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(8) Pre -refunded municipal obligations defined as follows: Any bonds or other <br />obligations of any state of the United States of America or of any agency, instrumentality or local <br />governmental unit of any such state which are not callable at the option of the obligor prior to <br />maturity or as to which irrevocable instructions have been given by the obligor to call on the date <br />specified in the notice; and <br />a. which are rated, based on an irrevocable escrow account or fund (the <br />"escrow"), in the highest long-term rating category of at least one <br />nationally recognized rating agencies; or <br />b. (i) which are fully secured as to principal and interest and <br />redemption premium, if any, by an escrow consisting only of cash <br />or direct obligations of the United States of America, which escrow <br />may be applied only to the payment of such principal of and interest <br />and redemption premium, if any, on such bonds or other obligations <br />on the maturity date or dates thereof or the specified redemption date <br />or dates pursuant to such irrevocable instructions, as appropriate, <br />and <br />(ii) which escrow is sufficient, as verified by a nationally <br />recognized independent certified public accountant, to pay principal <br />of and interest and redemption premium, if any, on the bonds or <br />other obligations described in this paragraph on the maturity date or <br />dates specified in the irrevocable instructions referred to above, as <br />appropriate. <br />(9) General obligations of states or political subdivisions of states with a short- <br />term rating in one of the two highest rating categories and a long-term rating in one of the two <br />highest rating categories of at least two nationally recognized rating agencies. In the event such <br />obligations are variable rate obligations, the interest rate on such obligations must be reset not less <br />frequently than annually. <br />(10) Funds invested in the Local Agency Investment Fund (as that term is <br />defined in Section 16429.1 of the California Government Code, as such section may be amended <br />or recodified from time to time) to the extent deposits and withdrawals may be made by the <br />Trustee. <br />(11) Certificates of deposit secured at all times by collateral described in (2) and/or <br />(3) above. Such certificates must be issued by commercial banks, savings and loan associations or <br />mutual savings banks, including the Trustee and its affiliates. The collateral must be held by a third <br />party and the bondholders must have a perfected first security interest in the collateral. <br />The value of the above investments, other than cash, shall be determined as follows: <br />"Value," which shall be determined as of the end of the month, means "fair <br />market value," which may be determined using a computer pricing service <br />including any service contained in the Trustee's accounting system, provided that <br />the Trustee shall not be liable for any error made by any such service. <br />9 <br />55394.00068\42092121.3 <br />