RESOLUTION 31728

A RESOLUTION relating to contracting indebtedness; confirming, ratifying and approving certain terms of the issuance and sale of The City of Seattle, Washington, Municipal Light and Power Revenue Bonds, Series 2017A (Multi-Modal) and Series 2017B (Multi-Modal), for the purposes set forth in Ordinance 124916; authorizing the Director of Finance to execute a Continuing Covenant Agreement with the initial purchaser of such Bonds to negotiate and execute related documents and agreements from time to time in connection with the election of variable interest rate modes; and confirming, ratifying and approving action taken and to be taken by the Director of Finance of the City of Seattle and other City officials relating to the issuance and sale of the bonds to the initial purchaser thereof and in connection with the election of variable interest rate modes with respect thereto throughout the term of such bonds.

WHEREAS, by Ordinance 124916 (the “Bond Ordinance”), The City of Seattle, Washington (the “City”) authorized the issuance and sale of not to exceed $280,000,000 of its municipal light and power revenue bonds in one or more series (1) to pay part of the cost of carrying out the Plan of Additions; (2) to provide for the Reserve Fund Requirement; (3) to capitalize interest on, if necessary, and pay the costs of issuance of the Bonds; and (4) for other Light System purposes approved by ordinance; and

WHEREAS, the Bond Ordinance authorizes the Director of Finance to conduct a negotiated sale of the bonds in one or more Series, to accept an offer to purchase those bonds and to set certain Bond Sale Terms (as defined in the Bond Ordinance) within certain parameters set forth in the Bond Ordinance, which acceptance is effective upon approval by the City Council by resolution; and

WHEREAS, pursuant to the Bond Ordinance, the City has accepted competitive proposals for the purchase of its Municipal Light and Power Revenue Bonds, Series 2017A (Multi-Modal) and Series 2017B (Multi-Modal) (together, the “Bonds”), and the proposed sale of the Bonds to State Street Public Lending Corporation or one of its affiliates has been presented to the City Council for its approval with the Bond Sale Terms; NOW, THEREFORE,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEATTLE, THE MAYOR CONCURRING, THAT:

Section 1.  Definitions. The meanings of capitalized terms used and not otherwise defined in this resolution shall be as set forth in the Bond Ordinance. In addition, the following terms as used in this resolution shall have the following meanings:

“Alternate Credit Facility” means a letter of credit, insurance policy, line of credit, surety bond or security, or other liquidity facility issued as a replacement or substitute for any Credit Facility then in effect.

“Authorized Denomination” means (a) during any Daily Interest Rate Period or Weekly Interest Rate Period, $100,000 or any integral multiple of $5,000 in excess of $100,000; (b) during any Long-Term Interest Rate Period, $5,000 or any integral multiple thereof; (c) during any Index Rate Period that is not an Index Rate Direct Purchase Period, $5,000 or any integral multiple thereof; and (d) during any Index Rate Direct Purchase Period, $250,000, or any integral multiple of $5,000 in excess of $250,000 or such other minimum denomination as may be set forth in the applicable Direct Purchase Agreement.

“Bank Bond” means a Bond (or portion thereof in any Authorized Denomination) that is purchased by the Bond Registrar with amounts paid or provided by a Credit Provider under a Credit Facility.

“Bank Rate” means that rate of interest borne by a Bank Bond, as specified or determined in accordance with a Credit Facility.

“Bloomberg Page BBAM1” means the display designated on page “BBAM1” on the Bloomberg Service (or such other page as may replace the BBAM1 page on that service, any successor service or such other service or services as may be nominated by the British Bankers’ Association for the purpose of displaying London Interbank offered rates for U.S. dollar deposits).

“Bond Legislation” means, together, the Bond Ordinance and this resolution.

“Bond Ordinance” means Ordinance 124916 of the City.

“Bond Purchase Fund” means the trust fund established with the Bond Registrar pursuant to Section 14.

“Bonds” means the $100,000,000 aggregate principal amount of Municipal Light and Power Revenue Bonds, Series 2017A (Multi-Modal) and Series 2017B (Multi-Modal), issued pursuant to the Bond Ordinance and this resolution, in one or more Series (with such additional or alternative naming conventions as may be convenient to indicate a series designation).

“Book-Entry Form” means a form under which physical bond certificates in fully registered form are registered only in the name of a Securities Depository or its nominee as Registered Owner, with the physical bond certificates held by and “immobilized” in the custody of the Securities Depository, where the system for recording and identifying the transfer of the ownership interests of the Beneficial Owners in those Bonds is maintained by and the responsibility of other entities than the City or the Bond Registrar.

“Business Day” means any day other than a Saturday or Sunday that (a) is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in the City of New York, New York, Boston, Massachusetts, or Seattle, Washington, or the city or cities in which the principal office of the Remarketing Agent or the Calculation Agent is located nor a day on which the New York Stock Exchange is closed or the payment system of the Federal Reserve Bank is not operational; and (b) during any Index Rate Period in which the Index is One-Month LIBOR or Three-Month LIBOR, is a London Business Day.

“Calculation Agent” means (a) during an Index Rate Direct Purchase Period, the Index Rate Holder; and (b) during any other Interest Rate Period, the Bond Registrar, unless and until the Director of Finance, in his sole discretion, selects another trustee, financial advisory firm, bank or other financial institution to serve as calculation agent for a Series of the Bonds. During an Index Rate Direct Purchase Period, the Director of Finance may select another trustee, financial advisory firm, bank or other financial institution to serve as calculation agent only upon receipt of the prior written consent of the Index Rate Holder.

“Continuing Covenant Agreement” means the Continuing Covenant Agreement between the City and the Initial Purchaser, which shall be deemed to be a Direct Purchase Agreement for purposes of this resolution, and which shall substantially reflect the key terms of the Term Sheet attached as Exhibit A with such modifications as are acceptable to the Designated Representative, and which is authorized to be executed on behalf of the City pursuant to Section 2. References in this resolution to the Continuing Covenant Agreement shall include all amendments, supplements, modifications, assignments, extensions, renewals or restatements from time to time made in accordance with the terms of such agreement.

“Conversion” means a conversion of an entire Series of the Bonds from one Interest Rate Period to another Interest Rate Period (including the establishment of a new Long-Term Interest Rate Period or Index Rate Period). The following events shall not be Conversions for purposes of this resolution: (a) the continuation of a Daily Interest Rate at the end of a Daily Interest Rate Period, (b) the continuation of a Weekly Interest Rate at the end of a Weekly Interest Rate Period, (c) the imposition of a Delayed Remarketing Period, (d) during an Index Rate Direct Purchase Period, a renewal or extension of the term of such Index Rate Direct Purchase Period then in effect or a conversion from one Index Rate Direct Purchase Period to another Index Rate Direct Purchase Period whether or not the holder of the Bonds is the same Index Rate Holder, and (e) an Extraordinary Mandatory Redemption of a Series pursuant to a Term-Out Provision.

“Conversion Date” means the effective date of a Conversion.

“Credit Facility” means any letter of credit, insurance policy, line of credit, surety bond, or other security or other liquidity facility, if any, to be issued by the Credit Provider in connection with a Conversion to a Daily Interest Rate, a Weekly Interest Rate, or other interest rate mode, that secures or supports the payment when due of the principal and Purchase Price of and interest on a Bond, including any Alternate Credit Facility, or any extensions, amendments or replacements thereof pursuant to its terms. The Director of Finance may, in his discretion, designate a reimbursement agreement entered into in connection with a Credit Facility as a Parity Payment Agreement, if such designation is otherwise consistent with the requirements of the Bond Ordinance.

“Credit Facility Purchase Account” means each account with that name established within the Bond Purchase Fund pursuant to Section 14.

“Credit Provider” means any bank, insurance company, pension fund or other financial institution that provides a Credit Facility or Alternate Credit Facility for a Series of the Bonds.

“Daily Interest Rate” means a variable interest rate established in accordance with Section 6(b)(1).

“Daily Interest Rate Period” means, with respect to a Series of the Bonds, each period during which a Daily Interest Rate is in effect.

“Default Rate” as used in connection with any Index Rate Direct Purchase Period, has the meaning set forth in the applicable Direct Purchase Agreement.

“Delayed Remarketing Period” means the period as set forth in Section 10(f), applicable to Unremarketed Bonds that are not subject to a Direct Purchase Agreement.

“Designated Representative” means the Director of Finance.

“Determination of Taxability” as used in connection with any Index Rate Direct Purchase Period, has the meaning set forth in the Direct Purchase Agreement from time to time in effect.

“Direct Purchase Agreement” means (a) during the Initial Index Rate Period and while any Unremarketed Bonds remain outstanding, the Continuing Covenant Agreement, and (b) during any subsequent Index Rate Direct Purchase Period, any written agreement between the City and a direct purchaser for the purchase of all of a Series of the Bonds bearing interest at an Index Rate.

“Elect” or “Election” means the election by the Designated Representative of a new Interest Rate Period.

“Event of Default” as used in connection with any Index Rate Direct Purchase Period, has the meaning set forth in the applicable Direct Purchase Agreement.

“Event of Taxability” as used in connection with any Index Rate Direct Purchase Period, has the meaning set forth in the Direct Purchase Agreement from time to time in effect.

“Extraordinary Event” means (a) during an Index Rate Direct Purchase Period, a failure by the City to purchase or cause the purchase of all or a portion of a Series of the Bonds on a Mandatory Tender Date, causing such Bonds (or portion thereof) to become Unremarketed Bonds; or (b) during any Interest Rate Period in which a Credit Facility is in effect, the occurrence of certain extraordinary events set forth under the applicable provisions of the Reimbursement Agreement or other agreement relating to the applicable Credit Facility.

“Extraordinary Mandatory Redemption” means the periodic redemption of principal of Unremarketed Bonds or Bank Bonds in the amounts and on the dates set forth in a Term-Out Provision of a Direct Purchase Agreement or agreement relating to a Credit Facility.

“Favorable Opinion of Bond Counsel” means a written legal opinion of Bond Counsel addressed to the City, the Bond Registrar, the Credit Provider (if any), the Index Rate Holder (if any), and the Remarketing Agent (if any), to the effect that a specified action is permitted under the Bond Legislation and will not impair the exclusion of interest on the affected Bonds from gross income for purposes of federal income taxation (subject to customary exceptions). The foregoing definition is not intended to limit the persons to whom such written legal opinion may additionally be required to be delivered pursuant to a Direct Purchase Agreement.

“Index” means any of (a) One-Month LIBOR, (b) Three-Month LIBOR, (c) the SIFMA Index, or (d) any other index selected by the Designated Representative.

“Index Rate” means:

  (a) during the Initial Index Rate Period, a per annum rate of interest established on each Interest Determination Date equal to the product of (1) the sum of (A) the applicable Index Rate Spread and (B) the product of One-Month LIBOR and the applicable Index Rate Percentage, and (2) the applicable Margin Rate Factor, all as identified in the Continuing Covenant Agreement and subject to adjustment as set forth therein (which adjustments may include, without limitation, adjustments based on Rating changes by a Rating Agency, an Unremarketed Bonds Rate, a Taxable Rate and a Default Rate and other increased rates), which Index Rate shall, during the Initial Index Rate Period, be rounded to the third decimal place; and

  (b) during any subsequent Index Rate Period, a variable interest rate established in accordance with Section 6(b)(4)(A) (if a Direct Purchase Agreement is in effect) or Section 6(b)(4)(B) (if a Direct Purchase Agreement is not in effect).

