Common use of Adjustment of Lease Schedules Clause in Contracts

Adjustment of Lease Schedules. (a) Periodic Lease Rent, Allocated Rent, Lessor Section 467 Loan Balance, Lessee Section 467 Loan Balance, Lessor Section 467 Interest, Lessee Section 467 Interest and Termination Value (collectively, the "Adjustment Items") shall be adjusted, either upward or downward, to reflect: (i) the effect of any refunding or refinancing of the Lease Debt and Notes (including without limitation, the principal amount, amortization and interest rates) issued pursuant to Section 2.12 of the Lease Indenture in connection with a refinancing of the Notes pursuant to Section 12.2 of the Participation Agreement; (ii) the financing of Modifications to the Facility pursuant to Section 12.1 of the Participation Agreement (including without limitation the issuance of Additional Lessor Notes pursuant to Section 2.12 of the Lease Indenture in connection therewith) or (iii) the correction of any manifest error in the mathematical computation of the Adjustment Items. (b) In the event the Registration Statement is not effective or the Exchange Offer has not been consummated within 270 days of the Initial Purchaser's request therefor (collectively, "Registration Delay"), the Owner Lessor and the Facility Lessee will institute an alternative rent schedule (the "Alternative Rent Schedule") to replace Schedules 1-A, 1-B and 1-C attached hereto and an alternative termination value schedule (the "Alternative Termination Value Schedule") to replace Schedule 2 attached hereto. The Alternative Rent Schedule will require amounts of Periodic Lease Rent during the Basic Lease Term ("Alternative Rent") to be paid that equal the sum of the Periodic Lease Rent that would have been paid absent a Registration Delay and an amount equal to the increased amounts paid pursuant to the Notes because of the Registration Delay ("Additional Amount"). The Alternative Termination Value Schedule will reflect the increase on any Termination Date of such Additional Amount. The Alternative Rent Schedule will allocate the Additional Amount over the Basic Lease Term in accordance with the rules of Section 467 of the Code then in effect and in a manner that preserves the Owner Participant's Expected Return. At the commencement of any Registration Delay, the Alternative Rent Schedule and Alternative Termination Value Schedule will be based on the assumption that the Additional Amount applies for the term of the Notes. In the event the Additional Amount terminates prior to the term of the Notes, such schedules will be revised to reflect the actual amounts of Additional Amount paid. It is the intent of the Owner Lessor and the Facility Lessee that the options set forth in this Section 3.5(b) constitute alternative rent schedules as contemplated under Treasury Regulation 1.467-l(h)(3)(v). (c) Any adjustments pursuant to this Section 3.5 shall be calculated (i) first, to maintain the Owner Participant's Expected Return, and (ii) second, at the option of the Facility Lessee, (A) to minimize the average annual Periodic Lease Rent over the Basic Lease Term for the Facility Lessee's GAAP accounting purposes, (B) to minimize to the extent possible, the net present value, discounted at the Discount Rate, compounded on a semi-annual basis to the date of the termination, of Periodic Lease Rent and/or (C) to maintain operating lease treatment for Shawville Facility Lease 6 the Facility Lessee; provided that no such adjustment shall require the Owner Participant to record a loss as of the date such adjustment is made or shall change the Owner Participant's book earnings for the year in which such adjustment is made and each of the succeeding four years by more than plus or minus 5% without the consent of the Owner Participant. (d) Anything herein or in any other Operative Document to the contrary notwithstanding, Periodic Lease Rent payable on any Rent Payment Date, whether or not adjusted in accordance with this Section 3.5, shall, in the aggregate, be in an amount at least sufficient to pay in full principal and interest payable on the Notes on such Rent Payment Date. Anything herein or in any other Operative Document to the contrary notwithstanding, Termination Values (excluding the Equity Portion of Termination Value) payable on any date under this Facility Lease, whether or not adjusted in accordance with this Section 3.5, shall in the aggregate, together with all other Rent due and owing on such date, exclusive of any portion thereof that is an Excepted Payment, be in an amount at least sufficient to pay in full the principal of, premium (other than premium, if any, payable by the Owner Lessor pursuant to Section 14), if any, and accrued interest on the Notes payable on such date. (e) Notwithstanding anything herein to the contrary, the Facility Lessee shall be permitted to defer the Equity Portion of Periodic Lease Rent and the Equity Portion of Termination Value (or the Equity Portion of a Qualifying Cash Bid) with respect to the Facility by such amounts and to such dates as shall be permitted under Section 5.4 of the Tax Indemnity Agreement; provided, that if Termination Value should become due in connection with an exercise of remedies following a Lease Event of Default, any such deferred Rent shall become due and payable. Termination Value shall be adjusted to the extent required under Section 8 (f) of the Tax Indemnity Agreement. (g) Any adjustment pursuant to this Section 3.5 shall initially be computed by the Owner Participant or the Equity Investor using the same method of computation, Tax Assumptions and Pricing Assumptions originally used (other than those that have changed as the result of the event giving rise to the adjustment) in the calculation of the Adjustment Items as of the Closing Date, and shall be subject to the verification procedure described in this Section 3.5(g) and in compliance with Section 467 of the Code (as in effect at the date of such adjustment), but only to the extent the original transaction complied therewith. Once computed, the results of such computation shall promptly be delivered by the Owner Participant to the Facility Lessee. Within 30 days after the receipt of the results of any such adjustment, the Facility Lessee may request that a nationally recognized firm of accountants or lease advisors selected by the Owner Participant and reasonably satisfactory to the Facility Lessee (the "Verifier") verify, on a confidential basis, after consultation with the Owner Participant and the Facility Lessee, the accuracy of such adjustment in accordance with this Section 3.5. The Owner Participant and the Facility Lessee hereby agree, subject to the execution by the Verifier of an appropriate confidentiality agreement, to provide the Verifier with all information and materials (other than the income tax returns or accounting records of the Equity Investor, the Equity Subsidiary Holding Company, the Equity Subsidiary or the Owner Participant) as shall be necessary in connection therewith. Each of the Owner Participant, the Owner Lessor, the Equity Investor and the Facility Lessee shall have the right to communicate with the Verifier and submit Shawville Facility Lease 7

Appears in 1 contract

Samples: Facility Lease Agreement (GenOn Energy, Inc.)

