating to the calculation of any revised nuclear asset-recovery charges and the scheduled adjustments thereto, including as a result of any inaccuracy of any of the assumptions made in such calculations, so long as the Servicer has acted in good faith and has not acted in a negligent manner in connection therewith, nor shall the Servicer have any liability whatsoever as a result of any person or entity, including the Holders, not receiving any payment, amount or return anticipated or expected or in respect of any Nuclear Asset-Recovery Bond generally.
Section 6.02. Indemnities of Servicer; Release of Claims. The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer under this Servicing Agreement.
(a) The Servicer shall indemnify the Issuer, the Indenture Trustee (for itself and for the benefit of the Holders) and the Independent Manager and each of their respective trustees, officers, directors, employees and agents (each, an Indemnified Party), for, and defend and hold harmless each such Person from and against, any and all Indemnified Losses imposed on, incurred by or asserted against any such Person as a result of (i) the Servicers willful misconduct, bad faith or negligence in the performance of, or reckless disregard of, its duties or observance of its covenants under the Servicing Agreement and the Intercreditor Agreement, (ii) the Servicers material breach of any of its representations or warranties that results in a Servicer Default under this Servicing Agreement or a default under the Intercreditor Agreement; and (iii) litigation and related expenses relating to the Servicers status and obligations as Servicer (other than any proceeding the Servicer is required to institute under this Servicing Agreement), except to the extent of Indemnified Losses either resulting from the willful misconduct, bad faith or gross negligence of such Person seeking indemnification hereunder or resulting from a breach of a representation or warranty made by such Person seeking indemnification hereunder in any of the Basic Documents that gives rise to the Servicers breach.
(b) For purposes of Section 6.02(a), in the event of the termination of the rights and obligations of Duke Energy Florida (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 Servicing Agreement, such Servicer shall be deemed to be the Servicer pending appointment of a successor Servicer pursuant to Section 7.02.
(c) Indemnification under this Section 6.02 shall survive any repeal of, modification of, or supplement to, or judicial invalidation of, the Nuclear Asset-Recovery Law or
the Financing Order and shall survive the resignation or removal of the Indenture Trustee or any Independent Manager or the termination of this Servicing Agreement and shall include reasonable out-of-pocket fees and expenses of investigation and litigation (including reasonable attorneys fees and expenses).
(d) Except to the extent expressly provided in this Servicing Agreement or the other Basic Documents (including the Servicers claims with respect to the Servicing Fee and the payment of the purchase price of Series Property), the Servicer hereby releases and discharges the Issuer, any Independent Manager and the Indenture Trustee, and each of their respective officers, directors and agents (collectively, the Released Parties), from any and all actions, claims and demands whatsoever, whenever arising, which the Servicer, in its capacity as Servicer or otherwise, shall or may have against any such Person relating to the Series Property or the Servicers 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.
(e) The Servicer shall indemnify the Commission, on behalf of the Customers, to the extent Customers incur Losses associated with higher servicing fees payable to a Successor Servicer as a result of the Servicers negligence, recklessness or willful misconduct or termination of this Servicing Agreement for cause. Further, if the Servicer remains an entity subject to the Commissions regulatory authority as a public utility (or otherwise for ratemaking purposes), the Servicer hereby acknowledges and agrees that the Commission, subject to the outcome of an appropriate Commission proceeding, may take such action as the Commission deems necessary or appropriate under its regulatory authority to require the Servicer to make Customers whole for any Losses they incur in connection with the failure of any material representation, or warranty by the Servicer under this Agreement, or by reason of the Servicers negligence, recklessness or willful misconduct or termination of this Servicing Agreement for cause, including without limitation Losses attributable to higher Series Charges imposed on Customers by reason of additional Operating Expenses. The Servicer hereby acknowledges and agrees that such action by the Commission may include, but is not limited to, adjustments to the Servicers other regulated rates and charges or credits to Customers. If the Servicer does not remain, or is not, subject to the Commissions regulatory authority as a public utility (or otherwise for ratemaking purposes), such Servicer shall indemnify the Commission, on behalf of the Customers, for any Losses incurred by Customers by reason of the Servicers negligence, recklessness or willful misconduct or termination of this Servicing Agreement for cause, including without limitation Losses attributable to higher Series Charges imposed on Customers by reason of additional Operating Expenses. The Servicers indemnification under this Section 6.02(e) shall survive the termination of this Agreement, and any amounts paid with respect thereto shall be remitted and deposited with the Indenture Trustee for deposit in the Collection Account, unless otherwise directed by the Commission. Notwithstanding anything to the contrary in this Servicing Agreement or in any other Basic Document, so long as any Series A Bonds are Outstanding, any indemnity payments to the Commission (for the benefit of Customers) pursuant to this Section 6.02(e) shall be promptly remitted to the Indenture Trustee for deposit in the applicable Collection Account.
(f) The Servicer shall not be required to indemnify an Indemnified Party for any amount paid or payable by such Indemnified Party in the settlement of any action,
proceeding or investigation without the written consent of the Servicer, which consent shall not be unreasonably withheld. Promptly after receipt by an Indemnified Party of notice (or, in the case of the Indenture Trustee, receipt of notice by a Responsible Officer only) of the commencement of any action, proceeding or investigation, such Indemnified Party shall, if a claim in respect thereof is to be made against the Servicer under this Section 6.02, notify the Servicer in writing of the commencement thereof. Failure by an Indemnified Party to so notify the Servicer shall relieve the Servicer from the obligation to indemnify and hold harmless such Indemnified Party under this Section 6.02 only to the extent that the Servicer suffers actual prejudice as a result of such failure. With respect to any action, proceeding or investigation brought by a third party for which indemnification may be sought under this Section 6.02, the Servicer shall be entitled to conduct and control, at its expense and with counsel of its choosing that is reasonably satisfactory to such Indemnified Party, the defense of any such action, proceeding or investigation (in which case the Servicer shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the Indemnified Party except as set forth below); provided, that the Indemnified Party shall have the right to participate in such action, proceeding or investigation through counsel chosen by it and at its own expense. Notwithstanding the Servicers election to assume the defense of any action, proceeding or investigation, the Indemnified Party shall have the right to employ separate counsel (including local counsel), and the Servicer shall bear the reasonable fees, costs and expenses of such separate counsel, if (i) the defendants in any such action include both the Indemnified Party and the Servicer and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to the Servicer, (ii) the Servicer shall not have employed counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, (iii) the Servicer shall authorize the Indemnified Party to employ separate counsel at the expense of the Servicer or (iv) in the case of the Indenture Trustee, such action exposes the Indenture Trustee to a material risk of criminal liability or forfeiture or a Servicer Default has occurred and is continuing. Notwithstanding the foregoing, the Servicer shall not be obligated to pay for the fees, costs and expenses of more than one separate counsel for the Indemnified Parties other than one local counsel, if appropriate. The Servicer will not, without the prior written consent of the Indemnified Party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought under this Section 6.02 (whether or not the Indemnified Party is an actual or potential party to such claim or action) unless such settlement, compromise or consent includes an unconditional release of the Indemnified Party from all liability arising out of such claim, action, suit or proceeding.
Section 6.03. Binding Effect of Servicing Obligations. The obligations to continue to provide service and to collect and account for Series Charges will be binding upon the Servicer, any Successor and any other entity that provides distribution services to a Person that is a Florida customer of Duke Energy Florida or any Successor so long as the Series Charges have not been fully collected and posted. Any Person (a) into which the Servicer may be merged, converted or consolidated and that is a Permitted Successor, (b) that may result from any merger, conversion or consolidation to which the Servicer shall be a party and that is a Permitted Successor, (c) that may succeed to the properties and assets of the Servicer substantially as a whole and that is a Permitted Successor or (d) that otherwise is a Permitted
Successor, which Person in any of the foregoing cases executes an agreement of assumption to perform all of the obligations of the Servicer hereunder, shall be the successor to the Servicer under this Servicing Agreement without further act on the part of any of the parties to this Servicing Agreement; provided, however, that (i) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 6.01 shall have been breached and no Servicer Default and no event that, 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 Issuer, the Commission and the Indenture Trustee an Officers Certificate and an Opinion of Counsel from external counsel stating that such consolidation, conversion, merger or succession and such agreement of assumption complies with this Section 6.03 and that all conditions precedent, if any, provided for in this Servicing Agreement relating to such transaction have been complied with, (iii) the Servicer shall have delivered to the Issuer, the Indenture Trustee, the Commission and the Rating Agencies an Opinion of Counsel from external counsel of the Servicer either (A) stating that, in the opinion of such counsel, all filings to be made by the Servicer, including filings with the Commission pursuant to the Nuclear Asset-Recovery Law and the UCC, have been executed and filed and are in full force and effect that are necessary to fully preserve, perfect and maintain the priority of the interests of the Issuer and the Liens of the Indenture Trustee in the Series 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, (iv) the Servicer shall have delivered to the Issuer, the Indenture Trustee, the Commission and the Rating Agencies an Opinion of Counsel from independent tax counsel stating that, for U.S. federal income tax purposes, such consolidation, conversion, merger or succession and such agreement of assumption will not result in a material adverse U.S. federal income tax consequence to the Issuer or the Holders of Series A Bonds, (v) the Servicer shall have given the Rating Agencies prior written notice of such transaction and (vi) any applicable requirements of the Intercreditor Agreement have been satisfied. When any Person (or more than one Person) acquires the properties and assets of the Servicer substantially as a whole or otherwise becomes the successor, by merger, conversion, consolidation, sale, transfer, lease or otherwise, to all or substantially all the assets of the Servicer in accordance with the terms of this Section 6.03, then, upon satisfaction of all of the other conditions of this Section 6.03, the preceding Servicer shall automatically and without further notice be released from all its obligations hereunder (except for responsibilities for its actions prior to such release).
Section 6.04. Limitation on Liability of Servicer and Others.
(a) Except as otherwise provided under this Servicing Agreement, neither the Servicer nor any of the directors, officers, employees or agents of the Servicer shall be liable to the Issuer or any other Person for any action taken or for refraining from the taking of any action pursuant to this Servicing Agreement or for good faith 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 negligence, recklessness or willful misconduct in the performance of duties or by reason of reckless disregard of obligations and duties under this Servicing Agreement. The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person, respecting any matters arising under this Servicing Agreement.
(b) The Servicer acknowledges that the Commission, acting on its own behalf, has authority to enforce all provisions of this Servicing Agreement for the benefit of Customers, including without limitation the enforcement of Section 6.02(e).
(c) Except as provided in this Servicing Agreement, including Section 5.02(d), the Servicer shall not be under any obligation to appear in, prosecute or defend any legal action relating to the Series Property that is not directly related to one of the Servicers enumerated duties in this Servicing Agreement or related to its obligation to pay indemnification, and that in its reasonable opinion may cause it to incur any expense or liability; provided, however, that the Servicer may, in respect of any Proceeding, undertake any action that it is not specifically identified in this Servicing Agreement as a duty of the Servicer but that the Servicer reasonably determines is necessary or desirable in order to protect the rights and duties of the Issuer or the Indenture Trustee under this Servicing Agreement and the interests of the Holders and Customers under this Servicing Agreement.
Section 6.05. Duke Energy Florida Not to Resign as Servicer. Subject to the provisions of Section 6.03, Duke Energy Florida shall not resign from the obligations and duties imposed on it as Servicer under this Servicing Agreement except upon a determination that the performance of its duties under this Servicing Agreement shall no longer be permissible under applicable Requirements of Law. Notice of any such determination permitting the resignation of Duke Energy Florida shall be communicated to the Issuer, the Commission, the Indenture Trustee and each Rating Agency 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 Issuer, the Commission and each Indenture Trustee concurrently with or promptly after such notice. No such resignation shall become effective until a Successor Servicer has been approved by the Commission and has assumed the servicing obligations and duties hereunder of the Servicer in accordance with Section 7.02.
Section 6.06. Servicing Compensation.
(a) In consideration for its services hereunder, until the Collection in Full of the Charges, the Servicer shall receive an annual fee (the Servicing Fee) in an amount equal to (i) 0.05% of the aggregate initial principal amount of all Series A Bonds for so long as Duke Energy Florida or an Affiliate of Duke Energy Florida is the Servicer or (ii) if Duke Energy Florida or any of its Affiliates is not the Servicer, an amount agreed upon by the Successor Servicer and the Indenture Trustee, provided, that the annual Servicing Fee shall not exceed 0.6% of the aggregate initial principal amount of all Series A Bonds, unless the Commission has approved the appointment of the Successor Servicer or the Commission does not act to either approve or disapprove such appointment on or before the date which is 45 days after notice of the proposed appointment of the Successor Servicer is provided to the Commission in the same manner substantially as provided in Section 8.01(c). The Servicing Fee owing shall be calculated based on the initial principal amount of the Series A Bonds and shall be paid semi-annually, with half of the Servicing Fee being paid on each Payment Date, except for the amount of the Servicing Fee to be paid on the first Payment Date in which the Servicing Fee then due will be calculated based on the number of days that this Servicing Agreement has been in effect.
In addition, the Servicer shall be entitled to be reimbursed by the Issuer for filing fees and fees and expenses for attorneys, accountants, printing or other professional services retained by the Issuer and paid for by the Servicer (or procured by the Servicer on behalf of the Issuer and paid for by the Servicer) to meet the Issuers obligations under the Basic Documents (Reimbursable Expenses). Except for such Reimbursable Expenses, the Servicer shall be required to pay all other costs and expenses incurred by the Servicer in performing its activities hereunder (but, for the avoidance of doubt, excluding any such costs and expenses incurred by Duke Energy Florida in its capacity as Administrator).
(b) The Servicing Fee set forth in Section 6.06(a) shall be paid to the Servicer by the Indenture Trustee, on each Payment Date in accordance with the priorities set forth in Section 8.02(e) 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 any such date shall be added to the Servicing Fee payable on the subsequent Payment Date. In no event shall the Indenture Trustee be liable for the payment of any Servicing Fee or other amounts specified in this Section 6.06; provided, that this Section 6.06 does not relieve the Indenture Trustee of any duties it has to allocate funds for payment for such fees under Section 8.02 of the Indenture.
(c) The Servicer and the Issuer acknowledge and agree that the Servicers actual collections of Series Charges on some days might exceed the Servicers deemed collections, and that the Servicers actual collections of Series Charges on other days might be less than the Servicers deemed collections. The Servicer and the Issuer further acknowledge and agree that the amount of these variances are likely to be small and are not likely to be biased in favor of over-remittances or under-remittances. Consequently, so long as the Servicer faithfully makes all daily remittances based on weighted average days sales outstanding, as provided for herein, the Servicer and the Issuer agree that no actual or deemed investment earnings shall be payable in respect of such over-remittances or under-remittances. However, the Servicer shall remit at least annually to the Indenture Trustee, for the benefit of the Issuer, any late charges received from Customers in respect of Series Charges.
(d) The foregoing Servicing Fee constitutes a fair and reasonable compensation for the obligations to be performed by the Servicer. Such Servicing Fee shall be determined without regard to the income of the Issuer, shall not be deemed to constitute distributions to the recipient of any profit, loss or capital of the Issuer and shall be considered a fixed Operating Expense of the Issuer subject to the limitations on such expenses set forth in the Financing Order.
(e) Any services required for or contemplated by the performance of the above-referenced services by the Servicer to be provided by unaffiliated third parties may, if provided for or otherwise contemplated by the Financing Order and if the Issuer deems it necessary or desirable, be arranged by the Issuer or by the Servicer at the direction (which may be general or specific) of the Issuer. Costs and expenses associated with the contracting for such third-party professional services may be paid directly by the Issuer or paid by the Servicer and reimbursed by the Issuer in accordance with Section 6.06(a), or otherwise as the Servicer and the Issuer may mutually arrange.
Section 6.07. Compliance with Applicable Law. The Servicer covenants and agrees, in servicing the Series Property, to comply in all material respects with all laws applicable to, and binding upon, the Servicer and relating to the Series Property, the noncompliance with which would have a material adverse effect on the value of the Series Property; provided, however, that the foregoing is not intended to, and shall not, impose any liability on the Servicer for noncompliance with any Requirement of Law that the Servicer is contesting in good faith in accordance with its customary standards and procedures. It is expressly acknowledged that the payment of fees to the Rating Agencies shall be at the expense of the Issuer and that, if the Servicer advances such payments to the Rating Agencies, the Issuer shall reimburse the Servicer for any such advances.
Section 6.08. Access to Certain Records and Information Regarding Series Property. The Servicer shall provide to the Indenture Trustee access to the Nuclear Asset-Recovery Property Records for the Series A Bonds as is reasonably required for the Indenture Trustee to perform its duties and obligations under the Indenture and the other Basic Documents and shall provide access to such records to the Holders as required by applicable law. Access shall be afforded without charge, but only upon reasonable request and during normal business hours at the offices of the Servicer. Nothing in this Section 6.08 shall affect the obligation of the Servicer to observe any applicable law (including any Commission Regulation) prohibiting disclosure of information regarding 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 6.08.
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, including a collection agent acting pursuant to the Intercreditor Agreement; provided, however, that, unless such Person is an Affiliate of Duke Energy Florida, the Rating Agency Condition shall have been satisfied in connection therewith; provided, further, that the Servicer shall remain obligated and be liable under this Servicing Agreement for the servicing and administering of the Series 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 Series Property. The fees and expenses of any such Person shall be as agreed between the Servicer and such Person from time to time, and none of the Issuer, the Indenture Trustee, the Holders 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 on or principal of the Series A Bonds.
Section 6.11. Remittances.
(a) The Nuclear Asset-Recovery Charge Collections on any Servicer Business Day (the Daily Remittance) shall be calculated according to the procedures set forth in Exhibit A and remitted by the Servicer as soon as reasonably practicable to the General Subaccount of the Collection Account but in no event later than two Servicer Business Days following such Servicer Business Day. Prior to each remittance to the General Subaccount of the Collection
Account pursuant to this Section 6.11, the Servicer shall provide written notice (which may be via electronic means, including electronic mail) to the Indenture Trustee and, upon request, to the Issuer of each such remittance (including the exact dollar amount to be remitted). The Servicer shall also, promptly upon receipt, remit to the Collection Account any other proceeds of the Series Collateral that it may receive from time to time. Reconciliations of bank statements shall be as set forth in Exhibit A.
(b) The Servicer agrees and acknowledges that it holds all Nuclear Asset-Recovery Charge Payments collected by it and any other proceeds for the Series Collateral received by it for the benefit of the Indenture Trustee and the Holders and that all such amounts will be remitted by the Servicer in accordance with this Section 6.11 without any surcharge, fee, offset, charge or other deduction except for and interest earnings permitted by Section 6.06. The Servicer further agrees not to make any claim to reduce its obligation to remit all Nuclear Asset-Recovery Charge Payments collected by it in accordance with this Servicing Agreement.
(c) Unless otherwise directed to do so by the Issuer, the Servicer shall be responsible for selecting Eligible Investments in which the funds in the Collection Account shall be invested pursuant to Section 8.03 of the Indenture.
Section 6.12. Maintenance of Operations. Subject to Section 6.03, Duke Energy Florida agrees to continue, unless prevented by circumstances beyond its control, to operate its electric distribution system to provide service so long as it is acting as the Servicer under this Servicing Agreement.
ARTICLE VII
DEFAULT
Section 7.01. Servicer Default. If any one or more of the following events (a Servicer Default) shall occur and be continuing:
(a) any failure by the Servicer to remit to the Collection Account on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of such failure is received by the Servicer and the Commission from the Issuer or the Indenture Trustee or after discovery of such failure by a Responsible Officer of the Servicer;
(b) any failure on the part of the Servicer or, so long as the Servicer is Duke Energy Florida or an Affiliate thereof, any failure on the part of Duke Energy Florida, as the case may be, duly to observe or to perform in any material respect any covenants or agreements of the Servicer or Duke Energy Florida, as the case may be, set forth in this Servicing Agreement (other than as provided in Section 7.01(a) or Section 7.01(c)) or any other Basic Document to which it is a party, which failure shall (i) materially and adversely affect the rights of the Holders and (ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer or Duke Energy Florida, as the case may be, by the Issuer, the Commission (with a copy to the Indenture Trustee) or to the Servicer or Duke Energy Florida, as the case may be, by the Indenture Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;
(c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days;
(d) any representation or warranty made by the Servicer in this Servicing Agreement or any other Basic Document shall prove to have been incorrect in a material respect when made, which has a material adverse effect on the Holders and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Indenture Trustee) by the Issuer, the Commission or the Indenture Trustee or (ii) such failure is discovered by a Responsible Officer of the Servicer; or
(e) an Insolvency Event occurs with respect to the Servicer or Duke Energy Florida;
then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee shall, upon the instruction of Holders evidencing a majority of the Outstanding Amount of the Series A Bonds or by the Commission, subject to the terms of the Intercreditor Agreement, by notice then given in writing to the Servicer (and to the Indenture Trustee if given by the Holders) (a Termination Notice), terminate all the rights and obligations (other than the obligations set forth in Section 6.02 and the obligation under Section 7.02 to continue performing its functions as Servicer until a successor Servicer is appointed) of the Servicer under this Servicing Agreement and under the Intercreditor Agreement; provided, however the Indenture Trustee shall not give a Termination Notice upon instruction of the Commission unless the Rating Agency Condition is satisfied. In addition, upon a Servicer Default described in Section 7.01(a), the Holders and the Indenture Trustee as financing parties under the Nuclear Asset-Recovery Law (or any of their representatives) shall be entitled to apply to the Commission or a court of appropriate jurisdiction for an order for sequestration and payment of revenues arising with respect to the Series Property. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Servicing Agreement, whether with respect to the Series A Bonds, the Series Property, the Series Charges or otherwise, shall, without further action, pass to and be vested in such successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Nuclear Asset-Recovery Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the successor Servicer, the Issuer and the Indenture Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Servicing Agreement, including the transfer to the successor Servicer for administration by it of all Nuclear Asset-Recovery Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Series Property or the Series Charges. As soon as practicable
after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Nuclear Asset-Recovery Property Records to the successor Servicer. In case a successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys fees and expenses) incurred in connection with transferring the Nuclear Asset-Recovery Property Records to the successor Servicer and amending this Servicing Agreement and the Intercreditor Agreement to reflect such succession as Servicer pursuant to this Section 7.01 shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of Duke Energy Florida as Servicer shall not terminate Duke Energy Floridas rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).
Section 7.02. Appointment of Successor.
(a) Upon the Servicers receipt of a Termination Notice pursuant to Section 7.01 or the Servicers resignation or removal in accordance with the terms of this Servicing Agreement, the predecessor Servicer shall continue to perform its functions as Servicer under this Servicing 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 Servicers removal or resignation hereunder, the Indenture Trustee may, at the written direction and with the consent of the Holders of a majority of the Outstanding Amount of the Series A Bonds or of the Commission shall, but subject to the provisions of the Intercreditor Agreement, appoint a successor Servicer with the Issuers 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 reasonably acceptable to the Issuer and the Indenture Trustee and provide prompt written notice of such assumption to the Issuer, the Commission and the Rating Agencies. If, within 30 days after the delivery of the Termination Notice, a new Servicer shall not have been appointed, the Indenture Trustee may, at the direction of the Holders of a majority of the Series A Bonds, petition the Commission or a court of competent jurisdiction to appoint a successor Servicer under this Servicing Agreement. A Person shall qualify as a successor Servicer only if (i) such Person is permitted under Commission Regulations to perform the duties of the Servicer, (ii) the Rating Agency Condition shall have been satisfied, (iii) such Person enters into a servicing agreement with the Issuer having substantially the same provisions as this Servicing Agreement and (iv) such Person agrees to perform the obligations of the Servicer under the Intercreditor Agreement. In no event shall the Indenture Trustee be liable for its appointment of a successor Servicer. The Indenture Trustees expenses incurred under this Section 7.02(a) shall be at the sole expense of the Issuer and payable from the Collection Account as provided in Section 8.02 of the Indenture.
(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 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 Servicing Agreement.
Section 7.03. Waiver of Past Defaults. The Indenture Trustee, with the written consent of the Commission and the consent of the Holders evidencing a majority of the Outstanding Amount of the Series A Bonds, may 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 Servicing 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 Servicing Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto. Promptly after the execution of any such waiver, the Servicer shall furnish copies of such waiver to each of the Rating Agencies.
Section 7.04. Notice of Servicer Default. The Servicer shall deliver to the Issuer, the Indenture Trustee, the Commission and the Rating Agencies, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, written notice of any event that, with the giving of notice or lapse of time, or both, would become a Servicer Default under Section 7.01.
Section 7.05. Cooperation with Successor. The Servicer covenants and agrees with the Issuer that it will, on an ongoing basis, cooperate with the successor Servicer and provide whatever information is, and take whatever actions are, reasonably necessary to assist the successor Servicer in performing its obligations hereunder.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Amendment.
(a) Subject to Section 8.01(c), this Servicing Agreement may be amended in writing by the Servicer and the Issuer with the prior written consent of the Indenture Trustee and the satisfaction of the Rating Agency Condition; provided, that any such amendment may not adversely affect the interest of any Holder in any material respect without the consent of the Holders of a majority of the Outstanding Amount. Promptly after the execution of any such amendment or consent, the Issuer shall furnish copies of such amendment or consent to each of the Rating Agencies and the Commission.
(b) Prior to the execution of any amendment to this Servicing Agreement, the Issuer and the Indenture Trustee shall be entitled to receive and conclusively rely upon an Opinion of Counsel of external counsel stating that such amendment is authorized and permitted by this Servicing Agreement and all conditions precedent, if any, provided for in this Servicing Agreement relating to such amendment have been satisfied and upon the Opinion of Counsel from external counsel referred to in Section 3.01(c)(i). The Issuer and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment that affects their own rights, duties, indemnities or immunities under this Servicing Agreement or otherwise.
(c) Notwithstanding anything to the contrary in this Section 8.01, no amendment or modification of this Servicing Agreement, nor any waiver required by Section
7.03 hereof, shall be effective except upon satisfaction of the conditions precedent in this paragraph (c).
(i) At least 15 days prior to the effectiveness of any such amendment or modification and after obtaining the other necessary approvals set forth in Section 8.01(a) (except that the consent of the Indenture Trustee may be subject to the consent of the Holders if such consent is required or sought by the Indenture Trustee in connection with such amendment or modification) or prior to the effectiveness of any waiver of a default approved by the Holders of a majority of the Outstanding Amount of the Series A Bonds, the Servicer shall have delivered to the Commissions executive director and general counsel written notification of any proposed amendment, which notification shall contain:
(A) a reference to Docket Nos. 150171-EI;
(B) an Officers Certificate stating that the proposed amendment or modification has been approved by all parties to this Servicing Agreement or alternatively, the waiver of default has been approved by the Holders of a majority of the Outstanding Amount of Series A Bonds; and
(C) a statement identifying the person to whom the Commission is to address any response to the proposed amendment or to request additional time.
(ii) If the Commission or an authorized representative of the Commission, within 15 days (subject to extension as provided in clause (iii)) of receiving a notification complying with subparagraph (i), shall have delivered to the office of the person specified in clause (i)(C) a written statement that the Commission might object to the proposed amendment or modification, or to the waiver of default, then, subject to clause (iv) below, such proposed amendment or modification, or the waiver of default, shall not be effective unless and until the Commission subsequently delivers a written statement that it does not object to such proposed amendment or modification.
(iii) If the Commission or an authorized representative of the Commission, within 15 days of receiving a notification complying with subparagraph (i), shall have delivered to the office of the person specified in clause (i)(C) a written statement requesting an additional amount of time not to exceed thirty days (or, in the case of a waiver of default, 15 days) in which to consider such proposed amendment or modification, then such proposed amendment or modification shall not be effective if, within such extended period, the Commission shall have delivered to the office of the person specified in clause (i)(C) a written statement as described in subparagraph (ii), unless and until the Commission subsequently delivers a written statement that it does not object to such proposed amendment or modification.
(iv) If (A) the Commission or an authorized representative of the Commission, shall not have delivered written notice that the Commission might object to such proposed amendment or modification, or the waiver of default, within the time periods described in subparagraphs (ii) or (iii), whichever is applicable, or (B) the Commission or authorized representative of the Commission, has delivered such written notice but does not within 60 days of the delivery of the notification in (a) above, provide subsequent written notice confirming that it does in fact object and the reasons therefore or advise that it has initiated a proceeding to determine what action it might take with respect to the matter, then the Commission shall be conclusively deemed not to have any objection to the proposed amendment or modification or waiver of default, as the case may be, and such amendment or modification or waiver of default, as the case may be, may subsequently become effective upon satisfaction of the other conditions specified in Section 8.01(a).
(v) Following the delivery of a statement from the Commission or an authorized representative of the Commission to the Servicer under subparagraph (ii), the Servicer and the Issuer shall have the right at any time to withdraw from the Commission further consideration of any proposed amendment, modification or waiver of default.
(d) For the purpose of this Section 8.01(a), an authorized representative of the Commission means any person authorized to act on behalf of the Commission, as evidenced by an Opinion of Counsel (which may be the general counsel) to the Commission.
Section 8.02. Maintenance of Accounts and Records.
(a) The Servicer shall maintain accounts and records as to the Series Property accurately and in accordance with its standard accounting procedures and in sufficient detail to permit reconciliation between Nuclear Asset-Recovery Charge Payments received by the Servicer and Nuclear Asset-Recovery Charge Collections from time to time deposited in the Collection Account.
(b) The Servicer shall permit the Indenture 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 Servicers normal operations, to inspect, audit and make copies of and abstracts from the Servicers records regarding the Series Property and the Series Charges. Nothing in this Section 8.02(b) shall affect the obligation of the Servicer to observe any applicable law (including any Commission Regulation) prohibiting disclosure of information regarding 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. Any notice, report or other communication given hereunder shall be in writing and shall be effective (i) upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (ii) upon receipt when sent by an overnight courier, (iii) on the date personally delivered to an authorized officer of the party to
which sent or (iv) on the date transmitted by facsimile or other electronic transmission with a confirmation of receipt in all cases, addressed as follows:
(a) in the case of the Servicer, to Duke Energy Florida, LLC, at (i) 299 First Avenue North, St. Petersburg, Florida 33701, Attention: Director, Rates and Regulatory Strategy, Telephone: 727-820-4560 and (ii) 550 South Tryon Street, Charlotte, North Carolina 28202, Attention: Treasurer, Telephone: 704-382-3853 c/o Assistant Treasurer;
(b) in the case of the Issuer, to Duke Energy Florida Project Finance, LLC, at 299 First Avenue North, St. Petersburg, Florida 33701, Attention: Managers, Telephone: (980) 373-8659;
(c) in the case of the Indenture Trustee, to the Corporate Trust Office;
(d) in the case of Fitch, to Fitch Ratings, 33 Whitehall Street, New York, New York 10004, Attention: ABS Surveillance, Telephone: (212) 908-0500, Facsimile: (212) 908-0355;
(e) in the case of S&P, to Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business, Structured Credit Surveillance, 55 Water Street, New York, New York 10041, Telephone: (212) 438-8991, Email: servicer_reports@standardandpoors.com (all such notices to be delivered to S&P in writing by email); and
(f) in the case of the Commission, Florida Public Services Commission, 2450 Shumard Oak Blvd., Tallahassee, Florida, 32399-0850, Attention: Staff Director of Accounting & Finance.
Each party hereto may, by notice given in accordance herewith to the other party or parties hereto, designate any further or different address to which subsequent notices, reports and other communications shall be sent.
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 Servicing Agreement concerning the resignation of the Servicer, this Servicing Agreement may not be assigned by the Servicer. Any assignment of this Servicing Agreement is subject to satisfaction of any conditions set forth in the Intercreditor Agreement.
Section 8.05. Limitations on Rights of Others. The provisions of this Servicing Agreement are solely for the benefit of the Servicer, the Issuer, the Commission, on behalf of itself and Customers, and, to the extent provided herein or in the other Basic Documents, the Indenture Trustee and the Holders, and the other Persons expressly referred to herein, and such Persons shall have the right to enforce the relevant provisions of this Servicing Agreement. Nothing in this Servicing Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Series Property or Series Collateral or under or in respect of this Servicing Agreement or any covenants, conditions or provisions contained herein. Notwithstanding anything to the contrary
contained herein, for the avoidance of doubt, any right, remedy or claim to which any Customer may be entitled pursuant to the Financing Order and to this Servicing Agreement may be asserted or exercised only by the Commission (or by its counsel in the name of the Commission) for the benefit of such Customer.
Section 8.06. Severability. Any provision of this Servicing 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 remainder of such provision (if any) or the remaining provisions hereof (unless such a construction shall be unreasonable), 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 Servicing 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. Governing Law. This Servicing Agreement shall be governed by and construed in accordance with the laws of the State of Florida, 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 8.09. Assignment to Indenture Trustee. The Servicer hereby acknowledges and consents to the assignment by the Issuer to the Indenture Trustee of any or all of the Issuers rights hereunder. In no event shall the Indenture Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates delivered pursuant hereto, as to all of which any recourse shall be had solely to the assets of the Issuer subject to the availability of funds therefor under Section 8.02 of the Indenture.
Section 8.10. Nonpetition Covenants. Notwithstanding any prior termination of this Servicing Agreement or the Indenture, the Servicer shall not, prior to the date that is one year and one day after the satisfaction and discharge of the Indenture, acquiesce, petition or otherwise invoke or cause the Issuer to invoke or join with any Person in provoking the process of any Governmental Authority for the purpose of commencing or sustaining an involuntary case against the Issuer under any U.S. federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer for any substantial part of the property of the Issuer or ordering the dissolution, winding up or liquidation of the affairs of the Issuer.
Section 8.11. Limitation of Liability. It is expressly understood and agreed by the parties hereto that this Servicing Agreement is executed and delivered by the Indenture Trustee, not individually or personally but solely as Indenture Trustee in the exercise of the powers and authority conferred and vested in it, and that the Indenture Trustee, in acting hereunder, is entitled to all rights, benefits, protections, immunities and indemnities accorded to it under the Indenture.
Section 8.12. Rule 17g-5 Compliance. The Servicer agrees that any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Servicer to any Rating Agency under this Servicing Agreement or any other Basic Document to which it is a party for the purpose of determining the initial credit rating of the Series A Bonds or undertaking credit rating surveillance of the Series A Bonds with any Rating Agency, or satisfy the Rating Agency Condition, shall be substantially concurrently posted by the Servicer on the 17g-5 Website.
Section 8.13. Indenture Trustee Actions. In acting hereunder, the Indenture Trustee shall have the rights, protections and immunities granted to it under the Indenture.
{SIGNATURE PAGE FOLLOWS}
IN WITNESS WHEREOF, the parties hereto have caused this Servicing Agreement to be duly executed by their respective officers as of the day and year first above written.
|
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||||
|
|
as Issuer | ||||
|
|
| ||||
|
|
| ||||
|
|
By: |
/s/ Stephen G. De May | |||
|
|
|
Name: |
Stephen G. De May | ||
|
|
|
Title: |
President, Chief Financial Officer and Treasurer | ||
|
|
| ||||
|
|
| ||||
|
|
DUKE ENERGY FLORIDA, LLC, | ||||
|
|
as Servicer | ||||
|
|
| ||||
|
|
| ||||
|
|
By: |
/s/ Stephen G. De May | |||
|
|
|
Name: |
Stephen G. De May | ||
|
|
|
Title: |
Senior Vice President, Tax and Treasurer | ||
|
|
| ||||
ACKNOWLEDGED AND ACCEPTED: |
|
| ||||
|
|
| ||||
THE BANK OF NEW YORK MELLON |
|
| ||||
TRUST COMPANY, NATIONAL ASSOCIATION, |
|
| ||||
as Indenture Trustee |
|
| ||||
|
|
| ||||
|
|
| ||||
By: |
/s/ Mitchell L. Brumwell |
|
| |||
|
Name: |
Mitchell L. Brumwell |
|
| ||
|
Title: |
Vice President |
|
|
Signature Page to Nuclear Asset Recovery Servicing Agreement
EXHIBIT A
SERVICING PROCEDURES
The Servicer agrees to comply with the following servicing procedures:
SECTION 1. Definitions.
Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Servicing Agreement (the Agreement).
SECTION 2. Data Acquisition.
(a) Installation and Maintenance of Meters. The Servicer shall cause to be installed, replaced and maintained meters in accordance with the Servicer Policies and Practices.
(b) Meter Reading. In accordance with the Servicer Policies and Practices, the Servicer shall obtain consumption measurements for each Customer or determine any Customers consumption on the basis of estimates in accordance with Commission Regulations.
(c) Cost of Metering. The Issuer shall not be obligated to pay any costs associated with the metering duties set forth in this Section 2, including the costs of installing, replacing and maintaining meters, nor shall the Issuer be entitled to any credit against the Servicing Fee for any cost savings realized by the Servicer as a result of new metering and/or billing technologies.
SECTION 3. Consumption and Bill Calculation.
The Servicer shall obtain a calculation of each Customers consumption (which may be based on data obtained from such Customers meter read or on consumption estimates determined in accordance with Commission Regulations) in accordance with the Servicer Policies and Practices and shall determine therefrom Billed Nuclear Asset-Recovery Charges for the Series A Bonds.
SECTION 4. Billing.
(a) Commencement of Billing. The Servicer shall implement the Series Charges as of the date following Series Closing Date for the Series A Bonds and shall thereafter bill each Customer for each Customers Billed Nuclear Asset-Recovery Charges for the Series A Bonds in accordance with the provisions of this Section 4.
(b) Frequency of Bills; Billing Practices. In accordance with the Servicer Policies and Practices, the Servicer shall generate and issue a Bill to each Customer. In the event that the Servicer makes any material modification to the Servicer Policies and Practices, it shall notify
the Issuer, the Indenture Trustee and the Rating Agencies as soon as practicable, and in no event later than 60 Servicer Business Days after such modification goes into effect, but the Servicer may not make any modification that will materially adversely affect the Holders.
(c) Format.
(i) The Customers Bill will contain a separate line item identifying the monthly charge representing the Series Property. The Customers Bill shall contain in text or in a footnote, text substantially to the effect that the monthly charge representing Series Property has been approved by the Financing Order, and that a portion of the monthly charge is being collected by the Servicer, as servicer, on behalf of the Issuer as owner of the Series Property.
(ii) The Servicer shall conform to such requirements in respect of the format, structure and text of Bills delivered to Customers as Commission Regulations shall from time to time prescribe. To the extent that Bill format, structure and text are not prescribed by applicable law or by Commission Regulations, the Servicer shall, subject to clause (i) of this subsection (c), determine the format, structure and text of all Bills in accordance with its reasonable business judgment, the Servicer Policies and Practices and historical practice.
(d) Delivery. Except as provided in the next sentence, 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 or (ii) by any other means, whether electronic or otherwise, that the Servicer may from time to time use in accordance with the Servicer Policies and Practices. The Servicer shall pay from its own funds all costs of issuance and delivery of all Bills that it renders, including printing and postage costs as the same may increase or decrease from time to time.
SECTION 5. Customer Service Functions.
The Servicer shall handle all Customer inquiries and other Customer service matters according to the Servicer Policies and Practices.
SECTION 6. Collections; Payment Processing; Remittance.
(a) Collection Efforts, Policies, Procedures.
(i) The Servicer shall collect Billed Nuclear Asset-Recovery Charges for the Series A Bonds (including late charges in respect of Series Charges) from Customers as and when the same become due in accordance with such collection procedures as it follows with respect to comparable assets that it services for itself or others including, in accordance with Commission Regulations and the Servicer Policies and Practices, that:
(A) The Servicer shall prepare and deliver overdue notices to Customers.
(B) The Servicer shall deliver past-due and shut-off notices.
(C) The Servicer may employ the assistance of collection agents.
(D) The Servicer shall apply Customer deposits to the payment of delinquent accounts.
(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 Policies and Practices and (B) would comply in all material respects with applicable law.
(iii) The Servicer shall accept payment from Customers in respect of Billed Nuclear Asset-Recovery Charges for the Series A Bonds in such forms and methods and at such times and places in accordance with the Servicer Policies and Practices.
(b) Payment Processing; Allocation; Priority of Payments. The Servicer shall post all payments received to Customer accounts as promptly as practicable, and, in any event, substantially all payments shall be posted no later than two Servicer Business Days after receipt.
(c) Investment of Estimated Nuclear Asset-Recovery Charge Payments Received. Prior to remittance on the applicable remittance date, the Servicer may invest estimated Nuclear Asset-Recovery Charges Payments 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.
(d) Calculation of Daily Remittance.
(i) The Servicer will remit Series Charges directly to the Indenture Trustee pursuant to Section 6.11 of the Servicing Agreement. The Servicer will remit Series Charges based on estimated collections using a weighted average balance of days outstanding (ADO) on Duke Energy Floridas retail bills. Nuclear Asset-Recovery Charge Collections for the Series A Bonds remitted will represent the charges estimated to be received for any period based upon the ADO and an estimated system-wide write-off percentage.
(ii) The Nuclear Asset-Recovery Charge Collections for the Series A Bonds will be remitted by the Servicer to the Indenture Trustee as soon as reasonably practicable to the General Subaccount of the Collection Account on each Servicer Business Day, but in no event later than two Servicer Business Days following such Servicer Business Day. Estimated daily Nuclear Asset-Recovery Charge Collections for the Series A Bonds will be remitted to the Indenture Trustee on each Servicer Business Day based upon the ADO and estimated write-offs. Each day on which those remittances are made is referred to as a daily remittance date.
(iii) No less often than annually, the Servicer and the Indenture Trustee will reconcile remittances of estimated Nuclear Asset-Recovery Charge Collections for the Series A Bonds with actual Nuclear Asset-Recovery Charge Payments for the Series A
Bonds received by the Servicer to more accurately reflect the amount of Billed Nuclear Asset-Recovery Charges for the Series A Bonds that should have been remitted, based on ADO and the actual system-wide write-off percentage. To the extent the remittances of estimated payments arising from the Series Charges exceed the amounts that should have been remitted based on actual system-wide write-offs, the Servicer will be entitled to withhold the excess amount from any subsequent remittance to the Indenture Trustee until the balance of such excess is reduced to zero. To the extent the remittances of estimated payments arising from the Series Charges are less than the amount that should have been remitted based on actual system wide write-offs, the Servicer will remit the amount of the shortfall to the Indenture Trustee within two Servicer Business Days. Although the Servicer will remit estimated Nuclear Asset-Recovery Charge Collections for the Series A Bonds to the Indenture Trustee, the Servicer will not be obligated to make any payments on the Series A Bonds.
(iv) At least annually, the Servicer also will remit to the Indenture Trustee, for the benefit of the Issuer, any late charges received from Customers with respect to the Series Charges.
(v) The Servicer agrees and acknowledges that it holds all Nuclear Asset-Recovery Charge Collections for the Series A Bonds received by it and any other proceeds for the Series Collateral received by it for the benefit of the Indenture Trustee and the Holders and that all such amounts will be remitted by the Servicer without any surcharge, fee, offset, charge or other deduction. The Servicer further agrees not to make any claim to reduce its obligation to remit all Nuclear Asset-Recovery Charge Payments for the Series A Bonds collected by it in accordance with the Servicing Agreement.
(e) Partial Collections. Upon a partial payment of amounts billed, including amounts billed under special contracts, such partial payments shall be allocated ratably among the Series Charges and the Sellers other billed amounts (including any accrued interest and late fees) based on the ratio of each component of the bill to the total bill. If more than one Series of Nuclear Asset-Recovery Bonds are Outstanding, partial payments allocable to Series Charges shall be allocated pro rata based upon the amount of Nuclear Asset-Recovery Charges owing with respect to each series.
(f) No Advances. The Servicer shall not be obligated to advance any of its own funds to the Issuer.
MONTHLY SERVICERS CERTIFICATE
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC
$1,294,290,000 Series A Senior Secured Nuclear Asset-Recovery Bonds
Pursuant to Section 3.01(b) of the Nuclear Asset-Recovery Property Servicing Agreement dated as of June 22, 2016 by and between Duke Energy Florida, LLC, as Servicer, and Duke Energy Florida Project Finance, LLC, as Issuer (the Servicing Agreement), the Servicer does hereby certify as follows:
Capitalized terms used but not defined in this Monthly Servicers Certificate have their respective meanings as set forth in the Servicing Agreement. References herein to certain sections and subsections are references to the respective sections or subsections of the Servicing Agreement.
Current BILLING MONTH: { }
Current BILLING MONTH: { / /20 } - { / /20 }
Standard Billing for prior BILLING MONTH
Residential Total Billed |
|
$ |
{ |
} |
|
|
Residential NUCLEAR ASSET-RECOVERY CHARGE (NARC) Billed |
|
$ |
{ |
} |
{ . |
}% |
|
|
|
|
|
| |
General Service Non-Demand Total Billed |
|
$ |
{ |
} |
|
|
General Service Non-Demand NARC Billed |
|
$ |
{ |
} |
{ . |
}% |
|
|
|
|
|
| |
General Service Billed |
|
$ |
{ |
} |
|
|
General Service NARC Billed |
|
$ |
{ |
} |
{ . |
}% |
|
|
|
|
|
| |
General Service Demand Total Billed |
|
$ |
{ |
} |
|
|
General Service Demand NARC Billed |
|
$ |
{ |
} |
{ . |
}% |
|
|
|
|
|
| |
Curtailable Total Billed |
|
$ |
{ |
} |
|
|
Curtailable NARC Billed |
|
$ |
{ |
} |
{ . |
}% |
|
|
|
|
|
| |
Interruptible Total Billed |
|
$ |
{ |
} |
|
|
Interruptible NARC Billed |
|
$ |
{ |
} |
{ . |
}% |
|
|
|
|
|
| |
Lighting Total Billed |
|
$ |
{ |
} |
|
|
Lighting NARC Billed |
|
$ |
{ |
} |
{ . |
}% |
|
|
|
|
|
| |
YTD Net Write-offs as a % of Billed Revenue |
|
|
|
|
| |
Non-Residential Class Customer Write-offs |
|
{ . |
}% |
|
| |
Residential Class Customer Write-offs |
|
{ . |
}% |
|
| |
Total Write-offs |
|
{ . |
}% |
|
|
Aggregate NARC Collections
Total NARC Remitted for BILLING MONTH |
|
|
|
|
| |
Residential NARC Collected |
|
$ |
{ |
} |
|
|
General Service Non-Demand NARC Collected |
|
$ |
{ |
} |
|
|
General Service NARC Collected |
|
$ |
{ |
} |
|
|
General Service Demand NARC Collected |
|
$ |
{ |
} |
|
|
Curtailable NARC Collected |
|
$ |
{ |
} |
|
|
Interruptible NARC Collected |
|
$ |
{ |
} |
|
|
Lighting NARC Collected |
|
$ |
{ |
} |
|
|
Sub-Total of NARC Collected |
|
$ |
{ |
} |
|
|
|
|
|
|
|
| |
Total NARC Collected and Remitted |
|
$ |
{ |
} |
|
|
|
|
|
|
|
| |
Aggregate NARC Remittances for { 20 } BILLING MONTH |
|
$ |
{ |
} |
|
|
Aggregate NARC Remittances for { 20 } BILLING MONTH |
|
$ |
{ |
} |
|
|
Aggregate NARC Remittances for { 20 } BILLING MONTH |
|
$ |
{ |
} |
|
|
|
|
|
|
|
| |
Total Current NARC Remittances |
|
$ |
{ |
} |
|
|
Current BILLING MONTH: { / /20 } - { / /20 }
Executed as of this { } day of { } 20{ }.
|
DUKE ENERGY FLORIDA, LLC, | |
|
as Servicer | |
|
| |
|
| |
|
By: |
|
|
|
Name: |
|
|
Title: |
CC: DUKE ENERGY FLORIDA PROJECT FINANCE, LLC
SEMI-ANNUAL SERVICERS CERTIFICATE
Pursuant to Section 4.01(c)(ii) of the Nuclear Asset-Recovery Property Servicing Agreement, dated as of June 22, 2016 (the Servicing Agreement), by and between DUKE ENERGY FLORIDA, LLC, as servicer (the Servicer), and Duke Energy Florida Project Finance, LLC, the Servicer does hereby certify, for the { }, 20{ } Payment Date (the Current Payment Date), as follows:
Capitalized terms used but not defined herein have their respective meanings as set forth in the Servicing Agreement. References herein to certain sections and subsections are references to the respective sections of the Servicing Agreement or the Indenture, as the context indicates.
Collection Periods: { } to { }
Payment Date: { }, 20{ }
1. Collections Allocable and Aggregate Amounts Available for the Current Payment Date:
i. |
|
Remittances for the { } Collection Period |
|
$ |
{ |
} |
ii. |
|
Remittances for the { } Collection Period |
|
$ |
{ |
} |
iii. |
|
Remittances for the { } Collection Period |
|
$ |
{ |
} |
iv. |
|
Remittances for the { } Collection Period |
|
$ |
{ |
} |
v. |
|
Remittances for the { } Collection Period |
|
$ |
{ |
} |
vi. |
|
Remittances for the { } Collection Period |
|
$ |
{ |
} |
vii. |
|
Investment Earnings on Capital Subaccount |
|
$ |
{ |
} |
viii. |
|
Investment Earnings on Excess Funds Subaccount |
|
$ |
{ |
} |
ix. |
|
Investment Earnings on General Subaccount |
|
$ |
{ |
} |
x. |
|
General Subaccount Balance (sum of i through ix above) |
|
$ |
{ |
} |
xi. |
|
Excess Funds Subaccount Balance as of prior Payment Date |
|
$ |
{ |
} |
xii. |
|
Capital Subaccount Balance as of prior Payment Date |
|
$ |
{ |
} |
xiii. |
|
Collection Account Balance (sum of xi through xii above) |
|
$ |
{ |
} |
2. Outstanding Amounts of as of prior Payment Date:
i. |
|
Series A 2018 { } Outstanding Amount |
|
$ |
{ |
} |
ii. |
|
Series A 2021 { } Outstanding Amount |
|
$ |
{ |
} |
iii. |
|
Series A 2026 { } Outstanding Amount |
|
$ |
{ |
} |
iv. |
|
Series A 2032 { } Outstanding Amount |
|
$ |
{ |
} |
v. |
|
Series A 2035 { } Outstanding Amount |
|
$ |
{ |
} |
vi. |
|
Aggregate Outstanding Amount of all Series A Bonds |
|
$ |
{ |
} |
3. Required Funding/Payments as of Current Payment Date:
|
|
Principal |
|
Principal Due |
| |
i. |
|
Series A 2018 { } |
|
$ |
{ |
} |
ii. |
|
Series A 2021 { } |
|
$ |
{ |
} |
iii. |
|
Series A 2026 { } |
|
$ |
{ |
} |
iv. |
|
Series A 2032 { } |
|
$ |
{ |
} |
v. |
|
Series A 2035 { } |
|
$ |
{ |
} |
vi. |
|
All Series A Bonds |
|
$ |
{ |
} |
|
|
Interest |
|
|
|
|
WAL |
|
Interest Rate |
|
Days in Interest Period(1) |
|
Principal Balance |
|
Interest Due |
| ||
vii. Series A 2018 { } |
|
{ |
}% |
{ |
} |
$ |
{ |
} |
$ |
{ |
} |
viii. Series A 2021 { } |
|
{ |
}% |
{ |
} |
$ |
{ |
} |
$ |
{ |
} |
ix. Series A 2026 { } |
|
{ |
}% |
{ |
} |
$ |
{ |
} |
$ |
{ |
} |
x. Series A 2032 { } |
|
{ |
}% |
{ |
} |
$ |
{ |
} |
$ |
{ |
} |
xi. Series A 2035 { } |
|
{ |
}% |
{ |
} |
$ |
{ |
} |
$ |
{ |
} |
xii. |
|
All Series A Bonds |
|
|
|
|
$ |
{ |
} |
|
|
Required Level |
|
Funding Required |
| ||
xiii. Capital Subaccount |
|
$ |
{ |
} |
$ |
{ |
} |
4. Allocation of Remittances as of Current Payment Date Pursuant to 8.02(e) of Indenture:
i. Trustee Fees and Expenses; Indemnity Amounts |
|
|
|
$ |
{ |
} |
|
|
ii. Servicing Fee |
|
|
|
$ |
{ |
} |
|
|
iii. Administration Fee |
|
|
|
$ |
{ |
} |
|
|
iv. Operating Expenses |
|
|
|
$ |
{ |
} |
|
|
Series A Bonds |
|
Aggregate |
|
Per $1,000 of Original Principal |
|
|
| |||
v. Semi-Annual Interest (including any past-due for prior periods) |
|
|
|
$ |
{ |
} |
|
| ||
1. Series A 2018 { }Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
2. Series A 2021 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
3. Series A 2026 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
4. Series A 2032 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
5. Series A 2035 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
|
|
$ |
{ |
} |
|
|
|
| ||
vi. Principal Due and Payable as a Result of an Event of Default or on Final Maturity Date |
|
|
|
|
|
$ |
{ |
} | ||
1. Series A 2018 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
2. Series A 2021 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
3. Series A 2026 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
4. Series A 2032 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
5. Series A 2035 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
|
|
$ |
{ |
} |
|
|
|
| ||
vii. Semi-Annual Principal |
|
|
|
|
|
$ |
{ |
} | ||
1. Series A 2018 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
2. Series A 2021 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
|
(1)On 30/360 day basis for initial payment date; otherwise use one-half of annual rate.
3. Series A 2026 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
4. Series A 2032 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
5. Series A 2035 { } Interest Payment |
|
$ |
{ |
} |
$ |
{ |
} |
|
| |
|
|
$ |
{ |
} |
|
|
|
| ||
viii. Other unpaid Operating Expenses |
|
|
|
|
|
$ |
{ |
} | ||
ix. Funding of Capital Subaccount (to required level) |
|
|
|
|
|
$ |
{ |
} | ||
x. Capital Subaccount Return to Duke Energy Florida |
|
|
|
|
|
$ |
{ |
} | ||
xi. Deposit to Excess Funds Subaccount |
|
|
|
|
|
$ |
{ |
} | ||
xii. Released to Issuer upon Retirement of all Series A Bonds |
|
|
|
|
|
$ |
{ |
} | ||
xiii. Aggregate Remittances as of Current Payment Date |
|
|
|
|
|
$ |
{ |
} |
5. Outstanding Amount and Collection Account Balance as of Current Payment Date (after giving effect to payments to be made on such Payment Date):
i. |
|
Series A 2018 { } |
|
$ |
{ |
} |
ii. |
|
Series A 2021 { } |
|
$ |
{ |
} |
iii. |
|
Series A 2026 { } |
|
$ |
{ |
} |
iv. |
|
Series A 2032 { } |
|
$ |
{ |
} |
v. |
|
Series A 2035 { } |
|
$ |
{ |
} |
vi. |
|
Aggregate Outstanding Amount of all Series A Bonds |
|
$ |
{ |
} |
vii. |
|
Excess Funds Subaccount Balance |
|
$ |
{ |
} |
viii. |
|
Capital Subaccount Balance |
|
$ |
{ |
} |
ix. |
|
Aggregate Collection Account Balance |
|
$ |
{ |
} |
6. Subaccount Withdrawals as of Current Payment Date (if applicable, pursuant to Section 8.02(e) of Indenture):
i. |
|
Excess Funds Subaccount |
|
$ |
{ |
} |
ii. |
|
Capital Subaccount |
|
$ |
{ |
} |
iii. |
|
Total Withdrawals |
|
$ |
{ |
} |
7. Shortfalls in Interest and Principal Payments as of Current Payment Date:
i. |
|
Semi-annual Interest |
|
|
| |
|
|
Series A 2018 { } Interest Payment |
|
$ |
{ |
} |
|
|
Series A 2021 { } Interest Payment |
|
$ |
{ |
} |
|
|
Series A 2026 { } Interest Payment |
|
$ |
{ |
} |
|
|
Series A 2032 { } Interest Payment |
|
$ |
{ |
} |
|
|
Series A 2035 { } Interest Payment |
|
$ |
{ |
} |
|
|
Total |
|
$ |
{ |
} |
ii. |
|
Semi-annual Principal |
|
|
| |
|
|
Series A 2018 { } Principal Payment |
|
$ |
{ |
} |
|
|
Series A 2021 { } Principal Payment |
|
$ |
{ |
} |
|
|
Series A 2026 { } Principal Payment |
|
$ |
{ |
} |
|
|
Series A 2032 { } Principal Payment |
|
$ |
{ |
} |
|
|
Series A 2035 { } Principal Payment |
|
$ |
{ |
} |
|
|
Total |
|
$ |
{ |
} |
8. Shortfalls in Payment of Return on Invested Capital as of Current Payment Date:
i. |
|
Return on Invested Capital |
|
$ |
{ |
} |
9. Shortfalls in Required Subaccount Levels as of Current Payment Date:
i. |
|
Capital Subaccount |
|
$ |
{ |
} |
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Semi-Annual Servicers Certificate this { } day of { }, 20{ }.
|
DUKE ENERGY FLORIDA, INC., | |
|
as Servicer | |
|
| |
|
| |
|
By: |
|
|
|
Name: |
|
|
Title: |
SERVICER CERTIFICATE
The undersigned hereby certifies that the undersigned is the duly elected and acting { } of DUKE ENERGY FLORIDA, LLC, as servicer (the Servicer) under the Nuclear Asset-Recovery Property Servicing Agreement dated as of June 22, 2016 (the Servicing Agreement) by and between the Servicer and DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, and further certifies that:
1. The undersigned is responsible for assessing the Servicers compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the Servicing Criteria).
2. With respect to each of the Servicing Criteria, the undersigned has made the following assessment of the Servicing Criteria in accordance with Item 1122(d) of Regulation AB, with such discussion regarding the performance of such Servicing Criteria during the fiscal year covered by the Sponsors annual report on Form 10-K:
Regulation AB |
|
Servicing Criteria |
|
Assessment |
General Servicing Considerations | ||||
1122(d)(1)(i) |
|
Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements. |
|
Applicable; assessment below. |
1122(d)(1)(ii) |
|
If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third partys performance and compliance with such servicing activities. |
|
Not applicable; no servicing activities were outsourced. |
1122(d)(1)(iii) |
|
Any requirements in the transaction agreements to maintain a back-up servicer for pool assets are maintained. |
|
Not applicable; transaction agreements do not provide for a back-up servicer. |
1122(d)(1)(iv) |
|
A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements. |
|
Not applicable; transaction agreements do not require a fidelity bond or errors and omissions policy. |
1122(d)(1)(v) |
|
Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information. |
|
Applicable |
Cash Collection and Administration | ||||
1122(d)(2)(i) |
|
Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements. |
|
Applicable. |
1122(d)(2)(ii) |
|
Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel. |
|
Applicable. |
Regulation AB |
|
Servicing Criteria |
|
Assessment |
1122(d)(2)(iii) |
|
Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements. |
|
Applicable; no advances by the Servicer are permitted under the transaction agreements, except for payments of certain indemnities. |
1122(d)(2)(iv) |
|
The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements. |
|
Applicable, but no current assessment is required since the related accounts are maintained by the Indenture Trustee. |
1122(d)(2)(v) |
|
Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, federally insured depository institution with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) under the Exchange Act. |
|
Applicable, but no current assessment required; all custodial accounts are maintained by the Indenture Trustee. |
1122(d)(2)(vi) |
|
Unissued checks are safeguarded so as to prevent unauthorized access. |
|
Not applicable; all payments made by wire transfer. |
1122(d)(2)(vii) |
|
Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are: (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. |
|
Applicable; assessment below. |
Investor Remittances and Reporting | ||||
1122(d)(3)(i) |
|
Reports to investors, including those to be filed with the SEC, are maintained in accordance with the transaction agreements and applicable SEC requirements. Specifically, such reports: (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the SEC as required by its rules and regulations; and (D) agree with investors or the trustees records as to the total unpaid principal balance and number of pool assets serviced by the servicer. |
|
Applicable; assessment below. |
Regulation AB |
|
Servicing Criteria |
|
Assessment |
1122(d)(3)(ii) |
|
Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements. |
|
Not applicable; investor records maintained by the Indenture Trustee. |
1122(d)(3)(iii) |
|
Disbursements made to an investor are posted within two business days to the servicers investor records, or such other number of days specified in the transaction agreements. |
|
Applicable. |
1122(d)(3)(iv) |
|
Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements. |
|
Applicable; assessment below. |
Pool Asset Administration | ||||
1122(d)(4)(i) |
|
Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents. |
|
Applicable; assessment below. |
1122(d)(4)(ii) |
|
Pool assets and related documents are safeguarded as required by the transaction agreements. |
|
Applicable; assessment below. |
1122(d)(4)(iii) |
|
Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements. |
|
Not applicable; no removals or substitutions of Nuclear Asset-Recovery Property are contemplated or allowed under the transaction documents. |
1122(d)(4)(iv) |
|
Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the servicers obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset agreements. |
|
Applicable; assessment below. |
1122(d)(4)(v) |
|
The servicers records regarding the pool assets agree with the servicers records with respect to an obligors unpaid principal balance. |
|
Not applicable; because underlying obligation (Nuclear Asset-Recovery Charge) is not an interest-bearing instrument. |
1122(d)(4)(vi) |
|
Changes with respect to the terms or status of an obligors pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents. |
|
Applicable; assessment below. |
1122(d)(4)(vii) |
|
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. |
|
Applicable; limited assessment below. Servicer actions governed by Commission regulations. |
Regulation AB |
|
Servicing Criteria |
|
Assessment |
1122(d)(4)(viii) |
|
Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entitys activities in monitoring delinquent pool assets, including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment). |
|
Applicable, but does not require assessment since no explicit documentation requirement with respect to delinquent accounts are imposed under the transaction agreements due to availability of true-up mechanism; and any such documentation is maintained in accordance with applicable Florida commission rules and regulations.. |
1122(d)(4)(ix) |
|
Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents. |
|
Not applicable; Nuclear Asset-Recovery Charges are not interest-bearing instruments. |
1122(d)(4)(x) |
|
Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligors pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements. |
|
Not applicable. |
1122(d)(4)(xi) |
|
Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. |
|
Not applicable; Servicer does not make payments on behalf of obligors. |
1122(d)(4)(xii) |
|
Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicers funds and not charged to the obligor, unless the late payment was due to the obligors error or omission. |
|
Not applicable; Servicer cannot make advances of its own funds on behalf of customers under the transaction agreements. |
1122(d)(4)(xiii) |
|
Disbursements made on behalf of an obligor are posted within two business days to the obligors records maintained by the servicer, or such other number of days specified in the transaction agreements. |
|
Not applicable; Servicer cannot make advances of its own funds on behalf of customers to pay principal or interest on the bonds. |
Regulation AB |
|
Servicing Criteria |
|
Assessment |
1122(d)(4)(xiv) |
|
Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements. |
|
Applicable; assessment below. |
1122(d)(4)(xv) |
|
Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements. |
|
Not applicable; no external enhancement is required under the transaction agreements. |
3. To the best of the undersigneds knowledge, based on such review, the Servicer is in compliance in all material respects with the applicable servicing criteria set forth above as of and for the period ended the end of the fiscal year covered by the Issuers annual report on Form 10-K. {If not true, include description of any material instance of noncompliance.}
4. {[ ], an independent registered public accounting firm, has issued an attestation report on the Servicers assessment of compliance with the applicable servicing criteria as of and for the period ended the end of the fiscal year covered by the Issuers annual report on Form 10-K.}
5. Capitalized terms used but not defined herein have their respective meanings as set forth in the Servicing Agreement.
Executed as of this { } day of { }, 20{ }.
|
DUKE ENERGY FLORIDA, LLC, | |
|
as Servicer | |
|
| |
|
| |
|
By: |
|
|
|
Name: |
|
|
Title: |
CERTIFICATE OF COMPLIANCE
The undersigned hereby certifies that the undersigned is the duly elected and acting { } of DUKE ENERGY FLORIDA, LLC, as servicer (the Servicer) under the Nuclear Asset-Recovery Property Servicing Agreement dated as of June 22, 2016 (the Servicing Agreement) by and between the Servicer and DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, and further certifies that:
1. A review of the activities of the Servicer and of its performance under the Servicing Agreement during the twelve months ended { }, 20{ } has been made under the supervision of the undersigned pursuant to Section 3.03 of the Servicing Agreement.