“Index Rate Direct Purchase Period” means each Index Rate Period, including the Initial Index Rate Period, during which the applicable Series of the Bonds is purchased and held pursuant to a Direct Purchase Agreement, including any Term-Out Period or other period during which Unremarketed Bonds continue to be outstanding while a Direct Purchase Agreement is in effect.

“Index Rate Percentage” means:

  (a) during the Initial Index Rate Period, 70%, as described in Exhibit A and as further set forth in the Continuing Covenant Agreement;

  (b) during any subsequent Index Rate Direct Purchase Period, the percentage specified in the Direct Purchase Agreement then in effect; and

  (c) during any other Index Rate Period, the percentage of the Index selected by the Designated Representative pursuant to Section 6(b)(4)(B).

“Index Rate Period” means, with respect to any Series of the Bonds, each period during which an Index Rate is in effect (including, without limitation, the Initial Index Rate Period and each Index Rate Direct Purchase Period).

“Index Rate Spread” means:

  (a) during the Initial Index Rate Period, the “Applicable Spread” as that term is defined in the Continuing Covenant Agreement, which is initially set at forty-three basis points (0.43%) and is subject to adjustment as described in the term sheet attached as Exhibit A and as further set forth in the Continuing Covenant Agreement; and

  (b) during any subsequent Index Rate Period, either (1) the spread determined by the Remarketing Agent on or prior to the Conversion Date that marks the beginning of such period, pursuant to Section 6(b)(4)(B), or (2) during any Index Rate Direct Purchase Period, the spread (and any adjustments thereto) specified in the Direct Purchase Agreement in effect for such period.

“Index Rate Holder” means, during the Initial Index Rate Period, State Street Public Lending Corporation, and during any other Index Rate Direct Purchase Period applicable to a Series of the Bonds, during which:

  (a) such Series is not held in Book-Entry Form, (1) if there is a single Registered Owner of all Bonds of such Series, the Registered Owner of such Series, or (2) if there is more than one Registered Owner of Bonds within a Series, Registered Owners owning a majority of the aggregate principal amount of the then outstanding Bonds of such Series; and

  (b) such Series is held in Book-Entry Form, (1) if there is a single Beneficial Owner of all Bonds of such Series, the Beneficial Owner, or (2) if there is more than one Beneficial Owner of the Bonds of such Series, Beneficial Owners of a majority of the aggregate principal amount of the then outstanding Bonds of such Series.

“Initial Index Rate Period” means the Index Rate Direct Purchase Period for a Series of the Bonds commencing on the Initial Issue Date and ending on the earliest of (a) with respect to a Conversion of a Series, the Conversion Date next succeeding the Initial Issue Date, to which the Index Rate Holder has given its written consent, (b) the first day of a Term-Out Period, as specified in the Continuing Covenant Agreement, or (c) the Initial Bank Purchase Date, as defined in the Continuing Covenant Agreement.

“Initial Issue Date” means the date on which the Bonds are delivered to the Initial Purchaser pursuant to the Continuing Covenant Agreement, consistent with Section 3(b).

“Initial Purchaser” means State Street Public Lending Corporation, or any affiliate thereof (i.e., another entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with, State Street Public Lending Corporation).

“Interest Accrual Date” with respect to a Series of the Bonds means:

(a)  for any Daily Interest Rate Period, the first day thereof and, thereafter, the first day of each calendar month during such Daily Interest Rate Period;

(b)  for any Weekly Interest Rate Period, the first day thereof and, thereafter, the first Wednesday of each calendar month during such Weekly Interest Rate Period;

(c)  for any Long-Term Interest Rate Period, the first day thereof and, thereafter, each Interest Payment Date during that Long-Term Interest Rate Period, other than the last such Interest Payment Date; and

(d)  for each Index Rate Period, the first day thereof and, thereafter, the first Business Day of each calendar month during such Index Rate Period, unless otherwise specified in a Direct Purchase Agreement in effect for such period.

“Interest Determination Date” for each Index Rate Period means:

(a)  for each Index Rate Direct Purchase Period (including the Initial Index Rate Period), either (1) the Interest Determination Date(s) set forth in the Direct Purchase Agreement, or if none are specified, then (2) the date(s) set forth in subsection (b); and

  (b) for each such period that is not an Index Rate Direct Purchase Period (1) if the Index is One-Month LIBOR or Three-Month LIBOR, the second London Business Day preceding the first day of such Index Rate Period and, thereafter, the second London Business Day preceding each Interest Reset Date during such Index Rate Period; (2) if the Index is the SIFMA Index, the first day of such Index Rate Period and, thereafter, each Wednesday (or, if any such Wednesday is not a Business Day, the succeeding Business Day); and (3) if any other Index has been selected by the Designated Representative, the date(s) selected by the Designated Representative.

“Interest Payment Date” means:

  (a) for interest accrued in (1) any Daily Interest Rate Period, the fifth Business Day of the next succeeding calendar month; (2) any Weekly Interest Rate Period, the first Wednesday of each calendar month, or, if the first Wednesday is not a Business Day, the next succeeding Business Day; (3) any Long-Term Interest Rate Period, each May l and November l, or if any May l or November l is not a Business Day, the next succeeding Business Day; or (4) any Index Rate Period, (i) the first Business Day of each calendar month, (ii) each Purchase Date, and (iii) each date on which all or a portion of the Bonds are redeemed, unless otherwise specified in a Direct Purchase Agreement in effect for such period;

(b)  without duplication, the first Business Day succeeding the last day of each Interest Rate Period; and

(c)  with respect to any Bonds during a Term-Out Period, the dates set forth in the Term-Out Provision of the applicable Direct Purchase Agreement or Credit Facility for the payment of interest on such Bonds.

“Interest Rate Period” means each Daily Interest Rate Period, Weekly Interest Rate Period, Long Term Interest Rate Period or Index Rate Period (including, without limitation, any Index Rate Direct Purchase Period).

“Interest Reset Date” means:

(a)  for each Index Rate Direct Purchase Period (including the Initial Index Rate Period), either (1) the Interest Reset Dates set forth in the Direct Purchase Agreement or (2) if none are specified, the dates set forth in subsection (b); and

(b)  for each Index Rate Period that is not an Index Rate Direct Purchase Period (1) if the Index is One-Month LIBOR or Three-Month LIBOR, the first Business Day of each calendar month; (2) if the Index is the SIFMA Index, Thursday of each week, or if not a Business Day, the next succeeding Business Day; and (3) if any other Index has been selected by the Designated Representative, the date(s) selected by the Designated Representative.

“London Business Day” means a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and United States Dollar deposits) in the London interbank market.

“Long-Term Interest Rate” means a term, non-variable interest rate established in accordance with Section 6(b)(3).

“Long-Term Interest Rate Period” means, with respect to a Series of the Bonds, each period during which a Long-Term Interest Rate is in effect.

“Mandatory Tender Date” means each Purchase Date on which a Series of the Bonds then in an Index Rate Period is required to be tendered for purchase as set forth in Section 10(b).

“Margin Rate Factor” means the margin rate factor identified in a Direct Purchase Agreement for purposes of determining an Index Rate during an Index Rate Direct Purchase Period.

“Market Agent” means the Index Rate Holder or any affiliate thereof or any third party financial advisory firm, investment banking firm, commercial bank or any other financial institution with experience in pricing information for tax exempt municipal securities, as selected by the City (and consented to by the Index Rate Holder) to serve as market agent in connection with a Conversion to an Index Rate Period.

“Maturity Date” means the final date on which the principal of a Bond is stated on its face to become due and payable as provided in this resolution, regardless of any Sinking Fund Requirement or optional or mandatory redemption prior to maturity.

“Maximum Federal Corporate Tax Rate” means the maximum rate of income taxation imposed on corporations pursuant to Section 11(b) of the Code, as in effect from time to time (or, if as a result of a change in the Code, the rate of income taxation imposed on corporations generally shall not be applicable to the Index Rate Holder, the maximum statutory rate of federal income taxation which could apply to the Index Rate Holder). As of the date hereof, the Maximum Federal Corporate Tax Rate is 35%.

“Maximum Interest Rate” means 12% per annum, calculated in the same manner as interest is calculated for the interest rate then in effect on the affected Series of the Bonds. Notwithstanding the immediately preceding sentence, with respect to Bank Bonds and any Series of the Bonds during an Index Rate Direct Purchase Period (including Unremarketed Bonds), Maximum Interest Rate shall mean 25% per annum, calculated in the manner set forth in the applicable Direct Purchase Agreement or Credit Facility. In no event shall the maximum interest rate exceed the maximum rate permitted by applicable law from time to time.

“One-Month LIBOR” (a) during the Initial Index Rate Direct Purchase Period, shall have the meaning given in the Continuing Covenant Agreement; and (b) during any subsequent Index Rate Period, shall have the meaning given in the Direct Purchase Agreement, or if none, the rate determined on each Interest Determination Date by the Calculation Agent for deposits in U.S. dollars for a one-month maturity which appears on Bloomberg Page BBAM1, or any successor page, as of 11:00 a.m., London time, on such Interest Determination Date (or if not so reported, then as determined by the Calculation Agent by obtaining quotes from Reference Banks, as set forth in Section 6(b)). If at any time One-Month LIBOR determined as provided above would be less than zero percent (0.00%), then One-Month LIBOR shall be deemed to be zero percent (0.00%).

“Par Call Date” means, with respect to a Bond bearing interest at an Index Rate (a) other than during an Index Rate Direct Purchase Period: (1) during any Index Rate Period that is two years or longer in duration, the first Business Day that is on or after the date that is six months prior to the end of such Index Rate Period, or the date established by the Designated Representative with a Favorable Opinion of Bond Counsel; and (2) during any other Index Rate Period, the first Business Day after the end of such Index Rate Period; and (b) during the Initial Index Rate Period and any other Index Rate Direct Purchase Period or if the Bonds are Unremarketed Bonds, the first Business Day on which the Bond is subject to call for optional redemption at a price of 100% of the principal amount thereof plus interest accrued to the date fixed for redemption, as set forth in the Direct Purchase Agreement.

“Participant” means, with respect to the Securities Depository, a member of or participant in the Securities Depository.

“Purchase Date” means each date on which a Series of the Bonds is required to be purchased pursuant to Section 10.

“Purchase Price” means the purchase price to be paid to the Registered Owner(s) of Bonds purchased pursuant to Section 10, which shall be equal to the principal amount thereof tendered for purchase, without premium, plus accrued interest from the immediately preceding Interest Accrual Date to the Purchase Date (if such date is not an Interest Payment Date), plus any other accrued and unpaid interest, except in the case of a proposed Conversion from a Long-Term Interest Rate Period on a date on which the Bonds being converted would otherwise be subject to optional redemption pursuant to Section 9(a) if such Conversion did not occur, the Purchase Price shall also include the optional redemption premium, if any, provided for such date under Section 9(a)(3).

“Record Date” means (a) with respect to any Interest Payment Date in a Daily Interest Rate Period, the last Business Day of each calendar month or, in the case of the last Interest Payment Date in a Daily Interest Rate Period, the Business Day immediately preceding such Interest Payment Date, (b) with respect to any Interest Payment Date in any Long-Term Interest Rate Period, the 15^th day immediately preceding that Interest Payment Date, (c) with respect to any Interest Payment Date in any Weekly Interest Rate Period, the Business Day preceding the Interest Payment Date, and (d) with respect to any Interest Payment Date in any Index Rate Period, the 15^th day immediately preceding that Interest Payment Date, unless otherwise provided in a Direct Purchase Agreement then in effect.

“Reference Bank” means any of the four largest U.S. banks with an office in London, based upon consolidated total asset size, as listed by the Federal Reserve in its most current statistical release on its website with respect thereto.

