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Home My Public Portal About05919 ORDINANCE NO. 5919 OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT ADOPTED MARCH 13. 1985 $8,600,000 ADJUSTABLE RATE LIMITED TENDER OPTION CLEAN WATER REVENUE BONDS . SERIES A 1985 INDEX PAGE Title.................................. 1 Recitals............................... 1 ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms......... 4 ARTICLE II AUTHORIZATION OF BONDS Section 201. Security for the Bonds................. 8 Section 202. Description of the Bonds............... 9 Section 203. Method and Place of Payment of Bonds... 12 Section 204. Registration, Transfer and Exchange of Bonds............................. 12 Section 205. Execution, Registration and Delivery of the Bonds......................... 14 Section 206. Mutilated, Lost, Stolen or Destroyed Bonds................................ 15 Section 207. Destruction of Bonds................... 15 Section 208. Temporary Bonds........................ 16 Section 209. Form of Bonds.......................... 16 ARTICLE III REDEMPTION OF BONDS Section 301. Extraordinary Mandatory Redemption..... 16 Section 302. Optional Redemption.................... 17 Section 303. Mandatory Sinking Fund Redemption...... 17 Section 304. Mandatory Redemption Upon a Determination of Taxability.......... 18 Section 305. Notice of Redemption................... 18 Section 306. Selection of Bonds to Be Redeemed...... 18 Prior to Escrow Release Date Section 307. Selection of Bonds to be Redeemed...... 19 From and After Escrow Release Date Section 308. Effect of Call for Redemption.......... 20 Section 309. Redemption Pursuant to Put Option...... 20 -i- PAGE ARTICLE IV LIMITED TENDER OPTION Section 401. Limited Tender Option.................. 20 Section 402. Notice of Owners of Bonds Regarding Adjusted Rate and Limited Tender Option............................... 20 Section 403. Exercise of Limited Tender Option...... 22 Section 404. Funds for Purchase of Bonds............ 23 Section 405. Delivery of Purchased Bonds............ 23 Section 406. Duties of Remarketing Agent with Respect to Purchase of Bonds......... 23 ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS Section 501. Creation of Funds and Accounts......... 24 Section 502. Administration of Funds and Accounts... 25 ARTICLE VI APPLICATION OF BOND PROCEEDS Section 601. Disposition of Bond Proceeds........... 25 Section 602. Application of Monies in the Escrow Fund.......................... 25 Section 603. Application of Monies in the Construction Fund.................... 25 Section 604. Withdrawals from Construction Fund..... 25 Section 605. Surplus in Construction Fund........... 26 ARTICLE VII APPLICATION OF REVENUES Section 701. Revenue Fund........................... 26 Section 702. Application of Monies in Funds and Accounts............................. 26 Section 703. Deficiency of Payments into Funds or Accounts............................. 29 Section 704. Transfer of Funds to Paying Agent and Bond Registrar................... 30 -ii- PAGE ARTICLE VIII DEPOSIT AND INVESTMENT OF FUNDS Section 801. Deposits of Monies..................... 30 Section 802. Investment of Funds.................... 30 Section 803. Arbitrage Covenant..................... 31 ARTICLE IX PARTICULAR COVENANTS OF THE DISTRICT Section 901. Efficient and Economical Operation..... 31 Section 902. Rate Covenant.......................... 31 Section 903. Reasonable Charges for all Services.... 32 Section 904. Restrictions on Mortgage or Sale of System............................... 32 Section 905. Insurance.............................. 32 Section 906. Books, Records and Accounts............ 33 Section 907. Annual Budget.......................... 33 Section 908. Annual Audit........................... 33 Section 909. Owners Right of Inspection............. 34 Section 910. Performance of Duties........ ......... 35 ARTICLE X ADDITIONAL BONDS Section 1001. Prior Lien Bonds....................... 35 Section 1002. Parity Lien Bonds...................... 35 Section 1003. Junior Lien Bonds...................... 36 Section 1004. Refunding Bonds........................ 37 ARTICLE XI DEFAULT AND REMEDIES Section 1101. Acceleration of Maturity in Event of Default.............................. 37 Section 1102. Remedies............................... 38 Section 1103. Limitation on Rights of Bondholders.... 38 Section 1104. Remedies Cumulative.................... 38 Section 1105. No Obligation to Levy Taxes............ 39 -iii- PAGE ARTICLE XII BOND REGISTRAR: REMARKETING AGENT: AND INDEXING AGENT Section 1201. Designation of Paying Agent and Bond Registrar....................... 39 Section 1202. Successor Paying Agent and Bond Agent.. 39 Section 1203. Designation of Remarketing Agent....... 41 Section 1204. Successor Remarketing Agent............ 41 Section 1205. Indexing Agent......................... 42 ARTICLE XIII DEFEASANCE Section 1301. Defeasance............................. 43 ARTICLE XIV AMENDMENTS Section 1401. Amendments............................. 43 ARTICLE XV MISCELLANEOUS pROVISIONS Section 1501. Severability........................... 44 Section 1502. Governing Law.......................... 45 Section 1503. Effective Date......................... 45 Passage................................ 45 Signature and Seals.................... 45 -iv- ORDINANCE NO. 5919 AN ORDINANCE AUTHORIZING THE ISSUANCE OF $8,600,000 PRINCIPAL AMOUNT OF ADJUSTABLE RATE LIMITED TENDER OPTION CLEAN WATER REVENUE BONDS, SERIES A 1985, OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT, FOR THE PURPOSE OF PAYING THE COST OF EXTENDING AND IMPROVING THE SEWERAGE SYSTEM OF THE DISTRICT; PRESCRIBING THE FORM AND DETAILS OF SAID REVENUE BONDS AND THE COVENANTS AND AGREEMENTS MADE BY THE DISTRICT TO FACILITATE AND PROTECT THE PAYMENT THEREOF; AND PROVIDING FOR THE COLLECTION, SEGREGATION AND APPLICATION OF THE REVENUES OF THE SEWERAGE SYSTEM OF THE DISTRICT FOR THE PURPOSE OF PAYING THE COST OF OPERATION AND MAINTENANCE OF SAID SYSTEM, PAYING THE PRINCIPAL OF AND INTEREST ON SAID REVENUE BONDS, AND PROVIDING REASONABLE AND ADEQUATE RESERVE FUNDS. WHEREAS, The Metropolitan St. Louis Sewer District, a body corporate, a municipal corporation and a political subdivision of the State of Missouri (herein called the "District"), now owns and operates a revenue producing sewerage system serving the District and its inhabitants; and WHEREAS, the District is subject to the provisions of the Federal Water Pollution Control Act, as amended, 33 U.S.C. 466 et seq., commonly referred to as the Clean Water Act (the "Clean Water Act") the stated objective of which is to restore and maintain the chemical, physical, and biological integrity of the nation's waters; and WHEREAS, the District desires to make extensions and improvements to its sewerage system to bring the District into compliance with the Clean Water Act; and WHEREAS, the District is authorized under the provisions of Article VI, Section 30 of the Missouri Constitution and the Plan of the District adopted by the voters within the District for its government (the "Plan"), to issue and sell revenue bonds for the purpose of paying all or part of the cost of acquiring, constructing, improving or extending sewer or drainage facilities (collectively the "sewerage system" or "system") of the District, provided that the cost of operation and maintenance thereof and the principal of and interest on such revenue bonds shall be payable solely from the revenues derived by the District from the operation of such system; and 2 WHEREAS, pursuant to such authority, a special election was held in the District on Tuesday, August 7, 1984, for the purpose of submitting to the qualified electors of the District the question whether to issue the Clean Water Revenue Bonds of the District in the amount of $60,000,000 for the purpose of extending and improving the sewerage system of the District, the cost of operation and maintenance of said system and the principal of and interest on said revenue bonds to be payable solely from the revenues derived by the District from the operation of its sewerage system, including all future extensions and improvements thereto; and WHEREAS, said special election was held in the District on Tuesday, August 7, 1984, pursuant to the Plan of the District and the Constitution and laws of the State of Missouri and it was found and determined that more than four-sevenths of the qualified electors of the District voting on the question had voted in favor of the issuance of said Clean Water Revenue Bonds for the purpose aforesaid, the vote on said question having been 154,168 votes for said question to 81,764 votes against said question; and WHEREAS, the Board of Trustees of the District has caused plans for a five-year capital improvement program to be prepared to bring the District into compliance with the Clean Water Act (the "Clean Water Capital Improvement Program"); and WHEREAS, the estimated cost of the first phase of the Clean Water Capital Improvement Program is $99,350,000. to be funded $45,551,000 from federal grants, $17,922,000 from state grants, and $35,877,000 from funds to be provided by the District; and WHEREAS, none of the bonds so authorized by the voters of the District have heretofore been issued, and it is hereby found and determined that it is necessary that the District issue and deliver forthwith its Adjustable Rate Limited Tender Option Clean Water Revenue Bonds in the principal amount of $8,600,000 for the purpose of paying a portion of the cost of said Clean Water Capital Improvement Program; and WHEREAS, the District does not have Outstanding any other bonds or other obligations payable from the revenues derived by the District from the operation of its sewerage system, with the exception of a series of Sewerage System Revenue Bonds, Series 1962, of the Coldwater Creek Trunk Subdistrict of The Metropolitan St. Louis Sewer District, dated June 1, 1962 (the "1962 Bonds"), authorized by Ordinance No. 764 of the District adopted on May 29, 1962 (the "1962 Ordinance"), said Outstanding bonds due on June 1 in the years 1964 to 1992, inclusive, and a series of Sewerage System Revenue Bonds, Series 1963, of the Coldwater Creek Trunk Subdistrict of The Metropolitan St. Louis Sewer District, dated August 1, 1963 (the "1963 Bonds"), authorized by Ordinance No. 1029 of the District adopted on August 28, 1963 (the "1963 Ordinance"), said Outstanding bonds due on June 1 in the years 1966 to 1992, 3 inclusive, the 1962 Bonds and the 1963 Bonds remain Outstanding in the principal amount of $3,695,000; and a series of Sewer Revenue Bonds of the Fee Fee Trunk Sewer Subdistrict of The Metropolitan St. Louis Sewer District, dated December 1, 1977 (the "1977 Bonds"), authorized by Ordinance No. 3388 of the District adopted on December 5, 1977 (the "1977 Ordinance"), which bonds remain Outstanding in the principal amount of $8,726.000, said Outstanding bonds due on December 1 in the years 1980 and 2002, inclusive, (collectively the "Outstanding Subdistrict Revenue Bonds"); and WHEREAS, under the provisions of the 1962 Ordinance and the 1963 Ordinance, the 1962 Bonds and the 1963 Bonds are secured by a pledge of revenues of the sewerage system of the Coldwater Creek Trunk Subdistrict of The Metropolitan St. Louis Sewer District, and the District has covenanted that no additional Bonds shall be issued or obligations incurred by said subdistrict which are payable in whole or in part from or chargeable to the revenues derived or to be derived from the operation of said sewerage system of the subdistrict (except obligations incurred in the operation and maintenance thereof), unless such obligations are in all respects junior and subordinate to the 1962 Bonds and the 1963 Bonds; and WHEREAS, under the provisions of the 1977 Ordinance, the 1977 Bonds are secured by a pledge of revenues of the sewerage system of the Fee Fee Trunk Sewer Subdistrict of The Metropolitan St. Louis Sewer District, and the District has covenanted that no additional Bonds shall be issued or obligations incurred by said subdistrict which are payable in whole or in part from or chargeable to the revenues derived or to be derived from the operation of said sewerage system of the subdistrict (except obligations incurred in the operation and maintenance thereof), unless such obligations are in all respects junior and subordinate to the 1977 Bonds; and WHEREAS, under the provisions of the 1962 Ordinance, the 1963 Ordinance, and the 1977 Ordinance, the District may issue additional bonds payable out of the revenues derived from the operation of the sewerage system of the District which are junior and subordinate to the 1962 Bonds, the 1963 Bonds, and the 1977 Bonds; NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF TRUSTEES OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In 4 addition to words and terms defined elsewhere in this Ordinance, the following words and terms as used in this Ordinance shall have the following meanings. unless some other meaning is plainly intended: "Adjusted Rate" means the interest rate on the Bonds as said rate is determined and adjusted in accordance with Section 203 hereof. "Adjustment Period" means such period beginning on the Interest Adjustment Date and ending on the day preceding the next succeeding Interest Adjustment Date. "Authorized Denominations" means $100,000 or integral multiples thereof prior to the Escrow Release Date, and thereafter $5,000 or integral multiples thereof. "Bond Reserve Account" means the Reserve Account for Adjustable Rate Limited Tender Option Clean Water Revenue Bonds, Series A 1985, created by Section 501 of this Ordinance. "Bond Reserve Requirement" means the sum of One Million Dollars ($1,000,000). "Bonds" means the Adjustable Rate Limited Tender Option Clean Water Revenue Bonds, Series A 1985, of the District, authorized and issued pursuant to this Ordinance. "Business Day" means a day on which the Paying Agent and Bond Registrar and Remarketing Agent and banks located in New York City and St. Louis, Missouri, are open for the purpose of conducting a commercial banking business. "Component Issues" means municipal revenue bonds and other limited and special obligation bonds, the interest on which is exempt from federal income taxation, having a term approximately equal to the time remaining until the next succeeding Interest Adjustment Date and being of the same quality as that of the Bonds; provided, that if the bonds are not rated at the time of selection of the Component Issues, the Component Issues shall consist of bonds rated "Baa" or be of the same quality. "Construction Fund" means the Sewer System Construction Fund created by Section 501 of this Ordinance. "Consulting Engineer" means an independent engineer or engineering firm, having a national reputation for skills and experience in the construction and operation of public utilities, at the time employed by the District for the purpose of carrying out the duties imposed on the Consulting Engineer by this Ordinance 5 in conjunction with the construction project. "Delivery Office" of the Remarketing Agent means One North Jefferson Avenue, St. Louis, Missouri 63101, Attention: Daniel J. Schaub, Vice-President, or such other address as may be designated in writing to the District, and the Paying Agent and Bond Registrar. "Depreciation and Replacement Account" means the Sewerage System Depreciation and Replacement Account created by Section 501 of this Ordinance. "Depreciation and Replacement Requirement" means the sum of One Million Dollars ($1,000,000). "Determination of Taxability" means the final adoption of legislation or regulations, or the issuance of a statutory notice of deficiency or a ruling by the Internal Revenue Service, or a final decision of a court of competent jurisdiction which holds in effect that the interest payable on any Bond is not excludable from the gross income of the Owner of any Bond for Federal income tax purposes; provided, however, no such Determination of Taxability shall be deemed to have occurred until the expiration or waiver of all periods for appeal; and, provided further, that in the event the Determination of Taxability is contested by the District in the name of the Owner of any Bond, then all final decisions regarding such contest shall be made by the Owner of any Bond and shall be binding on the District, provided that if the Owner of any Bond refuses to permit the District to contest the Determination of Taxability at any time then the interest on the Bonds shall not be deemed to be taxable within the meaning of this paragraph. "District" means The Metropolitan St. Louis Sewer District, and any successors or assigns. "Escrow Agent" means Mercantile Trust Company National Association, St. Louis, Missouri, and any successor thereto as provided in the Escrow Trust Agreement. "Escrow Fund" means the Adjustable Rate Limited Tender Option Clean Water Revenue Bond Escrow Fund created by Section 501 of this Ordinance. "Escrow Release" means the transfer of funds held by the Escrow Agent to the Secretary-Treasurer of the District for deposit into the Construction Fund pursuant to the provisions of Section 7(c) of the Escrow Trust Agreement. "Escrow Release Date" means the date of the Escrow Release. 