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<br />-23- <br />Section 3.05. Issuance of Parity Debt. In addition to the 2018 Bonds, the Successor <br />Agency may issue or incur additional Parity Debt to refund all or a portion of the Outstanding <br />Bonds hereunder in such principal amount as shall be determined by the Successor Agency, <br />subject to the satisfaction of the of following conditions precedent: <br /> <br />(i) annual debt service on such Parity Debt is lower than annual debt service on the <br />obligations being refunded during every Bond Year the refunded obligations would otherwise be <br />outstanding; <br /> <br />(ii) in the case of Parity Debt issued as additional Bonds under a Supplemental Indenture, <br />the amount on deposit in the Reserve Account (and any subaccounts therein) shall be increased <br />to the Reserve Requirement taking into account the additional Bonds to be issued; <br /> <br />(iii) in the case of Parity Debt not issued as additional Bonds under a Supplemental <br />Indenture, the Parity Debt Instrument shall state whether there shall be a reserve account <br />established with respect to such Parity Debt, and shall also set forth the amount, if any, to be <br />deposited in such reserve account as well as the reserve requirement with respect to such Parity <br />Debt; and <br /> <br />(iv) principal with respect to such Parity Debt shall be paid on September 1 in any year in <br />which such principal is payable. <br /> <br />Section 3.06. Issuance of Subordinate Debt. The Successor Agency may issue or incur <br />Subordinate Debt in such principal amount as shall be determined by the Successor Agency. <br />449