148-02 Water System Mortgage Revenue Bonds

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The Fiscal Officer is also hereby authorized and directed to solicit and obtain, but only if financially beneficial to the Issuer as determined by the Fiscal Officer in her sole discretion, the consent of the majr~rity of Holders of the Outstanding Bonds to the substitution of a surety bond in lieu of retaining cash on deposit in the Bond Keserve Fund for the purpose of satisfying the Bond Reserve Requirement for Outstanding Series 1995 Bonds (such a substitution hereafter referred to as the "Surety Bond Substitution"). Upon the determination by the Fiscal Officer that the Surety Bond Substitution will result in a financial benefit to the Issuer, the Mayor and the Fiscal Officer, or either one of them, is hereby authorized to take all necessary or appropriate actions to consummate the Surety Bond Substitution, and any surety bond obtained pursuant to this paragraph may be issued as part of any surety bond being obtained for the Series 2002 Refunding Bonds pursuant to Section I0 hereof. Upon effecting the Surety Bond Substitution, the Fiscal Officer shall direct the Trustee in writing as to the application of the moneys in the Bond Reserve Fund, which application shall be in accordance with the provisions of the Indenture and other applicable law. In connection with obtaining such a surety bond for the Series 1995 Bonds, the Legislative Authority hereby determines that it is (a) impractical to obtain such a surety bond under competitive bidding procedures and (b) cost-effective and in the best interests of the Issuer to purchase such surety bond without competitive bidding; provided, however, that the Fiscal Officer shall obtain informal proposals from more than one provider of such surety bond, and shall make her selection of the provider of such surety bond based upon her analysis of the financial benefit that the Issuer will receive and any other factors that she deems relevant. The surety bond so selected shall be in such form as, in the Fiscal Officer's judgment, will satisfy the Bond Reserve Requirement for the Series 1995 Bonds. Section 4. Security and Sources of Payment. The Series 2002 Refunding Bonds shall be issued on a parity with the Outstanding Series 1991 Bonds and the Outstanding Series 1995 Bonds and any Additional Bonds hereafter issued as to the Holder's fights and security under the Indenture. Bond Service Charges on the Series 2002 Refunding Bonds shall be payable from those sources as set forth in Section 3.04 of the Original Indenture, except that to the extent that a surety bond, the proceeds of which are and will irrevocably be available to pay Bond Service Charges on the Series 2002 Refunding Bonds, is obtained in lieu of a cash deposit to the Bond Reserve Fund to satisfy the Bond Reserve Requirement with respect to the Series 2002 Refunding Bonds, Bond Service Charges on the Series 2002 Refunding Bonds shall not be secured by nor payable from any moneys or investments on deposit to the credit of the Bond Reserve Fund, and unless the Surety Bond Substitution has been effected, Bond Service Charges on the Outstanding Series 1991 Bonds and the Outstanding Series 1995 Bonds shall not be payable from nor secured by such surety bond or any of its proceeds. Payment of Bond Service Charges on the Series 2002 Refunding Bonds shall be secured only as provided for herein and in the Indenture. Section 5. Allocation of Purchase Price of the Series 2002 Refunding Bonds. The Purchase Price shall be received and receipted by the Fiscal Officer, or by the Trnstee on the Issuer's behalf, and shall be allocated, deposited and credited as follows: (a) the amount repres'enting accrued interest, as such amount is specified in the Certificate of Award, shall be deposited to the credit of the appropriate account in the Bond Fund created by Section 5.06 of the Original Indenture; (b) the amount, if any, to provide a cash funding of the Bond Reserve Requirement (if not met from the amount presently on deposit in the Bond Reserve Fund) with respect to the Series 2002 Refunding Bonds shall be deposited to the credit of a separate account in the Bond Reserve Fund; provided, however, that if the Issuer, acting through the Fiscal Officer, has elected to obtain a surety bond in satisfaction of the Bond Reserve Requirement for the Series 2002 Refunding Bonds and, with the consent of a majority of their Holders and subject to the provisions of Section 3(h) hereof, for the Series 1995 Bonds, the amount of the premium required to be paid to the provider of such surety bond on the date of delivery of the Series 2002 Refunding Bonds shall be paid to such provider by the Trustee from the proceeds of the Series 2002 Refunding Bonds deposited to the credit of the appropriate account of the Construction Fund pursuant to item (f) below and according to the written instructions of the Fiscal Officer;