“Reimbursement Agreement” means any agreement between the City and a Credit Provider, pursuant to which a Credit Facility or Alternate Credit Facility is issued by the Credit Provider, as the same may be amended or supplemented.

“Remarketing Account” means each account with that name established within the Bond Purchase Fund pursuant to Section 14.

“Remarketing Agent” means each remarketing firm qualified under Section 12 to act as Remarketing Agent for the Bonds and appointed by the Designated Representative on behalf of the City.

“Remarketing Agreement” means any remarketing agreement between the City and the Remarketing Agent whereby the Remarketing Agent undertakes to perform the duties of the Remarketing Agent under this resolution.

“SIFMA” means the Securities Industry and Financial Markets Association (formerly the Bond Market Association).

“SIFMA Index”:

  (a) during the Initial Index Rate Direct Purchase Period, shall have the meaning given in the Continuing Covenant Agreement (if any); and

  (b) during any subsequent Interest Rate Period, shall have the meaning given in the Direct Purchase Agreement, or if none, shall mean the seven-day high-grade market index of tax-exempt variable rate demand obligations produced by Municipal Market Data and published or made available by SIFMA or any person acting in cooperation with or under the sponsorship of SIFMA. If such index is no longer published or otherwise not available, the SIFMA Index for any day will mean the level of the “S&P Weekly High Grade Index” (formerly the J.J. Kenny Index) maintained by Standard & Poor’s Securities Evaluations Inc. for a 7-day maturity as published on the Interest Reset Date or most recently published prior to the Interest Reset Date. If at any time neither such index is available, the Calculation Agent shall use instead an index that the Calculation Agent, after consultation with the Remarketing Agent (if any) and the Designated Representative, determines most closely approximates the SIFMA Index.

“SIFMA Rate” means a per annum rate of interest established on each Interest Determination Date that is

  (a) during any Index Rate Direct Purchase Period, equal to the product of (1) the sum of the SIFMA Index plus the applicable Index Rate Spread, and (2) the applicable Margin Rate Factor, all as determined pursuant to the applicable Direct Purchase Agreement; and

  (b) during any Index Rate Period that is not an Index Rate Direct Purchase Period, equal to the sum of (1) the SIFMA Index rate issued on Wednesday of each week, or if any Wednesday is not a Business Day, the succeeding Business Day, and (2) the Index Rate Spread.

“Series” as used in this resolution refers to a series of the Bonds issued pursuant to the Bond Ordinance and this resolution.

“Stepped Interest Rate” means for any Index Rate Period that is not subject to a Direct Purchase Agreement, a per annum interest rate or rates equal to either (a) the SIFMA Index plus a percentage determined by the Remarketing Agent, or (b) the per annum interest rate or rates as determined by the Remarketing Agent, which determination is made, in either case, on or prior to the initial Interest Determination Date pursuant to Section 6(b)(4)(B)(iv).

“Taxable Date” means the date on which interest on the Bonds is first includable in gross income of the Owner (including, without limitation, any previous Owner) thereof as a result of an Event of Taxability, as such date is established pursuant to a Determination of Taxability.

“Taxable Period” has the meaning set forth in the applicable Direct Purchase Agreement.

“Taxable Rate” means, for each day during a Taxable Period, an interest rate per annum at all times equal to the product of the interest rate on the Bonds (including Unremarketed Bonds) then in effect, and the Taxable Rate Factor.

“Taxable Rate Factor” means, for each day that the Taxable Rate is determined, one divided by the difference between one minus the Maximum Federal Corporate Tax Rate then in effect.

“Term-Out Period” means a period, as determined in accordance with a Direct Purchase Agreement or Credit Facility then in effect, during which Unremarketed Bonds become subject to Extraordinary Mandatory Redemption in periodic, approximately equal installments of principal during the Term-Out Period.

“Term-Out Provision” means a provision in a Direct Purchase Agreement or Credit Facility that requires the Extraordinary Mandatory Redemption of principal of Unremarketed Bonds in installments payable in accordance with a scheduled amortization of such principal over a Term-Out Period, to be determined as set forth in the applicable Direct Purchase Agreement or Credit Facility.

“Three-Month LIBOR” means (a) during the Initial Index Rate Direct Purchase Period, shall have the meaning given in the Continuing Covenant Agreement, if any; and (b) during any subsequent Index Rate Period, the rate determined by the Calculation Agent for deposits in U.S. dollars for a three-month maturity as published by Reuters (or such other service as may be nominated by the British Bankers Association, for the purpose of displaying London interbank offered rates for U.S. dollar deposits) as of 11:00 a.m., London time, on such Interest Determination Date (or if not so reported, then as determined by the Calculation Agent by obtaining quotes from Reference Banks, as set forth in Section 6(b)). If at any time, the Three-Month LIBOR determined as provided above would be less than zero percent (0.0%), then Three-Month LIBOR shall be deemed to be zero percent (0.00%).

“Undelivered Bond” means any Bond which constitutes an Undelivered Bond under the provisions of Section 10(d).

“Unremarketed Bond” means any Bonds that are not purchased when tendered for purchase and which become Unremarketed Bonds pursuant to Section 10(f).

“Unremarketed Bonds Rate” has the meaning set forth in the Direct Purchase Agreement, if any.

“Weekly Interest Rate” means a variable interest rate for a Bond established in accordance with Section 6(b)(2).

“Weekly Interest Rate Period” means, with respect to a Series of the Bonds, each period during which a Weekly Interest Rate is in effect.

Section 2.  Sale and Delivery of Bonds. The City Council finds that the sale of the Bonds to the Initial Purchaser, in one or more Series (with such additional naming convention as may be convenient), on Bond Sale Terms consistent with the parameters set forth in the Bond Legislation is in the best interest of the City and in the public interest and, therefore, authorizes the Designated Representative to execute and deliver on behalf of the City, the Continuing Covenant Agreement reflecting the terms set forth in Exhibit A with such modifications thereto, consistent with the Bond Legislation, as shall be approved by the Designated Representative, which approval shall be evidenced by such execution and delivery.

Section 3.  Approval of Bond Sale Terms. In accordance with Section 5 of the Bond Ordinance, the following Bond Sale Terms are approved:

(a)  Principal Amount. The Bonds shall be issued in one or more Series, in the aggregate principal amount of $100,000,000.

(b)  Date. Each Bond shall be dated its Initial Issue Date.

(c)  Denominations. The Bonds shall be issued in Authorized Denominations, as that term is defined in this resolution.

(d)  Mechanism for Determining Interest Rates. Each Series of the Bonds shall bear interest as provided herein.

(e)  Payment Dates. Interest on each Bond shall be payable on each Interest Payment Date. The principal of each Bond shall be payable in accordance with the redemption provisions set forth herein, including in accordance with the maturity schedule set forth in Exhibit C.

(f)  Final Maturity. The final Maturity Date of each Series of the Bonds may be no later than November 1, 2046.

(g)  Redemption and Tender Rights. Each Series of the Bonds shall be subject to optional, mandatory and extraordinary mandatory redemption as provided in Section 9 and shall be subject to tender for purchase as provided in Section 10.

(h)  Price. The purchase price for each Series of the Bonds is par.

(i)  Other Terms and Conditions. The following terms and conditions, along with such additional Bond Sale Terms as are set forth in the Continuing Covenant Agreement, are ratified, confirmed and approved in all respects:

(1)  The average expected life of the capital facilities to be financed with the proceeds of the Bonds exceeds the weighted average maturity of the Bonds allocated to financing those capital facilities.

(2)  The Parity Conditions have been met or satisfied so that the Bonds may be issued as Parity Bonds.

(3)  The City Council has given due regard to the cost of operation and maintenance of the Light System and to any portion of the Gross Revenues pledged for the payment of any bonds, warrants or other indebtedness, and finds and determines that the Gross Revenues, at the rates established consistent with Section 13(d) of the Bond Ordinance, will be sufficient to meet all expenses of operation and maintenance of the Light System and to provide the amounts previously pledged for the payment of all outstanding obligations payable out of the Gross Revenue and pledged for the payment of the Bonds.

(4)  The Reserve Requirement for the Bonds shall be established and funded as set forth in Section 5. No proceeds of the Bonds shall be deposited into the Reserve Fund for this purpose.

(5)  The Bonds shall be issued as Tax-Exempt Bonds, in accordance with Section 14(a) of the Bond Ordinance.

Section 4.  Deposit and Use of Bond Proceeds. The proceeds of the Bonds received by the City shall be deposited immediately upon receipt in the funds, accounts or subaccounts within the Light Fund as designated by the Director of Finance and shall be used to pay part of the costs of the Plan of Additions and the costs of issuing the Bonds and for such other purposes as may be approved by ordinance. No proceeds of the Bonds shall be deposited into the Reserve Fund.

Section 5.  Reserve Fund Requirement.

(a)  Amount of the Reserve Fund Requirement for the Bonds. With respect to the Bonds, the Reserve Fund Requirement shall mean (1) for so long as the 2005 Reserve Surety remains in effect, the additional amount necessary, if any, to provide an overall level of funding in the Reserve Fund equal to the maximum amount permitted by the Code as a “reasonably required reserve or replacement fund,” calculated as of the Initial Issue Date based on the debt service requirements for all Parity Bonds then outstanding; and (2) from and after the expiration or termination of the 2005 Reserve Surety, the Reserve Fund Requirement for the Bonds shall be zero.

(b)  Method of Funding the Reserve Fund Requirement. Prior to the Initial Issue Date, the City shall deposit into the Reserve Fund an amount sufficient to satisfy the Reserve Fund Requirement for the Bonds, as set forth in this section. Such deposit shall be made from Gross Revenues or other funds of the City available from sources other than proceeds of the Bonds.

Section 6.  Election of Interest Rate Period; Determination of Interest. Each Series of the Bonds shall bear interest in one of the following interest rate modes: Daily Interest Rate, Weekly Interest Rate, Long-Term Interest Rate or Index Rate. Bonds that become Unremarketed Bonds shall bear interest either (a) as set forth in the applicable Direct Purchase Agreement or (b) if not subject to a Direct Purchase Agreement, then at the Stepped Interest Rate; Bonds that become Bank Bonds shall bear interest at the Bank Rate as set forth in the applicable Credit Facility. The interest rate and Interest Rate Period for any Series of the Bonds may be adjusted as set forth in this section. All Bonds of a single Series shall be in the same interest rate mode. The Interest Rate Period for a Series of the Bonds may not be adjusted prior to the Purchase Date, except for a Conversion of all outstanding Bonds of such Series.

(a)  Election of Interest Rate Period.

(1)  Election of Daily Interest Rate. Except as provided in subsection (c) of this Section, the Designated Representative, on behalf of the City may, from time to time, by written notice to the Credit Provider (if any), the Bond Registrar, the Calculation Agent and the Remarketing Agent (if any), Elect that any Series of the Bonds bear interest at a Daily Interest Rate. The notice of Election given by the Designated Representative shall (A) specify the proposed Conversion Date, which shall be (i) in each case, a Business Day not earlier than the 30th day following the second Business Day after receipt by the Bond Registrar of such notice; (ii) in the case of a Conversion from a Long-Term Interest Rate Period, the day following the last day of such Long-Term Interest Rate Period or a day on which such Series of the Bonds would otherwise be subject to optional redemption pursuant to Section 9(a)(3) if such Conversion did not occur; and (iii) in the case of a Conversion from an Index Rate Period, the day following the last day of such Index Rate Period or on or after a Par Call Date; and (B) state whether a Credit Facility is to be in effect on the Conversion Date.

