Common use of Tax Covenants of Corporation Clause in Contracts

Tax Covenants of Corporation. The Corporation will not take or permit, or omit to take or cause to be taken, any action that would adversely affect the exclusion from gross income for federal income tax purposes of the interest evidenced by or paid on the Series 2020 Bonds and, if it should take or permit, or omit to take or cause to be taken, any such action, the Corporation will take or cause to be taken all lawful actions within its power necessary to rescind or correct such actions or omissions promptly on having knowledge thereof. The Corporation acknowledges that the continued exclusion of interest evidenced by or paid on the Series 2020 Bonds from a Holder’s gross income for federal income tax purposes depends, in part, on compliance with the arbitrage limitations imposed by Section 148 of the Code. To that end, the Corporation covenants that it will comply with the Tax Regulatory Agreement. The Corporation acknowledges that, for federal income tax purposes, the Series 2020 Bonds are being issued by the Corporation as an instrumentality of the County, acting on behalf of such County as set forth in Revenue Ruling 63-20 (as supplemented by Revenue Procedure 82-26) and covenants to comply with all provisions of such Revenue Ruling as so supplemented. The Corporation, therefore, represents, warrants and covenants as follows: (a) The County may, at any time, request and receive a conveyance of fee simple title to and exclusive possession of the Project Facilities by (i) establishing an irrevocable deposit with the Trustee, as escrow agent, that will be sufficient to defease the Series 2020 Bonds, and (ii) paying the reasonable costs incident to such defeasance. The Trustee and the Corporation agree in such event to immediately cancel all encumbrances on the Project Facilities and Real Property to which they are a party, including any management contract or lease of the Project Facilities and Real Property. (b) If the Corporation defaults in its payments of principal and interest due on the Series 2020 Bonds and the Trustee declares the principal of the Series 2020 Bonds to be due and payable, the County is granted the exclusive option to purchase the Project Facilities, including any improvements, for a price equal to the amount of the Series 2020 Bonds which are Outstanding, as well as any other Bonds as may be Outstanding, plus accrued interest to the date of such default and, upon such purchase, to terminate the Sub-Base Lease. These provisions are not intended and shall not be interpreted so as to limit the rights of the Holders of the Series 2020 Bonds to pursue their remedies under this Trust Agreement and the Facilities Agreement. (c) The County shall obtain fully unencumbered fee simple title to the Project Facilities when the Series 2020 Bonds are discharged and paid in full. The Corporation will convey to the County such fee simple title and exclusive possession and use of the Project Facilities, including any additions thereto, without demand or further action on its part. (d) The proceeds of fire or other casualty insurance policies received in connection with the damage or destruction to the portion of the Project Facilities financed or refinanced with the proceeds of the Series 2020 Bonds, including any improvements, will be used, subject to the provisions of this Trust Agreement regarding extraordinary redemption of the Series 2020 Bonds, to rebuild the Project Facilities or to redeem the Series 2020 Bonds or, if all of the Series 2020 Bonds as well as any other Bonds as may be Outstanding have been paid or defeased under this Trust Agreement, will be remitted to the County. (e) In the event of any division of the Project Facilities and the Real Property pursuant to Section 2.4 of the Facilities Agreement, the Corporation agrees that, unless (i) it obtains an opinion of Bond Counsel to the effect that such action is unnecessary to preserve the exclusion from gross income of interest on the Series 2020 Bonds, or (ii) the Corporation or the Trustee is directed by the owners of a majority of the beneficial ownership interests of the Series 2020 Bonds, it will timely undertake to satisfy the requirements of the Code and the Treasury Regulations relating to a change in use of the Real Property or the Project Facilities. Regulations governing such remedial action are now contained in Section 1.141-12 of the Treasury Regulations.

