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72R-083 .-.... ......... .,~ CITY OP ANAHEIM RESOLUTION NO. _Z2B._:-_a~ RESOLUTION OF THE CD'Y COUNCIL OF THE CITY OF ANAHEIM, CALIFORNIA, AUTHORIZING THE ISSUANCE OF $8,000,000 ELECTRIC REVENUE BONDS OP SAID CITY AND PROVIDING THE TERMS AND CONDITIONS FOR tHE ISSUANCE OF SAID BONDS WHEREAS, the City of Anaheim is a City organized and existing under a Charter duly and regularly adopted pursuant to the provisions of the Constitution of the State of CalifOrnia; and WHEREAS, pursuant to Section 1210 of said Charter, the City of Anaheim acting by and through its City Council, is authorized to issue, on behalf of said City, revenue bonds for electric purposes; and WHEREAS, said Section 1210, Revenue Bonds, of said City Charter, states as fonows: "Bonds which are payable only out of such revenues as may be specified in such bonds may be issued when the City Council by ordinance shall have established a procedure for the issuance of such bonds. Such bonds, payable only out of revenues, shall not constitute an indebtedness or general obligation of the City. No such bonds payable out o~ revenues shall be issued without the assent of a majority of the voters voting upon the proposition for issuing the same at an election at which such proposition shall have been duly submitted to the qualified electors of the City. "It shall be competent for the City to make contracts and covenants for the benefit of the holders of any such bonds payable only from revenues and which shall not constitute a general obligation of the City for the establishment of a fund or funds, for the maintaining of adequate rates or charges, for restrictions upon further indebtedness payable out of the same fund or revenues, for restrictions upon transfer out of such fund, and other appropriate covenants. Money placed in any such special fund for the payment of principal and/or interest on any issue of such bonds or to assure the application thereof to a specific purpose shall not be expended for any other purpose whatever except for the purpose for which such special fund was established and shall be deemed segregated from all other funds of the City and reserved exclusively for the purpose for which such special fund was established until the purpose of its establishment shall have been fully accomplished." WHEREAS, pursuant to said Section 1210 of said Charter, and Ordinance No. 2980 of the City Council of the City of Anaheim, a special municipal election was held in said City on January 18, 1972 for the purpose of submitting to the qualified voters of said City the proposition of issuing electric revenue bonds in the amount of $8,000,000, pursuant to the provisions of said Section 1210, for the following purposes, to wit: For the acquisition, construction and financing of additions, enlargements and improvements of the electric system of said City, including all engineering, financing and legal fees, costs of the issuance of said revenue bonds, bond reserve funds and other costs, incidental to or connected with such acquisition, construction and financing. WHEREAS, said proposition was approved by the votes of more than a majority of all the voters voting on said proposition at said special municipal election; and WHEREAS, Ordinance No. 2980 of the City Council of the City of Anaheim incorporating certain sections of the Revenue Bond Act of 1941 (Chapter 6, Part 1, Division 2, Title 5 of the Government Code of the State of California) establishes a procedure for the issuance of such bonds as provided for .,~ in said Section 1210; and 1 ~, ~. ~ WHEREAS, said City is now. authorized to issue said bonds by this Resolution and pursuant to the procedures set forth in said Ordinance No. 2980, and as provided in said Section 1210; and WHEREAS, this Oty Council deems it necessary to issue and sell $8,000,000 principal amount of said bonds at this time, designated "Electric Revenue Bonds, Issue of 1972"; NOW, THEREFORE, the Council of the City of Anaheim, California, DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER as follows: Section 1. DelnltiOI& As used in this resolution the following terms shall have the following meanings: (a) "aty" means the City of Anaheim, California. (b) "Oty Council" or "Council" means the City Council of said City. (c) "Treasmer" means the City Treasurer of said City. (d) "Revenue Bond Law" means the Revenue Bond Law of 1941 as cited. in the recitals hereof. (e) ''The bonds" or "said bonds" means the bonds authorized by this resolution. (f) "Enterprise" means the following: The entire electric system of the City of Anaheim, including all improvements and extensions later constructed or acquired (sometimes hereinafter referred to as "Electric System") . (g) "Gross revenues" or "Revenues" of the enterprise means rates, fees and charges for providing electric service to persons and real property and all other fees, rents and charges and other income derived by the City, from the ownership, operation, use or services of the enterprise. (h) "Maintenance and operation expenses" of the enterprise means the reasonable and necessary current expenses of maintaining, repairing and operating the enterprise, including City administrative expenses directly attributable to electric system functions, but excluding depreciation and amortization, all computed in accordance with sound accounting principles and consistant with existing accounting practices of the City. (i) "Net revenues" of the enterprise means the anlount of the gross revenues of the enterprise less the maintenance and operation expenses of the enterprise. (j) "Maximum annual debt service" shall be the maximum sum obtained for any fiscal year of computation, or any fiscal year thereafter by totaling the following for such fiscal year: ( 1) The principal amount of all outstanding serial bonds of this issue and any parity serial bonds payable in such fiscal year; (2) The minimum mandatory annual sinking fund payments, if required; and (3) The interest which would be due during such fiscal year on the aggregate principal amount of bonds which would be outstanding in such fiscal year if the bonds are retired as scheduled, but deducting and excluding from such aggregate amount the amount of bonds already ~tired. (k) "Parity bonds" means revenue bonds, revenue notes or other similar evidences of indebtedness issued for the acquisition, construction and financing of extensions of, additions to, repairs and replacements to, renewals of, and improvements of the enterprise, payable out of the revenues derived from the enterprise and which, as provided in this resolution, rank on a parity with the bonds of this issue. 2 ~ - .~ (I) "Subsequent resolution" means any resolution of issuance for any parity bonds. (m) "Fiscal year" means the year period beginning on July 1 and ending on the next following June 30. (n) "Authorized investments" means direct obligations of or obligations guaranteed by the United States of America, or Certificates of Deposit of recognized banks or trust companies fully secured by direct obligations of or obligations guaranteed by the United States of America. Section 2. Equality of Bonds, Pledge of Revenues. Pursuant to said Section 1210 of the City Charter, said Ordinance No. 2980 and this resolution, the bonds shall be equally secured by a pledge, charge and lien upon the gross revenues of the enterprise without priority for number, date of bonds, date of sale, date of execution, or date of delivery, and the payment of the interest on and principal of said bonds and any premiums upon the redemption of any thereof shall be and are secured by an exclusive pledge, charge and lien upon the gross revenues of the enterprise, and all of the gross revenues of the enterprise are hereby pledged, charged and assigned for the security of said bonds, and such gross revenues and any interest earned on the gross revenues shall constitute a trust fund for the security and payment of the interest on and principal of said outstanding bonds and so long as any of the bonds or interest thereon are unpaid said gross revenues and interest thereon shall not be used for any other purpose, except as permitted by this resolution and any subsequent resolution, and shall be held in trust for the benefit of the bond- holders and shall be applied pursuant to this resolution, or to this resolution as modified pursuant to provisions herein, and any subsequent resolution. Nothing in this resolution shall preclude: (a) the redemption prior to maturity of any bonds subject to call and redemption and payment of said bonds from proceeds of refunding bonds issued under said Section 1210 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 berein, of additional indebtedness evidenced by revenue bonds, revenue notes or any other evidences of indebtedness payable out of the revenues of the enterprise and ranking on a parity with said bonds. Any bond for the payment and discharge of which upon or prior to maturity, or upon redemption prior to matwity, provision has been made through the setting apart in the Electric System Revenue Bond and Interest Fund or the Redemption Fund or in a special trust fund or account created pursuant to this resolution to insure the payment or redemption thereof (as the case may be), of money sufficient for the purpose, or through the irrevocable segregation for that purpose in some fund or trust account of moneys sufficient therefor, shall be deemed to be no