Financing Improvements. Upon the request of the Facility Lessee delivered at least 90 days prior to financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor and the Indenture Trustee agree to cooperate with the Facility Lessee to (a) issue Additional Lessor Notes under the Collateral Trust Indenture to finance such Improvement which will rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; (b) execute and deliver one or more supplements to the Collateral Trust Indenture for purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, and (c) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause (iv) below; provided, however, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee shall have no obligation to accept such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 of the Collateral Trust Indenture shall have been satisfied. The obligation to finance such Improvements through the issuance of Additional Lessor Notes under Section 2.12 of the Collateral Trust Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Indenture being called a "Supplemental Financing") is subject to the following additional conditions: except with respect to Required Improvements, there shall be no more than one such financing in any calendar year; the Additional Lessor Notes (A) shall have a final maturity no later than the final maturity of the Lessor Notes issued on the Closing Date and (B) will be fully repaid out of additional Basic Rent, as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes shall have an average life to maturity equal to the average life to maturity of the Lessor Notes issued on the Closing Date; appropriate increases to Basic Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall be made to protect the Owner Participant's Net Economic Return; provided that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Lessor Notes; the Facility Lessee shall have paid, on an After-Tax Basis, all reasonable costs and expenses of the Transaction Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture Trustee, the Lease Indenture Company, the Pass Through Company and the Pass Through Trustees, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; no Significant Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed with the proceeds of the Additional Lessor Notes shall cure such Significant Lease Default or Lease Event of Default and such Improvements shall be made in compliance with the Operative Documents and the South Point Ground Lease; such Additional Lessor Notes represent an aggregate amount not less than $20 million, nor greater than 100% of the costs of the Improvements being financed; provided that the aggregate balance of the Lessor Notes for the Undivided Interest never exceeds 80% of the fair market value (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to the Owner Participant) of the Undivided Interest taking into account the fair market value of such Improvements; the Owner Participant shall have received a favorable opinion of its tax counsel satisfactory to such Owner Participant to the effect that such financing creates no incremental tax risk not indemnified to the Owner Participant's satisfaction (including additional indebtedness incurred to finance the Improvements not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); the Owner Participant shall suffer no adverse accounting effects under GAAP as a result of such financing; the Facility Lessee shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; the Facility Lessee or the Guarantor shall have, at such time, a credit rating of at least Investment Grade from S&P and Moody's; the Facility Lessee shall pay to (a) the Owner Participanx x xxx of $100,000 and (b) the Pass Through Trustees for the benefit of the Certificateholders, to be shared by such Certificateholders on a pro rata basis, a fee of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee shall at all times have the right to fund Improvements to the Facility other than through the Facility Lease; provided that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease on an unsecured basis. Notwithstanding any of the foregoing of this Section 11.1, except for Required Improvements and Improvements relating to pollution control, no Improvement shall materially decrease the value, residual value, utility or remaining economic useful life of the Facility immediately prior to such Improvement or cause the Facility to become limited-use property.
Appears in 4 contracts
Samples: Participation Agreement (Calpine Corp), Participation Agreement (Calpine Corp), Participation Agreement (Calpine Corp)
Financing Improvements. Upon the request of the Facility Lessee delivered at least 90 days prior to financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor and the Indenture Trustee agree to cooperate with the Facility Lessee to (a) issue Additional Lessor Notes under the Collateral Trust Indenture to finance such Improvement which will rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; (b) execute and deliver one or more supplements to the Collateral Trust Indenture for purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, and (c) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause (iv) below; provided, however, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee shall have no obligation to accept such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 of the Collateral Trust Indenture shall have been satisfied. The obligation to finance such Improvements through the issuance of Additional Lessor Notes under Section 2.12 of the Collateral Trust Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Indenture being called a "Supplemental Financing") is subject to the following additional conditions: except with respect to Required Improvements, there shall be no more than one such financing in any calendar year; the Additional Lessor Notes (A) shall have a final maturity no later than the final maturity of the Lessor Notes issued on the Closing Date and (B) will be fully repaid out of additional Basic Rent, as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes shall have an average life to maturity equal to the average life to maturity of the Lessor Notes issued on the Closing Date; appropriate increases to Basic Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall be made to protect the Owner Participant's Net Economic Return; provided that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Lessor Notes; the Facility Lessee shall have paid, on an After-Tax Basis, all reasonable costs and expenses of the Transaction Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture Trustee, the Lease Indenture Company, the Pass Through Company and the Pass Through Trustees, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; no Significant Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed with the proceeds of the Additional Lessor Notes shall cure such Significant Lease Default or Lease Event of Default and such Improvements shall be made in compliance with the Operative Documents and the South Point Ground LeaseDocuments; such Additional Lessor Notes represent an aggregate amount not less than $20 million, nor greater than 100% of the costs of the Improvements being financed; provided that the aggregate balance of the Lessor Notes for the Undivided Interest never exceeds 80% of the fair market value (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to the Owner Participant) of the Undivided Interest taking into account the fair market value of such Improvements; the Owner Participant shall have received a favorable opinion of its tax counsel satisfactory to such Owner Participant to the effect that such financing creates no incremental tax risk not indemnified to the Owner Participant's satisfaction (including additional indebtedness incurred to finance the Improvements not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); 63 the Owner Participant shall suffer no adverse accounting effects under GAAP as a result of such financing; the Facility Lessee shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or Participant, the Indenture Trustee may reasonably request; the Facility Lessee or the Guarantor shall have, at such time, a credit rating of at least Investment Grade from S&P and Moody's; the Facility Lessee shall pay to (a) the Owner Participanx Participaxx x xxx xxe of $100,000 and (b) the Pass Through Trustees for the benefit of the Certificateholders, to be shared by such Certificateholders on a pro rata basis, a fee of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee shall at all times have the right to fund Improvements to the Facility other than through the Facility Lease; provided that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease on an unsecured basis. Notwithstanding any of the foregoing of this Section 11.1, except for Required Improvements and Improvements relating to pollution control, no Improvement shall materially decrease the value, residual value, utility or remaining economic useful life of the Facility immediately prior to such Improvement or cause the Facility to become limited-use property.
