Common use of Application of Buy-Down Amounts Clause in Contracts

Application of Buy-Down Amounts. (a) All Buy-Down Amounts shall be deposited into a separate account maintained by the Depositary Bank on behalf of the Collateral Agent pending application in accordance with the remaining provisions of this Section 4.3. Subject to the remaining provisions of this Section 4.3, the Collateral Agent shall apply the amounts in such separate account to the payment, or reimbursement to the extent the same have been paid or satisfied by the Company, of the costs of modification, repair and replacement of that portion of the Facility that requires modification, repair or replacement in order to remedy the circumstances giving rise to the obligation of the Contractor to pay such Buy-Down Amounts. (b) The Collateral Agent is hereby authorized to disburse from such separate account the amount required to be paid for the modification, repair or replacement of that portion of the Facility that requires modification, repair or replacement in order to remedy the circumstances giving rise to the obligation of the Contractor to pay such Buy-Down Amounts as specified in Section 4.3(a). The Collateral Agent is hereby authorized and directed to issue its checks or transfer funds electronically for each disbursement from such separate account, but shall not be required to do so until at least one Business Day after receipt of a Performance Enhancement Certificate signed by an Authorized Representative of the Company and approved by the Independent Engineer. The Collateral Agent shall be entitled to rely on all certifications and statements in such Performance Enhancement Certificate. The Collateral Agent shall keep and maintain adequate records pertaining to such separate account and all disbursements therefrom and shall file an accounting thereof with the Company and the Independent Engineer within three months following the last business day of each Fiscal Year. Upon receipt of an Officer's Certificate of the Company, confirmed by the Independent Engineer, certifying that all modifications, repairs or replacements of that portion of the Facility that requires modification, repair or replacement in order to remedy the circumstances giving rise to the obligation of the Contractor to pay Buy-Down Amounts have been completed, the Collateral Agent shall transfer all funds remaining in such separate account to the Revenue Account for application in accordance with Section 3.10(b); PROVIDED, that if such funds or a portion thereof are deposited in the Distribution Account in accordance with Section 3.10(b) eleventh, the provisions of Section 3.14(b)(iv) and (v) shall not apply in respect of such funds. (c) As soon as reasonably practicable following receipt by the Company or the Collateral Agent of Buy-Down Amounts, the Company shall make a reasonable good faith determination as to whether (i) it is technically feasible to modify, repair or replace that portion of the Facility that requires modification, repair or replacement in order to remedy the circumstances giving rise to the obligation of the Contractor to pay such Buy-Down Amounts, (ii) the Buy-Down Amounts, together with any other amounts that are available to the Company for such modification, repair or replacement, are sufficient to permit such modification, repair or replacement, including the making of all required payments of interest and principal on the Company's Debt during such modification, repair or replacement, (iii) the projected average Senior Debt Service Coverage Ratio (after giving effect to such modification, repair or replacement and the application of the Buy-Down Amounts to accomplish the same) during the PPA Term (taken as one period) and the Post-PPA Period (taken as one period) is equal to or greater than the projected average Senior Debt Service Coverage Ratio set forth in the base case projections for each such period set forth in the final offering circular dated on or before the Closing Date relating to the Bonds and (iv) the projected minimum Senior Debt Service Coverage Ratio (after giving effect to such modification, repair or replacement and the application of the Buy-Down Amounts to accomplish the same) during the PPA Term and the Post-PPA Period is equal to or greater than the projected minimum Senior Debt Service Coverage Ratio set forth in the base case projections for each such period set forth in the final offering circular dated on or before the Closing Date relating to the Bonds. The determination of the Company shall be evidenced by an Officer's Certificate (together with such supporting detail as the Collateral Agent or the Independent Engineer may reasonably request) filed with the Collateral Agent which, in the event the Company determines that such portion of the Facility can be modified, repaired or replaced and that the other statements set forth in clauses (ii)-(iv) of this Section 4.3(c) are true, shall also set forth a reasonable good faith