Condition Upon Return. On the Date of Return, (other than in connection with a return of the Undivided Interest by the Facility Lessee pursuant to SECTION 13 or SECTION 14), the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waived, whereupon this Facility Lease shall terminate: (a) the Facility will be in at least as good condition as it would have been in if it had been maintained during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION 7), ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances); (b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Law; (c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility; (d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility; (e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement; (f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2; (g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties. (h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term; (i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and (j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
Appears in 3 contracts
Samples: Facility Lease Agreement (Eme Homer City Generation Lp), Facility Lease Agreement (Eme Homer City Generation Lp), Facility Lease Agreement (Eme Homer City Generation Lp)
Condition Upon Return. On the Date of Return, (other than in connection with a return of the Undivided Interest Unless purchased by the Facility Lessee pursuant to SECTION 13 Section 19 or SECTION 14)20 hereof, upon the Facility termination of this Lease at the end of the Basic Term or any Renewal Term or pursuant to Sections 9(b) or 15, unless Lessor has requested that Lessee agrees that return the following conditions Aircraft to a storage location pursuant to Section 5(b) (in which case the "RETURN CONDITIONS"storage location provided in said Section 5(b) shall be satisfied or waiveddeemed to be the return location), whereupon this Facility Lease shall terminate:
(a) Lessee will return the Facility Airframe to Lessor at one of Lessee's principal maintenance bases located in one of the forty-eight contiguous states of the United States chosen by Lessee, and Lessee will be in give Lessor at least as good condition as it would have been in ten (10) days prior written notice of the place of such return. At the time of such return, (i) Lessee will, at its own cost and expense, unless otherwise requested by Lessor to retain the existing registration of the Aircraft at least ninety (90) days prior to the date of return hereunder, cause the Aircraft, if it had been maintained during is not then so registered, to be registered under the Facility Lease Term in compliance laws of the United States with the provisions of this Facility Lease (including, without limitation, SECTION 7), ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already Federal Aviation Administration in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Law;
(c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies designee, provided that Lessee shall be relieved of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair its obligations under this sentence if such registration is prohibited by reason of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation failure of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor Participant or its Lessor's designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for eligible on such date to own an aircraft registered with the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, Federal Aviation Administration and (ii) any the Airframe will be fully equipped with the Engines (or Acceptable Alternate Engines) installed thereon. Also, at the time of such return, Lessor shall have good title to such Airframe and all supplies, spare parts, consumables, safety equipmentEngines or Acceptable Alternate Engines, and other parts such Airframe and Engine or materials as Acceptable Alternate Engines (A) shall be certified (or, if not then registered under the Transportation Code by reason of the proviso of clause (i) in the Facility Lessee's possession preceding sentence or because Lessor has so requested that the Aircraft not be so registered, shall hold a valid certificate of airworthiness issued by the country of registry and shall be reasonably appropriate or necessary eligible for certification by the continued operation of Federal Aviation Administration) as an airworthy aircraft by the Facility;
Federal Aviation Administration, (e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)B) shall be free and clear of all Liens (other than Permitted Encumbrances set forth Lessor Liens, Indenture Trustee's Liens and Loan Participant Liens) and rights of third parties under pooling, interchange, overhaul, repair or other similar agreements or arrangements, (C) shall be in clauses a regular passenger configuration, and in as good a condition as when delivered by Seller to Lessee, ordinary wear and tear excepted, and otherwise in the condition required to be maintained under Lessee's FAA-approved maintenance plan (iinotwithstanding any Sublease theretofore in effect), (iiiD) in the event that Lessee (or any Sublessee then in possession of the Aircraft) shall not then be using a continuous maintenance program with respect to the Airframe immediately prior to such return but instead shall have been using a block overhaul program with respect to the Airframe, then (i) such block overhaul program shall have been approved by the government of registry of the Aircraft and (ii) the Airframe shall have remaining until the next scheduled block overhaul at least 25% of the allowable hours between block overhauls permitted under the block overhaul program then used by Lessee or such Sublessee, (E) on average, the Engines or Acceptable Alternate Engines shall not have been operated since the last engine shop visit more than 75% of the time represented by Lessee's average on-wing hang time as then applicable to mature engines employed on A330-___ aircraft in Lessee's fleet (based on a three (3) year average), (vii), (viii), (ix), (xiF) shall have all Lessee's and any Sublessee's exterior marking removed or painted over with areas thereof refinished to match adjacent areas and (xiiiG) shall be in a state of cleanliness suitable under Lessee's normal service standards for operation in Lessee's revenue passenger service and in all such cases the Aircraft shall not have been discriminated against whether by reason of its leased status or otherwise in maintenance, use, operation or in any other manner whatsoever. If clause (D) of the definition thereof; PROVIDED, HOWEVER, first paragraph of this subsection (a) shall be applicable but the Airframe does not meet the conditions specified in the case of Permitted Encumbrances set forth in clauses said clause (iiiD), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves Lessee shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, pay or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time cause to be paid to Lessor, concurrently with the Facility Lessee, or an Affiliate return thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination Dollar amount computed by multiplying (i) 110% of the Facility Site Lease or at direct cost to Lessee (based upon the Owner Lessor's option. Within 180 days after direct cost to Lessee for similar aircraft in the expiration or termination fleet of this Facility Lease, Lessee) during the Owner Lessor shall notify the Facility Lessee preceding 12 months of performing an airframe block overhaul of the material elements type referred to in such clause (D) by (ii) a fraction of which (x) the numerator shall be the excess of 25% of the Support Services that hours of operation allowable between such block overhauls over the Owner Lessor desires actual number of hours of operation remaining on the Facility Lessee, or its Affiliate, Airframe to perform. Following the next such notice, block overhaul and (y) the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates denominator shall be released from any further obligation to provide the number of hours of operation allowable between such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility block overhauls in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third partiessuch block overhaul program.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
Appears in 2 contracts
Samples: Lease Agreement (Us Airways Inc), Lease Agreement (Us Airways Inc)
Condition Upon Return. On At the Date time of Return, (other than in connection with a the return of the Undivided Interest Project by the Facility Lessee to the Owner Lessor or any transferee or assignee of the Owner Lessor pursuant to SECTION 13 or SECTION 14)Section 5.1, the Facility Lessee agrees that the following conditions shall be complied with, all at the Lessee's sole cost and expense; provided that clauses (the "RETURN CONDITIONS"a), (b) and (d) shall be satisfied or waived, whereupon this Facility Lease not apply to any return pursuant to Section 10 and clause (b) (solely with respect to compliance with Section 8) shall terminatenot apply to any termination pursuant to Section 14:
(a) the Facility will Project shall be in at least as good condition as it would have been in if it had been maintained during in the Facility Lease Term in compliance with manner required by the provisions terms of this Facility Project Lease and shall be free and clear of all Liens (including, without limitation, SECTION 7other than Permitted Liens described in clause (a)-(c), ordinary wear (f), (g) and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may bej) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowancesdefinition thereof);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law Project shall be in compliance with Sections 7 and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Law8;
(c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as no Component shall be in a temporary component and any replacement component shall satisfy the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation standards of the FacilitySection 7.2;
(d) if this Project Lease is being terminated and the Facility Owner Lessor's Leasehold Interest is being transferred to a third party pursuant to Section 13 or Section 14, the Lessee, at the request of the Owner Lessor, shall enter into arrangements with such third party reasonably acceptable to such third party to permit such third party access to and use of the Project and the Project Site; and
(e) the Lessee, at the request of the Owner Lessor made in accordance with Section 8.4, shall sell to the Owner Lessor (or its designee transferee or transferee assignee) on the date set forth in Section 8.4 at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according Fair Market Sales Value thereof each Removable Modification to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred Project requested by the Owner Lessor, and/or the Owner Participant or Expansion Project, subject in each case to all existing Liens. The fees and expenses of the OP Guarantor or Independent Appraiser(s) incurred pursuant to this clause (3e) a material risk of any material adverse effect on the interest of shall be paid by the Owner Lessor, . If the Owner Participant or Lessor determines not to purchase any Removable Modification (which may include the OP Guarantor; PROVIDEDExpansion Project) the Lessee, HOWEVERat its expense, if any shall remove such action cannot reasonably be completed prior to Removable Modification from the Project Site no later than the expiration or early termination of such Lease Term, and if continued operation date of the Facility could not reasonably be expected to result in strict liability being imposed upon Project Lease without damaging or otherwise adversely affecting the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2Project.
Appears in 2 contracts
Samples: Project Lease Agreement (Ormat Technologies, Inc.), Project Lease Agreement (Ormat Technologies, Inc.)