2. To the undersigneds knowledge, based on such review, the Servicer has fulfilled all of its obligations in all material respects under the Servicing Agreement throughout the twelve months ended { }, 20{ }, except as set forth on EXHIBIT A hereto.
Executed as of this { } day of { }, 20{ }.
|
DUKE ENERGY FLORIDA, LLC, | |
|
as Servicer | |
|
| |
|
| |
|
By: |
|
|
|
Name: |
|
|
Title: |
EXHIBIT A
TO
CERTIFICATE OF COMPLIANCE
LIST OF SERVICER DEFAULTS
The following Servicer Defaults, or events that with the giving of notice, the lapse of time, or both, would become Servicer Defaults, known to the undersigned occurred during the twelve months ended { }, 20{ }:
Nature of Default |
|
Status |
{ } |
|
{ } |
EXPECTED SINKING FUND SCHEDULE
Outstanding Principal Balance Per Series A Bond
Semi-Annual |
|
Series A |
|
Series A |
|
Series A |
|
Series A |
|
Series A |
| |||||
Series Closing Date |
|
$ |
183,000,000 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2017 |
|
$ |
147,300,00 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2017 |
|
$ |
120,300,000 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2018 |
|
$ |
91,968,362 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2018 |
|
$ |
66,819,301 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2019 |
|
$ |
38,167,849 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2019 |
|
$ |
12,697,061 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2020 |
|
|
|
$ |
133,721,958 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
September 1, 2020 |
|
|
|
$ |
107,883,912 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
March 1, 2021 |
|
|
|
$ |
78,473,209 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
September 1, 2021 |
|
|
|
$ |
52,163,338 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
March 1, 2022 |
|
|
|
$ |
22,276,781 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
September 1, 2022 |
|
|
|
|
|
$ |
431,486,993 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
March 1, 2023 |
|
|
|
|
|
$ |
401,419,122 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
September 1, 2023 |
|
|
|
|
|
$ |
374,328,724 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
March 1, 2024 |
|
|
|
|
|
$ |
343,548,495 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
September 1, 2024 |
|
|
|
|
|
$ |
315,736,958 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
March 1, 2025 |
|
|
|
|
|
$ |
284,226,703 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
September 1, 2025 |
|
|
|
|
|
$ |
255,676,143 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
March 1, 2026 |
|
|
|
|
|
$ |
223,417,756 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
September 1, 2026 |
|
|
|
|
|
$ |
194,109,843 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2027 |
|
|
|
|
|
$ |
161,084,768 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2027 |
|
|
|
|
|
$ |
131,000,718 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2028 |
|
|
|
|
|
$ |
97,189,941 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2028 |
|
|
|
|
|
$ |
66,310,505 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2029 |
|
|
|
|
|
$ |
31,694,550 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2029 |
|
|
|
|
|
|
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
March 1, 2030 |
|
|
|
|
|
|
|
$ |
214,357,231 |
|
$ |
275,290,000 |
| |
September 1, 2030 |
|
|
|
|
|
|
|
$ |
181,556,335 |
|
$ |
275,290,000 |
| |
March 1, 2031 |
|
|
|
|
|
|
|
$ |
144,928,619 |
|
$ |
275,290,000 |
| |
September 1, 2031 |
|
|
|
|
|
|
|
$ |
111,133,282 |
|
$ |
275,290,000 |
| |
March 1, 2032 |
|
|
|
|
|
|
|
$ |
73,491,827 |
|
$ |
275,290,000 |
| |
September 1, 2032 |
|
|
|
|
|
|
|
$ |
38,669,301 |
|
$ |
275,290,000 |
| |
March 1, 2033 |
|
|
|
|
|
|
|
|
|
$ |
275,290,000 |
| ||
September 1, 2033 |
|
|
|
|
|
|
|
|
|
$ |
239,255,018 |
| ||
March 1, 2034 |
|
|
|
|
|
|
|
|
|
$ |
199,408,169 |
| ||
September 1, 2034 |
|
|
|
|
|
|
|
|
|
$ |
162,192,506 |
| ||
March 1, 2035 |
|
|
|
|
|
|
|
|
|
$ |
121,146,581 |
| ||
September 1, 2035 |
|
|
|
|
|
|
|
|
|
$ |
82,613,161 |
| ||
March 1, 2036 |
|
|
|
|
|
|
|
|
|
$ |
40,324,274 |
| ||
September 1, 2036 |
|
|
|
|
|
|
|
|
|
|
|
APPENDIX A
DEFINITIONS AND RULES OF CONSTRUCTION
A. Defined Terms. The following terms have the following meanings:
17g-5 Website is defined in Section 10.18(a) of the Indenture.
Account Records is defined in Section 1(a)(i) of the Administration Agreement.
Act is defined in Section 10.03(a) of the Indenture.
Additional Series means issuance by the Issuer of any series of Nuclear Asset-Recovery Bonds issued after the date hereof, that will be undertaken only if (i) such issuance has been authorized by the Commission, (ii) the Rating Agency Condition has been satisfied and it is a condition of issuance for each Series of Nuclear Asset-Recovery Bonds that the new Series receive a rating or ratings as required by the Financing Order or a Subsequent Financing Order, (iii) the Issuer has delivered to the Indenture Trustee an Opinion of Counsel of a nationally recognized firm experienced in such matters to the effect that after such issuance, in the opinion of such counsel, if either or both of Duke Energy Florida or the Seller were to become a debtor in a case under the United States Bankruptcy Code (Title 11, U.S.C.), a federal court exercising bankruptcy jurisdiction and exercising reasonable judgment after full consideration of all relevant factors would not order substantive consolidation of the assets and liabilities of the Issuer with those of the bankruptcy estate of Duke Energy Florida or the Seller, subject to the customary exceptions, qualifications and assumptions contained therein.
Administration Agreement means the Administration Agreement, dated as of the date hereof, by and between Duke Energy Florida and the Issuer.
Administration Fee is defined in Section 2 of the Administration Agreement.
Administrator means Duke Energy Florida, as Administrator under the Administration Agreement, or any successor Administrator to the extent permitted under the Administration Agreement.
AES means an alternative energy supplier which is authorized by law to sell electric service to a customer using the transmission or distribution system of Duke Energy Florida.
Affiliate means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, control when used with respect to any specified Person means the power to direct the management and policies of such specified Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms controlling and controlled have meanings correlative to the foregoing.
Amendatory Schedule means a revision to service riders or any other notice filing filed with the Commission in respect of the Nuclear Asset-Recovery Rate Schedule pursuant to a True-Up Adjustment.
Annual Accountants Report is defined in Section 3.04(a) of the Servicing Agreement.
Authorized Denomination means, with respect to any Nuclear Asset-Recovery Bond, the authorized denomination therefor specified in the Series Supplement, which shall be at least $2,000 and, except as otherwise provided in the Series Supplement, integral multiples of $1,000 in excess thereof, except for one Nuclear Asset-Recovery bond which may be of a smaller denomination.
Bankruptcy Code means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.).
Basic Documents means the Indenture, each Series Supplement, the Certificate of Formation, the LLC Agreement, the Administration Agreement, and, with respect to each Series, the applicable Sale Agreement, Bill of Sale, Servicing Agreement, Intercreditor Agreement, Letter of Representations, Underwriting Agreement and all other documents and certificates delivered in connection therewith.
Bill of Sale means a bill of sale substantially in the form of Exhibit A to the Sale Agreement delivered pursuant to Section 2.02(a) of the Sale Agreement.
Billed Nuclear Asset-Recovery Charges means the amounts of Nuclear Asset-Recovery Charges billed by the Servicer.
Billing Period means the period created by dividing the calendar year into 12 consecutive periods of approximately 21 Servicer Business Days.
Bills means each of the regular monthly bills, summary bills, opening bills and closing bills issued to Customers by Duke Energy Florida in its capacity as Servicer.
Bond Interest Rate means, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, the rate at which interest accrues on the Nuclear Asset-Recovery Bonds of such Series or WAL, as specified in the applicable Series Supplement.
Book-Entry Form means, with respect to any Nuclear Asset-Recovery Bond, that such Nuclear Asset-Recovery Bond is not certificated and the ownership and transfers thereof shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture and the Series Supplement pursuant to which such Nuclear Asset-Recovery Bond was issued.
Book-Entry Nuclear Asset-Recovery Bonds means any Nuclear Asset-Recovery Bonds issued in Book-Entry Form; provided, however, that, after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive Nuclear Asset-Recovery Bonds are to be issued to the Holder of such Nuclear Asset-Recovery
Bonds, such Nuclear Asset-Recovery Bonds shall no longer be Book-Entry Nuclear Asset-Recovery Bonds.
Business Day means any day other than a Saturday, a Sunday or a day on which banking institutions in St. Petersburg, Florida, Charlotte, North Carolina or New York, New York are, or DTC or the Corporate Trust Office is, authorized or obligated by law, regulation or executive order to be closed.
Capital Contribution means the amount of cash contributed to the Issuer by Duke Energy Florida as specified in the LLC Agreement.
Capital Subaccount is defined in Section 8.02(a) of the Indenture.
Certificate of Compliance means the certificate referred to in Section 3.03 of the Servicing Agreement and substantially in the form of Exhibit E to the Servicing Agreement.
Certificate of Formation means the Certificate of Formation filed with the Secretary of State of the State of Delaware on January 5, 2016 pursuant to which the Issuer was formed.
Charge means any nuclear asset-recovery charges as defined in Section 366.95(1)(j) of the Nuclear Asset-Recovery Law that are authorized by the Financing Order or any Subsequent Financing Order.
Claim means a claim as defined in Section 101(5) of the Bankruptcy Code.
Clearing Agency means an organization registered as a clearing agency pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant means a securities broker, dealer, bank, trust company, clearing corporation or other financial institution or other Person for whom from time to time a Clearing Agency effects book entry transfers and pledges of securities deposited with such Clearing Agency.
Code means the Internal Revenue Code of 1986.
Collateral is defined in the preamble of the Indenture.
Collection Account is defined in Section 8.02(a) of the Indenture for such Series.
Collection in Full of the Charges means the day on which the aggregate amounts on deposit in the General Subaccount and the Excess Funds Subaccount are sufficient to pay in full all the Outstanding Nuclear Asset-Recovery Bonds and to replenish any shortfall in the Capital Subaccount.
Collection Period means any period commencing on the first Servicer Business Day of any Billing Period and ending on the last Servicer Business Day of such Billing Period.
Commission means the Florida Public Service Commission.
Commission Condition means the satisfaction of any precondition to any amendment or modification to or action under any Basic Documents through the obtaining of Commission consent or acquiescence, as described in the related Basic Document.
Commission Regulations means any regulations, including temporary regulations, promulgated by the Commission pursuant to Florida law.
Company Minutes is defined in Section 1(a)(iv) of the Administration Agreement.
Corporate Trust Office means the office of the Indenture Trustee at which, at any particular time, its corporate trust business shall be administered, which office as of the date hereof is located at BNY Mellon Global Corporate Trust, 10161 Centurion Parkway North, Jacksonville, Florida 32256; Telephone: 904-998-4714; Facsimile: 904-645-1930, or at such other address as the Indenture Trustee may designate from time to time by notice to the Holders of Nuclear Asset-Recovery Bonds and the Issuer, or the principal corporate trust office of any successor trustee designated by like notice.
Covenant Defeasance Option is defined in Section 4.01(b) of the Indenture.
Customer means any existing or future customer (including individuals, corporations, other businesses, and federal, state and local governmental entities) receiving transmission or distribution service from Duke Energy Florida or its successors or assignees under Commission-approved rate schedules or under special contracts, even if such customer elects to purchase electricity from an AES following a fundamental change in regulation of public utilities in Florida.
Daily Remittance is defined in Section 6.11(a) of the Servicing Agreement.
Default means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.
Definitive Nuclear Asset-Recovery Bonds is defined in Section 2.11 of the Indenture.
Delaware UCC means the Uniform Commercial Code as in effect on the Series Closing Date in the State of Delaware.
DTC means The Depository Trust Company.
Duke Energy Florida means Duke Energy Florida, LLC, a Florida limited liability company.
Eligible Account means a segregated non-interest-bearing trust account with an Eligible Institution.
Eligible Institution means:
(a) the corporate trust department of the Indenture Trustee or a subsidiary thereof, so long as any of the securities of the Indenture Trustee has a credit rating from each Rating Agency in one of its generic rating categories that signifies investment grade; or
(b) a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank) (i) that has either (A) a long-term issuer rating of AA- or higher by S&P, A2 or higher by Moodys and AA or higher by Fitch, if rated by Fitch, or (B) a short-term issuer rating of A-1+ or higher by S&P, P-1 or higher by Moodys and F1 or higher by Fitch, if rated by Fitch, or any other long-term, short-term or certificate of deposit rating acceptable to the Rating Agencies, and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation.
If so qualified under clause (b) of this definition, the Indenture Trustee may be considered an Eligible Institution for the purposes of clause (a) of this definition.
Eligible Investments means instruments or investment property that evidence:
(a) direct obligations of, or obligations fully and unconditionally guaranteed as to timely payment by, the United States of America;
(b) demand or time deposits of, unsecured certificates of deposit of, money market deposit accounts of, bank deposit products of or bankers acceptances issued by, any depository institution (including, but not limited to, bank deposit products of the Indenture Trustee, acting in its commercial capacity) incorporated or organized under the laws of the United States of America or any State thereof and subject to supervision and examination by U.S. federal or state banking authorities, so long as the commercial paper or other short-term debt obligations of such depository institution are, at the time of deposit, rated at least A-1 and P-1 or their equivalents by each of S&P and Moodys and, if Fitch provides ratings thereon by Fitch, or such lower rating as will not result in the downgrading or withdrawal of the ratings of the Nuclear Asset-Recovery Bonds;
(c) commercial paper (including commercial paper of the Indenture Trustee, acting in its commercial capacity, and other than commercial paper of Duke Energy Florida or any of its Affiliates), which at the time of purchase is rated at least A-1 and P-1 or their equivalents by each of S&P and Moodys or such lower rating as will not result in the downgrading or withdrawal of the ratings of the Nuclear Asset-Recovery Bonds;
(d) investments in money market funds having a rating in the highest investment category granted thereby (including funds for which the Indenture Trustee or any of its Affiliates is investment manager or advisor) from Moodys, S&P and Fitch, if rated by Fitch;
(e) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or its agencies or instrumentalities, entered into with Eligible Institutions;
(f) repurchase obligations with respect to any security or whole loan entered into with an Eligible Institution or with a registered broker/dealer acting as principal and that meets the ratings criteria set forth below:
(i) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any such broker/dealer being referred to in this definition as a broker/dealer), the unsecured short-term debt obligations of which are rated at least P-1 by Moodys, A-1+ by S&P and, if Fitch provides a rating thereon, F-1+ by Fitch at the time of entering into such repurchase obligation; or
(ii) an unrated broker/dealer, acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least P-1 by Moodys, A-1+ by S&P and, if Fitch provides a rating thereon, F-1+ by Fitch at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company; and
(g) any other investment permitted by each of the Rating Agencies;
in each case maturing not later than the Business Day preceding the next Payment Date or Special Payment Date, if applicable (for the avoidance of doubt, investments in money market funds or similar instruments that are redeemable on demand shall be deemed to satisfy the foregoing requirement). Notwithstanding the foregoing: (1) no securities or investments that mature in 30 days or more shall be Eligible Investments unless the issuer thereof has either a short-term unsecured debt rating of at least P-1 from Moodys or a long-term unsecured debt rating of at least A1 from Moodys and also has a long-term unsecured debt rating of at least A from S&P; (2) no securities or investments described in clauses (b) through (d) above that have maturities of more than 30 days but less than or equal to 3 months shall be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least A1 from Moodys and a short-term unsecured debt rating of at least P-1 from Moodys; and (3) no securities or investments described in clauses (b) through (d) above that have maturities of more than 3 months shall be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least A1 from Moodys and a short-term unsecured debt rating of at least P-1 from Moodys.
Event of Default is defined in Section 5.01 of the Indenture.
Excess Funds Subaccount is defined in Section 8.02(a) of the Indenture.
Exchange Act means the Securities Exchange Act of 1934.
Expected Sinking Fund Schedule means, with respect to any WAL, the expected sinking fund schedule related thereto set forth in the applicable Series Supplement.
Federal Book-Entry Regulations means 31 C.F.R. Part 357 et seq. (Department of Treasury).
Federal Funds Rate means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Servicer from three federal funds brokers of recognized standing selected by it.
Final means, with respect to the Financing Order or Subsequent Financing Order, that the Financing Order has become final, that the Financing Order is not being appealed and that the time for filing an appeal thereof has expired.
Final Maturity Date means, with respect to each Series of WAL of Nuclear Asset-Recovery Bonds, the final maturity date therefor as specified in the applicable Series Supplement.
Financing Costs means all financing costs as defined in Section 366.95(1)(e) of the Nuclear Asset-Recovery Law allowed to be recovered by Duke Energy Florida under the Financing Order.
Financing Order means the financing order issued by the Commission to Duke Energy Florida on November 19, 2015, Docket No. 150148-EI, authorizing the creation of the Nuclear Asset-Recovery Property.
Financing Party means any and all of the following: the Holders, the Indenture Trustee, Duke Energy Florida, collateral agents, any party under the Basic Documents, or any other person acting for the benefit of the Holders.
Fitch means Fitch Ratings or any successor thereto. References to Fitch are effective so long as Fitch is a Rating Agency.
Florida Secured Transactions Registry means the centralized database in which all initial financing statements, amendments, assignments, and other statements of charge authorized to be filed under Chapter 679 of the Florida statutes.
Florida UCC means the Uniform Commercial Code as in effect on the Series Closing Date in the State of Florida.
General Subaccount is defined in Section 8.02(a) of the Indenture for such Series.
Global Nuclear Asset-Recovery Bond means a Nuclear Asset-Recovery Bond to be issued to the Holders thereof in Book-Entry Form, which Global Nuclear Asset-Recovery Bond shall be issued to the Clearing Agency, or its nominee, in accordance with Section 2.11 of the Indenture and the Series Supplement.
Governmental Authority means any nation or government, any U.S. federal, state, local or other political subdivision thereof and any court, administrative agency or other instrumentality or entity exercising executive, legislative, judicial, regulatory or administrative functions of government.
Grant means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, grant, transfer, create, grant a lien upon, a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture and the Series Supplement. A Grant of the Collateral shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.
Holder means the Person in whose name a Nuclear Asset-Recovery Bond is registered on the Nuclear Asset-Recovery Bond Register.
Indemnified Losses is defined in Section 5.03 of the Servicing Agreement.
Indemnified Party is defined in Section 6.02(a) of the Servicing Agreement.
Indemnified Person is defined in Section 5.01(f) of the Sale Agreement.
Indenture means the Indenture, dated as June 22, 2016, by and between the Issuer and The Bank of New York Mellon, a National Association, as Indenture Trustee and as Securities Intermediary.
Indenture Trustee means The Bank of New York Mellon Trust Company, National Association, a national banking association, as indenture trustee for the benefit of the Secured Parties, or any successor indenture trustee for the benefit of the Secured Parties, under the Indenture.
Independent means, when used with respect to any specified Person, that such specified Person (a) is in fact independent of the Issuer, any other obligor on the Nuclear Asset-Recovery Bonds, the Seller, the Servicer and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director (other than as an independent director or manager) or person performing similar functions.
Independent Certificate means a certificate to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and consented to by the Indenture Trustee, and such certificate shall state that the signer has read the definition of Independent in the Indenture and that the signer is Independent within the meaning thereof.
Independent Manager is defined in Section 4.01(a) of the LLC Agreement.
Independent Manager Fee is defined in Section 4.01(a) of the LLC 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 specified Person or any substantial part of its property in an involuntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the date hereof or thereafter, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or ordering the winding-up or liquidation of such specified Persons 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 specified Person of a voluntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the Series Closing Date or thereafter, or the consent by such specified Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such specified Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or the making by such specified Person of any general assignment for the benefit of creditors, or the failure by such specified Person generally to pay its debts as such debts become due, or the taking of action by such specified Person in furtherance of any of the foregoing.
Intercreditor Agreement means the Intercreditor Agreement, dated as of the date hereof, by and among the Issuer, the Indenture Trustee, Duke Energy Florida and the parties to the accounts receivables sale program of Duke Energy Florida Receivables LLC, and any subsequent such agreement.
Interim True-Up Adjustment means either an Optional Interim True-Up Adjustment made in accordance with Section 4.01(b)(ii) of the Servicing Agreement or a Non-standard True-Up Adjustment made in accordance with Section 4.01(b)(iii) of the Servicing Agreement.
Investment Company Act means the Investment Company Act of 1940.
Investment Earnings means investment earnings on funds deposited in the Collection Account net of losses and investment expenses.
Issuer means Duke Energy Florida Project Finance, LLC, a Delaware limited liability company, named as such in the Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the Trust Indenture Act, each other obligor on the Nuclear Asset-Recovery Bonds.
Issuer Documents is defined in Section 1(a)(iv) of the Administration Agreement.
Issuer Order means a written order signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or Paying Agent, as applicable.
Issuer Request means a written request signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or Paying Agent, as applicable.
Legal Defeasance Option is defined in Section 4.01(b) of the Indenture.
Letter of Representations means any applicable agreement between the Issuer and the applicable Clearing Agency, with respect to such Clearing Agencys rights and obligations (in its capacity as a Clearing Agency) with respect to any Book-Entry Nuclear Asset-Recovery Bonds.
Lien means a security interest, lien, mortgage, charge, pledge, claim or encumbrance of any kind.
LLC Agreement means the Amended and Restated Limited Liability Company Agreement of Duke Energy Florida Project Finance, LLC, dated as of June 10, 2016.
Losses means (a) any and all amounts of principal of and interest on the Nuclear Asset-Recovery Bonds not paid when due or when scheduled to be paid in accordance with their terms and the amounts of any deposits by or to the Issuer required to have been made in accordance with the terms of the Basic Documents or the Financing Order or Subsequent that are not made when so required and (b) any and all other liabilities, obligations, losses, claims, damages, payments, costs or expenses of any kind whatsoever.
Manager means each manager of the Issuer under the LLC Agreement.
Member has the meaning specified in the first paragraph of the LLC Agreement.
Monthly Servicers Certificate is defined in Section 3.01(b)(i) of the Servicing Agreement.
Moodys means Moodys Investors Service, Inc.. References to Moodys are effective so long as Moodys is a Rating Agency.
Non-standard True-Up Adjustment means any Non-standard True-Up Adjustment made pursuant to Section 4.01(b)(iii) of the Servicing Agreement.
NRSRO is defined in Section 10.18(b) of the Indenture.
Nuclear Asset-Recovery Bond Register is defined in Section 2.05 of the Indenture.
Nuclear Asset-Recovery Bond Registrar is defined in Section 2.05 of the Indenture.
Nuclear Asset-Recovery Bonds means all Series of the nuclear asset-recovery bonds issued under the Indenture.
Nuclear Asset-Recovery Charge Collections means Charges actually received by the Servicer to be remitted to the Collection Account.
Nuclear Asset-Recovery Charge Payments means the payments made by Customers based on the Charges.
Nuclear Asset-Recovery Costs means (i) the balance of the Crystal River Unit 3 Regulatory Asset as of December 31, 2015 as allowed under the Financing Order minus (ii) $35,894,547.00, which, pursuant to the Commissions Final Order PSC-16-0138-FOF-EI issued on April 5, 2016, shall not be included in, recovered or further trued up as part of the Crystal River Unit 3 Regulatory Asset, plus (iii) carrying charges accruing at 6.0% per annum on the balance of the Crystal River Unit 3 Regulatory Asset (adjusted as described in (ii) above) from December 31, 2015 through the date hereof.
Nuclear Asset-Recovery Law means the laws of the State of Florida adopted in May 2015 enacted as Section 366.95, Florida Statutes.
Nuclear Asset-Recovery Property Records is defined in Section 5.01 of the Servicing Agreement.
Nuclear Asset-Recovery Rate Class means one of the seven separate rate classes to whom Charges are allocated for ratemaking purposes in accordance with the Financing Order.
Nuclear Asset-Recovery Rate Schedule means the Tariff sheets to be filed with the Commission stating the amounts of the Charges, as such Tariff sheets may be amended or modified from time to time pursuant to a True-Up Adjustment.
NY UCC means the Uniform Commercial Code as in effect on the date hereof in the State of New York.
Officers Certificate means a certificate signed by a Responsible Officer of the Issuer under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, and delivered to the Indenture Trustee.
Ongoing Financing Costs means the Financing Costs described as such in the Financing Order, including Operating Expenses and any other costs identified in the Basic
Documents; provided, however, that Ongoing Financing Costs do not include the Issuers costs of issuance of the Nuclear Asset-Recovery Bonds.
Operating Expenses means all unreimbursed fees, costs and out-of-pocket expenses of the Issuer, including all amounts owed by the Issuer to the Indenture Trustee (including indemnities, legal, audit fees and expenses) or any Manager, the Servicing Fee, the Administration Fee, legal and accounting fees, Rating Agency fees, any Regulatory Assessment Fees and related fees (i.e. website provider fees) and any franchise or other taxes owed by the Issuer, including on investment income in the Collection Account.
Opinion of Counsel means one or more written opinions of counsel, who may, except as otherwise expressly provided in the Basic Documents, be employees of or counsel to the party providing such opinion of counsel, which counsel shall be reasonably acceptable to the party receiving such opinion of counsel, and shall be in form and substance reasonably acceptable to such party.
Optional Interim True-Up Adjustment means any Optional Interim True-Up Adjustment made pursuant to Section 4.01(b)(ii) of the Servicing Agreement.
Outstanding means, as of the date of determination, all Nuclear Asset-Recovery Bonds theretofore authenticated and delivered under the Indenture, except:
(a) Nuclear Asset-Recovery Bonds theretofore canceled by the Nuclear Asset-Recovery Bond Registrar or delivered to the Nuclear Asset-Recovery Bond Registrar for cancellation;
(b) Nuclear Asset-Recovery Bonds or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Nuclear Asset-Recovery Bonds; and
(c) Nuclear Asset-Recovery Bonds in exchange for or in lieu of other Nuclear Asset-Recovery Bonds that have been issued pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Nuclear Asset-Recovery Bonds are held by a Protected Purchaser;
provided, that, in determining whether the Holders of the requisite Outstanding Amount of the Nuclear Asset-Recovery Bonds or any Series or WAL thereof have given any request, demand, authorization, direction, notice, consent or waiver under any Basic Document, Nuclear Asset-Recovery Bonds owned by the Issuer, any other obligor upon the Nuclear Asset-Recovery Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding (unless one or more such Persons owns 100% of such Nuclear Asset-Recovery Bonds), except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Nuclear Asset-Recovery Bonds that the Indenture Trustee actually knows to be so owned shall be so disregarded. Nuclear Asset-Recovery Bonds so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgees right so to act with respect to such Nuclear Asset-Recovery Bonds and that the pledgee is not the Issuer, any other obligor upon the Nuclear
Asset-Recovery Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons.
Outstanding Amount means the aggregate principal amount of all Nuclear Asset-Recovery Bonds, or, if the context requires, all Nuclear Asset-Recovery Bonds of a Series or WAL, Outstanding at the date of determination.
Paying Agent means, with respect to the Indenture, the Indenture Trustee and any other Person appointed as a paying agent for the Nuclear Asset-Recovery Bonds pursuant to the Indenture.
Payment Date means, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, the dates specified in the applicable Series Supplement; provided, that if any such date is not a Business Day, the Payment Date shall be the Business Day succeeding such date.
Periodic Billing Requirement means, for any Remittance Period, the aggregate amount of Charges calculated by the Servicer as necessary to be billed during such period in order to collect the Periodic Payment Requirement on a timely basis.
Periodic Interest means, with respect to any Payment Date, the periodic interest for such Payment Date as specified in the Series Supplement.
Periodic Payment Requirement for any Remittance Period means the total dollar amount of Nuclear Asset-Recovery Charge Collections reasonably calculated by the Servicer in accordance with Section 4.01 of the Servicing Agreement as necessary to be received during such Remittance Period (after giving effect to the allocation and distribution of amounts on deposit in the Excess Funds Subaccount at the time of calculation and that are projected to be available for payments on the Nuclear Asset-Recovery Bonds at the end of such Remittance Period and including any shortfalls in Periodic Payment Requirements for any prior Remittance Period) in order to ensure that, as of the last Payment Date occurring in such Remittance Period, (a) all accrued and unpaid principal of and interest on the Nuclear Asset-Recovery Bonds then due shall have been paid in full on a timely basis, (b) the Outstanding Amount of the Nuclear Asset-Recovery Bonds is equal to the Projected Unpaid Balance on each Payment Date during such Remittance Period, (c) the balance on deposit in the Capital Subaccount equals the Required Capital Level and (d) all other fees and expenses due and owing and required or allowed to be paid under Section 8.02 of the Indenture as of such date shall have been paid in full; provided, that, with respect to any Semi-Annual True-Up Adjustment or Interim True-Up Adjustment occurring after the date that is one year prior to the last Scheduled Final Payment Date for the Nuclear Asset-Recovery Bonds, the Periodic Payment Requirements shall be calculated to ensure that sufficient Nuclear Asset-Recovery Charges will be collected to retire the Nuclear Asset-Recovery Bonds in full as of the next Payment Date.
Periodic Principal means, with respect to any Payment Date, the excess, if any, of the Outstanding Amount of Nuclear Asset-Recovery Bonds over the outstanding principal balance specified for such Payment Date on the Expected Sinking Fund Schedule.
Permitted Lien means the Lien created by the Indenture.
Permitted Successor is defined in Section 5.02 of the Sale Agreement.
Person means any individual, corporation, limited liability company, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or Governmental Authority.
Predecessor Nuclear Asset-Recovery Bond means, with respect to any particular Nuclear Asset-Recovery Bond, every previous Nuclear Asset-Recovery Bond evidencing all or a portion of the same debt as that evidenced by such particular Nuclear Asset-Recovery Bond, and, for the purpose of this definition, any Nuclear Asset-Recovery Bond authenticated and delivered under Section 2.06 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Nuclear Asset-Recovery Bond shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Nuclear Asset-Recovery Bond.
Premises is defined in Section 1(g) of the Administration Agreement.
Proceeding means any suit in equity, action at law or other judicial or administrative proceeding.
Projected Unpaid Balance means, as of any Payment Date, the sum of the projected outstanding principal amount of each WAL of Nuclear Asset-Recovery Bonds for such Payment Date set forth in the Expected Sinking Fund Schedule.
Property means all nuclear asset-recovery property as defined in Section 366.95(1)(l) of the Nuclear Asset-Recovery Law created pursuant to the Financing Order or a Subsequent Financing Order and under the Nuclear Asset-Recovery Law, including the right to impose, bill, collect and receive the Charges authorized under the Financing Order and to obtain periodic adjustments of the Charges and all revenue, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests specified in Section 366.95(1)(l)1., regardless of whether such revenues, collections, claims, rights to payment, payments, money, or proceeds are imposed, billed, received, collected, or maintained together with or commingled with other revenues, collections, rights to payment, payments, money, or proceeds.
Protected Purchaser has the meaning specified in Section 8-303 of the UCC.
Rating Agency means, with respect to any WAL of Nuclear Asset-Recovery Bonds, any of Moodys, S&P or Fitch that provides a rating with respect to the Nuclear Asset-Recovery Bonds. If no such organization (or successor) is any longer in existence, Rating Agency shall be a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, notice of which designation shall be given to the Indenture Trustee and the Servicer.
Rating Agency Condition means, with respect to any action, at least ten Business Days prior written notification to each Rating Agency of such action, and written confirmation from each of S&P and Moodys to the Servicer, the Indenture Trustee and the Issuer that such action will not result in a suspension, reduction or withdrawal of the then current rating by such Rating Agency of any WAL of Nuclear Asset-Recovery Bonds; provided, that, if,
within such ten Business Day period, any Rating Agency (other than S&P) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (a) the Issuer shall be required to confirm that such Rating Agency has received the Rating Agency Condition request and, if it has, promptly request the related Rating Agency Condition confirmation and (b) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five Business Days following such second request, the applicable Rating Agency Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agencys right to review or consent).
Record Date means one Business Day prior to the applicable Payment Date.
Registered Holder means the Person in whose name a Nuclear Asset-Recovery Bond is registered on the Nuclear Asset-Recovery Bond Register.
Regulation AB means the rules of the SEC promulgated under Subpart 229.1100 Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123.
Regulatory Assessment Fee means any assessment fee due to the Commission pursuant to Section 350.113, Florida Statutes.
Reimbursable Expenses is defined in Section 2 of the Administration Agreement and Section 6.06(a) of the Servicing Agreement.
Released Parties is defined in Section 6.02(d) of the Servicing Agreement.
Remittance Period means, with respect to any True-Up Adjustment, the period comprised of 6 consecutive Collection Periods beginning with the Collection Period in which such True-Up Adjustment would go into effect, from the Series Closing Date to the first Scheduled Payment Date, and for each subsequent period between Scheduled Payment Dates.
Required Capital Level means, with respect to any Series of Nuclear Asset-Recovery Bonds, the amount specified as such in the Series Supplement therefor.
Requirement of Law means any foreign, U.S. federal, state or local laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority or common law.
Responsible Officer means, with respect to: (a) the Issuer, any Manager or any duly authorized officer; (b) the Indenture Trustee, any officer within the Corporate Trust Office of such trustee (including the President, any Vice President, any Assistant Vice President, any Secretary, any Assistant Treasurer or any other officer of the Indenture Trustee customarily performing functions similar to those performed by persons who at the time shall be such officers, respectively, and that has direct responsibility for the administration of the Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred to because of such officers knowledge and familiarity with the particular subject); (c) any
corporation (other than the Indenture Trustee), the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer or any other duly authorized officer of such Person who has been authorized to act in the circumstances; (d) any partnership, any general partner thereof; and (e) any other Person (other than an individual), any duly authorized officer or member of such Person, as the context may require, who is authorized to act in matters relating to such Person.
Return on Invested Capital means, for any Payment Date with respect to any Remittance Period, the sum of (i) rate of return, payable to Duke Energy Florida, on its Capital Contribution equal to the rate of interest payable on the longest maturing WAL of Nuclear Asset-Recovery Bonds plus (ii) any Return on Invested Capital not paid on any prior Payment Date.
S&P means Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business. References to S&P are effective so long as S&P is a Rating Agency.
Sale Agreement means the Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated as of the date hereof, or any subsequent Nuclear Asset-Recovery Property Purchase and Sale Agreement relating to another Series of Nuclear Asset-Recovery Bonds by and between the Issuer and Duke Energy Florida, and acknowledged and accepted by the Indenture Trustee.
Scheduled Final Payment Date means, with respect to each Series of Nuclear Asset-Recovery Bonds, the date when all interest and principal is scheduled to be paid with respect to that applicable Series in accordance with the Expected Sinking Fund Schedule, as specified in the Series Supplement. For the avoidance of doubt, the Scheduled Final Payment Date with respect to any Series shall be the last Scheduled Payment Date set forth in the Expected Sinking Fund Schedule relating to such Series. The last Scheduled Final Payment Date means the Scheduled Final Payment Date of the latest maturing WAL of a Series of Nuclear Asset-Recovery Bonds.
Scheduled Payment Date means, with respect to each Series or WAL of Nuclear Asset-Recovery Bonds, each Payment Date on which principal for such Series or WAL is to be paid in accordance with the Expected Sinking Fund Schedule for such Series or WAL.
SEC means the Securities and Exchange Commission.
Secured Obligations means the payment of principal of and premium, if any, interest on, and any other amounts owing in respect of, the Nuclear Asset-Recovery Bonds and all fees, expenses, counsel fees and other amounts due and payable to the Indenture Trustee.
Secured Parties means the Indenture Trustee, the Holders and any credit enhancer described in a Series Supplement.
Securities Act means the Securities Act of 1933.
Securities Intermediary means The Bank of New York Mellon Trust Company, National Association, a national banking association, solely in the capacity of a securities
intermediary as defined in the NY UCC and Federal Book-Entry Regulations or any successor securities intermediary under the Indenture.
Seller is defined in the preamble to the Sale Agreement.
Semi-Annual Servicers Certificate is defined in Section 4.01(c)(ii) of the Servicing Agreement.
Semi-Annual True-Up Adjustment means each adjustment to the Nuclear Asset-Recovery Charges made in accordance with Section 4.01(b)(i) of the Servicing Agreement.
Semi-Annual True-Up Adjustment Date means the first billing cycle of March and September of each year, commencing in July 1, 2016.
Series means any series of Nuclear Asset-Recovery Bonds.
Series A Bonds means the Series A Senior Secured Nuclear Asset-Recovery Bonds issued by the Issuer on June 22, 2016.
Series Charges means Charges for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Closing Date means the date on which a Series of the Nuclear Asset-Recovery Bonds are originally issued in accordance with Section 2.10 of the Indenture and the respective Series Supplement.
Series Collateral means Collateral for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Property means Property for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Supplement means an indenture supplemental to the Indenture in the form attached as Exhibit B to the Indenture that authorizes the issuance of Nuclear Asset-Recovery Bonds.
Servicer means Duke Energy Florida, as Servicer under the Servicing Agreement.
Servicer Business Day means any day other than a Saturday, a Sunday or a day on which banking institutions in St. Petersburg, Florida, Charlotte, North Carolina or New York, New York are authorized or obligated by law, regulation or executive order to be closed, on which the Servicer maintains normal office hours and conducts business.
Servicer Default is defined in Section 7.01 of the Servicing Agreement.
Servicer Policies and Practices means, with respect to the Servicers duties under Exhibit A to the Servicing Agreement, 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 and, if applicable, others.
Servicing Agreement means the Nuclear Asset-Recovery Property Servicing Agreement, dated as of the date hereof, or any subsequent Nuclear Asset-Recovery Property Servicing Agreement relating to another Series of Nuclear Asset-Recovery Bonds by and between the Issuer and Duke Energy Florida, and acknowledged and accepted by the Indenture Trustee.
Servicing Fee is defined in Section 6.06(a) of the Servicing Agreement.
Servicing Standard means the obligation of the Servicer to calculate, apply, remit and reconcile proceeds of the Property, including Nuclear Asset-Recovery Charge Payments, and all other Collateral for the benefit of the Issuer and the Holders (a) with the same degree of care and diligence as the Servicer applies with respect to payments owed to it for its own account, (b) in accordance with all applicable procedures and requirements established by the Commission for collection of electric utility tariffs and (c) in accordance with the other terms of the Servicing Agreement.
Special Payment Date means the date on which, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, any payment of principal of or interest (including any interest accruing upon default) on, or any other amount in respect of, the Nuclear Asset-Recovery Bonds of such Series or WAL that is not actually paid within five days of the Payment Date applicable thereto is to be made by the Indenture Trustee to the Holders.
Special Record Date means, with respect to any Special Payment Date, the close of business on the fifteenth day (whether or not a Business Day) preceding such Special Payment Date.
Sponsor means Duke Energy Florida, in its capacity as sponsor of the Nuclear Asset-Recovery Bonds within the meaning of Regulation AB.
State means any one of the fifty states of the United States of America or the District of Columbia.
State Pledge means the pledge of the State of Florida as set forth in Section 366.95(11) of the Nuclear Asset-Recovery Law.
Subaccounts is defined in Section 8.02(a) of the Indenture.
Subsequent Financing Order means, a financing order of the Commission under the Nuclear Asset-Recovery Law issued to Duke Energy Florida subsequent to the Financing Order.
Successor means any successor to Duke Energy Florida under the Nuclear Asset-Recovery Law, whether pursuant to any bankruptcy, reorganization or other insolvency
proceeding or pursuant to any merger, conversion, acquisition, sale or transfer, by operation of law, as a result of electric utility restructuring, or otherwise.
Successor Servicer is defined in Section 3.07(e) of the Indenture.
Tariff means the most current version on file with the Commission of July 1, 2016.
Tax Returns is defined in Section 1(a)(iii) of the Administration Agreement.
Temporary Nuclear Asset-Recovery Bonds means Nuclear Asset-Recovery Bonds executed and, upon the receipt of an Issuer Order, authenticated and delivered by the Indenture Trustee pending the preparation of Definitive Nuclear Asset-Recovery Bonds pursuant to Section 2.04 of the Indenture.
Termination Notice is defined in Section 7.01 of the Servicing Agreement.
True-Up Adjustment means any Semi-Annual True-Up Adjustment or Interim True-Up Adjustment, as the case may be.
Trust Indenture Act means the Trust Indenture Act of 1939 as in force on the Series Closing Date, unless otherwise specifically provided.
UCC means the Uniform Commercial Code as in effect in the relevant jurisdiction.
Underwriters means the underwriters who purchase Nuclear Asset-Recovery Bonds of any Series from the Issuer and sell such Nuclear Asset-Recovery Bonds in a public offering.
Underwriting Agreement means the Underwriting Agreement, dated June 15, 2016, by and among Duke Energy Florida, the representatives of the several Underwriters named therein and the Issuer.
U.S. Government Obligations means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and that are not callable at the option of the issuer thereof.
WAL means any one of the groupings of Nuclear Asset-Recovery Bonds of a Series differentiated by sinking fund schedule, interest rate or sinking fund schedule, as specified in the Series Supplement.
WAL Maturity Date means, with respect to any WAL of Nuclear Asset-Recovery Bonds, the maturity date therefor, as specified in the Series Supplement therefor.
Weighted Average Days Outstanding means the weighted average number of days Duke Energy Floridas monthly bills to Customers remain outstanding during the calendar year preceding the calculation thereof pursuant to Section 4.01(b)(i) of the Servicing Agreement.
B. Rules of Construction. Unless the context otherwise requires, in each Basic Document to which this Appendix A is attached:
(a) All accounting terms not specifically defined herein shall be construed in accordance with United States generally accepted accounting principles. To the extent that the definitions of accounting terms in any Basic Document are inconsistent with the meanings of such terms under generally accepted accounting principles or regulatory accounting principles, the definitions contained in such Basic Document shall control.
(b) The term including means including without limitation, and other forms of the verb include have correlative meanings.
(c) All references to any Person shall include such Persons permitted successors and assigns, and any reference to a Person in a particular capacity excludes such Person in other capacities.
(d) Unless otherwise stated in any of the Basic Documents, in the computation of a period of time from a specified date to a later specified date, the word from means from and including and each of the words to and until means to but excluding.
(e) The words hereof, herein and hereunder and words of similar import when used in any Basic Document shall refer to such Basic Document as a whole and not to any particular provision of such Basic Document. References to Articles, Sections, Appendices and Exhibits in any Basic Document are references to Articles, Sections, Appendices and Exhibits in or to such Basic Document unless otherwise specified in such Basic Document.
(f) The various captions (including the tables of contents) in each Basic Document are provided solely for convenience of reference and shall not affect the meaning or interpretation of any Basic Document.
(g) The definitions contained in this Appendix A apply equally to the singular and plural forms of such terms, and words of the masculine, feminine or neuter gender shall mean and include the correlative words of other genders.
(h) Unless otherwise specified, references to an agreement or other document include references to such agreement or document as from time to time amended, restated, reformed, supplemented or otherwise modified in accordance with the terms thereof (subject to any restrictions on such amendments, restatements, reformations, supplements or modifications set forth in such agreement or document) and include any attachments thereto.
(i) References to any law, rule, regulation or order of a Governmental Authority shall include such law, rule, regulation or order as from time to time in effect, including any amendment, modification, codification, replacement or reenactment thereof or any substitution therefor.
(j) The word will shall be construed to have the same meaning and effect as the word shall.
(k) The word or is not exclusive.
(l) All terms defined in the relevant Basic Document to which this Appendix A is attached shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein.
(m) A term has the meaning assigned to it.
Exhibit 99.2
Execution Version
NUCLEAR ASSET-RECOVERY PROPERTY PURCHASE AND SALE AGREEMENT
by and between
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC,
Issuer
and
DUKE ENERGY FLORIDA, LLC,
Seller
Acknowledged and Accepted by
THE BANK OF NEW YORK MELLON
TRUST COMPANY, NATIONAL ASSOCIATION, as Indenture Trustee
Dated as of June 22, 2016
TABLE OF CONTENTS
|
Page |
|
|
ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION |
1 |
SECTION 1.01. Definitions and Rules of Construction |
1 |
|
|
ARTICLE II CONVEYANCE OF NUCLEAR ASSET-RECOVERY PROPERTY |
1 |
SECTION 2.01. Conveyance of Series Property |
1 |
SECTION 2.02. Conditions to Conveyance of Series Property |
2 |
|
|
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER |
4 |
SECTION 3.01. Organization and Good Standing |
4 |
SECTION 3.02. Due Qualification |
4 |
SECTION 3.03. Power and Authority |
4 |
SECTION 3.04. Binding Obligation |
4 |
SECTION 3.05. No Violation |
4 |
SECTION 3.06. No Proceedings |
5 |
SECTION 3.07. Approvals |
5 |
SECTION 3.08. The Series Property |
5 |
SECTION 3.09. Limitations on Representations and Warranties |
8 |
|
|
ARTICLE IV COVENANTS OF THE SELLER |
9 |
SECTION 4.01. Existence |
9 |
SECTION 4.02. No Liens |
9 |
SECTION 4.03. Use of Proceeds |
9 |
SECTION 4.04. Delivery of Collections |
9 |
SECTION 4.05. Notice of Liens |
9 |
SECTION 4.06. Compliance with Law |
9 |
SECTION 4.07. Covenants Related to Series A Bonds and Series Property |
9 |
SECTION 4.08. Protection of Title |
11 |
SECTION 4.09. Nonpetition Covenants |
11 |
SECTION 4.10. Taxes |
11 |
SECTION 4.11. Notice of Breach to Rating Agencies, Etc. |
12 |
SECTION 4.12. Filing Requirements |
12 |
SECTION 4.13. Further Assurances |
12 |
SECTION 4.14. Intercreditor Agreement |
12 |
|
|
ARTICLE V THE SELLER |
12 |
SECTION 5.01. Liability of Seller; Indemnities |
12 |
SECTION 5.02. Merger, Conversion or Consolidation of, or Assumption of the Obligations of, Seller |
15 |
SECTION 5.03. Limitation on Liability of Seller and Others |
15 |
|
|
ARTICLE VI MISCELLANEOUS PROVISIONS |
16 |
SECTION 6.01. Amendment |
16 |
SECTION 6.02. Notices |
18 |
SECTION 6.03. Assignment |
18 |
SECTION 6.04. Limitations on Rights of Third Parties |
18 |
SECTION 6.05. Severability |
19 |
SECTION 6.06. Separate Counterparts |
19 |
SECTION 6.07. Governing Law |
19 |
SECTION 6.08. Assignment to Indenture Trustee |
19 |
SECTION 6.09. Limitation of Liability |
19 |
SECTION 6.10. Waivers |
19 |
|
|
EXHIBIT | |
|
|
Exhibit A Form of Bill of Sale |
|
|
|
APPENDIX | |
|
|
Appendix A Definitions and Rules of Construction |
|
This NUCLEAR ASSET-RECOVERY PROPERTY PURCHASE AND SALE AGREEMENT, dated as of June 22, 2016, is by and between DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, a Delaware limited liability company, and DUKE ENERGY FLORIDA, LLC (the Seller), a Florida limited liability company, and acknowledged and accepted by THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as indenture trustee.
RECITALS
WHEREAS, the Issuer desires to purchase the Series Property created pursuant to the Nuclear Asset-Recovery Law;
WHEREAS, the Seller is willing to sell its rights and interests under the Financing Order to the Issuer, whereupon such rights and interests will become the Series Property;
WHEREAS, the Issuer, in order to finance the purchase of the Series Property, will issue the Series A Bonds under the Indenture; and
WHEREAS, the Issuer, to secure its obligations under the Series A Bonds and the Indenture, will pledge, among other things, all right, title and interest of the Issuer in and to the Series Property and this Sale Agreement to the Indenture Trustee for the benefit of the Secured Parties.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. Definitions and Rules of Construction. Capitalized terms used but not otherwise defined in this Sale Agreement shall have the respective meanings given to such terms in Appendix A, which is hereby incorporated by reference into this Sale Agreement as if set forth fully in this Sale Agreement. Not all terms defined in Appendix A are used in this Sale Agreement. The rules of construction set forth in Appendix A shall apply to this Sale Agreement and are hereby incorporated by reference into this Sale Agreement as if set forth fully in this Sale Agreement, however for purposes of this Sale Agreement, unless otherwise indicated herein, the terms Series Charges, Series Closing Date, Series Collateral and Series Property mean the Series Charges, Series Closing Date, Series Collateral and Series Property for the Series A Bonds.
ARTICLE II
CONVEYANCE OF NUCLEAR ASSET-RECOVERY PROPERTY
SECTION 2.01. Conveyance of Series Property.
(a) In consideration of the Issuers delivery to or upon the order of the Seller of $1,278,285,713, subject to the conditions specified in Section 2.02, the Seller does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse or warranty, except as set forth herein, all right, title and interest of the Seller in, to and under
the Series Property (such sale, transfer, assignment, setting over and conveyance of the Series Property includes, to the fullest extent permitted by the Nuclear Asset-Recovery Law and the Florida UCC, the assignment of all revenues, collections, claims, rights, payments, money or proceeds of or arising from the Series Charges related to the Series Property, as the same may be adjusted from time to time). Such sale, transfer, assignment, setting over and conveyance is hereby expressly stated to be a sale or other absolute transfer and, pursuant to Section 366.95(5)(c) of the Nuclear Asset-Recovery Law, shall be treated as a true sale and not as a pledge of or secured transaction relating to the Sellers right, title, and interest in, to, and under the Series Property. The Seller and the Issuer agree that after giving effect to the sale, transfer, assignment, setting over and conveyance contemplated hereby the Seller has no right, title or interest in, to or under the Series Property to which a security interest could attach because (i) it has sold, transferred, assigned, set over and conveyed all right, title and interest in and to the Series Property to the Issuer, (ii) as provided in Section 366.95(5)(c) of the Nuclear Asset-Recovery Law, all right, title and interest shall have passed to the Issuer and (iii) as provided in Section 366.95(5)(c)4. of the Nuclear Asset-Recovery Law, appropriate financing statements shall have been filed and such transfer is perfected against all third parties, including subsequent judicial or other lien creditors. If such sale, transfer, assignment, setting over and conveyance is held by any court of competent jurisdiction not to be a true sale as provided in Section 366.95(5)(c) of the Nuclear Asset-Recovery Law, then such sale, transfer, assignment, setting over and conveyance shall be treated as a pledge of the Series Property and as the creation of a security interest (within the meaning of the Nuclear Asset-Recovery Law and the UCC) in the Series Property and, without prejudice to its position that it has absolutely transferred all of its rights in the Series Property to the Issuer, the Seller hereby grants a security interest in the Series Property to the Issuer (and to the Indenture Trustee for the benefit of the Secured Parties) to secure their respective rights under the Basic Documents to receive the Series Charges and all other Series Property.
(b) Subject to Section 2.02, the Issuer does hereby purchase the Series Property from the Seller for the consideration set forth in Section 2.01(a).
SECTION 2.02. Conditions to Conveyance of Series Property. The obligation of the Seller to sell, and the obligation of the Issuer to purchase, Series Property on the Series Closing Date shall be subject to the satisfaction or waiver of each of the following conditions:
(a) on or prior to the Series Closing Date, the Seller shall have delivered to the Issuer a duly executed Bill of Sale identifying and conveying the Series Property on the Series Closing Date;
(b) on or prior to the Series Closing Date, the Seller shall have obtained the Financing Order creating the Series Property;
(c) as of the Series Closing Date, the Seller is not insolvent and will not have been made insolvent by such sale and the Seller is not aware of any pending insolvency with respect to itself;
(d) as of the Series Closing Date, (i) the representations and warranties of the Seller in this Sale Agreement must be true and correct with the same force and effect as if made on
that date (except to the extent they relate to an earlier date), (ii) on and as of the Series Closing Date no breach of any covenant or agreement of the Seller contained in this Sale Agreement has occurred and is continuing and (iii) no Servicer Default shall have occurred and be continuing;
(e) as of the Series Closing Date, (i) the Issuer shall have sufficient funds available to pay the purchase price for the Series Property to be conveyed on such date and (ii) all conditions to the issuance of the Series A Bonds intended to provide such funds set forth in the Indenture and the applicable Series Supplement shall have been satisfied or waived;
(f) on or prior to the Series Closing Date, the Seller shall have taken all action required to transfer to the Issuer ownership of the Series Property on such date, free and clear of all Liens other than Liens created by the Issuer pursuant to the Basic Documents and to perfect such transfer, including filing any statements or filings under the Nuclear Asset-Recovery Law or the Florida UCC; and the Issuer or the Servicer, on behalf of the Issuer, shall have taken any action required for the Issuer to grant the Indenture Trustee a Lien and first priority perfected security interest in the Series Collateral and maintain such security interest as of the Series Closing Date;
(g) the Seller shall have received and delivered to the Rating Agencies and the Issuer any Opinions of Counsel required by the Rating Agencies;
(h) the Seller shall have received and delivered to the Issuer and the Indenture Trustee an opinion or opinions of outside tax counsel (as selected by the Seller, and in form and substance reasonably satisfactory to the Issuer and the Indenture Trustee) to the effect that (i) the Issuer will not be subject to U.S. federal income tax as an entity separate from its sole owner and that the Series A Bonds will be treated as debt of the Issuers sole owner for U.S. federal income tax purposes and (ii) for U.S. federal income tax purposes, the issuance of the Series A Bonds will not result in gross income to the Seller;
(i) on and as of the Series Closing Date, each of the Certificate of Formation, the LLC Agreement, the Servicing Agreement, this Sale Agreement, the Indenture, the applicable Series Supplement, the Financing Order and the Nuclear Asset-Recovery Law shall be in full force and effect;
(j) the Series A Bonds shall have received the highest credit ratings possible, as evidenced by a certification from the Seller;
(k) the Seller shall have delivered to the Indenture Trustee and the Issuer an Officers Certificate confirming the satisfaction of each condition precedent specified in this Section 2.02;
(l) the Seller shall have received the purchase price for the Series Property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to Section 3.09, the Seller makes the following representations and warranties, as of the Series Closing Date, and the Seller acknowledges that the Issuer has relied thereon in acquiring the Series Property. The representations and warranties shall survive the sale and transfer of Series Property to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. The Seller agrees that (i) the Issuer may assign the right to enforce the following representations and warranties to the Indenture Trustee and (ii) the following representations and warranties inure to the benefit of the Issuer and the Indenture Trustee.
SECTION 3.01. Organization and Good Standing. The Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Florida, with requisite power and authority to own its properties and conduct its business as of the Series Closing Date.
SECTION 3.02. Due Qualification. The Seller is duly qualified to do business and is 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 shall require such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and approvals would not be reasonably likely to have a material adverse effect on the Sellers business, operations, assets, revenues or properties, the Series Property, the Issuer or the Series A Bonds).
SECTION 3.03. Power and Authority. The Seller has the requisite power and authority to execute and deliver this Sale Agreement and to carry out its terms. The Seller has full power and authority to own the Series Property and to sell and assign the Series Property to the Issuer and the Seller has duly authorized such sale and assignment to the Issuer by all necessary action. The execution, delivery and performance of obligations under this Sale Agreement have been duly authorized by all necessary action on the part of the Seller under its organizational documents and laws.
SECTION 3.04. Binding Obligation. This Sale Agreement constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to bankruptcy, receivership, insolvency, reorganization, moratorium or other laws affecting creditors rights generally from time to time in effect and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.05. No Violation. The consummation of the transactions contemplated by this Sale Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the Sellers organizational documents or any indenture, or other material agreement or instrument to which the Seller is a party or by which it is bound, result in the creation or imposition of any Lien upon any of the Sellers properties pursuant to the terms of any such indenture, agreement or other instrument (other than any Lien that may be granted in the Issuers favor or any Lien under the Basic Documents or any Liens created by the Issuer pursuant to the Nuclear Asset-Recovery Law) or violate any existing law or any order, rule or
regulation applicable to the Seller issued by any Governmental Authority having jurisdiction over the Seller or its properties. The Series Property is not subject to any Lien thereon, other than the Liens created by the Indenture and the Nuclear Asset-Recovery Law.
SECTION 3.06. No Proceedings. Except as disclosed in Schedule 3.06, there are no proceedings or, to the Sellers knowledge, investigations pending or proceedings threatened, before any Governmental Authority having jurisdiction over the Seller or its properties: (a) asserting the invalidity of the Basic Documents, the Series A Bonds, the Nuclear Asset-Recovery Law or the Financing Order; (b) seeking to prevent the issuance of the Series A Bonds or the consummation of any of the transactions contemplated by the Basic Documents; (c) seeking a determination or ruling that could reasonably be expected to materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, the Basic Documents, the related series of Series A Bonds or the Financing Order; or (d) challenging the Sellers treatment of the Series A Bonds as debt of the Seller for U.S. federal income tax purposes.
SECTION 3.07. Approvals. No governmental approvals, authorizations, consents, orders or other actions or filings, other than filings under the Nuclear Asset-Recovery Law or with the Florida Secured Transaction Registry or the UCC of Delaware, are required for the Seller to execute, deliver and perform its obligations under this Sale Agreement except those which have previously been obtained or made or are required to be made by the Servicer in the future pursuant to the Servicing Agreement.
SECTION 3.08. The Series Property.
(a) Information. Subject to Section 3.08(h), at the Series Closing Date, all written information, as amended or supplemented from time to time, provided by the Seller to the Issuer with respect to the Series Property (including the Expected Sinking Fund Schedule and the Financing Order) is true and correct in all material respects and does not omit any material facts and all historical data for the purpose of calculating the initial nuclear asset-recovery charges in the issuance advice letter and initial routine true-up adjustment request are true and correct, and the assumptions used for such calculations are reasonable and made in good faith.
(b) True-Sale and Absolute Transfer. The transfer, sale, assignment and conveyance of the Series Property constitutes a sale or other absolute transfer of all of the Sellers right, title and interest in the Series Property to the Issuer; upon the execution and delivery of this Sale Agreement and the Bill of Sale on the Series Closing Date, the Series Property shall be validly transferred and sold to the Issuer and the Seller will have no right, title or interest in the Series Property and the Series Property would not be part of the estate of the Seller as debtor in the event of a filing of a bankruptcy petition by or against the Seller under any bankruptcy law. The Seller hereby represents that no portion of the Series Property has been sold, transferred, assigned, pledged or otherwise conveyed by the Seller to any person other than the Issuer, and, to the Sellers knowledge (after due inquiry), no security agreement, financing statement or equivalent security or lien instrument listing the Seller as debtor covering all or a portion of the Series Property is on file or of record in any jurisdiction, except such as may have been file or recorded in favor of the Issuer or the Indenture Trustee in connection with the Basic Documents.
(c) Title. The Seller is the sole owner of the Series Property sold to the Issuer on the Series Closing Date and such sale is made free and clear of all Liens other than Liens created by the Issuer pursuant to Indenture. All actions or filings, including filings under the Nuclear Asset-Recovery Law and the UCC, necessary to give the Issuer a valid ownership interest in the Series Property and to grant the Indenture Trustee a first priority perfected security interest in the Series Property, free and clear of all Liens of the Seller or any other Person have been taken or made.
(d) Financing Order; Other Approvals. On the Series Closing Date, under the laws of the State of Florida (including the Nuclear Asset-Recovery Law) and the United States in effect on the Series Closing Date: (i) The Financing Order has been issued by the Commission in accordance with the Nuclear Asset-Recovery Law, and such order and the process by which it was issued comply with all applicable laws, rules and regulations. The Financing Order has become effective pursuant to the Nuclear Asset-Recovery Law and is, and as of the date of issuance of the Series A Bonds will be, in full force and effect and final and non-appealable; (ii) the Series A Bonds will be entitled to the protections provided by the Nuclear Asset-Recovery Law and, accordingly, the Financing Order and the Series Charges are irrevocable and not subject to reduction by the Commission, except for the True-Up Adjustments to the Series Charges provided for in the Financing Order; (iii) revisions to Duke Energy Floridas electric tariff to implement the Series Charges have been filed and are in full force and effect, such revisions are consistent with the Financing Order, and any electric tariff implemented consistent with a Financing Order issued by the Commission is not subject to modification by the Commission except for True-Up Adjustments made in accordance with the Nuclear Asset-Recovery Law; (iv) the process by which the Financing Order was adopted and approved complies with all applicable laws, rules and regulations; (v) the Financing Order is not subject to appeal and is legally enforceable, and the process by which it was issued complied with all applicable laws, rules and regulations and (vi) no Governmental Approvals, authorizations, consents, orders or other actions or filings, other than filings under the Nuclear Asset-Recovery Law or the UCC of Florida or Delaware, are required for the Seller to executed, deliver and perform its obligations under this Sale Agreement except those which have previously been obtained or made or are required to be made by the Servicer in the future pursuant to the Servicing Agreement.
(e) State Action. Under the Nuclear Asset-Recovery Law, the State of Florida may not take or permit any action that would impair the value of the Series Property or reduce or alter, except for the True-Up Adjustment, or impair the Series Charges to be imposed, collected and remitted to the Issuer, for the benefit of the Holders of the Series A Bonds until the principal, interest or other charges incurred or contracts to be performed in connection with the Series A Bonds are paid or performed in full. Furthermore, under the contract clauses of the Constitution of the State of Florida and the United States Constitution, any action taken by the State of Florida, including the Commission that substantially impairs the rights of the Holders of the Series A Bonds is likely to be found by a court of competent jurisdiction to be an impairment of contract with respect to the State Pledge, unless such action is a reasonable exercise of the State of Floridas sovereign powers and of a character reasonable and appropriate to further a significant and legitimate public purpose and, under the takings clauses of the constitution of the State of Florida and the United States Constitution, any action taken by the State of Florida to repeal or amend the Nuclear Asset-Recovery Law or take any other
action in contravention of the State Pledge if such action constitutes a permanent appropriation of a substantial property interest of the Holders of the Series A Bonds in the Series Property or substantially impairs the value of the Series Property so as to unduly interfere with the reasonable expectations of the Holders arising from their investments in the Series A Bonds, could be reasonably be concluded by a court of competent jurisdiction to be a compensable taking, unless such court finds that just compensation has been provided to the Holders of the Series A Bonds; but nothing in this paragraph precludes any limitation or alteration if full compensation is made by law for the full protection of the Series Charges and of the Holders of the Series A Bonds or any assignee or party entering into a contract with the Seller.