(2)  Election of Weekly Interest Rate. Except as provided in subsection (c) of this Section, the Designated Representative, on behalf of the City, may, from time to time, by written notice to the Credit Provider (if any), the Bond Registrar, the Calculation Agent and the Remarketing Agent (if any), Elect that any Series of the Bonds bear interest at a Weekly Interest Rate. The notice of Election given by the Designated Representative shall (A) specify the proposed Conversion Date, which shall be (i) in each case, a Business Day not earlier than the 30th day following the second Business Day after receipt by the Bond Registrar of such notice; (ii) in the case of a Conversion from a Long-Term Interest Rate Period, the day following the last day of such Long-Term Interest Rate Period or a day on which that Series of the Bonds would otherwise be subject to optional redemption pursuant to Section 9(a)(3) if such Conversion did not occur; and (iii) in the case of a Conversion from an Index Rate Period, the day following the last day of such Index Rate Period or on or after a Par Call Date; and (B) state whether a Credit Facility is to be in effect on the Conversion Date.

(3)  Election of Long-Term Interest Rate. Except as provided in subsection (c) of this Section, the Designated Representative, on behalf of the City may, from time to time, by written notice to the Credit Provider (if any), the Bond Registrar, the Calculation Agent and the Remarketing Agent (if any), Elect that any Series of the Bonds bear, or continue to bear, interest at the Long-Term Interest Rate. The notice of Election given by the Designated Representative shall specify (A) the proposed Conversion Date, which shall be (i) in each case, a Business Day not earlier than the 30th day following the second Business Day after receipt by the Bond Registrar of such notice; (ii) in the case of a Conversion from a Long-Term Interest Rate Period, the day following the last day of such Long-Term Interest Rate Period or a day on which such Series of the Bonds would otherwise be subject to optional redemption pursuant to Section 9(a)(3) if such Conversion did not occur; and (iii) in the case of a Conversion from an Index Rate Period, the day following the last day of such Index Rate Period or on or after a Par Call Date; and (B) the last day of the Long-Term Interest Rate Period, which shall be either the day prior to the Maturity Date or a day that both immediately precedes a Business Day and is at least 181 days after the proposed Conversion Date.

(4)  Election of Index Rate. Except as provided in subsection (c) of this Section, the Designated Representative, on behalf of the City may, from time to time, by written notice to the Credit Provider (if any), the Bond Registrar, the Index Rate Holder (if any), the Calculation Agent and the Remarketing Agent (if any), Elect that any Series of the Bonds bear, or continue to bear, interest at an Index Rate. The notice of Election given by the Designated Representative shall specify the proposed Conversion Date, which shall be (A) in each case, a Business Day not earlier than the 30^th day following the second Business Day after receipt by the Bond Registrar of such notice; (B) in the case of a Conversion from a Long-Term Interest Rate Period, the day following the last day of such Long-Term Interest Rate Period or a day on which such Series of the Bonds would otherwise be subject to optional redemption pursuant to Section 9(a)(3) if such Conversion did not occur; (C) in the case of a Conversion from an Index Rate Period, the day following the last day of such Index Rate Period or on or after a Par Call Date (or, if applicable, the day specified pursuant to a Direct Purchase Agreement then in effect); (D) the date on which the Index Rate Period is to end (which date shall be a Mandatory Tender Date) or, if applicable, a statement that the Index Rate Period is to end on the day prior to the Maturity Date; and (E) the notice shall also specify: (i) the Index that is to be in effect, (ii) the Index Rate Percentage (if applicable) and Index Rate Spread (if applicable); and (iii) the Par Call Date for such Index Rate Period (if applicable).

If, by the second Business Day preceding the 29^th day prior to the last day of any Index Rate Period other than an Index Rate Direct Purchase Period, the Bond Registrar has not received notice of the City’s Election to effect a Conversion, then (A) the next Interest Rate Period shall be an Index Rate Period, (B) the Index (and the Index Rate Percentage or Index Rate Spread, as applicable) for such Index Rate Period shall remain unchanged, and (C) the term of such Index Rate Period shall be the same as the preceding Index Rate Period (but shall not extend beyond the day prior to the Maturity Date).

(5)  Election of Index Rate Subject to a Direct Purchase Agreement. Except as provided in subsection (c), the Designated Representative, on behalf of the City may, from time to time, by written notice to the Credit Provider (if any), the Bond Registrar, the Index Rate Holder (if any), the Calculation Agent and the Remarketing Agent (if any), Elect that any Series of the Bonds bear interest at an Index Rate subject to a Direct Purchase Agreement. The notice of Election given by the Designated Representative shall specify the proposed Conversion Date, which shall be (A) in each case, a Business Day not earlier than the 30^th day following the second Business Day after receipt by the Bond Registrar of such notice; (B) in the case of a Conversion from a Long-Term Interest Rate Period, the day following the last day of such Long-Term Interest Rate Period or a day on which such Series of the Bonds would otherwise be subject to optional redemption pursuant to Section 9(a)(3) if such Conversion did not occur; (C) in the case of a Conversion from an Index Rate Period other than an Index Rate Direct Purchase Period, the day following the last day of such Index Rate Period or on or after a Par Call Date (or, if applicable, the day specified pursuant to a Direct Purchase Agreement then in effect); and (D) the Conversion Date on which the new Index Rate Period is to end or, if applicable, a statement that the Index Rate Period is to end on the day prior to the Maturity Date. The notice to the Bond Registrar and the Calculation Agent shall be accompanied by a copy of the Direct Purchase Agreement to go into effect on the Conversion Date.

  (6)  Rescission of Election to Effect a Conversion. The Designated Representative may rescind any Election to effect a Conversion by delivering to the Credit Provider (if any), the Bond Registrar, the Index Rate Holder (if any), the Calculation Agent and the Remarketing Agent (if any), on or prior to 10:00 a.m., New York time, on the second Business Day preceding a proposed Conversion Date, a notice to the effect that the City has determined to rescind its Election to effect such Conversion.

If the City rescinds its Election to effect a Conversion of a Series of the Bonds, then such Series shall bear interest at a Weekly Interest Rate commencing on the proposed Conversion Date, except that (A) if a Daily Interest Rate Period is in effect immediately prior to the proposed Conversion, such Series shall continue to bear interest at the Daily Interest Rate, (B) if an Index Rate Period (other than an Index Rate Direct Purchase Period) is in effect immediately prior to the proposed Conversion, such Series shall continue to bear interest at the applicable Index Rate, or (C) if an Index Rate Direct Purchase Period is in effect immediately prior to the proposed Conversion, the effect of a rescission shall be that the Bonds remain subject to such Direct Purchase Agreement, shall remain subject to mandatory tender as set forth in Section 10(b)(1)(D), and any portion not purchased on the Mandatory Tender Date may be subject to a Term-Out Provision, if a Term-Out Provision is included in the applicable Direct Purchase Agreement. If notice of a Conversion of a Series of the Bonds (other than a Series with respect to which a Direct Purchase Agreement is then in effect) has been mailed to the Registered Owner(s) of such Series of the Bonds as provided in Section 8(d) and the City subsequently rescinds its Election to effect such Conversion, such Series of the Bonds shall nevertheless be subject to mandatory tender for purchase on the proposed Conversion Date.

(b)  Determination of Interest Rates.

(1)  Determination of Daily Interest Rate. Each Series of the Bonds in a Daily Interest Rate Period shall bear interest at the Daily Interest Rate, which shall be determined by the Remarketing Agent by 9:30 a.m., New York time, on each Business Day. The Daily Interest Rate for any day that is not a Business Day shall be the same as the Daily Interest Rate for the preceding Business Day.

Each Daily Interest Rate shall be the rate of interest per annum determined by the Remarketing Agent (based on an examination of tax-exempt obligations comparable, in the judgment of the Remarketing Agent, to such Series of the Bonds and known by the Remarketing Agent to have been priced or traded under then-prevailing market conditions) to be the minimum interest rate that, if borne by such Series of the Bonds, would enable the Remarketing Agent to sell all of that Series of the Bonds on such Business Day at a price (without regard to accrued interest) equal to the principal amount thereof.

If no Daily Interest Rate is established by the Remarketing Agent, then the Daily Interest Rate for such Business Day shall be the same as the preceding Daily Interest Rate, and such Daily Interest Rate shall continue to be in effect until the earlier of (A) the date on which the Remarketing Agent determines a new Daily Interest Rate or (B) the seventh day succeeding the first day on which the Daily Interest Rate was not determined by the Remarketing Agent. If the Daily Interest Rate is held to be invalid or unenforceable by a court of law, or the Remarketing Agent fails to determine the Daily Interest Rate for a period of seven days as described in clause (B) of the preceding sentence, then the Daily Interest Rate, as determined by the Remarketing Agent, shall be equal to 110% of the SIFMA Index, or if such index is no longer available, 85% of the interest rate on 30-day high grade unsecured commercial paper notes sold through dealers by major corporations as reported in The Wall Street Journal on the Business Day such Daily Interest Rate would otherwise have been determined, until the Daily Interest Rate is again validly determined by the Remarketing Agent.

(2)  Determination of Weekly Interest Rate. Each Series of the Bonds in a Weekly Interest Rate Period shall bear interest at the Weekly Interest Rate, which shall be determined by the Remarketing Agent by 5:00 p.m., New York time, on Tuesday of each week, or if such day is not a Business Day, then on the succeeding Business Day. The first Weekly Interest Rate for each Weekly Interest Rate Period shall be determined on or prior to the first day of such Weekly Interest Rate Period and shall be in effect for the period commencing on and including the first day of such Weekly Interest Rate Period and ending on and including the succeeding Tuesday. Thereafter, each Weekly Interest Rate shall be in effect for the period commencing on and including Wednesday and ending on and including the succeeding Tuesday, unless such Weekly Interest Rate Period ends on a day other than Tuesday, in which event the last Weekly Interest Rate for such Weekly Interest Rate Period shall be in effect for the period commencing on and including the Wednesday preceding the last day of such Weekly Interest Rate Period and ending on and including the last day of such Weekly Interest Rate Period.

Each Weekly Interest Rate shall be the rate of interest per annum determined by the Remarketing Agent (based on an examination of tax-exempt obligations comparable, in the judgment of the Remarketing Agent, to the Bonds and known by the Remarketing Agent to have been priced or traded under then-prevailing market conditions) to be the minimum interest rate which, if borne by the applicable Series of the Bonds, would enable the Remarketing Agent to sell all of that Series of the Bonds on the effective date of that rate at a price (without regard to accrued interest) equal to the principal amount thereof.

If no Weekly Interest Rate is established by the Remarketing Agent, then the Weekly Interest Rate shall be the same as the preceding Weekly Interest Rate if such Weekly Interest Rate was determined by the Remarketing Agent. If the preceding Weekly Interest Rate was not determined by the Remarketing Agent, or if the Weekly Interest Rate determined by the Remarketing Agent is held to be invalid or unenforceable by a court of law, then the Weekly Interest Rate, as determined by the Remarketing Agent, shall be equal to 110% of the SIFMA Index, or if such index is no longer available, 85% of the interest rate on 30-day high grade unsecured commercial paper notes sold through dealers by major corporations as reported in The Wall Street Journal on the day such Weekly Interest Rate would otherwise have been determined, until the Weekly Interest Rate is again validly determined by the Remarketing Agent.

(3)  Determination of Long-Term Interest Rate. Each Series of the Bonds in a Long-Term Interest Rate Period shall bear interest at the Long-Term Interest Rate. The Long-Term Interest Rate for each Long-Term Interest Period shall be determined by the Remarketing Agent on a Business Day no later than the first day of such Long-Term Interest Rate Period.

