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1982-028 ORDINANCE AUTHORIZING THE ISSUANC5 OF CITY OF DENTON ELECTRIC SYSTEM REVENUE BONDS SERIES 1982 THE STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON WHEREAS, the C~ty of Denton, Texas (the "C~ty") has duly ~ssued, and there are now outstanding, pursuant to Vernon's Ann Tex C~v St Artlcle 1118n-12 and other applicable laws, the following ser~es or ~ssue of Electric Revenue Bonds which are now secured by a f~rst l~en on and pledge of the Net Revenues of the Clty's Electric Llght and Power System (the "System") C~ty of Denton Electric System Revenue Refunding Bonds, Ser~es 1978, dated March 15, 1978, orb- g~nally ~ssued ~n the principal amount of $19,255,000 (the "Ser~es 1978 Bonds"), and WHEREAS, the Ser~es 1978 Bonds are the only bonds or other obligations secured by or payable from the Net Revenues of the System, and WHEREAS, the City Council of the Clty is the governing body of the C~ty, and WHEREAS, the bonds hereinafter authorized are "Additional Bonds" as permitted by Ordinance No 78-12 authorizing the Series 1978 Bonds, and are to be lssued and delivered pursuant to Vernon's Ann Tex C~v St Articles 1111-1118, and other applicable laws THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS Section 1 BONDS AUTHORIZED That the C~ty's bonds are hereby authorized to be ~ssued in the principal amount of $3,000,000, FOR THE PURPOSE OF PROVIDING MONEY FOR IMPROVEMENTS AND EXTENSIONS OF THE ELECTRIC LIGHT AND POWER SYSTEM OF THE CITY Section 2 BONDS DESIGNATED That sa~d bonds shall be designated as the CITY OF DENTON ELECTRIC SYSTEM REVENUE BONDS, SERIES 1982 (the "Ser~es 1982 Bonds") Section 3 DATE AND MATURITIES That the Ser~es 1982 Bonds shall be dated APRIL 1, 1982, shall be ~n the denomlna- tlon of $5,000 each, shall be numbered consecutively from one upward, and shall mature serially on the maturity date, ~n each of the years, and ~n the amounts, respectively, unless redeemed prior to maturity as required or permitted ~n the FORM OF BOND set forth an Sectlon 6 of th~s Ordinance, as set forth ~n the following schedule MATURITY DATE DECEMBER 1 YEARS AMOUNTS YEARS AMOUNTS 1983 $ 75,000 1992 $200 000 1984 75~000 1993 200 000 1985 75,000 1994 200 000 1986 75~000 1995 200 000 1987 100,000 1996 200 000 1988 200~000 1997 200 000 1989 200,000 1998 200 000 1990 200~000 1999 200 000 1991 200,000 2000 200 000 Section 4 INTEREST That the Ser~es 1982 Bonds sched- uled to mature during the years, respectively, set forth as follows shall bear ~nterest from the date thereof to maturity or redemption at the following rates per annum maturities 1983 /~ ?J'~% maturities 1992, #~-o% maturities 1984 /~ ~% maturities 1993, maturities 1985 ~ oQ% maturities 1994, /~ ~ % maturities 1986 /3 9.% maturities 1995, ~% maturities 1987 /~ ~ % maturltles 1996, /w~% maturities 1988 ~3 .~ % maturities 1997, maturities 1989 ,~ ~ % maturities 1998, maturities 1990 .~ ~% maturities 1999, /~ % maturities 1991 ~j-% maturlt~es 2000, ~ 0~% Sa~d lnterest shall be evidenced by lnterest coupons which shall appertain to the Ser~es 1982 Bonds, and which shall be payable ~n the manner provided and on the dates stated ~n the FORM OF BOND set forth ~n Section 6 of thls Ordlnance Section 5 GENERAL CHARACTERISTICS That the Ser~es 1982 Bonds and ~nterest coupons shall be ~ssued, shall be payable, may be redeemed prior to thelr scheduled maturities, shall have the characteristics, and shall be s~gned and executed (and the Ser~es 1982 Bonds shall be sealed), all as provided, and ~n the 2 manner indicated, in the FORM OF BOND set forth in Section 6 of this Ordinance Section 6 FORMS That the form of the Ser~es 1982 Bonds, ~ncluding the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be prlnted and endorsed on each of the Serles 1982 Bonds, and the form of the aforesaid ~nterest coupons which shall appertain and be attached ~n~t~ally to each of the Ser~es 1982 Bonds, shall be, respectively, substantially as follows FORM OF BOND NO $5,000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON ELECTRIC SYSTEM REVENUE BOND SERIES 1982 ON DECEMBER 1, , THE CITY OF DENTON, IN DENTON COUNTY, TEXAS, hereby promises to pay to bearer hereof the pr~nclpal amount of FIVE THOUSAND DOLLARS and to pay ~nterest thereon at the rate of __% per annum from the date of th~s Bond, evidenced by interest coupons pay- able DECEMBER 1, 1982, and semiannually on each JUNE 1 and DECEMBER 1 thereafter wh~le th~s Bond is outstanding THE PRINCIPAL of th~s Bond and the ~nterest coupons apper- taining hereto shall be payable to bearer, ~n lawful money of the Un~ted States of America, w~thout exchange or collection charges to the bearer, upon presentatlon and surrender of this Bond or proper ~nterest coupon, at the following, which, col- lectively, shall constitute and be deflned as the "Paying Agent" for th~s Ser~es of Bonds THE FORT WORTH NATIONAL BANK, FORT WORTH, TEXAS, OR, %T THE OPTION OF THE BEARER, AT FIRST S%ATE BANK OF DENTON, DENTON, TEXAS THIS BOND ~s one of a Series dated as of APRIL 1, 1982, authorized and ~ssued ~n the principal amount of $3,000,000, 3 FOR THE PURPOSE OF PROVIDING MONEY FOR IMPROVEMENTS AND EXTENSIONS OF THE ELECTRIC LIGHT AND POWER SYSTEM OF THE CITY ON DECEMBER 1, 1991, or on any Interest payment date thereafter, the outstanding Bonds of this Series may be redeemed prior to their scheduled maturities, at the option of said City, in whole or in part, with funds derived from any source, for the principal amount thereof and accrued interest thereon to the date fixed for redemption, and without premium AT LEAST thirty days prior to the date fixed for any prior redemption said City shall cause a written notice of such re- demption to be published at least once an a financial publica- tion published in The City of New York, New York By the date fixed for any such redemption due provlslon shall be made for the payment at the "Paylng Agent" of the prlnclpal amount of the Bonds which are to be so redeemed and accrued Interest thereon to the date fixed for redemption If such written no- tice of redemption is published and if due provision for such payment is made, all as provided above, the Bonds which are to be so redeemed thereby automatically shall be redeemed prior to thelr scheduled maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be re- garded as being outstanding except for the right of the bearer to receive the redemption price from the "Paying Agent" out of the funds provided for such payment IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly authorized, issued, and deliv- ered pursuant to the applicable laws of the State of Texas, in- cluding particularly Vernon's Ann Clv St of Texas, Articles 1111-1118; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or an the authorization, issuance, and delivery of this Bond and the Series of which it is a part have been performed, existed, and been done in accordance with law, that this Bond and the Ser~es of which ~t ~s a part constitute special obligations of sa~d C~ty, secured by and payable from an lrrevocable f~rst l~en on and pledge of the "Pledged Revenues", as defined in the Ordlnance authorizing thls Serles of Bonds (the "Ordlnance"), which ~nclude initially the "Net Revenues of the C~ty's Electrlc Llght and Power System", as such term ~s defined ~n the Ordinance, and which "Pledged Revenues" may, ~n the future, at the optlon of the C~ty, lnclude other resources THE CITY has reserved the r~ght, subject to the restric- tions stated in the Ordinance, to ~ssue addlt~onal parity revenue bonds which also may be secured by and payable from an ~rrevocable f~rst l~en on and pledge of the aforesaid Pledged Revenues, ~n the same manner and to the same extent as th~s Bond and the Series of whlch ~t is a part THE HOLDER HEREOF shall never have the r~ght to demand payment of th~s obligation out of any funds raised or to be raised by taxation, or from any source whatsoever other than the Pledged Revenues and other sources described ~n the Or- dinance IN WITNESS WHEREOF, th~s Bond and the interest coupons appertaining hereto have been s~gned w~th the facsimile slgna- ture of the Mayor of sa~d City and countersigned w~th the fac- s~mile signature of the C~ty Secretary of sald C~ty, and the official seal of sald Clty has been duly impressed, or placed ~n facsimile, on th~s Bond XXXXXXXX XXXXXXXX Clty Secretary, City of Denton Mayor, City of Denton FORM OF REGISTRATION CERTIFICATE COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO I hereby certify that th~s Bond has been examined, cer- tified as to validity, and approved by the Attorney General of the State of Texas, and that this bond has been registered by the Comptroller of Public Accounts of the State of Texas Witness my signature and seal this XXXXXXXX Comptroller of Public Accounts of the State of Texas FORM OF INTEREST COUPON NO $ THE CITY OF DENTON, IN DENTON COUNTY, TEXAS, promises to pay to bearer