98-039 ORD AUTHORIZE TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1998

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Section 19. INTEREST AND SINKING FLTND REQUIREMENTS. (a) That promptly after the delivery of the Bonds the Issuer shall cause to be deposited to the credit of the Interest and Sinking Fund any accrued interest received from the sale and delivery of the Bonds, and any such deposit shall be used to pay part of the interest next coming due on the Bonds. (b) That the Issuer shall transfer from the Net Revenues and deposit to the credit of the Interest and Sinking Fund the amounts, at the times, as follows: (1) such amounts, deposited in approximately equal monthly installments on or before the l Oth day of each month hereafter, commencing with the month during which the Bonds are delivered, or the month thereafter if delivery is made after the l Oth day thereof, as will be sufficient, together with other amounts, if any, then on hand in the Interest and Sinking Fund and available for such purpose, to pay interest scheduled to accrue and come due on the Bonds, the Outstanding Bonds, and any Revenue Bonds, on the next succeeding interest payment date; (2) such amounts, deposited in approximately equal monthly installments on or before the l Oth day of each month hereafter, commencing with the month during which the Bonds are delivered, or the month thereafter if delivery is made after the l Oth day thereof, as will be sufficient, together with other amounts, if any, then on hand in the Interest and Sinking Fund and available for such purpose, to pay principal scheduled to mature and come due on the Bonds, the Outstanding Bonds, and any Revenue Bonds, on the next succeeding principal payment date; and Section 20. RESERVE FLTND REQUIREMENTS. The Issuer has on deposit in the Reserve Fund $ which is the Required Reserve Amount, which amount is equal to the average annual principal and interest requirement on the Bonds and the Outstanding Bonds. The Issuer shall maintain an amount of money and investments equal to the average annual principal and interest requirements of the Bonds, the Outstanding Bonds, and any Revenue Bonds, if any, (the "Required Reserve Amount"). Following the issuance of Bonds, the Required Reserve Amount shall be equal to the average annual principal and interest requirements of the Bonds, and any Revenue Bonds then outstanding. After the delivery of any Revenue Bonds the Issuer shall cause the Reserve Fund to be increased, if and to the extent necessary, so that such fund will contain an amount of money and investments equal to the Required Reserve Amount. Any increase in the Required Reserve Amount may be funded from Net Revenues or from proceeds from the sale of any Revenue Bonds, or any other available source or combination of sources. All or any part of the Required Reserve Amount not funded initially and immediately after the delivery of any installment or issue of Revenue Bonds shall be funded, within not more than five years from the date of such delivery, by deposits of Net Revenues in approximately equal monthly installments on or before the l Oth day of each month. Principal amounts of the Bonds, the Outstanding Bonds, and any Revenue Bonds which must be redeemed pursuant to any applicable mandatory redemption requirements shall be deemed to be maturing amounts of principal for the purpose of calculating principal and interest requirements on such bonds. When and so long as the amount in the Reserve Fund is not less than the Required 25