Condition Upon Return. On the Date of Return, (other than in connection with a return of the Undivided Interest Unless purchased by the Facility Lessee pursuant to SECTION 13 Section 19 or SECTION 14)20 hereof, upon the Facility termination of this Lease at the end of the Basic Term or any Renewal Term or pursuant to Sections 9(b) or 15, unless Lessor has requested that Lessee agrees that return the following conditions Aircraft to a storage location pursuant to Section 5(b) (in which case the "RETURN CONDITIONS"storage location provided in said Section 5(b) shall be satisfied or waiveddeemed to be the return location), whereupon this Facility Lease shall terminate:
(a) Lessee will return the Facility Airframe to Lessor at one of Lessee's principal maintenance bases located in one of the forty-eight contiguous states of the United States chosen by Lessee, and Lessee will be in give Lessor at least as good condition as it would have been in ten (10) days prior written notice of the place of such return. At the time of such return, (i) Lessee will, at its own cost and expense, unless otherwise requested by Lessor to retain the existing registration of the Aircraft at least ninety (90) days prior to the date of return hereunder, cause the Aircraft, if it had been maintained during is not then so registered, to be registered under the Facility Lease Term in compliance laws of the United States with the provisions of this Facility Lease (including, without limitation, SECTION 7), ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already Federal Aviation Administration in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Law;
(c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies designee, provided that Lessee shall be relieved of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair its obligations under this sentence if such registration is prohibited by reason of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation failure of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor Participant or its Lessor's designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for eligible on such date to own an aircraft registered with the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, Federal Aviation Administration and (ii) any the Airframe will be fully equipped with the Engines (or Acceptable Alternate Engines) installed thereon. Also, at the time of such return, Lessor shall have good title to such Airframe and all supplies, spare parts, consumables, safety equipmentEngines or Acceptable Alternate Engines, and other parts such Airframe and Engine or materials as Acceptable Alternate Engines (A) shall be certified (or, if not then registered under the Transportation Code by reason of the proviso of clause (i) in the Facility Lessee's possession preceding sentence or because Lessor has so requested that the Aircraft not be so registered, shall hold a valid certificate of airworthiness issued by the country of registry and shall be reasonably appropriate or necessary eligible for certification by the continued operation of Federal Aviation Administration) as an airworthy aircraft by the Facility;
Federal Aviation Administration, (e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)B) shall be free and clear of all Liens (other than Permitted Encumbrances set forth Lessor Liens, Indenture Trustee's Liens and Loan Participant Liens) and rights of third parties under pooling, interchange, overhaul, repair or other similar agreements or arrangements, (C) shall be in clauses a regular passenger configuration, and in as good a condition as when delivered by Seller to Lessee, ordinary wear and tear excepted, and otherwise in the condition required to be maintained under Lessee's FAA-approved maintenance plan (iinotwithstanding any Sublease theretofore in effect), (iiiD) in the event that Lessee (or any Sublessee then in possession of the Aircraft) shall not then be using a continuous maintenance program with respect to the Airframe immediately prior to such return but instead shall have been using a block overhaul program with respect to the Airframe, then (i) such block overhaul program shall have been approved by the government of registry of the Aircraft and (ii) the Airframe shall have remaining until the next scheduled block overhaul at least 25% of the allowable hours between block overhauls permitted under the block overhaul program then used by Lessee or such Sublessee, (E) in the event that Lessee (or any Sublessee then in possession of the Aircraft) during the period of operation of the Aircraft immediately prior to such return shall not have been using an on-condition maintenance program with respect to the Engines (or Acceptable Alternate Engines), Lessee agrees that the average number of hours or cycles of operation (whichever shall be applicable under the maintenance program then in use with respect to such Engines (or Acceptable Alternate Engines) on such Engines (or Acceptable Alternate Engines) remaining until the next scheduled engine heavy maintenance shall be at least 25% of the hours or cycles (whichever shall be applicable) between engine heavy maintenance allowed under the maintenance program then in use with respect to such Engines (or Acceptable Alternate Engines), (vii)F) shall have all Lessee's and any Sublessee's exterior marking removed or painted over with areas thereof refinished to match adjacent areas, (viii), (ix), (xi) and (xiiiG) shall be in a state of cleanliness suitable under Lessee's normal service standards for operation in Lessee's revenue passenger service and in all such cases the Aircraft shall not have been discriminated against whether by reason of its leased status or otherwise in maintenance, use, operation or in any other manner whatsoever. If clause (D) of the definition thereof; PROVIDED, HOWEVER, first paragraph of this subsection (a) shall be applicable but the Airframe does not meet the conditions specified in the case of Permitted Encumbrances set forth in clauses said clause (iiiD), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves Lessee shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, pay or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time cause to be paid to Lessor, concurrently with the Facility Lessee, or an Affiliate return thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination Dollar amount computed by multiplying (i) 110% of the Facility Site Lease or at direct cost to Lessee (based upon the Owner Lessor's option. Within 180 days after direct cost to Lessee for similar aircraft in the expiration or termination fleet of this Facility Lease, Lessee) during the Owner Lessor shall notify the Facility Lessee preceding 12 months of performing an airframe block overhaul of the material elements type referred to in such clause (D) by (ii) a fraction of which (x) the numerator shall be the excess of 25% of the Support Services that hours of operation allowable between such block overhauls over the Owner Lessor desires actual number of hours of operation remaining on the Facility Lessee, or its Affiliate, Airframe to perform. Following the next such notice, block overhaul and (y) the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates denominator shall be released from any further obligation to provide the number of hours of operation allowable between such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility block overhauls in accordance with Prudent Industry Practice and such block overhaul program. If clause (E) of the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination first paragraph of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, subsection (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior applicable but the Engines (or Acceptable Alternate Engines) do not meet the conditions specified in said clause (E), Lessee shall pay or cause to be paid to Lessor, concurrently with the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination return thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred Dollar amount computed by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
multiplying (i) 110% of the Facility direct cost to Lessee (based upon the direct cost to Lessee for similar aircraft in the fleet of Lessee) during the preceding 12 months of performing for an engine of the same model as the Engines (or Acceptable Alternate Engines) the scheduled engine heavy maintenance under the maintenance program then used by Lessee for engines of the same model as the Engines (or Acceptable Alternate Engines) by (ii) a fraction which (x) the numerator shall have at least be the capability and excess of 25% of the functional ability hours or cycles (whichever is applicable) of operation of one Engine between engine heavy maintenance allowable under the maintenance program then in use with respect to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at such Engines (or Acceptable Alternate Engines) over the ratings for which it was designed after taking into account normal performance degradation as a function actual average number of hours or cycles of operation of such Engines (aor Acceptable Alternate Engines) time remaining until the next such scheduled engine heavy maintenance and (by) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There denominator shall be no other return conditions the number of hours or requirements other than the Return Conditions set forth in this SECTION 5.2cycles allowable between such scheduled engine heavy maintenance.
Appears in 2 contracts
Samples: Lease Agreement (Us Airways Inc), Lease Agreement (Us Airways Inc)
Condition Upon Return. On At the Date time of Return, (other than in connection with a return of the Undivided Interest a Unit by the Facility Lessee pursuant to SECTION 13 or SECTION 14), the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waived, whereupon this Facility Lease shall terminate:
(a) the Facility will be in at least as good condition as it would have been in if it had been maintained during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION 7), ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee assignee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor pursuant to Section 5.1, the following conditions shall be complied with, all at the Facility Lessee's sole cost and expense; provided that clauses (a), (b) and (d) shall not apply to any return pursuant to Section 10 and clause (b) shall not apply to any return pursuant to Section 14:
(a) such Unit shall be in the same condition as when delivered, ordinary wear and tear excepted, and shall be free and clear of all Liens (other than Permitted Liens of the type specified in (a), (b), (c) or (h) of the definition thereof);
(b) such Unit shall be in compliance with Sections 7 and 8; and
(c) if the Facility Lease is being terminated with respect to a Unit and such Unit is being transferred to a third party, the Facility Lessee, at the request of the Owner Lessor, shall enter into a site lease and an assignment agreement substantially in the form of the Site Lease and the Assignment and Reassignment of Facility Agreements (without reassignment) solely with respect to the Unit being returned with the transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name assignee of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Law;
(c) the Facility Lessee shall provide make other arrangements reasonably acceptable to the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings to permit such third party access to and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair use of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;Unit it is acquiring; and
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor (or its designee or transferee designee) at the then fair market value Fair Market Sales Value thereof, determined by agreement between the Facility Lessee and the Owner Lessor orLessor, or absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal ProcedureProcedure (x) any spare parts then held by the Facility Lessee at the Facility Site, an undivided interest equal the Other Facility Site or the adjoining properties which relate to or are useful in connection with the Unit being returned (other than spare parts which were designated for, or otherwise held for use in connection with, the Unit, if any, which remains subject to this Facility Lease, the Other Facility (to the extent then subject to the Other Facility Lease) or any other generating unit owned or operated by the Facility Lessee or any Affiliate thereof, including, spare parts which were held in a spare parts pool (or similar arrangement) for use at multiple generating units owned or operated by the Facility Lessee or any Affiliate thereof whether or not the Unit being returned was included in such spare parts pool; provided that, if such spare parts are held in a pool solely for use at the Facility and the Other Facility and both the Facility Lease and the Other Facility Lease have been or are then being terminated, then, upon agreement between the Owner Lessor and the Other Owner Lessor, the Facility Lessee shall sell such spare parts to the Owner Lessor or such Other Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee), and (iiy) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be each Severable Modification to the Unit being returned title to which has not vested in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances Owner Lessor as set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) the first sentence of the definition thereof; PROVIDED, HOWEVERSection 8.3, in the case of Permitted Encumbrances set forth in clauses either (iiix) or (y), (vii)subject to all existing encumbrances including, (viii) in the case of Severable Modifications, the rights of any Additional Owners and (ix) the Facility Lessee under, or pursuant to arrangements made in accordance with Sections 4.2 or 4.3 of the definition thereof, adequate cash reserves Site Lease or the Shared Facilities Agreement. The appraiser's fees and expenses incurred pursuant to this clause (d) shall have been escrowed in a manner reasonably satisfactory to be paid by the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide . Unless purchased by the Owner Lessor with pursuant to this Section 5.2(d), the Support Services; PROVIDEDOwner Lessor shall have no right, that the Facility Lessee, title or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent interest in any spare parts owned by the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
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Samples: Facility Lease Agreement (Dynegy Danskammer LLC), Participation Agreement (Dynegy Danskammer LLC)
Condition Upon Return. On At the Date time of Return, (other than in connection with a any return of the Undivided Interest by the Facility Lessee pursuant to SECTION 13 or SECTION 14)Section 5.1, the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waivedcomplied with, whereupon this Facility Lease shall terminateall at the Lessee's expense:
(a) The right to use the Undivided Interest granted hereunder for the benefit of the Lessee shall cease and terminate.
