The URL can be used to link to this page

1982-238CITY OF ANAHEIM RESOLUTION NO. 82R -238 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM, CALIFORNIA, AUTHORIZING THE ISSUANCE OF $18,000,000 ELECTRIC REVENUE BONDS, ISSUE A OF 1982, AND $52,000,000 ELECTRIC REVENUE BONDS, ISSUE B OF 1982, OF THE CITY AND PROVIDING THE TERMS AND CONDITIONS FOR THE ISSUANCE OF THE BONDS ADOPTED: MAY 7, 1982 TABLE OF CONTENTS - Section 1. DEFINITIONS. . . . . . . . . . . . . . . 3 Section 2. EQUALITY OF BONDS, PLEDGE OF REVENUES. 6 Section 3. PURPOSE OF BONDS . . . . . . . . . . . . . 7 Section 4. SPECIAL OBLIGATIONS; NO GENERAL CITY LIABILITY . . . . . . . . . . . . . . . 7 Section 5. DESCRIPTION OF BONDS. . . . . . . . . . . 8 Section 6. INTEREST; PLACE OF PAYMENT. . . . . . . . 8 Section 7. EXECUTION OF BONDS. . . . . . . . . . . . 9 Section 8. REGISTRATION . . . . . . . . . . . . . . . 9 Section 9. REDEMPTION OF BONDS. . . . . . . . . . . 9 Section 10. FUNDS AND ACCOUNTS. . . . . . . . . . . .12 Section 11. DISPOSITION OF BOND PROCEEDS; CONSTRUCTION ACCOUNTS. . . . . . . . . .13 Section 12. REVENUE ACCOUNT. . . . . . . . . . . . .14 Section 13. BOND SERVICE ACCOUNT; IDC ACCOUNT; SINKING ACCOUNT. . . . . . . . . . . . .15 Section 14. M &0 ACCOUNT. . . . . . . . . . . . . . .17 Section 15. RESERVE FUND . . . . . . . . . . . . . . .17 Section 16. R &R ACCOUNT. . . . . . . . . . . . . . .18 Section 17. SURPLUS FUND . . . . . . . . . . . . . . .18 Section 18. INVESTMENTS. . . . . . . . . . . . . . .19 Section 19. WARRANTY. . . . . . . . . . . . . . .20 Section 20. COVENANTS. . . . . . . . . . . . . . . .20 Covenant 1. Punctual Payment. . . . . . . . .20 Covenant 2. Discharge Claims. . . . . . . . .20 Covenant 3. Commence Acquisition and Construction. . . . . . . . . . .21 -i- TABLE OF CONTENTS, Continued Covenant 4. Operate Enterprise in - Efficient and Economical Manner . . . . . . . . . . . . . . 21 Covenant 5. Against Sale, Eminent Domain, Existing and Future Agreements. . . . . . . . . . . .21 Covenant 6. Insurance. . . . . . . . . . . .22 Covenant 7. Records and Accounts. . . . . . .22 Covenant 8. Collection of Charges. . . . . .22 Covenant 9. Rates and Charges. . . . . . . .23 Covenant 10. No Priority for Additional Indebtedness. . . . . . . . . . .23 Covenant 11. Limits on Parity Bonds. . . . . .24 Covenant 12. Arbitrage. . . . . . . . . . . .25 Section 21. LOST, STOLEN, DESTROYED, OR MUTILATEDBONDS. . . . . . . . . . . . .25 Section 22. CANCELLATION OF BONDS. . . . . . . . . .26 Section 23. CONSENT OF BONDHOLDERS. . . . . . . . . .26 Section 24. BOND AND COUPON FORMS. . . . . . . . . .29 Section 25. TEMPORARY BONDS. . . . . . . . . . . . .35 Section 26. RESOLUTION CONSTITUTES CONTRACT. . . . .35 Section 27. DEFEASANCE . . . . . . . . . . . . . . . .36 Section 28. FUTURE CONTRACTS . . . . . . . . . . . . .37 Section 29. SEVERABILITY. . . . . . . . . . . . . .37 Section 30. SUBSTITUTES. . . . . . . . . . . . . . .37 Section 31. MODIFICATION OF PRIOR RESOLUTION. . . . .37 Section 32. EFFECTIVE DATE . . . . . . . . . . . . . .37 -ii- CITY OF ANAHEIM RESOLUTION NO. 82R -238 RESOLUTION OF THE CITY CALIFORNIA, AUTHORIZIZ ELECTRIC REVENUE BONDS, ELECTRIC REVENUE BONDS, PROVIDING THE TERMS AND BONDS COUNCIL OF THE CITY OF ANAHEIM, 1G THE ISSUANCE OF $18,000,000 ISSUE A OF 1982, AND $52,000,000 ISSUE B OF 1982, OF THE CITY AND CONDITIONS FOR THE ISSUANCE OF THE WHEREAS, the City of Anaheim is a municipal corporation organized and existing under a Charter duly and regularly adopted pursuant to the provisions of the Constitution of the State of California; and WHEREAS, Section 1210 of the City Charter ( "Section 1210 ") provides as follows: "Bonds which are payable only out of such revenues as may be specified in such bonds may be issued when the City Council by ordinance shall have established a procedure for the issuance of such bonds. Such bonds, payable only out of revenues, shall not constitute an indebtedness or gen- eral obligation of the City. No such bonds payable out of revenues shall be issued without the assent of a majority of the voters voting upon the proposition for issuing the same at an election at which such proposition shall have been duly submitted to the qualified electors of the City. "It shall be competent for the City to make contracts and covenants for the benefit of the holders of any such bonds payable only from revenues and which shall not con- stitute a general obligation of the City for the establish- ment of a fund or funds, for the maintaining of adequate rates or charges, for restrictions upon further indebted- ness payable out of the same fund or revenues, for restric- tions upon transfer out of such fund, and other appropriate covenants. Money placed in any such special fund for the payment of principal and /or interest on any issue of such bonds or to assure the application thereof to a specific purpose shall not be expended for any other purpose what - - ever except for the purpose for which such special fund was established and shall be deemed segregated from all other funds of the City and reserved exclusively for the purpose for which such special fund was established until the pur- pose of its establishment shall have been fully accomplished. "Notwithstanding the foregoing, the City may sell and issue at any time and from time to time revenue bond antic- ipation notes (including renewal revenue bond anticipation notes) in anticipation of the revenue bonds authorized by the voters on June 2, 1981; provided that the aggregate principal amount of such revenue bond anticipation notes and revenue bonds outstanding in accordance with their terms at any one time shall not exceed $92 million. Such revenue bond anticipation notes may be sold, issued and secured in such manner and subject to such terms and condi- tions as the City Council may prescribe by ordinance; pro- vided that such revenue bond anticipation notes shall not constitute an indebtedness or general obligation of the City of Anaheim and are not to be secured by the taxing -- power of said City "; and WHEREAS, Ordinance No. 2980 of the City Council, as amended by Ordinance No. 4158 and by Ordinance No. 4328, incorporating cer- tain sections of the Revenue Bond Law of 1941 (Chapter 6, Part 1, Division 2, Title 5 of the Government Code of the the State of California), establishes a procedure for the issuance of such bonds as provided for in Section 1210; and WHEREAS, pursuant to Section 1210, Ordinance No. 2980 and Resolution No. 74R -615 of the City Council, a special municipal elec- tion was held in the City on March 4, 1975, for the purpose of sub- mitting to the qualified voters of the City the following proposition: "In order to provide more economical electrical ser- vice, shall the City of Anaheim be authorized to finance the construction and acquisition of facilities, property and rights related to the generation, transmission and dis- tribution of electrical energy by issuing revenue bonds, not payable from property taxes, in an amount not to exceed 150 Million Dollars ? "; and WHEREAS, said proposition (the "1975 Proposition ") was approved by the votes of more than a majority of all the voters voting on the 1975 Proposition at the special municipal election; and WHEREAS, of said authorized amount of $150,000,000, the City has heretofore issued $6,000,000 electric revenue bonds desig- nated "Electric Revenue Bonds, Issue of 1976 ", $12,500,000 electric revenue bonds designated "Electric Revenue Bonds, Second Issue (Subordinated) of 1976" and $84,000,000 electric revenue bonds desig- nated "Electric Revenue Bonds, Issue of 1980 "; and WHEREAS, pursuant to Section 1210, Ordinance No. 2980, as amended, and Resolution No. 81R -138 of the City Council, a special municipal election was held in the City on June 2, 1981, for the -2- purpose of submitting to the qualified voters of the City the following proposition: "In order to obtain substantial savings and provide more economical electric service, shall the City of Anaheim be authorized to finance the construction and acquisition of facilities, property and rights related to the San Onofre Nuclear Generating Station and the generation and transmission of electric energy by issuing revenue bonds and revenue bond anticipation notes and any combination thereof, not payable from property taxes, in an aggregate principal amount outstanding in accordance with their terms at any one time not to exceed $92 million ? "; and WHEREAS, said proposition (the "1981 Proposition ") was approved by the votes of more than a majority of all the voters voting on the 1981 Proposition at the special municipal election; and WHEREAS, pursuant to the 1981 Proposition, Ordinance No. 4252, as amended by Ordinance No. 4267 and Ordinance No. 4270, and Resolution No. 81R -455 of the City Council, the City provided for the issuance of up to $80,000,000 Electric Revenue Bond Anticipation Notes to be paid from the proceeds of an issue of electric revenue bonds entitled "Electric Revenue Bonds, Issue of 1981" authorized by Resolution No. 81R -379 of the City Council but never issued; and WHEREAS, this City Council deems it necessary to issue and sell at this time, for the purposes hereinafter set forth, $18,000,000 of the remaining $47,500,000 principal amount of electric revenue bonds authorized by the 1975 Proposition, to be designated "Electric Revenue Bonds, Issue A of 1982" and $52,000,000 of the principal amount of electric revenue bonds authorized by the 1981 Proposition, to be designated "Electric Revenue Bonds, Issue B of 1982" , said Issue B of 1982 to be issued in lieu of the Issue of 1981 authorized by Resolution No. 81R -379 of the City Council; and the Electric Revenue Bonds, Issue A of 1982 and Issue B of 1982 shall be on a parity with the City's Electric Revenue Bonds, Issue of 1972, Electric Revenue Bonds, Issue of 1976, Electric Revenue Bonds, Issue of 1980 and any other parity electric revenue bonds which may be issued in the future by the City; NOW, THEREFORE, the City Council of the City of Anaheim, California, DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows: SECTION 1. Definitions. As used in this Resolution: (a) "Annual Debt Service" as computed from time to time under Covenant 11 of Section 14 hereof with respect to any Fiscal Year means the amount of principal (including required payments into any sinking account established for -3- the Bonds or any Parity Bonds) and interest which will become due and payable or will accrue in such Fiscal Year on outstanding Bonds and Parity Bonds. (b) "Authorized Investments" means any obligations in which the City may lawfully invest its funds. (c) "Bonds" means the revenue bonds authorized to be issued by this Resolution. (d) "1982 A Bonds" means the $18,000,000 aggregate principal amount of Bonds issued hereunder pursuant to the proposition approved by the voters of the City on March 4, 1975, as set forth in Resolution No. 74R -615 of the City Council. (e) "1982 B Bonds" means the $52,000,000 aggregate principal amount of Bonds issued hereunder pursuant to the proposition approved by the voters of the City on June 2, 1981, as set forth in Resolution No. 81R -138 of the City Council. (f) "City" means the City of Anaheim, California. City. (g) "City Council" means the City Council of the (h) "Enterprise" means the entire electric system of the City of Anaheim, including all improvements and exten- sions later constructed or acquired. (i) "Finance Director" means the Finance Director of the City. (j) "Fiscal Agent" means the fiscal agent under the 1972 Bond Resolution. (k) "Fiscal Year" means the year period beginning on July 1 and ending on the next following June 30. (1) "Gross Revenues" means all rates, fees and charges for providing