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84R-396 I~ \... - ~\ Clift OF ARABBDI USOL1r.rIOa 110. aea- 3" RESOLU'rIOR i. TIlE CI~ COUIICIL OF ftB em OF ARABBIII, CAL .toRBIA, .. DftORIIIRG 'l'BB ISsoua or .',650,000 .~ D~ BOBDB, 1984 SBRtBs . OF ftB' CI. AID) _IDlE ftB 'DiI.CIII:j AlII) . . I'.rIORS OF SUCH JDmS ADQr.rBD: otmBBR 9, 1984 ~, ,~ Section 1. Section 2. Section 3. Section 4. Section s. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section 15. Section 16. Section 17. Section 18. ,.- .-.... ~ . . . . 4 TABLE OF CORrBHTS DEFIN I'1'\IiONS. . . . . . . . . . . . . . . 6 EQUALI~ OF 1984 BONDS AND PARITY BONDS, HaEDGE OF REVENUES. ... PURPOSE I OF THE 1984 BONDS. . . . . . . . 7 SPECIAL; OBLIGATIONS, NO GENERAL CITY LIABILItt-Y. ............... 7 -i- . 7 . . . 9 DESCRIptrION OF 'IEE 1984 BONDS. . . . . EXECUTIJ)N AND, 'AU~~TICATION OF THE 1984 B~S. . . . . . . . . . . . . . . . 9 . . . . 9 ' . .10 . .13 PLACE ~ PAYMENT. . . . . . . . . . . . . .14 . .14 REGIS~ION AND TRANSFER. . . . . . . .15 . . . .15 REDEMPT!tPN,OF 1984 BONDS. . . . . . . . .18 . .19 . .20 . . . .20 FUNDS Atro ACCOUNTS. . . . . . . . ~ Section 19. INVESTI$~TS . .21 . . . . . . . . . . . . . Section 20. WARRANTfl. . . . . . . . . . . . . . . . .21 DISPOSIliION OF OE.. RTAIN AVAILABLE MONEYS D BOND PROCEEDS , CONSTRU ' ION ACCOUNTS. ..... REVENUE! ACCOUNT. M& 0 ACCPONT. . . . . . . . . . . . . . . . . . . . . . . BOND S!WICE ACCOUNT, SINKING ACCOUNT'. .......... . . RESERVEt FUND. R&R ACCOUNT. E&I ACCOONT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SURPLUS;MQNEYS IN THE REVENUE ACCOUNT~ .......... . . .~ Section 21. Covenant Covenant Covenant Covenant 4. Covenant 5. ~. Covenant Covenant Covenant Covenant Covenant Covenant Covenant Covenant Section 22. Section 23. Section 24. Section 25. Section 26. Section 27. Section 28. Section 29. Section 30. Section 31. Section 32. COVENANtS. ............. 1 . tunctual Payment., . . . . . . 2. ~lscharge Claims. ...... 3. C9mmence Acquisition and tQnstructlon. ......... .22 ~perate Enterprise in _fficient and Economical .~nner. ............ .22 .gainst Sale, Eminent Domain, tkisting _nd Future .greements. ......... thsurance. ......... iecords and Accounts. .... ~llection of Charges. ... ates and Charges. ..... .~ Priority for Additional thdebtedness. ........ ,~lmits on parity Bonds. ... l~bitrage. ......... 'ater Revenue Anticipation .~tes. ............ .27 I""" --... .fj.ga . .21 . .21 . .22 . .22 . .24 . .24 . .24 . .25 . .25 . .26 . .27 . . . .27 ."27 TA$E OP COftENTS, Continued 6. 7. 8. 9. 10. 11. 12. 13. LOST, SfOLEN, DES. TROYED, OR MUTILAT*b 1984 BONDS. . . . CANCELL.tION OF 1984 BONDS. . . . . . . . . . . .28 . .31 RESOLUTtON CONSTITUTES CONTRACT. TEMPO~Y 1984 BONDS. . . . . . . . . . .37 . . . .37 .38 .39 CONSENT OF 1984 BONDHOLDERS. 1984 BO*O FORM. . . . . . . . . . . . . . . . . .39 . .39 . . . .40 . . . . . . DEFEAS~CE. . . . FUTURE CONTRACTS. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUB STITtJTES. . . . . . . . . . . . . EFFECTrtE DATE. . . . . . .. . . . -ii- ,-.." ~, CITY OP ANAHBIM RBSOLftION NO. 84.- 39~ '''-- RBSOL OTION 0 3', Cln ~.', mtCIL OF TIIB CITY OF ARABBIB, CALIl'O.a, A, ZIIIG -rQB ISSUANtB OF $6,650,000 ~ REYdlJS'BOBDS,'l .. SERIB$, OF TIlE CIT! AND 'PBO\'1J)IR; !III TERMS AIm CONDIT NS' OP snCH B(R)S ,', , '- , ,~ WBBRBAS, thetCity of ~naheim (the "Cityn) is a municipal corporation organized E' ' d existing under a charter duly and regularly adopted pursuant to t " provis,ions of the Constitution of the State of California (the nC . rtern); and WHBREAS, Se4tion 1210 of the Charter (nSection 1210.) pro- vides 'as follows:' - ~ "Bonds which' pre paYaPle only out of such revenues as may be specified h such bpnds may be issued when the City Council by or din ~e shall have established a procedure for the issuance of sleh bonds,. Such bonds, payable only out of revenues, shal not constitute an indebtedness or gen- eral obligation 0 the City. No such bonds payable out of revenues shall beiissued without the assent of a majority of the voters vot~ng upon the proposition for issuing the same at an electipn at whi~h such proposition shall have been duly submi tt~ 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 transf~r 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 t!le purpose for which such special fund was established and sball be deemed segregated from all other funds of the City and reserved exclusively for the purpose for which such s~cial fund was established until the pur- pose of its e~tabli~hment shall have been fully accomplished. I ~ I ;' ,. ~ /~ ,-", Notwithstand~ng the foregoing, the City may sell and issue at any time land from time to time revenue bond antic- ipation notes (inqluding renewal revenue bond anticipation notes) in anticip~tion of the revenue bonds authorized ~ the voters on Jun~ 2, 1981; provided that the aggregate principal amount Qf such r.venue bond anticipation notes and revenue bond. outstanding in accordance with their terms at any one ~1me shall not exceed $92 million. Such revenue bond antip~pation notes may be sold, issued and secured in such ~er and subject to such terms and condi- tions as the City iCouncil may prescribe ~ ordinance; pro- vided that such rEfvenue bond anticipation notes shall not. constitute an ind~btedness or general obligation of the City of Anaheim a$6 are not to be secured by the taxing power of said Cit~. Notwithstand 'Qg the foregoing, the City may also sell and issue at any ~me and from time to time revenue bond anticipation note (including renewal revenue bond antici- pation notes) in ticipation of any electric or water rev- enue bonds there ~fore or hereafter authorized by the voters; provided e (i) the aggregate principal amount of such electric rev~, .,.,ue bonds in anticipation of which such electric revenue ~nd anticipation notes and the electric revenue bond anti~pation notes were issued outstanding in accordance with ~heir terms at anyone time shall not exceed the princi~l amount of such electric revenue bonds authorized by the ~oters and (ii) the aggregate principal amount of such wa~r revenue bond anticipation notes and the water revenue ~nds in anticipation of which such water revenue bond anti~pation notes were issued outstanding in accordance with U.eir terms at anyone time shall not exceed the princi~l amount of such water revenue bonds authorized by the voters. Such revenue bond anticipation notes may be sOld" issued and secured in such manner and subject to such te~s and conditions as the City Council may prescribe by o~dinance; provided that such revenue bond anticipation notesishall not constitute an indebtedness or general obligation. of the City of Anaheim and are not to be secured by the tax~ng power of said City. Notwi thstandiAg the foregoing, the City may also sell and issue at any tf.'le and from time to time revenue antici- pation notes (inclpding renewal revenue anticipation notes) in anticipation of'the receipt of revenues of the City's water and electric utilities; provided that the aggregate principal amount of such revenue anticipation notes outstanding in accprdance with their terms at anyone time shall not exceed, for each of such utilities, an amount ..~ -2- l J "..-" -~ ~, /~ equal to 25% of t.e gross revenue earned bY the respective utility during th~ immediately preceding fiscal year as set forth in the audited financial statements of such utility for such year. ~Iuch rev~nue anticipation notes may be sold, issued, andlsecured in such manner and subject to such terms' and cOJ1cJitions as the City Council may prescribe by ordinance; protided that such revenue anticipation notes shall not constit~te an in~ebtedness or general obligation of the City of An~heim and are not to be secured by the taxing power of s~id City.-; and WHBREAS, orC4.pance No. 2933 of the City Council, as amended by Ordinance No. 4536 ~~ the Cit,y COuncil, incorporating certain sec- tions of the Revenue ~il,' d Law of 1941 (Chapter 6, Part l, Division 2, Title 5 of the Govern~~nt Code of the State of California), estab- lishes a procedure fo~ the issuance of'water revenue bondS as pro- vided for in Section ~2l0; and WHEREAS, pUi.. ant to Section l210, Ordinance No. 2933 (as originally adopted) an . Resol~tion No. 78R-S33 of the City COuncil; a special municipal 'ele .~, ion was held in' the City on November 7, 1978, for the purpose of su tting to the qualified voters of the City. the following proposition~ ' RShall the C~~y of Anaheim be authorized to finance the aCqUisition~..",nd construction of additions to and improvements of. water &system of said city ~ the issu- ance of revenue b lids, not payable fran property taxes, in an amount not to ,iceed 14 Million Dollars?R; and WHBRBAS, sa~d propos~tion (the -l978 Proposition-) was approved ~ the votes q~ more th~n a majority of the voters voting on the 1978 Proposition ~t said special municipal election; and WHBRBAS, of ..id autho~ized amount of $14,000,000, the City has heretofore issue~. $7,350,000 water revenue bonds. 'designated -Water Revenue Bonds, '];980 Series.; and WHEREAS, pu~uant to Section 1210, Ordinance No. 2933 (as originally adopted) an,'ResolutiDn No. 82R-391 of the City Council, a special municipal ele~ion was held in the City on NOvember 2, 1982, for the purpose of sUjtting to the qualified voters of the City the fOllowing proposition: ' .~n order to :provide a more economical market for the remaining water rdYenue bonds authorized by a majority of the voters in 19~B to provide more economical water service, shall c~ty Counoil Resolution No. 78R-533 be amended to elimin~e from such Resolution the maximum rate -3- ,..-", ~ 1-' ~ '" of interest (eigh~ percent) which may be paid on such bonds and to provide iqstead in such Resolution that the City Council shall, atjor prior to the time of sale of any such bonds, establish ~f resolution a maximum rate of interest which may be paid ion the bonds then being sold?R, and WHBREAS, sa~d propoSition (the R1982 PropositionR) was approved by the votes .t more than a majority of the voters voting on the 1982 Proposition 4t said special municipal election; and WHBREAS, thilS City Council deems it necessary to issue for the. purposes hereinaf~er set f~rth, all of the remaining $6,650,000 principal amount of tW, ".ater rev" enue bonds authorized by the '19"18 Proposition, to be des gnated -Water Revenue Bonds, 1984 SeriesR; and the Water Revenue Bon ., 1984 Series, shall be on a' parity with the city's Water Revenueeries 1971 Bonds, Water Revenue Bonds, 1980 Series and any other ~.rity water revenue bonds which may be issued in the future by the City; ROlf, TIIBRBPO", the C.. ty Council of the City of ADabeia, ,California, DOES H~ RBSOLVIB, DBTBRIIIRE AND ORDER as follows: SBCrIOR 1. ~finitiC$8. As used in this Resolution, unless the context ot~.rwise requires: (a) .Authori~..d Investments. means any obligations in which the City ma~lawfully invest its funds. (b) "1984 Bo~4sR means the $6,650,000 aggregate prin- cipal amount of B9,~dS authqrized and issued hereunder ,pur- suant to the 1978 l'roposit1on. (c) "City. m~ans the City of Anaheim, California. (d) "City Co~ncil. means the City Council of the City. (e) .Enterpr~.e" means the entire waterworks system of the ,City, inc14ing all additions to, and improvements and extensions 0 " said system later constructed or acquired. Cf) "Fiscal ~ent" means the fiscal agent under the 1971 Bond Resolut~n and the 1980 Bond Resolution. (g) "Fiscal ~ear" means tbe year period beginning on July 1 and ending iOn the next following June 30. -4- .