(b) The Facility will shall be in at least as good condition as it would have been in if it had been maintained maintained, repaired and operated during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION 7)Lease, ordinary wear and tear excepted; , and the Owner Lessor there shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, no deferred maintenance in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);Facility.
(bc) the Facility The Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor (or any transferee or designee of either such Person its designee) for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor (or such transferee or designee designee) to obtain, any and all licenses licenses, permits, approvals and permits consents of any Governmental Authorities Entities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor (or such transferee or designee designee) in connection with the its use, operation or 8 13 maintenance of the Undivided Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of in compliance with Applicable Law;.
(cd) The Undivided Interest shall be free and clear of all Liens other than Permitted Liens of the type described in clause (d), (e), (f) or (g) of the definition thereof.
(e) The Facility shall be capable of being operated, maintained and monitored from the Facility Site; and the Facility shall be capable of being operated as a coal-fired electric generating facility at the ratings for which it was designed, on a continuing basis in normal commercial operation, and shall be capable of functioning in the manner for which it was designed and all capital expenditures in respect of the Facility shall have been made without discriminating against the Facility (considered in the context of Prudent Industry Practice) solely because the Undivided Interest is leased to and not owned by the Lessee.
(f) The Facility shall be in compliance with all requirements of manufacturers required to maintain in full force and effect any material warranty then in effect with respect to the Facility.
(g) No Component shall be a temporary Component and any Replacement Component shall satisfy the standards of Section 7.2.
(h) The Lessee shall provide surrender to the Owner Lessor (or its transferee or designee with designee) originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings drawings, performance logs and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricityThe Lessee, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation request of the Lessor, shall sell (subject to all existing Liens and so long as a function contemporaneous sale is consummated to the applicable Other Lessor under each of the Other Leases, other than any Other Leases in which the Lessee (aor its Affiliates) time has an owner participant interest) to the Lessor (or its designee) at the then fair market value thereof, determined by agreement between the Lessee, the Lessor and (b) such applicable Other Lessors or, absent agreement, by an appraisal conducted according to the Appraisal Procedures, an undivided interest equal to the Lessor's Percentage in all Required Improvements Severable Modifications made to the Facility made in accordance with this Facility Lease; andthat are owned by the Lessee. If the Lessor and such other applicable Other Lessors do not elect to purchase such Severable Modifications, the Lessee may, at its expense, remove such Severable Modifications at the end of the Lease Term.
(j) at Each Support Agreement shall be valid and in full force and effect, unless such Agreement has been previously terminated to the Owner Lessor's request, a nationally recognized independent engineer (selected extent permitted by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2Operative Documents.
Appears in 1 contract
Condition Upon Return. On At the Date time of Return, (other than in connection with a any return of the Undivided Interest by the Facility Lessee pursuant to SECTION 13 or SECTION 14)Section 5.1, the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waived, whereupon this Facility Lease shall terminatethat:
(a) the Facility Lease and the Facility Site Sublease shall cease and terminate;
(b) the Facility will be in at least as good condition as it would have been in if it had been maintained during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION limitation the provisions of Section 7), ) ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file determined in accordance with the EPA or DEP Return Acceptance Tests;
(as the case may bec) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, in any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor to the Owner Lessor or a transferee or designeedesignee of the Owner Lessor, as to the case may be on or after such return as required extent permitted by Requirements of Law;
(c) Law and the Facility Lessee shall provide the Owner Lessor provisions of such licenses or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facilitypermits;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all each Severable Improvements Improvement made to the Facility that are is owned by the Facility Lessee, subject to any existing encumbrances. The fees and expenses incurred in connection with the appraisal required by this subsection (iid) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in paid by the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the FacilityOwner Lessor;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest Lessor (the "SUPPORT ARRANGEMENTS") to provide provide, from and after expiration or early termination of the Owner Facility Site Sublease, the Facility Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee (or any domestic, unregulated Affiliate thereof its Affiliate) is capable of providing such services of, and is either still in the business of of, providing such Support Services to others or performs such Support Services on its own behalfServices, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of all Support Services from during and after the expiration of this the Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, payable periodically in advance on no more less than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all services provided under such arrangements and shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Facility Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.and
(hf) the Facility Lessee shall provide to the Owner Lessor arrange, at its sole cost and the Owner Participant expense, for a Phase I Environmental Survey of the Facility and the Facility Site andSite, which shall be in form, scope and substance reasonably satisfactory to the Owner Participant, not later than 180 days prior to a return of the Undivided Interest pursuant to Section 5.1 or, in connection with a return other than pursuant to Section 5.1, not later than the date of return; PROVIDED that, if as a result of such surveythe Phase I Environmental Survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, such Phase I Environmental Survey shall be expanded to a Phase II Environmental Survey, as which shall be in form, scope and substance reasonably satisfactory to the presence or absence of Environmental Conditions (Owner Participant. Each such survey shall be conducted, with appropriate diligence and compliance or non-compliance with applicable Environmental Laws)good faith, not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized an environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to . Any reports prepared by such consulting firm documenting the surveys shall be in form and scope reasonably satisfactory provided promptly upon receipt by the Facility Lessee to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such the environmental surveysurveys conducted pursuant to this Section 5.2(f), any action (including, any cleaning, further investigation, or abatement, correctioncorrective action, removal removal, monitoring, clean-up, remediation or remediation) is required in order that other response actions relating to Environmental Conditions at, on, under or migrating from the Facility and or the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed required to ensure that the Facility and the Facility Site will be brought into compliance comply in all material respects with all applicable Environmental Laws, the Facility Lessee shall, at its sole cost and all material Environmental Conditions recommended for correction in such survey will be corrected expense, as promptly as is reasonably practicable practical and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respectSite, (2) the risk of criminal liability being incurred by the Owner Lessor, make arrangements reasonably satisfactory to the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if for conducting and completing any such clean-up, remediation or other response action cannot reasonably be completed prior in relation to the expiration or early termination of Environmental Conditions identified in such Lease Term, and if continued operation of environmental surveys as required to ensure that the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or and the Facility Lessee, then the Facility Lessee Site comply with all applicable Environmental Laws. Nothing in this Section 5.2(f) shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form relieve EME of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the its indemnification obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of under the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(HSection 5.2(f) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
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Condition Upon Return. On At the Date time of Return, (other than in connection with a return of the Undivided Facility Interest by the Facility Lessee pursuant to SECTION Section 5.1 (other than a return pursuant to Section 13 or SECTION 14), the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waivedcomplied with, whereupon this all at the Facility Lease shall terminateLessee's sole cost and expense:
(a) the Facility will be in at least as good condition as it would have been in if it had been maintained maintained, repaired and operated during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION the provisions of Section 7), ordinary wear and tear excepted; , and the Owner Lessor there shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, no deferred maintenance in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances)Facility;
(b) the Facility Lessee shallInterest shall be free and clear of all Liens other than Permitted Liens set forth in clauses (ii), to the extent permitted by Requirements of Law (iii), (iv), (vi), (viii) and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests (ix) of the Owner Participantdefinition thereof; provided, however, that nothing in this Section 5.2(b) shall limit the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance obligations of the Undivided Interest that are not already in the name Facility Lessee under Section 10.1 of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of LawParticipation Agreement;
(c) the Facility Lessee shall provide have at least the Owner Lessor or its transferee or designee with originals or copies of all documentscapability and functional ability, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating as certified by an independent professional engineer selected pursuant to the installationIndependent Engineer Selection Procedure, maintenanceto generate electricity, operationon a continuous basis in normal commercial operating conditions, construction, design, modification substantially at the ratings for which it was designed after taking into account all Modifications to the Facility made in accordance with this Facility Lease (ordinary wear and repair of tear excepted);
(d) the Facility, in each case as Facility shall be in the Facility Lessee's possession and reasonably appropriate or necessary material compliance with all requirements of manufacturers required for the continued operation maintenance in full force and effect of any material warranty then in effect with respect to the Facility;
(de) no Component of the Facility shall be a temporary Component and any replacement Component of the Facility shall satisfy the standards of Section 7.2; and
(f) the Facility Lessee, at the request of the Owner Lessor, shall sell pursuant to Section 8.3 (subject to all existing encumbrances) to the Owner Lessor (or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessortransferee) conducted according to the Appraisal Procedure, all Optional Modifications which are Severable Modifications or an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all such Optional Modifications which are Severable Improvements Modifications made to the Facility that which are owned by the Facility Lessee, and Lessee (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) the Undivided Interest (and the than Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials Modifications referred to in SECTION 5.2(Dthe first sentence of Section 8.3)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory . In addition to the Owner Lessor; PROVIDEDforegoing conditions, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Facility Interest (the "SUPPORT ARRANGEMENTSSupport Arrangements") to provide the Owner Lessor with the Support Services; PROVIDEDprovided, that the Facility Lessee, or its Affiliate, as the case may be, Lessee shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs performing such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from during and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than on an annual basis, for such rights and the performance of other services, services and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease Term or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to continue to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from of any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later . Other than the Date of Return; PROVIDED, FURTHER, that in the event Support Services covered by such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executedcontracts, the Facility Lessee shall will have no further obligation to provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third partiesServices.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