6 "Escrow Trust Agreement" means the Escrow Trust Agreement dated as of April 1, 1985, between the District and the Escrow Agent as the same may from time to time be amended or supplemented in accordance with the provisions thereof. "Indexing Agent" means the Indexing Agent designated as such pursuant to Section 1206 hereof and any successor thereto appointed and serving in such capacity pursuant to this Ordinance. "Indexing Agreement" mean the Indexing Agreement dated as of April 1, 1985, between the District and the Indexing Agent, as the same may from time to time be amended or supplemented in accordance with the provisions thereof. If a successor Indexing Agent is appointed and serving in such capacity pursuant to this Ordinance, "Indexing Agreement" shall mean such other similar agreement between the District and such successor Indexing Agent. "Interest Adjustment Date" means February 15, 1988, and February 15 of each year thereafter. "Interest Index" means the Interest Index determined in accordance with Section 203 of this Ordinance. "Limited Tender Option" means the option granted to Owners of Bonds to tender Bonds for attempted purchase pursuant to Section 401 hereof. "Net Revenues" means all Revenues of the System less the reasonable expenses of operation, maintenance and repair of such System, but before other payments or charges, plus taxes levied and collected on a District-wide basis for operation, maintenance, and repair of the System and available for such purposes. "Operation and Maintenance Account" means the Sewerage System Operation and Maintenance Account created by Section 501 of this Ordinance. "Ordinance" means this Ordinance as from time to time amended in accordance with the terms hereof. "Outstanding", when used with reference to Bonds, means as of any particular date, all Bonds theretofore authenticated and delivered under the Ordinance, except: (a) Bonds theretofore cancelled by the Paying Agent and Bond Registrar or delivered to the Paying Agent and Bond Registrar for cancellation; (b) Bonds deemed paid in accordance with the provisions of this Ordinance; and 7 (c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursuant to this Ordinance. "Outstanding Subdistrict Revenue Bonds" means the 1962 Bonds, the 1963 Bonds, and the 1977 Bonds as described and defined in the preamble of this Ordinance. "Owner" means the person or persons in whose name or names a Bond shall be registered on the books of the District kept for that purpose in accordance with the provisions of this Ordinance. "Paying Agent and Bond Registrar" means Mercantile Trust Company National Association, St. Louis, Missouri, a national banking association organized under the laws of the United States, and its successors and assigns. "Principal and Interest Account" means the Principal and Interest Account for Adjustable Rate Limited Tender Option Clean Water Revenue Bonds, Series A 1985, created by Section 501 of this Ordinance. "Purchase Price" means an amount equal to 100% of the principal amount of any Bond tendered pursuant to Section 403 hereof. "Record Date" means that day which is the first day of the month of any interest payment date. "Remarketing Agent" means the Remarketing Agent designated as such pursuant to Section 1204 hereof and any successor thereto appointed and serving in such capacity pursuant to this Ordinance. "Principal Office" of the Remarketing Agent means the principal office of the Remarketing Agent designated in the Remarketing Agreement. "Remarketing Agreement" means the Remarketing Agreement dated as of April 1, 1985, between the District and the Remarketing Agent, as the same may from time to time be amended or supplemented in accordance with the provisions thereof. If a successor Remarketing Agent is appointed and serving in such capacity pursuant to this Ordinance, "Remarketing Agreement" shall mean such other similar agreement between the District and such successor Remarketing Agent. "Revenue Fund" means the Sewerage System Revenue Fund created by Section 501 of this Ordinance. 8 "Revenues" means all of the revenues derived and collected by the District from the operation of the System, including the revenues of all extensions and improvements to the System hereafter constructed or acquired by the District, and including all fees and charges collected by the District. "System" or "Sewerage System" means the entire sewerage plant and system owned and operated by the District or its subdistricts for the collection, storage, handling, and treatment of wastewater or stormwater, and combined sewers for the collection, storage, treatment and handling of wastewater and storm water to serve the needs of the District or its subdistricts 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 District or its subdistricts. ARTICLE II AUTHORIZATION OF THE BONDS Section 201. Security for the Bonds. The Bonds shall be special obligations of the District payable solely from, and secured as to the payment of principal and interest by a pledge of the Revenues derived by the District from the operation of the System, including Revenues derived from extensions and improvements to the System hereafter constructed or acquired by the District, and the taxing power of the District 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 District, nor shall they constitute an indebtedness of the District within the meaning of any constitutional, statutory or charter provision, limitation or restriction. The Bonds shall be junior and subordinate, with respect to the payment of principal and interest from the Revenues derived by the District from the operation of its Sewerage System and in all other respects, to the Outstanding Subdistrict Revenue Bonds and, in the event of any default in the payment of either principal of or interest on any of the Outstanding Subdistrict Revenue Bonds, all of the Revenues of the sewerage system of the respective subdistrict, including all extensions and improvements thereto which have been pledged to secure the Outstanding Subdistrict Revenue Bonds, will be applied solely to the payment of the principal of and interest on the Outstanding Subdistrict Revenue Bonds until such default is cured. The Bonds shall not have any priority with respect to the payment of principal or interest from said Revenues or otherwise over any sewerage system revenue bonds of the District hereafter issued in accordance with the provisions of this Ordinance and standing on a parity with the 9 Bonds, nor shall any sewerage system revenue bonds of the District hereafter issued have any priority with respect to the payment of principal or interest from said Revenues or otherwise over the Bonds. Section 202. Description of the Bonds. (A) The Bonds shall consist of fully registered Bonds without coupons, numbered from R-1 consecutively upward in order of issuance, in the denomination of $100,000 or any integral multiple thereof prior to the Escrow Release Date. and thereafter in the denomination of $5000 or an integral multiple thereof (the "Authorized Denominations"). (B) Each Bond shall be dated the date of its authentication and shall bear interest which shall be payable on February 15 and August 15 of each year commencing August 15, 1985, from the interest payment date next preceding the date thereof to which interest has been paid or duly provided for, unless the date thereof is an interest payment date to which interest has been paid or duly provided for, in which case from the date thereof, or unless no interest has been paid or duly provided for on the Bonds, in which case from April 1, 1985, until payment of the principal thereof has been made or duly provided for. Notwithstanding the foregoing, any Bond dated after any Record Date and before the following interest payment date shall bear interest from such interest payment date, provided, however, that if the District shall default in the payment of interest due on such interest payment date, then such Bond shall bear interest from the next preceding interest payment date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, or, if no interest has been paid or duly provided for on the Bonds, from April 1, 1985. The Bonds shall mature on February 15, 2005. (C) Adjusted Rate: (i) The Bonds shall bear interest at the Adjusted Rate. Notwithstanding the provisions of the other subsections of this Section, the Adjusted Rate may never exceed the maximum rate authorized by law, which as of the date hereof is fourteen percent (14%); (ii) From the date of initial issuance and delivery of the Bonds to and including the day preceding the first Interest Adjustment Date, the Bonds shall bear interest at the rate of ten and seven-eighths percent (10 7/8%) per annum. Thereafter, for each Adjustment Period, the Bonds shall bear interest at the rates from time to time described in this subsection (C); 10 (iii) For each Adjustment Period the Adjusted Rate shall be established in the manner hereinafter described. The Indexing Agent shall, on the January 15 next preceding each Interest Adjustment Date or on the next succeeding Business Date if such date is not a Business Day, compute the "Interest Index". The Interest Index shall be expressed as an interest rate per annum, and shall be the arithmetic average of one year yield evaluations at par of securities, of not less than twenty (20) Component Issues, selected by the Indexing Agent. The specific issues included in the Component Issues may be selected by the Indexing Agent in its discretion subject to the provisions of this Ordinance and the Indexing Agreement. The specific issues included in the Component Issues may be changed from time to time by the Indexing Agent in its discretion. The computation of the Interest Index by the Indexing Agent shall be conclusive and binding upon the Owners of the Bonds, the District, the Paying Agent and Bond Registrar and the Remarketing Agent. The Indexing Agent shall give immediate telephonic notice to the Remarketing Agent and the Paying Agent and Bond Registrar of the computed Interest Index, promptly confirmed in writing, by registered mail or telegram to the District, the Paying Agent and Bond Registrar, and the Remarketing Agent; (iv) On each Interest Adjustment Date, the Adjusted Rate for the next succeeding Adjustment Period shall be established as follows: (a) if any Bonds shall have been tendered and delivered to the Remarketing Agent for attempted purchase pursuant to Section 403 of this Ordinance, and if all such Bonds have been sold by the Remarketing Agent pursuant to the Remarketing Agreement, the interest rate borne by all Bonds shall be a rate determined by the Remarketing Agent to be that rate which, if borne by the Bonds, having due regard to prevailing financial market conditions, would be the interest rate necessary, but which would not exceed the interest rate necessary, to enable the Remarketing Agent to sell all of the Bonds so delivered to the Remarketing Agent at 100% of the principal amount thereof; provided, however, that the interest rate so determined shall not be less than ninety percent (90%) nor greater than one hundred twenty percent (120%), inclusive, of the Interest Index, but in no event shall the Adjusted Rate exceed the maximum rate authorized by law, which as of the date hereof is fourteen percent (14%) per annum. (b) If any Bonds have been tendered and delivered to the Remarketing Agent for attempted purchase pursuant to Section 403 of this Ordinance, and if any of such Bonds shall not have been sold by the Remarketing Agent pursuant to the Remarketing Agreement, the interest rate 11 borne by all Bonds shall be equal to a percentage per annum equal to one hundred twenty percent (120%) of the Interest Index, but in no event shall the Adjusted Rate exceed the maximum rate authorized by law, which as of the date hereof is fourteen percent (14%) per annum. (c) If no Bonds shall have been tendered and delivered to the Remarketing Agent for purchase pursuant to the provisions of Section 403 of this Ordinance, the interest rate borne by all Bonds shall be the Interest Index, but in no event to exceed the maximum rate authorized by law, which as of the date hereof is fourteen percent (14%) per annum. (v) In the event that for any reason the Interest Index or the Adjusted Rate cannot be established as provided in this section for any Adjustment Period, or is held invalid or unenforceable by a court of law, the Adjusted Rate for such Adjustment Period shall be fourteen percent (14%) or such lower rate at which the Remarketing Agent can sell all Bonds tendered and delivered for attempted purchase pursuant to Section 403 of this Ordinance, but in no event shall the Adjusted Rate exceed the maximum rate authorized by law. (vi) The Remarketing Agent shall announce the Adjusted Rate so determined by telephonic notice to the District and the Paying Agent and Bond Registrar on the Interest Adjustment Date, promptly confirmed in writing, by registered mail or telegram to the District and the Paying Agent and Bond Registrar. (D) Interest on the Bonds shall be computed on the basis of a 360-day year of twelve 30-day months. Section 203. Method and Place of Payment of Bonds. The principal of each Bond shall be paid at maturity or upon earlier redemption to the person in whose name such Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of such Bond at the principal office of the Paying Agent and Bond Registrar. The Purchase Price of the Bonds shall be payable in lawful money of the United States of America by the Remarketing Agent to the Owner of Bonds entitled to receive such Purchase Price at its address shown on the registration books maintained by the Paying Agent and Bond Registrar, unless otherwise instructed by such Owner at least 24 hours prior to the time such Purchase Price is due. Payment of interest on the Bonds shall be made to the Owner thereof on the applicable payment date by check mailed by the Paying Agent and Bond Registrar to such Owner at its address as it appears on the registration books maintained by the Paying Agent and Bond Registrar or at such other address as is furnished to the Paying Agent and Bond Registrar in writing by such Owner, or in such other manner as may be mutually acceptable to the Paying Agent and Bond Registrar and the Owner of any Bond. 12 The Paying Agent and Bond Registrar shall keep in its office a record of payment of principal of, redemption premium, if any, and interest on all Bonds. Section 204. Registration, Transfer and Exchange of Bonds. The District covenants that it will, as long as any of the Bonds herein authorized remain Outstanding, cause to be kept at the office of the Paying Agent and Bond Registrar books 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 registration books kept by the Paying Agent and Bond Registrar. Each Bond shall be transferable only upon the registration books maintained by the Paying Agent and Bond Registrar by the registered Owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof at the principal office of the Paying Agent and Bond Registrar together with a written instrument of transfer satisfactory to the Paying Agent and Bond Registrar duly executed by the registered Owner or his duly authorized attorney. Upon the transfer of any such Bond and the payment of any fee, tax, or governmental charge, the Paying Agent and Bond Registrar shall issue in the name of the transferee a new registered Bond or Bonds of the same aggregate principal amount and maturity as the surrendered Bond registered in the name of the transferee, in any denomination herein authorized. Bonds, upon surrender thereof at the principal office of the Paying Agent and Bond Registrar with a written instrument of transfer satisfactory to the Paying Agent and Bond Registrar duly executed by the Owner or his duly authorized attorney, may, at the option of the Owner thereof, and upon payment of any fee, tax or governmental charge required to be paid, be exchanged for an equal aggregate principal amount of Bonds of the same maturity, in any denomination herein authorized. The Paying Agent and Bond Registrar shall not be required to exchange or register a transfer of (a) any Bonds during the 15-day period next preceding the selection of Bonds to be redeemed and thereafter until the date of the mailing of a notice of redemption of Bonds selected for redemption, or (b) any Bonds selected, called or being called for redemption in whole or in part except, in the case of any Bond to be redeemed in part, the portion thereof not so to be redeemed; provided that the foregoing shall not apply to the registration or transfer of any Bond which has been tendered to the Remarketing Agent pursuant to Section 403 hereof, and in any such case, for purposes of selection for redemption, the Bond so tendered and the Bond issued to the transferee thereof pursuant to Section 405 hereof shall be deemed 13 and treated as the same Bond. If any Bond shall be transferred and delivered pursuant to Section 405 hereof after such Bond has been called for redemption, the Remarketing Agent shall deliver to such transferee a copy of the applicable redemption notice, indicating that the Bond delivered to such transferee has previously been called for redemption. The District and the Paying Agent and Bond Registrar may deem and treat the person in whose name any Bond shall be registered as the absolute Owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of redemption price, if any, and interest on said Bond and for all other purposes, and all such payments so made to any such registered Owner or upon his 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 District nor the Paying Agent and Bond Registrar shall be affected by any notice to the contrary, but such registration may be changed as herein provided. