51-91 $4,750,000 Water System Mortgage Revenue Bonds

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be deposited to the credit of the Bond Reserve Fund; and (c) the balance of said Proceeds shall be deposited to the credit of the Construction Fund for Project 1991. Simultaneously with the delivery of the Series 1991 Bonds, the Issuer shall deposit from Revenues in the custody of the Issuer: (i) into the Bond Reserve Fund the amount determined and set forth in the Certificate of Award; (ii) into the Water Revenue Fund an amount equal to one-twelfth (1/12) of the Operating Expenses during the preceding Fiscal Year; and (iii) the balance into the Water Reserve Fund. Section 6. ~ecuritv for the Bonds. As provided in the Indenture, the Bonds shall be special obligations of the Issuer and (a) the Bond Service Charges thereon shall be payable equally and ratably 'solely from the Net Revenues, the Special Funds, the Water Revenue Fund (to the extent moneys therein constitute Net Revenues) and the Water Reserve Fund; and (b) the payment of Bond Service Charges on the Bonds shall be secured (i) by a pledge of and lien on (A) the Special Funds, (B) Net Revenues, (C) the Water Revenue Fund (to the extent the moneys therein constitute Net Revenues) and (D) the Water Reserve Fund, provided, however, that any pledge or lien on any fund, account, revenues, money or other intangible property not in the custody of the Trustee shall be valid and enforceable only to the extent permitted by law and (ii) by the Indenture; provided, however, that nothing herein shall prevent payment of Bond Service Charges on Additional Bonds from being otherwise secured and payable from sources or by property and instruments not applicable to the Series 1991 Bonds and any one or more Series of Additional Bonds or not being secured or protected from sources or by property or instruments applicable to the Series 1991 Bonds or one or more Series of Additional Bonds. The Issuer covenants that it will promptly pay from such sources the Bond Service Charges on every Bond issued under the provisions of the Indenture at the places, on the dates and in the manner provided in the Indenture and in said Bonds, according to the true intent and meaning thereof. Nothing in this Bond Legislation, the Bonds, or the Indenture, shall represent or constitute a general obligation, debt or bonded indebtedness of the' Issuer and further, nothing therein or herein gives the Holders of any Bonds, and they do not have, the right to have excises, ad valorem taxes or other taxes levied by the Legislative Authority or the Issuer, or by the State or the taxing authority of any other political subdivision, for the payment of Bond Service Charges on the Bonds, but such Bonds are payable solely from the Net Revenues and the Special Funds, and the Water Reserve Fund, as provided in the Indenture; provided, however, that nothing herein shall be deemed to prohibit the Issuer, of its own volition, from using to the extent it is l&wfully authorized to do so, any other resources or revenues for the fulfillment of any of the terms, conditions or obligations of the Indenture or any of the Bonds. Section 7. Creation of Funds~ Application of Revenues. The Special Funds, Water Reserve Fun~, Rebate Fund and Water Revenue Fund shall be held and applied as provided in the IndentUre. So long as any Bonds secured by the Indenture remain outstanding, all Revenues of the Utility as now constituted or hereafter improved or extended, together with any Revenues available on the date of delivery of the Series 1991 Bonds, shall be deposited in, or constitute a part of, as the case may be, the Water Revenue Fund. Section 8. Covenants of Issuer. (a) In addition to other covenants of the Issuer herein and in the Indenture, the Issuer, by issuance of the Series 1991 Bonds, covenants and agrees with the Holders of the Bonds that: -7-