longer outstanding and unpaid within the meaning of any provision of this resolution. Additionally, the bonds shall be deemed to be no longer outstanding and unpaid within the meaning of any provision of this resolution, if the City shall have given to the Fiscal Agent: (a) irrevocable instructions to publish a notice of redemption (if any bonds are to be redeemed); and (b) authorized investments maturing and bearing interest at times and in amounts sufficient to pay when due the principal and interest and redemption premium (if any) to become due on all the bonds. Section 3. Amount, Issuance, Purpose aod Nature of Bonds. Under and pursuant to said Section 1210, revenue bonds of the City in the amount of $8,000,000 shall be issued for the purposes stated in the recitals hereof. Said revenue bonds shall be and are special obligations of the Oty and shall be and are secured by a pledge of and lien upon, and shall be and are a charge upon, and shall be and are payable as to the principal thereof and interest thereon and any premiums upon the redemption of any thereof solely from, the gross revenues of the enterprise, such gross revenues being hereby pledged, charged and assigned for the security of the Bonds. Section 4. No GeDeraI City Liability. The general fund of the City is not liable for the payment of the bonds or their interest, nor is the credit or taxing power of the City pledged for the payment of .....-.... 3 .,-. ,~ ~. the bonds or their interest. The holder of the bonds or coupons shall not compel the exercise of the taxing power by the City or the forfeiture of any of its property. The principal of and interest on the bonds and premiums upon the redemption of any thereof are not a debt of the City nor a legal or equitable pledge, charge, lien, or encumbrance, upon any of its property, or upon any of its income, receipts, or revenues, except the gross revenues of the enterprise which are, under the terms of this resolution and said Revenue Bond Law, pledged to the payment of said bonds and interest. Section 5. n.enp6OD 01 Bonds. The bonds shall be in the principal sum of $8,000,000. The bonds shall all be in the denomination of $5,000, and shall be 1600 in number, numbered 1 to 1600, inclusive. The bonds shall be designated ELECTRIC REVENUE BONDS, ISSUE OF 1972, shall be dated April 1, 1972, and shall be payable in consecutive numerical order on July 1 in each year of maturity in the amounts for each of the several years as follows: Yell' == YIR ....... Amomd $400,000 400,000 425,000 475,000 500,000 525,000 550,000 600,000 625,000 675,000 1973 __________________________ __ _ ___ 1974__________________..____.____._ _ 1975 _____._ __ ___.___.._____________ 1976_______________________________ 1977 _.________....______________.__ 1978________.__...________.....___. 1979.______________ __ _ ______________ 1980.________._______________.______ 1981______.___.____._._.._._____.___ 1982______ ________________ __________ $200,000 225,000 250,000 250,000 275,000 275,000 300,000 325,000 350,000 375,000 1983 ____________.___________________ 1984. __________.___________________. 1985________________________________ 1986______________________________ 1987 ___.___._____________________.__ 1988_______________________________ 1989 ________________________________ 1990______.____________ ____.________ 1991________________________________ 1992_____________ _ __________________ Section 6. ...... Said bonds shall bear interest at a rate or rates to be hereafter fixed by resolution or resolutions, but not to exceed seven percent (7 %) per annum, payable on July 1, 1972 and semiannually thereafter on the first days of January and July of each year. Each bond shall bear interest until the principal sum thereof has been paid, provided, however, that if at the maturity. date of any bond, or if the same is redeemable and has been duly called for redemption, funds are available for the payment or redemption thereof in full accordance with the terms of this resolution, said bonds shall then cease to bear interest. Said bonds and the interest thereon shall be payable in lawful money of the United States of America at the office of the Treasurer of the City of Anaheim, California, or, at the option of the holder, at the Corporate Agency Division of Bank of America National Trust and Savings Association, in Los Angeles, California., or at any paying agent of the City in San Francisco, California, Chicago, Illinois, or in New York, New York. At the present time the paying agents of the City are Bank of America National Trust and Savings Association, San Francisco, California, Continental Dlinois National Bank: and Trust Company of Chicago, Chicago, Dlinois and The Chase Manhattan Bank N.A., New York, New York. The City covenants that while the bonds are outstanding it shall maintain paying agents in each of the aforesaid cities. Section 7. EKeeutioa of Roads. The Mayor of the City and the Treasurer are hereby authorized and directed to sign all of the bonds by their printed, lithographed or engraved facsimile signatures, and the Gty Clerk of the Gty is hereby authorized and directed to countersign the bonds and to affix thereto the corporate seal of the Oty, and the Treasurer is hereby authorized and directed to sign the interest coupons of the bonds by his printed, lithographed or engraved facsimile signature. Section 8. ReptntioD. The Bonds may be registered either as to principal only or as to both principal and interest, and any registered bond may be discharged from registration in the manner and with the effect set forth in the provisions for registration contained in the form of bond set forth herein. Section 9. Redemption of DoDds. The bonds maturing on or prior to July 1, 1982, are not subject to call or redemption prior to maturity. The bonds maturing on or after July 1, 1983, may be called ~, 4 ....- ..--. ~ before matwity and redeemed, at the option of the City, on July 1, 1980, or on any interest payment date thereafter prior to maturity, at a redemption price for each redeemable Bond equal to 1 OO~ % of the principal amount thereof plus ~ % of such principal amount for each whole twelve months' period and for any remaining fraction of a twelve months' period from the redemption date to the maturity date of such Bond, but the redemption price, including premium payable at any time upon redemption, shall not exceed 104% of such principal amount. All or any of tbe bonds subject to call may be called for redemption at any one time. If less than all of the bonds are redeemed at anyone time, such bonds shall be redeemed by complete maturity or maturities. The interest payment date on which bonds which are called are to be presented for redemption is herein sometimes called "redemption date." (a) Notice of Redemption. Notice of the intended redemption shall be published by one insertion in a newspaper of general circulation in the County of Los Angeles, California, and in a financial newspaper or journal of national circulation published in the Oty of New York, New York, said publications to be at least 30 days but not more than 60 days prior to the redemption date. The notice of redemption shall (a) state the redemption date; (b) state the. redemption price; (c) state the numbers and date of maturity of the bonds to be redeemed, provided, that whenever any call includes all of the outstanding bonds subject to call the numbers of the bonds. need not be stated; (d) require that such bonds be surrendered with all interest coupons maturing subsequent to the redemption date (except that no coupons need be surrendered on bonds registered as to both principal and interest) at the office of the Treasurer of the City of Anaheim, California, or, at the option of the holder, at the Corporate Agency Division of Bank of America National Trust and Savings Association in Los Angeles, California, at any paying agent of the City of San Francisco, California, Chicago, Dlinois, or in New York, New York; and (e) give notice that further interest on such bonds will not accrue after the designated. redemption date. The Fiscal Agent shall, on or before the date of publication of said notice of redemption, mail a similar notice postage prepaid to any person, firm or corporation that originally purchased any of said bonds from the City. If any of the bonds designated for redemption shall be registered so as to be payable otherwise than to bearer, the Fiscal Agent shall, on or before the date of publication of said notice of redemption, mail a similar notice postage prepaid to the respective registered owners thereof at the addresses appearing on the bond registry book. The actual receipt by the holder of any bond of notice of such redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect the validity of the proceeA;nSfl for the redemption of such bonds or the cessation of interest on the redemption date. The notice or notices required by this section shall be given by the Fiscal Agent. A certificate by the Fiscal Agent that notice of call and redemption has been given to original purchasers and to holders of registered bonds as herein provided shall be conclusive as against all parties, and no bondholder whose bond or registered bond is called for redemption may object thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that he failed to actually receive such notice of call and redemption. (b) Redemption Fund. Prior to the redemption date there shall be established by the Fiscal Agent a redemption fund to be described or kno",-n as Electric Revenue Bonds, Issue of 1972, Redemption Fund (herein sometimes referred to as "Redemption Fund") , and prior to the redemption date there shall be set aside in said Redemption Fund moneys available for the purpose and sufficient to redeem, at the premiums payable as in this resolution provided, the bonds designated in such notice of redemption. Said moneys must be set aside in said fund solely for that purpose and shall be applied on or after the redemption date to payment (principal and premium) of the bonds to be redeemed upon presentation and surrender of such bonds and, except as to registered bonds, all interest coupons maturing after the redemption date, and shall be used only for that purpose. Any ..,,---,. 