The Long-Term Interest Rate shall be the rate of interest per annum determined by the Remarketing Agent (based on an examination of tax-exempt obligations comparable, in the judgment of the Remarketing Agent, to such Series of the Bonds and known by the Remarketing Agent to have been priced or traded under then-prevailing market conditions) to be the minimum interest rate at which the Remarketing Agent will agree to purchase such Series of the Bonds on the effective date of that rate for resale at a price (without regard to accrued interest) equal to the principal amount thereof.

If, by the second Business Day preceding the 29^th day prior to the last day of any Long-Term Interest Rate Period, the Bond Registrar has not received notice pursuant to Section 8(d) of the City’s Election to effect a Conversion, the succeeding Interest Rate Period shall be a Weekly Interest Rate Period until Conversion to another Interest Rate Period, and such Series of the Bonds shall be subject to mandatory tender for purchase as provided in Section 10(b)(1) on the first day of such Weekly Interest Rate Period.

(4)  Index Rate Period.

(A)  Index Rate Direct Purchase Period; Authorization for Direct Purchase Agreement. The initial Interest Rate Period for each Series of the Bonds shall be the Initial Index Rate Period and an Index Rate Direct Purchase Period. During such period, each Series shall bear interest at an Index Rate as set forth herein and in the Continuing Covenant Agreement and, if such Bonds become Unremarketed Bonds, at the interest rate set forth in the Continuing Covenant Agreement, the terms of which shall be in effect for the period commencing on the Initial Issue Date to the date specified in the Continuing Covenant Agreement (which Index Rate is subject to adjustment as set forth in such Continuing Covenant Agreement). During any subsequent Index Rate Direct Purchase Period, the Interest Rate shall be an Index Rate as set forth in the Direct Purchase Agreement in effect for such period.

In connection with any Election to effect a Conversion of a Series to an Index Rate Direct Purchase Period or to extend or renew a Direct Purchase Agreement then in effect, the Designated Representative is authorized to negotiate, execute and deliver a Direct Purchase Agreement (or an agreement amending, restating or otherwise modifying a Direct Purchase Agreement then in effect) on behalf of the City, consistent with the Bond Legislation, in such form as shall be approved by the Designated Representative, which approval shall be evidenced by such execution and delivery.

(B)  Determination of Index Rate When Direct Purchase Agreement Not In Effect. Each Series of the Bonds in an Index Rate Period not subject to a Direct Purchase Agreement shall bear interest at the Index Rate, determined as follows:

(i) If the Index selected by the Designated Representative is the SIFMA Index, such Index Rate shall be the SIFMA Rate. If the Index is One-Month LIBOR, Three-Month LIBOR or another index, the Index Rate shall be the sum of (I) the product of the Index multiplied by the Index Rate Percentage, plus (II) the Index Rate Spread. Such Index Rate shall initially be determined by the Remarketing Agent after consultation with and approval by the Designated Representative on the initial Interest Determination Date for such Index Rate Period. The Index Rate shall be in effect for the period commencing on the first day of such Index Rate Period to but excluding the first Interest Reset Date of such Index Rate Period. Thereafter, the Index Rate shall be determined by the Calculation Agent on each Interest Determination Date, and such Index Rate shall be in effect for the period commencing on each Interest Reset Date to but excluding the following Interest Reset Date.

(ii) If the selected Index is either the One-Month LIBOR or Three-Month LIBOR, and such rate is not available on an Interest Determination Date, such rate determined by the Calculation Agent on the basis of the rates at which deposits in U.S. dollars for a one-month or three-month (as applicable) maturity and in a principal amount of at least U.S. $1,000,000 are offered at approximately 11:00 a.m., London time, on such Interest Determination Date, to prime banks in the London interbank market by three Reference Banks. The Calculation Agent shall request the principal London office of each such Reference Bank to provide a quotation of its rate. If at least two such quotations are provided, the rate will be the arithmetic mean of such quotations. If fewer than two quotations are provided, the rate will be the arithmetic mean of the rates quoted by three (if three quotations are not provided, two or one, as applicable) major banks in New York City, selected by the Designated Representative, at approximately 11:00 a.m. on the Interest Determination Date for loans in U.S. dollars to leading European banks in a principal amount of at least U.S. $1,000,000 having a one-month or three-month (as applicable) maturity. If none of the banks in New York City selected by the Designated Representative is then quoting rates for such loans, then such rate shall remain unchanged from the preceding Interest Determination Date.

(iii) The Index Rate Percentage shall be selected by the Designated Representative in connection with the Conversion to each Index Rate Period and shall remain in effect throughout such period. The Index Rate Spread shall be the spread determined by the Remarketing Agent (based on an examination of tax-exempt obligations comparable, in the judgment of the Remarketing Agent, to such Series of the Bonds and known by the Remarketing Agent to have been priced or traded under then-prevailing market conditions) to be the minimum spread which, when added to the Index (multiplied, if applicable, by the Index Rate Percentage), equals the interest rate which, if borne by such Series of the Bonds, would enable the Remarketing Agent to sell all of such Series of the Bonds on the effective date of that rate at a price (without regard to accrued interest) equal to the principal amount thereof. The Index Rate Spread shall be determined on the initial Interest Determination Date with respect to each Index Rate Period and shall remain in effect throughout such Index Rate Period.

(iv) The Stepped Interest Rate to be in effect during a Delayed Remarketing Period shall be determined by the Remarketing Agent, after consultation with and approval by the Designated Representative. The Stepped Interest Rate shall be determined on or prior to the initial Interest Determination Date and shall remain in effect throughout such Index Rate Period.

(v) If the Designated Representative selects an alternate index other than the One-Month LIBOR, Three-Month LIBOR or SIFMA Index, a Favorable Opinion of Bond Counsel must be obtained and a certificate shall be prepared and sent to the Bond Registrar setting forth the Index, the Index Rate Spread and Index Rate Percentage, if any, and other appropriate terms.

(c) Renewal or Extension of Existing Index Rate Direct Purchase Period; Conversion from Index Rate Direct Purchase Period. During any Index Rate Direct Purchase Period for a Series of the Bonds (including the Initial Index Rate Period), the Designated Representative, on behalf of the City may submit a written request to the then-current Index Rate Holder to renew or extend an existing Index Rate Direct Purchase Period or to purchase such Series of the Bonds upon a Conversion to a new Index Rate Direct Purchase Period. Upon receipt of such request, the Index Rate Holder shall use commercially reasonable efforts to respond to such request within 60 days after receipt of all information necessary, in the Index Rate Holder’s reasonable judgment, to permit the Index Rate Holder to make an informed credit decision. The Index Rate Holder shall inform the City in writing of its decision, in its sole and absolute discretion, to accept (subject to the preparation, execution and delivery of a Direct Purchase Agreement (or amendments or modifications to an existing Direct Purchase Agreement effecting a renewal or extension thereof) and other documentation in form and substance satisfactory to the Index Rate Holder prior to the Conversion Date or the renewal or extension date) or reject any such request. If the Index Rate Holder fails to respond in writing to such request within such 60-day period (or such later date as the Designated Representative and the then current Index Rate Holder(s) may agree), the Index Rate Holder shall be deemed to have rejected such request.

Upon written acceptance (subject to preparation of documentation, as set forth above), the Designated Representative, on behalf of the City, shall, if the terms of such acceptance are acceptable to the Designated Representative in his sole discretion, give written notice to the Index Rate Holder and the Bond Registrar of the City’s Election that during the next Interest Rate Period, such Series of the Bonds shall bear interest at an Index Rate subject to a Direct Purchase Agreement. The notice of Election given by the Designated Representative shall specify (A) the proposed Conversion Date (or effective date of such renewal or extension of a Direct Purchase Agreement then in effect), which shall be the day following the last day of the then-current Index Rate Period or on or after a Par Call Date (or, if applicable, the day specified pursuant to a Direct Purchase Agreement then in effect); (B) the date on which the new Index Rate Period is to end (or, if applicable, a statement that the new Index Rate Period is to end on the day prior to the Maturity Date); (C) the Index Rate that is to be in effect and, if applicable, the Index Rate Percentage, Index Rate Spread, and any Margin Rate Factor; and (D) any Par Call Date or Mandatory Tender Date for the new Index Rate Period, if applicable. The notice shall be accompanied by a letter of Bond Counsel that it expects to be able to give a Favorable Opinion of Bond Counsel on the Conversion Date. In addition, such direction shall confirm the appointment of a Calculation Agent and a Market Agent, if applicable.

(d) Unremarketed Bonds; Delayed Remarketing Period. Unremarketed Bonds subject to a Direct Purchase Agreement shall bear interest on the dates, at the rates and in the manner set forth in the applicable Direct Purchase Agreement, and, if such agreement contains a Term-Out Provision, shall become subject to Extraordinary Mandatory Redemption in accordance therewith. Unremarketed Bonds not subject to a Direct Purchase Agreement shall be subject to a Delayed Remarketing Period as set forth in Section 10(f) and shall bear interest at the Stepped Interest Rate until such Bond ceases to be an Unremarketed Bond. A Bond shall cease to be an Unremarketed Bond only if such Unremarketed Bond is remarketed and transferred, or such Unremarketed Bond is redeemed in full.

(e) Bank Bonds. Bank Bonds shall bear interest at the Bank Rate until such Bonds are no longer Bank Bonds. Bank Bonds may become subject to Extraordinary Mandatory Redemption in accordance with the Reimbursement Agreement or other agreement relating to the applicable Credit Facility.

(f)  Determinations of Remarketing Agent and Calculation Agent Binding. All percentages resulting from any calculation of any interest rate for any Series of the Bonds shall be rounded upward to the third decimal place. The Remarketing Agent (if any) and the Calculation Agent shall provide prompt notice of each determination of the interest rate for each Series of the Bonds to the City, the Credit Provider (if any), the Bond Registrar and the Remarketing Agent (if any). The Bond Registrar shall provide notice of any such determination to the Index Rate Holder during an Index Rate Direct Purchase Period and to a Registered Owner of any Bond during any other Interest Rate Period upon request. Absent manifest error, each such determination shall be conclusive and binding upon the City, the Credit Provider (if any), the Bond Registrar, the Remarketing Agent (if any) and the Owner of each Bond.

(g)  Maximum Interest Rate; Excess Interest. Notwithstanding any provision in this resolution to the contrary, at no time shall any Series of the Bonds bear interest at a rate higher than the Maximum Interest Rate. With respect to any Series of the Bonds during any Index Rate Direct Purchase Period (including any such Bonds that become Unremarketed Bonds), if the rate of interest on such Bonds exceeds the Maximum Interest Rate for such Bonds, then (i) such Bonds shall bear interest at the Maximum Interest Rate and Excess Interest (as defined in this subsection) shall be deferred until such date as the rate of interest borne by such Bonds as calculated pursuant to the applicable Direct Purchase Agreement is below the Maximum Interest Rate, at which time Excess Interest shall be payable with respect to such Bonds in amounts that, when combined with the then current interest due on the Bonds, does not exceed payment at the Maximum Interest Rate. For purposes of this provision, “Excess Interest” shall mean interest on the affected Bonds calculated at the rate equal to the difference between (i) the rate of interest for such Bonds as calculated pursuant to this resolution and the applicable Direct Purchase Agreement, and (ii) the Maximum Interest Rate. Payments of deferred Excess Interest shall no longer be due and payable in accordance with the terms of this Resolution upon the earlier to occur of the date on which such Bonds are tendered for purchase in accordance herewith and are so paid, or such Bonds are paid in full, but may be payable on the earlier to occur of (i) the date on which such Bonds are tendered for purchase in accordance herewith and are so paid, or (ii) such Bonds are paid in full, in accordance with the terms of the Direct Purchase Agreement as a fee thereunder.