-..... .,~ " (h) "Maximum, Annual Debt Service. as computed from time to time unde~ Section 15 and Covenant II of Section 20 hereof means the11argest of the sums obtained for the Fiscal Year of co~putation or any Fiscal Year thereafter ~ totaling the follq~ing for each such Fiscal Year: (1) The prinqipal amount of all serial 1984 Bonds and serial parit1.Bonds p.,yable in such Fisc~ Year and outstanding 4t the dat.e of such computat1on; (2) The min~4M sinkin, account payments, if any, pay- able'in such IPiscal Year with respect to the term 1984 Bonds and anf term Parity Bonds outstanding at the date of such~~omputation; and (3) The inte~st which would be due during such Fiscal Year on the m. gregate principal amount of the 1984 Bonds and pa .t.ty BondS, which would be outstanding'in such Fiscal.ar if the serial 1984 Bonds and serial Pari ty Bonds iC)utstan'ding on the date of such canputa- tion are ret~~ed as they mature and if the term 1984 Bonds and any term Parity Bonds outstanding onth.e date of suc~ computation, if any, are retired as scheduled in this Resolution and in the resolution providing fo~ the issuance of such term Parity Bonds. (i) "Net Rev~~ues. of the Enterprise means the amount of the Revenues l~.s the Operating Expenses. (j) .197l Bpnd ResOlution. means Resolution No. 7lR-233' of t.e City Council, adopted June 1, 1971, authorizing' the i~$uance of the 1971 Bonds. '- ',' (k) Rl971 Boq4sR means the $2,000,000 water revenue bonds designated 'fater Revenue Series 1971 Bonds" referred to in the recital~hereof. (l) R1980 B~nd ResolutionR means Resolution No. 80R-75 of the I~ity Cou~cil, adopted February 26, 1980, authorizing the i~.uance of the 1980 Bonds. ' ,~ ~, (m) "1980 BO~4s" means the $7,350,000 water revenue bonds desi9nate~nWater Revenue Bonds, 1990 SeriesR referred to in th~ recitals hereof. (n) "Operati~g Expenses. of the Enterprise means the reasonable and ne1.ssary current expenses of maintaining, repairing and oprating the Enterprise, including City administrative epenses directly attributable to water -5- f I .,....... ,'......., .~'. system function~, but excluding depreciation and amortization, andj~ebt service requirements of the City's general obligation water bends, all computed in accordance with sound accoun~~ng principles and consistent with exist- ing accounting pr~4tices of the City. (0) "Ordinan~e No. 2933" means ,Ordinance No. 2933 of the City Council, I.dopted Qn June 1, 1971, as amended by Ordinance No. 453~, adopted on September 4, 1984. (p) "Par i ty ~Ionds" m.ans the 1971 Bonds, the 1980 Bonds and any oth~~ revenue bonds, revenue notes or othe~ similar evidences ~f indebtedness hereafter issued for the acquisition, cons~r;uction .nd financing of additions to, and improvements qf the En~erprise, ~able out of the Net Revenues and WhiCh~, ., as provided in this Resolution, rank'on a parity with the tLi984 Bonds. (q) "parity ,pnd ResolutionR means any resolution authorizing the i~uance of parity Bonds. (r) "RegistraF''' means Securities Services Division in Los Angeles or Sanl iFrancisoo of Bank of America National Trust and Savings l'issociation. (s) "ResolutiPnIl means this Resolution No. 84~39' of the Ci ty Council. . (t) .Revenue~'! means all rates, fees and charges for providing water Etrvice t,o persons and real property (including connectpn fees) and all other fees, rents and charges and othe~income derived by the City, from the ownership, operatibn, use or services of the Enterprise. (u) RTreasur_r" means the Treasurer of the City. SECTION 2. ~ity o. 1984 BoDcJs and Parity Bonds; PJledge of Revenues. Pursuan~to Section l210 and Section l2l0.l of the City Charter, ordinanc~.., " No. 2933 and this Resolution, the 1984 Bonds and all parity Bonds shf1~Ll be equally secured by a pledge, charge and lien upon the Net Reve~pes of the Enterprise without priority for number, date of bonds, date of sale, date of execution, or date of delivery, and the paym.nt of the interest on and principal of the 1984 Bonds and all Parity Bonds and any premiums upon the redemption of any thereof shall be' and are secured by an exclusive pledge of and charge and lien upon t.e Net Revenues of the Enterprise, and all of the Net Revenues of the Enterprise are hereby pledged, charged and assigned for the securi~y of the 1984 Bonds and all parity Bonds, and such Net Revenues and .ny interest earned on the Net Revenues shall ~, -6- '" ,~. ~ ,~ ......... constitute a trust fund for the security and paYment of the interest on and principal of, ~e 1984 Bonds and all parity Bonds, and so long as any of the 1984 BPinds, Patity Bonds or interest thereon are unpai d, the Net ReventtEts and interest thereon shall not be used for' any other purpose, ex~~pt as permitted" by this Resolution or any parity Bond Resolution,] and shall be held in trust for the benefit of the bondowners and sh~1l be applied pursuant to this Resolution, or to this Resolution as imodified pursuant to provisions herein, and to any Parity Bond Resol~tion. Nothing in t~jJs Resolu~ion shall preclude: (a) the redemp- tion prior to maturit~of any l~84 Bonds subject to call and redemp- tion or payment of saijd Bonds at maturity from proceeds of refunding bonds issued under sec~$on l2l0.l 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 Bon~; or (c) the issuance of additional indebted- ness payable solely frq. surplus moneys in the Revenue Account pursu- ant to Section 18 her~f. SBcrIOI1 3. ~rpose' of the 1984 Bonds. Under and pursu- ant to Section l2l0 of I~e City Charter and Ordinance No. 2933 and in accordance with the aUt" :,orizatiO$s stated in the recit~s hereof, the 1984 Bonds shall be is, .ued for the purpose of financ1ng the cost of the acquisition and co structio1'l of additions to and improvements of the Enterprise. SBC'fIOR 4. iial (l)J.igationsJ Ro General City Liability. The 1984 Bonds Shall'.', special obligations of the City and shall be payable as to the prin , 'pal thertof and interest thereon and any pre- mium upon the redem~ion of any thereof solely from the Net Revenues. The general.. d of the City is not liable for the payment of the 1984 Bonds or ~~eir interest, nor is the credit or taxing power of the City pledged for the payment of the 1984 Bonds or their interest. The holders' of the 1984 Bonds shall not be entitled to compel the exercise of ~e taxing power ~ the City or the forfeiture of any of its property. The principal of and interest on the 1984 Bonds and any premium upon the redemption of any thereof are not a debt of the City 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 Net Revenues and the funds and accounts established o~ maintained by this Resolution. SBC'lIOR 5. ~scription of the 1984 Bonds. The I 9 8 4 Bonds sha~l all be in the denomination of $5,000 or any integral multiple of $5,000, an~numbered consecutively from ~l upwards. The 1984 Bonds shall be de.ignated .WATER REVENUE BONDS, 1984 SERIESR. The 1984 Bonds shall b, payable on April 1 in each year of maturity in the amounts for each of the several years, shall bear interest -7- ~ ~ payable semi-annually on the first days of April and October of each year, commencing Apri~ l, 1985, as follows: .1"'" Year of Maturity 118' 1'187 ",S 1'1.' ,,90 11" 11' J. 1f13 ''11'1 1fI~5 'ff' 'f'7 Iff 8 If" ~<<} b'1 uoz U.$ "UtI'! u>> so ZMJ" ~7 2108 ..., pr ~cJ,pa1 :a..-nunt ~~~ ''''c,o /61t!11,eHIfO I't:)~_o ,~~ ~o~ I~,_~D I "'r;~,,- , $61~_. /,.8,0.. ,''',.- "s, __. 2.( $, .- 1.,3 S', '- ~s; .'D " If"~ ... '''~~O ..tt',,~ __ J 7", IUIO 'rIfO , ... fs--, ,.. "'SJ (U'O ~"s, -~ 1.05',_0 .6G', tloO Interest Rate 7. '10 ~ 7.75 B.DO 6. '2.'> 8.S'D 8..,$ '..0 'I. )oS '.511 '1.610 <T. ?o q.fD ,.,. ID... III... 1~.i/Jt1 I~.,~ '../D 1~.14 I..'U) I().:if? I~'~ I~.'" 1/).'10 The City Council here~,. deter.mi~es that the maximum rate of interest which may be paid on .. e 1984 Bbnds equals the highest interest rate set forth above. Eac 11984 Bona shall bear interest from the inter- est payment date nex. precedihg the date of its authentication, unless such 1984 Bond I~uthenticated on an interest payment date, in which event from such ifnterest payment date or unless such 1984 Bond is authenticated as of fa day during the period from the day after the record date immediate~ preced1ng an interest payment date to,such interest payment date, 'inclusive, in which event such 1984 Bond shall bear interest from su~h interest payment date1 provided, however, that if the date of auttnentication of any 1984 Bond shall be prior to March 15, 1985, such ~984 Bond shall bear interest from October 1, 1984: provided, furth~r, that if, as shown by the records of the Registrar, interest on the 1984 Bonds shall be in default, 1984 Bonds issued in exchange fbr 1984 Bonds surrendered for transfer or exchange shall bear i~terest from the interest payment date to which interest has been paid ,in full on the 1984 Bonds surrendered or if no interest has been pai~, October l, 1984. ~ -8- ~., A~ I' ,~ The 1984 Bonds maturing in the years /98fD 1/-0 2..oDlj J ~~S;tNLJ . are sometimes referred tOiherein as .serial 1984 Bonds" and the 1984 Bonds maturing in --::j , are sometimes referred to herein as' -term 1984 Bonds. - '-Lt.,,&. ~4- '^-4D -k.v-.-.- ICle"l 8.....ds. SBCTIOR 6. ,-lace of PaYEDt. If at the maturity date of any 1984 Bond ot if t~. same is redeemable and has been duly called for redemption, funds !.re avai!able for the payment or redemption thereof in full accor44nce wi tla the terms of this Resolution, said 1984 Bonds shall then tt': ase to bear interest. The 1984 Bonds and the ' interest thereon sha, be payable in lawful money of the United states of America. T~e princij>al of the 1984 Bonds and any premium upon the redemption ~hereof shall be payable at the Securities Services Division of Bank of America National Trust and Savings Association in Los An~eles or San Francisco, California, or 'at any, other paying agent of the City' in New York, New York. Interest on the 1984 Bonds shall ije payable by check or draft mailed to the reg- istered owner on th+ registration records maintained by the Registrar, determined 'as of ~e close of business on the 15th day of the calendar month i~ediately preceding an interest payment date (including the date on which the principal of a 1984 Bond is,to be paid) . ' SBCrIOR 7. ~ecution and Authentication of the 1984 Bonds. The Mayor of the City I~,nd the ~reasurer are hereby auth~rized and directed to sign the l~84 Bonds ~ their printed, lithographed or engraved facsimile si~~atures, and the City Clerk of the City is hereby authorized and ~irected to countersign the 1984 Bonds ~ his or her facsimile sign~ure and to affix thereto or otherwise repro- duce thereon the cor~iate seal of the City. The 1984 Bon1 shall bear thereon a certificate of authen- tication, , in the form ,t forth in Section 25 of the Resolution, exe- cuted manually by the .egistrar. Only such 1984 Bonds as shall bear thereon such certifica~e of authentication shall be entitled to any right or benefit under ~e Resol~tion and no 1984 Bond shall be valid or obligatory for any purpose until such certificate of authentica- tion shall have been dply executed by the Registrar. Such certifi- cate of the Registrar ppon any 1984 Bond executed on behalf of the City shall be conclusiv(e evidence that the 1984 Bond so authenticated has been duly authentipated and delivered under the Resolution and that the owner thereof is entitled to the benefits of the Resol ution. , . SE~IOR 8. *gistratton and Transfer. The 1984 Bonds shall be issued in fUt!llLj' '. registered form. The 1984 Bonds shall be transferable only upon. e books of the City, which shall be kept for such purposes at theurities Services Division in San Francisco of -9- ~ ~. r ,.