5.0.-6.0. EDSR 08-12-2002 - Laserfiche WebLink

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In the event the annual appropriation is not made,the Trustee is entitled to repossession and the right to re-lease the buildings and the Authority's interest in the land, who on behalf of the owners of the Series 2002A Bonds will attempt to sell or sublease and operate the Project. If the III City were to not appropriate for debt service, certain consequences may result including the lowering of the City's credit rating. In connection with the issuance of the Series 2002A Bonds and any Additional Bonds to be issued(the"Bonds"),the Indenture will require the Authority to establish and maintain a separate trust account to be designated the Reserve Fund. The Reserve Fund is equal to approximately one year of debt service on the Series 2002A Bonds. Monies in the Reserve Fund will be used solely to pay principal of and interest on the Bonds in the event that Rental Payments are insufficient. Upon issuance of the Series 2002A Bonds, the Trustee will hold a debt service reserve surety bond to be issued by the Insurer in an amount estimated to be$642,705 (the "Surety Bond")as the Reserve Requirement for the Series 2002A Bonds. The Reserve Requirement may be funded and satisfied with cash and/or with one or more debt service reserve surety bonds issued by the Insurer (including the Surety Bond) or by an insurance company rated in the highest rating category by S&P and Moody's and approved by the Insurer ("Qualified Surety Bonds"), or a combination of the two. The advantages of a Surety Bond at this time outweighs its costs. The cost of a Surety bond is approximately $27,000 up-front to the City. The savings of a Surety Bond are savings on a lower amount of underwriter's fees of approximately $8,000 plus an annual savings of approximately$15,000 to$20,000 per year because the investment earnings on a debt service reserve are 2.5%to 3% lower than the interest cost of the Bonds. • A Construction Fund will be created into which the proceeds of the Series 2002A Bonds(other than any amounts deposited into the Bond Fund)shall be deposited. Monies in the Construction Fund shall be applied to the payment of Project costs and issuance expenses. Disbursements from the Construction Fund shall be made by the Trustee upon receipt of the documentation specified in the Indenture. When all of the costs payable from the Construction Fund have been determined and paid for, any remaining balance shall be deposited into the Bond Fund. Additional Bonds The Authority may,at the request of the City and upon the fulfillment of certain conditions,issue additional bonds(the "Additional Bonds") in such amounts as may be requested by the City for the purpose of(a)completing the Project,(b)providing additions or further improvements to the Project,or(c)refunding all or any part of the Series 2002A Bonds of any one or more series then outstanding. Additional Bonds may be issued in one or more series in various principal amounts, mature and be redeemable at different rates and on different dates and otherwise vary. The Additional Bonds shall rank equally and be on a parity with the Series 2002A Bonds and will be equally and ratably secured by a pledge of the Rental Payments by the City under the Lease. In the event Additional Bonds are issued,the City and the Authority will enter into an amendment or supplement to the Lease providing for additional Rental Payments in an amount at least sufficient to pay the principal of and premium, if any, and interest on such Additional Bonds when due. Upon the issuance of any Additional Bonds, the Reserve Requirement shall be • Page 4