estimate by the Company of the total cost of such modification, repair or replacement. The Company shall deliver to the Collateral Agent at the time it delivers the Officer's Certificate referred to above a certificate of the Independent Engineer, dated the date of the Officer's Certificate, stating that, based upon reasonable investigation and review of the determinations, assumptions, conclusions and estimates of costs made by the Company, the Independent Engineer believes the determinations, assumptions, conclusions and estimates of costs set forth in the Officer's Certificate to be reasonable. (d) If the Company cannot provide the Officer's Certificate referred to in Section 4.3(c) to permit the application of Buy-Down Amounts toward the modification, repair or replacement of that portion of the Facility or the Independent Engineer fails to confirm such Officer's Certificate as required by Section 4.3(c), all of the Buy-Down Amounts received by the Company or the Collateral Agent shall be distributed in accordance with Section 4.3(e). (e) All Buy-Down Amounts to be distributed pursuant to this Section 4.3(e) shall be distributed by the Collateral Agent, ratably (based on the amount owing to the specified recipient), to (i) the Trustee in respect of the amount of the Outstanding Bonds for redemption of Bonds in accordance with the Indenture, (ii) the DSR LOC Provider in respect of the outstanding amount of DSR LOC Loans, DSR LOC Term Loans or DSR LOC Bonds and (iii) the PPA LOC Provider in respect of the outstanding amount of any PPA LOC Loans. (f) At the time the Collateral Agent is to make a distribution pursuant to Section 4.3(e), the Collateral Agent shall deposit into a separate trust account to be maintained by the Collateral Agent an amount up to the amount available to be drawn under the DSR Letter of Credit (taking into account, without duplication, in the case of the DSR Letter of Credit, the maximum amount which may become available to be drawn in the future by reason of an increase in the DSRA Required Balance), and not represented by a DSR LOC Loan, DSR LOC Term Loan or DSR Bond; PROVIDED, HOWEVER, that if funds available are insufficient to make all payments required under Section 4.2(a) paragraph SECOND and the required deposits provided for in this sentence, distribution of funds shall be made ratably to the specified recipients. The Collateral Agent shall hold the funds in such separate account until receipt of a written notice or notices from the DSR LOC Provider (which such notice or notices shall be contemporaneously delivered by the DSR LOC Provider to the other Senior Parties) executed by an Authorized Representative of the DSR LOC Provider to the effect that either (i) the Collateral Agent has made a drawing on the DSR Letter of Credit or (ii) the DSR Letter of Credit has expired or terminated without a drawing being made thereunder. Upon receipt of a notice specified in clause (i) above, the Collateral Agent shall distribute to the DSR LOC Provider that proportionate share of the amount in the relevant separate account referred to above, equal to such drawing's proportionate share of the DSR Letter of Credit collateralized by such account. Upon receipt of a notice specified in clause (ii) above, the Collateral Agent shall distribute from the relevant separate account to the Trustee an amount equal to the amount in such separate account. (g) At the time the Collateral Agent is to make a distribution pursuant to Section 4.3(e), the Collateral Agent shall deposit into a separate trust account to be maintained by the Collateral Agent an amount available to be drawn under the PPA Letter of Credit (and not represented by a PPA LOC Loan); PROVIDED, HOWEVER, that if funds available are insufficient to make all payments required under Section 4.2(a) paragraph SECOND and the required deposits provided for in this sentence, distribution of funds shall be made ratably to the specified recipients. The Collateral Agent shall hold the funds in such separate account until receipt of a written notice or notices from the PPA LOC Provider (which such notice or notices shall be contemporaneously delivered by the PPA LOC Provider to the other Senior Parties) executed by an Authorized Representative of the PPA LOC Provider to the effect that either (i) the Collateral Agent has made a drawing on the PPA Letter of Credit or (ii) the PPA Letter of Credit has expired or terminated without a drawing being made thereunder. Upon receipt of a notice specified in clause (i) above, the Collateral Agent shall distribute to the PPA LOC Provider that proportionate share of the amount in the relevant separate account referred to above, equal to such drawing's proportionate share of the PPA Letter of Credit collateralized by such account. Upon receipt of a notice specified in clause (ii) above, the Collateral Agent shall distribute from the relevant separate account to the Trustee an amount equal to the amount in such separate account.