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Adjustment of Lease Schedules. (a) Periodic Lease Rent, Allocated Rent, Lessor Section 467 Loan Balance, Lessee Section 467 Loan Balance, Lessor Section 467 Interest, Lessee Section 467 Interest and Termination Value (collectively, the "Adjustment Items") shall be adjusted, either upward or downward, to reflect: (i) the effect of any refunding or refinancing of the Lease Debt and Notes (including without limitation, the principal amount, amortization and interest rates) issued pursuant to Section 2.12 of the Lease Indenture in connection with a refinancing of the Notes pursuant to Section 12.2 of the Participation Agreement; (ii) the financing of Modifications to the Facility pursuant to Section 12.1 of the Participation Agreement (including without limitation the issuance of Additional Lessor Notes pursuant to Section 2.12 of the Lease Indenture in connection therewith) or (iii) the correction of any manifest error in the mathematical computation of the Adjustment Items. (b) In the event the Registration Statement is not effective or the Exchange Offer has not been consummated within 270 days of the Initial Purchaser's request therefor (collectively, "Registration Delay"), the Owner Lessor and the Facility Lessee will institute an alternative rent schedule (the "Alternative Rent Schedule") to replace Schedules 1-A, 1-B and 1-C attached hereto and an alternative termination value schedule (the "Alternative Termination Value Schedule") to replace Schedule 2 attached hereto. The Alternative Rent Schedule will require amounts of Periodic Lease Rent during the Basic Lease Term ("Alternative Rent") to be paid that equal the sum of the Periodic Lease Rent that would have been paid absent a Registration Delay and an amount equal to the increased amounts paid pursuant to the Notes because of the Registration Delay ("Additional Amount"). The Alternative Termination Value Schedule will reflect the increase on any Termination Date of such Additional Amount. The Alternative Rent Schedule will allocate the Additional Amount over the Basic Lease Term in accordance with the rules of Section 467 of the Code then in effect and in a manner that preserves the Owner Participant's Expected Return. At the commencement of any Registration Delay, the Alternative Rent Schedule and Alternative Termination Value Schedule will be based on the assumption that the Additional Amount applies for the term of the Notes. In the event the Additional Amount terminates prior to the term of the Notes, such schedules will be revised to reflect the actual amounts of Additional Amount paid. It is the intent of the Owner Lessor and the Facility Lessee that the options set forth in this Section 3.5(b) constitute alternative rent schedules as contemplated under Treasury Regulation 1.467-l(h)(3)(v). (c) Any adjustments pursuant to this Section 3.5 shall be calculated (i) first, to maintain the Owner Participant's Expected Return, and (ii) second, at the option of the Facility Lessee, (A) to minimize the average annual Periodic Lease Rent over the Basic Lease Term for the Facility Lessee's GAAP accounting purposes, (B) to minimize to the extent possible, the net present value, discounted at the Discount Rate, compounded on a semi-annual basis to the date of the termination, of Periodic Lease Rent and/or (C) to maintain operating lease treatment for Shawville Keystone Facility Lease 6 the Facility Lessee; provided that no such adjustment shall require the Owner Participant to record a loss as of the date such adjustment is made or shall change the Owner Participant's book earnings for the year in which such adjustment is made and each of the succeeding four years by more than plus or minus 5% without the consent of the Owner Participant. (d) Anything herein or in any other Operative Document to the contrary notwithstanding, Periodic Lease Rent payable on any Rent Payment Date, whether or not adjusted in accordance with this Section 3.5, shall, in the aggregate, be in an amount at least sufficient to pay in full principal and interest payable on the Notes on such Rent Payment Date. Anything herein or in any other Operative Document to the contrary notwithstanding, Termination Values (excluding the Equity Portion of Termination Value) payable on any date under this Facility Lease, whether or not adjusted in accordance with this Section 3.5, shall in the aggregate, together with all other Rent due and owing on such date, exclusive of any portion thereof that is an Excepted Payment, be in an amount at least sufficient to pay in full the principal of, premium (other than premium, if any, payable by the Owner Lessor pursuant to Section 14), if any, and accrued interest on the Notes payable on such date. (e) Notwithstanding anything herein to the contrary, the Facility Lessee shall be permitted to defer the Equity Portion of Periodic Lease Rent and the Equity Portion of Termination Value (or the Equity Portion of a Qualifying Cash Bid) with respect to the Facility by such amounts and to such dates as shall be permitted under Section 5.4 of the Tax Indemnity Agreement; provided, that if Termination Value should become due in connection with an exercise of remedies following a Lease Event of Default, any such deferred Rent shall become due and payable. Termination Value shall be adjusted to the extent required under Section 8 (f) of the Tax Indemnity Agreement. (g) Any adjustment pursuant to this Section 3.5 shall initially be computed by the Owner Participant or the Equity Investor using the same method of computation, Tax Assumptions and Pricing Assumptions originally used (other than those that have changed as the result of the event giving rise to the adjustment) in the calculation of the Adjustment Items as of the Closing Date, and shall be subject to the verification procedure described in this Section 3.5(g) and in compliance with Section 467 of the Code (as in effect at the date of such adjustment), but only to the extent the original transaction complied therewith. Once computed, the results of such computation shall promptly be delivered by the Owner Participant to the Facility Lessee. Within 30 days after the receipt of the results of any such adjustment, the Facility Lessee may request that a nationally recognized firm of accountants or lease advisors selected by the Owner Participant and reasonably satisfactory to the Facility Lessee (the "Verifier") verify, on a confidential basis, after consultation with the Owner Participant and the Facility Lessee, the accuracy of such adjustment in accordance with this Section 3.5. The Owner Participant and the Facility Lessee hereby agree, subject to the execution by the Verifier of an appropriate confidentiality agreement, to provide the Verifier with all information and materials (other than the income tax returns or accounting records of the Equity Investor, the Equity Subsidiary Holding Company, the Equity Subsidiary or the Owner Participant) as shall be necessary in connection therewith. Each of the Owner Participant, the Owner Lessor, the Equity Investor and the Facility Lessee shall have the right to communicate with the Verifier and submit Shawville Facility Lease 7HOU0!:587609.2.

Appears in 1 contract

Samples: Facility Lease Agreement (GenOn Energy, Inc.)