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Paying Agent and Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Ordinance. For every such transfer or exchange of Bonds, the Paying Agent and Bond Registrar may make a charge to the Bond Owner sufficient to reimburse the Paying Agent and Bond Registrar for any tax or other governmental charge required to be paid with respect to such exchange or transfer. The fees and charges of the Paying Agent and Bond Registrar for making any transfer or exchange provided for by this Ordinance and the expense of any bond printing necessary to effect the subsequent transfer or exchange of any Bond shall be paid by the District. Section 205. Execution, Registration and Delivery of the Bonds. Each of the Bonds, including any Bond issued in exchange or as substitution for the Bonds initially delivered, shall be signed by the manual or facsimile signature of the Chairman of the Board of Trustees of the District and attested by the manual or facsimile signature of the Secretary-Treasurer of the District, and shall have the corporate seal of the District affixed thereto or imprinted thereon. In case any officer whose signature or facsimile thereof appears on any Bonds shall cease to be such officer before the delivery of such Bonds, such signature or facsimile thereof shall nevertheless be valid and sufficient for all purposes, the same 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 Chairman of the Board of Trustees of the District 14 and the Secretary-Treasurer of the District are hereby authorized and directed to prepare and execute the Bonds as hereinbefore provided. and to deliver the Bonds to the Paying Agent and Bond Registrar for authentication. Upon authentication, the Paying Agent and Bond Registrar shall deliver the Bonds to Mercantile Trust Company National Association, St. Louis, Missouri, representing the original purchasers of the Bonds, upon payment of the purchase price of 100% of the principal amount thereof plus accrued interest thereon to the date of delivery. The Bonds shall have endorsed thereon a certificate of authentication substantially in the form set forth on the form of the Bonds set forth in Exhibit A attached hereto, which shall be manually executed by the Paying Agent and Bond Registrar. No Bond shall be entitled to any security or benefit under this Ordinance or shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Paying Agent and Bond Registrar. Such executed certificate of authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Ordinance. The certificate of authentication on any Bond shall be deemed to have been duly executed if signed by any authorized officer or employee of the Paying Agent and Bond Registrar, but it shall not be necessary that the same officer or employee sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time. Section 206. Mutilated, Lost, Stolen or Destroyed Bonds. In the event any Bond is mutilated, lost, stolen, or destroyed, the Issuer shall execute and the Paying Agent and Bond Registrar shall authenticate a new Bond of like date and denomination as that mutilated, lost, stolen or destroyed, provided that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Issuer or the Paying Agent and Bond Registrar, and in the case of any lost, stolen, or destroyed Bond, there first shall be furnished to the District and the Paying Agent and Bond Registrar evidence of such loss, theft or destruction satisfactory to the District and the Paying Agent and Bond Registrar, together with an indemnity satisfactory to them which indemnity shall, in any event, name the Paying Agent and Bond Registrar as a beneficiary. In the event any such Bond shall have matured, the Paying Agent and Bond Registrar, instead of issuing a duplicate Bond, may pay the same without surrender thereof, making such requirements as it deems fit for its protection, including a lost instrument bond. The District and the Paying Agent and Bond Registrar may charge the Owner of such Bond with their reasonable fees and expenses for such service. In executing a new Bond, the District may rely conclusively upon a representation by the Paying Agent and Bond Registrar that the Paying Agent and Bond Registrar is satisfied with the adequacy of the evidence presented concerning the mutilation, loss, theft or destruction of any Bond. 15 Section 207. Destruction of Bonds. Whenever any Outstanding Bond shall be delivered to the Paying Agent and Bond Registrar for cancellation pursuant to this Ordinance, or for replacement pursuant to Section 207 hereof, such Bond shall be promptly cancelled and cremated or otherwise destroyed by the Bond Registrar, and counterparts of a certificate of destruction shall be furnished by the Paying Agent and Bond Registrar to the District. Section 208. Temporary Bonds. Until Bonds in definitive form are ready for delivery, the District may execute, and upon the request of the District, the Paying Agent and Bond Registrar shall authenticate and deliver, subject to the provisions, limitations and conditions set forth above, one or more Bonds in temporary form, whether printed, typewritten, lithographed or otherwise produced, substantially in the form of the definitive Bonds, with appropriate omissions, variations and insertions, and in authorized denominations. Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the liens and benefits of this Ordinance. Upon presentation and surrender of any Bond or Bonds in temporary form, the District shall, at the request of the Paying Agent and Bond Registrar, execute and deliver to the Paying Agent and Bond Registrar, and the Paying Agent and Bond Registrar shall authenticate and deliver, in exchange therefor, a Bond or Bonds in definitive form. Such exchange shall be made by the Paying Agent and Bond Registrar without making any charge therefor to the Owner of such Bond in temporary form. Notwithstanding the foregoing, Bonds in definitive form may be issued hereunder in typewritten form. Section 209. Form of Bonds. The Bonds and the certificate of authentication to be endorsed thereon shall be in substantially the form set forth in Exhibit A attached hereto, with appropriate variations, omissions and insertions as permitted or required by this Ordinance. ARTICLE III REDEMPTION OF BONDS AND PUT OPTION Section 301. Extraordinary Redemption. (A) In the event of a final determination by a court of competent jurisdiction that the District is without authority to issue the Bonds or fulfill its pledge of Revenues or other covenant under this Ordinance, all of the Bonds then Outstanding shall be called for redemption and payment on the next succeeding Interest Adjustment Date at the principal amount thereof, plus accrued interest thereon to the redemption date. 16 (B) In the event that the monies in the Escrow Fund have not been transferred to the District pursuant to the provisions of the Escrow Trust Agreement by January 26, 1988, all of the Bonds then Outstanding, shall be called for redemption and payment on February 15, 1988, at the principal amount thereof, plus accrued interest thereon to the redemption date; provided, however, the mandatory redemption called for by this subsection may be waived with the written consent of the owners of 100% of the Bonds at the time Outstanding, which consent shall be delivered to the Escrow Agent and the District on or prior to February 1, 1988. (C) In the event that the monies in the Escrow Fund have not been transferred to the District pursuant to the provisions of the Escrow Trust Agreement by January 26, 1989, all of the Bonds then Outstanding shall be called for redemption and payment on February 15, 1989. Section 302. Optional Redemption. At the option of the District, the Bonds, or portions thereof, may be called for redemption and payment prior to maturity (Bonds of less than a single maturity to be selected by lot in multiples of Authorized Denominations by the Paying Agent and Bond Registrar in such equitable manner as it shall designate) in whole at any time or in part on any interest payment date at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon to the redemption date. Section 303. Mandatory Sinking Fund Redemption. The Bonds shall be subject to mandatory redemption and payment prior to maturity at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon, on each February 15, in the years and in the principal amounts set forth below: Year Amount Year Amount 1989 $200,000 1997 $500,000 1990 200,000 1998 500,000 1991 300,000 1999 500,000 1992 300,000 2000 600,000 1993 300,000 2001 700,000 1994 400,000 2002 700,000 1995 400,000 2003 800,000 1996 400,000 2004 900,000 The remaining $900,000 principal amount of the Bonds shall be paid at maturity on February 15, 2005. At the option of the District, to be exercised on or before the fifteenth day next preceding any such redemption date, the principal amount of any Bonds to be redeemed on such date may be reduced by the principal amount of Bonds theretofore redeemed 17 (otherwise than through operation of such mandatory redemption) and cancelled by the Paying Agent and Bond Registrar and not theretofore applied as a credit against any mandatory redemption obligation, and may also be reduced by the principal amount of Bonds theretofore purchased by the District and delivered to the Paying Agent and Bond Registrar for cancellation and not theretofore applied as such a credit, and may also be reduced by monies in the Principal and Interest Account or other monies of the District delivered to the Remarketing Agent for purchase of Bonds tendered to the Remarketing Agent for attempted purchase pursuant to Section 403 of this Ordinance and utilized by the Remarketing Agent for such purchase. Section 304. Mandatory Redemption Upon a Determina- tion Of Taxability. In the event of a Determination of Taxability with respect to any Bonds, all of the Bonds then Outstanding shall be called for redemption and payment on the next succeeding Interest Adjustment Date at the principal amount thereof, plus accrued interest to the redemption date. Section 305. Notice of Redemption. Notice of the call for redemption identifying the Bonds or portions thereof to be redeemed, shall be given by the Paying Agent and Bond Registrar by mailing a copy of the redemption notice by registered or certified mail at least ten (10) days but not more than sixty (60) days prior to the date fixed for redemption to the Owner of each Bond to be redeemed in whole or in part at the address shown on the registration books. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives the notice. The Paying Agent and Bond Registrar shall deliver a copy of any such redemption notice to the Remarketing Agent. Notwithstanding the foregoing provisions of this section, delivery by the Remarketing Agent of a copy of a redemption notice to a transferee of a Bond which has been called for redemption shall be deemed to satisfy the requirements of the first sentence of this section with respect to any such transferee. Section 306. Selection of Bonds to Be Redeemed Prior to Escrow Release Date. Prior to the Escrow Release Date Bonds shall be selected for redemption as follows: (A) Bonds shall be redeemed only in the principal amount of $100,000 or any integral multiple thereof. When less than all of the Outstanding Bonds of any series are to be redeemed and paid prior to maturity, such Bonds shall be selected by the Paying Agent and Bond Registrar by lot in $100,000 units of face value in such equitable manner as the Paying Agent and Bond Registrar may determine. 18 (B) In the case of a partial redemption of bonds by lot when Bonds of denominations greater than $100,000 are then Outstanding, then for all purposes in connection with such redemption each $100,000 of face value shall be treated as though it were a separate Bond of the denomination of $100,000. If it is determined that one or more, but not all, of the $100.000 units of face value represented by any fully registered Bond is selected for redemption, then upon notice of intention to redeem such $100,000 unit or units, the Owner of such fully registered Bond or his attorney or legal representative shall forthwith present and surrender such Bond to the Paying Agent and Bond Registrar (1) for payment of the redemption price (including the premium, if any, and interest to the date fixed for redemption) of the $100,000 unit or units of face value called for redemption, and (2) for exchange without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such fully registered Bond. If the Owner of any such fully registered Bond of a denomination greater than $100,000 shall fail to present such Bond to the Paying Agent and Bond Registrar for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the $100.000 unit or units of face value called for redemption (and to that extent only). Section 307. Selection of Bonds to Be Redeemed From and After the Escrow Release Date. From and after the Escrow Release Date Bonds shall be selected for redemption as follows: (A) Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof. When less than all of the Outstanding Bonds of any series are to be redeemed and paid prior to maturity, such Bonds shall be selected by the Paying Agent and Bond Registrar by lot in $5,000 units of face value in such equitable manner as the Paying Agent and Bond Registrar may determine. (B) In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than $5,000 are then Outstanding, 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 fully registered Bond is selected for redemption, then upon notice of intention to redeem such $5,000 unit or units, the Owner of such fully registered Bond or his attorney or legal representative shall forthwith present and surrender such Bond to the Paying Agent and Bond Registrar (1) for payment of the redemption price (including the premium, if any, and interest to the date fixed for redemption) of the $5.000 unit or units of face value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the 19 aggregate principal amount of the unredeemed portion of the principal amount of such fully registered Bond. If the Owner of any such fully registered Bond of a denomination greater than $5,000 shall fail to present such Bond to the Paying Agent and Bond Registrar 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 308. Effect of Call for Redemption. Whenever any Bond is called for redemption and payment as provided in this Article, all interest on such Bond shall cease from and after the date for which such call is made, provided funds are available for its payment at the price hereinbefore specified. Section 309. Redemption Pursuant to Put Option. The Owner of any Bond shall have a one-time option to put such Bond to the District for redemption and payment on the earlier of the following: (A) February 15, 1988, provided that the Escrow Release Date is on or prior to February 15, 1987, and the Owner of such Bond has given written notice of the exercise of the put to the District and the Paying Agent and Bond Registrar on or before February 15, 1987. (B) February 15, 1989, provided that the Owner of such Bond has given written notice of the exercise of the put to the District and the Paying Agent and Bond Registrar on or before February 15, 1988. All Bonds so put to the District pursuant to the provisions of this subsection shall become due and payable on the appropriate February 15 for which they are so put and the District shall pay and redeem on such date all Bonds so put pursuant to the provisions hereof. ARTICLE IV LIMITED TENDER OPTION Section 401. Limited Tender Option. The Owner of any Bond shall have the option to tender such Bond to the Remarketing Agent for attempted purchase on each Interest Adjustment Date, such purchase to occur in the manner and under the conditions set forth in this Article. The Owner of any Bond shall have the right to have such Bond offered for purchase in whole or in part (in integral multiples of Authorized Denominations) on the Interest Adjustment Date at the Purchase Price. 