55B - RESO - WARNER ASSESSMENT DISTRICT

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(D) Deficiencv. Upon malting a transfer from the Reserve Fund to the Redemption Fund, pursuant to subsection (B) of this Section 4.02 or Section 4,03(B) hereof, the Fiscal Agent shall report such fact to the City. As provided in the form of the Bonds attached hereto as Exhibit A, the City Council has determined in the Resolution of Intention that the City will not obligate itself to advance funds from the City Treasury to cure any deficiency which may occur in the Redemption Fund. (E) Determination of Ultimate Loss. Notwithstanding the provisions of subsection (B) of this Section 4.02, if the Treasurer determines, pursuant to Section 8770 of the California Streets and Highways Code, that there is a danger of an ultimate loss accruing to the Bond Owners, for any reason, the provisions of that section and Sections 8771, 8772 and 8773 of the California Streets and Highways Code shall govern with respect to the procedures which shall be followed in paying the principal of and interest on the Outstanding Bonds, Section 4,03 Reserve Fund, (A) Establishment of Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the "Assessment District No. 2015 -01 of the City of Santa Ana Improvement Bonds Reserve Fund" to the credit of which a deposit shall be made as required by Section 3.02(B) hereof, which deposit is equal to the Reserve Requirement as of the Closing Date, and to which deposits shall be made as provided in Section 4.02(B) hereof. Moneys in the Reserve Fund shall be held, by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest and any premium on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. (B) Use of Fund. Except as otherwise provided in this Section, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of, and interest and any premium on the Bonds or, in accordance with the provisions of subsection (E) of this Section 4,03, or for the purpose of redeeming Bonds. Anrormts transferred from the Reserve Fund to the Redemption Fund pursuant to this subsection shall be restored by the City from the collection of delinquent installments on the Assessments levied on parcels for which such installments are delinquent, and penalties and interest thereon, whether by judicial foreclosure proceedings or otherwise, as soon as is reasonably possible following the receipt by the City of such delinquent installments, penalties and interest. (C) Transfer Due to Deficiency in Redemption Fund. Whenever transfer is made from the Reserve Fund to the Redemption Fund due to a deficiency in the Redemption Fetid, the Fiscal Agent shall report such fact to the City. (D) Transfers on Payment of Assessments. Whenever an Assessment levied on a lot or parcel of property within the Assessment District is paid off, the Fiscal Agent shall, upon receiving an Officer's Certificate regarding such Assessment, transfer from the Reserve Fund to the Redemption Fund an amount equal to the reduction in such Assessment determined pursuant -23- 55B -43