Appears in 4 contracts
Samples: Participation Agreement (Calpine Corp), Participation Agreement (Calpine Corp), Participation Agreement (Calpine Corp)
Financing Improvements. Upon the written request of the Facility Lessee Midwest delivered at least 90 ninety (90) days prior to any proposed financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor Lessor, the Lease Indenture Trustee and the Indenture Pass Through Trustee agree to cooperate with the Facility Lessee Midwest to (a) issue Additional Lessor Notes under the Collateral Trust Lease Indenture to finance such Improvement which will rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; and (b) execute and deliver one or more supplements to the Collateral Trust Indenture for purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, and (c) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause (ivv) below; provided, however, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor’s Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee . Midwest shall have no obligation to accept and the Owner Participant shall not be obligated to provide such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 of the Collateral Trust Indenture shall have been satisfied. The obligation to finance such Improvements Improvement through the issuance of Additional Lessor Notes under Section 2.12 of the Collateral Trust Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Indenture being called a "“Supplemental Financing"”) is subject to the limitations on incurrence of additional Indebtedness set forth in the Operative Documents and the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year; ;
(ii) Improvements shall be made in compliance with the Operative Documents;
(iii) such Improvement is a Required Improvement;
(iv) the Additional Lessor Notes (A) shall have a final maturity date no later than the final maturity expiration date of the Lessor Notes issued on the Closing Date Basic Lease Term or any Renewal Term then in effect or already elected by Midwest and (B) will be fully repaid out of additional Basic Rent, Lease Rent or Renewal Rent and Termination Value as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes shall have an average life to maturity equal to the average life to maturity of the Lessor Notes issued on the Closing Date; Operative Documents;
(v) appropriate increases adjustments to Basic Lease Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall also be made to protect the Owner Participant's Net Economic ’s Expected Return; provided that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Lessor Notes; the Facility Lessee ;
(vi) NRG shall have paid, on an After-Tax Basis, all reasonable out-of-pocket costs and expenses of the Transaction Lease Financing Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Owner Trustee, the Lease Indenture Trustee, the Lease Indenture CompanyCompany in its individual capacity, the Pass Through Company Trustee and the Pass Through TrusteesCompany in its individual capacity, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; 14;
(vii) no Significant Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed with the proceeds of the Additional Lessor Notes shall cure such Significant Lease Default or Lease Event of Default Default, and any such Improvements shall be made in compliance with the Operative Documents and Documents;
(viii) the South Point Ground Lease; sum of (y) the principal amount of such Additional Lessor Notes represent an aggregate and (z) the principal amount of all comparable additional lessor notes used to finance such Improvements pursuant to the Other Facility Lease, is not less than $20 million, nor million and not greater than 100% of the costs cost of the Improvements being financed; provided that the aggregate sum of (I) the outstanding balance of the Lessor Notes for and (II) all comparable lessor notes issued and outstanding of the Undivided Interest Other Owner Lessor under the lease indenture to which such Other Owner Lessor are party never exceeds 80(x) 90% of the fair market value lesser of (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to the Owner Participant1) of the Undivided Interest taking into account the fair market value of the Facility taking into account such Improvements; , as determined pursuant to the Appraisal Procedure, and (2) the sum of (t) the Purchase Price, (u) the comparable purchase price for the Other Undivided Interest and (v) the cost of the Improvement being financed;
(ix) the Owner Participant shall have received a favorable opinion of its reasonably satisfactory to it from nationally recognized tax counsel satisfactory to such selected by the Owner Participant and reasonably acceptable to NRG, to the effect that such financing creates no would not result in any material indemnified, or any unindemnified, incremental tax risk not indemnified to the Owner Participant's satisfaction ;
(including additional indebtedness incurred to finance the Improvements not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); x) the Owner Participant shall not suffer no any material adverse accounting effects under GAAP as a result of providing such additional financing;
(xi) the cost of the Improvement, together with the cost of all previous Improvements financed with Additional Lessor Notes is not greater than 25% of the sum of (x) the Purchase Price and (y) the comparable purchase price for the Other Undivided Interest; unless the Facility Lessee shall have received confirmation that after giving effect to the financing in connection with such Improvement, the Lease Debt rating will not fall below BBB- or Baa3 from S&P and Xxxxx’x, respectively;
(xii) Midwest and NRG shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; the Facility Lessee or the Guarantor shall have, at and
(xiii) such time, a credit rating of at least Investment Grade from S&P Additional Lessor Notes are issued pursuant to and Moody's; the Facility Lessee shall pay to (a) the Owner Participanx x xxx of $100,000 and (b) the Pass Through Trustees for the benefit in accordance with Section 2.13 of the CertificateholdersLease Indenture and Midwest and NRG shall have delivered such certificates, reports and other documents and shall have taken all other actions which are required to be shared delivered or taken by such Certificateholders on a pro rata basis, a fee them pursuant to Section 2.13 of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1Lease Indenture. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee Midwest shall at all times have the right to fund finance Improvements to the Facility other than through the Facility Lease; provided that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease if such financing would not result in any Lien on an unsecured basis. Notwithstanding any the Facility or the Facility Land and shall be subject to the limitations on incurrence of additional Indebtedness contained in the foregoing of this Section 11.1other Operative Documents; provided further, except for that Required Improvements and Non-Severable Improvements relating shall automatically, upon being affixed to pollution controlthe Facility, no Improvement shall materially decrease become the value, residual value, utility or remaining economic useful life property of the Facility immediately prior Owner Lessor and subject to such Improvement or cause the Facility to become limited-use propertyLease.
Appears in 3 contracts
Samples: Participation Agreement (Midwest Generation LLC), Participation Agreement (Midwest Generation LLC), Participation Agreement (Midwest Generation LLC)
Financing Improvements. (a) Upon the written request of the Facility Lessee Xxxxx City delivered at least 90 days prior to any proposed financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor and the Lease Indenture Trustee agree to cooperate with the Facility Lessee Xxxxx City to (ai) issue Additional Lessor Notes under the Collateral Trust Indenture to finance such Improvement Improvement, which will Additional Lessor Notes shall rank pari passu PARI PASSU with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; (bii) execute and deliver one or more supplements to the Collateral Trust Lease Indenture for the purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, Security Interest; and (ciii) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause subclause (iviii) below; provided, howeverPROVIDED HOWEVER, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor's Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee Xxxxx City shall have no obligation to accept such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 2.6 of the Collateral Trust Lease Indenture shall have been satisfied. The obligation to finance such Improvements through the issuance of Additional Lessor Notes under Section 2.12 2.6 of the Collateral Trust Lease Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Lease Indenture being called a "Supplemental FinancingSUPPLEMENTAL FINANCING") is subject to the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year; provided, that there shall be no such limitation with respect to Required Improvements;
(ii) the Additional Lessor Notes (Ax) shall have a final maturity date no later than two (2) years prior to the final maturity last day of the Lessor Notes issued on the Closing Date and Basic Lease Term; (By) will be fully repaid out of additional Basic Rent, Lease Rent as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes and (z) shall have an average life be subject to maturity equal to the average life to maturity of the Lessor Notes such terms and conditions as are customary for indebtedness issued on the Closing Date; in connection with leveraged lease transactions;
(iii) appropriate increases adjustments to Basic Lease Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall be made to protect the Owner Participant's Net Economic Return; provided provided, however, that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Initial Lessor Notes; the Facility Lessee ;
(iv) Xxxxx City shall have paid, on an After-Tax Basis, all reasonable costs and expenses of the Lease Transaction Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture TrusteeOwner Manager, the Security Agent and the Lease Indenture Company, the Pass Through Company and the Pass Through TrusteesTrustee, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; such Supplemental Financing;
(v) no Significant Material Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed made with the proceeds of the Additional Lessor Notes shall cure such Significant Material Lease Default or Lease Event of Default Default, and such Improvements shall be made in compliance with the Operative Documents and the South Point Ground Lease; Documents;
(vi) such Additional Lessor Notes represent financing is for an aggregate amount not less than $20 5 million, nor greater than 100% of the costs of the Improvements being financed; provided that the aggregate balance principal amount of the Additional Lessor Notes for the Undivided Interest never exceeds 80% of the fair market value (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to not exceed the Owner ParticipantLessor's Percentage of $300,000,000;
(vii) of the Undivided Interest taking into account the fair market value of such Improvements; the Owner Participant shall have received a favorable (x) an opinion of its tax counsel reasonably satisfactory to such it from Owner Participant Participant's Counsel to the effect that such financing creates no should not result in any incremental risk of material adverse federal income tax risk not indemnified consequences to the Owner Participant's satisfaction , and (including additional indebtedness incurred y) an indemnity against such risk in form and substance reasonably satisfactory to finance the Improvements Owner Participant from or guaranteed by an entity that meets the Minimum Credit Rating (or, if the Minimum Credit Rating requirement is not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); met, the Owner Participant shall suffer no adverse accounting effects under GAAP as a result have received credit support in respect of such financingindemnity reasonably satisfactory to the Owner Participant); provided that if the Facility Lessee opinion referred to in clause (x) shall be that such financing "will" not result in any incremental risk of material adverse federal income tax consequences to the Owner Participant, then the Minimum Credit Rating requirement shall not be required with respect to the indemnity set forth in clause (y);
(viii) Xxxxx City shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; ;
(ix) the Facility Lessee or Owner Participant shall not suffer any material adverse accounting effect under GAAP as a result of such financing;
(x) the Guarantor projected Basic Lease Rent Service Coverage Ratio shall have, at such time, a credit rating of be at least Investment Grade 1.5 to 1.0 and the average Basic Lease Rent Service Coverage Ratio shall be at least 1.75 to 1.0, calculated at the time of issuance of such Additional Lessor Notes, and calculated in accordance with MAPS and the then Base Case assumptions; and
(xi) Xxxxx City shall have received, and shall have provided to the Owner Participant, written confirmation from S&P and Moody's; the Facility Lessee shall pay to Rating Agencies that the then-current ratings of the Fundco Bonds will not be reduced as a result of such financing. Notwithstanding the provisions of paragraph (a) the Owner Participanx x xxx of $100,000 and (b) the Pass Through Trustees for the benefit of the Certificateholdersthis SECTION 12.1, with respect to be shared by such Certificateholders on a pro rata basis, a fee of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee shall Xxxxx City shall, subject to SECTION 6.7 hereof, at all times have the right to fund Improvements to the Facility other than through the Facility Lease; provided that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease on an unsecured basis. Notwithstanding any of the foregoing of this Section 11.1, except for Required Improvements and Improvements relating to pollution control, no Improvement shall materially decrease the value, residual value, utility or remaining economic useful life of the Facility immediately prior to such Improvement or cause the Facility to become limited-use property.
