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ARTICLE XI DISCHARGE AND DEFEASANCE Section 11.01. Discharge and Defeasance bv Payment. When any Bond or Bonds shall have been paid in full as to principal and interest, or when any Bond or Bonds shall have become due and payable, whether at maturity or otherwise, and the City shall have provided for the payment of the entire amount due or to become due on such Bond or Bonds by depositing with the Paying AgentIRegistrar, for payment of such Bond or Bonds then outstanding, the entire amount due or to become due thereon, and the City shall also have paid or caused to be paid all sums payable with respect to such Bond or Bonds under this Ordinance, and shall have made proper arrangements for payment of the compensation due or to become due the Paying Agent/Registrar with respect to such Bond or Bonds, then the Bond or Bonds thus paid or for which provision for payment is thus made shall be deemed paid and retired and shall no longer be regarded as outstanding and unpaid, and the Paying Agent/Registrar, upon receipt of a letter of instructions from the City requesting the same, shall discharge and release the lien of this Ordinance with respect to such Bond or Bonds and execute and deliver to the City such releases or other instruments as shall be requisite to release the lien hereof. Section 11.02. Discharge and Defeasance bv Deposit. (a) The City may discharge its obligation to pay the principal of and interest on all or any portion of the Bonds and its obligation to pay other sums payable or to become payable under this Ordinance by the City, including the compensation due or to become due the Paying Agent/Registrar, by complying with the following provisions: (i) the City shall deposit or cause to be deposited with the Paying Agent/Registrar or other lawfully authorized entity an amount of money that, together with the interest earned on or capital gains or profits to be realized from the investment of such money, will be sufficient to pay the principal of, accrued interest on and redemption premium, if any, on such Bond or Bonds to maturity or prior redemption, and to pay such other amounts as may be reasonably estimated by the Paying Agent/Registrar to become payable under this Ordinance with respect to the Bond or Bonds being provided for, including the compensation d4e or to become due the Paying Agent/Registrar; and (ii) if such Bond or Bonds are scheduled to paid or redeemed on a date later than the next scheduled interest payment date thereon, the City shall establish or cause to be established a separate escrow account fund with the Paying Agent/Registrar or such other lawfully authorized entity pursuant to an escrow deposit agreement for the deposit pursuant to subsection (a)(i) of this Section; (iii) the City shall make provision for the investment of such moneys by the Paying Agent/Registrar or such other lawfully authorized entity in: (A) direct noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (B) noncallable obligations of an agency or instrumentality of the United States, including obI igations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding obligations, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and/or (C) noncilllable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been R:\SANMAR\GO.OO\DOCS\FlNAL~o. v.pd 27