5 -........ ........., .~.., interest coupon due on or prior to the redemption date shall be paid from the Electric System Revenue Bond and Interest Fund upon presentation and surrender thereof. Any interest due on or prior to the redemption date upon bonds registered as to both principal and interest shall be paid from said Electric System Revenue Bond and Interest Fund. Each bond presented, if unregistered, or if registered as to principal only, must have attached thereto or presented therewith all interest coupons maturing after the redemption date. H, after all of the bonds have been redeemed and cancelled or paid and cancened, there are moneys remaining in said Redemption Fund, said moneys shall be transferred to the Revenue Fund; provided, that if said moneys are part of the proceeds of refunding bonds said moneys shall be transferred to the fund or account created for the payment of principal of and interest on such refunding bonds. (c) Effect of the Notice of Redemption. When notice of redemption has been given, and when the amount necessary for the redemption of the bonds called for redemption (principal and premium) is set aside for that purpose in the Redemption Fund, the bonds designated for redemption shall become due and payable on the redemption date, and upon presentation and surrender of said bonds and, except as to bonds registered as to both principal and interest, all interest coupons maturing after the redemption date, at the place specified in the notice of redemption, such bonds shall be redeemed and paid at said redemption price out of the Redemption Fund, and no interest will accme on such bonds called for redemption or on any interest coupon thereof after the redemption date specified in such notice, and the holders of said bonds so called for redemption after such redemption date shall look for the payment of such bonds and the premium thereon only to said Redemption Fund. All bonds redeemed and all interest coupons thereof shall be cancelled forthwith by the Fiscal Agent and shall not be reissued. All interest coupons pertaining to any redeemed bonds, which coupons have matured on or prior to the redemption date, shall continue to be payable to the respective holders thereof but without interest thereon. All unpaid interest payable at or prior to the redemption date upon bonds registered in such manner that the interest is payable only to the registered owners shall continue to be payable to the respective registered owners of such bonds, or their order, but without interest thereon. Section 10. Fiscal Agent. The City hereby appoints the Bank of America National Trost and Savings AssociatioD in Los Angeles, California, as the Fiscal Agent for the purpose of paying the principal of and interest on any of the bonds presented for payment at its Corporate Agency Division in Los Angeles, California, and for the purpose of performing all other duties assigned to or imposed upon the Fiscal Agent as in this resolution provided. The Fiscal Agent initially appointed and any successor thereof may be removed by the City and a successor or successors appointed; provided that each such successor shall be a bank or trust company doing business in and having an office in'the City of Los Angeles, State of California. Any such Fiscal Agent designated by the City shall continue to be the Fiscal Agent of the City for all of said purposes until the designation of a successor as such Fiscal Agent, and the City agrees that it will maintain a Fiscal Agent in said City of Los Angeles so long as any of said bonds or any parity bonds are outstanding and unpaid. The Fiscal Agent is hereby authorized and directed to withdraw from the funds and in the manner provided herein all sums required for the payment of the principal of and interest on the bonds presented for payment at the places herein provided at maturity, or on call and redemption or on purchase by the Fiscal Agent prior to maturity. The Fiscal Agent is hereby authorized to redeem the bonds and the interest coupons appertaining thereto when duly presented to it for payment at maturity, or on call and redemption or on purchase by the Fiscal Agent prior to maturity, and to cancel all bonds and coupons upon payment thereof and to return the same so cancelled to the Treasurer. The Fiscal Agent shall keep accurate records of all funds administered by it and of all bonds and coupons paid and discharged by it. The recitals of fact and all promises, covenants and agreements herein and in the bonds of said authorized issue contained shall be taken as statements, promises, covenants and agreements of the City, and the Fiscal Agent assumes no responsibility for the correctness of the same, and makes no 6 ~.. r ....... ..~ representations as to the validity or sufficiency of this resolution or of the bonds or coupons, and shall incur no responsibility in respect thereof, other than in connection with the duties or obligations herein or in the bond assigned to or imposed upon the Fiscal Agent. The Fiscal Agent shall be under no responsibility or duty with respect to the issuance of the bonds for value. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or default. Any Fiscal Agent appointed hereunder may resign at any time. Upon the merger, consolidation or other reorganization of any Fiscal Agent, the City shall appoint a new Fiscal Agent, which may be the corporation resulting from such reorganization. Section 11. Funds and AeeollJlts. Under and pursuant to said Section 1210 and said Ordinance No. 2980 there are created the following funds and accounts: ( 1) Electric Revenue Bonds, Issue of 1972, Electric Revenue Fund (herein sometimes referred to as "Electric Revenue Fund") held by the City Treasurer, in which are created the following accounts: (a) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Account (herein sometimes referred to as "Revenue Account"); (b) Electric Revenue Bonds, Issue of 1972, Electric System Maintenance and Operation Account (herein sometimes referred to as "M & 0 Account"); (c) Electric Revenue Bonds, Issue of 1972, Electric System Renewal and Replacement Account (herein sometimes referred to as "R and R Account"); (d) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Bond Construction Account (herein sometimes referred to as "Construction Account"); (2) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Bond and Interest Fund (herein sometimes referred to as "Bond Service Fund") held by the Fiscal Agent. (3) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Bond Reserve Fund (herein sometimes referred to as "Reserve Fund") held by the Fiscal Agent. Section 12. Disposition of Bond Proceeds. The proceeds of the sale of the bonds shall be received by the Treasurer and deposited as follows: ( 1) The accmed interest, if any, to the Fiscal Agent, to be placed in the Bond Service Fund. (2) The balance shall be placed in the Construction Account. The City may deposit money received from any source in the Construction Account. The moneys set aside and placed in the Construction Account shall remain therein until from time to time expended for the purposes for which the bonds were issued. Moneys in the Construction Account may be invested in any authorized investments, provided that the maturity or maturities thereof shall not be later than the date or dates on which moneys must be available to meet scheduled Construction Account expenditures. If any sum remains in said Construction Account after the full accomplishment of the purposes for which the bonds were issued, it shall be transferred to and placed in the Reserve Fund in such amounts as shall be necessary to bring the balance in the Reserve Fund to an amount equal to maximum annual debt service, and any sum remaining thereafter in the Construction Account shall be transferred to and placed into the Revenue Account. .~. Section 13. Reve:nue Account. The Treasurer shall deposit the gross revenues of the enterprise as received in the Revenue Account. The Treasurer shall transfer moneys from the Revenue Account to the funds and in the amounts and priority as follows. 