electric service to persons and real property and all other fees, rents and charges and other income derived by the City, from the ownership, operation, use or services of the Enterprise. (m) "Maintenance and Operation Expenses" means the reasonable and necessary current expenses of maintaining, repairing and operating the Enterprise, including City administrative expenses directly attributable to electric system functions, but excluding depreciation, interest and -4- amortization, all computed in accordance with sound accounting principles and consistent with existing account- ing practices of the City. (n) "Maximum Annual Debt Service" as computed from time to time under Section 15 and Covenant 11 of Section 20 hereof means the largest of the sums obtained for the Fiscal Year of computation or any Fiscal Year thereafter by totaling the following for each such Fiscal Year: (1) The principal amount of all serial Bonds and serial Parity Bonds payable in such Fiscal Year and outstanding at the time of such computation; (2) The minimum sinking account payments, if any, pay- able in such Fiscal Year with respect to the term Bonds and any term Parity Bonds; and (3) The interest which would be due during such Fiscal Year on the aggregate principal amount of Bonds and Parity Bonds which would be outstanding in such Fiscal Year if the serial Bonds and serial Parity Bonds out- standing on the date of such computation are retired as they mature and if the term Bonds and any term Parity Bonds outstanding on the date of such computa- tion, if any, are retired as scheduled in this Resolution and in the resolution providing for the issuance of such term Parity Bonds. (o) "Net Revenues" of the Enterprise means the amount of the Gross Revenues less the Maintenance and Operation Expenses. (p) "1972 Bond Resolution" means Resolution No. 72R -83 of the City Council, adopted March 14, 1972, authorizing the issuance of the 1972 Bonds. (q) "1972 Bonds" means the $8400400 electric reve- nue bonds designated "Electric Revenue Bonds, Issue of 1972" referred to in the recitals hereof. (r) "1976 Bond Resolution" means Resolution No. 76R- 149 of the City Council, adopted March 30, 1976, authoriz- ing the issuance of the 1976 Bonds. (s) "1976 Bonds" means the $6,000,000 electric reve- nue bonds designated "Electric Revenue Bonds, Issue of 1976" referred to in the recitals hereof. -5- (t) "1980 Bond Resolution" means Resolution No. 80R -457 of the City Council, adopted October 10, 1980, authorizing the issuance of the 1980 Bonds. (u) "1980 Bonds" means the $84,000,000 electric reve- nue bonds designated "Electric Revenue Bonds, Issue of 1980" referred to in the recitals hereof. (v) "Ordinance No. 2980" means Ordinance No. 2980 of the City Council, adopted on November 9, 1971, as amended by Ordinance No. 4158 adopted on September 9, 1980 and by Ordinance No. 4328, adopted on April 27, 1982. (w) "Parity Bonds" means the 1972 Bonds, the 1976 Bonds, the 1980 Bonds and any other revenue bonds, revenue notes or other similar evidences of indebtedness heretofore or hereafter issued for the acquisition, construction and financing of extensions of, additions to, repairs and replacements to, renewals of, and improvements of the Enterprise, payable out of the revenues and which, as pro- vided in this Resolution, rank on a parity with the Bonds. (x) "Parity Bond Resolution" means any resolution authorizing the issuance of Parity Bonds. (y) "Registrar" means Bank of America National Trust and Savings Association. (z) "Resolution" means this Resolution No. 82R -238 of the City Council. (aa) "Treasurer" means the Treasurer of the City. SECTION 2. Equality of Bonds, Pledge of Revenues. Pursuant to Section 1210 of the City Charter, Ordinance No. 2980 and this Resolution, the Bonds and all Parity Bonds shall be equally secured by a pledge, charge and lien upon the Gross Revenues of the Enterprise without priority for number, date of bonds, date of sale, date of execution, or date of delivery, and the payment of the inter- est on and principal of the Bonds and all Parity Bonds and any premi- ums upon the redemption of any thereof shall be and are secured by an exclusive pledge of and charge and lien upon the Gross Revenues of the Enterprise, and all of the Gross Revenues of the Enterprise are hereby pledged, charged and assigned for the security of the Bonds and all Parity Bonds, and such Gross Revenues and any interest earned on the Gross Revenues shall constitute a trust fund for the security and payment of the interest on and principal of the Bonds and all Parity Bonds and so long as any of the Bonds and all Parity Bonds or interest thereon are unpaid, the Gross Revenues and interest thereon shall not be used for any other purpose, except as permitted by this Resolution and any Parity Bond Resolutions, and shall be held in trust for the benefit of the bondholders and shall be applied pursuant to this Resolution, or to this Resolution as modified pursu- ant to provisions herein, and to any Parity Bond Resolutions. Nothing in this Resolution shall preclude: (a) the redemp- tion prior to maturity of any Bonds subject to call and redemption or payment of said Bonds at maturity from proceeds of refunding bonds issued under Section 1210.1 of the City Charter as the same now exists or as hereafter amended, or under any other law of the State of California; (b) the issuance, subject to the limitations contained herein, of Parity Bonds; or (c) the issuance of additional indebted- ness payable solely from surplus moneys in the Surplus Fund pursuant to Section 17 hereof. SECTION 3. Purpose of Bonds. Under and pursuant to Section 1210 of the City Charter and Ordinance No. 2980 and in accor- dance with the authorizations stated in the recitals hereof, (A) the 1982 A Bonds shall be issued for the purpose of financing the con- struction and acquisition of facilities, property and rights related to the generation, transmission and distribution of electrical energy, including but not limited to the acquisition of an ownership interest in Unit No. 2 and Unit No. 3 of the San Onofre Nuclear Generating Station, the funding of interest during construction and -of the Reserve Fund, the payment of other costs and expenses inciden- tal to the foregoing and the payment of Electric Revenue Bond Anticipation Notes issued by the City pursuant to Ordinance No. 4252 (as amended) of the City Council, and (B) the 1982 B Bonds shall be issued for the purpose of financing the construction and acquisition of facilities, property and rights related to the San Onofre Nuclear Generating Station and the generation and transmission of electric energy, including but not limited to the acquisition of an ownership interest in Unit No. 2 and Unit No. 3 of the San Onofre Nuclear Generating Station, the funding of interest during construction and of the Reserve Fund, the payment of other costs and expenses inciden- tal to the foregoing and the payment of any bond anticipation notes or other notes or obligations of the City, including the Electric Revenue Bond Anticipation Notes issued by the City pursuant to Ordinance No. 4252 (as amended) of the City Council, the proceeds of which are used for any of the above purposes. SECTION 4. Special Obligations; No General City Liability. The Bonds shall be special obligations of the City and shall be pay- able as to the principal thereof and interest thereon and any premium upon the redemption of any thereof solely from the Gross Revenues. The general fund of the City is not liable for the payment of the Bonds or their interest, nor is the credit or taxing power of the City pledged for the payment of the Bonds or their interest. The holders of the Bonds or coupons shall not be entitled to compel the exercise of the taxing power by the City or the forfeiture of any of its property. The principal of and interest on the Bonds and any premium upon the redemption of any thereof are not a debt of the City -7- or a legal or equitable pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts or revenues, except the Gross Revenues. The 1982 A Bonds and the 1982 B Bonds maturing in the years 1984 to 1996, inclusive, are sometimes referred to herein as "serial Bonds" and the 1982 B Bonds maturing in 2007 are sometimes referred to herein as "term Bonds." SECTION 6. Interest; Place of Payment. T h e 1 9 8 2 A Bonds shall bear interest at the rate of 8% per annum, payable semi- annually on the first days of April and October of each year, com- mencing October 1, 1982. The 1982 B Bonds maturing in each of the following years shall bear interest at the following rates, payable semi - annually on the first days of April and October of each year, commencing October 1, 1982: SECTION 5. Description of Bonds. The Bonds shall all be in the denomination of $5,000, and the 1982 A Bonds and the 1982 B Bonds shall each be numbered consecutively from 1 upwards. The 1982 A Bonds shall be designated ELECTRIC REVENUE BONDS, ISSUE A OF 1982, and the 1982 B Bonds shall be designated ELECTRIC REVENUE BONDS, ISSUE B OF 1982. The Bonds shall be dated May 1, 1982, and shall be payable in consecutive numerical order on October 1 in each year of maturity in the amounts for each of the several years as follows: 1982 A Bonds 1982 B Bonds Year Principal Amount Year Principal Amount 1984 $1,450,000 1984 $ 550,000 1985 1,550,000 1985 600,000 1986 1,700,000 1986 650,000 1987 1,800 1987 700,000 1988 1,950,000 1988 750,000 1989 2,100,000 1989 850,000 1990 2,300,000 1990 900,000 1991 2,500,000 1991 1,050,000 1992 2,650,000 1992 1,150,000 1993 1,250,000 1994 1,350,000 1995 1,550,000 1996 1,700,000 2007 38,950,000 The 1982 A Bonds and the 1982 B Bonds maturing in the years 1984 to 1996, inclusive, are sometimes referred to herein as "serial Bonds" and the 1982 B Bonds maturing in 2007 are sometimes referred to herein as "term Bonds." SECTION 6. Interest; Place of Payment. T h e 1 9 8 2 A Bonds shall bear interest at the rate of 8% per annum, payable semi- annually on the first days of April and October of each year, com- mencing October 1, 1982. The 1982 B Bonds maturing in each of the following years shall bear interest at the following rates, payable semi - annually on the first days of April and October of each year, commencing October 1, 1982: Year Rate 1984 7.50% 1985 8.00 1986 8.50 1987 8.75 1988 9.00 1989 9.40 1990 9.70 1991 10.00 1992 10.25 1993 10.50 1994 10.75 1995 11.00 1996 11.10 2007 11.50 Each Bond shall bear interest from its date until the principal sum thereof has been paid; provided, however, that if at the maturity date of any Bond or if the same is redeemable and has been duly called for redemption, funds are available for the payment or redemp- tion thereof in full accordance with the terms of this Resolution, said Bonds shall then cease to bear interest. The Bonds and the interest thereon shall be payable in lawful money of the United States of America at the Corporate Agency Division of Bank of America National Trust and Savings Association in Los Angeles or San Francisco, California, or at the option of the holder, at any other paying agent of the City in New York, New York. SECTION 7. Execution of Bonds. The Mayor of the City and the Treasurer are hereby authorized and directed to sign the Bonds by their printed, lithographed or engraved facsimile signa- tures, and the City Clerk of the City is hereby authorized and directed to countersign the Bonds and to affix thereto the corporate seal of the City, and the Treasurer is hereby authorized and directed to sign the interest coupons of the Bonds by his or her printed, lithographed or engraved facsimile signature. SECTION 8. Registration. The Bonds may be registered either as to principal only or as to both principal and interest, and