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thereto and any other expenses (including the fees and expenses of the Paying Agent/Registrar) <br />connected therewith. <br />Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, <br />or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not <br />the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and <br />shall be entitled to all the benefits of this Second Supplement equally and ratably with all other <br />Outstanding Bonds. <br />Section 3.06. BOND INSURANCE. In connection with the sale of a series of the <br />Bonds, the City Official may obtain a municipal bond insurance policy from a municipal bond <br />insurer (the "Insurer") to guarantee the full and complete payment required to be made by or on <br />behalf of the City on some or all of the Bonds as determined by the City Official. The City <br />Official are hereby authorized to sign a commitment letter and insurance agreement with any <br />Insurer and to pay the premium for the bond insurance policies at the time of the delivery of the <br />Bonds out of the proceeds of sale of a series of the Bonds or from other available funds and to <br />execute such other documents and certificates as necessary in connection with the bond <br />insurance policies as he or she may deem appropriate. Printing on Bonds covered by the bond <br />insurance policies a statement describing such insurance, in form and substance satisfactory to <br />the Insurer and the City Official, is hereby approved and authorized. The Pricing Certificate <br />may contain provisions related to the bond insurance policies, including payment provisions <br />thereunder, and the rights of the Insurer or Insurers, and any such provisions shall be read and <br />interpreted as an integral part of this Second Supplement. <br />ARTICLE IV <br />PAYMENTS, REBATE FUND AND RESERVE FUND <br />Section 4.01. PAYMENTS. (a) Accrued and Capitalized Interest. Immediately after <br />the delivery of a series of the Bonds the City shall deposit any accrued interest and any sale <br />proceeds to be used to pay capitalized interest received from the sale and delivery of such Bonds <br />to the credit of the Interest and Sinking Account to be held to pay interest on such Bonds. <br />(b) Debt Service Payments. Semiannually on or before each principal or interest <br />payment date while any of the Bonds are outstanding and unpaid, commencing on the first <br />interest payment date for the Bonds, the City shall make available from the Interest and Sinking <br />Account to the Paying Agent/Registrar, money sufficient to pay such interest on and such <br />principal of the Bonds as will accrue or mature, or be subject to mandatory redemption prior to <br />maturity, on such principal, redemption, or interest payment date. The Paying Agent/Registrar <br />shall cancel all paid Bonds and shall furnish the City with an appropriate certificate of <br />cancellation. <br />Section 4.02. REBATE ACCOUNT. A separate and special account to be known as <br />the Rebate Account is hereby established by the City pursuant to the requirements of Section <br />148(f) of the Code and the tax covenants of the City contained in Section 5.01 of this Second <br />Supplement for the benefit of the United States of America and the City, as their interests may <br />15 <br />SanMARCOS\EtectricUlitSysRevBonds\2021: 21idtSuppOrdimnce <br />