(f) No Repeal of the Nuclear Asset-Recovery Law. Apart from amending the Constitution of the State of Florida by initiative, the voters of the State of Florida do not have initiative powers to amend, repeal or revoke the Nuclear Asset-Recovery Law.
(g) Tax Liens. After due inquiry, the Seller is not aware of any judgment or tax lien filing against the Issuer or the Seller.
(h) Assumptions. On the Series Closing Date, based upon the information available to the Seller on such date, the assumptions used in calculating the Series Charges are reasonable and are made in good faith. Notwithstanding the foregoing, the Seller makes no representation or warranty, express or implied, that amounts actually collected arising from those Series Charges will in fact be sufficient to meet the payment obligations on the related Series A Bonds or that the assumptions used in calculating such Series Charges will in fact be realized.
(i) Creation of Series Property.
(i) For purposes of the Nuclear Asset-Recovery Law, the Series Property constitutes a present property right that will continue to exist until the Series A Bonds issued pursuant to the Financing Order are paid in full and all Financing Costs of the Series A Bonds have been recovered in full; and
(ii) the Series Property consists of (A) all rights and interest of the Seller under the Financing Order, including the right to impose, bill, collect and receive Series Charges; (B) the right under the Financing Order to obtain True-Up Adjustments of the Series Charges; and (C) all revenues, collections, payments, money and proceeds arising out of the rights and interests described in (A) and (B).
(j) Nature of Representations and Warranties. The representations and warranties set forth in this Section 3.08, insofar as they involve conclusions of law, are made not on the basis that the Seller purports to be a legal expert or to be rendering legal advice, but rather to reflect the parties good faith understanding of the legal basis on which the parties are entering into this Sale Agreement and the other Basic Documents and the basis on which the Holders are purchasing the Series A Bonds, and to reflect the parties agreement that, if such understanding turns out to be incorrect or inaccurate, the Seller will be obligated to indemnify the Issuer and its permitted assigns (to the extent required by and in accordance with Section 5.01), and that the Issuer and its permitted assigns will be entitled to enforce any rights and remedies under
the Basic Documents on account of such inaccuracy to the same extent as if the Seller had breached any other representations or warranties hereunder.
(k) Prospectus. As of the date hereof, the information describing the Seller under the caption DEFs Review of Nuclear Asset-Recovery Property and Duke Energy Florida, LLCThe Depositor, Sponsor, Seller and Servicer in the prospectus dated June 15, 2016 relating to the Series A Bonds is true and correct in all material respects.
(l) Solvency. After giving effect to the sale of the Series Property hereunder, the Seller:
(i) is solvent and expects to remain solvent;
(ii) is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended purpose;
(iii) is not engaged in nor does it expect to engage in a business for which its remaining property represents unreasonably small capital;
(iv) reasonably believes that it will be able to pay its debts as they come due; and
(v) is able to pay its debts as they mature and does not intend to incur, or believes that it will not incur, indebtedness that it will not be able to repay at its maturity.
(m) No Court Order. There is no order by any court providing for the revocation, alteration, limitation or other impairment of the Nuclear Asset-Recovery Law, the Financing Order, the Series Property or the Series Charges or any rights arising under any of them or that seeks to enjoin the performance of any obligations under the Financing Order.
(n) Survival of Representations and Warranties The representations and warranties set forth in this Section 3.08 shall survive the execution and delivery of this Sale Agreement and may not be waived by any party hereto except pursuant to a written agreement executed in accordance with Article VI and as to which the Rating Agency Condition has been satisfied.
SECTION 3.09. Limitations on Representations and Warranties. Without prejudice to any of the other rights of the parties, the Seller will not be in breach of any representation or warranty as a result of a change in law by means of any legislative enactment, constitutional amendment or voter initiative. Notwithstanding anything in this Sale Agreement to the contrary, the Seller makes no representation that amounts collected will be sufficient to meet the obligations on the Series A Bonds.
ARTICLE IV
COVENANTS OF THE SELLER
SECTION 4.01. Existence. Subject to Section 5.02, so long as any of the Series A Bonds are Outstanding, the Seller (a) will keep in full force and effect its existence and remain in good standing or equivalent status under the laws of the jurisdiction of its organization and (b) will obtain and preserve its qualifications to do business in each jurisdiction in which such qualification is or will be necessary to protect the validity and enforceability of this Sale Agreement and each other instrument or agreement to which the Seller is a party necessary to the proper administration of this Sale Agreement and the transactions contemplated thereby.
SECTION 4.02. No Liens. Except for the conveyances under this Sale Agreement or any Lien for the benefit of the Issuer, the Holders of the Series A Bonds or the Indenture Trustee, the Seller will not sell, pledge, assign or transfer to any other person, or grant, create, incur, assume or suffer to exist any Lien on, any of the Series Property, whether existing as of the transfer date or thereafter created, or any interest therein. The Seller will not at any time assert any Lien against or with respect to any Series Property, and will defend the right, title and interest of the Issuer and of the Indenture Trustee, on behalf of the Secured Parties, in, to and under the Series Property against all claims of third parties claiming through or under the Seller.
SECTION 4.03. Use of Proceeds. The Seller will use the proceeds of the sale of the related Series Property in accordance with the Financing Order.
SECTION 4.04. Delivery of Collections. In the event that the Seller receives any Nuclear Asset-Recovery Charge Collections or other payments in respect of the Series Charges or the proceeds thereof, other than in its capacity as the Servicer, the Seller agrees to pay to the Servicer, on behalf of the Issuer, all payments received by it in respect thereof, but in no event later than two Business Days after the Seller becomes aware of such receipt.
SECTION 4.05. Notice of Liens. The Seller shall notify the Issuer and the Indenture Trustee promptly after becoming aware of any Lien on any of the Series Property, other than the conveyances hereunder and any Lien pursuant to the Basic Documents, including the Lien in favor of the Indenture Trustee for the benefit of the Holders of the Series A Bonds.
SECTION 4.06. Compliance with Law. The Seller will materially comply with its organizational or governing documents and all laws, treaties, rules, regulations and determinations of any Governmental Authority applicable to it, except to the extent that failure to so comply would not materially adversely affect the Issuers or the Indenture Trustees interests in the Series Property under any of the Basic Documents, the timing or amount of Series Charges payable by Customers or of Sellers performance of its material obligations under this Sale Agreement.
SECTION 4.07. Covenants Related to Series A Bonds and Series Property.
(a) So long as any of the Series A Bonds are Outstanding, the Seller shall treat the Series Property as the Issuers property for all purposes other than financial accounting, U.S. federal income tax purposes and state income and franchise tax purposes.
(b) So long as any of the Series A Bonds are Outstanding, the Seller shall treat such Series A Bonds as debt of the Issuer and not that of the Seller, except for financial accounting and U.S. federal income tax purposes. For U.S. federal income tax purposes, so long as any of the Series A Bonds are Outstanding, the Seller agrees to treat such Series A Bonds as indebtedness of the Seller (as the sole owner of the Issuer) secured by the related Series Collateral unless otherwise required by appropriate taxing authorities.
(c) So long as any of the Series A Bonds are Outstanding, the Seller shall disclose in its financial statements that the Issuer and not the Seller is the owner of the Series Property and that the assets of the Issuer are not available to pay creditors of the Seller or its Affiliates (other than the Issuer).
(d) So long as any of the Series A Bonds are Outstanding, the Seller shall not own or purchase any Series A Bonds.
(e) So long as the Series A Bonds are Outstanding, the Seller shall disclose the effects of all transactions between the Seller and the Issuer in accordance with generally accepted accounting principles.
(f) The Seller agrees that, upon the sale by the Seller of the Series Property to the Issuer pursuant to this Sale Agreement, (i) to the fullest extent permitted by law, including applicable Commission Regulations and the Nuclear Asset-Recovery Law, the Issuer shall have all of the rights originally held by the Seller with respect to the Series Property, including the right (subject to the terms of the Servicing Agreement) to exercise any and all rights and remedies to collect any amounts payable by any Customer in respect of the Series Property, notwithstanding any objection or direction to the contrary by the Seller (and the Seller agrees not to make any such objection or to take any such contrary action) and (ii) any payment by any Customer directly to the Issuer shall discharge such Customers obligations, if any, in respect of the Series Property to the extent of such payment, notwithstanding any objection or direction to the contrary by the Seller.
(g) So long as any of the Series A Bonds are Outstanding, (i) in all proceedings relating directly or indirectly to the Series Property, the Seller shall affirmatively certify and confirm that it has sold all of its rights and interests in and to such property (other than for financial accounting or tax purposes), (ii) the Seller shall not make any statement or reference in respect of the Series Property that is inconsistent with the ownership interest of the Issuer (other than for financial accounting or tax purposes), (iii) the Seller shall not take any action in respect of the Series Property except solely in its capacity as the Servicer thereof pursuant to the Servicing Agreement or as otherwise contemplated by the Basic Documents, (iv) neither the Seller nor the Issuer shall take any action, file any tax return or make any election inconsistent with the treatment of the Issuer, for U.S. federal income tax purposes and, to the extent consistent with applicable state tax law, state income and franchise tax purposes, as a disregarded entity that is not separate from the Seller (or, if relevant, from another sole owner of the Issuer) and (v) the Seller shall not sell any additional Property pursuant to the Nuclear Asset-Recovery Law unless the Rating Agency Condition has been satisfied.
SECTION 4.08. Protection of Title. The Seller shall execute and file such filings, including filings with the Florida Secured Transaction Registry pursuant to the Nuclear Asset-Recovery Law, and cause to be executed and filed such filings, all in such manner and in such places as may be required by law to fully preserve, maintain, protect and perfect the ownership interest of the Issuer, and the back-up precautionary security interest of the Issuer pursuant to Section 2.01, and the first priority security interest of the Indenture Trustee in the Series Property, including all filings (including but not limited to continuation statements) required under the Nuclear Asset-Recovery Law and the UCC relating to the transfer of the ownership of the rights and interest in the Series Property by the Seller to the Issuer or the pledge of the Issuers interest in the Series Property to the Indenture Trustee. The Seller shall deliver or cause to be delivered to the Issuer and the Indenture Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. The Seller shall institute any action or proceeding necessary to compel performance by the Commission, the State of Florida or any of their respective agents of any of their obligations or duties under the Nuclear Asset-Recovery Law, the Financing Order, or any issuance advice letter for the Series A Bonds and the Seller 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, in each case as may be reasonably necessary (a) to seek to protect the Issuer and the Secured Parties from claims, state actions or other actions or proceedings of third parties that, if successfully pursued, would result in a breach of any representation set forth in Article III or any covenant set forth in Article IV and (b) to seek to block or overturn any attempts to cause a repeal of, modification of or supplement to the Nuclear Asset-Recovery Law, the Financing Order or any issuance advice letter for the Series A Bonds, or the rights of Holders of the Series A Bonds by legislative enactment or constitutional amendment that would be materially adverse to the Issuer or the Secured Parties or that would otherwise cause an impairment of the rights of the Issuer or the Secured Parties. The costs of any such actions or proceedings undertaken by the Seller will be reimbursed by the Issuer as an Operating Expense.
SECTION 4.09. Nonpetition Covenants. Notwithstanding any prior termination of this Sale Agreement or the Indenture, the Seller shall not, prior to the date that is one year and one day after the termination of the Indenture and payment in full of the Series A Bonds or any other amounts owed under the Indenture, petition or otherwise invoke or cause the Issuer to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a voluntary case against the Issuer under any U.S. federal or state bankruptcy, insolvency or similar law, appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official or any substantial part of the property of the Issuer, or ordering the winding up or liquidation of the affairs of the Issuer.
SECTION 4.10. Taxes. So long as any of the Series A Bonds are outstanding, the Seller shall, and shall cause each of its Affiliates to, pay all material taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, business, income or property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental charges would, after any applicable grace periods, notices or other similar requirements, result in a Lien on the Series Property; provided, that no such tax need be paid if the Seller or one of its Affiliates is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and if the Seller or
such Affiliate has established appropriate reserves as shall be required in conformity with generally accepted accounting principles.
SECTION 4.11. Notice of Breach to Rating Agencies, Etc. Promptly after obtaining knowledge thereof, in the event of a breach in any material respect (without regard to any materiality qualifier contained in such representation, warranty or covenant) of any of the Sellers representations, warranties or covenants contained herein, the Seller shall promptly notify the Issuer, the Indenture Trustee, the Commission and the Rating Agencies of such breach. For the avoidance of doubt, any breach that would adversely affect scheduled payments on the Series A Bonds will be deemed to be a material breach for purposes of this Section 4.11.
SECTION 4.12. Filing Requirements. The Seller shall comply with all filing requirements, including any post-closing filings, in accordance with the Financing Order.
SECTION 4.13. Further Assurances. Upon the request of the Issuer, the Seller shall execute and deliver such further instruments and do such further acts as may be reasonably necessary to carry out the provisions and purposes of this Sale Agreement.
SECTION 4.14. Intercreditor Agreement. The Seller shall not continue as or become a party to any (i) trade receivables purchase and sale agreement or similar arrangement under which it sells all or any portion of its accounts receivables owing from Florida electric distribution customers unless the Indenture Trustee, the Seller and the other parties to such additional arrangement shall have entered into the Intercreditor Agreement in connection therewith and the terms of the documentation evidencing such trade receivables purchase and sale arrangement or similar arrangement shall expressly exclude Series Property (including Series Charges) from any receivables or other assets pledged or sold under such arrangement or (ii) sale agreement selling to any other Affiliate property consisting of charges similar to the Charges sold pursuant to this Sale Agreement, payable by Customers pursuant to the Nuclear Asset-Recovery Law or any similar law, unless the Seller and the other parties to such arrangement shall have entered into an Intercreditor Agreement in connection with any agreement or similar arrangement described in this Section 4.14.
ARTICLE V
THE SELLER
SECTION 5.01. Liability of Seller; Indemnities.
(a) The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Sale Agreement.
(b) The Seller shall indemnify the Issuer and the Indenture Trustee (for itself and the benefit of the Holders of the Series A Bonds) and each of their respective officers, directors, employees, trustees, managers and agents for, and defend and hold harmless each such Person from and against, any and all taxes (other than taxes imposed on Holders as a result of their ownership of a Series A Bond) that may at any time be imposed on or asserted against any such Person as a result of the sale and assignment of the Series Property to the Issuer, including
any franchise, sales, gross receipts, general corporation, tangible personal property, privilege or license taxes, but excluding any taxes imposed as a result of a failure of such Person to withhold or remit taxes with respect to payments on any Series A Bond, it being understood that the Holders shall be entitled to enforce their rights against the Seller under this Section 5.01(b) solely through a cause of action brought for their benefit by the Indenture Trustee as set forth in the Indenture.
(c) The Seller shall indemnify the Issuer and the Indenture Trustee (for itself and the benefit of the Holders of the Series A Bonds) and each of their respective officers, directors, employees, trustees, managers and agents for, and defend and hold harmless each such Person from and against, any and all taxes (other than taxes imposed on Holders as a result of their ownership of a Series A Bond) that may at any time be imposed on or asserted against any such Person as a result of the Issuers ownership and assignment of the Series Property, the issuance and sale by the Issuer of the Series A Bonds or the other transactions contemplated in the Basic Documents, including any franchise, sales, gross receipts, general corporation, tangible personal property, privilege or license taxes, but excluding any taxes imposed as a result of a failure of such Person to withhold or remit taxes with respect to payments on any Series A Bond.
(d) Indemnification under Sections 5.01(b), 5.01(c), 5.01(d) and 5.01(e) shall include reasonable out-of-pocket fees and expenses of investigation and litigation (including reasonable attorneys fees and expenses), except as otherwise expressly provided in this Sale Agreement.
(e) The Seller shall indemnify the Issuer and the Indenture Trustee (for itself and for the behalf of the Holders of the Series A Bonds), and each of the Issuers and the Indenture Trustees respective officers, directors, managers, employees and agents for, and defend and hold harmless each such Person from and against, (i) any and all amounts of principal of and interest on the Series A Bonds not paid when due or when scheduled to be paid in accordance with their terms and the amount of any deposits to the Issuer required to have been made in accordance with the terms of the Basic Documents which are not made when so required, in each case as a result of the Sellers breach of any of its representations, warranties or covenants contained in this Sale Agreement, and (ii) any and all Losses that may be imposed on or asserted against any such Person, other than any liabilities, obligations or claims for or payments of principal of or interest on the Series A Bonds, together with any reasonable costs and expenses actually incurred by such Person, as a result of the Sellers material breach of any of its representations, warranties or covenants contained in this Sale Agreement, except to the extent of Losses either resulting from the willful misconduct, bad faith or gross negligence of such Indemnified Person or resulting from a breach of a representation or warranty made by such Indemnified Person in any of the Basic Documents that gives rise to Sellers breach, and provided that, with respect to a material breach of a representation, warranty or covenant, the Seller has first had a 30-day opportunity to cure such breach beginning with the receipt of a notice of breach from the Issuer or the Indenture Trustee and has failed to cure such breach within such period; and provided further that the Holders of the Series A Bonds shall be entitled to enforce their rights against the Seller under this Section 5.01(e) solely through a cause of action brought for their benefit by the Indenture Trustee.
(f) The Seller shall indemnify the Servicer (if the Servicer is not the Seller) for the costs of any action instituted by the Servicer pursuant to Section 5.02(d) of the Servicing Agreement that are not paid as Operating Expenses in accordance with the priorities set forth in Section 8.02(e) of the Indenture.
(g) The remedies provided in this Sale Agreement are the sole and exclusive remedies against the Seller for breach of its representations and warranties in this Sale Agreement.
(h) If the Seller remains an entity subject to the Commissions regulatory authority as a public utility (or otherwise for ratemaking purposes), the Seller acknowledges and agrees that the Commission may, subject to the outcome of an appropriate Commission proceeding, take such action as it deems necessary or appropriate under its regulatory authority to require the Seller to make Customers whole for any Losses they incur by reason of
(i) any failure of the Sellers material representations or warranties set forth in this Agreement (other than the Sellers representations and warranties set forth in Sections 3.08(d), 3.08(e) and 3.08(i)), or
(ii) any material breach of the Sellers covenants contained in this Agreement (other than the Sellers covenant set forth in the third sentence of Section 4.08),
including in each case (without limitation) Losses attributable to higher Series Charges imposed on Customers. The Seller acknowledges and agrees that such action by the Commission may include, but is not limited to, adjustments to the Sellers other regulated rates and charges or credits to Customers.
(i) If the Seller does not remain an entity subject to the Commissions regulatory authority as a public utility (or otherwise for ratemaking purposes), the Seller shall indemnify the Commission, on behalf of Customers, for any Losses Customers incur by reason of
(i) any failure of the Sellers material representations or warranties set forth in this Agreement (other than the Sellers representations and warranties set forth in Sections 3.08(d), 3.08(e) and 3.08(i)), or
(ii) any material breach of the Sellers covenants contained in this Agreement (other than the Sellers covenant set forth in the third sentence of Section 4.08),
including without limitation Losses attributable to higher Series Charges imposed on Customers.
(j) Indemnification under this Section 5.01 shall survive any repeal of, modification of, or supplement to, or judicial invalidation of, the Nuclear Asset-Recovery Law or the Financing Order and shall survive the resignation or removal of the Indenture Trustee or the termination of this Sale Agreement and will rank pari passu with other general, unsecured obligations of the Seller. The Seller shall not indemnify any party under this Section 5.01 for any changes in law after the Series Closing Date, whether such changes in law are effected by
means of any legislative enactment, any constitutional amendment or any final and non-appealable judicial decision.
SECTION 5.02. Merger, Conversion or Consolidation of, or Assumption of the Obligations of, Seller. Any Person (a) into which the Seller may be merged or consolidated and which succeeds to all or substantially all of the electric distribution business of the Seller, (b) which results from the division of the Seller into two or more Persons and which succeeds to all or substantially all of the electric distribution business of the Seller, (c) which may result from any merger or consolidation to which the Seller shall be a party and which succeeds to all or substantially all of the electric distribution business of the Seller, (d) which may succeed to the properties and assets of the Seller substantially as a whole and which succeeds to all or substantially all of the electric distribution business of the Seller, or (e) which may otherwise succeed to all or substantially all of the electric distribution business of the Seller, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Seller under this Sale Agreement, shall be the successor to the Seller hereunder without the execution or filing of any document or any further act by any of the parties to this Sale Agreement; provided, however, that: (i) immediately after giving effect to such transaction, no representation or warranty made pursuant to Article III shall have been breached and no Servicer Default, and no event that, after notice or lapse of time, or both, would become a Servicer Default, shall have occurred and be continuing, (ii) the Seller shall have delivered to the Issuer and the Indenture Trustee an Officers Certificate and an Opinion of Counsel each stating that such consolidation, reorganization, merger or succession and such agreement of assumption comply with this Section 5.02 and that all conditions precedent, if any, provided for in this Sale Agreement relating to such transaction have been complied with, (iii) the Seller shall have delivered to the Issuer and the Indenture Trustee an Opinion of Counsel stating that, in the opinion of such counsel, either (A) all filings to be made by the Seller or the Seller, in its capacity as Seller or as Servicer, including filings under the Nuclear Asset-Recovery Law with the Florida Secured Transaction Registry and the UCC, that are necessary or advisable to fully preserve and protect the respective interests of the Issuer and the Indenture Trustee in the Series Property have been executed and filed, and reciting the details of such filings, or (B) no such action is necessary to preserve and protect such interests, (iv) the Seller shall have given the Rating Agencies prior written notice of such transaction and (v) the Seller shall have delivered to the Issuer, the Indenture Trustee and the Rating Agencies an Opinion of Counsel from external tax counsel stating that, for U.S. federal income tax purposes, such consolidation, conversion, merger or succession and such agreement of assumption will not result in a material U.S. federal income tax consequence to the Issuer, the Seller, the Indenture Trustee or the Holders of Series A Bonds. When any Person (or more than one Person) acquires the properties and assets of the Seller substantially as a whole or otherwise becomes the successor, whether by merger, conversion, consolidation, sale, transfer, lease, management contract or otherwise, to all or substantially all of the assets of the Seller in accordance with the terms of this Section 5.02, then, upon satisfaction of all of the other conditions of this Section 5.02, the preceding Seller shall automatically and without further notice be released from all of its obligations hereunder.
SECTION 5.03. Limitation on Liability of Seller and Others. The Seller and any director, officer, employee or agent of the Seller may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person,
respecting any matters arising hereunder. Subject to Section 4.08, the Seller shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations under this Sale Agreement and that in its opinion may involve it in any expense or liability.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. Amendment.
(a) Subject to Section 6.01(b), this Sale Agreement may be amended in writing by the Seller and the Issuer with (a) the prior written consent of the Indenture Trustee (b) the satisfaction of the Rating Agency Condition and (c) if any amendment would adversely affect in any material respect the interest of any Holder of the Series A Bonds, the consent of a majority of the Holders of each affected WAL of Series A Bonds. In determining whether a majority of Holders of the Series A Bonds have consented, Series A Bonds owned by the Issuer or any Affiliate of the Issuer shall be disregarded, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such consent, the Indenture Trustee shall only be required to disregard any Series A Bonds it actually knows to be so owned. Promptly after the execution of any such amendment or consent, the Issuer shall furnish copies of such amendment or consent to each of the Rating Agencies.
Prior to the execution of any amendment to this Sale Agreement, the Issuer and the Indenture Trustee shall be entitled to receive and rely upon (i) an Opinion of Counsel, which counsel may be an employee of or counsel to the Issuer or the Seller and which shall be reasonably satisfactory to the Indenture Trustee, or, in the Indenture Trustees sole judgment, external counsel of the Seller stating that the execution of such amendment is authorized and permitted by this Sale Agreement and that all conditions precedent provided for in this Sale Agreement relating to such amendment have been complied with and (ii) the Opinion of Counsel referred to in Section 3.01(c)(i) of the Servicing Agreement. The Issuer and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment that affects the Indenture Trustees own rights, duties or immunities under this Sale Agreement or otherwise.
(b) Notwithstanding anything to the contrary in this Section 6.01, no amendment or modification of this Agreement shall be effective except upon satisfaction of the conditions precedent in this paragraph (b).
(i) At least 15 days prior to the effectiveness of any such amendment or modification and after obtaining the other necessary approvals set forth in Section 6.01(a) (except that the consent of the Indenture Trustee may be subject to the consent of the Holders of the Series A Bonds if such consent is required or sought by the Indenture Trustee in connection with such amendment or modification) the Seller shall have delivered to the Commissions Staff Director of Accounting & Finance written notification of any proposed amendment, which notification shall contain:
A. a reference to Docket Nos. 150171-EI;
B. an Officers Certificate stating that the proposed amendment or modification has been approved by all parties to this Sale Agreement; and
C. a statement identifying the person to whom the Commission is to address any response to the proposed amendment or to request additional time.
(ii) If the Commission or an authorized representative of the Commission, within 15 days (subject to extension as provided in clause (iii)) of receiving a notification complying with subparagraph (i), shall have delivered to the office of the person specified in clause (i)(C) a written statement that the Commission might object to the proposed amendment or modification, then, except as provided in clause (iv) below, such proposed amendment or modification shall not be effective unless and until the Commission subsequently delivers a written statement that it does not object to such proposed amendment or modification; or
(iii) If the Commission or an authorized representative of the Commission, within 15 days of receiving a notification complying with subparagraph (i), shall have delivered to the office of the person specified in clause (i)(C) a written statement requesting an additional amount of time not to exceed thirty days in which to consider such proposed amendment or modification, then such proposed amendment or modification shall not be effective if, within such extended period, the Commission shall have delivered to the office of the person specified in clause (i)(C) a written statement as described in subparagraph (ii), unless and until the Commission subsequently delivers a written statement that it does not object to such proposed amendment or modification.
(iv) If (A) the Commission or an authorized representative of the Commission, shall not have delivered written notice that the Commission might object to such proposed amendment or modification within the time periods described in subparagraphs (ii) or (iii), whichever is applicable, or (B) the Commission or authorized representative of the Commission, has delivered such written notice but does not within 60 days of the delivery of the notification in (a) above, provide subsequent written notice confirming that it does in fact object and the reasons therefore or advise that it has initiated a proceeding to determine what action it might take with respect to the matter, then the Commission shall be conclusively deemed not to have any objection to the proposed amendment or modification and such amendment or modification may subsequently become effective upon satisfaction of the other conditions specified in Section 6.01(a).
(v) Following the delivery of a statement from the Commission or an authorized representative of the Commission to the Seller under subparagraph (ii), the Seller and the Issuer shall have the right at any time to withdraw from the Commission further consideration of any proposed amendment.
(c) For the purpose of this Section 6.01, an authorized representative of the Commission means any person authorized to act on behalf of the Commission, as evidenced by an Opinion of Counsel (which may be the general counsel) to the Commission.
SECTION 6.02. Notices. Any notice, report or other communication given hereunder shall be in writing and shall be effective (i) upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (ii) upon receipt when sent by an overnight courier, (iii) on the date personally delivered to an authorized officer of the party to which sent or (iv) on the date transmitted by facsimile or other electronic transmission with a confirmation of receipt in all cases, addressed as follows:
(a) in the case of the Seller, to Duke Energy Florida, LLC at (i) 299 First Avenue North, St. Petersburg, Florida 33701, Attention: Director, Rates and Regulatory Strategy, Telephone: 727-820-4560 in care of (c/o): Director, Rates and Regulatory Planning and (ii) 550 South Tryon Street, Charlotte, North Carolina 28202, Attention: Treasurer, Telephone: 704-382-3853 c/o Assistant Treasurer;
(b) in the case of the Issuer, to Duke Energy Florida Project Finance, LLC, at 299 First Avenue North, St. Petersburg, Florida 33701, Attention: Managers, Telephone: (980) 373-8659;
(c) in the case of the Indenture Trustee, to the Corporate Trust Office;
(d) in the case of Fitch, to Fitch Ratings, 33 Whitehall Street, New York, New York 10004, Attention: ABS Surveillance, Telephone: (212) 908-0500, Facsimile: (212) 908-0355;
(e) in the case of S&P, to Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business, Structured Credit Surveillance, 55 Water Street, New York, New York 10041, Telephone: (212) 438-8991, Email: servicer_reports@standardandpoors.com (all such notices to be delivered to S&P in writing by email); and
(f) in the case of the Commission, at Florida Public Service Commission, 2450 Shumard Oak Blvd., Tallahassee, Florida 32399-0850, Attention: Staff Director of Accounting & Finance.
Each party hereto may, by notice given in accordance herewith to the other party or parties hereto, designate any further or different address to which subsequent notices, reports and other communications shall be sent.
SECTION 6.03. Assignment. Notwithstanding anything to the contrary contained herein, except as provided in Section 5.02, this Sale Agreement may not be assigned by the Seller.
SECTION 6.04. Limitations on Rights of Third Parties. The provisions of this Sale Agreement are solely for the benefit of the Seller, the Issuer, the Commission (on behalf of itself and Customers) the Indenture Trustee (for the benefit of the Secured Parties) and the other Persons expressly referred to herein, and such Persons shall have the right to enforce the relevant provisions of this Sale Agreement. Nothing in this Sale Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Series Property or under or in respect of this Sale Agreement or any covenants, conditions or provisions contained herein.
SECTION 6.05. Severability. Any provision of this Sale 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 remainder of such provision (if any) or the remaining provisions hereof (unless such construction shall be unreasonable), and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 6.06. Separate Counterparts. This Sale 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 6.07. Governing Law. This Sale Agreement shall be construed in accordance with the laws of the State of Florida, 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 6.08. Assignment to Indenture Trustee. The Seller hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Secured Parties of all right, title and interest of the Issuer in, to and under this Sale Agreement, the Series Property and the proceeds thereof and the assignment of any or all of the Issuers rights hereunder to the Indenture Trustee for the benefit of the Secured Parties.
SECTION 6.09. Limitation of Liability. It is expressly understood and agreed by the parties hereto that this Sale Agreement is executed and delivered by the Indenture Trustee, not individually or personally but solely as Indenture Trustee on behalf of the Secured Parties, in the exercise of the powers and authority conferred and vested in it. The Indenture Trustee in acting hereunder is entitled to all rights, benefits, protections, immunities and indemnities accorded to it under the Indenture.
SECTION 6.10. Waivers. Any term or provision of this Sale Agreement may be waived, or the time for its performance may be extended, by the party or parties entitled to the benefit thereof; provided, however, that no such waiver delivered by the Issuer shall be effective unless the Indenture Trustee has given its prior written consent thereto. Any such waiver shall be validly and sufficiently authorized for the purposes of this Sale Agreement if, as to any party, it is authorized in writing by an authorized representative of such party, with prompt written notice of any such waiver to be provided to the Rating Agencies. The failure of any party hereto to enforce at any time any provision of this Sale Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the validity of this Sale Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Sale Agreement shall be held to constitute a waiver of any other or subsequent breach.
{REMAINDER OF PAGE INTENTIONALLY LEFT BLANK}
IN WITNESS WHEREOF, the parties hereto have caused this Sale Agreement to be duly executed by their respective officers as of the day and year first above written.
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC | ||
|
as Issuer | ||
|
| ||
|
| ||
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
President, Chief Financial Officer and Treasurer |
|
| ||
|
| ||
|
DUKE ENERGY FLORIDA, LLC | ||
|
as Seller | ||
|
| ||
|
| ||
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
Senior Vice President, Tax and Treasurer |
ACKNOWLEDGED AND ACCEPTED: |
| ||
|
| ||
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, | |||
| |||
|
| ||
By: |
/s/ Mitchell L. Brumwell |
| |
|
Name: |
Mitchell L. Brumwell |
|
|
Title: |
Vice President |
|
Signature Page to Nuclear Asset-Recovery Property Purchase and Sale Agreement
BILL OF SALE
This Bill of Sale is being delivered pursuant to the Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated as of June 22, 2016 (the Sale Agreement), by and between Duke Energy Florida, LLC (the Seller) and Duke Energy Florida Project Finance, LLC (the Issuer). All capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Sale Agreement.
In consideration of the Issuers delivery to or upon the order of the Seller of $[ ], the Seller does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse or warranty, except as set forth in the Sale Agreement, all right, title and interest of the Seller in and to the Series Property created or arising under the Financing Order dated November 19, 2015 issued by the Florida Public Service Commission under the Nuclear Asset-Recovery Law (such sale, transfer, assignment, setting over and conveyance of the Series Property includes, to the fullest extent permitted by the Nuclear Asset-Recovery Law, the rights and interests of the Seller under the Financing Order, including the right of the Seller and any Successor or assignee of the Seller to impose, bill, collect and receive Series Charges, the right to obtain True-Up Adjustments and all revenue, collections, claims, rights to payments, payments, moneys and proceeds arising out of the rights and interests created under the Financing Order). Such sale, transfer, assignment, setting over and conveyance is hereby expressly stated to be a sale or other absolute transfer and, pursuant to Section 366.95(5)(c). of the Nuclear Asset-Recovery Law, shall be treated as a true sale and not as a pledge of or secured transaction relating to the Sellers right, title, and interest in, to, and under the Series Property. The Seller and the Issuer agree that after giving effect to the sale, transfer, assignment, setting over and conveyance contemplated hereby the Seller has no right, title or interest in, to, or under the Series Property to which a security interest could attach because (i) it has sold, transferred, assigned, set over and conveyed all right, title and interest in and to the Series Property to the Issuer, (ii) as provided in Section 366.95(5)(c). of the Nuclear Asset-Recovery Law, all right, title and interest shall have passed to the Issuer and (iii) as provided in Section 366.95(5)(c)4. of the Nuclear Asset-Recovery Law, appropriate financing statements have been filed and such transfer is perfected against all third parties, including subsequent judicial or other lien creditors. If such sale, transfer, assignment, setting over and conveyance is held by any court of competent jurisdiction not to be a true sale as provided in Section 366.95(5)(c). of the Nuclear Asset-Recovery Law, then such sale, transfer, assignment, setting over and conveyance shall be treated as a pledge of the Series Property and as the creation of a security interest (within the meaning of the Nuclear Asset-Recovery Law and the UCC) in the Series Property and, without prejudice to its position that it has absolutely transferred all of its rights in the Series Property to the Issuer, the Seller hereby grants a security interest in the Series Property to the Issuer (and to the Indenture Trustee for the benefit of the Secured Parties) to secure their respective rights under the Basic Documents to receive the Series Charges and all other Series Property.
The Issuer does hereby purchase the Series Property from the Seller for the consideration set forth in the preceding paragraph.
Each of the Seller and the Issuer acknowledges and agrees that the purchase price for the Series Property sold pursuant to this Bill of Sale and the Sale Agreement is equal to its fair market value at the time of sale.
The Seller confirms that (i) each of the representations and warranties on the part of the Seller contained in the Sale Agreement are true and correct in all respects on the date hereof as if made on the date hereof and (ii) each condition precedent that must be satisfied under Section 2.02 of the Sale Agreement has been satisfied upon or prior to the execution and delivery of this Bill of Sale by the Seller.
This Bill of Sale 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.
This Bill of Sale shall be construed in accordance with the laws of the State of Florida, 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 law.
IN WITNESS WHEREOF, the Seller and the Issuer have duly executed this Bill of Sale as of this [ ] day of [ ], 2016.
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | |
|
as Issuer | |
|
| |
|
| |
|
By: |
|
|
|
Name: |
|
|
Title: |
|
| |
|
| |
|
DUKE ENERGY FLORIDA, LLC, | |
|
as Seller | |
|
| |
|
| |
|
By: |
|
|
|
Name: |
|
|
Title: |
APPENDIX A
DEFINITIONS AND RULES OF CONSTRUCTION
A. Defined Terms. The following terms have the following meanings:
17g-5 Website is defined in Section 10.18(a) of the Indenture.
Account Records is defined in Section 1(a)(i) of the Administration Agreement.
Act is defined in Section 10.03(a) of the Indenture.
Additional Series means issuance by the Issuer of any series of Nuclear Asset-Recovery Bonds issued after the date hereof, that will be undertaken only if (i) such issuance has been authorized by the Commission, (ii) the Rating Agency Condition has been satisfied and it is a condition of issuance for each Series of Nuclear Asset-Recovery Bonds that the new Series receive a rating or ratings as required by the Financing Order or a Subsequent Financing Order, (iii) the Issuer has delivered to the Indenture Trustee an Opinion of Counsel of a nationally recognized firm experienced in such matters to the effect that after such issuance, in the opinion of such counsel, if either or both of Duke Energy Florida or the Seller were to become a debtor in a case under the United States Bankruptcy Code (Title 11, U.S.C.), a federal court exercising bankruptcy jurisdiction and exercising reasonable judgment after full consideration of all relevant factors would not order substantive consolidation of the assets and liabilities of the Issuer with those of the bankruptcy estate of Duke Energy Florida or the Seller, subject to the customary exceptions, qualifications and assumptions contained therein.
Administration Agreement means the Administration Agreement, dated as of the date hereof, by and between Duke Energy Florida and the Issuer.
Administration Fee is defined in Section 2 of the Administration Agreement.
Administrator means Duke Energy Florida, as Administrator under the Administration Agreement, or any successor Administrator to the extent permitted under the Administration Agreement.
AES means an alternative energy supplier which is authorized by law to sell electric service to a customer using the transmission or distribution system of Duke Energy Florida.
Affiliate means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, control when used with respect to any specified Person means the power to direct the management and policies of such specified Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms controlling and controlled have meanings correlative to the foregoing.
Amendatory Schedule means a revision to service riders or any other notice filing filed with the Commission in respect of the Nuclear Asset-Recovery Rate Schedule pursuant to a True-Up Adjustment.
Annual Accountants Report is defined in Section 3.04(a) of the Servicing Agreement.
Authorized Denomination means, with respect to any Nuclear Asset-Recovery Bond, the authorized denomination therefor specified in the Series Supplement, which shall be at least $2,000 and, except as otherwise provided in the Series Supplement, integral multiples of $1,000 in excess thereof, except for one Nuclear Asset-Recovery bond which may be of a smaller denomination.
Bankruptcy Code means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.).
Basic Documents means the Indenture, each Series Supplement, the Certificate of Formation, the LLC Agreement, the Administration Agreement, and, with respect to each Series, the applicable Sale Agreement, Bill of Sale, Servicing Agreement, Intercreditor Agreement, Letter of Representations, Underwriting Agreement and all other documents and certificates delivered in connection therewith.
Bill of Sale means a bill of sale substantially in the form of Exhibit A to the Sale Agreement delivered pursuant to Section 2.02(a) of the Sale Agreement.
Billed Nuclear Asset-Recovery Charges means the amounts of Nuclear Asset-Recovery Charges billed by the Servicer.
Billing Period means the period created by dividing the calendar year into 12 consecutive periods of approximately 21 Servicer Business Days.
Bills means each of the regular monthly bills, summary bills, opening bills and closing bills issued to Customers by Duke Energy Florida in its capacity as Servicer.
Bond Interest Rate means, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, the rate at which interest accrues on the Nuclear Asset-Recovery Bonds of such Series or WAL, as specified in the applicable Series Supplement.
Book-Entry Form means, with respect to any Nuclear Asset-Recovery Bond, that such Nuclear Asset-Recovery Bond is not certificated and the ownership and transfers thereof shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture and the Series Supplement pursuant to which such Nuclear Asset-Recovery Bond was issued.
Book-Entry Nuclear Asset-Recovery Bonds means any Nuclear Asset-Recovery Bonds issued in Book-Entry Form; provided, however, that, after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive Nuclear Asset-Recovery Bonds are to be issued to the Holder of such Nuclear Asset-Recovery
Bonds, such Nuclear Asset-Recovery Bonds shall no longer be Book-Entry Nuclear Asset-Recovery Bonds.
Business Day means any day other than a Saturday, a Sunday or a day on which banking institutions in St. Petersburg, Florida, Charlotte, North Carolina or New York, New York are, or DTC or the Corporate Trust Office is, authorized or obligated by law, regulation or executive order to be closed.
Capital Contribution means the amount of cash contributed to the Issuer by Duke Energy Florida as specified in the LLC Agreement.
Capital Subaccount is defined in Section 8.02(a) of the Indenture.
Certificate of Compliance means the certificate referred to in Section 3.03 of the Servicing Agreement and substantially in the form of Exhibit E to the Servicing Agreement.
Certificate of Formation means the Certificate of Formation filed with the Secretary of State of the State of Delaware on January 5, 2016 pursuant to which the Issuer was formed.
Charge means any nuclear asset-recovery charges as defined in Section 366.95(1)(j) of the Nuclear Asset-Recovery Law that are authorized by the Financing Order or any Subsequent Financing Order.
Claim means a claim as defined in Section 101(5) of the Bankruptcy Code.
Clearing Agency means an organization registered as a clearing agency pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant means a securities broker, dealer, bank, trust company, clearing corporation or other financial institution or other Person for whom from time to time a Clearing Agency effects book entry transfers and pledges of securities deposited with such Clearing Agency.
Code means the Internal Revenue Code of 1986.
Collateral is defined in the preamble of the Indenture.
Collection Account is defined in Section 8.02(a) of the Indenture for such Series.
Collection in Full of the Charges means the day on which the aggregate amounts on deposit in the General Subaccount and the Excess Funds Subaccount are sufficient to pay in full all the Outstanding Nuclear Asset-Recovery Bonds and to replenish any shortfall in the Capital Subaccount.
Collection Period means any period commencing on the first Servicer Business Day of any Billing Period and ending on the last Servicer Business Day of such Billing Period.
Commission means the Florida Public Service Commission.
Commission Condition means the satisfaction of any precondition to any amendment or modification to or action under any Basic Documents through the obtaining of Commission consent or acquiescence, as described in the related Basic Document.
Commission Regulations means any regulations, including temporary regulations, promulgated by the Commission pursuant to Florida law.
Company Minutes is defined in Section 1(a)(iv) of the Administration Agreement.
Corporate Trust Office means the office of the Indenture Trustee at which, at any particular time, its corporate trust business shall be administered, which office as of the date hereof is located at BNY Mellon Global Corporate Trust, 10161 Centurion Parkway North, Jacksonville, Florida 32256; Telephone: 904-998-4714; Facsimile: 904-645-1930, or at such other address as the Indenture Trustee may designate from time to time by notice to the Holders of Nuclear Asset-Recovery Bonds and the Issuer, or the principal corporate trust office of any successor trustee designated by like notice.
Covenant Defeasance Option is defined in Section 4.01(b) of the Indenture.
Customer means any existing or future customer (including individuals, corporations, other businesses, and federal, state and local governmental entities) receiving transmission or distribution service from Duke Energy Florida or its successors or assignees under Commission-approved rate schedules or under special contracts, even if such customer elects to purchase electricity from an AES following a fundamental change in regulation of public utilities in Florida.
Daily Remittance is defined in Section 6.11(a) of the Servicing Agreement.
Default means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.
Definitive Nuclear Asset-Recovery Bonds is defined in Section 2.11 of the Indenture.
Delaware UCC means the Uniform Commercial Code as in effect on the Series Closing Date in the State of Delaware.
DTC means The Depository Trust Company.
Duke Energy Florida means Duke Energy Florida, LLC, a Florida limited liability company.
Eligible Account means a segregated non-interest-bearing trust account with an Eligible Institution.
Eligible Institution means:
(a) the corporate trust department of the Indenture Trustee or a subsidiary thereof, so long as any of the securities of the Indenture Trustee has a credit rating from each Rating Agency in one of its generic rating categories that signifies investment grade; or
(b) a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank) (i) that has either (A) a long-term issuer rating of AA- or higher by S&P, A2 or higher by Moodys and AA or higher by Fitch, if rated by Fitch, or (B) a short-term issuer rating of A-1+ or higher by S&P, P-1 or higher by Moodys and F1 or higher by Fitch, if rated by Fitch, or any other long-term, short-term or certificate of deposit rating acceptable to the Rating Agencies, and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation.
If so qualified under clause (b) of this definition, the Indenture Trustee may be considered an Eligible Institution for the purposes of clause (a) of this definition.
Eligible Investments means instruments or investment property that evidence:
(a) direct obligations of, or obligations fully and unconditionally guaranteed as to timely payment by, the United States of America;
(b) demand or time deposits of, unsecured certificates of deposit of, money market deposit accounts of, bank deposit products of or bankers acceptances issued by, any depository institution (including, but not limited to, bank deposit products of the Indenture Trustee, acting in its commercial capacity) incorporated or organized under the laws of the United States of America or any State thereof and subject to supervision and examination by U.S. federal or state banking authorities, so long as the commercial paper or other short-term debt obligations of such depository institution are, at the time of deposit, rated at least A-1 and P-1 or their equivalents by each of S&P and Moodys and, if Fitch provides ratings thereon by Fitch, or such lower rating as will not result in the downgrading or withdrawal of the ratings of the Nuclear Asset-Recovery Bonds;
(c) commercial paper (including commercial paper of the Indenture Trustee, acting in its commercial capacity, and other than commercial paper of Duke Energy Florida or any of its Affiliates), which at the time of purchase is rated at least A-1 and P-1 or their equivalents by each of S&P and Moodys or such lower rating as will not result in the downgrading or withdrawal of the ratings of the Nuclear Asset-Recovery Bonds;
(d) investments in money market funds having a rating in the highest investment category granted thereby (including funds for which the Indenture Trustee or any of its Affiliates is investment manager or advisor) from Moodys, S&P and Fitch, if rated by Fitch;
(e) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or its agencies or instrumentalities, entered into with Eligible Institutions;
(f) repurchase obligations with respect to any security or whole loan entered into with an Eligible Institution or with a registered broker/dealer acting as principal and that meets the ratings criteria set forth below:
(i) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any such broker/dealer being referred to in this definition as a broker/dealer), the unsecured short-term debt obligations of which are rated at least P-1 by Moodys, A-1+ by S&P and, if Fitch provides a rating thereon, F-1+ by Fitch at the time of entering into such repurchase obligation; or
(ii) an unrated broker/dealer, acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least P-1 by Moodys, A-1+ by S&P and, if Fitch provides a rating thereon, F-1+ by Fitch at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company; and
(g) any other investment permitted by each of the Rating Agencies;
in each case maturing not later than the Business Day preceding the next Payment Date or Special Payment Date, if applicable (for the avoidance of doubt, investments in money market funds or similar instruments that are redeemable on demand shall be deemed to satisfy the foregoing requirement). Notwithstanding the foregoing: (1) no securities or investments that mature in 30 days or more shall be Eligible Investments unless the issuer thereof has either a short-term unsecured debt rating of at least P-1 from Moodys or a long-term unsecured debt rating of at least A1 from Moodys and also has a long-term unsecured debt rating of at least A from S&P; (2) no securities or investments described in clauses (b) through (d) above that have maturities of more than 30 days but less than or equal to 3 months shall be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least A1 from Moodys and a short-term unsecured debt rating of at least P-1 from Moodys; and (3) no securities or investments described in clauses (b) through (d) above that have maturities of more than 3 months shall be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least A1 from Moodys and a short-term unsecured debt rating of at least P-1 from Moodys.
Event of Default is defined in Section 5.01 of the Indenture.
Excess Funds Subaccount is defined in Section 8.02(a) of the Indenture.
Exchange Act means the Securities Exchange Act of 1934.
Expected Sinking Fund Schedule means, with respect to any WAL, the expected sinking fund schedule related thereto set forth in the applicable Series Supplement.
Federal Book-Entry Regulations means 31 C.F.R. Part 357 et seq. (Department of Treasury).
Federal Funds Rate means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Servicer from three federal funds brokers of recognized standing selected by it.
Final means, with respect to the Financing Order or Subsequent Financing Order, that the Financing Order has become final, that the Financing Order is not being appealed and that the time for filing an appeal thereof has expired.
Final Maturity Date means, with respect to each Series of WAL of Nuclear Asset-Recovery Bonds, the final maturity date therefor as specified in the applicable Series Supplement.
Financing Costs means all financing costs as defined in Section 366.95(1)(e) of the Nuclear Asset-Recovery Law allowed to be recovered by Duke Energy Florida under the Financing Order.
Financing Order means the financing order issued by the Commission to Duke Energy Florida on November 19, 2015, Docket No. 150148-EI, authorizing the creation of the Nuclear Asset-Recovery Property.
Financing Party means any and all of the following: the Holders, the Indenture Trustee, Duke Energy Florida, collateral agents, any party under the Basic Documents, or any other person acting for the benefit of the Holders.
Fitch means Fitch Ratings or any successor thereto. References to Fitch are effective so long as Fitch is a Rating Agency.
Florida Secured Transactions Registry means the centralized database in which all initial financing statements, amendments, assignments, and other statements of charge authorized to be filed under Chapter 679 of the Florida statutes.
Florida UCC means the Uniform Commercial Code as in effect on the Series Closing Date in the State of Florida.
General Subaccount is defined in Section 8.02(a) of the Indenture for such Series.
Global Nuclear Asset-Recovery Bond means a Nuclear Asset-Recovery Bond to be issued to the Holders thereof in Book-Entry Form, which Global Nuclear Asset-Recovery Bond shall be issued to the Clearing Agency, or its nominee, in accordance with Section 2.11 of the Indenture and the Series Supplement.
Governmental Authority means any nation or government, any U.S. federal, state, local or other political subdivision thereof and any court, administrative agency or other instrumentality or entity exercising executive, legislative, judicial, regulatory or administrative functions of government.
Grant means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, grant, transfer, create, grant a lien upon, a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture and the Series Supplement. A Grant of the Collateral shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.
Holder means the Person in whose name a Nuclear Asset-Recovery Bond is registered on the Nuclear Asset-Recovery Bond Register.
Indemnified Losses is defined in Section 5.03 of the Servicing Agreement.
Indemnified Party is defined in Section 6.02(a) of the Servicing Agreement.
Indemnified Person is defined in Section 5.01(f) of the Sale Agreement.
Indenture means the Indenture, dated as June 22, 2016, by and between the Issuer and The Bank of New York Mellon, a National Association, as Indenture Trustee and as Securities Intermediary.
Indenture Trustee means The Bank of New York Mellon Trust Company, National Association, a national banking association, as indenture trustee for the benefit of the Secured Parties, or any successor indenture trustee for the benefit of the Secured Parties, under the Indenture.
Independent means, when used with respect to any specified Person, that such specified Person (a) is in fact independent of the Issuer, any other obligor on the Nuclear Asset-Recovery Bonds, the Seller, the Servicer and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director (other than as an independent director or manager) or person performing similar functions.
Independent Certificate means a certificate to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and consented to by the Indenture Trustee, and such certificate shall state that the signer has read the definition of Independent in the Indenture and that the signer is Independent within the meaning thereof.
Independent Manager is defined in Section 4.01(a) of the LLC Agreement.
Independent Manager Fee is defined in Section 4.01(a) of the LLC 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 specified Person or any substantial part of its property in an involuntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the date hereof or thereafter, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or ordering the winding-up or liquidation of such specified Persons 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 specified Person of a voluntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the Series Closing Date or thereafter, or the consent by such specified Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such specified Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or the making by such specified Person of any general assignment for the benefit of creditors, or the failure by such specified Person generally to pay its debts as such debts become due, or the taking of action by such specified Person in furtherance of any of the foregoing.
Intercreditor Agreement means the Intercreditor Agreement, dated as of the date hereof, by and among the Issuer, the Indenture Trustee, Duke Energy Florida and the parties to the accounts receivables sale program of Duke Energy Florida Receivables LLC, and any subsequent such agreement.
Interim True-Up Adjustment means either an Optional Interim True-Up Adjustment made in accordance with Section 4.01(b)(ii) of the Servicing Agreement or a Non-standard True-Up Adjustment made in accordance with Section 4.01(b)(iii) of the Servicing Agreement.
Investment Company Act means the Investment Company Act of 1940.
Investment Earnings means investment earnings on funds deposited in the Collection Account net of losses and investment expenses.
Issuer means Duke Energy Florida Project Finance, LLC, a Delaware limited liability company, named as such in the Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the Trust Indenture Act, each other obligor on the Nuclear Asset-Recovery Bonds.
Issuer Documents is defined in Section 1(a)(iv) of the Administration Agreement.
Issuer Order means a written order signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or Paying Agent, as applicable.
Issuer Request means a written request signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or Paying Agent, as applicable.
Legal Defeasance Option is defined in Section 4.01(b) of the Indenture.
Letter of Representations means any applicable agreement between the Issuer and the applicable Clearing Agency, with respect to such Clearing Agencys rights and obligations (in its capacity as a Clearing Agency) with respect to any Book-Entry Nuclear Asset-Recovery Bonds.
Lien means a security interest, lien, mortgage, charge, pledge, claim or encumbrance of any kind.
LLC Agreement means the Amended and Restated Limited Liability Company Agreement of Duke Energy Florida Project Finance, LLC, dated as of June 10, 2016.
Losses means (a) any and all amounts of principal of and interest on the Nuclear Asset-Recovery Bonds not paid when due or when scheduled to be paid in accordance with their terms and the amounts of any deposits by or to the Issuer required to have been made in accordance with the terms of the Basic Documents or the Financing Order or Subsequent that are not made when so required and (b) any and all other liabilities, obligations, losses, claims, damages, payments, costs or expenses of any kind whatsoever.
Manager means each manager of the Issuer under the LLC Agreement.
Member has the meaning specified in the first paragraph of the LLC Agreement.
Monthly Servicers Certificate is defined in Section 3.01(b)(i) of the Servicing Agreement.
Moodys means Moodys Investors Service, Inc.. References to Moodys are effective so long as Moodys is a Rating Agency.
Non-standard True-Up Adjustment means any Non-standard True-Up Adjustment made pursuant to Section 4.01(b)(iii) of the Servicing Agreement.
NRSRO is defined in Section 10.18(b) of the Indenture.
Nuclear Asset-Recovery Bond Register is defined in Section 2.05 of the Indenture.
Nuclear Asset-Recovery Bond Registrar is defined in Section 2.05 of the Indenture.
Nuclear Asset-Recovery Bonds means all Series of the nuclear asset-recovery bonds issued under the Indenture.
Nuclear Asset-Recovery Charge Collections means Charges actually received by the Servicer to be remitted to the Collection Account.
Nuclear Asset-Recovery Charge Payments means the payments made by Customers based on the Charges.
Nuclear Asset-Recovery Costs means (i) the balance of the Crystal River Unit 3 Regulatory Asset as of December 31, 2015 as allowed under the Financing Order minus (ii) $35,894,547.00, which, pursuant to the Commissions Final Order PSC-16-0138-FOF-EI issued on April 5, 2016, shall not be included in, recovered or further trued up as part of the Crystal River Unit 3 Regulatory Asset, plus (iii) carrying charges accruing at 6.0% per annum on the balance of the Crystal River Unit 3 Regulatory Asset (adjusted as described in (ii) above) from December 31, 2015 through the date hereof.
Nuclear Asset-Recovery Law means the laws of the State of Florida adopted in May 2015 enacted as Section 366.95, Florida Statutes.
Nuclear Asset-Recovery Property Records is defined in Section 5.01 of the Servicing Agreement.
Nuclear Asset-Recovery Rate Class means one of the seven separate rate classes to whom Charges are allocated for ratemaking purposes in accordance with the Financing Order.
Nuclear Asset-Recovery Rate Schedule means the Tariff sheets to be filed with the Commission stating the amounts of the Charges, as such Tariff sheets may be amended or modified from time to time pursuant to a True-Up Adjustment.
NY UCC means the Uniform Commercial Code as in effect on the date hereof in the State of New York.
Officers Certificate means a certificate signed by a Responsible Officer of the Issuer under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, and delivered to the Indenture Trustee.
Ongoing Financing Costs means the Financing Costs described as such in the Financing Order, including Operating Expenses and any other costs identified in the Basic
Documents; provided, however, that Ongoing Financing Costs do not include the Issuers costs of issuance of the Nuclear Asset-Recovery Bonds.
Operating Expenses means all unreimbursed fees, costs and out-of-pocket expenses of the Issuer, including all amounts owed by the Issuer to the Indenture Trustee (including indemnities, legal, audit fees and expenses) or any Manager, the Servicing Fee, the Administration Fee, legal and accounting fees, Rating Agency fees, any Regulatory Assessment Fees and related fees (i.e. website provider fees) and any franchise or other taxes owed by the Issuer, including on investment income in the Collection Account.
Opinion of Counsel means one or more written opinions of counsel, who may, except as otherwise expressly provided in the Basic Documents, be employees of or counsel to the party providing such opinion of counsel, which counsel shall be reasonably acceptable to the party receiving such opinion of counsel, and shall be in form and substance reasonably acceptable to such party.
Optional Interim True-Up Adjustment means any Optional Interim True-Up Adjustment made pursuant to Section 4.01(b)(ii) of the Servicing Agreement.
Outstanding means, as of the date of determination, all Nuclear Asset-Recovery Bonds theretofore authenticated and delivered under the Indenture, except:
(a) Nuclear Asset-Recovery Bonds theretofore canceled by the Nuclear Asset-Recovery Bond Registrar or delivered to the Nuclear Asset-Recovery Bond Registrar for cancellation;
(b) Nuclear Asset-Recovery Bonds or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Nuclear Asset-Recovery Bonds; and
(c) Nuclear Asset-Recovery Bonds in exchange for or in lieu of other Nuclear Asset-Recovery Bonds that have been issued pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Nuclear Asset-Recovery Bonds are held by a Protected Purchaser;
provided, that, in determining whether the Holders of the requisite Outstanding Amount of the Nuclear Asset-Recovery Bonds or any Series or WAL thereof have given any request, demand, authorization, direction, notice, consent or waiver under any Basic Document, Nuclear Asset-Recovery Bonds owned by the Issuer, any other obligor upon the Nuclear Asset-Recovery Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding (unless one or more such Persons owns 100% of such Nuclear Asset-Recovery Bonds), except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Nuclear Asset-Recovery Bonds that the Indenture Trustee actually knows to be so owned shall be so disregarded. Nuclear Asset-Recovery Bonds so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgees right so to act with respect to such Nuclear Asset-Recovery Bonds and that the pledgee is not the Issuer, any other obligor upon the Nuclear
Asset-Recovery Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons.
Outstanding Amount means the aggregate principal amount of all Nuclear Asset-Recovery Bonds, or, if the context requires, all Nuclear Asset-Recovery Bonds of a Series or WAL, Outstanding at the date of determination.
Paying Agent means, with respect to the Indenture, the Indenture Trustee and any other Person appointed as a paying agent for the Nuclear Asset-Recovery Bonds pursuant to the Indenture.
Payment Date means, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, the dates specified in the applicable Series Supplement; provided, that if any such date is not a Business Day, the Payment Date shall be the Business Day succeeding such date.
Periodic Billing Requirement means, for any Remittance Period, the aggregate amount of Charges calculated by the Servicer as necessary to be billed during such period in order to collect the Periodic Payment Requirement on a timely basis.
Periodic Interest means, with respect to any Payment Date, the periodic interest for such Payment Date as specified in the Series Supplement.
Periodic Payment Requirement for any Remittance Period means the total dollar amount of Nuclear Asset-Recovery Charge Collections reasonably calculated by the Servicer in accordance with Section 4.01 of the Servicing Agreement as necessary to be received during such Remittance Period (after giving effect to the allocation and distribution of amounts on deposit in the Excess Funds Subaccount at the time of calculation and that are projected to be available for payments on the Nuclear Asset-Recovery Bonds at the end of such Remittance Period and including any shortfalls in Periodic Payment Requirements for any prior Remittance Period) in order to ensure that, as of the last Payment Date occurring in such Remittance Period, (a) all accrued and unpaid principal of and interest on the Nuclear Asset-Recovery Bonds then due shall have been paid in full on a timely basis, (b) the Outstanding Amount of the Nuclear Asset-Recovery Bonds is equal to the Projected Unpaid Balance on each Payment Date during such Remittance Period, (c) the balance on deposit in the Capital Subaccount equals the Required Capital Level and (d) all other fees and expenses due and owing and required or allowed to be paid under Section 8.02 of the Indenture as of such date shall have been paid in full; provided, that, with respect to any Semi-Annual True-Up Adjustment or Interim True-Up Adjustment occurring after the date that is one year prior to the last Scheduled Final Payment Date for the Nuclear Asset-Recovery Bonds, the Periodic Payment Requirements shall be calculated to ensure that sufficient Nuclear Asset-Recovery Charges will be collected to retire the Nuclear Asset-Recovery Bonds in full as of the next Payment Date.
Periodic Principal means, with respect to any Payment Date, the excess, if any, of the Outstanding Amount of Nuclear Asset-Recovery Bonds over the outstanding principal balance specified for such Payment Date on the Expected Sinking Fund Schedule.
Permitted Lien means the Lien created by the Indenture.
Permitted Successor is defined in Section 5.02 of the Sale Agreement.
Person means any individual, corporation, limited liability company, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or Governmental Authority.
Predecessor Nuclear Asset-Recovery Bond means, with respect to any particular Nuclear Asset-Recovery Bond, every previous Nuclear Asset-Recovery Bond evidencing all or a portion of the same debt as that evidenced by such particular Nuclear Asset-Recovery Bond, and, for the purpose of this definition, any Nuclear Asset-Recovery Bond authenticated and delivered under Section 2.06 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Nuclear Asset-Recovery Bond shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Nuclear Asset-Recovery Bond.
Premises is defined in Section 1(g) of the Administration Agreement.
Proceeding means any suit in equity, action at law or other judicial or administrative proceeding.
Projected Unpaid Balance means, as of any Payment Date, the sum of the projected outstanding principal amount of each WAL of Nuclear Asset-Recovery Bonds for such Payment Date set forth in the Expected Sinking Fund Schedule.
Property means all nuclear asset-recovery property as defined in Section 366.95(1)(l) of the Nuclear Asset-Recovery Law created pursuant to the Financing Order or a Subsequent Financing Order and under the Nuclear Asset-Recovery Law, including the right to impose, bill, collect and receive the Charges authorized under the Financing Order and to obtain periodic adjustments of the Charges and all revenue, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests specified in Section 366.95(1)(l)1., regardless of whether such revenues, collections, claims, rights to payment, payments, money, or proceeds are imposed, billed, received, collected, or maintained together with or commingled with other revenues, collections, rights to payment, payments, money, or proceeds.
Protected Purchaser has the meaning specified in Section 8-303 of the UCC.
Rating Agency means, with respect to any WAL of Nuclear Asset-Recovery Bonds, any of Moodys, S&P or Fitch that provides a rating with respect to the Nuclear Asset-Recovery Bonds. If no such organization (or successor) is any longer in existence, Rating Agency shall be a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, notice of which designation shall be given to the Indenture Trustee and the Servicer.
Rating Agency Condition means, with respect to any action, at least ten Business Days prior written notification to each Rating Agency of such action, and written confirmation from each of S&P and Moodys to the Servicer, the Indenture Trustee and the Issuer that such action will not result in a suspension, reduction or withdrawal of the then current rating by such Rating Agency of any WAL of Nuclear Asset-Recovery Bonds; provided, that, if,
within such ten Business Day period, any Rating Agency (other than S&P) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (a) the Issuer shall be required to confirm that such Rating Agency has received the Rating Agency Condition request and, if it has, promptly request the related Rating Agency Condition confirmation and (b) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five Business Days following such second request, the applicable Rating Agency Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agencys right to review or consent).