7 .,-.,. .......... ~ Section 14. Bond Service.Fund. First, on or before the twentieth (20th) day of each calendar month so long as any of the bonds are outstanding the Treasurer shall set aside out of the Revenue Account into the Bond Service Fund held by the Fiscal Agent, the following amounts: ( 1) One-Sixth (1 j 6th) of the interest which will become due and payable on the outstanding bonds within the next ensuing six (6) months, except that for the first interest payment due after the issuance of the bonds the monthly sum transferred shall be the interest which will become due and payable less the amount of any accrued interest placed in the Bond Service Fund divided by the number of months remaining in said period; and (2) one-twelfth (ljI2th) of the principal amount which will mature and be payable on the out- standing serial bonds within the next ensuing twelve (12) months, except that for the first principal payment due after the issuance of the bonds the monthly sum transferred shall be the principal amount which will be due and payable divided by the number of months remaining in said period. In the event that the transfer or transfers for each calendar month as aforesaid are less than the amounts required for that month because of lack of funds or for any other reason the deficiency shall be added to and become a part of the transfer or transfers required for the following calendar month. In any event, such sums shall be transferred so that the full amount required to pay, as it becomes due, the interest on said bonds and any maturity or installment of principal on said bonds shall be set aside in the Bond Service Fund at least five (5) days prior to the date the installment of interest and/or principal becomes due. Any moneys required to be set aside, transferred to and placed in the Bond Service Fund may be prepaid in whole or in part by being earlier set aside, transferred to and placed in the Bond Service Fund, and in that event the monthly transfer which has been so prepaid need not be made at the time appointed therefor. In any event at least five (5) days prior to the due date of any installment of interest and/or principal on such bonds all sums required for the payment thereof must be in the Bond Service Fund. Moneys in the Bond Service Fund may be temporarily invested in any authorized. investments provided that the maturity or maturities thereof shall not be later than the date or dates on which money must be available in the Bond Service Fund. The bonds and the interest COUPODS shall recite that they are payable from the Revenue Account, but notwithstanding such recital shall be paid from the Bond Service Fund which is derived from the Revenue Account, or from a Redemption Fund established in accordance with Section 9 (b) of this Resolution. If after all of the bonds and any parity bonds have been redeemed and cancelled or paid and cancelled (or provision is made therefor) there are moneys remaining in the Bond Service Fund or Reserve Fund said moneys shall be transferred to the Revenue Account. Section 15. M a 0 AcCOUDt. Second, to the M & 0 Account, amounts sufficient for the payment of the maintenance and operation expenses of the electric system as said expenses become due and payable. Section 16. Resene FUDd. Thinlt on or before the twentieth (20th) day of each calendar month so long as any of the bonds are outstanding, the Treasurer shall set aside out of the Revenue Account into the Reserve Fund held by the Fiscal Agent an amount adequate to establish a balance in said Reserve Fund equal to maximum annual debt service, provided that the initial balance in said Reserve Fund shall be established by deposit of 1/6Oth of maximum annual debt service in each of the sixty calendar months next succeeding the issuance of the bonds and that during said sixty month period only said deposit shall be required, and provided further that in the event that the transfer or transfers for each calendar month during said 60 month period, and thereafter, are less than the amounts required for that month because of lack of funds, or any other reason, the deficiency shall be added to and become a part of the transfer or transfers required for the following calendar month. Moneys in the Reserve Fund shall be used solely for the purpose of paying the principal of and interest on the bonds or any parity bonds in the event that the moneys in the Bond Service Fund are ~. 8 "'11'"'" ,...... ...... ,............. insufficient therefor and for that purpose the Fiscal Agent shall withdraw and transfer moneys from the Reserve Fund to the Bond Service Fund. Whenever moneys are withdrawn from the Reserve Fund an equal amount of moneys shall be placed in the Reserve Fund by transfers from the first available moneys in the Revenue Account. Moneys in the Reserve Fund may be invested in any authorized investments provided that the maturity or maturities thereof shall not be later than five (5) years from the date of investment, and provided further that moneys in the Reserve Fund in excess of maximum annual debt service may be withdrawn from the Reserve Fund and transferred to the Revenue Account by the Fiscal Agent. Moneys in the Reserve Fund may be used to pay the principal of and/or interest on the last outstanding maturity of the bonds or any parity bonds. Section 17. R and R Account. Fourth, on or before the twentieth (20th) day of each calendar month as long as the bonds are outstanding the Treasurer shall set aside out of the Revenue Account into the R and R Account an amount equal to 1 % of the revenues received in the preceding calendar month until a balance is established, or reestablished therein equal to 2 % of the depreciated book value of the land, general plant and equipment which constitute a portion of the enterprise. The monies contained in said account shall be used for transfer to the Bond Service Fund to prevent default in payment of the principal and interest on the Bonds or any Additional Bonds, or for extraordinary maintenance and repairs, renewals and replacements to the system, but not for additions to and extensions of the system, provided, however, that when monies are used for such purpose or purposes, they shall be returned by the transfer of an additional 1 % of the revenues of the preceding calendar month com- mencing no later than 90 days after such use. If at any time the balance in the Rand R Fund exceeds the balance herein identified, said excess may be transferred to the Revenue Account. Section 18. Surplus. All monies remaining in the Revenue Account after all transfers required hereunder have been made, and all covenants contained herein have been duly performed may be: ( 1) invested in any authorized investments; (2) transferred to the Redemption Fund to be used for the redemption of any of said bonds which are subject to call and redemption prior to maturity or for the purchase from time to time in the open market of any outstanding bonds whether or not subject to call and redemption (irrespective of the maturity or number of such bonds) at prices and in such manner, either at public or private sale, or otherwise, as the City in its discretion may determine, but such purchase price (including brokerage and other charges, but excluding accrued interest) shall not exceed 104 % of the principal amount or the redemption price of the callable bonds on the next redemption date, whichever is less; or (3) used for any lawful purpose of the City. Section 19. Investments. Except as hereinbefore provided, obligations purchased as investments of moneys in any of the funds in which investments are authorized shall be deemed at all times to be a part of such funds and any income realized from such investments shall be credited to such funds and any losses resulting from such investments shall be charged to such funds. The Fiscal Agent or Treasurer, as the case may be, shall sell at the best price obtainable or present for redemption any obligations so purchased whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer from such funds. For the purpose of determining at any given time the balance in any such funds any such investments constituting a part of such funds shall be valued at the then estimated or appraised market value of such investments. Monies in all funds and accounts described in Section 11 hereof shall be invested only in authorized investments. The City shall not use any part of the proceeds of the Bonds directly or indirectly in such manner as, pursuant to Section 103 (d) of the Internal Revenue Code of the United States and to the Rules and Regulations of the Internal Revenue Service pertaining thereto, to affect the tax free status of the interest payable on the bonds. Section 20. Warranty. The City shall preserve and protect the security of the bonds and the rights of the bondholders and warrant and defend their rights against all claims and demands of all .......-... persons. 