~ the Registrar, by the registered owner thereof in person or ~ his attorney duly authori~ed in writing, upon surrender thereof together with a written instr~ent of transfer satisfactoEy to the Registrar duly executed by thel registe~ed owner or his duly author ized attorney. Upon the t~~nsfer of any such registered 1984 Bond, the Registrar shall issue iin the name of the transferee a new registered Bond or 1984 Bonds of 'the same aggregate principal amount and matu- rity as the surrender~d 1984 Bond. The Registrar may, with the con- cur rence of the City, !qesignate an addi tional office where transfer of registered 1984 BondS may be effected ~ the Registrar provided in this Section. The City an~ each paying agent may deem and treat the person in whose name ~' 1984 Bo~d shall be registered upon the books of the City as the abs :,lute owner of such 1984 Bond, whether such 1984 Bond shall be ov , ,due or not, for the purpose of receiving pay- ment of, or on account !of, the principal or redemption price, if any, of and interest on suc~ 1984 Bona and for all other purposes, and all such payments so made ~o any such registered owner or upon his order shall be valid and eff~ctual to satisfy and discharge the liability .upon such 1984 Bond tojthe extent of the sum or sums so paid, and neither the City nor ~ paying agent shall be affected py any notice to the contrary. The Pity agrees to indemnify and save each paying agent harmless from ~nd against any and all loss, cost, charge, expense, judgment or liability incurred ~ it, acting in good faith and without negligence under the Resolution, in so treating such reg- istered owner. In all cases in which the privilege of exchanging 1984 Bonds or transferrin, registered 1984 Bonds is exerc~sed, the Registrar shall authen~icate and deliver 1984 Bonds in accordance wi th the provisions of l~e Resoltation. All 1984 Bonds surrendered in any such exchanges or ~~ansfers shall forthwith be delivered to the Registrar and cancelle~ by the Registrar and returned to the City. For every such exchang~ or transfer of 1984 Bonds, whether temporary or definitive, the City' or the Registrar may make a charge suffi9ient to reimburse it for any tax, fee or other governmental charge required to be paid ~ith respect to such exchange or transfer. Neither th~ City nor tpe Registrar shall be required to transfer or exchange any 1984 Bond~ for a period of 15 days next preceding any selection of 1984 Bond$ to be redeemed or thereafter until after the first publication or m~iling of any notice of redemption or any 1984 Bonds called for redemption. SECTION 9. Rtadeaptlon of 1984 Bonds. The 1984 Bonds maturing on or after Ap~~l l, 1995 maybe redeemed prior to maturity, at the option of the C~ty, on and after April 1, 1994, in whole at any time or in part on any interest payment date, at the following -10- L r r -.. redemption priCes, exPt~ssed as a percentage of the principal amount, together with accrued 'interest to the date of redemption: Redemptioni ~eriod (Dates In~usi"e) Red~tion Price "........ April l, 199,4 and Mar~',h 3l, 199,,5 103' April l, 1995 and Marij 31, 1996 102' April 1, 1996 and Mar ~ 31, 1997 101 April l, 1997 and thett_after" , , lOO The term 198~'Bonds a~e also subject to mandatory sinking fund redemption prior i1;o matur~ty at the principal amount thereof plus accrued intere~t to th~ redemption date as provided in Section 14 hereof. T.. term 1984 Bonds to be so redeemed shall be selected by lot wi th n the m'a'turi ty to which such redemption relates. ..-... Allor any o~the 1984 Bonds subject to redemption at the option' of the City may! ibe caIi'eC! for redemption at anyone time. If less than'all of the 1~84 Bonds are redeemed at the option of the City at anyone time, ~u,' ,uch 1984 Bonds shall be. redeemed in ~nverse order of maturity and ~ lot wtthin each matur1ty. The interestj"ayment 4ate on which 1984 Bonds which are called are to be prese~ted for redemption is herein sometimes called the R redemption date..: (a) Notice OMi~Pt~n. Notice of the intended redemp- tion shall be pub1ishe , jonce in . newspaper of general circulation in the City of Anaheim, C ifornia, and once in a daily newspaper or financial journal publ' ished in Cbr near the Borough of Manhattan, New York, said pUblicationi' to be at least 30 days but not more than '60 days prior to the red , tion date. The 'not1ce of redemption shall Ca) state the redempti date; (b) state the redemption price; (c) state the numbers an4date of maturity of the 1984 Bonds to 'be redeemed; provided, ho~ever, that whenever any call includes all of the outstanding 1984 Bpnds subject to redemption, the numbers of the 1984 Bonds need not be: stated; Cd) require that such 1984 Bonds be surrendered at the Sec~tities Services Division of Bank of America National Trust and S_vings Association in Los Angeles or San Francisco, California, or at the option of the holder, at any other paying agent of the Ci~y in New York, New York; and Ce) give notice that further interest on such 1984 Bonds will not accrue after the designated- redemption ~ate. The Registrar shall, on or before the date of publication of said notice of redemption, mail by first- class, postage prepa~d a similar notice postage prepaid to the respective registered Owners thereof at the addresses appearing on -ll- ~., ~ ,...-,." I' ~ the registration reco~ds maintained ~ the Registrar, as of the date of such notice. . The actual rqeipt by the holder of any 1984 Bond of notice of such redemption sh~l not be a condition precedent to redemption, and failure to receiv . 'such not;.ice shall not affect the validity of the proceedings for re .ption of such 1984 Bonds or the cessation of interest on the redeption date. The mailed notice or notices required by this sect '..on shall be given by the City. (b) Red~ti~ Pund. Prior to the redemption date there shall be established ~redempt~on fund to be described as the ,Water Revenue Bonds Redempt!.,O" ."."n Fund (b" erein referred to as the RRedemption FundR), and prior to .'e redemp~ion date there shall be set aside in the Redemption Fund m 'eys available for the purpose and sufficient to redeem, at the pri ' s payable as in this Resolution provided, the 1984 Bonds designated,1n such notice of redemption. Said moneys shall be set aside in ~e Redemption Fund solely for that purpose and shall be applied on or'after tbe redemption date to payment of the 1984 Bonds to be rede!..,.,ed upon presentation and surrender of such 1984 Bonds. Any accr .d interest due on or prior to the redemption date shall be paid fro, . the Bond Service Account. Any interest due on or prior to the red~ption date upon 1984 Bonds shall be paid from the Bond Service Acco~. If, after all of the 1984 Bonds have been redeemed and cancell,d or paid and cancelled, there are moneys remaining in the Redem~ion Fund, said moneys shall be transferred to the Revenue Account; p~iovided, however, that if said moneys are part of the proceeds of refUnding bonds said moneys shall be transferred to the fund or accounticreated for the payment of principal of and interest on such refun~ing bonds. The Redemption Fund m~y also be used to provide for the redemption of Parity Bonds. (c) Bffect of, the Notice of Redeaption. When notice of redemption has been g~ven, and when the amount necessary for the redemption of the 1984i Bonds called for redemption is set aside for that purpose in the Re~mption Fund, the 1984 Bonds designate~ for redemption shall becom~ due and payable on the redemption date, and upon presentation and sPrrender of said 1984 Bonds at the ~ace spec- ified in the notice of redemption, such 1984 Bonds shall be redeemed and paid at said redemption price out of the Redemption Fund, and no interest will accrue otl such 1984 Bonds called for redemption after the redemption date speFified in such notice, and the holders of said 1984 Bonds so called fbr redemption after such redemption date shall look for the payment of such 1984 Bonds only to said Redemption Fund. All 1984 Bonds redeemed shall be cancelled forthwith and shall not be reissued. -l2- l j r ~ ,"""""'" All unpaid i~terest payable at or prior to the redemption date shall continue t01be payable to the respective registered owners of such 1984 Bonds, o~ their order, but without interest thereon. SE~IOR 10. . 'unda ana Accounts. A. The Treasurer shall continue to maintain ~~,e follo~ing funds and accounts, heretofore created pursuant to S~etion 12lD of the City Charter, under the 1971 Bond Resolution and r~4esignat.d under the 1980 Bond Resolution;-so long as any of the 19~4 Bonds remain outstanding: (l) Water En~erprise Fund (the RWater Enterprise FundR)i' and the fq110wing accounts within said fund: (a) Wat~r System Revenue Account (the RRevenue Account<<); a~d ' - (b) Wat~r Syste~ Maintenance and Operating Account' (the !~M&O AccountR); and (c) watetz, System Renewal and Replacement Account {the .R&R'Ac~unt.); and I (d) Wat.~ Syste~ Extension and Improvement Account' (the !-iE& I Account R) . B. The Fiscap., Agent spall continue to maintain the follow- ing funds so long as ~ of the 1971 Bonds and the 1980 Bonds remain outstanding:. , (1) Water Sys~em Revenue Bond and Interest Fund (the RBond Service Fundrl);, and ' - (2) Water Sy'tem Revenue Bond Reserve Fund (the wReserve FundR). . From and afte~ the retirement of all of the 1971 Bonds and the 1980 Bonds (or the\date on which provision for such retirement has been made so that ~.e 1971 B$nds are no longer outstanding within the meaning of the 197 Bond Resolution and the 1980 Bonds are no longer outstanding wit in the meaning of the 1980 Bond Resolution) the Reserve Fund shall: be maintained ~ the Treasurer so long as any of the 1984 Bonds rema~n outstanding. c. The Fisca~ Agent shall continue to maintain the Water System Revenue Bond Sin~;i.ng Fund (the "l980 Sinking Fund") so long as any of the 1980 Bonds temain outstanding. ,~ -13- L r ~ "........ D. The foll~ing additional accounts are hereby created in the Water Enterprise F~d and shall be maintained by the Treasurer so long as any of the 19* Bonds J:'emain outstanding: (l) Water Sy~~em Revenue Bond and Interest Account (the -Bond Servic~ 'AccountR) 1 (2) Water Sy.tem Revenue Bond Sinking Account (the - Sinking Account -) f;, and (3) Water Sy~~em Revenue Bond, 1984 Construction Account (the nl984i iConstrudtion Account"). E. Additiona~: account$ in the Water Enterprise Fund may be created by subsequent ~Iesolutions of the City Council. ' SECTIOR 11. ~i8po8it~on of Certain Available Moueysand Bond Proceeds; Con8tr~tion Accounts. A.The proce~~ of the 1984 Bonds shall be transferred and ,deposited as follows: (1) An amountl$ufficient to cause the amount in the Reserve Fund to eq,,"~, 1 the M~ximum Annual Debt Service for the 1971 Bonds, th" 1980 Bonds and the 1984 Bonds shall be transferred to t~ Fiscal Agent and deposited in the Reserve Fund. (2) The rema~~,der shall be deposited in the 1984 Construction Accou*t. ,.-.., B. The City t~y dePOs:i.t moneys, received from any source, in the 1984 Constructio j Account. The moneys set aside and placed in the 1984 Construction ,~count snall be expended solely for the pur- poses for which the 194 Bonds were issued. C. If any s~ remains in the 1984 Construction Account after the full accampli.bment (as certified by the General Manager of the Public. utilities ~artment of the City) of the purposes for which the 1984 Bonds w~re issued, it shall be transferred to the Redemption Fund to be ,eed to pay, by redemption or purchase at a purchase price (includi.g broker~ge and other fees) not exceeding par plus accrued interest, 1984 BondS, or parity Bonds issued for one or more of the same purpbses for which the 1984 Bonds were issued. SECTIOR 12. .evenue Account. The Revenues of the Enterprise shall be deposited with the City Treasurer to the credit of the Revenue Accoun~. On or before the twentieth day of each calendar month, there sJlaall be withdrawn from the Revenue Account the -l4- I j .