Adjustment of Lease Schedules. (a) Periodic The Facility Lessee and the Owner Lessor agree that Basic Lease Rent, Allocated Rent, Lessor Section 467 Loan Balance, Lessee Section 467 Loan Balance, Lessor Section 467 Interest, Lessee Section 467 Interest and Termination Value (collectively, the "Adjustment Items") Rent shall be adjustedadjusted after the Closing Date, either upward upwards or downwarddownwards, to reflect: reflect (i) the effect of any refunding or refinancing a reduction in Basic Lease Rent in connection with a partial termination of the Facility Lease Debt and pursuant to Section 15 calculated in accordance with the second sentence of Section 3.2, (ii) a reduction in Basic Lease Rent in connection with the prepayment of one or more Southaven Holdco Notes in connection with a Regulatory Event of Loss calculated in accordance with Section 13.2(c), (including without limitation, iii) either a reduction or an increase in Basic Lease Rent to reflect the principal amount, amortization and interest rates) rate on any Additional Lessor Notes issued pursuant to Section 2.12 of the Lease Indenture in connection with (A) a refinancing of the Notes pursuant to Section 12.2 of the Participation Agreement; (ii) the financing of Modifications to the Facility pursuant to Section 12.1 of the Participation Agreement (including without limitation the issuance of Additional Lessor Notes pursuant to Section 2.12 11.1 of the Participation Agreement or (B) a Supplemental Financing pursuant to Section 11.2 of the Participation Agreement, and (iv) a reduction in Basic Lease Indenture Rent (Equity Portion) in connection therewith) or (iii) the correction of any manifest error in the mathematical computation with a termination of the Adjustment Items. (b) In the event the Registration Statement is not effective or the Exchange Offer has not been consummated within 270 days Seven States Profits Interest, calculated pursuant to Section 11.4 of the Initial Purchaser's request therefor Participation Agreement. Any adjustments pursuant to this Section 3.4 shall be calculated in a manner to ensure that Basic Lease Rent payable hereunder is in an amount sufficient to (collectively, "Registration Delay"), 1) enable the Owner Lessor to pay the principal of and interest on the Facility Lessee will institute an alternative rent schedule Lessor Notes (the "Alternative Rent Schedule") after taking into account such Additional Lessor Notes issued pursuant to replace Schedules 1-A, 1-B and 1-C attached hereto and an alternative termination value schedule (the "Alternative Termination Value Schedule") to replace Schedule 2 attached hereto. The Alternative Rent Schedule will require amounts of Periodic Lease Rent during the Basic Lease Term ("Alternative Rent") to be paid that equal the sum Section 11.2 of the Periodic Lease Rent that would have been paid absent a Registration Delay Participation Agreement and an amount equal to the increased amounts paid pursuant to the refinancing of Lessor Notes because of the Registration Delay ("Additional Amount"). The Alternative Termination Value Schedule will reflect the increase on any Termination Date of such Additional Amount. The Alternative Rent Schedule will allocate the Additional Amount over the Basic Lease Term in accordance with the rules of Section 467 11.1 of the Code then Participation Agreement, as applicable) due and payable on each scheduled payment date in effect respect of such Lessor Note, and (2) preserve the return on and of the Equity Investment and, in the case of a Supplemental Financing, any Additional Equity Investment made pursuant to Section 11.2 of the Participation Agreement, as contemplated at the time the Equity Investment or Additional Equity Investment, if any, was made through the end of the Facility Lease Term calculated in a manner that preserves consistent with the Owner Participant's Expected Return. At the commencement of any Registration Delay, the Alternative Rent Schedule and Alternative Termination Value Schedule will be based on the assumption that the Additional Amount applies for the term initial calculation of the Notes. In the event the Additional Amount terminates prior to the term return on and of the Notes, such schedules will be revised to reflect the actual amounts of Additional Amount paid. It is the intent Equity Investment of the Owner Lessor and the Facility Lessee that Equity Investor, including as to the options set forth in this Section 3.5(b) constitute alternative rent schedules as contemplated under Treasury Regulation 1.467-l(h)(3)(v). (c) Any adjustments pursuant to this Section 3.5 shall be calculated (i) firstU.S. federal, to maintain state and local income tax consequences of the return on and of such investment and of the receipt of Basic Lease Rent and Supplemental Lease Rent by the Owner Participant's Expected Return, and (ii) second, at the option of the Facility Lessee, (A) to minimize the average annual Periodic Lease Rent over the Basic Lease Term Lessor for the Facility Lessee's GAAP accounting purposes, (B) to minimize to the extent possible, the net present value, discounted at the Discount Rate, compounded on a semi-annual basis to the date payment of the termination, of Periodic Lease Rent and/or (C) to maintain operating lease treatment for Shawville Facility Lease 6 the Facility Lessee; provided that no such adjustment shall require the Owner Participant to record a loss as of the date such adjustment is made or shall change the Owner Participant's book earnings for the year in which such adjustment is made and each of the succeeding four years by more than plus or minus 5% without the consent of the Owner Participant. (d) Anything herein or in any other Operative Document to the contrary notwithstanding, Periodic Lease Rent payable on any Rent Payment Date, whether or not adjusted in accordance with this Section 3.5, shall, in the aggregate, be in an amount at least sufficient to pay in full principal and interest payable on the Notes on such Rent Payment Date. Anything herein or in any other Operative Document to the contrary notwithstanding, Termination Values (excluding the Equity Portion of Termination Value) payable on any date under this Facility Lease, whether or not adjusted in accordance with this Section 3.5, shall in the aggregate, together with all other Rent amounts due and owing on such date, exclusive of any portion thereof that is an Excepted Payment, be in an amount at least sufficient to pay in full the principal of, premium (other than premium, if any, payable by the Owner Lessor pursuant to Section 14), if any, and accrued interest on the Notes payable on such date. (e) Notwithstanding anything herein to the contrary, the Facility Lessee shall be permitted to defer the Equity Portion of Periodic Lease Rent and the Equity Portion of Termination Value (under or the Equity Portion of a Qualifying Cash Bid) with respect to the Facility by such amounts and to such dates as shall be permitted under Section 5.4 of Lessor Notes or the Tax Indemnity AgreementLease Indenture; providedprovided that, that if Termination Value should become due in connection with an exercise any adjustments of remedies following a Basic Lease Event Rent (Equity Portion) made pursuant to Section 3.4(a)(iv), or any other adjustment of DefaultBasic Lease Rent thereafter, any such deferred Rent shall become due the amount sufficient to preserve the return on and payable. Termination Value of the Equity Investment under clause (2) above shall be adjusted the amount necessary to make principal and interest payments on the Southaven Holdco Notes. The adjustments contemplated by this Section 3.4 will result in corresponding adjustments to the extent required under Section 8 (f) of the Tax Indemnity AgreementTermination Values. (g) Any adjustment pursuant to this Section 3.5 shall initially be computed by the Owner Participant or the Equity Investor using the same method of computation, Tax Assumptions and Pricing Assumptions originally used (other than those that have changed as the result of the event giving rise to the adjustment3.4(a) in the calculation of the Adjustment Items as of the Closing Date, and shall be made subject to the verification procedure described in this Section 3.5(g) and in compliance with Section 467 of the Code (as in effect at the date of such adjustment), but only to the extent the original transaction complied therewith. Once computed, the results of such computation shall promptly be delivered by the Owner Participant to the Facility Lessee. Within 30 days after the receipt of the results of any such adjustment, the Facility Lessee may request that a nationally recognized firm of accountants or lease advisors selected by the Owner Participant and reasonably satisfactory to the Facility Lessee (the "Verifier"3.4(b) verify, on a confidential basis, after consultation with the Owner Participant and the Facility Lessee, the accuracy of such adjustment in accordance with this Section 3.5. The Owner Participant and the Facility Lessee hereby agree, subject to the execution by the Verifier of an appropriate confidentiality agreement, to provide the Verifier with all information and materials (other than the income tax returns or accounting records of the Equity Investor, the Equity Subsidiary Holding Company, the Equity Subsidiary or the Owner Participant) as shall be necessary in connection therewith. Each of the Owner Participant, the Owner Lessor, the Equity Investor and the Facility Lessee shall have the right to communicate with the Verifier and submit Shawville Facility Lease 7hereof.

