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Requirement, and the investment of funds in the Reserve <br /> Account, shall be subject to such restrictions and <br /> affirmative obligations as shall be necessary in order that <br /> none of the Secured Bonds shall (in the absence of <br /> compliance with any such restrictions or affirmative <br /> obligations) become generally subject to federal income <br /> taxation. <br /> In this subparagraph 16(d) , references to provisions of <br /> the Code shall be to the then-applicable provisions of the <br /> Internal Revenue Code of 1986, as amended, supplemented or <br /> superseded, and to the regulations, rulings and decisions <br /> thereunder, relating to tax-exempt obligations. <br /> The City hereby appropriates to the Reserve Account <br /> from the proceeds of the Bonds the sum of $ , <br /> being the Reserve Requirement calculated as described above <br /> for the Bonds. The Reserve Requirement shall be held as a <br /> reserve for the payment of the principal of and interest on <br /> all bonds payable from the Debt Service Account when due. <br /> Whenever and to the extent the balance in the Reserve <br /> Account is less than the Reserve Requirement, all earnings <br /> on monies invested in the Reserve Account shall be retained <br /> therein, monies on hand in the Surplus Account shall be <br /> transferred to the Reserve Account, and (if a deficiency <br /> still exists following the preceding steps) Gross Revenues <br /> from the Gross Revenue Account shall be transferred to the <br /> Reserve Account to the extent such Gross Revenues are not at <br /> the time needed in the Debt Service Account or Operating <br /> Account. Whenever the balance in the Reserve Account <br /> exceeds the Reserve Requirement, the excess shall be <br /> transferred to the extent of any deficiency in the Debt <br /> Service Account and the Operating Account, in that order of <br /> priority, and then to the Surplus Account. Moneys on hand <br /> in the Reserve Account shall be used only to pay interest or <br /> principal actually due on bonds payable from the Debt <br /> Service Account when, if and to the extent that such <br /> interest or principal cannot be paid in full from the Debt <br /> Service Account; provided that the amount of the reserve <br /> allocable to any bond issuepayable-fr-om the Debt Service <br /> Account may be used at any time to defease such bond issue <br /> (or applicable portion thereof) in accordance with paragraph <br /> 26, so long as the balance remaining on hand in the Reserve <br /> Account following such use is not less than the Reserve <br /> Requirement with respect to Outstanding bonds which continue <br /> to be payable from the Debt Service Account. <br /> (e) Operating Account. To the Operating Account <br /> there shall be credited such amounts of the Gross <br /> 244882 <br /> 20 <br />