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HomeMy WebLinkAbout02263 ORD - 04/27/1948AN ORDINANCE+ 2 2 (-3 AUTHORIZING THE ISSUANCE OF WATERWORKS REVENUE BONDS FOR THE PURPOSE OF PAYING A MONEY JUDG&= RENDERED AGAINST THE CITY OF CORPUS CHRISTI, IN THE CASE OF FRED P. HAY"ARD, ET AL., VS. CITY OF CORPUS CHRISTI, ET AL, DESIGNATED IN THE COURT OF CIVIL APPEALS FOR THE TENTH SUPREME JUDICIAL DISTRICT OF TEXAS AS CAUSE NO. 2666, PLEDGING THE NET REVENUES OF THE CITY'S WATM ORKS SYSTEM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A DEED OF TRUST ON THE PHYSICAL PROPERTIES OF SUCH SYSTEM AS DEFINED IN THE ORDINANCE, INCLUDING THE GRANT OF A FRANCHISE FOR THE OPERATION THEREOF IN THE EV12JT OF DEFAULT AND SALE UNDER SUCH DEED OF TRUST; PRESCRIBING THE LDIITATIONS UNDER ?"HICH ADDITIONAL WATERWORKS REVENUE BONDS MAY BE ISSUED; ORDAINING OTHER MATTERS RELATING TO THE SUBJECT. 4lffRF.AS, in the suit entitled Fred P. Hayward, et al, vs. City of Corpus Christi, No. 2666 on the docket of the Court of Civil Appeals for the Tenth Supreme Judicial District of Texas, final money judgment was render- ed against the City of Corpus Christi in the amount of One Million Eight Hundred - Thirty -Three Thousand Five Hundred Fifty -eight and 7/100 Dollars (312833,558.07). with interest at the rate of 6% per annum thereon from May 5, 1945, because of construction money for the Cityts Waterworks System expended or advanced by Plaintiffs; and WHEREAS, the City Council by ordinance passed on February 17, 1948,.authorized notice to be published of its intention to issue Waterworks Revenue Bonds for the purpose of paying such judgment; and WHEREAS, such notice was duly published in the CORPUS CHRISTI PRESS, the official newspaper for the City, in its issues of February 19, 1948, and Febr^^ua�ry 26, 19/48, as evidenced by an affidavit of publication executed by `i; �g +�'{'¢, �ynrF , the 45S AAA0M ' ,ed//tlY of said newspaper, duly on file in the office of the City Secretary, sqb- stantially in the fora prescribed in said ordinance; and VNEREAS, on March 5, 1948, the date specified in said notice for the passage of the ordinance authorizing the issuance of the revenue bonds, no petition for a referendum election meeting the requirements of law had been filed which fact is evidenced by an ordinance passed by the City AA V3 R Council on March 5, 1948, and no such petition meeting such requirements has been filed up to the time of the passage of this ordinance; and VfiTIMAS, the interest on said judgment is accumulating so that it is not possible to determine the .amount of the judgment as it will exist on the date of the delivery of such Waterworks Revenue Bonds; and WHEREAS, the City had adequate authority under the Constitution and laws of the State of Texas and its Charter, including, but without limitation, the provisions of Chapter 349, Acts of the 49th Legislature passed in 1945; carried forward in Vernonis Annotated Civil Statutes of Texas as Article 1110x; BE IT ORDAINED BY THE CITY COU14CIL OF THE CITY OF CORPUS CHRISTI, TEXAS; 1, That the findings and statements contained in the preamble to this ordinance are true and correct. 2. That for the purpose of paying the money ,judgment awarded against the City in the case hereinabove cited in this ordinance, there shall be issued the Waterworks Revenue Bonds of the City of Corpus Christi, Texas, in the amount of Two Million Two Hundred Thousand Dollars ($2,200,000.00), under authority of Chapter 349, Acts of the 49th Legislature, passed in 1945, which bonds and the interest thereon shall be payable from the revenues from said Waterworks System and secured by a deed of trust on said System, all as more specifically hereinafter provided. 3. That said bonds shall be called f'City of Corpus Christi Waterworks Revenue Bonds, Series 194811, shall be datedt 1, 1948, shall be in denomination of One Thousand ("1,000.00) Dollars each, and shall be numbered One (1) to Two Thousand Two Hundred (2,200) both inclusive. 3a. The Bonds shall be registerable as to principal at the option of the holder on the books of the Registrar upon presentation of the Bonds to such Registrar. The Trustee is hereby appointed Bond Registrar.. Such registration shall not only be noted on the books of such Registrar kept for such purpose, but shall be noted by such Registrar on the Bonds so registered, and after such registration no transfer of a Bond so registered shall be valid unless made on the books of such Registrar by the registered holder or his legal representative, thereunto duly authorized, and similarly noted on the Bonds. Bonds registered as to principal may be discharged from registration by being transferred to bearer after which they shall be transferable by delivery, but may be again registered as to principal as before. Bonds not so registered, or which have been so transferred to bearer, shall be in all respects negotiable. The registration of Bonds as to principal shall not restrain the negotiability by delivery of the coupons attached thereto. 