20 Section 402. Notice to Owners of Bonds Regarding Adjusted Rate and Limited Tender Option. (A) On the January 2 next preceding each Interest Adjustment Date, or on the next succeeding Business Day if such date is not a Business Day. the Paying Agent and Bond Registrar shall send written notice by first class mail, postage prepaid, to each Owner of the Bonds stating the following: (i) that the interest rate borne by the Bonds will be changed on the forthcoming Interest Adjustment Date and will remain fixed at such rate until the day preceding the next Interest Adjustment Date or the maturity of the Bonds, as the case may be; (ii) that on the January 16 preceding the Interest Adjustment Date, or on the next Business Day if such date is not a Business Day, the Paying Agent and Bond Registrar will prepare and deliver to each Owner of the Bonds by first class mail, postage prepaid, a notice stating (a) the Interest Index determined by the Indexing Agent in accordance with Section 203(C) hereof, and (b) that the Adjusted Rate to be borne by the Bonds beginning on the Interest Adjustment Date shall not be less that 90% nor more than 120% of the Interest Index, and in no event greater than the interest rate authorized by law, and of which the Owners will receive notice by first class mail, postage prepaid. to be sent on the Interest Adjustment Date, or the next succeeding Business Day if such date is not a Business Day; and (iii) that each Owner of the Bonds will have the right to deliver all or any portion of the Bonds on or prior to the February 1 next preceding the Interest Adjustment Date, or the next succeeding Business Day if such date is not a Business Day, to the Remarketing Agent for purchase on the Interest Adjustment Date, in accordance with the provisions of Section 403 hereof. The Paying Agent and Bond Registrar shall also send a copy of such notice to the District, the Remarketing Agent and the Indexing Agent. (B) On the January 16 next preceding each Interest Adjustment Date, or on the next succeeding Business Day if such date is not a Business Day, the Paying Agent and Bond Registrar shall send the written notice by first class mail, postage prepaid, to each Owner of the Bonds stating as follows: (i) the rate of interest determined as the Interest Index; (ii) that on the Interest Adjustment Date, the interest rate borne by the Bonds shall not be less than 90% nor more than 120% of the Interest Index (and in no event greater than that interest rate authorized by law); (iii) that any Bond delivered to the Remarketing Agent at its Principal Office or at such other address as may be specified in the notice on or before 4:00 p.m., St. Louis, Missouri time, on the February 1 next preceding the Interest Adjustment Date, or on the next succeeding Business Day if such date is not a Business Day, together with a written instrument referencing such notice and all necessary endorsements and guarantees of signatures with respect to the Bonds so delivered, shall be offered by the Remarketing Agent for purchase at a price equal to 100% of the principal amount thereof, on the Interest Adjustment Date, subject to the ability of 21 the Remarketing Agent to remarket all Bonds so tendered for redemption; and (iv) that following such Interest Adjustment Date, the interest rate borne by the Bonds will remain fixed until the next succeeding Interest Adjustment Date or until maturity, as the case may be, and that there will be no right to deliver such Bonds for purchase until the next succeeding Interest Adjustment Date or until maturity, as the case may be. (C) From the last date on which Bonds may be delivered for purchase until noon, St. Louis, Missouri time, on the Interest Adjustment Date, or on the next preceding Business Day if such date is not a Business Day the Remarketing Agent shall use its best efforts to sell the Bonds which have been so delivered for purchase. The Remarketing Agent shall determine the Adjusted Rate to be borne by the Bonds beginning on such Interest Adjustment Date in accordance with the provisions of Section 203(C) hereof on or before noon, St. Louis, Missouri time, on the Interest Adjustment Date, or on the next preceding Business Day if such date is not a Business Day, and shall immediately give telephonic notice (promptly confirmed in writing) of such Adjusted Rate to the Paying Agent and Bond Registrar and the District. Section 403. Exercise of Limited Tender Option. In order to exercise such option with respect to any Bond, the Owner must tender and deliver to the Remarketing Agent on or before 4:00 p.m. St. Louis, Missouri time on the February 1 or the next succeeding Business Day if such date is not a Business Day, but not before the January 16 next preceding the Interest Adjustment Date, each Bond to be so purchased together with: (A) a properly executed notice (the "Bond Owner Election Notice") to the Remarketing Agent that the Owner is exercising its option to have such Bond offered for purchase, and specifying the principal amount to be offered for purchase (which notice shall be in substantially the form of the Bond Owner Election Notice set forth as an attachment to each Bond); and (B) a properly executed instrument of transfer (which instrument of transfer may be in the form provided on the reverse side of each Bond). The Remarketing Agent shall, in its sole discretion, conclusively determine with respect to any Bond tendered whether the Owner thereof shall have properly tendered its Bond for attempted purchase. The tender and delivery of a Bond to the Remarketing Agent shall be irrevocable and binding upon such Owner. Upon delivery of Bonds to the Remarketing Agent by Owners exercising their option to tender Bonds for purchase, the Remarketing Agent shall offer for sale, and use its best efforts to sell, such Bonds. Any sale shall be made on the applicable 22 Interest Adjustment Date at a price equal to 100% of the principal amount thereof. If less than all Bonds tendered for purchase are remarketed, the particular Bonds or portions thereof deemed to be remarketed shall be selected by the Remarketing Agent by lot or by such other random means as the Remarketing Agent shall determine in its discretion. Payment to any Owner exercising its option to tender Bonds and whose Bonds are deemed remarketed shall be made by the Remarketing Agent by check or draft mailed by the Remarketing Agent on the date of purchase, or on the next succeeding Business Day if such date is not a Business Day, to the address appearing on the written notice from such Owner. Bonds not sold by the Remarketing Agent shall be returned by the Remarketing Agent to the tendering Owners in whose name said Bonds are registered along with an instrument of transfer duly executed by the Remarketing Agent. Section 404. Funds for Purchase of Bonds. On the date Bonds are to be purchased pursuant to Section 401 hereof, such Bonds shall be purchased at the Purchase Price only from the funds listed below. Funds for the payment of the Purchase Price shall be derived from the following sources in the order of priority indicated: (A) monies delivered to the Remarketing Agent representing the proceeds of the sale of any Bonds tendered to the Remarketing Agent for purchase pursuant to Section 403 hereof; (B) any other monies furnished to the Remarketing Agent by or on behalf of the District and available for such purpose. Any monies remaining after delivery of the purchased Bonds in accordance with the provisions of Section 405 hereof shall promptly be delivered by the Remarketing Agent to the District for application in accordance with the provisions of Section 702 hereof. Section 405. Delivery of Purchased Bonds. (A) Bonds purchased with monies described in Section 404(A) hereof shall be delivered by the Remarketing Agent, at its Delivery Office, to or upon the order of the purchasers thereof. (B) Bonds purchased with monies described in Section 404(B) hereof shall be delivered to the Paying Agent and Bond Registrar for cancellation. Bonds delivered in accordance with the provisions of 23 this section shall be registered in accordance with instructions furnished by the Remarketing Agent to the Paying Agent and Bond Registrar. Section 406. Duties of Remarketing Agent with Respect to Purchase of Bonds. (A) The Remarketing Agent shall hold all Bonds delivered to it pursuant to Section 403 hereof in trust for the benefit of the respective Owners of Bonds which shall have so delivered such Bonds until monies representing the Purchase Price of such Bonds shall have been delivered to or for the account of or to the order of such Owners of Bonds or such Bonds shall be redelivered to the Owners thereof; (B) The Remarketing Agent shall hold all monies delivered to it pursuant to this Ordinance for the purchase of Bonds in a separate account, in trust for the benefit of the person or entity which shall have so delivered such monies until the Bonds purchased with such monies shall have been delivered to or for the account of such person or entity; (C) Immediately upon the delivery to it of Bonds in accordance with said Section 403, the Remarketing Agent shall give telephonic or telegraphic notice to the District of the principal amount of the Bonds so delivered and shall forward to the District a copy of of each notice delivered to it in accordance with Section 403 hereof. (D) Two Business Days prior to each Interest Adjustment Date which succeeds the tender of any Bonds, the Remarketing Agent shall advise the District, by telephonic notice, of the face amount of any tendered Bonds for which firm commitments to purchase have not then been obtained. ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS Section 501. Creation of Funds and Accounts. There are hereby created and ordered to be established in the treasury of the District six separate accounts to be known respectively as the: (A)Sewerage System Construction Fund (herein called the "Construction Fund"); (B)Sewerage System Revenue Fund (herein called the "Revenue Fund"); 24 (C)Sewerage System Operation and Maintenance Account (herein called the "Operation and Maintenance Account"); (D)Principal and Interest Account for Adjustable Rate Limited Tender Option Clean Water Revenue Bonds (herein called the "Principal and Interest Account"); (E)Reserve Account for Adjustable Rate Limited Tender Option Clean Water Revenue Bonds (herein called the "Bond Reserve Account"); (F)Sewerage System Depreciation and Replacement Account (herein called the "Depreciation and Replacement Account"); and There is hereby ratified and confirmed in the custody of the Escrow Agent pursuant to the provisions of the Escrow Trust Agreement, the Adjustable Rate Limited Tender Option Clean Water Revenue Bond Escrow Fund (herein called the "Escrow Fund"). Section 502. Administration of Funds and Accounts. The funds and accounts established pursuant to Section 501 hereof shall be maintained and administered by the District solely for the purposes and in the manner as provided in this Ordinance so long as any of the Bonds remain Outstanding and unpaid. ARTICLE VI APPLICATION OF BOND PROCEEDS Section 601. Disposition of Bond Proceeds. The entire 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 in the Escrow Fund. Section 602. Application of Monies in the Escrow Fund. The Escrow Fund shall be maintained and administered by the Escrow Agent for the benefit of the Bondholders and the District pursuant to the terms of the Escrow Trust Agreement. Section 603. Application of Monies in the Construction Fund. Monies in the Construction Fund shall be used by the District for the sole purpose of paying the cost of extending and improving the System as hereinbefore provided, in accordance with the plans and specifications therefor prepared by the District's engineers or the District's consulting engineers and on file in the offices of the District. 25 Section 604. Withdrawals from Construction Fund. Withdrawals from the Construction Fund shall be made only on duly authorized and executed warrant therefor accompanied by a certificate executed by the Consulting Engineer 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 Construction Fund of all costs and expenses incident to the issuance of the Bonds without a certificate from the Consulting Engineer. Section 605. Surplus in Construction Fund. Upon completion of the extensions and improvements to the System as hereinbefore provided, any surplus remaining in the Construction Fund shall be deposited in the Principal and Interest Account. ARTICLE VII APPLICATION OF REVENUES Section 701. Revenue Fund. The District covenants and agrees that from and after the delivery of the Bonds, and continuing as long as any of the Bonds remain Outstanding and unpaid, all of the Revenues derived and collected by the District from the operation of the System, including the Revenues of all extensions and improvements to the System hereafter constructed or acquired by the District, will be paid and deposited into the Revenue Fund, and that said Revenues shall be segregated and kept separate and apart from all other monies, Revenues, funds and accounts of the District and shall not be mingled with any other monies, Revenues, funds and accounts of the District; provided that the Revenues of the Fee Fee Trunk Sewer Subdistrict and of the Coldwater Creek Trunk Subdistrict shall be held and applied by the District in accordance with the provisions of the 1962 Ordinance, the 1963 Ordinance, and the 1977 Ordinance, which secure the Outstanding Subdistrict Revenue Bonds, and the claim of the Bonds with respect to such subdistrict Revenues shall be junior and subordinate to the Outstanding Subdistrict Revenue Bonds. The Revenue Fund shall be administered and applied solely for the purposes and in the manner herein provided in this Ordinance. Section 702. Application of Moneys in Funds and Accounts. The District covenants and agrees that from and after the delivery of the Bonds, and continuing so long as any of the said Bonds shall remain Outstanding and unpaid, the District will, administer and allocate all of the monies then held in the Revenue Fund as follows: 26 (A) There shall first be paid all costs of operating and maintaining the System and keeping the System in good repair and working order, including, without limiting the generality of the foregoing, salaries, wages, costs of materials and supplies, annual audits, periodic consulting engineers' reports and insurance. (B) There shall next be paid and credited on the first day of each month following transfer of the proceeds of the Escrow Fund to the District, from the Revenue Fund to the Principal and Interest Account, to the extent necessary to meet at maturity or mandatory redemption thereof the payment of all principal of and interest on the Bonds, and to pay the fees and expenses of the Paying Agent and Bond Registrar, the Remarketing Agent and the Indexing Agent, the following sums: (i) Beginning with the first of said monthly deposits and continuing on the first day of each month thereafter to and including August 1, 1985, an equal pro rata portion of the amount of interest becoming due on the Bonds on August 15, 1985; and thereafter, beginning on September 1, 1985, and continuing on the first day of each month thereafter so long as any of the Bonds shall remain Outstanding and unpaid an equal pro rata portion of the amount of interest that will become due on the Bonds on the next succeeding interest payment date: (ii) Beginning on March 1, 1988, and continuing on the first day of each month thereafter to and including February 