Appears in 2 contracts
Samples: Participation Agreement (Eme Homer City Generation Lp), Participation Agreement (Eme Homer City Generation Lp)
Financing Improvements. Upon the request of the Facility Lessee delivered at least 90 days prior to financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor and the Indenture Trustee agree to cooperate with the Facility Lessee to (a) issue Additional Lessor Notes under the Collateral Trust Indenture to finance such Improvement which will rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; (b) execute and deliver one or more supplements to the Collateral Trust Indenture for purpose of subjecting the Owner Lessor's interest Interest in any such Improvements to the Liens thereof, and (c) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause (iv) below; provided, however, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee shall have no obligation to accept such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 of the Collateral Trust Indenture shall have been satisfied. The obligation to finance such Improvements through the issuance of Additional Lessor Notes under Section 2.12 of the Collateral Trust Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Indenture being called a "Supplemental Financing") is subject to the following additional conditions: except with respect to Required Improvements, there shall be no more than one such financing in any calendar year; the Additional Lessor Notes (A) shall have a final maturity no later than the final maturity of the Lessor Notes issued on the Closing Date and (B) will be fully repaid out of additional Basic Rent, as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes shall have an average life to maturity equal to the average life to maturity of the Lessor Notes issued on the Closing Date; appropriate increases to Basic Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall be made to protect the Owner Participant's Net Economic Return; provided that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Lessor Notes; the Facility Lessee shall have paid, on an After-Tax Basis, all reasonable costs and expenses of the Transaction Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture Trustee, the Lease Indenture Company, the Pass Through Company and the Pass Through Trustees, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; no Significant Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed with the proceeds of the Additional Lessor Notes shall cure such Significant Lease Default or Lease Event of Default and such Improvements shall be made in compliance with the Operative Documents and the South Point Ground FILOT Lease; such Additional Lessor Notes represent an aggregate amount not less than $20 million, nor greater than 100% of the costs of the Improvements being financed; provided that the aggregate balance of the Lessor Notes for the Undivided Interest never exceeds 80% of the fair market value (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to the Owner Participant) of the Undivided Interest taking into account the fair market value of such Improvements; the Owner Participant shall have received a favorable opinion of its tax counsel satisfactory to such Owner Participant to the effect that such financing creates no incremental tax risk not indemnified to the Owner Participant's satisfaction (including additional indebtedness incurred to finance the Improvements not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); the Owner Participant shall suffer no adverse accounting effects under GAAP as a result of such financing; the Facility Lessee shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or Participant, the Indenture Trustee may reasonably request; the Facility Lessee or the Guarantor shall have, at such time, a credit rating of at least Investment Grade from S&P and Moody's; the Facility Lessee shall Lxxxxx xhall pay to (a) the Owner Participanx x xxx Participant a fee of $100,000 and (b) the Pass Through Trustees for the benefit of the Certificateholders, to be shared by such Certificateholders on a pro rata basis, a fee of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee shall at all times have the right to fund Improvements to the Facility other than through the Facility Lease; provided that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease on an unsecured basis. Notwithstanding any of the foregoing of this Section 11.1, except for Required Improvements and Improvements relating to pollution control, no Improvement shall materially decrease the value, residual value, utility or remaining economic useful life of the Facility immediately prior to such Improvement or cause the Facility to become limited-use property.
Appears in 2 contracts
Samples: Participation Agreement (Calpine Corp), Participation Agreement (Calpine Corp)
Financing Improvements. (a) Upon the written request of the Facility Lessee Xxxxx City delivered at least 90 days prior to any proposed financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor and the Lease Indenture Trustee agree to cooperate with the Facility Lessee Xxxxx City to (ai) issue Additional Lessor Notes under the Collateral Trust Indenture to finance such Improvement Improvement, which will Additional Lessor Notes shall rank pari passu PARI PASSU with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; (bii) execute and deliver one or more supplements to the Collateral Trust Lease Indenture for the purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, Security Interest; and (ciii) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause subclause (iviii) below; provided, howeverPROVIDED HOWEVER, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor's Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee Xxxxx City shall have no obligation to accept such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 2.6 of the Collateral Trust Lease Indenture shall have been satisfied. The obligation to finance such Improvements through the issuance of Additional Lessor Notes under Section 2.12 2.6 of the Collateral Trust Lease Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Lease Indenture being called a "Supplemental FinancingSUPPLEMENTAL FINANCING") is subject to the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year; provided, that there shall be no such limitation with respect to Required Improvements;
(ii) the Additional Lessor Notes (Ax) shall have a final maturity date no later than two (2) years prior to the final maturity last day of the Lessor Notes issued on the Closing Date and Basic Lease Term; (By) will be fully repaid out of additional Basic Rent, Lease Rent as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes and (z) shall have an average life be subject to maturity equal to the average life to maturity of the Lessor Notes such terms and conditions as are customary for indebtedness issued on the Closing Date; in connection with leveraged lease transactions;
(iii) appropriate increases adjustments to Basic Lease Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall be made to protect the Owner Participant's Net Economic Return; provided provided, however, that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Initial Lessor Notes; the Facility Lessee ;
(iv) Xxxxx City shall have paid, on an After-Tax Basis, all reasonable costs and expenses of the Lease Transaction Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture TrusteeOwner Manager, the Security Agent and the Lease Indenture Company, the Pass Through Company and the Pass Through TrusteesTrustee, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; such Supplemental Financing;
(v) no Significant Material Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed made with the proceeds of the Additional Lessor Notes shall cure such Significant Material Lease Default or Lease Event of Default Default, and such Improvements shall be made in compliance with the Operative Documents and the South Point Ground Lease; Documents;
(vi) such Additional Lessor Notes represent financing is for an aggregate amount not less than $20 5 million, nor greater than 100% of the costs of the Improvements being financed; provided that the aggregate balance principal amount of the Additional Lessor Notes for the Undivided Interest never exceeds 80% of the fair market value (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to not exceed the Owner ParticipantLessor's Percentage of $300,000,000;
(vii) of the Undivided Interest taking into account the fair market value of such Improvements; the Owner Participant shall have received a favorable (x) an opinion of its tax counsel reasonably satisfactory to such it from Owner Participant Participant's Counsel to the effect that such financing creates no should not result in any incremental risk of material adverse federal income tax risk not indemnified consequences to the Owner Participant's satisfaction , and (including additional indebtedness incurred y) an indemnity against such risk in form and substance reasonably satisfactory to finance the Improvements Owner Participant from or guaranteed by an entity that meets the Minimum Credit Rating (or, if the Minimum Credit Rating requirement is not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); met, the Owner Participant shall suffer no adverse accounting effects under GAAP as a result have received credit support in respect of such financingindemnity reasonably satisfactory to the Owner Participant); provided that if the Facility Lessee opinion referred to in clause (x) shall be that such financing "will" not result in any incremental risk of material adverse federal income tax consequences to the Owner Participant, then the Minimum Credit Rating requirement shall not be required with respect to the indemnity set forth in clause (y);
(viii) Xxxxx City shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; ;
(ix) the Facility Lessee or Owner Participant shall not suffer any material adverse accounting effect under GAAP as a result of such financing;
(x) the Guarantor projected Basic Lease Rent Service Coverage Ratio shall have, at such time, a credit rating of be at least Investment Grade from S&P 1.5 to 1.0 and Moody's; the Facility Lessee average Basic Lease Rent Service Coverage Ratio shall pay be at least 1.75 to 1.0, calculated at the time of issuance of such Additional Lessor Notes, and determined according to the lesser of (a) such ratios as set forth in an Officer's Certificate of the Owner Participanx x xxx of $100,000 Facility Lessee, and (b) such ratios calculated in accordance with MAPS and the Pass Through Trustees for then Base Case assumptions; and
(xi) Xxxxx City shall have received, and shall have provided to the benefit Owner Participant, written confirmation from the Rating Agencies that the then-current ratings of the Certificateholders, to Fundco Bonds will not be shared by such Certificateholders on reduced as a pro rata basis, a fee result of $100,000 for each such financing. The Facility Lessee shall cause the Power Market Consultant to provide to the Facility Lessee, updated electricity price projections for purposes of allowing the Facility Lessee to provide its certification specified in each case under clauses subsection(x)(a) above. Notwithstanding the provisions of paragraph (a) and (b) aboveof this SECTION 12.1, other than the first financing; and Calpine shall have affirmed with respect to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee shall Xxxxx City shall, subject to SECTION 6.7 hereof, at all times have the right to fund Improvements to the Facility other than through the Facility Lease; provided that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease on an unsecured basis. Notwithstanding any of the foregoing of this Section 11.1, except for Required Improvements and Improvements relating to pollution control, no Improvement shall materially decrease the value, residual value, utility or remaining economic useful life of the Facility immediately prior to such Improvement or cause the Facility to become limited-use property.
