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collections of special assessments to be received before the <br />maturity date of the Bonds, together with the proceeds of any <br />definitive bonds or additional temporary bonds, to be issued at <br />or before the maturity date, and other revenues pledged for the <br />payment of the Bonds and the interest thereon will equal at least <br />five percent (5s) in excess of the principal and interest <br />requirements of the Bonds as the same become due. <br />18. Bondholder Covenant. The provisions of this <br />resolution constitute a covenant with the holders of the Bonds <br />issued by the City and the definitive bond to be issued to refund <br />such Bonds and, with respect to the payment of funds to the Debt <br />Service Account, a pledge of those funds for the benefit of the <br />holders of the Bonds payable therefrom. <br />19. Defeasance. When all Bonds have been discharged <br />as provided in this paragraph, all pledges, covenants and other <br />rights granted by this resolution to the registered holders of <br />the Bonds shall, to the extent permitted by law, cease. The City <br />may discharge its obligations with respect to any Bonds which are <br />due on any date by irrevocably depositing with the Bond Registrar <br />on or before that date a sum sufficient for the payment thereof <br />in full; or if any Bond should not be paid when due, it may <br />nevertheless be discharged by depositing with the Bond Registrar <br />a sum sufficient for the payment thereof in full with interest <br />accrued to the date of such deposit. The City may also discharge <br />its obligations with respect to any prepayable Bonds called for <br />redemption on any date when they are prepayable according to <br />their terms, by depositing with the Bond Registrar on or before <br />that date a sum sufficient for the payment thereof in full, <br />provided that notice of redemption thereof has been duly given. <br />The City may also at any time discharge its obligations with <br />respect to any Bonds, subject to the provisions of law now or <br />hereafter authorizing and regulating such action, by depositing <br />irrevocably in escrow, with a suitable banking institution <br />qualified by law as an escrow agent for this purpose, cash or <br />securities described in Minnesota Statutes, Section 475.67, <br />Subdivision 8, bearing interest payable at such times and at such <br />rates and maturing on such dates as shall be required, without <br />regard to sale and/or reinvestment, to pay all amounts to become <br />due thereon to maturity or, if notice of redemption as herein <br />required has been duly provided for, to such earlier redemption <br />date. <br />20. Compliance With Reimbursement Bond Regulations. <br />The provisions of this paragraph are intended to establish and <br />provide for the City's compliance with United States Treasury <br />Regulations Section 1.150-2 (the "Reimbursement Regulations") <br />applicable to the "reimbursement proceeds" of the Bonds, being <br />those portions thereof which will be used by the City to <br />reimburse itself for any expenditure which the City paid or will <br />931992.1 21 <br />