Appears in 1 contract

Sources: Collateral Agency and Intercreditor Agreement (Aes Red Oak LLC)

Application of Buy-Down Amounts. (a) All Buy-Down Amounts shall be deposited into a separate account maintained by the Depositary Bank on behalf of the Collateral Agent pending application in accordance with the remaining provisions of this Section 4.3. Subject to the remaining provisions of this Section 4.3, the Collateral Agent shall apply the amounts in such separate account to the payment, or reimbursement to the extent the same have been paid or satisfied by the Company, of the costs of modification, repair and replacement of that portion of the Facility that requires modification, repair or replacement in order to remedy the circumstances giving rise to the obligation of the Contractor to pay such Buy-Down Amounts. (b) The Collateral Agent is hereby authorized to disburse from such separate account the amount required to be paid for the modification, repair or replacement of that portion of the Facility that requires modification, repair or replacement in order to remedy the circumstances giving rise to the obligation of the Contractor to pay such Buy-Down Amounts as specified in Section 4.3(a). The Collateral Agent is hereby authorized and directed to issue its checks or transfer funds electronically for each disbursement from such separate account, but shall not be required to do so until at least one Business Day after upon receipt of a Performance Enhancement Certificate signed by an Authorized Representative of the Company and approved by the Independent Engineer. The Collateral Agent shall be entitled to rely on all certifications and statements in such Performance Enhancement Certificate. The Collateral Agent shall keep and maintain adequate records pertaining to such separate account and all disbursements therefrom and shall file an accounting thereof with the Company and the Independent Engineer within three months following the last business day of each Fiscal Year. Upon receipt of an Officer's Certificate of the Company, confirmed by the Independent Engineer, certifying that all modifications, repairs or replacements of that portion of the Facility that requires modification, repair or replacement in order to remedy the circumstances giving rise to the obligation of the Contractor to pay Buy-Down Amounts have been completed, the Collateral Agent shall transfer all funds remaining in such separate account to the Revenue Account for application in accordance with Section 3.10(b); PROVIDEDprovided, that if such funds or a portion thereof are deposited in the Distribution Account in accordance with Section 3.10(b) eleventh, the provisions of Section 3.14(b)(iv) and (v) shall not apply in respect of such funds. (c) As soon as reasonably practicable following receipt by the Company or the Collateral Agent of Buy-Down Amounts, the Company shall make a reasonable good faith determination as to whether (i) it is technically feasible to modify, repair or replace that portion of the Facility that requires modification, repair or replacement in order to remedy the circumstances giving rise to the obligation of the Contractor to pay such Buy-Down Amounts, (ii) the Buy-Down Amounts, together with any other amounts that are available to the Company for such modification, repair or replacement, are sufficient to permit such modification, repair or replacement, including the making of all required payments of interest and principal on the Company's Debt during such modification, repair or replacement, (iii) the projected average Senior Debt Service Coverage Ratio (after giving effect to such modification, repair or replacement and the application of the Buy-Down Amounts to accomplish the same) during the PPA Term (taken as one period) and the Post-PPA Period (taken as one period) is equal to or greater than the projected average Senior Debt Service Coverage Ratio set forth in the base case projections for each such period set forth in the final offering circular dated on or before the Closing Date relating to the Bonds and (iv) the projected minimum Senior Debt Service Coverage Ratio (after giving effect to such modification, repair or replacement and the application of the Buy-Down Amounts to accomplish the same) during the PPA Term and the Post-PPA Period is equal to or greater than the projected minimum Senior Debt Service Coverage Ratio set forth in the base case projections for each such period set forth in the final offering circular dated on or before the Closing Date relating to the Bonds. The determination of the Company shall be evidenced by an Officer's Certificate (together with such supporting detail as the Collateral Agent or the Independent Engineer may reasonably request) filed with the Collateral Agent which, in the event the Company determines that such portion of the Facility can be modified, repaired or replaced and that the other statements set forth in clauses (ii)-(iv) of this Section 4.3(c) are true, shall also set forth a reasonable good faith estimate by the Company of the total cost of such modification, repair