RESOLUTION NO. [______]

A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF WATER AND SEWAGE SYSTEM IMPROVEMENT REVENUE BONDS, SERIES 2015, OF THE CITY OF LAWRENCE, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. [______] OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED THEREWITH.

WHEREAS, the Issuer has previously passed the Ordinance authorizing the issuance of the Series 2015 Bonds; and

WHEREAS, the Ordinance authorized the governing body of the Issuer to adopt a resolution prescribing certain details and conditions and to make certain covenants with respect to the issuance of the Series 2015 Bonds.

NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF LAWRENCE, KANSAS, AS FOLLOWS:

Article I

DEFINITIONS

Section 101. Definitions of Words and Terms.

In addition to words and terms defined elsewhere herein, the following words and terms as used in this Bond Resolution shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons.

“Act” means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., and K.S.A. 10-1201 et seq., all as amended and supplemented from time to time.

“Additional Bonds” means any bonds secured by the Revenues hereafter issued pursuant to Article IX of this Bond Resolution and any other similar provision in any Parity Resolution.

“Additional Obligations” means any leases or other obligations secured by the Revenues, other than Additional Bonds, hereafter issued pursuant to Article IX of this Bond Resolution and any other similar provision in any Parity Resolution.

“Authorized Denomination” means $5,000 or any integral multiples thereof.

“Average Annual Debt Service Requirements” means the average of the Debt Service Requirements as computed for the then current and all future fiscal years; provided that the Debt Service Requirements in the final Stated Maturity of any series of Parity Bonds shall be reduced by the value of cash and Permitted Investments on deposit in the applicable debt service reserve account, so long as such debt service reserve account is maintained at the applicable Debt Service Reserve Requirement.

“BAB Interest Subsidy Payments” means payments to be received by the City from the U.S. Department of Treasury under Code §§ 54AA(g) and 6431 in connection with the payments of interest on the Series 2009-A Bonds.

“Balloon Indebtedness” means Long-Term Indebtedness, 25% or more of the original principal amount of which becomes due (either by maturity or mandatory redemption) during any consecutive twelve-month period, if such principal amount becoming due is not required to be amortized below such percentage by mandatory redemption or prepayment prior to such twelve-month period.

“Beneficial Owner” of Series 2015 Bonds includes any Owner of Bonds and any other Person who, directly or indirectly has the investment power with respect to any such Series 2015 Bonds.

“Bond Counsel” means the firm of Gilmore & Bell, P.C., or any other attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the Issuer.

“Bond Insurer” means: (a) with respect to the Series 2007 Bonds, MBIA; and (b) with respect to Additional Bonds, the entity set forth in the supplemental resolution authorizing such Additional Bonds.

“Bond Payment Date” means any date on which principal of or interest on any Series 2015 Bond is payable.

“Bond Register” means the books for the registration, transfer and exchange of Series 2015 Bonds kept at the office of the Bond Registrar.

“Bond Registrar” means: (a) with respect to the Series 2015 Bonds, the State Treasurer, and its successors and assigns; and (b) with respect to Additional Bonds, the entity designated as Bond Registrar in the supplemental resolution authorizing such Additional Bonds.

“Bond Resolution” means this resolution relating to the Series 2015 Bonds and any supplemental resolution authorizing any Additional Bonds.

“Bond” or “Bonds” means the Series 2015 Bonds and any bonds secured by the Revenues, which (a) have been issued as Parity Bonds prior to the date of this Bond Resolution, or (b) are hereafter issued pursuant to Article IX of this Bond Resolution and any other similar provision in any Parity Resolution.

“Business Day” means a day other than a Saturday, Sunday or any day designated as a holiday by the Congress of the United States or by the Legislature of the State and on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its operations.

“Cede & Co.” means Cede & Co., as nominee of DTC and any successor nominee of DTC.

“City” means the City of Lawrence, Kansas.

“Clerk” means the duly appointed and/or elected Clerk or, in the Clerk’s absence, the duly appointed Deputy Clerk or Acting Clerk of the Issuer.

“Code” means the Internal Revenue Code of 1986, as amended, and the applicable regulations promulgated thereunder by the United States Department of the Treasury.

“Consultant” means the Consulting Engineer, the Independent Accountant, or an independent consultant qualified and having a favorable reputation for skill and experience in financial affairs selected by the Issuer for the purpose of carrying out the duties imposed on the Consultant by the Bond Resolution.

“Consulting Engineer” means an independent engineer or engineering firm or architect or architectural firm, having a favorable reputation for skill and experience in the construction, financing and operation of public utilities, at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Consulting Engineer by the Bond Resolution.

“Costs of Issuance” means all costs of issuing any series of Bonds, including all publication, printing, signing and mailing expenses in connection therewith, registration fees, financial advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in connection with compliance with the Code, all expenses incurred in connection with receiving financial ratings on any series of Bonds, and any premiums or expenses incurred in obtaining any credit enhancement.

“Costs of Issuance Account” means the Costs of Issuance Account for Water and Sewage System Improvement Revenue Bonds, Series 2015 created pursuant to Section 501 hereof.

“Dated Date” means April 28, 2015.

“Debt Service Coverage Ratio” means, for any Fiscal Year: (a) with respect to the covenants contained in Section 802 hereof, the ratio determined by dividing (i) a numerator equal to the Net Revenues for such Fiscal Year by (ii) a denominator equal to the the Debt Service Requirements for such Fiscal Year; and (b) with respect to the covenants contained in Article IX hereof, the ratio determined by dividing (i) a numerator equal to the Net Revenues for such Fiscal Year by (ii) a denominator equal to the
Average Annual Debt Service Requirements on all System Indebtedness; provided that with respect to Additional Bonds that are proposed to be Parity Bonds, Debt Service Requirements on Junior Lien Obligations and Subordinate Lien Bonds shall be disregarded; further provided that with respect to Additional Bonds that are proposed to be Junior Lien Obligations, Debt Service Requirements on Subordinate Lien Bonds shall be disregarded.

“Debt Service Requirements” means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and interest payments on the System Indebtedness for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State and having full trust powers.

“Debt Service Reserve Requirement” means (i) with respect to the Series 2005 Bonds, the sum of $2,284,607.66; (ii) with respect to the Series 2007 Bonds, the sum of $1,729,115.48; (iii) with respect to the Series 2008 Bonds, the sum of $324,260.00; (iv) with respect to the Series 2009-A Bonds, the sum of $836,935.00; (v) with respect to the Series 2015 Bonds, the sum of $_____________; and (vi) with respect to any Parity Bonds, the amount set forth in the Parity Resolution.

“Defaulted Interest” means interest on any Series 2015 Bond which is payable but not paid on any Interest Payment Date.

“Defeasance Obligations” means any of the following obligations:

(a) Cash; or

(b) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or

(c) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions:

(1) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions;

(2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations;

(3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations;

(4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust;

(5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and

(6) such obligations are rated in a rating category by Moody’s or Standard & Poor’s that is no lower than the rating category then assigned by that Rating Agency to United States Government Obligations

“Depreciation and Emergency Account” means the Water and Sewage System Depreciation and Emergency Account referred to in Section 501 hereof.

“Depreciation and Emergency Requirement” means an amount equal to $50,000.00.

“Derivative” means any investment instrument whose market price is derived from the fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and collateralized mortgage obligations.

“Director of Finance” means the duly appointed and acting Director of Finance of the Issuer or, in the Director’s absence, the duly appointed Deputy, Assistant or Acting Director of Finance of the Issuer.

“Disclosure Undertaking” means the Issuer’s Continuing Disclosure Undertaking relating to certain obligations contained in the SEC Rule.

“Discount Indebtedness” means Long-Term Indebtedness that is originally sold at a price (excluding accrued interest, but without deduction of any underwriters’ discount) of less than 75% of the maturity amount including the amount of principal and interest to accrete at maturity of such Long-Term Indebtedness.

“DTC” means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns, including any successor securities depository duly appointed.

“Event of Default” means each of the following occurrences or events:

(a) Payment of the principal and of the redemption premium, if any, of any of the Parity Bonds or Parity Obligations shall not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for redemption or otherwise; or

(b) Payment of any installment of interest on any of the Parity Bonds or Parity Obligations shall not be made when the same shall become due; or

(d) Any substantial part of the System shall be destroyed or damaged to the extent of impairing its efficient operation or adversely affecting its Net Revenues and the Issuer shall not within a reasonable time commence the repair, replacement or reconstruction thereof and proceed thereafter to complete with reasonable dispatch the repair, replacement or reconstruction thereof; or

(e) Final judgment for the payment of money shall be rendered against the Issuer as a result of the ownership, control or operation of the System and any such judgment shall not be discharged within one hundred twenty (120) days from the entry thereof or an appeal shall not be taken therefrom or from the order, decree or process upon which or pursuant to which such judgment shall have been granted or entered, in such manner as to stay the execution of or levy under such judgment, order, decree or process or the enforcement thereof; or

(f) An order or decree shall be entered, with the consent or acquiescence of the Issuer, appointing a receiver or receivers of the System or any part thereof or of the revenues thereof, or if such order or decree, having been entered without the consent or acquiescence of the Issuer, shall not be vacated or discharged or stayed on appeal within sixty (60) days after the entry thereof; or

(g) Any proceeding shall be instituted, with the consent or acquiescence of the Issuer, for the purpose of effecting a composition between the Issuer and its creditors or for the purpose of adjusting the claims of such creditors pursuant to any federal or state statute now or hereafter enacted, if the claims of such creditors are under any circumstances payable from the Net Revenues of the System; or

(h) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Series 2015 Bonds or in this Bond Resolution (other than the covenants relating to continuing disclosure contained herein and in the Disclosure Undertaking) on the part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice specifying such default and requiring same to be remedied shall have been given to the Issuer by the Owner of any of the Series 2015 Bonds then Outstanding; or

(i) A monetary default shall have occurred on any System Indebtedness.

(j) Any Event of Default, as defined in any Parity Resolution or Parity Obligation Documents.

“Expenses” means all reasonable and necessary expenses of operation, maintenance and repair of the System and keeping the System in good repair and working order (other than interest paid on System Indebtedness and depreciation and amortization charges during the period of determination), determined in accordance with generally accepted accounting principles, including without limiting the generality of the foregoing, current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, employee’s health, hospitalization, pension and retirement benefits, costs of materials and supplies, paying agent fees and expenses, annual audits, periodic Consultant’s reports, properly allocated share of charges for insurance, the cost of purchased water, gas and power, if any, for System operation, obligations (other than for borrowed money or for rents payable under capital leases) incurred in the ordinary course of business, liabilities incurred by endorsement for collection or deposit of checks or drafts received in the ordinary course of business, short-term obligations incurred and payable within a particular Fiscal Year, other obligations or indebtedness incurred for the purpose of leasing (pursuant to a true or operating lease) equipment, fixtures, inventory or other personal property, and all other expenses incident to the operation of the System, but shall exclude all general administrative expenses of the City not related to the operation of the System and transfers into the Debt Service Reserve Account and Depreciation and Emergency Account provided for in this Bond Resolution.

“Federal Tax Certificate” means the Issuer’s Federal Tax Certificate dated as of the Issue Date, as the same may be amended or supplemented in accordance with the provisions thereof.

“Fiscal Year” means the twelve month period ending on December 31.

“Funds and Accounts” means funds and accounts created pursuant to or referred to in Section 501 hereof.

“Independent Accountant” means an independent certified public accountant or firm of independent certified public accountants at the time employed by the Issuer for the purpose of carrying out the duties imposed on the Independent Accountant by the Bond Resolution.

“Index Rate” means the rate of interest set forth in The Bond Buyer Revenue Bond Index (or, in the event that The Bond Buyer does not compile such index or ceases publication, another comparable publication recognized in the municipal bond market) published for the week immediately preceding the date of determination.

“Interest Payment Date(s)” means: (a) with respect to the Series 2015 Bonds, the Stated Maturity of an installment of interest on the Series 2015 Bonds which shall be May 1 and November 1 of each year, commencing November 1, 2015; and (b) with respect to Additional Bonds, the Stated Maturity of an installment of interest on such Additional Bonds, as set forth in the supplemental resolution authorizing such Additional Bonds.

“Interim Indebtedness” means System Indebtedness having a term not less than one year, and not in excess of five years, incurred or assumed in anticipation of being refinanced or refunded with Long-Term Indebtedness.

“Issue Date” means the date when the Issuer delivers the Series 2015 Bonds to the Purchaser in exchange for the Purchase Price.

“Issuer” means the City and any successors or assigns.

“Junior Lien Obligations” means any Additional Bonds or Additional Obligations payable from, and secured by a lien on the Revenues, which lien is junior to that of any Parity Bonds, but senior to that of the Subordinate Lien Bonds.

“KDHE Loans” means the Loan Agreement between the Kansas Department of Health and Environment, acting on behalf of the State of Kansas (KDHE”), and the City, effective as of November 29, 1999, as amended by a First Amendment to the Loan Agreement between KDHE and the City, effective as of August 11, 2000.

“Long-Term Indebtedness” means System Indebtedness having an original stated maturity or term greater than one year, or renewable or extendible at the option of the debtor for a period greater than one year from the date of original issuance or incurrence thereof.

“Maturity” when used with respect to any bond or other obligation means the date on which the principal of such bond or other obligation becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or call for redemption or otherwise.

