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(b) to immediately invest $3,529,356.00 of such funds in the Federal Securities set forth on Schedule B attached hereto and to hold such securities and $9.93 of such funds in cash in accordance with the terms of this Agreement; (c) in the event the securities described on Schedule B cannot be purchased, substitute securities may be purchased with the consent of the Issuer but only upon receipt of verification from an independent certified public accountant that the cash and securities deposited will not be less than the Escrow Requirement and only upon receipt of an opinion of Bryant, Miller and Olive, P.A., that such securities constitute Federal Securities for purposes of this Agreement; (d) there will be no investment of firnds except as set forth in this Section 3 and except as set forth in Section 5. SECTION 4. PAYMENT OF BONDS AND EXPENSES. (a) Defeased Bonds. On the dates and in the amounts set forth on Schedule A, the Escrow Holder shall transfer to The Bank of New York, New York, New York, the Paying Agent for the Defeased Bonds (the "Paying Agent"), in immediately available funds solely from amounts available in the Escrow Account, a sum sufficient to pay that portion of the Annual Debt Service for the Defeased Bonds coming due on such dates, as shown on Schedule A. (b) Surplus. After making the payments from the Escrow Account described in Subsection 4(a) above, the Escrow Holder shall retain in the Escrow Account any remaining cash in the Escrow Account in excess of the Escrow Requirement until the termination of this Agreement, and shall then pay any remaining funds to the Issuer. (c) Priority of Payments. The holders of the Defeased Bonds shall have an express first priority security interest in the funds and Federal Securities in the Escrow Account until such funds and Federal Securities are used and applied as provided in this Agreement. SECTION 5. REINVESTMENT. (a) Except as provided in Section 3 and in this Section, the Escrow Holder shall have no power or duty to invest any funds held under this Agreement or to sell, transfer or otherwise dispose of or make substitutions of the Federal Securities held hereunder. (b) At the written request of the Issuer and upon compliance with the conditions hereinafter stated, the Escrow Holder shall sell, transfer or otherwise dispose of any of the Federal Securities acquired hereunder and shall substitute other Federal Securities and reinvest any excess receipts in Federal Securities. The Issuer will not request the Escrow Holder to exercise any of the powers described in the preceding sentence in any manner which, will cause interest on the Bonds to be included in the gross income of the holders thereof for purposes of Federal income taxation. The transactions may be effected only if (i) an independent certified public accountant selected by the 3