RES 87418 - Laserfiche WebLink

THEREFOR. SUCH OBLIGATION AND THE OBLIGATION TO MAKE RENTAL PAYMENTS DO NOT CONSTITUTE DEBTS OF THE CITY, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF AkrY CONSTITUTIONAL OR STATUTORY LIMITATION NOR OBLIGATIONS OF THE CITY FOR WHICH THE CITY IS OBLIGATED OR PERMITTED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. Should the City default in its payment obligation under the Lease, the Trustee, as assignee of the Lessor, may retain the Lease and hold the City liable for all Rental Payments on an annual basis and have the right to re-enter and re-let the Project. Such re-entry and re-letting will not effect a surrender of the Lease. Alternatively, the Trustee may terminate the Lease and proceed against the City to recover damages pursuant to the Lease. Due to the specialized nature of the Project, no assurance can be given that the Trustee will be able to re-let the Project so as to provide rental income sufficient to make principal and interest payments wiEh respect to the Certificates in a timely manner, and the TrusTee is not empowered to sell the Project for the benefit of the Owners of the Certificates. Additionally, the Trustee may exercise no remedy that would deny the City the use of Capital Project I if to do so would cause the City to be in default under the resolution authorizing its currently outstanding Water Revenue Bonds. Reserve Fund. A Certificate Reserve Fund (the "Reserve Fund") will be established with the Trustee pursuant to the Lease and will be funded from proceeds of the Certificates in an amount equal to $773,000, and thereafter maintained in an amount equal to the maximum amount of Rental Payments remaining to be paid by the City during any twelve-month period ending on October 1. Amounts in the Reserve Fund are to be used for the payment of Rental Payments when such Rental Payments have been abated in whole or in part or when other monies of the City are not otherwise available to make such Rental Payments. The City, at its option, may restore the Reserve Fund from lawfully available funds to an amount equal to the foregoing amount. Insurance Reserve Fund. An Insurance Reserve Fund will be established wi~h the Trustee pursuant to the Lease and will be funded from proceeds of the Certificates in an amount equal to $50,000.* The Trustee will cause the moneys in the Insurance Reserve Fund to be applied to pay, together with insurance proceeds received or to be received by the Trustee and to make up for portions of losses not covered by insurance because of deductible amounts or replacement cost limitations on the *Subject to change. 7