“Mayor” means the duly elected and acting Mayor, or in the Mayor’s absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the Issuer.

“MBIA” means MBIA Insurance Corporation, Armonk, New York, and its successors and assigns.

“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer.

“Net Revenues” means, for the period of determination, all Revenues less all Expenses.

“Notice Address” means with respect to the following entities:

(a) To the Issuer at:

Attn: City Clerk

City Hall

6 East 6th Street,

Lawrence, Kansas 66044

(b) To the Paying Agent at:

Series 2015 Bonds:

State Treasurer of the State of Kansas

Landon Office Building

900 Southwest Jackson, Suite 201

Topeka, Kansas 66612-1235

Fax: (785) 296-6976

Additional Bonds:

The address set forth in the supplemental resolution authorizing such Additional Bonds.

Series 2015 Bonds:

[Purchaser Name]

[Purchaser Address]

[Purchaser City, State]

Fax: [__________________]

Additional Bonds:

The address set forth in the supplemental resolution authorizing such Additional Bonds.

(d) To the Rating Agency(ies):

Moody’s Municipal Rating Desk

7 World Trade Center

250 Greenwich Street

23rd Floor

New York, New York 10007

Standard & Poor’s Ratings Services, a division of

McGraw Hill Financial Inc.

55 Water Street, 38th Floor

New York, New York 10004

(f) To the Bond Insurer:

MBIA Insurance Corporation

113 King Street

Armonk, New York 10504

or such other address as is furnished in writing to the other parties referenced herein.

“Notice Representative” means:

(a) With respect to the Issuer, the Clerk.

(b) With respect to the Bond Registrar and Paying Agent, the Director of Bond Services.

(d) With respect to any Rating Agency, any Vice President thereof.

(e) With respect to the Bond Insurer, any Vice President with a copy to its General Counsel and Attn: Insured Portfolio Management-Surveillance.

“Official Statement” means Issuer’s Official Statement relating to the Series 2015 Bonds.

“Operation and Maintenance Account” means the Water and Sewage System Operation and Maintenance Account referred to in Section 501 hereof.

“Ordinance” means Ordinance No. [____] of the Issuer authorizing the issuance of the Series 2015 Bonds, as amended from time to time.

“Outstanding” means:

(a) when used with reference to Bonds, as of a particular date of determination, all Bonds theretofore, authenticated and delivered, except the following Bonds:

(i) Bonds theretofore canceled by the paying agent for such Bonds or delivered to the paying agent for such Bonds for cancellation pursuant to the ordinance and resolution authorizing the issuance of such Bonds;

(ii) Bonds deemed to be paid in accordance with the provisions of Section 1101 of the Bond Resolution or any similar provisions of any resolution applicable to any such Bonds;

(iii) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered under the applicable resolution authorizing such Bonds;

(iv) Bonds, the principal or interest of which has been paid by a bond insurer; and

(b) with respect to any System Indebtedness that is not a Bond, as of the date of determination, all such System Indebtedness theretofore issued or incurred by the Issuer, except to the extent the obligation to make payments on such System Indebtedness has been discharged in accordance with the terms of the instrument or instruments creating or evidencing such Indebtedness.

“Owner” when used with respect to any Series 2015 Bond means the Person in whose name such Series 2015 Bond is registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of this Bond Resolution, and the Owner of the Series 2015 Bonds, as set forth on the Bond Register, is Cede & Co., the term Owner shall be deemed to be the Beneficial Owner of the Series 2015 Bonds.

“Parity Bonds” means the Outstanding Series 2005 Bonds, Series 2007 Bonds, Series 2008 Bonds, Series 2009-A Bonds, Series 2015 Bonds, and any Additional Bonds hereafter issued pursuant to Section 902 or Section 905 of the Bond Resolution and standing on a parity and equality with the Series 2015 Bonds with respect to the lien on the Net Revenues.

“Parity Obligation Documents” means the ordinance, resolution, and/or any other documentation authorizing the issuance of Parity Obligations.

“Parity Obligations” means any Additional Obligations hereafter issued or incurred pursuant to Section 902 or Section 905 of this Bond Resolution and standing on a parity and equality with the Parity Bonds with respect to the lien on the Net Revenues.

“Parity Resolution” means the Series 2005 Bond Resolution, the Series 2007 Bond Resolution, the Series Bond 2008 Resolution, the Series 2009-Bond A Resolution, this Bond Resolution and the ordinances and/or resolutions under which any Additional Bonds which constitute Parity Bonds are hereafter issued.

“Participants” means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference.

“Paying Agent” means: (a) with respect to the Series 2015 Bonds, the State Treasurer and its successors and assigns; and (b) with respect to Additional Bonds, the entity designated as Paying Agent in the supplemental resolution authorizing such Additional Bonds.

“Permitted Investments” shall mean the investments hereinafter described, provided, however, no moneys or funds shall be invested in a Derivative: (a) investments authorized by K.S.A. 12-1675 and amendments thereto; (b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and amendments thereto; (c) direct obligations of the United States Government or any agency thereof; (d) the Issuer’s temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto; (e) interest-bearing time deposits in commercial banks or trust companies located in the county or counties in which the Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by securities described in (c); (f) obligations of the federal national mortgage association, federal home loan banks, federal home loan mortgage corporation or government national mortgage association; (g) repurchase agreements for securities described in (c) or (f); (h) investment agreements or other obligations of a financial institution the obligations of which at the time of investment are rated in either of the three highest rating categories by Moody’s or Standard & Poor’s; (i) investments and shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities described in (c) or (f); (j) receipts evidencing ownership interests in securities or portions thereof described in (c) or (f); (k) municipal bonds or other obligations issued by any municipality of the State as defined in K.S.A. 10-1101 which are general obligations of the municipality issuing the same; (l) bonds of any municipality of the State as defined in K.S.A. 10-1101 which have been refunded in advance of their maturity and are fully secured as to payment of principal and interest thereon by deposit in trust, under escrow agreement with a bank, of securities described in (c) or (f); or (m) other investment obligations authorized by the laws of the State, all as may be further restricted or modified by amendments to applicable State law.

“Person” means any natural person, corporation, partnership, joint venture, association, firm, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body.

“Project” means, collectively, Project A, Project B, Project C, and Project D and any Substitute Project.

“Project A” means the acquisition, construction, reconstruction, alterations, repair, improvements, extensions or enlargements of the System described in Resolution No. 6717 of the City and referred to in the Preamble to the Ordinance.

“Project B” means the acquisition, construction, reconstruction, alterations, repair, improvements, extensions or enlargements of the System described in Resolution No. 7019 of the City and referred to in the Preamble to the Ordinance.

“Project C” means the acquisition, construction, reconstruction, alterations, repair, improvements, extensions or enlargements of the System described in Resolution No. 7062 of the City and referred to in the Preamble to the Ordinance.

“Project D” means the acquisition, construction, reconstruction, alterations, repair, improvements, extensions or enlargements of the System described in Resolution No. 7107 of the City and referred to in the Preamble to the Ordinance.

“Purchase Price” means: (a) with respect to the Series 2015 Bonds the principal amount of the Series 2015 Bonds plus accrued interest to the date of delivery[, plus a premium of $___________] [, less an underwriting discount of $____________] [, less an original issue discount of $_________]]; and (b) with respect to Additional Bonds, the amount set forth in the supplemental resolution authorizing such Additional Bonds.

“Purchaser” means: (a) with respect to the Series 2015 Bonds, [PURCHASER NAME], [PURCHASER CITY, STATE], the original purchaser of the Series 2015 Bonds, and any successor and assigns; and (b) with respect to Additional Bonds, the original purchaser of such Additional Bonds, as set forth in the supplemental resolution authorizing such Additional Bonds.

“Put Indebtedness” means Long-Term Indebtedness which is (a) payable or required to be purchased or redeemed from the holder by or on behalf of the underlying obligor, at the option of the holder thereof, prior to its stated maturity date, or (b) payable or required to be purchased or redeemed from the holder by or on behalf of the underlying obligor, other than at the option of the holder, prior to its stated maturity date, other than pursuant to any mandatory sinking fund or other similar fund, or other than by reason of acceleration upon the occurrence of an Event of Default under this Bond Resolution.

“Rating Agency” means any company, agency or entity that provides financial ratings for the Bonds.

“Rebate Fund” means the Rebate Fund for Water and Sewage System Improvement Revenue Bonds, Series 2015 created pursuant to Section 501 hereof.

“Record Dates” for the interest payable on any Interest Payment Date means the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date.

“Redemption Date” when used with respect to any Series 2015 Bond to be redeemed means the date fixed for the redemption of such Series 2015 Bond pursuant to the terms of this Bond Resolution.

“Redemption Price” when used with respect to any Series 2015 Bond to be redeemed means the price at which such Series 2015 Bond is to be redeemed pursuant to the terms of this Bond Resolution, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date.

“Refunding Bonds” means any bonds issued to refund any System Indebtedness, pursuant to Section 905 hereof.

“Replacement Bonds” means Series 2015 Bonds issued to the Beneficial Owners of the Series 2015 Bonds in accordance with Section 209 hereof.

“Revenue Fund” means the Water and Sewage System Revenue Fund referred to in Section 501 hereof.

“Revenues” means all income and revenues derived and collected by the City from the operation and ownership of the System, including investment and rental income, net proceeds from business interruption insurance, BAB Interest Subsidy Payments, transfers from the Surplus Account to the Revenue Fund of Net Revenues derived in a prior Fiscal Year and any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation and equipping of facilities to be applied during the period of determination to pay interest on System Indebtedness, but excluding any profits or losses on the early extinguishment of debt or on the sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets.

“SEC Rule” means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934.

“Securities Depository” means, initially, DTC, and its successors and assigns.

“Series 2005 Bond Resolution” means collectively the Issuer’s Ordinance No. 7909 and Resolution No. 6603, which authorized the Series 2005 Bonds.

“Series 2005 Bonds” means the Issuer’s Water and Sewage System Refunding and Improvement Revenue Bonds, Series 2005, dated August 1, 2005.

“Series 2007 Bond Resolution” means collectively the Issuer’s Ordinance No. 8119 and Resolution No. 6725, which authorized the Series 2007 Bonds.

“Series 2007 Bonds” means the Issuer’s Water and Sewage System Improvement Revenue Bonds, Series 2007, dated June 15, 2007.

“Series 2008 Bond Resolution” means collectively the Issuer’s Ordinance No. 8325 and Resolution No. 6802, which authorized the Series 2008 Bonds.

“Series 2008 Bonds” means the Issuer’s Water and Sewage System Improvement Revenue Bonds, Series 2008, dated October 1, 2008.

“Series 2009-A Bond Resolution” means collectively the Issuer’s Ordinance No. 8433 and Resolution No. 6844, which authorized the Series 2009-A Bonds.

“Series 2009-A Bonds” means the Issuer’s Taxable Water and Sewage System Improvement Revenue Bonds, Series 2009-A (Build America Bonds – Direct Pay), dated August 6, 2009.

“Series 2015 Bonds” means the Issuer’s Water and Sewage System Improvement Revenue Bonds, Series 2015, in the aggregate principal amount of $[PRINCIPAL AMOUNT], authorized and issued by the Issuer pursuant to the Ordinance and this Bond Resolution.

“Series 2015 Debt Service Account” means the Debt Service Account for the Series 2015 Bonds created by Section 501 hereof.

“Series 2015 Debt Service Reserve Account” means the Debt Service Reserve Account for the Series 2015 Bonds created by Section 501 hereof.

“Series 2015 Project Fund” means the Project Fund for the Series 2015 Bonds created by Section 501 hereof.

[“Series 2015[-_____] Term Bonds” means the Series 2015 Bonds scheduled to mature in the year ____.]

[“Series 2015[-________________] Term Bonds” means the Series 2015 Bonds scheduled to mature in the year ________________.]

“Short-Term Indebtedness” means System Indebtedness having an original maturity less than or equal to one year from the date of original incurrence thereof, and not renewable or extendible at the option of the obligor thereon for a term greater than one year beyond the date of original issuance.

“Special Record Date” means the date fixed by the Paying Agent pursuant to Section 204 hereof for the payment of Defaulted Interest.

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of McGraw Hill Financial Inc., New York, New York, a corporation organized and existing under the laws of the State of New York, and its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Standard & Poor’s” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer.

“State” means the state of Kansas.

“State Treasurer” means the duly elected Treasurer or, in the Treasurer’s absence, the duly appointed Deputy Treasurer or acting Treasurer of the State.

“Stated Maturity” when used with respect to any bond or other obligation or any installment of interest thereon means the date specified in such bond or other obligation and this Bond Resolution or the resolution or documents authorizing such bond or obligations as the fixed date on which the principal of such bond or obligation or such installment of interest is due and payable.

“Subordinate Lien Bonds” means the KDHE Loans and any Additional Bonds or Additional Obligations payable from the Revenues on a subordinate lien basis to any Parity Bonds, Parity Obligations and Junior Lien Obligations, and which constitute general obligations of the Issuer.

“Substitute Project” means the substitute or additional projects of the Issuer as authorized by Section 507 of this Bond Resolution.

“Surplus Account” means the Water and Sewage System Surplus Account referred to in Section 501 hereof.