Record Date means one Business Day prior to the applicable Payment Date.
Registered Holder means the Person in whose name a Nuclear Asset-Recovery Bond is registered on the Nuclear Asset-Recovery Bond Register.
Regulation AB means the rules of the SEC promulgated under Subpart 229.1100 Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123.
Regulatory Assessment Fee means any assessment fee due to the Commission pursuant to Section 350.113, Florida Statutes.
Reimbursable Expenses is defined in Section 2 of the Administration Agreement and Section 6.06(a) of the Servicing Agreement.
Released Parties is defined in Section 6.02(d) of the Servicing Agreement.
Remittance Period means, with respect to any True-Up Adjustment, the period comprised of 6 consecutive Collection Periods beginning with the Collection Period in which such True-Up Adjustment would go into effect, from the Series Closing Date to the first Scheduled Payment Date, and for each subsequent period between Scheduled Payment Dates.
Required Capital Level means, with respect to any Series of Nuclear Asset-Recovery Bonds, the amount specified as such in the Series Supplement therefor.
Requirement of Law means any foreign, U.S. federal, state or local laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority or common law.
Responsible Officer means, with respect to: (a) the Issuer, any Manager or any duly authorized officer; (b) the Indenture Trustee, any officer within the Corporate Trust Office of such trustee (including the President, any Vice President, any Assistant Vice President, any Secretary, any Assistant Treasurer or any other officer of the Indenture Trustee customarily performing functions similar to those performed by persons who at the time shall be such officers, respectively, and that has direct responsibility for the administration of the Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred to because of such officers knowledge and familiarity with the particular subject); (c) any
corporation (other than the Indenture Trustee), the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer or any other duly authorized officer of such Person who has been authorized to act in the circumstances; (d) any partnership, any general partner thereof; and (e) any other Person (other than an individual), any duly authorized officer or member of such Person, as the context may require, who is authorized to act in matters relating to such Person.
Return on Invested Capital means, for any Payment Date with respect to any Remittance Period, the sum of (i) rate of return, payable to Duke Energy Florida, on its Capital Contribution equal to the rate of interest payable on the longest maturing WAL of Nuclear Asset-Recovery Bonds plus (ii) any Return on Invested Capital not paid on any prior Payment Date.
S&P means Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business. References to S&P are effective so long as S&P is a Rating Agency.
Sale Agreement means the Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated as of the date hereof, or any subsequent Nuclear Asset-Recovery Property Purchase and Sale Agreement relating to another Series of Nuclear Asset-Recovery Bonds by and between the Issuer and Duke Energy Florida, and acknowledged and accepted by the Indenture Trustee.
Scheduled Final Payment Date means, with respect to each Series of Nuclear Asset-Recovery Bonds, the date when all interest and principal is scheduled to be paid with respect to that applicable Series in accordance with the Expected Sinking Fund Schedule, as specified in the Series Supplement. For the avoidance of doubt, the Scheduled Final Payment Date with respect to any Series shall be the last Scheduled Payment Date set forth in the Expected Sinking Fund Schedule relating to such Series. The last Scheduled Final Payment Date means the Scheduled Final Payment Date of the latest maturing WAL of a Series of Nuclear Asset-Recovery Bonds.
Scheduled Payment Date means, with respect to each Series or WAL of Nuclear Asset-Recovery Bonds, each Payment Date on which principal for such Series or WAL is to be paid in accordance with the Expected Sinking Fund Schedule for such Series or WAL.
SEC means the Securities and Exchange Commission.
Secured Obligations means the payment of principal of and premium, if any, interest on, and any other amounts owing in respect of, the Nuclear Asset-Recovery Bonds and all fees, expenses, counsel fees and other amounts due and payable to the Indenture Trustee.
Secured Parties means the Indenture Trustee, the Holders and any credit enhancer described in a Series Supplement.
Securities Act means the Securities Act of 1933.
Securities Intermediary means The Bank of New York Mellon Trust Company, National Association, a national banking association, solely in the capacity of a securities
intermediary as defined in the NY UCC and Federal Book-Entry Regulations or any successor securities intermediary under the Indenture.
Seller is defined in the preamble to the Sale Agreement.
Semi-Annual Servicers Certificate is defined in Section 4.01(c)(ii) of the Servicing Agreement.
Semi-Annual True-Up Adjustment means each adjustment to the Nuclear Asset-Recovery Charges made in accordance with Section 4.01(b)(i) of the Servicing Agreement.
Semi-Annual True-Up Adjustment Date means the first billing cycle of March and September of each year, commencing in July 1, 2016.
Series means any series of Nuclear Asset-Recovery Bonds.
Series A Bonds means the Series A Senior Secured Nuclear Asset-Recovery Bonds issued by the Issuer on June 22, 2016.
Series Charges means Charges for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Closing Date means the date on which a Series of the Nuclear Asset-Recovery Bonds are originally issued in accordance with Section 2.10 of the Indenture and the respective Series Supplement.
Series Collateral means Collateral for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Property means Property for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Supplement means an indenture supplemental to the Indenture in the form attached as Exhibit B to the Indenture that authorizes the issuance of Nuclear Asset-Recovery Bonds.
Servicer means Duke Energy Florida, as Servicer under the Servicing Agreement.
Servicer Business Day means any day other than a Saturday, a Sunday or a day on which banking institutions in St. Petersburg, Florida, Charlotte, North Carolina or New York, New York are authorized or obligated by law, regulation or executive order to be closed, on which the Servicer maintains normal office hours and conducts business.
Servicer Default is defined in Section 7.01 of the Servicing Agreement.
Servicer Policies and Practices means, with respect to the Servicers duties under Exhibit A to the Servicing Agreement, 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 and, if applicable, others.
Servicing Agreement means the Nuclear Asset-Recovery Property Servicing Agreement, dated as of the date hereof, or any subsequent Nuclear Asset-Recovery Property Servicing Agreement relating to another Series of Nuclear Asset-Recovery Bonds by and between the Issuer and Duke Energy Florida, and acknowledged and accepted by the Indenture Trustee.
Servicing Fee is defined in Section 6.06(a) of the Servicing Agreement.
Servicing Standard means the obligation of the Servicer to calculate, apply, remit and reconcile proceeds of the Property, including Nuclear Asset-Recovery Charge Payments, and all other Collateral for the benefit of the Issuer and the Holders (a) with the same degree of care and diligence as the Servicer applies with respect to payments owed to it for its own account, (b) in accordance with all applicable procedures and requirements established by the Commission for collection of electric utility tariffs and (c) in accordance with the other terms of the Servicing Agreement.
Special Payment Date means the date on which, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, any payment of principal of or interest (including any interest accruing upon default) on, or any other amount in respect of, the Nuclear Asset-Recovery Bonds of such Series or WAL that is not actually paid within five days of the Payment Date applicable thereto is to be made by the Indenture Trustee to the Holders.
Special Record Date means, with respect to any Special Payment Date, the close of business on the fifteenth day (whether or not a Business Day) preceding such Special Payment Date.
Sponsor means Duke Energy Florida, in its capacity as sponsor of the Nuclear Asset-Recovery Bonds within the meaning of Regulation AB.
State means any one of the fifty states of the United States of America or the District of Columbia.
State Pledge means the pledge of the State of Florida as set forth in Section 366.95(11) of the Nuclear Asset-Recovery Law.
Subaccounts is defined in Section 8.02(a) of the Indenture.
Subsequent Financing Order means, a financing order of the Commission under the Nuclear Asset-Recovery Law issued to Duke Energy Florida subsequent to the Financing Order.
Successor means any successor to Duke Energy Florida under the Nuclear Asset-Recovery Law, whether pursuant to any bankruptcy, reorganization or other insolvency
proceeding or pursuant to any merger, conversion, acquisition, sale or transfer, by operation of law, as a result of electric utility restructuring, or otherwise.
Successor Servicer is defined in Section 3.07(e) of the Indenture.
Tariff means the most current version on file with the Commission of July 1, 2016.
Tax Returns is defined in Section 1(a)(iii) of the Administration Agreement.
Temporary Nuclear Asset-Recovery Bonds means Nuclear Asset-Recovery Bonds executed and, upon the receipt of an Issuer Order, authenticated and delivered by the Indenture Trustee pending the preparation of Definitive Nuclear Asset-Recovery Bonds pursuant to Section 2.04 of the Indenture.
Termination Notice is defined in Section 7.01 of the Servicing Agreement.
True-Up Adjustment means any Semi-Annual True-Up Adjustment or Interim True-Up Adjustment, as the case may be.
Trust Indenture Act means the Trust Indenture Act of 1939 as in force on the Series Closing Date, unless otherwise specifically provided.
UCC means the Uniform Commercial Code as in effect in the relevant jurisdiction.
Underwriters means the underwriters who purchase Nuclear Asset-Recovery Bonds of any Series from the Issuer and sell such Nuclear Asset-Recovery Bonds in a public offering.
Underwriting Agreement means the Underwriting Agreement, dated June 15, 2016, by and among Duke Energy Florida, the representatives of the several Underwriters named therein and the Issuer.
U.S. Government Obligations means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and that are not callable at the option of the issuer thereof.
WAL means any one of the groupings of Nuclear Asset-Recovery Bonds of a Series differentiated by sinking fund schedule, interest rate or sinking fund schedule, as specified in the Series Supplement.
WAL Maturity Date means, with respect to any WAL of Nuclear Asset-Recovery Bonds, the maturity date therefor, as specified in the Series Supplement therefor.
Weighted Average Days Outstanding means the weighted average number of days Duke Energy Floridas monthly bills to Customers remain outstanding during the calendar year preceding the calculation thereof pursuant to Section 4.01(b)(i) of the Servicing Agreement.
B. Rules of Construction. Unless the context otherwise requires, in each Basic Document to which this Appendix A is attached:
(a) All accounting terms not specifically defined herein shall be construed in accordance with United States generally accepted accounting principles. To the extent that the definitions of accounting terms in any Basic Document are inconsistent with the meanings of such terms under generally accepted accounting principles or regulatory accounting principles, the definitions contained in such Basic Document shall control.
(b) The term including means including without limitation, and other forms of the verb include have correlative meanings.
(c) All references to any Person shall include such Persons permitted successors and assigns, and any reference to a Person in a particular capacity excludes such Person in other capacities.
(d) Unless otherwise stated in any of the Basic Documents, in the computation of a period of time from a specified date to a later specified date, the word from means from and including and each of the words to and until means to but excluding.
(e) The words hereof, herein and hereunder and words of similar import when used in any Basic Document shall refer to such Basic Document as a whole and not to any particular provision of such Basic Document. References to Articles, Sections, Appendices and Exhibits in any Basic Document are references to Articles, Sections, Appendices and Exhibits in or to such Basic Document unless otherwise specified in such Basic Document.
(f) The various captions (including the tables of contents) in each Basic Document are provided solely for convenience of reference and shall not affect the meaning or interpretation of any Basic Document.
(g) The definitions contained in this Appendix A apply equally to the singular and plural forms of such terms, and words of the masculine, feminine or neuter gender shall mean and include the correlative words of other genders.
(h) Unless otherwise specified, references to an agreement or other document include references to such agreement or document as from time to time amended, restated, reformed, supplemented or otherwise modified in accordance with the terms thereof (subject to any restrictions on such amendments, restatements, reformations, supplements or modifications set forth in such agreement or document) and include any attachments thereto.
(i) References to any law, rule, regulation or order of a Governmental Authority shall include such law, rule, regulation or order as from time to time in effect, including any amendment, modification, codification, replacement or reenactment thereof or any substitution therefor.
(j) The word will shall be construed to have the same meaning and effect as the word shall.
(k) The word or is not exclusive.
(l) All terms defined in the relevant Basic Document to which this Appendix A is attached shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein.
(m) A term has the meaning assigned to it.
Exhibit 99.3
Execution Version
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT, dated as of June 22, 2016, is entered into by and between Duke Energy Florida, LLC, a Florida limited liability company, as administrator, and Duke Energy Florida Project Finance, LLC, a Delaware limited liability company.
Capitalized terms used but not otherwise defined in this Administration Agreement shall have the respective meanings given to such terms in Appendix A, which is hereby incorporated by reference into this Administration Agreement as if set forth fully in this Administration Agreement. Not all terms defined in Appendix A are used in this Administration Agreement. The rules of construction set forth in Appendix A shall apply to this Administration Agreement and are hereby incorporated by reference into this Administration Agreement as if set forth fully in this Administration Agreement.
W I T N E S S E T H:
WHEREAS, the Issuer is issuing Series A Bonds pursuant to the Indenture and the Series Supplement dated the date hereof;
WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of Nuclear Asset-Recovery Bonds, including (a) the Indenture, (b) the Servicing Agreement for the Series A Bonds, (c) the Sale Agreement for the Series A Bonds and (d) the other Basic Documents to which the Issuer is a party relating to the Series A Bonds;
WHEREAS, pursuant to the Basic Documents, the Issuer is required to perform certain duties in connection with the Basic Documents, the Series A Bonds and the Series Collateral pledged to the Indenture Trustee pursuant to the Indenture and Series Supplement dated the date hereof;
WHEREAS, pursuant to the Indenture, the Issuer may issue Additional Series of Nuclear Asset-Recovery Bonds, whereby the Issuer would be required to perform certain duties in connection with the Basic Documents, the Additional Series of Nuclear Asset-Recovery Bonds and the Collateral pledged to the Indenture Trustee for such Series pursuant to the Indenture and applicable Series Supplement(s);
WHEREAS, the Issuer has no employees, other than its officers and managers, and does not intend to hire any employees, and consequently desires to have the Administrator perform certain of the duties of the Issuer referred to above and to provide such additional services consistent with the terms of this Administration Agreement and the other Basic Documents as the Issuer may from time to time request; and
WHEREAS, the Administrator has the capacity to provide the services and the facilities required thereby and is willing to perform such services and provide such facilities for the Issuer on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Duties of the Administrator; Management Services. The Administrator hereby agrees to provide the following corporate management services to the Issuer and to cause third parties to provide professional services required for or contemplated by such services in accordance with the provisions of this Administration Agreement:
(a) furnish the Issuer with ordinary clerical, bookkeeping and other corporate administrative services necessary and appropriate for the Issuer, including the following services:
(i) maintain at the Premises general accounting records of the Issuer (the Account Records), subject to year-end audit, in accordance with generally accepted accounting principles, separate and apart from its own accounting records, prepare or cause to be prepared such quarterly and annual financial statements as may be necessary or appropriate and arrange for year-end audits of the Issuers financial statements by the Issuers independent accountants;
(ii) prepare and, after execution by the Issuer, file with the SEC and any applicable state agencies documents required to be filed by the Issuer with the SEC and any applicable state agencies, including periodic reports required to be filed under the Exchange Act;
(iii) prepare for execution by the Issuer and cause to be filed such income, franchise or other tax returns of the Issuer as shall be required to be filed by applicable law (the Tax Returns) and cause to be paid on behalf of the Issuer from the Issuers funds any taxes required to be paid by the Issuer under applicable law;
(iv) prepare or cause to be prepared for execution by the Issuers Managers minutes of the meetings of the Issuers Managers and such other documents deemed appropriate by the Issuer to maintain the separate limited liability company existence and good standing of the Issuer (the Company Minutes) or otherwise required under the Basic Documents (together with the Account Records, the Tax Returns, the Company Minutes, the LLC Agreement and the Certificate of Formation, the Issuer Documents) and any other documents deliverable by the Issuer thereunder or in connection therewith; and
(v) hold, maintain and preserve at the Premises (or such other place as shall be required by any of the Basic Documents) executed copies (to the extent applicable) of the Issuer Documents and other documents executed by the Issuer thereunder or in connection therewith;
(b) take such actions on behalf of the Issuer as are necessary or desirable for the Issuer to keep in full effect its existence, rights and franchises as a limited liability company under the laws of the State of Delaware and obtain and preserve its qualification to do business in each jurisdiction in which it becomes necessary to be so qualified;
(c) take such actions on the behalf of the Issuer as are necessary for the issuance and delivery of Nuclear Asset-Recovery Bonds;
(d) provide for the performance by the Issuer of its obligations under each of the Basic Documents, and prepare, or cause to be prepared, all documents, reports, filings, instruments, notices, certificates and opinions that it shall be the duty of the Issuer to prepare, file or deliver pursuant to the Basic Documents;
(e) to the full extent allowable under applicable law, enforce each of the rights of the Issuer under the Basic Documents, at the direction of the Indenture Trustee;
(f) provide for the defense, at the direction of the Issuers Managers, of any action, suit or proceeding brought against the Issuer or affecting the Issuer or any of its assets;
(g) provide office space (the Premises) for the Issuer and such reasonable ancillary services as are necessary to carry out the obligations of the Administrator hereunder, including telecopying, duplicating and word processing services;
(h) undertake such other administrative services as may be appropriate, necessary or requested by the Issuer; and
(i) provide such other services as are incidental to the foregoing or as the Issuer and the Administrator may agree.
In providing the services under this Section 1 and as otherwise provided under this Administration Agreement, the Administrator will not knowingly take any actions on behalf of the Issuer that (i) the Issuer is prohibited from taking under the Basic Documents, or (ii) would cause the Issuer to be in violation of any U.S. federal, state or local law or the LLC Agreement.
In performing its duties hereunder, the Administrator shall use the same degree of care and diligence that the Administrator exercises with respect to performing such duties for its own account and, if applicable, for others.
Section 2. Compensation. As compensation for the performance of the Administrators obligations under this Administration Agreement (including the compensation of Persons serving as Manager(s), other than the Independent Manager(s), and officers of the Issuer, but, for the avoidance of doubt, excluding the performance by Duke Energy Florida of its obligations in its capacity as Servicer), the Administrator shall be entitled to $50,000 annually (the Administration Fee), payable by the Issuer in full on the first Payment Date following the issuance of the Series A Bonds and every second Payment Date thereafter. In addition, the Administrator shall be entitled to be reimbursed by the Issuer for all costs and expenses of services performed by unaffiliated third parties and actually incurred by the Administrator in connection with the performance of its obligations under this Administration Agreement in accordance with Section 3 (but, for the avoidance of doubt, excluding any such costs and expenses incurred by Duke Energy Florida in its capacity as Servicer), to the extent that such costs and expenses are supported by invoices or other customary documentation and are reasonably allocated to the Issuer (Reimbursable Expenses).
Section 3. Third Party Services. Any services required for or contemplated by the performance of the above-referenced services by the Administrator to be provided by unaffiliated third parties (including independent accountants fees and counsel fees) may, if provided for or otherwise contemplated by the Financing Order or a Subsequent Financing Order and if the Issuer deems it necessary or desirable, be arranged by the Issuer or by the Administrator at the direction (which may be general or specific) of the Issuer. Costs and expenses associated with the contracting for such third-party professional services may be paid directly by the Issuer or paid by the Administrator and reimbursed by the Issuer in accordance with Section 2, or otherwise as the Administrator and the Issuer may mutually arrange.
Section 4. Additional Information to be Furnished to the Issuer. The Administrator shall furnish to the Issuer from time to time such additional information regarding the Series Collateral or the Collateral, as applicable, an as the Issuer shall reasonably request.
Section 5. Independence of the Administrator. For all purposes of this Administration Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator shall have no authority, and shall not hold itself out as having the authority, to act for or represent the Issuer in any way and shall not otherwise be deemed an agent of the Issuer.
Section 6. No Joint Venture. Nothing contained in this Administration Agreement (a) shall constitute the Administrator and the Issuer as partners or co-members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (b) shall be construed to impose any liability as such on either of them or (c) shall be deemed to confer on either of them any express, implied or apparent authority to incur any obligation or liability on behalf of the other.
Section 7. Other Activities of Administrator. Nothing herein shall prevent the Administrator or any of its members, managers, officers, employees or affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an administrator for any other Person even though such Person may engage in business activities similar to those of the Issuer.
Section 8. Term of Agreement; Resignation and Removal of Administrator.
(a) This Administration Agreement shall continue in force until the payment in full of all Series of Nuclear Asset-Recovery Bonds and any other amount that may become due and payable under the Indenture, upon which event this Administration Agreement shall automatically terminate. Notwithstanding the foregoing, the Administrators obligation under Section 11(c) to indemnify Customers shall survive termination of this Administration Agreement.
(b) Subject to Section 8(e) and Section 8(f), the Administrator may resign its duties hereunder by providing the Issuer, the Commission and the Rating Agencies with at least 60 days prior written notice.
(c) Subject to Section 8(e) and Section 8(f), the Issuer may remove the Administrator without cause by providing the Administrator, the Commission and the Rating Agencies with at least 60 days prior written notice.
(d) Subject to Section 8(e) and Section 8(f), at the sole option of the Issuer, the Administrator may be removed immediately upon written notice of termination from the Issuer to the Administrator and the Rating Agencies if any of the following events shall occur:
(i) the Administrator shall default in the performance of any of its duties under this Administration Agreement and, after notice of such default, shall fail to cure such default within ten days (or, if such default cannot be cured in such time, shall (A) fail to give within ten days such assurance of cure as shall be reasonably satisfactory to the Issuer and (B) fail to cure such default within 30 days thereafter);
(ii) a court of competent jurisdiction shall enter a decree or order for relief, and such decree or order shall not have been vacated within 60 days, in respect of the Administrator in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or such court shall appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Administrator or any substantial part of its property or order the winding-up or liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, shall consent to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official for the Administrator or any substantial part of its property, shall consent to the taking of possession by any such official of any substantial part of its property, shall make any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due.
The Administrator agrees that if any of the events specified in Section 8(d)(ii) or Section 8(d)(iii) shall occur, it shall give written notice thereof to the Issuer, the Commission and the Indenture Trustee as soon as practicable but in any event within seven days after the happening of such event.
(e) No resignation or removal of the Administrator pursuant to this Section 8 shall be effective until a successor Administrator has been appointed by the Issuer, the Rating Agency Condition shall have been satisfied with respect to the proposed appointment, the Commission Condition set forth in Section 13(b) of this Administration Agreement has been satisfied, and such successor Administrator has agreed in writing to be bound by the terms of this Administration Agreement in the same manner as the Administrator is bound hereunder.
(f) The appointment of any successor Administrator shall be effective only after satisfaction of the Rating Agency Condition and the Commission Condition with respect to the proposed appointment.
Section 9. Action upon Termination, Resignation or Removal. Promptly upon the effective date of termination of this Administration Agreement pursuant to Section 8(a), the resignation of the Administrator pursuant to Section 8(b) or the removal of the Administrator pursuant to Section 8(c) or Section 8(d), the Administrator shall be entitled to be paid a pro-rated portion of the annual fee described in Section 2 through the date of termination and all Reimbursable Expenses incurred by it through the date of such termination, resignation or removal. The Administrator shall forthwith upon such termination pursuant to Section 8(a) deliver to the Issuer all property and documents of or relating to the Collateral then in the custody of the Administrator. In the event of the resignation of the Administrator pursuant to Section 8(b) or the removal of the Administrator pursuant to Section 8(c) or Section 8(d), the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator.
Section 10. Administrators Liability. (a) Except as otherwise provided herein, the Administrator assumes no liability other than to render or stand ready to render the services called for herein, and neither the Administrator nor any of its members, managers, officers, employees or affiliates shall be responsible for any action of the Issuer or any of the members, managers, officers, employees or affiliates of the Issuer (other than the Administrator itself). The Administrator shall not be liable for nor shall it have any obligation with regard to any of the liabilities, whether direct or indirect, absolute or contingent, of the Issuer or any of the members, managers, officers, employees or affiliates of the Issuer (other than the Administrator itself).
(b) The Administrator acknowledges that the Commission has authority to enforce all provisions of this Administration Agreement for the benefit of Customers, including without limitation the enforcement of Section 11(c). Notwithstanding anything to the contrary contained in this Administration Agreement, for the avoidance of doubt, any right, remedy or claim to which any Customer may be entitled pursuant to this Administration Agreement may be asserted or exercised only by the Commission for the benefit of such Customer.
Section 11. Indemnity.
(a) Subject to the priority of payments set forth in the Indenture, the Issuer shall indemnify the Administrator and its shareholders, directors, officers, employees and affiliates against all losses, claims, damages, penalties, judgments, liabilities and expenses (including all expenses of litigation or preparation therefor whether or not the Administrator is a party thereto) that any of them may pay or incur arising out of or relating to this Administration Agreement and the services called for herein; provided, however, that such indemnity shall not apply to any such loss, claim, damage, penalty, judgment, liability or expense resulting from the Administrators negligence or willful misconduct in the performance of its obligations hereunder.
(b) The Administrator shall indemnify the Issuer and its members, managers, officers and employees against all losses, claims, damages, penalties, judgments, liabilities and expenses (including all expenses of litigation or preparation therefor whether or not the Issuer is a party thereto) that any of them may incur as a result of the Administrators negligence or willful misconduct in the performance of its obligations hereunder.
(c) If the Administrator remains an entity subject to the Commissions regulatory authority as a public utility (or otherwise for ratemaking purposes), the Administrator hereby acknowledges and agrees that the Commission, subject to the outcome of an appropriate Commission proceeding, may take such action as it deems necessary or appropriate under its regulatory authority to require the Administrator to make Customers whole for any Losses they incur by reason of the Administrators negligence, recklessness or willful misconduct, including without limitation Losses attributable to higher Charges imposed on Customers by reason of additional Operating Expenses. The Administrator hereby acknowledges and agrees that such action by the Commission may include, but is not limited to, adjustments to the Administrators other regulated rates and charges or credits to Customers. If the Administrator does not remain, or is not subject to, the Commissions regulatory authority as a public utility (or otherwise for ratemaking purposes), such Administrator shall indemnify the Commission, on behalf of the Customers, for any Losses incurred by Customers by reason of the Administrators negligence, recklessness or willful misconduct, including without limitation Losses attributable to higher Charges imposed on Customers by reason of additional Operating Expenses. The Administrators indemnification under this Section 11(c) shall survive the termination of this Administration Agreement, and any amounts paid with respect thereto shall be remitted and deposited with the Indenture Trustee for deposit into the Collection Account, unless otherwise directed by the Commission.
Section 12. Notices. Any notice, report or other communication given hereunder shall be in writing and shall be effective (i) upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (ii) upon receipt when sent by an overnight courier, (iii) on the date personally delivered to an authorized officer of the party to which sent or (iv) on the date transmitted by facsimile or other electronic transmission with a confirmation of receipt in all cases, addressed as follows:
(a) if to the Issuer, to Duke Energy Florida Project Finance, LLC, at 299 First Avenue North, St. Petersburg, Florida 33701, Attention: Manager, Telephone: 980-373-8659;
(b) if to the Administrator, to Duke Energy Florida, LLC, at 299 First Avenue North, St. Petersburg, Florida 33701, Attention: Director, Rates and Regulatory Strategy, Telephone: 727-820-4560 in care of (c/o): Director, Rates and Regulatory Planning and at 550 South Tryon Street, Charlotte, North Carolina 28202, Attention: Treasurer, Telephone: 704-382-3853 c/o Assistant Treasurer; and
(c) if to the Indenture Trustee, to the Corporate Trust Office.
Each party hereto may, by notice given in accordance herewith to the other party or parties hereto, designate any further or different address to which subsequent notices, reports and other communications shall be sent.
Section 13. Amendments.
(a) Subject to Section 13(b), this Administration Agreement may be amended from time to time by a written amendment duly executed and delivered by each of the Issuer and the Administrator, with the prior written consent of the Indenture Trustee, the satisfaction of the Rating Agency Condition; provided, that any such amendment may not adversely affect the interest of any Holder in any material respect without the consent of the Holders of a majority of the outstanding principal amount of all Nuclear Asset-Recovery Bonds. Promptly after the execution of any such amendment or consent, the Issuer shall furnish copies of such amendment or consent to each of the Rating Agencies.
(b) Commission Condition. Notwithstanding anything to the contrary in this Section 13, no amendment or modification of this Administration Agreement shall be effective, nor shall any action requiring satisfaction of this condition pursuant to Section 8(e), Section 8(f), or Section 14 of this Administration Agreement be taken or be effective except upon satisfaction of the conditions precedent in this paragraph (b).
(i) At least 15 days prior to the effectiveness of any such amendment or modification and after obtaining the other necessary approvals set forth in Section 13(a) (except that the consent of the Indenture Trustee may be subject to the consent of Holders of the Nuclear Asset-Recovery Bonds if such consent is required or sought by the Indenture Trustee in connection with such amendment or modification) the Administrator shall have delivered to the Commissions Staff Director of Accounting & Finance written notification of any proposed amendment, which notification shall contain:
(A) a reference to Docket No. 150171-EI;
(B) an Officers Certificate stating that the proposed amendment or modification has been approved by all parties to this Administration Agreement; and
(C) a statement identifying the person to whom the Commission is to address any response to the proposed amendment or to request additional time.
(ii) If the Commission or an authorized representative of the Commission, within 15 days (subject to extension as provided in clause (iii)) of receiving a notification complying with subparagraph (i), shall have delivered to the office of the person specified in clause (i)(C) a written statement that the Commission might object to the proposed amendment or modification, then, subject to clause (iv) below, such proposed amendment or modification shall not be effective unless and until the Commission subsequently delivers a written statement that it does not object to such proposed amendment or modification; or
(iii) If the Commission or an authorized representative of the Commission, within 15 days of receiving a notification complying with subparagraph (i), shall have delivered to the office of the person specified in clause (i)(C) a written statement requesting an additional amount of time not to exceed thirty days in which to consider such proposed amendment or modification, then such proposed amendment or modification shall not be effective if, within such extended period, the Commission shall
have delivered to the office of the person specified in clause (i)(C) a written statement as described in subparagraph (ii), unless and until the Commission subsequently delivers a written statement that it does not object to such proposed amendment or modification.
(iv) If (A) the Commission or an authorized representative of the Commission, shall not have delivered written notice that the Commission might object to such proposed amendment or modification within the time periods described in subparagraphs (ii) or (iii), whichever is applicable, or (B) the Commission or authorized representative of the Commission, has delivered such written notice but does not within 60 days of the delivery of the notification in (a) above, provide subsequent written notice confirming that it does in fact object and the reasons therefore or advise that it has initiated a proceeding to determine what action it might take with respect to the matter, then the Commission shall be conclusively deemed not to have any objection to the proposed amendment or modification and such amendment or modification may subsequently become effective upon satisfaction of the other conditions specified in Section 13(a).
(v) Following the delivery of a statement from the Commission or an authorized representative of the Commission to the Administrator under subparagraph (ii), the Administrator and the Issuer shall have the right at any time to withdraw from the Commission further consideration of any proposed amendment, modification or other action.
(vi) For the purpose of this Section 13, an authorized representative of the Commission means any person authorized to act on behalf of the Commission, as evidenced by an Opinion of Counsel (which may be the general counsel) to the Commission.
Section 14. Successors and Assigns. This Administration Agreement may not be assigned by the Administrator unless such assignment is previously consented to in writing by the Issuer, the Commission and the Indenture Trustee and subject to the satisfaction of the Rating Agency Condition in connection therewith. Any assignment with such consent and satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Administration Agreement may be assigned by the Administrator without the consent of the Issuer, the Commission or the Indenture Trustee and without satisfaction of the Rating Agency Condition to a corporation or other organization that is a successor (by merger, reorganization, consolidation or purchase of assets) to the Administrator, including any Permitted Successor; provided, that such successor or organization executes and delivers to the Issuer and the Commission an agreement in which such corporation or other organization agrees to be bound hereunder by the terms of said assignment in the same manner as the Administrator is bound hereunder. Subject to the foregoing, this Administration Agreement shall bind any successors or assigns of the parties hereto. Upon satisfaction of all of the conditions of this Section 14, the preceding Administrator shall automatically and without further notice be released from all of its obligations hereunder.
Section 15. Governing Law. This Administration Agreement shall be construed in accordance with the laws of the State of Florida, 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 16. Counterparts. This Administration Agreement may be executed in counterparts, each of which when so executed shall be an original, but all of which together shall constitute but one and the same Administration Agreement.
Section 17. Severability. Any provision of this Administration Agreement that is prohibited or unenforceable in any jurisdiction shall 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 18. Nonpetition Covenant. Notwithstanding any prior termination of this Administration Agreement, the Administrator covenants that it shall not, prior to the date that is one year and one day after payment in full of all Nuclear Asset-Recovery Bonds, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining an involuntary case against the Issuer under any U.S. federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property or ordering the winding up or liquidation of the affairs of the Issuer.
Section 19. Assignment to Indenture Trustee. The Administrator hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee for the benefit of the Secured Parties pursuant to the Indenture of any or all of the Issuers rights hereunder and the assignment of any or all of the Issuers rights hereunder to the Indenture Trustee for the benefit of the Secured Parties.
{REMAINDER OF PAGE INTENTIONALLY LEFT BLANK}
IN WITNESS WHEREOF, the parties have caused this Administration Agreement to be duly executed and delivered as of the day and year first above written.
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||
|
as Issuer | ||
|
| ||
|
| ||
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
President, Chief Financial Officer and Treasurer |
|
|
| |
|
|
| |
|
DUKE ENERGY FLORIDA, LLC, | ||
|
as Administrator | ||
|
| ||
|
|
| |
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
Senior Vice President, Tax and Treasurer |
Signature Page to Administration Agreement
APPENDIX A
DEFINITIONS AND RULES OF CONSTRUCTION
A. Defined Terms. The following terms have the following meanings:
17g-5 Website is defined in Section 10.18(a) of the Indenture.
Account Records is defined in Section 1(a)(i) of the Administration Agreement.
Act is defined in Section 10.03(a) of the Indenture.
Additional Series means issuance by the Issuer of any series of Nuclear Asset-Recovery Bonds issued after the date hereof, that will be undertaken only if (i) such issuance has been authorized by the Commission, (ii) the Rating Agency Condition has been satisfied and it is a condition of issuance for each Series of Nuclear Asset-Recovery Bonds that the new Series receive a rating or ratings as required by the Financing Order or a Subsequent Financing Order, (iii) the Issuer has delivered to the Indenture Trustee an Opinion of Counsel of a nationally recognized firm experienced in such matters to the effect that after such issuance, in the opinion of such counsel, if either or both of Duke Energy Florida or the Seller were to become a debtor in a case under the United States Bankruptcy Code (Title 11, U.S.C.), a federal court exercising bankruptcy jurisdiction and exercising reasonable judgment after full consideration of all relevant factors would not order substantive consolidation of the assets and liabilities of the Issuer with those of the bankruptcy estate of Duke Energy Florida or the Seller, subject to the customary exceptions, qualifications and assumptions contained therein.
Administration Agreement means the Administration Agreement, dated as of the date hereof, by and between Duke Energy Florida and the Issuer.
Administration Fee is defined in Section 2 of the Administration Agreement.
Administrator means Duke Energy Florida, as Administrator under the Administration Agreement, or any successor Administrator to the extent permitted under the Administration Agreement.
AES means an alternative energy supplier which is authorized by law to sell electric service to a customer using the transmission or distribution system of Duke Energy Florida.
Affiliate means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, control when used with respect to any specified Person means the power to direct the management and policies of such specified Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms controlling and controlled have meanings correlative to the foregoing.
Amendatory Schedule means a revision to service riders or any other notice filing filed with the Commission in respect of the Nuclear Asset-Recovery Rate Schedule pursuant to a True-Up Adjustment.
Annual Accountants Report is defined in Section 3.04(a) of the Servicing Agreement.
Authorized Denomination means, with respect to any Nuclear Asset-Recovery Bond, the authorized denomination therefor specified in the Series Supplement, which shall be at least $2,000 and, except as otherwise provided in the Series Supplement, integral multiples of $1,000 in excess thereof, except for one Nuclear Asset-Recovery bond which may be of a smaller denomination.
Bankruptcy Code means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.).
Basic Documents means the Indenture, each Series Supplement, the Certificate of Formation, the LLC Agreement, the Administration Agreement, and, with respect to each Series, the applicable Sale Agreement, Bill of Sale, Servicing Agreement, Intercreditor Agreement, Letter of Representations, Underwriting Agreement and all other documents and certificates delivered in connection therewith.
Bill of Sale means a bill of sale substantially in the form of Exhibit A to the Sale Agreement delivered pursuant to Section 2.02(a) of the Sale Agreement.
Billed Nuclear Asset-Recovery Charges means the amounts of Nuclear Asset-Recovery Charges billed by the Servicer.
Billing Period means the period created by dividing the calendar year into 12 consecutive periods of approximately 21 Servicer Business Days.
Bills means each of the regular monthly bills, summary bills, opening bills and closing bills issued to Customers by Duke Energy Florida in its capacity as Servicer.
Bond Interest Rate means, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, the rate at which interest accrues on the Nuclear Asset-Recovery Bonds of such Series or WAL, as specified in the applicable Series Supplement.
Book-Entry Form means, with respect to any Nuclear Asset-Recovery Bond, that such Nuclear Asset-Recovery Bond is not certificated and the ownership and transfers thereof shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture and the Series Supplement pursuant to which such Nuclear Asset-Recovery Bond was issued.
Book-Entry Nuclear Asset-Recovery Bonds means any Nuclear Asset-Recovery Bonds issued in Book-Entry Form; provided, however, that, after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive Nuclear Asset-Recovery Bonds are to be issued to the Holder of such Nuclear Asset-Recovery
Bonds, such Nuclear Asset-Recovery Bonds shall no longer be Book-Entry Nuclear Asset-Recovery Bonds.
Business Day means any day other than a Saturday, a Sunday or a day on which banking institutions in St. Petersburg, Florida, Charlotte, North Carolina or New York, New York are, or DTC or the Corporate Trust Office is, authorized or obligated by law, regulation or executive order to be closed.
Capital Contribution means the amount of cash contributed to the Issuer by Duke Energy Florida as specified in the LLC Agreement.
Capital Subaccount is defined in Section 8.02(a) of the Indenture.
Certificate of Compliance means the certificate referred to in Section 3.03 of the Servicing Agreement and substantially in the form of Exhibit E to the Servicing Agreement.
Certificate of Formation means the Certificate of Formation filed with the Secretary of State of the State of Delaware on January 5, 2016 pursuant to which the Issuer was formed.
Charge means any nuclear asset-recovery charges as defined in Section 366.95(1)(j) of the Nuclear Asset-Recovery Law that are authorized by the Financing Order or any Subsequent Financing Order.
Claim means a claim as defined in Section 101(5) of the Bankruptcy Code.
Clearing Agency means an organization registered as a clearing agency pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant means a securities broker, dealer, bank, trust company, clearing corporation or other financial institution or other Person for whom from time to time a Clearing Agency effects book entry transfers and pledges of securities deposited with such Clearing Agency.
Code means the Internal Revenue Code of 1986.
Collateral is defined in the preamble of the Indenture.
Collection Account is defined in Section 8.02(a) of the Indenture for such Series.
Collection in Full of the Charges means the day on which the aggregate amounts on deposit in the General Subaccount and the Excess Funds Subaccount are sufficient to pay in full all the Outstanding Nuclear Asset-Recovery Bonds and to replenish any shortfall in the Capital Subaccount.
Collection Period means any period commencing on the first Servicer Business Day of any Billing Period and ending on the last Servicer Business Day of such Billing Period.
Commission means the Florida Public Service Commission.
Commission Condition means the satisfaction of any precondition to any amendment or modification to or action under any Basic Documents through the obtaining of Commission consent or acquiescence, as described in the related Basic Document.
Commission Regulations means any regulations, including temporary regulations, promulgated by the Commission pursuant to Florida law.
Company Minutes is defined in Section 1(a)(iv) of the Administration Agreement.
Corporate Trust Office means the office of the Indenture Trustee at which, at any particular time, its corporate trust business shall be administered, which office as of the date hereof is located at BNY Mellon Global Corporate Trust, 10161 Centurion Parkway North, Jacksonville, Florida 32256; Telephone: 904-998-4714; Facsimile: 904-645-1930, or at such other address as the Indenture Trustee may designate from time to time by notice to the Holders of Nuclear Asset-Recovery Bonds and the Issuer, or the principal corporate trust office of any successor trustee designated by like notice.
Covenant Defeasance Option is defined in Section 4.01(b) of the Indenture.
Customer means any existing or future customer (including individuals, corporations, other businesses, and federal, state and local governmental entities) receiving transmission or distribution service from Duke Energy Florida or its successors or assignees under Commission-approved rate schedules or under special contracts, even if such customer elects to purchase electricity from an AES following a fundamental change in regulation of public utilities in Florida.
Daily Remittance is defined in Section 6.11(a) of the Servicing Agreement.
Default means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.
Definitive Nuclear Asset-Recovery Bonds is defined in Section 2.11 of the Indenture.
Delaware UCC means the Uniform Commercial Code as in effect on the Series Closing Date in the State of Delaware.
DTC means The Depository Trust Company.
Duke Energy Florida means Duke Energy Florida, LLC, a Florida limited liability company.
Eligible Account means a segregated non-interest-bearing trust account with an Eligible Institution.
Eligible Institution means:
(a) the corporate trust department of the Indenture Trustee or a subsidiary thereof, so long as any of the securities of the Indenture Trustee has a credit rating from each Rating Agency in one of its generic rating categories that signifies investment grade; or
(b) a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank) (i) that has either (A) a long-term issuer rating of AA- or higher by S&P, A2 or higher by Moodys and AA or higher by Fitch, if rated by Fitch, or (B) a short-term issuer rating of A-1+ or higher by S&P, P-1 or higher by Moodys and F1 or higher by Fitch, if rated by Fitch, or any other long-term, short-term or certificate of deposit rating acceptable to the Rating Agencies, and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation.
If so qualified under clause (b) of this definition, the Indenture Trustee may be considered an Eligible Institution for the purposes of clause (a) of this definition.
Eligible Investments means instruments or investment property that evidence:
(a) direct obligations of, or obligations fully and unconditionally guaranteed as to timely payment by, the United States of America;
(b) demand or time deposits of, unsecured certificates of deposit of, money market deposit accounts of, bank deposit products of or bankers acceptances issued by, any depository institution (including, but not limited to, bank deposit products of the Indenture Trustee, acting in its commercial capacity) incorporated or organized under the laws of the United States of America or any State thereof and subject to supervision and examination by U.S. federal or state banking authorities, so long as the commercial paper or other short-term debt obligations of such depository institution are, at the time of deposit, rated at least A-1 and P-1 or their equivalents by each of S&P and Moodys and, if Fitch provides ratings thereon by Fitch, or such lower rating as will not result in the downgrading or withdrawal of the ratings of the Nuclear Asset-Recovery Bonds;
(c) commercial paper (including commercial paper of the Indenture Trustee, acting in its commercial capacity, and other than commercial paper of Duke Energy Florida or any of its Affiliates), which at the time of purchase is rated at least A-1 and P-1 or their equivalents by each of S&P and Moodys or such lower rating as will not result in the downgrading or withdrawal of the ratings of the Nuclear Asset-Recovery Bonds;
(d) investments in money market funds having a rating in the highest investment category granted thereby (including funds for which the Indenture Trustee or any of its Affiliates is investment manager or advisor) from Moodys, S&P and Fitch, if rated by Fitch;
(e) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or its agencies or instrumentalities, entered into with Eligible Institutions;
(f) repurchase obligations with respect to any security or whole loan entered into with an Eligible Institution or with a registered broker/dealer acting as principal and that meets the ratings criteria set forth below:
(i) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any such broker/dealer being referred to in this definition as a broker/dealer), the unsecured short-term debt obligations of which are rated at least P-1 by Moodys, A-1+ by S&P and, if Fitch provides a rating thereon, F-1+ by Fitch at the time of entering into such repurchase obligation; or
(ii) an unrated broker/dealer, acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least P-1 by Moodys, A-1+ by S&P and, if Fitch provides a rating thereon, F-1+ by Fitch at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company; and
(g) any other investment permitted by each of the Rating Agencies;
in each case maturing not later than the Business Day preceding the next Payment Date or Special Payment Date, if applicable (for the avoidance of doubt, investments in money market funds or similar instruments that are redeemable on demand shall be deemed to satisfy the foregoing requirement). Notwithstanding the foregoing: (1) no securities or investments that mature in 30 days or more shall be Eligible Investments unless the issuer thereof has either a short-term unsecured debt rating of at least P-1 from Moodys or a long-term unsecured debt rating of at least A1 from Moodys and also has a long-term unsecured debt rating of at least A from S&P; (2) no securities or investments described in clauses (b) through (d) above that have maturities of more than 30 days but less than or equal to 3 months shall be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least A1 from Moodys and a short-term unsecured debt rating of at least P-1 from Moodys; and (3) no securities or investments described in clauses (b) through (d) above that have maturities of more than 3 months shall be Eligible Investments unless the issuer thereof has a long-term unsecured debt rating of at least A1 from Moodys and a short-term unsecured debt rating of at least P-1 from Moodys.
Event of Default is defined in Section 5.01 of the Indenture.
Excess Funds Subaccount is defined in Section 8.02(a) of the Indenture.
Exchange Act means the Securities Exchange Act of 1934.
Expected Sinking Fund Schedule means, with respect to any WAL, the expected sinking fund schedule related thereto set forth in the applicable Series Supplement.
Federal Book-Entry Regulations means 31 C.F.R. Part 357 et seq. (Department of Treasury).
Federal Funds Rate means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Servicer from three federal funds brokers of recognized standing selected by it.
Final means, with respect to the Financing Order or Subsequent Financing Order, that the Financing Order has become final, that the Financing Order is not being appealed and that the time for filing an appeal thereof has expired.
Final Maturity Date means, with respect to each Series of WAL of Nuclear Asset-Recovery Bonds, the final maturity date therefor as specified in the applicable Series Supplement.
Financing Costs means all financing costs as defined in Section 366.95(1)(e) of the Nuclear Asset-Recovery Law allowed to be recovered by Duke Energy Florida under the Financing Order.
Financing Order means the financing order issued by the Commission to Duke Energy Florida on November 19, 2015, Docket No. 150148-EI, authorizing the creation of the Nuclear Asset-Recovery Property.
Financing Party means any and all of the following: the Holders, the Indenture Trustee, Duke Energy Florida, collateral agents, any party under the Basic Documents, or any other person acting for the benefit of the Holders.
Fitch means Fitch Ratings or any successor thereto. References to Fitch are effective so long as Fitch is a Rating Agency.
Florida Secured Transactions Registry means the centralized database in which all initial financing statements, amendments, assignments, and other statements of charge authorized to be filed under Chapter 679 of the Florida statutes.
Florida UCC means the Uniform Commercial Code as in effect on the Series Closing Date in the State of Florida.
General Subaccount is defined in Section 8.02(a) of the Indenture for such Series.
Global Nuclear Asset-Recovery Bond means a Nuclear Asset-Recovery Bond to be issued to the Holders thereof in Book-Entry Form, which Global Nuclear Asset-Recovery Bond shall be issued to the Clearing Agency, or its nominee, in accordance with Section 2.11 of the Indenture and the Series Supplement.
Governmental Authority means any nation or government, any U.S. federal, state, local or other political subdivision thereof and any court, administrative agency or other instrumentality or entity exercising executive, legislative, judicial, regulatory or administrative functions of government.
Grant means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, grant, transfer, create, grant a lien upon, a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture and the Series Supplement. A Grant of the Collateral shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.
Holder means the Person in whose name a Nuclear Asset-Recovery Bond is registered on the Nuclear Asset-Recovery Bond Register.
Indemnified Losses is defined in Section 5.03 of the Servicing Agreement.
Indemnified Party is defined in Section 6.02(a) of the Servicing Agreement.
Indemnified Person is defined in Section 5.01(f) of the Sale Agreement.
Indenture means the Indenture, dated as June 22, 2016, by and between the Issuer and The Bank of New York Mellon, a National Association, as Indenture Trustee and as Securities Intermediary.
Indenture Trustee means The Bank of New York Mellon Trust Company, National Association, a national banking association, as indenture trustee for the benefit of the Secured Parties, or any successor indenture trustee for the benefit of the Secured Parties, under the Indenture.
Independent means, when used with respect to any specified Person, that such specified Person (a) is in fact independent of the Issuer, any other obligor on the Nuclear Asset-Recovery Bonds, the Seller, the Servicer and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director (other than as an independent director or manager) or person performing similar functions.
Independent Certificate means a certificate to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and consented to by the Indenture Trustee, and such certificate shall state that the signer has read the definition of Independent in the Indenture and that the signer is Independent within the meaning thereof.
Independent Manager is defined in Section 4.01(a) of the LLC Agreement.
Independent Manager Fee is defined in Section 4.01(a) of the LLC 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 specified Person or any substantial part of its property in an involuntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the date hereof or thereafter, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or ordering the winding-up or liquidation of such specified Persons 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 specified Person of a voluntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the Series Closing Date or thereafter, or the consent by such specified Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such specified Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or the making by such specified Person of any general assignment for the benefit of creditors, or the failure by such specified Person generally to pay its debts as such debts become due, or the taking of action by such specified Person in furtherance of any of the foregoing.
Intercreditor Agreement means the Intercreditor Agreement, dated as of the date hereof, by and among the Issuer, the Indenture Trustee, Duke Energy Florida and the parties to the accounts receivables sale program of Duke Energy Florida Receivables LLC, and any subsequent such agreement.
Interim True-Up Adjustment means either an Optional Interim True-Up Adjustment made in accordance with Section 4.01(b)(ii) of the Servicing Agreement or a Non-standard True-Up Adjustment made in accordance with Section 4.01(b)(iii) of the Servicing Agreement.
Investment Company Act means the Investment Company Act of 1940.
Investment Earnings means investment earnings on funds deposited in the Collection Account net of losses and investment expenses.
Issuer means Duke Energy Florida Project Finance, LLC, a Delaware limited liability company, named as such in the Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the Trust Indenture Act, each other obligor on the Nuclear Asset-Recovery Bonds.
Issuer Documents is defined in Section 1(a)(iv) of the Administration Agreement.
Issuer Order means a written order signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or Paying Agent, as applicable.
Issuer Request means a written request signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or Paying Agent, as applicable.
Legal Defeasance Option is defined in Section 4.01(b) of the Indenture.
Letter of Representations means any applicable agreement between the Issuer and the applicable Clearing Agency, with respect to such Clearing Agencys rights and obligations (in its capacity as a Clearing Agency) with respect to any Book-Entry Nuclear Asset-Recovery Bonds.
Lien means a security interest, lien, mortgage, charge, pledge, claim or encumbrance of any kind.
LLC Agreement means the Amended and Restated Limited Liability Company Agreement of Duke Energy Florida Project Finance, LLC, dated as of June 10, 2016.
Losses means (a) any and all amounts of principal of and interest on the Nuclear Asset-Recovery Bonds not paid when due or when scheduled to be paid in accordance with their terms and the amounts of any deposits by or to the Issuer required to have been made in accordance with the terms of the Basic Documents or the Financing Order or Subsequent that are not made when so required and (b) any and all other liabilities, obligations, losses, claims, damages, payments, costs or expenses of any kind whatsoever.
Manager means each manager of the Issuer under the LLC Agreement.
Member has the meaning specified in the first paragraph of the LLC Agreement.
Monthly Servicers Certificate is defined in Section 3.01(b)(i) of the Servicing Agreement.
Moodys means Moodys Investors Service, Inc.. References to Moodys are effective so long as Moodys is a Rating Agency.
Non-standard True-Up Adjustment means any Non-standard True-Up Adjustment made pursuant to Section 4.01(b)(iii) of the Servicing Agreement.
NRSRO is defined in Section 10.18(b) of the Indenture.
Nuclear Asset-Recovery Bond Register is defined in Section 2.05 of the Indenture.
Nuclear Asset-Recovery Bond Registrar is defined in Section 2.05 of the Indenture.
Nuclear Asset-Recovery Bonds means all Series of the nuclear asset-recovery bonds issued under the Indenture.
Nuclear Asset-Recovery Charge Collections means Charges actually received by the Servicer to be remitted to the Collection Account.
Nuclear Asset-Recovery Charge Payments means the payments made by Customers based on the Charges.
Nuclear Asset-Recovery Costs means (i) the balance of the Crystal River Unit 3 Regulatory Asset as of December 31, 2015 as allowed under the Financing Order minus (ii) $35,894,547.00, which, pursuant to the Commissions Final Order PSC-16-0138-FOF-EI issued on April 5, 2016, shall not be included in, recovered or further trued up as part of the Crystal River Unit 3 Regulatory Asset, plus (iii) carrying charges accruing at 6.0% per annum on the balance of the Crystal River Unit 3 Regulatory Asset (adjusted as described in (ii) above) from December 31, 2015 through the date hereof.
Nuclear Asset-Recovery Law means the laws of the State of Florida adopted in May 2015 enacted as Section 366.95, Florida Statutes.
Nuclear Asset-Recovery Property Records is defined in Section 5.01 of the Servicing Agreement.
Nuclear Asset-Recovery Rate Class means one of the seven separate rate classes to whom Charges are allocated for ratemaking purposes in accordance with the Financing Order.
Nuclear Asset-Recovery Rate Schedule means the Tariff sheets to be filed with the Commission stating the amounts of the Charges, as such Tariff sheets may be amended or modified from time to time pursuant to a True-Up Adjustment.
NY UCC means the Uniform Commercial Code as in effect on the date hereof in the State of New York.
Officers Certificate means a certificate signed by a Responsible Officer of the Issuer under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, and delivered to the Indenture Trustee.
Ongoing Financing Costs means the Financing Costs described as such in the Financing Order, including Operating Expenses and any other costs identified in the Basic
Documents; provided, however, that Ongoing Financing Costs do not include the Issuers costs of issuance of the Nuclear Asset-Recovery Bonds.
Operating Expenses means all unreimbursed fees, costs and out-of-pocket expenses of the Issuer, including all amounts owed by the Issuer to the Indenture Trustee (including indemnities, legal, audit fees and expenses) or any Manager, the Servicing Fee, the Administration Fee, legal and accounting fees, Rating Agency fees, any Regulatory Assessment Fees and related fees (i.e. website provider fees) and any franchise or other taxes owed by the Issuer, including on investment income in the Collection Account.
Opinion of Counsel means one or more written opinions of counsel, who may, except as otherwise expressly provided in the Basic Documents, be employees of or counsel to the party providing such opinion of counsel, which counsel shall be reasonably acceptable to the party receiving such opinion of counsel, and shall be in form and substance reasonably acceptable to such party.
Optional Interim True-Up Adjustment means any Optional Interim True-Up Adjustment made pursuant to Section 4.01(b)(ii) of the Servicing Agreement.
Outstanding means, as of the date of determination, all Nuclear Asset-Recovery Bonds theretofore authenticated and delivered under the Indenture, except:
(a) Nuclear Asset-Recovery Bonds theretofore canceled by the Nuclear Asset-Recovery Bond Registrar or delivered to the Nuclear Asset-Recovery Bond Registrar for cancellation;
(b) Nuclear Asset-Recovery Bonds or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Nuclear Asset-Recovery Bonds; and
(c) Nuclear Asset-Recovery Bonds in exchange for or in lieu of other Nuclear Asset-Recovery Bonds that have been issued pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Nuclear Asset-Recovery Bonds are held by a Protected Purchaser;
provided, that, in determining whether the Holders of the requisite Outstanding Amount of the Nuclear Asset-Recovery Bonds or any Series or WAL thereof have given any request, demand, authorization, direction, notice, consent or waiver under any Basic Document, Nuclear Asset-Recovery Bonds owned by the Issuer, any other obligor upon the Nuclear Asset-Recovery Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding (unless one or more such Persons owns 100% of such Nuclear Asset-Recovery Bonds), except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Nuclear Asset-Recovery Bonds that the Indenture Trustee actually knows to be so owned shall be so disregarded. Nuclear Asset-Recovery Bonds so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgees right so to act with respect to such Nuclear Asset-Recovery Bonds and that the pledgee is not the Issuer, any other obligor upon the Nuclear
Asset-Recovery Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons.
Outstanding Amount means the aggregate principal amount of all Nuclear Asset-Recovery Bonds, or, if the context requires, all Nuclear Asset-Recovery Bonds of a Series or WAL, Outstanding at the date of determination.
Paying Agent means, with respect to the Indenture, the Indenture Trustee and any other Person appointed as a paying agent for the Nuclear Asset-Recovery Bonds pursuant to the Indenture.
Payment Date means, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, the dates specified in the applicable Series Supplement; provided, that if any such date is not a Business Day, the Payment Date shall be the Business Day succeeding such date.
Periodic Billing Requirement means, for any Remittance Period, the aggregate amount of Charges calculated by the Servicer as necessary to be billed during such period in order to collect the Periodic Payment Requirement on a timely basis.
Periodic Interest means, with respect to any Payment Date, the periodic interest for such Payment Date as specified in the Series Supplement.
Periodic Payment Requirement for any Remittance Period means the total dollar amount of Nuclear Asset-Recovery Charge Collections reasonably calculated by the Servicer in accordance with Section 4.01 of the Servicing Agreement as necessary to be received during such Remittance Period (after giving effect to the allocation and distribution of amounts on deposit in the Excess Funds Subaccount at the time of calculation and that are projected to be available for payments on the Nuclear Asset-Recovery Bonds at the end of such Remittance Period and including any shortfalls in Periodic Payment Requirements for any prior Remittance Period) in order to ensure that, as of the last Payment Date occurring in such Remittance Period, (a) all accrued and unpaid principal of and interest on the Nuclear Asset-Recovery Bonds then due shall have been paid in full on a timely basis, (b) the Outstanding Amount of the Nuclear Asset-Recovery Bonds is equal to the Projected Unpaid Balance on each Payment Date during such Remittance Period, (c) the balance on deposit in the Capital Subaccount equals the Required Capital Level and (d) all other fees and expenses due and owing and required or allowed to be paid under Section 8.02 of the Indenture as of such date shall have been paid in full; provided, that, with respect to any Semi-Annual True-Up Adjustment or Interim True-Up Adjustment occurring after the date that is one year prior to the last Scheduled Final Payment Date for the Nuclear Asset-Recovery Bonds, the Periodic Payment Requirements shall be calculated to ensure that sufficient Nuclear Asset-Recovery Charges will be collected to retire the Nuclear Asset-Recovery Bonds in full as of the next Payment Date.
Periodic Principal means, with respect to any Payment Date, the excess, if any, of the Outstanding Amount of Nuclear Asset-Recovery Bonds over the outstanding principal balance specified for such Payment Date on the Expected Sinking Fund Schedule.
Permitted Lien means the Lien created by the Indenture.
Permitted Successor is defined in Section 5.02 of the Sale Agreement.
Person means any individual, corporation, limited liability company, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or Governmental Authority.
Predecessor Nuclear Asset-Recovery Bond means, with respect to any particular Nuclear Asset-Recovery Bond, every previous Nuclear Asset-Recovery Bond evidencing all or a portion of the same debt as that evidenced by such particular Nuclear Asset-Recovery Bond, and, for the purpose of this definition, any Nuclear Asset-Recovery Bond authenticated and delivered under Section 2.06 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Nuclear Asset-Recovery Bond shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Nuclear Asset-Recovery Bond.
Premises is defined in Section 1(g) of the Administration Agreement.
Proceeding means any suit in equity, action at law or other judicial or administrative proceeding.
Projected Unpaid Balance means, as of any Payment Date, the sum of the projected outstanding principal amount of each WAL of Nuclear Asset-Recovery Bonds for such Payment Date set forth in the Expected Sinking Fund Schedule.
Property means all nuclear asset-recovery property as defined in Section 366.95(1)(l) of the Nuclear Asset-Recovery Law created pursuant to the Financing Order or a Subsequent Financing Order and under the Nuclear Asset-Recovery Law, including the right to impose, bill, collect and receive the Charges authorized under the Financing Order and to obtain periodic adjustments of the Charges and all revenue, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests specified in Section 366.95(1)(l)1., regardless of whether such revenues, collections, claims, rights to payment, payments, money, or proceeds are imposed, billed, received, collected, or maintained together with or commingled with other revenues, collections, rights to payment, payments, money, or proceeds.
Protected Purchaser has the meaning specified in Section 8-303 of the UCC.
Rating Agency means, with respect to any WAL of Nuclear Asset-Recovery Bonds, any of Moodys, S&P or Fitch that provides a rating with respect to the Nuclear Asset-Recovery Bonds. If no such organization (or successor) is any longer in existence, Rating Agency shall be a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, notice of which designation shall be given to the Indenture Trustee and the Servicer.
Rating Agency Condition means, with respect to any action, at least ten Business Days prior written notification to each Rating Agency of such action, and written confirmation from each of S&P and Moodys to the Servicer, the Indenture Trustee and the Issuer that such action will not result in a suspension, reduction or withdrawal of the then current rating by such Rating Agency of any WAL of Nuclear Asset-Recovery Bonds; provided, that, if,
within such ten Business Day period, any Rating Agency (other than S&P) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (a) the Issuer shall be required to confirm that such Rating Agency has received the Rating Agency Condition request and, if it has, promptly request the related Rating Agency Condition confirmation and (b) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five Business Days following such second request, the applicable Rating Agency Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agencys right to review or consent).
Record Date means one Business Day prior to the applicable Payment Date.
Registered Holder means the Person in whose name a Nuclear Asset-Recovery Bond is registered on the Nuclear Asset-Recovery Bond Register.
Regulation AB means the rules of the SEC promulgated under Subpart 229.1100 Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123.
Regulatory Assessment Fee means any assessment fee due to the Commission pursuant to Section 350.113, Florida Statutes.
Reimbursable Expenses is defined in Section 2 of the Administration Agreement and Section 6.06(a) of the Servicing Agreement.
Released Parties is defined in Section 6.02(d) of the Servicing Agreement.
Remittance Period means, with respect to any True-Up Adjustment, the period comprised of 6 consecutive Collection Periods beginning with the Collection Period in which such True-Up Adjustment would go into effect, from the Series Closing Date to the first Scheduled Payment Date, and for each subsequent period between Scheduled Payment Dates.
Required Capital Level means, with respect to any Series of Nuclear Asset-Recovery Bonds, the amount specified as such in the Series Supplement therefor.
Requirement of Law means any foreign, U.S. federal, state or local laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority or common law.
Responsible Officer means, with respect to: (a) the Issuer, any Manager or any duly authorized officer; (b) the Indenture Trustee, any officer within the Corporate Trust Office of such trustee (including the President, any Vice President, any Assistant Vice President, any Secretary, any Assistant Treasurer or any other officer of the Indenture Trustee customarily performing functions similar to those performed by persons who at the time shall be such officers, respectively, and that has direct responsibility for the administration of the Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred to because of such officers knowledge and familiarity with the particular subject); (c) any
corporation (other than the Indenture Trustee), the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer or any other duly authorized officer of such Person who has been authorized to act in the circumstances; (d) any partnership, any general partner thereof; and (e) any other Person (other than an individual), any duly authorized officer or member of such Person, as the context may require, who is authorized to act in matters relating to such Person.
Return on Invested Capital means, for any Payment Date with respect to any Remittance Period, the sum of (i) rate of return, payable to Duke Energy Florida, on its Capital Contribution equal to the rate of interest payable on the longest maturing WAL of Nuclear Asset-Recovery Bonds plus (ii) any Return on Invested Capital not paid on any prior Payment Date.