-..", /~ #' r- -, entire amount on depo~it in the Revenue Account and there shall be allocated and deposit~a such amount in the indicated priority to the fOllowing accounts an4 funds. SB~IOR 13. ! ~'O Acc~t. Fir s t, so long as any of the 1984 Bonds are outst~'.l~. ding, ~'" ere shall be allocated to the M&O Account amounts suffi ,~ent for the payment of the Operating Expenses' of the Enterprise as aid expenses become due and pay~e. Amounts in the M&O Account sh1l be used solely to pay Operating Expenses. SE~IOR 14. ~nd Se"ice Account, Sinking Accotmt. Second, so long "as" any i<>f the 1984 Bonds are outstanding, in ad4J,tion to but on a parity wi#h the tr~nsfers to the Bond Service Fund and the 1980 Sinking Fun~ requi red by Section 15 of the 1971 Bond Resolution and Section l6 of the 1980' Bond Resolution: A. There sh~l be allocated to the Bond Service Account the following' amounts:! (l)one-sixtbjof the i.nterest which will become due and payable on the! ioutstanQing 1984 Bonds and Parity Bonds (other than the 19t1!1 Bonds and the 1980 Bonds) within the next ensuing six 1., "..nths, e~cept that, with respect to any interest payment ,te, the monthly sum allocated shall be the interest whi . will become due and payable on such interest payment ,_te less any portion of such interest which has been pro~,ided for (a) ~ transfers required with respect to the 198.' Bonds by any Parity Bond Resolution, and (b) in the case of any other Parity Bonds, aqy trans- fers required wi~h respect to such Parity Bonds by. any other parity Bond Resolution; and (2) one-twelt,th of the principal amount which will mature and be paya~e on the outstanding serial 1984 Bonds and serial Parity onds (other than the 1971 Bonds and the 1980 Bonds) within the next ensuing twelve months. B. There sha~l be allocated to the Sinking Account, each month during the twelv,~month period preceding the dates set forth below, in addition toiany 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 tbe principal of the respective amounts of 1984 term Bonds which shall be called and redeemed on the dates set forth below, unless such amounts are used to purchase 1984 term Bonds as provided in this Secti<>n: -15- l1 r' Sinking Accountt Redellllptlon oat. (~ril 1) . ~, - principal &mnunt 1984 Ter~ Bonds,M*turing A Sinking ACcoun~, Red8llptlon Da~ (.-prill) I principal &~nftt:. "'........., )' -l6- I I - f .-, Sinking Account Redemption Date (.i1 1) .'...-.... 1984 Term ~onds Sinkin9 Account . R.ec:1ellption Date f (~ri1 II Pr incipa1 &w.n1V1t: 1, Pr iDciW &w.nunt: c., In any ev~.t, such sums shall be allocated from the Revenue Account to the ~ond Ser~ice Account and the Sinking Account so that the full amOUi'tf required to pay, as it becomes due, the interest on said 1984 ", ., ds and .,parity Bonds (other than the 1971 Bonds and the 1980 Bon ,I) and aqy installment of principal on said 1984 Bonds and Parity ~nds (ot~er than the 1971 Bonds and, with respect to sinking fund! payments, the 1980 Bonds) shall be set aside in the Bond Service Acc~unt and the' Sinking Account at least five days prior to the date the installment of interest or principal becomes due. --.. -17- hi r -." .,~ If for any ..ason in any month the~e are insufficient amounts in Revenue Acqount to make all required deposits in the Bond Service Account, the B,~d Service Fund, the 1980 Sinking Fund and the Sinking Account, then i the amounts available shall be allocated pro' rata towards the requli,red deposits and- the deficiencies shall be added to and become a 'part of the allocations required for the fol- lowing calendar month. Any moneys r,guired to be set aside in the Bond Service Account or the Sinking Account may be prepaid in whole or in 'part ~ being earlier set asi4. therein" and in that event the monthly allo- cation which has bee~ so prepaid need not be made at the time appointed therefor. !~ach monthly transfer may be reduced by an amount equal to any iI1vestment income received during its preceding calendar month on mon~ys in the Bond Service Account or the Sinking Account. The 1984 Bonqs shall recite that they are payable from the Water Enterprise Fund, I ~ut not,ti'thstanding such recital shall be paid from the Bond Service i~ccoun~, or from the Redemption Fund estab- lished in accordance with Section 9(b) of this Resolution. Moneys in th~ Sinking Account shall be used to redeem ~ term 1984 Bonds and tt:t.m Parity bonds (other than the 1971 Bonds and the 1980 Bonds) at th~ times and in the amounts as provided in this Section and any Parity$ond Resoaution. Any such call and redemption of term 1984 Bonds Sh~l be made in accordance with Section 9 hereof, and for that purpose m~eys in the Sinking Account may be transferred to the Redemption Fun ,.for the payment of principal upon redemption of any term 1984 Bon~s called for redemption prior to maturity. Moneys in th~ Sinking Account may also be used, prior to the date when any term 1984 Bonds or term Parity bonds (other than 1971 Bonds or 1980 BO~,',S) are selected by lot, in lieu of (or par- tially in lieu of) man4_tory call and redemption on the next succeed- ing sinking fund rede~tion date, for the purchase of any such term 1984 Bonds or term parity bonds (other than 1971 Bonds or 1980 Bonds) at a purchase price (~ncluding brokerage and other fees) not exceed- ing par plus accrued ~nterest. If after all ,of the 1984 Bonds and any parity Bonds have been redeemed and can~elled or paid and cancelled (or provision is made therefor) there are moneys remaining in the Bond Service Account, the Sinking ~acount or the Reserve Fund, said moneys may be transferred to the Re~enue Account. ..-...., SBCrIOR 15. .eserve fUnd. Third, so long as any of the 1984 Bonds are outstanding, there shall be transferred to the Reserve -18- 11 c~ ~ f' -" Fund an amount suffic~.nt to provide a balance in the Reserve Fund equal to Maximum Annu~l Debt Service. Moneys in th~ Reserve Fund shall be used solely for the purpose of paying the f-=incipal of and interest on the 1984 Bonds and a~y Parity Bonds, in he event that moneys in the Bond Service Fund (1n the case of the 1 11 Bonds) or the Bond Service Fund or the 1980 . Sinking Fund (in the4se of tae 1980 Bonds), or the Bond Service Account or the Sinking i4ccount (in the' case of the 1984 Bonds 'and any other parity Bonds) ar,'insufficient therefor. For'that purpose, the Fiscal Agent or the T~easurer, as appropriate; shall withdraw and transfer sufficient mqneys from the Reserve Fund to the Bond S~rvice Fund, the BondServic~ Account, the 1980 Sinking Fund or the Sinking Account, as the case, may be. If at - any time 'the moneys 'in the Reserve Fund are insu~licient to make all such required transfers, the available moneys ~n the Reserve Fund shall be distributed pro rata towards the requ~red deposits. ' Whenever moneys are withdrawn from the Reserve Fund 14n equal amount of moneys shall be placed in the Reserve Fund by t~ansfers from the first available moneys in the Revenue Account. Prior to thetnitial transfer from the Revenue Account pur- suant to Section l2 hi,eof in each month, moneys in the Reserve Fund in excess of Maximum ,',nual Debt Service may be withdrawn from the Reserve Fund and tran ' erred to the Revenue Account. - If on the fi~~t day of a Fiscal Year in which the Maximmn Annual Debt Service c " ',culated "eXClUding such Fiscal Year is less than the Maximmn Annu ,'Debt Service calculated including such Fiscal Year (in both cases at ,r giving effect to any proposed red~ption or refunding of any 1984 nds or Parity Bonds during such Fiscal Year), then in each month du~~ng such Fiscal Year, prior to the transfer from the Revenue Accoqnt pursuant to Section 12 in each month, there may be transferred frqm the Reserve Fund to the Revenue Account an amount equal to one-t~lfth of the difference between the two calcu- lations of Maximum An~Ual Debt Service. For purposes of calcul~ting amounts required to be in the Reserve Fund during such Fiscal Year, the amounts so transf~rred shall be deemed to be on deposit in the Reserve Fund. Such ~unts shall be used only for the purposes set forth in Section 3 he~eof or to pay the principal of 1984 Bonds or parity Bonds at matur~ty, ~ redemption or ~ purchase at a purchase price (including brok~rage and other fees) not exceeding par plus accrued interest. SECTION 16. It&R Account. Fourth, so long as any of the 1984 Bonds are outst_nding, there'shall be allocated to the R&R Account an amount eqpal to 2' of the Revenues received in the preceding calendar ~~nth until a balance is established, or reestablished, therei~ equal to 2% of the depreciated book value of -l9- I I ~ I -, .-.. the land, general pl~nt and equipment which" constitute tbenet utility plant of the ~terpriseor such other balance as the consult- ing engineer may reco~end. The moneys contained in the R&R Account shall be used for traIll$fer to the Bond Service Account, to the Bond' Service Fund, to the ~980 Sinking Fund or to the Sinking Account, as ' the case may be, to p~.vent default in payment of the principal and interest on the 1984 aonds or any Parity Bonds, or for extraordinary maintenance and repair., renewals and replacements to the Enterprise, but not for additions :to and extensions of the Enterprise. If at any ti~e the balance in the R&R Account exceeds the minimum balance herei~ identified, said excess may be transferred to the Revenue Account. ,--., SBCl'IOll17. *&1 AccolIIDt. Fifth, so long as the 1984 Bonds are' outstanding'jthere shall be set aside out of the Revenue Account into the E&I ~qcount sUch amounts as shall be deemed desir- able by the city Coun~~l or appcopriate city staff ~ appointment of the City Council. The !Jt\Oneys contained in said Account shall be used for transfer to the Bq~d Sery'ice Account, to the Bond Service Fund, to the 1980 Sinking F~d or to the Sinking Account, as the case may be, to prevent defaul~ in payment of principal and interest on the 1984 Bonds or any Parilty Bonds, or for extension and improvement of the Enterprise. SBCrIOR 18. !4urplus Joneys in the Revenue Account. All moneys remaining in t~ Revenue Account after all transfers required hereunder have been m4~e, shall be applied to the payment of the principal of and inte~st on the City's Water Revenue Anticipation Notes issued pursuan~ to Section l2l0 of the City Charter and Ordinance No. 4415 and iOrdinance No. 4530 of the City Council, to the extent required by the :1;esolution (s) pursuant to which such Notes are issued, and thereafter!, to the extent available, may be (1) used for the redemption of any ~984 Bonds or parity Bonds which are subject to call and redemption p~ior to maturity or for the purchase from to time in the open marke~ of any outstanding 1984 Bonds or Parity Bonds whether or not subject to call and redemption (irrespective of the maturity or number of such 1984 Bonds or parity Bonds) at prices and in such manner, either at public or private sale, or otherwise, as the Treasurer in his oIr her discretion may determine, but such pur- chase price (including brokerage and other charges, but excluding accrued interest) sh~ll not exceed the principal amount or the redemption price of t~ callable 1984 Bonds or parity Bonds on the next redemption date, whichever is less; or (2) used for any lawful purpose of. the City, i~cluding but not limited to the security and payment of other ind~btedness incurred in connection with the Enterprise. -20- ~ ---. -, ~, SECTION 19. Investmeats. Obligations purchased as investments of money~in any of the funds and accounts in which investments are autho~~ed shall be deemed at all times to be a part of such funds and acco!qnts and any income realized from such invest- ments shall be credit~ to