Tax Covenants of Corporation. The Corporation will not take or permit, or omit to take or cause to be taken, any action that would adversely affect the exclusion from gross income for federal income tax purposes of the interest evidenced by or paid on the Series 2020 Bonds Notes and, if it should take or permit, or omit to take or cause to be taken, any such action, the Corporation will take or cause to be taken all lawful actions within its power necessary to rescind or correct such actions or omissions promptly on having knowledge thereof. The Corporation acknowledges that the continued exclusion of interest evidenced by or paid on the Series 2020 Bonds Notes from a Holder’s gross income for federal income tax purposes depends, in part, on compliance with the arbitrage limitations imposed by Section 148 of the Code. To that end, the Corporation covenants that it will comply with the Tax Regulatory Agreement. The Corporation acknowledges that, for federal income tax purposes, the Series 2020 Bonds Notes are being issued by the Corporation as an instrumentality of the County, acting on behalf of such County as set forth in Revenue Ruling 63-20 (as supplemented by Revenue Procedure 82-26) and covenants to comply with all provisions of such Revenue Ruling as so supplemented. The Corporation, therefore, represents, warrants and covenants as follows: (a) The County may, at any time, request and receive a conveyance of fee simple title to and exclusive possession of the Project Facilities by (i) establishing an irrevocable deposit with the Trustee, as escrow agent, that will be sufficient to defease the Series 2020 BondsNotes, and (ii) paying the reasonable costs incident to such defeasance. The Trustee and the Corporation agree in such event to immediately cancel all encumbrances on the Project Facilities and Real Property to which they are a party, including any management contract or lease of the Project Facilities and Real Property. (b) If the Corporation defaults in its payments of principal and interest due on the Series 2020 Bonds Notes and the Trustee declares the principal of the Series 2020 Bonds Notes to be due and payable, the County is granted the exclusive option to purchase the Project Facilities, including any improvements, for a price equal to the amount of the Series 2020 Bonds Notes which are Outstanding, as well as any other Bonds as may be Outstanding, plus accrued interest to the date of such default and, upon such purchase, to terminate the Sub-Base Lease. These provisions are not intended and shall not be interpreted so as to limit the rights of the Holders of the Series 2020 Bonds Notes to pursue their remedies under this Trust Agreement and the Facilities Agreement. (c) The County shall obtain fully unencumbered fee simple title to the Project Facilities when the Series 2020 Bonds Notes are discharged and paid in full. The Corporation will convey to the County such fee simple title and exclusive possession and use of the Project Facilities, including any additions thereto, without demand or further action on its part. (d) The proceeds of fire or other casualty insurance policies received in connection with the damage or destruction to the portion of the Project Facilities or Real Property financed or refinanced with the proceeds of the Series 2020 BondsNotes, including any improvements, will be used, subject to the provisions of this Trust Agreement regarding extraordinary redemption of the Series 2020 BondsNotes, to rebuild the Project Facilities or to redeem the Series 2020 Bonds Notes or, if all of the Series 2020 Bonds as well as any other Bonds as may be Outstanding Notes have been paid or defeased under this Trust Agreement, will be remitted to the County. (e) In the event of any division of the Project Facilities and the Real Property pursuant to Section 2.4 of the Facilities Agreement, the Corporation agrees that, unless (i) it obtains an opinion of Bond Counsel to the effect that such action is unnecessary to preserve the exclusion from gross income of interest on the any Series 2020 BondsNotes, or (ii) the Corporation or the Trustee is directed by the owners of a majority of the beneficial ownership interests of the Series 2020 BondsNotes, it will timely undertake to satisfy the requirements of the Code and the Treasury Regulations relating to a change in use of the Real Property or the Project Facilities. Regulations governing such remedial action are now contained in Section 1.141-12 of the Treasury Regulations.