9 - ~ "~" Section 21. Cove_nts. So long as any of the bonds issued hereunder are outstanding" and unpaid, the City makes the following covenants with the bondholders under the provisions of Section 1210 of the City Charter (to be performed by the City or its proper officers, agents or employees) which covenants are necessary, convenient and desirable to secure the bonds and tend to make them more marketable; provided, however, that said covenants do not require the City to expand any funds other than the revenues received or receivable from the enterprise. Covenant 1. Pandual PaymeDt. The City covenants that it will duly and punctually payor cause to be paid the principal of and interest on every bond issued hereunder, together with the premium thereon, if any be payable, on the date, at the place and in the manner mentioned in the bonds and coupons and in accordance with this resolution, and that the payments into the Bond Service Fund and the Reserve Fund will be made, all in strict conformity with the terms of said bonds and of this resolution, and that it will faithfully observe and perform all of the conditions, covenants and requirements . of this resolution and all resolutions supplemental thereto and of the bonds issued hereunder, and that time of such payment and performance is of the essence of the City's contract with the bondholders. Covenant 2. Discharge CIIIbos. The City covenants that in order to fully preserve and protect the priority and security of the bonds the City shall pay from the Revenue Account and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the enterprise which~ if unpaid, may become a lien or charge upon the property or revenues of the enterprise prior or superior to the lien of the bonds and impair the security of the bonds. The City shall also pay from the Revenue Account all taxes and assessments or other governmental charges lawfully levied or assessed upon or in respect of the enterprise or upon any part thereof or upon any of the revenues therefrom. Covenant 3. Commence Acquisition and CoDStrudiOD. The City covenants that as soon as funds are available therefor, the City will commence the accomplishment of the purposes for which the bonds are issued and will continue the same to completion with all practicable dispatch and in an economical manner. Covenant 4. Operate Enterprise in Efticient and Eeoaomieal~. The City covenants and agrees to operate the enterprise in an efficient and economical manner and to operate, maintain and preserve the enterprise in good repair and working order. Covenant 5. AgaiDst Sale, EmiEId Domain, EDiting 8Dd Fatale AgreemeDfs, Compe8tlml. Except as provided herein, the City covenants that the enterprise shall not be" mortgaged or otherwise encumbered, sold, leased, pledged, any charge placed thereon, or disposed of as a whole or substantially as a whole unless such sale or other disposition be so arranged as to provide for sums adequate to provide for the immediate payment of the principal of and interest on and premiums, if any, due upon the call and redemption thereof, of the bonds, payment of which is required to be made out of the gross revenues of the enterprise. The City further covenants that the revenues from the enterprise or any other funds pledged or othelWise made available to secure payment of the principal of and interest on the bonds shall not be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed of or used except as authorized by the terms of this resolution. The City further covenants that it will not enter into any agreement which impairs the operation of the enterprise or any part of it necessary" to secure adequate revenues to pay the principal and interest of the bonds or which otherwise would impair the rights of the bondholders with respect to the revenues of the operation of the enterprise. If any substantial part of the enterprise is sold the payment therefor shall either be used for the acquisition and/or construction of improvements and extensions of the enterprise or shall be placed in the appropriate funds and shall be used to payor call and redeem said bonds and any parity bonds in the manner provided in this resolution and any subsequent resolution. The City covenants that any amounts received as awards as a result of the taking of all or any part of the enterprise by the lawful exercise of eminent domain, if and to the extent that such right can be ~ 10 ..... ,.-.., ..-..., ~ exercised against such property of the City, shall either be used for the acquisition and/or construction of improvements and extension of the enterprise or shall be placed in the appropriate funds and shall be used to pay or call and redeem said bonds and any parity bonds in the manner provided in this resolution and any subsequent resolution. The City will not sell, lease or otherwise encumber any part of the Electric System except properties or facilities no longer useful or necessary to its efficient and economical operation, and it wiD. not con- struct, acquire, operate, permit or (to the extent permitted by law) consent to any competing facilities, except the facilities to be acquired from the proceeds of the bondS, within the City limits. Any proceeds from the sale or disposition of any part of the Electric System shall be placed in the Revenue Account. Covenant 6. Insurance. The City covenants that it shall at all times maintain with responsible insurers all such insurance on the enterprise as is customarily maintained by simDar utilities systems with respect to works and properties of like character against accident to, loss of or damage to such works or properties and loss of revenues insurance. If any useful part of the enterprise shall be damaged or destroyed, such part shall be restored to use. The money collected from insurance against accident to or destruction of the physical enterprise shall be used for repairing or rebuilding the damaged or destroyed enterprise, and to the extent not so applied, shall be applied to the retirement of said out- standing and unredeemed bonds and any parity bonds issued for the enterprise and for such pwpose paid into the appropriate funds. The money collected from loss of revenues insurance shall be deposited in the Revenue Account. The City shall also maintain with responsible insurers workmen's compensation insurance. and insurance against public liability and property damage to the extent reasonably necessary to protect tho City and the bondholders. - . Notwithstanding the foregoing, the City may provide any insurance required by this Covenant 6 through a self insurance program. Covenant 7. Records and AccoUDts. The City covenants that it shall keep proper books of record and accounts of the enterprise, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the enterprise. Said books shall at all times be subject to the inspection of the holders of not less than 10% of the outstanding bonds or their representatives authorized in writing. The City covenants that it will cause the books and accounts of the enterprise to be audited annually by an independent certified public accountant or firm of certified public accountants and shall furnish a copy of the audit report to the Fiscal A~ent, and upon request, to any bondholder. Covenant 8. Collection of Charges. The City will permit no free use or services of, the Electric System. The City will pay promptly into the Electric System Revenue Account from the City's General Fund (or other adequate designated funds) for all City use and services of the Electric System. The City will not grant or establish within any class of service preferential or discriminatory rates, fees or charges for use and services of the Electric System. For the purposes of setting such rates, fees and charges, service located outside the city limits of the City of Anaheim may be considered as separate classes of service. The City covenants that it shall at all time during the period any of the bonds are outstanding maintain and enforce valid regulations for the payment of bills for electric service and that such regulations shall at all times during such period provide that the City shall discontinue electric service to any user whose electric bill has not been paid within the time fixed by said regulations. .....---.. Covenant 9. Rates and Charges. The City shall and hereby covenants that it shall prescribe, revise and collect such charges for the services and facilities of the enterprise which, after making allowances for contingencies and error in the estimates, shall be at least sufficient to pay the following amounts in the order set forth: 11 .......... (a) The interest on and principal payments of the outstanding bonds as they become due and payable; (b) All current expenses for the necessary and reasonable maintenance and operation expenses of the enterprise as said expenses become due and payable; (c) All payments required for compliance with this resolution including payments required to be made into the Reserve Fund and the R and R Account; (d) All payments required to meet any other obligations of the Oty which are charges, liens, encumbrances upon or payable from the revenues of the enterprise; and the charges shall be so fixed that the net revenues shall be at least equal to the sum of 1.25 times the amounts payable under <a). Covenant 10. No Pdority for AdIIItI.u_ BoadI. The City covenants that no Additional Bonds shall be iS8ucd pursuant to said Section 1210 or any law of the State of California having any priority in payment of principal or interest out of the revenue of the enterprise over the bonds hereby authorized to be issued and payable out of said revenues. Covenant 11. UDIitI.. Adt1G18111 DeIIt. AdditioDal Bonds (on a parity with this Issue of 1972) may be issued to finance or re-finance any repairs, improvements, enlargements or extensions of the enterprise and to refund any Bonds or Additional bonds tben outstanding, provided that tbe Oty covenants that, except for bonds issued to refund Bonds or Additicmal Bonds, no additional indebtedness evidenced by revenue bonds, revenue notes or any other evidences of indebtedness payable out of the revenues of the enterprise and ranking on a parity with these bonds shall be created or incurred unless: Fint: The City is not in default under the terms of this resolution. Second: The net revenues of the enterprise, calculated on sound accounting principles, as shown by the books of the City for each of the last two completed fiscal years prior to the adoption of the resolution of award of bids for such additional indebtedness as shown by an audit certificate or opinion of an