such funds and accounts and any losses resul ting from such injvlestments shall be charged to such funds and accounts. The Fiscal i1igent or the Treasurer, as the case may be, '. shall sell at the best !,~rice obt~inable or present for redemption any obligations so purcha~d whenever it may be necessary to do so in order to provide money~ to meet any payment or transfer from such funds and accounts. Fqr the purpose of deter.mining at any given time the balance in any such funds ana accounts, any such investment$ con- stituting a part of suqh funds and accounts shall be valued at the then estimated or appr~ised market value of such investments. Moneys in all funds and accou~ts described in Section lO hereof shall be invested only in Autho~ized Investments; except that so long as any of the 1971 Bonds and ~e 1980 Bonds are outstanding, amounts in the Revenue Account, the MI&O Account, the R&R Account, the E&I Account, the 1980 Sinking Fund, the Bond Service Fund and the Reserve Fund shall be invested only in direct obligations of or obligations guar- .anteed by the United S~tes of ~erica, or certificates of deposit of recognized banks or trUSt companies fully secured by direct obliga- tions of or obligation~ guaranteed by the United States of America. All investments of moneylS in such funds and accounts shall mature not later than such times ai5 the Treasurer estimates such moneys shall be needed for the purposes for which such moneys are held. . SEC'.rIOR 20. ~arranty. The City shall preserve and pro- tect the security of t~~ 1984 Bonds and the rights of the owners of the 1984 Bonds and warr~t and defend their rights against ~ll claims and demands of all per.pns. S~IOR 21. qovenants. So long as any of the 1984 Bonds are outstanding, the dity makes the following covenants with the bondowners under the ptOvisions of Section 1210 of the City Charter (to be performed by ~he City or its proper officers, agents or employees) which covenants are n_cessary, convenient and desirable to secure the 1984 Bonds .nd tend to make them more marketable; pro- vided, however, that said covenants do not require the City to expend any moneys other than the Revenues of the Enterprise. Covenant 1. t?Unctua1 pa~t. The City covenants that it w ill duly and Punctually payor cause to be paid the principal of and interest on every 1984 Bond issued hereunder, together with the pre- mium thereon, if any be' payable, on the date, at the place and in the manner mentioned in the 1984 Bonds and in accordance with this Resolution, and that t.e payments into the Bond Service Account, the Sinking Account and the Reserve Fund will be made, all in strict conformity with the tetms of the 1984 Bonds and of this Resolution, -2l- II -.. -.., "-",, and that it ~ill f~ithfully observe and ~erform all of the conditions, covenants !~nd requirements of this Resolution and all resolutions supplement~ thereto and of the 1984 Bonds issued hereun- der, and that time of i$uch payment and performance is of the essence of the City's contracbwith the Bondowners. Covenant 2. ill>>iscbarge Claims. TheCi ty covenants that in order to preserve andiSirotect t,he priority and security of the 1984 Bonds the City shall y from amounts available in the O&M Account and discharge all law ' 1 claims for labor, materials and supplies furnished for or in c~nection with the Enterprise which, if unpaid, may become a lien or ~~arge upon the property or Revenues of the Enterprise prior or su .rior to the lien of the 1984 Bonds and impair the security of the 19 ',., Bonds. The City shall also pay from amounts available in the O&M . count all taxes and assessments or other gov- ernmental charges lawf.lly levted or assessed upon or in respect of the Enterprise or upon! any part thereof or upon any of the revenues thereof. Covenant 3. Iqo_n~e Acquisition and Construction. The Ci ty covenants that as i.oon as funds are available therefor, the City will commence (to the ~xtent not already conunenced)the accomplish- ment of the purposes fpr which the 1984 Bonds are issued and will continue the same to cbtmpletion with all practicable dispatch and in ' an economical manner. . ..-, Covenant 4. .rate .terprise in Efficient and Bconoatcal Kanner. The City cove~nts to operate the Enterprise in an efficient and economical manne .,.,and to operate, maintain and preserve the Enterprise in good re ir and working order. Covenant S.Against Sale, Bainent Doaain, Existing and Puture Agreeaents. Exdept as provided herein, the City covenants that the Enterprise shia!ll not be mortgaged or otherwise encumbered, sold, leased, pledged, ~y charge placed thereon, or disposed of as a whole or substantially, as a whole unless such sale or other di~si- tion be so arranged as! !to provide for sums adequate to provide for the immediate payment qf the principal of and interest on and premi- ums, if any, due upon ~e call and redemption thereof, of the 1984 Bonds. The City fu~ther covenants that the Revenues of the Enterprise or any othelr funds pledged or otherwise made available to secure payment of the principal of and interest on the 1984 Bonds shall not be mortgagedr encumbered, sOld, leased, pledged, any charge placed thereon, or disposed of or used except as authorized ~ the terms of this Resolutibn. The City further covenants that it will not enter into any agreement which impairs the operation of the Enterprise or any part Qf it necessary to secure adequate revenues to pay the principal of and inter.at on the 1'84 Bonda or which otherwise would impair the rights of the bondownera with r.apect to -22- ~, ~ - " "- the Revenues of the ~nterprise. If any substantial part of the Enterprise is sold, th~ payment therefor shall either be used for the acquisition and/or con.~ructionof improvements and extensions of the Enterprise or shall b~' ,placed in the appropriate funds or accounts and shall be used to ,'y or call and redeem the 1984 Bonds and any parity Bonds in the m tmer provided in this Resolution or in any' parity Bond Resolutio~. The Ci ty cov~qants that any amounts received as awards as a result of the taking j'f all or any part of the Enterprise by the lawful exercise of em,~4',ent domctin, if and to the extent that. such right can be exercis,la against such property of the City, shall either be used for th ,acquisit;,ion and/or construction of improve- ments and extension ,f the Enterprise or shall be placed in the appropriate funds or ~ccounts and shall be used to payor call and redeem the 1984 Bonds Ictnd any parity Bonds in the manner provided in this Resolution or in I~ny Parity Bond Resolution. The City wil+ not sell, lease or otherwise encumber any ,part of the Enterpris4t except properties or facilities no longer useful or necessary k:IO its efficient and economical operation. Notwithstand~~g any other provisions contained herein, the City may: (1) sell o~dispose of customer connections (and related distribution lines) lqq, ated outside the City limits, (2) take all action necessary to fu1till itscommdtments under its existing agree- ments with Yorba Lind, County Water District, and any subsequent implemental agreements~ and (3) enter into, and take all actions nec- essary to fulfill its commitments under, contractual agre~ents con- cerning water service 11;,0 all or part of any areas which are annexed to the City of Anaheim ,after the sale and delivery of the 1984 Bonds, with parties organized 11;,0 provide water service to all or part of any such area. Any proce~ds from the sale or disposition of any part of the Water System or t~e granting of any service rights or privileges pursuant to the prece~ing sentence shall be used to defray the,cost of renewals, replaceme,~s, additions and extensions to the Enterprise or shall be held for ~he redemption prior to maturity or open market purchase of 1984 Bond~ or Parity Bonds then outstanding, but such purchase price (incluqing brokerage and other charges, but excluding accrued interest) sha~l not exceed 104% of the principal amount or the redemption price Qf the callable bonds on the last redemption date, whichever is leSs. Any proceeds from the sale or disposition of any part of the Enterprise shall be placed in the Revenue Account. -23- .. ..-...., --.. (' ~\ Covenant 6. ~nsurance. The City covenants that it shall at all times maintain ~~th respQnsible insurers all such insurance on the Enterprise as is c~tomarilY"maintained by similar utilities sys-' tems with respect to ~~:ks and properties of like character against accident to, loss of1"or damag,. e to such works or properties and against loss of revenu"fS. If aqy useful part of the Enterprise shall be damaged or destroy.d such part shall be restored to use. The money collected from ip$urance against accident, loss or damage shall be used for repairing,~r rebuilding the lost, damaged or destroyed works and properties, and to the extent not so applied, shall be applied to the retir~., nt of 0\1tstanding1984 Bonds and any Parity Bonds issued for the $~terprise and for such purpose paid into the appropriate funds or a~~ounts. The money collected from loss of rev- enues insurance shall~e deposited in the Revenue Account. The City sh~ll also maintain with responsible insurers workers' compensation 'insurance and insurance against public liabil- ity and property damag+to the, ~xtent reasonably necessary to protect the City and the Bondqwners., Notwithstand~~g the foregoing, the City may provide any insurance required b~' this Covenant 6 through a self-insurance program. ' Covenant 7.,..ecords ""d,AccOUDts. The City covenants that it shall keep P~ioper books of record and accounts of the Enterprise, separatet,om all ~tber records and accounts, in which complete and correct e ~ries sha~l be made of all transactions relat- ing to the Enterprise.i Said books shall at all times be subject to the inspection of the ijQlders of not less than 10% of the outstanding 1984 Bonds or their r~presentatives authorized in writing. The City co~enants that it will cause the books and accounts of the Entera~ise to be audited annually ~ an independent certified public acco~rltant or firm of certified public accountants and shall furnish a cqpy of the audit report, upon request, to any bondholder. Covenant 8. i~ollection of Charges. The City will permit no free connections .ith, or use and services of the Enterprise except for the follow~ng: (l) public fire qydrants; (2) public fire flows; (3) watering of 'public street dividers; and (4) to the extent, if any, provided in the City's existing agreements with Yorba Linda County Water District. The City will pay promptly into the Revenue Account from the City'!s General Fund (or other available funds) for all City connections w~th, use and services of, the Enterprise except the foregoing. The Ci~ will not grant or establish within any class of service preferenti~ or discriminatory rates, fees or charges for connections with, and use and serv~ces of, the Enterprise except as -24- I I ~ - i -" .~. provided in the CitY~4 existing agreements with Yorba Linda COunty Water District and S2~sequent implemental agreements. For the pur- poses of setting suc . irates, 1"ees and charges, connections located outside the city lim~s of tht City of Anaheim may be considered as separate classes of S~' tvice. 