“System” means the entire combined waterworks plant and system and sewerage plant and system owned and operated by the Issuer for the production, storage, treatment and distribution of water, and for the collection, treatment and disposal of sewage, to serve the needs of the Issuer and its inhabitants and others, including all appurtenances and facilities connected therewith or relating thereto, together with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the Issuer.

“System Indebtedness” means collectively all Parity Bonds, all Parity Obligations, all Additional Bonds, all Additional Obligations, all Junior Lien Obligations and all Subordinate Lien Bonds which are payable out of, or secured by an interest in, the Revenues.

“Term Bonds” means any Series 2015 Bonds designated as Term Bonds in this Bond Resolution.

“Treasurer” means the duly appointed and/or elected Treasurer or, in the Treasurer’s absence, the duly appointed Deputy Treasurer or acting Treasurer of the Issuer.

“United States Government Obligations” means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payment on obligations issued by the United States of America (including the interest component of obligations of the Resolution Funding Corporation), or securities which represent an undivided interest in such obligations, which obligations are rated in the highest rating category by a nationally recognized rating service and such obligations are held in a custodial account for the benefit of the Issuer.

“Variable Rate Indebtedness” means any System Indebtedness which provides for interest to be payable thereon at a rate per annum that may vary from time to time over the term thereof in accordance with procedures provided in the instrument creating such System Indebtedness.

Article II

AUTHORIZATION AND DETAILS OF THE BONDS

Section 201. Authorization of the Series 2015 Bonds.

The Series 2015 Bonds have been heretofore authorized and directed to be issued pursuant to the Ordinance in the principal amount of $[PRINCIPAL AMOUNT], for the purpose of providing funds to: (a) pay a portion of the costs of the Projects, (b) pay Costs of Issuance; and (c) make a deposit to the Series 2015 Debt Service Reserve Account.

Section 202. Description of the Series 2015 Bonds.

The Series 2015 Bonds shall consist of fully registered bonds in Authorized Denominations, and shall be numbered in such manner as the Bond Registrar shall determine. All of the Series 2015 Bonds shall be dated as of the Dated Date, shall become due in the amounts, on the Stated Maturities, and subject to redemption and payment, prior to their Stated Maturities as provided in Article III hereof and shall bear interest at the rates per annum as follows:

SERIAL BONDS

Maturity Date (November 1)	Principal Amount	Annual Rate of Interest	Maturity Date (November 1)	Principal Amount	Annual Rate of Interest
2016	$________	____%	2029	$________	____%
2017	________	____%	2030	________	____%
2018	________	____%	2031	________	____%
2019	________	____%	2032	________	____%
2020	________	____%	2033	________	____%
2021	________	____%	2034	________	____%
2022	________	____%	2035	________	____%
2023	________	____%	2036	________	____%
2024	________	____%	2037	________	____%
2025	________	____%	2038	________	____%
2026	________	____%	2039	________	____%
2027	________	____%	2040	________	____%
2028	________	____%

[TERM BONDS

Stated Maturity

(November 1)

Principal

Amount

Annual Rate

of Interest

________________

$_______

_____%]

The Series 2015 Bonds shall bear interest at the above specified rates (computed on the basis of a 360-day year of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid on the Interest Payment Dates in the manner set forth in Section 208 hereof. The Series 2015 Bonds shall be issued as Book-Entry-Only Bonds and administered in accordance with the provisions of Section 209 hereof.

Each of the Series 2015 Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be printed in accordance with the format required by the Attorney General of the State and shall be substantially in the form attached hereto as Exhibit A or as may be required by the Attorney General pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 (1983), in accordance with the Kansas Bond Registration Law, K.S.A. 10-620 et seq.

Section 203. Designation of Paying Agent and Bond Registrar.

The State Treasurer is hereby designated as the Paying Agent for the payment of principal of and interest on the Series 2015 Bonds and Bond Registrar with respect to the registration, transfer and exchange of the Series 2015 Bonds. The Mayor of the Issuer is hereby authorized and empowered to execute on behalf of the Issuer an agreement with the Bond Registrar and Paying Agent for the Series 2015 Bonds.

The Issuer will at all times maintain a Paying Agent and Bond Registrar meeting the qualifications herein described for the performance of the duties hereunder. The Issuer reserves the right to appoint a successor Paying Agent or Bond Registrar by (a) filing with the Paying Agent or Bond Registrar then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent or Bond Registrar and appointing a successor, and (b) causing notice of appointment of the successor Paying Agent and Bond Registrar to be given by first class mail to each Owner. No resignation or removal of the Paying Agent or Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent or Bond Registrar.

Every Paying Agent or Bond Registrar appointed hereunder shall at all times meet the requirements of K.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively.

Section 204. Method and Place of Payment of the Series 2015 Bonds.

The principal of, or Redemption Price, and interest on the Series 2015 Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of public and private debts.

The principal or Redemption Price of each Series 2015 Bond shall be paid at Maturity to the Person in whose name such Series 2015 Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Series 2015 Bond at the principal office of the Paying Agent.

The interest payable on each Series 2015 Bond on any Interest Payment Date shall be paid to the Owner of such Series 2015 Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to the address of such Owner shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Owner or (b) in the case of an interest payment to any Owner of $500,000 or more in aggregate principal amount of Series 2015 Bonds, by electronic transfer to such Owner upon written notice given to the Bond Registrar by such Owner, not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank, ABA routing number and account number to which such Owner wishes to have such transfer directed.

Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Series 2015 Bond shall cease to be payable to the Owner of such Series 2015 Bond on the relevant Record Date and shall be payable to the Owner in whose name such Series 2015 Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this paragraph. The Issuer shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Series 2015 Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall promptly notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Series 2015 Bond entitled to such notice at the address of such Owner as it appears on the Bond Register not less than 10 days prior to such Special Record Date.

The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Series 2015 Bonds and at least annually shall forward a copy or summary of such records to the Issuer.

Section 205. Registration, Transfer and Exchange of Series 2015 Bonds.

The Issuer covenants that, as long as any of the Series 2015 Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Bond Registrar as herein provided. Each Series 2015 Bond when issued shall be registered in the name of the Owner thereof on the Bond Register.

Series 2015 Bonds may be transferred and exchanged only on the Bond Register as provided in this Section. Upon surrender of any Series 2015 Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or exchange such Bond for a new Series 2015 Bond or Series 2015 Bonds in any Authorized Denomination of the same Stated Maturity and in the same aggregate principal amount as the Series 2015 Bond that was presented for transfer or exchange.

Series 2015 Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by the Owner’s duly authorized agent.

In all cases in which the privilege of transferring or exchanging Series 2015 Bonds is exercised, the Bond Registrar shall authenticate and deliver Series 2015 Bonds in accordance with the provisions of this Bond Resolution. The Issuer shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of Series 2015 Bonds provided for by this Bond Resolution and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Bond Registrar, are the responsibility of the Owners of the Series 2015 Bonds. In the event any Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Code § 3406, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Owner hereunder or under the Series 2015 Bonds.

The Issuer and the Bond Registrar shall not be required (a) to register the transfer or exchange of any Series 2015 Bond that has been called for redemption after notice of such redemption has been mailed by the Paying Agent pursuant to Section 303 hereof and during the period of 15 days next preceding the date of mailing of such notice of redemption; or (b) to register the transfer or exchange of any Series 2015 Bond during a period beginning at the opening of business on the day after receiving written notice from the Issuer of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to Section 208 hereof.

The Issuer and the Paying Agent may deem and treat the Person in whose name any Series 2015 Bond is registered on the Bond Register as the absolute Owner of such Series 2015 Bond, whether such Series 2015 Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on said Series 2015 Bond and for all other purposes. All payments so made to any such Owner or upon the Owner’s order shall be valid and effective to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Issuer nor the Paying Agent shall be affected by any notice to the contrary.

At reasonable times and under reasonable regulations established by the Bond Registrar, the Bond Register may be inspected and copied by the Owners (or a designated representative thereof) of 10% or more in principal amount of the Series 2015 Bonds then Outstanding or any designated representative of such Owners whose authority is evidenced to the satisfaction of the Bond Registrar.

Section 206. Execution, Registration, Authentication and Delivery of Series 2015 Bonds.

Each of the Series 2015 Bonds, including any Series 2015 Bonds issued in exchange or as substitutions for the Series 2015 Bonds initially delivered, shall be executed for and on behalf of the Issuer by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the Clerk and the seal of the Issuer shall be affixed thereto or imprinted thereon. The Mayor and Clerk are hereby authorized and directed to prepare and execute the Series 2015 Bonds in the manner herein specified, and to cause the Series 2015 Bonds to be registered in the office of the Clerk, which registration shall be evidenced by the manual or facsimile signature of the Clerk with the seal of the Issuer affixed thereto or imprinted thereon. The Series 2015 Bonds shall also be registered in the office of the State Treasurer, which registration shall be evidenced by the manual or facsimile signature of the State Treasurer with the seal of the State Treasurer affixed thereto or imprinted thereon. In case any officer whose signature appears on any Series 2015 Bonds ceases to be such officer before the delivery of such Series 2015 Bonds, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery. Any Series 2015 Bond may be signed by such persons who at the actual time of the execution of such Series 2015 Bond are the proper officers to sign such Series 2015 Bond although at the date of such Series 2015 Bond such persons may not have been such officers.

The Mayor and Clerk are hereby authorized and directed to prepare and execute the Series 2015 Bonds as herein specified, and when duly executed, to deliver the Series 2015 Bonds to the Paying Agent for authentication.

The Series 2015 Bonds shall have endorsed thereon a certificate of authentication substantially in the form attached hereto as Exhibit A hereof, which shall be manually executed by an authorized officer or employee of the Bond Registrar, but it shall not be necessary that the same officer or employee sign the certificate of authentication on all of the Series 2015 Bonds that may be issued hereunder at any one time. No Series 2015 Bond shall be entitled to any security or benefit under this Bond Resolution or be valid or obligatory for any purpose unless and until such certificate of authentication has been duly executed by the Bond Registrar. Such executed certificate of authentication upon any Series 2015 Bond shall be conclusive evidence that such Series 2015 Bond has been duly authenticated and delivered under this Bond Resolution. Upon authentication, the Bond Registrar shall deliver the Series 2015 Bond to the Purchaser upon instructions of the Issuer or its representative.

Section 207. Mutilated, Lost, Stolen or Destroyed Series 2015 Bonds.

If (a) any mutilated Series 2015 Bond is surrendered to the Bond Registrar or the Bond Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Series 2015 Bond, and (b) there is delivered to the Issuer and the Bond Registrar such security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the Bond Registrar that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and, upon the Issuer’s request, the Bond Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Series 2015 Bond, a new Series 2015 Bond of the same Stated Maturity and of like tenor and principal amount.

If any such mutilated, destroyed, lost or stolen Series 2015 Bond has become or is about to become due and payable, the Issuer, in its discretion, may pay such Series 2015 Bond instead of issuing a new Series 2015 Bond.

Upon the issuance of any new Series 2015 Bond under this Section, the Issuer and the Paying Agent may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith.

Every new Series 2015 Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the Issuer, and shall be entitled to all the benefits of this Bond Resolution equally and ratably with all other Outstanding Bonds.

Section 208. Cancellation and Destruction of Series 2015 Bonds Upon Payment.

All Series 2015 Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Series 2015 Bonds so cancelled and destroyed and shall file an executed counterpart of such certificate with the Issuer.

Section 209. Book-Entry Bonds; Securities Depository.

The Series 2015 Bonds may be issued as Book-Entry-Only Bonds. If so, the Series 2015 Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective interests in the Series 2015 Bonds, except in the event the Bond Registrar issues Replacement Bonds as provided in this Section. It is anticipated that during the term of the Series 2015 Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Series 2015 Bonds to the Participants until and unless the Bond Registrar authenticates and delivers Replacement Bonds to the Beneficial Owners as described in the following paragraph.

(a) If the Issuer determines (1) that the Securities Depository is unable to properly discharge its responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the continuation of a book-entry system to the exclusion of any Series 2015 Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Series 2015 Bonds, or (b) if the Bond Registrar receives written notice from Participants having interests in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book-entry system to the exclusion of any Series 2015 Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Series 2015 Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (a)(1) or (a)(2) of this paragraph, the Issuer, with the consent of the Bond Registrar, may select a successor securities depository in accordance with the following paragraph to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Series 2015 Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Issuer, the Bond Registrar or Owners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Bond Registrar may rely on information from the Securities Depository and its Participants as to the names of the Beneficial Owners of the Series 2015 Bonds. The cost of printing, registration, authentication, and delivery of Replacement Bonds shall be paid for by the Issuer.

In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Bond Registrar upon its receipt of a Series 2015 Bond or Series 2015 Bonds for cancellation shall cause the delivery of Series 2015 Bonds to the successor Securities Depository in appropriate denominations and form as provided herein.

Section 210. Nonpresentment of Bonds.

If any Series 2015 Bond is not presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Series 2015 Bond have been made available to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Series 2015 Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Series 2015 Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Bond Resolution or on, or with respect to, said Series 2015 Bond. If any Series 2015 Bond is not presented for payment within four years following the date when such Series 2015 Bond becomes due at Maturity, the Paying Agent shall repay, without liability for interest thereon, to the Issuer the funds theretofore held by it for payment of such Series 2015 Bond, and such Series 2015 Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer shall not be liable for any interest thereon and shall not be regarded as a trustee of such money.

