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4 'JA D Sectiœ 10.04. Soeci.al Covenants. The City hereby further co~ as follows: - (a) The City has the lawful power to pJedge the net reve:n:ues suppcrting this issue ofBoods and has Iav.ful1y e:œrcised said power under the Coo. <¡tin Jtir., and laws of the State of T e:œs, including said power e:xisting under Articles 1111 et sell.. V AT. C . S .. as ~ that the Boods and the Additiooal Parity ObliwmlY'l'l, when issued, shall be ratably secured under said pledge in such manner that ooe issue of Parity Revenue Obligatioos shall have no pœfere:Dœ over any other issue. (ò) Other than fee pledge made far the payment and security of the Parity Revenue ObligatiQDS to be ont<ttRnÆl1g following i.ssuanœ of the Bands and certain obligatiCIJS of the City secured by and payable from a lien on and pledge of the Net Revenues inferi<r to those securing payme:nt of the Bonds, the Net Revenues of the System. have not in any ~ been pJedged to the payment of any debt <r obligation of the City <r of the System. (c) So 1oog as any of the Boods <r any interest tbeœan :remain t"OTto;tATVii"g. the City v.ill not sell <r eI1C'1II1M the System <r any suMtJrntial part thereaf: ¡rovided that this shall not be cœstIUed to ¡xOOibit the sale of such mAr.hinery IX' other ¡xoperties <r equipnent which has become obsolete <r otherwise unsuited to the efficient apeætioo of the System; also. with the exœptim of the AddinmaJ Parity ObligatiCIJS e:q:œssiy pemritted by this Oniinance to be issued, it will net encumber the net revenues of the System unless such cncumlxanœ is made juni<r and sulxxdinate to all of the ¡rovisiCIJS of this 0rdúJaDœ. (d) No tree service of the System shall be allowed, and sboo1d the City <r any of its agencies cc instrume:nt.a1ities make use of the services and facilities of the System. payme:nt of the reasonable value thereof shall be made by the City out of moneys from sources other than the œvènues and income of the System. (e) To the extent that it legally may, the City further covenants and agrees that, as long as any Parity Revenue Obligllfioos, <r any interest thereoo, are Qilrt<ttATVii"&. no fumchise shall be gœnted fix" the installatiœ <r opeœtiœ of any ~ ~ <r sewer system; and that the City will ¡rohibit the opeœtiœ of any 'W1iter system <r sewer system other than those owned by the City. and the opeœtiœ of any such system by anyœe other than this City is hereby prohibited Sectiœ 10.05. Pa'roJent of the Bonds. ~ I While any of the Boods are Qilm.tmvlmg and 1.IDp8id, there shall be made available to the Payjng Agent/.R.egist:, out of the I Interest and Sinking Fund, money sufficient to pay the interest 00. and the principal of the Bonds, as applicable; as will acaue IX'mature œ each applicable Interest Pa}11Jot:nt Date. Section 10.06. Other RetJrese:ntations and Covenants. (a) The City will faithfully perlŒm at all times any and all covenants, undertakings. stipulBtioos, and ¡rovisiœs NY1tRint>d in this 0rdúJaDœ and in each Bood; and the City wilL at the times and in the manner prescribed by this Ordinance. deposit <r cause to be deposited the amounts ofmct:IeY ~fux:I by this Oniinance. (ò) The City is duly authaized under the laws of the State of Texas to issue the Bonds; all actiœ œ its part fix" the aeatiœ and issuance of the Boods bas been duly and effedi vely taken; ¡md the Boods in the bands of the Owners thereof are and v.ill be valid and enfìxceabIe obligatiCIJS of the City in acaxdanœ with their terms. Sed:iœ 1 O. rn . Federal Tax Matters. (a) The City hereby re¡x=ts that the proceeds ofthe.Bands are needed at this time to fir the purposes ~ in Sectiœ 3.01 hereof; that it is not reasaoably expected that the proceeds of the Boods IX" maney deposited in the Interest and SinIång Fund will be used <r invested in a manner that \VOUld cause the Bonds to be IX" become "arbitœge hoods, »within the meaning of Sectiœ 148 of the Code; and that, except fee the Interest and SinIång Fund, no other funds IX" accomrts have been established <r pJedged to the payment of the Bœ4 (ò) The City will not tJùœ any actioo. <r fail to tJùœ any actioo. with respect to the investment of the ¡xoœeds of the Bœds <r any other funds of the City, including amounts r=:ived fian the investment of any of the fcxegoing, if such actioo. <r inaction, based upoo. the facts. ~T1UIt""', and cimJID.<tt~ known œ the Closing Date, \VOUld result in cœstitn1Ïng the Hoods "arbitIage hoods," within the meaning of Sed:iœ 148 of the Code, and the City will net tJùœ any de1iberate actiœ motivated by arbitœge that \VOUld have such result (c) The City v.ill not take any action <r fail to take any actioo. which action, IX" inacticn, would result in the Bonds being treated as "¡xi \'ate activity bands" v.ithin the meaning of Sectiœ 14l( a) of the Code. 22