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HomeMy Public PortalAboutORD15536 ORDINANCE NO. 15536 OF CITY OF JEFFERSON,MISSOURI PASSED JUNE 6,2016 AUTHORIZING NOT TO EXCEED $10,000,000 SEWERAGE SYSTEM REVENUE BONDS SERIES 2016 ORDINANCE NO. 15536 INDEX Page Title 1 Recitals 1 ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms 4 ARTICLE II AUTHORIZATION OF BONDS Section 201. Authorization of Bonds 11 Section 202. Sale of Bonds; Description of Bonds 11 Section 203. Designation of Paying Agent 11 Section 204. Method and Place of Payment of Bonds 12 Section 205. Registration,Transfer and Exchange of Bonds 13 Section 206. Execution,Authentication and Delivery of Bonds 14 Section 207. Mutilated,Destroyed,Lost and Stolen Bonds 14 Section 208. Cancellation and Destruction of Bonds Upon Payment 14 Section 209. Preliminary and Final Official Statement 15 Section 210. Book-Entry Bonds; Securities Depository 15 ARTICLE III REDEMPTION OF BONDS Section 301. Optional and Mandatory Redemption of Bonds 16 Section 302. Selection of Bonds to Be Redeemed 17 Section 303. Notice and Effect of Call for Redemption 17 ARTICLE IV SECURITY FOR BONDS Section 401. Security for Bonds 19 ARTICLE V CREATION AND RATIFICATION OF FUNDS AND ACCOUNTS; DEPOSIT AND APPLICATION OF BOND PROCEEDS Section 501. Establishment of Funds and Accounts 19 Section 502. Deposit of Bond Proceeds 20 Section 503. Application of Moneys in the Project Fund 20 ARTICLE VI APPLICATION OF REVENUES Section 601. Revenue Fund 21 Section 602. Application of Moneys in Funds and Accounts 21 Section 603. Transfer of Funds to Paying Agent 23 Section 604. Payments Due on Saturdays, Sundays and Holidays 23 Section 605. Nonpresentment of Bonds 23 ARTICLE VII DEPOSIT AND INVESTMENT OF MONEYS Section 701. Deposit and Investment of Moneys 24 ARTICLE VIII GENERAL COVENANTS AND PROVISIONS Section 801. Efficient and Economical Operation 24 Section 802. Continuing Disclosure 24 Section 803. Rate Covenant 25 Section 804. Reasonable Charges for all Services 25 Section 805. Corporate Existence 25 Section 806. Restrictions on Mortgage or Sale of System 25 Section 807. Insurance 26 Section 808. Books,Records and Accounts 26 Section 809. Annual Budget 26 Section 810. Annual Audit 26 Section 811. Right of Inspection 27 Section 812. Performance of Duties and Covenants 27 Section 813. Parity Bond Certification 27 Section 814. Tax Covenants 27 ARTICLE IX ADDITIONAL BONDS AND OBLIGATIONS Section 901. Senior Lien Bonds 28 Section 902. Parity Bonds and Other Obligations 28 Section 903. Junior Lien Bonds and Other Obligations 29 Section 904. Refunding Bonds 29 ARTICLE X DEFAULT AND REMEDIES Section 1001. Acceleration of Maturity Upon Default 30 Section 1002. Other Remedies 30 Section 1003. Limitation on Rights of Bondowners 30 (ii) Section 1004. Remedies Cumulative 30 Section 1005. No Obligation to Levy Taxes 31 Section 1006. Exception for Continuing Disclosure 31 ARTICLE XI DEFEASANCE Section 1101. Defeasance 31 ARTICLE XII MISCELLANEOUS PROVISIONS Section 1201. Amendments 32 Section 1202. Notices, Consents and Other Instruments by Bondowners 33 Section 1203. Further Authority 33 Section 1204. Severability 33 Section 1205. Governing Law 33 Section 1206. Electronic Storage 34 Section 1207. Effective Date 35 Exhibit A—Form of Bond Exhibit B—Form of Omnibus Continuing Disclosure Undertaking Exhibit C—Form of Certificate of Final Terms Exhibit D—Form of Notice of Bond Sale (iii) BILL NO. 2016-14 SPONSORED BY: Councilman Henry ORDINANCE NO. / S'-.5'3 Le AN ORDINANCE AUTHORIZING THE ISSUANCE OF SEWERAGE SYSTEM REVENUE BONDS, SERIES 2016, IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $10,000,000,PRESCRIBING THE FORM AND DETAILS OF SAID BONDS AND THE COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN ACTIONS AND DOCUMENTS AND PRESCRIBING OTHER MATTERS RELATING THERETO. WHEREAS, the City of Jefferson, Missouri (the "City"), a home rule charter city and political subdivision duly organized and existing under the laws of the State of Missouri, and pursuant to Article VI, Section 27 of the Missouri Constitution and Chapter 250 of the Revised Statutes of Missouri, as amended (the "Act"), now owns and operates a revenue producing sewerage system serving the City and its inhabitants and others within its service area(the"System,"as hereinafter more fully defined); and WHEREAS, the City has no bonds or other obligations outstanding payable from the Net Revenues(as hereinafter more fully defined)of the System save and except the following: Amount Amount Series of Bonds Dated Issued Outstanding Sewerage System Refunding and Improvement 11/01/2001 $24,875,000 $11,610,000 Revenue Bonds (State Revolving Fund Program), Series 2001B Sewerage System Revenue Bonds (State Revolving 5/19/2005 $4,600,000 $2,810,000 Fund Program), Series 2005A Sewerage System Refunding and Improvement 11/01/2005 $10,105,000 $6,600,000 Revenue Bonds (State Revolving Fund Program), Series 2005B Sewerage System Revenue Bonds (State Revolving 10/30/2008 $3,900,000 $3,030,000 Fund Program), Series 2008 Sewerage System Revenue Bonds, Series 2010A 8/05/2010 $1,300,000 $400,000 Taxable Sewerage System Revenue Bonds, Series 8/05/2010 $6,445,000 $6,445,000 2010B (Build American Bonds—Direct Payment) Sewerage System Revenue Bonds(State of Missouri 11/13/2012 $15,000,000 $13,751,000 —Direct Loan Program), Series 2012 Sewerage System Revenue Bonds, Series 2014 5/15/2014 $9,940,000 $9,940,000 WHEREAS, the City is authorized under the provisions of the Act to issue and sell revenue bonds for the purpose of providing funds for acquiring, constructing, extending and improving the System upon obtaining the required voter approval and provided that the principal of and interest on such revenue bonds shall be payable solely from the revenues derived from the operation of the System; and WHEREAS, pursuant to such authority, a special bond election was duly held in the City on November 7, 2000, on the question whether to issue sewerage system revenue bonds in the principal amount of$52,000,000 (the "2000 Voted Authority") for the purpose of improving and extending the City's sewerage system, and it was found and determined that a simple majority of the qualified electors of the City voting on the question had voted in favor of the issuance of said revenue bonds for the purpose aforesaid,the vote on said question having been 14,406 votes for said question to 2,687 votes against said question; and WHEREAS, by Ordinance No. 13295 adopted on October 31, 2001, the City has issued its Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2001B, in the original principal amount of$24,875,000, of which $11,610,000 remains outstanding as of the date of adoption of this Ordinance; and WHEREAS, by Ordinance No. 13878 adopted on May 4, 2005,the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2005A, in the original principal amount of$4,600,000,of which $2,810,000 remains outstanding as of the date of adoption of this Ordinance; and -2- WHEREAS, by Ordinance No. 13961 adopted on October 17, 2005, the City has issued its Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2005B, in the original principal amount of$10,105,000, of which $6,600,000 remains outstanding as of the date of adoption of this Ordinance; and WHEREAS, by Substitute Bill 2008-64 for Ordinance No. 14411 adopted on October 6, 2008, the City has issued its Sewerage System Revenue Bonds(State Revolving Fund Program), Series 2008, in the original principal amount of$3,900,000, of which $3,030,000 remains outstanding as of the date of adoption of this Ordinance; and WHEREAS, by Ordinance No. 14698 adopted on July 19, 2010 (the "Series 2010 Ordinance"), the City has issued (i) its Sewerage System Revenue Bonds, Series 2010A, in the original principal amount of $1,300,000, of which $400,000 remains outstanding as of the date of adoption of this Ordinance, and (ii) its Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds— Direct Payment), in the original principal amount of $6,445,000, of which $6,445,000 remains outstanding as of the date of adoption of this Ordinance; and WHEREAS, the City issued all but $4,750 principal amount of the 2000 Voted Authority, and the City elected, pursuant to the Series 2010 Ordinance, to forfeit and abandon the right of the City to issue the remaining$4,750; and WHEREAS,pursuant to the Act, a special bond election was duly held in the City on November 2, 2010, on the question whether to issue sewerage system revenue bonds in the principal amount of $35,000,000 for the purpose of improving and extending the City's sewerage system, and it was found and determined that a simple majority of the qualified electors of the City voting on the question had voted in favor of the issuance of said revenue bonds for the purpose aforesaid, the vote on said question having been 11,703 votes for said question to 3,165 votes against said question; and WHEREAS, by Ordinance No. 15039 adopted on November 5, 2012, the City has issued its Sewerage System Revenue Bonds (State of Missouri—Direct Loan Program), Series 2012, in the original principal amount of$15,000,000, of which $13,751,000 remains outstanding as of the date of adoption of this Ordinance; and WHEREAS, by Ordinance No. 15256 adopted on May 5, 2014, the City has issued its Sewerage System Revenue Bonds, Series 2014, in the original principal amount of$9,940,000,of which $9,940,000 remains outstanding as of the date of adoption of this Ordinance; and WHEREAS, $24,940,000 of the bonds so authorized in November of 2010 have heretofore been issued, and the City now proposes to issue an additional portion of the bonds so authorized, in an aggregate principal amount of not to exceed $10,000,000, to provide funds to pay the costs of the Project (as defined below); and WHEREAS, plans and specifications for the Project and an estimate of the cost thereof have been prepared and made by a Consultant (as hereinafter defined) to the City and the same are hereby accepted and approved and are on file in the office of the City Clerk; and WHEREAS, it is hereby found and determined that it is necessary and advisable and in the best interest of the City and of its inhabitants that revenue bonds be issued and secured in the form and manner as hereinafter provided to provide funds for the Project; -3- NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE CITY OF JEFFERSON,MISSOURI,AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following capitalized words and terms as used in this Ordinance shall have the following meanings: "Accountant" means an independent certified public accountant or firm of certified public accountants. "Act" means Article VI, Section 27 of the Missouri Constitution and Chapter 250 of the Revised Statutes of Missouri, as amended. "Authority" means the State Environmental Improvement and Energy Resources Authority, a governmental instrumentality of the State of Missouri. "Authority Program Bonds" means any bonds of the Authority heretofore or hereafter issued under the SRF Program, all or a portion of the proceeds of which are loaned to the City with respect to the System and pursuant to the SRF Program. "Average Annual Debt Service" means the average of the Debt Service Requirements as computed for the then current and all future fiscal years. "Bond Counsel" means Gilmore & Bell, P.C., Kansas City, Missouri, or any other attorney or firm of attorneys with a nationally recognized standing in the field of municipal bond financing selected by the City. "Bond Payment Date"means any date on which principal of or interest on any Bond is payable at the Maturity thereof or on any Interest Payment Date. "Bond Register"means the books for the registration,transfer and exchange of Bonds kept at the office of the Paying Agent. "Bondowner," "Owner" or "Registered Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. "Bonds" means the Sewerage System Revenue Bonds, Series 2016, of the City, authorized and issued pursuant to this Ordinance. "Business Day" means a day, other than a Saturday, Sunday or holiday, on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its banking operations. "Cede & Co." means Cede & Co., as nominee name of The Depository Trust Company, New York,New York, and any successor nominee with respect to the Bonds. -4- "Certificate of Final Terms"means the Certificate of Final Terms,the form of which is attached to this Ordinance as Exhibit C. "City"means the City of Jefferson, Missouri, and any successors or assigns. "Code"means the Internal Revenue Code of 1986, as amended, and the applicable regulations of the Treasury Department proposed or promulgated thereunder. "Consultant" means an independent engineer or engineering firm having a favorable reputation for skill and experience in the construction, financing and operation of public utilities and the preparation of management studies and financial feasibility studies in connection therewith, selected by the City for the purpose of carrying out the duties imposed on the Consultant by this Ordinance. "Continuing Disclosure Undertaking" means the Omnibus Continuing Disclosure Undertaking dated the date set forth therein,the form of which is attached to this Ordinance as Exhibit B. "Debt Service Account" means the Series 2016 Debt Service Account in the Debt Service Fund created by Section 501 hereof "Debt Service Requirements" means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and net interest or interest-like payments (after taking into account any applicable Subsidy Payments) on all System Revenue Bonds for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State of Missouri and having full trust powers. "Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest Payment Date. "Defeasance Obligations"means any of the following obligations: (a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or (b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions: (1) the obligations are (i) not subject to redemption prior to maturity or (ii)the trustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations; -5- (3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations; (4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust; (5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and (6) the obligations are rated in the highest rating category by Moody's Investors Service, Inc. (presently "Aaa") or Standard & Poor's Ratings Services (presently"AAA"). "Depreciation and Replacement Account" means the account by that name ratified and confirmed by Section 501 hereof. "Depreciation and Replacement Accumulation Requirement" means $500,000, which includes amounts required to be accumulated in the Depreciation and Replacement Account pursuant to the ordinances of the City authorizing all other outstanding issues of System Revenue Bonds, as such amounts may be decreased upon redemption or maturity of each series of System Revenue Bonds. "Expenses"means all reasonable and necessary expenses of operation,maintenance and repair of the System and keeping the System in good repair and working order(other than interest paid on System Revenue Bonds and depreciation and amortization charges during the period of determination), determined in accordance with generally accepted accounting principles, including without limiting the generality of the foregoing, current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, costs of materials and supplies, Paying Agent fees and expenses, annual audits, periodic Consultant's reports, properly allocated share of charges for insurance, the cost of purchased water, gas and power, if any, obligations (other than for borrowed money or for rents payable under capital leases) incurred in the ordinary course of business, liabilities incurred by endorsement for collection or deposit of checks or drafts received in the ordinary course of business, short-term indebtedness incurred and payable within a particular fiscal year, other obligations or indebtedness incurred for the purpose of leasing (pursuant to a true or operating lease) equipment, fixtures, inventory or other personal property, and all other expenses incident to the operation of the System, but shall exclude all general administrative expenses of the City not related to the operation of the System. "Federal Tax Certificate"means the Federal Tax Certificate dated as of June 1, 2016, delivered by the City for the Bonds, which sets forth certain facts, covenants, representations, and expectations relating to the use of Bond proceeds and the use of property financed or refinanced with those proceeds, and the investment of the Bond proceeds and certain other related money in order to comply with the requirements of Code imposed on the Bonds. "Interest Payment Date"means the Stated Maturity of an installment of interest on any Bond. "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or by call for redemption or otherwise. "Net Revenues"means all Revenues less all Expenses. -6- "Notice of Bond Sale" means the Notice of Bond Sale relating to the public offering for sale of the Bonds,the form of which is attached to this Ordinance as Exhibit D. "Operation and Maintenance Account"means the account by that name ratified and confirmed by Section 501 hereof. "Ordinance" means this Ordinance as from time to time amended in accordance with the terms hereof. . "Original Principal Amount" means the Original Principal Amount of the Bonds specified in the Certificate of Final Terms. "Outstanding," when used with reference to Bonds, means, as of any particular date of determination, all Bonds theretofore issued and delivered hereunder,except the following Bonds: (a) Bonds theretofore cancelled by the Paying Agent or delivered to the Paying Agent for cancellation; (b) Bonds deemed to be paid in accordance with the provisions of Section 1101 hereof; and (c) Bonds in exchange for or in lieu of which other Bonds have been registered and delivered hereunder. "Parity Bonds" means the Previously Issued Parity Bonds and any additional bonds or other obligations hereafter issued or incurred pursuant to Section 902 hereof and standing on a parity and equality with the Bonds with respect to the payment of principal and interest from the Net Revenues of the System. "Parity Ordinances" means the Previously Issued Parity Ordinances and the ordinance or ordinances under which any additional Parity Bonds are hereafter issued pursuant to Section 902 hereof. "Participants" means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent"means UMB Bank,N.A., St. Louis,Missouri,and any successors and assigns. "Permitted