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Samples: Facility Lease Agreement (Reliant Energy Mid Atlantic Power Services Inc)
Condition Upon Return. On the Date of Return, (other than in connection with a return of the Undivided Interest by the Facility Lessee pursuant to SECTION Section 13 or SECTION 14), the Facility Lessee ---------------- agrees that the following conditions (the "RETURN CONDITIONSReturn Conditions") shall be ----------------- satisfied or waived, whereupon this Facility Lease and the Facility Site Sublease shall terminate:
(a) the Facility will be in at least as good condition as it would have been in if it had been maintained during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION 7), ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances)Lease;
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Lawbe;
(c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and subject to any existing encumbrances, (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the FacilityFacility and (iii) those items listed on Schedule 5.2(d) that are, on the Date of Return, owned by, and in the possession of, the Facility Lessee;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Liens in existence on the Closing Date and Permitted Encumbrances Liens set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi), (xiii) and (xiiixiv) of the definition thereof; PROVIDEDprovided, HOWEVERhowever, in the case of Permitted Encumbrances Liens set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDEDprovided, FURTHERfurther, that nothing in this SECTION 5.2(ESection 5.2(e) shall limit the obligations of the Facility -------------- Lessee under SECTION Section 10.1 of the Participation Agreement;; ------------
(f) any Component in existence on the Date of Return shall be in satisfy the same condition as required under SECTION standards of Section 7.2;; -----------
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTSSupport Arrangements") to provide the Owner Lessor with -------------------- the Support Services; PROVIDEDprovided, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, appropriate arrangements with respect to any Retained Assets and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents)Lease. Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, services and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to continue to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from of any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDEDprovided, HOWEVERfurther, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDEDprovided, FURTHERfurther, that that, in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the wholesale power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.;
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and including compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION Section 5.1, not later than the date such Undivided Interest is ----------- returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent Lease Indenture Trustee with a plan, reasonably satisfactory to the Owner Participant and/or the Security AgentLease Indenture Trustee, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, Laws and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable practical and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(HSection 5.2(h) shall be completed prior to the -------------- expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(ESection 5.2(e)) on the Facility, the Undivided Interest or the -------------- Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant Participant, the Equity Investor or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant Participant, the Equity Investor or the OP Guarantor; PROVIDEDprovided, HOWEVERhowever, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, Term and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility LesseeEquity Investor, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable practical and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of ReturnTerm. Neither the provision of the surveys contemplated by this SECTION 5.2(HSection 5.2(h), nor any other provision of this SECTION 5.2(HSection -------------- ------- 5.2(h), shall alter the obligations of any party to the Operative Documents, ------ including those set forth in SECTIONS 5.4(IIISections 5.4(iv) and 10.1 of the Participation ---------------- -------- Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(HSection ------- 5.2(h) shall survive the termination of this Facility Lease and the expiration ------ of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (ai) time and (bii) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Owners Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION Section 5.2.. -----------
Appears in 1 contract
Condition Upon Return. On the Date of Return, (other than in connection with a return of the Undivided Interest by the Facility Lessee pursuant to SECTION 13 or SECTION OR 14), the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waived, whereupon this Facility Lease and the Facility Site Sublease shall terminate:
(a) the Facility will be in at least as good condition as it would have been in if it had been maintained during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION 7), ) ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to shall be terminated and all emissions credits and allowances allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances Date shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such credits or allowances);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Law;
(c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(DSection 5.2(d)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E5.2(e) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in satisfy the same condition as required under standards of SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the 10 Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, services and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to continue to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from of any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDEDprovided, HOWEVERfurther, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that that, in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received 11 such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, Laws and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable practical and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H5.2(h) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E5.2(e)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, Term and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable practical and shall provide financial assurance in the form of a satisfactory letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) 12 months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H5.2(h), nor any other provision of this SECTION 5.2(H5.2(h), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III5.4(iii) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H5.2(h) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (ai) time and (bii) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participantparticipant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION Section 5.2.. 12
Appears in 1 contract
Samples: Facility Lease Agreement (Eme Homer City Generation Lp)
Condition Upon Return. On Except with respect to a return of the Date Undivided Interest pursuant to Section 14.3, at the time of Return, (other than in connection with a any return of the Undivided Interest by the Facility Lessee pursuant to SECTION 13 or SECTION 14)in accordance with Section 5.1, the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waivedcomplied with, whereupon this all at the Facility Lease shall terminateLessee's sole cost and expense:
(a) the right to use the Undivided Interest granted hereunder for the benefit of the Facility Lessee shall cease and terminate;
(b) the Facility will be in at least as good condition as it would have been in if it had been maintained maintained, repaired and operated during the Facility Lease Term in compliance with the provisions of this Facility Lease (includingLease, without limitation, SECTION 7), ordinary reasonable wear and tear excepted; , and the Owner Lessor there shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, no deferred maintenance in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances)Facility;
(bc) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner ParticipantParticipant or the Facility Lessor, at the Owner Lessor or any transferee or designee expense of either such Person the Facility Lessee, for purposes of obtaining, or enabling the Owner Participant, Participant or the Owner Facility Lessor or such transferee or designee their respective designees to obtain, any and all licenses licenses, permits, approvals and permits consents of any Governmental Authorities Entities or other Persons that are or will be required to be obtained by the Owner Participant, Participant or the Owner Facility Lessor or such transferee or designee in connection with the its use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required in compliance with Applicable Law and in the manner contemplated by Requirements of Lawthe Rocky Mountain Agreements;
(cd) the Facility Lessee shall provide return and surrender possession of the Owner Undivided Interest to the Facility Lessor (or its transferee designee) free and clear of the Lien described in clause (i) of the definition of "Permitted Liens", except to the extent of the interests of Oglethorpe under the Head Lease and the Ground Lease;
(e) the Facility shall have at least the capability and functional ability, including the existence of sufficient water flows in contributing streams, to perform substantially at the ratings for which it was designed, on a continuing basis in normal commercial operation, all functions for which it was designed (ordinary wear and tear excepted);
(f) the Facility shall be in compliance with all requirements of manufacturers required for the maintenance in full force and effect of any material warranty then in effect with respect to the Facility;
(g) no Component shall be a temporary Component and any replacement Component shall satisfy the standards of Section 7.2. Prior to redelivery of the Undivided Interest under this Section 5.2, upon not less than 45 days' prior request of the Facility Lessor, the Facility Lessee shall perform such maintenance on the Facility which is in addition to that otherwise required to be performed by the Facility Lessee hereunder as the Facility Lessor may reasonably specify (using its best efforts on a time-available basis for such work). If the Facility Lessee is unable to perform such requested maintenance, it will use its best efforts to arrange to have such maintenance performed by another Person acceptable to the Facility Lessor at rates comparable to those the Facility Lessee obtains for maintenance performed on its own facilities. The Facility Lessor shall either promptly reimburse the Facility Lessee for the Facility Lessee's cost or designee pay such rates charged by any such Person acceptable to the Facility Lessor in connection with such requested maintenance. The Facility Lessee shall also surrender to the Facility Lessor originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, operation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) , and shall use its best efforts to obtain and surrender to the Facility Lessor originals or copies of any such documents, instruments, plans, maps, specifications, manuals, drawings or other documentary materials as shall be in the possession of any Affiliate of the Facility Lessee. The Facility Lessee shall effect delivery of the Undivided Interest (at its own cost and expense by executing and delivering to the Severable Improvements, supplies, spare parts, consumables, safety equipment, Facility Lessor an instrument or instruments in form and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner substance reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained evidencing surrender by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, 's rights to performthe Undivided Interest under this Facility Lease and to the possession thereof. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to At least 60 but not more than 120 days prior to redelivery of the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts Undivided Interest pursuant to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executedthis Section 5.2, the Facility Lessee shall perform the Return Acceptance Tests and shall promptly provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating results to the Facility it has with third parties.