Tax Covenants of Corporation. The Corporation will not take or permit, or omit to take or cause to be taken, any action that would adversely affect the exclusion from gross income for federal income tax purposes of the interest evidenced by or paid on the Series 2020 2017B Bonds and, if it should take or permit, or omit to take or cause to be taken, any such action, the Corporation will take or cause to be taken all lawful actions within its power necessary to rescind or correct such actions or omissions promptly on having knowledge thereof. The Corporation acknowledges that the continued exclusion of interest evidenced by or paid on the Series 2020 2017B Bonds from a an Holder’s gross income for federal income tax purposes depends, in part, on compliance with the arbitrage limitations imposed by Section 148 of the Code. To that end, the Corporation covenants that it will comply with the Tax Regulatory Agreement. The Corporation acknowledges that, for federal income tax purposes, that the Series 2020 2017B Bonds are being issued by the Corporation as an instrumentality of the CountyCorporation, acting on behalf of such County as set forth in the City, within the meaning of Revenue Ruling 63-20 20, 1963-1 C.B. 24 (as supplemented by “Revenue Procedure 82Ruling 63-2620”) and Treasury Regulation Section 1.103-1(b), and covenants to comply with all provisions of such Revenue Ruling as so supplemented63-20 and all of the applicable provisions of Revenue Procedure 82-26, 1982-1 C.B. 476 (“Revenue Procedure 82-26”). The Corporation, therefore, Corporation therefore represents, warrants and covenants as follows: (a) The County may, at any time, request and receive a conveyance of fee simple title to and exclusive possession Corporation is organized under the general nonprofit laws of the Project State as a nonprofit organization, the articles of incorporation of the Corporation provide that the Corporation is not organized for profit, and the Corporation’s income does not inure to any private person. The activities and purposes of the Corporation are those permitted under the general nonprofit corporation laws of the State, the Corporation will engage only in activities and for purposes that are permitted under the general nonprofit laws of the State and the Facilities by and the 2017 Real Property are located entirely within the geographic boundaries of the City. (ib) establishing an irrevocable deposit The articles of incorporation of the Corporation provide that income of the Corporation will not inure to any private person. In fact, income of the Corporation does not inure to any private person, and upon dissolution of the Corporation, the Corporation’s net assets shall be distributed to the City. The Corporation shall not amend or modify its articles of incorporation or bylaws to modify any of its stated purposes or activities, or with respect to any other provision, unless the Corporation has filed with the Trustee, as escrow agent, that will be sufficient to defease the Series 2020 Bonds, and (ii) paying the reasonable costs incident to such defeasance. The Trustee and the Corporation agree in such event City a Favorable Opinion of Bond Counsel. (c) Prior to immediately cancel all encumbrances on a termination (if any) of the Project Purchase and Use Agreement pursuant to Section 2.2 thereof which gives rise to a partition of the Facilities pursuant to Section 2.4 thereof, the City shall have exclusive beneficial possession and use of the Facilities and the 2017 Real Property to which they are a partyProperty, including any management contract or lease improvements and additions thereto, equivalent to at least 95% of the Project fair rental value of the Facilities and the 2017 Real Property for the term of the Series 2017B Bonds, including any other obligations issued by the Corporation either to make improvements to the Facilities and the 2017 Real Property or to refund a prior issue of the Corporation’s obligations related to the Facilities and the 2017 Real Property. (b) If the Corporation defaults in its payments of principal and interest due on the Series 2020 Bonds and the Trustee declares the principal of the Series 2020 Bonds to be due and payable, the County is granted the exclusive option to purchase the Project Facilities, including any improvements, for a price equal to the amount of the Series 2020 Bonds which are Outstanding, as well as any other Bonds as may be Outstanding, plus accrued interest to the date of such default and, upon such purchase, to terminate the Sub-Base Lease. These provisions are not intended and shall not be interpreted so as to limit the rights of the Holders of the Series 2020 Bonds to