05-13-2020 Council Packet - Laserfiche WebLink

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12316306v3 -32- subject only to the provisions of Section 5.04 hereof, on or before any interest payment date transfer from the Reserve Fund to the Bond Fund any amount required to restore the deficiency and, so long as the balance remaining to the credit of the Reserve Fund thereafter is not less than $50,000, such transfer shall not result in an Event of Default under the Indenture or Loan Agreement; provided, however, that such amounts transferred from the Reserve Fund to the Bond Fund are restored to the Reserve Fund by the Borrower making Loan Repayments pursuant to Section 4.02(d) of the Loan Agreement in six equal monthly installments, each such installment being in an amount equal to one-sixth of the amount originally transferred, and the first such installment being due on the first day of the month following such original transfer from the Reserve Fund. The funds and investments in the Reserve Fund are irrevocably pledged to and shall be used by the Trustee, from time to time, as may be required, for the payment of principal of, premium (if any) on and interest on the Bonds as and when such principal and interest shall become due and payable and, subject only to the provisions of Section 7.05 hereof, for that purpose only; provided, nonetheless, that (i) as provided in Section 4.09 of the Loan Agreement, if investment earnings cause the amount on deposit in the Reserve Fund to exceed the Reserve Requirement, the Trustee shall, not less frequently than semiannually, on or prior to each Interest Payment Date commencing November 1, 2020, transfer the excess to the Bond Fund, and (ii) moneys and investments in the Reserve Fund shall be transferred to the Bond Fund when the moneys and proceeds of investments in the Reserve Fund shall be sufficient (with moneys and proceeds of investments in the Bond Fund) to pay when due the principal of and interest on all outstanding Bonds. Notwithstanding the foregoing, to the extent the Borrower has not deposited sufficient funds with the Trustee for any required rebate payments the Trustee in accordance with Section 4.08(d) of the Loan Agreement, the Trustee is authorized to use funds and investments in the Reserve Fund to pay the amount of any rebate payment due to the United States in respect of the Bonds under Section 148(f) of the Internal Revenue Code. Section 5.04 Repair and Replacement Reserve Fund. There is hereby established and the Trustee shall maintain so long as any of the Series 2020 Bonds are outstanding, a fund to be designated "City of Little Canada, Minnesota Senior Housing and Health Care Facilities Revenue Bonds (Langton Shores Project) Repair and Replacement Reserve Fund" (the "R&R Reserve"), into which deposits shall be made by the Borrower and from which withdrawals may be made by the Borrower, all in accordance with Section 6.12 of the Loan Agreement. Notwithstanding the foregoing, the Trustee, in its discretion, is authorized to use funds and investments in the R&R Reserve to pay the amount of any rebate due to the United States in respect of the Bonds under Section 148(f) of the Internal Revenue Code, if the Borrower shall have failed to pay or provide for the payment thereof under Section 4.08(d) of the Loan Agreement. Section 5.05 Investment of Funds. Moneys on deposit to the credit of the Project Fund, Bond Fund, Sinking Fund, Reserve Fund, and Optional Redemption Fund shall, upon request by the Authorized Borrower Representative, be invested by the Trustee in, to the extent authorized by the Act (i) direct obligations of or obligations fully guaranteed by the United States of