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e e payment are insufficient for such purpose, and may be used for the purpose of fmally retiring the last of any Parity Bonds. Beginning on May 15, 1994 and ending April 30, 1999, the City shall, from the Net Revenues in the System Fund, deposit into the Reserve Fund an amount of money in equal monthly amounts (the "Monthly Reserve Deposit") to achieve the Reserve Requirement (hereinafter described). Notwithstanding any provision hereof to the contrary, no deposits shall be made into the Reserve Fund at a time when there is a deficiency in the amount on deposit in the Interest and Sinking Fund nor shall any deposits be made into the Reserve Fund at any time it contains an amount equal to or greater than the Reserve Requirement. If and whenever the balance in the Reserve Fund is reduced below the Reserve Requirement, or if the City should fail timely to make any Monthly Reserve Deposit in full, then and in either such event, the City shall, from the first available and unallocated Net Revenues of the following month or months, cause amounts equal in the aggregate to any such deficiency to be set apart and transferred into the Reserve Fund and such transfers shall be in addition to the amounts otherwise required to be deposited into such Fund during such month or months. Surplus funds in the Reserve Fund resulting from any reduction of the Reserve Requirement or otherwise shall be promptly transferred from the Reserve Fund into the Interest and Sinking Fund, and payments into the Interest and Sinking Fund from the System Fund shall be reduced accordingly. As used herein "Reserve Requirement" shall be the lesser of (1) 10% of the face amount of the Parity Bonds, (2) 100% of the maximum annual debt service for the Parity Bonds. or (3) 125% of average annual debt service for the Parity Bonds, SECTION 12. INVESTMENTS, Money in any Fund established by the Parity Bonds Ordinances may, at the option of the City, be placed or invested in "Pennitted Investments" as defined and used herein to mean, to the extent pennitted by Texas law: (1) direct obligations of (including obligatio~s issued or held in book entry fonn on the books of) the Department of Treasury of the United States of 'America; (2) obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including: Export - Import Bank Fanners Home Administration U,S. Maritime Administration Small Business Administration Government National Mortgage Association (GNMA) U.S, Department of Housing and Urban Development (PHA's) Federal Housing Administration; (3) bonds, notes, or other evidences of indebtedness rated "AAA" by Standard & Poor's Rating Group ("S&P") and "Aaa" by Moody's Investors Service ("Moody's") issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation with remaining maturities not exceeding three years; or (4) U.S. dollar denominated deposit accounts, federal funds, and banker's acceptances with domestic commercial banks which have a rating on their short tenn certificales of deposit on the date of purchase of "A-I" or "A-l+" by S&P and "P_l" by Moody's and maturing no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); Any obligation in which money from the Interest and Sinking Fund or the Reserve Fund are so invested shall be kept and held in the depository bank of the City in escrow and in trust for the benefit of the owners of the Parity Bonds, and shall be promptly sold and the proceeds of sale applied to the making of any payments required to be made from the Interest and Sinking Fund or Reserve Fund, as the case may be. Except as described in Section 20, all such investments shall at all times be a part of the Fund from which the money used to acquire said invesunents shall have come and all earnings on such investments shall be credited to, and losses thereon charged against, such Fund. Notwithstanding any provision hereof to the contrary, any investment of 12