pursue their remedies under this Trust Agreement and the Facilities Agreement. (cd) The County City presently has or shall obtain fully unencumbered fee simple title title, subject to Permitted Encumbrances, to the Project Facilities when and the 2017 Real Property no later than such time as the Series 2020 2017B Bonds are discharged. For purposes of this paragraph and the definition of “Base Lease Term” as such term is defined in the Base Lease, the Series 2017B Bonds will be discharged when (i) cash is available at the place of payment on the date that the Series 2017B Bonds are due (whether at maturity or upon prior call for redemption) and paid in full(ii) interest ceases to accrue on the Series 2017B Bonds. The Upon discharge of the Series 2017B Bonds, the Corporation will convey to the County City such fee simple title and exclusive possession and use of the Project FacilitiesFacilities and the 2017 Real Property (to the extent the City does not already have such title, possession and use), including any additions thereto, without demand or further action on its part. In this regard, all leases, management contracts and similar encumbrances (other than Permitted Encumbrances), if any, relating to the Facilities and the 2017 Real Property shall terminate upon discharge of the Series 2017B Bonds. (de) While the Purchase and Use Agreement is in effect, the City has the right at any time to obtain unencumbered fee title and exclusive possession of the Facilities and the 2017 Real Property, including any additions thereto (to the extent the City does not already have such possession and use) by exercising its rights under Section 9.1 of the Purchase and Use Agreement, by placing into escrow an amount equal to the amount described therein. If the City exercises such right, the Corporation must immediately cancel all encumbrances (other than Permitted Encumbrances) on the Facilities and the 2017 Real Property (to the extent the Corporation has possession and use thereof), including leases and management contracts, except as may be otherwise permitted by Revenue Procedure 82-26. (f) While the Purchase and Use Agreement is in effect, in the event the Corporation defaults in its payments under the Series 2017B Bonds, the City has the exclusive option to purchase the Facilities (and any additions thereto) for the amount of the Outstanding Series 2017B Bonds and accrued interest to the date of default. The City must, if at all, exercise its option not more than 90 days from the date it is notified by the Corporation (or the Trustee on behalf of the Corporation) of such default and, if elected, must have 90 days from the date of exercise of such option to purchase the Facilities. (g) All of the original proceeds of the Series 2017B Bonds shall be used to provide tangible real and tangible personal property. Proceeds are considered to provide tangible property only if the proceeds are (i) used to finance costs that a taxpayer must charge to the property’s capital account, may elect to charge to the property’s capital account instead of deducting, or may elect to deduct instead of charging to the property’s capital account and (ii) used to fund a reasonably required reserve fund for the Series 2017B Bonds within the meaning of Revenue Procedure 82-26. The preceding sentence does not apply to a de minimis amount, less than $5,000, that is included in the Series 2017B Bonds solely for the purpose of rounding the dollar amount of the issue. If excess proceeds remain on hand after the completion of construction or reconstruction of the Facilities, the requirements of this paragraph will be considered met if (i) the face amount of the Series 2017B Bonds (taking into account estimated investment proceeds) was based on reasonable estimates of the cost of the Facilities at the time the Series 2017B Bonds were issued, and the excess proceeds are used and invested in the manner described in Section 3.052 of Revenue Procedure 82-26. For purposes of this paragraph, “original proceeds” are amounts (after payment of all expenses of issuing the Series 2017B Bonds) received at any time as a result of the sale of the Series 2017B Bonds and “investment proceeds” are amounts (net of administrative costs) that result from the investment of any proceeds of the Series 2017B Bonds. However, investment proceeds do not include amounts earned after the date that (i) construction, reconstruction or acquisition of the Facilities is completed, or (ii) all of the proceeds (less amounts used to fund a reasonably required reserve fund) have been spent on the construction, reconstruction or acquisition of the Facilities, whichever occurs later. (h) The Council enacted