Agmt08 South Bayside System Authority AKA Silicon Valley Clean Water

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Section 4. Pledge of Net Revenues. The City hereby establishes a pledge of, lien on and security interest in all of the Net Revenues to secure the SBSA Bond Payments. The City shall deposit all of the Gross Revenues in the Sewer Utility Fund immediately upon receipt. Amounts on deposit in the Sewer Utility Fund will be applied by the City to pay when due the following amounts in the following order of priority: (a) all Operation and Maintenance Costs; (b) the SBSA Bond Payments and all payments of principal of and interest and premium (if any) on outstanding Parity Debt; (C) any other payments required to comply with the provisions of the Joint Powers Agreement and any Parity Debt Documents; and (d) any other lawful purposes of the Sewer Utility System. The City shall manage, conserve and apply amounts on deposit in the Sewer Utility Fund in such a manner that all deposits required to be made under Section 4 will be made at the times and in the amounts so required. So long as the City is not ¡n default in the payment of the SBSA Bond Payments or the payment of principal of and interest and premium (if any) on outstanding Parity Debt, the City may use and apply amounts in the Sewer Utility Fund for (i) the payment of any subordinate obligations or any unsecured obligations, (ii) the acquisition and construction of improvements to the Sewer Utility System, (iii) the establishment of a rate stabilization fund, or (iv) any other lawful purposes of the City. Section 5. Special Obligation of the City; Obligations Absolute. The City's obligation to pay the SBSA Bond Payments and any other amounts coming due and payable hereunder is a special obligation of the City limited solely to the Net Revenues. Under no circumstances is the City required to advance moneys derived from any source of income other than the Net Revenues and other sources specifically identified herein for the payment of the SBSA Bond Payments and such other amounts. No other funds or property of the City are liable for the payment of the SBSA Bond Payments and any other amounts coming due and payable hereunder. The obligations of the City to pay the SBSA Bond Payments from the Net Revenues and to perform and observe the other agreements contained herein are absolute and unconditional and are not subject to any defense or any right of set-off, counterclaim or recoupment arising out of any breach by the Authority of any obligation to the City or otherwise with respect to the Sewer Utility System, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority. Until all of the SBSA Bond Payments are fully paid or prepaid, the City will (a) not suspend or discontinue payment of any SBSA Bond Payments, (b) perform and observe all other agreements contained in this Agreement, and (c) not terminate this Agreement for any cause, including but not limited to the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Sewer Utility System, failure to complete the acquisition and construction of the Project by the estimated completion date thereof, sale of the Sewer Utility System, the taking by eminent domain of title to or temporary use of