1.'be City covenants that it shall at all times during the per '()d any of the 1984 Bonds are outstanding main- tain and enforce vali. regulations for the payment of bills for water service and that sucb regulations shall at all times during such period provide that ~ne City shall discontinue water service to any user whose water bill ))as not been paid within the time fixed by said regulations. Covenant 9. . . Rates a~d Charges. The City shall and here~ covenants that it Sh~:,~.l prescribe, revise and collect such charges for the services and f.cilities of the Enterprise which, after making allowances for contiqgencies and error in the estimates, shall be at least sufficient to pay the following amounts in the order set forth: (a) All curIMnt expenses for the necessary and rea- sonable OperatiQ. Expenses of the Enterprise as said expenses become 4/e and ~yable; (b) The int$iest on and principal payments (including any sinking'accoup~ paymenus) of the outstanding 1984 Bonds and Parity Bonds .s they become due and payable; (c) All paYW~nts required for compliance with this Resol ution inclu ,tlg transfers required to be made fr<?JD the Revenue Account 'other funds and accounts; and (d) All pay~!nts required to meet any other obliga- tions of the CitYi iwhich are charges, liens or encumbrances upon or payable ftiom the Revenues of the Enterprise; and the charges shal~ be so fixed that the Net Revenues shall at least equal l.50 timers the amounts payable under (b). For PlU'poses of this Section, Net Revenues shall include all investment income on all accounts establi~qed in the Water Enterprise Fund and on all other funds establish.a for the benefit of the holders of the 1984 Bonds or Par i ty Bonds!. .' ...-..., Covenant 10~ No priority for Additional Indebtedness. The City covenants th.~ no additional indebtedness shall be incurred pursuant to Section l~lO and other 'provisions of the City Charter or any law of the State of California having any priority in payment of pr incipal or interest out of the Revenues of the Enterprise over the 1984 Bonds. -25- '-. --., ....-.., Covenant ll~ Liaits on parity Bonds. (a) Parity bonds may be issued to fin4~ce or re-finance any repairs, improvements, enlargements or extei,ions of the Enterprise, provided that the City covenants that, exce t for bonds issued to refund any 1984 Bonds or- Parity Bonds, no suc 'additional indebtedness evidenced qy revenue bonds, revenue notes ~r any other evidence of indebtedness payable out of the Revenues ~f the Enterprise and ranking on a parity with the 1984 Bonds shall 'be created or incurred unless: Pi r 8 t . The City is not in defa ul t under the terms of th~$ Resolution. The ~et Revenues of the Enterprise, calculated '~sound apcounting principles, as shown by the books 0 the City for each of the last two com- pleted Fisc Years p~ior to the adoption of the reso- lution appr~ing the sale of such additional indebted- ness as sh ~ an audit certificate or opinion of an independent! icertified public accountant or firm of , certified p~lic ac~untants employed by the City, plus, at th, option of the City, the allowance for earnings h~...'.'., inafter set forth in subparagraph (b) "of this covena~, shall have amounted to at least 1.50 times the ~imum Annual Debt Service in any Fiscal Year therea ter on all indebtedness to be outstanding immedia tely . $ubsequent to the incurring of such addi- tional inde~tedness. Cb) For the ipurposes ,of this oovenant, the following may be added to the Net Rev84,es, of the Enterprise for the purpose of apply- ing the restrictions !<:ontained in this covenant: An all~ance for earnings arising from any increase i~ the cha~ges made for service from the EnterpriselPich has become effective prior to the incurring 0 .'such adqitional indebtedness but which, during all ,or any part of said last two completed Fiscal Years~ was not in effect, in an amount equal to 75' of the ~ount by which the Net Revenues should have been iQcreased if such increase in charges had been in eff~ct during the whole of said last two co~ pleted Fisc~ Years, as shown by, the certificate or opinion of ~ independent certified accountant or firm of certified public accountants employed qy the City. .-" -26- LI J .~. .... '.-... ,-. I ~ (c) For pur~oses of this Section, Net Revenues shall include,all investme~t income on all accounts established in the Wa ter Enterprise Fund! ~d on a1J. other funds established for the ben- efit of the holders Qf the 1984 Bonds or parity Bonds. (d) Junior ~ten bonds Cpayablein whole or in part from the Net Revenues) may be' issued to finance or refinance any repairs, enlargements, extens~C,~ns or i$provements of the enterprise, but no Revenues may be use~! for th~ payment of such junior lien bonds (interest, princi~41, red~mption premium or sinking fund installments) or the 'establishment or maintenance of any funds or accounts created in conjunction with their issuance, unle"ss and until: (1) the City '4as complied fully with all provisions of the Resolution and has m~4e all payments required to that time by the Resolution; (2) the ~_serve Fund contains an amount equal to no less than the maximum com~~ned annual principal and interest requirements of all 1984 Bonds and parity Bonds then outstanding. Covenant 12. Arbitr.ge. The City covenants that under no circumstances shall ~y initi~ investment, subsequent investment or reinvestment 'of the etoceeds (/)f the 1984 Bonds be made in such a manner as to result iIi-the loss of exemption from federal income tax- ation of interest on ithe 1984 Bonds. Covenant 13., Water .evenue Anticipation Rates. The Ci ty covenants that it wil~ . retire its Water Revenue Anticipation Notes so that no such Note or ~otes will remain outstanding under Ordinance No. 4415 of the City iuncil, as amended by Ordinance No. 4530 of the City Council, after .e 1971 Bonds and the 1980 Bonds are no longer deemed to be outstand',g in accordance with their terms and under the 1971 Bond Resolution and the 1980 Bond Resolution, respectively. SECTION 22. Lost, Stolen, Destroyed, or Mutilated 1984 Bonds. In the event ~at any 1984 Bond is lost, stolen, destroyed or mutilated, the Ci tv will cause to be issued a new 1984 Bond simi- lar to the or iginal tp replace the same in such manner and upon such reasonable terms and pondi tions, including the payment of costs and the posting of a surety bond if the City deems such surety bond nec- essary, as may from ~fme to time be determined and prescribed by resolution. The City may authorize such new 1984 Bond to be signed and authenticated in such manner as it determines in said resolution. SECTION 23. Cancellation of 1984 Bonds. All 1984 Bonds surrendered to any pay~g agent of the City for payment upon maturity or for redemption ~hall upon payment therefor be cancelled immediately. Any 19~ Bonds purchased by the City as authorized herein shall be canCelled forthwith and shall not be reissued. -27- i:c4 ..J .-.", /,.-." (' ..-., SEC'l'ION 24. i Consent of 1984 Bondholders. The consents of bondowners provide~: for in t;his Section shall relate solely to the amendment, waiver dr modification of the covenants specified in Section 20 hereof an~. shall n<>t be effective to waive or modify any' other provisions ofbis Resolution or aqy other proceedings for the issuance of the 198,' Bonds. Any act relating to the amendment, waiver or modificatiqn of any of the said covenants consented to by bondowners holding 6~ 2/3% in aggregate principal amount of the out- standing 1984 Bonds, exclusive of 1984 Bonds, if any, owned ~ the City, shall be bindincj upon the holders of all of the 1984 Bonds, and shall not be deemed 4~ inf ringement of any of the provisions of this Resolution, whatever the character of such act may be, and may be done and performed a~ fully and freely as if expressly permitted by the terms of this Re~lution, and after such consent relating to such specified matters has been given, no bondholder 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 ~~y action pursuant thereto. 'Bondholder. may'cansent by affirmative vote at a bondowners' meeting ~~ may consent in writing without a meeting, all as hereinafter proviqed. . No such amet~ent, waiver or modification shall be made which will permit (a)i;a change in the maturity or term of redemption of the principal Ofa~y 1984 Bond or any installment of interest thereon or a reductio' j in the pirincipal amount of or redemption price or redemption premi . jor rate 0,: f interest upon any 1984 Bond w~thout the consent of the hder of such 1984 Bond; or (b) a reduct10n of the percent;age of the [principal amount of 1984 Bonds the vote or con- sent of which is req~ired to effect any such amendment. Notwithstan~ing the foregoing, this Resolution may be amended without 1984 ~ondowner approval to supplement and amend this Resolution to permit itihe 1984 Bonds to be issued in coupon form pro- vided that the City r~~eives an opinion of nationally recognized Bond Counsel that the is41j1ance of the 1984 Bonds will not affect the exemption from Feder~ income taxation of the interest on the 1984 Bonds, and the City ~all mail or cause to be mail ed notice to the owners of the 1984 Bo~cBs of the availability of exchanging registered 1984 Bonds for couponi 1984 Bonds. (a) calling JJpndbolders I lleeting. If the C i t Y shall desire to- obtain any such consent it may call a meeting of bondow- ners, by resolution, !for the purpose of considering the action, the consent to which is d~sired. (b) NOtice o~ Meeting. Notice specifying the purpose, place, date and hour pf such meeting shall be published once in a -28- I j ,. ,~ ~ financial newspaper ~t journal of national circulation published in or near ,the City of lJ_w York, New York, not less than sixty days and not more than ninety i4ays priQr to the date fixed for the meeting. Such noti ce shall se~. forth the nature of the proposed action, con- sent to which is des~Jted. The City Clerk of the City shall also on or before the first! publication of such notice, mail a similar notice, postage prePi'.,i,d,to the respective registered owners thereof at their addresses apearing on the 1984 Bond registry books. The place, date and hour If holding such meeting and the date or dates of publishing and mailiQg such notice shall be determined ~ the City, in its discretion. ~. The actual Ifeceipt by any bondholder of notice of any such meeting shall not be ia condit~on precedent to the holding of such meeting, and failureito receive such notice shall not affect the validity of the pr=~edingS thereat. A certificate by the City Clerk, approved by r "olution of the City Council, that the meeting has been called andt notice thereof has been given as herein pro- vided shall be concl qaive as against all parties and it shall not be open to any bondhold~r to show that he failed to receive notice of such meeting. (c) Voting I'alifica~ions. Any bondholder may, prior to any such meeting, deli~ver his 1984 Bond or 1984 Bonds to any agency designated by the Ci . for the purpose, and shall thereupon be enti- ;led to receive an a ~",ropriate receipt for the 1984 Bond or 1984 Bonds so deposited, lling for the redelivery of such 1984 Bond or 1984 Bonds at any ti~ after the meeting. ~e Treasurer shall pre- pare and deliver to tbje chairman of the meeting a list of the names and addresses of the ~Iegistered owners of 1984 Bonds, with a state- ment of the matur i ti$ and serial numbers of the 1984 Bonds held and deposited by each of ',uch bondowners, and no bondholder shall be entitled to vote at ~'.Ch meeting unless his name appears upon such list or unless he sh '1 present his 1984 Bond or 1984 Bonds at the meeting or a certifi ,ate of deposit thereof, satisfactory to the City, executed by a btlnk or trust company. No bondholder shall be permitted to vote with respect to a larger aggregate principal amount of 1984 Bonds than is set against his name on such list, unless he shall produce the 1984 Bonds upon which he desires to vote, or a cer- tificate of deposit tbereof as above provided. (d) Issuer-otned 1984 Bonds. The City covenants that it will present at the m~'" ting a certificate, signed and verified ~ one member of the City Co ncil and by the Treasurer stating the maturi- ties and serial numrs of all 1984 Bonds owned by, or held for account of, the City,' directly or indirectly. No person shall be permitted at the meettng to vote or consent with respect to any 1984 Bond appearing upon sbch such certificate, or any 1984 Bond which it shall be established at or prior to the meeting is owned ~ the City, -29- r t I I , I r I I I t I .