an ordinance on , 2017, which date is within one year prior to the issue date of the Series 2017B Bonds, approving the purposes and activities of the Corporation, the 2017 Project and the issuance of the Series 2017B Bonds by the Corporation for the purposes of financing the costs of the 2017 Project, and stating that the City will accept title to the Facilities, including any additions or improvements thereto, no later than such time as the 2017 Bonds are discharged. (i) The proceeds of fire or other casualty insurance policies received in connection with the damage or destruction to the portion of the Project Facilities financed or refinanced with the proceeds of the Series 2020 2017B Bonds, including any improvements, will be used, subject to the provisions of Section 4.1(b) of this Trust Agreement regarding extraordinary special optional redemption of the Series 2020 2017B Bonds, to rebuild the 2017 Project Facilities or to redeem the Series 2020 2017B Bonds or, if all of the Series 2020 2017B Bonds as well as any other Bonds as may be Outstanding have been paid or defeased under this Trust Agreement, will be remitted to the CountyCity. (ej) In the event of any division of the Project Facilities and the Real Property pursuant to Section 2.4 of the Facilities Purchase and Use Agreement, the Corporation agrees that, unless (i) it obtains an opinion of Bond Counsel to the effect that such action is unnecessary to preserve the exclusion from gross income of interest on the any Series 2020 2017B Bonds, or (ii) the Corporation or the Trustee is directed by the owners of a majority of the beneficial ownership interests of the Series 2020 2017B Bonds, it will timely undertake to satisfy the requirements of the Code and the Treasury Regulations relating to a change in use of the Real Property or the Project Facilities. Regulations governing such remedial action are now contained in Section 1.141-12 of the Treasury Regulations.

Tax Covenants of Corporation. The Corporation will not take or permit, or omit to take or cause to be taken, any action that would adversely affect the exclusion from gross income for federal income tax purposes of the interest evidenced by or paid on the Series 2020 Bonds 2018 Bond and, if it should take or permit, or omit to take or cause to be taken, any such action, the Corporation will take or cause to be taken all lawful actions within its power necessary to rescind or correct such actions or omissions promptly on having knowledge thereof. The Corporation acknowledges that the continued exclusion of interest evidenced by or paid on the Series 2020 Bonds 2018 Bond from a Holder’s gross income for federal income tax purposes depends, in part, on compliance with the arbitrage limitations imposed by Section 148 of the Code. To that end, the Corporation covenants that it will comply with the Tax Regulatory Agreement. The Corporation acknowledges that, for federal income tax purposes, the Series 2020 Bonds are 2018 Bond is being issued by the Corporation as an instrumentality of the CountyCity, acting on behalf of such County City as set forth in Revenue Ruling 63-20 (as supplemented by Revenue Procedure 82-26) and covenants to comply with all provisions of such Revenue Ruling as so supplemented. The Corporation, therefore, represents, warrants and covenants as follows: (a) The County City may, at any time, request and receive a conveyance of fee simple title to and exclusive possession of the Project Facilities by (i) establishing an irrevocable deposit with the Trustee, as escrow agent, that will be sufficient to defease the Series 2020 Bonds2018 Bond, and (ii) paying the reasonable costs incident to such defeasance. The Trustee Purchaser and the Corporation agree in such event to immediately cancel all encumbrances on the Project Facilities and Real Property to which they are a party, including any management contract or lease of the Project Facilities and Real Property. (b) If the Corporation defaults in its payments of principal and interest due on the Series 2020 Bonds 2018 Bond and the Trustee Purchaser declares the principal of the Series 2020 Bonds 2018 Bond to be due and payable, the County City is granted the exclusive option to purchase the Project Facilities, including any improvements, for a price equal to the amount of the Series 2020 Bonds 2018 Bond which are Outstanding, as well as any other Bonds as may be Outstanding, plus accrued interest to the date of such default and, upon such purchase, to terminate the Sub-Base Lease. These provisions are not intended and shall not be interpreted so as to limit the rights of the Holders Purchaser of the Series 2020 Bonds 2018 Bond to pursue their