Section 7.  Accrual and Payment of Interest.

(a)  Accrual of Interest. Each Bond shall bear interest from its date of issuance, including the Interest Accrual Date preceding the date of authentication thereof or, if such date of authentication is an Interest Accrual Date to which interest on such Bond has been paid in full or duly provided for, from such date of authentication. However, if, as shown by the records of the Bond Registrar, interest on a Bond is in default, a Bond issued in exchange for a Bond that is surrendered for registration or transfer or exchange shall bear interest from the date to which interest on such surrendered Bond had been paid or duly provided for or, if no interest has been paid on such surrendered Bond, from the date of authentication of such surrendered Bond.

(b)   Payment of Interest. Interest shall be payable on each Interest Payment Date, on each redemption date, on each Purchase Date and on the Maturity Date. In any event, interest on each Series of the Bonds shall be payable for the final Interest Rate Period to the date on which that Series of the Bonds is paid in full.

(c)  Daily Interest Rate Period. Interest on a Series of the Bonds during any Daily Interest Rate Period shall accrue on the basis of the actual number of days elapsed in a 365-day year (or a 366-day year in a leap year) and shall be payable on each Interest Payment Date for the period commencing on the Interest Accrual Date preceding the prior Interest Payment Date and ending on the last day of the month in which such Interest Accrual Date occurs.

(d)  Weekly Interest Rate Period. Interest on a Series of the Bonds during any Weekly Interest Rate Period shall accrue on the basis of the actual number of days elapsed in a 365-day year (or a 366-day year in a leap year) and shall be payable on each Interest Payment Date for the period commencing on the preceding Interest Accrual Date (or, if any such Interest Payment Date is not a Wednesday, commencing on the second preceding Interest Accrual Date) and ending on and including the Tuesday preceding such Interest Payment Date (or, if sooner, the last day of such Weekly Interest Rate Period).

(e)  Long-Term Interest Rate Period. Interest on a Series of the Bonds during any Long-Term Interest Rate Period shall accrue on the basis of a 360-day year composed of twelve 30-day months and shall be payable on each Interest Payment Date for the period commencing on the Interest Accrual Date of the preceding month and ending on the day preceding the next Interest Accrual Date.

(f)  Index Rate Period. During an Index Rate Period, except as otherwise specified in a Direct Purchase Agreement then in effect, if the applicable Index is (1) the SIFMA Index, interest shall accrue on the basis of the actual number of days elapsed in a 365-day year (or a 366-day year in a leap year), (2) One-Month LIBOR or Three-Month LIBOR, interest shall accrue on the basis of the actual number of days elapsed in a 360-day year, or (3) another index determined by the Designated Representative, interest shall accrue as determined by the Designated Representative. Unless otherwise specified in a Direct Purchase Agreement then in effect, interest during an Index Rate Period shall be payable on each Interest Payment Date for the period commencing on the preceding Interest Accrual Date and ending on the day preceding the next Interest Accrual Date.

Section 8.  Conversion of Interest Rate Periods.

(a)  Notice of Conversion to Daily Interest Rate Period. The Bond Registrar shall give notice of a Conversion to a Daily Interest Rate Period to the Registered Owner(s) of the Series of the Bonds to be converted not less than 30 days prior to the proposed Conversion Date, as set forth in a notice of an Election of a Daily Interest Rate Period by the Designated Representative. The notice of the Bond Registrar shall state (1) that the interest rate will be converted to a Daily Interest Rate unless the City rescinds its Election to convert the interest rate to a Daily Interest Rate as provided in Section 6(a); (2) the proposed Conversion Date; (3) that such Series is subject to mandatory tender for purchase on the proposed Conversion Date; (4) the Purchase Price; (5) the place of delivery for purchase of such Series of the Bonds; and (6) the information set forth in Section 10(c).

(b)  Notice of Conversion to Weekly Interest Rate Period. The Bond Registrar shall give notice of a Conversion to a Weekly Interest Rate Period to the Registered Owner(s) of the Series of the Bonds to be converted not less than 30 days prior to the proposed Conversion Date. The notice of the Bond Registrar shall state (1) that the interest rate will be converted to a Weekly Interest Rate unless the City rescinds its Election to convert the interest rate to a Weekly Interest Rate as provided in Section 6(a); (2) the proposed Conversion Date; (3) that such Series is subject to mandatory tender for purchase on the proposed Conversion Date; (4) the Purchase Price; (5) the place of delivery for purchase of such Series of the Bonds; and (6) the information set forth in Section 10(c).

(c)  Notice of Conversion to Long-Term Interest Rate Period. The Bond Registrar shall give notice of a Conversion to a Long-Term Interest Rate Period to the Registered Owner(s) of the Series of the Bonds to be converted not less than 30 days prior to the proposed Conversion Date. The notice of the Bond Registrar shall state (1) that the interest rate will be converted to, or continue to be, the Long-Term Interest Rate unless either the City rescinds its Election to convert the interest rate to the Long-Term Interest Rate as provided in Section 6(a), or all of such Series of the Bonds is not remarketed on the proposed Conversion Date; (2) the proposed Conversion Date; (3) the last day of the new Long-Term Interest Rate Period; (4) that such Series is subject to mandatory tender for purchase on the proposed Conversion Date; (5) the Purchase Price; (6) the place of delivery for purchase of such Series of the Bonds; and (7) the information set forth in Section 10(c).

(d)  Notice of Conversion to Index Rate Period. The Bond Registrar shall give notice of a Conversion to an Index Rate Period to the Registered Owner(s) of the Series of the Bonds to be converted not less than 30 days prior to the proposed Conversion Date. Such notice shall state (1) that the interest rate will be converted to, or continue to be, an Index Rate, unless the City rescinds its Election to convert the interest rate to an Index Rate as provided in Section 6(a); (2) the proposed Conversion Date; (3) the Conversion Date on which the Index Rate Period is to end or, if applicable, that the Index Rate Period is to end on the day prior to the Maturity Date; (4) that such Series of the Bonds are subject to mandatory tender for purchase on the proposed Conversion Date; (5) the Purchase Price; (6) the place of delivery for purchase of such Series of the Bonds; and (7) the information set forth in Section 10(c).

(e)  Certain Additional Conditions. No Conversion shall take effect unless each of the following conditions, to the extent applicable, has been satisfied: (1) the City has obtained the written consent of the applicable Credit Provider (if any); (2) if required pursuant to the notice of Conversion, a Credit Facility is in effect on the Conversion Date; (3) the City has received a Favorable Opinion of Bond Counsel with respect to such Conversion dated the Conversion Date; and (4) the Bond Registrar has sufficient funds on hand from remarketing or refunding proceeds, proceeds of a draw on the Credit Facility or other funds made available by the City, to pay the Purchase Price of such Series of the Bonds on the Conversion Date.

Section 9.  Redemption and Payment of Bonds.

(a)  Optional Redemption.

(1)  Weekly or Daily Interest Rate Period. During a Daily Interest Rate Period or a Weekly Interest Rate Period, each Series of the Bonds then in a Daily Interest Rate or Weekly Interest Rate Period shall be subject to optional redemption at the written direction of the Designated Representative on any Business Day, in whole or in part, at a redemption price of 100% of the principal amount thereof plus interest, if any, accrued to the date fixed for redemption.

(2)  Index Rate Period. During an Index Rate Period, each Series of the Bonds then in an Index Rate Period shall be subject to optional redemption at the written direction of the Designated Representative on any Interest Accrual Date on or after any Par Call Date, in whole or in part, at a redemption price of 100% of the principal amount thereof plus interest, if any, accrued to the date fixed for redemption.

(3)  Long-Term Interest Rate Period. During a Long-Term Interest Rate Period, each Series of the Bonds then in a Long-Term Interest Rate Period shall be subject to optional redemption at the written direction of the Designated Representative, (A) on the first day of such Long-Term Interest Rate Period, in whole or in part, at a redemption price of 100% of the principal amount thereof plus interest accrued to the date fixed for redemption, and (B) thereafter, on any day during the periods specified below in whole or in part, at the redemption prices (expressed as a percentage of principal amount) specified below plus interest, if any, accrued to the date fixed for redemption:

The Designated Representative may agree to amend the above table prior to a Conversion to the Long-Term Interest Rate Period with respect to which such amended table is to be in effect, if he deems such amendment to be necessary or convenient, but only upon delivery of a Favorable Opinion of Bond Counsel.

If the Conversion Date for a Series of the Bonds converted to a Long-Term Interest Rate Period is other than a day that would be an Interest Payment Date during such Long-Term Interest Rate Period, then the date on which such Series is first subject to redemption pursuant to the foregoing table (after the first day of such Long-Term Interest Rate Period) shall be the first Interest Payment Date succeeding the date on which such Series otherwise would be subject to redemption, and the redemption price shall be adjusted on each anniversary of that Interest Payment Date as provided in such table.

(4)  During Term-Out Period. In addition, during a Term-Out Period regardless of interest rate mode, the Bonds shall be subject to optional redemption upon the written direction of the Designated Representative, on any Business Day, in whole or in part, at a redemption price of 100% of the principal amount thereof plus interest, if any, accrued to the date fixed for redemption.

(b)  Mandatory Sinking Fund Redemption. Each Series of the Bonds shall be designated as Term Bonds and, if not redeemed or purchased at the City’s option prior to the Maturity Date, such Bonds shall be redeemed, at a price equal to the principal amount thereof to be redeemed plus accrued interest, on November 1 in each of the years and the Sinking Fund Requirements set forth in Exhibit B to this resolution.

(c)  Extraordinary Mandatory Sinking Fund Redemption. In the case of a Series that is subject to a Direct Purchase Agreement or Credit Facility with a Term-Out Provision, Unremarketed Bonds shall be subject to Extraordinary Mandatory Redemption during the Term-Out Period in the amounts, on the dates and in the manner as set forth Term-Out Provision of the applicable Direct Purchase Agreement or Credit Facility.

Section 10.  Optional and Mandatory Tender and Purchase.

(a)  Optional Tender for Purchase. During any Weekly Interest Rate Period and any Daily Interest Rate Period, the Bonds shall be subject to tender for purchase at the option of the Registered Owner (or Beneficial Owner, if such Series of the Bonds is held in Book-Entry Form) as set forth below, and if tendered in accordance with this subsection (a), shall be payable as set forth in subsection (e).

(1)  Daily Interest Rate Period. Bonds of a Series that is in a Daily Interest Rate Period may be tendered for purchase in any Authorized Denomination (provided that the amount of such Series that is not tendered for purchase must also be in an Authorized Denomination) upon delivery by a Registered Owner of such Bonds to the Bond Registrar and to the Remarketing Agent by no later than 11:00 a.m., New York time, on any Business Day, of an irrevocable written notice (or an irrevocable telephonic notice, promptly confirmed by telecopy or other writing), which states (A) the principal amount of such Bonds to be purchased and (B) the Purchase Date, which may be any succeeding Business Day. Any such notice delivered to the Bond Registrar or the Remarketing Agent after 11:00 a.m., New York time, shall be deemed to have been received on the succeeding Business Day. If the Bonds so tendered for purchase are not registered in the name of the Securities Depository, the Registered Owner shall deliver the Bonds to the Bond Registrar at its designated office for delivery of Bonds at or prior to 12:00 noon, New York time, on the Purchase Date, accompanied by an instrument of transfer in form satisfactory to the Bond Registrar.