independent certified public accountant or firm of certified public accountants employed by the City, plus, at the option of the City, any or all of the items hereinafter in this covenam designated (a), shall have amounted to at least 1.25 times the maximum annual debt service in any fiscal year thereafter on all indebtedness to be outstanding immediately subsequent to the incurring of such additional indebtedness. For said purposes, principal requirements shall be construed to include mandatory annual sinking fund installments for any series of Additional Bonds issued or to be issued as term bonds. For the purposes of this covenant, the gross revenues of the enterprise shall not include any sum transferred &om the Construction Fund under the provisions of this resolution. The items any or all of which may be added to such gross revenues for the purpose of applying the restriction contained in this covenant are the following: (a) An allowance for earnings arising from any increase in the charges made for service from the enterprise which has become effective prior to the incurring of such additional indebtedness but which, during all or any part of said last two completed fiscal years, was not in effect, in an amount equal to 95 % of the amount by which the gross revenues would have been increased if such increase in charges had been in effect during the whole of said last two completed fiscal years, as shown by the certificate or opinion of independent certified public accountant or firm of certified public accountants employed by the City. Section 22. Lost, Stole.., Destroyed or Mutilated Bonds. In the event that any bond or any interest coupon pertaining thereto is lost, stolen, destroyed or mutilated, the Qty will cause to be issued a new bond or coupon similar to the original to replace the same in such manner and upon 12 ~ ~ .,.... ..-- ~ ~" such reasonable terms and conditions, including the payment of costs and the posting of a surety bond if the Gty deems such surety bond necessary, as may from time to time be determined- and prescribed by resolution. The City may authorize such new bond or coupon or coupons to be sigauxl and authenticated in such manner as it determines in said resolution. Section 23. CanceUation of Bonds. All bonds and coupons surrendered to the Treasurer, the Fiscal Agent or any paying agent of the City for payment upon maturity or for redemption shall upon payment therefor be cancelled immediately. Any bonds purchased by the City as authorized herein together with all unpaid coupons pertaining thereto shall be cancelled forthwith and shall not be reissued. Section 24. Consent of Bondholders. The consents of bondholders provided for in this section shall relate solely to the amendment, waiver or modification of the covenants specified in Section 21 hereof and shall not be effective to waive or modify any other provisions of this resolution or any other proceedings for the issuance of the bonds. Any act relating to the amendment, waiver or modification of any of the said covenants consented to by bondholders holding 66~ % in aggregate principal amount of the outstanding bonds, exclusive of bonds, if any, owned by the aty, shall be binding upon" the holders of all of the bonds and interest coupons, whether such coupons be attached to bonds or detached therefrom, and shall not be deemed an infringement of any of the provisions of this resolution, whatever the character of such act may be, and may be done and performed as fully and freely as if expressly permitted by the terms of this resolution, and after such consent relating to such specified matters has been given, no bondholder or holder of any interest coupon, whether attached to a bond or detached therefrom, shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the City or any officer thereof from taking any action pursuant thereto. Bondholders may consent by affirmative vote at a bondholders' meeting or may consent in writing without a meeting, all as hereinafter provided. No such amendment, waiver or modification shall be made which will permit (a) a change in the maturity or term of redemption of the principal of any bond or any installment of interest thereon; (b) a reduction in the principal amount of or redemption price or redemption premium or rate of interest upon any bond without the consent of the holder of such bond; or ( c) a reduction of the percentage of the principal amount of bonds the vote or consent of which is required to effect any such amendment. (a) Calling Bondholders' Meeting. If the City shall desire to obtain any such consent it may call a meeting of bondholders, by resolution, for the purpose of considering the action, the consent to which is desired. (b) Notice of Meeting. Notice specifying the purpose, place, date and hour of such meeting shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New York, not less than sixty (60) days and not more than ninety (90) days prior to the date fixed for the meeting. Such notice shall set forth the nature of the proposed action, consent to which is desired. If any of the bonds shall be so registered as to be payable otherwise than to bearer, the City Oerk of the City shall, on or before the first publication of such notice, mail a similar notice, postage prepaid, to the respective registered owners thereof at their addresses appearing on the bond registry books. The place, date and hour of holding such meeting and the date or dates of publishing and mailing such notice shall be determined by the City, in its discretion. The actual receipt by any bondholder of notice of any such meeting shall not be a condition precedent to the holding of such meeting, and failure to receive such notice shall not aftect the validity of the proceedings thereat. A certificate by said City Clerk, approved by resolution of the City Council that the meeting has been called and that notice thereof has been given as .,"-'" 13 - ..- ....... ~,.. herein provided shall be conclusive as against all parties and it shall not be open to any bond- holder to show that he failed to receive notice of such meeting. (c) Voting Qualifications. Any bondholder may, prior to any such meeting, deliver his bond or bonds to any agency designated by the City for the purpose, and shall thereupon be entitled to receive an appropriate receipt for the bond or bonds so deposited, calling for the redelivery of such bond or bonds at any time after the meeting. The Treasurer shall prepare and deliver to the chairman of the meeting a list of the names and addresses of the registered owners of bonds, with a statement of the maturities and serial numbers of the bonds held and deposited by each of such bondholders, and no bondholder shall be entitled to vote at such meeting unless his name appears upon such list or unless he shall present his bond or bonds at the meeting or a certificate of deposit thereof, satisfactory to the Oty, executed by a bank or trust company. No bondholders shall be permitted to vote with respect to a larger aggregate principal amount of bonds than is set against his name on such list, unless he shall produce the bonds upon which he desires to vote, or a certificate of deposit thereof as above provided. (d) Issuer-owned Bonds. The City covenants that it will present at the meeting a certifi.cate, signed and verified by one member of the City Council and by the Treasurer stating the maturities and serial numbers of all bonds owned by, or held for account of, the aty, directly or indirectly. No person shall be permitted at the meeting to vote or consent with respect to any bond appearing upon sudl certificate, or any bond which it shall be established at or prior to the meeting is owned by the City, directly or indirectly, and no such bond (in this resolution referred to as "issuer-owned bonds") shall be counted in determining whether a quorum is present at the meeting. (e) Quorum and Procedure. A representation of at least 66~ % in aggregate principal amount of the bonds then outstanding (exclusive of issuer-owned bonds) shall be necessary to constitute a quorum at any meeting of bondholders, but less than a quorum may adjourn the meeting from time to time, and the meeting may be held as so adjourned without further notice, whether such adjournment shall have been had by a quorum or by less than a quorum. The City shall, by an instrument in writing, appoint a temporary chairman of the meeting, and the meeting shall be organized by the election of a permanent chairman and a secretary. At any meeting each bondholder shall be entitled to one vote for every $5,000 principal amount of bonds with respect to which he shall be entitled to vote as aforesaid, and such vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The City, by its duly authorized representative, may attend any meeting of the bondholders, but shall not be required to do so. (f) Vote Required. At any such meeting held as aforesaid there shall be 6Ubmitted for the consideration and action of the bondholders a statement of proposed action, consent to which is desired, and if such action shall be consented to and approved by bondholders holding at least 66% % in aggregate amount of the bonds then outstanding (exclusive of issuer-owned bonds) the chairman and secretary of the meeting shall so certify in writing to the City, and such certificate shall constitute complete evidence of consent of bondholders under the provisions of this resolution. A certificate signed and verified by the chairman and the secretary of any such meeting shall be conclusive evidence and the only competent evidence of matters stated in such certificate relating to proceedings taken at such meeting. (g) Written Consent of Bondholders. If the City shall desire to obtain any such consent in writing, without a meeting of bondholders, the City Council may, by resolution, propose the action, to which consent is desired. A copy of such resolution, together with a request to bondholders for their consent to the action proposed therein, shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New York. H any of the bonds shall be so registered as to be payable otherwise than to bearer, the Qty Clerk of the City shall, on or before the publication of such resolution and request, mail a copy thereof to each registered owner at the address appearing on the bond registry books. "" Ii; ~ 14 ........ ~ .~ The actual receipt by any bondholder of such resolution and request shall not affect the validity of the proceedings for the obtaining of such consent. A certificate by said City Oerk, approved by resolution of the City Council, that said resolution and request has been published and mailed as herein provided shall be conclusive as against all parties, and it shall not be open to any bondholder to show that he failed to receive such resolution and consent. Each written consent shall be accompanied by proof of ownership of the bonds for which such consent is given. Proof of ownership shall be made in such manner as shall be prescribed by the resolution proposing the action. Any such written consent shall be binding upon the holder of the bonds giving such consent and on any subsequent holder (whether or not such subsequent holder has notice thereof) unless such consent is revoked in writing by the holder giving such consent or by the subsequent holder. To be effective, any revocation of consent must be filed before the adoption of the resolution accepting consents as hereinafter provided. After the holders of at least 66~ % in aggregate principal amount of the bonds then outstand~ ing (exclusive of issuer-owned bonds) shall have consented in writing, the City Council shall adopt a resolution accepting such consents and such resolution shall constitute complete evidence of the consent of bondholders under this resolution. (h) Publication of Consent. Notice specifying the amendment, waiver or modification that has received the consent of bondholders as required by this section shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New York, not less than sixty (60) days following the final action in the proceedings for the obtaining of such consent. Said notice is only for the information of bondholders and failure to publish such notice or any defect therein shall not affect the validity of the proceedings theretofore taken in the obtaining of such consent. Section 25. Bond and Coupon Forms. Said bonds shall be payable to bearer, shall be issued in negotiable from, and shall be negotiable, and the form of said bonds and interest coupons thereof shall be substantially as follows: UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF ANAHEIM ELECTRIC REVENUE BOND, ISSUE OF 1972 No. _ _ _____ _____ _ _ _______ _ ___ _ __. _ ______ $5,000 THE CITY OF ANAHEIM, a municipal corporation situated in the County of Orange, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from the Electric System Revenue. Account, as hereinafter provided, to the bearer, on July 1, ---_un' upon presentation and surrender of this bond, the sum of FIVE THOUSAND DOLLARS, with interest thereon at the rate of ___Un_ % per annum, payable on July 1, 1972 and semiannually thereafter on the first days of January and July of each and every year from the date hereof until this bond is paid, upon presentation and surrender of the respective interest coupons hereto attached; provided, however, that if at the maturity date of this bond or, if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption, funds are available for the payment or redemption thereof, as provided in the resolution hereinafter mentioned, this bond shall then cease to bear interest. Both principal and interest are payable in lawful money of the United States of America, at the office of the Treasurer of the Oty of Anaheim in Anaheim, California, or, at the option of the holder, at the Corporate Agency Division of Bank of America National Trust and Savings Association in Los Angeles, California or at any paying agent of the City in San Francisco, California, Chicago, Illinois, or in New York, New York. ,,--.. 15 .---. This is one of a duly authorized issue of bonds of the City designated "Electric Revenue Bonds", Issue of 1972, hereinafter called "the bonds," all of which have been issued pursuant to Section 1210 of the City Charter of the City of Anaheim and Ordinance No. 2980 of the City Council of said City, for the pmpose of the acquisition, construction and financing of additions, enlargements and improvement of the electric system for said City and the creation of said issue and the terms and conditions of the bonds are provided for by the resolution of the City Council of said City authorizing the bonds adopted _uuu_uu uuuuu______, designated Resolution No. ____nu____' and this reference incorporates said resolution and said ordinance, and by acceptance hereof the holder of this bond and the coupons hereto attached assents to said terms and conditions. Said resolution is adopted under, and this bond and the interest coupons hereto attached are issued under and are to be construed in accordance with said Charter, said ordinance and the laws of the State of California. This bond and the interest hereon and any premium upon the redemption hereof are not a debt of the City of Anaheim, nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts, or revenues, except the gross revenues of the enterprise (as defined in said resolution) pledged to its payment, and the principal of and the interest on this bond and any premium upon the redemption hereof are payable solely from the gross revenues of the enterprise pledged to its payment and said City is not obligated to pay such principal, interest and premium except from said gross revenues. The Electric System Revenue Account is established under and pursuant to said Section 1210 of the City Charter, said Ordinance No. 2980 and said resolution, and under the provisions of said resolution authorizing the issuance of this bond the revenues received from the enterprise are required to be deposited to the credit of said Electric System Revenue Account and used only for the purposes authorized by said resolution, including the payment of principal and interest of the series of bonds of which this is one. By the terms of said Section 1210 of the City Charter and said Ordinance No. 2980 and by covenant expressed in said resolution, the Gty is obligated to prescribe, revise and collect charges for the services and facilities of the electric system of the City such as to provide revenues sufficient to pay the interest on and principal of the bonds as they become due and payable in addition to all other payments required for compliance with said resolution and the necessary and reasonable maintenance and operation costs of the electric system, is prohibited from issuing bonds having any priority with respect to payment from the gross revenues of the enterprise, and is subject to conditions with respect to any sale of said electric system. In the manner provided in said resolution, any or all of the obligations referred to in this para- graph and certain other obligations mentioned in said resolution may be waived with the consent of the holders of 66% % in aggregate principal amount of the outstanding bonds, exclusive of issuer-owned bonds. This bond is callable and redeemable prior to maturity in accordance with the provisions for redemption endorsed hereon. This bond and the coupons hereto attached are negotiable instruments and shall be negotiable by delivery. This bond may be registered either as to principal only or as to both principal and interest, in accordance with the provisions for registration endorsed hereon. It is hereby certified and recited that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the incurring of the indebtedness evidenced by this bond and in issuance of this bond exist, have happened, and have been performed in due time, from and manner as required by the Constitution and laws of the State of California and the City Charter of the City of Anaheim and that this bond, together with all other indebtedness of the City pertaining to the aforesaid electric system, is within every debt and other limit prescribed by the Constitution and laws of the State of California and said Charter. 16 ~. ~, '!'""" ...-.... ...."........ IN WITNESS WHEREOF, said City of Anaheim has caused this bond to be signed by the Mayor and the City Treasurer of said City by their facsimile signatures, countersigned by the aty Qerk of said City, and sealed with the corporate seal of said City, and the interest coupons hereto attached to be signed by the City Treasurer by his facsimile signature, and has caused this bond to be dated April 1 , 1972. Mayor of the City of Anaheim, California COUNTERSIGNED: City Clerk of the City of Anaheim, California Qty Treasurer of the City of Anaheim, California (SEAL) (COUPON FORM) On the first day of uu__u_____uuu_ 19____ THE CIlY OF ANAHEIM, CALIFORNIA, will pay to the bearer, at the office of the Treasurer of the City of Anaheim in Anaheim, California, or, at Coupon ,No. the option of the holder, at the Corporate Agency Division of Bank of America National Trust and Savings Association in Los Angeles, ------------------__uuuu____ California, or at any paying agent of the City in San Francisco, California, Chicago, Illinois, or in New York, New York, out of the Electric System Revenue Account of said City and not out of any other fund or moneys of the City, the sum of $_______u___________________ in lawful money of the United States of America, being the interest then due on ELECfRIC REVENUE BOND, ISSUE OF 1972 NO. dated u______u____ ____U_____hn_____' subject to the provisions on the reverse hereof. City Treasurer of the City of Anaheim, California On the reverse side of the coupon there shall be printed substantially the following: (REVERSE OF COUPON) If the bond to which this coupon is attached is redeemable and is duly called for redemp- tion on a date prior to the maturity date of this coupon, this coupon will be void. PROVISIONS FOR REDEMPTION Unless this bond matures on or prior to July 1, 1982, it is redeemable in the manner and subject to the terms and provisions, and with the effect, set forth in the resolution referred to on the face of this bond, .at the option of the City, on July 1, 1980, or on any interest payment date thereafter prior to maturity, upon at least 30 days' prior notice published in a newspaper circulated in the County of .".".-- 17 ~ ,... Los Angeles, California, and in a financial newspaper or journal of national circulation published in the City of New York, New York, at a redemption price for each redeemable bond equal to 100JA % of the principal amount thereof plus ~ % of such principal amount for each whole twelve months' period and for any remaining fraction of a twelve months' period from the redemption date to the maturity date of such Bond, but the redemption price, including premium payable at any time upon redemption, shall not exceed 104% of such principal amount. PROVISIONS FOR REGISTRATION This bond may be registered in the name of any person as the registered owner hereof, either as to principal only or as to both principal and interest, and, if registered in either of said forms may be changed to registration in the other of said forms or discharged from registration. Each registration, transfer after registration, change of form. of registration, or discharge. from registration of this bond shall be entered by an authorized officer of the Fiscal Agent in books kept by it for the purpose in its Corporate Agency Division in Los Angeles, California, and noted by him in the registration blank below. Registration as to principal only shall not affect the negotiability by delivery of the coupons pertaining hereto. Upon registration as to both principal and interest, all unmatured coupons pertaining hereto shall be surrendered to said officer and may be preserved. So long as this bond is registered, no transfer hereof shall be valid for any purpose unless made by the registered owner and entered and noted as herein provided, and the principal hereof and any redemption premium shall be payable only to the registered owner, or to his order. Interest on this bond, if registered as to both principal and interest, shall be payable to the person whose name appears upon the registry books as the registered owner hereof at the close of business on the tenth day precen1ng the interest payment date, or to his order. If this bond is registered as to both principal and interest and its registration is changed to registration as to principal only, or if it is discharged from registration, there shall be attached hereto coupons representing interest hereon to become due thereafter to the date of maturity hereof. In lieu thereof, and upon surrender and cancellation hereof, the Treasurer in his discretion may issue in exchange therefor a new bond, with such coupons attached, identical with this bond, except for the previous notations on the registration blank hereon, and except that the signatures on the new bond shall be those of the persons holding the office at the time of affixing such signatures. The issuance of any such new bond, or new coupons, shall be at the expense of the registered owner. Each discharge hereof from registration shall be effected by an entry on the registry books, arid a notation in the blank below, that this bond is payable to bearer, whereupon this bond shall become an unregistered bearer instrument, negotiable by delivery as if it had never been registered. Each request for registration, transfer, change or discharge must be in form satisfactory to the Bank of America National Trust and Savings Association and must be made in writing, signed by the registered owner, or by his agent duly authorized in writing, or by the bearer, as the case may be. DID of In WboIe N...e M.mer of SipatDre of Authorized OtIicer ReaIIIndoD Realltered lleaIIIntIoa of FiIW AI- Section 26. Proeeedings Constitute CODtraet. The provisions of this resolution and of the resolutions providing for the sale of the bonds and awarding the bonds and fixing the interest rate or rates thereon shall constitute a contract between the City and the bondholders and the provisions thereof shall be enforceable by any bondholder for the equal benefit and protection of all bondholders similarly situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding 18 ~. ~, - ~ f~ at law or in equity that is now or may hereafter be authorized under the laws of the State of California in any court of competent jurisdiction. Said contract is made under and is to be construed in accordance with the laws of the State of California. . No remedy conferred hereby upon any bondholder is intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by the Charter, Ordinance No. 2980 or any law of the State of California. No waiver of any default or breach of duty or contract by any bondholder shall affect any subsequent default or breach of duty or contract or shall impair any rights or remedies on said subsequent default or breach. No delay or omission of any bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the bondholders may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and the bondholder shall prevail, said bondholder shall be entitled to receive from the Electric System Revenue Account reimbursement for reasonable costs, expenses, outlays and attorney's fees and should said suit, action or proceeding be abandoned, or be determined adversely to the bondholders then, and in every such case, the City and the bondholders shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. After the issuance and delivery of the bonds this resolution shall be irrepealable, but shall be subject to modification to the extent and in the manner provided in this resolution, but to no greater extent and in no other manner. Section 27. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the City from making contracts or creating bonded or other indebtedness payable fro~ the general fund of the City or from taxes or any source other than the revenues of the enterprise. as defined herein, and from and after the sale of the bonds the general fund of the City shall not include the revenues of the enterprise and no contract or other obligation payable from the general fund of the Gty shall be payable from the revenues of the enterprise, except as provided herein. Section 28. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this resolution, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this resolution and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this resolution and the bonds issued pursuant hereto shall remain valid and the bondholders shall retain all valid rights a.nd benefits accorded to them under this resolution and the Constitution and laws of the State of California. If the provisions relating to the appointment and duties of a Fiscal Agent are held to be unconstitutional, invalid or unenforceable said duties shall be performed by the officer of the city performing the functions of a treasurer. Section 29. Eftective Date. This resolution shall take effect upon adoption. ADOPTED, SIGNED AND APPROVED this ~~y of u~.~~b 1972. "'- "...... Attest: ~Q~)t f)~~~;/- City Clerk 19 ..... STATE OP CAUPORNJA } CoUNTY OF ORANG. SSe aTY OF ANABBDI I, DENE M. DAOUST, City aerk of the City of Anaheim, California, Do HBRBBY CBR.TIFY that the fOrrfoin~esolution was duly adopted by the City Council of said city and was approved by the Mayorl ol"~aiaemty at a ..__::':'::.'7.':'.:':'::::.':'.:'.u. regular meeting of said City Council held on the l~.~_b day of Karch.., 1972, and that it was so adopted as follows: AYES: COuncWneo Roth, Pebley, Thom and Stephenson NOBS: Councilmen None ABSENT: COuncilmen Dutton ~ ),r.~~ City CleTt of the City of Anaheim, California (SEAL) STATB OF CAuPoRNIA } COUNTY OF ORANoB SSe aTY OF ANABBIM I, DENB M. DAOUST, City Clerk of the City of Anaheim, California, Do HEREBY CERTIPY that the above and foregoing is a full, true and correct copy of Resolution No. u_uu.u..uu__, and that the same has not been amended or repealed. DATED: ______uu__uu__u____, 1972. Oty Clerk of the Gty of Anaheim, California (SEAL) I, DENE M. DAOUST, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the original of Resolution No. 72R-83 duly passed and adopted by the Anaheim City Council on March 14, 1972. ~ hrLJl~ City Clerk. 20 ~. ~ ., r-