S&P means Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business. References to S&P are effective so long as S&P is a Rating Agency.
Sale Agreement means the Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated as of the date hereof, or any subsequent Nuclear Asset-Recovery Property Purchase and Sale Agreement relating to another Series of Nuclear Asset-Recovery Bonds by and between the Issuer and Duke Energy Florida, and acknowledged and accepted by the Indenture Trustee.
Scheduled Final Payment Date means, with respect to each Series of Nuclear Asset-Recovery Bonds, the date when all interest and principal is scheduled to be paid with respect to that applicable Series in accordance with the Expected Sinking Fund Schedule, as specified in the Series Supplement. For the avoidance of doubt, the Scheduled Final Payment Date with respect to any Series shall be the last Scheduled Payment Date set forth in the Expected Sinking Fund Schedule relating to such Series. The last Scheduled Final Payment Date means the Scheduled Final Payment Date of the latest maturing WAL of a Series of Nuclear Asset-Recovery Bonds.
Scheduled Payment Date means, with respect to each Series or WAL of Nuclear Asset-Recovery Bonds, each Payment Date on which principal for such Series or WAL is to be paid in accordance with the Expected Sinking Fund Schedule for such Series or WAL.
SEC means the Securities and Exchange Commission.
Secured Obligations means the payment of principal of and premium, if any, interest on, and any other amounts owing in respect of, the Nuclear Asset-Recovery Bonds and all fees, expenses, counsel fees and other amounts due and payable to the Indenture Trustee.
Secured Parties means the Indenture Trustee, the Holders and any credit enhancer described in a Series Supplement.
Securities Act means the Securities Act of 1933.
Securities Intermediary means The Bank of New York Mellon Trust Company, National Association, a national banking association, solely in the capacity of a securities
intermediary as defined in the NY UCC and Federal Book-Entry Regulations or any successor securities intermediary under the Indenture.
Seller is defined in the preamble to the Sale Agreement.
Semi-Annual Servicers Certificate is defined in Section 4.01(c)(ii) of the Servicing Agreement.
Semi-Annual True-Up Adjustment means each adjustment to the Nuclear Asset-Recovery Charges made in accordance with Section 4.01(b)(i) of the Servicing Agreement.
Semi-Annual True-Up Adjustment Date means the first billing cycle of March and September of each year, commencing in July 1, 2016.
Series means any series of Nuclear Asset-Recovery Bonds.
Series A Bonds means the Series A Senior Secured Nuclear Asset-Recovery Bonds issued by the Issuer on June 22, 2016.
Series Charges means Charges for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Closing Date means the date on which a Series of the Nuclear Asset-Recovery Bonds are originally issued in accordance with Section 2.10 of the Indenture and the respective Series Supplement.
Series Collateral means Collateral for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Property means Property for the benefit of a particular Series of Nuclear Asset-Recovery Bonds.
Series Supplement means an indenture supplemental to the Indenture in the form attached as Exhibit B to the Indenture that authorizes the issuance of Nuclear Asset-Recovery Bonds.
Servicer means Duke Energy Florida, as Servicer under the Servicing Agreement.
Servicer Business Day means any day other than a Saturday, a Sunday or a day on which banking institutions in St. Petersburg, Florida, Charlotte, North Carolina or New York, New York are authorized or obligated by law, regulation or executive order to be closed, on which the Servicer maintains normal office hours and conducts business.
Servicer Default is defined in Section 7.01 of the Servicing Agreement.
Servicer Policies and Practices means, with respect to the Servicers duties under Exhibit A to the Servicing Agreement, 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 and, if applicable, others.
Servicing Agreement means the Nuclear Asset-Recovery Property Servicing Agreement, dated as of the date hereof, or any subsequent Nuclear Asset-Recovery Property Servicing Agreement relating to another Series of Nuclear Asset-Recovery Bonds by and between the Issuer and Duke Energy Florida, and acknowledged and accepted by the Indenture Trustee.
Servicing Fee is defined in Section 6.06(a) of the Servicing Agreement.
Servicing Standard means the obligation of the Servicer to calculate, apply, remit and reconcile proceeds of the Property, including Nuclear Asset-Recovery Charge Payments, and all other Collateral for the benefit of the Issuer and the Holders (a) with the same degree of care and diligence as the Servicer applies with respect to payments owed to it for its own account, (b) in accordance with all applicable procedures and requirements established by the Commission for collection of electric utility tariffs and (c) in accordance with the other terms of the Servicing Agreement.
Special Payment Date means the date on which, with respect to any Series or WAL of Nuclear Asset-Recovery Bonds, any payment of principal of or interest (including any interest accruing upon default) on, or any other amount in respect of, the Nuclear Asset-Recovery Bonds of such Series or WAL that is not actually paid within five days of the Payment Date applicable thereto is to be made by the Indenture Trustee to the Holders.
Special Record Date means, with respect to any Special Payment Date, the close of business on the fifteenth day (whether or not a Business Day) preceding such Special Payment Date.
Sponsor means Duke Energy Florida, in its capacity as sponsor of the Nuclear Asset-Recovery Bonds within the meaning of Regulation AB.
State means any one of the fifty states of the United States of America or the District of Columbia.
State Pledge means the pledge of the State of Florida as set forth in Section 366.95(11) of the Nuclear Asset-Recovery Law.
Subaccounts is defined in Section 8.02(a) of the Indenture.
Subsequent Financing Order means, a financing order of the Commission under the Nuclear Asset-Recovery Law issued to Duke Energy Florida subsequent to the Financing Order.
Successor means any successor to Duke Energy Florida under the Nuclear Asset-Recovery Law, whether pursuant to any bankruptcy, reorganization or other insolvency
proceeding or pursuant to any merger, conversion, acquisition, sale or transfer, by operation of law, as a result of electric utility restructuring, or otherwise.
Successor Servicer is defined in Section 3.07(e) of the Indenture.
Tariff means the most current version on file with the Commission of July 1, 2016.
Tax Returns is defined in Section 1(a)(iii) of the Administration Agreement.
Temporary Nuclear Asset-Recovery Bonds means Nuclear Asset-Recovery Bonds executed and, upon the receipt of an Issuer Order, authenticated and delivered by the Indenture Trustee pending the preparation of Definitive Nuclear Asset-Recovery Bonds pursuant to Section 2.04 of the Indenture.
Termination Notice is defined in Section 7.01 of the Servicing Agreement.
True-Up Adjustment means any Semi-Annual True-Up Adjustment or Interim True-Up Adjustment, as the case may be.
Trust Indenture Act means the Trust Indenture Act of 1939 as in force on the Series Closing Date, unless otherwise specifically provided.
UCC means the Uniform Commercial Code as in effect in the relevant jurisdiction.
Underwriters means the underwriters who purchase Nuclear Asset-Recovery Bonds of any Series from the Issuer and sell such Nuclear Asset-Recovery Bonds in a public offering.
Underwriting Agreement means the Underwriting Agreement, dated June 15, 2016, by and among Duke Energy Florida, the representatives of the several Underwriters named therein and the Issuer.
U.S. Government Obligations means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and that are not callable at the option of the issuer thereof.
WAL means any one of the groupings of Nuclear Asset-Recovery Bonds of a Series differentiated by sinking fund schedule, interest rate or sinking fund schedule, as specified in the Series Supplement.
WAL Maturity Date means, with respect to any WAL of Nuclear Asset-Recovery Bonds, the maturity date therefor, as specified in the Series Supplement therefor.
Weighted Average Days Outstanding means the weighted average number of days Duke Energy Floridas monthly bills to Customers remain outstanding during the calendar year preceding the calculation thereof pursuant to Section 4.01(b)(i) of the Servicing Agreement.
B. Rules of Construction. Unless the context otherwise requires, in each Basic Document to which this Appendix A is attached:
(a) All accounting terms not specifically defined herein shall be construed in accordance with United States generally accepted accounting principles. To the extent that the definitions of accounting terms in any Basic Document are inconsistent with the meanings of such terms under generally accepted accounting principles or regulatory accounting principles, the definitions contained in such Basic Document shall control.
(b) The term including means including without limitation, and other forms of the verb include have correlative meanings.
(c) All references to any Person shall include such Persons permitted successors and assigns, and any reference to a Person in a particular capacity excludes such Person in other capacities.
(d) Unless otherwise stated in any of the Basic Documents, in the computation of a period of time from a specified date to a later specified date, the word from means from and including and each of the words to and until means to but excluding.
(e) The words hereof, herein and hereunder and words of similar import when used in any Basic Document shall refer to such Basic Document as a whole and not to any particular provision of such Basic Document. References to Articles, Sections, Appendices and Exhibits in any Basic Document are references to Articles, Sections, Appendices and Exhibits in or to such Basic Document unless otherwise specified in such Basic Document.
(f) The various captions (including the tables of contents) in each Basic Document are provided solely for convenience of reference and shall not affect the meaning or interpretation of any Basic Document.
(g) The definitions contained in this Appendix A apply equally to the singular and plural forms of such terms, and words of the masculine, feminine or neuter gender shall mean and include the correlative words of other genders.
(h) Unless otherwise specified, references to an agreement or other document include references to such agreement or document as from time to time amended, restated, reformed, supplemented or otherwise modified in accordance with the terms thereof (subject to any restrictions on such amendments, restatements, reformations, supplements or modifications set forth in such agreement or document) and include any attachments thereto.
(i) References to any law, rule, regulation or order of a Governmental Authority shall include such law, rule, regulation or order as from time to time in effect, including any amendment, modification, codification, replacement or reenactment thereof or any substitution therefor.
(j) The word will shall be construed to have the same meaning and effect as the word shall.
(k) The word or is not exclusive.
(l) All terms defined in the relevant Basic Document to which this Appendix A is attached shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein.
(m) A term has the meaning assigned to it.
Exhibit 99.5
|
HUNTON & WILLIAMS LLP 1111 BRICKELL AVENUE SUITE 2500 MIAMI, FLORIDA 33131
TEL 305 810 2500 FAX 305 810 2460 |
|
|
|
FILE NO: 34085.113 |
June 22, 2016
To Each of the Persons Listed on Schedule A Attached Hereto
Re: Duke Energy Florida Project Finance, LLC Federal Constitutional Issues
Ladies and Gentlemen:
We have served as special counsel to Duke Energy Florida, LLC, a Florida limited liability company (DEF), and Duke Energy Florida Project Finance, LLC, a Delaware limited liability company (the Issuer) in connection with the Registration Statement on Form SF-1 (File Nos. 333-209196 and 333-209196-01) filed on January 29, 2016, as amended by Amendment No. 1 filed on February 9, 2016, Amendment No. 2 filed on March 31, 2016, Amendment No. 3 filed on May 3, 2016, Amendment No. 4 filed on May 26, 2016 and Amendment No. 5 filed on June 2, 2016 by the Issuer with the Securities and Exchange Commission pursuant to the Securities Act of 1933, including the prospectus therein (the Prospectus), relating to the registration thereunder of the Issuers Series A Senior Secured Bonds (the Bonds). The Bonds will be issued in an aggregate principal amount of $1,294,290,000 pursuant to the provisions of the Indenture, dated as of June 22, 2016, between the Issuer and The Bank of New York Mellon, as Indenture Trustee (Trustee), together with a series supplement dated as of June 22, 2016, between the Issuer and the Trustee establishing the form and terms of such Bonds (collectively, the Indenture). Under the Indenture, the Trustee holds, inter alia, certain rights as described below (Rights) as collateral security for the payment of the Bonds.
As described in the Indenture, the Rights consist of Nuclear Asset-Recovery Property as defined in Fla. Stat. § 366.95(1)(l), which was created pursuant to Order No. PSC-15-0537-FOF-EI in Docket No. 150171-EI issued by the Florida Public Service Commission (Commission) on November 19, 2015 (Financing Order); and such Nuclear Asset-Recovery Property was assigned to the Issuer pursuant to the provisions of the Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated as of June 22, 2016 (Sale Agreement), between DEF and the Issuer, in consideration for the payment by the Issuer to DEF of the proceeds of the sale of the Bonds, net of certain issuance costs. The Rights include the right to impose and receive certain nonbypassable charges (Charges) and are
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 2
Nuclear Asset-Recovery Charges as defined in Fla. Stat. § 366.95(1)(j). The Financing Order provides that the Charges may be periodically trued-up in order to ensure the expected recovery of amounts sufficient to (1) pay principal on the Bonds pursuant to the sinking fund schedule to be followed in accordance with the provisions of the Bonds and the Indenture, (2) pay interest thereon and related fees and expenses, and (3) fund and maintain the required reserves for the payment of the Bonds.
The Financing Order was issued in response to an application for its issuance that was filed by DEF with the Commission pursuant to Fla. Stat. § 366.95(2). DEF filed its Issuance Advice Letter with respect to the Bonds with the Commission on June 16, 2016, as required by the Financing Order, and the Commission has not issued an order to stop the issuance of the Bonds.
Fla. Stat. § 366.95(11) (the State Pledge) provides:
(11) STATE PLEDGE.
(a) For purposes of this subsection, the term bondholder means a person who holds a nuclear asset-recovery bond.
(b) The state pledges to and agrees with bondholders, the owners of the nuclear asset-recovery property, and other financing parties that the state will not:
1. Alter the provisions of this section which make the nuclear asset-recovery charges imposed by a financing order irrevocable, binding, and nonbypassable charges;
2. Take or permit any action that impairs or would impair the value of nuclear asset-recovery property or revises the nuclear asset-recovery costs for which recovery is authorized; or
3. Except as authorized under this section, reduce, alter, or impair nuclear asset-recovery charges that are to be imposed, collected, and remitted for the benefit of the bondholders and other financing parties until any and all principal, interest, premium, financing costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 3
related nuclear asset-recovery bonds have been paid and performed in full.
This paragraph does not preclude limitation or alteration if full compensation is made by law for the full protection of the nuclear asset-recovery charges collected pursuant to a financing order and of the holders of nuclear asset-recovery bonds and any assignee or financing party entering into a contract with the electric utility.
(c) Any person or entity that issues nuclear asset-recovery bonds may include the pledge specified in paragraph (b) in the nuclear asset-recovery bonds and related documentation.
Fla. Stat. § 366.95(11). As authorized by the foregoing statutory provision and the Financing Order, the language of the State Pledge has been included in the Bonds and the Indenture, pursuant to Fla. Stat. § 366.95(11)(c).
We have made no independent investigation of the facts referred to herein and have relied, for the purpose of rendering this opinion, exclusively on the statements contained and matters provided for in the Financing Order and related transaction documents, except as otherwise stated herein.
We have been requested to provide you with our reasoned opinion as to:
(1) Whether the State Pledge creates a contractual relationship between the State of Florida and the holders of the Bonds (the Bondholders) for the purpose of the Contract Clause, U.S. Const. art. I, § 10;
(2) Whether the Bondholders (or the Trustee on their behalf) would have a valid claim, under the Contract Clause, U.S. Const. art. I, § 10, in the event that the Florida Legislature (Legislature) passes any law (or the Commission exercising legislative powers takes any action) prior to the time that the Bonds and related financing costs are fully paid and discharged (collectively, Legislative Action) that in either case limits, alters, impairs, or reduces the value of the Nuclear Asset-Recovery Property or the Nuclear Asset-Recovery Charges (collectively, Impairment);
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 4
(3) Whether preliminary and permanent injunctive relief would be available under federal law to delay or prevent implementation of Legislative Action hereafter taken that limits, alters, impairs, or reduces the value of the Nuclear Asset-Recovery Property or the Nuclear Asset-Recovery Charges so as to cause an Impairment pending final adjudication of a claim challenging such Legislative Action under the Contract Clause; and
(4) Whether, under the Takings Clause, U.S. Const. amend. V, the State of Florida could not repeal or amend Fla. Stat. § 366.95 or take any other action in contravention of the State Pledge without paying just compensation to the Bondholders if doing so (a) completely deprived the Bondholders of all economically beneficial use of the Nuclear Asset-Recovery Property or (b) unduly interfered with the reasonable expectations of the Bondholders arising from their investment in the Bonds.
Based upon our review of the relevant judicial authority, as set forth in this letter, but subject to the qualifications, limitations, and assumptions (including the assumption that any Impairment would be substantial) set forth in this letter, it is our opinion that:
(1) the State Pledge constitutes a contractual relationship between the Bondholders and the State of Florida;
(2) absent a demonstration by the State of Florida that an Impairment is necessary to further a significant and legitimate public purpose, the Bondholders (or the Trustee acting on their behalf) would have a valid claim, under the Contract Clause, against the constitutionality of any Legislative Action determined to limit, alter, impair, or reduce the value of the Nuclear Asset-Recovery Property or the Nuclear Asset-Recovery Charges so as to cause an Impairment prior to the time that the Bonds are fully paid and discharged;
(3) preliminary injunctive relief should be available under federal law to delay implementation of Legislative Action hereafter taken and determined to limit, alter, impair, or reduce the value of the Nuclear Asset-Recovery Property or the Nuclear Asset-Recovery Charges so as to cause an Impairment in violation of the Contract Clause, and, upon
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 5
final adjudication of a claim challenging such Legislative Action, permanent injunctive relief should be available under federal law to prevent implementation of such Legislative Action; and
(4) the Takings Clause would require the State to pay just compensation to the Bondholders if a court determines that a repeal or amendment of Fla. Stat. § 366.95, or any other action taken by the State of Florida in contravention of the State Pledge, (a) completely deprived Bondholders of all economically beneficial use of the Nuclear Asset-Recovery Property or (b) unduly interfered with the reasonable expectations of the Bondholders arising from their investment in the Bonds.
We note that judicial resolution of issues relating to the Contract Clause and the Takings Clause has typically proceeded on a case-by-case basis, with courts emphasizing each cases particular facts and circumstances. Importantly, we are not aware of any reported controlling judicial precedents directly on point. Our analysis is a reasoned application of judicial decisions involving similar or analogous circumstances.1
DISCUSSION
A CONTRACTUAL RELATIONSHIP
A preliminary issue to determine whether the Contract Clause will provide any protection to the Bondholders is whether the Bondholders and the State have entered into a contractual relationship. Courts have recognized the general presumption that, absent some clear indication that the legislature intends to bind itself contractually, . . . a law is not intended to create private contractual or vested rights but merely declares a policy to be pursued until the legislature shall ordain otherwise. Natl R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S. 451, 465-66 (1985) (quoting Dodge v. Bd. of Educ., 302 U.S. 74, 78 (1937)). This presumption is based on the fact that the legislatures principal function is not
1 DEF and another utility company are currently defending a putative class action lawsuit, which alleges that the Commission has unlawfully turned ratepayers into involuntary investors in nuclear projects. Compl. at ¶ 2, Newton v. Duke Energy Fla., LLC, No. 0:16-cv-60341 (S.D. Fla. Feb. 22, 2016), ECF No. 1. The named plaintiffs have brought four causes of action: (1) violation of the dormant Commerce Clause; (2) preemption under the Atomic Energy Act of 1954; (3) preemption under the Energy Policy Act of 2005; and (4) unjust enrichment. The only provisions that the plaintiffs have challenged are Fla. Stat. §§ 366.93 and 403.519(5). Id. at ¶ 2 n.1. The named plaintiffs have not challenged the State Pledge in Fla. Stat. § 366.95(11), and the pendency of that lawsuit does not affect any of the opinions expressed herein.
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 6
to make contracts, but to make laws that establish the policy of the state. Id. at 466; Taylor v. City of Gadsden, 767 F.3d 1124, 1133 (11th Cir. 2014). Thus, a litigant asserting the creation of a contract with the state bears the burden to overcome this presumption. Dodge, 302 U.S. at 79.
A litigant overcomes this presumption where the language of the statute indicates an intention to have the [government] enter into a private contractual arrangement. Natl R.R., 470 U.S. at 467; accord Taylor, 767 F.3d at 1133-34. In determining whether a contract has been created by statute, it is of first importance to examine the language of the statute. Dodge, 302 U.S. at 78. A contract is created when the language and circumstances evince a legislative intent to create private rights of a contractual nature enforceable against the State. U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1, 17 n.14 (1977); accord Maine Assn of Retirees v. Bd. of Trs. of Me. Pub. Emps. Ret. Sys., 758 F.3d 23, 29 (1st Cir. 2014); Taylor v. City of Gadsden, 958 F. Supp. 2d 1287, 1321 (N.D. Ala. 2013), affd, 767 F.3d 1124 (11th Cir. 2014).
In U.S. Trust, the Supreme Court affirmed the trial courts finding that a statutory covenant of two states for the benefit of the holders of certain bonds gave rise to a contractual obligation between such states and the bondholders. 431 U.S. at 18. The covenant at issue limited the ability of the Port Authority of New York and New Jersey to subsidize rail passenger transportation from revenues and reserves pledged as security for such bonds. In finding the existence of a contract between such states and bondholders, the Court stated [t]he intent to make a contract is clear from the statutory language: The 2 States covenant and agree with each other and with the holders of any affected bonds. Id. at 17.
Similarly, in Indiana ex rel. Anderson v. Brand, the Supreme Court determined that the Indiana Teachers Tenure Act created a contract between the state and specified teachers because the statutory language demonstrated a clear legislative intent to contract. 303 U.S. 95, 105-07 (1938). The Court based its decision, in part, on the legislatures use of the word contract twenty-five times in the Act. Id. at 105; see also Maine Assn, 758 F.3d at 30-31 (holding that the legislature had plainly and expressly create[d] a contractual commitment to the retirees via the following language: No amendment to this Part may cause any reduction in the amount of benefits which would be due to a member based on creditable service, compensation, employee contributions and the provisions of this Part on the date immediately preceding the effective date of the amendment).
However, the mere use of the word contract in a statute will not necessarily evince the requisite legislative intent. See Natl R.R., 470 U.S. at 470. After all, sometimes a legislature
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 7
uses the word inadvertently or in other than its usual legal meaning. Brand, 303 U.S. at 105. In National Railroad, the Court found that use of the word contract in the Rail Passenger Service Act defined only the relationship between the newly-created nongovernmental corporation (Amtrak) and the railroads, not the relationship between the United States and the railroads. The Court determined that [l]egislation outlining the terms on which private parties may execute contracts does not on its own constitute a statutory contract. Id. at 467.
Like the language of the covenant considered in U.S. Trust, the language of the State Pledge plainly manifests the Legislatures intent to bind the State of Florida. Indeed, the biggest difference between such language and the U.S. Trust statute is the use of the verb pledge, rather than covenant, but that difference is not, in our view, material. The definition of the Legislatures termpledgeis [a] formal promise or undertaking, whereas the definition of covenant is [a] formal agreement or promise. Blacks Law Dictionary 419, 1273 (9th ed. 2009). This slight variation between the State Pledge and the language contained in the U.S. Trust statute appears inconsequential and not to provide a basis for distinguishing the wording of the two statutes. Moreover, Fla. Stat. § 366.95 uses the word contract. See Fla. Stat. § 366.95(5)(c)(3) (Any right that an electric utility has in the nuclear asset-recovery property before its pledge, sale, or transfer or any other right created under this section or created in the financing order and assignable under this section or assignable pursuant to a financing order is property in the form of a contract right. (emphasis added)). Given this language, Fla. Stat. § 366.95, like the statute at issue in U.S. Trust, evinces a contractual relationship.
Further, unlike the statute construed in National Railroad, here Fla. Stat. § 366.95 expressly includes language indicating the State of Floridas obligation with respect to nuclear asset-recovery bond transactions:
The state pledges to and agrees with bondholders, the owners of the nuclear asset-recovery property, and other financing parties that the state will not:
1. Alter the provisions of this section which make the nuclear asset-recovery charges imposed by a financing order irrevocable, binding, and nonbypassable charges;
2. Take or permit any action that impairs or would impair the value of nuclear asset-recovery property or revises the nuclear asset-recovery costs for which recovery is authorized; or
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 8
3. Except as authorized under this section, reduce, alter, or impair nuclear asset-recovery charges that are to be imposed, collected, and remitted for the benefit of the bondholders and other financing parties until any and all principal, interest, premium, financing costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related nuclear asset-recovery bonds have been paid and performed in full.
Fla. Stat. § 366.95(11)(b).
On the other hand, it could be contended that the factual situation in the U.S. Trust case is distinguishable from the factual situation surrounding the issuance of the Bonds. In U.S. Trust, the bonds were issued by a governmental agency, whereas here the Bonds are being issued by the Issuer, a private entity. This distinction, however, is not likely to be deemed significant. Here, the State of Florida authorizes an issuer of nuclear asset-recovery bonds to include the State Pledge in contracts with the holders of nuclear asset-recovery bonds (such as the Bonds). See Fla. Stat. § 366.95(11)(c) (Any person or entity that issues nuclear asset-recovery bonds may include the pledge specified in paragraph (b) in the nuclear asset-recovery bonds and related documentation.). Further, Fla. Stat. § 366.95 dictates that a utility must obtain a financing order before any nuclear asset-recovery bonds, such as the Bonds here, are issued, and said financing order may (and, in the case here, does) include the State Pledge. Fla. Stat. § 366.95(2). The authority to issue such a financing order rests with the State of Florida, acting through the Commission; therefore, the appearance of the State Pledge in the Financing Order, made in connection with an essential state-law predicate to issuance of the Bonds, is closely analogous to the commitment made by the governmental entity in U.S. Trust. In addition, the Financing Order states that it is irrevocable by the Commission, further indicating that a contractual relationship exists.
In summary, the language of the State Pledge supports the conclusion that it constitutes a contractual relationship between the State of Florida and the Bondholders.
THE CONTRACT CLAUSE
The next step is to determine whether the Contract Clause will protect that relationship. The Contract Clause provides that [n]o State shall . . . pass any . . . Law impairing the Obligation of Contracts. U.S. Const. art. I , § 10. The Contract Clause serves to encourage trade and credit by promoting confidence in the stability of contractual obligations. U.S. Trust, 431
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 9
U.S. at 15. Simply put, the Contract Clause limits the power of the States to modify their own contracts as well as to regulate those between private parties. Id. at 17.
Literally read, the Contract Clause appears to prohibit any law impairing the obligation of contracts; however, the U.S. Supreme Court has qualified that, [a]lthough the language of the Contract Clause is facially absolute, its prohibition must be accommodated to the inherent police power of the State to safeguard the vital interests of its people. Energy Reserves Grp., Inc. v. Kan. Power & Light Co., 459 U.S. 400, 410 (1983) (quoting Home Bldg. & Loan Assn v. Blaisdell, 290 U.S. 398, 434 (1934)).
The Supreme Court applies a tripartite analysis to determine whether a particular legislative action violates the Contract Clause:
(1) Whether there is a contractual relationship and the legislative action operates as a substantial impairment of that contractual relationship;
(2) Whether the legislative action is justified by a significant and legitimate public purpose; and
(3) Whether the adjustment of the rights and responsibilities of the contracting parties is reasonable and appropriate given that public purpose.
Id. at 411-12. In addition, when dealing with cases involving a contract with a state, there is a step zero, known as the reserved powers doctrine. This initial step involves a determination of the States power to create irrevocable contract rights in the first place. U.S. Trust, 431 U.S. at 23. This determination asks whether the state has surrender[ed] an essential attribute of its sovereignty, the idea being that the legislature cannot contract away such an essential attribute. Id.
Before delving into the analysis, it is important to consider whether the Supreme Court could, in the future, unsettle its precedents. The Supreme Court has the authority to overturn its own precedents; however, the Contract Clause jurisprudence is unlikely to change in any fundamental way. The principle of stare decisisi.e., the idea that todays Court should stand by yesterdays decisionsapplies with particular force to the Contract Clause jurisprudence. See Kimble v. Marvel Entmt, LLC, 135 S. Ct. 2401, 2409 (2015); see also id. at 2410 ([W]e have often recognized that in just those contextscases involving property and contract rightsconsiderations favoring stare decisis are at their acme. (quoting
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 10
Payne v. Tennessee, 501 U.S. 808, 828 (1991)). Accordingly, although the Supreme Court has on occasion overruled its prior constitutional precedents, it would not appear likely to do so here.
The following subparts address: (A) whether the contractual relationship violates the reserved powers doctrine; and (B) Floridas burden in justifying an Impairment.2
A. The Reserved Powers Doctrine
The reserved powers doctrine limits the states ability to bind itself contractually in a manner that surrenders an essential attribute of its sovereignty. U.S. Trust, 431 U.S. at 23. Under this doctrine, if a contract purports to surrender a states reserved powersi.e., powers that cannot be contracted awaysuch contract is void. Id. Although the scope of the reserved powers doctrine has not been precisely defined by the courts, case law has established that a state cannot enter into contracts that forbid future exercises of its police powers or its power of eminent domain. Id. at 24 n.21. In contrast, the Supreme Court has held that a states power to enter into effective financial contracts cannot be questioned and that promises which are purely financial do not necessarily compromise a states reserved powers. Id. at 24-25; see also Lipscomb v. Columbus Mun. Separate Sch. Dist., 269 F.3d 494, 505 (5th Cir. 2001) (Purely financial obligations . . . do not surrender aspects of the States sovereignty, and thus are subject to the Contract Clause.).
Under existing case law, the State Pledge does not, in our view, purport to surrender an essential attribute of Floridas sovereignty. Although the State Pledge limits Floridas regulatory authority to some degree, it does not purport to contract away, or forbid future exercises of, power that courts have deemed to be protected, such as the power of eminent domain or the police power to protect the public health and safety. Through financing orders, such as the Financing Order, the State of Florida authorizes electric utilities to issue nuclear-asset recovery bonds (such as the Bonds) and pledges not to impair the value of the nuclear-asset recovery property securing such instruments. Fla. Stat. § 366.95(2). In other words, the State Pledge constitutes an agreement made by the State of Florida not to impair the financial security for nuclear asset-recovery bonds in order to foster the capital markets acceptance of such bonds, which are expressly authorized and will be issued pursuant to Fla. Stat. § 366.95.
2 The determination of whether a particular Legislative Action constitutes a substantial impairment of a particular contract is a fact-intensive analysis, and nothing in this letter expresses any opinion as to how a court would resolve the substantial impairment issue with respect to the Financing Order, the Nuclear Asset-Recovery Property, or the Bonds, vis-à-vis a particular Legislative Action. Accordingly, we have assumed for purposes of this letter that any Impairment resulting from a challenged Legislative Action would be substantial.
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 11
The State Pledge is clearly an inducement offered by the State of Florida to investors to purchase the Bonds. See Fla. Stat. § 366.95(11)(b) (The state pledges to and agrees with bondholders, the owners of the nuclear asset-recovery property, and other financing parties that the state will not: . . . reduce, alter, or impair nuclear asset recovery-charges . . . until any and all principal, interest, premium, financing costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related nuclear asset-recovery bonds have been paid and performed in full.). As such, we believe that the State Pledge is akin to the type of financial contract involved in U.S. Trust. See U.S. Trust, 431 U.S. at 25. Accordingly, the reserved powers doctrine does not appear to apply here, which means that the State of Florida could validly (and did) enter into the contractual relationship with the Bondholders.
B. The States Burden to Justify an Impairment
To survive scrutiny under the Contract Clause, [i]f the state regulation constitutes a substantial impairment, the State, in justification, must have a significant and legitimate public purpose behind the regulation, such as the remedying of a broad and general social or economic problem. Energy Reserves, 459 U.S. at 411-12 (citation omitted). This test is, by design, nebulous and open to interpretation. However, the case law has provided several examples to help illustrate the tests contours.
In assessing the states burden, courts consider the foreseeability of the state later adopting legislation that alters the contractual obligationthe more regulated an industry is, the more likely an impairment can be foreseen and will be deemed reasonable. See, e.g., id. at 411 (no impairment where substantial regulation of the industry at time of contracting indicating that the plaintiffs reasonable expectation could not have been impaired by the subsequent legislation); Sanitation & Recycling Indus. v. City of N.Y., 107 F.3d 985, 993 (2d Cir. 1997) (Impairment is greatest where the challenged government legislation was wholly unexpected. When an industry is heavily regulated, regulation of contracts may be foreseeable.).
However, this is not the only factor that courts consider in making this assessment. For instance, Blaisdell rejects a Contract Clause challenge to a Minnesota law that, in response to economic conditions caused by the Great Depression, (1) authorized county courts to extend the period of redemption from foreclosure sales on mortgages previously made for such additional time as the court may deem to be just and equitable, subject to certain limitations, and (2) limited actions for deficiency judgments. 290 U.S. at 415-18. In upholding the Minnesota law, the Court relied on the following factors: (1) an economic emergency existed which threatened the loss of homes and lands that furnished Minnesotans with necessary
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 12
shelter and means of subsistence; (2) the law was not enacted for the benefit of particular individuals but for the protection of a basic interest of society; (3) the relief provided by the law was appropriate to the emergency and could only be granted upon reasonable conditions; (4) the conditions on which the period of redemption was extended by the law did not appear to be unreasonable; and (5) the law was temporary in operation and limited to the emergency on which it was based. Id. at 444-47. Blaisdell was a closely divided case, with the Four Horsemeni.e., the four conservatives justices who opposed much of President Franklin D. Roosevelts New Deal3signing on to an impassioned dissent that would have struck down the law. See id. at 448-83 (Sutherland, J., dissenting).
In the same term as Blaisdell, the Supreme Court qualified its prior decision, emphasizing the importance of the last factor in Blaisdelli.e., the temporary and conditional relief which the legislation granted. W.B. Worthen Co. v. Thomas, 292 U.S. 426, 434 (1934). In W.B. Worthen, the subject litigation was an Arkansas law providing that moneys paid to any Arkansas resident as the insured or beneficiary designated under an insurance policy, such as a life insurance policy, shall be exempt from liability or seizure under judicial process. Id. at 429-30. The Court struck down the Arkansas law under the Contract Clause, noting that the Arkansas law was not a temporary emergency measure. Id. at 434. The permanent nature of the Arkansas law was the key to the Supreme Courts holding. Id. In a concurrence in the judgment, however, the Four Horsemen rejected the majoritys attempt to distinguish Blaisdell, arguing instead that an emergency can [never] justify, or, what is really the same thing, can [never] furnish an occasion for justifying, a nullification of the constitutional restriction upon state power in respect of the impairment of contractual obligations. Id. at 434-35 (Sutherland, J., concurring in the judgment).
This dispute shows the uncertainties in determining whether, on balance, a states purpose in imposing a substantial impairment is significant and legitimate enough to justify the impairment. However, with respect to the nuclear asset-recovery bonds, there is less cause for uncertainty. The reason is that the deference to be given to a legislatures determination of the need for a particular impairment depends in large part on whether the contract at issue is purely private or the state is itself a contracting party. When the state is not a contracting party, courts generally defer to legislative judgment as to the necessity and reasonableness of a particular action. See, e.g., Keystone Bituminous Coat Assn v. DeBenedictis, 480 U.S. 470, 474, 506 (1987) (upholding a law authorizing revocation of a coal mine operators mining permit as a reasonable and necessary response to the devastating effects of subsidence caused by underground mining). In contrast, the Supreme Court has noted that such
3 The Four Horsemen were Justices Butler, McReynolds, Sutherland, and Van Devanter.
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 13
deference is not appropriate when a state is a contracting party. U.S. Trust, 431 U.S. at 25-26. When the state is itself a contracting party, a stricter standard of justification applies. See, e.g., Energy Reserves, 459 U.S. at 412 n.14. Indeed, in Energy Reserves, the Court noted that [i]n almost every case, the Court has held a governmental unit to its contractual obligations when it enters financial or other markets. Id.
For instance, in U.S. Trust, the states of New York and New Jersey had covenanted that revenues and reserves securing certain bonds would not be depleted below a certain level. 431 U.S. at 25. The states thereafter repealed that promise in order to finance new mass transit projects, claiming that the repeal was justified by the need to promote and encourage additional use of mass transportation in response to energy shortages and environmental concerns. Id. at 28-29. The Court ruled that the states action was nevertheless invalid under the Contract Clause because repeal of the covenant was neither necessary to achievement of the plan nor reasonable in light of the circumstances. Id. at 29. The Court stated that a modification less drastic than total repeal would have permitted the states to achieve their plan to improve commuter rail service, and, in fact, the states could have achieved that goal without modifying the covenant at all. Id. at 30. After all, the states could discourage automobile use through taxes on gasoline or parking, for example, and use the revenues to subsidize mass transit projects. Id. at 30 n.29.
U.S. Trust contrasts the legislation at issue in that case with that in El Paso v. Simmons, 379 U.S. 497 (1965). El Paso involves Texas legislation that limited the reinstatement rights of defaulting purchasers of land from the state to gains reasonably expected from the contract when the statute creating those rights was adopted. Id. at 498-99. As recounted in U.S. Trust, this older statute had effects that were unforeseen and unintended by the legislature when originally adopted, i.e., speculators were placed in a position to obtain windfall benefits. 431 U.S. at 31. By limiting gains to those reasonably expected at the time of the prior statutes enactment, Texas simply realigned the then-current situation with the parties original expectations. U.S. Trust distinguishes El Paso because the need for mass transportation (the asserted purpose behind the new legislation) was not a new development and the likelihood that publicly owned commuter railroads would produce substantial deficits was well-known when the covenant was adopted. Id. at 31-32. Although public perception of the importance of mass transit undoubtedly grew between 1962, when the covenant was adopted, and 1974, when it was repealed, these concerns were not unknown in 1962, and the subsequent changes were of degree and not of kind. Id. at 32.
U.S. Trust also distinguishes Faitoute Iron & Steel Co. v. City of Asbury Park, 316 U.S. 502 (1942), which was the only time in this [20th] century that alteration of a municipal bond
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 14
contract has been sustained. U.S. Trust, 431 U.S. at 27. Faitoute involves a state municipal reorganization act under which bankrupt local governments could be placed in receivership by a state agency. Pursuant to that act, the holders of certain municipal revenue bonds received new securities bearing lower interest rates and later maturities. As recounted in U.S. Trust, Faitoute rejected the bondholders Contract Clause claims on the theory that the old bonds represented only theoretical rights; as a practical matter the city could not raise its taxes enough to pay off its creditors under the old contract terms, and thus the plan enabled the city to meet its financial obligations more effectively. Id. at 28. U.S. Trust emphasizes that the obligation in Faitoute was discharged, not impaired by the plan. Id. (quoting Faitoute, 316 U.S. at 511).
This case law demonstrates that a state bears a substantial burden when attempting to justify an impairment of a contract to which it is a party. As noted above, state contracts which are financial in nature do not involve reserved state policy powers and, [i]n almost every case, the Court has held a governmental unit to its contractual obligations when it enters financial or other markets. Energy Reserves, 459 U.S. at 412 n.14. A state action that impairs contracts to which it is a party must further a significant, legitimate and broad public purpose, not the interests of a narrow group; moreover, that public purpose must be served by a reasonable, necessary and carefully tailored measure, as a State is not free to impose a drastic impairment when an evident and more moderate course would serve its purposes equally well. U.S. Trust, 431 U.S. at 31.
It is impossible to envision every possible exigency that may arise in the future and that may cause Florida to attempt to substantially impair the Rights to the Nuclear Asset-Recovery Property. However, given the heavy burden on a state when it is a contracting party, as is the case here, we do not anticipate that the state will be able to meet its burden.
INJUNCTIVE RELIEF
In a Contract Clause challenge to Legislative Action alleged to cause an Impairment, the remedies which the plaintiff would be expected to seek include, inter alia, an injunction to prevent state officials from enforcing the provisions of such Legislative Action. The Bondholders would be expected to seek both a preliminary injunction and a permanent injunction. A preliminary injunction serves to delay the implementation of the Legislative Action pending the resolution of the court challenge, whereas a permanent injunction serves to prevent the implementation of the Legislative Action, once the court has resolved the merits of the litigation.
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 15
A. Preliminary Injunction
A party may move for a preliminary injunction at the onset of litigation. The purpose of a preliminary injunction is to prevent the plaintiff from being injured where there is no adequate remedy at law. Reynolds v. Roberts, 207 F.3d 1288, 1299 (11th Cir. 2000).
The Eleventh Circuit, which includes Florida, has described when a court may grant a preliminary injunction:
A district court may grant injunctive relief only if the moving party shows that: (1) it has a substantial likelihood of success on the merits; (2) irreparable injury will be suffered unless the injunction issues; (3) the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) if issued, the injunction would not be adverse to the public interest.
Siegel v. Lepore, 234 F.3d 1163, 1176 (11th Cir. 2000) (en banc) (per curiam). The grant or denial of a preliminary injunction is a decision within the sound discretion of the district court, and the district courts exercise of that discretion is reviewed on appeal under the deferential abuse of discretion standard. United States v. Lambert, 695 F.2d 536, 539 (11th Cir. 1983).
Here, the four factors for a preliminary injunction appear to be met. No further analysis of the first factor regarding the likelihood of success is needed here because the Bondholders likelihood of success on a challenge under the Contract Clause has already been addressed supra.
As to the second factor, [a] showing of irreparable harm is the sine qua non of injunctive relief. Ne. Fla. Chapter v. City of Jacksonville, Fla., 896 F.2d 1283, 1285 (11th Cir. 1990). An injury is irreparable only if it cannot be undone through monetary remedies. Id. A legal remedy may be inadequate or the injury may be irreparable because the amount of damages may be difficult or impossible to measure. See, e.g., Multi-Channel TV Cable Co. v. Charlottesville Quality Cable Operating Co., 22 F.3d 546, 551 (4th Cir. 1994) (Generally, irreparable injury is suffered when monetary damages are difficult to ascertain or are inadequate. (quoting Danielson v. Local 275, 479 F.2d 1033, 1037 (2d Cir. 1973)). Furthermore, if an injury is of a continuing nature, such that, e.g., the Bondholders would be forced to sue for damages each time they suffer injury (e.g., every non-receipt of a scheduled interest payment), an injunction is warranted. See Lee v. Bickell, 292 U.S. 415, 421 (1934)
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 16
([W]e are not in doubt [that] the multiplicity of actions necessary for redress at law [is] sufficient, without reference to other considerations, to uphold the remedy by injunction.).
Here, we would anticipate that the Bondholders would face irreparable injury. For starters, it is doubtful that the Bondholders (or the Trustee acting on their behalf) could obtain adequate money damages from Florida or its officials. U.S. Trust, for instance, describes the difficulty of evaluating the impact of the repeal of the covenant at issue in that case upon the market price of the bonds. The Supreme Court, after establishing that it could not ascertain with certainty whether the fluctuations in market price were caused by the repeal of the covenant and after noting that the bonds rating had not changed, determined that no one can be sure precisely how much financial loss the bondholders suffered. 431 U.S. at 19. Furthermore, if Florida enacts Legislative Action that limits, alters, impairs, or reduces the value of the Nuclear Asset-Recovery Property or the Nuclear Asset-Recovery Charges, the Bondholders would suffer an injury of a continual nature, given the multiplicity of actions that would be necessary to redress every non-receipt of a scheduled interest payment. Taken together, it seems as though the Bondholders could establish irreparable injury.
As to the third factor, we have no reason to believe that any damage the proposed injunction may cause to the State of Florida would outweigh the damage of the Legislative Action to the Bondholders. The court will seek to tailor any injunction in order to minimize the harm to the state. See Caron Found. of Fla., Inc. v. City of Delray Beach, 879 F. Supp. 2d 1353, 1373-74 (S.D. Fla. 2012). Where the states harm is purely financial and calculable, then the states harm should not outweigh the harm to the plaintiffs. See Gen. Motors Corp. v. Phat Cat Carts, Inc., 504 F. Supp. 2d 1278, 1287 (M.D. Fla. 2006) (granting the injunction because Defendants losses, if any, from the injunction would be a loss of revenues that is easily calculable).
As to the fourth factor, with respect to whether the injunction, if granted, would not be adverse to the public interest, the Eleventh Circuit has explained that [t]he public has no interest in enforcing an unconstitutional [law]. KH Outdoor, LLC v. City of Trussville, 458 F.3d 1261, 1272 (11th Cir. 2006). Thus, if the court determines that the Bondholders have established a substantial likelihood that the challenged legislation is unconstitutional under the Contract Clause, then the public interest factor will counsel in favor of an injunction being issued.
Accordingly, the Bondholders would appear to satisfy these traditional requirements for preliminary injunctive relief. Bearing in mind the equitable and discretionary nature of a
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 17
preliminary injunction, we should expect the Bondholders to be able to obtain an injunction to delay Legislative Action that would violate the Contract Clause.
B. Permanent Injunction
The analysis for whether a court will issue a permanent injunction is little different from the analysis for a preliminary injunction. Indeed, as the Eleventh Circuit has explained, the test is essentially the same for a permanent injunction as it is for a preliminary injunction, except that the plaintiff must show actual success on the merits instead of a likelihood of success. Klay v. United Healthgroup, Inc., 376 F.3d 1092, 1097 (11th Cir. 2004) (quoting Siegel, 234 F.3d at 1213 (Carnes, J., dissenting)).
Because we should expect the Bondholders to be able to obtain a preliminary injunction (subject to the caveats described supra), we should also expect that they should be able to obtain a permanent injunction. The only difference for a permanent injunction is that the Bondholders would need to await a ruling on the merits of their Contract Clause claim. A permanent injunction would not be available until the Bondholders could show actual success on the merits. In other words, once the district court rules in favor of the Bondholders on their Contract Clause claim, they should be entitled to a permanent injunction as well. The State of Florida should thereby be permanently enjoined from enforcing the Legislative Action.
THE TAKINGS CLAUSE
The Takings Clause of the Fifth Amendment of the United States Constitution provides that private property shall not be taken for public use, without just compensation. U.S. Const. amend. V. The Takings Clause is made applicable to state action via the Fourteenth Amendment. Webbs Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 160 (1980). The Takings Clause covers both tangible and intangible property. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1003. Rights under contracts can be property for purposes of the Takings Clause, Lynch v. United States, 292 U.S. 571, 577 (1934), but legislation that disregards or destroys contract rights does not always constitute a taking. Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 224 (1986). Where intangible property is at issue, state law will determine whether a property right exists. If a court determines that an intangible asset is property, a court will then consider whether the owner of the property interest had a reasonable investment-backed expectation that the property right would be protected. PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 83 (1980).
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 18
The Supreme Court has suggested that the Takings Clause may be implicated by a diverse range of government actions, including when the government (a) permanently appropriates or denies all economically productive use of property;4 (b) destroys property other than in response to emergency conditions;5 or (c) reduces, alters, or impairs the value of property so as to unduly interfere with reasonable investment-backed expectations.6
The Supreme Court has identified two categories where regulatory action constitutes a per se taking: regulations that require an owner to suffer a permanent physical invasion of property, and regulations that deprive the owner of all economically beneficial use of the property. Lingle v. Chevron U.S.A., 544 U.S. 528, 538 (2005). Outside these two narrow categories, challenges to regulations that interfere with protected property interests are governed by the three-part test set forth in Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 124 (1978). Under that test, a regulation constitutes a taking if it denies a property owner economically viable use of that property, which is determined by three factors: (1) the character of the governmental action; (2) the economic impact of the regulation on the claimant; and (3) the extent to which the regulation has interfered with distinct investment-backed expectations. Id. at 124.
The first Penn Central factor requires the court to examine the purpose and importance of the public interest reflected in the regulatory imposition and to balance the liberty interest of the private property owner against the Governments need to protect the public interest through imposition of the restraint. Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 1176 (Fed. Cir. 1994).
The second factor incorporates the principle enunciated by Justice Holmes that [g]overnment hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law. Pa. Coal Co. v. Mahon, 260 U.S.
4 See, e.g., Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015 (1992) (noting that regulatory action will be deemed a per se taking if it denies all economically beneficial or productive use of the property).
5 The emergency exception to the just compensation requirement of the Takings Clause often appears in cases involving the governments activities during military hostilities. See, e.g., Natl Bd. of Young Mens Christian Assns v. United States, 395 U.S. 85 (1969); United States v. Cent. Eureka Mining Co., 357 U.S. 155 (1958). The emergency exception is not limited to wartime activities, however. See, e.g., Miller v. Schoene, 276 U.S. 272 (1928) (no compensable taking where trees destroyed to prevent disease from spreading to other trees).
6 See, e.g., Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978) (noting that one consideration in the Takings Clause analysis is the extent to which the regulation has interfered with distinct investment-backed expectations).
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 19
393, 413 (1922). However, [n]ot every destruction or injury to property by governmental action has been held to be a taking in the constitutional sense. Armstrong v. United States, 364 U.S. 40, 48 (1960). For instance, diminution in property value alone does not constitute a taking, unless accompanied by serious economic harm.
The third factor is a way of limiting takings recovery to owners who could demonstrate that they bought their property in reliance on a state of affairs that did not include the challenged regulatory regime. Loveladies, 28 F.3d at 1177. The burden of showing such interference is a heavy one. Keystone, 480 U.S. at 493. Thus, a reasonable investment-backed expectation must be more than a unilateral expectation or an abstract need. Ruckelshaus, 467 U.S. at 1005-06 (quoting Webbs Fabulous, 449 U.S. at 161). Further, legislation readjusting rights and burdens is not unlawful solely because it upsets otherwise settled expectations. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 16 (1976). [T]he fact that legislation disregards or destroys existing contractual rights does not always transform the regulation into an illegal taking. Connolly, 475 U.S. at 224 (citation omitted). In order to sustain a claim under the Takings Clause, the private party must show that it had a reasonable expectation at the time the contract was entered that it would proceed without possible hindrance from changes in government policy. Chang v. United States, 859 F.2d 893, 897 (Fed. Cir. 1988).
We are not aware of any case law which addresses the applicability of the Takings Clause in the context of an exercise by a state of its police power to abrogate or impair contracts otherwise binding on the state. The outcome of any claim that interference by the State of Florida with the value of the Nuclear Asset-Recovery Property without compensation is unconstitutional would likely depend on factors such as the state interest furthered by that interference and the extent of financial loss to the Bondholders caused by that interference, as well as the extent to which courts would deem that the Bondholders had a reasonable expectation that changes in government policy and regulation would not interfere with their investment. With respect to this latter factor, we note that Fla. Stat. § 366.95 expressly provides for the creation of Nuclear Asset-Recovery Property in connection with the sale of the Nuclear Asset-Recovery Property to the Issuer, and further provides that the Financing Order, once final, is irrevocable. Moreover, through the State Pledge, Florida has pledge[d] to and agree[d] with bondholders, the owners of the nuclear asset-recovery property, and other financing parties not to impair the value of such Nuclear Asset-Recovery Property. Fla. Stat. § 366.95(11)(b). Considering the circumstances, the Bondholders have reasonable investment expectations with respect to their investments in the Bonds.
Based on our analysis of relevant judicial authority, it is our opinion, as set forth above, subject to all of the qualifications, limitations and assumptions set forth in this letter, that,
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 20
under the Takings Clause, a reviewing court would hold that the State of Florida would be required to pay just compensation to Bondholders if Floridas repeal or amendment of Fla. Stat. § 366.95 or the Commissions amendment or revocation of the Financing Order, or the taking of any other action by Florida or the Commission in contravention of the State Pledge: (1) constituted a permanent appropriation of a substantial property interest of the Bondholders in the Nuclear Asset-Recovery Property or denied all economically productive use of the Nuclear Asset-Recovery Property; (2) destroyed the Nuclear Asset-Recovery Property other than in response to emergency conditions; or (3) substantially reduced, altered, or impaired the value of the Nuclear Asset-Recovery Property so as to unduly interfere with the reasonable expectations of the Bondholders arising from their investments in the Bonds. In determining what is an undue interference, a court would consider the nature of the governmental action and weigh the public purpose served thereby against the degree to which it interferes with the legitimate property interests and distinct investment-backed expectations of the Bondholders. There can be no assurance, however, that any such award of just compensation would be sufficient to pay the full amount of principal of and interest on the Bonds.
* * *
The scope of this letter is limited to the federal laws of the United States of America. We note that the judicial analysis of issues relating to the Contract Clause and the Takings Clause has typically proceeded on a case-by-case basis and that the courts determination is typically strongly influenced by the facts and circumstances of the particular case. We further note that, except as explained supra, there are no reported controlling judicial precedents that are directly on point. Our analysis is necessarily a reasoned application of judicial decisions involving similar or analogous circumstances. Moreover, the application of equitable principles (including the availability of injunctive relief) is subject to the discretion of the court. We cannot predict the facts and circumstances that will be present in the future and may be relevant to the exercise of such discretion. Consequently, there can be no assurance that a court will follow our reasoning or reach the conclusions that current judicial precedent supports. It is our and your understanding that none of the foregoing opinions is intended to be a guaranty as to what a particular court would actually hold; instead, each such opinion is only an expression as to the decision a court ought to reach if the issue were properly prepared and presented to it and the court followed what we believe to be the applicable legal principles under existing judicial precedent. The recipients of this letter should take these considerations into account in analyzing the risks associated with the subject transaction.
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 21
While a copy of this letter may be posted to an internet website required under Rule 17g-5 under the Securities and Exchange Act of 1934, as amended, and maintained by DEF solely for the purpose of complying with such rule, this letter is solely for your benefit in connection with the transactions described supra and may not be quoted, used or relied upon by, nor may copies be delivered to, any other person (including without limitation, any governmental or regulatory agency and all purchasers of Bonds other than the underwriters named in Schedule II of the Underwriting Agreement), nor may you rely on this letter for any other purpose, without our prior written consent.
This letter is being delivered solely for the benefit of the persons to whom it is addressed; accordingly, it may not be quoted, filed with any governmental authority or other regulatory agency or otherwise circulated or utilized for any other purpose without our prior written consent. We hereby consent to the filing of this letter as an exhibit to the Registration Statement filed with the Securities and Exchange Commission on June 22, 2016, and to all references to our firm included in or made a part thereof. In giving the foregoing consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the related rules and regulations. We assume no obligation to update or supplement this letter to reflect any facts or circumstances which may hereafter come to our attention with respect to the opinions or statements expressed above, including any changes in applicable law which may hereafter occur.
|
Very truly yours, |
|
|
|
|
|
/s/ Hunton & Williams LLP |
08506/02151/13936
Each of the Persons Listed on Schedule A Attached Hereto
June 22, 2016
Page 22
Schedule A
Guggenheim Securities, LLC
330 Madison Avenue
New York, New York 10017
RBC Capital Markets, LLC
200 Vesey Street
New York, New York 10281
as Representatives of the several Underwriters
Duke Energy Florida, LLC
299 First Avenue North
St. Petersburg, Florida 33701
Duke Energy Florida Project Finance, LLC
299 First Avenue North
St. Petersburg, Florida 33701
The Bank of New York Mellon Trust Company, National Association
10161 Centurion Parkway N.
Jacksonville, Florida 32256
Attention: Corporate Trust Department
Moodys Investors Service, Inc.
World Trade Center at 250 Greenwich Street
New York, New York 10007
Fitch Ratings
33 Whitehall Street
New York, New York 10004
Attention: ABS Surveillance
Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC
Structured Credit Surveillance
55 Water Street
New York, New York 10041
Exhibit 99.6
|
Shutts & Bowen LLP 4301 W. Boy Scout Boulevard Suite 300 Tampa, Florida 33607 PHONE (813) 229-8900 FAX (813) 229-8901 |
June 22, 2016
To the addressees listed
on the attached Schedule A
Re: Florida Constitutional Law Opinion relating to Impairment Issues as it pertains to the Nuclear Asset-Recovery Act
Ladies and Gentlemen:
We have acted as local Florida counsel to Duke Energy Florida, LLC, a Florida limited liability company (DEF). In connection with the issuance and sale by Duke Energy Florida Project Finance, LLC (Issuer), a Delaware limited liability company, of its $1,294,290,000 Series A Senior Secured Bonds (the Bonds), DEF has requested from us certain reasoned opinions as described herein pertaining to the Nuclear Asset-Recovery Act, Section 366.95, Florida Statutes (the Nuclear Asset-Recovery Act). The Bonds are being issued pursuant to the provisions of the Indenture, dated as of June 22, 2016 (the Indenture), between the Issuer and The Bank of New York Mellon Trust Company, National Association, as Indenture Trustee and Securities Intermediary (the Trustee). Under the Indenture, the Trustee holds, among other things, certain rights as described below (the Rights) as collateral security for the payment of the Bonds.
As described in the Indenture, the Rights consist of nuclear asset-recovery property as defined in the Nuclear Asset-Recovery Act, which were created in favor of DEF pursuant to Order No. PSC-15-0537-FOF-EI in Docket No. 150171-EI issued by the Florida Public Service Commission (the Florida Commission) on November 19, 2015 (the Financing Order); and such nuclear asset-recovery property was assigned to the Issuer pursuant to the provisions of the Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated as of June 22, 2016 (the Sale Agreement), by and between DEF and the Issuer, in consideration for the payment by the Issuer to DEF of the proceeds of the sale of the Bonds, net of certain issuance costs. As described in the Financing Order, the Rights include the right to impose and receive certain non-bypassable charges and are nuclear asset-recovery charges as defined in the Nuclear Asset-Recovery Act (the Charges). The Financing Order approves the process for true-up adjustments to be made periodically to the Charges to ensure the recovery of collections sufficient to provide for the timely payment of the principal of and interest on the Bonds and of all of the ongoing financing costs payable by the Issuer with respect to the Bonds.
The Financing Order was issued in response to DEFs Petition for Issuance of a Nuclear Asset-Recovery Financing Order and Motion to Consolidate submitted for filing with the Florida Commission on July 27, 2015, pursuant to the provisions of the Nuclear Asset-Recovery Act. DEF filed its Issuance Advice Letter and final form of True-Up Adjustment Letter with respect to the Bonds with the Florida Commission on June 16, 2016, as required by the Financing Order and the Florida Commission has not issued an order to stop the issuance of the Bonds.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 2
Section 11 of the Nuclear Asset Recovery Act, Fla. Stat. § 366.95, provides:
(11) STATE PLEDGE. --
(a) For purposes of this subsection, the term bondholder means a person who holds a nuclear-asset recovery bond.
(b) The state pledges to and agrees with bondholders, the owners of the nuclear asset-recovery property, and other financing parties that the state will not:
1. Alter the provisions of this section which make the nuclear asset-recovery charges imposed by a financing order irrevocable, binding, and nonbypassable charges;
2. Take or permit any action that impairs or would impair the value of nuclear asset-recovery property or revises the nuclear asset-recovery costs for which recovery is authorized; or
3. Except as authorized under this section, reduce, alter, or impair nuclear asset-recovery charges that are to be imposed, collected, and remitted for the benefit of the bondholders and other financing parties until any and all principal, interest, premium, financing costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related nuclear asset-recovery bonds have been paid and performed in full.
This paragraph does not preclude limitation or alteration if full compensation is made by law for the full protection of the nuclear asset-recovery charges collected pursuant to a financing order and of the holders of nuclear asset-recovery bonds and any assignee or financing party entering into a contract with the electric utility.
(c) Any person or entity that issues nuclear-asset-recovery bonds may include the pledge specified in paragraph (b) in the nuclear-asset recovery bonds and related documentation.
The foregoing pledge has been included in the Bonds and in the Indenture.
As used herein, Transaction Documents means, collectively, the documents described on Schedule B hereto, and Transaction means the transactions contemplated by the Transaction Documents and the Financing Order.
In rendering the opinions set forth below, we have examined and relied upon originals or copies, certified or otherwise identified to our satisfaction, of certain of the Transaction Documents and such other documents relating to the Transaction as we have deemed necessary or advisable as a basis for such opinion. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity with originals of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. We have also assumed with respect to each party that (i) each of the documents submitted to us was duly authorized, executed and delivered by each party thereto, (ii) each party to such documents had the full power (including, without limitation, corporate, trust or limited liability company power where applicable) and authority to enter into, execute, deliver and perform all obligations under such documents and (iii) all such documents are legal, valid and binding obligations enforceable in accordance
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 3
with their respective terms against each of the parties thereto under applicable law. We have made no independent investigation of the facts referred to herein, and with respect to such facts have relied, for the purpose of rendering this opinion and except as otherwise stated herein, exclusively on the statements contained and matters provided for in the Transaction Documents and such other documents relating to the Transaction as we deemed advisable, including the factual representations, warranties and covenants contained therein as made by the respective parties thereto.
Our client has requested that we provide you with our reasoned opinion as to:
1. whether the holders of the Bonds (the Bondholders) could challenge successfully under the contract clause of the Florida Constitution (Article I, Section 10 (the Florida Contract Clause)) the constitutionality of any legislation passed by the Florida Legislature (the Legislature), any constitutional amendment voted by the people of Florida or any action of the Florida Commission exercising legislative powers (Legislative Action) that limits, alters, impairs or reduces the value of the Rights or the Charges so as to cause a substantial impairment, of (a) the terms of the Indenture or the Bonds or (b) the rights and remedies of the Bondholders (or the Trustee acting on their behalf) prior to the time that the Bonds are fully paid and discharged (Impairs or an Impairment);
2. whether temporary injunctive relief would be available under Florida law to delay implementation of an Impairment pending final adjudication of a claim challenging such implementation under the Florida Contract Clause and, assuming a favorable final adjudication of such claim, whether relief would be available to prevent permanently the implementation of the challenged Impairment; and
3. whether a Legislative Action that repeals the State Pledge or substantially impairs or reduces the value of the Rights or Charges so as to cause a substantial impairment of (a) the terms of the Indenture or the Bonds or (b) the rights and remedies of the Bondholders (or the Trustee acting on their behalf) prior to the time the Bonds are fully paid and discharged, would constitute a compensable taking under the takings clause of the Florida Constitution (Article X, Section 6(a) (the Florida Takings Clause)).
Our opinions assume that any Legislative Action that prevents payment of the Bonds or significantly affects the security for the Bonds is Legislative Action that substantially limits, alters, impairs or reduces the value of the Bonds. We do not offer any opinion as to how a court would determine whether any specific action would impair the value of nuclear asset-recovery property, revise the nuclear asset-recovery costs for which recovery is authorized or reduce, alter, or impair nuclear asset-recovery charges, or what facts would be required to prevail on those claims.1
1 DEF and another utility company are currently defending a putative class action lawsuit, which alleges that the Florida Commission has unlawfully turned ratepayers into involuntary investors in nuclear projects. Compl. at ¶ 2, Newton v. Duke Energy Fla., LLC, No. 0:16-cv-60341 (S.D. Fla. Feb. 22, 2016), ECF No. 1. The named plaintiffs have brought four causes of action: (1) violation of the dormant Commerce Clause; (2) preemption under the Atomic Energy Act of 1954; (3) preemption under the Energy Policy Act of 2005; and (4) unjust enrichment. The only provisions that the plaintiffs have challenged are Fla. Stat. §§ 366.93 and 403.519(5). Id. at ¶ 2 n.1. The named plaintiffs have not challenged the State Pledge in Fla. Stat. § 366.95(11), and the pendency of that lawsuit does not affect any of the opinions expressed herein.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 4
In rendering these opinions, we have also relied, with your permission, upon the conclusions expressed in the opinion of Hunton & Williams LLP with respect to the contracts clause and takings clause of the Constitution of the United States.
