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Portion and sums held in the Escrow Account, will produce at least five percent in excess of the <br />amount needed to meet when due the principal and interest payments on the Capital <br />Improvement Refunding Portion. The tax levies shall be irrepealable so long as any of the <br />Capital Improvement Refunding Portion are outstanding and unpaid, provided that the City <br />reserves the right and power to reduce the levies in the manner and to the extent permitted by <br />Minnesota Statutes, Section 475.61, Subdivision 3. <br />Upon payment of the Prior Capital Improvement Bonds, the uncollected taxes levied in <br />the Prior Capital Improvement Resolution authorizing the issuance of the Prior Capital <br />Improvement Bonds which are not needed to pay the Prior Capital Improvement Bonds as a <br />result of the Refunding shall be canceled. <br />(b) General Obligation Pledge. For the prompt and full payment of the principal of <br />and interest on the Capital Improvement Refunding Portion as the same respectively become <br />due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably <br />pledged. If the balance in the Escrow Account or Capital Improvement Debt Service Subaccount <br />is ever insufficient to pay all principal and interest then due on the Capital Improvement <br />Refunding Portion payable therefrom, the deficiency shall be promptly paid out of any other <br />accounts of the City which are available for such purpose, and such other funds may be <br />reimbursed without interest from the Escrow Account or Capital Improvement Debt Service <br />Subaccount when a sufficient balance is available therein. <br />18. Covenants Relating to the Abatement Refunding Portion. <br />(a) Coverage Test. The Tax Abatements are such that if collected in full they will <br />produce at least five percent in excess of the amount needed to meet when due the principal and <br />interest payments on the Abatement Refunding Portion of the Bonds. Consequently, no taxes are <br />levied at the present time. <br />(b) Pledge of Abated Taxes; General Obligation Pledge. The City hereby pledges <br />and appropriates the Tax Abatements to the payment of the principal and interest on the <br />Abatement Refunding Portion of the Bonds. For the prompt and full payment of the principal <br />and interest on the Abatement Refunding Portion of the Bonds, as the same respectively become <br />due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably <br />pledged. If the balance in the Abatement Debt Service Subaccount is ever insufficient to pay all <br />principal and interest then due on the Abatement Refunding Portion of the Bonds and any other <br />bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City <br />which are available for such purpose, and such other funds may be reimbursed with or without <br />interest from the Abatement Debt Service Subaccount when a sufficient balance is available <br />therein. <br />19. Securities; Escrow Agent. Securities purchased from moneys in the Escrow <br />Account shall be limited to securities set forth in Minnesota Statutes, Section 475.67, <br />Subdivision 8, and any amendments or supplements thereto. Securities purchased from the <br />Escrow Account shall be purchased simultaneously with the delivery of the Bonds. The City <br />Council has investigated the facts and hereby finds and determines that the Escrow Agent is a <br />suitable financial institution to act as escrow agent. <br />16 <br />5253945vl <br />