any registered Bond may be discharged from registration in the manner and with the effect set forth in the Bond form in Section 24 hereof. SECTION 9. Redemption of Bonds. The 1982 B Bonds matur- ing on or of ter October 1, 1992 may be redeemed prior to maturity, at the option of the City, on April 1, 1992, or on any interest payment date thereafter, in whole or in part, at the following redemption prices, expressed as a percentage of the principal amount, together with accrued interest to the date of redemption: -9- Redemption Dates April 1 and October 1) 1987 -88 1989 -90 1991 -92 1993 and thereafter F 13• 5 0 01 - 0 11 103% 102 101 100 The 1982 A Bonds maturing on or after October 1, 1987 may be redeemed prior to maturity, at the option of the City, on April 1, 1987, or on any interest payment date thereafter, in whole or in part, at 100% of the principal amount thereof, together with accrued interest to the date of redemption. The Bonds redemption prior to accrued interest to hereof. are also subject to mandatory sinking fund maturity at the principal amount thereof plus the redemption date as provided in Section 13 All or any of the Bonds subject to redemption may be called for redemption at any one time. If less than all of the Bonds are redeemed at any one time, such Bonds shall be redeemed in inverse order of maturity and by lot within each maturity. The interest pay- ment date on which Bonds which are called are to be presented for redemption is herein sometimes called the "redemption date." (a) Notice of Redemption. Notice of the intended redemp- tion shall be published once in a newspaper of general circulation in the County of Los Angeles, California, and once in a financial news- paper or journal of national circulation published in or near the City of New York, New York, said publications to be at least 30 days but not more than 60 days prior to the redemption date. The notice of redemption shall (a) state the redemption date; (b) state the redemption price; (c) state the numbers and date of maturity of the Bonds to be redeemed; provided, however, that whenever any call includes all of the outstanding Bonds subject to redemption, the num- bers of the Bonds need not be stated; (d) require that such Bonds be surrendered with all interest coupons maturing subsequent to the redemption date (except that no coupons need be surrendered on Bonds registered as to both principal and interest) at the Corporate Agency Division of Bank of America National Trust and Savings Association in Los Angeles or San Francisco, California, or at the option of the holder, at any other paying agent of the City in New York, New York; and (e) give notice that further interest on such Bonds will not accrue after the designated redemption date. If any of the Bonds designated for redemption shall be reg- istered so as to be payable otherwise than to bearer, the Registrar shall, on or before the date of publication of said notice of redemption, mail a similar notice postage prepaid to the respective -10- registered owners thereof at the addresses appearing on the Bond registry book. The actual receipt by the holder of any Bond of notice of such redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect the validity of the proceedings for redemption of such Bonds or the cessation of interest on the redemption date. The mailed notice or notices required by this section shall be given by the Registrar. A certificate by the Registrar that notice of call and redemption has been given to hold - ers of registered Bonds as herein provided shall be conclusive as against all parties, and no bondholder whose Bond is called for redemption may object thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that he failed to receive actual notice of call and redemption. (b) Redemption Fund. Prior to the redemption date there shall be established a redemption fund to be described as the Electric Revenue Bonds Redemption Fund (herein referred to as the "Redemption Fund "), and prior to the redemption date there shall be set aside in the Redemption Fund moneys available for the purpose and sufficient to redeem, at the prices payable as in this Resolution provided, the Bonds designated in such notice of redemption. Said moneys shall be set aside in the Redemption Fund solely for that pur- pose and shall be applied on or after the redemption date to payment of the Bonds to be redeemed upon presentation and surrender of such Bonds and, except as to registered Bonds, all interest coupons matur- ing after the redemption date, and shall be used only for that purpose. Any interest coupon and accrued interest due on or prior to the redemption date shall be paid from the Bond Service Account upon presentation and surrender thereof. Any interest due on or prior to the redemption date upon Bonds registered as to both principal and interest shall be paid from the Bond Service Account. Each Bond presented, if unregistered, or if registered as to principal only, must have attached thereto or presented therewith all interest cou- pons maturing after the redemption date. If, after all of the Bonds have been redeemed and cancelled or paid and cancelled, there are moneys remaining in the Redemption Fund, said moneys shall be trans- ferred to the Revenue Account; provided, however, that if said moneys are part of the proceeds of refunding bonds said moneys shall be transferred to the fund or account created for the payment of princi- pal of and interest on such refunding bonds. The Redemption Fund may also be used to provide for the redemption of Parity Bonds. (c) Effect of the Notice of Redemption. When notice of redemption has been given, and when the amount necessary for the �. redemption of the Bonds called for redemption is set aside for that purpose in the Redemption Fund, the Bonds designated for redemption shall become due and payable on the redemption date, and upon presentation and surrender of said Bonds and, except as to Bonds registered as to both principal and interest, all interest coupons -11- maturing after the redemption date, at the place specified in the notice of redemption, such Bonds shall be redeemed and paid at said redemption price out of the Redemption Fund, and no interest will accrue on such Bonds called for redemption or on any interest coupon thereof after the redemption date specified in such notice, and the holders of said Bonds so called for redemption after such redemption date shall look for the payment of such Bonds only to said Redemption Fund. All Bonds redeemed and all interest coupons thereof shall be cancelled forthwith and shall not be reissued. All interest coupons pertaining to any redeemed Bonds, which coupons have matured on or prior to the redemption date, shall continue to be payable to the respective holders thereof but without interest thereon. All unpaid interest payable at or prior to the redemption date upon Bonds registered in such manner that the inter- est is payable only to the registered owners shall continue to be payable to the respective registered owners of such Bonds, or their order, but without interest thereon. SECTION 10. Funds and Accounts. A. The Treasurer shall continue to maintain the following funds and accounts, heretofore created under the 1972 Bond Resolution, the 1976 Bond Resolution and Resolution No. 76R -276 of the City Council and pursuant to Section 1210 of the City Charter, so long as any of the Bonds remain outstanding: (1) Electric Revenue Fund, and the following accounts within said fund: (a) Electric Revenue Bonds, Bond Service Account (the "Bond Service Account "); (b) Electric Revenue Bonds, Issue of 1972, Electric System Maintenance and Operation Account (the "M &O Account "); and (c) Electric Revenue Bonds, Issue of 1972, Electric System Renewal and Replacement Account (the "R &R Account "); and (2) Electric System Surplus Revenue Fund (the "Surplus Fund "). B. The Fiscal Agent shall continue to maintain the follow- ing funds so long as any of the 1972 Bonds remain outstanding: _. (1) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Bond and Interest Fund (the "Bond Service Fund "); and -12- (2) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Bond Reserve Fund (the "Reserve Fund "). From and after the retirement of all of the 1972 Bonds (or the date on which provision for such retirement has been made so that they are no longer outstanding within the meaning of the 1972 Bond Resolution) the Reserve Fund shall be maintained by the Treasurer so long as any of the Bonds remain outstanding. C. The Treasurer shall accounts in the Electric Revenue Bonds remain outstanding: continue to maintain the following Fund so long as any of the 1980 (1) Electric Revenue Bonds, Issue of 1980, Construction Account (the "1980 Construction Account "); (2) Electric Revenue Bonds, Issue of 1980, Interest During Construction Account (the "1980 IDC Account "); and (3) Electric Revenue Bonds, Issue of 1980, Sinking Account (the "1980 Sinking Account "). D. The following additional accounts are hereby created in the Electric Revenue Fund and shall be maintained by the Treasurer so long as any of the Bonds remain outstanding: (1) Electric Revenue Bonds, Electric System Revenue Account (the "Revenue Account "); (2) Electric Revenue Bonds, Issue A of 1982, Construction Account (the "1982 A Construction Account "); (3) Electric Revenue Bonds, Issue B of 1982, Construction Account (the "1982 B Construction Account "); (4) Electric Revenue Bonds, Interest During Construction Account (the "IDC Account "); and (5) Electric Revenue Bonds Sinking Account (the "Sinking Account "). E. Additional accounts in the Electric Revenue Fund may be created by subsequent resolutions of the City Council. SECTION 11. Disposition of Bond Proceeds; Construction Accounts. (a) The proceeds of the sale of the 1982 A Bonds shall be received by the Treasurer and deposited as follows: (1) An amount equal to the total amount of interest payable on the 1982 A Bonds from their date to October 1, 1982, plus an amount equal to one -half of the total amount -13- of interest payable on the 1982 A Bonds from October 1, 1982 to March 1, 1984 shall be deposited in the IDC Account. (2) An amount sufficient to cause the amount in the Reserve Fund to equal the Maximum Annual Debt Service cal- culated without giving effect to the issuance of the 1982 B Bonds shall be transferred to the Fiscal Agent for deposit in the Reserve Fund. (3) The balance shall be deposited in the 1982 A Construction Account. (b) The proceeds of the sale of the 1982 B Bonds shall be received by the Treasurer and deposited as follows: (1) An amount equal to the total amount of interest payable on the 1982 B Bonds from their date to October 1, 1982, plus an amount equal to one -half of the total amount of interest payable on the 1982 B Bonds from October 1, 1982 to March 1, 1984 shall be deposited in the IDC Account. (2) An amount sufficient to cause the amount in the Reserve Fund (calculated after the transfer to the Reserve Fund referred to in subsection (a) (2) of this Section) to equal the Maximum Annual Debt Service shall be transferred to the Fiscal Agent for deposit in the Reserve Fund. (3) The balance shall be deposited in the 1982 B Construction Account. The City may deposit money received from any source in the 1982 A Construction Account or the 1982 B Construction Account, or both. The moneys set aside and placed in either the 1982 A Construction Account or the 1982 B Construction Account shall be expended solely for the purposes for which the 1982 A Bonds and the 1982 B Bonds, respectively, were issued. If any sum remains in either the 1982 A Construction Account or the 1982 B Construction Account after the full accomplish- ment (as certified by