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Section 2. Provisions for Refunding the Refunded Bonds. The City agrees, <br /> simultaneously with the delivery of the Bonds, to irrevocably deposit with the Refunding Trustee <br /> $6,252,448.98 of the proceeds thereof for credit to the Advance Refunding Account. <br /> The Refunding Trustee shall immediately apply $6,252,400 to purchase, on behalf of the <br /> City, the securities described in Appendix A attached hereto (collectively, the "Acquired <br /> Obligations") for credit to the Advance Refunding Account, to establish a beginning cash balance <br /> of $48.98 in such Account, and to pay certain costs of issuance as set forth on Appendix B <br /> attached hereto. The Acquired Obligations and beginning cash balance shall be applied by the <br /> Refunding Trustee to the payment of the principal and interest due and to become due on the <br /> Refunded Bonds in accordance with the schedule set forth in Appendix C hereof. Investments in <br /> mutual funds and unit investment trusts are prohibited. <br /> The Acquired Obligations and beginning cash balance in the Advance Refunding Fund <br /> shall be held in trust for the security and benefit of the holders and owners of the Refunded Bonds <br /> (subject to the right to substitute obligations pursuant to Section 5 of this Agreement). <br /> The City agrees that it will cause to be delivered to the Refunding Trustee, on or before <br /> the delivery of the Bonds to the initial purchasers thereof, statements setting forth the maturity <br /> schedule of the Refunded Bonds by number, amount, date of maturity and interest rates, the <br /> amount of interest to be paid on each semiannual interest payment date, the amount of principal to <br /> be paid on each annual principal payment date, and the redemption price to be paid on the date <br /> that any Refunded Bonds are to be redeemed, together with an opinion of a certified public <br /> accounting firm regarding the sufficiency of the Acquired Obligations and moneys to be deposited <br /> in the Advance Refunding Account. <br /> The City, by Section 14 of the Bond Ordinance, has irrevocably called the Refunded 1988 <br /> Bonds for redemption and prepayment on July 1, 1998, and has irrevocably called the Refunded <br /> 1982 Bonds for redemption and prepayment on December 1, 1995. The call for redemption and <br /> prepayment of such Refunded Bonds shall be irrevocable upon the delivery of the Bonds to the <br /> A-2 DOTO6M.DOC 94/01/19 <br />