Agenda Packets - 1987/12/14 - Laserfiche WebLink

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ARTiCLE VI Tax Increment Section 8.1. Tax Guarantee. (a) Subsequent to the City's issuance of the Bonds, in the event that the City on a date sixty (60) days prior to the date that the City is required to make any principal or interest payment with respect to the Bonds has not received sufficient Tax increment paid with respect to the Redevelopment Property (when added to the amount of capitalized Interest available from the issuance of the Bonds) is insufficient tc make the next succeeding principal and/or interest payment on the Bonds, the City shall provide notice to the Redeveloper of such fact and the amount of the deficiency in Tax increment. Twenty (20) days after receipt of such notice of deficiency, the Redeveloper shall be liablt for and shall pay to the City the amount of such deficiency. Failure on the part of the City to provide the notice of the deficiency when required pursuant to this Section 6.1.(a) shall not relieve the Redeveloper of Its obligation to make such paymenylwenty (20) days after actual notice of the deficiency Is provided by the City to the Redeveloper. (b) The obligation of the Redeveloper to make the payments provided for in this Section 6.1 shall be absolute and unconditional irrespective of any defense or any rights of setoff, recoupment or counter -claim It might otherwise have against the City or any other government body or other person, and shall be secured by the Guarantee Letter of Credit. Prior to delivery to the Redeveloper of r' any Certificate of Completion pursuant to Section 4.4 of this Agreement, prior to the City making any payment in connection with the construct!on of the Public Improvements, or prior to the City's making of any reimbursement of funds under Section 3.7, whichever occurs earlier, the Redeveloper shall deliver to the City the Guarantee Letter of Credit lu a form satisfactory to the City for an amount equal to the annual Tax Increment necessary to be generated by the Redevelopment Property to pay annual principal and interest payments on that portion of the Bonds the proceeds of which have been distributed, for which application for distribution has been made, or for which the City has incurred binding obligations to expend. The Guarantee Letter of Credit shall be available for payments to the City pursuant to any demand for payment by the City to cover deficiencies in taxes in the 4th, 5th and 6th years following the issuance of the Bonds. Any Guarantee Letter of Credit may have an expirati it at least one yea- from the date when the City receives the Letter of Credit; provided, however, that if such Guarantee Letter of Credit expires prior to the 6th year after Issuance of the Bonds, then thirty-five (35) days prior to the expiration date of the Guarantee Letter of Credit, the Redeveloper shall provide a substitute Guarantee Letter of Credit to the City, In the same form and in the same amount, with an expiration date of at least one year from the expiration date of the prior Letter of Credit. Upon tender by the Redeveloper of the substitute Letter of Credit, the City will exchange the prior Guarantee Letter of Credit for such substitute. The City may draw upon the Guarantee Letter of Credit in the event that the Redeveloper: (1) falls to pay any deficiency in taxes pursuant to this Section 6.1; or (11) fails to provide a substitute Guarantee Letter of Credit as required in this Section 6.1. (e) in the event that the Redeveloper fails to comply with Its obligation Fhet pay any deficiency In Tax Increment as set forth In this Section 6.1 when due, to shell have the option, in additional to any other remedy available to it 26