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e e (d) The term "City Council" shall mean the governing body of the City. ( e) The term "Interest and Sinking Fund" means the fund provided for in Section 8 hereof. (f) The term "Municipal Bond Guaranty Insurance Policy" means the municipal bond guaranty insurance policy issued by AMBAC Indemnity insuring the payment when due of the principal and interest on the Bonds as provided therein. (g) The term "Permitted Investments" means one or more of the following: (1) direct obligations of (including obligations issued or held in book entry form on the books of) the Department of Treasury of the United States of America; (2) obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including: Export - Import Bank Farmers Home Administration U.S. Maritime Administration Small Business Administration Government National Mortgage Association (GNMA) u.s. Department of Housing and Urban Development (PHA's) Federal Housing Administration; (3) bonds, notes or other evidences of indebtedness rated "AAA" by Standard & Poor's Corporation and "Aaa" by Moody's Investor Services issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation with remaining maturities not exceeding three years; or (4) other forms of investments permitted by law and approved in writing by AMBAC Indemnity. (h) The term "Year" or "fIScal year" shall mean the regular fiscal year used by the City which may be any 12 consecutive months period established by the City. Section 7. PLEDGE AND LEVY OF TAXES. While the Bonds and any part of the principal thereof or the interest thereon remain outstanding and unpaid, there is hereby levied and there shall be annually assessed and collected in due time, form, and manner and at the same time other City taxes are assessed, levied, and collected, in each year beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property in the City sufficient to pay the current interest thereon and to create a sinking fund of not less than two percent of the principal amount of the Bonds then outstanding or of not less than the amount required to pay the principal payable out of said tax, whichever is greater, fun allowance being made for delinquencies and costs of collection, and said taxes, when collected shall be applied to the principal of and interest on the Bonds and for no other purpose. 12