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<br />14 <br />Lease Payments; Covenant to Appropriate <br />The City covenants, under the Lease, to make Lease Payments as rental for the right to <br />use and occupy the Leased Property under the Lease. Amounts of the scheduled Lease <br />Payments are calculated to be sufficient to pay debt service on the Bonds when due. Lease <br />Payments will be paid by the City semiannually to the Trustee on the Business Day immediately <br />preceding each Interest Payment Date. Upon receipt, the Trustee will deposit the Lease <br />Payments in the Bond Fund for the purposes of paying principal of and interest on the Bonds. <br />The City covenants under the Lease to take such action as may be necessary to include all <br />Lease Payments and Additional Rental Payments in its annual budgets and to make the <br />necessary annual appropriations for all such rental payments. <br />Under certain circumstances described in the Lease, however, Lease Payments are <br />subject to abatement during periods of substantial interference with the City’s use and <br />occupancy of all or a portion of the Leased Property, as described in “ – Abatement” below. <br />Abatement <br />The Lease provides that the obligation of the City to pay Lease Payments will be subject <br />to abatement by reason of (i) any damage or destruction such that there is substantial <br />interference with the use and occupancy of all or any portion of the Leased Property, or (ii) a <br />temporary taking of the Leased Property or a permanent taking of a portion of the Leased <br />Property. Such abatement will be in an amount determined by the City, such that the resulting <br />unabated portion of the Lease Payments will represent fair consideration for the use and <br />occupancy of the remaining usable portions of the Leased Property. <br />In the case of abatement due to damage or destruction of the Leased Property, such <br />abatement will continue for the period commencing with such damage or destruction and ending <br />with the substantial completion of the work of repair or reconstruction. In the case of abatement <br />due to a partial or temporary taking of the Leased Property under the power of eminent domain, <br />(i) the Lease shall continue in full force and effect with respect Leased Property not taken or not <br />permanently taken and (ii) the Lease Payments are subject to abatement in an amount <br />determined by the City such that the resulting Lease Payments represent fair consideration for <br />the use and occupancy of the remaining usable portions of the Leased Property. If all of the <br />Leased Property is taken permanently under the power of eminent domain or sold to a <br />government threatening to exercise the power of eminent domain, the term of the Lease ceases <br />as of the day such possession is taken. <br />Notwithstanding the foregoing, under the Lease, the Lease Payments will not be subject <br />to abatement to the extent that proceeds of insurance against accident to or destruction of the <br />Leased Property collected by the City or the Authority in the event of any such accident or <br />destruction (including rental interruption insurance) or amounts in the Bond Fund are available <br />to pay Lease Payments which would otherwise be abated. <br />Insurance; Condemnation <br />In the event of an abatement of Lease Payments, debt service on the Bonds may, to a <br />certain extent, be covered by insurance proceeds. The City is required to procure and maintain <br />rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of <br />any portion of the Leased Property constituting buildings or other improvements as a result of <br />certain hazards pursuant to the Lease. Such insurance will be in an amount at least equal to