Appears in 1 contract

Samples: Lease Purchase Agreement (Tennessee Valley Authority)

Adjustment of Lease Schedules. (a) Periodic The Facility Lessee and the Owner Lessor agree that Basic Lease Rent, Allocated Rent, Lessor Section 467 Loan Balance, Lessee Section 467 Loan Balance, Lessor Section 467 Interest, Lessee Section 467 Interest and Termination Value (collectively, the "Adjustment Items") Rent shall be adjustedadjusted after the Closing Date, either upward upwards or downwarddownwards, to reflect: reflect (i) the effect of any refunding or refinancing a reduction in Basic Lease Rent in connection with a partial termination of the Facility Lease Debt pursuant to Section 15 calculated in accordance with the second sentence of Section 3.2, (ii) a reduction in Basic Lease Rent in connection with the prepayment of one or more Equity Notes in connection with a Regulatory Event of Loss calculated in accordance with Section 13.2(c), and Notes (including without limitation, iii) either a reduction or an increase in Basic Lease Rent to reflect the principal amount, amortization and interest rates) rate on any Additional Lessor Notes issued pursuant to Section 2.12 of the Lease Indenture in connection with (A) a refinancing of the Notes pursuant to Section 12.2 of the Participation Agreement; (ii) the financing of Modifications to the Facility pursuant to Section 12.1 of the Participation Agreement (including without limitation the issuance of Additional Lessor Notes pursuant to Section 2.12 11.1 of the Lease Indenture in connection therewith) Participation Agreement or (iiiB) the correction of any manifest error in the mathematical computation a Supplemental Financing pursuant to Section 11.2 of the Adjustment ItemsParticipation Agreement. (b) In the event the Registration Statement Any adjustments pursuant to this Section 3.4 shall be calculated in a manner to ensure that Basic Lease Rent payable hereunder is not effective or the Exchange Offer has not been consummated within 270 days of the Initial Purchaser's request therefor (collectively, "Registration Delay"), in an amount sufficient to enable the Owner Lessor to pay the principal of and interest on the Facility Lessee will institute an alternative rent schedule Lessor Notes (the "Alternative Rent Schedule") after taking into account such Additional Lessor Notes issued pursuant to replace Schedules 1-A, 1-B and 1-C attached hereto and an alternative termination value schedule (the "Alternative Termination Value Schedule") to replace Schedule 2 attached hereto. The Alternative Rent Schedule will require amounts of Periodic Lease Rent during the Basic Lease Term ("Alternative Rent") to be paid that equal the sum Section 11.2 of the Periodic Lease Rent that would have been paid absent a Registration Delay Participation Agreement and an amount equal to the increased amounts paid pursuant to the refinancing of Lessor Notes because of the Registration Delay ("Additional Amount"). The Alternative Termination Value Schedule will reflect the increase on any Termination Date of such Additional Amount. The Alternative Rent Schedule will allocate the Additional Amount over the Basic Lease Term in accordance with the rules of Section 467 11.1 of the Code then Participation Agreement, as applicable) due and payable on each scheduled payment date in effect respect of such Lessor Note and to preserve the return on and of the Equity Investment and, in the case of a Supplemental Financing, any Additional Equity Investment made pursuant to Section 11.2 of the Participation Agreement, as contemplated at the time the Equity Investment or Additional Equity Investment, if any, was made through the end of the Facility Lease Term calculated in a manner that preserves consistent with the Owner Participant's Expected Return. At the commencement of any Registration Delay, the Alternative Rent Schedule and Alternative Termination Value Schedule will be based on the assumption that the Additional Amount applies for the term initial calculation of the Notes. In the event the Additional Amount terminates prior to the term return on and of the Notes, such schedules will be revised to reflect the actual amounts of Additional Amount paid. It is the intent Equity Investment of the Owner Lessor and the Facility Lessee that Equity Investor, including as to the options set forth in this Section 3.5(b) constitute alternative rent schedules as contemplated under Treasury Regulation 1.467-l(h)(3)(v). (c) Any adjustments pursuant to this Section 3.5 shall be calculated (i) firstU.S. federal, to maintain state and local income tax consequences of the return on and of such investment and of the receipt of Basic Lease Rent and Supplemental Lease Rent by the Owner Participant's Expected Return, and (ii) second, at the option of the Facility Lessee, (A) to minimize the average annual Periodic Lease Rent over the Basic Lease Term Lessor for the Facility Lessee's GAAP accounting purposes, (B) to minimize to the extent possible, the net present value, discounted at the Discount Rate, compounded on a semi-annual basis to the date payment of the termination, of Periodic Lease Rent and/or (C) to maintain operating lease treatment for Shawville Facility Lease 6 the Facility Lessee; provided that no such adjustment shall require the Owner Participant to record a loss as of the date such adjustment is made or shall change the Owner Participant's book earnings for the year in which such adjustment is made and each of the succeeding four years by more than plus or minus 5% without the consent of the Owner Participant. (d) Anything herein or in any other Operative Document to the contrary notwithstanding, Periodic Lease Rent payable on any Rent Payment Date, whether or not adjusted in accordance with this Section 3.5, shall, in the aggregate, be in an amount at least sufficient to pay in full principal and interest payable on the Notes on such Rent Payment Date. Anything herein or in any other Operative Document to the contrary notwithstanding, Termination Values (excluding the Equity Portion of Termination Value) payable on any date under this Facility Lease, whether or not adjusted in accordance with this Section 3.5, shall in the aggregate, together with all other Rent amounts due and owing on such date, exclusive of any portion thereof that is an Excepted Payment, be in an amount at least sufficient to pay in full the principal of, premium (other than premium, if any, payable by the Owner Lessor pursuant to Section 14), if any, and accrued interest on the Notes payable on such date. (e) Notwithstanding anything herein to the contrary, the Facility Lessee shall be permitted to defer the Equity Portion of Periodic Lease Rent and the Equity Portion of Termination Value (under or the Equity Portion of a Qualifying Cash Bid) with respect to the Facility Lessor Notes or the Lease Indenture. The adjustments contemplated by such amounts and to such dates as shall be permitted under this Section 5.4 of the Tax Indemnity Agreement; provided, that if Termination Value should become due 3.4 will result in connection with an exercise of remedies following a Lease Event of Default, any such deferred Rent shall become due and payable. Termination Value shall be adjusted corresponding adjustments to the extent required under Section 8 (f) of the Tax Indemnity AgreementTermination Values. (g) Any adjustment pursuant to this Section 3.5 shall initially be computed by the Owner Participant or the Equity Investor using the same method of computation, Tax Assumptions and Pricing Assumptions originally used (other than those that have changed as the result of the event giving rise to the adjustment3.4(a) in the calculation of the Adjustment Items as of the Closing Date, and shall be made subject to the verification procedure described in this Section 3.5(g) and in compliance with Section 467 of the Code (as in effect at the date of such adjustment), but only to the extent the original transaction complied therewith. Once computed, the results of such computation shall promptly be delivered by the Owner Participant to the Facility Lessee. Within 30 days after the receipt of the results of any such adjustment, the Facility Lessee may request that a nationally recognized firm of accountants or lease advisors selected by the Owner Participant and reasonably satisfactory to the Facility Lessee (the "Verifier"3.4(b) verify, on a confidential basis, after consultation with the Owner Participant and the Facility Lessee, the accuracy of such adjustment in accordance with this Section 3.5. The Owner Participant and the Facility Lessee hereby agree, subject to the execution by the Verifier of an appropriate confidentiality agreement, to provide the Verifier with all information and materials (other than the income tax returns or accounting records of the Equity Investor, the Equity Subsidiary Holding Company, the Equity Subsidiary or the Owner Participant) as shall be necessary in connection therewith. Each of the Owner Participant, the Owner Lessor, the Equity Investor and the Facility Lessee shall have the right to communicate with the Verifier and submit Shawville Facility Lease 7hereof.

