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<br />Bonds Resolution and the Parity Bonds Resolutions; but the right of the Authority to issue revenue bonds payable from a
<br />subordinate lien on the sUIplus Net Revenues in specifically recognized and retained.
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<br />Insurance.
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<br />(1) The Board shall cause to be insured for such parts of the System as would usually be insured by corporations
<br />operating like properties, with a responsible insurance company or companies, against risks, accidents, or casualties against
<br />which and to the extent insurance is usually carried by corporations operating like properties, including, to the extent
<br />reasonably obtainable, fire and extended coverage insurance, insurance against damage by floods, and use and occupancy
<br />insw"ance. Public liability and property damage insurance shall also be carried unless legal counsel for the Board gives a
<br />written opinion to the effect that the Authority and the Board are not liable for claims which would be protected by such
<br />insurance. All insurance premiums shall be paid as an Operating Expense. At any time while any contractor engaged in
<br />construction work shall be fully responsible therefor, the Board shall not be required to cany insurance on the work being
<br />constructed if the contractor is required to cany appropriate insurance. All such policies shall be open to the inspection of the
<br />Bondholders and their representatives at all reasonable times. Upon the happening of any loss or damage covered by insurance
<br />from one or more of said causes, the Board shall make due proof of loss and shall do all things necessary or desirable to cause
<br />the insuring companies to make payment in full directly to the Board. The proceeds of insurance covering such property,
<br />together with any other funds necessary and available for such purpose, shall be used forthwith by the Board for repairing the
<br />property damaged or replacing the property destroyed; provided, however, that if said insurance proceeds and other funds are
<br />insufficient for such purpose, then said insurance proceeds pertaining to the System shall be deposited in a special and separate
<br />trust fund, at an official depository of the Authority, to be designated the Insurance Account The Insurance Account shall be
<br />held until such time as other funds become available which, together with the Insurance Account, will be sufficient to make the
<br />repairs or replacement originally required.
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<br />(2) The annual audit hereinafter required may contain a section commenting on whether or not the Board has
<br />complied with the requirements of this section with respect to the maintenance of insurance, and shall state whether or not all
<br />insurance premiums upon the insurance policies to which reference is made have been paid.
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<br />Records. The Board shall keep proper books of record and account in which full, true, proper, and correct entries will
<br />be made of all dealings, activities, and transactions relating to the System, the Pledged Revenues, and the Funds created
<br />pursuant to this Resolution, and all books, documents, and vouchers relating thereto shall at all reasonable times be made
<br />available for inSpection' upon request of any Bondholder or customer of the Authority. To the extent consistent with the
<br />provisions of this Resolution, the Board shall keep its books and records in a manner confonning to standard accounting
<br />practices as usually would be followed by private corporations owning and operating a system similar to the System, with
<br />appropriate recognition being given to essential differences between municipal and corporate accounting practices.
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<br />Audits. After the close of each fiscal year, an audit will be made of the books and accounts relating to the System and
<br />the Pledged Revenues by an independent certified public accountant or an independent fmn of certified public accountants. The
<br />audit shall include a schedule of the deposits made to the various funds created by this Resolution. The annual audit reports
<br />shall be open to the inspection of the Bondholders and their agents and representatives at all reasonable times.
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<br />Governmental AlZencies. It will comply with all of the terms and conditions of any and all franchises, permits, and
<br />authorizations applicable to or necessary with respect to the System, and which have been obtained from any govermnental
<br />agency; and the Board has or will obtain and keep in full force and effect all franchises, permits, authorization, and other
<br />requirements applicable to or necessary with respect to the acquisition, construction, equipment, operation, and maintenance of
<br />the System.
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<br />No Comnetition. It will not operate, or grant any franchise or pennit for the acquisition, construction, or operation of,
<br />any facilities which would be ill competition with the System, and to the extent that it legally may, the Authority will prohibit
<br />any such competing facilities.
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