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ARTICLE III APPLICATION OF MONEYS; DISBURSEMENT Section 3.1. Application of Moneys. On the Closing Date, the Authority shall cause the Assignee to apply the amount of $8,470,000.00 as follows: (a) $5,970,000.00 shall be applied by the Assignee to the prepayment in whole of the principal component of the lease payments under the Existing Lease Agreement; and (b) $2,500,000.00 (the "Completion Amount") shall be deposited in the Depository Account and disbursed in accordance with the provisions of Section 3.2 hereof. Section 3.2. Disbursement. (a) The City agrees to establish, on or prior to the Closing Date, an account (the "Depositary Account") with the Depositary Agent, which account shall be used solely for the investment of the Completion Amount and for the payment of costs of completing the Improvements and Costs of Issuance and for no other purposes. On the Closing Date, the Completion Amount shall be deposited in the Depositary Account. Written evidence of such deposit shall be provided by the City to the Assignee. To secure the performance of the City's obligations under this Lease Agreement, the City hereby grants to the Assignee a first priority security interest in the cash and investments from time to time held in the Depositary Account and all proceeds thereof, which security interest shall automatically vest without the necessity of a writing or formal agreement, and agrees with respect thereto that the Assignee shall have all the rights and remedies of a secured party under the applicable Uniform Commercial Code. (b) Amounts on deposit in the Depositary Account shall be withdrawn by the Depositary Agent upon the receipt, from time to time of a Disbursement Certificate of the City, signed by an authorized officer of the City and the construction or project manager of the Improvements and affirmed for payment by the Assignee, substantially in the form attached hereto as Exhibit E, stating: (i) the name of the payee or payees to whom each such payment is due, which may be the City in the case of reimbursement for costs theretofore paid by the City; (ii) if such disbursement is for reimbursement to the City, evidence of prior payment; (iii) the respective amounts to be paid; (iv) the purpose for which each obligation to be paid was incurred; (v) that obligations in the stated amounts have been incurred by the City and are presently due and payable and that each item thereof is a proper charge against the Depositary Account, and has not been previously paid therefrom; (vi) that there has not been filed with or served upon the City notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the amounts payable to any of the persons named in such requisition, which has not been released or will not be released simultaneously with the payment -5-