Section 211. Calculation of Debt Service Requirements.

(a) Debt Service Requirements on Balloon, Put, Short-Term and Interim Indebtedness.

(1) The principal of Balloon Indebtedness, Put Indebtedness or Short-Term Indebtedness being treated as Long-Term Indebtedness under Section 902 hereof, or Interim Indebtedness shall be deemed due and payable at its Stated Maturity; provided, however, that at the election of the Issuer for the purpose of any computation of Debt Service Requirements, whether historical or projected, the principal deemed payable on Balloon Indebtedness, Put Indebtedness or Short-Term Indebtedness being treated as Long-Term Indebtedness under Section 902 hereof, or Interim Indebtedness, shall be deemed to be payable as set forth below:

(A) If the Issuer has obtained a binding commitment of a bank or other financial institution (whose senior debt obligations, or the senior debt obligations of the holding company of which such bank or financial institution is the principal subsidiary, are then rated “A” or better by any Rating Agency) to refinance such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or a portion thereof, including without limitation, a letter of credit or a line of credit, the Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or portion thereof to be refinanced, may be deemed to be payable in accordance with the terms of the refinancing arrangement;

(B) If the Issuer has entered into a binding agreement providing for the deposit by the Issuer with a bank or other financial institution (whose senior debt obligations, or the senior debt obligations of the holding company of which such bank or financial institution is the principal subsidiary, are then rated “A” or better by any Rating Agency), in trust (herein called a “Special Redemption Fund”) of amounts, less investment earnings realized and retained in the Special Redemption Fund, equal in aggregate to the principal amount of such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or a portion thereof, when due from the sums so deposited and investment earnings realized thereon, then the principal amount of the Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or portion thereof, may be deemed to be payable in accordance with the terms of such agreement;

(C) If the Issuer has entered into arrangements or agreements with respect to the principal amount of such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness, other than those referred to in subsections (A) and (B) above, which a Consultant in a certificate filed with the Issuer determines, taking into account the interests of the Owners of System Indebtedness, provides adequate assurances that the Issuer will be able to meet the Debt Service Requirements due on such Indebtedness, the Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness may be deemed to be payable in accordance with the terms of such arrangement or agreement; or

(D) Such Balloon Indebtedness, Put Indebtedness or Short-Term Indebtedness may be deemed to be System Indebtedness which, at the date of its original incurrence, was payable over a term not to exceed twenty (20) years in equal annual installments of principal and interest at the Index Rate.

A Consultant shall deliver to the Issuer a certificate stating that it is reasonable to assume that installment obligations of such term of the Issuer can be incurred and stating the interest rate then applicable to installment obligations of such term of comparable quality. Interim Indebtedness may be deemed to be Indebtedness which, at the date of its original incurrence, would meet the conditions specified in the statement of the Consultant as required in Section 902; provided that the Consultant shall for each annual period that the Debt Service Requirement is computed, provide a supplemental statement that at such period, the certifications contained in the statement are reasonable.

(2) Interest that is payable prior to the Stated Maturity of any Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness shall be taken into account for such appropriate period in computation of Debt Service Requirements. Interest payable at maturity or early redemption on Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness may either be amortized over the anticipated maturity or such longer period as is permitted under Section 902 or Section 211(a)(1)(D) or may be treated as principal payable on the principal maturity date of such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness.

(3) In measuring compliance with the applicable tests hereunder in connection with incurring Put Indebtedness and generally for purposes of determining the Debt Service Requirements relating thereto, Put Indebtedness shall be deemed to mature based upon the actual amortization requirements for the Put Indebtedness, only to the extent that the Issuer has a commitment to refinance such Put Indebtedness.

(b) Debt Service Requirements on Discount Indebtedness. At the election of the Issuer for the purpose of any computation of Debt Service Requirements, whether historical or projected, the principal and interest deemed payable on Discount Indebtedness shall be deemed to be payable as set forth below:

(1) If the Issuer has obtained a binding commitment of a bank or other financial institution (whose senior debt obligations, or the senior debt obligations of the holding company of which such bank or financial institution is the principal subsidiary, are then rated “A” or better by any Rating Agency) to refinance such Discount Indebtedness, or a portion thereof, including without limitation, a letter of credit or a line of credit, the Discount Indebtedness, or portion thereof to be refinanced, may be deemed to be payable in accordance with the terms of the refinancing arrangement;

(2) If the Issuer has entered into a binding agreement providing for the deposit with a bank or other financial institution (whose senior debt obligations, or the senior debt obligations of the holding company of which such bank or financial institution is the principal subsidiary, are then rated “A” or better by any Rating Agency), in trust (herein called a “Special Redemption Fund”) of amounts, less investment earnings realized and retained in the Special Redemption Fund, equal in aggregate to the principal amount of such Discount Indebtedness, or a portion thereof, and providing for the payment of such principal amount when due from the sums so deposited, and investment earnings realized thereon, then the Discount Indebtedness, or portion thereof, may be deemed to be payable in accordance with the terms of such agreement;

(3) If the Issuer has entered into arrangements or agreements with respect to the principal amount of such Discount Indebtedness, other than those referred to in subsections (1) and (2) above, which a Consultant in a certificate filed with the Issuer determines, taking into account the interests of the holders of System Indebtedness, provides adequate assurances that the Issuer will be able to meet the Debt Service Requirements due on such Indebtedness, the Discount Indebtedness may be deemed to be payable in accordance with the terms of such arrangement or agreement; or

(4) As of any time the maturity amount represented by Discount Indebtedness shall be deemed to be the accreted value of such Indebtedness computed on the basis of a constant yield to maturity.

Section 212. Debt Service Requirements on Variable Rate Indebtedness. When calculating interest requirements on Variable Rate Indebtedness which bears a variable rate of interest for periods as to which the rate of interest has not been determined, the rate of interest on Outstanding Variable Rate Indebtedness shall be the average annual rate of interest which was payable on such Variable Rate Indebtedness during the twelve (12) months immediately preceding the date as of which the calculation is made; and the rate of interest on Variable Rate Indebtedness to be incurred (or incurred less than twelve (12) months preceding such date) shall be the average annual rate of interest which would have been payable on such Variable Rate Indebtedness had it been outstanding for a period of twelve (12) months immediately preceding the date as of which the calculation is made, all as set forth in a certificate of a Consultant, delivered to the Issuer.

Section 213. Preliminary and Final Official Statement.

For the purpose of enabling the Purchaser to comply with the requirements of Section (b)(1) of the SEC Rule, the Issuer hereby deems the information regarding the Issuer contained in the Preliminary Official Statement to be “final” as of its date, except for the omission of such information as is permitted by Section (b)(1) of the SEC Rule, and the appropriate officers of the Issuer are hereby authorized, if requested, to provide the Purchaser a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of the SEC Rule.

The final Official Statement is hereby authorized to be prepared by supplementing, amending and completing the Preliminary Official Statement, with such changes and additions thereto as are necessary to conform to and describe the transaction. The Mayor or chief financial officer are hereby authorized to execute the final Official Statement as so supplemented, amended and completed, and the use and public distribution of the final Official Statement by the Purchaser in connection with the reoffering of the Series 2015 Bonds is hereby authorized. The proper officials of the Issuer are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Series 2015 Bonds.

The Issuer agrees to provide to the Purchaser within seven business days of the date of the sale of Series 2015 Bonds sufficient copies of the final Official Statement to enable the Purchaser to comply with the requirements of the SEC Rule and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Board.

Section 214. Sale of the Series 2015 Bonds.

The sale of the Series 2015 Bonds to the Purchaser is hereby ratified and confirmed. The Mayor and Clerk are hereby authorized to execute the official bid form submitted by the Purchaser. Delivery of the Series 2015 Bonds shall be made to the Purchaser as soon as practicable after the adoption of this Bond Resolution, upon payment of the Purchase Price.

Article III

REDEMPTION OF Series 2015 BONDS

Section 301. Redemption by Issuer.

The Series 2015 Bonds shall be subject to redemption and payment prior to their Stated Maturity, as follows:

(a) Optional Redemption. At the option of the Issuer, Series 2015 Bonds maturing on November 1, in the years 2026 and thereafter will be subject to redemption and payment prior to their Stated Maturity on November 1, 2025, and thereafter as a whole or in part (selection of maturities and the amount of Series 2015 Bonds of each maturity to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at any time, at the Redemption Price of 100% (expressed as a percentage of the principal amount), plus accrued interest thereon to the Redemption Date.

[(b) Mandatory Redemption.

(1) General. The Term Bonds shall be subject to mandatory redemption and payment prior to Stated Maturity pursuant to the mandatory redemption requirements at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. At its option, to be exercised on or before the 45th day next preceding any mandatory Redemption Date, the Issuer may: (1) deliver to the Paying Agent for cancellation Term Bonds subject to mandatory redemption on said mandatory Redemption Date, in any aggregate principal amount desired; or (2) furnish the Paying Agent funds, together with appropriate instructions, for the purpose of purchasing any Term Bonds subject to mandatory redemption on said mandatory Redemption Date from any Owner thereof whereupon the Paying Agent shall expend such funds for such purpose to such extent as may be practical; or (3) receive a credit with respect to the mandatory redemption obligation of the Issuer under this Section for any Term Bonds subject to mandatory redemption on said mandatory Redemption Date which, prior to such date, have been redeemed (other than through the operation of the mandatory redemption requirements of this subsection) and cancelled by the Paying Agent and not theretofore applied as a credit against any redemption obligation under this subsection. Each Term Bond so delivered or previously purchased or redeemed shall be credited at 100% of the principal amount thereof on the obligation of the Issuer to redeem Term Bonds of the same Stated Maturity on such mandatory Redemption Date, and any excess of such amount shall be credited on future mandatory redemption obligations for Term Bonds of the same Stated Maturity as designated by the Issuer, and the principal amount of Term Bonds to be redeemed by operation of the requirements of this Section shall be accordingly reduced. If the Issuer intends to exercise any option granted by the provisions of clauses (1), (2) or (3) above, the Issuer will, on or before the 45th day next preceding each mandatory Redemption Date, furnish the Paying Agent a written certificate indicating to what extent the provisions of said clauses (1), (2) and (3) are to be complied with, with respect to such mandatory redemption payment.

(2) The Series 2015[-_____] Term Bonds. [There are no Series 2015 Term Bonds.] [The Issuer shall from the payments specified in Section 602(b) hereof which are to be deposited into the Series 2015 Debt Service Account redeem on ____________________ 1 in each year, the following principal amounts of Series 2015[-______] Term Bonds:

Principal Amount	Year


	*

_______________

*Final Maturity

(3) [The Series 2015-[________________] Term Bonds. The Issuer shall from the payments specified in Section 602(b) hereof which are to be deposited into the Series 2015 Debt Service Account redeem on ____________________ 1 in each year, the following principal amounts of Series 2015[-________________] Term Bonds:

Principal Amount	Year


	________________*

_______________

*Final Maturity

Section 302. Selection of Series 2015 Bonds to be Redeemed.

Series 2015 Bonds shall be redeemed only in an Authorized Denomination. When less than all of the Series 2015 Bonds are to be redeemed and paid prior to their Stated Maturity, such Series 2015 Bonds shall be redeemed in such manner as the Issuer shall determine. Series 2015 Bonds of less than a full Stated Maturity shall be selected by the Bond Registrar in a minimum Authorized Denomination of principal amount in such equitable manner as the Bond Registrar may determine.

In the case of a partial redemption of Series 2015 Bonds by lot when Series 2015 Bonds of denominations greater than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption a minimum Authorized Denomination of face value shall be treated as though it were a separate Series 2015 Bond of the denomination of a minimum Authorized Denomination. If it is determined that one or more, but not all, of a minimum Authorized Denomination of face value represented by any Series 2015 Bond is selected for redemption, then upon notice of intention to redeem a minimum Authorized Denomination, the Owner or the Owner’s duly authorized agent shall forthwith present and surrender such Bond to the Bond Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of a minimum Authorized Denomination of face value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Series 2015 Bond or Series 2015 Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Series 2015 Bond. If the Owner of any such Series 2015 Bond fails to present such Series 2015 Bond to the Paying Agent for payment and exchange as aforesaid, such Series 2015 Bond shall, nevertheless, become due and payable on the redemption date to the extent of a minimum Authorized Denomination of face value called for redemption (and to that extent only).

Section 303. Notice and Effect of Call for Redemption.

In the event the Issuer desires to call the Series 2015 Bonds for redemption prior to maturity, written notice of such intent shall be provided to the Bond Registrar in accordance with K.S.A. 1 Series 2015 0-129, as amended, not less than 45 days prior to the Redemption Date. The Bond Registrar shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Bond Registrar at least 45 days prior to the Redemption Date of written instructions of the Issuer specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Series 2015 Bonds to be called for redemption. [The foregoing provisions of this paragraph shall not apply in the case of any mandatory redemption of Term Bonds hereunder, and Term Bonds shall be called by the Paying Agent for redemption pursuant to such mandatory redemption requirements without the necessity of any action by the Issuer and whether or not the Paying Agent holds moneys available and sufficient to effect the required redemption.]