(2)  Weekly Interest Rate Period. Bonds of a Series that is in a Weekly Interest Rate Period may be tendered for purchase in any Authorized Denomination (provided that the amount of such Series that is not tendered for purchase must also be in an Authorized Denomination) upon delivery by the Registered Owner to the Bond Registrar and to the Remarketing Agent of an irrevocable written notice which states (A) the principal amount of such Bonds to be purchased and (B) the Purchase Date, which may be any Business Day not prior to the seventh day after the date of the delivery of such notice to the Bond Registrar and the Remarketing Agent. Any such notice delivered to the Bond Registrar or the Remarketing Agent after 4:00 p.m., New York time, shall be deemed to have been received on the succeeding Business Day. If the Bonds so tendered for purchase are not registered in the name of the Securities Depository, the Registered Owner shall deliver the Bonds to the Bond Registrar at its designated office for delivery of Bonds at or prior to 10:00 a.m., New York time, on the Purchase Date, accompanied by an instrument of transfer in form satisfactory to the Bond Registrar.

(3)  Irrevocable Notice Deemed to be Tender of Bonds. The giving of notice of optional tender for purchase by a Registered Owner or Participant as provided in this subsection (a) shall constitute the irrevocable tender for purchase of those Bonds with respect to which such notice is given regardless of whether such Bonds are delivered to the Bond Registrar for purchase on the applicable Purchase Date. If Bonds tendered for purchase are registered in the name of the Securities Depository, such tender is subject to confirmation by the Securities Depository to the Bond Registrar that the Participant has the required Ownership interest in those Bonds.

(b)  Mandatory Tender for Purchase.

(1)  Bonds Subject to Mandatory Tender. Each Series of the Bonds shall be subject to mandatory tender for purchase at the Purchase Price on the following Purchase Dates (without duplication):

(A) on the first day of each Interest Rate Period, except if such new Interest Rate Period is the result of an extension or renewal of a Direct Purchase Agreement in connection with an Index Rate Direct Purchase Period;

(B) on each proposed Conversion Date for which notice has been given to the Registered Owner(s) in accordance with subsection (c) of this section;

(C) on or after each Par Call Date for which notice has been given to the Registered Owner(s) in accordance with subsection (c) of this section;

(D) during any Interest Rate Period in which the Series is subject to a Credit Facility, in the event that such Series ceases to be subject to that Credit Facility, as set forth in subsection (2) of this section; and

(E) during any Index Rate Direct Purchase Period, on each Mandatory Tender Date specified in a Direct Purchase Agreement then in effect, for which notice, if required thereunder, has been given as set forth therein.

(2)  Mandatory Tender of Bonds Upon Expiration or Termination of Credit Facility. In addition, each Series of the Bonds with respect to which a Credit Facility is then in effect shall be subject to mandatory tender for purchase if at any time the Bond Registrar receives notice that such Series will cease to be subject to purchase pursuant to such Credit Facility as a result of (A) the termination, replacement or expiration of such Credit Facility (including termination at the option of the City in accordance with the terms of any Reimbursement Agreement or upon an event of default under the Reimbursement Agreement), or (B) a Conversion. The Purchase Date for such mandatory tender shall be (A) the fifth Business Day preceding any such expiration or termination of such Credit Facility (if no Alternate Credit Facility is to be delivered to the Bond Registrar), (B) the Business Day on which such Alternate Credit Facility is delivered to the Bond Registrar, or (C) the Conversion Date.

(c)  Notice of Mandatory Tender for Purchase. In connection with any mandatory tender for purchase of a Series of the Bonds under subsection (b) of this section, the Bond Registrar shall give notice to the Registered Owner(s) of the applicable Series of the Bonds (which may be combined with a notice of Conversion under Section 8), as follows:

(1)  Each notice shall state that if the Purchase Price is provided to the Bond Registrar from remarketing or refunding proceeds, proceeds of a draw on the Credit Facility or other funds made available by the City, such Series will be purchased on the Purchase Date; and

(2)  In the case of a mandatory tender for purchase pursuant to subsection (b)(1), the notice shall state (A) the Purchase Date, and (B) if in conjunction with a Conversion, the type of Interest Rate Period to which such Series will be converted on the Purchase Date;

(3)  In the case of a mandatory tender for purchase pursuant to subsection (b)(2), the notice shall state (A) that the Credit Facility will expire, terminate or be replaced, (B) that after the Purchase Date, such Series will no longer be purchased pursuant to the Credit Facility then in effect, and (C) the short-term ratings applicable to such Series may be lowered or withdrawn; and

(4)  In the case of a Series that is not registered in the name of the Securities Depository, the notice shall state that (A) the Purchase Price will be payable only upon surrender of such Bonds to the Bond Registrar at its designated office for delivery of Bonds, accompanied by an instrument of transfer, in form satisfactory to the Bond Registrar, executed in blank by the Registered Owner or its duly authorized representative, with such signature guaranteed by a commercial bank, trust company or member firm of the New York Stock Exchange, and (B) if the Registered Owner of any such Bond does not surrender that Bond to the Bond Registrar for purchase on the Purchase Date, then that Bond shall be deemed to be an Undelivered Bond, no interest shall accrue on such Bond on and after the Purchase Date and the Registered Owner shall have no rights under the Bond Legislation other than to receive payment of the Purchase Price for such Undelivered Bond.

(d)  Delivery of Bonds Subject to Mandatory Tender; Undelivered Bonds. Payment of the Purchase Price of a Series subject to mandatory tender for which a notice has been given in accordance with subsection (c) shall be as set forth in subsection (e), below. Bonds to be so purchased that are not registered in the name of the Securities Depository must be delivered at or prior to 10:00 a.m., New York time, on the Purchase Date to the Bond Registrar at its designated office for delivery of Bonds, accompanied by an instrument of transfer in form satisfactory to the Bond Registrar and satisfying the conditions set forth in the notice of mandatory tender. If the Registered Owner of a Bond subject to mandatory tender for purchase that is not registered in the name of the Securities Depository fails to deliver its Bond to the Bond Registrar at the place and on the Purchase Date and by the time specified, or fails to deliver its Bond properly endorsed, such Bond shall constitute an Undelivered Bond.

If funds in the amount of the Purchase Price of an Undelivered Bond are available for payment to the Registered Owner thereof on the Purchase Date at the time specified, then from and after the Purchase Date and time of that required delivery (1) the Undelivered Bond shall be deemed to be purchased and shall no longer be deemed to be outstanding under the Bond Legislation; (2) interest shall no longer accrue on the Undelivered Bond; and (3) funds in the amount of the Purchase Price of the Undelivered Bond shall be held uninvested and without liability for interest by the Bond Registrar for the benefit of the Registered Owner thereof, to be paid on delivery (and proper endorsement) of the Undelivered Bond to the Bond Registrar at its designated office for delivery of Bonds.

(e)  Payment of Purchase Price. Bonds tendered for purchase under subsection (a) or (b) of this section shall be purchased on the Purchase Date specified in the applicable notice by payment of the Purchase Price made by the Bond Registrar, from the sources specified in this subsection of this section, payable in immediately available funds to the Registered Owner (and not to any Participant), by 3:00 p.m., New York time, on the Purchase Date, or as soon as practicable thereafter upon the receipt by the Bond Registrar of the Purchase Price in the Bond Purchase Fund as set forth in Section 14.

The Purchase Price of any Bonds to be purchased on any Purchase Date shall be made from the following sources in the following order of priority: (1) proceeds of the remarketing of such Bonds; (2) proceeds of refunding bonds issued by the City; (3) proceeds of a draw on the Credit Facility; and (4) other funds made available by the City (which may include Net Revenues, to the extent legally available for such purpose consistent with the Bond Legislation).

(f)  Failure to Pay Purchase Price of Bonds in Index Rate Period; Unremarketed Bonds. During any Index Rate Period, if the entire Purchase Price for any Series of the Bonds subject to mandatory tender for purchase under subsection (b)(1) of this section cannot be paid on the applicable Purchase Date, then only a portion of such Series in an amount equal to the funds available to pay the full Purchase Price thereof will be purchased on such Purchase Date. Those Bonds to be purchased shall be selected as provided in Section 8(c) of the Bond Ordinance for partial redemption, unless otherwise provided in a Direct Purchase Agreement applicable to such Series. The remainder of the Bonds of such Series for which there are not sufficient available funds to pay the full Purchase Price shall not be purchased and shall become Unremarketed Bonds, subject to the following:

  (1) With respect to Unremarketed Bonds for which no Direct Purchase Agreement is in effect, a Delayed Remarketing Period will commence on the Purchase Date for which funds were insufficient to pay the entire Purchase Price. During a Delayed Remarketing Period, the following will apply: (A) the Unremarketed Bonds will bear interest at the Stepped Interest Rate; (B) interest shall continue to be due and payable on each Interest Payment Date and also shall be payable on the last day of the Delayed Remarketing Period and the Unremarketed Bonds; (C) the Remarketing Agent (if any) will continue to be obligated to remarket the applicable Bonds; (D) the Unremarketed Bonds will continue to be subject to optional redemption by the City as described in Section 9(a); (E) the Designated Representative on behalf of the City, by notice to the Bond Registrar and the Remarketing Agent, may Elect to effect a Conversion of the Unremarketed Bonds as described in Section 6(a); and (F) if and when the Unremarketed Bonds are successfully remarketed as described in Section 13, the Registered Owner(s) of the Unremarketed Bonds will be obligated to tender their Bonds to the Bond Registrar for purchase.

(2) If a Direct Purchase Agreement is then in effect for such Series, then as to such Unremarketed Bonds, the following will apply: (A) the Unremarketed Bonds shall bear interest at the rate of interest as set forth in the applicable Direct Purchase Agreement, and, if not specified in the applicable Direct Purchase Agreement, the Stepped Interest Rate; (B) interest on the Unremarketed Bonds shall continue to be due and payable on each Interest Payment Date (or such other date(s) as may be specified in the applicable Direct Purchase Agreement) and also shall be payable on the date on which all Bonds cease to be Unremarketed Bonds; (C) the Remarketing Agent (if any) will continue to be obligated to remarket the applicable Bonds; (D) the Unremarketed Bonds will continue to be subject to optional redemption by the City as described in Section 9(a); (E) the Designated Representative on behalf of the City, by notice to the Index Rate Holder, and the Bond Registrar, may Elect to effect a Conversion of the Unremarketed Bonds as described in Section 6(a); (F) if and when the applicable Bonds are successfully remarketed as described in Section 13, the Index Rate Holder will be obligated to tender the Unremarketed Bonds to the Bond Registrar for purchase at par plus accrued interest to the Purchase Date; (G) the Unremarketed Bonds shall remain subject to the provisions of the Direct Purchase Agreement then in effect, which may include Extraordinary Mandatory Redemption of such Unremarketed Bonds in the amounts and on the dates as set forth in a Term-Out Provision (if any) if the failure to purchase the Unremarketed Bonds occurred on a Mandatory Tender Date, and (H) if not otherwise provided for in the Direct Purchase Agreement, shall otherwise be subject to subsection (1) above as if no Direct Purchase Agreement were in effect.

Section 11.  Credit Facility; Bank Bonds.

(a)  Draws on a Credit Facility. When a Credit Facility is in effect with respect to any Series, the Bond Registrar shall draw on the Credit Facility in accordance with the terms of the Credit Facility and the provisions of the Reimbursement Agreement, to the extent necessary to pay when due the principal and Purchase Price of and interest on such Series of the Bonds.