I. OPINION 1 THE CONTRACT CLAUSE OF THE FLORIDA CONSTITUTION.
Article I, section 10 of the Florida Constitution provides that [n]o . . . law impairing the obligation of contracts shall be passed. As part of the Florida Constitutions Declaration of Rights, this right belongs to the people, including corporations, as against the government. Citrus Cnty. Hosp. Bd. v. Citrus Meml Health Found., Inc., 150 So. 3d 1102, 1106 (Fla. 2014); see also Traylor v. State, 596 So. 2d 957, 963 (Fla. 1992) (explaining that [e]ach right in the Declaration of Rights is a distinct freedom guaranteed to each Floridian against government intrusion and operates in favor of the individual, against [the] government); State Farm Mut. Auto. Ins. Co. v. Gant, 478 So. 2d 25, 26 (Fla. 1985) (applying the contract clause to a corporation).
Whether the Bondholders would have a valid challenge against an Impairment as an impairment of the obligation under the Florida Contract Clause requires analysis of the following issues:
(1) whether a contract existed between the parties,
(2) whether the obligations under the contract were substantially impaired, and
(3) whether the impairment was reasonable and necessary to meet an important public purpose.
Scott v. Williams, 107 So. 3d 379, 385 (Fla. 2013) (citing, inter alia, U.S. Tr. Co. of N.Y. v. New. Jersey, 431 U.S. 1 (1977)).
In determining the question of unconstitutional contract impairment in Florida, where a contract has been found to exist and to have been impaired by subsequent legislation, the Florida Supreme Court has adopted a balancing approach to determine if a statute unconstitutionally impairs a contract virtually no degree of impairment will be tolerated, but a court is allowed to consider the actual effect of the provision on the contract and to balance a partys interest in not having the contract impaired against the States source of authority and the evil sought to be remedied. Scott v. Williams, 107 So. 3d at 385.
Whether a law establishes contractual obligations on a state or another governmental body depends on the intent of the legislative body, as evidenced by the language of the law and the circumstances surrounding its passage. Because the courts view the state as having reserved its authority to exercise the police power to safeguard public interests, the Florida Contract Clause is not an absolute and utterly unqualified restriction of the States protective power. Morris v. Waite, 160 So. 516, 517 (Fla. 1935). A Legislative Action that impairs a contractual obligation may thus be constitutional if it is a reasonable and necessary means to achieve an important public purpose.
Although Florida courts tend to apply a higher degree of scrutiny under the Florida Contract Clause than do federal courts under the U.S. Contract Clause (Section 10 of Article I, U.S. Constitution), see infra, both federal and state courts apply a balancing test and weigh the degree of impairment of the contract
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 5
against the public purpose to be achieved by the challenged Legislative Action.2 In so doing, the courts weigh the reasonableness and necessity of the Legislative Action in meeting that objective. Generally, the courts apply closer and stricter scrutiny to legislative actions impairing contracts where the state or a governmental body is a party to the contract, such as in public debt obligations.
As a general proposition, courts have considered the foreseeability of the state later adopting legislation that alters contractual obligations; the more regulated an industry is, the more likely an impairing Legislative Action operating in that industry can be foreseen and will be found reasonable. See, e.g., Energy Reserves Grp. v. Kan. Power & Light Co., 459 U.S. 400, 411 (1983) (no impairment where substantial regulation of the industry at time of contracting indicated that partys reasonable expectation could not have been impaired by the subsequent legislation); Sanitation & Recycling Indus. v. City of New York, 107 F.3d 985, 993 (2d Cir. 1997) (Impairment is greatest where the challenged government legislation was wholly unexpected. When an industry is heavily regulated, regulation of contracts may be foreseeable.); Easthampton Sav. Bank v. City of Springfield, 874 F. Supp. 2d 25, 32 (D. Mass. 2012) (When determining whether an impairment is substantial, the court must focus on the parties reasonable expectations, including whether the parties were operating in a heavily regulated industry. The mortgage industry has historically been heavily regulated, and Plaintiffs must have reasonably expected that some of the terms of their mortgages could be impaired by future changes in regulation.) (citations omitted).
The Nuclear Asset-Recovery Act provides in the State Pledge that the state pledges to and agrees with bondholders, the owners of the nuclear asset-recovery property, and other financing parties, indicating an intent by the state legislature to enter into a contractual relationship with these parties. As is the case with legislation authorizing governmental bonds, the Nuclear Asset-Recovery Acts provision for a revenue source is relied upon as a vital part of the contract with holders of nuclear asset-recovery bonds, and a court would likely find that such authority and ability to provide payment for nuclear asset-recovery bonds should be subjected to the strict scrutiny applied to obligations of governmental bodies.
Florida courts apply the balancing test and inquire whether a legislative action is a reasonable and necessary means towards an important public purpose. See, e.g., Yellow Cab Co. v. Dade Cnty., 412 So. 2d 395, 397 (Fla. 3d DCA 1982) (citing U.S. Tr. Co. of N.Y. v. New Jersey, 431 U.S. 1, 97 (1977)); Searcy Denney Scarola Barnhart & Shipley, P.A. v. State, No. 4D133497, 2015 Fla. App. LEXIS 10778, at *30, 2015 WL 4269031, at *11 (Fla. 4th DCA, July 15, 2015) (applying a balancing test and holding that the limitation on attorneys fees contained in a legislative claims bill was a constitutionally permissible exercise of legislative authority and did not constitute an impairment of contractual obligation). The result of this inquiry is dependent on the nature of the Legislative Action subsequently enacted and the circumstances surrounding its enactment, and therefore, cannot reasonably be predicted.
2 Floridas lower courts have consistently reiterated the position taken by the Florida Supreme Court in Yamaha Parts Distrib. Inc. v. Ehrman, 316 So. 2d 557 (Fla. 1975) (and later cited by Pomponio v. Claridge of Pompano Condo., Inc., 378 So. 2d 774, 780 (Fla.1979)) that virtually no degree of contract impairment is tolerable in this state. See, e.g., Coral Lakes Cmty. Assn v. Busey Bank, N.A., 30 So. 3d 579, 584 (Fla. 2d DCA 2010); Pudlit 2 Joint Venture, LLP v. Westwood Gardens Homeowners Assn, 169 So.3d 145, 150 (Fla. 4th DCA, 2015). As explained in Pomponio, some impairment is tolerable, although perhaps not so much as would be acceptable under traditional federal contract clause analysis. 378 So. 2d at 780 (also cited by Lee Cnty. v. Brown, 929 So. 2d 1202, 1208 (Fla. 2nd DCA 2006) and Florida Ins. Guar. Assn v. Devon Neighborhood Assn, 33 So. 3d 48, 52 (Fla. 4th DCA 2009) (quashed on other grounds by Florida Ins. Guar. Assn, Inc. v. Devon Neighborhood Assn, Inc., 67 So. 3d 187 (Fla. 2011)).
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 6
The Florida Contract Clause is substantially similar to the Contract Clause of the U.S. Constitution. Florida Ins. Guar. Assn v. Devon Neighborhood Assn, 67 So. 3d 187, 193 (Fla. 2011) (Similar to the federal constitutional contract clause, Article I, Section 10 of the Florida Constitution, prohibits the enactment of any law impairing the obligation of contracts.) (citation omitted). Although the Florida Supreme Court has articulated a slight difference, indicating that lesser impairment is tolerable in Florida than under the federal constitution, Pomponio v. Claridge of Pompano Condo., Inc., 378 So. 2d 774, 779-80 (Fla. 1979), as a general matter Florida has adopt[ed an] approach to contract clause analysis similar to United States Supreme Court. Scott v. Williams, 107 So. 3d 379, 401 (Fla. 2013). Therefore, any analysis of the Florida Contract Clause is enhanced by examination of federal cases.
A. The Existence of a Contractual Relationship
A contract may be created from a law authorizing a contract or from a contract itself. As a general matter, [f]or many decades, [the U.S. Supreme Court] has maintained that absent some clear indication that the legislature intends to bind itself contractually, the presumption is that a law is not intended to create private contractual or vested rights but merely declares a policy to be pursued until the legislature shall ordain otherwise. Natl R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S. 451, 465-66 (1985).
Whether a statute constitutes a contractual arrangement between the state and the other parties that have entered into contracts pursuant to such a statute depends on whether the legislature intended to create enforceable contractual rights binding upon the state. In determining legislative intent, both the language of the statute and the circumstances of the enactment of law are relevant. Natl R.R. Passenger Corp. v. Atchison, Topeka and Santa Fe Ry. Co., 470 U.S. 451 (1985); U.S. Tr. Co., 431 U.S. at 18 & n. 14. In Natl R.R., the Court found that neither the language nor the circumstances surrounding the enactment of the Congressional statute at issue evidenced an intent to have the United States itself enter a contractual relationship with the railroad companies claiming impairment, where the statute outlined the general terms on which Amtrak (expressly characterized in the statute as a non-governmental corporation) could enter into contracts with railroad companies, particularly since this was an area of pervasive prior regulation by Congress and where the statute itself expressly reserved the right to repeal or amend.3
In contrast, the Court in United States Trust Co. found the states intent to make a contract was clear from the statutory language, where the statute itself provided,
The 2 States covenant and agree with each other and the holders of any affected bonds, . . . that so long as any of such bonds remain outstanding and unpaid and the holders thereof shall not have given their consent as provided in their contract with the port authority; . . . neither the States nor the port authority nor any subsidiary corporation . . . will apply any of the rentals, tolls, fares, fees, charges, revenues or reserves, which have been pledged in whole or in part as security for such bonds, for any railroad purposes whatsoever other than permitted purposes hereinafter set forth.
3 Note that in National Railroad, the statute under attack was a federal one, and therefore the impairment of contract claim was brought under the due process clause, since the contract clause applies only to state actions. The protection of contractual obligations from federal legislation under the due process clause appears to be less than the protection against state impairment of contracts under the contract clause. Nevertheless, the first step of establishing a contract is the same.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 7
U.S. Tr. Co., 431 U.S. at 9-10, 18. Additionally, the Court pointed out that the purpose of the covenant was to invoke the protection of the Contract Clause as security against repeal and to increase the public marketability of the bonds.
The Nuclear Asset-Recovery Act authorizing the collection of nuclear asset-recovery charges, the issuance of nuclear asset-recovery bonds and the pledge of revenues towards their payment would appear to be closer to the statute in U.S. Trust Co. than the one in National Railroad in terms of creating a contract between the State and holders of Bonds. Unlike the statute in National Railroad, which expressly reserved Congress right to repeal, alter or amend this Act at any time (470 U.S. at 456), the Nuclear Asset-Recovery Act does not reserve the Legislatures ability to change the statutory provisions authorizing the issuance, the security and the source for payment of the Bonds. To the contrary, in the State Pledge, the State has expressly pledged not to do so unless full compensation is made by law for the full protection of the nuclear asset-recovery charges collected pursuant to a financing order and of the holders of nuclear asset-recovery bonds (Nuclear Asset-Recovery Act, Section 366.95(11)(b)). Moreover, the Nuclear Asset-Recovery Act reveals legislative intent to preserve the authority of electric utilities, and their assignees, to collect nuclear asset-recovery charges and the pledge of nuclear asset-recovery property to payment of their bonds against any future impairment. Section 366.95(5)(a)(3). of the Nuclear Asset-Recovery Act provides in relevant part:
All or any portion of nuclear-asset-recovery property specified in a financing order issued to an electric utility may be transferred, sold, conveyed, or assigned to a successor or assignee, that is wholly owned, directly or indirectly, by the electric utility, created for the limited purpose of acquiring, owning, or administering nuclear asset-recovery property or issuing nuclear asset-recovery bonds under the financing order. All or any portion of nuclear asset-recovery property may be pledged to nuclear asset-recovery bonds issued pursuant to the financing order, amounts payable to financing parties and to counterparties under any ancillary agreements, and other financing costs.
Id. (emphasis added).
Section 366.95(5)(a) of the Nuclear Asset-Recovery Act makes clear the Legislatures intent that the revenue to be created through nuclear asset-recovery charges in all events remains available to support repayment of nuclear asset-recovery bonds issued in reliance upon such revenue sources. This section of the Act states, in pertinent part, as follows:
(a)1. All nuclear asset-recovery property that is specified in a financing order constitutes an existing, present property right or interest therein, notwithstanding that the imposition and collection of nuclear asset-recovery charges depends on the electric utility, to which the financing order is issued, performing its servicing functions relating to the collection of nuclear asset-recovery charges and on future electricity consumption. Such property exists regardless of whether the revenues or proceeds arising from the property have been billed, have accrued, or have been collected and notwithstanding the fact that the value or amount of the property is dependent on the future provision of service to customers by the electric utility or its successors or assignees.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 8
2. Nuclear asset-recovery property specified in a financing order exists until nuclear asset-recovery bonds issued pursuant to the financing order are paid in full and all financing costs and other costs of such nuclear asset-recovery bonds have been recovered in full.
.
5. The interest of a transferee, purchaser, acquirer, assignee, or pledgee in nuclear asset-recovery property specified in a financing order issued to an electric utility, and in the revenue and collections arising from that property, is not subject to setoff, counterclaim, surcharge, or defense by the electric utility or any other person or in connection with the reorganization, bankruptcy, or other insolvency of the electric utility or any other entity.
Additionally, Section 366.95(2)(C)(6) of the Nuclear Asset-Recovery Act provides in relevant part:
Subsequent to the transfer of nuclear asset-recovery property to an assignee or the issuance of nuclear asset-recovery bonds authorized thereby, whichever is earlier, a financing order is irrevocable and, except as provided in subparagraph 4, and paragraph (d), the commission may not amend, modify, or terminate the financing order by any subsequent action or reduce, impair, postpone, terminate, or otherwise adjust nuclear asset-recovery charges approved in the financing order. After the issuance of a financing order, the electric utility retains sole discretion regarding whether to assign, sell, or otherwise transfer nuclear asset-recovery property or to cause nuclear asset-recovery bonds to be issued, including the right to defer or postpone such assignment, sale, transfer, or issuance
This section supports an argument that the Legislature intended that once the Financing Order is issued, no action by the Florida Commission may impair the charges approved by it.
Like the statute in United States Trust Co., the statute here, including the State Pledge, expresses the intent of the Legislature that the committed revenue source for repayment of the Bonds should be protected. The statutory language is similar to the United States Trust Co. statute in its foreseeable effect of inducing reliance by potential investors.
B. The Balancing of Impairment Versus Public Purpose
The next step of the analysis requires determining whether a Legislative Action has operated as a substantial impairment of a contractual relationship.
The threshold inquiry is whether the state law has, in fact, operated as a substantial impairment of a contractual relationship. The severity of the impairment is said to increase the level of scrutiny to which the legislation will be subjected. Total destruction of contractual expectations is not necessary for a finding of substantial impairment. On the other hand, state regulation that restricts a party to gains it reasonably expected from the contract does not necessarily constitute a substantial impairment. In determining the extent of the impairment, we are to consider whether the industry the complaining party has entered has been
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 9
regulated in the past. If the state regulation constitutes a substantial impairment, the State, in justification, must have a significant and legitimate public purpose behind the regulation, such as the remedying of a broad and general social or economic problem.
U.S. Fid. & Guar. Co. v. Dept of Ins., 453 So. 2d 1355, 1360 (Fla. 1984) (citing Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244-45 (1978) and U.S. Tr. Co., 431 U.S. at 17, 22, 26-27) (internal citations and quotation marks omitted). However, [u]nless the State itself is a contracting party, as is customary in reviewing economic and social regulation, . . . courts properly defer to legislative judgment as to the necessity and reasonableness of a particular measure. Id. at 1361 (citing U.S. Tr. Co., 431 U.S. at 22-23).
If the Nuclear Asset-Recovery Act is found by a court to have created a contract with the State as a party (which we believe to be the case here), a Legislative Action that operates to impair it would be subject to a higher degree of scrutiny as to the necessity and reasonableness of the impairment, including an examination of whether reasonable alternatives existed to the impairing Legislative Action and whether it exceeded that which was reasonably necessary. See U.S. Tr. Co., 431 U.S. at 24-26. If a court were to conclude, instead, that such undertakings were essentially a private contract, the court would be more likely to uphold a Legislative Action as a reasonable and necessary means towards an important public purpose.
In United States Trust Co., the U.S. Supreme Court invoked the Contract Clause to invalidate a New Jersey law that repealed its statutory covenant with the bondholders of the New York Port Authority (a governmental entity) that certain funds pledged to debt service on the bonds would not be used for mass transit purposes. Although the governmental entity, the Port Authority, was a party to the contract and the states by statute had made the covenant that was being impaired, the Court nevertheless examined whether an important public purpose justified the degree of impairment. The Court recognized the admittedly important purpose of promoting the use of mass transportation, but found repeal of the covenant unnecessary and suggested less drastic alternatives to subsidize mass transit. As further evidence that the law was unreasonable, the Court noted that the covenant was specifically intended to protect the pledged revenue against the foreseeable possibility of the Port Authority becoming more involved in deficit-incurring operations of mass transit.
In Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978), the Court invalidated the retroactive application of a Minnesota law requiring certain employers who terminated their pension plans or operations in the state to make immediate contributions to the plan for all employees with at least ten years of service. The Court first found that the statute constituted a severe impairment by nullifying express terms of the companys obligations under its pension plan and imposing a completely unexpected liability in potentially disabling amounts. Id. at 247. The Court then determined that the statute was not necessary to meet an important general social problem, as the statute applied to an extremely narrow class of employersthose with pension plans who had terminated operations in the state.4 Additionally, the
4 The Court noted the contrasting case of Home Building & Loan Assn v. Blaisdell, 290 U.S. 398 (1934), where it upheld a Minnesota law that provided for extensions of the redemption periods for mortgage foreclosures during the widespread economic emergency, on the condition that mortgagor pay all or a reasonable part of the propertys income or rental value. The basic test was whether the legislation is addressed to a legitimate end and the measures taken are reasonable and appropriate to that end. Id. At 438. The court found that the statute did not impair the obligation to pay the debt, but simply changed the time of payment and that it was narrowly tailored to meet the needs of the broad economic problem.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 10
statute did not operate in an area already subject to state regulation at the time the companys contractual obligations were originally undertaken, but invaded an area never before subject to regulation by the State. Id. at 250.
By contrast, in Energy Reserves Group v. Kansas Power & Light Co., 459 U.S. 400 (1983), the Court unanimously upheld a state natural gas regulation imposing price controls on intrastate gas. The Court found that the regulations were not special interest legislation because they affected the entire gas industry. Moreover, the regulations dealt with the important social problem of rapidly rising consumer gas prices due to federal deregulation. Based on the nature of the industry and the terms of the contract at issue, the Court concluded that [p]rice regulation existed and was foreseeable as the type of law that would alter contract obligations . . . . In short, ERGs reasonable expectations have not been impaired by the Kansas Act. Id. at 416.
Finally, in Keystone Bituminous Coal Association v. DeBenedictis, 480 U.S. 470 (1987), the Court upheld a state statute requiring coal mine operators to repair or pay for damage caused to certain surface structures by mining operations. The court found that the statute operated as a substantial impairment of a contractual relationship because it removed surface owners waivers, under pre-existing contracts, of damage caused by mining operations. Id. at 504. Nevertheless, the Court concluded that the statute withstands scrutiny even if it is assumed that it constitutes a total impairment, as the public interest of protecting surface structures was adequate justification. Id. at 504, fn. 31. The Court deferred to the states determination that the statute was necessary to protect a significant and legitimate public interest, explaining that the states determination is entitled to deference because the state is not a party to the contracts in question. Id. at 505.
Relying on analysis similar to that of the U.S. Supreme Court, the Florida Supreme Court has adopted a balancing approach to evaluate a claim under the Florida Contract Clause. See Pomponio v. Claridge of Pompano Condo., 378 So. 2d 774 (Fla. 1979). In Pomponio, the Court prohibited retroactive application of a law requiring the deposit of rent with a court during litigation over condominium leases. The 99-year lease at issue was executed before enactment of the law and did not expressly incorporate statutory amendments in the lease terms. The court stated:
To determine how much impairment is tolerable, we must weigh the degree to which a partys contract rights are statutorily impaired against both the source of authority under which the state purports to alter the contractual relationship and the evil which it seeks to remedy. Obviously, this becomes a balancing process to determine whether the nature and extent of the impairment is constitutionally tolerable in light of the importance of the states objective, or whether it unreasonably intrudes into the parties bargain to a degree greater than is necessary to achieve that objective.
Id. at 780. The court found that the rent retention provision was an economic deprivation the landlord had not bargained for, producing potential erosion of value (at least in our persistently inflationary economy) which goes beyond mere inconvenience. Id. at 781. Additionally, the court found dubious the policy reason for the statutory provision suggested by lesseesto prevent foreclosures for non-payment of rent during litigation. Finally, the court considered that the manner in which the police power has been wielded here is not the least restrictive means possible, and suggested that the severity of the law would have been mitigated had it allowed disbursements to lessors upon a showing of personal hardship. Id. at 783.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 11
In Scott v. Williams, the Florida Supreme Court explained the balancing test (but did not apply it in light of its finding that no contract existed):
As with laws impairing the obligations of private contracts, an impairment may be constitutional if it is reasonable and necessary to serve an important public purpose. In applying this standard, however, complete deference to a legislative assessment of reasonableness and necessity is not appropriate because the States self-interest is at stake. A governmental entity can always find a use for extra money, especially when taxes do not have to be raised. If a State could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all.
107 So. 3d 379, 385 (Fla. 2013) (citing U.S. Tr. Co., 431 U.S. at 25).
In Geary Distrib. Co. v. All Brand Importers, Inc., 931 F.2d 1431, 1435 (11th Cir. 1991), the Eleventh Circuit applied the Pomponio balancing test to find that the retroactive application of a beer distribution statute to a preexisting contract was unconstitutional under the Florida Contract Clause. The distributor sued the manufacturer for withholding consent to the assignment of distribution rights to a third party, relying on a statute prohibiting the unreasonable withholding of consent. In a very cursory fashion, the court balanced the competing interests:
Thus, the states authority for the statute is its inherent police power to regulate commercial activity within its borders. The evil the statute seeks to eliminate is unfair business practices by franchisors that restrict the distribution of malt beverage products to the public . . . . we conclude that the Supreme Court of Florida would find the impairment is significantly greater than necessary.
Id. at 1436.
C. Florida Cases on Governmental Debt Obligations and State Contracts
If the existence of State contractual obligations under the Nuclear Asset-Recovery Act were found, courts might find persuasive the following Florida cases on governmental debt obligations. Most of these cases were decided in the early part of the twentieth century and are rather absolute in protecting the integrity of public securities contracts against impairment by subsequent Legislative Actions adversely affecting their security and debt service payment. They must, however, be viewed as subject to review under the balancing approach subsequently articulated by the Florida Supreme Court in Pomponio.
In Humphreys v. State ex rel. Palm Beach Cnty., 145 So. 858 (Fla. 1933), the Florida Supreme Court affirmed mandamus in enforcing bondholders rights according to the original contract under which the Town of Boynton issued bonds. After the bonds were issued, the legislature divided Boynton into two, and attempted to allocate the existing debt of Boynton between the two towns. The court stated:
But the Constitution of the United States is to the effect that all laws which may have been passed, since bonds were issued, purporting to take away taxes necessary to meet the payments pledged to be made therefrom when the bonds were sold, are, as to affected security holders, invalid as impairing the obligation of contract.
Id. at 862.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 12
In State ex rel. Womans Benefit Assn v. Port of Palm Beach Dist., 164 So. 851, 857 (Fla. 1935), the Florida Supreme Court held void a state constitutional amendment exempting homestead property of less than $5,000 from taxation in so far as it might prohibit the levy, assessment and collection of taxes on such homesteads for the payment of debt service on bonds issued prior the adoption of the amendment, unless and until some other adequate fund were provided to replace the fund lost by the exemption. It was alleged that the Port of Palm Beach District had defaulted on payment of debt service and that the exemption would reduce the amount of tax collections and thus diminish the security and reduce the value of bonds and coupons . . . and impair the obligations of . . . contracts contrary to Florida and U.S. Constitutions. Id. at 853.
The court explained its finding of impairment as follows:
To impair has been defined as meaning to make worse, to diminish in quantity, value, excellency, or strength; to lessen in power; to weaken. Whatever legislation lessens the efficacy of the means of enforcement of the obligation is an impairment. Also if it tends to postpone or retard the enforcement of the contract, it is an impairment. See State of Louisiana ex rel. Ranger v. City of New Orleans, 102 U.S. 203, 26 L.Ed. 132. If the provisions of [the constitutional amendment] are to be considered as being operative . . . then there will be a lessening of the efficacy of the means of the enforcement of the obligations of the bond contract. These bonds were issued with the clear legal requirement by a valid enactment of the Legislature, that all of the then taxable property in the district should be taxed to provide for the payment of both interest on, and principal of, the bonds.
Id. at 856 (emphasis in original); see also Citrus Cnty. Hosp. Bd. v. Citrus Meml Health Found., Inc., 150 So. 3d 1102, 1108 (Fla. 2014) (citing Port of Palm Beach for the same definition of impairment).
Citing numerous U.S. Supreme Court and Florida cases, the Port of Palm Beach court further stated,
It has been repeatedly held, in fact there is practical unanimity in the authorities, that subsequent legislation cannot annul nor diminish, retard or lessen, the efficacy of prior laws entering into or forming a part of the contracts with bondholders.
Id. at 760 (emphasis added; citations omitted). The court found impairment despite the dissents argument that the amendment left bondholders with an adequate remedy in requiring the levy of a sufficient tax on non-exempt property to meet obligations of the contract and that the property sought to be exempted represented a small fraction of the taxable property.
Port of Palm Beach and other Florida cases suggest that impairment of bond contracts would be permissible if an adequate substitute for the lost funds or lost security were provided. Port of Palm Beach, 164 So. at 857. In Day v. City of St. Augustine, 139 So. 880 (Fla. 1932), a taxpayer attacked the levy of tolls for use of a bridge construction project, claiming in part that tolls were not called for to pay off the bonds used to construct the bridge, since the bonds were general obligation bonds. Rejecting the taxpayers contention, the Florida Supreme Court stated:
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 13
When municipal bonds are authorized by appropriate legislative act and a particular means is provided or authorized to pay them, the right to change such means of payment and provide a different mode, is necessarily within the legislative power at all times, subject only to the constitutional inhibition against impairment of the obligation of contracts by changing the means of payment first provided for without furnishing an adequate substitute.
Id. at 885.
Similarly, in Duval Cnty. v. Jennings, 164 So. 356 (Fla. 1935), the Florida Supreme Court held:
[T]he continued collection of reasonable tolls and charges for the benefit of holders of [bridge] bonds . . . is a contractually secured obligation that cannot be impaired by [a statute authorizing an election to determine whether bridge should be toll-free], so long as bonds remain unpaid, unless ultimate payment of the bonds and interest be actually secured by some special fund set aside for the sole benefit of the bondholders and adequate to satisfy their demands without being subordinate to any prior charges for maintenance, operation, etc., payable out of same in preference to the bondholders demands should the bridge be damaged or destroyed.
Id. at 358 (emphasis in original).
The court reasoned that under the settled law of this state, the statute authorizing the bridge bonds, including provisions relating to the collection and imposition of tolls, became part of the contract security given to bondholders, and such provisions could not be subsequently changed or diminished by the Legislature to the prejudice or likely impairment of the obligation of contract. Although the bond trustees already had about $327,000, which was more than sufficient to pay outstanding bonds and interest aggregating about $122,000, the court also noted that costs for operation and maintenance of the bridge had a first priority interest in the trust fund.
In a related case the following year, the Florida Supreme Court found that a statutory provision authorizing the use of a portion of the same surplus fund greatly in excess of the needs for payment of the outstanding bridge bonds for the construction of a new bridge did not violate the obligation of the existing bond contract, since the toll collections continue and the surplus fund is not reduced below its primary uses for the . . . bridge bond payments. Flint v. Duval Cnty., 170 So. 587, 596 (Fla. 1936). The court pointed out that the use of perhaps $225,000 of about $360,000 then in the fund, with only $71,000 of bonds outstanding and maturing in 1948, would not endanger the ultimate sufficiency of the fund to pay the remaining . . . bonds in 1948 with interest. Id.
In City of Ft. Lauderdale v. State ex rel. Elston Bank & Trust Co., 169 So. 584 (Fla. 1936), the court held that the legislature could not release a city from liability on its debt obligations, even if it imposed liability therefor on another public entity. The subject statute assigned liability for city general obligation bonds to a port authority. In affirming mandamus against the city, the court reasoned:
It is well settled that law affecting the enforcement, as the authority and ability to provide payment for municipal bonds in accordance with the terms of the contract under which such bonds were issued, becomes a vital part of the bond contract so that neither the authority nor the ability to perform the contract undertaken when the bonds were issued may be impaired during the
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 14
continuance of the contract by legislation subsequently passed tending to that end, whether so designed to operate or not. The degree of impairment is not material.
Where a subsequently passed statute materially alters the remedies originally afforded municipal bondholders for the enforcement of their bonds, such legislation is deemed to impair the obligation of the bondholders contract . . . and it therefore will be disregarded . . . as a law undertaking to unconstitutionally impair the obligation of contracts in the particular case.
Id. at 587 (citations omitted).
Notwithstanding the rigid application of the Contract Clause in these earlier Florida cases, after the Florida Supreme Court adopted the balancing test in Pomponio, the Court has applied the balancing test even to contracts to which the State itself is a party. Thus, in Chiles v. United Faculty of Fla., 615 So. 2d 671 (Fla. 1993), the Court struck down a statute eliminating pay raises appropriated to state employee collective bargaining agreements by previous statutory enactments; the justification was that eliminating the raises was necessary to resolve a projected $700 million shortfall in state revenue. The Court acknowledged that the legislature must be given some leeway to deal with bona fide emergencies, but found that the State failed to establish a compelling state interest as required under the Contract Clause because it did not demonstrate that the funds are [not] available from [any] other reasonable source. Id. at 673; cf., Scott v. Williams, 107 So. 3d 379 (Fla. 2013) (acknowledging that Pomponio balancing approach applies where a contract has been found to exist and to have been impaired by subsequent legislation, but finding that statutory framework governing public employees retirement system did not create binding contract rights and that prospective changes to participation requirements and benefits payments were within Legislatures authority).
D. The Balancing Test is Unpredictable.
In analyzing the above case-law relative to the Nuclear Asset-Recovery Act, it is apparent that the outcomes turn on particular facts in the balancing of contract rights impaired versus the reasonableness and necessity of an impairment serving a public purpose, sometimes leading to inexplicably inconsistent results among the cases. There is no way to predict or describe the precise form of a future Legislative Action impairing the terms of the Indenture and the Bonds or the rights and remedies of the Bondholders, the circumstances under which it might be enacted, or the public purpose to be effectuated thereby. Likewise, the form of and nature of, and facts surrounding, litigation that might arise challenging a Legislative Action as an unconstitutional impairment of contract cannot be predicted. Thus, whether a court would determine that a future Legislative Action would constitute a substantial impairment of the terms of the Indenture and the Bonds or the rights and remedies of the Bondholders, and whether such a Legislative Action would be viewed as a reasonable and necessary means toward an important public purpose, cannot reasonably be predicted.
Some general guides to what might be permissible and impermissible can be discerned from the cases. Obviously, the less severe the impairment, the greater the likelihood that a court will find the impairing Legislative Action to be reasonable. A State is not completely free to consider impairing the obligations of its own contracts on a par with other policy alternatives and is not free to impose a drastic impairment when an evident and more moderate course would serve its purposes equally well. Scott v. Williams, 107 So. 3d 379, 385 (Fla. 2013) (citing United States Tr. Co.). If a statute affected only a very
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 15
narrow segment of a population or an industry, a court might infer that the public purpose was not so important and that the Legislative Action was unnecessary. See Allied Structural Steel, 438 U.S. at 248. If the Legislative Action operated in a way that was foreseeable at the time the contract was entered into, such as in an already regulated area, then the courts will more likely find the impairing Legislative Action to be reasonable. See Energy Reserves Grp., 459 U.S. at 416. However, even if a Legislative Action constituted a severe or total impairment, the courts might still defer to the legislating bodys determination of the reasonableness and necessity of the Legislative Action in light of an important public purpose. See Keystone Bituminous Coal Assn, 480 U.S. at 504.
Thus, for example, a court might uphold a Legislative Action temporarily suspending or limiting the authority of an electric utility, or its assignees, to collect nuclear asset-recovery charges or other revenues to provide relief to electric utility customers in an emergency situation, such as the occurrence of an event or a series of events widely creating economic havoc among customers. The court might reason that the utility industry is already heavily regulated and that such a Legislative Action would not unreasonably interfere with the contractual rights of bondholders, the owners of nuclear asset-recovery property or other financing parties. This is not to suggest that a more severe impairment might not be sustained; rather, that could depend on the courts view of the urgency and unavoidable necessity of the measures taken by the legislative body to protect public interests, such as the health, safety and welfare of the people of the State. Such analysis would be extremely fact-intensive and virtually impossible to predict with a degree of certainty.
E. Constitutional Amendment by Voter Initiative.
The Florida Constitution is fundamentally an act of the people of the State, and is a product of what the people intended. State v. State Bd. of Admin., 157 Fla. 360, 367 (Fla. 1946). Article XI, Section 1 of the Florida Constitution generally confers the power to propose amendments or revisions of the Florida Constitution upon the Legislature. However, Article XI, Section 3 of the Florida Constitution grants the people the power to propose the revision or amendment of the constitution without the aid of any legislative enactment. State ex rel. Citizens Prop. for Tax Relief v. Firestone, 386 So. 2d 561 (Fla. 1980); see also Advisory Op. to the Atty. Gen. Re Limiting Cruel & Inhumane Confinement of Pigs During Pregnancy, 815 So. 2d 597, 601 (Fla. 2002) (noting abuse of citizens initiative process for constitutional amendments) (Pariente, J., concurring); Advisory Op. to the Atty. Gen. - Limited Marine Net Fishing, 620 So. 2d 997, 1000 n.2 (discussing proliferation of citizens initiative amendments and observing that Floridas constitution is one of the most easily amended constitutions in the country) (McDonald, J., concurring). The citizens initiative process is invoked by filing a petition signed by a number of electors in each of one-half of the congressional districts of the State, and of the State as a whole, equal to 8% of the votes cast in each of such districts respectively and in the State as a whole in the last preceding election in which presidential electors were chosen. Art. XI, § 3, Fla. Const. Meeting these requirements allows the amendment to be placed on a state-wide ballot for ratification. An initiative petition with subsequent passage by the electors could, therefore, result in the revision or even repeal of the Nuclear Asset-Recovery Act.
Case law suggests that an amendment to the Florida Constitution which operates to impair an existing contractual obligation would be subject to the Contracts Clause analysis as discussed above. In State ex rel. Sovereign Camp, W.O.W. v. Boring, the Florida Supreme Court stated that [a] state can no more impair the obligation of an antecedent contract by adopting a Constitution or amending its Constitution than by passing or amending a statute. 164 So. 859, 865 (Fla. 1935); see also Bd. of Pub. Instruction for Bay Cnty. v. State ex rel. Barefoot, 199 So. 760, 762 (Fla. 1941) (Florida law is well-settled that a provision of even the organic law of the state may not be given such effect that it will impair an
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 16
obligation existing at time of its adoption, since a state constitutional provision is a law within the meaning of Federal Constitution prohibiting passage of law impairing the obligation of contracts.); Gray v. Moss, 156 So. 262, 265-66 (Fla. 1934) (The prohibition in the Constitution of the United States against the passage of law impairing the obligation of contracts applies to the Constitution, as well as to the laws, of each State.) (citing New Orleans Gas Co. v. La. Light Co., 115 U.S. 650 (1885)).
A principal inquiry in impairment analysis is whether the Legislative Action operates retroactively. In State v. Lavazzoll, 434 So. 2d 321, 323 (Fla. 1983), the Florida Supreme Court upheld a constitutional amendment mandating that the state constitutional exclusionary rule be interpreted in conformity with the United States Supreme Courts interpretation of the Fourth Amendment to the United States Constitution, focusing on its prospective application. The Court explained:
[i]t is a well-established rule of construction that in the absence of clear legislative expression to the contrary, a law is presumed to operate prospectively. This rule applies with particular force to those instances where retrospective operation of the law would impair or destroy existing rights. In accordance with the rule applicable to original acts, it is presumed that provisions added by an amendment affecting existing rights are intended to operate prospectively also. Nowhere . . . on the [ballot in question] is there manifested any intent that the amendment be applied retroactively. Therefore, the amendment must be given prospective effect only.
Id. at 323 (citations omitted). In Florida Ins. Guar. Assn v. Devon Neighborhood Assn, 67 So. 3d 187 (Fla. 2011), the Florida Supreme Court held that a 2005 amendment to an insurance statute did not apply retroactively, explaining:
. . . two interrelated issues arise when the question of a statutes retroactive application is before the Courtthe court must first determine if there is clear evidence of legislative intent to apply the statute retrospectively. Once the first inquiry is made, and only if the legislation clearly expresses an intent that it must apply retroactively, then the second inquiry is whether retroactive application is constitutionally permissible . . . . [I]f the plain language of the statute does not evince an intent that the statute apply retroactively, the Court need not address the second prong . . . .
The rule that statutes are not to be construed retrospectively, unless such construction was plainly intended by the Legislature, applies with peculiar force to those statutes the retrospective operation of which would impair or destroy vested rights . . . . [I]f a statute accomplishes a remedial purpose by creating new substantive rights or imposing new legal burdens, the presumption against retroactivity would still apply.
Id. at 194 (citations omitted).
This principle has been applied by a lower court analyzing application of a constitutional amendment. Rusiecki v. Jackson-Curtis, 2005 WL 408133 (Fla. 6th Cir. Ct. Jan. 31, 2005) involved a constitutional amendment granting patients access to records made or received by a healthcare facility or provider relating to adverse medical incidents (i.e., peer review material that enjoyed various federal and
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 17
state statutory protections).5 The trial court held that because peer review was conducted (and the subject records were created) before passage of the constitutional amendment, healthcare providers had a vested substantive statutory right to non-disclosure of such information. Accordingly, the court determined that the amendment could be applied only prospectively (such that any peer review material created before the amendments passage would not be subject to production).
In sum, a constitutional amendment or revision affecting the Nuclear Asset-Recovery Act (and obligations created thereunder) likely would be subject to a Contract Clause analysis (including the Pomponio balancing test) to the extent such amendment or revision would apply retroactively to impair existing contractual obligations.
* * *
Based upon the foregoing analysis, in our opinion, a reviewing court would conclude that (a) the State Pledge constitutes a contractual relationship between the Bondholders and the State, and (b) absent a demonstration by the State that an Impairment is necessary to further a significant and legitimate public purpose, the State Pledge provides a basis upon which the Bondholders (or the Trustee acting on their behalf) could challenge successfully, under the Florida Contract Clause, the constitutionality of any Legislative Action subsequently passed by the Legislature, any law passed by the people as a constitutional amendment or any action of the Florida Commission exercising legislative powers that were determined to reduce, alter, or impair the value of the Nuclear Asset-Recovery Property or the Nuclear Asset-Recovery Charges so as to cause an Impairment before the Bonds are fully paid and discharged.
II. OPINION 2 POTENTIAL AVAILABILITY OF TEMPORARY AND
PERMANENT INJUNCTIVE RELIEF.
Here, we address the remedies of temporary and permanent injunctive relief enjoining state officials from enforcing provisions of Legislative Action that would Impair the Rights or the Charges. As a threshold matter, the potential availability of such relief will require a showing that (i) such Legislative Action violates the State Pledge; (ii) the State Pledge is a contract of the State; and (iii) the Legislative Action was not a legitimate and reasonable exercise of the states sovereign powers and reasonable and necessary to serve a legitimate public purpose.
The purpose of an injunction is to preserve an existing state or condition, and to afford relief against future acts that are against equity and good conscience. Seaboard Air Line Ry. v. Southern Inv. Co., 44 So. 351 (Fla. 1907). There are basically two kinds of injunctions: (1) prohibitory injunctions, which act to restrain specific conduct; and (2) mandatory injunctions, which act to command specific conduct . . . . Mandatory injunctions are looked upon with disfavor, and the courts seem even more reluctant to issue them than prohibitory ones. Mayors Jewelers v. Ca. Pub. Emps. Ret. Sys., 685 So. 2d 904, 910 (Fla. 4th DCA 1996) (citing Johnson v. Killian, 27 So. 2d 345, 346 (1946)); see also Amelio v. Marilyn Pines Unit II Condo. Assn, Inc., 173 So. 3d 1037, 1042 (Fla. 2d DCA 2015), rehg denied (Sept. 9, 2015) (Mandatory injunctions, which compel an affirmative action by the party enjoined, are looked upon with disfavor, and the courts are even more reluctant to issue them than prohibitory ones.) (citation omitted).
5 Rusiecki was a medical malpractice case in which the plaintiff sought discovery of peer review material from the defendant hospital; the information plaintiff sought included peer review of adverse incidents occurring before passage of the constitutional amendment.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 18
An injunction is not generally appropriate in a contract case absent some special equity or covenant within the terms of the agreement. See Campbell v. Maull, 67 So. 639, 639 (Fla. 1915). Jurisdiction to decree specific performance of a contract is exercised in two classes of cases: (1) where the contracts subject matter is of such a special nature that damages, when ascertained upon legal rules, would be inadequate; (2) or where damages are impracticable in that no real compensation can be arrived at through an action at law. Northwestern Natl Ins. Co. v. Greenspun, 330 So. 2d 561, 563 (Fla. 3d DCA 1976) (injunction is reasonable where plaintiffs alleged that insurer intended to increase its premiums upon its major medical insurance policies to obtain higher premiums and avoid contracts already written). Injunctions involving contracts are frequently seen in cases involving covenants not to compete. See Miller Mech., Inc. v. Ruth, 300 So. 2d 11, 12 (Fla. 1974) (The Court may award damages for breach of [non-compete] contract but the normal remedy is to grant an injunction); Graphic Bus. Sys., Inc. v. Rogge, 418 So. 2d 1084, 1086 (Fla. 1982) (same). However, [a] mandatory temporary injunction may be issued requiring specific performance of a contract. Wilson v. Sandstrom, 317 So. 2d 732, 736 (Fla. 1975). Such injunction cases typically involve contracts calling for personal services or acts of a special character, or for such services by persons of eminence or special qualifications. Id. at 738. Thus, under certain circumstances, Florida courts may grant injunctions mandating performance of contractual obligations.
Because an injunction is considered an extraordinary remedy, harsh and drastic, such relief, particularly when it is mandatory, is granted cautiously and sparingly. Amelio v. Marilyn Pines Unit II Condo. Assn, Inc., 173 So. 3d 1037, 1042 (Fla. 2d DCA 2015) (citing Johnson v. Killian, 27 So. 2d 345, 346 (Fla. 1946)). Thus, an injunction will only be granted where it is clear that one has sufficient right or interest in the property for which protection is sought. Diamond v. Interstate Trading Corp., 606 So. 2d 631, 632 (Fla. 3d DCA 1992); Register v. Pierce, 530 So. 2d 990, 993 (Fla. 1st DCA 1988) (For an injunction to be granted, the requesting party must have a clear legal right, free from reasonable doubt.).
A. Availability of Temporary Injunction.6
The purpose of a temporary injunction [is] to maintain the status quo. Blackhawk Heating & Plumbing Co. v. Data Lease Fin. Corp., 328 So. 2d 825, 826 (Fla. 1975). The status quo to be preserved is the last, actual, peaceable, non-contested status that preceded the pending controversy. Lieberman v. Marshall, 236 So. 2d 120, 125 (Fla. 1970). A temporary injunction would delay implementation of Legislative Action being challenged under the Florida Contract Clause as a substantial impairment, pending an adjudication on the merits of such claim.
To obtain a temporary injunction, the petitioner must satisfy a four-part test under Florida law: a substantial likelihood of success on the merits; lack of an adequate remedy at law; irreparable harm absent the entry of an injunction; and that injunctive relief will serve the public interest. Liberty Counsel v. Fla. Bar Bd. of Governors, 12 So. 3d 183, 186 (Fla. 2009) (citations and internal quotation marks omitted); see also DePuy Orthopaedics, Inc. v. Waxman, 95 So. 3d 928, 938 (Fla. 1st DCA 2012); Planned Parenthood of Greater Orlando v. MMB Props., 171 So. 3d 125, 128 (Fla. 5th DCA 2015); Florida Digestive Health Specialists, LLP v. Colina, No. 2D144561, 2015 WL 6874913, at *3 (Fla. 2d DCA Nov. 4, 2015). We discuss these elements separately below.
6 Preliminary injunction and temporary injunction are used interchangeably and have the same meaning. Ladner v. Plaza Del Prado Condominium Assn, 423 So. 2d 927, 929 (Fla. 3d DCA 1982); see also Hasley v. Harrell, 971 So. 2d 149, 152 (Fla. 2d DCA 2007) (A temporary, or preliminary, injunction is one entered on a nonfinal basis . . .).
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 19
1. Irreparable Harm
Irreparable injury is an injury of such nature that it cannot be redressed in a court of law; an injury for which monetary compensation will not suffice. Gonzalez v. Benoit, 424 So. 2d 957, 958 (Fla. 3d DCA 1983); Mullinix v. Mullinix, 182 So. 2d 268, 269 (Fla. 4th DCA 1966) (same). The general principle is that irreparable damage is not a reference to the amount of damages, but to the difficulty of measuring the amount of damage suffered. Therefore, harm will be considered irreparable where the damages must be estimated by conjecture, and not by any accurate standard. Sun Elastic Corp. v. O.B. Indus., 603 So. 2d 516, 517, n.3 (Fla. 3d DCA 1992). Thus, violation of reasonable restrictive covenants in employment contracts and disclosure of trade secrets or confidential business information generally involve irreparable harm. See Capraro v. Lanier Bus. Prods., Inc., 466 So. 2d 212, 213 (Fla. 1985) (irreparable injury may be presumed in the context of covenants not to compete and trade secrets); § 542.33(2)(a), Fla. Stat. (use of specific trade secrets . . . shall be presumed to be an irreparable injury); § 542.335(1)(j), Fla. Stat. ([th]e violation of an enforceable restrictive covenant creates a presumption of irreparable injury). Environmental threats and trademark violations also generally involve irreparable harm. See, e.g., Tally-Ho, Inc. v. Coast Cmty. Coll. Dist., 889 F.2d 1018, 1029 (11th Cir. 1989) (recognizing that irreparable harm generally occurs upon trademark infringement); South Fla. Water Mgmt. Dist. v. City of St. Cloud, 550 So. 2d 551, 553 (Fla. 5th DCA 1989) (temporary injunction appropriate where testimony about the effect of wells construction on quality and availability of water revealed sufficient evidence to establish irreparable injury).
By contrast, purely economic injury is generally not considered sufficient to warrant injunctive relief. E.g., Dania Jai Alai Intl, Inc. v. Murua, 375 So. 2d 57, 58 (Fla. 4th DCA 1979 (loss of income is not irreparable injury); South Fla. Limousines, Inc. v. Broward Cnty. Aviation Dept, 512 So. 2d 1059, 1061-62 (Fla. 4th DCA 1987) (no irreparable harm where plaintiffs competitors were awarded contract and nothing was being taken away from plaintiffs); Department of Transp. v. Kountry Kitchen of Key Largo, Inc., 645 So. 2d 1086, 1086 (Fla. 3d DCA 1994) (lost business resulting from removal of advertising sign does not constitute irreparable harm). For this reason, in contract cases that do not involve intangible rights, but instead feature only monetary losses, making the required showing of irreparable harm is frequently an obstacle.
2. No Adequate Remedy at Law
Florida case law generally requires, as a separately enumerated element for issuance of an injunction, that the moving party show the absence of an available legal remedy. E.g., Naegele Outdoor Adver. Co., Inc. v. City of Jacksonville, 659 So. 2d 1046, 1047 (Fla. 1995). To warrant the denial of an injunction, the available legal remedy must be plain, certain, prompt, speedy, sufficient, full and complete, practical and efficient in attaining the ends of justice. Liza Danielle, Inc. v. Jamko, Inc., 408 So. 2d 735, 738 (Fla. 3d DCA 1982); see also Citizens & S. Natl Bank v. Taylor, 191 So. 2d 866, 867 (Fla. 1st DCA 1966) (same).
It is pragmatically difficult to distinguish between the irreparable harm requirement and the inadequate legal remedy requirement, and many cases equate the two. See, e.g., Corporate Mgmt. Advisors, Inc. v. Boghos, 756 So. 2d 246, 247 (Fla. 5th DCA 2000) (The question of whether the injury is irreparable turns on whether there is an adequate legal remedy available.); Bradley v. Health Coal., 687 So. 2d 329, 333 n.6 (Fla. 3d DCA 1997) (superseded on other grounds by Fla. Stat. § 542.335) (explaining that a temporary injunction requires a showing of a likelihood of irreparable harm and the unavailability of an adequate remedy at law). It is relatively clear, however, that where an adequate legal remedy exists (as
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 20
is generally the case where the claim at issue is solely for money damages), temporary injunctive relief is unlikely. De Leon v. Aerochago, S.A., 593 So. 2d 558, 559 (Fla. 3d DCA 1992) (injunctive relief inappropriate for money damages claims); State, Agency for Health Care Admin. v. Contl Car Servs., Inc., 650 So. 2d 173, 175 (Fla. 2d DCA 1995) (adequate legal remedy existed for alleged loss of business where historical records provided information sufficient to establish amount of monetary loss).
It seems doubtful that Bondholders (or the Trustee acting on their behalf) could obtain adequate money damages from the State or its officials. That damages are difficult to measure in the case of repeal of a statutory pledge of revenues to a bond issue is noted in U.S. Trust Co. v. New Jersey, 431 U.S. 1 (1977), in its discussion of the substantial nature of the impairment. The Court described the difficulty of evaluating the impact of the repeal of the covenant upon the market price of the bonds. After establishing that it could not ascertain with certainty that fluctuations in market price were caused by the repeal of the covenant and noting that the bonds rating had not changed, the Court determined that no one can be sure precisely how much financial loss the bondholders suffered. Id. at 19 (explaining that [f]actors unrelated to repeal may have influenced price. In addition, the market may not have reacted fully, even as yet, to the covenants repeal, because of the pending litigation and the possibility that the repeal would be nullified by the courts.)
3. Substantial Likelihood of Success on the Merits
Substantial likelihood of success on the merits is shown if good reasons for anticipating that result are demonstrated. It is not enough that a merely colorable claim is advanced. Naegele Outdoor Advertising Co. v. City of Jacksonville, 659 So. 2d 1046, 1047 (Fla. 1995). For example, a nonprofit corporation demonstrated a substantial likelihood of success of proving a Sunshine Law violation where there was undisputed evidence that the defendant school board, without providing notice, conducted a meeting related to matters on which foreseeable board action would have to be taken. Citizens for Sunshine, Inc. v. Sch. Bd. of Martin Cnty., 125 So. 3d 184, 188 (Fla. 4th DCA 2013). By contrast, a homeowner who sought a preliminary injunction against demolition of a house he had been building for five years failed to demonstrate a likelihood of success where the evidence showed that the municipal agency had issued multiple citations for failure to construct the home in accordance with applicable building codes, resulting in an unsafe structure. Dragomirecky v. Town of Ponce Inlet, 882 So. 2d 495 (Fla. 5th DCA 2004).
4. Considerations of Public Interest
The paramount interests of the public may have some bearing granting injunctive relief to protect private rights. If relevant, the public interest is a factor the courts also consider in granting or denying an injunction. Florida courts have held that public interest concerns arise where it plainly appears that an injunction will result in confusion and disorder, and will produce an injury to the public that outweighs the individual right of the complainant to have the relief sought. Fredericks v. Blake, 382 So. 2d 368, 371 (Fla. 3d DCA 1980). [A]n injunction may be denied where the injury to the public outweighs any individual right to relief. Knox v. Dist. Sch. Bd., 821 So. 2d 311, 314 (Fla. 5th DCA 2002). For example, in Lloyd Damsey, M.D., P.A. v. Mankowitz, 339 So. 2d 282 (Fla. 3d DCA 1976), the court refused to enjoin the defendant from practicing medicine in the geographic area where such practice was precluded by his non-compete agreement with a prior employer. The court explained that there was a compelling need for [the] defendants services as a surgeon in the area and enforcement of the covenant would jeopardize the public health of the community. Id. at 283.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 21
The purpose of a preliminary injunction is to preserve the status quo which existed before the controversy, not to take sides. Chicago Title Ins. Agency, Inc. v. Chi. Title Ins. Co., 560 So. 2d 296, 297 (Fla. 2d DCA 1990) (citing Lieberman v. Marshall, 236 So. 2d 120, 125 (Fla. 1970)). The status quo with respect to the Bonds before enactment of any challenged Legislative Action would appear to be the continued effectiveness of the Financing Order and the validity of the Rights and the Charges. To maintain that status quo and prevail in an application for a temporary injunction to enjoin State officials from enforcing a Legislative Action affecting the rights of Bondholders, Bondholders would be required to prove a substantial likelihood of irreparable harm, no adequate legal remedy, a likelihood of success on the merits of the challenge to the Legislative Action and that the public interest would not be disserved by such an injunction.
At the temporary injunction stage, Bondholders may confront arguments that there is no irreparable harm and/or there is an adequate legal remedy since ultimately Bondholders theoretically could obtain a judgment for monetary relief resulting from delayed payments or a default by the Issuer. A Florida court could find that a delay in the receipt of payments until final judgment is not the type of irreparable harm which a preliminary injunction seeks to prevent, absent countervailing circumstances or some special equity, and may require a showing that a reduction in the value of the Bonds is not compensable through a monetary award.
Bondholders could argue that irreparable harm and inadequacy of any legal remedy are shown by the possibility of delayed payments and threat of default by the Issuer, or even a downgrade in the credit rating assigned to the Bonds having an adverse impact on the value of the Bonds. The amount of such loss of value may not be immediately quantifiable and could, presumably, not be recovered. For a Florida court to grant injunctive relief, harm need not have actually occurred. The remedy is traditionally for protection from threatened or potential future injury [that is] likely to occur. American Bank of Merritt Island v. First Am. Bank & Tr., 455 So. 2d 443 (Fla. 5th DCA 1984); see also Cash v. Surf Club, 436 So. 2d 970, 972 (Fla. 3d DCA 1983) (well-grounded apprehension of irreparable injury to plaintiffs property is sufficient to warrant an injunction). Bondholders also or alternatively could argue that they are not required to demonstrate irreparable harm or inadequacy of any legal remedy upon a showing that the State or the Florida Commission acted beyond their constitutional authority (i.e., that Bondholders have a substantial likelihood of success at proving that the challenged Legislative Action is an unconstitutional impairment and/or taking). See Dept of Profl Reg. v. Fernandez-Lopez, 407 So. 2d 286, 287 (Fla. 3d DCA 1981) (analyzing inadequate legal remedy requirement in appeal from administrative action; stating that an exception exists which allows the circuit court to obtain jurisdiction to enjoin enforcement of facially unconstitutional rules).7
If the Legislative Action is an administrative act, the Court may engage in a somewhat modified analysis. It is reasonably well established that, in the absence of fraud or a gross abuse of discretion, a court should not enjoin administrative action. City of Pompano Beach v. Yardarm Rest., Inc. 509 So. 2d 1295, 1297 (Fla. 4th DCA 1987) (citing Johnson v. McNeill, 10 So.2d 143 (1942) and Hillsborough Cnty. Aviation Auth. v. Taller & Cooper, Inc., 245 So.2d 100 (Fla. 2d DCA 1971). Whether enactment of an ordinance is unreasonable or arbitrary depends upon the potential effect of the ordinance on the safety, health, morals, and general welfare of the community. Id. Bondholders also would be required to show damage, such that, in the appropriate case, administrative remedies would be of no avail, that there is no
7 Authorities interpreting or expanding this holding are sparse, and the holding may be found to be limited to administrative acts that are facially unconstitutional.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 22
adequate remedy provided and thus, they are not required to follow that avenue for relief. S. Bell Tel. & Tel. Co. v. Mobile Am. Corp., Inc., 291 So. 2d 199, 201 (Fla. 1974); see also Berkowitz v. City of Tamarac, 654 So. 2d 982 (Fla. 4th DCA 1995) (a plaintiff is not required to pursue administrative remedies where they are not available and adequate).
Upon a showing that a state statute interferes with federal constitutional rights, federal courts may enjoin State officials from enforcing an unconstitutional statute. See, e.g., Lets Help Fla. v. McCrary, 621 F.2d 195, 199 (5th Cir. 1980) (upholding an injunction prohibiting enforcement of state statutes restricting political contributions, finding that statutes violated First Amendment rights and explaining that, without such injunction, and given the pending election, the plaintiffs would have permanently lost the opportunity to affect the outcome of that election through their contributions); ABC Charters, Inc. v. Bronson, 591 F. Supp. 2d 1272, 1291 (S.D. Fla. 2008) (issuing preliminary injunction against implementation and enforcement of a Florida statute governing travel to Cuba, holding that statute likely would be found unconstitutional under various provisions of the federal Constitution).
Based upon the foregoing analysis, in our opinion, the determination of whether a temporary injunction should issue will depend upon the facts before the court and upon whether the Bondholders have demonstrated (a) a substantial likelihood of irreparable harm; (b) for which there is no adequate legal remedy; (c) a substantial likelihood of success on the merits of a challenge to the Legislative Action; and (d) that the public interest will not be disserved by issuance of the injunction. Because the decision to grant injunctive relief is discretionary with the trial judge,8 a number of variables may impact or affect the availability of this remedy.
B. Availability of Permanent Injunction.
To obtain a permanent injunction, the petitioner must establish a clear legal right, an inadequate remedy at law and that irreparable harm will arise absent injunctive relief. Liberty Counsel v. Fla. Bar Bd. of Governors, 12 So. 3d 183, 186 (Fla. 2009) (internal citation and quotation marks omitted). The public interest is also considered when determining whether to grant a permanent injunction. Stanberry v. Escambia Cnty., 813 So. 2d 278, 279 (Fla. 1st DCA 2002) (affirming denial of permanent injunction after property owner obtained favorable verdict in trespass flooding case against county; recognizing that plaintiffs neighbors had competing interests with respect to drainage flows such that public interest may have been disserved by injunction). The principal difference between the requirements of a temporary injunction and a permanent injunction is that there is no requirement to show a likelihood of success on the merits for a permanent injunction because the moving party necessarily will have prevailed on the merits.
Bondholders seeking a permanent injunction against an impairment arising from Legislative Action presumably could meet the irreparable harm and inadequate legal remedy requirements by obtaining a judicial declaration of the invalidity of such Legislative Action. A substantial impairment with respect to the payment of Bonds would, it would seem, constitute irreparable injury of a continuing nature supporting the grant of permanent injunctive relief. Florida courts have held that an injunction will lie to enjoin the
8 See, e.g., Smith v. Coalition to Reduce Class Size, 827 So. 2d 959, 961 (Fla. 2002) (an order imposing a permanent injunction lies within the sound discretion of the trial court and will be affirmed absent a showing of abuse of discretion); State Road Dept v. Newhall Drainage Dist., 54 So. 2d 48, 50 (Fla. 1951) (the matter of granting an injunction rests largely in the discretion of the trial court); Weinstein v. Aisenberg, 758 So. 2d 705, 706 (Fla. 4th DCA 2000) (decision whether to grant or deny injunctive relief is within the sound discretion of the trial court and will be affirmed absent an abuse of discretion).
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 23
diversion of public funds for an unauthorized use, Williams v. Town of Dunnellon, 169 So. 631 (Fla. 1936); and have enjoined the illegal expenditure of public funds in contravention of a city charter. Robert G. Lassiter & Co. v. Taylor, 128 So. 14 (Fla. 1930). The threat of diversion of funds pledged to the Bonds would appear to constitute the existence of irreparable injury sufficient to support injunctive relief to the extent that any funds not paid are unlikely to be replaced in the future. A substantial impairment with respect to the payment of Bonds thus may, subject to the courts discretion9, constitute irreparable injury of a continuing nature supporting permanent injunctive relief.
Based upon the foregoing analysis, a court in a properly prepared and presented case should conclude that temporary or permanent injunctive relief is available under Florida law to prevent implementation of Legislative Action passed hereafter and determined by such court to cause an Impairment of the Bonds or rights of the Bondholders in violation of the Florida Contract Clause.
III. OPINION 3 THE FLORIDA TAKINGS CLAUSE.
The Fifth Amendment of the United States Constitution provides, in part: nor shall private property be taken for public use, without just compensation (the Federal Takings Clause). The Fourteenth Amendment of the United States Constitution makes the Fifth Amendment, including the Federal Takings Clause, applicable to any state action. Webbs Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155 (1980). There have been numerous United States Supreme Court cases analyzing and evaluating Federal Takings Clause claims. The Hunton Constitutional Opinion contains a detailed analysis of the issue of whether the State of Florida could be required to compensate the Bondholders under the Federal Takings Clause if the State of Florida, exercising its legislative powers, takes an Impairment action.
A. Determination of a Taking is Fact-Intensive.
We have been asked to opine as to whether the Bondholders would be entitled to compensation, pursuant to the Florida Constitutions Takings Clause, should the States repeal or amendment of the Nuclear Asset-Recovery Act constitute a permanent appropriation of a substantial property interest of the Bondholders in the Nuclear Asset-Recovery Property and deprive the Bondholders of their reasonable expectations arising from their investment in the Bonds. The Eminent Domain section of the Florida Constitution (the Florida Takings Clause) provides as follows:
No private property shall be taken except for a public purpose and with full compensation therefor paid to each owner or secured by deposit in the registry of the court and available to the owner.
Art. X, § 6(a), Fla. Const.
The Supreme Court of Florida has held that [a] taking occurs where regulation denies substantially all economically beneficial or productive use of land. Moreover, a temporary deprivation may constitute a taking. Keshbro, Inc. v. City of Miami, 801 So. 2d 864, 871 (Fla. 2001); see also Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005) (explaining that a regulation depriving an owner of all economically beneficial use of real property constitutes a per se taking for which the government must pay just
9 See Gulf Bay Land Invs., Inc. v. Trecker, 955 So. 2d 1157, 1159 (Fla. 2d DCA 2007) (we review the trial courts judgment for permanent injunction under the abuse of discretion standard.); see also cases collected at footnote 8 supra.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 24
compensation). This test does not assure that an owner will be able to use property to earn a profit or to produce income, but rather that the owner will be able to make some use of the property that can be economically executed. State Dept of Envtl. Prot. v. Burgess, 772 So. 2d 540, 543 (Fla. 1st DCA 2000). The Florida Supreme Court has further stated that [g]enerally, the state must pay when it confiscates private property for common use . . . the state must pay when it regulates private property under its police power in such a manner that the regulation effectively deprives the owner of the economically viable use of that property, thereby unfairly imposing the burden of providing for the public welfare upon the affected owner. Joint Ventures, Inc. v. Dept of Transp., 563 So. 2d 622, 624 (Fla. 1990).