Appears in 1 contract
Samples: Participation Agreement (Eme Homer City Generation Lp)
Financing Improvements. Upon the written request of the Facility Lessee Midwest delivered at least 90 days prior to any proposed financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor Lessor, the Lease Indenture Trustee and the Indenture Trustee Pass Through Trustees agree to cooperate with the Facility Lessee Midwest to (a) issue Additional Lessor Notes under the Collateral Trust Lease Indenture to finance such Improvement which will rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; and (b) execute and deliver one or more supplements to the Collateral Trust Indenture for purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, and (c) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause (ivv) below; providedPROVIDED, howeverHOWEVER, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor's Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee . Midwest shall have no obligation to accept and the Owner Participant shall not be obligated to provide such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 of the Collateral Trust Indenture shall have been satisfied. The obligation to finance such Improvements Improvement through the issuance of Additional Lessor Notes under Section 2.12 of the Collateral Trust Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Indenture being called a "Supplemental FinancingSUPPLEMENTAL FINANCING") is subject to the limitations on incurrence of additional Indebtedness set forth in the Operative Documents and the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year;
(ii) Improvements shall be made in compliance with the Operative Documents;
(iii) such Improvement is a Required Improvement; 84
(iv) the Additional Lessor Notes (A) shall have a final maturity date no later than the final maturity expiration date of the Lessor Notes issued on the Closing Date Basic Lease Term or any Renewal Term then in effect or already elected by Midwest and (B) will be fully repaid out of additional Basic Rent, Lease Rent or Renewal Rent and Termination Value as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes shall have an average life to maturity equal to the average life to maturity of the Lessor Notes issued on the Closing Date; Operative Documents;
(v) appropriate increases adjustments to Basic Lease Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant Partic- ipant is making an Additional Equity Investment) shall also be made to protect the Owner Participant's Net Economic Expected Return; provided that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Lessor Notes; the Facility Lessee ;
(vi) EME shall have paid, on an After-Tax Basis, all reasonable out-of-pocket costs and expenses of the Transaction Lease Financing Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Owner Trustee, the Lease Indenture Trustee, the Lease Indenture CompanyCompany in its individual capacity, the Pass Through Company Trustees and the Pass Through TrusteesCompany in its individual capacity, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; SECTION 14;
(vii) no Significant Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed with the proceeds of the Additional Lessor Notes shall cure such Significant Lease Default or Lease Event of Default Default, and any such Improvements shall be made in compliance with the Operative Documents and Documents;
(viii) the South Point Ground Lease; sum of (y) the principal amount of such Additional Lessor Notes represent an aggregate and (z) the principal amount of all comparable additional lessor notes used to finance such Improvements pursuant to the Other Facility Lease, is not less than $20 million, nor million and not greater than 100% of the costs cost of the Improvements being financed; provided PROVIDED that the aggregate sum of (I) the outstanding balance of the Lessor Notes for and (II) all comparable lessor notes issued and outstanding of the Undivided Interest Other Owner Lessor under the lease indenture to which such Other Owner Lessor are party never exceeds 80(x) 90% of the fair market value lesser of (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to the Owner Participant1) of the Undivided Interest taking into account the fair market value of the Facility taking into account such Improvements; , as determined pursuant to the Appraisal Procedure, and (2) the sum of (t) the Purchase Price, (u) the comparable purchase price for the Other Undivided Interest and (v) the cost of the Improvement being financed;
(ix) the Owner Participant shall have received re- ceived a favorable opinion of its reasonably satisfactory to it from Hunton & Xxxxxxxx, or from nationally recognized tax counsel satisfactory to such selected by the Owner Participant and reasonably acceptable to EME, to the effect that such financing creates no would not result in any material indemnified, or any unindemnified, incremental tax risk not indemnified to the Owner Participant's satisfaction ;
(including additional indebtedness incurred to finance the Improvements not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); x) the Owner Participant shall not suffer no any material adverse accounting effects under GAAP as a result of providing such additional financing;
(xi) the cost of the Improvement, together with the cost of all previous Improvements financed with Additional Lessor Notes is not greater than 25% of the sum of (x) the Purchase Price and (y) the comparable purchase price for the Other Undivided Interest; unless the Facility Lessee shall have received confirmation that after giving effect to the financing in connection with such Improvement, the Lease Debt rating will not fall below BBB- or Baa3 from S&P and Xxxxx'x, respectively;
(xii) Midwest and EME shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; the Facility Lessee or the Guarantor shall have, at and
(xiii) such time, a credit rating of at least Investment Grade from S&P Additional Lessor Notes are issued pursuant to and Moody's; the Facility Lessee shall pay to (a) the Owner Participanx x xxx of $100,000 and (b) the Pass Through Trustees for the benefit in accordance with SECTION 2.13 of the CertificateholdersLease Indenture and Midwest and EME shall have delivered such certificates, reports and other documents and shall have taken all other actions which are required to be shared delivered or taken by such Certificateholders on a pro rata basis, a fee them pursuant to SECTION 2.13 of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1Lease Indenture. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee Midwest shall at all times have the right to fund finance Improvements to the Facility other than through the Facility Lease; provided PROVIDED that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease if such financing would not result in any Lien on an unsecured basis. Notwithstanding any the Facility or the Facility Land and shall be subject to the limitations on incurrence of additional Indebtedness contained in the foregoing other Operative Documents; PROVIDED FURTHER, that providers of financing for such Improvements made other than through the Facility Lease agree to be bound by Section 18.19 of this Section 11.1Agreement and by the Subordination Agreement; PROVIDED FURTHER, except for that Required Improvements and Non-Severable Improvements relating shall automatically, upon being affixed to pollution controlthe Facility, no Improvement shall materially decrease become the value, residual value, utility or remaining economic useful life property of the Facility immediately prior Owner Lessor and subject to such Improvement or cause the Facility to become limited-use propertyLease.
