03-10-10 Regular Meeting of the La Porte Area Water Authority

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ARTICLE FOUR REVENUES AND FUNDS SECTION 4.1. Creation of Funds. All Pledged Revenues shall be kept separate and apart from all other funds of the Authority, and the special funds described in this Article Four shall be established and maintained in an official depository bank or depository banks of the Authority so long as any of the Parity Bonds, or interest thereon, are outstanding and unpaid. SECTION 4.2. Revenue Fund. All Pledged Revenues are and shall be credited to the Revenue Fund immediately upon receipt. Payments from the Revenue Fund shall be made in the priority specified in Section 4.8 hereof. SECTION 4.3. Bond Fund. The Bond Fund is created for the sole purpose of paying the principal of, redemption premium, if any, and interest on the Parity Bonds, as the same come due. Payments into the Bond Fund shall be made in substantially equal monthly payments (commencing with respect to the Bonds and any Additional Bonds on the date of delivery to the initial purchaser thereof) during each year in which any of the Parity Bonds are outstanding in an aggregate amount equal to the amounts required to meet the interest and principal payments falling due on or before the next maturity date or mandatory redemption date of the Parity Bonds. The Authority shall, at least five days prior to September 15, 2010, and each March 15 and September 15 thereafter, deposit into the Bond Fund any additional Pledged Revenues available in the Revenue Fund which may be necessary to pay in full the interest on and principal, if any, coming due on such March 15 or September 15. In no event shall any amount in excess of the amounts stated above be retained in the Bond Fund, and any such excess amount may be withdrawn by the Authority and replaced in the Revenue Fund. SECTION 4.4. Reserve Fund. The Reserve Fund shall be used to pay the principal of and interest on the Parity Bonds when and to the extent the amounts in the Bond Fund available for such payment are insufficient for such purpose, and may be used for the purpose of finally retiring the last of the Bonds. Funds for the Reserve Fund are hereby appropriated from the reserve fund for the Refunded Bonds and shall be deposited in the Reserve Fund. Notwithstanding any provision hereof to the contrary, no deposits shall be made into the Reserve Fund at any time when there is a deficiency in the amount on deposit in to the Bond 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, the Authority shall, from the first available and unallocated Pledged 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 from the Revenue Fund; provided, however, that in any event amounts on deposit in the Reserve Fund shall be restored to the Reserve Requirement within 17 HOU:3003369.!