Appears in 1 contract

Samples: Facility Lease Purchase Agreement (Tennessee Valley Authority)

Adjustment of Lease Schedules. (a) Periodic The Lessee and the Owner Lessor agree that Basic Lease Rent, Allocated Rent, Lessor Section 467 Loan Balance, Lessee Section 467 Loan Balance, Lessor Section 467 Interest, Lessee Section 467 Interest and Termination Value (collectively, the "Adjustment Items") Rent shall be adjustedadjusted after the Closing Date, either upward upwards or downwarddownwards, to reflect: (i) the effect of any refunding or refinancing of the Lease Debt and Notes (including without limitation, reflect the principal amount, amortization and interest rates) rate on any Additional Lessor Notes issued pursuant to Section 2.12 of the Lease Indenture in connection with a refinancing of the Notes Lessor Note pursuant to Section 12.2 11.1 or 11.2 of the Participation Agreement; (ii) the financing of Modifications , provided that in connection with an adjustment relating to the Facility a refinancing pursuant to Section 12.1 of 11.2, the Participation Agreement (including without limitation adjustment shall reflect only the issuance of interest rate on such Additional Lessor Notes pursuant to Section 2.12 of Notes. To the Lease Indenture in connection therewith) or (iii) the correction of any manifest error in the mathematical computation of the Adjustment Items. (b) In the event the Registration Statement is extent not effective or the Exchange Offer has not been consummated within 270 days of the Initial Purchaser's request therefor (collectively, "Registration Delay"), the Owner Lessor and the Facility Lessee will institute an alternative rent schedule (the "Alternative Rent Schedule") to replace Schedules 1-A, 1-B and 1-C attached hereto and an alternative termination value schedule (the "Alternative Termination Value Schedule") to replace Schedule 2 attached hereto. The Alternative Rent Schedule will require amounts of Periodic Lease Rent during the Basic Lease Term ("Alternative Rent") to be paid that equal the sum of the Periodic Lease Rent that would have been paid absent a Registration Delay and an amount equal to the increased amounts paid pursuant to the Notes because of the Registration Delay ("Additional Amount"). The Alternative Termination Value Schedule will reflect the increase on any Termination Date of such Additional Amount. The Alternative Rent Schedule will allocate the Additional Amount over the Basic Lease Term in accordance inconsistent with the rules of Section 467 of the Code then in effect and in a manner that preserves the Owner Participant's Expected Return. At the commencement of prior sentence, any Registration Delay, the Alternative Rent Schedule and Alternative Termination Value Schedule will be based on the assumption that the Additional Amount applies for the term of the Notes. In the event the Additional Amount terminates prior to the term of the Notes, such schedules will be revised to reflect the actual amounts of Additional Amount paid. It is the intent of the Owner Lessor and the Facility Lessee that the options set forth in this Section 3.5(b) constitute alternative rent schedules as contemplated under Treasury Regulation 1.467-l(h)(3)(v). (c) Any adjustments pursuant to this Section 3.5 3.4(a) shall be calculated (i) first, to maintain preserve the Owner Participant's Expected Return, and ’s Net Economic Return through the end of the Network Lease Term; (ii) second, at the option of the Facility Lesseeconsistent with (i), (A) to minimize the average annual Periodic Lease Rent over present value to the Lessee of the Basic Lease Term for Rent; and (iii) third, to be consistent with any uneven rent safe harbor provided under Section 467 of the Facility Lessee's GAAP accounting purposesCode and the Treasury Regulations promulgated thereunder, (B) to minimize but only to the extent possiblethat Basic Lease Rent prior to such adjustment was so consistent (other than, the net present value, discounted at the Discount Rate, compounded on a semi-annual basis with respect to the date of the termination, of Periodic Lease Rent and/or (C) to maintain operating lease treatment for Shawville Facility Lease 6 the Facility Lessee; provided that no such adjustment shall require the Owner Participant to record a loss as of the date such adjustment is made or shall change the Owner Participant's book earnings for the year in which such adjustment is made and each of the succeeding four years by more than plus or minus 5% without the consent of the Owner Participant. (d) Anything herein or in any other Operative Document to the contrary notwithstanding, Periodic Lease Rent payable on any Rent Payment Date, whether or not adjusted in accordance with this Section 3.5, shall, in the aggregate, be in an amount at least sufficient to pay in full principal and interest payable limitation on the Notes on such Rent Payment Date. Anything herein or in any other Operative Document to criterion established by this clause (iii), if there shall have occurred a Tax Law Change), thereby not increasing the contrary notwithstanding, Termination Values (excluding the Equity Portion of Termination Value) payable on any date under this Facility Lease, whether or not adjusted in accordance with this Section 3.5, shall in the aggregate, together with all other Rent due and owing on such date, exclusive of any portion thereof that is an Excepted Payment, be in an amount at least sufficient to pay in full the principal of, premium (other than premiumpossibility, if any, payable by of the Owner Lessor pursuant Network Lease being determined to be a “disqualified leaseback or long term agreement” within the meaning of Section 14), if any, and accrued interest on 467 of the Notes payable on such date. (e) Notwithstanding anything herein to the contrary, the Facility Lessee shall be permitted to defer the Equity Portion of Periodic Lease Rent Code and the Equity Portion of Termination Value (or the Equity Portion of a Qualifying Cash Bid) with respect to the Facility by such amounts and to such dates as shall Treasury Regulations thereunder. Adjustments will be permitted under Section 5.4 of the Tax Indemnity Agreement; provided, that if Termination Value should become due in connection with an exercise of remedies following a Lease Event of Default, any such deferred Rent shall become due and payable. Termination Value shall be adjusted to the extent required under Section 8 (f) of the Tax Indemnity Agreement. (g) Any adjustment pursuant to this Section 3.5 shall initially be computed by the Owner Participant or the Equity Investor made using the same method of computation, Tax Assumptions computation originally used in the calculation of the Basic Lease Rent and the Pricing Assumptions originally used as set forth on Schedule 3 hereto (other than those that have changed as the result of the event giving rise to the adjustment). The adjustments contemplated by this Section 3.4(a) will result in corresponding adjustments to the calculation of the Adjustment Items as of the Closing Date, and Termination Values. Any adjustment pursuant to this Section 3.4(a) shall be made subject to the verification procedure described in this Section 3.5(g) and in compliance with Section 467 of the Code Sections 3.4(c) and (as in effect at the date of such adjustment), but only to the extent the original transaction complied therewith. Once computed, the results of such computation shall promptly be delivered by the Owner Participant to the Facility Lessee. Within 30 days after the receipt of the results of any such adjustment, the Facility Lessee may request that a nationally recognized firm of accountants or lease advisors selected by the Owner Participant and reasonably satisfactory to the Facility Lessee (the "Verifier"d) verify, on a confidential basis, after consultation with the Owner Participant and the Facility Lessee, the accuracy of such adjustment in accordance with this Section 3.5. The Owner Participant and the Facility Lessee hereby agree, subject to the execution by the Verifier of an appropriate confidentiality agreement, to provide the Verifier with all information and materials (other than the income tax returns or accounting records of the Equity Investor, the Equity Subsidiary Holding Company, the Equity Subsidiary or the Owner Participant) as shall be necessary in connection therewith. Each of the Owner Participant, the Owner Lessor, the Equity Investor and the Facility Lessee shall have the right to communicate with the Verifier and submit Shawville Facility Lease 7hereof.

