Resolution - #07-02-054 - 02/13/2007

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14. Delivery~ Application of Proceeds. The Certificates when so prepared and executed shall be delivered by the Administrator to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 15. Fund and Accounts. There is hereby created a special fund to be designated the "General Obligation Equipment Certificates of Indebtedness, Series 2007A Fund" (the "Fund") to be administered and maintained by the Administrater as- a bookkeeping account separate and apart from all other funds maintained in the official fmancial records of the City. The Fund shall be maintained in the manner herein specified until all of the Certificates and the interest thereon have been fully paid. There shall be maintained in the Fund separate accounts, to be designated the "Capital Account" and "Debt Service Account", respectively. (a) Capital Account. To the Capital Account there shall be credited the proceeds of the sale of the Certificates, less accrued interest received thereon. From the Capital Account there shall be paid all costs and expenses of the acquisition of the Equipment including all costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65. The moneys in the Capital Account shall be used for no other purposes except as otherwise provided by law; provided that the proceeds of the Certificates may also be used to the extent necessary to pay interest on the Certificates due prior to the anticipated date of commencement of the collection of taxes herein levied. (b) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (i) accrued interest received upon delivery of the Certificates; (ii) all taxes herein or hereafter levied for the payment of the Certificates and interest thereon; (iii) available City funds in the amount of $12.220.83, deposited at closing, sufficient to pay interest due on the Certificates on or before August 1, 2007; (iv) all funds remaining in the Capital Account after the payment of all costs of the Equipment; (v) all investment earnings on funds held in the Debt Service Account; and (vi) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Debt Service Account. The Debt Service Account shall be used solely to pay the principal and interest of the Certificates and any other General Obligation Equipment-.Certificates of the City hereafter issued by the City and made payable from said account as provided by law. No portion of the proceeds of the Certificates 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 (i) for a reasonable temporary period until such proceeds are needed for the purpose for which the Certificates were issued and (ii) in addition to the above in an amount not greater than the lesser of five percent (5%) of the proceeds ofthe Certificates or $100,000. To this effect, any proceeds ofthe Certificates and any sums from time to time held in the Capital Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the certificates payable there from) 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 1987047vl 12