remedies under this Trust Agreement Indenture and the Facilities Agreement. (c) The County City shall obtain fully unencumbered fee simple title to the Project Facilities when the Series 2020 Bonds 2018 Bond are discharged and paid in full. The Corporation will convey to the County City such fee simple title and exclusive possession and use of the Project Facilities, including any additions thereto, without demand or further action on its part. (d) The proceeds of fire or other casualty insurance policies received in connection with the damage or destruction to the portion of the Project Facilities or Real Property financed or refinanced with the proceeds of the Series 2020 Bonds2018 Bond, including any improvements, will be used, subject to the provisions of this Trust Agreement Indenture regarding extraordinary redemption of the Series 2020 Bonds2018 Bond, to rebuild the Project Facilities or to redeem the Series 2020 Bonds 2018 Bond or, if all of the Series 2020 Bonds as well as any other Bonds as may be Outstanding 2018 Bond have been paid or defeased under this Trust AgreementIndenture, will be remitted to the CountyCity. (e) In A reasonable estimate of the event of any division fair market value of the Project Facilities and the Real Property pursuant to Section 2.4 as of the Facilities Agreement, the Corporation agrees that, unless (i) it obtains an opinion of Bond Counsel to the effect that such action is unnecessary to preserve the exclusion from gross income of interest on the Series 2020 Bonds, or (ii) the Corporation or the Trustee is directed by the owners of a majority of the beneficial ownership interests latest maturity date of the Series 2020 Bonds, it will timely undertake 2018 Bond is equal to satisfy the requirements at least 20% of the Code and the Treasury Regulations relating to a change in use original costs of the Real Property or the Project Facilities. Regulations governing such remedial action . (f) A reasonable estimate of the remaining useful life of the Project Facilities on the latest maturity date of the Series 2018 Bond is equal to at least 20% of the original useful life of the Project Facilities. (g) It is expected that during calendar year 2018 the City and all entities subordinate thereto, including the Corporation, will not borrow on a tax-exempt basis (other than private activity bonds which are now contained not qualified 501(c)(3) bonds as defined in Section 1.141-12 145 of the Treasury RegulationsCode) in the aggregate an amount exceeding $10,000,000. In an ordinance enacted by the City Council of the City on , 2018, the City designated the Series 2018 Bond as a “qualified tax-exempt obligation” in accordance with Section 265(b)(3)(B) of the Code.

Tax Covenants of Corporation. ‌ The Corporation will not take or permit, or omit to take or cause to be taken, any action that would adversely affect the exclusion from gross income for federal income tax purposes of the interest evidenced by or paid on the Series 2020 2017B Bonds and, if it should take or permit, or omit to take or cause to be taken, any such action, the Corporation will take or cause to be taken all lawful actions within its power necessary to rescind or correct such actions or omissions promptly on having knowledge thereof. The Corporation acknowledges that the continued exclusion of interest evidenced by or paid on the Series 2020 2017B Bonds from a an Holder’s gross income for federal income tax purposes depends, in part, on compliance with the arbitrage limitations imposed by Section 148 of the Code. To that end, the Corporation covenants that it will comply with the Tax Regulatory Agreement. Agreement.‌ The Corporation acknowledges that, for federal income tax purposes, that the Series 2020 2017B Bonds are being issued by the Corporation as an instrumentality of the CountyCorporation, acting on behalf of such County as set forth in the City, within the meaning of Revenue Ruling 63-20 20, 1963-1 C.B. 24 (as supplemented by “Revenue Procedure 82Ruling 63-2620”) and Treasury Regulation Section 1.103-1(b), and covenants to comply with all provisions of such Revenue Ruling as so supplemented63-20 and all of the applicable provisions of Revenue Procedure 82-26, 1982-1 C.B. 476 (“Revenue Procedure 82-26”). The Corporation, therefore, Corporation therefore represents, warrants and covenants as follows: (a) The County may, at any time, request and receive a conveyance of fee simple title to and exclusive possession Corporation is organized under the general nonprofit laws of the Project State as a nonprofit organization, the articles of incorporation of the Corporation provide that the Corporation is not organized for