Appears in 1 contract

Samples: Network Lease Agreement (Tennessee Valley Authority)

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Adjustment of Lease Schedules. (a) Periodic The Facility Lessee and the Owner Lessor agree that Basic Lease Rent, Allocated Rent, Lessor Section 467 Loan Balance, Lessee Section 467 Loan Balance, Lessor Section 467 Interest, Lessee Section 467 Interest and Termination Value (collectively, the "Adjustment Items") Rent shall be adjustedadjusted after the Closing Date, either upward upwards or downwarddownwards, to reflect: reflect (i) the effect of any refunding or refinancing a reduction in Basic Lease Rent in connection with a partial termination of the Facility Lease Debt pursuant to Section 15 calculated in accordance with the second sentence of Section 3.2, (ii) a reduction in Basic Lease Rent in connection with the prepayment of one or more Equity Notes in connection with a Regulatory Event of Loss calculated in accordance with Section 13.2(c), and Notes (including without limitation, iii) either a reduction or an increase in Basic Lease Rent to reflect the principal amount, amortization and interest rates) rate on any Additional Lessor Notes issued pursuant to Section 2.12 of the Lease Indenture in connection with (A) a refinancing of the Notes pursuant to Section 12.2 of the Participation Agreement; (ii) the financing of Modifications to the Facility pursuant to Section 12.1 of the Participation Agreement (including without limitation the issuance of Additional Lessor Notes pursuant to Section 2.12 11.1 of the Lease Indenture in connection therewith) Participation Agreement or (iiiB) the correction of any manifest error in the mathematical computation a Supplemental Financing pursuant to Section 11.2 of the Adjustment ItemsParticipation Agreement. (b) In the event the Registration Statement Any 3 adjustments pursuant to this Section 3.4 shall be calculated in a manner to ensure that Basic Lease Rent payable hereunder is not effective or the Exchange Offer has not been consummated within 270 days of the Initial Purchaser's request therefor (collectively, "Registration Delay"), in an amount sufficient to enable the Owner Lessor to pay the principal of and interest on the Facility Lessee will institute an alternative rent schedule Lessor Notes (the "Alternative Rent Schedule") after taking into account such Additional Lessor Notes issued pursuant to replace Schedules 1-A, 1-B and 1-C attached hereto and an alternative termination value schedule (the "Alternative Termination Value Schedule") to replace Schedule 2 attached hereto. The Alternative Rent Schedule will require amounts of Periodic Lease Rent during the Basic Lease Term ("Alternative Rent") to be paid that equal the sum Section 11.2 of the Periodic Lease Rent that would have been paid absent a Registration Delay Participation Agreement and an amount equal to the increased amounts paid pursuant to the refinancing of Lessor Notes because of the Registration Delay ("Additional Amount"). The Alternative Termination Value Schedule will reflect the increase on any Termination Date of such Additional Amount. The Alternative Rent Schedule will allocate the Additional Amount over the Basic Lease Term in accordance with the rules of Section 467 11.1 of the Code then Participation Agreement, as applicable) due and payable on each scheduled payment date in effect respect of such Lessor Note and to preserve the return on and of the Equity Investment and, in the case of a Supplemental Financing, any Additional Equity Investment made pursuant to Section 11.2 of the Participation Agreement, as contemplated at the time the Equity Investment or Additional Equity Investment, if any, was made through the end of the Facility Lease Term calculated in a manner that preserves consistent with the Owner Participant's Expected Return. At the commencement of any Registration Delay, the Alternative Rent Schedule and Alternative Termination Value Schedule will be based on the assumption that the Additional Amount applies for the term initial calculation of the Notes. In the event the Additional Amount terminates prior to the term return on and of the Notes, such schedules will be revised to reflect the actual amounts of Additional Amount paid. It is the intent Equity Investment of the Owner Lessor and the Facility Lessee that Equity Investor, including as to the options set forth in U.S. federal, state and local income tax consequences of the return on and of such investment and of the receipt of Basic Lease Rent and Supplemental Lease Rent by the Owner Lessor for the payment of amounts due and payable by the Owner Lessor under or with respect to the Lessor Notes or the Lease Indenture. The adjustments contemplated by this Section 3.5(b) constitute alternative rent schedules as contemplated under Treasury Regulation 1.467-l(h)(3)(v)3.4 will result in corresponding adjustments to the Termination Values. (c) Any adjustments adjustment pursuant to this Section 3.5 3.4(a) shall be calculated (imade subject to and in compliance with Section 3.4(b) first, to maintain the Owner Participant's Expected Return, and (ii) second, at the option of the Facility Lessee, (A) to minimize the average annual Periodic Lease Rent over the Basic Lease Term for the Facility Lessee's GAAP accounting purposes, (B) to minimize to the extent possible, the net present value, discounted at the Discount Rate, compounded on a semi-annual basis to the date of the termination, of Periodic Lease Rent and/or (C) to maintain operating lease treatment for Shawville Facility Lease 6 the Facility Lessee; provided that no such adjustment shall require the Owner Participant to record a loss as of the date such adjustment is made or shall change the Owner Participant's book earnings for the