the amount shown on this interest coupon, in lawful money of the United States of America, without exchange or collection charges to the bearer, unless due provision has been made for the redemption prior to maturity of the Bond to which this interest coupon appertains, upon presentation and surren- der of this Interest coupon, at the THE FORT WORTH NATIONAL BANK, FORT WORTH, TEXAS, OR, AT THE OPTION OF THE BEARER, AT FIRST STATE BANK OF DENTON, DENTON, TEXAS, said amount being interest due that day on the Bond, bearing the number hereinafter designated, of that Issue of CITY OF DENTON ELECTRIC SYSTEM REVENUE BONDS, SERIES 1982, DATED APRIL 1, 1982 The holder hereof shall never have the right to de- mand payment of this obligation out of any funds raised or to be raised by taxation, or from any source whatsoever other than the Pledged Revenues and other sources described in the Bond to which this coupon appertains Bond No xxxxxxxx xxxxxxxx City Secretary Mayor Section 7 DEFINITIONS That as used in this Ordinance the following terms shall have the meanings set forth below, unless the text hereof specifically indicates otherwise (a) The term "City" shall mean the City of Denton, in Denton County, Texas (b) The term "Outstanding Bonds" shall mean the presently outstanding Electric Revenue Bonds of the City described in the preamble to this Ordinance (c) The term "Bonds" shall mean collectively the OutstandIng Bonds and the Series 1982 Bonds 6 (d) The term "Additional Bonds" shall mean the add~t~on- al parity revenue bonds which the C~ty reserves the r~ght to issue ~n the future, as provided ~n th~s Ordinance (e) The terms "Electric L~ght and Power System" and "System" shall mean the C~ty's ex~stlng electric light and power system, together w~th all future extensions, improve- ments, enlargements, and additions thereto, and all replace- ments thereof, provided that, notwithstanding the foregoing, and to the extent now or hereafter authorized or permltted by law, the term System shall not mean any electric l~ght and power facilities of any k~nd (~nclud~ng any electrlc power gen- erating and transm~sslon facilities) whlch are declared not to be a part of the System and which are acquired or constructed by the C~ty w~th the proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being special revenue obllgat~ons of the C~ty which are not Bonds or Addlt~on- al Bonds secured by and payable from a first l~en on and Pledge of the Pledged Revenues, as hereinafter deflned, but which are secured by and payable from any other l~ens on and pledges of any revenues, sources, or payments, ~nclud~ng, but not limited to, (~) special contract revenues or payments received from any other legal entity in connectlon w~th such fac~lltles and/or (il) a l~en on and pledge of the Pledged Revenues ]unlor and subor- dlnate an all respects to the llen and pledge ~n favor of the Bonds and Additional Bonds, and such revenues, sources, or pay- ments shall not be considered as or constitute Gross Revenues of the System, unless and to the extent otherwise provided ~n the ordinance or ordinances author~zlng the ~ssuance of such "Special Fac~l~tles Bonds" (f) The terms "Gross Revenues of the Clty's Electric L~ght and Power System" and "Gross Revenues" shall mean all revenues, ~ncome, and receipts of every nature derived or re- ceived by the City from the operation and ownership of the System, ~nclud~ng the ~nterest ~ncome from the ~nvestment or 7 deposlt of money in any Fund created by thls Ordlnance, cept~ng only the Retirement Fund (g) The terms "Net Revenues of the Clty's Electric L~ght and Power System", and "Net Revenues" shall mean all Gross Revenues after deducting and paying the current expenses of operation and maintenance of the System out of the Revenue Fund, hereinafter created, ~ncludlng all salaries, labor, materials, repairs, and extensions necessary to render efficient service, provided, however, that only such repairs and exten- sions, as ~n the judgment of the C~ty Council, reasonably and fairly exercised by the adoption of appropriate resolutions, are necessary to keep the System in operation and render ade- quate service to sa~d C~ty and the ~nhab~tants thereof, or such as m~ght be necessary to meet some physical accident or con- dltion which would otherwise lmpa~r the Bonds or Additional Bonds, shall be deducted ~n determining "Net Revenues" De- preciation shall never be considered as an expense of operation and maintenance Gross Revenues attributable to investment ~nterest ~ncome from the Reserve Fund and the Contingency Fund shall be used only to pay current expenses of operatlon and maintenance of the System and shall never constitute any part of Net Revenues (h) The term "Pledged Revenues" shall mean (1) the Net Revenues, plus (2) any add~tlonal revenues, ~ncome, re- ceipts, or other resources, ~nclud~ng, without l~m~tat~on, any grants, donations, or lncome re- ceived or to be received from the Un~ted States Government, or any other public or prlvate source, whether pursuant to an agreement or otherwise, which an the future may, at the option of the C~ty, be pledged to the payment of the Bonds or Additional Bonds (1) The term "year" shall mean the regular fiscal year used by the City in connection with the operation of the System, which may be any twelve consecutive months period established by the City (]) The term "Government Obligations" shall mean direct obligations of the United States of America, including obliga- tions the prlnclpal of and ~nterest on which are unconditional- ly guaranteed by the United States of America, which may be United States Treasury obligations such as ~ts State and Local Government Series, which may be in book-entry form Section 8 PLEDGE (a) That the Series 1982 Bonds are Additional Bonds Issued pursuant to Sections 23 and 24 of Ordinance No 78-12 authorlzlng the ~ssuance of the Series 1978 Bonds, and Sections 7 through 26 of this Ordinance substantial- ly restate and are supplemental to and cumulative of Sections 7 through 26 of sald Ordinance No 78-12, so that Sectlons 7 through 26 will be applicable to all of the Bonds and future Additional Bonds, except as otherwise specifically provided herein, and state all of the requlrements w~th respect to the Bonds (b) That the Bonds and any Additional Bonds, and the · nterest coupons appertalnlng thereto, are and shall be secured by and payable from an ~rrevocable first l~en on and pledge of the Pledged Revenues, and the Pledged Revenues are further pledged irrevocably to the establishment and maintenance of the Pledged Revenues Fund, the Retirement Fund, heretofore created by Ordinance No 78-12 for the sole benefit of the Ser~es 1978 Bonds, any other special invested retirement fund (similar to the Retirement Fund heretofore established solely for the benefit of the Series 1978 Bonds) hereafter created for the payment of any future Additional Bonds, the Reserve Fund, the Contingency Fund, and the Improvement Fund, all as hereinafter defined and provided The Bonds and any Additional Bonds are and will be secured by and payable from the Pledged Revenues, and are not secured by or payable from a mortgage or deed of trust on any real, personal, or mixed properties constitut- Ing the System Section 9 REVENUE FUND That there is hereby created and there shall be establlshed and maintained on the books of the City, and accounted for separate and apart from all other funds of the City, a special fund to be entitled the "City of Denton Electric System Revenue Bonds Revenue Fund" (the "Rev- enue Fund") All Gross Revenues shall be credited to the Rev- enue Fund immediately upon receipt, unless otherwise provided in th~s Ordinance All current expenses of operatlon and main- tenance of the System shall be paid from such Gross Revenues credlted to the Revenue Fund, as a first charge against same All Investment interest lncome credited to the Revenue Fund shall be expended first for current operation and maintenance expenses of the System, and in all events wlth~n f~ve months from the date of any such deposit Section 10 PLEDGED REVENUES FUND That for the purpose of paying the principal of and interest on all Bonds and any Additional Bonds, as the same mature and come due, and prov~d- lng a source of payment for other deposits requlred by this Ordinance, there is hereby created and there shall be establish- ed and maintained on the books of the City, and accounted for separate and apart from all other funds of the City, a separate fund to be entitled the "City of Denton Electric System Rev- enue Bonds Pledged Revenues Fund" (the "Pledged Revenues Fund") Section 11 RESERVE FUND That there is hereby created and there shall be established and maintained lnltlally at The Fort Worth National Bank, Fort Worth, Texas, and there- after, at the optlon of the C~ty, established and maintained at any time at any national bank having a capital and surplus in excess of $25,000,000, a separate