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United States (the "Rebate Amount "), exceeds the then applicable Reserve Requirement, the Fiscal Agent shall <br />provide written notice to the City of the amount of the excess and shall, subject to the requirements of the Fiscal <br />Agent Agreement, transfer an amount equal to the excess from the Reserve Fund to the Redemption Fund to be <br />used for the payment of Debt Service on the next succeeding Interest Payment Date in accordance with the <br />Fiscal Agent Agreement. <br />Whenever an Assessment on a lot or parcel of property within the Assessment District is paid off, the <br />Fiscal Agent shall, upon receiving an Officer's Certificate regarding such Assessment, transfer from the Reserve <br />Fund to the Redemption Fund an amount equal to the reduction in such Assessment determined pursuant to <br />Section 8881 of the California Streets and Highways Code, which amount shall be specified in the Officer's <br />Certificate. <br />Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the <br />Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due <br />upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer, transfer <br />the amount in the Reserve. Fund to the Redemption Fund to be applied, on the next succeeding Interest Payment <br />Date to the payment and redemption, in accordance with the Fiscal Agent Agreement, of all of the Outstanding <br />Bonds. In the event that the amount so transferred from the Reserve Fund to the Redemption Fund exceeds the <br />amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred <br />by the Fiscal Agent to the City to be applied as provided in Section 8885 of the California Streets and Highways <br />Code. <br />Obligation of the City Upon Delinquency <br />The City is under no obligation to transfer any funds of the City into the Redemption Fund for payment <br />of the principal of or interest on the Bonds if a delinquency occurs in the payment of any Assessment <br />Installments. See "SECURITY FOR THE BONDS — Covenant to Commence Superior Court Foreclosure <br />Proceedings" for a discussion of the City's obligation to foreclose Assessment liens upon delinquencies. <br />Covenant to Commence Superior Court Foreclosure Proceedings <br />The Act provides that in the event any Assessment Installment or any interest thereon is not paid when <br />due, the City may order the institution of a court action to foreclose the lien of the unpaid Assessment. In such <br />an action, the real property subject to the unpaid Assessment may be sold at judicial foreclosure sale. This <br />foreclosure sale procedure is not mandatory. The City has covenanted in the Fiscal Agent Agreement that it will <br />order, and cause to be commenced, judicial foreclosure proceedings against properties with delinquent <br />Assessment installments in excess of $10,000 by the October 1 following the close of the Fiscal Year in which <br />such installments were due, and will commence judicial foreclosure proceedings against all properties with <br />delinquent Assessment Installments by the October 1 following the close of each Fiscal Year in which it <br />receives Assessment Revenues in an amount which is less than 95% of the total Assessment Revenues which <br />were to be received in the Fiscal Year and diligently pursue to completion such foreclosure proceedings. <br />Upon the redemption or sale of the real property responsible for such delinquencies, the City will apply <br />the net proceeds thereof to deposit to the Reserve Fund the amount of any delinquency advanced therefrom to <br />the Redemption Fund for payment of interest on or principal of the Bonds, including Assessment Revenues <br />including net proceeds of redemption or sale of the real property and all such moneys are dedicated in their <br />entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided <br />in the Fiscal Agent Agreement and the 1915 Act. <br />IN THE EVENT SUCH SUPERIOR COURT FORECLOSURE OR FORECLOSURES ARE <br />NECESSARY, THERE MAY BE A DELAY IN PAYMENTS TO BONDOWNERS PENDING <br />PROSECUTION OF THE FORECLOSURE PROCEEDINGS AND RECEIPT BY THE CITY OF THE <br />PROCEEDS OF THE FORECLOSURE SALE; IT IS ALSO POSSIBLE THAT NO BID FOR THE <br />12 <br />55B -82 <br />