Investments" means any of the following securities and obligations, if and to the extent the same are at the time legal for investment of the moneys held in the funds and accounts listed in Section 501 hereof: (a) United States Government Obligations; (b) certificates of deposit or time deposits, whether negotiable or nonnegotiable, issued by any bank or trust company organized under the laws of the United States or any state, provided that such certificates of deposit or time deposits shall be either (1) continuously and fully insured by the Federal Deposit Insurance Corporation, or(2)continuously and fully secured by United States Government Obligations which shall have a market value, exclusive of accrued -7- interest, at all times at least equal to the principal amount of such certificates of deposit or time deposits; and (c) any other securities or investments that are lawful for the investment of moneys held in such funds or accounts under the laws of the State of Missouri. "Person" means any natural person, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. "Previously Issued Parity Bonds"means, collectively,the Series 2001 Bonds,the Series 2005A Bonds, the Series 2005B Bonds, the Series 2008 Bonds, the Series 2010A Bonds, the Series 2010B Bonds,the Series 2012 Bonds and the Series 2014 Bonds. "Previously Issued Parity Ordinances" means, collectively, the Series 2001 Ordinance, the Series 2005A Ordinance, the Series 2005B Ordinance, the Series 2008 Ordinance, the Series 2010 Ordinance,the Series 2012 Ordinance and the Series 2014 Ordinance. "Project"means improving and extending the City's sewerage system. "Project Fund"means the fund by that name created by Section 501 hereof. "Purchase Price" means the purchase price of the Bonds specified in the Certificate of Final Terms. "Purchaser"means the purchaser of the Bonds specified in the Certificate of Final Terms. "Rebate Fund"means the fund by that name referred to in Section 501 hereof. "Record Date" for the interest payable on any Interest Payment Date means the 15th day (whether or not a Business Day)of the calendar month next preceding such Interest Payment Date. "Redemption Date" when used with respect to any Bond to be redeemed means the date fixed for such redemption pursuant to the terms of this Ordinance. "Redemption Price" when used with respect to any Bond to be redeemed means the price at which such Bond is to be redeemed pursuant to the terms of this Ordinance, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date. "Replacement Bonds" means Bonds issued to the beneficial owners of the Bonds in accordance with Section 211(b)hereof. "Revenue Fund"means the fund by that name ratified and confirmed by Section 501 hereof. "Revenues" means all income and revenues derived from the ownership and operation of the System, including investment and rental income, net proceeds from business interruption insurance, sales tax revenues which have been annually appropriated by the City or which are limited solely to the payment of improvements to or expenses of the System, and any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation and equipping of System facilities to be applied during the period of determination to pay interest on System Revenue Bonds, but excluding -8- any profits or losses on the early extinguishment of debt or on the sale or other disposition, not in the ordinary course of business,of investments or fixed or capital assets. "Securities Depository" means, initially, The Depository Trust Company, New York, New York,and its successors and assigns. "Series 2001 Bonds"means the Sewerage System Refunding and Improvement Revenue Bonds, Series 2001B, of the City, in the aggregate principal amount of $24,875,000, authorized and issued pursuant to the Series 2001 Ordinance. "Series 2001 Ordinance" means Ordinance No. 13295 of the City passed on October 31, 2001, under which the Series 2001 Bonds were issued. "Series 2005A Bonds" means the Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2005A, of the City, in the aggregate principal amount of$4,600,000, authorized and issued pursuant to the Series 2005A Ordinance. "Series 2005A Ordinance" means Ordinance No. 13878 of the City passed on May 4, 2005, under which the Series 2005A Bonds were issued. "Series 2005B Bonds"means the Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2005B, of the City, in the aggregate principal amount of $10,105,000, authorized and issued pursuant to the Series 2005B Ordinance. "Series 2005B Ordinance"means Ordinance No. 13961 of the City passed on October 17, 2005, under which the Series 2005B Bonds were issued. "Series 2008 Bonds" means the Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2008, of the City, in the aggregate principal amount of $3,900,000, authorized and issued pursuant to the Series 2008 Ordinance. "Series 2008 Ordinance" means Substitute Bill 2008-64 for Ordinance No. 14411 of the City passed on October 6, 2008,under which the Series 2008 Bonds were issued. "Series 2010A Bonds" means the Sewerage System Revenue Bonds, Series 2010A, of the City, in the aggregate principal amount of $1,300,000, authorized and issued pursuant to the Series 2010 Ordinance. "Series 2010B Bonds" means the Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds — Direct Payment), of the City, in the aggregate principal amount of$6,445,000, authorized and issued pursuant to the Series 2010 Ordinance. "Series 2010 Ordinance" means Ordinance No. 14698 of the City passed on July 19, 2010, under which the Series 2010A Bonds and Series 2010B Bonds were issued. "Series 2012 Bonds" means the Sewerage System Revenue Bonds (State of Missouri — Direct Loan Program), Series 2012, of the City, in the aggregate principal amount of$15,000,000, authorized and issued pursuant to the Series 2012 Ordinance. "Series 2012 Ordinance"means Ordinance No. 15039 of the City passed on November 5, 2012, under which the Series 2012 Bonds were issued. -9- "Series 2014 Bonds" means the Sewerage System Revenue Bonds, Series 2014, of the City, in the aggregate principal amount of $9,940,000, authorized and issued pursuant to the Series 2014 Ordinance. "Series 2014 Ordinance"means Ordinance No. 15256 of the City passed on May 5, 2014, under which the Series 2014 Bonds were issued. "Special Record Date"means the date fixed by the Paying Agent pursuant to Section 204 hereof for the payment of Defaulted Interest. "SRF Program" means the Missouri Leveraged State Water Pollution Control Revolving Fund Program of the DNR and the Authority. "SRF Program Bonds" means any System Revenue Bonds heretofore or hereafter issued in connection with the City's participation in the SRF Program. "Stated Maturity" when used with respect to any Bond or any installment of interest thereon means the date specified in such Bond and this Ordinance as the fixed date on which the principal of such Bond or such installment of interest is due and payable. "Subsidy Payments" means funds received (or with respect to Section 902(b) hereof funds that are reasonably expected to be received)by the City that either(a)must be used or(b) have been used(or with respect to Section 902(b) hereof are reasonably expected to be used) to reduce the interest or principal payments on System Revenue Bonds. Such Subsidy Payments would include, but are not limited to,payments received by the City through a federal or State of Missouri program. "Surplus Account" means the account by that name ratified and confirmed by Section 501 hereof. "System" means the entire sewerage plant and system owned and operated by the City for the collection, treatment and disposal of sewage, to serve the needs of the City and its inhabitants and others, including all appurtenances and facilities connected therewith or relating thereto, together with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the City. "System Revenue Bonds" means collectively the Bonds and all other revenue bonds or other obligations which are payable out of,or secured by an interest in,the Net Revenues of the System. "United States Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payments on obligations issued or guaranteed by the United States of America (including the interest component of obligations of the Resolution Funding Corporation). "Valuation Date"means the first business day of each fiscal year of the System. -10- ARTICLE H AUTHORIZATION OF BONDS Section 201. Authorization of Bonds. There is hereby authorized and directed to be issued a series of bonds of the City, designated "Sewerage System Revenue Bonds, Series 2016," in the Original Principal Amount specified in the Certificate of Final Terms (the "Bonds"), for the purpose of providing funds for the Project. Section 202. Sale of Bonds; Description of Bonds. The Bonds shall be sold at public sale to the bidder whose bid is in compliance with the Notice of Bond Sale circulated for the sale of the Bonds, is not otherwise rejected by the City in accordance with the provisions of the Notice of Bond Sale, and will result in the lowest "true interest cost," determined as follows: the true interest cost is the discount rate (expressed as a per-annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the scheduled payment dates back to the dated date of the Bonds, produces an amount equal to the price bid, including net premium or original issue discount,if any,but excluding any interest accrued to the date of delivery. The Bonds shall be sold to the Purchaser at the purchase price set forth in the winning bid, as such purchase price may be adjusted in connection with issue sizing adjustments made in accordance with the terms of the Notice of Bond Sale. The Mayor or the President Pro Tempore is authorized to accept the Purchaser's winning bid and to execute a Certificate of Final Terms for and on behalf of and as the act and deed of the City, such officer's signature thereon being conclusive evidence of such official's and the City's approval thereof. Delivery of the Bonds shall be made to the Purchaser as soon as practicable after the adoption of this Ordinance and the acceptance of the Purchaser's bid, upon payment therefor in accordance with the terms of sale. The Bonds shall consist of fully registered bonds without coupons, numbered from 1 upward, in denominations of$5,000 or any integral multiple thereof. The Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be substantially in the form set forth in Exhibit A attached hereto and shall be subject to registration, transfer and exchange as provided in Section 205 hereof. The Bonds shall become due in the amounts on the Stated Maturities of July 1 in the years, shall bear interest at the rates per annum, and shall be issued with such terms and provisions specified in the Certificate of Final Terms. The Certificate of Final Terms shall be completed and shall be executed by the Mayor or the President Pro Tempore, and the signature of the Mayor or the President Pro Tempore,as applicable,on said Certificate of Final Terms, attested by the City Clerk, shall constitute conclusive evidence of the approval of both the Mayor or the President Pro Tempore,as applicable,and the Council of the City. The Bonds shall bear interest at the rates specified in Exhibit C (computed on the basis of a 360-day year of twelve 30-day months) from the date thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually on January 1 and July 1 in each year,beginning on January 1,2017. Section 203. Designation of Paying Agent. UMB Bank,N.A., St. Louis, Missouri, is hereby designated as the City's Paying Agent for the payment of principal of and interest on the Bonds and as bond registrar with respect to the registration, transfer and exchange of Bonds (herein called the "Paying Agent"). The City will at all times maintain a Paying Agent meeting the qualifications herein described for the performance of the duties hereunder. The City reserves the right to appoint a successor Paying Agent -11- by (1) filing with the Paying Agent then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent and appointing a successor, and (2)causing notice of the appointment of the successor Paying Agent to be given by first class mail to each Bondowner. The Paying Agent may resign upon giving written notice by first class mail to the City and the Bondowners not less than 60 days prior to the date such resignation is to take effect. No resignation or removal of the Paying Agent shall become effective until a successor has been appointed and has accepted the duties of the Paying Agent. Every Paying Agent appointed hereunder shall at all times be a commercial banking association or corporation or trust company located in the State of Missouri organized and in good standing and doing business under the laws of the United States of America or of the State of Missouri and subject to supervision or examination by federal or state regulatory authority. The Paying Agent shall be paid its fees and expenses for its services in connection herewith, which fees and expenses shall be paid as other Expenses are paid. Section 204. Method and Place of Payment of Bonds. The principal or Redemption Price of and interest on the Bonds shall be payable in any coin or currency of the United States of America that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. The principal or Redemption Price of each Bond shall be paid at Maturity by check or draft to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal corporate trust office of the Paying Agent. The interest payable on each Bond on any Interest Payment Date shall be paid to the Registered Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest by check or draft mailed by the Paying Agent to such Registered Owner at the address shown on the Bond Register or, in the case of an interest payment to any Registered Owner of$500,000 or more in aggregate principal amount of Bonds,by electronic transfer to such Registered Owner upon written notice signed by such Registered Owner and given to the Paying Agent not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank(which shall be in the continental United States), address, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Bond shall cease to be payable to the Registered Owner of such Bond on the relevant Record Date and shall be payable to the Registered Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this paragraph. The City shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment(which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall promptly notify the City of such Special Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Registered Owner of a Bond entitled to such notice at the address of such Registered Owner as it appears on the Bond Register not less than 10 days prior to such Special Record Date. -12- The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Bonds and shall upon the written request of the City at least annually forward a copy or summary of such records to the City. Section 205. Registration, Transfer and Exchange of Bonds. The City covenants that, as long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Paying Agent for the registration, transfer and exchange of Bonds as herein provided. Each Bond when issued shall be registered in the name of the owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as provided in this Section. Upon surrender of any Bond at the principal payment office of the Paying Agent, the Paying Agent shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Paying Agent, duly executed by the Registered Owner thereof or by the Registered Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Paying Agent shall authenticate and deliver Bonds in accordance with the provisions of this Ordinance. The City shall pay the fees and expenses of the Paying Agent for the registration, transfer and exchange of Bonds provided for by this Ordinance and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Paying Agent, are the responsibility of the Registered Owners of the Bonds. In the event any Registered Owner fails to provide a correct taxpayer identification number to the Paying Agent,the Paying Agent may make a charge against such Registered Owner sufficient to pay any governmental,charge required to be paid as a result of such failure. In compliance with Section 3406 of the Code, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Registered Owner hereunder or under the Bonds. The City and the Paying Agent shall not be required(a)to register the transfer or exchange of any Bond after notice calling such Bond or portion thereof for redemption has been given or during the period of fifteen days next preceding the first mailing of such notice of redemption; or(b)to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to Section 204 hereof. The City and the Paying Agent may deem and treat the Person in whose name any Bond is registered in the Bond Register as the absolute owner of such Bond,whether such Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on said Bond and for all other purposes. All payments so made to any such Registered Owner or upon the Registered Owner's order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor the Paying Agent shall be affected by any notice to the contrary. At reasonable times and under reasonable regulations established by the Paying Agent, the Bond Register may be inspected and copied by the Registered Owners of 10% or more in principal amount of the Bonds then Outstanding or any designated representative of such Registered Owners whose authority is evidenced to the satisfaction of the Paying Agent. -13- Section 206. Execution, Authentication and Delivery of Bonds. The Bonds, including any Bonds issued in exchange or as substitution for the Bonds initially delivered, shall be signed by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the City Clerk, and shall have the official seal of the City affixed thereto or imprinted thereon. In case any officer whose signature appears on any Bond ceases to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery. Any Bond may be signed by such persons who at the actual time of the execution of such Bond shall be the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers. The Mayor and City Clerk are hereby authorized and directed to prepare and execute the Bonds as herein specified, and when duly executed,to deliver the Bonds to the Paying Agent for authentication. The Bonds shall have endorsed thereon a certificate of authentication substantially in the form set forth in Exhibit A attached hereto, which shall be manually executed by an