Private Security or Payment Test Sample Clauses
The Private Security or Payment Test clause defines criteria to determine whether a financial instrument or transaction qualifies as a private security or constitutes a payment under relevant laws or regulations. Typically, this clause outlines specific characteristics or thresholds—such as the number of investors, transfer restrictions, or the nature of the payment—that must be met for the instrument to be classified accordingly. By establishing clear standards, the clause helps parties understand their regulatory obligations and ensures compliance, thereby reducing legal uncertainty and mitigating the risk of inadvertent violations.
Private Security or Payment Test. In general, the private security or payment test is satisfied if the present value of the payments to be taken into account exceeds 10% of the present value of the debt service to be paid over the term of the issue. The private payment portion of the test generally takes into account payment of debt service derived from payments (whether or not to the Issuer or a related party) in respect of property or borrowed money used or to be used for a private business use. The private security portion of the test generally takes into account payment of debt service directly or indirectly secured by an interest in property used or to be used for a private business use, or payments in respect of such property. The security for an issue and the payment of debt service on the issue are determined from both the bond documents and on the basis of an underlying arrangement between the parties. An underlying arrangement can result from separate agreements between the parties or may be inferred from all the facts and circumstances in connection with the issuance of the Bonds.
Private Security or Payment Test. Not more than 10% of the Periodic Payments under the Master Agreement shall be directly or indirectly (i) secured by any interest in property used or to be used for a private business use, or payments in respect of such property, or (ii) derived from payments in respect of property or borrowed money used or to be used for a private business use. The test described in this paragraph shall be applied by changing 10% to 5% with respect to any proceeds used for unrelated or disproportionate private business use. ▇▇▇▇ ▇▇▇▇▇ 4/20/17 3:45 PM
Private Security or Payment Test. During the Measurement Period, the District will not permit the Bonds to meet the private security or payment test of Section 141(b)(2) of the Code. To that end, among other things, the District will not permit the present value of the payments and property taken into account as private payments or private security under Treas. Reg.
§ 1. 141-4 (including, e.g., payments by a Person (whether or not to the District) of property financed or refinanced with the Proceeds of the Bonds and to be used in a Private Business Use (even if not made by a Private Business User) to the extent allocable to the payment of debt service on the Proceeds of the Bonds used to finance or refinance such property) to exceed 10 percent (five percent, in the case of combined unrelated Private Business Use Proceeds and disproportionate related Private Business Use Proceeds as described in Section 2.1 (E) hereof) of the present value of the debt service (as defined in Treas. Reg. § 1.141-4(b)(2)(ii)) over the term of the Bonds. For purposes of the foregoing example, under Treas. Reg. § 1.141-4(c)(2)(A) and (B) and - 4(d)(5), such payments with respect to Private Business Use Proceeds are not taken into account as private payments or private security to the extent that the present value of those payments exceeds the present value of debt service on those Private Business Use Proceeds. For purposes of the foregoing, under Treas. Reg. § 1.141-4(e), “generally applicable taxes,” including for all purposes hereof tax equivalency payments or other payments in lieu of taxes meeting the requirements of Treas. Reg. § 1.141-4(e)(5)(i) through (iv), are not treated as private payments or as private security. A tax, including for all purposes hereof a tax equivalency payment or other payment in lieu of a tax, is not a “generally applicable tax” to the extent one or more taxpayers make any “impermissible agreements” relating to payment of that tax. The following are examples of “impermissible agreements” that cause a tax to fail to be a “generally applicable tax”: an agreement to be personally liable on a tax that generally does not impose personal liability, to provide additional credit support such as a third party guarantee, or to pay unanticipated shortfalls; an agreement regarding the minimum market value of the property subject to the tax; and an agreement not to challenge or seek deferral of the tax. If an agreement by a taxpayer causes the tax imposed on that taxpayer not to be treated as ...
Private Security or Payment Test. 1. The security for, and payment of debt service on, the Loan is determined from both the terms of the Bond documents and on the basis of any underlying arrangement between the Recipient and a Nongovernmental Person.
2. Generally applicable taxes are not treated as private business payments as long as such taxes are not in the nature of fees for goods or services, have a uniform tax rate that is applied to all persons of the same classification in the appropriate jurisdiction and have a generally applicable manner of determination and collection.