fund to be entitled the "City of Denton Electric System Revenue Bonds Reserve Fund" (the "Reserve Pund") The Reserve Fund shall be used solely for 10 the purpose of f~nally retlrlng the last of any Bonds or Addi- tional Bonds, or for paying principal of and ~nterest on any Bonds or Additional Bonds when and to the extent the amounts · n the Pledged Revenues Fund, the Retirement Fund, any other special fund created for the payment of principal of and ~n- terest on any Additional Bonds, the Improvement Fund, and the Contingency Fund are ~nsuff~c~ent for such purpose Section 12 CONTINGENCY FUND That there ~s hereby created and there shall be established and ma~ntalned ~nltlal- ly at ~he Fort Worth National Bank, Fort Worth, Texas, and thereafter, at the option of the City, established and ma~n- tanned at any t~me at any official depository bank of the C~ty, and accounted for separate and apart from all other funds of the C~ty, a separate fund to be entitled the "C~ty of Denton Electric System Revenue Bonds Contingency Fund" (the Contin- gency Fund") The Contingency Fund shall be used solely for the purpose of paylng the costs of unexpected or extraordinary re- pa~rs or replacements of the System for which System funds are not otherwise available, or for paying principal of and ~nter- est on any Bonds or Additional Bonds, when and to the extent the amount ~n the Pledged kevenues Fund, the Retirement Fund, any other special fund created for the payment of principal of and ~nterest on any Additional Bonds, and the Improvement Fund are ~nsuff~clent for such purpose Section 13 IMPROVEMENT FUND That there ~s hereby created and there shall be established and maintained on the books of the C~ty, and accounted for separate and apart from all other funds of the C~ty, a separate fund to be entltled the "C~ty of Denton Electrlc System Revenue Bonds Improvement Fund" (the "Improvement Fund") The Improvement Fund shall be used solely for the purpose of paying the costs of ~mprovements, enlargements, extensions, additions, or other capital expendl- tures related to the System, or for paylng unexpected or ex- traordinary expenses of operation and maintenance of t~e Syatem 11 for which System funds are not otherwise available, or for pay- lng principal of and interest on any Bonds or Additional Bonds, when and to the extent the amount an the Pledged Revenues Fund, the Retirement Fund, and any other special fund created for the payment of principal of and interest on any Additional Bonds, are insufficient for such purpose Section 14 RETIREMENT FUND AND OTHER PAYMENTS (a) That there was created and established by Ordinance No 78-12, and there Ks hereby confirmed and ordered to be maintained at The Fort Worth National Bank, Fort Worth, Texas, as trustee and escrow agent, and as a paying agent for the Bonds, and ac- counted for separate and apart from all other funds of the City, a separate trust and escrow fund to be entitled the "City of Denton Electric System Revenue Refunding Bonds Series 1978 Retirement Fund" (the "Retirement Fund") The Retirement Fund shall be used solely for the purpose of paying the principal of and interest on the Series 1978 Bonds as the same mature and come due, or on redemption prior to maturity, and shall consti- tute a special sinking fund for the Bonds The City has en- tered into a trust and escrow agreement with The Fort Worth National Bank (hereinafter called the "Series 1978 Retirement Trust Agreement") which provides for the payment of the princi- pal of and interest on the Series 1978 Bonds as the same come due, and the investment an Government Obligations of money deposited to the credit of the Retirement Fund by the City The City shall make deposits to the credit of the Retirement Fund as hereinafter provided in this Ordinance If Additional Bonds are hereafter Issued, separate special invested retire- ment funds (similar to the Retirement Fund) may or may not be established, at the option of the City, for the special benefit of such Additional Bonds at a paying agent therefor, but the Retirement Fund was created solely for the benefit and security of the Series 1978 Bonds It Ks provided, however, that all Bonds and Additional Bonds shall be equally and ratably secured 12 by and payable from the Pledged Revenues deposated to the credat of the Pledged Revenues Fund, wathout preference or praoraty, and the Seraes 1978 Bonds are entatled to an ex- clusive claam on the Retarement Fund only after the deposits have been made therean as provided an thas Ordinance (b) That at as specafacally provaded that the Ser~es 1982 Bonds are not payable from or secured by the Retirement Fund or any other separate specaal anvested retarement fund, but the Ser~es 1982 Bonds are payable darectly from Pledged Revenues the Pledged Revenues Fund, and Pledged Revenues suffaclent to pay the pr~ncapal of and anterest on the Series 1982 Bonds as the same come due shall be deposited darectly wath the payang agents for the Seraes 1982 Bonds, out of the Pledged Revenues Fund, as requared by Section 16(d) hereof (c) That all Bonds and Addataonal Bonds are on a paraty w~th respect to payment from Pledged Revenues ~n the Pledged Revenues Fund and each Seraes or assue of Bonds and Additional Bonds has an equal and ratable claam on said Pledged Revenues Section 15 DEPOSITS OF PLEDGED REVENUES, INVESTMENTS, FUNDS SECURED (a) That Pledged Revenues shall be credited to or deposited an the Pledged Revenues Fund, the Retlrement Fund, the Reserve Fund, the Contingency Fund, the Improvement Fund, and other funds when and as required by th~s Ordanance and any ordinance authorizing the ~ssuance of Additional Bonds (b) That money an any Fund establashed pursuant to thls Ordinance (exceptang the Retirement Fund, whach shall be vested only ~n Government Obligations and as provided ~n the Seraes 1978 Retirement Trust Agreement) may, at the option of the Caty, be placed an tame deposits or certificates of de- posat secured by obligations of the type hereanafter descrabed, or be anvested ~n d~rect obl~gataons of the Un,ted States of America, obligations guaranteed or ansured by the Unated States of Ameraca, which, an the oplnaon of the Attorney General of the Unated States, are backed by ats full faith and credit or 13 represent ItS general obligations, or invested in indirect obligations of the United States of America, including, but not limited to, evidences of indebtedness issued, insured, or guaranteed by such governmental agencies as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home Loan Banks, Government National Mortgage Asso- ciation, United States Postal Service, Farmers Home Adminis- tration, Federal Home Loan Mortgage Association, Small Busi- ness Administration, Federal Housing Association, or Par- tlclpatlon Certificates in the Federal Assets Financing Trust, provided that all such deposits and investments shall be made in such manner that the money required to be expended from any Fund will be available at the proper time or times Such vestments shall be valued in terms of current market value as of the 20th day of November of each year Ail interest and income derived from such deposits and investments immediately shall be credited to, and any losses debited to, the Fund from which the deposit or investment was made, and surpluses in any Fund shall or may be disposed of as hereinafter prov~d- ed Such investments shall be sold promptly when necessary to prevent any default in connection with the Bonds or Addi- tional Bonds (c} That money in all Funds created by this Ordinance, to the extent not Invested, shall be secured in the manner prescribed by law for securing funds of the City Section 16 DEBT SERVICE REQUIREMENTS (a) That prompt- ly after the delivery of the Bonds the City shall cause to be credited to the Pledged Revenues Fund any accrued interest re- ceived from the sale and delivery of the Bonds (b) That on or before May 25, 1978, and semiannually on or before the 25th day of each November and of each May thereafter, the City shall credit to the Pledged Revenues Fund all available Pledged Revenues 14 (c) On or before June 1, 1978, and semaannually on or before the 1st day of each December and of each June there- after, the Caty shall deposat to the credat of the Retarement Fund, from Pledged Revenues ~n the Pledged Revenues Fund, such amounts as then wall cause to be on deposlt to the credlt of the Retirement Fund (~) money and/or par or prancapal amount of Government Obla- gataons owned by the C~ty, aggregatang the amount, respectavely, on each date, respect- avely, shown on the followlng schedule Aggregate Aggregate Aggregate Amount Date Amount Date Amount Date $ 443,000 6/1/78 $8,355,775 6/1/88 $8,166,475 6/1/98 1,877,814 12/1/78 9 555,775 12/1/88 8,466,475 12/1/98 1,705,072 6/1/79 8 326,375 6/1/89 8,157,700 6/1/99 2,617,072 12/1/79 9 526 375 12/1/89 8,407,700 12/1/99 2,701,072 6/1/80 8 296 375 6/1/90 8,150,387 6/1/00 3,618,072 