4. That the bonds shall bear interest a able on eG �"� p y 1, 1948 and thereafter semi - annually on MW 1 and Iionobw 1, at such rate or rates not greater than 4% per annum as may be fixed in a resolution to be adopted by the City Council after the sale of the Bonds has been made, and to be based on the rate or rates specified in the bid for purchase of the Bonds which shall have been accepted by the City. (a) Each of the Bonds of this issue maturing on and after JVW- W 1, 1954, is to be subject to redemption prior to maturity on W 1, 1953 and on interest a pp..=.e.-� any payment date thereafter to and including Pl�er 1, 1957 solely out of money available in the Redemption Fund created by said Deed of Trust, at a price of par and accrued interest to the date so fined for re- demption plus a premium of 4% of the principal amount. Each of the Bonds of 1 this issue maturing on and after 1W 1, 1959 is to be subject to redemption prior to maturity on-14 1, 1958 and on any interest payment date thereafter out of any money available to the City at the price effective on such date determined as follows; Par and accrued interest to the date so fized for redemption plus Dees...ber a premium of 3 -1/2% if redeemed on or prior to D� 1, 1960, such premium to be reduced on � 1, 1961 to 3 %, on 1g 1, 1964 to 2 -1/2%„ on � 1, 1967 JerF to 2 %, on Mw 1, 1970 to 1 -1/2%, on Mw 1, 1973 to 1 %, and if redeemed on and afteri� 1, 1976 without premium. Notice of intention to redeem Bonds is to be published in a financial publication in the City of New York, New York, and in the official newspaper of the City of Corpus Christi, at least once, not less than thirty (30) days before the date fixed for redemption, and thirty (30) days' notice in writing prior to the date fixed for redemption is to be J given to the bank or banks of payment. If, by the date fixed for redemption, funds shall have been made available sufficient to pay any bond so called for redemption and accrued interest theron plus the premium specified, it shall not thereafter bear interest. In the event less than all of the bonds outstanding then eligible for prior redemption •hall be thus called the bonds then proposed to be red@smedshall be called in the inverse order of their maturities,and if less than all outstanding bonds of a maturity are called the bonds of such maturity shall be called by lot. 5. Both principal and interest shall be payable in lawful money of the United States of America at Mercantile National Bank at Dallas, Dallas, Texas, upon the presentation and surrender of proper bonds and coupons. 6. Such bonds shall mature serially as follows: AQdDS NUMBERS MATURITY DATES IN7EREST DATES AMOUNTS 1 t0 40, both incl. �uNe 1, 1949 $ 40,000.00 41 to 80, " 1, 1950 ; 40,000.00 81 to 120, 121 to 165, ' 1, 1951 OF 1, 1952 40;000.00 166 to 210, 211 to 260, �' �� " " 1, 1953 1W 45,000.00 261 to 310, 1, 1954 1, 1955 50,000.00 50,000.00 50,000.00 311 to 360, 1 1955 50;000.00 361 to 415, 416 to 470, " " 1 1957 55'000.00 471 to 530, " 1, 1958 MW 1, 1959 55,000.00 b0, 000.00 531 to 590, 591 to 655, " W* 1, 1960 HIr 1, 1961 - 60,000.00 65,000.00 656 to 720, " " )Ajjr 1; 1962 65,000.00 721 to 790, " Mir 1, 1963 70,000.00 791 to 860, * 1, 1964 70-000.00 861 to 935, 936 to 1010, " " ' WIF 1; 1965 yyw 1, 1966 75,000.00 1011 to 1090, ' " Wlr 1, 1967 75,000,00 80,000.00 1091 to 1170, ' " b* 1, 1968 80,000.00 2171 to 1255, " Y!6 1, 1969 85,000.00 1256 to 1345, " " 1, 1970 90,000.00 1346 to 1"0, u " 1, iw 19971 95,000.00 1141 to 1 535 , li�► 1, 1972 95,000.00 1536 to 1635, 1636 to 1740, 1, 1973 100, 000.0() 1741 to 1850, '� ^ 1, 1974 w 1, 1975 105,o00.co 110;000.00 1851 to 1965, 1966 to 2080, ' " " " 1W 1, 1976 1, 1977 115,000.00 115,000.00 2081 to 2200, " n 1, 1978 120,000.00 y 7. That each of such Bonds shall be signed by the Mayor of Corpus Christi, shall be attested by the City Secretary, shall have the. corporate seal of the City impressed thereon, and shall be authenticated by the Trustee in the manner provided in the Deed of Trust for which provision is hereinafter made. Interest falling due on and prior to maturity shall be represented by appropriate interest coupons to be attached to such bonds, which coupons shall bear the facsimile signatures of said Mayor and City Secretary, and said officials, by the execution of such bonds, shall adopt as and for their own proper signatures their respective facsimile signatures appearing on said coupons. 