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5313747v2 13 be maintained in the manner herein specified un til the Bonds and the intere st thereon shall have been fully paid. In such records there shall be established and maintained the following separate accounts, for the purposes as follows: (a) Escrow Account. The Escrow Account shal l be maintained as an escrow account with U.S. Bank National Association (the "Escrow Agent"), in Saint Paul, Minnesota, which is a suitable financial institution within or without the State. $__________ in proceeds of the sale of the Bonds shall be received by the Escrow Agent and applied to fund the Escrow Account or to pay costs of issuing the Bonds. Proceeds of the Bonds less pr oceeds used to pay costs of issuance and any proceeds returned to the City are hereby irrevocably pledged and appropriated to the Escrow Account, together with all inve stment earnings thereon. The Escrow Account shall be invested in securities maturing or cal lable at the option of the holder on such dates and bearing interest at such rates as shall be required to provide su fficient funds, together with any cash or other funds retained in the Escrow Account , (i) to pay when due the interest to accrue on the Bonds to and including the Cr ossover Date; and (ii) to pay when called for redemption on the Crossover Date, the principal amount of the Refunded Bonds. The Escrow Account shall be irrevocably appropriated to the payment of (i) all interest on the Bonds to and including the Crossover Date, and (ii) the principal of the Refunded Bonds due by r eason of their call for redemption on the Crossover Date. The moneys in the Escrow Account shall be used solely for the purposes herein set forth and for no other pur pose, except that any surplus in the Escrow Account may be remitted to the City, all in accordance with an agreement (the "Escrow Agreement") by and between the City and Escrow Ag ent, a form of which agreement is on file in the office of the Clerk. Any moneys remitted to th e City pursuant to the Escrow Agreement shall be deposited in the Debt Service Account. (b) Debt Service Account. To the Debt Serv ice Account there is hereby pledged and irrevocably appropriated and there shall be credited : (1) after the Crossover Date, all collections of all taxes heretofore levied fo r the payment of the Prior Bonds which are not needed to pay the Prior Bonds as a result of the Refunding; (2) any collections of all taxes herein or hereafter levied for the payment of the Bonds; (3) any a ccrued interest received upon delivery of the Bonds; (4) any sums remitted to the City pursuant to the Escr ow Agreement; (5) any balance remaining after the Crossover Date in the Debt Service Account created by the Prior Resolution; (6) all investment earnings on funds in the De bt Service Account; and (7) any and all other moneys which are properly available and are ap propriated by the governin g body of the City to the Debt Service Account. The amount of any surplus remaining in the Debt Service Account when the Bonds and interest ther eon are paid shall be used cons istent with Minnesota Statutes, Section 475.61, Subdivision 4. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (a) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and (b) in addition to the above, in an amount not greater than the lesser of five percent of the procee ds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Fund (or any other City account which will be used to pay pr incipal and interest to become due on the Bonds) in excess of amounts which under th e applicable federal arbitrage regulations may be invested without regard as to yield shall not be invested in excess of the appli cable yield restrictions