the General Manager of the Public Utilities Department of the City) of the purposes for which the Bonds were issued, it shall be transferred to the Redemption Fund to be used to pay, by redemption or purchase at a purchase price (including broker- age and other fees) not exceeding par plus interest, the principal of Bonds or Parity Bonds issued for one or more of the same purposes for which the Bonds were issued. SECTION 12. Revenue Account. The T r e a s u r e r shall deposit the Gross Revenues of the Enterprise as received in the -14- Revenue Account. On or before the twentieth day of each calendar month, the Finance Director shall withdraw the entire amount on deposit in the Revenue Account and shall allocate and deposit such amount in the indicated priority to the following accounts and funds. SECTION 13. Bond Service Account; IDC Account; Sinking Account. First, so long as any of the Bonds are outstanding, in addition to but on a parity with the transfers to the Bond Service Fund and the 1980 Sinking Account required by Section 14 of the 1972 Bond Resolution and Section 13 of the 1980 Bond Resolution, the Finance Director shall allocate to the Bond Service Account the fol- lowing amounts: (1) one -sixth of the interest which will become due and payable on the outstanding Bonds and Parity -Bonds (other than the 1972 Bonds) within the next ensuing six months, except that for any interest payment due on the dates set forth below with respect to the Bonds, the monthly sum allocated shall be the interest which will become due and payable less the amount of any funded interest which shall be transferred to the Bond Service Account from the 1980 IDC Account in accordance with the 1980 Bond Resolution, from the IDC Account five days prior to the interest payment date as follows: Interest Payment Date Amount October 1, 1982 $3,007,562.50 April 1, 1983 1,804,537.50 October 1, 1983 1,804,537.50 April 1, 1984 1,503,781.25 and from the IDC Account such further amounts as may be provided for other Parity Bonds in any other Parity Bond Resolution, and (2) one - twelfth of the principal amount which will mature and be payable on the outstanding serial Bonds and serial Parity Bonds (other than the 1972 Bonds) within the next ensuing twelve months. So long as any of the Bonds are outstanding, the Finance Director shall allocate to the Sinking Account, each month during the twelve -month period preceding the dates set forth below, in addition to any amounts which may be specified in any Parity Bond Resolution with respect to any term Parity Bonds to be issued by the City in the future, one- twelfth of the amount set forth below in order to pay the principal of the respective amounts of 1982 B term Bonds which shall be called and redeemed on the dates set forth below, unless such amounts are used to purchase term Bonds as provided in this Section: -15- 1982 B Bonds Maturing October 1. 2007 Sinking Account Redemption Date ( OCtober 11 Amount 1997 $1,950,000 1998 2,100,000 1999 2,400,000 2000 2,650,000 2001 2,950,000 2002 3 2003 3,700,000 2004 4,150,000 2005 4,650,000 2006 5,200,000 2007 5,850,000 In any event, such sums shall be allocated from the Revenue Account to the Bond Service Account and the Sinking Account so that the full amount required to pay, as it becomes due, the interest on said Bonds and Parity Bonds (other than the 1972 Bonds) and any installment of principal on said Bonds and Parity Bonds (other than the 1972 Bonds and, with respect to sinking fund payments, the 1980 Bonds) shall be set aside in the Bond Service Account and the Sinking Account at least five days prior to the date the installment of interest or principal becomes due. If for any reason in the any month there are insufficient amounts in Revenue Account to make all required deposits in the Bond Service Account, the Bond Service Fund, the 1980 Sinking Account and the Sinking Account, then the amounts available shall be allocated pro rata towards the required deposits and the deficiencies shall be added to and become a part of the allocations required for the fol- lowing calendar month. Any moneys required to be set aside in the Bond Service Account or the Sinking Account may be prepaid in whole or in part by being earlier set aside therein, and in that event the monthly allo- cation which has been so prepaid need not be made at the time appointed therefor. Each monthly transfer may be reduced by an amount equal to any investment income received during its preceding calendar month on moneys in the Bond Service Account or the Sinking Account. The Bonds and the interest coupons shall recite that they are payable from the Electric Revenue Fund, but notwithstanding such recital shall be paid from the Bond Service Account, or from the Redemption Fund established in accordance with Section 9(b) of this Resolution. -16- Moneys in the Sinking Account shall be used to redeem any term Bonds and parity term bonds (other than the 1972 Bonds and the 1980 Bonds) at the times and in the amounts as provided in this Section and any Parity Bond Resolution. Any such call and redemption of term Bonds shall be made in accordance with Section 9 hereof, and for that purpose moneys in the Sinking Account may be transferred to the Redemption Fund for the payment of principal upon redemption of any term Bonds called for redemption prior to maturity. Moneys in the Sinking Account may also be used, prior to the date when any term Bonds or parity term bonds (other than 1972 Bonds or 1980 Bonds) are selected by lot, in lieu of (or partially in lieu of) mandatory call and redemption on the next succeeding sinking fund redemption date, for the purchase of any such term Bonds or parity term bonds (other than 1972 Bonds or 1980 Bonds) at a purchase price (including brokerage and other fees) not exceeding par plus accrued interest. If after all of the Bonds and any Parity Bonds have been redeemed and cancelled or paid and cancelled (or provision is made therefor) there are moneys remaining in the Bond Service Account, the Sinking Account or the Reserve Fund, said moneys may be transferred to the Revenue Account. SECTION 14. M&0 Account. Second, so long as any of the Bonds are outstanding, the Finance Director shall allocate to the M &O Account amounts sufficient for the payment of the Maintenance and Operation Expenses of the Enterprise as said expenses become due and payable. Amounts in the M &O Account shall be used solely to pay Maintenance and Operation Expenses. SECTION 15. Reserve Fund. Third, so long as any of the Bonds are outstanding, the Finance Director shall transfer to the Reserve Fund an amount sufficient to provide a balance in the Reserve Fund equal to Maximum Annual Debt Service. Moneys in the Reserve Fund shall be used solely for the purpose of paying the principal of and interest on the Bonds and any Parity Bonds, in the event that moneys in the Bond Service Fund (in the case of the 1972 Bonds) or the Bond Service Account or the 1980 Sinking Account (in the case of the 1980 Bonds), or the Bond Service Account or the Sinking Account (in the case of the Bonds and any other Parity Bonds) are insufficient therefor. For that purpose, the Fiscal Agent or the Treasurer, as appropriate, shall withdraw and transfer sufficient moneys from the Reserve Fund to the Bond Service Fund, the Bond Service Account, the 1980 Sinking Account or the Sinking Account, as the case may be. If at any time the moneys in the Reserve Fund are insufficient to make all such required trans- fers, the available moneys in the Reserve Fund shall be distributed pro rata towards the required deposits. -17- Prior to the transfer from the Revenue Account pursuant to Section 12 hereof in each month, moneys in the Reserve Fund in excess of Maximum Annual Debt Service may be withdrawn from the Reserve Fund and transferred to the Revenue Account. If on the first day of a Fiscal Year in which the Maximum Annual Debt Service calculated excluding such Fiscal Year is less than the Maximum Annual Debt Service calculated including such Fiscal Year (in both cases after giving effect to any proposed redemption or refunding of any Bonds or Parity Bonds during such Fiscal Year), then in each month during such Fiscal Year, prior to the transfer from the Revenue Account pursuant to Section 12 in each month, there may be transferred from the Reserve Account to the Revenue Account an amount equal to one - twelfth of the difference between the two calculations of Maximum Annual Debt Service. For purposes of calculating amounts required to be in the Reserve Fund during such Fiscal Year, the amounts so transferred shall be deemed to be on deposit in the Reserve Fund. Such amounts shall be used only for the purposes set f orth in Section 3 hereof or to pay the principal of Bonds or Parity Bonds at maturity, by redemption or by purchase at a purchase price (including brokerage and other fees) not exceeding par plus interest. SECTION 16. R &R Account. Fourth, so long as any of the Bonds are outstanding, the Finance Director shall allocate to the R &R Account an amount equal to 1% of the Gross Revenues received in the preceding calendar month until a balance is established, or reestab- lished, therein equal to 2% of the depreciated book value of the land, general plant and equipment which constitute the net utility plant of the Enterprise. The moneys contained in the R &R Account shall be used for transfer to the Bond Service Account, to the Bond Service Fund, to the 1980 Sinking Account or to the Sinking Account, as the case may be, to prevent default in payment of the principal and interest on the Bonds or any Parity Bonds, or for extraordinary maintenance and repairs, renewals and replacements to the Enterprise, but not for additions to and extensions of the Enterprise; provided, however, that when moneys are used for such purpose or purposes, they shall be returned by the transfer of an additional 1% of the Gross Revenues of the preceding calendar month commencing no later than 90 days after such use. If at any time the balance in the R &R Account exceeds the minimum balance herein identified, said excess may be transferred to the Revenue Account. SECTION 17. Surplus Fund. All moneys remaining in the Revenue Account after all transfers required hereunder have been made, and all covenants contained herein have been duly performed, shall be transferred to the Surplus Fund. CVIC Subject to the transfer requirement set forth in Section 17 of the 1980 Bond Resolution, moneys in the Surplus Fund shall, to the extent available, be transferred to the 1982 A and 1982 B Construction Accounts, proportionately with the respective original principal amounts of 1982 A Bonds and 1982 B Bonds, on a monthly basis (A) commencing with the month of January 1984, up to and including the month of March, 1984, in an amount equal to 50% of the amount of investment earnings on all amounts in the Reserve Fund received during the preceding month and (B) up to and including the month of October, 1982, in an amount equal to 100% of the amount of investment earnings on all amounts in the Bond Service Account received during the preceding month and commencing with the month of November, 1982 up to and including the month of March 1984, in an amount equal to 50% of the amount of investment earnings on all amounts in the Bond Service Account received during the preceding month. Moneys in the Surplus Fund not required to be transferred to any other account in the Electric Revenue Fund pursuant to this Section or any Parity Bond Resolution may be (1) used for the redemp- tion of any Bonds or Parity Bonds which are subject to call and redemption prior to maturity or for the purchase from to time in the open market of any outstanding Bonds or Parity