Resolution - #07-02-055 - 02/13/2007

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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 Fund (or any other City account which will be sued to pay principal and interest to become due on the Bonds) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard as to yield shall-notbe invested in-excess of the applicable yield restrictions imposed by the arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. In addition, the proceeds of the Bonds and 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 federal Internal Revenue Code of 1986, as amended (the "Code"). 15. Covenants Relating to the Bonds. (a) Tax Increments. The City hereby pledges and appropriates the Tax Increments to the Debt Service Account, which pledge and appropriation shall continue until the Bonds and any additional bonds payable from the Debt Service Account are paid or discharged. (b) Coverage Test. The Tax Increments are such that if collected in full they, together with estimated collections of other revenues herein pledged for the payment of the Bonds, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Bonds, consequently no taxes are levied at the present time. (c) Future Tax Levies. On or before October 10 of each year, the Treasurer shall certify to the County Auditor of Anoka County the amount of Tax Increments and any other funds appropriated to and then held in the Debt Service Account and the estimated collections of Tax Increments to be received in the next succeeding year. In the event that it is anticipated that the aggregate of said sums will not be sufficient to pay the principal and interest on the Bonds to become due in the first calendar year thereafter and the first six months of the succeeding calendar year, the City Council shall pass a resolution requesting the County Auditor of Anoka County to levy an ad valorem tax in an amount as is necessary, together with the aforementioned funds then held in the Debt Service Account and said estimated collections of Tax Increments to pay the principal and interest on the Bonds to become due during said period. (d) Reservation of Rights. Notwithstanding any provisions herein to the contrary, the City reserves the right to terminate, reduce, or apply to other lawful purposes the Tax Increments herein pledged to the payment of the Bonds and interest thereon to the extent and in the manner permitted by law. 16. Defeasance. When all Bonds have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Bond 1988178vl 15