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<br />Section 2.01. Pled~e of Revenues. The Bonds herein authorized are "additional bonds or obligations"
<br />described in the Ordinances authorizing the Outstanding Bonds, and the principal thereof and the interest
<br />thereon, together with the principal of and interest on the Outstanding Bonds, are and shall be payable
<br />from and secured by an irrevocable first lien on and pledge of the net revenues to be derived from the
<br />operation and/or ownership of the System. Current Expenses shall include all reasonable and necessary
<br />costs of operation, repairs, maintenance, and insurance, but shall exclude depreciation, payments into the
<br />Water and Sewer System Junior Lien Revenue Bond Interest and Sinking Fund and the Water and Sewer
<br />System Replacement and Repair Fund hereinafter created.
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<br />Seetin 7.01. Special Funds: Use of Surplus Funds. The City covenants, agrees and confirms that so long
<br />as any of the Outstanding Bonds, Bonds or Additional Bonds are outstanding, it will maintain in a bank
<br />which is a member of the Federal Deposit Insurance Corporation, the special account established pursuant
<br />to the Ordinance authorizing the Outstanding Bonds known as the "Water and Sewer System Revenue
<br />Fund", into which Fund shall be deposited as received all income and revenue arising from the operation or
<br />ownership of the combined waterworks and sewer system, and shall be kept separate and apart from all
<br />other funds, and shall be expended and used only in the manner and order specified below, all as permitted
<br />and defined by applicable statutes:
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<br />(a) Current Expenses of the System shall be payable from month to month as a first charge
<br />against the Water and Sewer System Revenue Fund as the same become due and payable. The City
<br />covenants and agrees that the Current Expenses of the operation of the System in any year will not
<br />exceed the reasonable and necessary amounts therefor.
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<br />(b) There has been created, established, and continuously maintained in a bank which is a member
<br />of the Federal Deposit Insurance Corporation, pursuant to the Ordinance authorizing the
<br />Outstanding Bonds, a separate account known as the "Water and Sewer System Junior Lien Revenue
<br />Bond Interest and Sinking Fund", (the "Water and Sewer System Junior Lien Bond Fund"). Said Fund
<br />is hereby confirmed and shall be used exclusively for the purpose of paying principal and interest on
<br />the Outstanding Bonds, the Bonds, and Additional Bonds hereafter issued to be on a parity with the
<br />Outstanding Bonds and the Bonds. The City covenants and agrees that so much of the proceeds from
<br />the sale of the Bonds as represents acèrued interest thereon shaH be deposited to the credit of the
<br />Water and Sewer System Junior Lien Bond Fund concurrently with the receipt of such proceeds.
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<br />Thereafter, and after providing for the payment of Current Expenses of the System, and in addition
<br />to the payments required by the Ordinances authorizing the Outstanding Bonds for the payment of
<br />the principal and interest on the Outstanding Bonds, there shall be transferred from the Water and
<br />Sewer System Revenue Fund to each month, not less than one-fifth of the next maturing interest
<br />payment and one-tenth of the next maturing principal payment with respect to the Bonds until the
<br />funds and/or investments in the Water and Sewer System Lien Bond Fund are sufficient to pay debt
<br />service requirements on the Outstanding Bonds and Bonds for the then current year, plus a debt
<br />service reserve in the sum of $ .
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<br />(c) There is hereby confirmed, and the City shaH continue to maintain in a bank which is a
<br />member of the Federal Deposit Insurance Corporation, so long as any of the Outstanding Bonds,
<br />Bonds or Additional Bonds are outstanding, a "Water and Sewer System Replacement and Repair.
<br />Fund", into which the sum of $ , or, such portion thereof as is available, shall be
<br />deposited on or before the 10th day of each month from the net revenues of the combined water and
<br />sewer system until the funds and/or investments therein shall amount to $ . Funds in
<br />said Water and Sewer System Replacement and Repair Fund shall be used to pay for any
<br />extraordinary repairs or replacements to the System for which funds are not otherwise available and
<br />to pay maturing principal or interest on the Outstanding Bonds, Bonds and Additional Bonds when
<br />funds in the Water and Sewer System Junior Lien Bond Fund are inadequate for such purposes.
<br />Whenever any funds are paid out of said Water and Sewer System Replacement and Repair Fund,
<br />payments into the account shaH be resumed and continued until such time as the account has been
<br />restored to the level of $
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<br />Subject to the foregoing, which are cumulative, any balance in the Water and Sewer System Revenue
<br />Fund may be used for the purpose of paying the cost of unusual or extraordinary maintainance,
<br />repairs and replacements, or for extensions and improvements which wiU either enhance the
<br />revenue-producing capacity of the Water and Sewer System or provide a higher degree of service,
<br />or for acquiring the Outstanding Bonds, Bonds or Additional Bonds for cancel1ation, or for redeeming
<br />the Outstanding Bonds, Bonds or Additional Bonds in inverse numerical and maturity order at not to
<br />exceed the redemption price, or for any other lawful purpose.
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