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principal next due within one year which would have accrued on said Bonds during the <br /> then current calendar month if such principal amounts were deemed to accrue monthly <br /> (assuming that a year consists of twelve equivalent calendar months of thirty days each) <br /> in equal amounts from the next preceding principal payment due date, or, if there is no <br /> such preceding principal payment due date, from a date one year preceding the due <br /> date of such principal amount. Moneys in the Principal Account shall be used to pay the <br /> principal of the Bonds as and when the same shall mature, and for no other purpose. <br /> The Issuer shall adjust the amount of deposit to the Principal Account not later than the <br /> month immediately preceding any principal payment date so as to provide sufficient <br /> moneys in the Principal Account to pay the principal on Bonds becoming due on such <br /> principal payment date. <br /> 3. Bond Amortization Account. Commencing in the month which is one <br /> year prior to any Amortization Installment due date, the Issuer shall deposit into or <br /> credit to the Bond Amortization Account the sum which, together with the balance in <br /> said Account, shall equal the Amortization Installments on all Bonds Outstanding due <br /> and unpaid and that portion of the Amortization Installments of all Bonds Outstanding <br /> next due which would have accrued on such Bonds during the then current calendar <br /> month if such Amortization Installments were deemed to accrue monthly (assuming <br /> that a year consists of twelve equivalent calendar months having thirty days each) in <br /> equal amounts from the next preceding Amortization Installment due date, or, if there is <br /> no such preceding Amortization Installment due date, from a date one year preceding <br /> the due date of such Amortization Installment. Moneys in the Bond Amortization <br /> Account shall be used to purchase or redeem Term Bonds in the manner herein <br /> provided, and for no other purpose. The Issuer shall adjust the amount of the deposit <br /> into the Bond Amortization Account not later than the 21st of each month immediately <br /> preceding any date for payment of an Amortization Installment so as to provide <br /> sufficient moneys in the Bond Amortization Account to pay the Amortization <br /> Installments on the Bonds coming due on such date. Payments to the Bond <br /> Amortization Account shall be on a parity with payments to the Principal Account. <br /> Amounts accumulated in the Bond Amortization Account with respect to any <br /> Amortization Installment (together with amounts accumulated in the Interest Account <br /> with respect to interest, if any, on the Term Bonds for which such Amortization <br /> Installment was established) may be applied by the Issuer, on or prior to the sixtieth day <br /> preceding the due date of such Amortization Installment (a) to the purchase of Term <br /> Bonds of the Series and maturity for which such Amortization Installment was <br /> established, at a price not greater than the Redemption Price at which such Term Bonds <br /> may be redeemed on the first date thereafter on which such Term Bonds shall be subject <br /> to redemption, or (b) to the redemption at the applicable Redemption Price of such Term <br /> Bonds, if then redeemable by their terms. The applicable Redemption Price(or principal <br /> amount of maturing Term Bonds) of any Term Bonds so purchased or redeemed shall be <br /> deemed to constitute part of the Bond Amortization Account until such Amortization <br /> Installment date, for the purposes of calculating the amount of such Account. As soon <br /> as practicable after the sixtieth day preceding the due date of any such Amortization <br /> Installment, the Issuer shall proceed to call for redemption on such due date,by causing <br /> notice to be given as provided in Section 3.03 hereof, Term Bonds of the Series and <br /> maturity for which such Amortization Installment was established (except in the case of <br /> Term Bonds maturing on an Amortization Installment date) in such amount as shall be <br /> necessary to complete the retirement of the unsatisfied balance of such Amortization <br /> Installment. The Issuer shall pay out of the Bond Amortization Account and the Interest <br /> Account to the appropriate Paying Agents, on or before the day preceding such <br /> redemption date (or maturity date), the amount required for the redemption (or for the <br /> payment of such Term Bonds then maturing), and such amount shall be applied by such <br /> Paying Agents to such redemption (or payment). All expenses in connection with the <br /> purchase or redemption of Term Bonds shall be paid by the Issuer from the Revenue <br /> Fund. <br /> 19 <br />