1, 1989, an equal pro rata portion of the amount of principal becoming due on the Bonds at maturity or mandatory redemption on February 15, 1989, and thereafter, beginning on March 1, 1989, and continuing on the first day of each month thereafter so long as any of the Bonds shall remain Outstanding and unpaid, an equal pro rata portion of the amount of principal that will become due on the Bonds on the next succeeding principal payment date, whether at maturity or mandatory redemption; and (iii) On the first day of each month preceding a month in which fees and expenses of the Paying Agent and Bond Registrar, Remarketing Agent and Indexing Agent are scheduled to become due, such amounts as may be required to pay such fees and expenses of the Paying Agent and Bond Registrar, Remarketing Agent and Indexing Agent becoming due in the next month. All amounts paid and credited to the Principal and Interest Account shall be expended and used by the District for the sole purpose of paying the interest on and principal of the Bonds as and when the same become due (or at the option of the District, 27 to pay the Purchase Price of any Bonds tendered on any Interest Adjustment Date) and the fees and expenses of the paying Agent and Bond Registrar, Remarketing Agent and Indexing Agent for serving as such under the provisions of this Ordinance. If at any time the monies in the Revenue Fund shall be insufficient to make in full the payments and credits at the time required to be made by the District to the principal and interest accounts established by the District to pay the principal of and interest on the Outstanding sewerage system revenue bonds of the District, including only the Bonds and any other sewerage system revenue bonds of the District hereafter issued and standing on a parity with the Bonds, the available monies in the Revenue Fund shall be divided among such principal and interest accounts in proportion to the respective principal amounts of said series of sewerage system revenue bonds of the District at the time Outstanding which are payable from the monies in said principal and interest accounts. (C) After all payments and credits required at the time to be made by the District under the provisions of paragraphs (A) and (B) of this Section have been made, there shall next be paid and credited on the first day of each month from the Revenue Fund to the Bond Reserve Account an amount not less than 1/36th of the Bond Reserve Requirement each month until said Account shall aggregate a sum equal to the Bond Reserve Requirement. Except as hereinafter provided in this section, all amounts paid and credited to the Bond Reserve Account shall be expended and used by the District solely to prevent any default in the payment of interest on or principal of the Bonds if the monies in the Principal and Interest Account are insufficient to pay the interest on or principal of said Bonds as they become due. After the Bond Reserve Account aggregates a sum equal to the Bond Reserve Requirement, no further payments into said Account shall be required, but if the District shall ever be required to expend and use a part of the monies in said Account for the purpose herein authorized and such expenditure shall reduce the amount of said Account below a sum equal to the Bond Reserve Requirement, the District shall resume and continue said monthly payments into said Account until said Account shall aggregate a sum equal to the Bond Reserve Requirement. Monies in the Bond Reserve Account may be used to call the Bonds for redemption and payment prior to their ultimate maturity provided all of the Bonds at the time Outstanding are called for payment and funds are available to pay the same according to their terms. Monies in the Bond Reserve Account shall be used to pay and retire the last Outstanding Bonds unless such Bonds and all interest thereon be otherwise paid. If at any time the monies in the Revenue Fund shall be 28 insufficient to make in full the payments and credits at the time required to be made by the District to the bond reserve accounts established by the District to protect the payment of the Outstanding sewerage system revenue bonds of the District, including only the Bonds and other sewerage system revenue bonds of the District hereafter issued and standing on a parity with the Bonds, the available monies in the Revenue Fund shall be divided among such bond reserve accounts in proportion to the respective principal amounts of said series of sewerage system revenue bonds of the District at the time Outstanding which are payable from the monies in such bond reserve accounts. (D) Prior to or concurrently with the issuance and delivery of the Bonds, the District shall pay and credit to the Depreciation and Replacement Account, from monies on hand and available for such purpose, the sum of $1,000,000. Except as hereinafter provided in Section 604, monies in the Depreciation and Replacement Account shall be expended and used by the District, if no other funds are available therefor, solely for the purpose of making emergency replacements and repairs in and to the District's sewerage system as may be necessary to keep said system in good repair and working order and to assure the continued effective and efficient operation thereof. No further payments into said Depreciation and Replacement Account shall be required, but if the District shall ever be required to expend and use a part of the monies in said Account for its authorized purposes and such expenditure shall reduce the amount of said Account below a sum equal to the Depreciation and Replacement Requirement, then the District after all payments and credits required at the time to be made by the District under the provisions of paragraphs (A), (B) and (C) of this Section have been made, there shall next be paid and credited on the first day of each month from the Revenue Fund to the Depreciation and Replacement Account an amount not less than 1/60th of the Depreciation and Replacement Requirement each month until said Account shall aggregate a sum equal to the Depreciation and Replacement Requirement. (E) After all payments and credits required at the time to be made by the District under the provisions of paragraphs (A), (B), (C) and (D) of this Section have been made, all monies remaining in the Revenue Fund may be expended by the Board for any lawful purpose, provided, however, that the District shall maintain a balance in the Revenue Fund sufficient to provide for: (1) the payment of Operation and Maintenance Expenses for the ensuing 60 days, (2) the necessary material purchase requirements for the ensuing 60 days and (3) reasonable reserves for unfunded contracts and commitments. Section 703. Deficiency of Payments into Funds or Accounts. If at any time the Revenues derived by the District from 29 the operation of its Sewerage System shall be insufficient to make any payment on the date or dates hereinbefore specified, the District will make good the amount of such deficiency by making additional payments or credits out of the first available Revenues thereafter received by the District from the operation of its Sewerage System, such payments and credits being made and applied in the order hereinbefore specified in Section 702 of this Ordinance. If at any time the monies in the Principal and Interest Account and in the Bond Reserve Account are not sufficient to pay the principal of and interest on the Bonds as and when the same become due, then the amount of such deficiency shall be made up by the transfer of funds from the Revenue Fund. Section 704. Transfer of Funds to Paying Agent and Bond Registrar. The Secretary-Treasurer of the District is hereby authorized and directed to withdraw from the Principal and Interest Account, and, to the extent necessary to prevent a default in the payment of either principal of or interest on the Bonds first from the Bond Reserve Account and then from the Revenue Fund as provided in Sections 702 and 703 hereof, sums sufficient to pay the principal of the Bonds, at maturity or by mandatory redemption and interest on the Bonds and the fees of the Paying Agent and Bond Registrar, Remarketing Agent, and Indexing Agent, as and when the same become due, and to forward such sums to the Paying Agent and Bond Registrar in available funds by the date when such principal, interest and fees of the Paying Agent and Bond Registrar, Remarketing Agent, and Indexing Agent will become due. If, through lapse of time, or otherwise, the Owners of Bonds shall no longer be entitled to enforce payment of heir obligations, it shall be the duty of the Paying Agent and Bond Registrar forthwith to return said funds to the District. All monies deposited with the Paying Agent and Bond Registrar shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance. ARTICLE VIII DEPOSIT AND INVESTMENT OF FUNDS Section 801. Deposits of Moneys. Cash monies in each of the funds and accounts created by and referred to in this Ordinance shall be deposited in a bank or banks located in the State of Missouri which are members of the Federal Deposit Insurance Corporati on, and all such bank deposits shall be continuously and adequately secured by the banks holding such deposits as provided by the laws of the State of Missouri. Section 802. Investment of Funds. Monies held in any 30 fund or account referred to in this Ordinance may be invested by the District in direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or in such other obligations as may be permitted by law; provided, however, that no such investment shall be made for a period extending longer than to the date when the monies invested may be needed for the purpose for which such fund or account was created or other than as permitted by state statute and the District's Plan. All interest 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 principal amount or the market value thereof, whichever is lower. If and when the amount held in any fund or account shall be in excess of the amount required by the provision of this Ordinance, the District shall direct that such excess be paid and credited to the Revenue Fund. Section 803. Arbitrage Covenant. The District covenants and agrees that it will use the proceeds of the Bonds as soon as practicable and with all reasonable dispatch for the purpose for which the Bonds are issued as hereinbefore set forth, and that no part of the proceeds of the Bonds shall be invested in any securities or obligations except for the temporary period pending such use, nor used, at any time, directly or indirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of the Bonds, would have caused any of the Bonds to be or become "Arbitrage Bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and the regulations of the Treasury Department thereunder. ARTICLE IX PARTICULAR COVENANTS OF THE DISTRICT The District covenants and agrees with each of the purchasers and Owners of any of the Bonds, that so long as any of the Bonds remain Outstanding and unpaid: Section 901. Efficient and Economical Operation. The District will continuously own and will operate its Sewerage System in an efficient and economical manner and will keep and maintain the same in good repair and working order. Section 902. Rate Covenant. The District will fix, establish, maintain and collect such rates, fees and charges for the use and services furnished by or through the System, including all extensions and improvements thereto hereafter constructed or acquired by the District. as will produce Revenues sufficient to (i) pay the cost of the operation and maintenance of said System; 31 (ii) pay the principal of, redemption premium, if any, and interest on the Bonds as and when the same become due; (iii) enable the District to have in each fiscal year Net Revenues from said System in an amount that will be not less than 110% of the amount required to be paid by the District in such fiscal year on account of both principal of and interest on all sewerage system revenue bonds at the time Outstanding; and (iv) provide reasonable and adequate reserves for the payment of the Bonds and the interest thereon and for the protection and benefit of the Sewerage System of the District as provided in this Ordinance. The District 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. Section 903. Reasonable Charges for all Services. None of the facilities or services provided by the System will be furnished to any user (excepting the District itself) without a reasonable charge being made therefor. Section 904. Restrictions on Mortgage or Sale of System. The District will not mortgage, pledge or otherwise encumber the System or any part thereof, or any extension or improvement thereof, nor will it sell, lease or otherwise dispose of said System or any material part thereof; provided, however, the District may sell any portion of such property 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. The proceeds of any such sale or sales shall be paid and deposited into the Revenue Fund. The District may cease to operate, abandon or otherwise dispose of any property which has become obsolete, nonproductive or otherwise unusable to the advantage of the District. Section 905. Insurance. The District will carry and maintain a reasonable amount of 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, such insurance to be of the character and coverage and in an amount as would normally be carried by a private corporation engaged in a similar type of business. In the event of loss or damage, the District, with reasonable dispatch, will use the proceeds of such insurance in reconstructing and replacing the property damaged or destroyed, or, if such reconstruction or replacement be unnecessary, then the District will pay and deposit the proceeds of such insurance into the Revenue Fund. The District in operating the System will carry workmen's compensation insurance in such amounts as would normally be maintained by a private corporation engaged in a similar type of business and public liability insurance in such amounts as the District shall deem necessary, and the proceeds derived from such insurance shall be used in paying the claims on account of which such proceeds were received. The cost of all insurance obtained 32 pursuant to the requirements of this section shall be paid as an operating cost out of the Revenues of the District's Sewerage System. Section 906. Books, Records and Accounts. The District will install and maintain proper books, records and accounts (entirely separate from all other records and accounts of the District) in which complete and correct entries will be made of all dealings and transactions of or in relation to the System of the District. Such accounts shall show the amount of Revenues received from the System, the application of such Revenues, and all financial transactions in connection therewith. Said books shall be kept by the District according to standard accounting practices as applicable to the operation of municipal utilities. Section 907. Annual Budget. Prior to the commencement of each fiscal year, the Executive Director of the District or other representative of the District designated by the Board of Trustees of the District will cause to be prepared and filed with the Secretary-Treasurer of the District a budget setting forth the estimated receipts and expenditures of the System for the next succeeding fiscal year. The Secretary-Treasurer of the District, promptly upon the filing of said budget in his office, will mail a copy of said budget to the original purchaser of the Bonds and to the Remarketing Agent. Said annual budget shall be prepared in accordance with the requirements of the laws of Missouri and shall contain all information as shall be required by such laws. Section 908. Annual Audit. Annually, promptly after the end of the fiscal year, the District will cause an audit to be made of the System for the preceding fiscal year by a certified public accountant or firm of certified public accountants to be employed for that purpose and paid from the Revenues of the System. Said annual audit shall include: (A) A classified statement of the gross Revenues received, of the expenditures for operation and maintenance, of the Net Operating Revenues, and of the amount of any capital expenditures made in connection with the system during the previous fiscal year; (B) A balance sheet as of the end of each fiscal year, with the amount on hand at the end of such year in each of the funds and accounts created by and referred to in Article V of this Ordinance; (C) A statement showing the profit or loss for such fiscal year; (D) A statement of all bonds matured or redeemed and interest paid on bonds during said fiscal year; 33 (E) A statement of the number of customers served by the System at the beginning and also at the end of such fiscal year; (F) A statement showing the amount and character of the insurance carried by the District on the property constituting the System and showing the names of the insurers, the expiration dates of the policies, and the premiums thereon; and (G) Such remarks and recommendations regarding the District's practices and procedures of operating the System and its accounting practices as said accountants may deem appropriate. Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the Secretary-Treasurer of the District, and a duplicate copy of said audit shall be mailed to the original purchaser of the Bonds and to the Remarketing Agent. Such audits shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, and user of the services of the System of the District, any Owner of any of the Bonds, or by anyone acting for or on behalf of such taxpayer, user or bondholder. As soon as possible after the completion of such annual audit, the Board of Trustees of the District shall review such audit, and if any audit shall disclose that proper provision has not been made for all of the requirements of the law under which the Bonds are issued, and of this Ordinance, the District covenants and agrees that it will promptly cure such deficiency and that it will promptly proceed to increase the rates, fees 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 909. Owners Right of Inspection. The Owner of any of the Bonds shall have the right at all reasonable times to inspect the System and all records. accounts and data relating thereto, and any such Owner shall be furnished all such information concerning said system and the operation thereof which he may reasonably request. Section 910. Performance of Duties. The District will faithfully and punctually perform all duties and obligations with respect to the operation of the System, including all extensions and improvements thereto, now or hereafter imposed upon the District by the Constitution and laws of the State of Missouri and by the provisions of this Ordinance. 34 ARTICLE X ADDITIONAL BONDS Section 1001. Prior Lien Bonds. The District covenants and agrees that so long as any of the Bonds remain Outstanding and unpaid, the District will not issue any additional bonds or other debt obligations payable out of the Revenues of its Sewerage System or any part thereof which are superior to the Bonds; provided, however, that nothing herein shall preclude the District from issuing any additional bonds or other debt obligations to refund, in whole or in part, the Outstanding Subdistrict Revenue Bonds. Section 1002. Parity Lien Bonds. The District covenants and agrees that so long as any of the Bonds remain Outstanding and unpaid, the District will not issue any additional bonds or other long-term obligations payable out of the Revenues of the System or any part thereof which stand on a parity or equality with the Bonds unless all of the following conditions are met: (A) The District shall not be in default in the payment of principal of or interest on the Bonds 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; and (B) The District shall obtain a certificate of the Consulting Engineer showing either of the following: (i) The average annual Net Revenues derived by the District from the operation of the System for the fiscal year immediately preceding the issuance of additional bonds shall have been equal to at least 125% of the maximum amount required to be paid out of said Revenues in any succeeding fiscal year on account of both principal and interest becoming due with respect to all sewerage system revenue obligations of the District, including the additional bonds proposed to be issued. In determining the Net Revenues of the System for the purpose of this subsection, the Consulting Engineer may adjust said Net Revenues by adding thereto, in the event the District 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 fiscal year immediately preceding the issuance of additional bonds, the amount, as estimated by the Consulting Engineer, of the additional Net Revenues which would have resulted from the operation of the System during said preceding fiscal year had such rate increase been in effect for the entire period. 35 (ii) The estimated average annual Net Revenues derived by the District from the operation of the System for the fiscal year immediately following the date of issue of such additional bonds shall be equal to at least 125% of the maximum amount required to be paid out of said Net Revenues in any succeeding fiscal year on account of both principal and interest becoming due with respect to all sewerage system revenue obligations of the District, including the additional bonds proposed to be issued. In determining the amount of estimated Net Revenues of the System for the purpose of this subsection. the Consulting Engineer may adjust said estimated Net Revenues by adding thereto any estimated increase in Net Revenues resulting from any increase in rates for the use and services of the System which, in the opinion of the Consulting Engineer, are economically feasible, and reasonably considered necessary based on projected operations of the System. Additional revenue bonds of the District issued under the conditions hereinbefore in this Section set forth shall stand on a parity with the Bonds and shall enjoy complete equality of lien on and claim against the Revenues of the System with the Bonds, and the District 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 principal and interest accounts and bond reserve accounts for the payment of such additional bonds and the interest thereon out of monies in the Revenue Fund. Section 1003. Junior Lien Bonds. Nothing in this Section contained shall prohibit or restrict the right of the District to issue additional revenue bonds or other revenue obligations for the purpose of extending, improving, enlarging, repairing or altering the System and to provide that the principal of and interest on said revenue bonds or obligations shall be payable out of the Revenues of the System, provided at the time of the issuance of such additional revenue bonds or obligations the District shall not be in default in the performance of any covenant or agreement contained in this Ordinance, 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 District shall be in default in paying either interest on or principal of the Bonds, or if the District shall be in default in making any payments required to be made by it under the provisions of paragraphs (A), (B) and (C) of Section 702 of this Ordinance, the District 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 District, subject to the provisions aforesaid, may make provision for paying the principal of and interest on said revenue bonds or obligations out of monies in the Revenue Fund. 36 Section 1004. Refunding Bonds. The District shall have the right, if it shall find it desirable, to refund any of the Bonds then subject to redemption or becoming due, under the provisions of any law then available. Said Bonds or any part thereof may be refunded and the refunding bonds so issued shall enjoy complete equality of pledge with any of the Bonds which are not refunded, if any. upon the Revenues of the System. ARTICLE XI DEFAULT AND REMEDIES Section 1101. Acceleration of Maturity in Event of Default. The District covenants and agrees that if it shall default in the payment of the principal of or interest on any of the Bonds as the same shall become due, and such default shall continue for a period of 30 days, or if the District or its governing body or any of the officers, agents or employees thereof shall fail or refuse to comply with any of the provisions of the Constitution or statutes of the State of Missouri, or of this Ordinance, at any time thereafter and while such default shall continue, the Owners of 25% in principal amount of the Bonds then Outstanding may, by written notice to the District filed in the office of the Secretary-Treasurer of the District or delivered in person to said Secretary-Treasurer of the District, 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 shall have 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 shall have been paid in full, and all other defaults, if any, by the District under the provisions of this Ordinance and under the provisions of the statutes of the State of Missouri shall have been cured, then and in every such case the Owners of 50% in principal amount of the Bonds then Outstanding, by written notice to the District 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 1102. Remedies. The provisions of this Ordinance, including the covenants and agreements herein contained, shall constitute a contract between the District and the Owners of the Bonds, and the Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have 37 the right, for the equal benefit and protection of all Owners of Bonds similarly situated: (a) By mandamus or other suit, action or proceedings at law or in equity to enforce his or their rights against the District 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 District, 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 any Owner of the Bonds. Section 1103. Limitation on Rights of Bondholders. No one or more bondholders 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 Owners of such Outstanding Bonds. Section 1104. Remedies Cumulative. No remedy conferred herein upon the Owners of Bonds 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 conferred herein. No waiver of any default or breach of duty or contract by the 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 thereon. No delay or omission of any Bond Owner 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 Owners of the Bonds by this Ordinance may be enforced and exercised from time to time and as often as may be deemed expedient. In case any suit, action or proceedings taken by any Bond Owner on account of any default or to enforce any right or exercise any remedy shall have been discontinued or abandoned for any reason, or shall have been determined adversely to such Bond Owner, then, and in every such case, the District and the Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Bond Owners shall continue as if no such suit, action or other proceedings had been brought or taken. 38 Section 1105. No Obligation to Levy Taxes. Nothing contained in this Ordinance shall be construed as imposing on the District 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. ARTICLE XII PAYING AGENT AND BOND REGISTRAR; REMARKETING AGENT; AND INDEXING AGENT Section 1201. Designation of Paying Agent and Bond Registrar. Mercantile Trust Company National Association, in the City of St. Louis, Missouri, is hereby designated as the District's paying agent for the payment of principal of, redemption premium, if any, and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds (herein called the "Paying Agent and Bond Registrar"). Section 1202. Successor Paving Agent and Bond Registrar. (A) Any corporation or association into which the Paying Agent and Bond Registrar may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such surviving corporation or association shall maintain its principal office in the State of Missouri, shall be and become the successor Paying Agent and Bond Registrar hereunder, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereof, anything herein to the contrary notwithstanding. (B) The Paying Agent and Bond Registrar may at any time resign by giving thirty (30) days' notice to the District and the Remarketing Agent. Such resignation shall not take effect until the appointment of a successor Paying Agent and Bond Registrar. (C) The Paying Agent and Bond Registrar may be removed at any time by an instrument in writing delivered to the Paying Agent and Bond Registrar by the District. In no event, however, shall any removal of the Paying Agent and Bond Registrar take effect until a successor Paying Agent and Bond Registrar shall have been appointed. (D) In case the Paying Agent and Bond Registrar shall resign or be removed, or be dissolved, or shall be in the course of 39 dissolution or liquidation, or otherwise become incapable of acting as Paying Agent and Bond Registrar, or in case it shall be taken under the control of any public officer or officers, or of a receiver appointed by a court, a successor shall be appointed by the District. Every successor Paying Agent and Bond Registrar appointed pursuant to the provisions of this Section shall be, if there be such an institution willing, qualified and able to accept the duties of the Paying Agent and Bond Registrar upon customary terms, a bank or trust company within or without the State, in good standing and having reported capital and surplus of not less than $25,000.000. Written notice of such appointment shall immediately be given by the District to the Owners of the Bonds. Any successor Paying Agent and Bond Registrar shall execute and deliver an instrument accepting such appointment and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all rights, powers, duties and obligations of its predecessor, with like effect as if originally named as Paying Agent and Bond Registrar, but such predecessor shall nevertheless, on the written request of the District, or of the successor, execute and deliver such instruments and do such other things as may reasonably be required to more fully and certainly vest and confirm in such successor all rights, powers, duties and obligations of such predecessor. If no successor Paying Agent and Bond Registrar has accepted appointment in the manner provided above within 90 days after the Paying Agent and Bond Registrar has given notice of its resignation as provided above, the Paying Agent and Bond Registrar may petition any court of competent jurisdiction for the appointment of a temporary successor Paying Agent and Bond Registrar; provided that any Paying Agent and Bond Registrar so appointed shall immediately and without further act be superseded by a Paying Agent and Bond Registrar appointed by the District as provided above. Section 1203. Designation of Remarketing Agent. A. G. Edwards & Sons, Inc., St. Louis, Missouri, is hereby designated as the District's Remarketing Agent for the remarketing of the Bonds. The Executive Director and SecretaryTreasurer of the District are hereby authorized and directed to execute the Remarketing Agreement with the Remarketing Agent on behalf of the District. Section 1204. Successor Remarketing Agent. (A) The Remarketing Agent may at any time resign and be discharged of the duties and obligations created by this Ordinance by giving at least sixty (60) days notice to the District, the Paying Agent and Bond Registrar, and the Indexing Agent at which time a successor Remarketing Agent, if available, will be appointed by the District. The Remarketing Agent may be removed at any time, by an instrument, signed by District and filed with the Remarketing Agent, the Paying Agent and Bond Registrar, and the Indexing Agent but such removal will not take effect prior to the appointment of a successor Remarketing Agent by the District. The Remarketing Agent 40 shall be a member of the National Association of Securities Dealers, Inc., having a capitalization of at least $50,000,000 and authorized by law to perform all the duties imposed upon it by this Ordinance. (B) In the event of the resignation or removal of the Remarketing Agent, the Remarketing Agent shall pay over, assign and deliver any monies and the Bonds held by it in such capacity to its successor or, if there be no successor, to the Paying Agent and Bond Registrar to be held in a separate account pursuant to Section 406(B) hereof. In the event that the Remarketing Agent shall resign or be removed, or be dissolved, or if the property or affairs of the Remarketing Agent shall be taken under the control of any state or federal court or administrative body because of a bankruptcy or insolvency, or for any other reason, and the District shall not have appointed a successor Remarketing Agent, the Paying Agent and Bond Registrar, notwithstanding the requirements of subsection (A) of this section, shall ipso facto be deemed to be the Remarketing Agent for all purposes of this Ordinance until the appointment of a successor Remarketing Agent; provided, however, that the Paying Agent and Paying Agent and Bond Registrar, in its capacity as Remarketing Agent, shall not be required to sell Bonds or determine the interest rate on the Bonds pursuant to Section 203 (C) hereof, and the Interest Index shall be the interest rate on the Bonds until a new Remarketing Agent is appointed. Section 1205. Indexing Agent. (A) Kenney Information Systems is hereby appointed as Indexing Agent for the Bonds. The Executive Director and Secretary-Treasurer of the District are hereby authorized and directed to execute the Indexing Agreement with the Indexing Agent on behalf of the District. The Indexing Agent shall designate to the District, the Paying Agent and Bond Registrar, and the Remarketing Agent, its Principal Office and signify its acceptance of the duties and obligations imposed upon it hereunder by a written instrument of acceptance delivered to the District under which the Indexing Agent will agree, particularly: (i) to compute the Interest Index pursuant to and in accordance with Section 203 (C) hereof, and to give notice to the District, the Paying Agent and Bond Registrar, and the Remarketing Agent of the Interest Index on the date of the computation thereof; (ii) to keep such books and records as shall be consistent with prudent industry practice and to make such books and records available for inspection by the District, the Paying Agent and Bond Registrar, and the Remarketing Agent at all reasonable times; and (iii) to perform all other obligations imposed on the Indexing Agent under this Ordinance. 