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(15) days prior written notice of any such intended transfer from the Reserve <br />Account. In the event additional bonds payable from the Net Revenues of the <br />Sewage Works are hereafter issued on a parity with the Bonds, the Reserve <br />Requirement shall be proportionately increased to equal maximum annual debt <br />service on the Bonds, any Prior Bonds payable from the Reserve Account, and all <br />bonds hereafter issued on a parity therewith; provided, that, if nationally recognized <br />bond counsel is unable to provide an opinion that interest on such proposed <br />additional parity bonds is excludable from gross income for federal income tax <br />purposes as a result of the determination of the Reserve Requirement in the manner <br />provided in this paragraph, then the City may, in order to allow such opinion to be <br />issued, establish a separate reasonably required reserve fund that secures only the <br />proposed parity bonds and shall expressly provide in the authorizing ordinance for <br />such proposed parity bonds that the moneys deposited in the Reserve Account hereby <br />as a margin of safety for the payment of principal of and interest on the Bonds do not <br />secure such proposed parity bonds. <br />The City may at any time and from time to time fund all or any part of <br />the Reserve Account by depositing in the Reserve Account one or more debt service <br />reserve surety bonds or insurance policies (each, a "Reserve Account Credit <br />Instrument"), each of which is issued by an insurance company rated at the time of <br />deposit in the highest rating category by Standard & Poor's Corporation and Moody's <br />Investors Service. As long as any Reserve Account Credit Instrument is in full force <br />and effect, any valuation of the Reserve Account shall treat the maximum amount <br />available under such Reserve Account Credit Instrument as its value. If the Reserve <br />Account Credit Instrument is provided subsequent to the initial cash contribution to <br />the Reserve Fund, and the Bonds are purchased by the Authority, notice of the <br />purchase of the Reserve Account Credit Instrument shall be given to the Authority. <br />Prior to applying any funds held in any debt service reserve accounts <br />securing any obligations payable out of the revenues of the sewage works of the City <br />to the payment of such obligation, the City shall cause all funds held in the Sewage <br />Works Sinking Fund (or any like fund or account from which debt service has been <br />structured to be paid) to be applied in full before any such reserve accounts are so <br />applied. <br />(c) Depository Agreements. The Sinking Fund, containing the <br />Bond and Interest Account and the Reserve Account, and/or the Construction <br />Account may be held by a financial institution acceptable to the Authority, pursuant <br />to terms acceptable to the Authority. If the Sinking Fund and the accounts therein are <br />held in trust, the City shall transfer the monthly required amounts of Net Revenues to <br />the Bond and Interest Account and the Reserve Account, and the financial institution <br />holding such funds in trust shall be instructed to pay the required payments in <br />accordance with the payment schedules for the City's outstanding bonds. The <br />Common Council hereby authorizes the Mayor and Controller to execute and deliver <br />an agreement with a financial institution to reflect this trust arrangement for the <br />Sinking Fund and/or the Construction Account. <br />BDDBOI 5863495v1 <br />-13- <br />