8. That such Bonds, the coupons to be thereto attached and the endorsements to appear thereon, shall be in substantially the foss shown in the Deed of Trust hereinafter in this ordinance authorized. 9. That the waterworks System of the City of Corpus Christi shall be operated by the City and the revenues thereof shall be applied and the bonds herein authorized shall be paid in the manner set out and provided in the Deed of Trust which is hereinafter in this ordinance set out in full, and all of the provisions of said Deed of Trust shall be effective and shall be applicable to the authorization, issuance and payment of the bonds herein authorized and to the operation of such System with like force and effect as though all of said provisions were otherwise then in the Deed of Trust separately set out in this ordinance. 10. That for the purpose of securing the payment of the bonds herein authorized, and for the purpose of providing for and fixing in more detail the rights of the holders thereof, and of the City and of the Trustee, and for the purpose of making an effective Deed of Trust lien on the System and the lien of said bonds on the revenues of the System, a Deed of Trust in substantially the following form and language is hereby authorized to be executed and delivered on behalf of the City of Corpus Christi: .5 DEED OF- TRUST THE STATE OF TEXAS COUNTY OF NIECES , THIS DEED OF TRUST dated as of 1, 1948, by and batvsen the City of Corpus Christi, a municipal corporation duly organized and existing under and by virtue of the laws of the State of Texas, situated in Nueces County, Texas (for brevity hereinafter called "CITY "), acting through its Mayor and City Secretary, duly authorized by an ordinance (hereinafter sometimes called the "BOND ORDINANCE ") passed by the City Council on April r_, 1948, PARTY OF THE FIRST PART, and MERCANTILE NATIONAL BANK AT DALLAS, DALLAS, TEXAS, a national banking association duly organized and existing under and by virtue of the Banking Laws of the United States (for brevity hereinafter called jimUSTEE"), PARTY OF THE SECOND PART: W I T N E S S E T H: WHEREAS, the CITY, for the purpose of paying the money judgment awarded against the City in the case of Fred P. Hayward, et al vs. City of Corpus Christi, No. 2666 on the docket of the Court of Civil Appeals for the Tenth Supreme Judicial District of Texas, has determined to issue a series of bonds under the authority of the Constitution and Laws of the State of Texas, including particularly but without limitation Chapter 349, Acts of the 49th Legislature (hereinafter called the "BONDS"?, and WHEREAS, the City Council of the City of Corpus Christi, by ordinance duly passed on the date above mentioned, has provided for the issuance of bonds for said purpose in the total amount of Two Million Two Hundred Thousand ($2,200,000.00) Dollars, which bonds are designated as "CITY OF CORPUS CHRISTI WATERWORKS REVENUE BONDS, SERIES 1948" (hereinafter sometimes called ,I o the 11BONDS11) are dated iq .c 1, 1948, in the denomination of One Thousand ($1,000.00'. Dollars each, numbered one (1) to Two Thousand �Two � Hundred (2,200), both in- clusive, and are to bear interest payable ece..y pc� 1, 1948, and semi - annually thereafter on MW 1 and &­;& 1 of each year, at the rates showm in the following maturity tabulation. WHEREAS, said Bonds are payable as to both principal and interest, in lawful money of the United States of America, at Mercantile National Bank at Dallas, Dallas, Texas, and mature serially as follows; BONDS NWERS MATURITY DAZES IMMST RAZES AMOUNTS 1 to 40, both incl. is 1, 1949 S 40,000,00 41 to 80, 81 to 120,. M° 1, 1950 1, 1951 40,000.00 40;000.00 121 to 165, 166 to 210, ^ 1, 1952 MW 1; 1953 45,000,00 1 to 260 '� ++ 1, 1954 45;000.00 50,000.00 261 to 310, + 1 1955 ' 50,000,00 311 to 360, MW 1, 1956 50;000.00 361 to 415, 416. to 470, ' " ' 1* 1, 1957 hw 1, 1958 55;000.00 55,000.00 471 to 530, 531 to 655, " Mir 1, 1959 60,000.00 60,000.00 591 to '+ �+ 1, 19 1 �!► , 65;000.00 656 to 720, '+ 1i�d 1, 1962 65,000.00 721 to 790, " 1, 1963 70,000.00 791 to 860, + 1* 1, 1964 70,000.00 861 to 935, 936 to 1010, +' . 