41 (B) The Indexing Agent may at any time resign and be discharged of the duties and obligations created by this Indenture by giving at least sixty (60) days notice to the District, the Paying Agent and Bond Registrar, and the Remarketing Agent, at which time a successor Indexing Agent, if available, will be appointed by the District. The Indexing Agent may be removed at any time by an instrument, signed by the District, filed with the Paying Agent and Bond Registrar, and the Remarketing Agent, but such removal shall not take effect prior to the appointment of a successor Indexing Agent by the District. The Indexing Agent shall be a nationally recognized municipal securities evaluation service authorized by law to perform all the duties imposed upon it by this Ordinance. ARTICLE XIII DEFEASANCE Section 1301. Defeasance. When all of the Bonds shall have been paid and discharged, then the requirements contained in this Ordinance and the pledge of Revenues made hereunder and all other rights granted hereby shall terminate. Bonds shall be deemed to have been paid and discharged within the meaning of this Ordinance if there shall have been deposited with the Paying Agent and Bond Registrar, or other bank located in the State of Missouri and having full trust powers, at or prior to the maturity or redemption date of said Bonds, in trust for and irrevocably appropriated thereto, monies and/or direct obligations of, or obligations the principal of and interest on which are guaranteed by the United States of America which, together with the interest to be earned on any such obligations, will be sufficient for the payment of the principal of said Bonds, the redemption premium thereon, if any, and interest accrued to the date of maturity or redemption, 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 always that if any such Bonds shall be redeemed prior to the maturity thereof, the District shall have elected to redeem such Bonds and notice of such redemption shall have been given. Any monies and obligations which at any time shall be deposited with the Paying Agent and Bond Registrar or other bank by or on behalf of the District, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent and Bond Registrar or other bank in trust for the respective Owners of the Bonds, and such monies shall be and are hereby irrevocably appropriated to the payment and discharge hereof. All monies deposited with the Paying Agent and Bond Registrar or other bank shall be deemed to be deposited in accordance with and subject to all of the provisions 42 contained in this Ordinance. ARTICLE XIV AMENDMENTS Section 1401. Amendments. The rights and duties of the District and the Bond Owners, 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 District with the written consent of the Owners of not less than 66-2/3% in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such 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 Secretary-Treasurer of the District, 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 District is required to pay by way of principal of or interest on any Bond; (C) permit the creation of a lien on the Revenues of the System prior or equal to the lien of the Bonds or additional bonds hereafter issued on a parity with the Bonds as hereinbefore provided; (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 District at any time in any respect with the written consent of the Owners of all of the Bonds at the time Outstanding. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the Secretary-Treasurer of the District a copy of the ordinance of the District hereinabove provided for, duly certified, as well as proof of consent to such modification by the Owners of not less than 66-2/3% in principal amount of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any 43 reference to such amendment or modification. ARTICLE XV MISCELLANEOUS PROVISIONS Section 1501. 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 1502. Governing Law. This Ordinance shall be governed exclusively by and construed in accordance with the applicable laws of the State of Missouri. Section 1503. Effective Date. This Ordinance shall take effect and be in full force from and after 15 days following its passage by the Board of Trustees. PASSED by the Board of Trustees of the Metropolitan St. Louis Sewer District, this 13th day of March, 1985. (SEAL) Chairman of the Board of Trustees of the District ATTEST: Secretary-Treasurer of the District CERTIFICATE STATE OF MISSOURI ) ) SS. COUNTY OF ST. LOUIS ) I, the undersigned, Secretary-Treasurer of The 44 Metropolitan St. Louis Sewer District, hereby certify that the above and foregoing constitutes a full, true and correct copy of Ordinance No. duly adopted by the governing body of the District at a meeting duly and regularly held on , 1985; that said Ordinance has not been modified, amended or repealed, and is in full force and effect as of the date hereof; and that the same is on file in my office. WITNESS my hand and official seal this day of , 1985. Secretary-Treasurer of the District (Seal) 45 EXHIBIT "A" Form of Bonds. Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be in substantially the following form: (FORM OF FULLY REGISTERED BOND) UNITED STATES OF AMERICA STATE OF MISSOURI Registered Registered No. R THE METROPOLITAN ST. LOUIS SEWER DISTRICT ADJUSTABLE RATE LIMITED TENDER OpTION CLEAN WATER REVENUE BOND SERIES A 1985 Initial Maturity Date of CUSIP Interest Rate Date Issue Number 10 7/8% February 15, 2005 April 1, 1985 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The METROPOLITAN ST. LOUIS SEWER DISTRICT, a body corporate, a municipal corporation, and a political subdivision of the State of Missouri (herein called the "District"), for value received, hereby promises to pay, solely from the source and as hereinafter provided, to the Registered Owner shown above, or registered assigns, the Principal Amount on the Maturity Date shown above, and to pay interest thereon at the Interest Rate per annum shown above (computed on the basis of a 360-day year of twelve 30-day months) from the Registration Date set forth herein or from the most recent interest payment date to which interest has been paid or duly provided for, payable semiannually on February 15 and August 15 in each year, beginning on August 15, 1985, until said principal sum shall have been paid. The principal of this Bond, subject to prior redemption as hereinafter provided, shall be paid 46 at maturity or upon earlier redemption to the person in whose name such Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of such Bond at the principal office of Mercantile Trust Company National Association, in the City of St. Louis, Missouri (the "paying Agent and Bond Registrar"). The interest payable on this Bond on any interest payment date shall be paid by check or draft mailed by the Paying Agent and Bond Registrar to the person in whose name such Bond is registered on the registration books maintained by the Paying Agent and Bond Registrar at the close of business on the Record Date for such interest, which shall be the first day (whether or not a business day) of the calendar month of such interest payment date. The principal of and interest on this Bond shall be payable in lawful money of the United States of America. This Bond is one of a duly authorized series of bonds of the District designated "Adjustable Rate Limited Tender Option Clean Water Revenue Bonds, Series A 1985," aggregating the principal amount of $8,600,000, issued by the District for the purpose of paying the cost of extending and improving the sewerage system of the District, under the authority of and in full compliance with the Plan of the District and the Constitution and laws of the State of Missouri, and pursuant to an election duly held in the District and an ordinance duly adopted by the governing body of the District (herein called the "Bond Ordinance"). The Bonds shall bear interest at a rate of interest per annum equal to the adjusted rate (the "Adjusted Rate"). The Adjusted Rate may never exceed the maximum rate authorized by law, which as of the date hereof is fourteen percent (14%). From the date of initial issuance and delivery of the Bonds to and including February 14, 1988, the Bonds shall bear interest at the rate of ten and seven-eighths percent (10 7/8%) per annum. Thereafter, for each period beginning on February 15, 1988, and the February 15 of each year thereafter (the "Interest Adjustment Date") and ending on the day preceding the next succeeding Interest Adjustment Date (the "Adjustment Period"), the Bonds shall bear interest at the rates from time to time described as follows: (1) Kenney Information Systems, acting as Indexing Agent, or any successor appointed and serving in such capacity pursuant to the Bond Ordinance (the "Indexing Agent") shall, on the January 15 next preceding each Interest Adjustment Date or on the next succeeding business day if such date is not a business day, compute the "Interest Index". The Interest Index shall be expressed as an interest rate per annum, and shall be the arithmetic average of one year yield evaluations at par of securities, of not less than twenty (20) component issues selected by the Indexing Agent. The component issues shall consist of municipal revenue bonds and other limited and special obligation bonds, the interest on which is exempt from 47 federal income taxation, having a term approximately equal to the time remaining until the next succeeding Interest Adjustment Date and being of the same quality as that of the Bonds; provided, that if the Bonds are not rated at the time of selection of the component issues, the component issues shall consist of bonds rated "Baa" or be of the same quality. (2) On each Interest Adjustment Date, the Adjusted Rate for the next succeeding Adjustment Period shall be established as follows: (a) if any Bonds shall have been tendered and delivered to the Remarketing Agent for attempted purchase pursuant to the provisions of the Bond Ordinance, and if all such Bonds have been sold by the Remarketing Agent, the interest rate borne by all Bonds shall be a rate determined by the Remarketing Agent to be that rate which, if borne by the Bonds, having due regard to prevailing financial market conditions, would be the interest rate necessary, but which would not exceed the interest rate necessary, to enable the Remarketing Agent to sell all of the Bonds so delivered to the Remarketing Agent at 100% of the principal amount thereof; provided, however, that the interest rate so determined shall not be less than ninety percent (90%) nor greater than one hundred twenty percent (120%), inclusive, of the Interest Index, but in no event shall the Adjusted Rate exceed the maximum rate authorized by law, which as of the date hereof is fourteen percent (14%) per annum. (b) If any Bonds have been tendered and delivered to the Remarketing Agent for attempted purchase pursuant to the provisions of the Bond Ordinance, and if any of such Bonds shall not have been sold by the Remarketing Agent, the interest rate borne by all Bonds shall be equal to a rate per annum equal to one hundred twenty percent (120%) of the Interest Index but in no event shall the Adjusted Rate exceed the maximum rate authorized by law, which as of the date hereof is fourteen percent (14%) per annum. (c) If no Bonds shall have been tendered and delivered to the Remarketing Agent for attempted purchase pursuant to the provisions 48 of the Bond Ordinance, the interest rate borne by all Bonds shall be the Interest Index, but in no event to exceed the maximum rate authorized by law, which as of the date hereof is fourteen percent (14%) per annum. (3) In the event that for any reason the Interest Index or the Adjusted Rate cannot be established for any Adjustment Period, or is held invalid or unenforceable by a court of law, the Adjusted Rate for such Adjustment Period shall be fourteen percent (14%) or such lower rate at which the Remarketing Agent can sell all Bonds tendered and delivered for attempted purchase pursuant to the provisions of the Bond Ordinance, but in no event shall the Adjusted Rate exceed the maximum rate authorized by law. (4) Interest on the Bonds shall be computed on the basis of a 360-day year of twelve 30-day months. The owner of any Bond shall have the option to tender such Bond to A. G. Edwards & Sons, Inc., acting as Remarketing Agent, and any successor appointed and serving in such capacity pursuant to the Bond Ordinance for attempted purchase on any Interest Adjustment Date, such purchase to occur in the manner and under the conditions set forth in the Bond Ordinance. The owner of any Bond shall have the right to have such Bond offered for purchase, in whole or in part (in integral multiples of Authorized Denominations as defined in the Bond Ordinance), at a purchase price equal to 100% of the principal amount thereof tendered for purchase. In the event that the Remarketing Agent is able to sell only a portion of the Bonds tendered, the particular Bonds deemed to be remarketed shall be selected, by random means, by the Remarketing Agent. Bonds not deemed to be sold by the Remarketing Agent shall be returned to the tendering owners in whose name said Bonds are registered. The Bonds are also subject to mandatory redemption and payment prior to maturity at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon, on each February 15, in the years and in the principal amounts set forth below: Year Amount Year Amount 1989 $200,000 1997 $500,000 1990 200,000 1998 500,000 1991 300,000 1999 500,000 1992 300,000 2000 600,000 1993 300,000 2001 700,000 1994 400,000 2002 700.000 1995 400,000 2003 800,000 49 1996 400,000 2004 900,000 The remaining $900,000 principal amount of the Bonds shall be paid at maturity on February 15, 2005. The Bonds are also subject to mandatory redemption as follows: (A) In the event of a final determination by a court of competent jurisdiction that the District is without authority to issue the Bonds or fulfill its pledge of revenues or other covenant under the Bond Ordinance, all of the Bonds then outstanding shall be called for redemption and payment on the next succeeding Interest Adjustment Date at the principal amount thereof, plus accrued interest thereon to the redemption date. (B) In the event that the moneys in the Escrow Fund (the "Escrow Fund") created pursuant to an Escrow Trust Agreement dated as of April 1, 1985, between the District and Mercantile Trust Company National Association, St. Louis, Missouri (the "Escrow Trust Agreement"), to hold the proceeds of the Bonds pending the resolution of pending litigation challenging the authority of the District to issue the Bonds and to raise user rates and charges to satisfy the rate covenant of the District under the Bond Ordinance (the "Litigation"), have not been transferred to the District pursuant to the provisions of the Escrow Trust Agreement, by January 26, 1988, all of the Bonds then outstanding, shall be called for redemption and payment on February 15. 