(h) Lessor. If the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of not pass such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditionstests, the Facility Lessee shall, at its own expense, within 90 days of take such actions as may be necessary to enable the Owner Lessor having received Facility to pass such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding tests and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory certify to the Owner Participant and/or the Security Agent, designed such passage of such tests prior to ensure that such delivery date. At the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER's request, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Termpossible and commercially reasonable, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made insurance in accordance with this Section 11 hereof for three months following the date of return of the Undivided Interest at the Facility LeaseLessor's sole cost and expense which cost and expense shall equal Facility Lessee's actual cost and expense for such insurance; and
(jh) at the Owner Lessor's request, FERC License shall have been renewed in favor of the Facility Lessor for a nationally recognized independent engineer (selected term of not less than 17 years from the Expiration Date on terms not materially more burdensome than those under the existing FERC License and shall be in full force and effect. At the time of any return of the Undivided Interest by the Facility Lessee and reasonably acceptable pursuant to Section 14.3, the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in clauses (a), (b), (c), (d) and (g) of this SECTION 5.2Section 5.2 shall be complied with at the Facility Lessee's sole cost and expense.
Appears in 1 contract
Condition Upon Return. On At the Date time of Return, (other than in connection with a the return of the Undivided Interest Facility by the Facility Lessee to the Owner Lessor or any transferee or assignee of the Owner Lessor pursuant to SECTION 13 or SECTION 14)Section 5.1, the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waivedcomplied with, whereupon all at the Lessee's sole cost and expense; provided that this Facility Lease Section 5.2 shall terminatenot apply to any return pursuant to Section 10:
(a) the Facility will shall be free and clear of all Liens (other than Permitted Liens of the type specified in (b) (other than Indenture Trustee's Liens), (h), (i), (j), (k), (l) or (m) of the definition thereof and the interests of the Owner Participant and the Owner Lessor under any of the Operative Documents);
(b) the Facility shall be in at least as good a condition as it would have been in if it had been maintained and operated during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION 7)Lease, ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Law;
(c) if this Facility Lease is being terminated and the Facility Lessee shall provide is being transferred to a third party pursuant to Section 13, 14 or 17, the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall enter into a site lease (substantially in the form of the Site Lease) and an assignment and assumption agreement with such third party or make other arrangements reasonably acceptable to such third party to permit such third party access to and use of the Facility, the Facility Site and the Ground Interest; and
(d) the Lessee, at the request of the Owner Lessor made in accordance with Section 8.3, shall sell to the Owner Lessor (or its designee or transferee transferee) at the then fair market value Fair Market Sales Value thereof, determined by agreement between the Facility Lessee and the Owner Lessor orLessor, or absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all each Severable Improvements made Modification to the Facility that are owned by the Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be title to which has not vested in the Facility LesseeOwner Lessor as set forth in the first sentence of Section 8.3, subject to all existing encumbrances. The appraiser's possession fees and shall be reasonably appropriate or necessary for the continued operation of the Facility;
expenses incurred pursuant to this clause (e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)d) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
Appears in 1 contract
Condition Upon Return. On the Date of Return, (other than in connection with a return of the Undivided Interest by the Facility Lessee pursuant to SECTION Section 13 or SECTION Section 14), the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONSReturn Conditions") shall be satisfied or waived, whereupon this Facility Lease shall terminate:
(a) the Facility will be in at least as good condition as it would have been in if it had been maintained during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION Section 7), ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Law;
(c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(DSection 5.2(d)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDEDprovided, HOWEVERhowever, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDEDprovided, FURTHERfurther, that nothing in this SECTION 5.2(ESection 5.2(e) shall limit the obligations of the Facility Lessee under SECTION Section 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION Section 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTSSupport Arrangements") to provide the Owner Lessor with the Support Services; PROVIDEDprovided, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDEDprovided, HOWEVERhowever, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDEDprovided, FURTHERfurther, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION Section 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(HSection 5.2(h) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(ESection 5.2(e)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDEDprovided, HOWEVERhowever, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(HSection 5.2(h), nor any other provision of this SECTION 5.2(HSection 5.2(h), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(IIISections 5.4(iii) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(HSection 5.2(h) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION Section 5.2.
Appears in 1 contract
Samples: Facility Lease Agreement (Eme Homer City Generation Lp)
Condition Upon Return. On the Date of Return, (other than in connection with a return of the Undivided Interest by the Facility Lessee pursuant to SECTION Section 13 or SECTION 14), the Facility Lessee ---------------- agrees that the following conditions (the "RETURN CONDITIONSReturn Conditions") shall be ----------------- satisfied or waived, whereupon this Facility Lease and the Facility Site Sublease shall terminate:
(a) the Facility will be in at least as good condition as it would have been in if it had been maintained during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION 7), ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances)Lease;
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, any and all licenses and permits of any Governmental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required by Requirements of Lawbe;
(c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an XXXXXXXXX FACILITY LEASE (L1) ----------------------------- appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and subject to any existing encumbrances, (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the FacilityFacility and (iii) those items listed on Schedule 5.2(d) that are, on the Date of Return, owned by, and in the possession of, the Facility Lessee;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Liens in existence on the Closing Date and Permitted Encumbrances Liens set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi), (xiii) and (xiiixiv) of the definition thereof; PROVIDEDprovided, HOWEVERhowever, in the case of Permitted Encumbrances Liens set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDEDprovided, FURTHERfurther, that nothing in this SECTION 5.2(ESection 5.2(e) shall limit the obligations of the Facility -------------- Lessee under SECTION Section 10.1 of the Participation Agreement;; ------------
(f) any Component in existence on the Date of Return shall be in satisfy the same condition as required under SECTION standards of Section 7.2;; -----------
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTSSupport Arrangements") to provide the Owner Lessor with -------------------- the Support Services; PROVIDEDprovided, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, appropriate arrangements with respect to any Retained Assets and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents)Lease. Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, services and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at XXXXXXXXX FACILITY LEASE (L1) ----------------------------- the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to continue to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from of any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDEDprovided, HOWEVERfurther, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDEDprovided, FURTHERfurther, that that, in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the wholesale power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.;
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and including compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION Section 5.1, not later than the date such Undivided Interest is ----------- returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent Lease Indenture Trustee with a plan, reasonably satisfactory to the Owner Participant and/or the Security AgentLease Indenture Trustee, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, Laws and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable practical and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(HSection 5.2(h) shall be completed prior to the -------------- expiration of the Basic XXXXXXXXX FACILITY LEASE (L1) ----------------------------- Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(ESection 5.2(e)) on the Facility, the Undivided Interest or the -------------- Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant Participant, the Equity Investor or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant Participant, the Equity Investor or the OP Guarantor; PROVIDEDprovided, HOWEVERhowever, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, Term and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility LesseeEquity Investor, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable practical and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of ReturnTerm. Neither the provision of the surveys contemplated by this SECTION 5.2(HSection 5.2(h), nor any other provision of this SECTION 5.2(H-------------- Section 5.2(h), shall alter the obligations of any party to the Operative -------------- Documents, including those set forth in SECTIONS 5.4(IIISections 5.4(iv) and 10.1 of the ---------------- -------- Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(HSection 5.2(h) shall survive the termination of this Facility -------------- Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility Facility, on a stand-alone, integrated basis, shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed (A) after taking into account normal performance degradation as a function of (ai) time and (bii) all Required Improvements to the Facility made in accordance with this Facility Lease and (B) without derogation of the provisions of Sections 5.2(h), 7.1 or 7.3, in ---------------------------- compliance with all Environmental Laws on a commercially reasonable basis other than immaterial non-compliance which does not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than a Permitted Lien) on, the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) risk of criminal liability being incurred by the Owner Lessor, the Owner Participant, the Equity Investor or the OP Guarantor, or (so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture has not been discharged) the Lease Indenture Trustee or any Pass Through Trustee or any of their respective Affiliates, or (3) material risk of any material adverse effect on the interests of the Owner Lessor, the Owner Participant, the Equity Investor or the OP Guarantor, or (so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture has not been discharged) the Lease Indenture Trustee or any Pass Through Trustee or any of their respective Affiliates (including, without limitation, subjecting any such Person to regulation as a public utility under any Requirement of Law); provided, that, if the Facility is not then in compliance, the Facility Lessee shall be deemed to have complied with the XXXXXXXXX FACILITY LEASE (L1) ----------------------------- condition set forth in clause (B) above if (x) the Facility Lessee has paid to the Owner Lessor, on an After-Tax Basis, an amount equal to the excess of (I) the Actual Cost of Compliance over (II) 110% of the Projected Emission Compliance Amount, such difference discounted annually at the Debt Rate to the Date of Return or (y) the Facility Lessee shall have made a rejectable offer in writing, at least 90 days prior to the Date of Return, to purchase the Undivided Interest at a price equal to Termination Value determined as of the Date of Return (the "Rejectable Offer") and shall have paid, on or before the Date of ---------------- Return, the applicable amounts set forth in Section 5.3. Notwithstanding ------------ anything to the contrary in this Section 5.2(i), the Facility Lessee may -------------- exercise its rights under clause (x) or (y) above only if, concurrently therewith, the Facility Lessee exercises its rights under clause (x) or (y), as applicable, of Section 5.2(i) of each Other Facility Lease; --------------