Appears in 1 contract
Financing Improvements. Upon the written request of the Facility Lessee Midwest delivered at least 90 days prior to any proposed financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor Lessor, the Lease Indenture Trustee and the Indenture Trustee Pass Through Trustees agree to cooperate with the Facility Lessee Midwest to (a) issue Additional Lessor Notes under the Collateral Trust Lease Indenture to finance such Improvement which will rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; and (b) execute and deliver one or more supplements to the Collateral Trust Indenture for purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, and (c) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause (ivv) below; providedPROVIDED, howeverHOWEVER, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor's Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee . Midwest shall have no obligation to accept and the Owner Participant shall not be obligated to provide such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 of the Collateral Trust Indenture shall have been satisfied. The obligation to finance such Improvements Improvement through the issuance of Additional Lessor Notes under Section 2.12 of the Collateral Trust Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Indenture being called a "Supplemental FinancingSUPPLEMENTAL FINANCING") is subject to the limitations on incurrence of additional Indebtedness set forth in the Operative Documents and the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year; ;
(ii) Improvements shall be made in compliance with the Operative Documents;
(iii) such Improvement is a Required Im- provement;
(iv) the Additional Lessor Notes (A) shall have a final maturity date no later than the final maturity expiration date of the Lessor Notes issued on the Closing Date Basic Lease Term or any Renewal Term then in effect or already elected by Midwest and (B) will be fully repaid out of additional Basic Rent, Lease Rent or Renewal Rent and Termination Value as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes shall have an average life to maturity equal to the average life to maturity of the Lessor Notes issued on the Closing Date; Operative Documents;
(v) appropriate increases adjustments to Basic Lease Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant Partic- ipant is making an Additional Equity Investment) shall also be made to protect the Owner Participant's Net Economic Expected Return; provided that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Lessor Notes; the Facility Lessee ;
(vi) EME shall have paid, on an After-Tax Basis, all reasonable out-of-pocket costs and expenses of the Transaction Lease Financing Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Owner Trustee, the Lease Indenture Trustee, the Lease Indenture CompanyCompany in its individual capacity, the Pass Through Company Trustees and the Pass Through TrusteesCompany in its individual capacity, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; SECTION 14;
(vii) no Significant Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed with the proceeds of the Additional Lessor Notes shall cure such Significant Lease Default or Lease Event of Default Default, and any such Improvements shall be made in compliance with the Operative Documents and Documents;
(viii) the South Point Ground Lease; sum of (y) the principal amount of such Additional Lessor Notes represent an aggregate and (z) the principal amount of all comparable additional lessor notes used to finance such Improvements pursuant to the Other Facility Lease, is not less than $20 million, nor million and not greater than 100% of the costs cost of the Improvements being financed; provided PROVIDED that the aggregate sum of (I) the outstanding balance of the Lessor Notes for and (II) all comparable lessor notes issued and outstanding of the Undivided Interest Other Owner Lessor under the lease indenture to which such Other Owner Lessor are party never exceeds 80(x) 90% of the fair market value lesser of (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to the Owner Participant1) of the Undivided Interest taking into account the fair market value of the Facility taking into account such Improvements; , as determined pursuant to the Appraisal Procedure, and (2) the sum of (t) the Purchase Price, (u) the comparable purchase price for the Other Undivided Interest and (v) the cost of the Improvement being financed;
(ix) the Owner Participant shall have received re- ceived a favorable opinion of its reasonably satisfactory to it from Hunton & Xxxxxxxx, or from nationally recognized tax counsel satisfactory to such selected by the Owner Participant and reasonably acceptable to EME, to the effect that such financing creates no would not result in any material indemnified, or any unindemnified, incremental tax risk not indemnified to the Owner Participant's satisfaction ;
(including additional indebtedness incurred to finance the Improvements not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); x) the Owner Participant shall not suffer no any material adverse accounting effects under GAAP as a result of providing such additional financing;
(xi) the cost of the Improvement, together with the cost of all previous Improvements financed with Additional Lessor Notes is not greater than 25% of the sum of (x) the Purchase Price and (y) the comparable purchase price for the Other Undivided Interest; unless the Facility Lessee shall have received confirmation that after giving effect to the financing in connection with such Improvement, the Lease Debt rating will not fall below BBB- or Baa3 from S&P and Xxxxx'x, respectively;
(xii) Midwest and EME shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; the Facility Lessee or the Guarantor shall have, at and
(xiii) such time, a credit rating of at least Investment Grade from S&P Additional Lessor Notes are issued pursuant to and Moody's; the Facility Lessee shall pay to (a) the Owner Participanx x xxx of $100,000 and (b) the Pass Through Trustees for the benefit in accordance with SECTION 2.13 of the CertificateholdersLease Indenture and Midwest and EME shall have delivered such certificates, reports and other documents and shall have taken all other actions which are required to be shared delivered or taken by such Certificateholders on a pro rata basis, a fee them pursuant to SECTION 2.13 of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1Lease Indenture. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee Midwest shall at all times have the right to fund finance Improvements to the Facility other than through the Facility Lease; provided PROVIDED that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease if such financing would not result in any Lien on an unsecured basis. Notwithstanding any the Facility or the Facility Land and shall be subject to the limitations on incurrence of additional Indebtedness contained in the foregoing other Operative Documents; PROVIDED FURTHER, that providers of financing for such Improvements made other than through the Facility Lease agree to be bound by Section 18.19 of this Section 11.1Agreement and by the Subordination Agreement; PROVIDED FURTHER, except for that Required Improvements and Non-Severable Improvements relating shall automatically, upon being affixed to pollution controlthe Facility, no Improvement shall materially decrease become the value, residual value, utility or remaining economic useful life property of the Facility immediately prior Owner Lessor and subject to such Improvement or cause the Facility to become limited-use propertyLease.
Appears in 1 contract
Financing Improvements. (a) Upon the written request of the Facility Lessee delivered at least 90 days prior to any proposed financing a portion of the cost of any Required or Non-Non- Severable Improvement, the Owner Lessor Lessor, the Lease Indenture Trustee and the Indenture each Pass Through Trustee agree to cooperate with the Facility Lessee to (ai) issue Additional Lessor Notes under the Collateral Trust Indenture to finance such Improvement which XXXXXXXXX PARTICIPATION AGREEMENT (L1) -------------------------------------- will rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; (bii) execute and deliver one or more supplements to the Collateral Trust Lease Indenture for the purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens Lien thereof, ; and (ciii) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause subclause (iviii) below; provided, provided however, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor's Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee SEMA shall have no obligation to accept such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 2.13 of the Collateral Trust Lease Indenture shall have been ------------ satisfied. The obligation to finance such Improvements through the issuance of Additional Lessor Notes under Section 2.12 2.13 of the Collateral Trust Lease Indenture (any financing ------------ of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Lease Indenture being called a "Supplemental Financing") is subject to the ---------------------- limitations on incurrence of additional Indebtedness set forth in Section 6.7 ----------- and to the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year; provided, that there shall be no such limitation with respect to Required Improvements;
(ii) the Additional Lessor Notes (Ax) shall have a final maturity date no later than the final later of (A) two (2) years prior to the last day of the Fixed Lease Term and (B) the maturity date of the Lessor Notes issued in place on the Closing Date Date, and (B) y), in either case, will be fully repaid out of additional Basic Rent, Periodic Lease Rent as adjusted pursuant to the Facility Lease, during the Facility ;
(iii) appropriate adjustments to Periodic Lease Term; the Additional Lessor Notes shall have an average life to maturity equal to the average life to maturity of the Lessor Notes issued on the Closing Date; appropriate increases to Basic Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall be made to protect the Owner Participant's Net Economic Return; provided provided, however, that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Initial Lessor Notes; the Facility Lessee ;
(iv) SEMA shall have paid, on an After-Tax Basis, all reasonable costs and expenses of the Transaction Lease Financing Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture TrusteeOwner Manager, the Equity Investor, the OP Guarantor, the Lease Indenture Company, the Trustee and each Pass Through Company and the Pass Through TrusteesTrustee, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; such Supplemental Financing;
(v) no Significant Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed made with the proceeds of the Additional Lessor Notes shall cure such Significant Lease Default or Lease XXXXXXXXX PARTICIPATION AGREEMENT (L1) -------------------------------------- 66 Event of Default Default, and such Improvements shall be made in compliance with the Operative Documents and SEMA shall have delivered an officer's certificate to the South Point Ground Lease; Owner Participant and the Pass Through Trustee to that effect;
(vi) such Additional Lessor Notes represent financing is for an aggregate amount not less than $20 million, nor greater than 100% of the costs of the Improvements being financed; provided that the aggregate balance of the Lessor Notes Loans for the Undivided Interest never exceeds 80Facility does not exceed 87% of the fair market value of the Facility taking into account such Improvements (which such fair market value shall to be determined by an appraiser selected by the Facility Lessee SEMA and reasonably acceptable to the Owner Participant);
(vii) of the Undivided Interest taking into account the fair market value of such Improvements; the Owner Participant shall have received a favorable (x) an opinion of its tax counsel reasonably satisfactory to such it from Owner Participant Participant's Counsel to the effect that such financing creates no should not result in any incremental risk of material adverse federal income tax risk not indemnified consequences to the Owner Participant's satisfaction , and (including additional indebtedness incurred y) an indemnity against such risk in form and substance reasonably satisfactory to finance the Improvements Owner Participant from or guaranteed by an entity that meets the Minimum Credit Rating (or, if the Minimum Credit Rating requirement is not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); met, the Owner Participant shall suffer no adverse accounting effects under GAAP as a result have received credit support in respect of such financingindemnity reasonably satisfactory to the Owner Participant); provided that if the Facility Lessee opinion referred to in clause (x) shall be that such financing "will" not result in any incremental risk of material adverse federal income tax consequences to the Owner Participant, then the Minimum Credit Rating requirement shall not be required with respect to the indemnity set forth in clause (y);
(viii) SEMA shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; ;
(ix) except with respect to Required Improvements and Improvements made for the Facility purpose of reducing pollution, the Lessee or the Guarantor shall have, at such time, a credit rating of at least Investment Grade BBB- from S&P and Moody'sBaa3 from Xxxxx'x; provided, however, such credit rating will not be required unless the projected amount of Lessor Notes issued to finance Improvements, other than Required Improvements and Improvements made for the purpose of reducing pollution, exceeds 10% of the projected fair market value of the Facility, after taking into account any Improvements made to the Facility, at any time during the remainder of the Facility Lessee Lease Term (such projected fair market value to be determined by an appraiser selected by the Owner Participant and reasonably acceptable to SEMA); and
(x) the Owner Participant, the Equity Investor and the OP Guarantor shall pay to not suffer any material adverse accounting effect under GAAP as a result of such financing. XXXXXXXXX PARTICIPATION AGREEMENT (L1) --------------------------------------
(b) Notwithstanding the provisions of paragraph (a) the Owner Participanx x xxx of $100,000 and (b) the Pass Through Trustees for the benefit of the Certificateholders, to be shared by such Certificateholders on a pro rata basis, a fee of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1. Notwithstanding the prior provision dealing ------- 12.1, with respect to the financing of Improvements through the Facility Lease, the Facility Lessee shall ---- SEMA shall, subject to Section 6.7 above, at all times have the right to fund ----------- Improvements to the Facility other than through the Facility Lease; provided that Required .
