80A - JOINT - SAFA - WATER SYS BONDS

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paragraph to any one or more of the Information Services or Securities Depositories, or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. Failure by the Trustee to mail notice of redemption pursuant to this paragraph to any one or more of the respective Owners of any Bonds designated for redemption shall not affect the of the proceedings for redemption with the Owners to whom such notice was mailed. Parity Obligations (a) The City may not create any Obligations the payments of which are senior or prior in right to the payment by the City of Parity Obligations. (b) Without regard to the conditions stated below, the City may at any time enter into or create an obligation or commitment which is a Credit Provider Reimbursement Obligation or a Qualified Swap Agreement provided the Obligation to which the Qualified Swap Agreement relates is a Parity Obligation. (c) The City may at any time and from time to time issue or create Parity Obligations, provided: (1) The City is not in default under the term of this Agreement. (2) (i) Net System Revenues, as certified by the City, for the most recent audited Fiscal Year preceding the date of execution of the Parity Obligations, plus (ii) projected Net System Revenues (as described below) are at least equal to 120% of Aggregate Maximum Annual Debt Service. The projections described in (2)(ii) above may take into account (A) increases in the charges made for service from the Water System which have been adopted by the City prior to the date of issuance or incurrence of such Parity Obligations, but which were not in effect for all or part of such preceding Fiscal Year, and which are scheduled to be effective in the period of Debt Service shown for such Parity Obligations, and (2) an allowance for estimated additional average annual Net System Revenues from any additions or connections to or improvements or extensions of the Water System which have occurred from the end of Fiscal Year preceding the date of execution of the Parity Obligations. (3) Notwithstanding the requirements described above, Parity Obligations may be issued or incurred to refund outstanding Parity Obligations if, after giving effect to the application of the proceeds thereof, total Debt Service will not be increased in any Fiscal Year in which Parity Obligations (outstanding on the date of issuance or incurrence of such refunding Parity Obligations, but excluding such refunding Parity Obligations) not being refunded are outstanding. (4) The City may but shall not be required to fund a reserve fund or obtain a reserve fund surety or instrument with respect to any Parity Obligations. If a reserve fund is funded for any Parity Obligations or a qualified reserve fund surety or instrument is obtained with respect to any Parity Obligations, such funded reserve fund or qualified reserve fund surety or instrument shall secure only the related Parity Obligations and shall not support the Bonds or any other Parity Obligations. For purposes of calculating the Debt Service coverage requirement described above, System Revenues shall exclude reimbursements from the United States of America pursuant to Section 54AA of the Code (Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111 -5, 23 Stat. 115 (2009), enacted February 17, 2009)), or any future similar program), and Debt Service shall be net of such reimbursements. Subordinate Obligations The City further covenants that it shall not issue or incur any Subordinate Obligations unless Net System Revenues or projected Net System Revenues, calculated in the same manner as described in paragraph (b) above, are equal to at lea8�lo9�t gm of Debt Service on all Parity Obligations and