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e e and Sewer System Revenue Bonds. Series 1990, and the "City of La Pone, Texas. Waterworks and Sewer System Revenue Refunding Bonds, Series 1991. (j) The tenn "Reserve Fund" shall mean that fund described in Section 12 hereof. (k) The tenn "System" shall mean the City's entire existing waterworks and sanity sewer system. together with all future extensions. enlargements. additions, replacements. and improvements thereto. (1) The "System Fund" shall mean that fund described in Section 10 hereof. (m) The tenn "Year" or "fiscal year" shall mean the regular fiscal year used by the City in cOMection with the operation of the System, which may be any 12 consecutive months period established by the City. SECTION 8. PLEDGE. The Parity Bonds. redemption premium. if any, and any interest payable thereon. are and shall be secured by and payable from a fITSt lien on and pledge of the Net Revenues, and the Net Revenues are funher pledged irrevocably to the establishment and maintenance of the Funds created by the Parity Bonds Ordinances. The Parity Bonds are not and will not be secured by or payable from a mortgage or deed of trust on any real, personal, or mixed properties constituting the System. The Registered Owner of the Parity Bonds shall never have the right to demand payment of such obligations out of any funds raised or to be raised by taxation, or from any source whatsoever other than the Net Revenues. This Ordinance shall not be construed as requiring the City to expend any funds which are derived from sources other than the operation of the System, but nothing herein shall be construed as preventing the City from doing so. SECTION 9. RATES. The City covenants and agrees with the holders of the Parity Bonds that it will: (a) fIX and maintain rates and collect charges for the facilities and services afforded by the System which will provide revenues sufficient at all times: (1) To pay all operation, maintenance, depreciation, replacement, and bettennent charges of the System; (2) To establish and maintain the Interest and Sinking Fund; (3) To generate in each year Net Revenues equal to one and twenty-five hundredths (1.25) times the maximum annual requirement for the payment of the principal of and interest on the Parity Bonds at the time outstanding (although amounts shall be paid into the Interest and Sinking Fund and the Reserve Fund only in accordance with Sections 10 and 12 hereof); and (4) To pay all indebtedness outstanding against the System, other than the Parity Bonds, as and when the same become due: and (b) deposit as collected all revenues derived from the operation of the System into the System Fund. SECTION 10. SYSTEM FUND. There has been created and established on the books of the City. and accounted for separate and apart from all other funds of the City. a special fund entitled the "City of La Porte. Texas, Waterworks and Sewer System Fund" (the "System Fund"). All gross revenues are and shall be credited to the System Fund immediately upon receipt. The necessary and reasonable expenses of operation and maintenance of the System shall first be paid from the System Fund upon approval of the City Council and, from 10