(c) SEMA shall pay the amounts referenced in paragraph (a)(iv) above regardless of whether or not such Supplemental Financing is consummated.
(d) SEMA shall pay the Owner Participant a fee equal to the Owner Lessor's Percentage of $150,000 for each financing of Improvements and non-Severable Improvements may only be financed other than through the Facility Lease on an unsecured basispursuant to Section 12.1(a). Notwithstanding any of the foregoing of this Section 11.1, except for Required Improvements and Improvements relating to pollution control, no Improvement shall materially decrease the value, residual value, utility or remaining economic useful life of the Facility immediately prior to such Improvement or cause the Facility to become limited-use property.---------------
Appears in 1 contract
Financing Improvements. (a) Upon the written request of the Facility Lessee delivered at least 90 days prior to any proposed financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor Lessor, the Lease Indenture Trustee and the Indenture each Pass Through Trustee agree to cooperate with the Facility Lessee to (ai) issue Additional Lessor Notes under the Collateral Trust Indenture to finance such Improvement which will rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; (bii) execute and deliver one or more supplements to the Collateral Trust Lease Indenture for the purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens Lien thereof, ; and (ciii) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause subclause (iviii) below; provided, provided however, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor's Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee SEMA shall have no obligation to accept such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 2.13 of the Collateral Trust Lease Indenture shall have been ------------ satisfied. The obligation to finance such Improvements through the issuance of Additional Lessor Notes under Section 2.12 2.13 of the Collateral Trust Lease Indenture (any financing ------------ of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Lease Indenture being called a "Supplemental Financing") is subject to the ---------------------- limitations on incurrence of additional Indebtedness set forth in Section 6.7 ----------- and to the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year; provided, that there shall be no such limitation with respect to Required Improvements;
(ii) the Additional Lessor Notes (Ax) shall have a final maturity date no later than the final later of (A) two (2) years prior to the last day of the Fixed Lease Term and (B) the maturity date of the Lessor Notes issued in place on the Closing Date Date, and (B) y), in either case, will be fully repaid out of additional Basic Rent, Periodic Lease Rent as adjusted pursuant to the Facility Lease, during the Facility ;
(iii) appropriate adjustments to Periodic Lease Term; the Additional Lessor Notes shall have an average life to maturity equal to the average life to maturity of the Lessor Notes issued on the Closing Date; appropriate increases to Basic Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall be made to protect the Owner Participant's Net Economic Return; provided provided, however, that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Initial Lessor Notes; the Facility Lessee ;
(iv) SEMA shall have paid, on an After-Tax Basis, all reasonable costs and expenses of the Transaction Lease Financing Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture TrusteeOwner Manager, the Equity Investor, the OP Guarantor, the Lease Indenture Company, the Trustee and each Pass Through Company and the Pass Through TrusteesTrustee, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; such Supplemental Financing;
(v) no Significant Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed made with the proceeds of the Additional Lessor Notes shall cure such Significant Lease Default or Lease Event of Default Default, and such Improvements shall be made in compliance with the Operative Documents and SEMA shall have delivered an officer's certificate to the South Point Ground Lease; Owner Participant and the Pass Through Trustee to that effect;
(vi) such Additional Lessor Notes represent financing is for an aggregate amount not less than $20 million, nor greater than 100% of the costs of the Improvements being financed; provided that the aggregate balance of the Lessor Notes Loans for the Undivided Interest never exceeds 80Facility does not exceed 87% of the fair market value of the Facility taking into account such Improvements (which such fair market value shall to be determined by an appraiser selected by the Facility Lessee SEMA and reasonably acceptable to the Owner Participant);
(vii) of the Undivided Interest taking into account the fair market value of such Improvements; the Owner Participant shall have received a favorable (x) an opinion of its tax counsel reasonably satisfactory to such it from Owner Participant Participant's Counsel to the effect that such financing creates no should not result in any incremental risk of material adverse federal income tax risk not indemnified consequences to the Owner Participant's satisfaction , and (including additional indebtedness incurred y) an indemnity against such risk in form and substance reasonably satisfactory to finance the Improvements Owner Participant from or guaranteed by an entity that meets the Minimum Credit Rating (or, if the Minimum Credit Rating requirement is not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); met, the Owner Participant shall suffer no adverse accounting effects under GAAP as a result have received credit support in respect of such financingindemnity reasonably satisfactory to the Owner Participant); provided that if the Facility Lessee opinion referred to in clause (x) shall be that such financing "will" not result in any incremental risk of material adverse federal income tax consequences to the Owner Participant, then the Minimum Credit Rating requirement shall not be required with respect to the indemnity set forth in clause (y);
(viii) SEMA shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; ;
(ix) except with respect to Required Improvements and Improvements made for the Facility purpose of reducing pollution, the Lessee or the Guarantor shall have, at such time, a credit rating of at least Investment Grade BBB- from S&P and Moody'sBaa3 from Xxxxx'x; provided, however, such credit rating will not be required unless the projected amount of Lessor Notes issued to finance Improvements, other than Required Improvements and Improvements made for the purpose of reducing pollution, exceeds 10% of the projected fair market value of the Facility, after taking into account any Improvements made to the Facility, at any time during the remainder of the Facility Lessee Lease Term (such projected fair market value to be determined by an appraiser selected by the Owner Participant and reasonably acceptable to SEMA); and
(x) the Owner Participant, the Equity Investor and the OP Guarantor shall pay to not suffer any material adverse accounting effect under GAAP as a result of such financing.
(b) Notwithstanding the provisions of paragraph (a) the Owner Participanx x xxx of $100,000 and (b) the Pass Through Trustees for the benefit of the Certificateholders, to be shared by such Certificateholders on a pro rata basis, a fee of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1. Notwithstanding the prior provision dealing 12.1, with respect to the financing of Improvements through the Facility ------------ Lease, the Facility Lessee shall SEMA shall, subject to Section 6.7 above, at all times have the right to ----------- fund Improvements to the Facility other than through the Facility Lease; provided that Required .
(c) SEMA shall pay the amounts referenced in paragraph (a)(iv) above regardless of whether or not such Supplemental Financing is consummated.