or replacement. The Company shall deliver to the Collateral Agent at the time it delivers the Officer's Certificate referred to above a certificate of the Independent Engineer, dated the date of the Officer's Certificate, stating that, based upon reasonable investigation and review of the determinations, assumptions, conclusions and estimates of costs made by the Company, the Independent Engineer believes the determinations, assumptions, conclusions and estimates of costs set forth in the Officer's Certificate to be reasonable. (d) If the Company cannot provide the Officer's Certificate referred to in Section 4.3(c) to permit the application of Buy-Down Amounts toward the modification, repair or replacement of that portion of the Facility or the Independent Engineer fails to confirm such Officer's Certificate as required by Section 4.3(c), all of the Buy-Down Amounts received by the Company or the Collateral Agent shall be distributed in accordance with Section 4.3(e). (e) All Buy-Down Amounts to be distributed pursuant to this Section 4.3(e) shall be distributed by the Collateral Agent, ratably (based on the amount owing to the specified recipient), to (i) the Trustee in respect of the amount of the Outstanding Bonds for redemption of Bonds in accordance with the Indenture, (ii) the DSR LOC Provider in respect of the outstanding amount of DSR LOC Loans, DSR LOC Term Loans or DSR LOC Bonds and (iii) the PPA CP LOC Provider in respect of the outstanding amount of any PPA CP LOC Loans. (f) At the time the Collateral Agent is to make a distribution pursuant to Section 4.3(e), the Collateral Agent shall deposit into a separate trust account to be maintained by the Collateral Agent an amount up to the amount available to be drawn under the DSR Letter of Credit (taking into account, without duplication, in the case of the DSR Letter of Credit, the maximum amount which may become available to be drawn in the future by reason of an increase in the DSRA Required Balance), and not represented by a DSR LOC Loan, DSR LOC Term Loan or DSR Bond; PROVIDEDprovided, HOWEVERhowever, that if funds available are insufficient to make all payments required under Section 4.2(a) paragraph SECOND second and the required deposits provided for in this sentence, distribution of funds shall be made ratably to the specified recipients. The Collateral Agent shall hold the funds in such separate account until receipt of a written notice or notices from the DSR LOC Provider (which such notice or notices shall be contemporaneously delivered by the DSR LOC Provider to the other Senior Parties) executed by an Authorized Representative of the DSR LOC Provider to the effect that either (i) the Collateral Agent has made a drawing on the DSR Letter of Credit or (ii) the DSR Letter of Credit has expired or terminated without a drawing being made thereunder. Upon receipt of a notice specified in clause (i) above, the Collateral Agent shall distribute to the DSR LOC Provider that proportionate share of the amount in the relevant separate account referred to above, equal to such drawing's proportionate share of the DSR Letter of Credit collateralized by such account. Upon receipt of a notice specified in clause (ii) above, the Collateral Agent shall distribute from the relevant separate account to the Trustee an amount equal to the amount in such separate account. (g) At the time the Collateral Agent is to make a distribution pursuant to Section 4.3(e), the Collateral Agent shall deposit into a separate trust account to be maintained by the Collateral Agent an amount available to be drawn under the PPA CP Letter of Credit (and not represented by a PPA CP LOC Loan); PROVIDEDprovided, HOWEVERhowever, that if funds available are insufficient to make all payments required under Section 4.2(a) paragraph SECOND second and the required deposits provided for in this sentence, distribution of funds shall be made ratably to the specified recipients. The Collateral Agent shall hold the funds in such separate account until receipt of a written notice or notices from the PPA CP LOC Provider (which such notice or notices shall be contemporaneously delivered by the PPA CP LOC Provider to the other Senior Parties) executed by an Authorized Representative of the PPA CP LOC Provider to the effect that either (i) the Collateral Agent has made a drawing on the PPA CP Letter of Credit or (ii) the PPA CP Letter of Credit has expired or terminated without a drawing being made thereunder. Upon receipt of a notice specified in clause (i) above, the Collateral Agent shall distribute to the PPA CP LOC Provider that proportionate share of the amount in the relevant separate account referred to above, equal to such drawing's proportionate share of the PPA CP Letter of Credit collateralized by such account. Upon receipt of a notice specified in clause (ii) above, the Collateral Agent shall distribute from the relevant separate account to the Trustee an amount equal to the amount in such separate account.

Appears in 1 contract

Sources: Collateral Agency and Intercreditor Agreement (Aes Ironwood LLC)