Bonds whether or not subject to call and redemption (irrespective of the maturity or number of such Bonds or Parity Bonds) at prices and in such manner, either at public or private sale, or otherwise, as the Treasurer in his or her discretion may determine, but such purchase price (including brokerage and other charges, but excluding accrued interest) shall not exceed the principal amount or the redemption price of the callable Bonds or Parity Bonds on the next redemption date, whichever is less; or (2) used for any lawful purpose of the City, including but not limited to the security and payment of other indebtedness incurred in connection with the Enterprise. SECTION 18. Investments. Obligations purchased as investments of moneys in any of the funds and accounts in which investments are authorized shall be deemed at all times to be a part of such funds and accounts and any income realized from such invest- ments shall be credited to such funds and accounts and any losses resulting from such investments shall be charged to such funds and accounts; provided, however, that any income derived from investment of proceeds of the 1982 Bonds in the IDC Account shall, when received, be transferred to the 1982 A Construction Account and the 1982 B Construction Account, proportionately with the respective original principal amounts of 1982 A Bonds and 1982 B Bonds. The Fiscal Agent or the Treasurer, as the case may be, shall sell at the best price obtainable or present for redemption any obligations so purchased whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer from such funds and accounts. For the purpose of determining at any given time the balance in any such funds and accounts, any such investments constituting a part of -19- such funds and accounts shall be valued at the then estimated or appraised market value of such investments. Moneys in all funds and accounts described in Section 10 hereof shall be invested only in Authorized Investments, except that so long as any of the 1972 Bonds are outstanding, amounts in the Revenue Account, the M &O Account, the R &R Account, the Bond Service Fund and the Reserve Fund shall be invested only in direct obligations of or obligations guaranteed by the United States of America, or certificates of deposit of recog- nized banks or trust companies fully secured by direct obligations of or obligations guaranteed by the United States of America. All investments of moneys in such funds and accounts shall mature not later than such times as the Finance Director estimates such moneys shall be needed for the purposes for which such moneys are held. SECTION 19. Warranty. The City shall preserve and pro- tect the security of the Bonds and the rights of the bondholders and warrant and defend their rights against all claims and demands of all persons. SECTION 20. Covenants. So long as any of the Bonds are outstanding, the City makes the following covenants with the bond- holders under the provisions of Section 1210 of the City Charter (to be performed by the City or its proper officers, agents or employees) which covenants are necessary, convenient and desirable to secure the Bonds and tend to make them more marketable; provided, however, that said covenants do not require the City to expend any moneys other than the Gross Revenues of the Enterprise. Covenant 1. Punbtual Payment. The City covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond issued hereunder, together with the premium thereon, if any be payable, on the date, at the place and in the manner mentioned in the Bonds and coupons and in accordance with this Resolution, and that the payments into the Bond Service Account, the Sinking Account and the Reserve Fund will be made, all in strict con- formity with the terms of the Bonds and of this Resolution, and that it will faithfully observe and perform all of the conditions, cove- nants and requirements of this Resolution and all resolutions supple- mental thereto and of the Bonds issued hereunder, and that time of such payment and performance is of the essence of the City's contract with the bondholders. Covenant 2. Discharge Claims. The City covenants that in order to preserve and protect the priority and security of the Bonds the City shall pay from amounts available in the 0 &M Account and dis- charge all lawful claims for labor, materials and supplies furnished for or in connection with the Enterprise which, if unpaid, may become a lien or charge upon the property or Gross Revenues of the Enterprise prior or superior to the lien of the Bonds and impair the security of the Bonds. The City shall also pay from amounts available in the 0 &M Account all taxes and assessments or other -20- governmental charges lawfully levied or assessed upon or in respect of the Enterprise or upon any part thereof or upon any of the reve- nues thereof. Covenant 3. Commence Acquisition and Construction. The City covenants that as soon as funds are available therefor, the City will commence (to the extent not already commenced) the accomplish- ment of the purposes for which the Bonds are issued and will continue the same to completion with all practicable dispatch and in an eco- nomical manner. Covenant 4. Operate Enterprise in Efficient and Economical Manner. The City covenants to operate the Enterprise in an efficient and economical manner and to operate, maintain and preserve the Enterprise in good repair and working order. Covenant 5. Against Sale, Eminent Domain, Existing and Future Agreements. Except as provided herein, the City covenants that the Enterprise shall not be mortgaged or otherwise encumbered, sold, leased, pledged, any charge placed thereon, or disposed of as a whole or substantially as a whole unless such sale or other disposi- tion be so arranged as to provide for sums adequate to provide for the immediate payment of the principal of and interest on and premi- ums, if any, due upon the call and redemption thereof, of the Bonds. The City further covenants that the Gross Revenues of the Enterprise or any other funds pledged or otherwise made available to secure pay- ment of the principal of and interest on the Bonds shall not be mort- gaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed of or used except as authorized by the terms of this Resolution. The City further covenants that it will not enter into any agreement which impairs the operation of the Enterprise or any part of it necessary to secure adequate revenues to pay the principal of and interest on the Bonds or which otherwise would impair the rights of the bondholders with respect to the Gross Revenues of the Enterprise. If any substantial part of the Enterprise is sold, the payment therefor shall either be used for the acquisition and /or con- struction of improvements and extensions of the Enterprise or shall be placed in the appropriate funds or accounts and shall be used to pay or call and redeem the Bonds and any Parity Bonds in the manner provided in this Resolution or in any Parity Bond Resolution. The City covenants that any amounts received as awards as a result of the taking of all or any part of the Enterprise by the lawful exercise of eminent domain, if and to the extent that such right can be exercised against such property of the City, shall either be used for the acquisition and /or construction of improve- ments and extension of the Enterprise or shall be placed in the appropriate funds or accounts and shall be used to pay or call and redeem the Bonds and any Parity Bonds in the manner provided in this Resolution or in any Parity Bond Resolution. -21- The City will not sell, lease or otherwise encumber any part of the Enterprise except properties or facilities no longer useful or necessary to its efficient and economical operation. Any proceeds from the sale or disposition of any part of the Enterprise shall be placed in the Revenue Account. Covenant 6. Insurance. The City covenants that it shall at all times maintain with responsible insurers all such insurance on the Enterprise as is customarily maintained by similar utilities sys- tems with respect to works and properties of like character against accident to, loss of or damage to such works or properties and against loss of revenues. If any useful part of the Enterprise shall be damaged or destroyed such part shall be restored to use. The money collected from insurance against accident, loss or damage shall be used for repairing or rebuilding the lost, damaged or destroyed works and properties, and to the extent not so applied, shall be applied to the retirement of outstanding Bonds and any Parity Bonds issued for the Enterprise and for such purpose paid into the appro- priate funds or accounts. The money collected from loss of revenues insurance shall be deposited in the Revenue Account. The City shall also maintain with responsible insurers worker's compensation insurance and insurance against public liabil- ity and property damage to the extent reasonably necessary to protect the City and the bondholders. Notwithstanding the foregoing, the City may provide any insurance required by this Covenant 6 through a self- insurance program. Covenant 7. Records and Accounts. The C i t y covenants that it shall keep proper books of record and accounts of the Enterprise, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relat- ing to the Enterprise. Said books shall at all times be subject to the inspection of the holders of not less than 10% of the outstanding Bonds or their representatives authorized in writing. The City covenants that it will cause the books and accounts of the Enterprise to be audited annually by an independent certified public accountant or firm of certified public accountants and shall furnish a copy of the audit report, upon request, to any bondholder. Covenant 8. Collection of Charges. The City will permit no free use or services of the Enterprise. The City will pay promptly into the Revenue Account from the City's General Fund (or other available funds) for all City use and services of the Enterprise. The City will not grant or establish within any class of service preferential or discriminatory rates, fees or charges for use and services of the Enterprise. For the purposes of setting such -22- rates, fees and charges, service located outside the city limits of the City of Anaheim may be considered as separate classes of service. The City covenants that it shall at all times during the period any of the Bonds are outstanding maintain and enforce valid regulations for the payment of bills for electric service and that such regulations shall at all times during such period provide that the City shall discontinue electric service to any user whose elec- tric bill has not been paid within the time fixed by said regulations. Covenant 9. Rates and Charges. The City shall and hereby covenants that it shall prescribe, revise and collect such charges for the services and facilities of the Enterprise which, after making allowances for contingencies and error in the estimates, shall be at least sufficient to pay the following amounts in the order set forth: (a) The interest on and principal payments (including any sinking account payments) of the outstanding Bonds and Parity Bonds as they become due and payable; (b) All current expenses for the necessary and rea- sonable Maintenance and Operation Expenses of the Enterprise as said expenses become due and payable; (c) All payments required for compliance with this Resolution including transfers required to be made from the Revenue Account to other funds and accounts; and (d) All payments required to meet any other obliga- tions of the City which are charges, liens or encumbrances upon or payable from the Gross Revenues of the Enterprise; and the charges shall be so fixed