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• 4.04. Full Faith and Credit Pledged. The full faith and credit and taxing <br /> power of the City shall be and are hereby irrevocably pledged for the prompt and full <br /> payment of the principal of and interest on the Bonds. It is estimated that the tax <br /> increment from the Districts and other funds herein pledged for the payment of the <br /> Bonds will be collected in amounts not less than five percent in excess of the <br /> amounts needed to meet when due the principal of and interest on the Bonds and <br /> all other obligations of the City payable from tax increments from the Districts as <br /> required by Minnesota Statutes, Section 475.61. Consequently, no ad valorem taxes <br /> are now levied to pay the Bonds or the interest to come due thereon, pursuant to <br /> Minnesota Statutes, Section 469.178, subdivision 2. <br /> 4.05. Additional Bonds. The City reserves the right to issue additional <br /> bonds payable from the Sinking Fund and tax increments to be derived from the <br /> Districts may be used to finance costs of other projects to be undertaken in <br /> accordance with the redevelopment plans of the HRA or to refund bonds previously <br /> issued for such purpose. <br /> Section 5. Defeasance. When all of the Bonds have been discharged as <br /> provided in this section, all pledges, covenants and other rights granted by this <br /> resolution to the holders of the Bonds shall cease. The City may discharge its <br /> obligations with respect to any Bonds which are due on any date by depositing with <br /> • the paying agent on or before that date a sum sufficient for the payment thereof in <br /> full; or, if any Bond should not be paid when due, it may nevertheless be discharged <br /> by depositing with the paying agent a sum sufficient for the payment thereof in full <br /> with interest accrued to the date of such deposit. The City may also discharge its <br /> obligations with respect to any prepayable Bond called for redemption on any date <br /> when it is prepayable according to their terms, by depositing with the Registrar on or <br /> before that date a sum sufficient for the payment thereof in full; provided that <br /> notice of the redemption thereof has been duly given as provided in Section 3.05. <br /> The City may also at any time discharge its obligations with respect to any Bonds, <br /> subject to the provisions of law now or hereafter authorizing and regulating such <br /> action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow <br /> agent for this purpose, cash or securities which are general obligations of the United <br /> States or securities of United States agencies which are authorized by law to be so <br /> deposited, bearing interest payable at such time and at such rates and maturing on <br /> such dates as shall be required, without reinvestment, to pay all principal and <br /> interest to become due thereon to maturity or, if notice of redemption as herein <br /> required has been duly provided for, to such earlier redemption date. <br /> -15- <br />