-.. .-... ~;~~~~lld 0:0 i~~i~~ct.rt;su~nrC:o~nesduclh9i:8:O:~~)d ~~~l{h~: ~~~~~:~i~~ determining whether ~. quorum is present. ...-..,.~ (e) ODOr1Dl ~d Proc~ure. A representation of at least 66 2/3% in aggregateJ,princiPaU amount of the 1984 Bonds then out- standing (exclusive ,~t" issuer-owned 1984 Bonds) shall be necessary to constitute a quorum ~!,~, any meeting of bO,ndowners, but less than a quorum may adjourn ~ meeting from time to time, and the meeting may be held as so adjour~d without further notice, whether such adjourn- ment shall have been! ~ad by a quorum or by less than a quorlDD.. The City shall, by an in4it.rument in writing, appoint a temporary chaiman of the meeting, and tJ1e meetin, shall be organized by the election of a peromanent chairman iand a secretary. At any meeting each bondholder shall be entitled to I one vote for every $5,000 principal amount of 1984 Bonds with res~ct to which he shall be entitled to vote as aforesaid, and such Mote may be given in person or by proxy duly appointed by an instfument' in writing presented at the meeting. ibe City,' by its duly au~horize~ representative, may attend any meeting of the bondowners, b~t shall not be required to do so. (f) Vote R~~ired. At any such meeting held as aforesaid there shall be submi ',ted for the consideration and action of the bondowners a state ,entof proposed action, consent to which is desired, and if suchi~ction shall be consented to and approved by bondowners holding a~ least 66 2/3% in aggregate amount of the 1984 Bonds then outstandi.g (exclu$ive of issuer-owned 1984 Bonds) the chairman and secretafY of the meeting shall so certi~ in writing to the City, and such certificate shall constitute complete evidence of consent of bondowner, under the provisions of this Resolution. A certificate signed a,a verified ~ the chairman and the secretary of any such meeting sha!l be conclusive evidence and the only competent evidence of matters $tated in such certificate relating to proceed- ings taken at such m,eting. (g) Written iC:Onsent of 1984 Bondholders. If the City shall desire to obtai~ any such consent in writing, without a meeting of bondowners, the ~ity Council may, by resolution, propose the action, to which con~ent is desired. A copy of such resolution, together with a requef;t to oondowners for their oonsent to the action proposed therein, sh~l be published once in a financial newspa~ or journal of national birculation published in or near the City of New York, New York. The City Clerk of the City shall also, on or before th-e publicati~n of such resolution and request, mail a copy thereof to each regis~ered owner at the address appearing on the bond registry books. ,--.., The actual ~~ceipt, ~ any bondholder of such resolution and request shall not aff~ct the validity of the proceedings for the -30- ~ I i ,..-.. """ '.-.... obtaining of such 40nsent. A certificate by said City Clerk, approved by resoluti~i' of the City Council, that said resolution and request has been pub jished and mailed as herein provided shall be conclusive as agains . all par"ties, and it shall not be open to any bondholder to show hat he failed to receive such resolution and consent. Each writt n consent shall be accompanied by proof of ownership of the 198 i Bonds for which such consent is given. Proof of ownership shall b i made in such manner as shall be prescribed by the resol ution propo tLng the acti,on. Any such written consen~ shall be binding upon the lder of the 1984 Bonds giving such consent and on any subsequent ho, ~er (whether or not such subsequent holder has notice thereof) unl~s such consent is revoked in writing by the holder giving such c~sent or by the subsequent holder. To be effec- tive, any revocation of COnseDt must be filed before the aCbption of the resolution accept~ng consents as hereinafter provided. After the h~llders of at least 66 2/3\ in aggregate princi- pal amount of the ~'984 Bonds then outstanding (exclusive of issuer-owned 1984 Bo,ds) shall have consented in writing, the City Council shall adopt ~." resolution accepting such consents and such resolution shall con . iitute coaplete evidence of the consent of bond- owners under this Re~lution. - (h) Publicai~on of C>>nsent. Notice specify ing the amend- ment, waiver or modi . tion t1)at has received the consent of bondow- ners as required by . is section shall be published once in a finan- cial newspaper or jo~nal of national circulation publ~shed in or near, the City of New ~rk, New York, not less than sixty days follow- ing the final actioniln th_ proceedings for the obtaining of such consent. said notic. is only for the information of bondowners and failure to publish su~ notice or aqy defect therein shall not affect the validity of the ~ceedings theretofore taken in the obtaining of such consent. S~IO. 25. 1984 Bond Por.a. Subject to the provisions of the Resolution, t'~ form of the 1984 Bonds and the Registrar's Certificate of Authelritication shall be substantially as follows: ~ -31- I I ! ,...., -... ,<""''''''''''""",,, [B~ND PORIIJ "ITBD S$Hs OP AllBRIm !' SDTB ~F CALlPO.xA, coDJr.f!r 01' ORASE . ' CITY OP AlWlBIB WAT~ RBVEIIU* BORD, 1984 8BRIP3 No. R-_ $_,000 ---, The CITY OF ~BIK,a municipal corporation situated in the County of orange~'i.,.iState o~""" California (the "City"), FQ.R VALUE REClIVED, hereby pro . ses to ~y, sOlely from the Water Enterprise Fund, as hereinafter, rovided, to or registered assigns, on April, 1, _, upon ,esentatiQn and surrender of this bond, the sum of ' DOLLARS, . i th intetest thereon at the rate of , per annum, payable semia~uallY on the first day of April and October of each and every year, . nmencing April 1, 1985, until the City's obli- gation with respect t . the payment of such principal sum shall be discharged. Such in_rest sh.ll be payable from the most recent interest payment dateinext pre~ding the date hereof to which inter- est has been paid, unfLiess the flate hereof is an April 1 or October 1 to which interest hasllbeen paicli, in which case from the date hereof, or unless the date he~~of is prior to March 15, 1985, in which case from October l, 1984,' ,or unless the date hereof is between a record date and the next suc~eding interest payment date, in which case f rom such interest paw.ent date; provided, further, that if, as shown by the records of the! Registrar, interest on the 1984 Bonds shall be in defaul t, 1984 Bond~ issued in exchange for 1984 Bonds surrendered for transfer or excha~ge shall bear interest from the interest pay_ ment date to which int:erest has been paid in full on the 1984 Bonds surrendered or if no interest has been paid, October l, 1984. The terms an~ provisions of this bond and definitions of certain terms used hefein may be continued on the reverse side of this bond and such co~tinued terms and provisions and definitions shall f or all purposes have the same effect as though fully set forth on the front of the bOnd. ~his bond s~all be negotiable, subject with respect to transfer to the provi~lons for registration set forth on the reverse hereof and in the Resolution. It is hereby,certified and recited that any and all acts, conditions and thin~$ required,to exist, to happen and to be -32- I I I -, I -.., performed precedent, to and in the incurring of the indebtedness evidenced by this bo~, ~ and in issuance of this bond exist, have hap- pened, and have be .. performed in due time, form and manner as requi red by the Cons. ~ tution and laws of the State of California and the City Charter and j that this bond, together with all other indebt- edness of the City ~~, taining to the City I s water system, is within every debt and other ~d.mit prescribed ~ the Constitution and laws of the State of Califor~ia and the City Charter. This bond Sl_ll not ~e entitled to any benefit under the Resolution or be val ~ or become obligatory for any purpos~ until this note shall hav . been authenticated by the execution by the Registrar of the Reg$trar's Certificate of Authentication hereon. 1M WITNESS "BRBOP, the City of Anaheim has caused this bond to be signed by j~e Mayor and the City Treasurer of the City ~ their facsimile signdtures, countersigned ~ the City Clerk of said City by her facsimilEt signature, and sealed with the corporate seal of the City, and has 1caused t~is bond to be dated October 1, 1984. "~ COI8ft'BRSIGIIBD: (SBAIJ City Clerk ~~ .. '~ I I Mayor City Treasurer -33- ,...-.., ~\ r ~ [FORM OF CERTI"ICATE OF AUTHENTICATION ON ALL BONDS] REGIS~.S CERTIFICATE OF AUTHENTICATION This bond i~, one of the Bonds delivered pursuant to the within-mentioned Resqlution. ' BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION Registrar By: Authorized Officer Date of Autbenticatiqn and, Registration: -34- I J ""......., ~ [REVEltSE OF BOND] Both princi~l of an4 interest on this bond are payable in lawful money of the ~ited Sta~es of America. 1'he principal on this bond and any premium iqpon the redemption thereof are payable at the /~ Securities Services d~vision of Bank of America National Trust and Savings Association iJri Los An~les or San Francisco, California, or, at the option of the ~~lder, at any other paying agent of the City in New York, New York. ,:Dnterest on this bond shall be payable ~ check or draft mailed to t~ registered owner on the registration records maintained by the Re~strar, qetermined as of the close of ~siness on the l5 th day of th.' calendar month iDmediately preceding an inter- est payment date (incl~ding the date on which the principal of a Bond is to be paid). This bond is! one of a duly authorized issue of bonds of the City designated .wai~r Revenue Bonds, 1984 SeriesR (the -l984 Bonds.), all of which! !have been issued pursuant to Section 1210 of the City Charter an;ordinance No. 2933 of the City Council, as amended (the "Ordinan, R), for the purpose of financing the mat of the acquisition and c nstructi~n of additions to and improvements of the Ci ty' s water syst., and the creation of said issue and the terms and' condi tions of the, 1984 Bonds are provided for ~ the resolution of the City Council apthorizin9 the 1984 Bonds adopted October 9, 1984, designated ResoJt1.Jtion No. 84~ _ (the "ResolutionR), and this reference incorporate~ the ResOlution and Section 1210 of the City Charter and the Ordi~nce, and by acceptance hereof the holder of this bond assents to ~id term,s and conditions. The 1984 bonds are hereinafter referred to as the "bonds.. The Resolution, is adopted under, and this bond, is issued under and, is to be construed in accordance with, the t:i. ty Charter, the Ordinance and the laws of the State of California. This bond an~, the interest hereon and any premium upon the redemption hereof are! ,p,ot a debt of the City, nor a legal or equita- ble pledge, charge, l~~n or encumbrance upon aqy of its property or upon any of its incqme, receipts, or revenues, except the Net Revenues (as defined !n the Resolution) of the City's water ~stem pledged to its payment~ and the principal of and the interest on this bond and any premium ~pon the redemption hereof are payable solely from the Net Revenues' of the City's water system pledged to its pay- ment and said City is not obligated to pay such principal, interest and premium except fr~ said Net Revenues. The Water Enterprise Fund is established under and pursuant to Section 1210 of the City Charter, the