Unless waived by any Owner of Series 2015 Bonds to be redeemed, if the Issuer shall call any Series 2015 Bonds for redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its intention to call and pay said Series 2015 Bonds to the State Treasurer and the Purchaser. In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the Owners of said Series 2015 Bonds. Each of said written notices shall be deposited in the United States first class mail not less than 30 days prior to the Redemption Date.

All official notices of redemption shall be dated and shall contain the following information:

(a) the Redemption Date;

(b) the Redemption Price;

(c) if less than all Outstanding Series 2015 Bonds are to be redeemed, the identification (and, in the case of partial redemption of any Bonds, the respective principal amounts) of the Series 2015 Bonds to be redeemed;

(d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Series 2015 Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and

(e) the place where such Series 2015 Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal office of the Paying Agent.

The failure of any Owner to receive notice given as heretofore provided or an immaterial defect therein shall not invalidate any redemption.

Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Series 2015 Bonds or portions of Series 2015 Bonds that are to be redeemed on such Redemption Date.

For so long as the Securities Depository is effecting book-entry transfers of any Series 2015 Bonds, the Bond Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Series 2015 Bond (having been mailed notice from the Bond Registrar, the Securities Depository, a Participant or otherwise) to notify the Beneficial Owner of the Series 2015 Bond so affected, shall not affect the validity of the redemption of such Series 2015 Bond.

Official notice of redemption having been given as aforesaid, the Series 2015 Bonds or portions of Series 2015 Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the Issuer defaults in the payment of the Redemption Price) such Series 2015 Bonds or portion of Series 2015 Bonds shall cease to bear interest. Upon surrender of such Series 2015 Bonds for redemption in accordance with such notice, the Redemption Price of such Series 2015 Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Series 2015 Bond or Series 2015 Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Series 2015 Bonds that have been surrendered for redemption shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued.

In addition to the foregoing notice, the Issuer shall provide such notices of redemption as are required by the Disclosure Undertaking. Further notice may be given by the Issuer or the Bond Registrar on behalf of the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if official notice thereof is given as above prescribed:

(a) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (1) the CUSIP numbers of all Series 2015 Bonds being redeemed; (2) the date of issue of the Series 2015 Bonds as originally issued; (3) the rate of interest borne by each Series 2015 Bond being redeemed; (4) the maturity date of each Series 2015 Bond being redeemed; and (5) any other descriptive information needed to identify accurately the Series 2015 Bonds being redeemed.

(b) Each further notice of redemption shall be sent at least one day before the mailing of notice to Owners by first class, registered or certified mail or overnight delivery, as determined by the Bond Registrar, to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Series 2015 Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the Series 2015 Bonds.

(c) Each check or other transfer of funds issued for the payment of the Redemption Price of Series 2015 Bonds being redeemed shall bear or have enclosed the CUSIP number of the Series 2015 Bonds being redeemed with the proceeds of such check or other transfer.

The Paying Agent is also directed to comply with any mandatory standards then in effect for processing redemptions of municipal securities established by the State or the Securities and Exchange Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any Series 2015 Bond.

Article IV

SECURITY FOR Series 2015 BONDS

Section 401. Security for the Series 2015 Bonds.

The Series 2015 Bonds shall be special obligations of the Issuer payable solely from, and secured as to the payment of principal and interest by a pledge of, the Net Revenues, and the Issuer hereby pledges said Net Revenues to the payment of the principal of and interest on the Series 2015 Bonds. The Series 2015 Bonds shall not be or constitute a general obligation of the Issuer, nor shall they constitute an indebtedness of the Issuer within the meaning of any constitutional, statutory or charter provision, limitation or restriction, and the taxing power of the Issuer is not pledged to the payment of the Series 2015 Bonds, either as to principal or interest.

The covenants and agreements of the Issuer contained herein and in the Series 2015 Bonds shall be for the equal benefit, protection and security of the legal owners of any or all of the Series 2015 Bonds, all of which Series 2015 Bonds shall be of equal rank and without preference or priority of one Series 2015 Bond over any other Series 2015 Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. The Series 2015 Bonds shall stand on a parity and be equally and ratably secured with respect to the payment of principal and interest from the Net Revenues and in all other respects with any Parity Bonds and Parity Obligations. The Series 2015 Bonds shall not have any priority with respect to the payment of principal or interest from said net income and revenues or otherwise over the Parity Bonds and Parity Obligations and the Parity Bonds and Parity Obligations shall not have any priority with respect to the payment of principal or interest from said net income and revenues or otherwise over the Series 2015 Bonds.

Article V

ESTABLISHMENT OF FUNDS AND ACCOUNTS

DEPOSIT AND APPLICATION OF BOND PROCEEDS

Section 501. Creation of Funds and Accounts.

Simultaneously with the issuance of the Series 2015 Bonds, there shall be created within the Treasury of the Issuer the following Funds and Accounts:

(a) Project Fund for Water and Sewage System Improvement Revenue Bonds, Series 2015 (the “Series 2015 Project Fund”);

(b) Debt Service Account for Water and Sewage System Improvement Revenue Bonds, Series 2015 (the “Series 2015 Debt Service Account”);

(c) Debt Service Reserve Account for Water and Sewage System Improvement Revenue Bonds, Series 2015 (the “Series 2015 Debt Service Reserve Account”);

(d) Costs of Issuance Account for Water and Sewage System Improvement Revenue Bonds, Series 2015 (the “Series 2015 Costs of Issuance Account”); and

(e) Rebate Fund for Water and Sewage System Improvement Revenue Bonds, Series 2015 (the “Rebate Fund”).

The Funds and Accounts established herein shall be administered in accordance with the provisions of this Bond Resolution so long as the Series 2015 Bonds are Outstanding.

The following separate Funds and Accounts created and established in the treasury of the Issuer are hereby ratified and confirmed and shall be administered in accordance with the provisions of the Parity Resolutions so long as any Parity Bonds are Outstanding in accordance with this Bond Resolution:

(a) Water and Sewage System Revenue Fund;

(b) Water and Sewage System Depreciation and Emergency Account;

(d) Water and Sewage System Operation and Maintenance Account.

The separate Funds and Accounts created and established in the treasury of the Issuer pursuant to each of the Parity Resolutions are hereby ratified and confirmed and shall be administered in accordance with the provisions of each of the Parity Resolutions so long as any of the Parity Bonds authorized by such Parity Resolution are outstanding.

Section 502. Deposit of Series 2015 Bond Proceeds.

The net proceeds received from the sale of the Series 2015 Bonds shall be deposited simultaneously with the delivery of the Series 2015 Bonds as follows:

(a) All accrued interest, if any, received from the sale of the Series 2015 Bonds shall be deposited in the Series 2015 Debt Service Account.

(b) The sum of $[________] shall be deposited in the Series 2015 Costs of Issuance Account.

(c) An amount equal to the Debt Service Reserve Requirement for the Series 2015 Bonds shall be deposited in the Series 2015 Debt Service Reserve Account.

(d) The remaining balance of the proceeds derived from the sale of the Series 2015 Bonds shall be deposited in the Series 2015 Project Fund.

Section 503. Application of Moneys in the Series 2015 Project Fund.

Moneys in the Series 2015 Project Fund shall be used for the sole purpose of: (a) paying the costs of the Project, in accordance with the plans and specifications therefor prepared by the Consulting Engineer, heretofore approved by the governing body of the Issuer and on file in the office of the Clerk, including any alterations in or amendments to said plans and specifications deemed advisable by the Consulting Engineer and approved by the governing body of the Issuer; (b) making transfers to the Series 2015 Debt Service Account to pay interest on the Series 2015 Bonds during construction of the Project; and (c) transferring any amounts to the Rebate Fund required by Section 505 hereof.

Withdrawals from the Series 2015 Project Fund shall be made only when authorized by the governing body of the Issuer. Each authorization for costs of the Project shall be supported by a certificate executed by the Issuer’s Director of Utilities (or designate) that such payment is being made for a purpose within the scope of this Bond Resolution and that the amount of such payment represents only the contract price of the property, equipment, labor, materials or service being paid for or, if such payment is not being made pursuant to an express contract, and that such payment is not in excess of the reasonable value thereof. Authorizations for withdrawals for other purposes shall be supported by a certificate executed by the Issuer’s Director of Utilities (or designate) stating that such payment is being made for a purpose within the purpose of this Bond Resolution.

Upon completion of the Project, any surplus remaining in the Series 2015 Project Fund shall be deposited in the Series 2015 Debt Service Account.

Section 504. Application of Moneys in the Rebate Fund.

(a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Federal Tax Certificate. All money at any time deposited in the Rebate Fund shall be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Federal Tax Certificate), for payment to the United States of America, and neither the Issuer nor the Owner of any Series 2015 Bonds shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and the Federal Tax Certificate.

(b) The Issuer shall periodically determine the rebatable arbitrage, if any, under Code § 148(f) in accordance with the Federal Tax Certificate, and the Issuer shall make payments to the United States of America at the times and in the amounts determined under the Federal Tax Certificate. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Series 2015 Bonds and payment and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Revenue Fund.

(c) Notwithstanding any other provision of this Bond Resolution, including in particular Article XI hereof, the obligation to pay rebatable arbitrage to the United States of America and to comply with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or payment in full of the Series 2015 Bonds.

Section 505. Application of Moneys in the Costs of Issuance Account.

Moneys in the Costs of Issuance Account shall be used by the Issuer to pay the Costs of Issuance. Any funds remaining in the Costs of Issuance Account, after payment of all Costs of Issuance, but not later than the later of 30 days prior to the first Stated Maturity of principal or one year after the date of issuance of the Series 2015 Bonds, shall be transferred to the Series 2015 Project Fund until completion of the Project and thereafter to the Issuer for deposit into the Series 2015 Debt Service Account.

Section 506. Substitution of Projects.

If the Issuer is prevented, hindered or delayed from proceeding with the acquisition or construction of the Project, the Issuer may elect to substitute or add other projects pursuant to this Section (the “Substitute Project”) provided the following conditions are met: (1) the Substitute Project and the issuance of water and sewer system revenue bonds to pay the cost of the Substitute Project has been duly authorized by the governing body of the Issuer in accordance with the laws of the State, (2) a resolution authorizing the use of the proceeds of the Series 2015 Bonds to pay the Authorized Costs of the Substitute Project has been duly adopted by the governing body of the Issuer, (3) the Attorney General of the State has approved the amendment to the transcript of proceedings for the Series 2015 Bonds to include the Substitute Project and (4) the Issuer has received an opinion of Bond Counsel to the effect that the use of the proceeds of the Series 2015 Bonds to pay the cost of the Substitute Project will not adversely affect the tax-exempt status of the Series 2015 Bonds under State or federal law and the Substitute Project has been duly authorized pursuant to this Section and the laws of the State.

Article VI

COLLECTION AND APPLICATION OF REVENUES

Section 601. Revenue Fund.

The Issuer covenants and agrees that from and after the delivery of the Series 2015 Bonds, and continuing as long as any of the Series 2015 Bonds remain Outstanding hereunder, all of the Revenues shall as and when received be paid and deposited into the Revenue Fund. Said Revenues shall be segregated and kept separate and apart from all other moneys, revenues, Funds and Accounts of the Issuer and shall not be commingled with any other moneys, revenues, Funds and Accounts of the Issuer. The Revenue Fund shall be administered and applied solely for the purposes and in the manner provided in this Bond Resolution, except as may be modified by the provisions of the Parity Resolution.

Section 602. Application of Moneys in Funds and Accounts.

The Issuer covenants and agrees that from and after the delivery of the Series 2015 Bonds and continuing so long as any of the Series 2015 Bonds shall remain Outstanding, it will on the first day of each month administer and allocate all of the moneys then held in the Revenue Fund as follows:

(a) Operation and Maintenance Account. There shall first be paid and credited to the Operation and Maintenance Account an amount sufficient to pay the estimated cost of operating and maintaining the System during the ensuing 60-day period. All amounts paid and credited to the Operation and Maintenance Account shall be expended and used by the Issuer solely for the purpose of paying the Expenses.

Parity Resolutions. The following transfers shall be made on a parity of lien basis with the transfers and requirements of the Parity Resolutions:

(b) Series 2015 Debt Service Account. There shall next be paid and credited monthly to the Series 2015 Debt Service Account, to the extent necessary to meet on each Bond Payment Date the payment of all interest on and principal of the Series 2015 Bonds, the following sums:

(1) Beginning with the first of said monthly deposits and continuing on the first day of each month thereafter to and including October 1, 2015, an equal pro rata portion of the amount of interest becoming due on the Series 2015 Bonds on November l, 2015; and thereafter, beginning on November 1, 2015, and continuing on the first day of each month thereafter so long as any of the Series 2015 Bonds remain Outstanding an amount not less than an equal pro rata portion of the amount of interest that will become due on the Series 2015 Bonds on the next succeeding Interest Payment Date; and

(2) Beginning with the first of said monthly deposits and continuing on the first day of each month thereafter, so long as any of the Series 2015 Bonds remain Outstanding, an amount not less than an equal pro rata portion of the amount of principal that will become due on the Series 2015 Bonds on the next succeeding Maturity date.

The amounts required to be paid and credited to the Series 2015 Debt Service Account pursuant to this Section shall be made at the same time and on a parity with the amounts at the time required to be paid and credited to the debt service accounts established for the payment of the Debt Service Requirements on Parity Bonds and Parity Obligations under the provisions of the Parity Resolution(s).

