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financed from Bond proceeds, if any, (ii) any amount over the minimum purchase price <br />of the Bonds paid by the Purchaser, and (iii) the accrued interest paid by the Purchaser <br />upon closing and delivery of the Bonds. <br />(b) The proceeds of the Bonds, less the appropriations made in paragraph (a), <br />together with any other funds appropriated during the construction of the Projects financed <br />by the Bonds (as identified in Resolution No. 96-90) (Projects) will be deposited in a <br />separate construction fund to be used solely to defray expenses of the Projects and the <br />payment of principal and interest on the Bonds prior to the completion and payment of <br />all costs of the Projects. When the Projects are completed and the cost thereof paid, the <br />construction account is to be closed and any balance therein is to be deposited in the Debt <br />Service Fund. <br />4.02. The City Council covenants and agrees with the holders of the Bonds that so long <br />as any of the Bonds remain outstanding and unpaid, it will keep and enforce the following <br />covenants and agreements: <br />(a) The City will continue to maintain and efficiently operate the water system <br />as public utilities and conveniences free from competition of other like utilities and will <br />cause all revenues therefrom to be deposited in bank accounts and credited to the water <br />system accounts as hereinabove provided, and will make no expenditures from those <br />accounts except for a duly authorized purpose and in accordance with this resolution. <br />(b) The City will also maintain the Debt Service Fund as a separate account <br />in the Water Fund and will cause money to be credited thereto from time to time, out of <br />net revenues from the water plant and system in sums sufficient to pay principal of and <br />interest on the Bonds when due. <br />(c) The City will keep and maintain proper and adequate books of records and <br />accounts separate from all other records of the City in which will be complete and correct <br />entries as to all transactions relating to the sewer plant and system and which will be open <br />to inspection and copying by any bondholder, or the bondholder's agent or attorney, at <br />any reasonable time, and it will furnish certified transcripts therefrom upon request and <br />upon payment of a reasonable fee therefor, and said account will be audited at least <br />annually by a qualified public accountant and statements of such audit and report will be <br />furnished to all bondholders upon request. <br />(d) The City Council will cause persons handling revenues of the water system <br />to be bonded in reasonable amounts for the protection of the City and the bondholders and <br />will cause the funds collected on account of the operations of the water system to be <br />deposited in a bank whose deposits are guaranteed under the Federal Deposit Insurance <br />Law. <br />DJK108785 <br />LN140-52 <br />