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<br />" <br /> <br />... <br /> <br />12. Debt Service Fund. There is hereby created on the <br />official books and records of the City a fund designated as <br />$2,350,000 General Obligation Capital Improvement Refunding <br />Bonds, Ser ies 1986, Debt Serv ice Fund (the "Debt Service <br />Fund"), which shall be held in trust by the City for the <br />benef i t of the Owne rs from time to time of the Bonds, as <br />hereinafter provided. Wi thin the Debt Service Fund, there <br />shall be created and maintained (at least until the Cross- <br />over Date) separate accounts designated as Interest Account <br />and principal Account. Until the principal of and interest <br />on the Bonds are paid, or until all of the Bonds are other- <br />wise discharged as hereinafter provided: <br /> <br />(a) The following amounts shall be credited to the <br />Interest Account, which funds are hereby pledged to and <br />shall be used to pay interest accruing on the Bonds <br />prior to the Crossover Date: <br /> <br />(i) Any accrued interest on the Bonds re- <br />ceived by the Ci ty upon the actual de- <br />livery of the Bonds, except that the same <br />may be used to prepay earnings on, and in <br />connection with the purchase of, Refund- <br />ing Obligations under the Escrow Deposit <br />Agreement for subsequent application <br />toward payment of the interest on the <br />Bonds; <br /> <br />(ii) All earnings on investments of funds held <br />in the Escrow Account (the "Escrow Earn- <br />ings") and received by the City pursuant <br />to the Escrow Deposit Agreement; and <br /> <br />(iii) Series 1986 Tax Levies to the extent that <br />the amounts described in (i) and (ii) are <br />insufficient to make timely payments of <br />the above-descr ibed interest on the <br />Bonds, when due; and <br /> <br />(b) There shall be credited to <br />Account, and are hereby pledged to the <br />pr incipal of the Bonds coming due on <br />Crossover Date, Series 1986 Tax Levies <br />ficient to pay the same, when due. <br /> <br />the Principal <br />payment of the <br />or pr ior to the <br />in amounts suf- <br /> <br />(c) From and after the Crossover Date, separate <br />Accounts shall no longer be required to be maintained in <br />the Debt Service Fund, and the City shall credit <br />thereto, and hereby pledges to the payment of the prin- <br />cipal of and interes t on the Bonds, when due, Ser ies <br />1986 Tax Levies in amounts sufficient for such purposes. <br /> <br />- 14 - <br />