Any amounts deposited in the Series 2015 Debt Service Account in accordance with Section 502(a) hereof shall be credited against the Issuer’s payment obligations as set forth in subsection (b)(1) of this Section.

All amounts paid and credited to the Series 2015 Debt Service Account shall be expended and used by the Issuer for the sole purpose of paying the Debt Service Requirements of the Series 2015 Bonds as and when the same become due at Maturity and on each Interest Payment Date.

If at any time the moneys in the Revenue Fund are insufficient to make in full the payments and credits at the time required to be made to the Series 2015 Debt Service Account and to the debt service accounts established to pay the principal of and interest on any Parity Bonds or Parity Obligations, the available moneys in the Revenue Fund shall be allocated first in accordance with the provisions of the Series 2005 Resolution and then shall be divided among such debt service accounts in proportion to the respective principal amounts of all other series of Parity Bonds and Parity Obligations at the time Outstanding which are payable from the moneys in said debt service accounts.

(c) Series 2015 Debt Service Reserve Account. Except as hereinafter provided in this Section, all amounts paid and credited to the Series 2015 Debt Service Reserve Account shall be expended and used by the Issuer solely to prevent any default in the payment of interest on or principal of the Series 2015 Bonds on any Maturity date or Interest Payment Date if the moneys in the Series 2015 Debt Service Account are insufficient to pay the Debt Service Requirements of the Series 2015 Bonds as they become due. So long as the Series 2015 Debt Service Reserve Account aggregates the Debt Service Reserve Requirement for the Series 2015 Bonds, no further payments into said Account shall be required, but if the Issuer is ever required to expend and use a part of the moneys in said Account for the purpose herein authorized and such expenditure reduces the amount of the Series 2015 Debt Service Reserve Account below the Debt Service Reserve Requirement for the Series 2015 Bonds, or if the valuation of the Series 2015 Debt Service Reserve Account as provided in Section 701(b) establishes that the value of the Series 2015 Debt Service Reserve Account is below the Debt Service Reserve Requirement for the Series 2015 Bonds, the Issuer shall transfer all available Revenues after providing for the transfers set forth above into the debt service account(s) until the Series 2015 Debt Service Reserve Account shall again aggregate the Debt Service Reserve Requirement for the Series 2015 Bonds.

If at any time the moneys in the Revenue Fund are insufficient to make in full the payments and credits at the time required to be made to the Series 2015 Debt Service Reserve Account and to fund any deficiencies to the debt service reserve accounts established with respect to any Parity Bonds, the available moneys in the Revenue Fund shall be divided among such debt service reserve accounts in proportion to the respective Debt Service Reserve Requirement deficiencies for all other series of Parity Bonds at the time Outstanding.

Moneys in the Series 2015 Debt Service Reserve Account may be used to call the Series 2015 Bonds for redemption and payment prior to their Stated Maturity or may be used to pay and retire the Series 2015 Bonds and interest thereon; provided that after such redemption or payment there shall remain in the Series 2015 Debt Service Reserve Account an amount equal to the Debt Service Reserve Requirement for the remaining Outstanding Series 2015 Bonds. Any amounts in the Series 2015 Debt Service Reserve Account in excess of the Debt Service Reserve Requirement on any valuation date shall be transferred (i) during the period of construction of the Project, to the Series 2015 Project Fund, and (ii) after such construction period, to the Series 2015 Debt Service Account.

(d) Debt Service Accounts and Debt Service Reserve Accounts – Junior Lien Obligations. There shall next be paid and credited monthly to the debt service account(s) for any Junior Lien Obligations, to the extent necessary to meet on each Bond Payment Date an amount equal to the payment of all interest on and principal of any Junior Lien Obligations and then to any debt service reserve account(s) for any Junior Lien Obligations, any amount required to be paid into such debt service reserve account(s). The amounts required to be paid and credited to the debt service account(s) and debt service reserve account(s) for any Junior Lien Obligations shall be made at the same time and on a parity with the amounts at the time required to be paid and credited to other debt service account(s) and debt service reserve account(s) established for the payment of the Debt Service Requirements on any Junior Lien Obligations.

(e) Debt Service Accounts and Debt Service Reserve Accounts-Subordinate Lien Bonds. There shall next be paid and credited monthly to the debt service account(s) for any Subordinate Lien Bonds, to the extent necessary to meet on each Bond Payment Date an amount equal to the payment of all interest on and principal of any Subordinate Lien Bonds and then to any debt service reserve account(s) for any Subordinate Lien Bonds, any amount required to be paid into such debt service reserve account(s). The amounts required to be paid and credited to the debt service account(s) and debt service reserve account(s) for any Subordinate Lien Bonds shall be made at the same time and on a parity with the amounts at the time required to be paid and credited to other debt service accounts and debt service reserve account(s) established for the payment of the Debt Service Requirements on any Subordinate Lien Bonds.

(f) Depreciation and Emergency Account. Except as hereinafter provided, moneys in the Depreciation and Emergency Account shall be expended and used by the Issuer, if no other funds are available therefor, solely for the purpose of making emergency replacements and repairs in and to the System as may be necessary to keep the System in good repair and working order and to assure the continued effective and efficient operation thereof. If the Issuer is ever required to expend a part of the moneys in the Depreciation and Emergency Account for its authorized purposes and such expenditure reduces the amount of the Depreciation and Emergency Account below the Depreciation and Emergency Requirement, then the Issuer shall make monthly payments into said account in an amount not less than one thirty-sixth (1/36) of the amount of such deficiency into the Depreciation and Emergency Account until the Depreciation and Emergency Account again aggregates the Depreciation and Emergency Requirement.

(g) Surplus Account. After all payments and credits required at the time to be made under the provisions of the preceding subsections have been made, all moneys remaining in the Revenue Fund shall be paid and credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the following purposes as determined by the governing body of the Issuer:

(1) Paying the cost of the operation, maintenance and repair of the System to the extent that may be necessary after the application of the moneys held in the Operation and Maintenance Account under the provisions of paragraph (a) of this Section;

(2) Paying the cost of extending, enlarging or improving the System;

(3) Preventing default in, anticipating payments into or increasing the amounts in the Series 2015 Debt Service Account, any debt service account for Parity Bonds or Parity Obligations, the Series 2015 Debt Service Reserve Account, any debt service reserve account for Parity Bonds or Parity Obligations, or the Depreciation and Emergency Account referred to in this Section, or any one of them, or establishing or increasing the amount of any debt service account or debt service reserve account created by the Issuer for the payment of any Parity Bonds or Parity Obligations;

(4) Calling, redeeming and paying prior to Stated Maturity, or, at the option of the Issuer, purchasing in the open market at the best price obtainable not exceeding the redemption price (if any bonds are callable), any System Indebtedness, including principal, interest and redemption premium, if any;

(5) Any other lawful purpose in connection with the operation of the System and benefiting the System;

(6) To make transfers to the Revenue Fund; or

(7) To make lawful transfers to any fund of the Issuer.

(h) Deficiency of Payments into Funds and Accounts. If at any time the Revenues are insufficient to make any payment on the date or dates hereinbefore specified, the Issuer will make good the amount of such deficiency by making additional payments or credits out of the first available Revenues, such payments and credits being made and applied in the order hereinbefore specified in this Section.

Section 603. Transfer of Funds to Paying Agent.

The Treasurer of the Issuer is hereby authorized and directed to withdraw from the Series 2015 Debt Service Account, and, to the extent necessary to prevent a default in the payment of either principal of or interest on the Series 2015 Bonds, from the Series 2015 Debt Service Reserve Account, the Depreciation and Emergency Account and the Surplus Account as provided in Section 602 hereof, sums sufficient to pay the principal of and interest on the Series 2015 Bonds as and when the same become due on any Bond Payment Date, and to forward such sums to the Paying Agent in a manner which ensures the Paying Agent will have available funds in such amounts on or before the Business Day immediately preceding each Bond Payment Date. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Bond Resolution.

Section 604. Payments Due on Saturdays, Sundays and Holidays.

In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date.

Article VII

DEPOSIT AND INVESTMENT OF MONEYS

Section 701. Deposits and Investment of Moneys.

(a) Moneys in each of the Funds and Accounts shall be deposited in accordance with laws of the State, in a bank, savings and loan association or savings bank organized under the laws of the State, any other state or the United States: (a) which has a main or branch office located in the Issuer; or (b) if no such entity has a main or branch office located in the Issuer, with such an entity that has a main or branch office located in the county or counties in which the Issuer is located. All such depositaries shall be members of the Federal Deposit Insurance Corporation, or otherwise as permitted by State law. All such deposits shall be invested in Permitted Investments as set forth in this Article or shall be adequately secured as provided by the laws of the State. All moneys held in the Funds and Accounts shall be kept separate and apart from all other funds of the Issuer so that there shall be no commingling with any other funds of the Issuer.

(b) Moneys held in any Fund or Account may be invested in accordance with this Bond Resolution and the Federal Tax Certificate, in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund was created. All earnings on any investments held in any Fund or Account shall accrue to and become a part of such Fund or Account; provided that, at the option of the Issuer, during the period of construction of the extensions and improvements to the System, all earnings on the investment of such funds derived from proceeds of the Series 2015 Bonds may be credited to the Series 2015 Project Fund. All earnings on investments held in the Series 2015 Debt Service Reserve Account shall accrue to and become a part of the Series 2015 Debt Service Reserve Account until the amount on deposit in the Series 2015 Debt Service Reserve Account shall aggregate the Debt Service Reserve Requirement for the Series 2015 Bonds; thereafter, all such earnings shall be credited to the Series 2015 Debt Service Account. All earnings on investments held in the Depreciation and Emergency Account shall accrue to and become a part of the Depreciation and Emergency Account until the amount on deposit in the Depreciation and Emergency Account shall aggregate the Depreciation and Emergency Requirement; thereafter, all such earnings shall be credited to the Revenue Fund.

In determining the amount held in any Fund or Account under the provisions of the Bond Resolution, Permitted Investments shall be valued at their market value. Such valuation shall be made as of the final Stated Maturity of principal of any Fiscal Year that the Series 2015 Bonds remain Outstanding.

(c) Notwithstanding anything to the contrary in this Bond Resolution, so long as any of the Parity Bonds remain Outstanding, any investments made pursuant to this Section shall be subject to any restrictions in the Parity Resolution with respect to the Funds and Accounts created by and referred to in such Parity Resolution.

Article VIII

GENERAL COVENANTS AND PROVISIONS

The Issuer covenants and agrees with each of the Owners of any of the Series 2015 Bonds that so long as any of the Series 2015 Bonds remain Outstanding and unpaid it will comply with each of the following covenants:

Section 801. Efficient and Economical Operation.

The Issuer will continuously own and will operate the System as a revenue producing facility in an efficient and economical manner and will keep and maintain the same in good repair and working order.

Section 802. Rate Covenant.

The Issuer, in accordance with and subject to applicable legal requirements, will fix, establish, maintain and collect such rates and charges for the use and services furnished by or through the System as will produce Revenues sufficient to (a) pay the Expenses; (b) pay the Debt Service Requirements on the Parity Bonds and Parity Obligations as and when the same become due at the Maturity thereof or on any Interest Payment Date; (c) enable the Issuer to have in each Fiscal Year, a Debt Service Coverage Ratio of not less than 1.20 on all Parity Bonds and Parity Obligations at the time Outstanding; 1.05 on any Junior Lien Obligations at the time Outstanding, and 1.00 on all Subordinate Lien Bonds at the time Outstanding; and (d) provide reasonable and adequate reserves for the payment of the Parity Bonds and Parity Obligations and the interest thereon and for the protection and benefit of the System as provided in any Parity Resolution or Parity Obligation Documents. The Issuer will require the prompt payment of accounts for service rendered by or through the System and will promptly take whatever action is legally permissible to enforce and collect delinquent charges. The Issuer will, from time to time as often as necessary, in accordance with and subject to applicable legal requirements, revise the rates and charges aforesaid in such manner as may be necessary or proper so that the Net Revenues will be sufficient to cover the obligations under this Section and otherwise under the provisions of the Parity Resolutions or Parity Obligation Documents. If in any Fiscal Year, Net Revenues are an amount less than as hereinbefore provided, the Issuer will immediately employ a Consultant to make recommendations with respect to such rates and charges. A copy of the Consultant’s report and recommendations shall be filed with the Clerk and shall be furnished to any Owner of the Series 2015 Bonds requesting a copy of the same, at the cost of such Owner. The Issuer shall, to the extent feasible, follow the recommendations of the Consultant.

Section 803. Reasonable Charges for all Services.

None of the facilities or services provided by the System will be furnished to any user (excepting the Issuer itself) without a reasonable charge being made therefor. If the Revenues derived from the System are at any time insufficient to pay the reasonable Expenses and also to pay the Debt Service Requirements of the System Indebtedness as and when the same become due, then the Issuer will thereafter pay into the Revenue Fund a fair and reasonable payment in accordance with effective applicable rates and charges for all services furnished to the Issuer or any of its departments by the System, and such payments will continue so long as the same may be necessary in order to prevent or reduce the amount of any default in the payment of the Debt Service Requirements of the System Indebtedness.

Section 804. Restrictions on Mortgage or Sale of System.

