Section 1. The Rector and Visitors of the University of
Virginia (the "Board") (a) covenants to fix, revise, charge
and collect charges and surcharges from the University's
auxiliary enterprises in connection with the provision of
heat and air conditioning by the Project to such auxiliary
enterprises so that the revenues therefrom will at all times
be sufficient to pay the principal of, premium, if any, and
interest on the Bonds issued to finance a portion of the
Project as and when the same become due, and to pay a portion
of the current expenses of operating the Project (the "Current
Expenses") which portion of such Current Expenses shall
be a first charge on such charges and surcharges and which
portion of such Current Expenses shall be at least equal to a
percentage of such Current Expenses determined by dividing
the total annual steam usage of the auxiliary enterprises
utilizing the Project by the total annual steam usage attributable
to the Project (the "Allocated Current Expenses"); and
(b) pledges such charges and surcharges to the payment of the
principal of, premium, if any, and interest on the Bonds
issued to finance a portion of the Project. The Board
further covenants that such charges and surcharges will be
fixed, revised, charged and collected so that the revenues
therefrom, after payment of Allocated Current Expenses, will
at all times be sufficient to pay the principal of, premium,
if any, and interest on the Bonds issued to finance a portion
of the Project as and when the same become due, and to pay
debt service on any outstanding obligations that have been
previously issued which are secured by the charges and
surcharges pledged herein, that portion of the Bonds issued
to finance a portion of the Project to be secured on a parity
with such obligations (other than any obligations secured by
a prior right in the rentals, fees and charges pledged
herein.) Any charges and surcharges pledged herein in excess
of the amounts required for the payment of Allocated Current
Expenses, the payment of the principal of, premium, if any,
and interest on the Bonds issued to finance a portion of the
Project when due, and debt service on any outstanding obligations
which are secured by such charges and surcharges may be
used by the University for any other proper purpose.
