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<br />12 <br />The City will faithfully observe and perform all the agreements, conditions, covenants <br />and terms required to be observed and performed by it pursuant to all outstanding Parity <br />Obligations as such may from time to time be amended. <br /> <br />Section 5.02. Against Encumbrances. <br /> <br />The City hereby covenants that, subject to Section 7.02 of the Indenture, there is no <br />pledge of or lien on Net Revenues senior to the pledge and lien securing the Installment <br />Payments. The City will not make any further pledge of or place any lien on the Net Revenues, <br />provided that the City may at any time, or from time to time, pledge or encumber the Net <br />Revenues in connection with the issuance or execution of Parity Obligations or other obligations <br />permitted by Section 4.03 hereof, or subordinate to the pledge of Net Revenues herein. <br /> <br />Section 5.03. Against Sale or Other Disposition of Property. <br /> <br />The City will not sell, lease, encumber or otherwise dispose of the Enterprise or any part <br />thereof in excess of one-half of one percent of the book value of the Enterprise in any Fiscal <br />Year, unless a Finance Officer certifies that such sale, lease, encumbrance or disposition will <br />not materially adversely affect the operation of the Enterprise or the Net Revenues; provided <br />however, any real or personal property which has become non-operative or which is not needed <br />for the efficient and proper operation of the Enterprise, or any material or equipment which has <br />become worn out, may be sold or exchanged at not less than the fair market value thereof and <br />the proceeds (if any) of such sale or exchange shall be deposited in the Revenue Fund. <br /> <br />The City will not enter into any agreement or lease which would impair the ability of the <br />City to meet the covenant set forth in Section 5.14 hereof or which would otherwise impair the <br />rights of the Bond Owners or the operation of the Enterprise. <br /> <br />Section 5.04. Against Competitive Facilities. <br /> <br />The City will not, to the extent permitted by law, acquire, maintain or operate and will not, <br />to the extent permitted by, law and its current contractual rights and obligations and within the <br />reasonable, scope of its powers, permit any other public or private agency, corporation, district <br />or political subdivision or any person whomsoever to acquire, maintain or operate within the City <br />any utility system competitive with the Enterprise, which utility system has a materially adverse <br />impact on Revenues. <br /> <br />Section 5.05. Tax Covenants. <br /> <br />(a) Private Activity Bond Limitation. The City will assure that the proceeds of the <br />Bonds are not so used as to cause the Bonds to satisfy the private business tests of section <br />141(b) of the Code or the private loan financing test of section 141(c) of the Code. <br /> <br />(b) Federal Guarantee Prohibition. The City will not take any action or permit or <br />suffer any action to be taken if the result of such action would be to cause any of the Bonds to <br />be "federally guaranteed" within the meaning of section 149(b) of the Code. <br /> <br />(c) Rebate Requirement. The City will take any and all actions necessary to assure <br />compliance with section 148(f) of the Code, relating to the rebate of excess investment <br />earnings, if any, to the federal government, to the extent that such section is applicable to the <br />Bonds. <br />8.C. - Page 174