The Issuer will not mortgage, pledge or otherwise encumber the System or any part thereof, nor will it sell, lease or otherwise dispose of the System or any material part thereof; provided, however, the Issuer may:

(a) sell at fair market value any portion of the System which has been replaced by other similar property of at least equal value, or which ceases to be necessary for the efficient operation of the System, and in the event of sale, the Issuer will apply the proceeds to either (1) redemption of Outstanding System Indebtedness in accordance with the provisions governing repayment of such System Indebtedness in advance of Stated Maturity, or (2) replacement of the property so disposed of by other property the revenues of which shall be incorporated into the System as hereinbefore provided;

(b) cease to operate, abandon or otherwise dispose of any property which has become obsolete, nonproductive or otherwise unusable to the advantage of the Issuer;

(c) lease, (1) as lessor, any real or personal property which is unused or unimproved, or which has become obsolete, nonproductive, or otherwise unusable to the advantage of the Issuer, or which is being acquired as a part of a lease/purchase financing for the acquisition and/or improvement of such property; and/or (2) as lessee, with an option of the Issuer to purchase, any real or personal property for the extension and improvement of the System. Property being leased as lessor and/or lessee pursuant to this subparagraph (c) shall not be treated as part of the System for purposes of this Section 804 and may be mortgaged, pledged or otherwise encumbered;

(d) sell, lease or convey all or substantially all of the System to another entity or enter into a management contract with another entity if:

(1) The transferee entity is a political subdivision organized and existing under the laws of the State, or instrumentality thereof, or an organization described in Code § 501(c)(3), and expressly assumes in writing the due and punctual payment of the principal of and premium, if any, and interest on all outstanding System Indebtedness according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Bond Resolution;

(2) If there remains unpaid any System Indebtedness which either (A) bears interest that is not includable in federal gross income under the Code, or (B) constitutes qualified Build America Bonds, the Issuer receives an opinion of Bond Counsel, in form and substance satisfactory to the Issuer, to the effect that under then existing law the consummation of such sale, lease or conveyance, whether or not contemplated on any date of the delivery of such System Indebtedness, would not cause either (A) the interest payable on such System Indebtedness to become includable in federal gross income under the Code or (B) the loss of BAB Interest Subsidy Payments, as applicable;

(3) The Issuer receives a certificate of the Consultant which demonstrates and certifies that immediately upon such sale or conveyance the transferee entity will not, as a result thereof, be in default in the performance or observance of any covenant or agreement to be performed or observed by it under any Parity Resolution or Parity Obligation Documents;

(4) Such transferee entity possesses such licenses to operate the System as may be required if it is to operate the System; and

(5) The Issuer receives an opinion of Bond Counsel, in form and substance satisfactory to the Issuer, as conclusive evidence that any such sale, lease or conveyance, and any such assumption, is permitted by law and complies with the provisions of this Section.

Section 805. Insurance.

The Issuer will carry and maintain insurance with respect to the System and its operations against such casualties, contingencies and risks (including but not limited to property and casualty, fire and extended coverage insurance upon all of the properties forming a part of the System insofar as the same are of an insurable nature, public liability and worker’s compensation insurance), such insurance to be of the character and coverage and in such amounts as would normally be carried by other enterprises engaged in similar activities of comparable size and similarly situated; provided the amount of such liability insurance shall be in amounts not less than the then maximum liability of a governmental entity for claims arising out of a single occurrence, as provided by the State’s tort claims act or other similar future law (currently $500,000 per occurrence). In the event of loss or damage, the Issuer, with reasonable dispatch, will use the proceeds of such insurance in reconstructing and replacing the property damaged or destroyed, or in paying the claims on account of which such proceeds were received, or if such reconstruction or replacement is unnecessary or impracticable, then the Issuer will pay and deposit the proceeds of such insurance into the Revenue Fund. The Issuer will annually review the insurance it maintains with respect to the System to determine that it is customary and adequate to protect its property and operations. The Issuer may elect to be self-insured for all or any part of the foregoing requirements. The cost of all insurance obtained pursuant to the requirements of this Section shall be paid as an Expense out of the Revenues of the System.

Section 806. Books, Records and Accounts.

The Issuer will install and maintain proper books, records and accounts (entirely separate from all other records and accounts of the Issuer) in which complete and correct entries will be made of all dealings and transactions of or in relation to the System. Such accounts shall show the amount of Revenues received from the System, the application of such Revenues, and all financial transactions in connection therewith. Said books shall be kept by the Issuer according to generally accepted accounting principles as applicable to the operation of municipal utilities.

Section 807. Annual Budget.

Prior to the commencement of each Fiscal Year, the Issuer will cause to be prepared and filed with the Clerk a budget setting forth the estimated receipts and expenditures of the System for the next succeeding Fiscal Year.

Section 808. Annual Audit.

Annually, promptly after the end of the Fiscal Year, the Issuer will cause an audit to be made of the financial statements System for the preceding Fiscal Year by an Independent Accountant to be employed for that purpose and paid from the Revenues of the System. Said annual audit shall cover in reasonable detail the operation of the System during such Fiscal Year. The report of said annual audit shall include:

(a) A classified statement of the Revenues received, the Expenses for operation and maintenance, the Net Revenues and the amount of any capital expenditures made in connection with the System during the previous Fiscal Year;

(b) A complete balance sheet as of the end of each Fiscal Year with the amount on hand at the end of such Fiscal Year in each of the Funds and Accounts created by and referred to in this Bond Resolution;

(c) A statement of all System Indebtedness matured or redeemed and interest paid on System Indebtedness during said Fiscal Year; and

(d) A statement showing the amount and character of the insurance carried on the property constituting the System and showing the names of the insurers, the expiration dates of the policies and the premiums thereon.

Within 30 days after the completion of each such annual audit, a copy of the report of thereof shall be filed in the office of the Clerk. Such audit reports shall at all times during the usual business hours be open to the examination and inspection by any user of the services of the System, any Owner of any of the Series 2015 Bonds, or by anyone acting for or on behalf of such user or Owner.

As soon as possible after the completion of the annual audit, the governing body of the Issuer shall review the report of such audit, and if the audit report discloses that proper provision has not been made for all of the requirements of this Bond Resolution and the Act, the Issuer will promptly cure such deficiency and will promptly proceed to modify the rates and charges to be charged for the use and services furnished by the System or take such other action as may be necessary to adequately provide for such requirements.

Section 809. Right of Inspection.

The Purchaser of the Series 2015 Bonds and any Owner or Owners of 10% of the principal amount of the Series 2015 Bonds then Outstanding shall have the right at all reasonable times to inspect the System and all records, accounts and data relating thereto, and shall be furnished all such information concerning the System and the operation thereof which the Purchaser or such Owner or Owners may reasonably request.

Section 810. Administrative Personnel.

The Issuer shall use its best efforts to employ at all times administrative personnel experienced and well qualified to operate the System. The Issuer further agrees that such administrative personnel shall be employed in sufficient numbers to ensure that the System will be operated in a prudent and efficient manner.

Section 811. Performance of Duties and Covenants.

The Issuer will faithfully and punctually perform all duties, covenants and obligations with respect to the operation of the System now or hereafter imposed upon the Issuer by the Constitution and laws of the State and by the provisions of this Bond Resolution.

Section 812. Report on System Condition.

The Issuer shall annually cause a qualified employee of the Issuer to make an examination of and report on the condition and operations of the System. At least every five years, the Issuer shall cause such examination and report to be made by the Consulting Engineer. Each such report shall make recommendations as to any changes in operations of the System deemed desirable and shall also make reference to any unusual or extraordinary items of maintenance and repair and any extensions, enlargements or improvements that may be needed in the period prior to the preparation of the next report required by this Section. A copy of each such report shall be filed in the office of the Clerk, and, upon written request, shall be sent to any Owner (at the expense of such Owner).

Section 813. Parity Bond Certification.

The Issuer hereby represents and covenants that the Series 2015 Bonds directed to be issued by this Bond Resolution are so issued in full compliance with the restrictions and conditions upon which the Issuer may issue Additional Bonds payable out of the Revenues derived from the operation of the System and which stand on a parity with the Parity Bonds heretofore issued and Outstanding, as set forth and contained in all applicable Parity Resolutions, and that the Series 2015 Bonds herein directed to be issued are so issued in all respects on a parity and equality with the Parity Bonds heretofore issued and Outstanding.

Article IX

ADDITIONAL BONDS AND OBLIGATIONS

Section 901. Senior Lien Bonds.

The Issuer covenants and agrees that so long as any of the Parity Bonds or Parity Obligations remain Outstanding, the Issuer will not issue any System Indebtedness payable out of the Revenues of the System or any part thereof which are superior to the Parity Bonds and Parity Obligations with respect to the lien on the Revenues.

Section 902. Parity Bonds and Parity Obligations.

The Issuer covenants and agrees that it will not issue any System Indebtedness which stands on a parity or equality of lien against the Net Revenues with the Parity Bonds or Parity Obligations unless the following conditions are met:

(a) The Issuer shall not be in default in the payment of principal of or interest on any Parity Bonds or Parity Obligations at the time Outstanding or in making any payment at the time required to be made into the respective Funds and Accounts created by and referred to in this Bond Resolution or any Parity Resolution (unless such System Indebtedness is being issued to provide funds to cure such default) nor shall any other Event of Default have occurred and be continuing;

(b) The Issuer shall deliver the following:

(1) Long-Term Indebtedness. A certificate signed by the Issuer evidencing either of the following:

(i) The Debt Service Coverage Ratio for the Fiscal Year immediately preceding the issuance of such System Indebtedness, as reflected by information provided by the Independent Accountant, shall be not less than 1.20, including the System Indebtedness proposed to be issued. In the event that the Issuer has instituted any increase in rates for the use and services of the System and such increase shall not have been in effect during the full Fiscal Year immediately preceding the issuance of such proposed System Indebtedness, the additional Net Revenues which would have resulted from the operation of the System during said preceding Fiscal Year had such rate increase been in effect for the entire period may be added to the stated Net Revenues for the calculation of the Debt Service Coverage Ratio, provided that such estimated additional Net Revenues shall be determined by a Consultant.

(ii) The estimated Debt Service Coverage Ratio (as determined by a Consultant), for the Fiscal Year immediately following the Fiscal Year in which the project, the cost of which is being financed by such System Indebtedness, is to be in commercial operation, shall be not less than 1.20, including the System Indebtedness proposed to be issued. In the event that the Issuer anticipates additional Revenues as a result of expansion or modification of the System by such System Indebtedness, the Issuer may adjust the estimated Net Revenues in determining the Debt Service Coverage Ratio, by adding thereto any estimated increase in Net Revenues resulting from any increase in Revenues for the use and services of the System, which, in the opinion of the Consultant, are reasonable based on projected operations of the System for such Fiscal Year.

(2) Short-Term Indebtedness. A certificate signed by the Issuer evidencing any one of the following:

(i) The principal amount of all Outstanding Short-Term Indebtedness does not exceed 15% of the Revenues for the most recently ended Fiscal Year for which financial information is available from the Independent Accountant;

(ii) The Short-Term Indebtedness could be incurred under subsection (b)(1) hereof assuming it was Long-Term Indebtedness.

(iii) There is delivered to the Issuer a certificate of a Consultant to the effect that it is such Consultant’s opinion that it is reasonable to assume that the Issuer will be able to refinance such Short-Term Indebtedness prior to its Stated Maturity in compliance with the provisions of this Section and the conditions described in subsection (b)(1) are met with respect to such Short-Term Indebtedness when it is assumed that such Short-Term Indebtedness is Long-Term Indebtedness maturing over 20 years (or such shorter period as such Consultant indicates is reasonable to assume in such statement) from the date of issuance of the Short-Term Indebtedness and bears interest on the unpaid principal balance at the Index Rate and is payable on a level annual debt service basis over a 20-year period (or such shorter period as such Consultant indicates is reasonable to assume in such statement).

(3) Interim Indebtedness. A certificate signed by the Issuer evidencing either of the following:

(i) The Interim Indebtedness could be incurred under subsection (b)(1) hereof assuming it was Long-Term Indebtedness.

(ii) There is delivered to the Issuer a certificate of a Consultant to the effect that it is such Consultant’s opinion that it is reasonable to assume that the Issuer will be able to refinance such Interim Indebtedness prior to its Stated Maturity in compliance with the provisions of this Section and the conditions described in subsection (b)(1) are met with respect to such Interim Indebtedness when it is assumed that such Interim Indebtedness is Long-Term Indebtedness maturing over 20 years (or such shorter period as such Consultant indicates is reasonable to assume in such statement) from the date of issuance of the Interim Indebtedness and bears interest on the unpaid principal balance at the Index Rate and is payable on a level annual debt service basis over a 20-year period (or such shorter period as such Consultant indicates is reasonable to assume in such statement).

(d) The ordinance and/or resolution authorizing such System Indebtedness shall contain or provide for substantially the same terms, conditions, covenants and procedures as established in this Bond Resolution.

Notwithstanding the foregoing restrictions, additional System Indebtedness may be issued under this Section if it is necessary: (1) in the opinion of the Consulting Engineer to do so to repair the System if damaged or destroyed by disaster to such extent necessary to keep it in good operating condition; or (2) in the opinion of the Issuer’s legal counsel to remedy any deficiency of the System relating to environmental pollution matters or to comply with the requirements of any governmental agency having jurisdiction over the Issuer with respect thereto.