(j) either: (i) all principal, accrued and unpaid interest on, and any other amounts due and payable with respect to, the Unrelated Indebtedness, if any, shall have been repaid in full, or (ii) the Facility Lessee shall, so long as any amounts remain due and owing under such Unrelated Indebtedness, provide credit support, in respect of such amounts, to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person; and
(jk) at the Owner Owners Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION Section 5.2.. -----------
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Condition Upon Return. On At the Date time of Return, (other than in connection with a any return of the Undivided Interest by the Facility Lessee pursuant to SECTION 13 or SECTION 14)Section 5.1, the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waived, whereupon this Facility Lease shall terminatethat:
(a) the Facility Lease and the Facility Site Sublease shall cease and terminate;
(b) the Facility will be in at least as good condition as it would have been in if it had been maintained during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION limitation the provisions of Section 7), ) ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, in its sole discretion, as the designated account representative on file determined in accordance with the EPA or DEP Return Acceptance Tests;
(as the case may bec) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, in any and all licenses and permits of any Governmental Govern mental Authorities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor to the Owner Lessor or a transferee or designeedesignee of the Owner Lessor, as to the case may be on or after such return as required extent permitted by Requirements of Law;
(c) Law and the Facility Lessee shall provide the Owner Lessor provi sions of such licenses or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facilitypermits;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all each Severable Improvements Improvement made to the Facility that are is owned by the Facility Lessee, subject to any existing encumbrances. The fees and expenses incurred in connection with the appraisal required by this subsection (iid) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in paid by the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the FacilityOwner Lessor;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest Lessor (the "SUPPORT ARRANGEMENTS") to provide provide, from and after expiration or early termination of the Owner Facility Site Sublease, the Facility Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee (or any domestic, unregulated Affiliate thereof its Affiliate) is capable of providing such services of, and is either still in the business of of, providing such Support Services to others or performs such Support Services on its own behalfServices, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably reason ably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of all Support Services from during and after the expiration of this the Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, payable periodically in advance on no more less than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all services provided under such arrangements and shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Facility Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.and
(hf) the Facility Lessee shall provide to the Owner Lessor arrange, at its sole cost and the Owner Participant expense, for a Phase I Environmental Survey of the Facility and the Facility Site andSite, which shall be in form, scope and substance reasonably satisfactory to the Owner Participant, not later than 180 days prior to a return of the Undivided Interest pursuant to Section 5.1 or, in connection with a return other than pursuant to Section 5.1, not later than the date of return; PROVIDED that, if as a result of such surveythe Phase I Environmental Survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, such Phase I Environmental Survey shall be expanded to a Phase II Environmental Survey, as which shall be in form, scope and substance reasonably satisfactory to the presence or absence of Environmental Conditions (Owner Participant. Each such survey shall be conducted, with appropriate diligence and compliance or non-compliance with applicable Environmental Laws)good faith, not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized an environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to . Any reports prepared by such consulting firm documenting the surveys shall be in form and scope reasonably satisfactory provided promptly upon receipt by the Facility Lessee to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such the environmental surveysurveys conducted pursuant to this Section 5.2(f), any action (including, any cleaning, further investigation, or abatement, correctioncorrective action, removal removal, monitoring, clean-up, remediation or remediation) is required in order that other response actions relating to Environmental Conditions at, on, under or migrating from the Facility and or the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed required to ensure that the Facility and the Facility Site will be brought into compliance comply in all material respects with all applicable Environmental Laws, the Facility Lessee shall, at its sole cost and all material Environmental Conditions recommended for correction in such survey will be corrected expense, as promptly as is reasonably practicable practical and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respectSite, (2) the risk of criminal liability being incurred by the Owner Lessor, make arrangements reasonably satisfactory to the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if for conducting and completing any such clean-up, remediation or other response action cannot reasonably be completed prior in relation to the expiration or early termination of Environmental Conditions identified in such Lease Term, and if continued operation of environmental surveys as required to ensure that the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or and the Facility Lessee, then the Facility Lessee Site comply with all applicable Environmental Laws. Nothing in this Section 5.2(f) shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form relieve EME of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the its indemnification obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of under the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(HSection 5.2(f) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
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Condition Upon Return. On If the Date of Return, (other than Ground Interest is returned by the --------------------- Ground Lessee upon or in connection with a the termination of the Site Sublease Term, the Facility Site shall be returned in the same condition as returned to the Ground Lessee by the Ground Lessor under the Facility Site Sublease. If following the expiration or earlier termination of the Facility Site Sublease the Facility Site is being operated by the Ground Lessor or its Affiliate pursuant to the Ownership and Operation Agreement, the Ground Lessor shall accept the return of the Undivided Interest Facility Site in the same condition as then being operated by the Facility Ground Lessor or its Affiliate under the Ownership and Operation Agreement. If the Ground Interest is returned by the Ground Lessee pursuant to SECTION 13 2.4(a) hereof at any time after either or SECTION 14)both of the aforesaid periods, in addition to the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waived, whereupon this Facility Lease shall terminate:terms set forth in Section 2.4(a):
(ai) the Facility will Site shall be in at least as good condition condition, ordinary wear and tear excepted, as it would have been in if had it had been maintained during from and after the Facility Lease expiration of the Site Sublease Term in compliance with the provisions of this Facility Site Lease (including, without limitation, SECTION 7the provisions of Section 8 hereof), ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosingsubject, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shallnevertheless, to the extent permitted conditions in effect at the time the Facility Site was returned to the Ground Lessee by Requirements of Law and the provisions of Ground Lessor under the Facility Site Sublease; and
(ii) if the Ground Lessee has not exercised its rights under Section 2.7 hereof or if it has exercised such licenses rights but has accepted the Ground Lessor's offer to purchase the Undivided Interest, the Ground Lessee shall assign, without representation or permitswarranty, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, in any and all licenses and permits of any Governmental Authorities or other Persons that which are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee then in effect in connection with the use, operation or maintenance of the Undivided Interest Facility Site and the Retained Xxxxxxxxx Land Transmission Line Area that are not already issued in the name of the Owner Ground Lessor, to the Ground Lessor or a transferee or designeedesignee of the Ground Lessor, as to the case may be on or after extent such return as required assignment is permitted by Requirements of Law;
(c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee Law and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance provisions of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration license or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third partiespermit.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
Appears in 1 contract
Samples: Facility Site Lease and Easement Agreement (Mirant Mid Atlantic LLC)
Condition Upon Return. On If the Date of Return, (other than Ground Interest is returned by --------------------- the Ground Lessee upon or in connection with a the termination of the Site Sublease Term, the Facility Site shall be returned in the same condition as returned to the Ground Lessee by the Ground Lessor under the Facility Site Sublease. If following the expiration or earlier termination of the Facility Site Sublease the Facility Site is being operated by the Ground Lessor or its Affiliate pursuant to the Ownership and Operation Agreement, the Ground Lessor shall accept the return of the Undivided Interest Facility Site in the same condition as then being operated by the Facility Ground Lessor or its Affiliate under the Ownership and Operation Agreement. If the Ground Interest is returned by the Ground Lessee pursuant to SECTION 13 2.4(a) hereof at any time after either or SECTION 14)both of the aforesaid periods, in addition to the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waived, whereupon this Facility Lease shall terminate:terms set forth in Section 2.4(a):
(ai) the Facility will Site shall be in at least as good condition condition, ordinary wear and tear excepted, as it would have been in if had it had been maintained during from and after the Facility Lease expiration of the Site Sublease Term in compliance with the provisions of this Facility Site Lease (including, without limitation, SECTION 7the provisions of Section 8 hereof), ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosingsubject, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shallnevertheless, to the extent permitted conditions in effect at the time the Facility Site was returned to the Ground Lessee by Requirements of Law and the provisions of Ground Lessor under the Facility Site Sublease; and
(ii) if the Ground Lessee has not exercised its rights under Section 2.7 hereof or if it has exercised such licenses rights but has accepted the Ground Lessor's offer to purchase the Undivided Interest, the Ground Lessee shall assign, without representation or permitswarranty, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, in any and all licenses and permits of any Governmental Authorities or other Persons that which are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee then in effect in connection with the use, operation or maintenance of the Undivided Interest Facility Site and the Retained Morgantown Land Transmission Line Area that are not already issued in the name of the Owner Ground Lessor, to the Ground Lessor or a transferee or designeedesignee of the Ground Lessor, as to the case may be on or after extent such return as required assignment is permitted by Requirements of Law;
(c) the Facility Lessee shall provide the Owner Lessor or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facility;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee Law and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made to the Facility that are owned by the Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance provisions of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration license or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third partiespermit.
