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Section 5. Funds and Accounts. <br /> (a) Reaffirmation of Funds; Creation of Accounts. There are hereby <br /> reaffirmed the General Fund and the Debt Service Fund. There is hereby established <br /> within the Debt Service Fund the Note Account and the Reserve Account. There is <br /> hereby established within the General Fund the Project Account. The foregoing funds <br /> and accounts shall be maintained by the District in accordance with the provisions of this <br /> Resolution. <br /> (b) Project Account. All moneys received from CWCB under the Loan <br /> Contracts shall be credited to the Project Account, in one or more subaccounts relating to <br /> each Loan Contract as determined in the discretion of the District's Executive Director, <br /> and shall be applied solely to the payment of the Project Costs. Upon the determination <br /> of the District's Executive Director that all Project Costs have been paid or are <br /> determinable, any balance remaining in the Project Account(less any amounts necessary <br /> to pay Project Costs not then due and owing) shall be applied solely in accordance with <br /> the terms of the Loan Contract,including without limitation provision A(5)thereof. <br /> (c) Note Account. Moneys in the Note Account shall be used solely for the <br /> purpose of paying the interest on and principal of the Promissory Notes. Following the <br /> provision for the payment of the Series 2013 Bonds in accordance with the terms of the <br /> Series 2013 Bond Resolution, there shall be credited to the Note Account an amount of <br /> Pledged Revenues which, when combined with other legally available moneys in the <br /> Note Account, will be sufficient to pay the principal of and interest on the Notes when <br /> due. In the event of insufficient Pledged Revenues, moneys shall be applied as provided <br /> in the Loan Contracts. Moneys in the Project Account also may be used to pay the <br /> interest accruing under provision A(4)of the Loan Contract prior to the completion of the <br /> Project. To the extent that moneys are not used from the final disbursement of loan funds <br /> pursuant to provision A(4) for such purpose, Pledged Revenues and other legally <br /> available moneys shall be credited to the Note Account prior to substantial completion of <br /> the Project in order to make said payment when due. <br /> (d) Reserve Account. <br /> (i) Use of Moneys in the Reserve Account. Moneys in the Reserve <br /> Account shall be used, if necessary, only to prevent a default in the payment of <br /> the principal of or interest on the Promissory Notes on any Payment Dates and the <br /> Reserve Account is hereby pledged to the payment of the Promissory Notes. hi <br /> the event the amounts credited to the Note Account are insufficient to pay the <br /> principal of or interest on Promissory Notes when due, the District shall transfer <br /> from the Reserve Accounts to the Note Account an amount which, when <br /> combined with moneys in the Note Account will be sufficient to make such <br /> payments when due. <br /> (ii) Funding and Maintenance of Required Reserve Amount. <br /> Commencing with the first Payment Date, the District shall annually credit an <br /> amount equal to one-tenth of the Required Reserve Amount on or before each <br /> 7 <br /> 4842-9493-1230.1 <br />