Additional System Indebtedness issued under the conditions set forth in this Section shall stand on a parity with the Parity Bonds and Parity Obligations and shall enjoy complete equality or lien on and claim against the Net Revenues of the System, and the Issuer may make equal provision for paying the Debt Service Requirements on such System Indebtedness out of the Revenue Fund and may likewise provide for the creation of reasonable debt service accounts and debt service reserve accounts for the payment of the Debt Service Requirements on such System Indebtedness and the interest thereon out of moneys in the Revenue Fund.

Section 903. Junior Lien Obligations.

Nothing in this Article shall prohibit or restrict the right of the Issuer to issue Junior Lien Obligations for any lawful purpose in connection with the operation of and benefiting the System and to provide that the Debt Service Requirements on such Junior Lien Obligations shall be payable out of the Net Revenues of the System, provided at the time of the issuance of such Junior Lien Obligations the Issuer is not in default in the performance of any covenant or agreement contained in the Bond Resolution (unless such System Indebtedness shall be issued to cure such default and shall be junior and subordinate to the Parity Bonds and Parity Obligations) so that if at any time the Issuer shall be in default in paying either interest on or principal of the Parity Bonds or Parity Obligations, or of the Issuer is in default in making debt service, operation and maintenance or debt service reserve deposits or payments required to be made by it under the Bond Resolution, the Issuer shall make no payments of either principal of or interest on said Junior Lien Obligations until said default or defaults be cured.

Section 904. Subordinate Lien Bonds.

Nothing in this Article shall prohibit or restrict the right of the Issuer to issue Subordinate Lien Bonds for any lawful purpose in connection with the operation of and benefiting the System and to provide that the Debt Service Requirements on such Subordinate Lien Bonds shall be payable out of the Net Revenues of the System, provided at the time of the issuance of such Subordinate Lien Bonds the Issuer is not in default in the performance of any covenant or agreement contained in the Bond Resolution (unless such System Indebtedness shall be issued to cure such default and shall be junior and subordinate to the Parity Bonds, Parity Obligations and Junior Lien Obligations) so that if at any time the Issuer shall be in default in paying either interest on or principal of the Parity Bonds, Parity Obligations and Junior Lien Bonds, or of the Issuer is in default in making debt service, operation and maintenance or debt service reserve deposits or payments required to be made by it under the Bond Resolution, the Issuer shall make no payments of either principal of or interest on said Subordinate Lien Bonds until said default or defaults be cured. Such Subordinate Lien Bonds may also constitute general obligations of the Issuer.

Section 905. Refunding Bonds.

The Issuer shall have the right, without complying with the provisions of Section 902 hereof, to issue Refunding Bonds for the purpose of refunding any of the System Indebtedness under the provisions of any law then available, and the Refunding Bonds so issued shall enjoy complete equality of pledge as did the System Indebtedness that was refunded; provided, however, that if only a portion of any series of System Indebtedness is refunded and if said System Indebtedness is refunded in such manner that the Refunding Bonds bear a higher average rate of interest or become due on a date earlier than that of the System Indebtedness which is refunded, then said System Indebtedness may be refunded without complying with the provisions of Section 902 hereof only by and with the written consent of the Owners of a majority in principal amount of the System Indebtedness that is not refunded; provided that such consent is not needed from Owners of Subordinate Lien Bonds or Junior Lien Obligations, nor is such consent needed if the System Indebtedness to be refunded constitutes Junior Lien Obligations or Subordinate Lien Bonds.

Article X

DEFAULT AND REMEDIES

Section 1001. Remedies.

The provisions of this Bond Resolution, including the covenants and agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Series 2015 Bonds. If an Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in principal amount of the Series 2015 Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Owners of Series 2015Bonds similarly situated:

(a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Owner or Owners against the Issuer and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of the Bond Resolution or by the Constitution and laws of the State;

(b) by suit, action or other proceedings in equity or at law to require the Issuer, its officers, agents and employees to account as if they were the trustees of an express trust; and

(c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Series 2015 Bonds.

Section 1002. Limitation on Rights of Owners.

The covenants and agreements of the Issuer contained herein and in the Series 2015 Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Series 2015 Bonds, all of which Series 2015 Bonds of any series shall be of equal rank and without preference or priority of one Series 2015 Bond over any other Series 2015 Bond in the application of the Funds and Accounts herein pledged to the payment of the principal of and the interest on the Series 2015 Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. No one or more Owners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Owners of such Outstanding Bonds.

Section 1003. Remedies Cumulative.

No remedy conferred herein upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Series 2015 Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Series 2015 Bonds by this Bond Resolution may be enforced and exercised from time to time and as often as may be deemed expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Owners shall continue as if no such suit, action or other proceedings had been brought or taken.

Section 1004. No Obligation to Levy Taxes.

Nothing contained in this Bond Resolution shall be construed as imposing on the Issuer any duty or obligation to levy any taxes either to meet any obligation incurred herein or to pay the principal of or interest on the Series 2015 Bonds.

Article XI

DEFEASANCE

Section 1101. Defeasance.

When any or all of the Series 2015 Bonds, redemption premium, if any, or scheduled interest payments thereon have been paid and discharged, then the requirements contained in this Bond Resolution and the pledge of the Revenues hereunder and all other rights granted hereby shall terminate with respect to the Series 2015 Bonds or scheduled interest payments thereon so paid and discharged. Series 2015 Bonds, redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Bond Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Series 2015 Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the principal or Redemption Price of said Series 2015 Bonds and/or interest accrued to the Stated Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any Series 2015 Bonds, no such satisfaction shall occur until: (a) the Issuer has elected to redeem such Series 2015 Bonds, and (b) either notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Bond Registrar to give such notice of redemption in compliance with Section 303 of this Bond Resolution. Any money and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the Issuer, for the purpose of paying and discharging any of the Series 2015 Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Series 2015 Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions of this Bond Resolution.

Article XII

TAX COVENANTS

Section 1201. General Covenants.

The Issuer covenants and agrees that it will comply with: (a) all applicable provisions of the Code necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Series 2015 Bonds; and (b) all provisions and requirements of the Federal Tax Certificate. The Mayor and Clerk are hereby authorized and directed to execute the Federal Tax Certificate in a form approved by Bond Counsel, for and on behalf of and as the act and deed of the Issuer. The Issuer will, in addition, adopt such other ordinances or] resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Series 2015 Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the Issuer.

Section 1202. Survival of Covenants.

The covenants contained in this Article and in the Federal Tax Certificate shall remain in full force and effect notwithstanding the defeasance of the Series 2015 Bonds pursuant to Article XI hereof or any other provision of this Bond Resolution until such time as is set forth in the Federal Tax Certificate.

Article XIII

CONTINUING DISCLOSURE REQUIREMENTS

Section 1301. Disclosure Requirements.

The Issuer hereby covenants with the Purchaser and the Beneficial Owners to provide and disseminate such information as is required by the SEC Rule and as further set forth in the Disclosure Undertaking, which are incorporated herein by reference. Such covenant shall be for the benefit of and enforceable by the Purchaser and the Beneficial Owners.

Section 1302. Failure to Comply with Continuing Disclosure Requirements.

In the event the Issuer fails to comply in a timely manner with its covenants contained in the preceding section, the Purchaser and/or any Beneficial Owner may make demand for such compliance by written notice to the Issuer. In the event the Issuer does not remedy such noncompliance within 10 days of receipt of such written notice, the Purchaser or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in the preceding section or for the enforcement of any other appropriate legal or equitable remedy, as the Purchaser and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the Issuer under such preceding section.

Article XIV

[RESERVED]

Article XV

MISCELLANEOUS PROVISIONS

Section 1501. Amendments.

The rights and duties of the Issuer and the Owners, and the terms and provisions of the Series 2015 Bonds or of this Bond Resolution, may be amended or modified at any time in any respect by resolution of the Issuer with the written consent of the Owners of not less than a majority in principal amount of the Series 2015Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the Clerk, but no such modification or alteration shall:

(a) extend the Maturity of any payment of principal or interest due upon any Series 2015 Bond;

(b) effect a reduction in the amount which the Issuer is required to pay as principal of or interest on any Series 2015 Bond;

(d) reduce the percentage in principal amount of Series 2015 Bonds required for the written consent to any modification or alteration of the provisions of this Bond Resolution; or

(e) permit the creation of a lien on the Revenues prior or equal to the lien of the Parity Bonds or Parity Obligations.

Any provision of the Series 2015 Bonds or of this Bond Resolution may, however, be amended or modified by resolution duly adopted by the governing body of the Issuer at any time in any legal respect with the written consent of the Owners of all of the Series 2015 Bonds at the time Outstanding.

Without notice to or the consent of any Owners, the Issuer may amend or supplement this Bond Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners, to more precisely identify the Project or provide for Substitute Projects, to conform this Bond Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Owners.

Every amendment or modification of the provisions of the Series 2015 Bonds or of this Bond Resolution, to which the written consent of the Owners is given, as above provided, shall be expressed in a resolution adopted by the governing body of the Issuer amending or supplementing the provisions of this Bond Resolution and shall be deemed to be a part of this Bond Resolution. A certified copy of every such amendatory or supplemental resolution, if any, and a certified copy of this Bond Resolution shall always be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any Series 2015 Bond authorized by this Bond Resolution, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental resolution or of this Bond Resolution will be sent by the Clerk to any such Owner or prospective Owner.

Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Clerk a copy of the resolution of the Issuer hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Owners of the Series 2015 Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification.

The Issuer shall furnish to the Paying Agent a copy of any amendment to the Series 2015 Bonds or this Bond Resolution which affects the duties or obligations of the Paying Agent under this Bond Resolution.

Section 1502. Notices, Consents and Other Instruments by Owners.

Any notice, consent, request, direction, approval or other instrument to be signed and executed by the Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Owners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Series 2015 Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Bond Resolution, and shall be conclusive in favor of the Issuer and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely:

(a) The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution.

(b) The fact of ownership of Series 2015 Bonds, the amount or amounts, numbers and other identification of Series 2015 Bonds, and the date of holding the same shall be proved by the Bond Register.

In determining whether the Owners of the requisite principal amount of Series 2015 Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Bond Resolution, Series 2015 Bonds owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Bond Resolution, except that, in determining whether the Owners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Series 2015 Bonds which the Owners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Series 2015 Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Owners the pledgee’s right so to act with respect to such Series 2015 Bonds and that the pledgee is not the Issuer.

Section 1503. Notices.

Any notice, request, complaint, demand or other communication required or desired to be given or filed under this Bond Resolution shall be in writing, given to the Notice Representative at the Notice Address and shall be deemed duly given or filed if the same shall be: (a) duly mailed by registered or certified mail, postage prepaid; or (b) communicated via fax, with electronic or telephonic confirmation of receipt. Copies of such notices shall also be given to the Paying Agent. The Issuer, the Paying Agent and the Purchaser may from time to time designate, by notice given hereunder to the others of such parties, such other address to which subsequent notices, certificates or other communications shall be sent.

All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confirmation of receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such other form of notice as shall be made with the approval of the Paying Agent shall constitute a sufficient notice.

Section 1504. Inconsistent Provisions.

In case any one or more of the provisions of this Bond Resolution or of the Series 2015 Bonds issued hereunder shall for any reason be inconsistent with the provisions of any Parity Resolution, Parity Bonds, Parity Obligations or Parity Obligation Documents: (a) the provisions of any Parity Resolution or Parity Obligation Document adopted prior to this Bond Resolution shall prevail with respect to Parity Bonds or Parity Obligations issued prior in time, so long as such Parity Bonds or Parity Obligations are Outstanding; and (b) the provisions of this Bond Resolution shall prevail with respect to any Parity Resolution or Parity Obligation Document adopted subsequent to the Bond Resolution, so long as any Series 2015 Bonds issued under this Bond Resolution are Outstanding.

Section 1505. Electronic Transactions.

The issuance of the Series 2015 Bonds and the transactions related thereto and described herein may be conducted and documents may be stored by electronic means.

Section 1506. Further Authority.

The officers and officials of the Issuer, including the Mayor and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Bond Resolution and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability.

Section 1507. Severability.

If any section or other part of this Bond Resolution, whether large or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Bond Resolution.

Section 1508. Governing Law.

This Bond Resolution shall be governed exclusively by and construed in accordance with the applicable laws of the State.

Section 1509. Effective Date. This Bond Resolution shall take effect and be in full force from and after its adoption by the governing body of the Issuer.

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Article I DEFINITIONS

Article II AUTHORIZATION AND DETAILS OF THE BONDS

Article III REDEMPTION OF Series 2015 BONDS

Article IV SECURITY FOR Series 2015 BONDS

Article V ESTABLISHMENT OF FUNDS AND ACCOUNTS

Article VI COLLECTION AND APPLICATION OF REVENUES

Article VII DEPOSIT AND INVESTMENT OF MONEYS

Article VIII GENERAL COVENANTS AND PROVISIONS

Article IX ADDITIONAL BONDS AND OBLIGATIONS

Article X DEFAULT AND REMEDIES

Article XI DEFEASANCE

Article XII TAX COVENANTS

Article XIII CONTINUING DISCLOSURE REQUIREMENTS

Article XIV [RESERVED]

Article XV MISCELLANEOUS PROVISIONS