(b)  Acceptance by the Bond Registrar. If at any time there are delivered to the Bond Registrar (1) a Credit Facility, (2) all required legal opinions and information (if any), and (3) all information required to give the notice of mandatory tender for purchase of a Series, then the Bond Registrar shall accept such Credit Facility and, after the date of the mandatory tender for purchase established pursuant to Section 10(b), promptly surrender any Credit Facility then in effect to the issuer thereof for cancellation in accordance with its terms.

(c)  Notice of Termination. The Bond Registrar shall give notice to the Remarketing Agent and the Registered Owner(s) of such Series of the termination or expiration of any Credit Facility in accordance with its terms.

(d)  Bank Bonds. A Credit Facility may provide that a Bond that is purchased by the Bond Registrar with amounts paid or provided by a Credit Provider under a Credit Facility shall become a Bank Bond and shall bear interest at the Bank Rate for each day from and including the day such Bank Bond becomes a Bank Bond to and excluding the day such Bank Bond ceases to be a Bank Bond or is paid in full. Interest on each Bank Bond shall be calculated and be payable on the dates and in the manner specified in the Credit Facility or Reimbursement Agreement. To the extent there are not remarketing proceeds or refunding bond proceeds available to pay a Bank Bond on any interest or principal payment date for those Bank Bonds, the City shall make such payment to the Bond Registrar from the Parity Bond Fund. A Credit Facility may include a Term-Out Provision applicable to Bank Bonds, providing for the Extraordinary Mandatory Redemption of such Bank Bonds in accordance with the Sinking Fund Requirements specified in the Credit Facility or Reimbursement Agreement.

Section 12.  Remarketing Agent. If the Designated Representative on behalf of the City Elects to effect a Conversion of any Series to a Daily Interest Rate Period, Weekly Interest Rate Period or Long-Term Interest Rate Period, the Designated Representative shall appoint a Remarketing Agent to remarket such Series on the Purchase Date, and shall enter into a Remarketing Agreement with such Remarketing Agent. Each Remarketing Agent appointed by the Designated Representative on behalf of the City shall designate its principal office in the Remarketing Agreement. The Remarketing Agent shall signify its acceptance of the duties and obligations imposed upon it under the Bond Legislation by a written instrument of acceptance (which may be the Remarketing Agreement) delivered to the City, the Bond Registrar and the Credit Provider (if any), under which the Remarketing Agent shall agree to keep such books and records related to the remarketing of such Series as is consistent with prudent industry practice and to make such books and records related to the remarketing of such Series available for inspection by the City, the Bond Registrar and the Credit Provider (if any), at all reasonable times.

Each Remarketing Agent shall be a member of the Financial Industry Regulatory Authority, Inc. (FINRA), having a combined capital stock, surplus and undivided profits of at least $50,000,000, and be authorized by law to perform all the duties imposed upon it by the Bond Legislation and the Remarketing Agreement. Each Remarketing Agent shall be acceptable to the Credit Provider (if any). A Remarketing Agent may at any time resign and be discharged of the duties and obligations created by this Resolution by giving notice to the City, the Bond Registrar and the Credit Provider (if any). Such resignation shall take effect on the 30^th day after the receipt by the City of the notice of resignation. A Remarketing Agent may be removed at any time on 15 days prior written notice, by an instrument signed by the Designated Representative, approved by the Credit Provider (if any), and delivered to the Remarketing Agent, the Bond Registrar and the Credit Provider.

Section 13.  Remarketing of Bonds; Notice of Interest Rates.

(a)  Remarketing. Upon a mandatory tender for purchase of a Series as required by Section 10(b) or notice of optional tender for purchase of a Series under Section 10(a), the Remarketing Agent shall offer for sale and use its best efforts to sell such Bonds on the Purchase Date and, if not remarketed on the Purchase Date, thereafter until sold, at the Purchase Price.

(b)  Notice of Purchase and Remarketing. The Remarketing Agent shall give notice to the Bond Registrar and the City by facsimile transmission, telephone, e-mail or similar electronic means promptly confirmed by a written notice, in no event later than 9:30 a.m., New York time, on each Purchase Date on which Bonds are purchased pursuant to a tender for purchase under Section 10, specifying the principal amount of such Bonds, if any, remarketed. If such Bonds are not registered in the name of the Securities Depository, the Remarketing Agent shall also provide a list of the purchasers showing the names and Authorized Denominations in which such Bonds are to be registered, and the addresses and taxpayer identification numbers of such purchasers.

Section 14.  Bond Purchase Fund. The Designated Representative is authorized to establish and maintain in the custody of the Bond Registrar a separate trust fund to be designated the “Bond Purchase Fund,” including executing such additional written authorizations or agreements on behalf of the City as may be required for the establishment and maintenance of such fund. The Bond Registrar shall further establish within the Bond Purchase Fund a separate trust account to be designated the “Remarketing Account” and, if a Credit Facility is delivered in connection with a Conversion, a separate trust account to be designated the “Credit Facility Purchase Account.”

(a)  Remarketing Account. Upon receipt of the proceeds of a remarketing of Bonds on a Purchase Date, the Bond Registrar shall deposit such proceeds in the Remarketing Account of the Bond Purchase Fund for application to the Purchase Price of such Bonds.

(b)  Credit Facility Purchase Account. Upon receipt from the Credit Provider of immediately available funds, the Bond Registrar shall deposit such money in the Credit Facility Purchase Account of the Bond Purchase Fund for application to the Purchase Price of such Bonds required to be purchased on a Purchase Date to the extent that the money on deposit in the Remarketing Account of the Bond Purchase Fund is not sufficient. Any amounts deposited in the Credit Facility Purchase Account and not needed on any Purchase Date for the payment of the Purchase Price for any Bonds shall be immediately returned to the Credit Provider. Any amounts in the Credit Facility Purchase Account shall be used only to purchase such Bonds.

(c)  Other City Funds. Amounts contributed by the City to the Purchase Price as provided in Section 10(e) shall be transferred from the Parity Bond Fund to the Bond Registrar and deposited into the Bond Purchase Fund for use in accordance with Section 14(a).

Section 15.  Defaults and Remedies Under a Direct Purchase Agreement; Taxable Rate under a Direct Purchase Agreement. In addition to and without limiting the terms and conditions that may be included in a Direct Purchase Agreement (including the Continuing Covenant Agreement), the Designated Representative may agree to terms that provide that, in the event of a default that becomes an Event of Default under the terms of an applicable Direct Purchase Agreement, the Series of the Bonds with respect to which the Event of Default occurred shall automatically and without notice bear interest at a Default Rate (as defined therein) which shall not exceed the Maximum Interest Rate, subject to the terms hereof and of the related Direct Purchase Agreement. The Default Rate shall commence upon occurrence of the Event of Default and shall continue in effect until such time as the Event of Default is cured or the affected Bonds are redeemed in full. The remedy of acceleration is expressly denied.

Notwithstanding anything contained in this resolution, during an Index Rate Direct Purchase Period, if any Owner of Parity Bonds, any Qualified Counterparty, or any provider of a Credit Facility, Qualified Insurance or Qualified Letter of Credit with respect to any Parity Bonds causes any such debt or any party causes any other obligations secured by all or any portion of the Gross Revenues to become immediately due and payable (whether by repurchase, mandatory tender, mandatory redemption, acceleration or otherwise), the Index Rate Holder may immediately, and without notice, declare or cause to be declared the unpaid principal amount of the Bonds, all interest accrued and unpaid thereon, and all other amounts owing or payable with respect to the Bonds and under the related Direct Purchase Agreement to be immediately due and payable.

In addition to and without limiting the terms and conditions that may be included in a Direct Purchase Agreement (including the Continuing Covenant Agreement), the Designated Representative may agree to terms that provide that, in the event of a Determination of Taxability, the affected Series of the Bonds shall bear interest at the Taxable Rate, as set forth in the Direct Purchase Agreement.

Section 16.  Other Payment Obligations Under a Direct Purchase Agreement or Credit Facility; Security. To the extent that a Direct Purchase Agreement or agreement relating to a Credit Facility imposes payment obligations (other than obligations to pay the principal of and interest on the Bonds, which shall be subject to the pledge of Section 12 of the Ordinance) (the “Obligations”) on the City, such Obligations are special limited obligations of the City payable from and hereby secured solely by a pledge of and lien on Gross Revenues, which pledge shall constitute a lien and charge upon such Gross Revenues subordinate only to reasonable charges for maintenance and operation of the Light System and the payments required to be made into the Parity Bond Fund and the accounts therein under the Ordinance. The Obligations shall not constitute general obligations of the City, the State or any political subdivision of the State or a charge upon any general fund or upon any money or other property of the City, the State or any political subdivision of the State not specifically pledged herein.

Section 17.  Registration and Transfer of Bonds during Initial Index Rate Period. In accordance with Section 6(c) of Ordinance 124916, the City hereby determines that during the Initial Index Rate Period, the Bonds shall not be held in book-entry form in the name of the Securities Depository, but shall be held in the name of the Initial Purchaser as Registered Owner. In conjunction with each future Conversion of a Series of the Bonds to a new Interest Rate Period hereunder and each extension, renewal or other modification of an Index Rate Direct Purchase Period, the Director of Finance is authorized, on behalf of the City and without further action by the City Council, to determine whether such Series of the Bonds shall be held, during such Interest Rate Period, in the name of the applicable Index Rate Holder or in the name of the Securities Depository, all in accordance with the provisions of Ordinance 124916.

Section 18.  General Authorization. The Mayor and the Director of Finance and each of the other appropriate officers of the City are each authorized and directed to do everything as in their judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by, the Bond Ordinance and this resolution. Without limiting the foregoing, the Designated Representative is authorized to select, from time to time, such Calculation Agents, Remarketing Agents, Market Agents or other agents as he may deem necessary or desirable in order to carry out the terms of this resolution, the Bonds and any Direct Purchase Agreement that may be in effect. The Designated Representative is further authorized to execute such amendments, supplements, restatements, extensions, renewals or other modifications to the Continuing Covenant Agreement as he may deem appropriate or desirable from time to time in any manner that is not inconsistent with the Bond Legislation; and is authorized to execute future Direct Purchase Agreements (along with such amendments, supplements, restatements, extensions, renewals or other modifications thereto as he may deem appropriate or desirable from time to time) with respect to future Index Rate Direct Purchase Periods.

Section 19.  Severability. The provisions of this resolution are declared to be separate and severable. If a court of competent jurisdiction, all appeals having been exhausted or all appeal periods having run, finds any provision of this resolution to be invalid or unenforceable as to any person or circumstance, such offending provision shall, if feasible, be deemed to be modified to be within the limits of enforceability or validity. If the offending provision cannot be so modified, it shall be null and void with respect to the particular person or circumstance, and all other provisions of this resolution in all other respects, and the offending provision with respect to all other persons and all other circumstances, shall remain valid and enforceable.

Section 20.  Ratification of Prior Acts. All acts taken pursuant to the authority of this resolution but prior to its effective date are ratified, approved and confirmed.

Section 20.  Section Headings. Section headings in this resolution are used for convenience only and shall not constitute a substantive portion of this resolution.

Adopted by the City Council the ________ day of _________________________, 2017, and signed by me in open session in authentication of its adoption this ________ day of _________________________, 2017.

____________________________________

President ____________ of the City Council

The Mayor concurred the ________ day of _________________________, 2017.

____________________________________

Edward B. Murray, Mayor

Filed by me this ________ day of _________________________, 2017.

____________________________________

Monica Martinez Simmons, City Clerk

(Seal)