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fund payments required to be made with respect to Bonds on such September 1. No deposit <br />need be made in the Principal Account if the amount contained therein is at least equal to <br />the aggregate amount of the principal of all Outstanding Serial Bonds maturing by their <br />terms on such September 1 plus the aggregate amount of all sinking fund payments <br />required to be made on such September 1 for all Outstanding Term Bonds. <br />The Trustee shall establish and maintain within the Principal Account a separate <br />subaccount for Bonds of each series and maturity, designated as the "Sinking Account" <br />(the "Sinking Account"), inserting therein the series and maturity (if more than one such <br />subaccount is established for such series) designation of such Bonds. With respect to each <br />Sinking Account, on each mandatory sinking account payment date established for such <br />Sinking Account, the Trustee shall apply the mandatory sinking account payment required <br />on that date to the redemption (or payment at maturity, as the case may be) of Term Bonds <br />of the series and maturity for which such Sinking Account was established, upon the notice <br />and in the manner provided herein or in the Supplemental Indenture pursuant to which such <br />series of Bonds were issued; provided that, at any time prior to the selection of Bonds for <br />such redemption, at the written direction of the City or the Authority, the Trustee may apply <br />moneys in such Sinking Account to the purchase of Term Bonds of such series and maturity <br />at public or private sale, as and when and at such prices (including brokerage and other <br />charges, but excluding accrued interest, which is payable from the Interest Account) as <br />shall be determined by the Authority, except that the purchase price (excluding accrued <br />interest) shall not exceed the redemption price that would be payable for such Bonds upon <br />redemption by application of such mandatory sinking account payment. If, during the <br />twelve month period immediately preceding the selection of Bonds for redemption, the <br />Trustee has purchased Term Bonds of such series and maturity with moneys in such <br />Sinking Account, such Bonds so purchased shall be applied, to the extent of the full <br />principal amount thereof, to reduce said mandatory Sinking Account payment. <br />All money in the Principal Account shall be used and withdrawn by the Trustee <br />solely for the purpose of paying the principal of the Bonds as they shall become due and <br />payable, except that any money in any Sinking Account shall be used and withdrawn by <br />the Trustee only to purchase or to redeem or to pay Term Bonds for which such Sinking <br />Account was created. <br />(c) Redemption Account. In addition to the above accounts, the Trustee shall <br />establish and maintain within the Payment Fund a special account designated the <br />"Redemption Account." All money in the Redemption Account shall be held in trust by <br />the Trustee and shall be applied, used and withdrawn either to redeem bonds pursuant to <br />Article 3 or for the purposes authorized in this subsection (c). Any moneys which, pursuant <br />to Section 7.01 of the Installment Purchase Agreement, are to be used to redeem Bonds <br />shall be deposited by the Trustee in the Redemption Account. The Trustee shall, on the <br />scheduled redemption date, withdraw from the Redemption Account and pay to the Owners <br />entitled thereto an amount equal to the redemption price of the Bonds to be redeemed on <br />such date. <br />(d) Any delinquent Installment Payments with respect to the Project shall be <br />applied first to the Interest Account for the immediate payment of interest payments past <br />26 <br />55394.00068\42092121.3 <br />