that the Net Revenues shall at least equal 1.10 times the amounts payable under (a), provided that so long as any of the 1972 Bonds remain outstanding said charges shall be so fixed that the Net Revenues shall at least equal 1.25 times the amounts payable under (a) . For purposes of this Section, Net Revenues shall include all investment income on all accounts established in the Electric Revenue Fund and on all other funds established for the benefit of the holders of Bonds or Parity Bonds. Covenant 10. No Priority for Additional Indebtedness. The City covenants that no additional indebtedness shall be incurred pursuant to Section 1210 and other provisions of the City Charter or any law of the State of California having any priority in payment of principal or interest out of the Gross Revenues of the Enterprise over the Bonds. -23- Covenant 11. Limits on Parity Bonds. (a) Parity bonds may be issued to finance or re- finance any repairs, improvements, enlargements or extensions of the Enterprise, provided that the City covenants that no such additional indebtedness evidenced by revenue bonds, revenue notes or any other evidence of indebtedness payable out of the Gross Revenues of the Enterprise and ranking on a parity with the Bonds shall be created or incurred unless: First: The City is not in default under the terms of this Resolution. Second: The Net Revenues of the Enterprise, calculated on sound accounting principles, as shown by the books of the City for each - of the last two com- pleted Fiscal Years prior to the adoption of the reso- lution approving the sale of such additional indebted- ness as shown by an audit certificate or opinion of an independent certified public accountant or firm of certified public accountants employed by the City, plus, at the option of the City, the allowance for earnings hereinafter set forth in subparagraph (c) of this covenant, shall have amounted to at least 1.10 times the Annual Debt Service in the Fiscal Year next succeeding the Fiscal Year in which such additional indebtedness is incurred on all Bonds and Parity Bonds, and, so long as any of the 1972 Bonds remain outstanding, at least 1.25 times the Maximum Annual Debt Service in any Fiscal Year thereafter on all indebtedness to be outstanding immediately subsequent to the incurring of such additional indebtedness. (b) Parity Bonds may also be issued to refund outstanding Bonds or Parity Bonds if, after giving effect to the application of the proceeds thereof either (i) Annual Debt Service will not be increased in any Fiscal Year in which Bonds or Parity Bonds (outstanding on the date of issuance of such refunding Parity Bonds, -but excluding such refunding Parity Bonds) not being refunded are outstanding, or (ii) the Net Revenues of the Enterprise, calculated on sound accounting principles, as shown by the books of the City for each of the last two completed Fiscal Years prior to the adoption of the resolution approving the sale of such additional indebtedness as shown by an audit certificate or opinion of an independent certified public accountant or firm of certified public accountants employed by the City, plus, at the option of the City, the allowance for earnings hereinafter set forth in subparagraph (c) of this covenant, shall have amounted to at least 1.10 times the Annual Debt Service in the Fiscal Year next succeeding the Fiscal Year in which such additional indebtedness is incurred on all Bonds and Parity Bonds; provided, however, that nothing contained in this subparagraph (b) shall limit the City's power to issue Parity Bonds to refund the outstanding 1972 Bonds as a whole. -24- (c) For the purposes of this covenant, the following may be added to the Gross Revenues of the Enterprise for the purpose of applying the restrictions contained in this covenant: An allowance for earnings arising from any increase in the charges made for service from the Enterprise which has become effective prior to the incurring of such additional indebtedness but which, during all or any part of said last two completed Fiscal Years, was not in effect, in an amount equal to 95% of the amount by which the Gross Revenues should have been increased if such increase in charges had been in effect during the whole of said last two com- pleted Fiscal Years, as shown by the certificate or opinion of an independent certified accountant or firm of certified public accountants employed by the City. (d) For purposes of this Section, Net Revenues shall include all investment income on all accounts established in the Electric Revenue Fund and on all other funds established for the ben- efit of the holders of Bonds or Parity Bonds. Covenant 12. Arbitrage. The City covenants that under no circumstances shall any initial investment, subsequent investment or reinvestment of the proceeds of the Bonds be made in such a manner as to result in the loss of exemption from federal income taxation of interest on the Bonds. Except as permitted during "temporary periods" (as such term is defined in the Income Tax Regulations referred to herein) by said Income Tax Regulations, the proceeds of the Bonds shall not be invested directly or indirectly in taxable obligations so as to produce a yield which is materially higher than the yield on the Bonds which results in the Bonds constituting "arbitrage bonds" within the meaning of Section 103(c), Internal Revenue Code of 1954, as amended, and the Income Tax Regulations issued thereunder, but such sums may be otherwise invested if and when such Code and any regulations thereunder permit the investment to be made in the manner without causing the Bonds to become "arbitrage Bonds ". SECTION 21. Lost, Stolen, Destroyed, or Mutilated Bonds. In the event that any Bond or any interest coupon pertaining thereto is lost, stolen, destroyed or mutilated, the City will cause to be issued a new Bond or coupon similar to the original to replace the same in such manner and upon such reasonable terms and conditions, including the payment of costs and the posting of a surety bond if the City deems such surety bond necessary, as may from time to time be determined and prescribed by resolution. The City may authorize such new Bond or coupon or coupons to be signed and authenticated in such manner as it determines in said resolution. -25- SECTION 22. Cancellation of Bonds. A 1 1 B o n d s a n d coupons surrendered to any paying agent of the City for payment upon maturity or for redemption shall upon payment therefor be cancelled immediately. Any Bonds purchased by the City as authorized herein together with all unpaid coupons pertaining thereto shall be can- celled forthwith and shall not be reissued. SECTION 23. Consent of Bondholders. The c o n s e n t s of bondholders provided for in this Section shall relate solely to the amendment, waiver or modification of the covenants specified in Section 20 hereof and shall not be effective to waive or modify any other provisions of this Resolution or any other proceedings for the issuance of the Bonds. Any act relating to the amendment, waiver or modification of any of the said covenants consented to by bondholders holding 60% in aggregate principal amount of the outstanding Bonds, exclusive of Bonds, if any, owned by the City, shall be binding upon the holders of all of the Bonds and interest coupons, whether such coupons be attached to Bonds or detached therefrom, and shall not be deemed an infringement of any of the provisions of this Resolution, whatever the character of such act may be, and may be done and per- formed as fully and freely as if expressly permitted by the terms of this Resolution, and after such consent relating to such specified matters has been given, no bondholder or holder of any interest coupon, whether attached to a Bond or detached therefrom, shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the City or any officer thereof from taking any action pursuant thereto. Bondholders may consent by affirmative vote at a bondholders' meeting or may consent in writing without a meeting, all as hereinafter provided. No such amendment, waiver or modification shall be made which will permit (a) a change in the maturity or term of redemption of the principal of any Bond or any installment of interest thereon or a reduction in the principal amount of or redemption price or redemption premium or rate of interest upon any Bond without the con- sent of the holder of such Bond; or (b) a reduction of the percentage of the principal amount of Bonds the vote or consent of which is required to effect any such amendment. (a) Calling Bondholders' Meeting. If the C i t y shall desire to obtain any such consent it may call a meeting of bondhold- ers, by resolution, for the purpose of considering the action, the consent to which is desired. (b) Notice of Meeting. Notice specifying the purpose, place, date and hour of such meeting shall be published once in a financial newspaper or journal of national circulation published in or near the City of New York, New York, not less than sixty days and not more than ninety days prior to the date fixed for the meeting. -26- Such notice shall set forth the nature of the proposed action, consent to which is desired. If any of the Bonds shall be so regis- tered as to be payable otherwise than to bearer, the City Clerk of the City shall, on or before the first publication of such notice, mail a similar notice, postage prepaid, to the respective registered owners thereof at their addresses appearing on the Bond registry books. The place, date and hour of holding such meeting and the date or dates of publishing and mailing such notice shall be determined by the City, in its discretion. The actual receipt by any bondholder of notice of any such meeting shall not be a condition precedent to the holding of such meeting, and failure to receive such notice shall not affect the validity of the proceedings thereat. A certificate by the City Clerk, approved by resolution of the City Council, that the meeting has been called and that notice thereof has been given as herein pro- vided shall be conclusive as against all parties and it shall not be open to any bondholder to show that he failed to receive notice of such meeting. (c) Voting Qualifications. Any bondholder may, prior to any such meeting, deliver his Bond or Bonds to any agency designated by the City for the purpose, and shall thereupon be entitled to receive an appropriate receipt for the Bond or Bonds so deposited, calling for the redelivery of such Bond or Bonds at any time after the meeting. The Treasurer shall prepare and deliver to the chairman of the meeting a list of the names and addresses of the registered owners of Bonds, with a statement of the maturities and serial num- bers of the Bonds held and deposited by each of such bondholders, and no bondholder shall be entitled to vote at such meeting unless his name appears upon such list or unless he shall present his Bond or Bonds at the meeting or a certificate of deposit thereof, satisfac- tory to the City, executed by a bank or trust company. No bondholder shall be permitted to vote with respect to a larger aggregate princi- pal amount of Bonds than is set against his name on such list, unless he shall produce the Bonds upon which he desires to vote, or a cer- tificate of deposit thereof as above provided. (d) Issuer -owned Bonds. The City covenants that it will present at the meeting a certificate, signed and verified by one member of the City Council and by the Treasurer stating the maturi- ties and serial numbers of all Bonds owned by, or held for account of, the City, directly or indirectly. No person shall be permitted at the meeting to vote or consent with respect to any Bond appearing upon such such certificate, or any Bond