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• interest when due. So long as the Reserve Account created pursuant to Section 4.04 <br /> hereof is fully funded, all Net Revenues remaining after satisfaction of the above <br /> requirements may be used for any lawful corporate purpose selected by the City <br /> Council. <br /> 4.04. Reserve Account. There is hereby established within the Liquor <br /> Enterprise Fund a "Reserve Account." There shall be an initial deposit of $92,000 to <br /> the Reserve Account from available funds of the City upon issuance of the Bonds. <br /> To fund the Reserve Account all available Net Revenues remaining after the <br /> required monthly deposit to the Revenue Bond Account shall be deposited in the <br /> Reserve Account until the balance therein equals $94,000, which is 10% of the <br /> principal amount of the Bonds. The money in the Reserve Account shall be used to <br /> pay principal and interest on the Bonds payable from the Revenue Bond Account <br /> whenever the amount on hand in the Revenue Bond Account is insufficient, but if <br /> used for such purpose it shall be restored to the required balance as soon as possible <br /> out of available Net Revenues. Should additional bonds payable from the Revenue <br /> Bond Account be issued pursuant to Section 4.06 hereof, the City shall increase the <br /> balance in the Reserve Account to an amount equal to the lesser of: (i) the <br /> maximum annual debt service payable in any future fiscal year during the <br /> remaining term of the bonds then outstanding on all bonds (including the <br /> additional bonds) payable from the Revenue Bond Account, (ii) 125% of the average <br /> annual debt service payable in any future fiscal year during the remaining term of <br /> • the bonds then outstanding on all bonds (including the additional bonds) payable <br /> from the Revenue Bond Account, or (iii) 10% of the original principal amount of all <br /> bonds (including additional bonds) payable from the Revenue Bond Account. Such <br /> increase shall be funded to the maximum extent feasible from the proceeds of the <br /> additional bonds, and, to the extent necessary, from the periodic deposit of available <br /> net revenues. <br /> 4.05. Issuance of Refunding Bonds. The City reserves the right and <br /> privilege of issuing and selling refunding certificates or bonds if and to the extent <br /> needed to refund maturing bonds payable form the Revenue Bond Account, if <br /> moneys in the Liquor Enterprise Fund are at any time insufficient for the payment <br /> in full of the principal and interest due thereon, which refunding obligations shall <br /> be payable from the Revenue Bond Account on a parity with the outstanding bonds <br /> payable therefrom, but shall not mature earlier than the final maturity of all bonds <br /> then outstanding. Nothing herein shall require the holder of any bond to accept a <br /> refunding obligation in exchange therefor. <br /> 4.06. Additional Bonds. The City hereby agrees that it will not issue <br /> any additional obligations payable from the Net Revenues or constituting a lien or <br /> charge thereon superior to or on a parity with the bonds previously issued unless it <br /> has first retired, or placed in escrow within a depository bank, moneys or securities <br /> sufficient to discharge the outstanding bonds pursuant to Section 7 hereof prior to <br /> • <br /> -16- <br />