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' r1 <br /> and agrees that from and after the closing and delivery of the 2018 Bonds, it will at all times, <br /> subject to the foregoing funding requirements, maintain an amount in the 2018 Reserve Account <br /> at least equal to the 2018 Bond Reserve Requirement except for withdrawals therefrom <br /> authorized hereinafter, at all times for so long as any 2018 Bonds remain outstanding. The 2018 <br /> Bond Reserve Requirement may be maintained by deposits of cash, a Qualified Letter of Credit <br /> or Qualified Insurance, or a combination of the foregoing. In computing the amount on hand in <br /> the 2018 Reserve Account, Qualified Insurance and/or a Qualified Letter of Credit shall be <br /> valued at the face amount thereof, and all other obligations purchased as an investment of <br /> moneys therein shall be equal to cash or cash equivalents or in the form of other investments <br /> with a maturity of ninety (90) days or more shall be subject to a marked to market valuation. As <br /> used herein, the term "cash" shall include U.S. currency, cash equivalents and evidences thereof, <br /> including deposits with the State of Washington's Local Government Investment Pool, including <br /> demand deposits, certified or cashier's check; and the deposit to the 2018 Reserve Account may <br /> be satisfied initially by the transfer of qualified investments to such account. <br /> Any Qualified Insurance shall not be cancelable on less than thirty (30) days' notice to <br /> the District. In the event of any cancellation or termination of a Qualified Insurance or a <br /> Qualified Letter of Credit, the 2018 Reserve Account shall be funded as if the 2018 Bonds that <br /> remain outstanding had been issued on the date of such notice of cancellation. <br /> In the event that the District elects to meet the 2018 Bond Reserve Requirement <br /> (following the date of issue of the 2018 Bonds) through the use of a Qualified Letter of Credit, <br /> Qualified Insurance or other equivalent credit enhancement device, the District may contract <br /> with the entity providing such Qualified Letter of Credit, Qualified Insurance or other equivalent <br /> credit enhancement device that the District's reimbursement obligation, if any, to such entity <br /> shall be made from payments of principal and interest on 2018 Bonds from the District subject <br /> only to the prior lien thereon for the payments required hereunder to be made to owners of the <br /> 2018 Bonds. <br /> (3) Withdrawals From 2018 Reserve Account. If the balances on hand in the <br /> 2018 Reserve Account are sufficient to satisfy the 2018 Bond Reserve Requirement, interest <br /> earnings shall be applied as provided in the following sentences. Whenever there is a sufficient <br /> amount in the 2018 Bond Account, including the 2018 Reserve Account to pay the principal of <br /> and interest on all outstanding 2018 Bonds, the money in the 2018 Reserve Account may be used <br /> to pay such principal and interest. As long as the money left remaining on deposit in the <br /> 2018 Reserve Account is equal to the 2018 Bond Reserve Requirement, money in the <br /> 2018 Reserve Account may be transferred to the 2018 Bond Account and used to pay the <br /> principal of and interest on 2018 Bonds as the same becomes due and payable. The District also <br /> may transfer out of the 2018 Reserve Account any money required in order to prevent any <br /> 2018 Bonds issued on a tax-exempt basis from becoming "arbitrage bonds" under the federal <br /> Internal Revenue Code of 1986, as amended. <br /> If a deficiency in the 2018 Bond Account for the payment of debt service on 2018 Bonds <br /> shall occur, such deficiency shall be made up from the Reserve Account by the withdrawal of <br /> cash therefrom for that purpose and by the sale or redemption of obligations held in the <br /> 2018 Reserve Account, in such amounts as will provide cash in the 2018 Reserve Account <br /> � 4- 501534419 v3 <br />