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Improvement Portion of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said subaccount as provided by law. (ii) State -Aid Improvements Debt Service Subaccount. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the State -Aid Improvements Debt Service Subaccount: (A) upon receipt from the Commissioner of Finance of the State of Minnesota, the annual amount of money needed for payment of principal and interest due each year on the State -Aid Portion of the Bonds from moneys allotted or to be allotted to the City from its account in the Municipal State -Aid Street Fund; (B) a pro rata share of all accrued interest received upon delivery of the Bonds; (C) any collections of all taxes hereafter levied for the payment of the State -Aid Portion of the Bonds; (D) a pro rata share of all funds remaining in the Construction Account after completion of the State -Aid Improvements and payment of the costs thereof; (E) all investment earnings on funds held in the State -Aid Improvements Debt Service Subaccount; and (F) any and all other moneys which are properly available and are appropriated by the governing body of the City to the State -Aid Improvements Debt Service Subaccount. The State -Aid Improvements Debt Service Subaccount shall be used solely to pay the principal and interest and any premiums for redemption of the State -Aid Portion of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from the State - Aid Improvements Debt Service Subaccount as provided by law. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Construction Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the bonds payable therefrom) in excess of amounts which under then applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code "). 16. Covenants Relating to the Improvement Portion of the Bonds. (a) Assessments. It is hereby determined that no less than one hundred percent of the cost to the City of each Public Improvement financed hereunder within the meaning of Minnesota Statutes, Section 475.58, Subdivision 1(3), shall be paid by special assessments to be levied against every assessable lot, piece and parcel of land benefited by any of the Public 4057760v3 17