profit, and the Corporation’s income does not inure to any private person. The activities and purposes of the Corporation are those permitted under the general nonprofit corporation laws of the State, the Corporation will engage only in activities and for purposes that are permitted under the general nonprofit laws of the State and the Facilities by and the 2017 Real Property are located entirely within the geographic boundaries of the City. (ib) establishing an irrevocable deposit The articles of incorporation of the Corporation provide that income of the Corporation will not inure to any private person. In fact, income of the Corporation does not inure to any private person, and upon dissolution of the Corporation, the Corporation’s net assets shall be distributed to the City. The Corporation shall not amend or modify its articles of incorporation or bylaws to modify any of its stated purposes or activities, or with respect to any other provision, unless the Corporation has filed with the Trustee, as escrow agent, that will be sufficient to defease the Series 2020 Bonds, and (ii) paying the reasonable costs incident to such defeasance. The Trustee and the Corporation agree in such event City a Favorable Opinion of Bond Counsel. (c) Prior to immediately cancel all encumbrances on a termination (if any) of the Project Purchase and Use Agreement pursuant to Section 2.2 thereof which gives rise to a partition of the Facilities pursuant to Section 2.4 thereof, the City shall have exclusive beneficial possession and use of the Facilities and the 2017 Real Property to which they are a partyProperty, including any management contract or lease improvements and additions thereto, equivalent to at least 95% of the Project fair rental value of the Facilities and the 2017 Real Property for the term of the Series 2017B Bonds, including any other obligations issued by the Corporation either to make improvements to the Facilities and the 2017 Real Property or to refund a prior issue of the Corporation’s obligations related to the Facilities and the 2017 Real Property. (b) If the Corporation defaults in its payments of principal and interest due on the Series 2020 Bonds and the Trustee declares the principal of the Series 2020 Bonds to be due and payable, the County is granted the exclusive option to purchase the Project Facilities, including any improvements, for a price equal to the amount of the Series 2020 Bonds which are Outstanding, as well as any other Bonds as may be Outstanding, plus accrued interest to the date of such default and, upon such purchase, to terminate the Sub-Base Lease. These provisions are not intended and shall not be interpreted so as to limit the rights of the Holders of the Series 2020 Bonds to pursue their remedies under this Trust Agreement and the Facilities Agreement. (cd) The County City presently has or shall obtain fully unencumbered fee simple title title, subject to Permitted Encumbrances, to the Project Facilities when and the 2017 Real Property no later than such time as the Series 2020 2017B Bonds are discharged. For purposes of this paragraph and the definition of “Base Lease Term” as such term is defined in the Base Lease, the Series 2017B Bonds will be discharged when (i) cash is available at the place of payment on the date that the Series 2017B Bonds are due (whether at maturity or upon prior call for redemption) and paid in full(ii) interest ceases to accrue on the Series 2017B Bonds. The Upon discharge of the Series 2017B Bonds, the Corporation will convey to the County City such fee simple title and exclusive possession and use of the Project FacilitiesFacilities and the 2017 Real Property (to the extent the City does not already have such title, possession and use), including any additions thereto, without demand or further action on its part. In this regard, all leases, management contracts and similar encumbrances (other than Permitted Encumbrances), if any, relating to the Facilities and the 2017 Real Property shall terminate upon discharge of the Series 2017B Bonds. (de) While the Purchase and Use Agreement is in effect, the City has the right at any time to obtain unencumbered fee title and exclusive possession of the Facilities and the 2017 Real Property, including any additions thereto (to the extent the City does not already have such possession and use) by exercising its rights under Section 9.1 of the Purchase and Use Agreement, by placing into escrow an amount equal to the amount described therein. If the City exercises such right, the Corporation must immediately cancel all encumbrances (other than Permitted Encumbrances) on the Facilities and the 2017 Real Property (to the extent