Res96 12894 - Laserfiche WebLink

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Surety the primary recourse of the Trustee in the event the Owner's payments are insufficient is to make demand under the Surety Bond for the required amount, and enforceability of payment against the Owner is restricted to the Project and certain related assets; WHEREAS, the Owner has entered into an Agreement of Sale to sell the Project to Security Capital Pacific Trust, a Maryland real estate investment trust (the "Purchaser"), and the Purchaser has arranged for continuation of the Surety Bond until October 1, 2000, at which date if the Bonds are not refunded or remarketed they are required to be purchased by the Surety; WHEREAS, the Loan Agreement provides that so long as there shall be no "Event of Default", the Owner may convey the Project and transfer its interest in the Loan Agreement to a new owner provided that the new owner assumes the obligations of the Owner under the Loan Agreement and the Regulatory Agreement and other related agreements and gives the City and the Trustee notice thereof, delivers to the Trustee confirmation from the Surety of the continuation of the Surety Bond, and satisfies any additional requirements of the Regulatory Agreement, and bond counsel delivers an opinion that the transfer will not cause interest on the Bonds to become subject to federal income taxation; WHEREAS, the Regulatory Agreement requires, as to the assumption by the new owner of the obligations of the Owner, that the new owner deliver an opinion of its own counsel that the new owner has duly assumed such obligations and that they are valid and binding to the same extent on the new owner as they were on the Owner, and that the Authorized Issuer Representative certify when such requirements are met, and thereby consent to the transfer on behalf of the City; WHEREAS, the Purchaser proposes to enter into an Amendment Agreement with the Trustee and the City whereby the Loan Agreement and related promissory note, and the Regulatory Agreement, are each amended to provide for the substitution of the Purchaser for the Owner, subject to a limited recourse provision applicable to the Purchaser (the "Amendment Agreement"); WHEREAS, the Purchaser also proposes to enter into an Assumption Agreement with the Trustee, the City and the Surety whereby the Purchaser assumes payment and performance liabilities and obligations and compliance with covenants of the Owner under the Loan Agreement, the Regulatory Agreement and other agreements, which assumption is inclusive of occurrences whether before or after the transfer (the "Assumption Agreement"); WHEREAS, the Purchaser also proposes to enter into a Second Amendment to Reimbursement Agreement with the Surety, whereby the RC(1)Res.Prov. -- 2 --