(d) SEMA shall pay the Owner Participant a fee equal to the Owner Lessor's Percentage of $150,000 for each financing of Improvements and non-Severable Improvements may only be financed other than through the Facility Lease on an unsecured basispursuant to Section 12.1(a). Notwithstanding any of the foregoing of this Section 11.1, except for Required Improvements and Improvements relating to pollution control, no Improvement shall materially decrease the value, residual value, utility or remaining economic useful life of the Facility immediately prior to such Improvement or cause the Facility to become limited-use property.----------------
Appears in 1 contract
Financing Improvements. (a) Upon the written request of the Facility Lessee Xxxxx City delivered at least 90 days prior to any proposed financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor and the Lease Indenture Trustee agree to cooperate with the Facility Lessee Xxxxx City to (ai) issue Additional Lessor Notes under the Collateral Trust Indenture to finance such Improvement Improvement, which will Additional Lessor Notes shall rank pari passu PARI PASSU with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; (bii) execute and deliver one or more supplements to the Collateral Trust Lease Indenture for the purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, Security Interest; and (ciii) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause subclause (iviii) below; provided, howeverPROVIDED HOWEVER, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor's Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee Xxxxx City shall have no obligation to accept such Additional Equity Investment; and (y) the conditions set forth below and in [Section 2.12 2.13] of the Collateral Trust Lease Indenture shall have been satisfied. The obligation to finance such Improvements through the issuance of Additional Lessor Notes under [Section 2.12 2.13] of the Collateral Trust Lease Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Lease Indenture being called a "Supplemental FinancingSUPPLEMENTAL FINANCING") is subject to the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year; provided, that there shall be no such limitation with respect to Required Improvements;
(ii) the Additional Lessor Notes (Ax) shall have a final maturity date no later than two (2) years prior to the final maturity last day of the Lessor Notes issued on the Closing Date and Basic Lease Term; (By) will be fully repaid out of additional Basic Rent, Lease Rent as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes and (z) shall have an average life be subject to maturity equal to the average life to maturity of the Lessor Notes such terms and conditions as are customary for indebtedness issued on the Closing Date; in connection with leveraged lease financings;
(iii) appropriate increases adjustments to Basic Lease Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall be made to protect the Owner Participant's Net Economic Return; provided provided, however, that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Initial Lessor Notes; the Facility Lessee ;
(iv) Xxxxx City shall have paid, on an After-Tax Basis, all reasonable costs and expenses of the Transaction Lease Financing Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture TrusteeOwner Manager, the Security Agent and the Lease Indenture Company, the Pass Through Company and the Pass Through TrusteesTrustee, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; such Supplemental Financing;
(v) no Significant Material Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed made with the proceeds of the Additional Lessor Notes shall cure such Significant Material Lease Default or Lease Event of Default Default, and such Improvements shall be made in compliance with the Operative Documents and the South Point Ground Lease; Documents;
(vi) such Additional Lessor Notes represent financing is for an aggregate amount not less than $20 5 million, nor greater than 100% of the costs of the Improvements being financed; provided that the aggregate balance principal amount of the Additional Lessor Notes for the Undivided Interest never exceeds 80% of the fair market value (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to not exceed the Owner ParticipantLessor's percentage of $300,000,000;
(vii) of the Undivided Interest taking into account the fair market value of such Improvements; the Owner Participant shall have received a favorable (x) an opinion of its tax counsel reasonably satisfactory to such it from Owner Participant Participant's Counsel to the effect that such financing creates no should not result in any incremental risk of material adverse federal income tax risk not indemnified consequences to the Owner Participant's satisfaction , and (including additional indebtedness incurred y) an indemnity against such risk in form and substance reasonably satisfactory to finance the Improvements Owner Participant from or guaranteed by an entity that meets the Minimum Credit Rating (or, if the Minimum Credit Rating requirement is not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); met, the Owner Participant shall suffer no adverse accounting effects under GAAP as a result have received credit support in respect of such financingindemnity reasonably satisfactory to the Owner Participant); provided that if the Facility Lessee opinion referred to in clause (x) shall be that such financing "will" not result in any incremental risk of material adverse federal income tax consequences to the Owner Participant, then 71 the Minimum Credit Rating requirement shall not be required with respect to the indemnity set forth in clause (y);
(viii) Xxxxx City shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request;
(ix) the Owner Participant shall not suffer any material adverse accounting effect under GAAP as a result of such financing; and
(x) the Facility Lessee or the Guarantor projected Basic Lease Rent Service Coverage Ratio shall have, at such time, a credit rating of be at least Investment Grade from S&P [ ] and Moody's; the Facility Lessee average Basic Lease Rent Service Coverage Ratio shall pay to be at least [ ], calculated at the time of issuance of such Additional Lessor Notes, and calculated in accordance with MAPS and the then Base Case assumptions. Notwithstanding the provisions of paragraph (a) the Owner Participanx x xxx of $100,000 and (b) the Pass Through Trustees for the benefit of the Certificateholdersthis SECTION 12.1, with respect to be shared by such Certificateholders on a pro rata basis, a fee of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee shall Xxxxx City shall, subject to SECTION 6.7 hereof, at all times have the right to fund Improvements to the Facility other than through the Facility Lease; provided that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease on an unsecured basis. Notwithstanding any of the foregoing of this Section 11.1, except for Required Improvements and Improvements relating to pollution control, no Improvement shall materially decrease the value, residual value, utility or remaining economic useful life of the Facility immediately prior to such Improvement or cause the Facility to become limited-use property.
Appears in 1 contract
Samples: Participation Agreement (Eme Homer City Generation Lp)
Financing Improvements. (a) Upon the written request of the Facility Lessee Xxxxx City delivered at least 90 days prior to any proposed financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor and the Lease Indenture Trustee agree to cooperate with the Facility Lessee Xxxxx City to (ai) issue Additional Lessor Notes under the Collateral Trust Indenture to finance such Improvement Improvement, which will Additional Lessor Notes shall rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; (bii) execute and deliver one or more supplements to the Collateral Trust Lease Indenture for the purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, Security Interest; and (ciii) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause subclause (iviii) below; provided, provided however, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor's Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee Xxxxx City shall have no obligation to accept such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 2.6 of the Collateral Trust Lease Indenture shall have been satisfied. The obligation to finance such Improvements through the issuance of Additional Lessor Notes under Section 2.12 2.6 of the Collateral Trust Lease Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Lease Indenture being called a "Supplemental Financing") is subject to the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year; provided, that there shall be no such limitation with respect to Required Improvements;
(ii) the Additional Lessor Notes (Ax) shall have a final maturity date no later than two (2) years prior to the final maturity last day of the Lessor Notes issued on the Closing Date and Basic Lease Term; (By) will be fully repaid out of additional Basic Rent, Lease Rent as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes and (z) shall have an average life be subject to maturity equal to the average life to maturity of the Lessor Notes such terms and conditions as are customary for indebtedness issued on the Closing Date; in connection with leveraged lease transactions;
(iii) appropriate increases adjustments to Basic Lease Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall be made to protect the Owner Participant's Net Economic Return; provided provided, however, that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Initial Lessor Notes; the Facility Lessee ;
(iv) Xxxxx City shall have paid, on an After-Tax Basis, all reasonable costs and expenses of the Lease Transaction Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture TrusteeOwner Manager, the Security Agent and the Lease Indenture Company, the Pass Through Company and the Pass Through TrusteesTrustee, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; such Supplemental Financing;
(v) no Significant Material Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed made with the proceeds of the Additional Lessor Notes shall cure such Significant Material Lease Default or Lease Event of Default Default, and such Improvements shall be made in compliance with the Operative Documents and the South Point Ground Lease; Documents;
(vi) such Additional Lessor Notes represent financing is for an aggregate amount not less than $20 5 million, nor greater than 100% of the costs of the Improvements being financed; provided that the aggregate balance principal amount of the Additional Lessor Notes for the Undivided Interest never exceeds 80% of the fair market value (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to not exceed the Owner ParticipantLessor's Percentage of $300,000,000;
(vii) of the Undivided Interest taking into account the fair market value of such Improvements; the Owner Participant shall have received a favorable (x) an opinion of its tax counsel reasonably satisfactory to such it from Owner Participant Participant's Counsel to the effect that such financing creates no should not result in any incremental risk of material adverse federal income tax risk not indemnified consequences to the Owner Participant's satisfaction , and (including additional indebtedness incurred y) an indemnity against such risk in form and substance reasonably satisfactory to finance the Improvements Owner Participant from or guaranteed by an entity that meets the Minimum Credit Rating (or, if the Minimum Credit Rating requirement is not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); met, the Owner Participant shall suffer no adverse accounting effects under GAAP as a result have received credit support in respect of such financingindemnity reasonably satisfactory to the Owner Participant); provided that if the Facility Lessee opinion referred to in clause (x) shall be that such financing "will" not result in any incremental risk of material adverse federal income tax consequences to the Owner Participant, then the Minimum Credit Rating requirement shall not be required with respect to the indemnity set forth in clause (y);
(viii) Xxxxx City shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; ;
(ix) the Facility Lessee or Owner Participant shall not suffer any material adverse accounting effect under GAAP as a result of such financing;
(x) the Guarantor projected Basic Lease Rent Service Coverage Ratio shall have, at such time, a credit rating of be at least Investment Grade from S&P 1.5 to 1.0 and Moody's; the Facility Lessee average Basic Lease Rent Service Coverage Ratio shall pay be at least 1.75 to 1.0, calculated at the time of issuance of such Additional Lessor Notes, and determined according to the lesser of (a) such ratios as set forth in an Officer's Certificate of the Owner Participanx x xxx of $100,000 Facility Lessee, and (b) such ratios calculated in accordance with MAPS and the Pass Through Trustees for then Base Case assumptions; and
(xi) Xxxxx City shall have received, and shall have provided to the benefit Owner Participant, written confirmation from the Rating Agencies that the then-current ratings of the Certificateholders, to Fundco Bonds will not be shared by such Certificateholders on reduced as a pro rata basis, a fee result of $100,000 for each such financing, in each case under clauses . The Facility Lessee shall cause the Power Market Consultant to provide to the Facility Lessee updated electricity price projections for purposes of allowing the Facility Lessee to provide its certification specified subsection (x)(a) above. Notwithstanding the provisions of paragraph (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by of this Section 11.1. Notwithstanding the prior provision dealing 12.1, with respect to the financing of Improvements through the Facility Lease, the Facility Lessee shall Xxxxx City shall, subject to Section 6.7 hereof, at all times have the right to fund Improvements to the Facility other than through the Facility Lease; provided that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease on an unsecured basis. Notwithstanding any of the foregoing of this Section 11.1, except for Required Improvements and Improvements relating to pollution control, no Improvement shall materially decrease the value, residual value, utility or remaining economic useful life of the Facility immediately prior to such Improvement or cause the Facility to become limited-use property.