authorized signatory of the Paying Agent,but it shall not be necessary that the same signatory sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time. No Bond shall be entitled to any security or benefit under this Ordinance or be valid or obligatory for any purpose unless and until such certificate of authentication has been duly executed by the Paying Agent. Such executed certificate of authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Ordinance. Upon authentication,the Paying Agent shall deliver the Bonds to or upon the order of the Purchaser of the Bonds upon payment of the Purchase Price to the City. Section 207. Mutilated, Destroyed, Lost and Stolen Bonds. If (a) any mutilated Bond is surrendered to the Paying Agent or the Paying Agent receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (b) there is delivered to the City and the Paying Agent such security or indemnity as may be required by the Paying Agent, then, in the absence of notice to the City and the Paying Agent that such Bond has been acquired by a bona fide purchaser, the City shall execute and the Paying Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable,the Paying Agent, in its discretion may pay such Bond instead of delivering a new Bond. Upon the issuance of any new Bond under this Section,the City or the Paying Agent may require the payment by the Registered Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent)connected therewith. Every new Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the City, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds. Section 208. Cancellation and Destruction of Bonds Upon Payment. All Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and shall file an executed counterpart of such certificate with the City. -14- Section 209. Preliminary and Final Official Statement. A Preliminary Official Statement is hereby authorized and approved in a form reviewed and approved by the City's Interim Finance Director and Bond Counsel, and the final Official Statement is hereby authorized and approved by supplementing, amending and completing the Preliminary Official Statement, with such changes and additions thereto as are necessary to conform to and describe the transaction. The Mayor of the City is hereby authorized to execute the final Official Statement as so supplemented, amended and completed, and the use and public distribution of the Official Statement by the Purchaser in connection with the reoffering of the Bonds is hereby authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds. For the purpose of enabling the Purchaser to comply with the requirements of Rule 15c2-12(b)(1) of the Securities and Exchange Commission, the City hereby deems the information regarding the City contained in the Preliminary Official Statement to be"final"as of its date, except for the omission of such information as is permitted by Rule 15c2-12(b)(1), and the appropriate officers of the City are hereby authorized, if requested, to provide the Purchaser a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of such Rule. The City agrees to provide to the Purchaser within seven business days of the date of the sale of the Bonds sufficient copies of the final Official Statement to enable the Purchaser to comply with the requirements of Rule 15c2-12(b)(4) of the Securities and Exchange Commission and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Board. Section 210. Book-Entry Bonds; Securities Depository. (a) The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no beneficial owner will receive certificates representing their respective interests in the Bonds, except in the event the Paying Agent issues Replacement Bonds as provided in subsection (b)hereof. It is anticipated that during the term of the Bonds, the Securities Depository will make book- entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on,the Bonds to the Participants until and unless the Paying Agent authenticates and delivers Replacement Bonds to the beneficial owners as described in subsection(b). (b) (1) If the City determines (A) that the Securities Depository is unable to properly discharge its responsibilities, or (B) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or(C)that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Bonds, or (2) if the Paying Agent receives written notice from Participants having interests in not less than 50%of the Bonds Outstanding, as shown on the records of the Securities Depository(and certified to such effect by the Securities Depository),that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Bonds, then the Paying Agent shall notify the Owners of such determination or such notice and of the availability of certificates to Owners requesting the same, and the Paying Agent shall register in the name of and authenticate and deliver Replacement Bonds to the beneficial owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under(1)(A) or(1)(B) of this subsection(b),the City, with the consent of the Paying Agent, may select a successor securities depository in accordance with Section 211(c) hereof to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to -15- the period of time when at least one Bond is registered in the name of the Securities Depository or its nominee. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Paying Agent, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the City,the Paying Agent or Owners are unable to locate a qualified successor of the Securities Depository in accordance with Section 211(c) hereof, then the Paying Agent shall authenticate and cause delivery of Replacement Bonds to Owners, as provided herein. The Paying Agent may rely on information from the Securities Depository and its Participants as to the names and addresses of and principal amounts held by the beneficial owners of the Bonds. The cost of printing, registration, authentication and delivery of Replacement Bonds shall be paid for by the City. (c) In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Paying Agent and the City receive written evidence with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Paying Agent upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in appropriate denominations and form as provided herein. ARTICLE III REDEMPTION OF BONDS Section 301. Optional and Mandatory Redemption of Bonds. (a) Optional Redemption. At the option of the City,certain Bonds specified in the Certificate of Final Terms or portions thereof may be called for redemption and payment prior to their Stated Maturity in whole or in part on the dates and at the redemption prices specified in the Certificate of Final Terms. (b) Mandatory Redemption of Bonds. The Term Bonds specified in the Certificate of Final Terms will be subject to mandatory redemption and payment prior to Stated Maturity in part on the dates and in the principal amounts specified in the Certificate of Final Terms, at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. At its option, to be exercised on or before the 45th day next preceding any mandatory Redemption Date, the City may: (1) deliver to the Paying Agent for cancellation Bonds subject to mandatory redemption on said mandatory Redemption Date, in any aggregate principal amount desired; or (2) furnish the Paying Agent funds, together with appropriate instructions, for the purpose of purchasing any Bonds subject to mandatory redemption on said mandatory Redemption Date from any Registered Owner thereof,whereupon the Paying Agent shall expend such funds for such purpose to such extent as may be practical; or(3) receive a credit with respect to the mandatory redemption obligation of the City under this Section for any Bonds subject to mandatory redemption on said mandatory Redemption Date which, prior to such date, have been redeemed (other than through the operation of the mandatory redemption requirements of this subsection(b)) and cancelled by the Paying Agent and not theretofore applied as a credit against any redemption obligation under this subsection(b). Each Term Bond so delivered or previously purchased or redeemed shall be credited at 100% of the principal amount -16- thereof on the obligation of the City to redeem Bonds of the same Stated Maturity on such mandatory Redemption Date, and any excess of such amount shall be credited on future mandatory redemption obligations for Bonds of the same Stated Maturity in chronological order, and the principal amount of Bonds of the same Stated Maturity to be redeemed by operation of the requirements of this Section shall be accordingly reduced. If the City intends to exercise any option granted by the provisions of clauses (1), (2) or(3) above, the City will, on or before the 45th day next preceding each mandatory Redemption Date, furnish the Paying Agent a written certificate indicating to what extent the provisions of said clauses(1),(2)and(3)are to be complied with respect to such mandatory redemption payment. Section 302. Selection of Bonds to Be Redeemed. (a) The Paying Agent shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Paying Agent at least 45 days prior to the Redemption Date of written instructions from the City specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Bonds to be called for redemption. If any Bonds are refunded more than 90 days in advance of such Redemption Date, any escrow agreement entered into by the City in connection with such refunding shall provide that such written instructions to the Paying Agent shall be given by the escrow agent on behalf of the City not less than 45 days prior to the Redemption Date. The Paying Agent may in its discretion waive such notice period so long as the notice requirements set forth in Section 303 are met. The foregoing provisions of this paragraph shall not apply to the mandatory redemption of Bonds hereunder, and Bonds shall be called by the Paying Agent for redemption pursuant to such mandatory redemption requirements without the necessity of any action by the City and whether or not the Paying Agent holds moneys available and sufficient to effect the required redemption. (b) Bonds shall be redeemed only in the principal amount of$5,000 or any integral multiple thereof. Bonds of less than a full Stated Maturity shall be selected by the Paying Agent in$5,000 units of principal amount in such equitable manner as the Paying Agent may determine. (c) In the case of a partial redemption of Bonds at the time Outstanding in denominations greater than $5,000, then for all purposes in connection with such redemption each $5,000 of face value shall be treated as though it were a separate Bond of the denomination of$5,000. If it is determined that one or more, but not all, of the $5,000 units of face value represented by any Bond are selected for redemption, then upon notice of intention to redeem such $5,000 unit or units, the Registered Owner of such Bond or the Registered Owner's duly authorized agent shall present and surrender such Bond to the Paying Agent (1) for payment of the Redemption Price and interest to the Redemption Date of such $5,000 unit or units of face value called for redemption, and (2) for exchange, without charge to the Registered Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Registered Owner of any such Bond fails to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the Redemption Date to the extent of the $5,000 unit or units of face value called for redemption(and to that extent only). Section 303. Notice and Effect of Call for Redemption. Unless waived by any Registered Owner of Bonds to be redeemed, official notice of any redemption shall be given by the Paying Agent on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 30 days prior to the Redemption Date to the Purchaser of the Bonds and each Registered Owner of the Bonds to be redeemed at the address shown on the Bond Register. All official notices of redemption shall be dated and shall contain the following information: -17- (a) the Redemption Date; (b) the Redemption Price; (c) if less than all Outstanding Bonds of a maturity are to be redeemed, the identification number, Stated Maturity, and, in the case of partial redemption of any Bonds, the respective principal amounts of the Bonds to be redeemed; (d) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (e) the place where such Bonds are to be surrendered for payment of the Redemption Price,which shall be the principal corporate office of the Paying Agent. The failure of any Registered Owner to receive notice given as heretofore provided or any defect therein shall not invalidate any redemption. Prior to any Redemption Date, the City shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on that date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Registered Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Bonds that have been redeemed shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued. The Paying Agent is also directed to comply with any mandatory standards established by the Securities and Exchange Commission and then in effect for processing redemptions of municipal securities. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. For so long as the Securities Depository is effecting book-entry transfers of the Bonds,the Paying Agent shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn,notify its Participants and that the Participants, in turn,will notify or cause to be notified the beneficial owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a beneficial owner of a Bond(having been mailed notice from the Paying Agent, the Securities Depository, a Participant or otherwise) to notify the beneficial owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. -18- ARTICLE IV SECURITY FOR BONDS Section 401. Security for Bonds. The Bonds shall be special obligations of the City payable solely from, and secured as to the payment of principal and interest by a pledge of, the Net Revenues of the System, and the City hereby pledges said Net Revenues to the payment of the principal of and interest on the Bonds. The Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional or statutory provision, limitation or restriction, and the taxing power of the City is not pledged to the payment of the Bonds either as to principal or interest. The covenants and agreements of the City contained herein and in the Bonds shall be for the equal benefit, protection and security of the legal Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds,or otherwise, except as to rate of interest, Stated Maturity and right of redemption prior to Stated Maturity as provided in this Ordinance. The Bonds shall stand on a parity and be equally and ratably secured with respect to the payment of principal and interest from the Net Revenues of the System and in all other respects with any Parity Bonds. The Bonds shall not have any priority with respect to the payment of principal or interest from said Net Revenues or otherwise over Parity Bonds and Parity Bonds shall not have any priority with respect to the payment of principal or interest from said Net Revenues or otherwise over the Bonds. ARTICLE V CREATION AND RATIFICATION OF FUNDS AND ACCOUNTS; DEPOSIT AND APPLICATION OF BOND PROCEEDS Section 501. Establishment of Funds and Accounts. There are hereby created or ratified and ordered to be established and maintained in the treasury of the City the following separate funds and accounts to be known respectively as the: (a) Sewerage System 2016 Project Fund(the"Project Fund"). (b) Sewerage System Revenue Fund(the"Revenue Fund"). (c) Sewerage System Operation and Maintenance Account(the "Operation and Maintenance Account"). (d) Debt Service Account for the Bonds, in the Debt Service Fund. (e) Sewerage System Depreciation and Replacement Account (the "Depreciation and Replacement Account"). (f) Sewerage System Surplus Account(the"Surplus Account"). (g) Rebate Fund. -19- The funds and accounts referred to in paragraphs (a) through (g) of this Section shall be maintained and administered by the City solely for the purposes and in the manner as provided in the Act and in this Ordinance and in the Previously Issued Parity Ordinances so long as any of the Bonds or the Previously Issued Parity Bonds remain outstanding within the meaning of this Ordinance and said Previously Issued Parity Ordinances,respectively. The City acknowledges the creation and continuing existence of the reserve accounts, debt service accounts, principal accounts and interest accounts established under the Previously Issued Parity Ordinances. Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds, including any premium or accrued interest thereon, shall be deposited simultaneously with the delivery of the Bonds,as follows: (a) Any premium on the Bonds shall be paid and credited to the Debt Service Account and applied in accordance with Section 602 hereof;and (b) The remaining balance of the proceeds of the Bonds specified in the Certificate of Final Terms shall be deposited in the Project Fund and applied in accordance with Section 503 hereof. Section 503. Application of Moneys in the Project Fund. Money in the Project Fund shall be used solely for the purpose of (a) paying the cost of the Project as hereinbefore provided, in accordance with the plans and specifications therefor prepared by the City's Consultant for the Project, as heretofore approved by the Council of the City and on file in the office of the City Clerk, including any alterations in or amendments to said plans and specifications deemed advisable by the Consultant and approved by the Council of the City, and(b) paying the costs and expenses incident to the issuance of the Bonds, including, but not limited to, the fees of attorneys, financial consultants, accountants, rating agencies, printers and others employed to render professional services and other costs, fees and expenses incurred in connection with the issuance of the Bonds. Withdrawals from the Project Fund shall be made only when authorized by the Council and only on duly authorized and executed warrants or vouchers therefor accompanied by a certificate executed by the Consultant that such payment is being made for a purpose within the scope of this Ordinance and that the amount of such payment represents only the contract price of the property,equipment, labor,materials or service being paid for or, if such payment is not being made pursuant to an express contract, that such payment is not in excess of the reasonable value thereof. Nothing hereinbefore contained shall prevent the payment out of the Project Fund of all costs and expenses incident to the issuance of the Bonds or withdrawals of sums for investment or reinvestment purposes under the terms of this Ordinance without a certificate from the Consultant. Upon completion of the Project as hereinbefore provided, any surplus money remaining in the Project Fund and not required for the payment of unpaid costs thereof shall be deposited into the Debt Service Account. -20- ARTICLE VI APPLICATION OF REVENUES Section 601. Revenue Fund. The City covenants and agrees that from and after the delivery of the Bonds, and continuing as long as any of the Bonds remain Outstanding hereunder, all of the Revenues shall as and when received be paid and deposited into the Revenue Fund unless otherwise specifically provided by this Ordinance. Said Revenues shall be segregated and kept separate and apart from all other moneys, revenues, funds and accounts of the City and shall not be commingled with any other moneys, revenues, funds and accounts of the City. The Revenue Fund shall be administered and applied solely for the purposes and in the manner provided in this Ordinance. Section 602. Application of Moneys in Funds and Accounts. The City covenants and agrees that from and after the delivery of the Bonds and continuing so long as any of the Bonds shall remain Outstanding, it will administer and allocate all of the moneys then held in the Revenue Fund as follows: (a) Operation and Maintenance Account. On the 25th day of each month, there shall be paid and credited to the Operation and Maintenance Account an amount sufficient to pay the estimated Expenses during the ensuing month. All amounts paid and credited to the Operation and Maintenance Account shall be expended and used by the City solely for the purpose of paying the Expenses of the System. (b) Debt Service Accounts. On the 25th day of each month, there shall next be paid and credited to the Debt Service Account, to the extent necessary to meet on each Bond Payment Date the payment of all interest on'and principal of the Bonds,the following sums: (1) Beginning with the first of said deposits and continuing on the 25th day of each month thereafter to and including December 25, 2016, an equal pro rata portion of the amount of interest becoming due on the Bonds on January 1, 2017; and thereafter, beginning on January 25, 2017, and continuing on the 25th day of each month thereafter so long as the Bonds shall remain outstanding and unpaid, an amount not less than 1/6 of the amount of interest that will become due on the Bonds on the next succeeding Interest Payment Date; and (2) Beginning with the first of said deposits on July 25, 2022 and continuing on the 25th day of each month thereafter to and including June 25,2023, an equal pro rata portion of the amount of principal becoming due on the respective series of the Bonds on July 1, 2023; and thereafter, beginning on July 25, 2023, and continuing on the first day of each month thereafter so long as any of the respective series of the Bonds shall remain outstanding and unpaid, an amount not less than 1/12 of the amount of principal that will become due on the respective series of the Bonds on the next succeeding Maturity. The amounts required to be paid and credited to the Debt Service Account pursuant to this Section shall be so paid at the same time and on a parity with the amounts at the time required to be paid and credited to the debt service accounts established for the payment of principal and interest on Parity Bonds under the provisions of the Parity Ordinances. If at any time the moneys in the Revenue Fund are insufficient to make in full the payments and credits at the time required to be made to the Debt Service Account and to the debt service accounts established to pay the principal of and interest on any Parity Bonds,the available -21- moneys in the Revenue Fund shall, unless otherwise directed by the Previously Issued Parity Ordinances, be divided among such debt service accounts in proportion to the respective principal amounts of said series of bonds at the time outstanding which are payable from the moneys in said debt service accounts. All amounts paid and credited to the Debt Service Account shall be expended and used by the City for the sole purpose of paying the interest on and principal of the Bonds as and when the same become due on each Bond Payment Date. (c) Depreciation and Replacement Account. So long as the amount in the Depreciation and Replacement Account aggregates $500,000 (the "Depreciation and Replacement Accumulation Requirement"), no further deposits will be required in the Depreciation and Replacement Account. But if the City shall ever be required to expend and use a part of the moneys in said Account for its authorized purposes and such expenditure shall reduce the amount of said Account below the Depreciation and Replacement Accumulation Requirement, then the City shall beginning on November 1, 2016 and each November 1 thereafter, deposit the sum of$120,000 each year until such Account aggregates the Depreciation and Replacement Accumulation Requirement. The amounts required to be deposited in the Depreciation and Replacement Account by this Ordinance shall include those amounts required to be deposited by the Previously Issued Parity Bonds. Except as hereinafter provided in Section 603, moneys in the Depreciation and Replacement Account shall be expended and used by the City, if no other funds are available therefor, solely for the purpose of making unusual or extraordinary replacements and repairs in and to the System as may be necessary to keep the System in good repair and working order and to assure the continued effective and efficient operation thereof, including replacing or repairing portions of the System or major items of any plant or equipment which either have been fully depreciated and are worn out or have become obsolete, inefficient or uneconomical. No moneys in said Account shall be used for the purpose of extending or enlarging the System. (d) Surplus Account. After all payments and credits required at the time to be made under the provisions of the foregoing paragraphs of this Section have been made, all moneys remaining in the Revenue Fund shall be paid and credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the following purposes as determined by the Council of the City: (1) Paying Expenses of the System to the extent that may be necessary after the application of the moneys held in the Operation and Maintenance Account under the provisions of paragraph(a)of this Section; (2) Paying the cost of extending, enlarging or improving the System; (3) Preventing default in, anticipating payments into or increasing the amounts in the debt service accounts or debt service reserve accounts for System Revenue Bonds or the Depreciation and Replacement Account, or any one of them, said payments made to prevent default to be made in the order prescribed in this Section 602 of this Ordinance or in the applicable sections of ordinances authorizing additional System Revenue Bonds hereafter issued, or establishing or increasing the amount of any debt service account or debt service reserve account created by the City for the payment of any additional System Revenue Bonds; or -22- (4) Calling, redeeming and paying prior to Stated Maturity, or, at the option of the City, purchasing in the open market at the best price obtainable not exceeding the redemption price (if any bonds are callable), the Bonds or any other System Revenue Bonds, including principal, interest and redemption premium, if any; or (5) Any other lawful purpose in connection with the operation of the System and benefitting the System. So long as any of the Bonds remain Outstanding, no moneys derived from the operation of the System shall be diverted to the general governmental or municipal functions of the City. (e) Deficiency of Payments into Funds and Accounts. If at any time the Revenues shall be insufficient to make any payment on the date or dates hereinbefore specified, the City will make good the amount of such deficiency by making additional payments or credits out of the first available Revenues thereafter received by the City, such payments and credits being made and applied in the order hereinbefore specified in this Section. Section 603. Transfer of Funds to Paying Agent. The Interim Finance Director or other authorized officer of the City is hereby authorized and directed to withdraw from the Debt Service Account, and, to the extent necessary to prevent a default in the payment of either principal of or interest on the Bonds, from the Surplus Account and the Depreciation and Replacement Account as provided in Section 602 hereof, sums sufficient to pay the principal of and interest on the Bonds as and when the same become due on any Bond Payment Date, and to forward such sums to the Paying Agent in a manner which ensures the Paying Agent will have available funds in such amounts on or before the Business Day immediately preceding each Bond Payment Date. If, through lapse of time, or otherwise, the Registered Owners of Bonds shall no longer be entitled to enforce payment of their obligations, it shall be the duty of the Paying Agent forthwith to return said funds to the City as provided in Section 605 hereof. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance. Section 604. Payments Due on Saturdays, Sundays and Holidays. In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Section 605. Nonpresentment of Bonds. In the event any Bond shall not be presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond shall have been made available to the Paying Agent all liability of the City to the Registered Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Registered Owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Ordinance or on, or with respect to, said Bond. If any Bond is not presented for payment within one year following the date when such Bond becomes due at Maturity, the Paying Agent shall repay to the City without liability for interest thereon the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Registered Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. -23- ARTICLE VII DEPOSIT AND INVESTMENT OF MONEYS Section 701. Deposit and Investment of Moneys. (a) Moneys in each of the funds and accounts created by and referred to in this Ordinance shall be deposited in a bank or banks or other legally permitted financial institutions located in the State of Missouri that are members of the Federal Deposit Insurance Corporation. All such deposits shall be continuously and adequately secured by the banks or financial institutions holding such deposits as provided by the laws of the State of Missouri. (b) Moneys held in any fund or account held in the custody of the City referred to in this Ordinance may be invested in Permitted Investments; provided,however,that no such investment shall be made for a period extending longer than the date when the moneys invested may be needed for the purpose for which such fund or account was created. All earnings on any investments held in any fund or account shall accrue to and become a part of such fund or account. In determining the amount held in any fund or account under any of the provisions of this Ordinance, obligations shall be valued at the lower of the cost or the market value thereof. If and when the amount held in any fund or account shall be in excess of the amount required by the provisions of this Ordinance, the City shall direct that such excess be paid and credited to the Revenue Fund. (c) So long as any of the Previously Issued Parity Bonds remain outstanding and unpaid, any investments made pursuant to this Section shall be subject to any restrictions in the Previously Issued Parity Ordinances with respect to the funds and accounts created or ratified by and referred to in the Previously Issued Parity Ordinances. ARTICLE VIII GENERAL COVENANTS AND PROVISIONS The City covenants and agrees with each of the Registered Owners of the Bonds that so long as any of the Bonds remain Outstanding it will comply with each of the following covenants: Section 801. Efficient and Economical Operation. The City will continuously own and will operate the System as a revenue producing System in an efficient and economical manner and will keep and maintain the same in good repair and working order. The City will establish and maintain such rules , and regulations for the use of the System as may be necessary to assure maximum utilization and most efficient operation of the System. Section 802. Continuing Disclosure. The City hereby covenants with the Purchaser and the Beneficial Owners (as defined in the Continuing Disclosure Undertaking) to provide and disseminate such information as is required by Rule 15c2-12 (as defined in the Continuing Disclosure Undertaking) and is further set forth in the Continuing Disclosure Undertaking attached hereto as Exhibit B. Such covenant shall be for the benefit of and enforceable by the Purchaser and such Beneficial Owners. In the event the City fails to comply in a timely manner with its covenants contained in this Section, the Purchaser and/or any such Beneficial Owner may make demand for such compliance by -24- written notice to the City. In the event the City does not remedy such noncompliance within 10 days of receipt of such written notice, the Purchaser or any such Beneficial Owner may in its discretion, without notice or demand, proceed to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in this Section or for the enforcement of any other appropriate legal or equitable remedy as the Purchaser and/or any such Beneficial Owner shall deem effectual to protect and enforce any of the duties of the City under this Section. Section 803. Rate Covenant. The City will fix, establish, maintain and collect such rates and charges for the use and services furnished by or through the System as will produce Revenues sufficient to (a)pay the Expenses of the System; (b) pay the principal of and interest on the Bonds as and when the same become due; and(c)provide reasonable and adequate reserves for the payment of the Bonds and the interest thereon and for the protection and benefit of the System as provided in this Ordinance. The City further covenants and agrees that such rates and charges will be sufficient to enable the City to have in each fiscal year Net Revenues not less than 110% of the Debt Service Requirements for such fiscal year. The City will require the prompt payment of accounts for service rendered by or through the System and will promptly take whatever action is legally permissible to enforce and collect delinquent charges. The City will, from time to time as often as necessary, in accordance with and subject to applicable legal requirements, revise the rates and charges aforesaid in such manner as may be necessary or proper so that the Net Revenues will be sufficient to cover the obligations of the City under this Section and otherwise under the provisions of this Ordinance. If for any two consecutive fiscal years Net Revenues shall be an amount less than as hereinbefore provided, the City will immediately employ a Consultant to make recommendations with respect to such rates and charges. A copy of the Consultant's report and recommendations shall be filed with the City Clerk and with the Purchaser of the Bonds and shall be furnished to any Registered Owner of the Bonds requesting a copy of the same, at the cost of such Registered Owner. The City shall,to the extent feasible, follow the recommendations of the Consultant. Section 804. Reasonable Charges for all Services. None of the facilities or services provided by the System will be furnished to any user (excepting the City itself) without a reasonable charge being made therefor. If the Revenues are at any time insufficient to pay the Expenses of the System and also to pay all interest on and principal of the Bonds as and when the same become due, then the City will thereafter pay into the Revenue Fund a fair and reasonable payment in accordance with effective applicable rates and charges for all use and services furnished to the City by the System, and such payments will continue so long as the same may be necessary in order to prevent or reduce the amount of any default in the payment of the interest on or principal of the Bonds. Section 805. Corporate Existence. The City will maintain its corporate identity and existence so long as any of the Bonds remain Outstanding, unless another body corporate and politic by operation of law succeeds to the powers, privileges, rights, liabilities, disabilities and duties of the City and is obligated by law to comply with the terms and provisions of this Ordinance without materially adversely affecting at any time the privileges and rights of any Owner of any Outstanding Bond. Section 806. Restrictions on Mortgage or Sale of System. The City will not mortgage, pledge or otherwise encumber the System or any part thereof,nor will it sell, lease or otherwise dispose of the System or any material part thereof; provided,however,the City may (a) sell at fair market value any portion of the System which shall have been replaced by other similar property of at least equal value, or which shall cease to be necessary for the efficient operation of the System, and in the event of sale,the City will apply the proceeds to either (1) redemption of Outstanding Bonds in accordance with the provisions governing redemption of Bonds in advance of Stated Maturity, or (2) replacement of the property so -25- disposed of by other property the Revenues of which shall be incorporated into the System as hereinbefore provided; (b) cease to operate, abandon or otherwise dispose of any property which has become obsolete,nonproductive or otherwise unusable to the advantage of the City; or (c) lease, (1)as lessor, any real or personal property which is unused or unimproved, or which has become obsolete, nonproductive or otherwise unusable to the advantage of the City, or which is being acquired as a part of a lease/purchase financing for the acquisition and/or improvement of such property; and/or (2) as lessee, with an option of the City to purchase, any real or personal property for the extension and improvement of the System. Property being leased as lessor and/or lessee pursuant to this subparagraph(c) shall not be treated as part of the System for purposes of this Section 805 and may be mortgaged,pledged or otherwise encumbered. Section 807. Insurance. The City will carry and maintain insurance with respect to the System and its operations against casualties,contingencies and risks(including but not limited to property and casualty, fire and extended coverage insurance upon all of the properties forming a part of the System insofar as the same are of an insurable nature, public liability insurance, business interruption insurance, worker's compensation and employee dishonesty insurance), such insurance to be of the character and coverage and in such amounts as would normally be carried by other municipalities or public entities engaged in similar activities of comparable size and similarly situated. In the event of loss or damage,the City, with reasonable dispatch,will use the proceeds of such insurance in reconstructing and replacing the property damaged or destroyed,or in paying the claims on account of which such proceeds were received, or if such reconstruction or replacement is unnecessary or impracticable, then the City will pay and deposit the proceeds of such insurance into the Revenue Fund. The City will annually review the insurance it maintains with respect to the System to determine that such insurance is customary and adequate to protect its property and operations. The cost of all insurance obtained pursuant to the requirements of this Section shall be paid as an Expense out of the Revenues. Section 808. Books,Records and Accounts. The City will install and maintain proper books, records and accounts(entirely separate from all other records and accounts of the City) in which complete and correct entries will be made of all dealings and transactions of or in relation to the System. Such accounts shall show the amount of Revenues of the System, the application of such Revenues, and all financial transactions in connection therewith. Said books shall be kept by the City according to standard accounting practices as applicable to the operation of facilities comparable to the System. Section 809. Annual Budget. Prior to the commencement of each fiscal year, the City will cause to be prepared and filed with the City Clerk a budget setting forth the estimated receipts and expenditures of the System for the next succeeding fiscal year. The City Clerk, promptly upon the filing of said budget in the City Clerk's office,will mail a copy of said budget to the Purchaser of the Bonds. Section 810. Annual Audit. Annually, promptly after the end of the fiscal year, the City will cause an audit of the System to be made for the preceding fiscal year by an Accountant to be employed for that purpose and paid from the Revenues. Said annual audit shall cover in reasonable detail the operation of the System during such fiscal year. Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the City Clerk, and a duplicate copy of said audit shall be mailed to the Purchaser of the Bonds. Such audits shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, any user of the services of the System, any Registered Owner of any of the Bonds,or by anyone acting for or on behalf of such taxpayer, user or Registered Owner. A copy of any such audit will, upon -26- request and upon receipt by the City of payment of the reasonable cost of preparing and mailing the same, be sent to any Bondowner or prospective Bondowner. As soon as possible after the completion of the annual audit, the governing body of the City shall review such audit, and if any audit shall disclose that proper provision has not been made for all of the requirements of this Ordinance,the City will promptly cure such deficiency and will promptly proceed to increase the rates and charges to be charged for the use and services furnished by the System as may be necessary to adequately provide for such requirements. Section 811. Right of Inspection. The Purchaser of the Bonds or any Registered Owner or Owners of 10% of the principal amount of the Bonds then Outstanding shall have the right at all reasonable times to inspect the System and all records, accounts and data relating thereto, and shall be furnished all such information concerning the System and the operation thereof which the Purchaser or such Registered Owner or Owners may reasonably request. Section 812. Performance of Duties and Covenants. The City will faithfully and punctually perform all duties, covenants and obligations with respect to the operation of the System now or hereafter imposed upon the City by the Constitution and laws of the State of Missouri and by the provisions of this Ordinance. Section 813. Parity Bond Certification. The City hereby represents and covenants that the Bonds directed to be issued by this Ordinance are so issued in full compliance with the restrictions and conditions upon which the City may issue additional bonds payable out of the Net Revenues of the System and which stand on a parity with the Previously Issued Parity Bonds now outstanding, as set forth and contained in the Previously Issued Parity Ordinances, and that the Bonds herein directed to be issued are so issued in all respects on a parity and equality with the Previously Issued Parity Bonds now outstanding. Section 814. Tax Covenants. (a) The City covenants and agrees that(1)it will comply with all applicable provisions of the Code, including Sections 103 and 141 through 150, necessary to maintain the exclusion from federal gross income of the interest on the Bonds and (2) it will not use or permit the use of any proceeds of Bonds or any other funds of the City, nor take or permit any other action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from federal gross income of the interest on the Bonds. The City will also pass such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future law in order to ensure that the interest on the Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the City. (b) The City covenants and agrees that (1) it will use the proceeds of the Bonds as soon as practicable for the purposes for which the Bonds are issued, and (2) it will not invest or directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the City in any manner, or take or omit to take any action,that would cause the Bonds to be"arbitrage bonds"within the meaning of Section 148(a)of the Code. (c) The City covenants that it will pay or provide for the payment from time to time of all arbitrage rebate to the United States pursuant to Section 148(f) of the Code and the Federal Tax Certificate. This covenant shall survive payment in full or defeasance of the Bonds. The Federal Tax Certificate may be amended or replaced if, in the opinion of Bond Counsel, such amendment or -27- replacement will not adversely affect the exclusion from federal gross income of the interest on the Bonds. (d) The City covenants that it will not use any portion of the proceeds of the Bonds, including any investment income earned on such proceeds, directly or indirectly, in a manner that would cause any Bond to be a"private activity bond"within the meaning of Section 141 of the Code. (e) The foregoing covenants shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to Article XI of this Ordinance or any other provision of this Ordinance,until the final Maturity of all Bonds Outstanding. ARTICLE IX ADDITIONAL BONDS AND OBLIGATIONS Section 901. Senior Lien Bonds. The City covenants and agrees that so long as any of the Bonds remain Outstanding,the City will not issue any additional bonds or incur or assume any other debt obligations appearing as liabilities on the balance sheet of the System for the payment of moneys determined in accordance with generally accepted accounting principles consistently applied, including capital leases as defined by generally accepted accounting principles, payable out of the Net Revenues of the System or any part thereof which are superior to the Bonds. Section 902. Parity Bonds and Other Obligations. The City covenants and agrees that so long as any of the Bonds remain Outstanding, it will not issue any additional bonds or other long-term obligations payable out of the Net Revenues of the System or any part thereof which stand on a parity or equality with the Bonds("Parity Bonds")unless the following conditions are met: (a) The City shall not be in default in the payment of principal of or interest on any Bonds or any Parity Bonds at the time outstanding or in making any payment at the time required to be made into the respective funds and accounts created by and referred to in this Ordinance or any Parity Ordinance for Parity Bonds at the time outstanding (unless such additional revenue bonds or obligations are being issued to provide funds to cure such default); and (b) Either of the following: (1) The average annual Net Revenues as set forth in the two most recent annual audits for the two fiscal years immediately preceding the issuance of additional bonds, as determined by an Accountant or a Consultant, shall have been equal to at least 110% of the Average Annual Debt Service for all System Revenue Bonds of the City, including the additional bonds proposed to be issued. In determining the average annual Net Revenues for the two preceding fiscal years for the purpose of this subsection, the City may obtain an Accountant or a Consultant to adjust said Net Revenues for the two preceding fiscal years by adding thereto, in the event the City shall have made any increase in rates for the use and services of the System and such increase shall not have been in effect during all of the two fiscal years for which annual audits are available immediately preceding the issuance of additional bonds, the amount, as estimated by the Accountant or Consultant, of the additional Net Revenues which would have resulted from the operation of the System during said two preceding fiscal years had such rate increase been in effect for the entire period; or -28- (2) The projected average annual Net Revenues for the two fiscal years immediately following the fiscal year in which the improvements to the System, the cost of which is being financed by such additional bonds, are to be placed in commercial operation, as determined by an Accountant or a Consultant, shall be equal to at least 110% of the average of the Debt Service Requirements in all fiscal years succeeding said fiscal year in which such improvements are expected to be placed in commercial operation. In determining the projected average annual Net Revenues for the purpose of this subsection, the Accountant or Consultant may adjust said projections by adding thereto any estimated increase in Net Revenues resulting from any increase or increases in rates for the use and services of the System duly made by the City which shall be in effect for the period of such projections and which, in the opinion of the Accountant or Consultant, are economically feasible and reasonably considered necessary based on projected operations of the System. Additional sewerage system revenue bonds of the City issued under the conditions set forth in this Section shall stand on a parity with the Bonds and shall enjoy complete equality of lien on and claim against the Net Revenues with the Bonds, and the City may make.equal provision for paying said bonds and the interest thereon out of the Revenue Fund and may likewise provide for the creation of reasonable debt service accounts and debt service reserve accounts for the payment of such additional bonds and the interest thereon out of moneys in the Revenue Fund. Section 903. Junior Lien Bonds and Other Obligations. Nothing in this Section contained shall prohibit or restrict the right of the City to issue additional revenue bonds or other revenue obligations for any lawful purpose in connection with the operation of the System and to provide that the principal of and interest on said revenue bonds or obligations shall be payable out of the Net Revenues of the System, provided at the time of the issuance of such additional revenue bonds or obligations the City shall not be in default in the performance of any covenant or agreement contained in this Ordinance (unless such additional revenue bonds or obligations are being issued to provide funds to cure such default), and provided further that such additional revenue bonds or obligations shall be junior and subordinate to the Bonds so that if at any time the City shall be in default in paying either interest on or principal of the Bonds, or if the City shall be in default in making any payments required to be made by it under the provisions of paragraphs (a), (b) and(c), (d) and (e) of Section 602 of this Ordinance, the City shall make no payments of either principal of or interest on said junior and subordinate revenue bonds or obligations until said default or defaults be cured. In the event of the issuance of any such junior and subordinate revenue bonds or obligations, the City, subject to the provisions aforesaid, may make provision for paying the principal of and interest on said revenue bonds or for paying said obligations out of moneys in the Revenue Fund. Section 904. Refunding Bonds. The City shall have the right, without complying with the provisions of Section 902 hereof, to refund any of the Bonds under the provisions of any law then available, and the refunding bonds so issued shall enjoy complete equality of pledge with any of the Bonds that are not refunded, if any,upon the Net Revenues of the System; provided,however,that if only a portion of the Bonds are refunded and if said Bonds are refunded in such manner that the aggregate amount of principal and interest scheduled to become due on the refunding bonds in any fiscal year (taking into account scheduled mandatory redemptions) exceeds the aggregate amount of principal and interest scheduled to become due on the refunded Bonds in said fiscal year(taking into account scheduled mandatory redemptions), then said Bonds may be refunded without complying with the provisions of Section 902 hereof only by and with the written consent of the Registered Owners of a majority in principal amount of the Bonds not refunded. -29- ARTICLE X DEFAULT AND REMEDIES Section 1001. Acceleration of Maturity Upon Default. The City covenants and agrees that if it defaults in the payment of the principal of or interest on any of the Bonds as the same shall become due on any Bond Payment Date, or if the City or its governing body or any of the officers, agents or employees thereof fail or refuse to comply with any of the provisions of this Ordinance or of the constitution or statutes of the State of Missouri, and such default continues for a period of 60 days after written notice specifying such default has been given to the City by the Registered Ownerof any Bond then Outstanding,then, at any time thereafter and while such default continues, the Registered Owners of 25% in principal amount of the Bonds then Outstanding may, by written notice to the City filed in the office of the City Clerk or delivered in person to said City Clerk, declare the principal of all Bonds then Outstanding to be due and payable immediately, and upon any such declaration given as aforesaid, all of said Bonds shall become and be immediately due and payable, anything in this Ordinance or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if at any time after the principal of said Outstanding Bonds has been so declared to be due and payable, all arrears of interest upon all of said Bonds, except interest accrued but not yet due on such Bonds, and all arrears of principal upon all of said Bonds has been paid in full and all other defaults, if any, by the City under the provisions of this Ordinance and under the provisions of the statutes of the State of Missouri have been cured, then and in every such case the Registered Owners of a majority in principal amount of the Bonds then Outstanding, by written notice to the City given as hereinbefore specified, may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon. Section 1002. Other Remedies. The provisions of this Ordinance, including the covenants and agreements herein contained, shall constitute a contract between the City and the Registered Owners of the Bonds, and the Registered Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Registered Owners of Bonds similarly situated: (a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Registered Owner or Owners against the City and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of this Ordinance or by the constitution and laws of the State of Missouri; (b) by suit, action or other proceedings in equity or at law to require the City, its officers, agents and employees to account as if they were the trustees of an express trust; and (c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Registered Owners of the Bonds. Section 1003. Limitation on Rights of Bondowners. No one or more Bondowners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Registered Owners of such Outstanding Bonds. Section 1004. Remedies Cumulative. No remedy conferred herein upon the Bondowners is intended to be exclusive of any other remedy,but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy -30- conferred herein. No waiver of any default or breach of duty or contract by the Registered Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies consequent thereon. No delay or omission of any Bondowner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Registered Owners of the Bonds by this Ordinance may be enforced and exercised from time to time and as often as may be deemed expedient. If any suit, action or proceedings taken by any Bondowner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Bondowner,then,and in every such case, the City and the Registered Owners of the Bonds shall be restored to their former positions and rights hereunder,respectively, and all rights,remedies, powers and duties of the Bondowners shall continue as if no such suit, action or other proceedings had been brought or taken. Section 1005. No Obligation to Levy Taxes. Nothing contained in this Ordinance shall be construed as imposing on the City any duty or obligation to levy any taxes either to meet any obligation incurred herein or to pay the principal of or interest on the Bonds. Section 1006. Exception for Continuing Disclosure. This Article X shall not apply to Section 802 of this Ordinance regarding continuing disclosure requirements, and Bondowners or Beneficial Owners of Bonds shall have no remedies for enforcement of said Section 802 other than the remedies provided in said Section 802. ARTICLE XI DEFEASANCE Section 1101. Defeasance. When any or all of the Bonds or the interest payments thereon shall have been paid and discharged, then the requirements contained in this Ordinance and the pledge of Net Revenues made hereunder