Ordinance and the Resol ution, and under' 'the provisions of the Resol ution the Revenues of the Ci ty' s water system are required to be deposi~ed to the credit of the Water Enterprise Fund and used only for the purposes authorized by the Resolution, including the payment of principal and interest of the bonds. ~~ -35- L ~ I I I I I I I t ,-." -... /-., By the term~,of Section 1210 of the City Charter and the Ordinance and by cov~~ant exptessed in the Resolution, the City is obligated to prescri., revise., and collect charges for the services and facilities of thwater ~stem of the City such as to provide revenues sufficient tq:~ the interest on and principal of the bonds as they become due a*a payable in addition to all other payments required for comPlia1~e with the Resolution and the necessary and reasonable maintena ce and operation costs of the City's water system, is prohibi te 'from iS$uing bonds having any priority with respect to payment fr~m the Revenues of the City's water system, and is subj ect to condi 1;ions wi th respect to any sale of said water system. In the manneir provide<i in the Resolution, any or all' of the obligations referred ~o in this paragraph and certain other obliga- tions mentioned in th~ Resolution may be waived with the consent of the holders of 66 2/3~ in aggregate principal amount of the outstand- ing bonds, exclusive of issuer-owned bonds. If this ~on . matures on or after April 1, 1995, it is recieemabl e in the 'r and subj ect to the terms and provisions, and wi th the effect, set iorth in the Resolution referred to on the face of this bond, at the pption of the City, on and after April 1, 1994, in whole at any time qr~ in part on any interest payment date. Notice of such redemption s~~l be m~led first-class, postage prepaid to the owner of record of: this bond as of the date of such notice, which shall be at least 30 a~ys' prior to the date fixed for redemption. Notice of such redem,,' tion shall also, at least 30 days prior to the date fixed for redemp,.ti.. on, be ~ ublished in a newspaper of general circulation in the Ci . of Anah<<Um and in a daily newspaper or finan- cial journal pUblis . d in or. near the Borough of Manhattan, New York,. Such redempt On shall occur at the following 'redemption prices, expressed as . percentage of the principal amount, together with accrued interest to the date of redemption: Reduapt:io" DamA RedeDWtioD Price April 1, April 1, April 1, April 1, 1994 1995 1996 1997 and Oct,per l, and Oct.t:>er 1, and Oct4t>er 1, and thet~after 1994 1995 1996 l03% 102 101 100 , t subject on The Bonds ate issuable in the form of registered Bonds without coupons in the. denominations of $5,000 or any integral multi- .~. pl e of $5,000. The ow"r of any Bond or Bonds may surrender the same (together with a writ~tn instrument of transfer satisfactory to the Registrar duly exec.ted by the registered owner or his duly -36- "....." f ~ c..-..., authorized attorney).t the Securities Services Division of Bank of America National Tr~st & Savings Association in San Francisco, California, as Regist~ar, in ~xchange for an equal aggregate princi- pal amount of re4~, stered Bonds ~f any other authorize~ denominations. Such ,_changes shall be in the manner, subject to the condi tions and upon; 'the paYJllent of the charges provided in the Resol ution. This bond i. transferable, as provided in the Resolution, only upon the books! ,of the Ci ty kept for that purpose at the above-mentioned Secur!~ies Services Division of the Registrar, ~ the registered owner her~qf inpetson, or ~ his duly authorized attor- ney, upon surrender qf this bond together with a written instrument of transf er satisfact'~ to the Registrar duly executed by the regis- tered owner or his ~1 authori~ed attorney, and thereupon a new reg- istered bond or bonds! ~f this series, without coupons and in the same aggregate principal ..ount, s~all be issued to the transferee in exchange therefor as ;provided in the Resolution, and upon payment of the charges therein E~escribed. The City and the paying agents of the City may deem an~treat' the person in whose name this bond is registered as the ab~lute owner hereof for the purpose of receiving payment of, or on acqaunt of, the principal and interest due hereon and for all other purposes. SBCrIOR 26. . Teaporatt 1984 Bonds. Any 1984 Bonds may be ini tially issued in t;\$1porary form exchangeable for definitive 1984 Bonds. The temporary 1984 Bonds may be printed, lithographed or typewritten, shall bel of such denominations as may be determined ~ the Ci ty , shall be w i~hout coupons and may contain such reference to any of the provision$ Qf this Resolution as may be appropriate. Every temporary 1984 ~nd shall be executed and sealed by the City and authenticated by~he Registrar in substantially the same manner as provided in Section 7 hereof. If the City issues temporary 1984 Bonds it will executel and furnish definitive Bonds without del~ and thereupon the tempora~ 1984 Bonds may be surrendered for cancella- tion at the office of the Treasurer, and the Treasurer shall deliver in exchange for such temporary 1984 Bonds an equal aggregate princi- pal amount of definit1~e 1984 Bonds of the same interest rates and maturities. Until so exchange,d, the temporary 1984 Bonds shall be entitled to the same benefits under this Resolution as definitive 1984 Bonds issued hereunder. SBCl'IOR 27. Resolution Constitutes Contract. The pro- visions ~f this Resolution shall constitute a contract between the City and the bondowne~s and the provisions hereof shall be enforce- able by any bondowner'for the equal benefit and protection of all .~ bondowners similarly situated by mandamus, accounting, mandatory injunction or any otber suit, action or proceeding at law or in equi ty that is now or may hereafter be authorized under the laws of -37- i j I I I ~, r .~ the State of CalifornILa in any court of canpetent jurisdiction. Said contract is made und.~ and is to be construed in accordance with the laws of the State of!talifornla. No remedy c ~ferred pereby upon any bondholder is intended to be exclusive of a ~ other Jtemedy, but each such remedy is cumula- tive and in addition p every Other remedy and may be exercised with- out exhausting and w ~hout regard to any other remedy conferred by the Charter, Ordi ,nce No. 2933 or any law of the State of California. No waiv t of any default or breach of duty or contract by any bondholder sh 1 affect any subsequent default or breach of duty or contract or ,l1al1 impcUr any rights or remedies on said sub- sequent default or br",ch. No delay or anission of any bondholder to exercise any right o~ power accruing upon any default shall impair any such right or pow.~ or shall be construed as a waiver of any such defaul t or acquiesceIi~e therein. Every substantive right and every remedy conferred upon! the bondawners may be enforced and exercised as often as may be deemed expedient. In case any suit, action or pro- ceeding to enforce ai!~ right or exercise any remedy shall be brought or taken and the bon bolder shall prevail, said bondholder shall be entitled to receive~om the Water Enterprise Fund reimbursement for reasonable costs, exg.nses, outlays and attorneys' fees and should said suit, action o~ proceeding be abandoned, or be determined adversely to the bonqowners then, and in every such case, the City and the bondowners _hall be restored to their former positions, rights and remedies ~s if such suit, action or proceeding had not been brought or taken. Prior to th,e issu~nce of any 1984 Bonds under this Resolution, the te~..",$"., and conditions of this Resolution and the rights and obligatio., of the City and of the holders of the 1984 Bonds and coupons t ereunder may be modified or amended in any respect without the . nsent of any person, upon the adoption by the City of one or more s!upplemental resolutions. After the i.,uance and delivery of the 1984 Bonds, this Resolution shall be ilrirepealable, but shall be subject to modifica- tion to the extent anqin the manner provided in this Resolution, but to no greater extent ~d in no other manner. SECTION 28. Defeasance. Allor any portion of the 1984 Bonds shall no longer. ~e deemed to be outstanding and unpaid if the City shall have made ~equate provision for the payment, in accor- dance with the 1984 ~Qnds and this Resolution, of the principal, interest and premium" if any, to become due thereon at maturity or upon call and redempt~on prior to maturity. Such provision shall be ~ deemed to be adequate! if the City shall have irrevocably set aside, in a special trust fupd or account, moneys which when added to the interest earned or to be earned from the investment or deposit -38- L j f ,-.., /..~ thereof shall be su~icient to make said payments as they become due. Moneys so set ;~ide may be invested in any direct obligations of, or obligations g~ranteed by, the United States of America, i~ which the City may 1 wfully invest its money. , SBCTION 29. PutureContracts. Nothing herein contained shall be deemed to r.~trict ot prohibit the City from making con- tracts or creating bo d or o~er indebtedness payable from the gen- eral fund of the Ci t or front taxes or any source other than the Revenues of the Ente prise, and from and after the sale of the 1984 Bonds the general fu a of the City shall not include the Revenues of the Enterprise and n contract or other obligation payable from the general fund of the ity shall be payable from the Revenues of the Enterprise, except a. providea herein. SBC.rION 30. i ,Severability. If any provision, or any por- tion thereof, cont~ned in this Resolution, or the application thereof to any person br circUDastance is held to be unconstitutional, invalid or unenforce~~le" the remainder of this Resolution and the application of any S~~,~,h proViS,ion, or portion thereof, to other per- sons or circumstance, shall be deemed severable and shall, not be affected thereby, and! this Resolution and the 1984 Bonds shall remain valid and the bondow~'rs shall retain all valid rights and benefits accorded to them und.r this Resolution, the City Charter and the Constitution and law$ of the $tate of California. SBC'l'IOR 31. SubstitJtes. The Mayor Pro-Tempore, any Deputy City Clerk, .~d any duly authorized substitute for the Treasurer, may act i, the place and stead of the Mayor, the City Clerk and the Treasui.r" respectively, in the perfor.mance of aqy and all things authorize., or provided for in this Resolution, including the signing of the 1 .84 Bonds. ,~ -39- . I ,~. ~. (.-, ~ , SBC'.rIOII 32. EffectiYe Date. This Resolution shall take effect immediately. ADOP'fSO, SI~ AIID 'APPROVBD this ninth day of October, 1984 . [ SEAL] Attest: ~~a~~~ ~ec/{J;:.u- ~ i City Clerk -40- II 1 ~ -. STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF ANAHEIM ) I, LEONORA N. SOHL, City Cler'k of the City of Anaheim, do hereby certify that the foregoing Resolution No. 84R-396 was introduced and adopted at a regular meeting provided by law, of he City Council of the City of Anaheim held on the 9th day of October, 1984~ by the following vote of the members thereof: ~\ AYES: COUNCIL MEMBERS: Kaywood, Bay, Overholt, Pickler and Roth NOES: COUNCIL MEMBmS: None ABSENT: COUNCIL MEMBERS: None AND I FURTHER certify that t~e Mayor of the City of Anaheim signed said Resolution No. 84R-396 on th, 9th day of October, 1984. IN WITNESS WHEREOF, I have h~reunto set my hand and affixed the seal Of. the City of Anaheim this 9th daylof October, 1984. '_ (SEAL) I, LEOWORA. N., SOHL, City Cle~k. of the City of Anaheim, do hereby certify that the foregoing is the origina of Resolution No. 84R-396 duly passed and adopted by the Anaheim City ouncil on October 9, 1984. ~'L 1t~ CITY CLERK "