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2014-001 SAFA
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Last modified
6/11/2014 11:47:57 AM
Creation date
6/11/2014 11:19:15 AM
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City Clerk
Doc Type
Resolution
Doc #
2014-001
Date
6/3/2014
Destruction Year
P
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ARTICLE IX <br />PREPAYMENT OF LEASE PAYMENTS <br />Section 9.1. Security Deposit. Notwithstanding any other provision of this Lease <br />Agreement, the City may on any date secure the payment of the Lease Payments in whole or in <br />part by depositing with the s' n or a fiduciary reasonably satisfactory to the ssi , in <br />trust, an amount of cash, which shall be held in a segregated trust or escrow fund under a trust <br />or escrow agreement that is in form and content acceptable to the Assignees, which cash so held <br />is either (a) sufficient to pay such Lease Payments, including the principal and interest <br />components thereof, in accordance with the Lease Payment schedule set forth in Exhibit C, or <br />(b) invested in whole in non - callable Federal Securities maturing not later than the dates such <br />funds will be required to make Lease Payments or any prepayment in an amount which is <br />sufficient, in the opinion of an independent certified public accountant (which opinion must be <br />in form and substance, and with such an accountant, acceptable to the Assignees and addressed <br />and delivered to the Assignnees), together with interest to accrue thereon and without <br />reinvestment and together with any cash which is so deposited, to pay such Lease Payments <br />when due under Section 4.3(a) or when due on any optional prepayment date under Section 9.2, <br />as the City instructs at the time of said deposit; provided, however, that at or prior to the date on <br />which any such security deposit is established, the City shall deliver to the Assignees an <br />opinion of Bond Counsel (in form and substance acceptable to the Assignees) to the effect that <br />any such security deposit will not adversely affect the excludability of the interest component of <br />Lease Payments from gross income of the Assignees for federal income tax purposes. In the <br />event of a security deposit under this Section with respect to all unpaid Lease Payments, (i) the <br />Term of this Lease Agreement shall continue, (ii) all obligations of the City under this Lease <br />Agreement, and all security provided by this Lease Agreement for said obligations, shall <br />thereupon cease and terminate, excepting only (A) the obligation of the City to make, or cause <br />to be made, all of the Lease Payments from such security deposit and, to the extent of any <br />deficiency, as rent payable from other legally available funds of the City, and (B) the release and <br />indemnification obligations of the City under subparagraphs (f) and (g) of Section 7.3, and (iii) <br />under Section 4.5, the Authority's leasehold interest in the Property will vest in the City on the <br />date of said deposit automatically and without further action by the City or the Authority. The <br />City hereby grants a first priority security interest in and the lien on said security deposit and <br />all proceeds thereof in favor of the Assignees. Said security deposit shall be deemed to be and <br />shall constitute a special fund for the payment of Lease Payments in accordance with the <br />provisions of this Lease Agreement and, notwithstanding anything to the contrary herein, Lease <br />Payments therefrom shall not be subject to abatement under Section 6.3 hereof to the extent <br />payable from the funds held by the Assignees or the fiduciary as described in the first sentence <br />of this Section 9.1. <br />Section 9.2. Optional Prepayment. <br />Section 9.3. Mandatory Prepayment From Net Proceeds of Insurance or Eminent <br />Domain. The City shall be obligated to prepay the unpaid principal components of the Lease <br />Payments in whole or in part in such order of prepayment as shall be selected by the City on <br />-30- <br />
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