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ARTICLE III COVENANTS, SPECIAL FUNDS AND APPLICATION THEREOF 3.01 Bonds Not to Be Indebtedness of Issuer. Neither the Bonds nor the coupons attached thereto shall be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of Art. VII, X12, Fla. Const. (1968), but shall be payable solely from and secured by a prior lien upon and pledge of the Pledged Funds as herein provided. No owner or holder of any Bond or coupon appertaining thereto shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond or coupon or Operating Expenses, or be entitled to payment of such Bond or coupon from any moneys of the Issuer except from the Pledged Funds in the manner provided herein. 3.02 Security for Bonds. The payment of the principal of and interest on the Bonds shall be secured forthwith equally and ratably by a pledge of and prior lien upon the Pledged Funds. The Issuer does hereby irrevocably pledge the Pledged Funds to the payment of the principal of and interest on the Bonds and to the payment into the Sinking Fund at the times pro- vided of the sums required to secure to the holders of the Bonds the payment of the principal thereof and interest thereon at the respective maturities of the Bonds and coupons so held by them. 3.03 Application of Bond Proceeds. The Issuer hereby covenants that it will establish a separate account or accounts into which shall be deposited the proceeds from the sale of the Bonds (except such portion thereof as shall be necessary to pay interest on the Bonds during the acquisition and construction of the Project, which shall be deposited in the Sinking Fund), grant funds and the additional funds, if any, required to assure payment in full of the Cost of the Project. Withdrawals from the Construction Account shall be made only for such purposes as shall have been previously specified in the Project Cost estima- tes and as shall be approved by the Issuer's consulting engineers for the Project. The Issuer's share of any liquidated damages or other moneys paid by defaulting contractors or their sureties, and all proceeds of insurance compensating for damages to the Project during the period of acquisition and construction, shall be depo- sited in the Construction Account to assure completion of the Project. Moneys in the Construction Account shall be secured by the depository bank in accordance with U.S. Treasury Department Circular 176 and in the manner prescribed by the laws of the -20- JUN 2 51g80 BOOK 43 wt -938