and all other rights granted hereby shall terminate with respect to the Bonds or interest payments so paid and discharged. Bonds or the interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Ordinance if there has been deposited with the Paying Agent or other commercial bank or trust company located in the State of Missouri and having full trust powers,at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned thereon, will be sufficient for the payment of the principal or Redemption Price of said Bonds, and/or interest to accrue on such Bonds to the Stated Maturity or Redemption Date, as the case may be,or if default in such payment shall have occurred on such date,then to the date of the tender of such payments; provided, however, that if any such Bonds shall be redeemed prior to the Stated Maturity thereof, (1) the City shall have elected to redeem such Bonds, and (2) either notice of such redemption shall have been given, or the City shall have given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Paying Agent to redeem such Bonds in compliance with Section 302(a) of this Ordinance. Any moneys and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the City, for the purpose of paying and discharging any of the Bonds or the interest payments thereon, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Registered Owners of such Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys and Defeasance Obligations deposited with the Paying Agent or other bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance. -31- In the event of an advance refunding, the City shall cause to be delivered a verification report of an independent nationally recognized certified public accountant. ARTICLE XII MISCELLANEOUS PROVISIONS Section 1201. Amendments. The Continuing Disclosure Undertaking is exempt from the provisions of this Section and is subject to amendment and modification only as provided therein. The rights and duties of the City and the Bondowners, and the terms and provisions of the Bonds or of this Ordinance, may be amended or modified at any time in any respect by ordinance of the City with the written consent of the Registered Owners of not less than a majority in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Registered Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the City Clerk,but no such modification or alteration shall: (a) extend the maturity of any payment of principal or interest due upon any Bond; (b) effect a reduction in the amount which the City is required to pay by way of principal of or interest on any Bond; (c) permit the creation of a lien on the Net Revenues of the System prior or equal to the lien of the Bonds or Parity Bonds; (d) permit preference or priority of any Bonds over any other Bonds; or (e) reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of this Ordinance. Any provision of the Bonds or of this Ordinance may, however, be amended or modified by Ordinance duly adopted by the governing body of the City at any time in any respect with the written consent of the Registered Owners of all of the Bonds at the time Outstanding. Without notice to or the consent of any Bondowners, the City may amend or supplement the Ordinance for the purpose of curing any formal defect, omission, inconsistency or ambiguity therein or in connection with any other change therein which is not materially adverse to the interests of the Bondowners. Every amendment or modification of the provisions of the Bonds or of this Ordinance to which the written consent of the Bondowners is given, as above provided, shall be expressed in an ordinance passed by the governing body of the City amending or supplementing the provisions of this Ordinance and shall be deemed to be a part of this Ordinance. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the City Clerk a copy of the ordinance of the City herein provided for, duly certified, as well as proof of any required consent to such modification by the Registered Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification. A certified copy of every such amendatory or supplemental proceedings and a certified copy of this Ordinance shall be made available for inspection by the Registered Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Ordinance, and upon payment of the reasonable cost of preparing the -32- same, a certified copy of any such amendatory or supplemental proceedings or of this Ordinance will be sent by the City Clerk to any such Bondowner or prospective Bondowner. The City shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Ordinance made hereunder which affects the duties or obligations of the Paying Agent under this Ordinance. Section 1202. Notices, Consents and Other Instruments by Bondowners. Any notice, consent, request, direction, approval, objection or other instrument required by this Ordinance to be signed and executed by the Bondowners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Bondowners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds (except for the assignment of ownership of a Bond as provided for in the form of Bond set forth in Exhibit A), if made in the following manner, shall be sufficient for any of the purposes of this Ordinance, and shall be conclusive in favor of the City and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: (a) The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof,or by affidavit of any witness to such execution. (b) The fact of ownership of Bonds, the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the Bond Register. In determining whether the Registered Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Ordinance, Bonds owned by the City shall be disregarded and deemed not to be Outstanding under this Ordinance, except that, in determining whether the Bondowners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Bondowners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Bondowners the pledgee's right so to act with respect to such Bonds and that the pledgee is not the City. Section 1203. Further Authority. The officers of the City, including the Mayor, the President Pro Tempore and City Clerk, shall be, and they hereby are, authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Ordinance and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. Section 1204. Severability. If any section or other part of this Ordinance, whether large or small, shall for any reason be held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Ordinance. Section 1205. Governing Law. This Ordinance shall be governed exclusively by and constructed in accordance with the applicable laws of the State of Missouri. -33- Section 1206. Electronic Storage. The parties hereto agree that the transaction described herein may be conducted and related documents may be stored by electronic means. [Remainder of this page intentionally left blank] -34- Section 1207. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the Council and approval by the Mayor. Passed: June 6,2016 Approved: June 6,2016 Presiding Officer Mayor (SEAL) ATTEST: APPROVED AS TO FORM: 71/11 -w‘ 7-i ity Clgrk —- _ City Counselor -35- EXHIBIT A TO ORDINANCE FORM OF SERIES 2016 BOND EXCEPT AS OTHERWISE PROVIDED IN THE ORDINANCE (DESCRIBED HEREIN), THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY (DESCRIBED HEREIN) OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. UNITED STATES OF AMERICA STATE OF MISSOURI Registered Registered No. $ CITY OF JEFFERSON,MISSOURI SEWERAGE SYSTEM REVENUE BOND SERIES 2016 Interest Rate Maturity Date Dated Date CUSIP Number July 1,20_ June_,2016 _ REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS THE CITY OF JEFFERSON,MISSOURI, a home rule charter city and a political subdivision of the State of Missouri (the "City"), for value received, hereby promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source and in the manner herein specified, the Principal Amount shown above on the Maturity Date shown above, unless called for redemption prior to said Maturity Date, and to pay interest thereon, but solely from the source and in the manner herein specified, at the Interest Rate per annum shown above(computed on the basis of a 360-day year of twelve 30-day months) from the Dated Date shown above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually on January and July 1 in each year,beginning on January 1,2017,until said Principal Amount has been paid. The Principal Amount or Redemption Price of this Bond shall be paid at Maturity or upon earlier redemption by check or draft to the Person in whose name this Bond is registered at the Maturity or Redemption Date thereof, upon presentation and surrender of this Bond at the principal payment office of UMB Bank, N.A., St. Louis, Missouri (the "Paying Agent"). The interest payable on this Bond on any Interest Payment Date shall be paid to the Person in whose name this Bond is registered on the Bond Register at the close of business on the Record Date for such interest(being the 15th day,whether or not a Business Day, of the calendar month next preceding the Interest Payment Date)by check or draft mailed by the Paying Agent to such Registered Owner at the address shown on the Bond Register or, in the case of an interest payment to any Registered Owner of$500,000 or more in aggregate principal amount of A-1 Bonds, by electronic transfer to such Registered Owner upon written notice signed by such Registered Owner and given to the Paying Agent not less than 15 days prior to the Record Date for such interest containing the electronic transfer instructions including the bank(which shall be in the continental United States), address, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. This Bond is one of a duly authorized series of bonds of the City designated "Sewerage System Revenue Bonds, Series 2016," aggregating the principal amount of$ (the "Bonds"), issued by the City for the purpose of improving and extending the City's sewerage system (said sewerage system,together with all future improvements and extensions thereto hereafter constructed or acquired by the City, being herein called the "System"), under the authority of and in full compliance with the Constitution and laws of the State of Missouri, including particularly Chapter 250,RSMo,and pursuant to an election duly held in the City and an ordinance duly passed by the Council of the City (herein called the "Ordinance"). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Ordinance. At the option of the City, Bonds or portions thereof maturing on July 1 in the years 20_ and thereafter may be called for redemption and payment prior to maturity on July 1, 20_, and thereafter in whole or in part at any time in such amounts for each maturity as shall be determined by the City(Bonds of less than a full maturity to be selected in multiples of $5,000 principal amount in such equitable manner as the Paying Agent shall designate) at the Redemption Price of 100% of the principal amount thereof,plus accrued interest thereon to the Redemption Date. Notice of redemption, unless waived, is to be given by the Paying Agent by mailing an official redemption notice by first class mail at least 30 days prior to the Redemption Date, to the original Purchaser of the Bonds and to each Registered Owner of each of the Bonds to be redeemed at the address shown on the Bond Register. Notice of redemption having been given as aforesaid,the Bonds or portions of Bonds to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the City defaults in the payment of the Redemption Price)such Bonds or portions of Bonds shall cease to bear interest. The Bonds are being issued by means of a book-entry system with no physical distribution of bond certificates to be made except as provided in the Ordinance. One Bond certificate with respect to each date on which the Bonds are stated to mature, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The City and the Paying Agent will recognize the Securities Depository nominee, while the registered owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii)notices and (iii)voting. Transfers of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfers of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The City and the Paying Agent will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of A-2 principal of and interest on this Bond shall be made in accordance with existing arrangements among the City,the Paying Agent and the Securities Depository. EXCEPT AS OTHERWISE PROVIDED IN THE ORDINANCE, THIS GLOBAL BOND MAY BE TRANSFERRED,IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. The Bonds are issued in fully registered form in the denomination of $5,000 or any integral multiple thereof. This Bond may be exchanged at the office of the Paying Agent for a like aggregate principal amount of Bonds of the same maturity of other authorized denominations upon the terms provided in the Ordinance. This Bond is transferable by the Registered Owner hereof in person or by the Registered Owner's agent duly authorized in writing, at the office of the Paying Agent, but only in the manner, subject to the limitations and upon payment of the charges provided in the Ordinance and upon surrender and cancellation of this Bond. The City shall pay all costs incurred in connection with the issuance, payment and initial registration of the Bonds and the cost of a reasonable supply of bond blanks. The Bonds are special obligations of the City payable solely from, and secured as to the payment of principal and interest by a pledge of,the Net Revenues of the System, and the taxing power of the City is not pledged to the payment of the Bonds either as to principal or interest. The Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction. The Bonds stand on a parity and are equally and ratably secured with respect to the payment of principal and interest from the Net Revenues and in all other respects with (i) an issue of Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2001B, of the City, (ii)an issue of Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2005A, of the City, (iii) an issue of Sewerage System Refunding and Improvement Revenue Bonds(State Revolving Fund Program), Series 2005B, of the City, (iv) an issue of Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2008, of the City, (v) an issue of Sewerage System Revenue Bonds, Series 2010A, of the City, (vi) an issue of Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds — Direct Payment), of the City, (vii) an issue of Sewerage System Revenue Bonds (State of Missouri — Direct Loan Program), Series 2012, of the City, and (viii) an issue of Sewerage System Revenue Bonds, Series 2014, of the City. Under the conditions set forth in the Ordinance, the City has the right to issue additional parity bonds and other obligations payable from and secured by the Net Revenues; provided, however, that such additional bonds may be so issued only in accordance with and subject to the covenants, conditions and restrictions relating thereto set forth in the Ordinance. The City hereby covenants and agrees with the Registered Owner of this Bond that it will keep and perform all covenants and agreements contained in the Ordinance, and will fix, establish, maintain and collect such rates, fees and charges for the use and services furnished by or through the System as will produce Revenues sufficient to pay the costs of operation and maintenance of the System, pay the principal of and interest on the Bonds as and when the same become due, and provide reasonable and adequate reserve funds. Reference is made to the Ordinance for a description of the covenants and agreements made by the City with respect to the collection, segregation and application of the Revenues of the System, the nature and extent of the security of the Bonds, the rights, duties and obligations of the City with respect thereto,and the rights of the Registered Owners thereof. A-3 This Bond may be transferred or exchanged, as provided in the Ordinance, only on the Bond Register kept for that purpose at the principal payment office of the Paying Agent, upon surrender of this Bond together with a written instrument of transfer or exchange satisfactory to the Paying Agent duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Bond or Bonds in any authorized denomination having the same Maturity Date and in the same aggregate principal amount shall be issued to the transferee in exchange therefor as provided in the Ordinance and upon payment of the charges therein prescribed. The City and the Paying Agent may deem and treat the Person in whose name this Bond is registered on the Bond Register as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes and neither the City nor the Paying Agent shall be affected by any notice to the contrary. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordinance until the Certificate of Authentication hereon has been executed by the Paying Agent. IT IS HEREBY CERTIFIED AND DECLARED that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of the Bonds have existed, happened and been performed in due time, form and manner as required by law, and that before the issuance of the Bonds, provision has been duly made for the collection and segregation of the Revenues of the System and for the application of the same as provided in the Ordinance. IN WITNESS WHEREOF, THE CITY OF JEFFERSON, MISSOURI, has executed this Bond by causing it to be signed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk and its official seal to be affixed hereto or imprinted hereon. CERTIFICATE OF AUTHENTICATION CITY OF JEFFERSON,MISSOURI This Bond is one of the Bonds of the issue described in the within-mentioned Ordinance. By: Mayor Registration Date: UMB BANK,N.A., (SEAL) Paying Agent ATTEST: By: Authorized Signatory City Clerk A-4 ASSIGNMENT FOR VALUE RECEIVED,the undersigned hereby sells,assigns and transfers unto Print or Type Name,Address and Social Security Number or other Taxpayer Identification Number of Transferee the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints agent to transfer the within Bond on the Bond Register kept by the Paying Agent for the registration thereof,with full power of substitution in the premises. Dated: NOTICE: The signature to this assignment must correspond with the name of the Registered Owner as it appears upon the face of the within Bond in every particular. Signature Guaranteed By: (Name of Eligible Guarantor Institution as defined by SEC Rule 17 Ad-15 (17 CFR 240.17 Ad-15)) or such other similar rule as Paying Agent deems applicable) By: Title: A-5 LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel,which was dated and issued as of the date of original issuance and delivery of the Bonds: GILMORE &BELL,P.C. 2405 Grand Boulevard Suite 1100 Kansas City,Missouri 64108 A-6 EXHIBIT B TO ORDINANCE FORM OF OMNIBUS CONTINUING DISCLOSURE UNDERTAKING This OMNIBUS CONTINUING DISCLOSURE UNDERTAKING dated June_, 2016 (this "Undertaking"), is executed and delivered by the CITY OF JEFFERSON,MISSOURI(the "City"). RECITALS 1. This Undertaking is executed and delivered in connection with the issuance by the City of $ Sewerage System Revenue Bonds, Series 2016, pursuant to Ordinance No. passed by the City Council on June 6, 2016 (collectively, the "Ordinance"), and to consolidate the continuing disclosure obligations of the City with respect to the Bonds and the Prior Undertakings, both as defined below, to enhance efficiency of the administration of Prior Undertakings and promote timely disclosure by the City. 2. The City is executing this Undertaking for the benefit of the Beneficial Owners of the Bonds and in order to assist each Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). The City is the only "obligated person" (as defined by the Rule)with responsibility for continuing disclosure hereunder. 