The United States Supreme Court stated in Eastern Enter. v. Apfel, 524 U.S. 498, 523 (1998) that the process for evaluating a regulations constitutionality involves an examination of the justice and fairness of the governmental action. That inquiry, by its nature, does not lend itself to any set formula, . . . and the determination whether justice and fairness require that economic injuries caused by public action [must] be compensated by the government, rather than remain disproportionately concentrated on a few persons is essentially ad hoc and fact intensive.10 Similarly, although Florida courts have provided some guidance for determining whether a taking has occurred, there is no set formula for determining whether economic injury caused by state action is a compensable taking. Vatalaro v. Dept of Envl Reg., 601 So. 2d 1223 (Fla. 5th DCA 1992) (citing Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984)). A determination of whether a taking has occurred rests on a factual inquiry that must be made on a case-by-case basis. Sarasota Welfare Home, Inc. v. City of Sarasota, 666 So. 2d 171, 173 (Fla. 2d DCA 1995); see also Graham v. Estuary Props., Inc., 399 So. 2d 1374, 1380 (Fla. 1981) (There is no settled formula for determining when the valid exercise of police power stops and an impermissible encroachment on private property rights begins. Whether a regulation is a valid exercise of the police power or a taking depends on the circumstances of each case.).
The Florida Supreme Court has identified various factors to consider in determining whether a taking has occurred, such as: whether there is a physical invasion of the property; the degree to which there is a diminution in value of the property, or stated another way, whether the regulation precludes all economically reasonable use of the property; whether the regulation confers a public benefit or prevents a public harm; whether the regulation promotes the health, safety, welfare, or morals of the public; whether the regulation is arbitrarily and capriciously applied; and the extent to which the regulation curtails investment-backed expectations. Graham v. Estuary Props., Inc., 399 So.2d 1374, 1380 (Fla. 1981) (citing various United States and Florida Supreme Court cases). The district courts of appeal have articulated similar factors. E.g., Gardens Country Club, Inc. v. Palm Beach Cnty., 712 So. 2d 398 (Fla. 4th DCA 1998) (factors to be considered include: (1) the economic impact of regulation on claimant and (2) the extent to which regulation has interfered with reasonable investment-backed expectations); Fla. Game & Fresh Water Fish Commn v. Flotilla, Inc., 636 So. 2d 761 (Fla. 2d DCA 1994) (factors include (1) whether there is physical invasion of property; (2) whether regulation precludes all economically reasonable use of property; (3) whether regulation confers public benefit or prevents public harm; (4) whether regulation promotes health, safety, welfare or morals of public; (5) whether regulation is arbitrarily and capriciously applied; and (6) extent to which regulation curtails investment-backed expectations). In short, while they are generally similar, the test each court applies may be different and not entirely predictable.
10 Florida courts consistently look to United States Supreme Court decisions in interpreting the Florida Takings Clause. See, e.g., City of St. Petersburg v. Bowen, 675 So. 2d 626 (Fla. 2d DCA 1996); Vatalaro v. Dept of Envl Reg., 601 So. 2d 1223, 1228 (Fla. 5th DCA 1992).
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 25
Florida courts have also articulated elements indicating that a regulation is not a taking. For example, in Golf Club of Plantation, Inc. v. City of Plantation, 717 So. 2d 166 (Fla. 4th DCA 1998) (citing Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992)), the court held that land use regulation is not a taking if it (1) substantially advances a legitimate state interest, and (2) does not deny an owner economically viable use of his land. The court further delineated the factual criteria to consider when determining whether taking through land use regulation has occurred as whether (1) there was a denial of economically viable use of the property; (2) the owner had distinct investment-backed expectations; and (3) it was an interest vested in the owner, as a matter of state property law. Whether or not expectations are considered reasonable will depend on whether the real property owner had notice in advance of his investment decision that the governmental regulations which are alleged to constitute the taking had been or would be enacted. Id. at 170; see also Webbs Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161 (1980) (finding constitutional a Florida statute that permitted respondent clerk of courts to receive interest on monies deposited in court registry; explaining that reasonable investment-backed expectation must be more than a mere unilateral expectation or an abstract).
B. Property Can Include Intangibles, Including Contractual Rights
As a general matter, property, in a legal sense, consists in the domination which is rightfully and lawfully obtained over a material thing, with the right to its use, enjoyment and disposition. Dade Cnty v. Gen. Waterworks Corp., 267 So. 2d 633 (Fla. 1972). In City of St. Petersburg v. Bowen, 675 So. 2d 626 (Fla. 2d DCA 1996), the court adopted the term property as explained in Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978), stating that the term property is not the physical thing; rather it is the group of rights inherent in the citizens relationship to the physical thing, such as the right to possess, use, and dispose of ones land. Id. at 630 n.2 (emphasis in original). Therefore, Florida courts have found property to include various rights, such as leaseholds, easements, franchises and contracts.11
Although the majority of Florida case law deals with real property rights,12 the United States Supreme Court has held that property other than real property or tangible personal property may nevertheless be entitled to the protections afforded by the Takings Clause. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1003-04 (1984) (recognizing trade secrets as a protected property right) (citing Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972)). An independent source, however, such as state law or existing rules, and not the United States Constitution, must create the protected property right. Webbs Fabulous Pharms. v. Beckwith, 449 U.S. 155, 161 (1980) (property interests . . . are not created by the Constitution. Rather,
11 See, e.g., Pondella Hall For Hire, Inc. v. Lamar, 866 So. 2d 719 (Fla. 5th DCA 2004) (stating that it is generally true that leasehold interests are considered property subject to a takings claim); Pinellas Cnty. v. Brown, 450 So. 2d 240, 242 (Fla. 2d DCA 1984) (acknowledging that the definition of property was sufficiently broad to extend to intangible and incorporeal rights, such as contractual obligations and leasehold interests); OConnor Dev. Corp. v. State Dept of Transp., 533 So. 2d 800, 801 (Fla. 1st DCA 1988) (government action barring the issuance of a development permit to a private property owner may constitute a taking if the action deprives the developer of a substantial portion of the beneficial use of the property); see also City of St. Petersburg v. Bowen, 675 So. 2d 626, 630 (Fla. 2d DCA 1996) (Unless the State can show that the owner had no reasonable expectation of the proposed use when he or she acquired the property, the owner must be compensated for the denial of that use.).
12 Compare Williams v. Am. Optical Corp., 73 So. 3d 120, 123 (Fla. 2011) (recognizing that a cause of action is property protected by the Florida Constitution).
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 26
they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law) (citation omitted); see also Ruckelshaus, 467 U.S. at 1004 (same).13
Due to Florida courts general deference to the Supreme Court of the United States analysis on the issue of taking, a Florida court likely would undertake a similar analysis of, and reach a similar conclusion regarding, the rights under the Nuclear Asset-Recovery Act in determining whether they constitute property for purposes of the Takings Clause of the Florida Constitution. In Scott v. Williams, 107 So. 3d 379, 396 (Fla. 2013), the Florida Supreme Court analyzed a retirement contractual right pursuant to the Takings Clause. While the Court found that the legislation which encroached on that particular contractual right did not amount to a taking, the analysis itself suggests that the Florida Supreme Court has accepted that contracts are property rights for purposes of a takings analysis. Cf. Behm v. Dept. of Transp., 383 So. 2d 216, 219 (Fla. 1980) (The right to business damages is a matter of legislative grace, not constitutional imperative. Lost profits and business damages are intangibles which generally do not constitute property in the constitutional sense.); see also M.J. Stavola Farms, Inc. v. DOT, 742 So. 2d 391, 392 n. 3 (Fla. 5th DCA 1999) and Broward Cnty. v. Carney, 586 So. 2d 425, 427 (Fla. 4th DCA 1991) (same).
C. The Nuclear Asset-Recovery Act Rights as Property.
The Nuclear Asset-Recovery Act provides that nuclear asset property
constitutes an existing, present property right or interest therein, notwithstanding that the imposition and collection of nuclear asset-recovery charges depends on the electric utility, to which the financing order is issued, performing its servicing functions relating to the collection of nuclear asset-recovery charges and on future electricity consumption.
Fla. Stat. § 366.95(5)(a).
However, the statutes own characterization of the nuclear asset-recovery property as a property right does not necessarily mean that a court will determine that the Bondholders Rights are protected by the Florida Takings Clause. If such a challenge arose, the Bondholders would have a strong argument that the Bondholders rights are property warranting the protections afforded by the Federal Takings Clause. See U.S. Tr. Co. v. New Jersey, 431 U.S. 1 (1977) (repeal of a legislative covenant, similar to a State Pledge, was found to impair the contract rights of the bondholders).
13 In Duquesne Light Co. v. Barasch, 488 U.S. 299, 308 (1989) (distinguished on other grounds in P.R. Tel. Co. v. Telecomms. Reg. Bd. of P.R., 665 F.3d 309, 323 (1st Cir. 2011)), the Supreme Court generally acknowledged that a utility (and its investors) have a right to a fair return on investment, which may be a property right for purposes of the Takings Clause. In Duquesne, however, the Court found that a state law requiring rates to be fixed without consideration of a utilitys expenditures for unbuilt nuclear facilities did not constitute a taking under the federal constitution. The Court engaged in a detailed analysis of rate regulation considerations, finding that the challenges to the state law did not present constitutional questions, in part because they required a piecemeal review of the states ratemaking methodology; ultimately the Court concluded that it had not been shown that the state law fail[ed] to give a reasonable rate of return on equity.
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 27
As discussed above, Florida and Federal law indicate that investment-backed expectations can be property for purposes of a takings analysis. Therefore, although many factors will have an impact on the market price of the Bonds, arguably, the maintenance of the market price of the Bonds could be a reasonable investment-backed expectation. Legislative Action that prevents the Bonds from being paid, therefore, would likely support a takings claim. Such Legislative Action would clearly interfere with Bondholders reasonable investment-backed expectations, since timely payment of the Bonds is the primary expectation of the Bondholders.
Additionally, the State Pledge itself may form the basis for reasonable investment-backed expectations. The United States Supreme Court has held that a government guarantee of confidentiality could form the basis for such an expectation. See Ruckelshaus, 467 U.S. at 1011. The Bondholders likely could argue that they would not have invested in the Bonds absent the States undertaking contained in the State Pledge and, therefore, that the State Pledge created reasonable investment-backed expectations. It is reasonable and logical that Bondholders who have invested in the Bonds expect that the Bonds will be paid and relied upon the State Pledge to mean that the State will not impair the State Pledge so as to endanger or imperil their investment.
D. Full Compensation Requirement.
As noted above, the Florida Constitution requires that any taking must be done, inter alia, with full compensation to the owner. Article X, Section 6(a). Full compensation means nothing less than payment for that which the property owner is being deprived of. Meyers v. City of Daytona Beach, 30 So. 2d 354, 355 (Fla. 1947). The Florida Supreme Court has consistently held that the constitutional provision for full compensation requires that the courts determine the value of the property by taking into account all the facts and circumstances that bear a reasonable relationship to the loss occasioned the owner by virtue of the taking. Florida E. Coast Ry. Co. v. Martin Cnty., 171 So. 2d 873, 877 (Fla. 1965) (emphasis in original) (citing Jacksonville Expressway Auth. v. Henry DuPree Co., 108 So. 2d 289, 291 (Fla. 1959)); Behm v. Div. of Admin., Dept of Transp., 383 So. 2d 216, 218 (Fla. 1980); see also Florida DOT v. Cove, 159 So. 3d 927, 932 (Fla. 2d DCA 2015) (same).
Therefore, [f]ull compensation within the meaning of the Constitution must be determined by reference to the state of affairs that would have existed absent any condemnation proceeding whatsoever, i.e., the owners retaining ownership. Florida Dept of Revenue v. Orange Cnty., 620 So. 2d 991, 992 (Fla. 1993).
Generally, just and full compensation due is the fair market value of the property at the time of the taking. Dept of Agric. & Consumer Servs. v. Polk, 568 So. 2d 35, 42 (citing First English Evangelical Lutheran Church v. Cnty. of L.A., 482 U.S. 304 (1987)). The Florida Supreme Court has also recognized, however, that although fair market value is an important element in the compensation formula, it is not an exclusive standard in this jurisdiction. Fair market value is merely a tool to assist us in determining what is full or just compensation, within the purview of our constitutional requirement. Polk, 568 So. 2d at 42 (citing Jacksonville Expressway Auth. v. Henry G. Du Pree Co., 108 So. 2d 289, 291 (Fla. 1958) and Dade Cnty. v. Gen. Waterworks Corp., 267 So. 2d 633, 639 (Fla. 1972) (The conclusion to be drawn is simply that the proper valuation method or methods for any given case are inextricably bound up with the particular circumstances of the case.).
Therefore, a court could reasonably conclude that Legislative Action constitutes a compensable taking under the Florida Takings Clause if it determines that the Legislative Action: (i) is an intentional action by the Legislature or the Florida Commission, (ii) effects a regulatory taking of the Rights, and (iii)
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 28
is for public use. To determine whether a compensable taking had occurred, the court likely would consider or apply the principles discussed above.
Specifically, a Florida court could reasonably conclude that the repeal or amendment of the Nuclear Asset-Recovery Act or taking of any other action in contravention of the State Pledge would constitute a permanent appropriation of a substantial property interest of the Bondholders requiring full compensation.
A courts response to a Takings Clause challenge likely will be affected by the nature of the Impairment action which could include, but is not limited to legislation that: (i) repeals or alters the State Pledge; (ii) prevents imposition of the Charges, (iii) revises the regulatory basis for establishing utility rates in a way that adversely impacts collection of the Charges; (iv) diverts the Rights from payment of the Bonds to other public purposes; or (v) adversely affects the assets that generated the Charges.
Based upon the foregoing analysis, in our opinion, under the Florida Takings Clause, a court should hold that the State pay just compensation to Bondholders if the States repeal or amendment of the Nuclear Asset-Recovery Act or taking of any other action in contravention of the State Pledge (a) constituted a permanent appropriation of a substantial property interest of the Bondholders in the Nuclear Asset-Recovery Property or denied all economically productive use of the Nuclear Asset-Recovery Property; (b) destroyed the Nuclear Asset-Recovery Property; or (c) substantially reduced, altered or impaired the value of the Nuclear Asset-Recovery Property so as to unduly interfere with the reasonable expectations of the Bondholders arising from their investments in the Bonds. However, there can be no assurance that any such award of just compensation would be sufficient to pay the full amount of principal of and interest on the Bonds.
* * *
All of the opinions set forth above are limited to the specific issues addressed, are given as of the date hereof, are limited in all respects to laws and facts existing on the date of this letter, and are based on the reasonable exercise of legal judgment. Due to the absence of controlling judicial precedent, our analysis is necessarily a reasoned application of judicial decisions involving similar or analogous circumstances. These opinions are specifically limited to the laws of the State of Florida. We note that there are no reported controlling judicial precedents of which we are aware directly on point and that judicial analysis of issues relating to the Florida Contract Clause and the Florida Takings Clause has typically proceeded on a case-by-case basis and that the courts determination, in most instances, is usually strongly influenced by the facts and circumstances of the particular case. Moreover, the authorities we have examined contain certain cases and authorities that are arguably inconsistent with our conclusions expressed herein. These cases and authorities are, in our opinion, distinguishable in the context of the application of the Florida Contract Clause and the Florida Takings Clause.
We express no opinion as to any federal or state securities or commodities laws, rules or regulations or blue sky laws or the rules or regulations of the Financial Industry Regulatory Authority, including, without limitation, as to the classification of the Nuclear Asset-Recovery Property or of the Issuer, or as to whether the Bonds meet the definition of asset-backed security or must be registered as such.
None of the foregoing opinions is intended to be a guarantee as to what a particular court would actually hold; rather, each opinion is only an expression of our belief as to the decision a court of competent jurisdiction ought to reach if the issues were properly prepared and presented to it and the court follows what we believe to be the applicable legal principles under existing judicial precedent. There can be no assurance that a repeal of or amendment to the Nuclear Asset-Recovery Act will not be sought or adopted or that any action by the State of Florida, the voters of the State of Florida or the Florida Commission may
To the addressees listed
on the attached Schedule A
June 22, 2016
Page 29
not occur, any of which might constitute a violation of the State Pledge. We cannot predict the facts and circumstances that will be present in the future and may be relevant. Consequently, there can be no assurance that a court will follow our reasoning or reach the conclusions we believe current judicial precedent supports. Furthermore, the outcome of any litigation cannot be predicted with any degree of certainty.
In the event of any Florida legislation, voter initiative or act of the Florida Commission that adversely impacts the rights of the Bondholders, costly and time-consuming litigation might ensue, adversely affecting, at least temporarily, the price and liquidity of the Bonds. Moreover, the application of equitable principles (including the availability of injunctive relief or the issuance of a stay pending appeal) is subject to the discretion of the court asked to apply them.
It is understood that the Rights may be subject to bankruptcy, insolvency, reorganization, moratorium, and other laws affecting creditors rights generally heretofore or hereafter enacted to the extent applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
While a copy of this opinion may be posted to an internet website required under Rule 17g-5 under the Securities and Exchange Act of 1934, as amended, and maintained by DEF solely for the purpose of complying with such rule, this opinion is provided solely to the addressees at the request of DEF in connection with the Issuers issuance of the Bonds. This opinion may be relied upon by the addressees only in connection with the issuance of the Bonds and may not be quoted, furnished to, used or relied upon by, nor may copies be delivered to, any other person (including, without limitation, any governmental or regulatory agency and all purchasers of Bonds, other than the Underwriters identified on Schedule A hereto) or entity (regardless of whether such other person or entity is related to or affiliated with one of the addressees), nor may the addressees rely on this opinion for any other purpose, without, in each instance, the express written consent of Shutts & Bowen LLP. We do not undertake to advise any addressee or anyone else of any changes in the opinions expressed herein resulting from changes in law, changes in facts, or any other matters that might hereafter occur, arise or be brought to our attention. Except with respect to DEF, the delivery of this opinion to the addressees does not create, and shall not be deemed to create, an attorney-client relationship.
We hereby consent to the filing of this letter as an exhibit to the Registration Statement on Form SF-1 (File Nos. 333-209196 and 333-209196-01) filed with the Securities and Exchange Commission on January 29, 2016, as last amended by Amendment No. 5 thereto filed on June 2, 2016, and to all references to our firm included in or made a part thereof. In giving the foregoing consents, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the related rules and regulations. We assume no obligation to update or supplement this letter to reflect any facts or circumstances which may hereafter come to our attention with respect to the opinions or statements expressed above, including any changes in applicable law which may hereafter occur.
|
Very truly yours, |
|
|
|
/s/ Shutts & Bowen LLP |
|
|
|
Shutts & Bowen LLP |
SCHEDULE A
ADDRESSEES
Duke Energy Florida, LLC
299 First Avenue North
St. Petersburg, Florida 33701
Duke Energy Florida Project Finance, LLC
299 First Avenue North
St. Petersburg, Florida 33701
The Bank of New York Mellon Trust Company, National Association
10161 Centurion Parkway N.
Jacksonville, Florida 32256
Attention: Corporate Trust Department
Guggenheim Securities, LLC
330 Madison Avenue
New York, New York 10017
as Representatives of the several Underwriters
RBC Capital Markets, LLC
200 Vesey Street
New York, New York 10281
as Representatives of the several Underwriters
Moodys Investors Service, Inc.
World Trade Center at 250 Greenwich Street
New York, New York 10007
Standard & Poors Rating Services, a Standard & Poors Financial Services LLC
Structured Credit Surveillance
55 Water Street
New York, New York 10041
Fitch Ratings
33 Whitehall Street
New York, New York 10004
Attention: ABS Surveillance
SCHEDULE B
TRANSACTION DOCUMENTS
1. Financing Order
2. Bonds
3. Indenture
4. Nuclear Asset-Recovery Property Purchase and Sale Agreement
Exhibit 99.7
This SERIES SUPPLEMENT, dated as of June 22, 2016 (this Supplement), is by and between DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, a limited liability company created under the laws of the State of Delaware (the Issuer), and The Bank of New York Mellon Trust Company, National Association (Bank), in its capacity as indenture trustee (the Indenture Trustee) for the benefit of the Secured Parties under the Indenture dated as of June 22, 2016, by and between the Issuer and The Bank of New York Mellon Trust Company, National Association, in its capacity as Indenture Trustee and in its separate capacity as a securities intermediary (the Indenture).
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that the Issuer and the Indenture Trustee may at any time enter into an indenture supplemental to the Indenture for the purposes of authorizing the issuance by the Issuer of a Series of the Nuclear Asset-Recovery Bonds and specifying the terms thereof. The Issuer has duly authorized the creation of a Series of the Nuclear Asset-Recovery Bonds with an initial aggregate principal amount of $1,294,290,000 to be known as Series A Senior Secured Bonds (the Series A Bonds), and the Issuer and the Indenture Trustee are executing and delivering this Supplement in order to provide for the Series A Bonds.
All terms used in this Supplement that are defined in the Indenture, either directly or by reference therein, have the meanings assigned to them therein, except to the extent such terms are defined or modified in this Supplement or the context clearly requires otherwise. In the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Supplement shall govern.
GRANTING CLAUSE
With respect to the Series A Bonds, the Issuer hereby Grants to the Indenture Trustee, as Indenture Trustee for the benefit of the Secured Parties of the Series A Bonds, all of the Issuers right, title and interest (whether now owned or hereafter acquired or arising) in and to (a) the Series Property created under and pursuant to the Financing Order and the Nuclear Asset-Recovery Law, and transferred by the Seller to the Issuer on the date hereof pursuant to the Sale Agreement (including, to the fullest extent permitted by law, the right to impose, bill, collect and receive the Series Charges, the right to obtain periodic adjustments to the Series Charges, and all revenue, collections, claims, rights to payments, payments, money and proceeds arising out of the rights and interests created under the Financing Order), (b) all Series Charges related to the Series Property, (c) the Sale Agreement and the Bill of Sale executed in connection therewith and all property and interests in property transferred under the Sale Agreement and the Bill of Sale with respect to the Series Property and the Series A Bonds, (d) the Servicing Agreement, the Administration Agreement, the Intercreditor Agreement and any subservicing, agency, administration or collection agreements executed in connection therewith, to the extent related to the foregoing Series Property and the Series A Bonds, (e) the Collection Account for the Series A Bonds, all subaccounts thereof and all amounts of cash, instruments, investment property or other assets on deposit therein or credited thereto from time to time and all financial assets and securities entitlements carried therein or credited thereto, (f) all rights to compel the
Servicer to file for and obtain periodic adjustments to the Series Charges in accordance with Section 366.95(2)(c)2.d. and Section 366.95(2)(c)4. of the Nuclear Asset-Recovery Law and the Financing Order, (g) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, whether such claims, demands, causes and choses in action constitute Series Property, accounts, general intangibles, instruments, contract rights, chattel paper or proceeds of such items or any other form of property, (h) all accounts, chattel paper, deposit accounts, documents, general intangibles, goods, instruments, investment property, letters of credit, letters-of-credit rights, money, commercial tort claims and supporting obligations related to the foregoing, and (i) all payments on or under, and all proceeds in respect of, any or all of the foregoing (the Series A Collateral), it being understood that the following do not constitute Series A Collateral: (x) cash that has been released pursuant to the terms of the Indenture, including Section 8.02(e)(x) of the Indenture and, following retirement of all Outstanding Series A Bonds, pursuant to Section 8.02(e)(xii) of the Indenture, (y) amounts deposited with the Issuer on the Series Closing Date, for payment of costs of issuance with respect to the Series A Bonds (together with any interest earnings thereon) or (z) proceeds from the sale of the Series A Bonds required to pay the purchase price for the Series Property and paid pursuant to the Sale Agreement for such Series and upfront Financing Costs, it being understood that such amounts described in clause (x) and clause (y) above shall not be subject to Section 3.17 of the Indenture. For the avoidance of doubt, any Series Property created with respect to an Additional Series shall not be Series A Collateral.
The foregoing Grant is made in trust to secure the Secured Obligations equally and ratably without prejudice, priority or distinction, except as expressly provided in the Indenture, to secure compliance with the provisions of the Indenture with respect to the Series A Bonds, all as provided in the Indenture and to secure the performance by the Issuer of all of its obligations under the Indenture. The Indenture and this Supplement constitute a security agreement within the meaning of the Nuclear Asset-Recovery Law and under the UCC to the extent that the provisions of the UCC are applicable hereto.
The Indenture Trustee, as indenture trustee on behalf of the Secured Parties of the Series A Bonds, acknowledges such Grant and accepts the trusts under this Supplement and the Indenture in accordance with the provisions of this Supplement and the Indenture.
Designation. The Series A Bonds shall be designated generally as the Nuclear Asset-Recovery Bonds, and further denominated as WALs Series A 2018, Series A 2021, Series A 2026, Series A 2032 and Series A 2035.
Initial Principal Amount; Bond Interest Rate; Scheduled Final Payment Date; Final Maturity Date; Required Capital Level. The Series A Bonds of each WAL shall have the initial principal amount, bear interest at the rates per annum (the Bond Interest Rate) and shall have the Scheduled Final Payment Dates and the Final Maturity Dates set forth below:
Weighted |
|
Initial |
|
Bond |
|
Scheduled |
|
Final | |
Series A 2018 |
|
$ |
183,000,000 |
|
1.196 |
% |
March 1, 2020 |
|
March 1, 2022 |
Series A 2021 |
|
$ |
150,000,000 |
|
1.731 |
% |
September 1, 2022 |
|
September 1, 2024 |
Series A 2026 |
|
$ |
436,000,000 |
|
2.538 |
% |
September 1, 2029 |
|
September 1, 2031 |
Series A 2032 |
|
$ |
250,000,000 |
|
2.858 |
% |
March 1, 2033 |
|
March 1, 2035 |
Series A 2035 |
|
$ |
275,290,000 |
|
3.112 |
% |
September 1, 2036 |
|
September 1, 2038 |
The Bond Interest Rate shall be computed on the basis of a 360-day year of twelve 30-day months.
The Required Capital Level for the Series A Bonds shall be equal to 0.5% of the initial principal amount thereof.
Authentication Date; Payment Dates; Expected Sinking Fund Schedule for Principal; Periodic Interest; Book-Entry Nuclear Asset-Recovery Bonds; Waterfall Caps.
Authentication Date. The Series A Bonds that are authenticated and delivered by the Indenture Trustee to or upon the order of the Issuer on June 22, 2016 (the Series Closing Date) shall have as their date of authentication June 22, 2016.
Payment Dates. The Payment Dates for the Series A Bonds are March 1 and September 1 of each year or, if any such date is not a Business Day, the next Business Day, commencing on March 1, 2017 and continuing until the earlier of repayment of the Series A Bonds in full and the Final Maturity Date.
Expected Sinking Fund Schedule for Principal. Unless an Event of Default shall have occurred and be continuing, on each Payment Date, the Indenture Trustee shall distribute to the Holders of record as of the related Record Date amounts payable pursuant to Section 8.02(e) of the Indenture as principal, in the following order and priority: (1) to the holders of the Series A 2018 Nuclear Asset-Recovery Bonds, until the Outstanding Amount of such Series A 2018 Nuclear Asset-Recovery Bonds thereof has been reduced to zero; (2) to the holders of the Series A 2021 Nuclear Asset-Recovery Bonds, until the Outstanding Amount of such Series A 2021 Nuclear Asset-Recovery Bonds thereof has been reduced to zero; (3) to the holders of the Series A 2026 Nuclear Asset-Recovery Bonds, until the Outstanding Amount of such Series A 2026 of Nuclear Asset-Recovery Bonds thereof has been reduced to zero; (4) to the holders of the Series A 2032 Nuclear Asset-Recovery Bonds, until the Outstanding Amount of such Series A 2032 of Nuclear Asset-Recovery Bonds thereof has been reduced to zero; and (5) to the holders of the Series A 2035 Nuclear Asset-Recovery Bonds, until the Outstanding Amount of such Series A 2035 of Nuclear Asset-Recovery Bonds thereof has been reduced to zero; provided, however, that in no event shall a principal payment pursuant to this Section 3(c) on any WAL on a Payment Date be greater than the amount necessary to reduce the Outstanding Amount of such WAL of Nuclear Asset-Recovery Bonds to the amount specified in the Expected Sinking Fund Schedule that is attached as Schedule A hereto for such WAL and Payment Date}.
Periodic Interest. Periodic Interest will be payable on each WAL of the Series A Bonds on each Payment Date in an amount equal to one-half of the product of (i) the applicable Bond Interest Rate and (ii) the Outstanding Amount of the related WAL of Series A Bonds as of the close of business on the preceding Payment Date after giving effect to all payments of principal made to the Holders of the related WAL of Series A Bonds on such preceding Payment Date; provided, however, that, with respect to the initial Payment Date, or if no payment has yet been made, interest on the outstanding principal balance will accrue from and including the Series Closing Date to, but excluding, the following Payment Date.
Book-Entry Nuclear Asset-Recovery Bonds. The Series A Bonds shall be Book-Entry Nuclear Asset-Recovery Bonds, and the applicable provisions of Section 2.11 of the Indenture shall apply to the Series A Bonds.
Waterfall Caps. The amount payable with respect to the Series A Bonds pursuant to Section 8.02(e)(i) of the Indenture shall not exceed $500,000 annually.
Authorized Denominations. The Series A Bonds shall be issuable in denominations of $2,000 and integral multiples of $1,000 in excess thereof, except for one bond, which may be a smaller denomination (the Authorized Denominations).
Delivery and Payment for the Series A Bonds; Form of the Series A Bonds. The Indenture Trustee shall deliver the Series A Bonds to the Issuer when authenticated in accordance with Section 2.03 of the Indenture. The Series A 2018 Nuclear Asset-Recovery Bonds, Series A 2021 Nuclear Asset-Recovery Bonds, Series A 2026 Nuclear Asset-Recovery Bonds, Series A 2032 Nuclear Asset-Recovery Bonds and Series A 2035 Nuclear Asset-Recovery Bonds shall be in the form of Exhibits 1 through 5 hereto.
Ratification of Indenture. As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture, as so supplemented by this Supplement, shall be read, taken and construed as one and the same instrument. This Supplement amends, modifies and supplements the Indenture only insofar as it relates to the Series A Bonds.
Counterparts. This Supplement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument.
Governing Law. This Supplement shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law and Sections 9-301 through 9-306 of the NY UCC), and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws; provided, that, except as set forth in Section 8.02(b) of the Indenture, the creation, attachment and perfection of any Liens created under the Indenture in Property, and all rights and remedies of the Indenture Trustee and the Holders with respect to the Property, shall be governed by the laws of the State of Florida.
Issuer Obligation. No recourse may be taken directly or indirectly by the Holders with respect to the obligations of the Issuer on the Series A Bonds, under the Indenture or this
Supplement or any certificate or other writing delivered in connection herewith or therewith, against (a) any owner of a beneficial interest in the Issuer (including Duke Energy Florida) or (b) any shareholder, partner, owner, beneficiary, officer, director, employee or agent of the Indenture Trustee, the Managers or any owner of a beneficial interest in the Issuer (including Duke Energy Florida) in its individual capacity, or of any successor or assign of any of them in their respective individual or corporate capacities, except as any such Person may have expressly agreed. Each Holder by accepting a Series A Bond specifically confirms the nonrecourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series A Bonds.
Indenture Trustee Disclaimer. The Indenture Trustee is not responsible for the validity or sufficiency of this Supplement or for the recitals contained herein.
Submission to Non-Exclusive Jurisdiction; Waiver of Jury Trial. Each of the Issuer and the Indenture Trustee hereby irrevocably submits to the non-exclusive jurisdiction of any New York State court sitting in The Borough of Manhattan in The City of New York or any U.S. federal court sitting in The Borough of Manhattan in The City of New York in respect of any suit, action or proceeding arising out of or relating to this Supplement and the Series A Bonds and irrevocably accepts for itself and in respect of its respective property, generally and unconditionally, jurisdiction of the aforesaid courts. Each of the Issuer and the Indenture Trustee irrevocably waives, to the fullest extent that it may effectively do so under applicable law, trial by jury.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Supplement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||
|
as Issuer | ||
|
| ||
|
| ||
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
President, Chief Financial Officer and Treasurer |
| |||
| |||
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, | ||
|
as Indenture Trustee and as Securities Intermediary | ||
|
| ||
|
| ||
|
By: |
/s/ Mitchell L. Brumwell | |
|
|
Name: |
Mitchell L. Brumwell |
|
|
Title: |
Vice President |
|
SCHEDULE A
TO SERIES SUPPLEMENT
EXPECTED SINKING FUND SCHEDULE
OUTSTANDING PRINCIPAL BALANCE
Date |
|
Series A |
|
Series A |
|
Series A |
|
Series A |
|
Series A |
| |||||
Series Closing Date |
|
$ |
183,000,000 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2017 |
|
$ |
147,300,00 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2017 |
|
$ |
120,300,000 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2018 |
|
$ |
91,968,362 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2018 |
|
$ |
66,819,301 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2019 |
|
$ |
38,167,849 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2019 |
|
$ |
12,697,061 |
|
$ |
150,000,000 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2020 |
|
|
|
$ |
133,721,958 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
September 1, 2020 |
|
|
|
$ |
107,883,912 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
March 1, 2021 |
|
|
|
$ |
78,473,209 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
September 1, 2021 |
|
|
|
$ |
52,163,338 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
March 1, 2022 |
|
|
|
$ |
22,276,781 |
|
$ |
436,000,000 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
September 1, 2022 |
|
|
|
|
|
$ |
431,486,993 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
March 1, 2023 |
|
|
|
|
|
$ |
401,419,122 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
September 1, 2023 |
|
|
|
|
|
$ |
374,328,724 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
March 1, 2024 |
|
|
|
|
|
$ |
343,548,495 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
September 1, 2024 |
|
|
|
|
|
$ |
315,736,958 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
March 1, 2025 |
|
|
|
|
|
$ |
284,226,703 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
September 1, 2025 |
|
|
|
|
|
$ |
255,676,143 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| ||
March 1, 2026 |
|
|
|
|
|
$ |
223,417,756 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2026 |
|
|
|
|
|
$ |
194,109,843 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2027 |
|
|
|
|
|
$ |
161,084,768 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2027 |
|
|
|
|
|
$ |
131,000,718 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2028 |
|
|
|
|
|
$ |
97,189,941 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2028 |
|
|
|
|
|
$ |
66,310,505 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
March 1, 2029 |
|
|
|
|
|
$ |
31,694,550 |
|
$ |
250,000,000 |
|
$ |
275,290,000 |
|
September 1, 2029 |
|
|
|
|
|
|
|
$ |
250,000,000 |
|
$ |
275,290,000 |
| |
March 1, 2030 |
|
|
|
|
|
|
|
$ |
214,357,231 |
|
$ |
275,290,000 |
| |
September 1, 2030 |
|
|
|
|
|
|
|
$ |
181,556,335 |
|
$ |
275,290,000 |
| |
March 1, 2031 |
|
|
|
|
|
|
|
$ |
144,928,619 |
|
$ |
275,290,000 |
| |
September 1, 2031 |
|
|
|
|
|
|
|
$ |
111,133,282 |
|
$ |
275,290,000 |
| |
March 1, 2032 |
|
|
|
|
|
|
|
$ |
73,491,827 |
|
$ |
275,290,000 |
| |
September 1, 2032 |
|
|
|
|
|
|
|
$ |
38,669,301 |
|
$ |
275,290,000 |
| |
March 1, 2033 |
|
|
|
|
|
|
|
|
|
$ |
275,290,000 |
| ||
September 1, 2033 |
|
|
|
|
|
|
|
|
|
$ |
239,255,018 |
| ||
March 1, 2034 |
|
|
|
|
|
|
|
|
|
$ |
199,408,169 |
| ||
September 1, 2034 |
|
|
|
|
|
|
|
|
|
$ |
162,192,506 |
| ||
March 1, 2035 |
|
|
|
|
|
|
|
|
|
$ |
121,146,581 |
| ||
September 1, 2035 |
|
|
|
|
|
|
|
|
|
$ |
82,613,161 |
| ||
March 1, 2036 |
|
|
|
|
|
|
|
|
|
$ |
40,324,274 |
| ||
September 1, 2036 |
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT 1
TO SERIES SUPPLEMENT
FORM OF SERIES A 2018 NUCLEAR ASSET-RECOVERY BONDS
{See Attached}
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OR ENTITY IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 1 |
|
$183,000,000 |
WAL Designation: Series A 2018 |
|
CUSIP No.: 26444G AA1 |
THE PRINCIPAL OF THIS SERIES A 2018 SENIOR SECURED NUCLEAR ASSET-RECOVERY BOND, (THIS NUCLEAR ASSET-RECOVERY BOND) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NUCLEAR ASSET-RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE SERIES COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS NUCLEAR ASSET-RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.10(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE PAYMENT IN FULL OF THIS NUCLEAR ASSET-RECOVERY BOND, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY
SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF FLORIDA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS NUCLEAR ASSET-RECOVERY BOND.
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC
SERIES A 2018 SENIOR SECURED NUCLEAR ASSET-RECOVERY BONDS
BOND |
|
ORIGINAL |
|
SCHEDULED |
|
FINAL |
|
|
|
|
|
|
|
|
|
1.196 |
% |
$183,000,000 |
|
March 1, 2020 |
|
March 1, 2022 |
|
Duke Energy Florida Project Finance, LLC, a limited liability company created under the laws of the State of Delaware (herein referred to as the Issuer), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified below or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date determined as provided below and ending on or before the Final Maturity Date shown above and to pay interest, at the Bond Interest Rate shown above, on each March 1 and September 1 or, if any such day is not a Business Day, the next Business Day, commencing on March 1, 2017 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each, a Payment Date), on the principal amount of this Nuclear Asset-Recovery Bond. Interest on this Nuclear Asset-Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of 360-day year of twelve 30-day months. Such principal of and interest on this Nuclear Asset-Recovery Bond shall be paid in the manner specified below.
The principal of and interest on this Nuclear Asset-Recovery Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Nuclear Asset-Recovery Bond shall be applied first to interest due and payable on this Nuclear Asset-Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Nuclear Asset-Recovery Bond, all in the manner set forth in the Indenture.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Nuclear Asset-Recovery Bond
shall not be entitled to any benefit under the Indenture referred to below or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Responsible Officer.
Date: June 22, 2016 |
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||
|
as Issuer | ||
|
| ||
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
INDENTURE TRUSTEES
CERTIFICATE OF AUTHENTICATION
Dated: June 22, 2016
This is one of the Series A 2018 Senior Secured Nuclear Asset-Recovery Bonds, designated above and referred to in the within-mentioned Indenture.
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, | ||
|
| ||
|
| ||
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
This Senior Secured Nuclear Asset-Recovery Bond, Series A 2018 is one of a duly authorized issue of Series A Senior Secured Nuclear Asset-Recovery Bonds of the Issuer (herein called the Series A Bonds), which Bonds are issuable in one or more Series, which Series are issuable in one or more WALs. The Series A Bonds consist of 5 WALs, including the Series A 2018 Senior Secured Nuclear Asset-Recovery Bonds, which include this Senior Secured Nuclear Asset-Recovery Bond (herein called the Series A 2018 Nuclear Asset-Recovery Bonds), all issued and to be issued under that certain Indenture dated as of June 22, 2016 (as supplemented by the Series Supplement (as defined below), the Indenture), between the Issuer and The Bank of New York Mellon Trust Company, National Association, in its capacity as indenture trustee (the Indenture Trustee, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the Securities Intermediary, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Bonds. For purposes herein, Series Supplement means that certain Series Supplement dated as of June 22, 2016 between the Issuer and the Indenture Trustee. All terms used in this Series A 2018 Nuclear Asset-Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.
All WALs of Series A Bonds are and will be equally and ratably secured by the Series Collateral pledged as security therefor as provided in the Indenture.
The principal of this Series A 2018 Nuclear Asset-Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account for the Series A Bonds are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Sinking Fund Schedule that is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Series A Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Series A 2018 Nuclear Asset-Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Bonds representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Nuclear Asset-Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Series A 2018 Nuclear Asset-Recovery Bonds shall be made pro rata to the Holders of the Series A 2018 Nuclear Asset-Recovery Bonds entitled thereto based on
the respective principal amounts of the Series A 2018 Nuclear Asset-Recovery Bonds held by them.
Payments of interest on this Series A 2018 Nuclear Asset-Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by check mailed first-class, postage prepaid, to the Person whose name appears as the Registered Holder of this Series A 2018 Nuclear Asset-Recovery Bond (or one or more Predecessor Nuclear Asset-Recovery Bonds) on the Nuclear Asset-Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that (a) upon application to the Indenture Trustee by any Holder owning a Global Nuclear Asset-Recovery Bond evidencing this Series A 2018 Nuclear Asset-Recovery Bond not later than the applicable Record Date, payment will be made by wire transfer to an account maintained by such Holder, and (b) if this Series A 2018 Nuclear Asset-Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Nuclear Asset-Recovery Bond evidencing this Series A 2018 Nuclear Asset-Recovery Bond unless and until such Global Nuclear Asset-Recovery Bond is exchanged for Definitive Nuclear Asset-Recovery Bonds (in which event payments shall be made as provided above) and except for the final installment of principal and premium, if any, payable with respect to this Series A 2018 Nuclear Asset-Recovery Bond on a Payment Date, which shall be payable as provided below. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Nuclear Asset-Recovery Bond Register as of the applicable Record Date without requiring that this Series A 2018 Nuclear Asset-Recovery Bond be submitted for notation of payment. Any reduction in the principal amount of this Series A 2018 Nuclear Asset-Recovery Bond (or any one or more Predecessor Nuclear Asset-Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Series A 2018 Nuclear Asset-Recovery Bond and of any Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then-remaining unpaid principal amount of this Series A 2018 Nuclear Asset-Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed no later than five days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Series A 2018 Nuclear Asset-Recovery Bond and shall specify the place where this Series A 2018 Nuclear Asset-Recovery Bond may be presented and surrendered for payment of such installment.
The Issuer shall pay interest on overdue installments of interest at the Bond Interest Rate to the extent lawful.
This Series A 2018 Nuclear Asset-Recovery Bond is a nuclear asset-recovery bond as such term is defined in the Nuclear Asset-Recovery Law. Principal and interest due and payable on this Series A 2018 Nuclear Asset-Recovery Bond are payable from and secured primarily by Series Property created and established by the Financing Order obtained from the Florida Public Service Commission pursuant to the Nuclear Asset-Recovery Law. Series Property consists of the rights and interests of the Seller in the Financing Order, including the
right to impose, bill, collect and receive Series Charges, the right to obtain True-Up Adjustments and all revenue, collections, claims, rights to payments, payments, moneys and proceeds arising out of the rights and interests created under the Financing Order.
Under the laws of the State of Florida in effect on the date hereof, pursuant to Section 366.95(11) of the Nuclear Asset-Recovery Law, the State of Florida has pledged to agree and work with the Holders, the Indenture Trustee, other Financing Parties that the State of Florida will not (a) alter the provisions of Section 366.95(11) of the Nuclear Asset-Recovery Law which make the Charges imposed by the Financing Order or Subsequent Financing Order irrevocable, binding, and nonbypassable charges; (b) take or permit any action that impairs or would impair the value of Property or revises the Nuclear Asset-Recovery Costs for which recovery is authorized; (c) or except as authorized under the Nuclear Asset-Recovery Law, reduce, alter, or impair Charges that are to be imposed, collected, and remitted for the benefit of the Holders, the Indenture Trustee and other Financing Parties until any and all principal, interest, premium, Financing Costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related Nuclear Asset-Recovery Bonds have been paid and performed in full.
The Issuer and Duke Energy Florida hereby acknowledge that the purchase of this Nuclear Asset-Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.
As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Series A 2018 Nuclear Asset-Recovery Bond may be registered on the Nuclear Asset-Recovery Bond Register upon surrender of this Series A 2018 Nuclear Asset-Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by, (a) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holders attorney duly authorized in writing, with such signature guaranteed by: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee, and (b) such other documents as the Indenture Trustee may require, and thereupon one or more new Nuclear Asset-Recovery Bonds of Authorized Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Series A 2018 Nuclear Asset-Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Section 2.04 or Section 2.06 of the Indenture not involving any transfer.
Each Holder, by acceptance of a Series A 2018 Nuclear Asset-Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Series A 2018 Nuclear Asset-Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (a) any owner of a membership interest in the Issuer (including Duke Energy Florida) or (b) any shareholder, partner, owner, beneficiary, agent, officer or employee of the
Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including Duke Energy Florida) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Series A 2018 Nuclear Asset-Recovery Bond specifically confirms the nonrecourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series A 2018 Nuclear Asset-Recovery Bonds.
Prior to the due presentment for registration of transfer of this Series A 2018 Nuclear Asset-Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Series A 2018 Nuclear Asset-Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Series A 2018 Nuclear Asset-Recovery Bond and for all other purposes whatsoever, whether or not this Series A 2018 Nuclear Asset-Recovery Bond be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Nuclear Asset-Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Holders representing a majority of the Outstanding Amount of all Nuclear Asset-Recovery Bonds at the time outstanding of each Series or WAL to be affected and upon the satisfaction of the Rating Agency Condition and Commission Condition. The Indenture also contains provisions permitting the Holders representing specified percentages of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all Series, on behalf of the Holders of all the Nuclear Asset-Recovery Bonds, with the consent of the Commission, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Series A 2018 Nuclear Asset-Recovery Bond (or any one of more Predecessor Nuclear Asset-Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Series A 2018 Nuclear Asset-Recovery Bond and of any Series A 2018 Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Series A 2018 Nuclear Asset-Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Nuclear Asset-Recovery Bonds issued thereunder, but with the satisfaction of the Commission Condition.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on a Nuclear Asset-Recovery Bond of a Series and (b) certain restrictive covenants and the related Events of Default of a Series, upon compliance by the Issuer with certain conditions set forth in the Indenture, which provisions apply to this Series A 2018 Nuclear Asset-Recovery Bond.
The term Issuer as used in this Series A 2018 Nuclear Asset-Recovery Bond includes any successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders under the Indenture.
The Series A 2018 Nuclear Asset-Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.
This Series A 2018 Nuclear Asset-Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law and Sections 9-301 through 9-306 of the NY UCC), and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws; provided, that the creation, attachment and perfection of any Liens created under the Indenture in Property, and all rights and remedies of the Indenture Trustee and the Holders with respect to the Property, shall be governed by the laws of the State of Florida.
No reference herein to the Indenture and no provision of this Series A 2018 Nuclear Asset-Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Series A 2018 Nuclear Asset-Recovery Bond at the times, place and rate and in the coin or currency herein prescribed.
The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Series A 2018 Nuclear Asset-Recovery Bond, by acquiring any Series A 2018 Nuclear Asset-Recovery Bond or interest therein, (a) express their intention that, solely for the purpose of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Series A 2018 Nuclear Asset-Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Series Collateral and (b) solely for purposes of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Series A 2018 Nuclear Asset-Recovery Bonds are outstanding, agree to treat the Series A 2018 Nuclear Asset-Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Series Collateral unless otherwise required by appropriate taxing authorities.
ABBREVIATIONS
The following abbreviations, when used above on this Nuclear Asset-Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM |
|
as tenants in common |
|
|
|
TEN ENT |
|
as tenants by the entireties |
|
|
|
JT TEN |
|
as joint tenants with right of survivorship and not as tenants in common |
|
|
|
UNIF GIFT MIN ACT |
|
Custodian |
|
|
(Custodian) (minor) |
|
|
|
|
|
Under Uniform Gifts to Minor Act ( ) |
|
|
(State) |
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
|
|
(name and address of assignee) |
the within Series A 2018 Nuclear Asset-Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer said Series A 2018 Nuclear Asset-Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.
|
| ||
Dated: |
|
|
|
|
Signature Guaranteed: | ||
|
| ||
|
| ||
The signature to this assignment must correspond with the name of the registered owner as it appears on the within Series A 2018 Nuclear Asset-Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.
NOTE: Signature(s) must be guaranteed by an institution that is a member of: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee.
EXHIBIT 2
TO SERIES SUPPLEMENT
FORM OF SERIES A 2021 NUCLEAR ASSET-RECOVERY BONDS
{See Attached}
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OR ENTITY IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 2 |
$150,000,000 |
WAL Designation: Series A 2021 |
CUSIP No.: 26444G AB9 |
THE PRINCIPAL OF THIS SERIES A 2021 SENIOR SECURED NUCLEAR ASSET-RECOVERY BOND, (THIS NUCLEAR ASSET-RECOVERY BOND) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NUCLEAR ASSET-RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE SERIES COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS NUCLEAR ASSET-RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.10(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE PAYMENT IN FULL OF THIS NUCLEAR ASSET-RECOVERY BOND, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY
SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF FLORIDA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS NUCLEAR ASSET-RECOVERY BOND.
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC
SERIES A 2021 SENIOR SECURED NUCLEAR ASSET-RECOVERY BONDS
BOND |
|
ORIGINAL |
|
SCHEDULED |
|
FINAL |
|
1.731 |
% |
$150,000,000 |
|
September 1, 2022 |
|
September 1, 2024 |
|
Duke Energy Florida Project Finance, LLC, a limited liability company created under the laws of the State of Delaware (herein referred to as the Issuer), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified below or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date determined as provided below and ending on or before the Final Maturity Date shown above and to pay interest, at the Bond Interest Rate shown above, on each March 1 and September 1 or, if any such day is not a Business Day, the next Business Day, commencing on March 1, 2017 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each, a Payment Date), on the principal amount of this Nuclear Asset-Recovery Bond. Interest on this Nuclear Asset-Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of 360-day year of twelve 30-day months. Such principal of and interest on this Nuclear Asset-Recovery Bond shall be paid in the manner specified below.
The principal of and interest on this Nuclear Asset-Recovery Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Nuclear Asset-Recovery Bond shall be applied first to interest due and payable on this Nuclear Asset-Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Nuclear Asset-Recovery Bond, all in the manner set forth in the Indenture.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Nuclear Asset-Recovery Bond
shall not be entitled to any benefit under the Indenture referred to below or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Responsible Officer.
Date: June 22, 2016 |
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||
|
as Issuer | ||
|
| ||
|
| ||
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
INDENTURE TRUSTEES
CERTIFICATE OF AUTHENTICATION
Dated: June 22, 2016
This is one of the Series A 2021 Senior Secured Nuclear Asset-Recovery Bonds, designated above and referred to in the within-mentioned Indenture.
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, | ||
|
as Indenture Trustee | ||
|
| ||
|
| ||
|
By: |
|
|
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
This Senior Secured Nuclear Asset-Recovery Bond, Series A 2021 is one of a duly authorized issue of Series A Senior Secured Nuclear Asset-Recovery Bonds of the Issuer (herein called the Series A Bonds), which Bonds are issuable in one or more Series, which Series are issuable in one or more WALs. The Series A Bonds consist of 5 WALs, including the Series A 2021 Senior Secured Nuclear Asset-Recovery Bonds, which include this Senior Secured Nuclear Asset-Recovery Bond (herein called the Series A 2021 Nuclear Asset-Recovery Bonds), all issued and to be issued under that certain Indenture dated as of June 22, 2016 (as supplemented by the Series Supplement (as defined below), the Indenture), between the Issuer and The Bank of New York Mellon Trust Company, National Association, in its capacity as indenture trustee (the Indenture Trustee, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the Securities Intermediary, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Bonds. For purposes herein, Series Supplement means that certain Series Supplement dated as of June 22, 2016 between the Issuer and the Indenture Trustee. All terms used in this Series A 2021 Nuclear Asset-Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.
All WALs of Series A Bonds are and will be equally and ratably secured by the Series Collateral pledged as security therefor as provided in the Indenture.
The principal of this Series A 2021 Nuclear Asset-Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account for the Series A Bonds are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Sinking Fund Schedule that is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Series A Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Series A 2021 Nuclear Asset-Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Bonds representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Nuclear Asset-Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Series A 2021 Nuclear Asset-Recovery Bonds shall be made pro rata to the Holders of the Series A 2021 Nuclear Asset-Recovery Bonds entitled thereto based on
the respective principal amounts of the Series A 2021 Nuclear Asset-Recovery Bonds held by them.
Payments of interest on this Series A 2021 Nuclear Asset-Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by check mailed first-class, postage prepaid, to the Person whose name appears as the Registered Holder of this Series A 2021 Nuclear Asset-Recovery Bond (or one or more Predecessor Nuclear Asset-Recovery Bonds) on the Nuclear Asset-Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that (a) upon application to the Indenture Trustee by any Holder owning a Global Nuclear Asset-Recovery Bond evidencing this Series A 2021 Nuclear Asset-Recovery Bond not later than the applicable Record Date, payment will be made by wire transfer to an account maintained by such Holder, and (b) if this Series A 2021 Nuclear Asset-Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Nuclear Asset-Recovery Bond evidencing this Series A 2021 Nuclear Asset-Recovery Bond unless and until such Global Nuclear Asset-Recovery Bond is exchanged for Definitive Nuclear Asset-Recovery Bonds (in which event payments shall be made as provided above) and except for the final installment of principal and premium, if any, payable with respect to this Series A 2021 Nuclear Asset-Recovery Bond on a Payment Date, which shall be payable as provided below. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Nuclear Asset-Recovery Bond Register as of the applicable Record Date without requiring that this Series A 2021 Nuclear Asset-Recovery Bond be submitted for notation of payment. Any reduction in the principal amount of this Series A 2021 Nuclear Asset-Recovery Bond (or any one or more Predecessor Nuclear Asset-Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Series A 2021 Nuclear Asset-Recovery Bond and of any Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then-remaining unpaid principal amount of this Series A 2021 Nuclear Asset-Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed no later than five days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Series A 2021 Nuclear Asset-Recovery Bond and shall specify the place where this Series A 2021 Nuclear Asset-Recovery Bond may be presented and surrendered for payment of such installment.
The Issuer shall pay interest on overdue installments of interest at the Bond Interest Rate to the extent lawful.
This Series A 2021 Nuclear Asset-Recovery Bond is a nuclear asset-recovery bond as such term is defined in the Nuclear Asset-Recovery Law. Principal and interest due and payable on this Series A 2021 Nuclear Asset-Recovery Bond are payable from and secured primarily by Series Property created and established by the Financing Order obtained from the Florida Public Service Commission pursuant to the Nuclear Asset-Recovery Law. Series Property consists of the rights and interests of the Seller in the Financing Order, including the
right to impose, bill, collect and receive Series Charges, the right to obtain True-Up Adjustments and all revenue, collections, claims, rights to payments, payments, moneys and proceeds arising out of the rights and interests created under the Financing Order.
Under the laws of the State of Florida in effect on the date hereof, pursuant to Section 366.95(11) of the Nuclear Asset-Recovery Law, the State of Florida has pledged to agree and work with the Holders, the Indenture Trustee, other Financing Parties that the State of Florida will not (a) alter the provisions of Section 366.95(11) of the Nuclear Asset-Recovery Law which make the Charges imposed by the Financing Order or Subsequent Financing Order irrevocable, binding, and nonbypassable charges; (b) take or permit any action that impairs or would impair the value of Property or revises the Nuclear Asset-Recovery Costs for which recovery is authorized; (c) or except as authorized under the Nuclear Asset-Recovery Law, reduce, alter, or impair Charges that are to be imposed, collected, and remitted for the benefit of the Holders, the Indenture Trustee and other Financing Parties until any and all principal, interest, premium, Financing Costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related Nuclear Asset-Recovery Bonds have been paid and performed in full.
The Issuer and Duke Energy Florida hereby acknowledge that the purchase of this Nuclear Asset-Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.
As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Series A 2021 Nuclear Asset-Recovery Bond may be registered on the Nuclear Asset-Recovery Bond Register upon surrender of this Series A 2021 Nuclear Asset-Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by, (a) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holders attorney duly authorized in writing, with such signature guaranteed by: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee, and (b) such other documents as the Indenture Trustee may require, and thereupon one or more new Nuclear Asset-Recovery Bonds of Authorized Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Series A 2021 Nuclear Asset-Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Section 2.04 or Section 2.06 of the Indenture not involving any transfer.
Each Holder, by acceptance of a Series A 2021 Nuclear Asset-Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Series A 2021 Nuclear Asset-Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (a) any owner of a membership interest in the Issuer (including Duke Energy Florida) or (b) any shareholder, partner, owner, beneficiary, agent, officer or employee of the
Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including Duke Energy Florida) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Series A 2021 Nuclear Asset-Recovery Bond specifically confirms the nonrecourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series A 2021 Nuclear Asset-Recovery Bonds.
Prior to the due presentment for registration of transfer of this Series A 2021 Nuclear Asset-Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Series A 2021 Nuclear Asset-Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Series A 2021 Nuclear Asset-Recovery Bond and for all other purposes whatsoever, whether or not this Series A 2021 Nuclear Asset-Recovery Bond be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Nuclear Asset-Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Holders representing a majority of the Outstanding Amount of all Nuclear Asset-Recovery Bonds at the time outstanding of each Series or WAL to be affected and upon the satisfaction of the Rating Agency Condition and Commission Condition. The Indenture also contains provisions permitting the Holders representing specified percentages of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all Series, on behalf of the Holders of all the Nuclear Asset-Recovery Bonds, with the consent of the Commission, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Series A 2021 Nuclear Asset-Recovery Bond (or any one of more Predecessor Nuclear Asset-Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Series A 2021 Nuclear Asset-Recovery Bond and of any Series A 2021 Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Series A 2021 Nuclear Asset-Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Nuclear Asset-Recovery Bonds issued thereunder, but with the satisfaction of the Commission Condition.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on a Nuclear Asset-Recovery Bond of a Series and (b) certain restrictive covenants and the related Events of Default of a Series, upon compliance by the Issuer with certain conditions set forth in the Indenture, which provisions apply to this Series A 2021 Nuclear Asset-Recovery Bond.
The term Issuer as used in this Series A 2021 Nuclear Asset-Recovery Bond includes any successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders under the Indenture.
The Series A 2021 Nuclear Asset-Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.
This Series A 2021 Nuclear Asset-Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law and Sections 9-301 through 9-306 of the NY UCC), and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws; provided, that the creation, attachment and perfection of any Liens created under the Indenture in Property, and all rights and remedies of the Indenture Trustee and the Holders with respect to the Property, shall be governed by the laws of the State of Florida.
No reference herein to the Indenture and no provision of this Series A 2021 Nuclear Asset-Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Series A 2021 Nuclear Asset-Recovery Bond at the times, place and rate and in the coin or currency herein prescribed.
The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Series A 2021 Nuclear Asset-Recovery Bond, by acquiring any Series A 2021 Nuclear Asset-Recovery Bond or interest therein, (a) express their intention that, solely for the purpose of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Series A 2021 Nuclear Asset-Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Series Collateral and (b) solely for purposes of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Series A 2021 Nuclear Asset-Recovery Bonds are outstanding, agree to treat the Series A 2021 Nuclear Asset-Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Series Collateral unless otherwise required by appropriate taxing authorities.
ABBREVIATIONS
The following abbreviations, when used above on this Nuclear Asset-Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM |
|
as tenants in common |
|
|
|
TEN ENT |
|
as tenants by the entireties |
|
|
|
JT TEN |
|
as joint tenants with right of survivorship and not as tenants in common |
|
|
|
UNIF GIFT MIN ACT |
|
Custodian |
|
|
(Custodian) (minor) |
|
|
|
|
|
Under Uniform Gifts to Minor Act ( ) |
|
|
(State) |
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
|
|
(name and address of assignee) |
the within Series A 2021 Nuclear Asset-Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer said Series A 2021 Nuclear Asset-Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.
|
| ||
Dated: |
|
|
|
|
Signature Guaranteed: | ||
|
| ||
|
| ||
The signature to this assignment must correspond with the name of the registered owner as it appears on the within Series A 2021 Nuclear Asset-Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.
NOTE: Signature(s) must be guaranteed by an institution that is a member of: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee.
EXHIBIT 3
TO SERIES SUPPLEMENT
FORM OF SERIES A 2026 NUCLEAR ASSET-RECOVERY BONDS
{See Attached}
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OR ENTITY IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 3 |
$436,000,000 |
WAL Designation: Series A 2026 |
CUSIP No.: 26444G AC7 |
THE PRINCIPAL OF THIS SERIES A 2026 SENIOR SECURED NUCLEAR ASSET-RECOVERY BOND, (THIS NUCLEAR ASSET-RECOVERY BOND) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NUCLEAR ASSET-RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE SERIES COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS NUCLEAR ASSET-RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.10(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE PAYMENT IN FULL OF THIS NUCLEAR ASSET-RECOVERY BOND, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY
SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF FLORIDA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS NUCLEAR ASSET-RECOVERY BOND.
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC
SERIES A 2026 SENIOR SECURED NUCLEAR ASSET-RECOVERY BONDS
BOND |
|
ORIGINAL |
|
SCHEDULED |
|
FINAL |
|
2.538 |
% |
$436,000,000 |
|
September 1, 2029 |
|
September 1, 2031 |
|
Duke Energy Florida Project Finance, LLC, a limited liability company created under the laws of the State of Delaware (herein referred to as the Issuer), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified below or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date determined as provided below and ending on or before the Final Maturity Date shown above and to pay interest, at the Bond Interest Rate shown above, on each March 1 and September 1 or, if any such day is not a Business Day, the next Business Day, commencing on March 1, 2017 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each, a Payment Date), on the principal amount of this Nuclear Asset-Recovery Bond. Interest on this Nuclear Asset-Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of 360-day year of twelve 30-day months. Such principal of and interest on this Nuclear Asset-Recovery Bond shall be paid in the manner specified below.
The principal of and interest on this Nuclear Asset-Recovery Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Nuclear Asset-Recovery Bond shall be applied first to interest due and payable on this Nuclear Asset-Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Nuclear Asset-Recovery Bond, all in the manner set forth in the Indenture.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Nuclear Asset-Recovery Bond
shall not be entitled to any benefit under the Indenture referred to below or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Responsible Officer.
Date: June 22, 2016 |
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||
|
as Issuer | ||
|
| ||
|
| ||
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
INDENTURE TRUSTEES
CERTIFICATE OF AUTHENTICATION
Dated: June 22, 2016
This is one of the Series A 2026 Senior Secured Nuclear Asset-Recovery Bonds, designated above and referred to in the within-mentioned Indenture.
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, | ||
|
as Indenture Trustee | ||
|
| ||
|
| ||
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
This Senior Secured Nuclear Asset-Recovery Bond, Series A 2026 is one of a duly authorized issue of Series A Senior Secured Nuclear Asset-Recovery Bonds of the Issuer (herein called the Series A Bonds), which Bonds are issuable in one or more Series, which Series are issuable in one or more WALs. The Series A Bonds consist of 5 WALs, including the Series A 2026 Senior Secured Nuclear Asset-Recovery Bonds, which include this Senior Secured Nuclear Asset-Recovery Bond (herein called the Series A 2026 Nuclear Asset-Recovery Bonds), all issued and to be issued under that certain Indenture dated as of June 22, 2016 (as supplemented by the Series Supplement (as defined below), the Indenture), between the Issuer and The Bank of New York Mellon Trust Company, National Association, in its capacity as indenture trustee (the Indenture Trustee, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the Securities Intermediary, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Bonds. For purposes herein, Series Supplement means that certain Series Supplement dated as of June 22, 2016 between the Issuer and the Indenture Trustee. All terms used in this Series A 2026 Nuclear Asset-Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.
All WALs of Series A Bonds are and will be equally and ratably secured by the Series Collateral pledged as security therefor as provided in the Indenture.
The principal of this Series A 2026 Nuclear Asset-Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account for the Series A Bonds are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Sinking Fund Schedule that is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Series A Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Series A 2026 Nuclear Asset-Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Bonds representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Nuclear Asset-Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Series A 2026 Nuclear Asset-Recovery Bonds shall be made pro rata to the Holders of the Series A 2026 Nuclear Asset-Recovery Bonds entitled thereto based on
the respective principal amounts of the Series A 2026 Nuclear Asset-Recovery Bonds held by them.