year in which such adjustment is made and each of the succeeding four years by more than plus or minus 5% without the consent of the Owner Participanthereof. (db) Anything herein or in any other Operative Transaction Document to the contrary notwithstanding, Periodic Basic Lease Rent payable on any Rent Payment Date, whether or not adjusted in accordance with this Section 3.53.4, shall, in the aggregate, be in an amount at least sufficient to pay in full the scheduled principal of and interest payable payments on the Lessor Notes on such Rent Payment Date, other than any such scheduled principal of and interest payments on the Lessor Notes to the extent paid from the Construction Period Financing Account pursuant to Section 2.17 of the Lease Indenture. Anything herein or in any other Operative Transaction Document to the contrary notwithstanding, Termination Values (excluding the Equity Portion of Termination Value) payable on any date under this Facility Lease, whether or not adjusted in accordance with this Section 3.53.4, shall in the aggregateshall, together with all other Basic Lease Rent due and owing on such date, exclusive of any portion thereof that is an Excepted Payment, be in an amount at least sufficient to pay in full the principal of, premium (other than premium, if any, payable by the Owner Lessor pursuant to Section 14), if any, and accrued interest on on, the Lessor Notes payable on such date. (e) Notwithstanding anything herein to the contrary, the Facility Lessee shall be permitted to defer the Equity Portion of Periodic Lease Rent and the Equity Portion of Termination Value (or the Equity Portion of a Qualifying Cash Bid) with respect to the Facility by such amounts and to such dates as shall be permitted under Section 5.4 of the Tax Indemnity Agreement; provided, that if Termination Value should become due in connection with an exercise of remedies following a Lease Event of Default, any such deferred Rent shall become due and payable. Termination Value shall be adjusted to the extent required under Section 8 (f) of the Tax Indemnity Agreement. (gc) Any adjustment pursuant to this Section 3.5 3.4 shall initially be computed by the Owner Participant or the Equity Investor using the same method of computationFacility Lessee, Tax Assumptions and Pricing Assumptions originally used (other than those that have changed as the result of the event giving rise to the adjustment) in the calculation of the Adjustment Items as of the Closing Date, and shall be subject to the verification procedure described in this Section 3.5(g) and in compliance with Section 467 of the Code (as in effect at the date of such adjustment3.4(c), but only to the extent the original transaction complied therewith. Once computed, the results of such computation shall promptly be delivered by the Owner Participant Facility Lessee to the Facility LesseeOwner Lessor. Within 30 20 days after the receipt of the results of any such adjustment, the Facility Lessee Owner Lessor may request that a nationally recognized firm of independent public accountants (which firm shall not be the primary accountants for the Facility Lessee, the Owner Lessor, the Equity Investor or lease advisors the Lease Indenture Trustee) jointly selected by the Owner Participant Lessor and reasonably satisfactory to the Facility Lessee (the "Verifier") verify, on a confidential basis, after consultation with the Owner Participant Lessor and the Facility Lessee, the accuracy of such adjustment in accordance with this Section 3.53.4. The Owner Participant Lessor and the Facility Lessee hereby agree, subject to the execution by the Verifier of an appropriate confidentiality agreement, to provide the Verifier with all information and materials (other than the income tax returns or accounting records of the Equity Investor, the Equity Subsidiary Holding Company, the Equity Subsidiary or the Owner Participantreturns) as shall be necessary in connection therewith. Each of If the Verifier confirms that such adjustment is in accordance with this Section 3.4, it shall so certify to the Facility Lessee and the Owner ParticipantLessor and such certification shall be final, binding and conclusive on the Facility Lessee, the Owner LessorLessor and the Equity Investor. If the Verifier concludes that such adjustment is not in accordance with this Section 3.4, and the adjustments to 4 Basic Lease Rent or Termination Value calculated by the Verifier are different from those calculated by the Facility Lessee, then it shall so certify to the Facility Lessee and the Owner Lessor and the Verifier's calculation shall be final, binding and conclusive on the Facility Lessee, the Owner Lessor and the Equity Investor and Investor. If the Owner Lessor does not request verification of any adjustment within the period specified above, the computation provided by the Facility Lessee shall have be final, binding and conclusive on the right Facility Lessee, the Owner Lessor and the Equity Investor. The final determination of any adjustment hereunder shall be set forth in an amendment to communicate with this Facility Lease, executed and delivered by the Owner Lessor and the Facility Lessee; provided, however, that any omission to execute and deliver such amendment shall not affect the validity and effectiveness of any such adjustment. The reasonable fees, costs and expenses of the Verifier in verifying an adjustment pursuant to this Section 3.4 shall be paid by the Facility Lessee. Notwithstanding anything herein to the contrary, the sole responsibility of the Verifier shall be to verify the calculations hereunder and submit Shawville matters of interpretation of this Facility Lease 7or any other Transaction Document shall not be within the scope of the Verifier's responsibilities. Section 3.5