3. This Undertaking, with respect to any series of Bonds issued prior to the effective date hereof, consolidates and supersedes, in their entirety, the Prior Undertakings entered into by the City in connection with the issuance of each series of Bonds. In consideration of the foregoing,the City covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Ordinance, which apply to any capitalized term used in this Undertaking unless otherwise defined in this Section,the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report filed by the City pursuant to, and as described in, Section 2 of this Undertaking. "Beneficial Owner"means, with respect to a series of Bonds, any registered owner of any Bonds of such series and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds of such series (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds of such series for federal income tax purposes. "Bonds" means all bonds of all series identified on Schedule 1 as such schedule may be supplemented and amended and, as context may require, the Bonds of any particular series identified on Schedule 1. The City may make future series of Bonds subject to this Undertaking by executing the Adoption Agreement attached as Exhibit B. B-1 Omnibus Continuing Disclosure Undertaking (Series 2016) "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal corporate trust office or designated payment office of the trustee, any paying agent or a Dissemination Agent, as applicable, is located are required or authorized by law to remain closed, or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB,which can be accessed at www.emma.msrb.org. "Fiscal Year" means the 12-month period beginning on November 1 and ending on October 31 or any other 12-month period selected by the City as its Fiscal Year for financial reporting purposes. "Material Events"means any of the events listed in Section 3 of this Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means each of the original underwriters of a series of Bonds required to comply with the Rule in connection with the offering of Bonds of that series. "Prior Undertakings" means the prior continuing disclosure undertakings of the City listed on Schedule 1. "Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934,as amended. Section 2. Provision ofAnnual Reports. (a) The City shall not later than 180 days after the end of the City's Fiscal Year, commencing with the year ending October 31, 2016, file with the MSRB, through EMMA, the following financial information and operating data(the "Annual Report"): (1) The audited financial statements of the City for the prior Fiscal Year prepared in accordance with accounting principles generally accepted in the United States. Such financial statements shall be accompanied by an audit report resulting from an audit conducted by an independent accountant. If audited financial statements are not available by the time the Annual Report is required to be filed pursuant to this Section, the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report promptly after they become available; and (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement, as described in Exhibit A, with such modifications to the formatting and general presentation thereof as deemed appropriate by the City; provided, any substantive change to information provided shall be effected only in accordance with Section 6 hereof. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the City is an "obligated person" (as defined by the Rule), which have been filed with the MSRB or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The City shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the City's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3. (b) In addition to the foregoing requirements of this Section, the City agrees to provide copies of the most recent Annual Report to any requesting Beneficial Owner or prospective Beneficial Owner,but only after the same has been filed with the MSRB on EMMA. Section 3. Reporting of Material Events. No later than 10 Business Days after the occurrence of any of the following events,the City shall give, or cause to be given, to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Bonds("Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions,the issuance by the Internal Revenue Service of proposed or final determinations of taxability,Notices of Proposed Issue(IRS Form 5701-TEB)or other material notices or determinations with respect to the tax status of the Bonds,or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency,receivership or similar event of the City; (which shall be deemed to occur as provided in the Rule); (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;and (14) appointment of a successor or additional trustee or the change of name of the trustee, if material. If the City has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the City shall send a notice to the MSRB of the failure of the City to file on a timely basis the Annual Report,which notice shall be given by the City in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The City's obligations under this Undertaking for a particular series of Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of that series of Bonds. If the City's obligations under this Undertaking are assumed in full by some other entity, such entity shall be responsible for compliance with this Undertaking in the same manner as if it were the City, and the City shall have no further responsibility hereunder. If such assumption occurs prior to the final maturity of such Bonds, the City shall give notice of such assumption in the same manner as for a Material Event under Section 3. Section S. Dissemination Agent. The City may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under this Undertaking (the "Dissemination Agent"), and may discharge any such agent,with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign as Dissemination Agent hereunder at any time upon 30 days prior written notice to the City. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report)prepared by the City pursuant to this Undertaking. Section 6. Bonds Subject to this Undertaking;Amendment; Waiver. (a) All outstanding Bonds as of the date of this Undertaking shown on Schedule 1 are hereby made subject to this Undertaking, and all Prior Undertakings are governed by the terms of this Undertaking. The City may make any future series of Bonds subject to this Undertaking by executing the Adoption Agreement attached as Exhibit B. (b) All references to the "Bonds" in this Undertaking shall apply separately to each series of Bonds that are or become subject to this Undertaking,without further amendment hereto. (c) Notwithstanding the provisions of subsection (d) of this Section or anything else contained in this Undertaking to the contrary, in conjunction with the public offering of any series of Bonds, the City may amend the categories of operating data to be updated on an annual basis as set forth on Exhibit A to conform to the operating data included in the final official statement for such series of Bonds, in conformance with the requirements and interpretations of the Rule as of the date of such final official statement, without further amendment to this Undertaking. Thereafter, the annual operating data to be filed by the City with the MSRB with respect to the Bonds (and all other series of Bonds then subject to this Undertaking) shall be deemed to be amended to reflect the requirements of the revised Exhibit A for the new series of Bonds. (d) Except as otherwise provided in subsection (c)of this Section, the City may amend this Undertaking and any provision of this Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the City with its written opinion that the undertaking of the City contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Undertaking; provided, however, that this Undertaking, including Schedule 1 hereto, may be amended for the purpose of (a) extending the coverage of this Undertaking to any additional series of Bonds, or (b) removing reference to any series of Bonds for which the City's reporting obligations have terminated in accordance with Section 4 hereof, each without the provision of a written opinion as otherwise required by this paragraph. (e) If a provision of this Undertaking is amended or waived with respect to a series of Bonds pursuant to subsection (d) of this Section, the City shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2)the Annual Report for the year in which the change is made should present a comparison(in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Undertaking shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Undertaking. If the City chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by this Undertaking, the City shall have no obligation under this Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the City fails to comply with any provision of this Undertaking, with respect to a series of Bonds, any Participating Underwriter or any Beneficial Owner of the Bonds of such series may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the City to comply with its obligations under this Undertaking. A default under this Undertaking shall not be deemed an event of default under the Ordinance or the Bonds, and the sole remedy under this Undertaking if there is any failure of the City to comply with this Undertaking shall be an action to compel performance and no person or entity shall be entitled to recover monetary damages. Section 9. Beneficiaries. This Undertaking shall inure solely to the benefit of the City, each Participating Underwriter, and Beneficial Owners from time to time with respect to a series of Bonds, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Undertaking, the Ordinance or the Bonds shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Undertaking shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim,action or suit in the appropriate court of law. Section 12. Governing Law. This Undertaking shall be governed by and construed in accordance with the laws of the State of Missouri. IN WITNESS WHEREOF, the City has caused this Undertaking to be executed as of the day and year first above written. CITY OF JEFFERSON,MISSOURI (SEAL) By: Name: Carrie Tergin Title: Mayor ATTEST By: Name: Phyllis Powell Title: City Clerk SCHEDULE 1 THE BONDS SERIES 2010A BONDS Issuer City of Jefferson,Missouri Issue Name Sewerage System Revenue Bonds, Series 2010A Obligated Person City of Jefferson,Missouri Date of Issuance August 5, 2010 Prior Undertaking Continuing Disclosure Undertaking(August 5, 2010) SERIES 2010B BONDS Issuer City of Jefferson,Missouri Issue Name Sewerage System Revenue Bonds, Series 2010B Obligated Person City of Jefferson,Missouri Date of Issuance August 5,2010 Prior Undertaking Continuing Disclosure Undertaking(August 5,2010) SERIES 2014 BONDS Issuer City of Jefferson,Missouri Issue Name Sewerage System Revenue Bonds, Series 2014 Obligated Person City of Jefferson,Missouri Date of Issuance May 15,2014 Prior Undertaking Continuing Disclosure Undertaking(May 15,2014) SERIES 2016 BONDS Issuer City of Jefferson, Missouri Issue Name Sewerage System Revenue Bonds, Series 2016 Obligated Person City of Jefferson,Missouri Date of Issuance June ,2016 EXHIBIT A FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The Operating Data in the sections and tables contained in the most recent Official Statement (with such modifications to the formatting and general presentation thereof as deemed appropriate by the City)generally described as follows: A. All of the tables under"FINANCIAL INFORMATION." B. The tables under"HISTORY AND OPERATION OF THE SYSTEM." C. The information contained in the table "Historical Debt Service Coverage" under "FINANCIAL INFORMATION CONCERNING THE SYSTEM" for the most recently ended fiscal year. EXHIBIT B ADOPTION AGREEMENT relating to OMNIBUS CONTINUING DISCLOSURE UNDERTAKING This Adoption Agreement (the "Adoption Agreement") dated as of , 20_, relating to that certain Omnibus Continuing Disclosure Undertaking dated as of June _, 2016, as supplemented and amended to date(the "Disclosure Undertaking"),is executed and delivered by the City of Jefferson, Missouri (the "City"). Capitalized terms not otherwise defined in this Adoption Agreement have the meanings given those terms in the Disclosure Undertaking. WHEREAS,the Disclosure Undertaking was executed and delivered by the City for the benefit of the Beneficial Owners of the outstanding Bonds (the "Prior Bonds")with respect to which the City is an obligated person within the meaning of Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Rule") and governs the continuing disclosure obligations of the City with respect to all future Bonds with respect to which the City is an obligated person within the meaning of the Rule after the date of the Disclosure Undertaking; WHEREAS,the City has determined to issue its [Type of Bonds], Series 20 in the aggregate principal amount of $ (the "Series 20_ Bonds") [on a parity with the Prior Bonds], which Series 20_ Bonds have been offered pursuant to an Official Statement dated 20 ; and WHEREAS,the City has determined that, in order to assist the underwriter[s] of the Series 20_ Bonds in complying with the Rule, it will reaffirm the applicability of the Disclosure Undertaking to the Series 20_Bonds in all respects through this Adoption Agreement. NOW,THEREFORE,the City covenants and agrees for the benefit of the Beneficial Owners of the Series 20 Bonds as follows: Section 1. Affirmation. The applicability of the Disclosure Undertaking to the Series 20_ Bonds is hereby affirmed in all respects. THIS ADOPTION AGREEMENT is entered into by the City as of the day and year first above written. CITY OF JEFFERSON,MISSOURI By: Name: Title: B-2 EXHIBIT C TO ORDINANCE FORM OF CERTIFICATE OF FINAL TERMS CITY OF JEFFERSON,MISSOURI SEWERAGE SYSTEM REVENUE BONDS SERIES 2016 June 6,2016] CERTIFICATE OF FINAL TERMS City of Jefferson,Missouri Jefferson City,Missouri Ladies and Gentlemen: The undersigned, (the"Purchaser"),hereby offers to purchase from the City of Jefferson, Missouri (the "City") $ aggregate principal amount of City of Jefferson, Missouri Sewerage System Revenue Bonds, Series 2016 (the"Bonds")to be issued by the City under and pursuant to an ordinance adopted by the City Council of the City on June 6, 2016 (the "Bond Ordinance"). Upon the terms and conditions of the Official Bid Form, the Notice of Bond Sale and the Preliminary Official Statement, all of which are made a part hereof, the Purchaser hereby agrees to purchase from the City, and the City hereby agrees to sell to the Purchaser, all(but not less than all)of the Bonds at a purchase price of$ (the principal amount of the Bonds plus [net] original issue premium of $ , less an underwriter's discount of $ ). The Bonds shall mature, shall bear interest and shall be subject to redemption as set forth in Schedule I hereto. Very truly yours, By: Title: C-1 Accepted and agreed to as of the date first above written: CITY OF JEFFERSON,MISSOURI (SEAL) By: Name: Carrie Tergin Title: Mayor ATTEST By: Name: Phyllis Powell Title: City Clerk C-2 SCHEDULE I TO CERTIFICATE OF FINAL TERMS 1. Maturity Schedule and Interest Rates for the Bonds: Stated Maturity Principal Annual Rate July 1 Amount of Interest Price Yield 2023 $ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2. Optional Redemption: At the option of the City, the Bonds or portions thereof maturing on July 1, 20_, and thereafter may be called for redemption and payment prior to the Stated Maturity thereof on July 1, 20_, and thereafter in whole or in part at any time in such amounts for each Stated Maturity as shall be determined by the City at the Redemption Price of 100% of the principal amount thereof,plus accrued interest thereon to the Redemption Date. 3. True interest cost on the Bonds calculated pursuant to Section 108.170(6),RSMo 4. Net proceeds available for Improvements• $ C-3 EXHIBIT D TO ORDINANCE FORM OF NOTICE OF BOND SALE D-1 NOTICE OF BOND SALE $9,775,000' CITY OF JEFFERSON,MISSOURI SEWERAGE SYSTEM REVENUE BONDS SERIES 2016 Bids. Electronic bids for the purchase of$9,775,000. principal amount of Sewerage System Revenue Bonds, Series 2016(the"Bonds"),of the City of Jefferson,Missouri(the"City"),herein described,will be received until 11:00 a.m.,Central Daylight Time,on JUNE 6,2016 All proposals must be submitted electronically through PARITY® as further described herein. No oral or auction bids will be considered. All bids will be read and evaluated at that time and place, and the award of the Bonds will be made by the Mayor of the City no later than 8:00 p.m.on June 6,2016. Pre-Bid Revisions. The City reserves the right to issue a Supplemental Notice of Bond Sale not later than 24 hours prior to the sale date through PARITY® and i-Deal Prospectus ("Supplemental Notice"). If issued, the Supplemental Notice may modify such terms of this Notice of Bond Sale as the City determines, including the date and time of the sale. Any such modifications will supersede the terms as set forth herein. Adjustment of Issue Size. In order to properly structure the transaction,the City reserves the right,on the date of the award of the Bonds to the successful bidder, in the City's sole discretion, to increase or decrease the principal amount of any maturity by not more than 10%of the principal amount of such maturity(provided that the total of the aggregate principal amount of the Bonds plus any reoffering premium shall not be greater than $10,000,000)depending on the interest rates bid and the bid premium or discount,if any. The successful bidder may not withdraw its bid or change the interest rates bid as a result of any changes made to the principal amount as described herein. In the event there is an increase or decrease in the final principal amount per maturity as described above,the successful bidder will be notified on the sale date by telephone,fax or electronic mail of such increases or decreases promptly after the sale and prior to the award of the bid by the City. In the event that the maturity amounts of the Bonds are adjusted, the purchase price will be adjusted to ensure that the percentage net compensation(i.e.,the percentage resulting from dividing(i)the aggregate difference between the offering price of the Bonds to the public and the price to be paid to the City by (ii) the principal amount of the Bonds) remains constant. Authority,Purpose and Security. The Bonds are being issued pursuant to the constitution and laws of the State of Missouri for the purpose of providing funds to extend and improve the City's sewerage system. The Bonds are special obligations of the City, payable solely from the net income and revenues derived by the City from the operation of its sewerage system after payment of costs of operation and maintenance. The Bonds are more particularly described in the Preliminary Official Statement dated the date hereof, available from the City's financial advisor,Piper Jaffray&Co.