the Corporation has possession and use thereof), including leases and management contracts, except as may be otherwise permitted by Revenue Procedure 82-26. (f) While the Purchase and Use Agreement is in effect, in the event the Corporation defaults in its payments under the Series 2017B Bonds, the City has the exclusive option to purchase the Facilities (and any additions thereto) for the amount of the Outstanding Series 2017B Bonds and accrued interest to the date of default. The City must, if at all, exercise its option not more than 90 days from the date it is notified by the Corporation (or the Trustee on behalf of the Corporation) of such default and, if elected, must have 90 days from the date of exercise of such option to purchase the Facilities. (g) All of the original proceeds of the Series 2017B Bonds shall be used to provide tangible real and tangible personal property. Proceeds are considered to provide tangible property only if the proceeds are (i) used to finance costs that a taxpayer must charge to the property’s capital account, may elect to charge to the property’s capital account instead of deducting, or may elect to deduct instead of charging to the property’s capital account and (ii) used to fund a reasonably required reserve fund for the Series 2017B Bonds within the meaning of Revenue Procedure 82-26. The preceding sentence does not apply to a de minimis amount, less than $5,000, that is included in the Series 2017B Bonds solely for the purpose of rounding the dollar amount of the issue. If excess proceeds remain on hand after the completion of construction or reconstruction of the Facilities, the requirements of this paragraph will be considered met if (i) the face amount of the Series 2017B Bonds (taking into account estimated investment proceeds) was based on reasonable estimates of the cost of the Facilities at the time the Series 2017B Bonds were issued, and the excess proceeds are used and invested in the manner described in Section 3.052 of Revenue Procedure 82-26. For purposes of this paragraph, “original proceeds” are amounts (after payment of all expenses of issuing the Series 2017B Bonds) received at any time as a result of the sale of the Series 2017B Bonds and “investment proceeds” are amounts (net of administrative costs) that result from the investment of any proceeds of the Series 2017B Bonds. However, investment proceeds do not include amounts earned after the date that (i) construction, reconstruction or acquisition of the Facilities is completed, or (ii) all of the proceeds (less amounts used to fund a reasonably required reserve fund) have been spent on the construction, reconstruction or acquisition of the Facilities, whichever occurs later. (h) The Council enacted an ordinance on , 2017, which date is within one year prior to the issue date of the Series 2017B Bonds, approving the purposes and activities of the Corporation, the 2017 Project and the issuance of the Series 2017B Bonds by the Corporation for the purposes of financing the costs of the 2017 Project, and stating that the City will accept title to the Facilities, including any additions or improvements thereto, no later than such time as the 2017 Bonds are discharged. (i) The proceeds of fire or other casualty insurance policies received in connection with the damage or destruction to the portion of the Project Facilities financed or refinanced with the proceeds of the Series 2020 2017B Bonds, including any improvements, will be used, subject to the provisions of Section 4.1(b) of this Trust Agreement regarding extraordinary special optional redemption of the Series 2020 2017B Bonds, to rebuild the 2017 Project Facilities or to redeem the Series 2020 2017B Bonds or, if all of the Series 2020 2017B Bonds as well as any other Bonds as may be Outstanding have been paid or defeased under this Trust Agreement, will be remitted to the CountyCity. (ej) In the event of any division of the Project Facilities and the Real Property pursuant to Section 2.4 of the Facilities Purchase and Use Agreement, the Corporation agrees that, unless (i) it obtains an opinion of Bond Counsel to the effect that such action is unnecessary to preserve the exclusion from gross income of interest on the any Series 2020 2017B Bonds, or (ii) the Corporation or the Trustee is directed by the owners of a majority of the beneficial ownership interests of the Series 2020 2017B Bonds, it will timely undertake to satisfy the requirements of the Code and the Treasury Regulations relating to a change in use of the Real Property or the Project Facilities. Regulations governing such remedial action are now contained in Section 1.141-12 of the Treasury Regulations.