1988, at the principal amount thereof, plus accrued interest thereon to the redemption date; provided, however, the mandatory redemption called for by this subsection may be waived with the written consent of the owners of 100% of the Bonds at the time outstanding, which consent shall be delivered to the Escrow Agent and the District on or prior to February 1, 1988. (C) In the event that the moneys in the Escrow Fund have not been transferred to the District pursuant to the provisions of the Escrow Trust Agreement by January 26, 1989, all of the Bonds then Outstanding shall be called for redemption and payment on February 15, 1989. The Bonds are also subject to mandatory redemption and payment prior to maturity in whole, in the event of a Determination of Taxability (as defined in the Bond Ordinance) with respect to any Bonds, on the next succeeding Interest Adjustment Date at the principal amount thereof, plus accrued interest to the redemption date. The owner of any Bond shall have a one-time option to put such Bond to the District for redemption and payment on the earlier of the following: 50 (A) February 15, 1988, provided that the funds held under the Escrow Trust Agreement have been transferred to the District pursuant to the provisions of that agreement on or prior to February 15, 1987, and the owner of such Bond has given written notice of the exercise of the put to the District and the Paying Agent and Bond Registrar on or before February 15. 1987. (B) February 15, 1989, provided that the owner of such Bond has given written notice of the exercise of the put to the District and the Paying Agent and Bond Registrar on or before February 15, 1988. All Bonds so put to the District pursuant to the provisions of the Bond Ordinance shall become due and payable on the appropriate February 15 for which they are so put and the District shall pay and redeem on such date all Bonds so put pursuant to the provisions hereof. In the event the District shall elect to so redeem and pay any of the Bonds prior to maturity or when the redemption of Bonds is required as aforesaid, the District shall give written notice of its intention to redeem and pay said Bonds on a specified date, the same being described by number and maturity, said notice to be given by United States registered mail addressed to the original purchaser of the Bonds, and to the registered Owner of each Bond, each of said Notices to be mailed at least ten (10) days but not more than sixty (60) days prior to the date fixed for redemption. Whenever any Bond is called for redemption and payment as aforesaid, all interest on said Bond shall cease from and after the date for which such call is made, provided funds are available for the payment of said Bond at the price hereinbefore specified. The Bonds are special obligations of the District payable solely from, and secured as to the payment of principal and interest by a pledge of, the Revenues derived by the District from the operation of the System, including Revenues derived by the District from the operation of its sewerage system, including Revenues derived from extensions and improvements to the System hereafter constructed or acquired by the District, and the taxing power of the District 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 District, nor shall they constitute an indebtedness of the District within the meaning of any constitutional, statutory or charter provision, limitation or restriction. The Bonds are junior and subordinate with respect to the payment of principal and interest from the revenues derived by the District from the operation of the Sewerage System, and in all other respects, to the outstanding revenue bonds of the Fee Fee 51 Trunk Sewer Subdistrict and the Coldwater Creek Subdistrict (the "Outstanding Subdistrict Revenue Bonds") and, in the event of any default in the payment of either principal of or interest on any of the Outstanding Subdistrict Revenue Bonds, all of the revenues of the sewerage system of the respective subdistrict, including all extensions and improvements thereto which have been pledged to secure the Outstanding Subdistrict Revenue Bonds, will be applied solely to the payment of the principal of the interest on the Outstanding Subdistrict Revenue Bonds until such default is cured. The Bonds shall not have any priority with respect to the payment of principal or interest from said revenues or otherwise over any sewerage system revenue bonds of the District hereafter issued in accordance with the provisions of the Bond Ordinance and standing on a parity with the Bonds, nor shall any sewerage system revenue bonds of the District hereafter issued have any priority with respect to the payment of principal or interest from said revenues or otherwise over the Bonds. Under the conditions set forth in the Bond Ordinance, the District has the right to issue additional parity bonds payable from the same source and secured by the same Revenues as the Bonds; 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 Bond Ordinance. The District hereby covenants with the Owner of this Bond to keep and perform all covenants and agreements contained in the Ordinance and the District will fix, establish, maintain and collect such rates, fees and charges for the use and services furnished by or through the sewerage system of the District, including all extensions and improvements thereto hereafter constructed or acquired by the District, as will produce Revenues sufficient to pay the cost of operation and maintenance of said 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 District with respect to the collection, segregation and application of the Revenues of the sewerage system of the District, the nature and extent of the security of the Bonds, the rights, duties and obligations of the District with respect thereto, and the rights of the Owners thereof. This Bond is transferable, as provided in the Ordinance. only upon the registration books kept for that purpose at the above-mentioned office of the Paying Agent and Bond Registrar by the registered Owner hereof in person or by his duly authorized attorney, upon surrender of this Bond together with a written instrument of transfer satisfactory to the Paying Agent and Bond Registrar duly executed by the registered Owner or his duly authorized attorney, and thereupon a new Bond or Bonds in the same 52 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 District and the Paying Agent and Bond Registrar and may deem and treat the person in whose name this Bond is registered 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. The Bonds are issuable in the form of fully registered Bonds without coupons in the denominations of $100,000 or any integral multiple thereof prior to the Escrow Release Date as defined in the Bond Ordinance, and thereafter in the denominations of $5,000 or any integral multiples thereof (the "Authorized Denominations"). Subject to the conditions and upon the payment of the charges provided in the Ordinance, the Owner of this Bond may surrender the same (together with a written instrument of transfer satisfactory to the Paying Agent and Bond Registrar duly executed by the registered Owner or his duly authorized attorney), in exchange for an equal aggregate principal amount of Bonds of the same maturity in any denomination authorized by the Ordinance. 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 shall have been executed by the Paying Agent and Bond Registrar. 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 of the District, including the Revenues of extensions and improvements to the System hereafter constructed or acquired, and for the application of the same as hereinbefore provided. IN WITNESS WHEREOF, THE METROPOLITAN ST. LOUIS SEWER DISTRICT, has executed this Bond by causing it to be signed by the manual or facsimile signature of the Chairman of its Board of Trustees and attested by the manual or facsimile signature of its Secretary-Treasurer, and its corporate seal to be affixed hereto or imprinted hereon, and this Bond to be dated the Dated Date shown above. Registration Date: METROPOLITAN ST. LOUIS SEWER DISTRICT 53 CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds By of the issue described in the Chairman of the within-mentioned Ordinance. Board of Trustees (Seal) Paying Agent and Bond Registrar ATTEST: By Authorized Officer Secretary-Treasurer of the District 54 ================================================================ ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Print or Type Name, Address and Social Security Number of Transferee the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept by the Paying Agent and Bond Registrar 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 Bank) By Title: ================================================================ (Form of Certificate and Assignment for Reverse of Bond) BOND OWNER ELECTION NOTICE ATTENTION:READ GENERAL INSTRUCTIONS BEFORE COMPLETING THIS BOND OWNER ELECTION NOTICE The undersigned hereby presents The Metropolitan St. Louis Sewer District (the "District"), Adjustable Rate Limited Tender Option Clean Water Revenue Bonds, Series A 1985, delivered 55 herewith to A.G. Edwards & Sons, Inc., St. Louis, Missouri, Remarketing Agent (the "Remarketing Agent"), under a Remarketing Agreement (the "Remarketing Agreement"), dated as of April 1, 1985, by and among the Remarketing Agent, and the District. and tenders such Bond(s) (or the portions thereof in integral multiples of Authorized Denominations under the Bond Ordinance specified below) for attempted purchase on February 15, (the "Interest Adjustment Date") at 100% of the aggregate principal amount thereof (the "Purchase Price"), as provided in the Bond Ordinance. Interest payable on the Interest Adjustment Date on fully registered Bonds will be paid by check or draft drawn upon and mailed by the Paying Agent and Bond Registrar to the registered owners thereof. If the Bonds accompanying this Bond Owner Election Notice are being voluntarily tendered by such Owners, this Bond Owner Election Notice need not be accepted by the Trustee or the Remarketing Agent unless it is received, properly completed, at or before 4:00 P.M., St. Louis, Missouri Time on the February 1, or the next succeeding Business Day if such date is not a Business Day, but not before the January 16 next preceding the Interest Adjustment Date by the Remarketing Agent at its corporate office at One North Jefferson Avenue, St. Louis, Missouri 63101. Once the Bond Owner Election Notice has been accepted by the Remarketing Agent, the election evidenced hereby is irrevocable and binding upon the under-signed. The Form for Transfer appearing on this Bond Owner Election Notice relates to each Bond delivered herewith. The following Bond(s) in fully registered form in the name(s) signed and printed or typed at the bottom of this Notice are submitted with this Bond Owner Election Notice for attempted purchase in whole or in part as specified below: (C) (B) Principal Amount, if (A) (B) (C) Principal Amount, if Delivered For any, Not Tendered for Bond Number Attempted Purchase Attempted Purchase $ $ $ $ $ $ 56 $ $ TOTAL $ TOTAL $ NOTE:(1)YOU MUST INSERT IN THE SPACE PROVIDED ABOVE: IN COLUMN (A) THE NUMBER OF EACH OF YOUR BOND(S) BEING SUBMITTED HEREUNDER; IN COLUMN (B) WITH RESPECT TO SUCH BOND(S) BEING SUBMITTED HEREUNDER, THE PRINCIPAL AMOUNT OF SUCH BOND(S) YOU WISH TO HAVE PURCHASED IN MULTIPLES OF AUTHORIZED DENOMINATIONS); AND IN COLUMN (C) THE PRINCIPAL AMOUNT OF SUCH BOND(S) YOU DO NOT WISH TO HAVE PURCHASED, IF ANY. (2) IMPORTANT - SEE GENERAL INSTRUCTIONS With respect to Bonds only a portion of which have been designated to be purchased, the undersigned hereby appoints the Remarketing Agent as his duly authorized attorney and directs the Remarketing Agent to present such Bond(s) to the Paying Agent and Bond Registrar for exchange into (i) Bond(s) representing that portion of the Bond(s) to be purchased and (ii) Bonds representing that portion of the Bond(s) not to be purchased, in fully registered form registered in the same name(s) as the Bond(s) submitted herewith. The undersigned hereby authorize(s) the Remarketing Agent to accept on (his) (their) behalf the Purchase Price of the Bond(s) submitted herewith or the designated portion(s) thereof pursuant to the Remarketing Agreement, and elect(s) to receive payment for such bond(s) (SEE GENERAL INSTRUCTIONS): by bank cashier's check at the time of surrender of the receipt to the Remarketing Agent; or by bank cashier's check mailed to the undersigned at the address indicated below. Signature(s) Print or Type Name(s) 57 Street City State Zip ( ) Area Code Telephone Number Dated: IMPORTANT:YOU MUST SIGN THE FOLLOWING FORM FOR TRANSFER AS INDICATED: FORM OF TRANSFER FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto bearer the fully registered Bond(s) identified above as being submitted for purchase in whole or in part (in the amount set forth in Column (B) above) and all rights thereunder, and hereby irrevocably constitutes and appoints the above-mentioned Remarketing Agent, as duly authorized attorney, to present such Bond(s) to the Paying Agent and Bond Registrar for transfer on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature(s): Note: The signature(s) on this Form for Transfer must correspond exactly to the name(s) of the registered owner(s) of this Bond appearing on the books of the Paying Agent and Bond Registrar in every particular, without alterations, enlargement or any change whatsoever. GENERAL INSTRUCTIONS 1. If this Bond Owner Election Notice is signed by the registered Owner(s) of (a) Bond(s), the signature(s) on this Bond Owner Election Notice must be exactly the same as the name(s) appearing on the Bond Register kept by the Paying Agent and Bond Registrar. If you wish to know in what form your name(s) appear(s) on the Bond Register, contact the Paying Agent and Bond Registrar. 58 2. If Bond(s) delivered to the Remarketing Agent hereunder are owned of record by two or more joint Owners, all such Owners must sign the Bond Owner Election Notice. 3. If this Bond Owner Election Notice is signed by trustees, executors, administrators, guardians, attorneys in fact. officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and a proper evidence of their authority so to act must be submitted. 4. If this Bond Owner Election Notice is signed by a person other than the registered Owner of any Bond(s) delivered herewith the Bond(s) must be either endorsed on the Assignment appearing on the Bond (not the Form for Transfer appearing on this Bond Owner Election Notice) or accompanied by appropriate bond powers, in each case signed exactly as the name or names of the registered Owner or Owners appear on the Bond Register. 5. Signatures on the Assignment appearing on the Bond (not the Form for Transfer appearing on this Bond Owner Election Notice) or on bond powers required by Instruction 4 must be guaranteed by a commercial bank or trust company or by a member organization of the National Association of Securities Dealers. 6. Brokers. banks or fiduciaries holding bonds for customers or beneficiaries should cooperate with such customers or beneficiaries in order to make sure that all of the Bonds belonging, or deemed for tax purposes to belong, to a single Bond Owner are delivered in the same Bond Owner Election Notice. Brokers or other nominees must submit separate Bond Owner Election Notices for each customer or beneficiary. 7. The method of presenting Bond(s) to the Remar- keting Agent is at the risk of the person making such presentation. If made by mail, registered mail is recommended. 8. Bond(s) may be delivered for purchase in whole or in part (portions thereof in integral multiples of Authorized Denominations). The portion submitted for purchase must be in increments of Authorized Denominations, and you must indicate what portion of such Bond(s) is being submitted for purchase in Column (B) of the second large box above. The Paying Agent and Bond Registrar will issue as soon as practicable after the Interest Adjustment Date a new bond in your name in an aggregate principal amount equal to the portions of Bond(s), if any, you do not have purchased. 9. If a Bond Owner has elected to receive payment of the Purchase Price of his Bond(s) or portions(s) thereof by bank 59 cashier's check mailed to him at the address indicated in this Bond Owner Election Notice, surrender of his Receipt to the Remarketing Agent is not necessary. 10. Bonds may be delivered to the Remarketing Agent pursuant to the terms of the Remarketing Agreement for attempted purchase on February 15, 1988, and on each February 15 thereafter. Be sure to insert in the first paragraph of this Bond Owner Election Notice the year in which you are exercising the election to have your Bond(s) purchased. FOR USE OF REMARKETING AGENT ONLY Receipt # was issued in exchange for the above-mentioned Bonds. 60 The foregoing Ordinance was adopted March 13, 1985.