(the"Financial Advisor"). This Notice of Bond Sale contains certain information for quick reference only. It is not, and is not intended to be,a summary of the Bonds. Each bidder is required to read the entire Preliminary Official Statement to obtain information essential to making an informed investment decision. Preliminary,subject to change. Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of$5,000 or any integral multiple thereof. The Bonds will be dated their date of delivery, and will become due in principal installments on July 1 in the years,subject to adjustment as provided herein,as follows: Principal Principal Year Amount* Year Amount" 2023 $585,000 2030 $700,000 2024 595,000 2031 720,000 2025 610,000 2032 740,000 2026 625,000 2033 765,000 2027 645,000 2034 790,000 2028 660,000 2035 815,000 2029 680,000 2036 845,000 The Bonds will bear interest from the date thereof at rates to be determined when the Bonds are sold as hereinafter provided,which interest will be payable semiannually on January 1 and July 1 in each year,beginning on January 1,2017. Place of Payment. Principal will be payable upon presentation and surrender of the Bonds by the registered owners thereof at the payment office of UMB Bank,N.A., St.Louis,Missouri,Paying Agent. Interest shall be paid to the registered owners of the Bonds as shown on the bond register at the close of business on the record date for such interest(a)by check or draft mailed by the Paying Agent to the address of such registered owners shown on the bond register, (b)at such other address as is furnished to the Paying Agent in writing by any registered owner or(c)in the case of an interest payment to any registered owner of$500,000 or more in aggregate principal amount of Bonds,by electronic transfer to such registered owner upon written notice given to the Paying Agent by such registered owner, not less than 5 days prior to the record date for such interest,containing the electronic transfer instructions including the bank(which shall be in the continental United States),ABA routing number and account name and account number to which such registered owner wishes to have such transfer directed. Book-Entry Only System. The Bonds will initially be registered in the name of Cede&Co.,as nominee of The Depository Trust Company,New York,New York,to which payments of principal of and interest on the Bonds will be made. Individual purchases of Bonds will be made in book-entry form only. Purchasers will not receive certificates representing their interest in Bonds purchased. It shall be the obligation of the successful bidder to furnish to DTC an underwriters' questionnaire. It shall be the obligation of the successful bidder to qualify the Bonds, if such qualification is necessary,in the jurisdictions in which it intends to reoffer the Bonds. Optional Redemption of Bonds Prior to Maturity. At the option of the City,Bonds may be called for redemption and payment prior to maturity on July 1, 2025 and thereafter, in whole or in part at any time, at the redemption price of 100% of the principal amount thereof, plus accrued interest thereon to the redemption date. Bonds of less than a single maturity will be selected for redemption by the City in multiples of$5,000 principal amount. Election to Specify Term Bonds. A bidder may elect to have all or a portion of the Bonds scheduled to mature consecutively issued as one or more term bonds scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedule of serial maturities set forth above, and subject to the bidder making such an election by including such information in the electronic bid submitted via PARITY®. Not less than all the Bonds of a single maturity may be converted to term bonds. Conditions of Bids. Proposals will be received on all of the Bonds bearing such rate or rates of interest as may be specified by the bidders,subject to the following conditions: The same rate shall apply to all Bonds of the same maturity. Each interest rate specified shall be a multiple of 1/20 or 1/100 of 1%. No supplemental interest payments will be authorized. The Bonds shall be sold by the City for a price not less than 100%or more than 107% *Preliminary,subject to change. -2- of the total principal amount thereof and no single maturity of the Bonds shall be sold at a premium of more than 115%,priced to the call date. Each bid shall specify the total interest cost during the life of the Bonds on the basis of such bid,the premium or discount, if any,offered by the bidder,and the net interest cost and the true interest cost on the basis of such bid. Each bidder agrees that, if it is awarded the Bonds, it will provide to the City the certification as to initial offering prices described under the caption "Certification as to Offering Prices" in this Notice of Bond Sale. Basis of Award. The Bonds will be awarded to the bidder whose bid will result in the lowest"true interest cost"("TIC"),determined as follows:the TIC is the discount rate(expressed as a per-annum percentage rate)which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds,from the scheduled payment dates back to the dated date of the Bonds, produces an amount equal to the price bid, including premium or discount, if any, but excluding any interest accrued to the date of delivery. Payments of principal and interest on the Bonds shall be based on the principal amounts set forth in this Notice of Bond Sale and the interest rates specified by each bidder. Present value shall be computed on the basis of semiannual compounding and a 360- day year of twelve 30-day months. No bidder shall be awarded the Bonds unless its bid shall be in compliance with the other terms and conditions of this Notice of Bond Sale. In the event that two or more bidders offer bids at the same lowest TIC,the City shall determine which bid, if any, shall be accepted, and its determination shall be final. Bidders are requested to supply an estimate of the TIC for the Bonds on the Bid Form described in this Notice of Bond Sale, computed as specified herein on the basis of their respective bids, which shall be considered as informative only and not binding on either the bidder or the City. In the event the TIC specified on the Official Bid Form does not correspond to the interest rates specified,the interest rates specified will govern and the TIC will be adjusted accordingly. The City reserves the right to waive irregularities and to reject any or all bids. Legal Opinion. The Bonds will be sold subject to the approving legal opinion of Gilmore &Bell, P.C., Bond Counsel,which opinion will be furnished and paid for by the City and printed on the Bonds and delivered to the successful bidder when the Bonds are delivered. Said opinions will also include the opinion of Bond Counsel relating to (i) the exclusion of the interest on the Bonds from gross income for federal and Missouri income tax purposes and (ii) the status of the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code(the"Code"). Reference is made to the Preliminary Official Statement for further discussion of federal and Missouri income tax matters relating to the interest on the Bonds. Certification as to Offering Prices. To provide the City with information necessary for compliance with Section 148 of the Code,the successful bidder will be required to complete,execute and deliver to the City prior to the delivery of the Bonds, a certificate regarding the "issue price" of the Bonds (as defined in Section 148 of the Code). For Bonds reoffered for sale, this certificate is intended to reflect the initial offering prices (excluding accrued interest and expressed as dollar prices) at which a substantial amount (i.e., 10% or more) of the Bonds of each maturity have been orare expected to be sold to the public. Prior to delivery of the Bonds, the successful bidder will execute and deliver to the City a written certification (the "Issue Price Certificate") containing the following representations(1)the initial offering price and interest rate for each maturity of the Bonds; (2)that all of the Bonds of each maturity were offered to the public in a bona fide public offering at the initial offering prices on the date the successful bidder's bid was accepted(the "Sale Date"), and(3)on the Sale Date the successful bidder reasonably expected that at least 10%of each maturity of the Bonds would be sold to the public at prices not higher than the initial offering prices. For purposes of the preceding sentence "public" means persons other than bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers. In the alternative, for Bonds not reoffered for sale, such certificate may instead provide that the successful bidder has purchased the Bonds for its own account in a capacity other than as an underwriter or wholesaler, and currently has no intent to reoffer the Bonds for sale. At the request of the City,the successful bidder will provide information explaining the factual basis for the successful bidder's Issue Price Certificate. This agreement by the successful bidder to provide such information will continue to apply after the issue date of the Bonds if(1) the City requests the information in connection with an audit or inquiry by the Internal Revenue Service or the Securities and Exchange Commission or(2)the information is required to be retained by the City pursuant to future regulation or similar guidance from the Internal Revenue Service,the Securities and Exchange Commission or other federal or state regulatory authority. -3- In addition,the successful bidder shall provide such issue prices to the City and its Financial Advisor no later than 12:00 p.m. on June 6,2016. Certificate of Final Terms. Prior to the delivery of the Bonds,the successful bidder will be required to execute and enter into with the City,a Certificate of Final Terms setting out the final terms of the Bonds, including the principal amounts,interest rates and pricing per maturity and the redemption provisions. Delivery and Payment. The City will deliver the Bonds, properly prepared, executed and registered, without cost to the successful bidder on or about June 20,2016 in book-entry form only through the facilities of The Depository Trust Company in New York,New York. The successful bidder will also be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Bonds and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Bonds affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Bonds shall be made in federal reserve funds,immediately available for use by the City. Good Faith Deposit. The successful bidder(the"Purchaser") is required to submit a good faith deposit in the amount of$200,000 (the "Deposit") to the City in the form of an electronic transfer of federal reserve funds, immediately available for use by the City, as instructed by the City or its Financial Advisor, no later than 12:00 P.M.,Central Time,on the day on which the proposals are received. If the Deposit is not received by such time,the City may abandon its plan to award the Bonds to such Purchaser, and contact the bidder with the next lowest TIC and offer said bidder the opportunity to become the Purchaser. The Deposit of the Purchaser shall constitute a good faith deposit and shall be retained by the City to insure performance of the requirements of the sale by the Purchaser. In the event the Purchaser shall fail to comply with the terms of its bid, the Deposit will be forfeited as full and complete liquidated damages. Upon delivery of the Bonds,the Deposit will be applied to the purchase price of the Bonds or shall be returned to the Purchaser,but no interest shall be allowed thereon. If a bid is accepted but the City fails to deliver the Bonds to the bidder in accordance with the terms and conditions of this Notice of Bond Sale,the Deposit shall be returned to the Purchaser. Bond Ratings. Standard& Poor's Ratings Services has given the Bonds a rating of "A+" (Stable Outlook)which reflects its evaluation of the investment quality of the Bonds. Such rating reflects only the view of such rating agency, and an explanation of the significance of such rating may be obtained therefrom. There is no assurance that the rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, by said rating agency if, in its judgment,circumstances warrant. Any such downward revisions or withdrawal of the rating may have an adverse effect on the market price of the Bonds. Submission of Bids. Electronic bids via PARITY® must be submitted in accordance with this Notice of Bond Sale. During the electronic bidding,no bidder will see any other bidder's bid or the status of their bid relative to other bids(i.e. whether their bid is a leading bid). Bidders may modify or cancel their bid at any time up to the end of the bidding. If provisions of this Notice of Bond Sale conflict with those of PARITY®,this Notice of Bond Sale shall control. Bids for the Bonds must be received before 11:00 a.m.,Central Daylight Time,on MONDAY, JUNE 6,2016. The City and the Financial Advisor shall not be responsible for any failure, misdirection, delay or error in the means of transmission selected by the bidder. PARITY®. All proposals must be submitted electronically through PARITY®and no other proposals will be considered. Information about the electronic bidding services of PARITY®may be obtained from i-Deal LLC at 1359 Broadway, 2nd Floor,New York,New York 10018, Phone No. (212) 849-5000 and from the following web site: www.newissuehome.i-deal.com. The City shall not be responsible for proper operation of, or have any liability for, any delays, interruptions, or damages caused by use of the PARITY® system. The City is using the PARITY®system as a communication mechanism,and not as the City's agent,to conduct the electronic bidding for the Bonds. The use of the PARITY®system shall be at the bidder's risk and expense, and the City and its agents shall have no liability with respect thereto. The bids must be received as provided herein and by the time specified. The City is not bound by any advice or determination of PARITY®to the effect that any particular bid complies with the terms of this Notice of Bond Sale and the bid specifications. An electronic bid made through the facilities of PARITY®shall be deemed an irrevocable offer to purchase the Bonds on the terms provided in this Notice of Bond Sale,arid shall be binding upon the bidder as if made by a signed,sealed bid delivered to the City. -4- Preliminary Official Statement and Official Statement. The City has prepared a Preliminary Official Statement, "deemed final" as of its date by the City except for the omission of certain information as provided in Securities and Exchange Commission Rule 15c2-12,copies of which may be obtained from the Financial Advisor as provided herein. Upon the sale of the Bonds, the City will adopt the final Official Statement and will furnish the Purchaser with an electronic copy of the final Official Statement within seven business days of the acceptance of the Purchaser's proposal in order to comply with Rule 15c2-12(b)(4)of the Securities and Exchange Commission and Rule G-32 of the Municipal Securities Rulemaking Board. The City's acceptance of the successful bidder's proposal for the purchase of the Bonds shall constitute a contract between the City and the Purchaser for purposes of said Rules. Paper copies of the Official Statement may be ordered by the Purchaser at its expense. Continuing Disclosure. The City covenants and agrees to enter into a continuing disclosure undertaking to provide ongoing disclosure about the City,for the benefit of the bondholders on or before the date of delivery of the Bonds as required by Section (b)(5)(i) of Rule 15c2-12 of the Securities and Exchange Commission, which continuing disclosure undertaking shall be in the form as may be agreed to in writing by the Purchaser. Except as disclosed in the Preliminary Official Statement,the City is in compliance with each undertaking previously entered into by the City pursuant to Rule 15c-2-12. A description of the City's compliance failures are provided in the Preliminary Official Statement. CUSIP Numbers. It is anticipated that CUSIP numbers will be printed on the Bonds and the Purchaser agrees by submitting its bid proposal to pay the cost thereof. In no event will the City, Bond Counsel or the Financial Advisor be responsible for the review of or express any opinion that the CUSIP numbers are correct. Incorrect CUSIP numbers on the Bonds shall not be cause for the Purchaser to refuse to accept delivery of the Bonds. Additional Information. Additional information regarding the Bonds may be obtained from the Financial Advisor,Piper Jaffray&Co., 11635 Rosewood Street,Leawood,Kansas,66211,Attention: Jack Dillingham(913) 345-3371. DATED this 17th day of May,2016. CITY OF JEFFERSON,MISSOURI By: /s/ Carrie Terpin Mayor ATTEST: By: /s/ Phyllis Powell City Clerk -5-