Payments of interest on this Series A 2026 Nuclear Asset-Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by check mailed first-class, postage prepaid, to the Person whose name appears as the Registered Holder of this Series A 2026 Nuclear Asset-Recovery Bond (or one or more Predecessor Nuclear Asset-Recovery Bonds) on the Nuclear Asset-Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that (a) upon application to the Indenture Trustee by any Holder owning a Global Nuclear Asset-Recovery Bond evidencing this Series A 2026 Nuclear Asset-Recovery Bond not later than the applicable Record Date, payment will be made by wire transfer to an account maintained by such Holder, and (b) if this Series A 2026 Nuclear Asset-Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Nuclear Asset-Recovery Bond evidencing this Series A 2026 Nuclear Asset-Recovery Bond unless and until such Global Nuclear Asset-Recovery Bond is exchanged for Definitive Nuclear Asset-Recovery Bonds (in which event payments shall be made as provided above) and except for the final installment of principal and premium, if any, payable with respect to this Series A 2026 Nuclear Asset-Recovery Bond on a Payment Date, which shall be payable as provided below. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Nuclear Asset-Recovery Bond Register as of the applicable Record Date without requiring that this Series A 2026 Nuclear Asset-Recovery Bond be submitted for notation of payment. Any reduction in the principal amount of this Series A 2026 Nuclear Asset-Recovery Bond (or any one or more Predecessor Nuclear Asset-Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Series A 2026 Nuclear Asset-Recovery Bond and of any Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then-remaining unpaid principal amount of this Series A 2026 Nuclear Asset-Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed no later than five days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Series A 2026 Nuclear Asset-Recovery Bond and shall specify the place where this Series A 2026 Nuclear Asset-Recovery Bond may be presented and surrendered for payment of such installment.
The Issuer shall pay interest on overdue installments of interest at the Bond Interest Rate to the extent lawful.
This Series A 2026 Nuclear Asset-Recovery Bond is a nuclear asset-recovery bond as such term is defined in the Nuclear Asset-Recovery Law. Principal and interest due and payable on this Series A 2026 Nuclear Asset-Recovery Bond are payable from and secured primarily by Series Property created and established by the Financing Order obtained from the Florida Public Service Commission pursuant to the Nuclear Asset-Recovery Law. Series Property consists of the rights and interests of the Seller in the Financing Order, including the
right to impose, bill, collect and receive Series Charges, the right to obtain True-Up Adjustments and all revenue, collections, claims, rights to payments, payments, moneys and proceeds arising out of the rights and interests created under the Financing Order.
Under the laws of the State of Florida in effect on the date hereof, pursuant to Section 366.95(11) of the Nuclear Asset-Recovery Law, the State of Florida has pledged to agree and work with the Holders, the Indenture Trustee, other Financing Parties that the State of Florida will not (a) alter the provisions of Section 366.95(11) of the Nuclear Asset-Recovery Law which make the Charges imposed by the Financing Order or Subsequent Financing Order irrevocable, binding, and nonbypassable charges; (b) take or permit any action that impairs or would impair the value of Property or revises the Nuclear Asset-Recovery Costs for which recovery is authorized; (c) or except as authorized under the Nuclear Asset-Recovery Law, reduce, alter, or impair Charges that are to be imposed, collected, and remitted for the benefit of the Holders, the Indenture Trustee and other Financing Parties until any and all principal, interest, premium, Financing Costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related Nuclear Asset-Recovery Bonds have been paid and performed in full.
The Issuer and Duke Energy Florida hereby acknowledge that the purchase of this Nuclear Asset-Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.
As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Series A 2026 Nuclear Asset-Recovery Bond may be registered on the Nuclear Asset-Recovery Bond Register upon surrender of this Series A 2026 Nuclear Asset-Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by, (a) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holders attorney duly authorized in writing, with such signature guaranteed by: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee, and (b) such other documents as the Indenture Trustee may require, and thereupon one or more new Nuclear Asset-Recovery Bonds of Authorized Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Series A 2026 Nuclear Asset-Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Section 2.04 or Section 2.06 of the Indenture not involving any transfer.
Each Holder, by acceptance of a Series A 2026 Nuclear Asset-Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Series A 2026 Nuclear Asset-Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (a) any owner of a membership interest in the Issuer (including Duke Energy Florida) or (b) any shareholder, partner, owner, beneficiary, agent, officer or employee of the
Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including Duke Energy Florida) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Series A 2026 Nuclear Asset-Recovery Bond specifically confirms the nonrecourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series A 2026 Nuclear Asset-Recovery Bonds.
Prior to the due presentment for registration of transfer of this Series A 2026 Nuclear Asset-Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Series A 2026 Nuclear Asset-Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Series A 2026 Nuclear Asset-Recovery Bond and for all other purposes whatsoever, whether or not this Series A 2026 Nuclear Asset-Recovery Bond be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Nuclear Asset-Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Holders representing a majority of the Outstanding Amount of all Nuclear Asset-Recovery Bonds at the time outstanding of each Series or WAL to be affected and upon the satisfaction of the Rating Agency Condition and Commission Condition. The Indenture also contains provisions permitting the Holders representing specified percentages of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all Series, on behalf of the Holders of all the Nuclear Asset-Recovery Bonds, with the consent of the Commission, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Series A 2026 Nuclear Asset-Recovery Bond (or any one of more Predecessor Nuclear Asset-Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Series A 2026 Nuclear Asset-Recovery Bond and of any Series A 2026 Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Series A 2026 Nuclear Asset-Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Nuclear Asset-Recovery Bonds issued thereunder, but with the satisfaction of the Commission Condition.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on a Nuclear Asset-Recovery Bond of a Series and (b) certain restrictive covenants and the related Events of Default of a Series, upon compliance by the Issuer with certain conditions set forth in the Indenture, which provisions apply to this Series A 2026 Nuclear Asset-Recovery Bond.
The term Issuer as used in this Series A 2026 Nuclear Asset-Recovery Bond includes any successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders under the Indenture.
The Series A 2026 Nuclear Asset-Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.
This Series A 2026 Nuclear Asset-Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law and Sections 9-301 through 9-306 of the NY UCC), and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws; provided, that the creation, attachment and perfection of any Liens created under the Indenture in Property, and all rights and remedies of the Indenture Trustee and the Holders with respect to the Property, shall be governed by the laws of the State of Florida.
No reference herein to the Indenture and no provision of this Series A 2026 Nuclear Asset-Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Series A 2026 Nuclear Asset-Recovery Bond at the times, place and rate and in the coin or currency herein prescribed.
The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Series A 2026 Nuclear Asset-Recovery Bond, by acquiring any Series A 2026 Nuclear Asset-Recovery Bond or interest therein, (a) express their intention that, solely for the purpose of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Series A 2026 Nuclear Asset-Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Series Collateral and (b) solely for purposes of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Series A 2026 Nuclear Asset-Recovery Bonds are outstanding, agree to treat the Series A 2026 Nuclear Asset-Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Series Collateral unless otherwise required by appropriate taxing authorities.
ABBREVIATIONS
The following abbreviations, when used above on this Nuclear Asset-Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM |
|
as tenants in common |
|
|
|
TEN ENT |
|
as tenants by the entireties |
|
|
|
JT TEN |
|
as joint tenants with right of survivorship and not as tenants in common |
|
|
|
UNIF GIFT MIN ACT |
|
Custodian |
|
|
(Custodian) (minor) |
|
|
|
|
|
Under Uniform Gifts to Minor Act ( ) |
|
|
(State) |
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
|
|
(name and address of assignee) |
the within Series A 2026 Nuclear Asset-Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer said Series A 2026 Nuclear Asset-Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.
|
| ||
Dated: |
|
|
|
|
Signature Guaranteed: | ||
|
| ||
|
| ||
The signature to this assignment must correspond with the name of the registered owner as it appears on the within Series A 2026 Nuclear Asset-Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.
NOTE: Signature(s) must be guaranteed by an institution that is a member of: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee.
EXHIBIT 4
TO SERIES SUPPLEMENT
FORM OF SERIES A 2032 NUCLEAR ASSET-RECOVERY BONDS
{See Attached}
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OR ENTITY IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 4 |
$250,000,000 |
WAL Designation: Series A 2032 |
CUSIP No.: 26444G AD5 |
THE PRINCIPAL OF THIS SERIES A 2032 SENIOR SECURED NUCLEAR ASSET-RECOVERY BOND, (THIS NUCLEAR ASSET-RECOVERY BOND) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NUCLEAR ASSET-RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE SERIES COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS NUCLEAR ASSET-RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.10(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE PAYMENT IN FULL OF THIS NUCLEAR ASSET-RECOVERY BOND, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY
SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF FLORIDA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS NUCLEAR ASSET-RECOVERY BOND.
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC
SERIES A 2032 SENIOR SECURED NUCLEAR ASSET-RECOVERY BONDS
BOND |
|
ORIGINAL |
|
SCHEDULED |
|
FINAL |
|
2.858 |
% |
$250,000,000 |
|
March 1, 2033 |
|
March 1, 2035 |
|
Duke Energy Florida Project Finance, LLC, a limited liability company created under the laws of the State of Delaware (herein referred to as the Issuer), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified below or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date determined as provided below and ending on or before the Final Maturity Date shown above and to pay interest, at the Bond Interest Rate shown above, on each March 1 and September 1 or, if any such day is not a Business Day, the next Business Day, commencing on March 1, 2017 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each, a Payment Date), on the principal amount of this Nuclear Asset-Recovery Bond. Interest on this Nuclear Asset-Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of 360-day year of twelve 30-day months. Such principal of and interest on this Nuclear Asset-Recovery Bond shall be paid in the manner specified below.
The principal of and interest on this Nuclear Asset-Recovery Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Nuclear Asset-Recovery Bond shall be applied first to interest due and payable on this Nuclear Asset-Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Nuclear Asset-Recovery Bond, all in the manner set forth in the Indenture.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Nuclear Asset-Recovery Bond
shall not be entitled to any benefit under the Indenture referred to below or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Responsible Officer.
Date: June 22, 2016 |
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||
|
as Issuer | ||
|
| ||
|
| ||
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
INDENTURE TRUSTEES
CERTIFICATE OF AUTHENTICATION
Dated: June 22, 2016
This is one of the Series A 2032 Senior Secured Nuclear Asset-Recovery Bonds, designated above and referred to in the within-mentioned Indenture.
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, | ||
|
as Indenture Trustee | ||
|
| ||
|
| ||
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
This Senior Secured Nuclear Asset-Recovery Bond, Series A 2032 is one of a duly authorized issue of Series A Senior Secured Nuclear Asset-Recovery Bonds of the Issuer (herein called the Series A Bonds), which Bonds are issuable in one or more Series, which Series are issuable in one or more WALs. The Series A Bonds consist of 5 WALs, including the Series A 2032 Senior Secured Nuclear Asset-Recovery Bonds, which include this Senior Secured Nuclear Asset-Recovery Bond (herein called the Series A 2032 Nuclear Asset-Recovery Bonds), all issued and to be issued under that certain Indenture dated as of June 22, 2016 (as supplemented by the Series Supplement (as defined below), the Indenture), between the Issuer and The Bank of New York Mellon Trust Company, National Association, in its capacity as indenture trustee (the Indenture Trustee, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the Securities Intermediary, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Bonds. For purposes herein, Series Supplement means that certain Series Supplement dated as of June 22, 2016 between the Issuer and the Indenture Trustee. All terms used in this Series A 2032 Nuclear Asset-Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.
All WALs of Series A Bonds are and will be equally and ratably secured by the Series Collateral pledged as security therefor as provided in the Indenture.
The principal of this Series A 2032 Nuclear Asset-Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account for the Series A Bonds are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Sinking Fund Schedule that is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Series A Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Series A 2032 Nuclear Asset-Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Bonds representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Nuclear Asset-Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Series A 2032 Nuclear Asset-Recovery Bonds shall be made pro rata to the Holders of the Series A 2032 Nuclear Asset-Recovery Bonds entitled thereto based on
the respective principal amounts of the Series A 2032 Nuclear Asset-Recovery Bonds held by them.
Payments of interest on this Series A 2032 Nuclear Asset-Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by check mailed first-class, postage prepaid, to the Person whose name appears as the Registered Holder of this Series A 2032 Nuclear Asset-Recovery Bond (or one or more Predecessor Nuclear Asset-Recovery Bonds) on the Nuclear Asset-Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that (a) upon application to the Indenture Trustee by any Holder owning a Global Nuclear Asset-Recovery Bond evidencing this Series A 2032 Nuclear Asset-Recovery Bond not later than the applicable Record Date, payment will be made by wire transfer to an account maintained by such Holder, and (b) if this Series A 2032 Nuclear Asset-Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Nuclear Asset-Recovery Bond evidencing this Series A 2032 Nuclear Asset-Recovery Bond unless and until such Global Nuclear Asset-Recovery Bond is exchanged for Definitive Nuclear Asset-Recovery Bonds (in which event payments shall be made as provided above) and except for the final installment of principal and premium, if any, payable with respect to this Series A 2032 Nuclear Asset-Recovery Bond on a Payment Date, which shall be payable as provided below. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Nuclear Asset-Recovery Bond Register as of the applicable Record Date without requiring that this Series A 2032 Nuclear Asset-Recovery Bond be submitted for notation of payment. Any reduction in the principal amount of this Series A 2032 Nuclear Asset-Recovery Bond (or any one or more Predecessor Nuclear Asset-Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Series A 2032 Nuclear Asset-Recovery Bond and of any Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then-remaining unpaid principal amount of this Series A 2032 Nuclear Asset-Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed no later than five days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Series A 2032 Nuclear Asset-Recovery Bond and shall specify the place where this Series A 2032 Nuclear Asset-Recovery Bond may be presented and surrendered for payment of such installment.
The Issuer shall pay interest on overdue installments of interest at the Bond Interest Rate to the extent lawful.
This Series A 2032 Nuclear Asset-Recovery Bond is a nuclear asset-recovery bond as such term is defined in the Nuclear Asset-Recovery Law. Principal and interest due and payable on this Series A 2032 Nuclear Asset-Recovery Bond are payable from and secured primarily by Series Property created and established by the Financing Order obtained from the Florida Public Service Commission pursuant to the Nuclear Asset-Recovery Law. Series Property consists of the rights and interests of the Seller in the Financing Order, including the
right to impose, bill, collect and receive Series Charges, the right to obtain True-Up Adjustments and all revenue, collections, claims, rights to payments, payments, moneys and proceeds arising out of the rights and interests created under the Financing Order.
Under the laws of the State of Florida in effect on the date hereof, pursuant to Section 366.95(11) of the Nuclear Asset-Recovery Law, the State of Florida has pledged to agree and work with the Holders, the Indenture Trustee, other Financing Parties that the State of Florida will not (a) alter the provisions of Section 366.95(11) of the Nuclear Asset-Recovery Law which make the Charges imposed by the Financing Order or Subsequent Financing Order irrevocable, binding, and nonbypassable charges; (b) take or permit any action that impairs or would impair the value of Property or revises the Nuclear Asset-Recovery Costs for which recovery is authorized; (c) or except as authorized under the Nuclear Asset-Recovery Law, reduce, alter, or impair Charges that are to be imposed, collected, and remitted for the benefit of the Holders, the Indenture Trustee and other Financing Parties until any and all principal, interest, premium, Financing Costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related Nuclear Asset-Recovery Bonds have been paid and performed in full.
The Issuer and Duke Energy Florida hereby acknowledge that the purchase of this Nuclear Asset-Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.
As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Series A 2032 Nuclear Asset-Recovery Bond may be registered on the Nuclear Asset-Recovery Bond Register upon surrender of this Series A 2032 Nuclear Asset-Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by, (a) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holders attorney duly authorized in writing, with such signature guaranteed by: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee, and (b) such other documents as the Indenture Trustee may require, and thereupon one or more new Nuclear Asset-Recovery Bonds of Authorized Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Series A 2032 Nuclear Asset-Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Section 2.04 or Section 2.06 of the Indenture not involving any transfer.
Each Holder, by acceptance of a Series A 2032 Nuclear Asset-Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Series A 2032 Nuclear Asset-Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (a) any owner of a membership interest in the Issuer (including Duke Energy Florida) or (b) any shareholder, partner, owner, beneficiary, agent, officer or employee of the
Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including Duke Energy Florida) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Series A 2032 Nuclear Asset-Recovery Bond specifically confirms the nonrecourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series A 2032 Nuclear Asset-Recovery Bonds.
Prior to the due presentment for registration of transfer of this Series A 2032 Nuclear Asset-Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Series A 2032 Nuclear Asset-Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Series A 2032 Nuclear Asset-Recovery Bond and for all other purposes whatsoever, whether or not this Series A 2032 Nuclear Asset-Recovery Bond be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Nuclear Asset-Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Holders representing a majority of the Outstanding Amount of all Nuclear Asset-Recovery Bonds at the time outstanding of each Series or WAL to be affected and upon the satisfaction of the Rating Agency Condition and Commission Condition. The Indenture also contains provisions permitting the Holders representing specified percentages of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all Series, on behalf of the Holders of all the Nuclear Asset-Recovery Bonds, with the consent of the Commission, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Series A 2032 Nuclear Asset-Recovery Bond (or any one of more Predecessor Nuclear Asset-Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Series A 2032 Nuclear Asset-Recovery Bond and of any Series A 2032 Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Series A 2032 Nuclear Asset-Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Nuclear Asset-Recovery Bonds issued thereunder, but with the satisfaction of the Commission Condition.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on a Nuclear Asset-Recovery Bond of a Series and (b) certain restrictive covenants and the related Events of Default of a Series, upon compliance by the Issuer with certain conditions set forth in the Indenture, which provisions apply to this Series A 2032 Nuclear Asset-Recovery Bond.
The term Issuer as used in this Series A 2032 Nuclear Asset-Recovery Bond includes any successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders under the Indenture.
The Series A 2032 Nuclear Asset-Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.
This Series A 2032 Nuclear Asset-Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law and Sections 9-301 through 9-306 of the NY UCC), and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws; provided, that the creation, attachment and perfection of any Liens created under the Indenture in Property, and all rights and remedies of the Indenture Trustee and the Holders with respect to the Property, shall be governed by the laws of the State of Florida.
No reference herein to the Indenture and no provision of this Series A 2032 Nuclear Asset-Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Series A 2032 Nuclear Asset-Recovery Bond at the times, place and rate and in the coin or currency herein prescribed.
The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Series A 2032 Nuclear Asset-Recovery Bond, by acquiring any Series A 2032 Nuclear Asset-Recovery Bond or interest therein, (a) express their intention that, solely for the purpose of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Series A 2032 Nuclear Asset-Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Series Collateral and (b) solely for purposes of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Series A 2032 Nuclear Asset-Recovery Bonds are outstanding, agree to treat the Series A 2032 Nuclear Asset-Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Series Collateral unless otherwise required by appropriate taxing authorities.
ABBREVIATIONS
The following abbreviations, when used above on this Nuclear Asset-Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM |
|
as tenants in common |
|
|
|
TEN ENT |
|
as tenants by the entireties |
|
|
|
JT TEN |
|
as joint tenants with right of survivorship and not as tenants in common |
|
|
|
UNIF GIFT MIN ACT |
|
Custodian |
|
|
(Custodian) (minor) |
|
|
|
|
|
Under Uniform Gifts to Minor Act ( ) |
|
|
(State) |
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
|
|
(name and address of assignee) |
the within Series A 2032 Nuclear Asset-Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer said Series A 2032 Nuclear Asset-Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.
|
| ||
Dated: |
|
|
|
|
Signature Guaranteed: | ||
|
| ||
|
| ||
The signature to this assignment must correspond with the name of the registered owner as it appears on the within Series A 2032 Nuclear Asset-Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.
NOTE: Signature(s) must be guaranteed by an institution that is a member of: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee.
EXHIBIT 5
TO SERIES SUPPLEMENT
FORM OF SERIES A 2035 NUCLEAR ASSET-RECOVERY BONDS
{See Attached}
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON OR ENTITY IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 5 |
$275,290,000 |
WAL Designation: Series A 2035 |
CUSIP No.: 26444G AE3 |
THE PRINCIPAL OF THIS SERIES A 2035 SENIOR SECURED NUCLEAR ASSET-RECOVERY BOND, (THIS NUCLEAR ASSET-RECOVERY BOND) WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NUCLEAR ASSET-RECOVERY BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE SERIES COLLATERAL, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS NUCLEAR ASSET-RECOVERY BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN SECTION 3.10(b) OR ARTICLE IV OF THE INDENTURE. THE HOLDER OF THIS NUCLEAR ASSET-RECOVERY BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE PAYMENT IN FULL OF THIS NUCLEAR ASSET-RECOVERY BOND, IT WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NOTHING IN THIS PARAGRAPH SHALL PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO THE ISSUER THAT IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN SUCH HOLDER AND IS NOT JOINED IN BY
SUCH HOLDER (OR ANY PERSON TO WHICH SUCH HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW OR (B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF FLORIDA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS NUCLEAR ASSET-RECOVERY BOND.
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC
SERIES A 2035 SENIOR SECURED NUCLEAR ASSET-RECOVERY BONDS
BOND |
|
ORIGINAL |
|
SCHEDULED |
|
FINAL |
|
3.112 |
% |
$275,290,000 |
|
September 1, 2036 |
|
September 1, 2038 |
|
Duke Energy Florida Project Finance, LLC, a limited liability company created under the laws of the State of Delaware (herein referred to as the Issuer), for value received, hereby promises to pay to Cede & Co., or registered assigns, the Original Principal Amount shown above in semi-annual installments on the Payment Dates and in the amounts specified below or, if less, the amounts determined pursuant to Section 8.02 of the Indenture, in each year, commencing on the date determined as provided below and ending on or before the Final Maturity Date shown above and to pay interest, at the Bond Interest Rate shown above, on each March 1 and September 1 or, if any such day is not a Business Day, the next Business Day, commencing on March 1, 2017 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each, a Payment Date), on the principal amount of this Nuclear Asset-Recovery Bond. Interest on this Nuclear Asset-Recovery Bond will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding such Payment Date or, if no interest has yet been paid, from the date of issuance. Interest will be computed on the basis of 360-day year of twelve 30-day months. Such principal of and interest on this Nuclear Asset-Recovery Bond shall be paid in the manner specified below.
The principal of and interest on this Nuclear Asset-Recovery Bond are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Nuclear Asset-Recovery Bond shall be applied first to interest due and payable on this Nuclear Asset-Recovery Bond as provided above and then to the unpaid principal of and premium, if any, on this Nuclear Asset-Recovery Bond, all in the manner set forth in the Indenture.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Nuclear Asset-Recovery Bond
shall not be entitled to any benefit under the Indenture referred to below or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Responsible Officer.
Date: June 22, 2016 |
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, | ||
|
as Issuer | ||
|
| ||
|
| ||
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
INDENTURE TRUSTEES
CERTIFICATE OF AUTHENTICATION
Dated: June 22, 2016
This is one of the Series A 2035 Senior Secured Nuclear Asset-Recovery Bonds, designated above and referred to in the within-mentioned Indenture.
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, | ||
|
as Indenture Trustee | ||
|
| ||
|
| ||
|
By: |
| |
|
|
Name: |
[ ] |
|
|
Title: |
[ ] |
This Senior Secured Nuclear Asset-Recovery Bond, Series A 2035 is one of a duly authorized issue of Series A Senior Secured Nuclear Asset-Recovery Bonds of the Issuer (herein called the Series A Bonds), which Bonds are issuable in one or more Series, which Series are issuable in one or more WALs. The Series A Bonds consist of 5 WALs, including the Series A 2035 Senior Secured Nuclear Asset-Recovery Bonds, which include this Senior Secured Nuclear Asset-Recovery Bond (herein called the Series A 2035 Nuclear Asset-Recovery Bonds), all issued and to be issued under that certain Indenture dated as of June 22, 2016 (as supplemented by the Series Supplement (as defined below), the Indenture), between the Issuer and The Bank of New York Mellon Trust Company, National Association, in its capacity as indenture trustee (the Indenture Trustee, which term includes any successor indenture trustee under the Indenture) and in its separate capacity as a securities intermediary (the Securities Intermediary, which term includes any successor securities intermediary under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Bonds. For purposes herein, Series Supplement means that certain Series Supplement dated as of June 22, 2016 between the Issuer and the Indenture Trustee. All terms used in this Series A 2035 Nuclear Asset-Recovery Bond that are defined in the Indenture, as amended, restated, supplemented or otherwise modified from time to time, shall have the meanings assigned to such terms in the Indenture.
All WALs of Series A Bonds are and will be equally and ratably secured by the Series Collateral pledged as security therefor as provided in the Indenture.
The principal of this Series A 2035 Nuclear Asset-Recovery Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account for the Series A Bonds are available therefor, and only until the outstanding principal balance thereof on the preceding Payment Date (after giving effect to all payments of principal, if any, made on the preceding Payment Date) has been reduced to the principal balance specified in the Expected Sinking Fund Schedule that is attached to the Series Supplement as Schedule A, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Series A Bonds to be immediately due and payable in accordance with Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). However, actual principal payments may be made in lesser than expected amounts and at later than expected times as determined pursuant to Section 8.02 of the Indenture. The entire unpaid principal amount of this Series A 2035 Nuclear Asset-Recovery Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Bonds shall be due and payable, if not then previously paid, on the date on which an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders of the Bonds representing a majority of the Outstanding Amount of the Bonds of this Series have declared the Nuclear Asset-Recovery Bonds to be immediately due and payable in the manner provided in Section 5.02 of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with Section 5.02 of the Indenture). All principal payments on the Series A 2035 Nuclear Asset-Recovery Bonds shall be made pro rata to the Holders of the Series A 2035 Nuclear Asset-Recovery Bonds entitled thereto based on
the respective principal amounts of the Series A 2035 Nuclear Asset-Recovery Bonds held by them.
Payments of interest on this Series A 2035 Nuclear Asset-Recovery Bond due and payable on each Payment Date, together with the installment of principal or premium, if any, shall be made by check mailed first-class, postage prepaid, to the Person whose name appears as the Registered Holder of this Series A 2035 Nuclear Asset-Recovery Bond (or one or more Predecessor Nuclear Asset-Recovery Bonds) on the Nuclear Asset-Recovery Bond Register as of the close of business on the Record Date or in such other manner as may be provided in the Indenture or the Series Supplement, except that (a) upon application to the Indenture Trustee by any Holder owning a Global Nuclear Asset-Recovery Bond evidencing this Series A 2035 Nuclear Asset-Recovery Bond not later than the applicable Record Date, payment will be made by wire transfer to an account maintained by such Holder, and (b) if this Series A 2035 Nuclear Asset-Recovery Bond is held in Book-Entry Form, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global Nuclear Asset-Recovery Bond evidencing this Series A 2035 Nuclear Asset-Recovery Bond unless and until such Global Nuclear Asset-Recovery Bond is exchanged for Definitive Nuclear Asset-Recovery Bonds (in which event payments shall be made as provided above) and except for the final installment of principal and premium, if any, payable with respect to this Series A 2035 Nuclear Asset-Recovery Bond on a Payment Date, which shall be payable as provided below. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Nuclear Asset-Recovery Bond Register as of the applicable Record Date without requiring that this Series A 2035 Nuclear Asset-Recovery Bond be submitted for notation of payment. Any reduction in the principal amount of this Series A 2035 Nuclear Asset-Recovery Bond (or any one or more Predecessor Nuclear Asset-Recovery Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Series A 2035 Nuclear Asset-Recovery Bond and of any Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then-remaining unpaid principal amount of this Series A 2035 Nuclear Asset-Recovery Bond on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed no later than five days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of this Series A 2035 Nuclear Asset-Recovery Bond and shall specify the place where this Series A 2035 Nuclear Asset-Recovery Bond may be presented and surrendered for payment of such installment.
The Issuer shall pay interest on overdue installments of interest at the Bond Interest Rate to the extent lawful.
This Series A 2035 Nuclear Asset-Recovery Bond is a nuclear asset-recovery bond as such term is defined in the Nuclear Asset-Recovery Law. Principal and interest due and payable on this Series A 2035 Nuclear Asset-Recovery Bond are payable from and secured primarily by Series Property created and established by the Financing Order obtained from the Florida Public Service Commission pursuant to the Nuclear Asset-Recovery Law. Series Property consists of the rights and interests of the Seller in the Financing Order, including the
right to impose, bill, collect and receive Series Charges, the right to obtain True-Up Adjustments and all revenue, collections, claims, rights to payments, payments, moneys and proceeds arising out of the rights and interests created under the Financing Order.
Under the laws of the State of Florida in effect on the date hereof, pursuant to Section 366.95(11) of the Nuclear Asset-Recovery Law, the State of Florida has pledged to agree and work with the Holders, the Indenture Trustee, other Financing Parties that the State of Florida will not (a) alter the provisions of Section 366.95(11) of the Nuclear Asset-Recovery Law which make the Charges imposed by the Financing Order or Subsequent Financing Order irrevocable, binding, and nonbypassable charges; (b) take or permit any action that impairs or would impair the value of Property or revises the Nuclear Asset-Recovery Costs for which recovery is authorized; (c) or except as authorized under the Nuclear Asset-Recovery Law, reduce, alter, or impair Charges that are to be imposed, collected, and remitted for the benefit of the Holders, the Indenture Trustee and other Financing Parties until any and all principal, interest, premium, Financing Costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related Nuclear Asset-Recovery Bonds have been paid and performed in full.
The Issuer and Duke Energy Florida hereby acknowledge that the purchase of this Nuclear Asset-Recovery Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge.
As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Series A 2035 Nuclear Asset-Recovery Bond may be registered on the Nuclear Asset-Recovery Bond Register upon surrender of this Series A 2035 Nuclear Asset-Recovery Bond for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by, (a) a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Holder hereof or such Holders attorney duly authorized in writing, with such signature guaranteed by: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee, and (b) such other documents as the Indenture Trustee may require, and thereupon one or more new Nuclear Asset-Recovery Bonds of Authorized Denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Series A 2035 Nuclear Asset-Recovery Bond, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange, other than exchanges pursuant to Section 2.04 or Section 2.06 of the Indenture not involving any transfer.
Each Holder, by acceptance of a Series A 2035 Nuclear Asset-Recovery Bond, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the Series A 2035 Nuclear Asset-Recovery Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (a) any owner of a membership interest in the Issuer (including Duke Energy Florida) or (b) any shareholder, partner, owner, beneficiary, agent, officer or employee of the
Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including Duke Energy Florida) in its respective individual or corporate capacities, or of any successor or assign of any of them in their individual or corporate capacities, except as any such Person may have expressly agreed in writing. Each Holder by accepting a Series A 2035 Nuclear Asset-Recovery Bond specifically confirms the nonrecourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series A 2035 Nuclear Asset-Recovery Bonds.
Prior to the due presentment for registration of transfer of this Series A 2035 Nuclear Asset-Recovery Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Series A 2035 Nuclear Asset-Recovery Bond is registered (as of the day of determination) as the owner hereof for the purpose of receiving payments of principal of and premium, if any, and interest on this Series A 2035 Nuclear Asset-Recovery Bond and for all other purposes whatsoever, whether or not this Series A 2035 Nuclear Asset-Recovery Bond be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Nuclear Asset-Recovery Bonds under the Indenture at any time by the Issuer with the consent of the Holders representing a majority of the Outstanding Amount of all Nuclear Asset-Recovery Bonds at the time outstanding of each Series or WAL to be affected and upon the satisfaction of the Rating Agency Condition and Commission Condition. The Indenture also contains provisions permitting the Holders representing specified percentages of the Outstanding Amount of the Nuclear Asset-Recovery Bonds of all Series, on behalf of the Holders of all the Nuclear Asset-Recovery Bonds, with the consent of the Commission, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Series A 2035 Nuclear Asset-Recovery Bond (or any one of more Predecessor Nuclear Asset-Recovery Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Series A 2035 Nuclear Asset-Recovery Bond and of any Series A 2035 Nuclear Asset-Recovery Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Series A 2035 Nuclear Asset-Recovery Bond. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Nuclear Asset-Recovery Bonds issued thereunder, but with the satisfaction of the Commission Condition.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on a Nuclear Asset-Recovery Bond of a Series and (b) certain restrictive covenants and the related Events of Default of a Series, upon compliance by the Issuer with certain conditions set forth in the Indenture, which provisions apply to this Series A 2035 Nuclear Asset-Recovery Bond.
The term Issuer as used in this Series A 2035 Nuclear Asset-Recovery Bond includes any successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders under the Indenture.
The Series A 2035 Nuclear Asset-Recovery Bonds are issuable only in registered form in denominations as provided in the Indenture and the Series Supplement subject to certain limitations therein set forth.
This Series A 2035 Nuclear Asset-Recovery Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions (other than Section 5-1401 of the New York General Obligations Law and Sections 9-301 through 9-306 of the NY UCC), and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws; provided, that the creation, attachment and perfection of any Liens created under the Indenture in Property, and all rights and remedies of the Indenture Trustee and the Holders with respect to the Property, shall be governed by the laws of the State of Florida.
No reference herein to the Indenture and no provision of this Series A 2035 Nuclear Asset-Recovery Bond or of the Indenture shall alter or impair the obligation, which is absolute and unconditional, to pay the principal of and interest on this Series A 2035 Nuclear Asset-Recovery Bond at the times, place and rate and in the coin or currency herein prescribed.
The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Series A 2035 Nuclear Asset-Recovery Bond, by acquiring any Series A 2035 Nuclear Asset-Recovery Bond or interest therein, (a) express their intention that, solely for the purpose of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for the purpose of state, local and other taxes, the Series A 2035 Nuclear Asset-Recovery Bonds qualify under applicable tax law as indebtedness of the sole owner of the Issuer secured by the Series Collateral and (b) solely for purposes of U.S. federal taxes and, to the extent consistent with applicable state, local and other tax law, solely for purposes of state, local and other taxes, so long as any of the Series A 2035 Nuclear Asset-Recovery Bonds are outstanding, agree to treat the Series A 2035 Nuclear Asset-Recovery Bonds as indebtedness of the sole owner of the Issuer secured by the Series Collateral unless otherwise required by appropriate taxing authorities.
ABBREVIATIONS
The following abbreviations, when used above on this Nuclear Asset-Recovery Bond, shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM |
|
as tenants in common |
|
|
|
TEN ENT |
|
as tenants by the entireties |
|
|
|
JT TEN |
|
as joint tenants with right of survivorship and not as tenants in common |
|
|
|
UNIF GIFT MIN ACT |
|
Custodian |
|
|
(Custodian) (minor) |
|
|
|
|
|
Under Uniform Gifts to Minor Act ( ) |
|
|
(State) |
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
|
|
(name and address of assignee) |
the within Series A 2035 Nuclear Asset-Recovery Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer said Series A 2035 Nuclear Asset-Recovery Bond on the books kept for registration thereof, with full power of substitution in the premises.
|
| ||
Dated: |
|
|
|
|
Signature Guaranteed: | ||
|
| ||
|
| ||
The signature to this assignment must correspond with the name of the registered owner as it appears on the within Series A 2035 Nuclear Asset-Recovery Bond in every particular, without alteration, enlargement or any change whatsoever.
NOTE: Signature(s) must be guaranteed by an institution that is a member of: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other signature guaranty program acceptable to the Indenture Trustee.
Exhibit 99.8
EXECUTION VERSION
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (this Agreement) is made as of June 22, 2016, by and among:
(a) Duke Energy Florida, LLC (in its individual capacity, the Company), as the Receivables Servicer referred to below in its separate capacity as the initial servicer of the Nuclear Asset-Recovery Property referred to below (including any successor in such capacity, the Initial Property Servicer), and in its separate respective capacities as a collection agent for the benefit of each of the Initial Property Servicer and the Receivables Servicer in accordance with the terms of this Agreement;
(b) Duke Energy Florida Project Finance, LLC, a Delaware limited liability company (the Initial Bond Issuer);
(c) The Bank of New York Mellon Trust Company, National Association, a national banking association, in its capacity as indenture trustee (including any successor in such capacity, the Initial Bond Trustee) under the Initial Indenture referred to below;
(d) Duke Energy Florida Receivables LLC, a Delaware limited liability company (Buyer); and
(e) SunTrust Bank, as Administrative Agent (in such capacity, and including any successor agent, the Administrative Agent) for the Receivables Lenders referred to below;
WHEREAS, pursuant to the terms of that certain Receivables Purchase Agreement, dated as of March 13, 2014 (as previously amended and as it may hereafter from time to time be further amended, restated or modified and as supplemented from time to time, the Purchase Agreement), between Buyer and the Company, the Company has sold and may hereafter sell to Buyer all of the Companys right, title and interest in and to certain Receivables, Related Security, Collections and all Proceeds (as such terms are defined in the Purchase Agreement; and the Receivables, Related Security, Collections and all Proceeds thereof are collectively referred to herein as the Receivables); and
WHEREAS, pursuant to that certain Credit Agreement, dated as of March 13, 2014 (as previously amended and as it may hereafter from time to time be further amended, restated or modified and as supplemented from time to time, the Credit Agreement), by and among the Buyer, the Administrative Agent and the financial institutions and other entities party thereto as Lenders and as Managing Agents (such Lenders, Managing Agents and the Administrative Agent being collectively referred to as the Receivables Lenders), Buyer has granted a security interest in the Receivables to the Administrative Agent for the benefit of the Receivables Lenders; and
WHEREAS, pursuant to the terms of the Purchase Agreement, the Credit Agreement and the Servicing Agreement, dated as of March 13, 2014 (as previously amended and as it may hereafter from time to time be further amended, restated or modified and as supplemented from time to time, the Servicing Agreement, and together with the Purchase Agreement and the Credit Agreement, collectively, the Receivables Agreements), the
Company has been appointed as a servicer (the Receivables Servicer) and has agreed to provide certain servicing and collection functions with respect to the Receivables;
WHEREAS, pursuant to the terms of that certain Nuclear Asset-Recovery Property Purchase and Sale Agreement, dated on or around June 22, 2016 (as it may hereafter from time to time be amended, restated or modified, the Initial Sale Agreement), between the Initial Bond Issuer and the Company in its capacity as seller, the Company has sold to the Initial Bond Issuer certain assets known as Nuclear Asset-Recovery Property which includes the right to impose, charge and collect Nuclear Asset-Recovery Charges as each such term is defined or as otherwise used in Chapter 366, Section 366.95, Florida Statutes (such Nuclear Asset-Recovery Property, the Initial Customer Property and such Nuclear Asset-Recovery Charges, the Initial Customer Charges);
WHEREAS, pursuant to the terms of that certain Indenture dated on or around June 22, 2016 (as it may hereafter from time to time be amended, restated or modified and as supplemented by the Series Supplement and any other supplemental indenture, the Series Supplement and Indenture, as supplemented, being collectively referred to herein as the Initial Indenture), between the Initial Bond Issuer and the Initial Bond Trustee, the Initial Bond Issuer, among other things, has granted to the Initial Bond Trustee a security interest in certain of its assets, including the Initial Customer Property, to secure, among other things, the bonds issued pursuant to the Initial Indenture (the Initial Bonds);
WHEREAS, pursuant to the terms of that certain Nuclear Asset-Recovery Property Servicing Agreement dated on or around June 22, 2016 (as it may hereafter from time to time be amended, restated or modified, the Initial Servicing Agreement, and the Initial Servicing Agreement, together with the Initial Sale Agreement and the Initial Indenture, the Initial Bond Agreements), between the Initial Bond Issuer and the Initial Property Servicer, the Initial Property Servicer has agreed to provide for the benefit of the Initial Bond Issuer certain servicing and collection functions with respect to the Initial Customer Charges;
WHEREAS, the Receivables and the Initial Customer Charges will be invoiced collectively on single bills sent to the Companys retail customers (the Customers), which Customers are obligated to pay both the Receivables and the Initial Customer Charges, and the parties hereto wish to agree upon their respective rights relating to the Receivables and the Initial Customer Property and any bank accounts into which collections of the foregoing may be deposited, as well as other matters of common interest to them which arise under or result from the coexistence of the Initial Bond Agreements and the Receivables Agreements;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:
SECTION 1. Acknowledgment of Ownership Interests and Security Interests.
(a) Each of the parties hereto hereby acknowledges the ownership interest of the Initial Bond Issuer in the Initial Customer Property, including the Initial Customer Charges and the revenues, collections, claims, rights, payments, money and proceeds arising therefrom, and the security interests granted therein in favor of the Initial Bond Trustee for the
benefit of itself and the holders of the Initial Bonds. Each of the parties hereto hereby acknowledges the ownership interest and security interests of the Buyer and the Receivables Lenders in the Receivables and the revenues, collections, claims, rights, payments, money and proceeds arising therefrom. The parties hereto agree that the Initial Customer Property and the Receivables each shall constitute separate property rights notwithstanding that they may be evidenced by a single bill. The Company and the Receivables Servicer further agree that they will not include the Initial Customer Property in calculating the amount of the Receivables sold or to be sold under the Receivables Agreements. Accordingly, the Receivables Lenders and the Receivables Servicer each acknowledge that, notwithstanding anything in the Receivables Agreements to the contrary, none of such parties has any interest in the Initial Customer Property, and each of the Initial Bond Trustee, the Initial Bond Issuer and the Initial Property Servicer further acknowledge that, notwithstanding anything in the Initial Bond Agreements to the contrary, none of such parties has any interest in the Receivables.
(b) Each of the Administrative Agent and the Buyer hereby releases all liens and security interests of any kind whatsoever which the Administrative Agent or Buyer may hold in the Initial Customer Property. Each of the Administrative Agent and Buyer agrees, upon the reasonable request of the Company or the Initial Bond Trustee, to execute and deliver to the Initial Bond Trustee such UCC partial release statements and other documents and instruments, and to do such other acts and things, as the Company or the Initial Bond Trustee may reasonably request in order to evidence the release provided for in this Section 1(b) and/or to execute and deliver to the Initial Bond Trustee UCC financing statement amendments to exclude the Initial Customer Property from the assets covered by any existing UCC financing statements relating to the Receivables; provided, however, that failure to execute and deliver any such partial release statements, financing statement amendments, documents or instruments, or to do such acts and things, shall not affect or impair the release provided for in this Section 1(b).
(c) Each of the Initial Bond Issuer and the Initial Bond Trustee hereby releases all liens and security interests of any kind whatsoever which either of them may hold in the Receivables. Each of the Initial Bond Issuer and the Initial Bond Trustee agrees, upon the reasonable request of the Administrative Agent or Buyer, to execute and deliver to the Administrative Agent or Buyer, as applicable, such UCC partial release statements and other documents and instruments, and to do such other acts and things, as the Administrative Agent or Buyer may reasonably request in order to evidence the release provided for in this Section 1(c) and/or to execute and deliver to the Administrative Agent or Buyer, as applicable, UCC financing statement amendments to exclude such Receivables from the assets covered by any existing UCC financing statements relating to the Initial Customer Property; provided, however, that failure to execute and deliver any such partial release statements, financing statement amendments, documents or instruments, or to do such acts and things, shall not affect or impair the release provided for in this Section 1(c).
SECTION 2. Deposit Accounts.
(a) The parties hereto each acknowledge that collections with respect to the Initial Customer Property and the Receivables may from time to time be deposited into one or more
designated accounts of the Buyer (the Buyer Accounts) and that such Buyer Accounts are subject to a security interest of the Administrative Agent and account control agreements among the Buyer, the Administrative Agent and the applicable account bank. Further, the parties hereto each acknowledge that collections with respect to the Initial Customer Property and the Receivables may from time to time be deposited into one or more designated accounts of the Company or the Receivables Servicer (the Company Accounts and together with the Buyer Accounts, the Deposit Accounts). Subject to Section 4, the Company, in its capacity as a collection agent for the benefit of the other parties hereto, agrees to:
(i) maintain the collections in the Deposit Accounts for the benefit of the Initial Property Servicer, the Initial Bond Trustee, the Initial Bond Issuer, the Receivables Servicer, the Buyer, the Administrative Agent and the Receivables Lenders, as their respective interests may appear, subject to the perfected security interest of the Administrative Agent in the Deposit Accounts and the provisions of the Receivables Agreements and this Agreement;
(ii) allocate and remit funds from the Deposit Accounts (x) in the case of collections relating to the Initial Customer Property, at the times and in the manner specified in the Initial Bond Agreements to the Initial Bond Trustee; and (y) in the case of collections relating to the Receivables, allocate and remit funds to the Receivables Lenders and the Buyer at the times and in the manner specified in the Receivables Agreements; provided, that:
(A) with respect to each customer rate class, to the extent that any shortfall exists between the aggregate amount billed and the aggregate amount collected in the Deposit Accounts, such shortfall will be allocated between the Initial Customer Charges and the Receivables pursuant to the following formula: (x) the amount billed with respect to the Initial Customer Charge or Receivable, as applicable, minus (y)(1) the amount billed with respect to the Initial Customer Charge or Receivable, as applicable, multiplied by (2) the total amount collected, divided by the total amount billed; and
(B) late payment penalties of the Receivables shall be allocated (x) to the Receivables Lenders to the extent that any such late payment penalties have been pledged to the Receivables Lenders and (y) otherwise to the Company; and
(iii) maintain records as to the amounts deposited into the Deposit Accounts, the amounts remitted therefrom and the allocation as provided in subsection (a) above.
(b) The Initial Bond Trustee, the Initial Bond Issuer, the Buyer and the Receivables Lenders shall each have the right to require an accounting from time to time of collections, deposits, allocations and remittances by the Company relating to the Deposit Accounts. Because of difficulties inherent in allocating collections on a daily basis, the Initial Property Servicer may implement percentage-based estimates for the purposes of determining the amount of collections which are allocable to the Initial Customer Property, which allocations will be subject to monthly reconciliations but will otherwise be deemed conclusive, subject to reconciliation as provided in the following sentences. In the event that
the estimated remittances to the Initial Bond Issuer for any calendar month are less than the actual amounts of Initial Customer Charge collections, the Initial Bond Issuer shall look to the Initial Property Servicer for any such shortfall and shall have no claims against the Receivables Lenders for such amounts. In the event that the estimated remittances to the Initial Bond Issuer are greater than the actual amounts of Initial Customer Charge collections, the Initial Bond Issuer shall remit such excess collections (or net such excess collections in accordance with the following sentence) to the Initial Property Servicer for forwarding to the Receivables Lenders (or the Receivables Servicer) on their behalf in accordance with the terms of the Receivables Agreements. Notwithstanding the foregoing, nothing in this paragraph shall (i) eliminate the right of the Receivables Lenders and the Administrative Agent, as assignees of the Company under the Receivables Agreements, to cause any such reconciliation payments to be paid directly to the Administrative Agent or its designee or (ii) prohibit any party from netting any such reconciliation payments owing by such party (the remitting party) to another party (the receiving party) against the amounts to be paid hereunder to the remitting party by such receiving party.
(c) The Initial Bond Trustee and the Initial Bond Issuer waive any interest in deposits to the Deposit Accounts to the extent that they are properly allocable to Collections with respect to Receivables, and the Administrative Agent and Buyer waive any interest in deposits to the Deposit Accounts to the extent that they are properly allocable to Initial Customer Charges. Each of the parties hereto acknowledges the respective security interests of the others in amounts on deposit in the Deposit Accounts to the extent of their respective interests as described in this Agreement.
(d) In no event may the Initial Bond Trustee take any action with respect to the Initial Customer Charges in a manner that would result in the Initial Bond Trustee obtaining possession of, or any control over, Collections of Receivables or any Deposit Account. In the event that the Initial Bond Trustee obtains possession of any Collections related to the Receivables, the Initial Bond Trustee shall notify the Administrative Agent of such fact, shall hold them in trust and shall promptly deliver them to the Administrative Agent (or its designees) upon request. Except as contemplated by this Section 2 with respect to the Administrative Agents exercise of control over the Buyer Accounts, in no event may the Administrative Agent or Buyer take any action with respect to the collection of Receivables in a manner that would result in the Administrative Agent or Buyer, as applicable, obtaining possession of, or any control over, collections of Initial Customer Charges. In the event that the Buyer obtains possession of any collections of Initial Customer Charges, the Buyer shall notify the Initial Bond Trustee of such fact, shall hold them in trust and shall promptly deliver them to the Initial Bond Trustee upon request.
(e) To the extent the Administrative Agent has exercised exclusive control over any Buyer Account, it shall allocate the funds on deposit therein related to the Initial Customer Property in accordance with the information provided to it by the Company and consistent with this Section 2, and shall remit such collections related to the Initial Customer Property at the direction of the Initial Bond Trustee. The Administrative Agent agrees to hold any Initial Customer Property that is in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee and/or gratuitous agent for the benefit of the Initial Bond Trustee and any assignee solely for the purpose of perfecting the security
interest granted in such Initial Customer Property pursuant to the Initial Sale Agreement and the Initial Indenture to the Initial Bond Trustee, subject to the terms and conditions of this Section 2. To the extent any Initial Customer Property is possessed by or is under the control of the Administrative Agent (either directly or through its agents or bailees), upon the request of the Initial Bond Trustee, the Administrative Agent shall deliver such Initial Customer Property to (or shall cause such Initial Customer Property to be delivered to) the Initial Bond Trustee and shall take all actions reasonably requested by the Initial Bond Trustee (at the expense of the Company) to cause the Initial Bond Trustee to have possession or control of same. The duties or responsibilities of the Administrative Agent under this Section 2 shall be subject to Section 6 and shall be limited solely to holding the Initial Customer Property as gratuitous bailee and/or gratuitous agent for the benefit of the Initial Bond Trustee for purposes of perfecting the security interest held by the Initial Bond Trustee therein. The agreement of the Administrative Agent to act as gratuitous bailee and/or gratuitous agent pursuant to this Section 2 is intended to satisfy the requirements of Section 9-313(c) of the UCC.
SECTION 3. Time or Order of Attachment. The acknowledgments contained in Sections 1 and 2 are applicable irrespective of the time or order of attachment or perfection of security or ownership interests or the time or order of filing or recording of financing statements or mortgages or filings under applicable law.
SECTION 4. Servicing.
(a) Pursuant to Section 2, the Company, in its role as collection agent hereunder, shall allocate and remit funds received from Customers for the benefit of the Initial Bond Issuer, the Initial Bond Trustee, the Buyer and the Receivables Lenders, respectively, and shall control the movement of such funds out of the Deposit Accounts (such allocation, remittance and deposits hereafter called the Allocation Services) in accordance with the terms of this Agreement. The same entity must always act as servicer in the performance of the Allocation Services as to both the Initial Bond Agreements and the Receivables Agreements.
(b) In the event that the Initial Bond Trustee is entitled to and desires to exercise its right, pursuant to the Initial Bond Agreements, to replace the Company as Initial Property Servicer, or in the event that the Receivables Lenders are entitled to and desire to exercise their right to replace the Company as Receivables Servicer, and therefore to terminate the role of the Company as the provider of the Allocation Services hereunder, the party desiring to exercise such right shall promptly give written notice to the other (the Servicer Notice) in accordance with the notice provisions of this Agreement and consult with the other with respect to the Person who would replace the Company in such capacities. Any successor to the Company in such capacities shall be agreed to by the Initial Bond Trustee and the Administrative Agent within ten (10) Business Days of the date of the Servicer Notice, and such successor shall be subject to satisfaction of the Rating Agency Condition (as defined below) and otherwise satisfy the provisions of the Initial Servicing Agreement and the Receivables Agreements. Business Day means any day other than a Saturday, Sunday, or any holiday for national banks or any New York banking corporation in St. Petersburg, Florida, Charlotte, North Carolina, Atlanta, Georgia or New York, New York. The Person
named as replacement collection agent in accordance with this Section 4 is referred to herein as the Replacement Collection Agent. The parties hereto agree that any entity succeeding to the rights of the Company as Receivables Servicer or as Initial Property Servicer shall be the same entity.
(c) Anything in this Agreement to the contrary notwithstanding, any action taken by the Initial Bond Trustee or the Administrative Agent to appoint a Replacement Servicer pursuant to this Section 4 shall be subject to the Rating Agency Condition and the consent, if required by law, regulation, regulatory order or of the Florida Public Service Commission or the Initial Bond Agreements. For the purposes of this Agreement, the Rating Agency Condition has the meaning set forth in the Initial Indenture. The parties hereto acknowledge and agree that the approval or the consent of the rating agencies which is required in order to satisfy the Rating Agency Condition is not subject to any standard of commercial reasonableness, and the parties are bound to satisfy this condition whether or not the rating agencies are unreasonable or arbitrary.
SECTION 5. Sharing of Information. The parties hereto agree to cooperate with each other and make available to each other or any Replacement Collection Agent any and all records and other data relevant to the Initial Customer Property and the Receivables which they may have in their possession or may from time to time receive from the Company, the Initial Property Servicer or the Receivables Servicer or any successor hereto or thereto, including, without limitation, any and all computer programs, data files, documents, instruments, files and records and any receptacles and cabinets containing the same. The Company hereby consents to the release of information regarding the Company pursuant to this Section 5.
SECTION 6. No Joint Venture; No Fiduciary Obligations; Etc.
(a) Nothing herein contained shall be deemed as effecting a joint venture among any of the Company, the Initial Bond Issuer, the Initial Bond Trustee, the Initial Property Servicer, the Administrative Agent, the Receivables Servicer and the Buyer.
(b) Neither Buyer nor the Administrative Agent is the agent of, or owes any fiduciary obligation to, the Initial Bond Trustee, the Initial Bond Issuer, the bondholders or any other party under this Agreement. Each of the Initial Bond Trustee (on behalf of itself and the bondholders), the Initial Bond Issuer and the Company hereby waives any right that it may now have or hereafter acquire to make any claim against Buyer or the Administrative Agent, in their respective capacities as such, on the basis of any such fiduciary obligation hereunder. Neither the Initial Bond Trustee nor the Initial Bond Issuer is the agent of, or owes any fiduciary obligation to, the Buyer or the Administrative Agent or any other party under this Agreement. Each of the Administrative Agent, the Company and the Buyer hereby waives any right that it may now have or hereafter acquire to make any claim against the Initial Bond Trustee or the Initial Bond Issuer on the basis of any such fiduciary obligation hereunder.
(c) Notwithstanding anything herein to the contrary, none of the Buyer, the Administrative Agent, the Initial Bond Trustee or the Initial Bond Issuer shall be required to
take any action that exposes it to personal liability or that is contrary to the Initial Indenture, the Initial Servicing Agreement, any Receivables Agreement or applicable law.
(d) None of the Buyer, the Administrative Agent, the Initial Bond Trustee or the Initial Bond Issuer nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement, except for its or their own gross negligence, bad faith or willful misconduct. Without limiting the foregoing, each of the Buyer, the Administrative Agent, the Initial Bond Trustee and the Initial Bond Issuer: (i) may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any party and shall not be responsible to any party for any statements, warranties or representations made by any other party in connection with this Agreement or any other agreement; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other agreement on the part of any other party; and (iv) shall incur no liability under or in respect of this Agreement by acting upon any writing (which may be by facsimile or other electronic transmission) believed by it in good faith to be genuine and signed or sent by the proper party or parties.
SECTION 7. Method of Adjustment and Allocation. Each of the parties hereto acknowledges that the Initial Property Servicer will adjust, calculate and allocate payments of Initial Customer Charges in accordance with the calculation methodology specified in Section 6 of Exhibit A of the Initial Servicing Agreement and the true-up mechanism described in Section 4.01 of the Initial Servicing Agreement in the form attached thereto as Exhibit B, and each of the parties hereto hereby acknowledges that neither the Administrative Agent nor any other Receivables Lenders shall be deemed or required under this Agreement to have any knowledge of or responsibility for the terms of such documents or any such adjustment, calculation and allocation. Accordingly, each of the Receivables Lenders (i) may, solely for the purposes of this Agreement, conclusively rely on the accuracy of the calculations of the Initial Property Servicer in making such adjustments, calculations and allocations. Such acknowledgement shall not relieve the Receivables Servicer of any of their respective obligations to make payments in accordance with the terms of the Receivables Agreements, nor shall it relieve the Initial Property Servicer of its obligations under the Initial Servicing Agreement.
SECTION 8. Termination. This Agreement shall terminate upon the payment in full of the Initial Bonds, or, if earlier, the termination of the Receivables Agreements as to the Company and the release of the Company from all further obligations thereunder, except that the understandings and acknowledgements contained in Sections 1, 2, 3, 6 and 15 shall survive the termination of this Agreement.
SECTION 9. Governing Law; Jurisdiction; Waiver of Jury Trial(a).
(a) THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
(b) In connection with any suit, claim, action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby, each party hereto hereby consents to the in personam jurisdiction of any court of the State of New York or any U.S. federal court located in the Borough of Manhattan in the City of New York, State of New York; each party hereto agrees that service by registered mail, or any other form equivalent thereto (or, in the alternative, by any other means sufficient under applicable law, rules and regulations) at the addresses set forth in Section 17 hereof shall be valid and sufficient for all purposes; and each party hereto agrees to, and irrevocably waives any objection based on forum non conveniens or venue not to, appear in such state or U.S. federal court located in the Borough of Manhattan. Each of the Company, Buyer, Initial Property Servicer, Receivables Servicer and the Initial Bond Issuer irrevocably designates CT Corporation System, 111 Eighth Avenue, New York, NY 10011, as its agent and attorney-in-fact for the acceptance of service of process and making an appearance on its behalf in any such action or proceeding and taking all such acts as may be necessary or appropriate in order to confer jurisdiction over it by such state or U.S. federal court in the Borough of Manhattan, and each of such parties stipulates that such appointment is irrevocable and coupled with an interest.
(c) EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 10. Further Assurances. Each of the parties hereto agrees to execute any and all agreements, instruments, financing statements, releases and any and all other documents reasonably requested by any of the other parties hereto in order to effectuate the intent of this Agreement. In each case where a release is to be given pursuant to this Agreement, the term release shall include any documents or instruments necessary to effect a release, as contemplated by this Agreement. All releases, subordinations and other instruments submitted to the executing party are to be prepared at the expense of the Company. Notwithstanding anything herein to the contrary, the Initial Bond Trustee shall not be required to execute any such agreements, instruments, releases or other documents unless directed to do so by an Issuer Order, as such term is defined in the Initial Indenture.
SECTION 11. Limitation on Rights of Others. This Agreement is solely for the benefit of the parties hereto, the holders of the Initial Bonds and the Receivables Lenders, and no other person or entity shall have any rights, benefits, priority or interest under or because of the existence of this Agreement.
SECTION 12. Amendments. In the event that (x) the Company hereafter causes any property (Additional Customer Property) consisting of the right to impose specified charges on Customers to be created and sold and pledged by the buyer thereof for the benefit of bondholders pursuant to any financing order of the Florida Public Service Commission, and the Company acts as servicer for the bonds issued pursuant to such financing order, or (y) the Company enters into any new receivables program following the termination of the Receivables Agreements in which
the Company participates as a seller or as a servicer of receivables, then, in either such event, upon the written request of the Company, the other parties hereto agree that this Agreement may be amended and restated (i) to add as parties hereto the relevant issuer of such additional bonds, the indenture trustee therefor, and the servicer of such Additional Customer Property and/or the relevant purchasers, lenders and servicers under such replacement receivables program, as the case may be, and (ii) to reflect the rights and obligations of the parties with respect to such new receivables purchases on terms substantially similar to the rights and obligations of the Receivables Servicer, the Administrative Agent and the Receivables Lenders hereunder and (iii) to reflect the rights and obligations of the parties with respect to any such Additional Customer Property on terms substantially similar to the rights and obligations of the Initial Bond Issuer, the Initial Bond Trustee and the Initial Servicer hereunder; provided that no such amendment shall be effective unless (x) evidenced by a written instrument signed by the parties hereto and such additional parties and (y) the Rating Agency Condition shall have been satisfied with respect thereto and provided, further, that no party hereto shall be required to execute any such amended agreement on terms which are materially more disadvantageous to it or to the holders of the Initial Bonds (in the case of the Initial Bond Trustee) or to the Receivables Lenders (in the case of the Administrative Agent) than the terms contained herein. In addition, the Initial Bond Trustee shall not be required to execute any such amendment unless directed to do so by an Issuer Order, as such term is defined in the Initial Indenture.
SECTION 13. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of such provision to other Persons, or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.
SECTION 14. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 15. Nonpetition Covenant.
(a) Notwithstanding any prior termination of this Agreement or the Initial Indenture, each of the parties covenants that it shall not, prior to the date which is one year and one day after payment in full of the last outstanding Initial Bonds, acquiesce, petition or otherwise invoke or cause the Initial Bond Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Initial Bond Issuer 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 Initial Bond Issuer or any
substantial part of its property, or ordering the winding up or liquidation of the affairs of the Initial Bond Issuer.
(b) Notwithstanding any prior termination of this Agreement or the Credit Agreement, each of the parties hereto other than the Administrative Agent hereby covenants and agrees that it shall not, prior to the date which is one year and one day after the termination of the Credit Agreement and the payment in full of all amounts owing by Buyer thereunder, acquiesce, petition or otherwise invoke or cause Buyer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against Buyer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Buyer or any substantial part of the property of Buyer, or ordering the winding up or liquidation of the affairs of Buyer.
SECTION 16. Trustees. The Bank of New York Mellon, as Initial Bond Trustee, in acting hereunder, is entitled to all rights, benefits, protections, immunities and indemnities accorded to it under the Initial Indenture.
SECTION 17. Notices, Etc. Any notice provided or permitted by this Agreement to be made upon, given or furnished to or filed with any party hereto shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing by facsimile transmission, first-class mail or overnight delivery service to the applicable party at its address set forth on Exhibit A hereto or, as to any party, at such other address as shall be designated by such party by written notice to the other parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
|
DUKE ENERGY FLORIDA, LLC, as Company, as Initial Property Servicer, as Receivables Servicer and as a collection agent | ||
|
| ||
|
| ||
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
Senior Vice President, Tax and Treasurer |
|
|
| |
|
|
| |
|
DUKE ENERGY FLORIDA PROJECT FINANCE, LLC, as Initial Bond Issuer | ||
|
| ||
|
| ||
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
President, Chief Financial Officer and Treasurer |
|
|
| |
|
|
| |
|
DUKE ENERGY FLORIDA RECEIVABLES LLC, as Buyer | ||
|
| ||
|
| ||
|
By: |
/s/ Stephen G. De May | |
|
|
Name: |
Stephen G. De May |
|
|
Title: |
President, Chief Financial Officer, |
|
|
|
Senior Vice President, Tax and Treasurer |
|
|
| |
|
|
| |
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as Initial Bond Trustee | ||
|
| ||
|
| ||
|
By: |
/s/ Mitchell L. Brumwell | |
|
|
Name: |
Mitchell L. Brumwell |
|
|
Title: |
Vice President |
Signature Page to
Intercreditor Agreement
|
SUNTRUST BANK, as Administrative Agent | ||
|
| ||
|
| ||
|
By: |
/s/ David Hufnagel | |
|
|
Name: |
David Hufnagel |
|
|
Title: |
Vice President |
Signature Page to
Intercreditor Agreement
EXHIBIT A
NOTICE ADDRESSES
EXHIBIT B
INITIAL SERVICING AGREEMENT
(Attached.)
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end
V/I;R@IH%B1K%*_+QBFAW(Y_P*##P"002)Q"V) UKR8S,R;8\OD?LOW)LQK/
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end
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end