80A - JOINT - SAFA - WATER SYS BONDS

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price for the Project has been paid in full (or provision for the payment thereof has been made pursuant to the Indenture). The City will not discontinue or suspend any Installment Payments whether or not the Project or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced, curtailed or terminated in whole or in part, and such Installment Payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or non - performance by any party of any agreement for any cause whatsoever. Rate Covenant The City hereby covenants to fix, prescribe, revise and collect rates and charges for the services and facilities famished by the Water System during each Fiscal Year which (together with other funds accumulated from System Revenues and which are lawfully available to the City for payment of any of the following amounts during such Fiscal Year) are at least sufficient, after making allowances for contingencies and errors in estimates, to pay the following amounts in the following order: G) all Maintenance and Operation Costs of the Water System estimated by the City to become due and payable in such Fiscal Year; (ii) all Debt Service coming due and payable in such Fiscal Year; and (iii) all payments required to meet any other obligations of City which are charges, liens or encumbrances upon, or payable from, the Net System Revenues. The City shall fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water System during each Fiscal Year which are sufficient to yield Net System Revenues, at least equal to one hundred and twenty percent (120 %) of the amounts payable under the preceding clause (b) in such Fiscal Year. The City may establish, as a fund within the Water Revenue Fund, a fund denominated the Rate Stabilization Fund. From time to time the City may deposit into the Rate Stabilization Fund, from current System Revenues, such amounts as the City shall determine and the amount of available current System Revenues shall be reduced by the amount so transferred. Amounts may be transferred from the Rate Stabilization Fund solely and exclusively to pay Maintenance and Operation Costs, and any amounts so transferred shall be deemed System Revenues when so transferred. All interest or other earnings upon amounts in the Rate Stabilization Fund may be withdrawn therefrom and accounted for as System Revenues. 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 Star. 115 (2009), enacted February 17, 2009)), or any future similar program), and Debt Service shall be net of such reimbursements. Pledge Under the Indenture Pursuant to the Indenture, the Authority has irrevocably pledged all Revenues and amounts on deposits in the funds and accounts established under the Indenture (other than amounts on deposit in the Rebate Fund) to the payments of principal and interest on the Bonds. The Indenture defines the term "Revenues" to mean all Installment Payments paid by the City pursuant to the Installment Purchase Agreement, including interest or profits from the investment of money in any account or fund (other than the Rebate Fund). In order to secure the pledge of the Revenues, the Authority has transferred, conveyed and assigned to the Trustee, for the benefit of the Owners, all of the Authority's rights under the Installment Purchase Agreement (excluding its right to indemnification thereunder), including the right to receive Installment Payments from the City, the right to receive any proceeds of insurance maintained thereunder or any condemnation award rendered with respect to the Project and the right to exercise any remedies provided therein in the event of a default by the City thereunder. 80A -153 13