which it shall be established at or prior to the meeting is owned by the City, directly or indi- rectly, and no such Bond (in this Resolution referred to as an "issuer -owned Bond ") shall be counted in determining whether a quorum is present. -27- (e) Quorum and Procedure. A representation of at least 60% in aggregate principal amount of the Bonds then outstanding (exclusive of issuer -owned Bonds) shall be necessary to constitute a quorum at any meeting of bondholders, but less than a quorum may adjourn the meeting from time to time, and the meeting may be held as so adjourned without further notice, whether such adjournment shall have been had by a quorum or by less than a quorum. The City shall, by an instrument in writing, appoint a temporary chairman of the meeting, and the meeting shall be organized by the election of a per- manent chairman and a secretary. At any meeting each bondholder shall be entitled to one vote for every $5,000 principal amount of Bonds with respect to which he shall be entitled to vote as afore- said, and such vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The City, by its duly authorized representative, may attend any meeting of the bondholders, but shall not be required to do so. (f) Vote Required. At any such meeting held as aforesaid there shall be submitted for the consideration and action of the bondholders a statement of proposed action, consent to which is desired, and if such action shall be consented to and approved by bondholders holding at least 60% in aggregate amount of the Bonds then outstanding (exclusive of issuer -owned Bonds) the chairman and secretary of the meeting shall so certify in writing to the City, and such certificate shall constitute complete evidence of consent of bondholders under the provisions of this Resolution. A certificate signed and verified by the chairman and the secretary of any such meeting shall be conclusive evidence and the only competent evidence of matters stated in such certificate relating to proceedings taken at such meeting. (g) Written Consent of Bondholders. If the City shall desire to obtain any such consent in writing, without a meeting of bondholders, the City Council may, by resolution, propose the action, to which consent is desired. A copy of such resolution, together with a request to bondholders for their consent to the action pro- posed therein, shall be published once in a financial newspaper or journal of national circulation published in or near the City of New York, New York. If any of the Bonds shall be so registered as to be payable otherwise than to bearer, the City Clerk of the City shall, on or before the publication of such resolution and request, mail a copy thereof to each registered owner at the address appearing on the bond registry books. The actual receipt by any bondholder of such resolution and request shall not affect the validity of the proceedings for the obtaining of such consent. A certificate by said City Clerk, approved by resolution of the City Council, that said resolution and request has been published and mailed as herein provided shall be conclusive as against all parties, and it shall not be open to any bondholder to show that he failed to receive such resolution and consent. Each written consent shall be accompanied by proof of ownership of the Bonds for which such consent is given. Proof of ownership shall be made in such manner as shall be prescribed by the resolution proposing the action. Any such written consent shall be binding upon the holder of the Bonds giving such consent and on any subsequent holder (whether or not such subsequent holder has notice thereof) unless such consent is revoked in writing by the holder giving such consent or by the subsequent holder. To be effective, any revocation of consent must be filed before the adoption of the resolution accepting consents as hereinafter provided. After the holders of at least 60% in aggregate principal amount of the Bonds then outstanding (exclusive of issuer -owned Bonds) shall have consented in writing, the City Council shall adopt a resolution accepting such consents and such resolution shall con- stitute complete evidence of the consent of bondholders under this Resolution. (h) Publication of Consent. Notice specifying the amend- ment, waiver or modification that has received the consent of bond- holders as required by this section shall be published once in a financial newspaper or journal of national circulation published in or near the City of New York, New York, not less than sixty days fol- lowing the final action in the proceedings for the obtaining of such consent. Said notice is only for the information of bondholders and failure to publish such notice or any defect therein shall not affect the validity of the proceedings theretofore taken in the obtaining of such consent. SECTION 24. Bond and Coupon Forms. The Bonds shall be payable to bearer, shall be issued in negotiable form, and shall be negotiable, and the form of said Bonds and interest coupons thereof shall be substantially as follows: -29- [BOND FORM] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF ANAHEIM ELECTRIC REVENUE BOND, ISSUE OF 1982 No. $5,000 The CITY OF ANAHEIM, a municipal corporation situated in the County of Orange, State of California (the "City"), FOR VALUE RECEIVED, hereby promises to pay, solely from the Electric Revenue Fund, as hereinafter provided, to the bearer, on October 1, , upon presentation and surrender of this bond, the sum of FIVE THOUSAND DOLLARS, with interest thereon at the rate of % per annum, payable semiannually on the first day of April and October of each and every year, commencing October 1, 1982, from the date hereof until this bond is paid, upon presentation and surrender of the respective interest coupons hereto attached; provided, however, that if at the maturity date of this bond or, if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption, funds are available for the payment or redemption there- of, as provided in the resolution hereinafter mentioned, this bond shall then cease to bear interest. Both principal and interest are payable in lawf ul money of the United States of America, at the Corporate Agency Division of Bank of America National Trust and Savings Association in Los Angeles or San Francisco, California, or, at the option of the holder, at any other paying agent of the City in Chicago, Illinois, or New York, New York. This is one of a duly authorized issue of bonds of the City designated "Electric Revenue Bonds, Issue of 1982" ( the "1982 _ bonds ") , all of which have been issued pursuant to Section 1210 of the City Charter and Ordinance No. 2980 the City Council, as amended (the "Ordinance ") , for the purpose of the construction and acquisi- tion of facilities, property and rights related to the City's elec- tric system, and the creation of said issue and the terms and condi- tions of the 1982 bonds are provided for by the resolution of the City Council authorizing the 1982 _ bonds and the bonds of the City designated "Electric Revenue Bonds, Issue of 1982 (the "1982 bonds "), adopted May 7, 1982, designated Resolution No. 82R -238 (the "Resolution "), and this reference incorporates the Resolution, Section 1210 of the City Charter and the Ordinance, and by acceptance hereof the holder of this bond and the coupons hereto attached assents to said terms and conditions. The 1982 _ bonds and the 1982 _ bonds are hereinafter referred to as the "bonds ". The Resolution -30- is adopted under, and this bond and the interest coupons hereto attached are issued under and are to be construed in accordance with, the City Charter, the Ordinance and the laws of the State of California. This bond and the interest hereon and any premium upon the redemption hereof are not a debt of the City , nor a legal or equita- ble pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts, or revenues, except the Gross Revenues (as defined in the Resolution) of the City's electric system pledged to its payment, and the principal of and the interest on this bond and any premium upon the redemption hereof are payable solely from the Gross Revenues of the City's electric system pledged to its payment and said City is not obligated to pay such principal, inter- est and premium except from said Gross Revenues. The Electric Revenue Fund is established under and pursuant to Section 1210 of the City Charter, the Ordinance and the Resolution, and under the provi- sions of the Resolution the Gross Revenues of the City's electric system are required to be deposited to the credit of the Electric Revenue Fund and used only for the purposes authorized by the Resolution, including the payment of principal and interest of the bonds. By the terms of Section 1210 of the City Charter and the Ordinance and by covenant expressed in the Resolution, the City is obligated to prescribe, revise and collect charges for the services and facilities of the electric system of the City such as to provide revenues sufficient to pay the interest on and principal of the bonds as they become due and payable in addition to all other payments required for compliance with the Resolution and the necessary and reasonable maintenance and operation costs of the City's electric system, is prohibited from issuing bonds having any priority with respect to payment from the Gross Revenues of the City's electric system, and is subject to conditions with respect to any sale of said electric system. In the manner provided in the Resolution, any or all of the obligations referred to in this paragraph and certain other obligations mentioned in the Resolution may be waived with the consent of the holders of 60% in aggregate principal amount of the outstanding bonds, exclusive of issuer -owned bonds. This bond and the coupons hereto attached are negotiable instruments and shall be negotiable by delivery. This bond may be registered either as to principal only or as to both principal and interest, in accordance with the provisions for registration endorsed hereon. It is hereby certified and recited that any and all acts, conditions and things required to exist, to happen and to be per- formed precedent to and in the incurring of the indebtedness evidenced by this bond and in issuance of this bond exist, have happened, and have been performed in due time, form and manner as -31- required by the Constitution and laws of the State of California and the City Charter and that this bond, together with all other indebt- edness of the City pertaining to the City's electric system, is within every debt and other limit prescribed by the Constitution and laws of the State of California and the City Charter. IN WITNESS WHEREOF, the City of Anaheim has caused this bond to be signed by the Mayor and the City Treasurer of the City by their facsimile signatures, countersigned by the City Clerk of said City, and sealed with the corporate seal of the City, and the inter- est coupons hereto attached to be signed by the City Treasurer by his facsimile signature, and has caused this bond to be dated May 1, 1982. Mayor COUNTERSIGNED: City Clerk ( SEAL) [REVERSE OF BOND] City Treasurer PROVISIONS FOR REDEMPTION If this is a 1982 B bond and matures on or after October 1, 1992, it is redeemable in the manner and subject to the terms and provisions, and with the effect, set forth in the Resolution referred to on the face of this bond, at the option of the City, on April 1, 1992, or on any interest payment date thereafter prior to maturity, upon at least 30 days' prior notice published in a newspaper of gen- eral circulation in the County of Los Angeles, California, and in a financial newspaper or journal of national circulation published in or near the City of New York, New York, and, if