12-95 Water System Bonds $3,300,000

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of proceedings certified by the Clerk, of all proceedings had with reference to the issuance of the Series 1995 Bonds along with such other information for the records of the Issuer as is necessary to determine the regularity and validity of the issuance of the Series 1995 Bonds. Section 9. Tax ComDliance Covenants. The Issuer covenants that it will restrict,'and that it will take such ac=ions as are reasonably necessary to require the Trustee in its capacity as Trustee to restrict the use of t_he proceeds of the Series 1995 Bonds in such manner and to such extent, if any, as may be necessary, after taking into account reasonable expectations at the time of the delivery of and payment for the Series 1995 Bonds, so that the Series 1995 Bonds will not constitute arbitrage bonds under Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") and the applicable regulations prescribed under that Section. To that end, the Authorized Official, or any other officer having responsibility for issuing the Series 1995 Bonds, shall, alone or with any other officer, agent, or employee of or consultant to the Issuer, give an appropriate certificate of the Issuer for inclusion in the transcript of proceedings for the Series 1995 Bonds, setting forth the reasonable expectations of the Issuer regarding the amount and use of all the proceeds of the Series 1995 Bonds and the facts, estimates, and circumstances on which those exceptions are based, which certificate may be premised in part on the reasonable expectations and the facts, estimates, and circumstances as provided by the Independent Engineer, all as of the date of.delivery of and payment for the Series 1995 Bonds. The Issuer covenants and represents that it will take all actions that may be required of the Issuer for the interest on the Series 1995 Bonds to be and remain excludable from gross income for federal income tax purposes, and that it has not taken and will not take or omit to take any actions which, if taken or omitted, would adversely affect such exclusion from gross income for federal income tax purposes, under the provisions of the Code and applicable amendments thereto, until andunless, and except to the extent the Issuer obtains a written Opinion of Bond Counsel that this covenant need not be complied with in order for the interest on the Series 1995 Bonds to continue to be excludable from gross income for federal income tax purposes. The Issuer will, among other acts of compliance, apply the proceeds of the Series 1995 Bonds, restrict the yield on investments of, or on obligations acquired with, such proceeds, make timely rebate payments to the federal government, maintain books and records, and refrain from certain uses of proceeds, all in such manner and to the extent necessary for the interest on the Series 1995 Bonds to be and remain excluded from gross income for federal income tax purposes; and the Authorized Official and other appropriate officers are hereby authorized and directed to take anyand all such actions, make such rebate payments, and make or give Such reports and certifications as may be appropriate to assure such exclusion of that interest. Section 10. Bond Insurance. The Legislative Authority hereby authorizes the Fiscal Officer, if recommended by the Original Purchaser and determined by the Fiscal Officer to be available and to produce an interest cost savings with respect to the Series 1995 Bonds (or any portion thereof), to make application for, and to purchase, with respect to the Series 199S Bonds, a municipal bond insurance policy for the Series 1995 Bonds (or any portion thereof) and hereby ratifies any such application heretofore made. Reasonably standard provisions pertaining to such insurance policy and reasonable changes to the First Supplemental Indenture relating to such insurance policy shall be approved by the officers executing the First Supplemental Indenture, which approval shall be evidenced by their execution thereof. In connection with obtaining such a municipal bond insurance policy, the Legislative Authority hereby determines that it is (a) impractical to obtain such a municipal bond insurance policy under competitive bidding procedures and -9-