12/1/80 9 496 375 12/1/90 8,425,387 12/1/00 3,742,072 6/1/81 8 266 075 6/1/91 8,142,343 6/1/01 4,665,072 12/1/81 8 866 075 12/1/91 8,417,343 12/1/01 4,830,072 6/1/82 8 250 775 6/1/92 8,134,300 6/1/02 5,761,072 12/1/82 8 850 775 12/1/92 8,434,300 12/1/02 5,970,072 6/1/83 8 235 325 6/1/93 8,125,525 6/1/03 6,911 072 12/1/83 8 835 325 12/1/93 8,425,525 12/1/03 7,165,072 6/1/84 8 219,725 6/1/94 8,116,750 6/1/04 8,128 072 12/1/84 8,819,725 12/1/94 8,416,750 12/1/04 8,430~072 6/1/85 8,204,125 6/1/95 8,107,975 6/1/05 9,285,072 12/1/85 8,804,125 12/1/95 8,457,975 12/1/05 8,410,407 6/1/86 8,188,375 6/1/96 8,097,737 6/1/06 9,545,407 12/1/86 8,688,375 12/1/96 8,447,737 12/1/06 8,383,735 6/1/87 8,175,250 6/1/97 8,087,500 6/1/07 9,548,735 12/1/87 8,475,250 12/1/97 6,175,500 12/1/07 Saad schedule as antended to set forth the full aggregate amounts whach are requared to provade for the payment and re- demptaon of the prancapal of and anterest on the Seraes 1978 Bonds as the same mature and come due However, at as antacl- pated that the anterest ancome from the anvestment of money an the Retarement Fund an Goverment Obllgataons w~ll reduce the amounts whach otherwase would be required to be deposated from the Pledged Revenues Fund an order to cause the Retarement Fund to contaan the requared aggregate amount on each requlred date as shown an saad schedule The Seraes 1978 Retirement Trust 15 Agreement provides for the investment of money deposited to the credit of the Retirement Fund in Government Obligations and other matters relating to the payment of the Series 1978 Bonds (d) On or before each June 1 and each December 1, the City shall make such deposits from the Pledged Revenues Fund as are required by this Ordinance, and by each ordInance authoriz- ing the issuance of any Additional Bonds for the payment of the principal of, interest on, and redemption premiums, if any, on such Additional Bonds, either to one or more special invested retirement funds (similar to the Retirement Fund) for any Addi- tional Bonds, or directly to any paying agent for any such Ad- ditional Bonds for which no special retirement fund is estab- lished (e) Ail investment interest income from the Pledged Revenues Fund shall be retained in and remain a part of such Fund Section 17 RESERVE FUND REQUIREMENTS That there is now on hand in the Reserve Fund the required amount of $2,250,000 It is found and determined, and has been officially estimated by the senior financial officer of the City, that $1,817,025 is the maximum amount which will be required by th~s Ordinance to be deposited in the Retirement Fund with respect to the Series 1978 Bonds in any future year from Pledged Revenues in the Pledged Revenues Fund, taking into consideration the estimated amounts of Government Obligations and interest income thereon to be available in the Retirement Fund in the future It is further found and determined that no other special retirement funds have been created, and that the average annual principal and interest requirements of the Series 1982 Bonds are less than $429,869 Therefore, the aggregate amount required to be accumulated and maintained in the Reserve Fund by Section 23(b) hereof after the delivery of the Ser~es 1982 Bonds $2,246,894, being less than the presently required $2,250,000 Therefore, when and so long as the money and ~nvestments in the 16 Reserve Fund are not less in market value than $2,250,000 (the "Reserve Required Amount") no deposits need be made to the credit of the Reserve Fund, but at any t~me the Reserve Fund contains less than the Reserve Required Amount, then, subject and subordinate to making the required deposlts to the credit of the Retirement Fund, and the deposits or payments required by th~s Ordinance for the payment of the Ser~es 1982 Bonds, and by any ordinance authorizing the issuance of Additional Bonds for the retirement or payment thereof and the lnterest thereon, the City shall transfer from Pledged Revenues In the Pledged Revenues Fund, and deposit to the credit of the Reserve Fund, semiannually on or before the 25th day of each May and of each November, a sum equal to 1/10th of the Reserve Required Amount, until the Reserve Fund contains the Reserve Required Amount The C~ty specifically covenants that it will, between the 20th and 25th days of each May and of each November of each year, deposit to the credit of the Revenue Fund all surplus in the Reserve Fund over the Reserve Required Amount, to be used w~thin f~ve months after each such deposit solely for the payment of current operation and malntenance expenses of the System Section 18 CONTINGENCY FUND REQUIREMENTS That promptly after the delivery of the Ser~es 1978 Bonds the Clty caused to be deposited to the credit of the Contingency Fund, from pro- ceeds from the sale and delivery of the Series 1978 Bonds, the sum of $250,000 No deposits are required to be made to the credit of the Contingency Fund so long as the amount of money and ~nvestments there~n are at least equal in market value to $250,000 (the "Contingency Required Amount") If and when the amount in the Contingency Fund ~s reduced or depleted to less than the Contingency Required Amount, then, subject and subordinate to making the required deposits to the credit of the Retlrement Fund, and the deposits or payments required by this Ordinance for the payment of the Series 1982 Bonds, and by 17 any ordinance authorizing the ~ssuance of Additional Bonds for the retirement or payment thereof and the ~nterest thereon, and the Reserve Fund, such reduction or depletion shall be restored from Pledged Revenues in the Pledged Revenues Fund which shall be budgeted for such purpose in the Clty's Annual Budget for the System for the next ensuing f~scal year or years, provided that the C~ty ~s not required to budget more than an amount equal to $50,000 for such purpose during any one f~scal year The C~ty specifically covenants that it w~ll, between the 20th and 25th days of each May and of each November of each year, deposit to the credit of the Revenue Fund all surplus ~n the Contingency Fund over the Contingency Fund Required Amount, to be used w~th~n five months after each such deposit solely for the payment of current operation and malntenance e~penses of the System Section 19 IMPROVEMENT FUND REQUIREMENTS That during each year, subject and subordinate to making the required de- posits to the credit of the Retirement Fund, the deposits or payments required by th~s Ordinance for the payment of the Ser~es 1982 Bonds, and by any ordinance authorlzlng the ~ssu- ance of Additional Bonds for the retirement or payment thereof and the ~nterest thereon, the Reserve Fund, and the Contingency Fund, the City shall be required to deposit to the credit of the Improvement Fund from Pledged Revenues in the Pledged Revenues Fund an amount equal to 8% of the "Adjusted Gross Revenues of the System", which term ~s hereby defined to mean the following the Gross Revenues of the System for such year after deductlng from such Gross Revenues an amount equal to the current expenses of operation and maintenance of the System for such year which are d~rectly attribut- able to (~) all fuel costs related to the production of electric energy by the C~ty and/or (~) the pur- chase of electric energy by the C~ty 18 Additional excess Pledged Revenues may, at the option of the C~ty Council, be deposited to the credit of the Improvement Fund as permitted by Section 20 (b) hereof, but no such addi- tional deposit ~s required Ail ~nvestment ~nterest ~ncome from the Improvement Fund shall be retained ~n and remain a part of such Fund Section 20 DEFICIENCIES, EXCESS PLEDGED REVENUES (a) That ~f on any occasion there shall not be sufficient Pledged Revenues to make all deposits and payments when and as required by th~s Ordinance and any ordinance authorizing the · ssuance of any Additional Bonds, such deficiency shall be made up as soon as possible from the next available Pledged Reve- nues, or from any other sources available for such purpose (b) That, subject to maklng all deposits and payments when and as required by th~s Ordinance and any ordinance au- thorizing the ~ssuance of Additional Bonds, the excess Pledged Revenues ~n the Pledged Revenues Fund may be used by the C~ty for any lawful purpose Section 21 PAYMENT OF BONDS AND ADDITIONAL BONDS On or before December 1, 1978, and semiannually on or before each June 1 and December ~ thereafter while any of the Bonds or Additional Bonds are outstanding and unpaid, the City shall make avallable to the paying agents therefor, out of the Re- tirement Fund, any other fund hereafter created for the retlre- ment and payment of principal of and ~nterest on any Additional Bonds, and d~rectly out of the Pledged Revenues ~n the Pledged Revenues Fund as required by th~s Ordinance, or out of the Improvement Fund, the Contingency Fund, or the Reserve Fund, ~n that order, ~f necessary, money sufficient to pay, on each of such