(h) the Facility Lessee shall provide to the Owner Lessor and the Owner Participant a Phase I Environmental Survey of the Facility and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Laws), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
Appears in 1 contract
Samples: Facility Site Lease and Easement Agreement (Mirant Mid Atlantic LLC)
Condition Upon Return. On the Date of Return, (other than in connection Except with respect to a return of the Undivided Equipment Interest pursuant to Section 14.3, at the time of any return of the Equipment Interest by the Facility Lessee pursuant to SECTION 13 or SECTION 14)Old Dominion in accordance with Section 5.1, the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waivedcomplied with, whereupon this Facility Lease shall terminateall at Old Dominion's sole cost and expense:
(a) the Facility right to use the Equipment Interest granted hereunder for the benefit of Old Dominion shall cease and terminate;
(b) Clover Unit 2 will be in at least as good condition as it would have been in if it had been maintained maintained, repaired and operated during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION 7), ordinary wear Operating Equipment Agreement and tear excepted; and the Owner Lessor there shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party no deferred maintenance in respect of its choosing, in its sole discretion, as the designated account representative on file with the EPA or DEP (as the case may be) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances)Clover Unit 2;
(bc) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and Old Dominion shall cooperate with all reasonable requests of the Owner ParticipantParticipant or the Facility Owner, at the Owner Lessor or any transferee or designee expense of either such Person Old Dominion, for purposes of obtaining, or enabling the Owner Participant, Participant or the Facility Owner Lessor or such transferee or designee their respective designees to obtain, any and all licenses licenses, permits, approvals and permits consents of any Governmental Authorities Entities or other Persons (including Virginia Power) that are or will be required to be obtained by the Owner Participant, Participant or the Facility Owner Lessor or such transferee or designee in connection with the its use, operation or maintenance of the Undivided Equipment Interest that are not already in the name of the Owner Lessor or a transferee or designee, as the case may be on or after such return as required in compliance with Applicable Law and in the manner contemplated by Requirements of the Clover Agreements (including, to the extent permitted by Applicable Law;
(c) , the transfer by Old Dominion to the Owner Participant or the Facility Lessee shall provide the Owner Lessor or its transferee their respective designees of any such licenses, permits, approvals and consents of any Governmental Entities or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case Persons as shall be are maintained in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation name of the FacilityOld Dominion);
(d) the Facility Lessee, at the request Old Dominion shall return and surrender possession of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all Severable Improvements made Equipment Interest to the Facility that are owned by the Facility Lessee, and Owner (iior its designee) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the Facility;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens (other than Permitted Encumbrances set forth Liens described in clauses (ii), (iii), (viiiv), (viiiv), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iiivi), (vii), (viii) (but only in circumstances where Old Dominion elects the Service Contract Option, no Payment Default, Bankruptcy Default or Event of Default has occurred and is continuing and the Facility Owner refinances the then outstanding aggregate principal amount of the Loans by the issuance of Additional Loan Certificates under the Loan Agreement to evidence a New Loan in such aggregate principal amount and then only to the extent of such aggregate principal amount), (ix), (x) (but only if such return shall occur prior to December 30, 2004) and (ixxi) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement"Permitted Liens");
(fe) any Component in existence on the Date of Return Old Dominion shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services and is either in the business of providing such Support Services to others or performs such Support Services on its own behalf, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access deliver to the Facility Owner all books and the Facility Site, that are necessary and appropriate for the Owner Lessor records (or any transferee or designee thereofincluding records maintained on electronic media) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of Support Services from and after the expiration of this Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, for the performance of such Support Services, periodically in advance on no more than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all such arrangements shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.
Clover Unit 2 in its possession (h) the Facility Lessee shall provide to the Owner Lessor including operating, maintenance, overhaul and the Owner Participant a Phase I Environmental Survey of the Facility modification records and the Facility Site and, if as a result of such survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental Survey, as to the presence or absence of Environmental Conditions (and compliance or non-compliance with applicable Environmental Lawsengineering reports), not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to be in form and scope reasonably satisfactory to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such environmental survey, any action (including, any cleaning, investigation, abatement, correction, removal or remediation) is required in order that the Facility and the Facility Site are in compliance with applicable Environmental Laws and the Return Conditions, the Facility Lessee shall, at its own expense, within 90 days of the Owner Lessor having received such environmental survey, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, reasonably satisfactory to the Owner Participant and/or the Security Agent, designed to ensure that the Facility and the Facility Site will be brought into compliance with applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to in this SECTION 5.2(H) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(H) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
Appears in 1 contract
Samples: Operating Equipment Agreement (Old Dominion Electric Cooperative)
Condition Upon Return. On At the Date time of Return, (other than in connection with a any return of the Undivided Interest by the Facility Lessee pursuant to SECTION 13 or SECTION 14)Section 5.1, the Facility Lessee agrees that the following conditions (the "RETURN CONDITIONS") shall be satisfied or waived, whereupon this Facility Lease shall terminatethat:
(a) the Facility Lease, the Facility Site Sublease and the Facility Site Sub-Sublease shall cease and terminate;
(b) the Facility will be in at least as good condition as it would have been in if it had been maintained during the Facility Lease Term in compliance with the provisions of this Facility Lease (including, without limitation, SECTION limitation the provisions of Section 7), ) ordinary wear and tear excepted; and the Owner Lessor shall be entitled to exercise its right pursuant to the Designated Representative Agreement to appoint itself or a party of its choosing, excepted as determined in its sole discretion, as the designated account representative on file accordance with the EPA or DEP Return Acceptance Tests;
(as the case may bec) to be allocated any emission allowances granted by such agencies with respect to the Facility on or after the Termination Date, and all such emission allowances shall be for the exclusive account of the Owner Lessor (and the Facility Lessee shall take such action as the Owner Lessor may reasonably request which the Owner Lessor deems necessary to obtain such allowances);
(b) the Facility Lessee shall, to the extent permitted by Requirements of Law and the provisions of such licenses or permits, assign an undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or its transferee or designee in, and shall cooperate with all reasonable requests of the Owner Participant, the Owner Lessor or any transferee or designee of either such Person for purposes of obtaining, or enabling the Owner Participant, the Owner Lessor or such transferee or designee to obtain, in any and all licenses and permits of any Governmental Authorities Entities or other Persons that are or will be required to be obtained by the Owner Participant, the Owner Lessor or such transferee or designee in connection with the use, operation or maintenance of the Undivided Interest that are not already in the name of the Owner Lessor to the Owner Lessor or a transferee or designeedesignee of the Owner Lessor, as to the case may be on or after such return as required extent permitted by Requirements of Law;
(c) Law and the Facility Lessee shall provide the Owner Lessor provisions of such license or its transferee or designee with originals or copies of all documents, instruments, plans, maps, specifications, manuals, drawings and other documentary materials relating to the installation, maintenance, operation, construction, design, modification and repair of the Facility, in each case as shall be in the Facility Lessee's possession and reasonably appropriate or necessary for the continued operation of the Facilitypermit;
(d) the Facility Lessee, at the request of the Owner Lessor, shall sell to the Owner Lessor or its designee or transferee at the then fair market value thereof, determined by agreement between the Facility Lessee and the Owner Lessor or, absent such agreement, by an appraisal (the fees and expenses to be for the account of the Owner Lessor) conducted according to the Appraisal Procedure, an undivided interest equal to the Owner Lessor's Percentage in (i) the Facility Lessee's right, title and interest in and to any or all each Severable Improvements Improvement made to the Facility that are is owned by the Facility Lessee, subject to any existing encumbrances. The fees and expenses incurred in connection with the appraisal required by this subsection (iid) any and all supplies, spare parts, consumables, safety equipment, and other parts or materials as shall be in paid by the Facility Lessee's possession and shall be reasonably appropriate or necessary for the continued operation of the FacilityOwner Lessor;