this bond is regis- tered, upon the mailing of a similar notice to the registered owner hereof, at the following redemption prices, expressed as a percentage of the principal amount, together with accrued interest to the date of redemption: -32- Redemption Dates (April 1 and October 11 1987 -88 1989 -90 1991 -92 1993 and thereafter 103% 102 101 100 If this is a 1982 A bond and matures on or after October 1, 1987, it is redeemable in the manner and subject to the terms and provisions, and with the effect, set forth in the Resolution referred to on the face of this bond, at the option of the City, on April 1, 1987, or on any interest payment date thereafter prior to maturity, on notice as described above, at 100% of the principal amount together with accrued interest to the redemption date. If this bond matures on October 1, 2007, it is subject to mandatory sinking fund redemption at par commencing on October 1 1997, as more fully set forth in the Resolution. PROVISIONS FOR REGISTRATION This bond may be registered in the name of any person as the registered owner hereof, either as to principal only or as to both principal and interest, and, if registered in either of said forms may be changed to registration in the other of said forms or discharged from registration. Each registration, transfer after registration, change of form of registration, or discharge from registration of this bond shall be entered by Bank of America National Trust and Savings Association, acting as Registrar, in books kept at its Corporate Agency Division in San Francisco, California, for the purpose, and noted in the registration blank below. Registration as to principal only shall not affect the negotiability by delivery of the coupons pertaining hereto. Upon registration as to both principal and inter- est, all unmatured coupons pertaining hereto, shall be surrendered to said officer and shall be preserved. So long as this bond is registered, no transfer hereof shall be valid for any purpose unless made by the registered owner and entered and noted as herein provided, and the principal hereof and any redemption premium shall be payable only to the registered owner, or to his order. Interest on this bond, if registered as to both principal and interest, shall be payable to the person whose name appears upon the registry books as the registered owner hereof at the close of business on the tenth day preceding the interest -33- payment date, or to his order. If this bond is registered as to both principal and interest and its registration is changed to registra- tion as to principal only, or if it is discharged from registration, there shall be attached thereto coupons representing interest hereon to become due thereafter to the date of maturity hereof. In lieu _ thereof, and upon surrender and cancellation hereof, the Registrar in its discretion may issue in exchange therefor a new bond, with such coupons attached, identical with this bond, except for the previous notations on the registration blank hereon, and except that the sig- natures on the new bond shall be those of the persons holding office at the time of affixing such signatures. The issuance of any such new bond, or new coupons, shall be at the expense of the registered owner. Each discharge hereof from registration shall be effected by an entry on the registry books, and a notation in the blank below, that this bond is payable to bearer, whereupon this bond shall become an unregistered bearer instrument, negotiable by delivery as if it had never been registered. Each request for registration, transfer, change or discharge must be in form satisfactory to the Registrar and must be made in writing, signed by the registered owner, or by his agent duly authorized in writing, or by the bearer, as the case may be. Date of In Whose Name Manner of Signature of Registration Registered Registration Registrar -34- [COUPON FORM] On the first day of the CITY OF ANAHEIM, CALIFORNIA, will pay to the bearer, at the Corporate Agency Division of Bank of America National Trust and Savings Association in Los Angeles or San Francisco, California, or, at the option of the holder, at any other paying agent of the City in New York, New York, out of the Electric Revenue Fund of said City and not out of any other fund or moneys of the City, the sum shown hereon in lawful money of the United States of America, being the interest then due on its ELECTRIC REVENUE BOND, ISSUE OF 1982 N0. , dated May 1, 1982, unless said bond shall have been duly called for previous redemption and payment of the redemption price made or duly provided for. City Treasurer of the City of Anaheim, California SECTION 25. Temporary Bonds. Any Bonds may be initially issued in temporary form exchangeable for definitive Bonds. The tem- porary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City, shall be without coupons and may contain such reference to any of the provisions of this Resolution as may be appropriate. Every temporary Bond shall be executed and sealed by the City in substantially the same manner as provided in Section 7 hereof. If the City issues temporary Bonds it will execute and furnish def iaitive Bonds without delay and thereupon the temporary Bonds may be surrendered for cancellation at the office of the Treasurer, and the Treasurer shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of defini- tive Bonds of the same interest rates and maturities. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds issued hereunder. SECTION 26. Resolution Constitutes Contract. The pro - visions of this Resolution shall constitute a contract between the City and the bondholders and the provisions hereof shall be enforce- ___ able by any bondholder for the equal benefit and protection of all bondholders similarly situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is now or may hereafter be authorized under the laws of the State of California in any court of competent jurisdiction. Said -35- contract is made under and is to be construed in accordance with the laws of the State of California. No remedy conferred hereby upon any bondholder is intended to be exclusive of any other remedy, but each such remedy is cumula- tive and in addition to every other remedy and may be exercised with- out exhausting and without regard to any other remedy conferred by the Charter, Ordinance No. 2980 or any law of the State of California. No waiver of any default or breach of duty or contract by any bondholder shall affect any subsequent default or breach of duty or contract or shall impair any rights or remedies on said sub- sequent default or breach. No delay or .omission of any bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the bondholders may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and the bondholder shall prevail, said bondholder shall be entitled to receive from the Electric Revenue Fund reim- bursement for reasonable costs, expenses, outlays and attorneys' fees and should said suit, action or proceeding be abandoned, or be deter- mined adversely to the bondholders then, and in every such case, the City and the bondholders shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. Prior to the issuance of any Bonds under this Resolution, the terms and conditions of this Resolution and the rights and obli- gations of the City and of the holders of the Bonds and coupons thereunder may be modified or amended in any respect without the con- sent of any person, upon the adoption by the City of one or more sup- plemental resolutions. After the issuance and delivery of the Bonds, this Resolution shall be irrepealable, but shall be subject to modifica- tion to the extent and in the manner provided in this Resolution, but to no greater extent and in no other manner. SECTION 27. Defeasance. Bonds shall no longer be deemed to be outstanding and unpaid if the City shall have made adequate provision for the payment, in accordance with the Bonds and this Resolution, of the principal, interest and premium, if any, to become due thereon at maturity or upon call and redemption prior to maturity. Such provisions shall be deemed to be adequate if the City shall have irrevocably set aside, in a special trust fund or account, moneys which when added to the interest earned or to be earned from the investment or deposit thereof shall be sufficient to make said payments as they become due. Moneys so set aside may be invested in any direct obligations of, or obligations guaranteed by, the United States of America, in which the City may lawfully invest its money. -36- SECTION 28. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the City from making con- tracts or creating bonded or other indebtedness payable from the gen- eral fund of the City or from taxes or any source other than the Gross Revenues of the Enterprise, and from and after the sale of the -, Bonds the general fund of the City shall not include the Gross Revenues of the Enterprise and no contract or other obligation pay- able from the general fund of the City shall be payable from the Gross Revenues of the Enterprise, except as provided herein. SECTION 29. Severability. If any provision, or any por- tion thereof, contained in this Resolution, or the application thereof to any person or circumstance is held to be unconstitutional, invalid or unenforceable, the remainder of this Resolution and the application of any such provision, or portion thereof, to other per- sons or circumstances shall be deemed severable and shall not be affected thereby, and this Resolution and the Bonds shall remain valid and the bondholders shall retain all valid rights and benefits accorded to them under this Resolution, the City Charter and the Constitution and laws of the State of California. SECTION 30. Substitutes. The Mayor Pro- Tempore, any Deputy City Clerk, and any duly authorized substitute for the Finance Director or the Treasurer, may act in the place and stead of the Mayor, the City Clerk, the Finance Director and the Treasurer, respectively, in the performance of any and all things authorized or provided for in this Resolution, including the signing of Bonds and coupons. SECTION 31. Modification of Prior Resolution. Resolution No. 81R -379, heretofore adopted by this City Council on August 18, 1981, is hereby modified to change the aggregate principal amount of electric revenue bonds authorized thereby from $92,000,000 to $40,000,000 and, in that respect, this Resolution shall be consid- ered supplemental to said Resolution No. 81R -379. Except as modified by this Section 31, said Resolution No. 81R -379 shall remain in full force and effect. SECTION 32. Effective Date. This Resolution shall take effect upon adoption. -37- ADOPTED, SIGNED AND APPROVED this 7th day of May, 1982. Mayor [ SEAL] Attest: City Clerk\ -j8- STATE OF CALIFORNIA ) - 1"WN COUNTY OF ORANGE ) ss. CITY OF ANAHEIM ) I, LINDA D. ROBERTS, City Clerk of the City of Anaheim, do hereby certify that the foregoing Resolution No. 82R -238 was introduced and adopted at a regular meeting provided by lay *, of the City Council of the City of Anaheim held on the 7th day of May, 1982, by the following vote of the members thereof: AYES: COUNCIL MEMBERS: Overholt, Kaywood and Bay NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Roth VACANCY: COUNCIL MEMBERS: One AND I FURTHER CERTIFY that the Mayor of the City of Anaheim signed said Resolution No. 82R -238 on the 7th day of May, 1982. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the City of Anaheim this 7th day of May, 1982. CITY CLERK OF THE CITY IV--ANAHEIM (SEAL) I, LINDA D. ROBERTS, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the original of Resolution No. 82R -238 duly passed and adopted by the Anaheim City Council on May 7, 1982. )CITY CLERK