dates, the principal of and ~nterest on the Bonds and Additional Bonds as the same matures and comes due, or to re- deem the Bonds o~ Additional Bonds prior to maturity, e~ther upon mandatory redemption or at the option of the C~ty as set forth here~n The paying agents shall destroy all pa~d Bonds and Additional Bonds, and the coupons apperta~nlng thereto, and 19 furnish the City with an appropriate certlflcate of cancella- tion or destruction Section 22 FINAL DEPOSITS (a) That any Bond or Addl- tlonal Bond shall be deemed to be paid, retired, and no longer outstanding within the meaning of thls Ordinance when payment of the principal of, redemption premium, if any, on such Bond or Additional Bond, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, upon redemption, or otherwise) either (~) shall have been made or caused to made in accordance with the terms thereof (including the giving of any required notice of redemption), or (il) shall have been provided by irrevocably depositing wlth or making available to a paying agent therefor, in trust and Irrevocably set aside exclusively for such payment, (1) money sufficient to make such payment or (2) Government Obligations which mature as to principal and ~nterest in such amounts and at such times as will insure the availability, without relnvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation, and expenses of such paying agent pertaining to the Bonds and Additional Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satls- factlon of such paying agent At such time as a Bond or Addi- tional Bond shall be deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or entitled to the benefits of thls Ordinance or a lien on and pledge of the Pledged Rev- enues, and shall be entitled to payment solely from such money or Government Obligations (b) That any moneys so deposited w~th a paying agent may at the direction of the City also be invested ~n Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from all Government Obligations in the hands of the paying agent pursuant to this Section which is not required for the payment of the Bonds and Additional 20 Bonds, the redemption premium, if any, and interest thereon, with respect to which such money has been so deposited, shall be turned over to the City or deposited as directed by the City Section 23 ADDITIONAL BONDS (a) That the C~ty shall have the right and power at any time and from time to time, and in one or more Series or Issues, to authorize, issue, and deliver additional parity revenue bonds (herein called "Addi- tional Bonds"), in accordance with law, in any amounts, for any lawful purpose, Including the refunding of any Bonds or Additional Bonds Such Additional Bonds, if and when author- lzed, issued, and delivered in accordance with this Ordinance, shall be secured by and made payable equally and ratably on a parity with the Bonds, and all other outstanding Additional Bonds, from an irrevocable first l~en on and pledge of the Pledged Revenues (b) That the Pledged Revenues Fund, the Improvement Fund, the Contingency Fund, and the Reserve Fund establ~sh- ed by this Ordinance shall secure and be used to pay all Addi- tional Bonds as well as the Bonds Each ordinance under which Additional Bonds are issued shall provide for the payment of such Additional Bonds and the ~nterest thereon Each such or- dinance may provide for the creation of a special invested re- tirement fund (similar to the Retirement Fund) for such Addi- tional Bonds or for payments directly to the paying agents therefor, as provided in Section 16(d) of this Ordinance Each such ordinance also shall provide and require that the aggregate amount to be accumulated and maintained ~n the Re- serve Fund shall be increased (if and to the extent necessary) to an amount not less than the aggregate of the following (1) the maximum amount, as then estimated by the senior flnanclal officer of the City, which will be required by th~s Ordinance to be de- posited to the credit of the Retirement Fund 21 in any future year from Pledged Revenues in the Pledged Revenues Fund, taking into con- s~deratlon the then estimated amounts of Govern- ment Oblzgatlons and ~nterest Income therefrom to be available zn the Retzrement Fund ~n the future, plus (zl) the maximum amount, zf any, as then estlmated by the senior flnanczal officer of the City, which will be requmred by any ordinance or or- dinances authorizing the issuance of any Addl- tzonal Bonds to be deposited to the credzt of any special ~nvested retzrement fund or funds (s~mllar to the Retirement Fund) for any out- standln~ Addztlonal Bonds in any future year from Pledged Revenues zn the Pledged Revenues Fund, taking lnto consideration the then est~- mated amounts of Government Obligations and ~nterest ~ncome therefrom to be available in the future, plus the average annual principal and znterest re- quirements of all Bonds and Addltzonal Bonds to be outstanding following the delzvery of the then proposed AddItional Bonds, which are payable dzrectly from the Pledged Revenues Fund and for which no speczal lnvested retire- ment fund (slmzlar to the Retlrement Fund) has been created and established by an ordlnance authorlzlng the ~ssuance of Addltlonal Bonds Such required addItional amount shall be so accumulated by the deposit in the Reserve Fund of all or any part of said requzr- ed addItional amount in cash zmmedlately after the delivery of the then proposed Additional Bonds, or, at the optzon of the Clty, by the deposit of said required additional amount (or any balance of said required additional amount not deposIted 22 an cash as permitted above) from Pledged Revenues an the Pledg- ed Revenues Fund, an semiannual lnstallments, made on or be- fore the 25th day of each May and of each November followlng the delivery of the then proposed Additional Bonds, of not less than 1/10th of said required additional amount (or 1/10th of the balance of sa~d required additional amount not deposit- ed an cash as permitted above) (c) That all calculatlons of average annual principal and interest requirements made pursuant to th~s Section shall be made as of and from the date of the Add~tlonal Bonds then proposed to be ~ssued (d) That the p~clpal of all Add~tlonal Bonds must be scheduled to be pa~d or mature on December 1 of the years which such principal ~s scheduled to be pald or mature, and all ~nterest thereon must be payable on May 1 and December 1 Seot~on 24 FURTHAR REQUIREMENTS FOR ADDITIONAL BONDS That Additional Bonds shall be ~ssued only ~n accordance w~th th~s Ordinance, but notw~thstandlng any provisions of th~s Ordinance to the contrary, no ~nstallment, Ser~es, or issue of Additional Bonds shall be ~ssued or delivered unless (a) The Mayor and the C~ty Secretary of the City s~gn a written certificate to the effect that the C~ty is not default as to any covenant, condition, or obligation an con- nect~on w~th all outstanding Bonds and Addlt~onal Bonds, and the ordlnances authorizing same, and that the Retirement Fund, any other special ~nvested retirement fund (s~m~lar to the Retirement Fund) hereafter created for the retirement and payment of the principal of and ~nterest on any Add~tlonal Bonds, and the Reserve Fund each contains the amount then re- quired to be there~n (b) An ~ndependent certified public accountant, or dependent f~rm of certified public accountants, s~gns a written cert~flcate to the effect that, during e~ther the next preceding year, or any twelve consecutive calendar month 23 period ending not more than ninety days prior to the passage of the ordinance authorizing the issuance of the then propos- ed Additional Bonds, the Pledged Revenues were, an his or its opinion (1) at least $4,500,000, if the ordinance author- lzmng the issuance of any Additional Bonds is passed before September 30, 1979, which is the end of the next complete fiscal year of the City, o__~r, if the ordinance authorizing the issuance of any Additional Bonds zs passed after September 30, 1979, (2) at least equal to 1 4 times the aggregate of the following amounts (1) the amount actually deposited, as re- quired by this Ordinance, to the credit of the Retirement Fund from Pledged Revenues in the Pledged Revenues Fund during such year or twelve month period, plus (11) the amount, if any, actually deposit- ed, as required by any ordinance or ordinances authorizing the issuance of Additional Bonds, to the credit of any other special invested retirement fund or funds (similar to the Re- tirement Fund) for any outstanding Additional Bonds from Pledged Revenues in the Pledged Revenues Fund during such year or twelve month period, plus (Ill) the average annual principal and In- terest requirements of all Additional Bonds, if any, to be outstanding after the delivery of the then proposed Additional Bonds, which are payable directly from the Pledged Revenues Fund and for which no special invested retire- ment fund (similar to the Retirement Fund) 24 has been