10052-10 Sewage Works Revenue Bonds

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(e) to provide for the refunding or advance refunding of the 2010 Bonds. SECTION 22. Defaults. In the event available moneys hereunder, subject to the restrictions on use of money held under this Ordinance as set forth herein, are insufficient to pay debt service on all bonds payable from the revenues of the Sewage Works when due, available moneys shall be applied, after payment of all costs and expenses associated therewith, to the 2010 Bonds and any bonds issued on parity with the 2010 Bonds as follows: First - To the payment to the persons entitled thereto of all installments of interest then due, including interest on any past due principal at the rate borne by such bond, in the order of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular installment, then to such payment ratably, according to the amounts due on such installments, to the persons entitled thereto, without any discrimination or privilege; and Second - To the payment to the persons entitled thereto of the unpaid principal of and premium on any of such bonds which shall have become due either at maturity or pursuant to a call for redemption (other than bonds called for redemption for the payment of which other moneys are held), in the order of their due dates, and, if the amount available shall not be sufficient to pay in the amounts due on any particular date, then to such payment ratably, according to the amount due on such date, to the persons entitled thereto without any discrimination or privilege. During the continuance of any default in the payment of either principal of or interest or premium on any 2010 Bond or bonds issue on parity with the 2010 Bonds, no payment shall be made with respect to any subordinate and junior bonds ("Junior Bonds"). Moneys available for payment to holders of Junior Bonds shall, in the event of an insufficient amount being available to pay all debt service with respect to the Junior Bonds when due, be applied to the Junior Bonds in accordance with the sequence and other terms set forth above with respect to payments regarding bonds issued on parity with the 2010 Bonds unless otherwise provided in the ordinance authorizing the Junior Bonds. SECTION 23. Bank Qualification. The City hereby designates the 2010 Bonds as "qualified tax-exempt obligations" under the provisions of Section 265(b)(3) of the Code, relating to the disallowance of 100% of the deduction of interest expense allocable to tax-exempt obligations. The 2010 Bonds qualify for the exception in Section 265 of the Code from the disallowance of 100% of the deduction by financial institutions of interest expense allocable to tax-exempt obligations, and are so designated, because: (a) the 2010 Bonds are not private activity bonds as defined in Section 141 of the Code; (b) the City has herein designated the 2010 Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of qualified tax-exempt obligations (excluding private activity bonds) which will be issued by or on behalf of the City, all entities which issue obligations on behalf of the City and all subordinate entities during the current calendar year will not exceed $30,000,000; and (d) the City, all entities which issue obligations on behalf of the City and all -21-