10A Action 2016 1017 - Laserfiche WebLink

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2 Security for the Bonds and Pledge of Revenues. The Bonds will be payable solely from and secured by Revenues and certain funds and accounts held under the Indenture. Revenues consist primarily of Lease Payments to be made by the City pursuant to a Lease Agreement, dated as of December 1, 2016, between the City and the Authority (the “Lease”) for certain real property leased by the Authority to the City (as described herein, the “Leased Property”). The Leased Property will be simultaneously leased by the Authority from the City pursuant to a Site Lease, dated as of December 1, 2016, between the City and the Authority (the “Site Lease”), in exchange for an upfront rental payment that the City will use to refinance the 2007 Certificates. See “THE LEASED PROPERTY” and “THE REFINANCING PLAN.” Under the Lease, the City covenants to take such action as necessary to include the Lease Payments in its annual budgets and to make all necessary appropriations for such Lease Payments (subject to abatement under certain circumstances described in the Lease). See “SECURITY FOR THE BONDS.” The scheduled Lease Payments payable by the City under the Lease are calculated to be sufficient to permit the Authority to pay the principal of, and interest on, the Bonds when due. However, in the event of any damage or destruction such that there is substantial interference with the use and occupancy of all or any portion of the Leased Property, or a temporary taking of the Leased Property or a permanent taking of a portion of the Leased Property, Lease Payments may be abated under the Lease without constituting a default. See “SECURITY FOR THE BONDS – Abatement” and “RISK FACTORS – Abatement.” However, proceeds of insurance may be available to pay Lease Payments in the event of insured damage, destruction or condemnation with respect to the Leased Property. Pursuant to an Assignment Agreement, dated as of December 1, 2016 (the “Assignment Agreement”), by and between the Authority and the Trustee, the Authority has assigned to the Trustee for the benefit of the Owners of the Bonds, certain of the Authority’s rights under the Lease, including its rights to receive Lease Payments and to enforce remedies in the event of a default by the City for the purpose of securing the payment of debt service on the Bonds. No Reserve Account. Neither the City nor the Authority will create or maintain a debt service reserve account with respect to the Lease Payments or for the Bonds. Additional Obligations. The City has existing obligations payable from the General Fund, and the City is permitted to enter into other obligations which constitute additional charges against its revenues without the consent of Owners of the Bonds. See “THE CITY AND CITY FINANCIAL INFORMATION – General Fund Obligations.” Under the Indenture, the Authority covenants that no additional bonds, notes or other indebtedness shall be issued or incurred by the Authority which are payable out of the Revenues in whole or in part, subject to the provisions of the Lease relating to permitted amendments that provide for additional rental to be pledged or assigned for the payment of bonds issued to finance or refinance projects for which the City is authorized to expend its funds. Redemption. The Bonds are subject to redemption prior to their stated maturity dates. See “THE BONDS – Redemption.” Abatement. The Lease provides that, except to the extent of proceeds of insurance against accident to or destruction of the Leased Property collected by the City or the Authority, amounts in the Bond Fund available to pay Lease Payments which would otherwise be abated, the obligation of the City to pay Lease Payments will be subject to abatement by reason of (i) any damage or destruction such that there is substantial interference with the use and