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4:JO ...,.,. BOND INFORMATION Authority. .. The Bonds are being issued in the principal amounf.-QfS1,5oo,OOO pursuant to the gen.erallaws of the State of Texas, particularly Articles 111 through 1118, inclusive, VAT.C.S., as ¡¡m,."M::!, and an Orclinanœ passed by the City Council. Security for Bonds. . . The Bonds are special obligations of the City payable, both as to principal and interest, solely from and secured by a first lien on and pledge of the Net Revenues of the System. Net Revenues means the gross revenues of the System. after deducting the maintenance and operating expenses. Maint£"nsml',e and operating expenses include cœrtractual payments which. under Texas laws and their provisions are established as operating expenses. The Bonds are not a charge upon any other income or revenues of the City and shall never constitute an indebtedness or pledge of the general credit or taxing powers of the City. The Ordinance does not create a lien or mortgage on the System and any judgment against the City may not be enforced by levy and execution against any property owned by the City, except Net Revenues. -~ ! Pledged Revenues. . . All of the Net Revenues of the system. with the exception of those in excess of the amounts required to establish and maintain the Revenues, Reserve and interest and Sinking Funds are irrevocably pledged for the pa}IDellt of the bonds and interest thereon. The payment of the Bonds and the interest thereon shall constiture a first lien upon the Net Revenues of the System. Application of System Revenues. . . All System revenues are deposited in the Revenue Fund and applied first to the payment of all necessary and reasonable expenses of operation and maintenance of the System. then thereafter transfers are made as required to the Interest and Sinking Funds and the Reserve Fund (as necessary) in that order, established by the Ordinance authorizing the issuance, of the Bonds. Surplus moneys not required for the above purposes may be used for any lawful puxpose. Redemption of Bonds. . . The City reserves the right:. at its option, to redeem Bonds having stated maturities on and after January 1, 2007, in whole or in part. in principal amounts ofS5,OOO or any integral multiple thereof on January 1,2006, or any date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption. If less than all of the Bonds of a maturity is to be redeemed, the Bonds to be redeemed shall be selected by the City. If a Bond (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Bond (or the principal amount thereof to be redeemed) shall beœme due and payable on such redemption dare and interest thereon shall cease to accrue from and after the redemption date provided fimds for the payment of the redemption price and accrued interest thereon arc held by the Paying AgentIRegistrar on the redemption date. Not less than 30 days prior to a redemption date for the Bonds, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid. to each registered owner of a Bond to be redeemed, in whole or in part. at the address of the registered owner appearing on the registration books of the Paying AgentlRegistrar at the close of business on the business day next preceding the date of mailing such notice. Any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the boOOhDlder. Rates . . . The City covenants and agrees that it will at all times fix. establish, maintain and collect such rates, charges and fees for the use and availability of the System and at all times as are necessary to produce Gross Revenues sufficient (1) to pay all CUlTent operating and maintenance expenses of the System. and (2) to make all deposits now or hereafter required to be made into the Funds created. Additional Bonds. . . The City reserved the right to issue additional parity revenue bonds, to be known as Additional Bonds, which. when issued and delivered, shall be payable from and secured by a first lien on and pledge of the Net Revenues of the System, in the same manner and to the same extent as the Bonds and all Additional Bonds shall in all respects be a parity and of equal dignity. The Additional Bonds may be issued in one or more installments or series, provided, however, that no installment or series of Additional Bonds shall be issued unless all conditions and terms stated in the Ordinance have been met See "DEBT INFORMATION - Selected Provisions of the Ordinance". Defeasance. . . The Ordinance provides that any Bond will be deemed paid and shall no longer be considered to be outstanding within the meaning of the Ordinance when payment of principal of and interest on such Bond to its stated maturity has been made or Provided for. Payment may be provided for by deposit of any combination of (1) money in an amount sufficient to make such payment and (2) non-œl1able direct obligations of the United States of America. Any such deposit must be certified by an independent public accountant to be of such maturities and interest payment dates and bear such interest as will be sufficient to make the payment to be provided for on the Bonds. Default and Remedies. . . If the City defaults in the payment of the principal of or interest on any of the Bonds when due, or defaults in the observance or performance of any of the covenants, conditions or obligations set forth in the Ordinance, any registered owner of the Bonds or an authorized representative of such owner is entitled to proceed against the City for the purpose of protecting and enforcing the rights of the registered owners of the Bonds, by \\IIÎt of maruiamus or other suit:. action or special prnç.......Hng in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including 6