created and established by an ordi- nance authorizing the issuance of Additional Bonds Section 25 GENERAL COVENANTS The City further cove- nants and agrees that in accordance with and to the extent required or permitted by law (a) PERFORMANCE It will faithfully perform at all times any and all covenants, undertakings, stipulations, and provi- sions contained in this Ordinance, and each ordinance authoriz- ing the issuance of Additional Bonds, and in each and every Bond and Additional Bond, that it will promptly pay or cause to be paid the principal of and interest on every Bond and Addi- tional Bond, on the dates and in the places and manner pre- scribed in such ordinances and Bonds or Additional Bonds, and that it will, at the times and in the manner prescribed, de- posit or cause to be deposited the amounts required to be de- posited into the Pledged Revenues Fund, into the RetIrement Fund, with the paying agents for all Bonds payable directly from the Pledged Revenues Fund, into any other fund or account established for any Additional Bonds, and into the Reserve Fund and the Contingency Fund, and any holder of the Bonds or Addi- tional Bonds may require the C~ty, its offlclals, and em- ployees, to carry out, respect, or enforce the covenants and obligations of this Ordinance, or any ordinance authorizing the issuance of Additional Bonds, by all legal and equitable means, including specifically, but without limitation, the use and filing of mandamus proceedings, in any court of competent jurisdiction, against the City, Its officials, and employees (b) CITY'S LEGAL AUTHORITY It is a duly created and existing home rule city of the State of Texas, and is duly authorized under the laws of the State of Texas to create and issue the Bonds, that all action on its part for the creation and issuance of the Bonds has been duly and effectively taken, 25 and that the Bonds Kn the hands of the holders and owners there- of are and wKll be valKd and enforceable specKal obligations of the Caty Kn accordance wKth theKr terms (c) TITLE It has or wKll obtaKn lawful tKtle to the lands, buKldangs, structures, and fac~lKt~es const~tutKng the System, that ~t warrants that Kt wKll defend, the tKtle to all the aforesaKd lands, bu~ldKngs, structures, and facKl~tKes, and every part thereof, for the benefat of the holders and owners of the Bonds and AddKtKonal Bonds, agaKnst the claKms and de- mands of all persons whomsoever, that ~t Ks lawfully qualified to pledge the Pledged Revenues to the payment of the Bonds and Additaonal Bonds an the manner prescribed hereln, and has law- fully exercased such rKghts (d) LIENS It w~ll from tKme to tame and before the same become delinquent pay and dKscharge all taxes, assessments, and governmental charges, Kf any, whKch shall be lawfully Kmposed upon Kt, or the System, that at w~ll pay all lawful claKms for rents, royalties, labor, materials, and supplKes whKch Kf un- paKd maght by law become a l~en or charge thereon, the laen of which would be prKor to or ~nterfere w~th the laens hereof, so that the prKorKty of the liens granted hereunder shall be fully preserved an the manner provided here~n, and that ~t wall not create or suffer to be created any mechanlcfs, laborer's, ma- teraalman's, or other 1Ken or charge which m~ght or could be prKor to the 1Kens hereof, or do or suffer any matter or th~ng whereby the l~ens hereof mlght or could be KmpaKred, provKded, however, that no such tax, assessment, or charge, and that no such claKms whKch mKght be used as the basks of a mechanic's, laborer's, materKalman's, or other 1Ken or charge, shall be required to be paKd so long as the validity of the same shall be contested Kn good faKth by the CKty (e) OPERATION OF SYSTEM, NO FREE SERVICE WhKle the Bonds or any Addataonal Bonds are outstandang and unpaad the C~ty shall continuously and effKcaently operate the System, 26 and shall maintain the System in good condition, repair, and working order, all at reasonable cost No free service of the System shall be allowed, and should the City or any of its agencies or instrumentalities make use of the services and facilities of the System, payment of the reasonable value shall be made by the C~ty out of funds from sources other than the revenues of the System, unless made from surplus or excess Pledged Revenues as permitted in Section 20(b) hereof (f) FURTHER ENCUMBRANCE While the Bonds or any Addi- tional Bonds are outstanding and unpaid, the City shall not additionally encumber the Pledged Revenues in any manner, ex- cept as permitted in th~s Ordinance in connection with Addi- tional Bonds, unless said encumbrance is made junior and sub- ordinate in all respects to the liens, pledges, covenants, and agreements of this Ordinance and any ordinance authorizing the issuance of Additional Bonds, but the right of the City to issue revenue bonds payable from a subordinate lien on the Pledged Revenues is speclflally recognized and retained (g) SALE OR DISPOSAL OF PROPERTY While the Bonds or any Additional Bonds are outstandlng and unpaid, the City shall not sell, convey, mortgage, encumber, lease, or in any manner transfer tltle to, or otherwise dispose of the System, or any significant or substantial part thereof, provided that whenever the City deems it necessary to dispose of any property, machinery, fixtures, or equipment, it may sell or otherwise dispose of such property, machinery, fixtures, or equipment when ~t has made arrangements to replace the same or provide substitutes therefor, unless it is determined by resolution of the C~ty Council that no such replacement or substitute is necessary (h) INSURANCE (1) The C~ty shall cause ~o be insured such parts of the System as would usually be insured by corporations operating l~ke properties, with a responsible ~nsurance company 27 or companaes, agaanst risks, accidents, or casualties agaanst which and to the extent lnsurance ~s usually carried by corpora- taons operating l~ke properties, Including, to the extent reasonably obtainable, fire and extended coverage ~nsurance, · nsurance agaanst damage by floods, and use and occupancy ln- surance Public llabalaty and property damage ansurance shall also be carried unless the C~ty Attorney of the Caty g~ves a written op~n~on to the effect that the Caty ~s not liable for claims which would be protected by such ansurance At any tlme wh~le any contractor engaged ~n construction work shall be fully responsable therefor, the Caty shall not be requared to carry insurance on the work beang constructed af the contractor required to carry appropriate ~nsurance All such polacaes shall be open to the ~nspectaon of the Bondholders and thear representatives at all reasonable t~mes Upon the happening of any loss or damage covered by insurance from one or more of sald causes, the C~ty shall make due proof of loss and shall do all th~ngs necessary or desarable to cause the lnsur~ng companies to make payment in full darectly to the City The proceeds of ~nsurance covering such property, together w~th any other funds necessary and available for such purpose, shall be used forthwith by the Caty for repalr~ng the property damaged or replacang the property destroyed, provaded, how- ever, that ~f sa~d ~nsurance proceeds and other funds are sufficient for such purpose, then said ansurance proceeds perta~nang to the System shall be used promptly as follows (~) for the redemption prior to maturity of the Bonds and Additional Bonds, ratably ~n the proportaon that the outstanding principal of each Ser~es or ~ssue of Bonds or Additional Bonds bears to the total outstandang prin- cipal of all Bonds and Additional Bonds, provlded that · f on any such occasion the principal of an~ such Ser~es or issue as not subject to redemptaon, at shall not be regarded as outstanding an making the foregoang compu- tation, or 28 (il) if none of the outstanding Bonds or Additional Bonds is subject to redemption, then for the purchase ,on the open market and retirement of said Bonds and Additional Bonds an the same proportion as prescrabed in the foregoing clause (1), to the extent practicable, provided that the purchase prace for any Bond or Addi- tional Bond shall not exceed the redemption prace of such Bond or Additional Bond on the farst date upon which it becomes subject to redemptaon, or (111) to the extent that the foregoang clauses and (il) cannot be complied with at the time, the surance proceeds, or the remainder thereof, shall be de- posited in a special and separate trust fund, at an offaclal deposatory of the City, to be designated the Insurance Account The Insurance Account shall be held until such time as the foregoing clauses (1) and/or can be compiled with, or untal other funds become avail- able which, together wath the Insurance Account, wall be sufflcaent to make the repairs or replacements oraganally requlred, whachever of saad events occurs first (2) The annual audit hereinafter requared shall contaan a section