Appears in 1 contract
Samples: Participation Agreement (Eme Homer City Generation Lp)
Financing Improvements. Upon the written request of the Facility Lessee Midwest delivered at least 90 days prior to any proposed financing a portion of the cost of any Required or Non-Severable Improvement, the Owner Lessor and the Indenture Trustee Holder Representative agree to cooperate with the Facility Lessee Midwest to (a) issue Additional Lessor Notes under by the Collateral Trust Indenture Owner Lessor to finance such Improvement which will rank pari passu with the Initial Lessor Notes and/or any Additional Lessor Notes then outstanding; and (b) execute and deliver one or more supplements to the Collateral Trust Indenture for purpose of subjecting the Owner Lessor's interest in any such Improvements to the Liens thereof, and (c) execute and deliver an amendment to the Facility Lease to reflect the adjustments required by clause (ivv) below; providedPROVIDED, howeverHOWEVER, that (x) the Owner Participant shall have been given the opportunity, but shall have no obligation, to provide all or part of the funds required to finance the Owner Lessor's Percentage of any such Improvement by making an Additional Equity Investment in such amount, if any, as it may determine in its sole and absolute discretion, but the Facility Lessee . Midwest shall have no obligation to accept and the Owner Participant shall not be obligated to provide such Additional Equity Investment; and (y) the conditions set forth below and in Section 2.12 of the Collateral Trust Indenture shall have been satisfied. The obligation to finance such Improvements Improvement through the issuance of Additional Lessor Notes under Section 2.12 of the Collateral Trust Indenture (any financing of Improvements through the issuance of such Additional Lessor Notes under the Collateral Trust Indenture being called a "Supplemental FinancingSUPPLEMENTAL FINANCING") is subject to the limitations on incurrence of additional Indebtedness set forth in the Operative Documents and the following additional conditions: except with respect to Required Improvements, :
(i) there shall be no more than one such financing in any calendar year; ;
(ii) Improvements shall be made in compliance with the Operative Documents;
(iii) such Improvement is a Required Improvement;
(iv) subject to Section 2.03 of the Lessor Loan Agreement, the Additional Lessor Notes (A) shall have a final maturity date no later than the final maturity expiration date of the Lessor Notes issued on the Closing Date Basic Lease Term or any Renewal Term then in effect or already elected by Xxxxxxx Holdings as instructed by Midwest and (B) will be fully repaid out of additional Basic Rent, Lease Rent or Renewal Rent and Termination Value as adjusted pursuant to the Facility Lease, during the Facility Lease Term; the Additional Lessor Notes shall have an average life to maturity equal to the average life to maturity of the Lessor Notes issued on the Closing Date; Operative Documents;
(v) appropriate increases adjustments to Basic Lease Rent and Termination Value (determined without regard to any tax benefits associated with such Improvements, unless the Owner Participant is making an Additional Equity Investment) shall also be made to protect the Owner Participant's Net Economic Expected Return; provided that there shall be no changes to the amortization schedule or interest amounts and payment dates on the then outstanding Lessor Notes; the Facility Lessee ;
(vi) Midwest shall have paid, on an After-Tax Basis, all reasonable out-of-pocket costs and expenses of the Transaction Lease Financing Parties, including the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Indenture Trustee, the Lease Indenture Company, the Pass Through Company Owner Trustee and the Pass Through TrusteesHolder Representative, in each case to the extent incurred in connection with any financing or refinancing pursuant to this Section 11 whether or not the financing is consummated; SECTION 16;
(vii) no Significant Lease Default or Lease Event of Default shall have occurred and be continuing unless the Improvements to be constructed with the proceeds of the Additional Lessor Notes shall cure such Significant Lease Default or Lease Event of Default Default, and any such Improvements shall be made in compliance with the Operative Documents and Documents;
(viii) the South Point Ground Lease; sum of (y) the principal amount of such Additional Lessor Notes represent an aggregate and (z) the principal amount of all comparable additional lessor notes used to finance such Improvements pursuant to the Other Facility Leases, is not less than $20 million, nor million and not greater than 100% of the costs cost of the Improvements being financed; provided PROVIDED that the aggregate sum of (I) the outstanding balance of the Lessor Notes for and (II) all comparable lessor notes issued and outstanding of the Undivided Interest Other Owner Lessors under the respective lessor loan agreements to which such Other Owner Lessors are party never exceeds 80(x) 90% of the fair market value lesser of (which fair market value shall be determined by an appraiser selected by the Facility Lessee and reasonably acceptable to the Owner Participant1) of the Undivided Interest taking into account the fair market value of the Facility taking into account such Improvements; , as determined pursuant to the Appraisal Procedure, and (2) the sum of (t) the Purchase Price, (u) the comparable purchase price for each of the Other Undivided Interests and (v) the cost of the Improvement being financed;
(ix) the Owner Participant shall have received a favorable opinion of its reasonably satisfactory to it from Hunton & Xxxxxxxx, or from nationally recognized tax counsel satisfactory to such selected by the Owner Participant and reasonably acceptable to Midwest, to the effect that such financing creates no would not result in any material indemnified, or any unindemnified, incremental tax risk not indemnified to the Owner Participant's satisfaction ;
(including additional indebtedness incurred to finance the Improvements not constituting "qualified nonrecourse indebtedness" within the meaning of Treasury Regulations Section 1-861-10T(b)); x) the Owner Participant shall not suffer no any material adverse accounting effects under GAAP as a result of providing such additional financing;
(xi) the cost of the Improvement, together with the cost of all previous Improvements financed with Additional Lessor Notes is not greater than 25% of the sum of (x) the Purchase Price and (y) the comparable purchase price for each of the Other Undivided Interests; unless the Facility Lessee shall have received confirmation that giving effect to the financing in connection with such Improvement, the Funding LLC Debt rating will not fall below BBB- or Baa3 from S&P and Xxxxx'x, respectively; and
(xii) Midwest shall have made or delivered such representations, warranties, covenants, opinions or certificates as the Owner Participant or the Indenture Trustee may reasonably request; the Facility Lessee or the Guarantor shall have, at .
(xiii) such time, a credit rating of at least Investment Grade from S&P Additional Lessor Notes are issued pursuant to and Moody's; the Facility Lessee shall pay to (a) the Owner Participanx x xxx of $100,000 and (b) the Pass Through Trustees for the benefit in accordance with SECTION 2.03 of the CertificateholdersLessor Loan Agreement and Midwest and Xxxxxxx Holdings shall have delivered such certificates, reports and other documents and shall have taken all other actions which are required to be shared delivered or taken by such Certificateholders on a pro rata basis, a fee them pursuant to SECTION 2.03 of $100,000 for each such financing, in each case under clauses (a) and (b) above, other than the first financing; and Calpine shall have affirmed to the Transaction Parties that the Calpine Guaranties cover the additional indebtedness contemplated by this Section 11.1Lessor Loan Agreement. Notwithstanding the prior provision dealing with the financing of Improvements through the Facility Lease, the Facility Lessee Midwest shall at all times have the right to fund finance Improvements to the Facility other than through the Facility Lease; provided PROVIDED that Required Improvements and non-Severable Improvements may only be financed other than through the Facility Lease if such financing would not result in any Lien on an unsecured basis. Notwithstanding any the Facility or the Facility Land and shall be subject to the limita- tions on incurrence of additional Indebtedness contained in the foregoing of this Section 11.1other Operative Documents; PROVIDED FURTHER, except for that Required Improvements and Non-Severable Improvements relating shall automatically, upon being affixed to pollution controlthe Facility, no Improvement shall materially decrease become the value, residual value, utility or remaining economic useful life property of the Facility immediately prior Owner Lessor and subject to such Improvement or cause the Facility to become limited-use propertyLease.
Appears in 1 contract
