397

371

(1) The facility or facilities to be constructed, acquired, extended, or improved entirely, or in part, from the proceeds of such additional Series of parity Bonds is or are made a part of the Dormitory System to be established in accordance with the provisions of Special Condition (b) above and the revenues derived therefrom are pledged as additional security for all Bonds then outstanding and such additional Series of parity Bonds.

(2) The Borrower is in full compliance with all covenants and undertakings in connection with all Bonds then outstanding and payable from the net revenues of the Dormitory System and any other revenues pledged as security.

(3) The estimated annual net revenues of the facility or facilities to be constructed, acquired, extended, or improved entirely, or in part, from the proceeds of such additional Series of parity Bonds, together with any other revenues pledged as security, when added to the estimated annual net revenues of the then existing Dormitory System, including any portion thereof which is under construction, together with any other revenues pledged as security, shall equal at least one and thirty-five hundredths (1.35) times the average annual requirements for principal of and interest on all Bonds then outstanding and on the additional Bonds authorized or to be issued and payable from the net revenues of the Dormitory System and any other revenues pledged as security.

The estimate of the future annual net revenues of the then existing Dormitory System (including any portion thereof which was under construction) shall be based on actual net revenues for the fiscal year next preceding the issuance of the additional parity Bonds as adjusted, if necessary, to reflect the schedule or rates and charges to become effective upon the addition thereto of the new facility or facilities, and after giving recognition to any anticipated changes in current expenses of the Dormitory System.

The calculation of the estimated net revenues of the facility or facilities to be constructed, acquired or improved, shall be predicated upon an assumed utilization rate of not more than 90 per cent and upon the anticipated rates and charges and current expenses upon completion.

The calculation of the average annual debt service requirements for principal of and interest on the additional Bonds to be issued shall, regardless of whether such Bonds are to be serial or term Bonds, be determined on the basis of the principal of and interest on such Bonds being payable in approximately equal installments.

The calculation of the estimates, as herein provided, shall be made by the Chief Financial Officer of the Borrower and approved by the President and governing body.

(k) The Borrower covenants and agrees that in the event additional Series of parity Bonds are issued in accordance with the provisions of Conditions (i) and (j) above, it shall:

(1) Adjust the amounts of the semi-annual deposits into the "Dormitory System Bond and Interest Sinking Fund Account of 1963", established in accordance with the provisions of Special Condition (e) above, in the manner prescribed by said Condition.

(2) Increase the maximum amount to be deposited annually into the "Dormitory System Repair and Replacement Reserve Account of 1963" to be established in accordance with the provisions of Special Condition (f) above, so that the maximum amount to be accumulated in said Reserve shall bear the same relationship to the total value of the Dormitory System as enlarged by the addition thereto of the facility or facilities constructed, acquired or improved entirely, or in part, fromthe proceeds of such additional Series of parity Bonds, as does the presently provided maximum Reserve of $520,000 bear to the total value of the Dormitory System to be established in accordance with the provisions of paragraphs (1) through (4) of Special Condition (b) above, which value shall be conclusively construed to be $13,500,000; provided, however, that the amount of such annual deposit shall not be increased until the fiscal year immediately