Item PFA-3 - Water Revenue Bonds

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commodities or byproducts sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the Water System, (ii) investment earnings on, and income derived from, the amounts referred to in the preceding clause (i), including investment earnings on the operating reserves, to the extent that the use of such earnings is limited to the Water System by or pursuant to law, and earnings on any Reserve Fund for Obligations but only to the extent that such earnings may be utilized under the Issuing Instrument for the payment of debt service for such Obligations; (iii) the proceeds derived by the City directly or indirectly from the sale or lease of a part of the Water System; and (iv) any amount received from the levy or collection of taxes which are solely available and are earmarked for the support of the operation of the Water System; provided, however, that System Revenues shall not include: (a) customers' deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City; and (b) the proceeds of borrowings. Notwithstanding the foregoing, there shall be deducted from System Revenues any amounts transferred into a Rate Stabilization Fund as contemplated by Section 6.08(b), and there shall be added to System Revenues any amounts transferred out of such Rate Stabilization Fund to pay Maintenance and Operation Costs. System Revenues shall include 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 Stat. 115 (2009), enacted February 17, 2009), or any future similar program); provided, however, for purposes of complying with the rate setting covenants contained herein and satisfying the debt service coverage requirements in connection with the issuance or incurring of Parity Obligations. System Revenues shall not include such other reimbursements from the United States of America. "Tax Certificate" means a certificate relating to the requirements of the Code, signed on behalf of the City and the Authority and delivered in connection with the issuance of Tax -Exempt Installment Payment Obligations. "Tax -Exempt Installment Payment Obligations" means Installment Payment Obligations in respect of which it is intended that the interest component thereof will be excluded from gross income of the holders thereof (other than any holder who is a "substantial user" of facilities financed with such obligations or a "related person" within the meaning of Section 147(a) of the Code) for federal income tax purposes, whether or not such interest in includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including any alternative minimum tax or environmental tax under the Code. "Tender Indebtedness" means any Parity Obligations or portions of Parity Obligations, a feature of which is an option, on the part of the holders thereof, or an obligation, under the terms of such Parity Obligations, to tender all or a portion of such Parity Obligations to the City, a Paying Agent, or other fiduciary or agent for payment or purchase and requiring that such. Bonds or portions of Bonds or that such rights to payments or portions of payments be purchased if properly presented. "Term Parity Obligations" means Term Obligations which are Parity Installment Obligations or are payable on a parity with Parity Installment Obligations. 11 55394.00068\42092413.3