commenting on whether or not the City has complied wath the requarements of this Sectaon wath respect to the main- tenance of insurance, which comments shall be based upon a certi- ficate of the City Manager or other offlclal designated by the City Council, and listing all policies carrled, and whether or not all insurance premiums upon the insurance policies to which reference is hereinbefore made have been paid (a) RATE COVENANT The City Council of the City will fax, establash, maintain, and collect such rates, charges, and fees for the use and avallabllaty of the System at all tames as are necessary to produce Gross Revenues suffaclent, together with any other Pledged Revenues, (1) to pay all current operation 29 and maantenance expenses of the System, and (2) produce an amount of Pledged Revenues each year at least equal to (a) 1 4 tames the aggregate of the followang amounts (1) the amount requared to be deposated by th~s Ordinance to the credit of the Retirement Fund durang such year ~fter gavang effect to the ant~capated anterest ~ncome from the anvestment of the moneys and anvestments an the Retarement Fund), plus (2) the amount, af any, requared to be deposited by any ordinance or ordanances authorazang the ~ssuance of Additional Bonds to the credat of any other specaal ~nvested retirement fund or funds (samalar to the Retirement Fund) for any outstandang Addataonal Bonds from Pledged Revenues an the Pledged Revenues Fund during such year, plus (3) the average annual principal and ~nterest re- quarements of all then outstanding Addataonal Bonds, af any, whach are payable darectly from the Pledged Revenues Fund and for whach no special anvested retirement fund (sam~lar to the Retarement Fund) has been created and es- tabl~shed by an ordinance author~zang the ~ssu- ance of Addat~onal Bonds, o__~r (aa) amounts suffacaent to provide for the deposits requlred by Sectaons 18 and 19 hereof to be made to the credit of the Contangency Fund and the Improvement Fund, whichever of (~) or (aa) as the greater (j) RECORDS It wall keep proper books of record and account an which full, true, and co~ ect entr~es w~ll be made of all dealings, actavataes, and transactions relatang to the System, the Pledged Revenues, and the Funds created pursuant to thas Ordanance, and all books, documents, and vouchers re- latang thereto shall at all reasonable t~mes be made ava~l- able for ~nspectaon upon request of any Bondholder 30 (k) AUDITS After the close of each year whale any of the Bonds or any Addataonal Bonds are outstanding, an audat wall be made of the books and accounts relating to the System and the Pledged Revenues by an andependent certafaed publac accountant or an andependent farm of certafaed publac account- ants As soon as practacable after the close of each such year, and when saad audit has been completed and made avaalable to the City, a copy of such audat for the precedang yea~ ~hall be ma~]ed to the Munacapal Advasory Councal of Texas and to any bondholders who shall so request an wratang Such annual audat reports shall be open to the anspectaon of the bondholders and their agents and representataves at all reasonable tames (1) GOVERNMENTAL AGENCIES It wall comply wath ali cf the terms and condataons of any and all franchases, permats, and authorazataons applacable to or necessary wath respect to the System, and whach have been obtaaned from any governmental agency, and the Caty has or wall obtain and keep in full force and effect all franchases, permits, authorization, and other requirements applacable to or necessary w~th respect to the acquas~t~on, constructaon, equapment, operation, and maanten- ance of the System (m) NO COMPETITION It w~ll not operate, or grant any franchase or permat for the acquasltaon, constructaon, or operation of, any local electric energy d~strabut~on facal~- t~es which would be ~n competlt~on w~th the System, and, to the extent that at legally may, the C~ty w~ll prohibit any such competing fac~lat~es (n) NO ARBITRAGE That the C~ty covenants to and w~th the purchasers of the Bonds that at wall make no use of the proceeds of the Bonds at any tame throughout the term of th~s assue of Bonds whach, af such use had been reasonably expect- ed on the date of delavery of the Bonds to and payment for the Bonds by the purchasers, would have caused the Bonds to be arbatrage bonds w~than the meanang of Section 103(c) of the Internal Revenue Code of 1954, as amended, or any regulataons 31 or rulings pertaining thereto, and by this covenant the City is obligated to comply with the requirements of the aforesaid SeCtion 103(c) and all applicable and pertinent Department of the Treasury regulations relating to arbitrage bonds The City further covenants that the proceeds of the Bonds will not otherwise be used directly or indirectly so as to cause all or any part of the Bonds to be or become arbitrage bonds within the meaning of the aforesaid Section 103(c), or any regulations pertaining thereto Section 26 AMENDMENT OF ORDINANCE (a) The holders of Bonds and Additional Bonds aggregating in principal amount 51% of the aggregate principal amount of then outstanding Bonds and Additional Bonds shall have the right from time to time to approve any amendment to this Ordinance which may be deemed necessary or desirable by the City, provided, however, that nothing herein contained shall permit or be construed to per- mlt the amendment of the terms and conditions in this Ordinance or in the Bonds or Additional Bonds so as to (1) Make any change in the maturity of the outstand- ing Bonds or Additional Bonds, (2) Reduce the rate of interest borne by any of the outstanding Bonds or Additional Bonds, (3) Reduce the amount of the principal payable on the outstanding Bonds or Additional Bonds, (4) Modify the terms of payment of principal of or interest on the outstanding Bonds or Additional Bonds, or impose any conditions with respect to such payment, (5) Affect the rights of the holders of less than all of the Bonds and Additional Bonds then out- standing, (6) Change the minimum percentage of the princi- pal amount of Bonds and Additional Bonds necessary for consent to such amendment 32 (b) If at any time the City shall desire to amend the Ordinance under this Section, the City shall cause notice of the proposed amendment to be published in a financial news- paper or 3ournal published in the City of New York, New York, once during each calendar week for at least two successive calendar weeks Such Notice shall briefly set forth the na- ture of the proposed amendment and shall state that a copy thereof is on file at the principal office of the Paying Agents for inspection by all holders of Bonds and Additional Bonds Such publication is not required, however, if notice in writ- lng is given to each holder of Bonds and Additional Bonds (c) Whenever at any time not less than thirty days, and within one year, from the date of the first publication of said notice or other service of written not~ce the City shall re- ceive an instrument or instruments executed by the holders of at least 51% in aggregate principal amount of all Bonds and Additional Bonds then outstanding, which instrument or instru- ments shall refer to the proposed amendment described in said notice and which specifically consent to and approve such amendment in substantially the form of the copy thereof on file with the Paying Agents, the City Council may pass the amendatory ordinance in substantially the same form (d) Upon the passage of any amendatory ordinance pur- suant to the provisions of this Section, this Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and the respective rights, duties, and obligations under this Ordinance of the City and all the holders of then outstanding Bonds and Additional Bonds and all future Bonds and Additional Bonds shall thereafter be determined, exercised, and enforced he~ under, subject in all respects to such amend- meats (e) Any consent given by the holder of a Bond or Addi- tional Bond pursuant to the provisions of this Section shall 33 be irrevocable for a period of slx months from the date of the first publication of the notlce provided for in this Section, and shall be conclusive and binding upon all future holders of the same Bond or Additional Bond during such per~od Such consent may be revoked at any time after slx months from the date of the first publication of such notice by the holder who gave such consent, or by a successor in title, by filing notice thereof with the paying agents and the City, but such revocation shall not be effective ~f the holders of 51% 1n aggregate pr~nclpal amount of the then outstanding Bonds and Additional Bonds as in th~s Section deflned have, prior to the attempted revocation, consented to and approved the amendment (f) For the purpose of this Section, the fact of the holding of Bonds or Additional Bonds by any bondholder and the amount and numbers of such Bonds or Additional Bonds and the date