Supporting and Amend Ordinance No. 8318-92, as amended by ordinance 8419-93, Additions and Improvements to Waterworks

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If, in addition to the Reserve Policy, any other reserve account substitute instrument ("Additional Reserve Policy") is provided, drawings under the Reserve Policy and any such Additional Reserve Policy, and repayment of Policy Costs and reimbursement of amounts due under the Additional Reserve Policy, shall be made on a pro-rata basis (calculated by reference to the maximum amounts available thereunder) after applying all available cash in the Debt Service Reserve Account and prior to replenishment of any such cash draws, respectively." SECTION 2. SUPPLEMENT AND AMENDMENT TO ORDINANCES -RESERVE POLICY. The 1992 Ordinance, as amended by the 1993 Ordinance, more specifically Ordinance No. 8318-92, as amended by Ordinance No. 8419-93, new Section 31; the 1997 Ordinance, more specifically Ordinance No. 8801-97, new Section 32; the 2000 Ordinance, more specifically Ordinance No.9095-00, new Section 33; and the 2001 Ordinance, more specifically Ordinance No. 9247-01, new Section 32 are hereby supplemented and amended by adding the following paragraphs to each new section: "Section . Reserve Policy The Mayor and the Controller, on behalf of the City, are hereby authorized to obtain a Reserve Policy as set forth in the section entitled Sinking Fund contained herein. The Mayor and the Controller, on behalf of the City, are also authorized to enter into an agreement with the Insurer (the Reserve Policy Agreement") and negotiate the terms of the Reserve Policy Agreement, with the advice of the City's financial advisor. The Mayor and the Controller, on behalf of the City, are also authorized to execute any and all other documents required to obtain the Reserve Policy. The City hereby agrees that (a) If the waterworks fails to pay any Policy Costs in accordance with the requirements set forth above, the Insurer shall be entitled to exercise any and all remedies available at law or under the authorized documents other than (i) acceleration of the maturity of the Bonds or (ii) remedies which would adversely affect the Bondholders. (b) This Ordinance shall not be discharged and the Bonds defeased until all Policy Costs owing to the Insurer shall have been paid in full. (c) The Insurer is granted a security interest (subordinance to that of the Bondholders) in all revenues and collateral pledged as security for the Bonds, for the repayment of the Policy Costs. (d) No additional bonds will be issued without the Insurer's prior written consent as long as Policy Costs are past due and still owing to the Insurer. (e) This Ordinance shall not be modified or amended without the prior written consent of the Insurer. -4-