(e) the Undivided Interest (and the Severable Improvements, supplies, spare parts, consumables, safety equipment, and other parts and materials referred to in SECTION 5.2(D)) shall be free and clear of all Liens other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii), (viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and (ix) of the definition thereof, adequate cash reserves shall have been escrowed in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that nothing in this SECTION 5.2(E) shall limit the obligations of the Facility Lessee under SECTION 10.1 of the Participation Agreement;
(f) any Component in existence on the Date of Return shall be in the same condition as required under SECTION 7.2;
(g) the Facility Lessee, or an Affiliate thereof, shall enter into an agreement or other arrangements reasonably acceptable to the Owner Lessor, which arrangements, however, shall not be a condition precedent to the return of the Undivided Interest Lessor (the "SUPPORT ARRANGEMENTS") to provide the Owner Facility Lessor with the Support Services; PROVIDED, that the Facility Lessee, or its Affiliate, as the case may be, Lessee shall be bound to provide Support Services only to the extent the Facility Lessee or any domestic, unregulated Affiliate thereof is capable of providing such services of, and is either still in the business of of, providing such Support Services to others or performs such Support Services on its own behalfServices, and only to the extent that such services are necessary for the operation of the Facility and cannot commercially reasonably and timely be obtained by the Owner Lessor or its Affiliates from third parties. It is the intent of the parties hereto that the Support Arrangements, together with the Facility Site Lease, and mutually agreed easements and rights of way, if required, will provide all rights, including reasonable access to the Facility and the Facility Site, that are necessary and appropriate for the Owner Lessor (or any transferee or designee thereof) to own and operate the Facility, and transmit power generated thereby, during and after the expiration of this Facility Lease in the same manner as operated and transmitted by the Facility Lessee during the Facility Lease Term (assuming such operation and transmission was in accordance with the Facility Site Lease and the other Operative Documents). Support Arrangements shall provide for the provision of all Support Services from during and after the expiration of this the Facility Lease, and will provide for fair market value compensation from time to time to be paid to the Facility Lessee, or an Affiliate thereof, thereof for the performance of such Support Services, payable periodically in advance on no more less than a monthly basis and no less than an annual basis, for such rights and the performance of other services, and all services provided under such arrangements and shall terminate upon expiration or early termination of the Facility Site Lease or at the Owner Facility Lessor's option. Within 180 days after the expiration or termination of this Facility Lease, the Owner Lessor shall notify the Facility Lessee of the material elements of the Support Services that the Owner Lessor desires the Facility Lessee, or its Affiliate, to perform. Following such notice, the Facility Lessee and the Owner Lessor shall negotiate in good faith the terms of the fair market value, performance standards, compensation and other terms of such specified Support Services, including the circumstances under which the Facility Lessee and its Affiliates shall be released from any further obligation to provide such Support Services, and enter into contracts for the performance of the Support Services upon any such negotiated terms, PROVIDED, HOWEVER, that if the notice referenced in the preceding sentence is given by the Owner Lessor at any time up to 60 days prior to the Date of Return, the Owner Lessor and the Facility Lessee shall use reasonable efforts to cause such contracts to be executed no later than the Date of Return; PROVIDED, FURTHER, that in the event such contracts shall not have been executed prior to the Date of Return, from the period beginning on such Date of Return and ending on the date on which such contracts are executed, the Facility Lessee shall provide to the Owner Lessor, at the then prevailing rate being charged for the same or similar services in the power generation industry, such specified Support Services as are necessary to enable the Owner Lessor to operate, maintain and repair the Facility in accordance with Prudent Industry Practice and the Facility Lease and in compliance with applicable Requirements of Law. The Facility Lessee shall also, subject to obtaining any required third party consents, assign to the Owner Lessor upon termination of this Facility Lease any support or similar agreements to the extent relating to the Facility it has with third parties.and
(hf) the Facility Lessee shall provide to the Owner Lessor arrange, at its sole cost and the Owner Participant expense, for a Phase I Environmental Survey of the Facility and the Facility Site andLand, which shall be in form, scope and substance reasonably satisfactory to the Owner Participant, not later than 180 days prior to a return of the Undivided Interest pursuant to Section 5.1 or, in connection with a return other than pursuant to Section 5.1, not later than the date of return; PROVIDED that, if as a result of such surveythe Phase I Environmental Survey, facts are revealed that would reasonably necessitate a Phase II Environmental Survey, such Phase I Environmental Survey shall be expanded to a Phase II Environmental Survey, as which shall be in form, scope and substance reasonably satisfactory to the presence or absence of Environmental Conditions (Owner Participant. Each such survey shall be conducted, with appropriate diligence and compliance or non-compliance with applicable Environmental Laws)good faith, not later than 12 months prior to the Date of Return or, in connection with a return other than pursuant to SECTION 5.1, not later than the date such Undivided Interest is returned, such surveys to be prepared by a reputable and nationally recognized an environmental consulting firm (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) and to . Any reports prepared by such consulting firm documenting the surveys shall be in form and scope reasonably satisfactory provided promptly upon receipt by the Facility Lessee to the Owner Participant. The cost and expense of preparing and providing such surveys shall be for the account of the Facility Lessee. If, as a result of either such the environmental surveysurveys conducted pursuant to this Section 5.2(f), any action (including, any cleaning, further investigation, or abatement, correctioncorrective action, removal removal, monitoring, clean-up, remediation or remediation) is other response actions relating to Environmental Conditions at, on, under or migrating from the Facility or the Facility Land are required in order to ensure that the Facility and the Facility Site are Land comply in compliance all material respects with all applicable Environmental Laws and the Return ConditionsLaws, the Facility Lessee shall, at its own sole cost and expense, within 90 days as promptly as is reasonably practical and without materially affecting the continued operation of the Owner Lessor having received such environmental surveyFacility or the Facility Site, (a) provide the Owner Participant and, so long as the Lessor Notes are outstanding and the Lien of the Lease Indenture shall not have been discharged, the Security Agent with a plan, make arrangements reasonably satisfactory to the Owner Participant and/or for conducting and completing any such clean-up, remediation or other response action in relation to the Security Agent, designed Environmental Conditions identified in such environmental surveys as required to ensure that the Facility and the Facility Site will be brought into compliance Land comply with all applicable Environmental Laws, and all material Environmental Conditions recommended for correction in such survey will be corrected as promptly as is reasonably practicable and without materially adversely affecting the continued operation of the Facility. The actions referred to Nothing in this SECTION 5.2(HSection 5.2(f) shall be completed prior to the expiration of the Basic Lease Term or any then existing Renewal Lease Term or early termination thereof, as applicable, in compliance with Environmental Laws other than immaterial violations that do not involve any (1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than Liens permitted pursuant to SECTION 5.2(E)) on the Facility, the Undivided Interest or the Facility Site or the impairment of the use, operation or maintenance of the Facility or the Facility Site in any material respect, (2) the risk of criminal liability being incurred by the Owner Lessor, the Owner Participant or the OP Guarantor or (3) a material risk of any material adverse effect on the interest of the Owner Lessor, the Owner Participant or the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be completed prior to the expiration or early termination of such Lease Term, and if continued operation of the Facility could not reasonably be expected to result in strict liability being imposed upon the Owner Lessor, the Owner Participant, the OP Guarantor or the Facility Lessee, then relieve the Facility Lessee shall complete such action as promptly thereafter as is reasonably practicable and shall provide financial assurance in the form of a letter of credit or equivalent collateral to the Owner Lessor and the Owner Participant, reasonably satisfactory to each such Person, during the period of such action following the end of such Lease Term and provided, further, that any such action shall be completed no later than twelve (12) months after the Date of Return. Neither the provision of the surveys contemplated by this SECTION 5.2(H), nor any other provision of this SECTION 5.2(H), shall alter the its indemnification obligations of any party to the Operative Documents, including those set forth in SECTIONS 5.4(III) and 10.1 of under the Participation Agreement. The obligations of the Facility Lessee set forth in this SECTION 5.2(HSection 5.2(f) shall survive the termination of this Facility Lease and the expiration of the applicable Facility Lease Term;
(i) the Facility shall have at least the capability and the functional ability to generate electricity, on a continuous basis in normal commercial operating conditions, substantially at the ratings for which it was designed after taking into account normal performance degradation as a function of (a) time and (b) all Required Improvements to the Facility made in accordance with this Facility Lease; and
(j) at the Owner Lessor's request, a nationally recognized independent engineer (selected by the Facility Lessee and reasonably acceptable to the Owner Participant) shall provide a certificate certifying that the Facility is in compliance with the Return Conditions. There shall be no other return conditions or requirements other than the Return Conditions set forth in this SECTION 5.2.
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