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ARTICLE IV APPLICATION OF PROCEEDS OF BONDS; ESTABLISHMENT OF FUNDS Section 4.01. Application of Proceeds of Sale of Bonds. Upon receipt of the proceeds of sale of the Bonds on any Closing Date, the proceeds thereof shall be forthwith set aside, paid over and deposited by the Treasurer, as set forth in the Bond Purchase Contract and appropriate Certificates of the City. Section 4.02. Cost of Issuance Fund. There is hereby created a special fund to be known as the "Seaport Boulevard Assessment District (Reassessment and Refunding of 1990) Cost of Issuance Fund" (the "Cost of Issuance Fund"), which the City hereby covenants and agrees to cause to be maintained and which shall be held in trust by the Treasurer. The moneys in the Cost of Issuance Fund shall be used in the manner provided by law solely for the purpose of the payment of Costs of Issuance, on or after the Closing Date. Any funds remaining in the Cost of Issuance Fund on the date that is six months after the Closing Date, shall be transferred to the Redemption Fund. Section 4.03. Reserve Fund. There is hereby created a special fund to be known as the "Seaport Boulevard Assessment District (Reassessment and Refunding of 1990) Reserve Fund" (the "Reserve Fund"). The amount of the Reserve Fund shall be established in the amount specified in the Bond Purchase Contract and thereafter shall not exceed the Reserve Requirement. The moneys in the Reserve Fund shall constitute a trust fund for the benefit of the Registered Owners of the Bonds and shall be administered by the City in accordance with and pursuant to the proViSions of Part 16 of the Bond Law; provided that proceeds from redemption or sale of the properties with respect to which payment of delinquent assessments and interest thereon was paid from the Reserve Fund, shall be credited to the Reserve Fund; and provided further that for the purposes of maintaining the Reserve Requirement and providing for any required reduction of the amount of money in the Reserve Fund during the term of the Bonds pursuant to Section 8887 of the Act, and applicable provisions of the Tax Code, all proceeds from investment of moneys in the Reserve Fund in excess of the Reserve Requirement shall be credited upon the assessments, except as otherwise provided in Section 5.07 hereof. Section 4.04. Redemption Fund. There is hereby created a special fund to be known as the "Seaport Boulevard Assessment District (Reassessment and Refunding of 1990) Limited Obligation Refunding Improvement Bonds Redemption Fund" (the "Redemption Fund"). The Treasurer shall place in the Redemption Fund premium received upon the sale of the Bonds and all sums received from the collection of unpaid reassessments provided in Section 5.01 hereof, and of the interest and penalties thereon. Section 4.05. Investment of Funds. Moneys in the Improvement Fund, Redemption Fund, and the Reserve Fund shall, whenever practicable, be invested in Authorized investments, maturing on a date prior to which such moneys are expected to be required. Any income therefrom or interest thereon shall accrue to and be deposited in the fund from which said moneys were invested, subject to the proviSions of Section 5.07 hereof. -14- I 1261