Appears in 1 contract

Samples: Lease Purchase Agreement

Adjustment of Lease Schedules. (a) The Facility Lessee and the Owner Lessor agree that Periodic Lease Rent, Allocated Rent, Lessor Proportional Rent, Section 467 Loan Balance, Lessee Section 467 Loan Balance, Lessor Section 467 Interest, Lessee Section 467 Interest and Termination Value (collectively, Values payable with respect to the "Adjustment Items") Undivided Interest shall be adjusted, either upward upwards or downwarddownwards, to reflect: reflect (i) the effect of any refunding or refinancing of the Lease Debt and Notes (including without limitation, the principal amount, amortization and interest rates) rate on any Additional Lessor Notes issued pursuant to Section 2.12 of the Lease Indenture in connection with a refinancing of the Notes Lessor Note pursuant to Section 12.2 13.2 of the Participation Agreement; , and (ii) the financing of Modifications to the Facility pursuant to Section 12.1 of the Participation Agreement (including without limitation the issuance of Additional Lessor Notes pursuant to Section 2.12 of the Lease Indenture in connection therewith) or (iii) with the correction financing of any manifest error in Modifications to the mathematical computation Facility pursuant to Section 13.1 of the Adjustment ItemsParticipation Agreement. (b) In the event the Registration Statement is not effective or the Exchange Offer has not been consummated within 270 days of the Initial Purchaser's request therefor (collectively, "Registration Delay"), the Owner Lessor and the Facility Lessee will institute an alternative rent schedule (the "Alternative Rent Schedule") to replace Schedules 1-A, 1-B and 1-C attached hereto and an alternative termination value schedule (the "Alternative Termination Value Schedule") to replace Schedule 2 attached hereto. The Alternative Rent Schedule will require amounts of Periodic Lease Rent during the Basic Lease Term ("Alternative Rent") to be paid that equal the sum of the Periodic Lease Rent that would have been paid absent a Registration Delay and an amount equal to the increased amounts paid pursuant to the Notes because of the Registration Delay ("Additional Amount"). The Alternative Termination Value Schedule will reflect the increase on any Termination Date of such Additional Amount. The Alternative Rent Schedule will allocate the Additional Amount over the Basic Lease Term in accordance with the rules of Section 467 of the Code then in effect and in a manner that preserves the Owner Participant's Expected Return. At the commencement of any Registration Delay, the Alternative Rent Schedule and Alternative Termination Value Schedule will be based on the assumption that the Additional Amount applies for the term of the Notes. In the event the Additional Amount terminates prior to the term of the Notes, such schedules will be revised to reflect the actual amounts of Additional Amount paid. It is the intent of the Owner Lessor and the Facility Lessee that the options set forth in this Section 3.5(b) constitute alternative rent schedules as contemplated under Treasury Regulation 1.467-l(h)(3)(v). (c) Any adjustments pursuant to this Section 3.5 shall be calculated (i) first, to maintain preserve the Owner Participant's Expected Net Economic Return through the end of the Fixed Lease Term; provided, however, that to the extent consistent with preserving the Owner Participant's Net Economic Return, and (ii) second, all adjustments shall at the option of the Facility Lessee, Lessee be calculated to (Ax) to minimize the average annual Periodic Lease Rent over the Basic Fixed Lease Term for the Facility Lessee's GAAP accounting purposes, purposes and/or (By) to minimize the present value to the extent possible, the net present value, discounted at the Discount Rate, compounded on a semi-annual basis to the date Facility Lessee of the termination, of Periodic Lease Rent and/or (C) to maintain operating lease treatment for Shawville Facility Lease 6 the Facility LesseeRent; provided provided, that no such adjustment shall require the Owner Participant to record a loss as of the date such adjustment is made or shall change the such Owner Participant's book earnings for the year in which such adjustment is made and each of the succeeding four years by more than plus or minus 5% without the consent of the Owner Participant+/-5%. (d) Anything herein or in any other Operative Document to the contrary notwithstanding, Periodic Lease Rent payable on any Rent Payment Date, whether or not adjusted in accordance with this Section 3.5, shall, in the aggregate, Adjustments will be in an amount at least sufficient to pay in full principal and interest payable on the Notes on such Rent Payment Date. Anything herein or in any other Operative Document to the contrary notwithstanding, Termination Values (excluding the Equity Portion of Termination Value) payable on any date under this Facility Lease, whether or not adjusted in accordance with this Section 3.5, shall in the aggregate, together with all other Rent due and owing on such date, exclusive of any portion thereof that is an Excepted Payment, be in an amount at least sufficient to pay in full the principal of, premium (other than premium, if any, payable by the Owner Lessor pursuant to Section 14), if any, and accrued interest on the Notes payable on such date. (e) Notwithstanding anything herein to the contrary, the Facility Lessee shall be permitted to defer the Equity Portion of Periodic Lease Rent and the Equity Portion of Termination Value (or the Equity Portion of a Qualifying Cash Bid) with respect to the Facility by such amounts and to such dates as shall be permitted under Section 5.4 of the Tax Indemnity Agreement; provided, that if Termination Value should become due in connection with an exercise of remedies following a Lease Event of Default, any such deferred Rent shall become due and payable. Termination Value shall be adjusted to the extent required under Section 8 (f) of the Tax Indemnity Agreement. (g) Any adjustment pursuant to this Section 3.5 shall initially be computed by the Owner Participant or the Equity Investor made using the same method of computation, Tax Assumptions computation and Pricing Assumptions assumptions originally used (other than those that have changed as the result of the event giving rise to the adjustment) in the calculation of the Adjustment Items as of the Closing Date, and shall be subject to the verification procedure described in Periodic Lease Rent. The adjustments contemplated by this Section 3.5(g) and 3.5 will result in compliance with corresponding adjustments to Allocated Rent, Proportional Rent, Section 467 of the Code (as in effect at the date of such adjustment)Loan Balances, but only to the extent the original transaction complied therewith. Once computed, the results of such computation shall promptly be delivered by the Owner Participant to the Facility Lessee. Within 30 days after the receipt of the results of any such adjustment, the Facility Lessee may request that a nationally recognized firm of accountants or lease advisors selected by the Owner Participant Section 467 Interest and reasonably satisfactory to the Facility Lessee (the "Verifier") verify, on a confidential basis, after consultation with the Owner Participant and the Facility Lessee, the accuracy of such adjustment in accordance with this Section 3.5. The Owner Participant and the Facility Lessee hereby agree, subject to the execution by the Verifier of an appropriate confidentiality agreement, to provide the Verifier with all information and materials (other than the income tax returns or accounting records of the Equity Investor, the Equity Subsidiary Holding Company, the Equity Subsidiary or the Owner Participant) as shall be necessary in connection therewith. Each of the Owner Participant, the Owner Lessor, the Equity Investor and the Facility Lessee shall have the right to communicate with the Verifier and submit Shawville Facility Lease 7Termination Values.

Appears in 1 contract

Samples: Facility Lease Agreement (PPL Montana LLC)

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