of their holding same, may be proved by the affidavit of the person claiming to be such holder, or by a certlflcate executed by any trust company, bank, banker, or any other de- pository wherever situated showing that at the date there~n mentioned such person had on deposit with such trust company, bank, banker, or other depository, the Bonds and Additional Bonds described in such certificate The City may conclusively assume that such ownership continues until written notice to the contrary is served upon the City Section 27 APPROVAL AND REGISTRATION OF SERIES 1982 BONDS That the Mayor of the City is hereby authorized to have control of the Series 1982 Bonds and all necessary records and proceedings pertalnlng to the Ser~es 1982 Bonds pending their delivery and their lnvestlgat~on, examination, and approval by the Attorney General of the State of Texas, and thelr registra- tion by the Comptroller of Public Accounts of the State of Texas Upon registration of the Series 1982 Bonds, sa~d Comptroller of Public Accounts (or a deputy designated in writing to act for 34 said Comptroller) shall manually sagn the Comptroller's Regas- tratzon Certificate printed and endorsed on the Ser~es 1982 Bonds, and the seal of sa~d Comptroller shall be lmpressed, or placed ~n facsimile, on each of the Ser~es 1982 Bonds Section 28 That ~t as hereby off~caally found and de- termined that a case of emergency or urgent public necessaty exists which requlres the holding of the meeting at which th~s Ordinance ~s passed, such emergency or urgent public necessity being that the proceeds from the sale of sa~d bonds are re- quired as soon as possible and wlthout delay for necessary and urgently needed public ~mprovements, and that sa~d meeting was open to the public, and publac not~ce of the t~me, place, and purpose of sa~d meeting was g~ven, all as required by Vernon's Ann C~v St Article 6252-17 Section 29 That the C~ty Council offlcaally f~nds, de- termines, and declares that sa~d bonds have been duly adver- tised for sale as required by the Home Rule Charter of sa~d C~ty, that sealed b~ds have been received at a publlc sale of sa~d bonds held on March 2, 1982, that all of sald bonds are hereby sold and shall be dellvered to a syndicate managed or headed by ~/~ ~,~ ~-'~,r~ ~6~ ~,~-~ ~,~,~/-~. belng the best b~dder at sa~d public sale, for the prancapal amount of sa~d bonds, and accrued ~nterest thereon to the date of delivery, plus a premium of $ 3~o Section 30 It ~s further found and determaned that the Off~caal Notice of Sale for sa~d bonds was duly publashed on January 29, 1982, an The Bond Buyer, New York, New York, which ~s a national publication regularly and pramaraly carry- · ng finan¢lal news and mun~capal bond notices, and on January 29, 1982, an the Denton Record-Chronacle, which has been designated as the official newspaper of the City of Denton The form and substance of sa~d Official Notlce of Sale, and the aforesaid publlcat~ons thereof, are hereby ap- proved and ratlfied in all respects by the Clty Council 35 Sectaon 31 That at is hereby offacaally found, deter- maned, and declared that said bonds have been sold at public sale to the b~dder offerang the lowest interest cost, after rec~avang sealed bads pursuant to an Offacaal Not~ce of Sale and Offacaal Statement dated February 15, 1982, prepared and d~strabuted an connection wath the sale of sa~d bonds Sa~d Offac~al Not~ce of Sale and Official Statement have been and are hereby approved by the Caty Council It ~s further offl- c~ally found, determaned, and declared that the statements and representatlons contained an sald Official Not~ce of Sale and Offacaal Statement are true and correct an all materaal re- spects, to the best knowledge and belief of the C~ty Councll 36 CERTIFICATE FOR ORDINANCE AUTHORIZING THE ISSUANCE OF CiTY OF DENTON ELECTRIC SYSTEM REVENUE BONDS SERIES 1982 THE STATE OF TEXAS ~OUNTY OF DENTON CITY OF DENTON We, the undersigned officers of said City, hereby certify as follows 1 The City Council of said City convened ~n REGULAR MEETING ON THE 2ND DAY OF MARCH, 1982, at the Municipal Building (C~ty Hall), and the roll was called of the duly constituted officers and members of said City Council, to-wit Charlotte Allen, City Secretary Richard O Stewart, Mayor Mark Chew R~chard H Tal~aferro Dwight L Galley Dr A Ray Stephens J~m Rlddlesperger Joe Alford and all of said persons were present, except the following absentees ,,~'o~,~ , thus constltuting a quorum Whereupon, among other business, the followlng was transacted at said Meeting a written ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF DENTON ELECTRIC SYSTEM REVENUE BONDS SERIES 1982 was duly introduced for the consideration of said City Council and duly read It was then duly moved and seconded that said Ordinance be passed, and, after due discussion, said motion, carrying w~th it the passage of said Ordinance, prevailed and carrled by the followlng vote AYES All members of said City Council shown present above voted "Aye" NOES None 2 That a true, full, and correct copy of the aforesaid Ordinance passed at the Meeting described in the above and foregoing paragraph is attached to and follows this Certifi- cate; that said Ordinance has been duly recorded in sa~d City Council's minutes of said Meeting, that the above and foregoing paragraph is a true, full, and correct excerpt from said C~ty Council's m~nutes of said Meeting pertaining to the passage of said Ordinance, that the persons named in the above and fore- golng paragraph are the duly chosen, qualified, and actlng officers and members of sald City Council as lndlcated therein, and that each of the officers and members of sa~d Clty Council was duly and sufficiently notified offlclally and personally, in advance, of the t~me, place, and purpose of the aforesaid Meeting, and that said Ordlnance would be lntroduced and considered for passage at said Meeting, and that said Meeting was open to the public, and public not~ce of the time, place, and purpose of said meeting was given, all as required by Vernon's Ann Tex Clv St Article 6252-17 3 That the Mayor of said C~ty has approved, and hereby approves, the aforesaid Ordinance, that the Mayor and the City Secretary of said City have duly signed said Ordinance, and that the Mayor and the C~ty Secretary of sa~d C~ty hereby de- clare that their slgning of this Certificate shall constitute the slgning of the attached and following copy of sald Ordi- nance for all purposes. .~S~GNED AND SEALED the 2nd day of ~ch~ 198~ ~ / ~ //// - C~y Secre~y ' ~ ~yor (SEAL) ............................... ..... .................. We, the undersigned, being respectively the City Attorney and the Bond Attorneys of the City of Denton, Texas, hereby certify that we prepared and approved as to legality the at- tached and following Ordinance przo~ ~lts p~s~e~ afore- said ~Cit~ ~t°rn~3 Bond Attorneys OFFICIAL BID FORM Honorable Mayor and City Council March 2 1982 City of Denton Denton, Texas Gentlemen Reference Is made to your Official Statement and Not]ce of Sale and Bidding Instructions dated February 15, 1982, of $3,000 000 CITY OF DENTON, TEXAS ELECTRIC SYSTEM REVENUE BONDS, SERIES 1982, both of which constitute a part hereof For your legally lSSUPd Bonds as described ~n aid Not}ce o¢ Sale and Bidding Instructions and Off~clai Statement, we wlll pay you par aD~.§ccr.~ed lntercst from date of issue to date o¢ delivery to us plus a cash premium of $ _~¢-/¢~.%Y~ for Bonds maturing and bearing interest as follow~ LAW OFFICES I~¢CALL~ PARKHURST ~ HORTON March 2, 1982 Honorable Mayor and Counczl of the C~ty of Denton Denton, Texas Gentlemen Clty of Denton Electric System Revenue Bonds, Series 1982, $3,000,000 In compllance with Sectlon 9 02 and Section 9 04 of the City Charter of the City of Denton, you are advised that the bids for the captloned lssue of bonds have been tabulated and that we f~nd that the bld of a syndicate managed or headed by the following w2th the bonds to bear interest at the rates there2n specified, with such bidder to pay par and accrued ~nterest to date of delivery for sazd bonds, plus a premium of $ ~¢~0 , ~s the lowest and best bid recelved, and we recommend that zt be accepted , We further certify that we have exam2ned the ordinance presently placed before the Mayor and Counc21 for the purpose of authorlz2ng the issuance of said bonds, and, in our opinion, thel sa&d proposed bond ord2nance Ks legal, and the bonds to be · ss~ed thereunder will be special obligations of the City, secured by and payable from an irrevocable f~rst lien on and pledge of the "Pledged Revenues", as defined zn the Ord2nance author2zzng thelr issuance Respectfully, FIRST SOVTIIWEST COWIPANY~ 900 MERCANTILE [~ANK BUILDING, DALLAS, TCXA,S 757_01 TABULATION OF BIDS RECEIVED AT SALE OF $3,000,000 CITY OF DENTON, TEXAS ELECTRIC SYSTEM REVENUE BONDS SERIES 1982 CROSS LESS NET EFFECTIVE ACCOUNT HANAGER NTEREST COST P:tE .~IU~4 INTEREST COST NTEREST