1h- 1, 1965 M* 1, 1966 75,000.00 75,000,00 1011 to 1090, " ' 'W 1, 1967 80,000.00 1091 to 3270, ' MW 1, 1968 80,000,00 1171 to 1255, 1, 1969 85,000.00 1256 to 1345, " " ilia 1, 1970 90,000.00 1346 to 1440, lli� 1, 1971 95,000.00 7441 to 1535, 1536 to 1635, ' ' 1, 1972 1, 1973 95,000.00 1636 to 1740, jy' 1, 1974 100,000.00 105,000.00 1741 to 1850, 1, 1975 110,000.00 1851 to 1965, ' 1, 1976 115;000.00 1966 to 2080, " " 1, 1977 115,000.00 2081 to 2200, " 1, 1978 120,000.00 WHEREAS, the Bonds and the interest coupons and certificates to appertain thereto, and the form for registration of the Bonds as to principal, and the Comptroller's certificate, and the Trustee's certificate, to be endorsed thereon, are to be in substantially the following forms, respectively, with appropriate insertions, omissidhs and variations as in this Deed of Trust provided: UNITED STALES OF AMERICA STATE CF TEXAS COUNTY OF NULCES CITY OF CORPUS CHRISTI WATERWORKS REVENUE BOND SERIES 1948 NO. 11,000.00 THE CITY OF CORPUS CHRISTI, a lawfully created and existing municipal corporation in Mr'CES COUNTY, TEXAS, out of revenues hereinafter specified, and from no other source, FOP. VAIDE RECEIVED, hereby promises to pw to bearer, or, if this Bond be registered as to principal, to the registered .� V NE holder thereof, on VW 1, 19_, the principal sum of ONE THOUSAND DOLLARS (41,000.00), and, from said revenues to pay interest thereon from the date hereof, at the rate of ) per centum rr��e.ee� be r N ia per annum, on li�wmrr 1, 1948, and thereafter semi — annually on W 1 and ppeee.Erinev ifs 1 of each year until the principal amount of this Bond shall have been paid. Both principal of and interest on this Bond are payable in lawful money of the United States of America, at Mercantile National Bank at Dallas, Dallas, Texas. Interest falling due on and prior to maturity is payable only upon presentation and surrender of the interest coupons hereto attached as they severally become due. THIS BOND is one of a duly authenticated issue of Bonds of like date and tenor, except as to serial number, interest rate, option of prior redemption, and maturity, issued for the purpose of paying the money judgment awarded against the City in the case of Fred P. Hayward, et al vs. City of Corpus Christi, Number 2666 on the docket of the Court of Civil Appeals for the Tenth Supreme Judicial District of Texas, pursuant to ordinance passed by the City Council of the City of Corpus Christi, and pursuant to a Deed of Trust of even date herewith by and between the CITE OF CORPUS CHRISTI and MERCANTILE NATIONAL BANK AT DALLAS, DALLAS, TEXAS (Hereinafter referred to as the "TRUSTEE "), as Trustee, an original counterpart of which Deed of Trust is on file in the office of said Trustee in the City of Dallas, Texas, reference to which ordinance and Deed of Trust is hereby made for a description of the funds charged with and pledged to the payment of the interest on and the principal of the Bonds, the nature and extent of the security thereof, and a statement of the rights, duties, and obligations of the City and the Trustee and the rights of the holders of the Bond, to all the provisions of which Deed of Trust the holder hereof by the acceptance of this Bond assents. THIS BOND shall not be deemed to constitute a debt of the City of Corpus Christi or a pledge of its faith and credit, but shall be payable as to principal and interest solely from the net revenues derived from the operation of the Waterworks System, including all additions, extensions and improvements thereto which may hereafter be made, hereinafter referred to as the "System ", and the holder hereof shall never have the right to demand payment of this obli- gation out of any funds raised or to be raised by taxation. This issue of Bonds is further secured by a lien upon the properties comprising the System and, in the event of default and the sale of such properties under provisions of said Deed of Trust, by a franchise to the purchaser to operate such properties for a period of twenty years.. The City of Corpus Christi hereby covenants and agrees that it will fix and maintain rates and charges for services to be rendered by the System sufficient to pay all operating, maintenance, depreciation, replace - went, betterment and interest charges, and for an Interest and Sinking Fund sufficient to pay the principal of and interest on the issue of Bonds of which this is one as such principal and interest matures, all in accordance with Article 1113 of the Revised Civil Statutes of Texas of 1925 as amended, and to create and maintain the several funds as prescribed in the Deed of Trust. (Each of the Bonds of this issue maturing on and after W 1, 1954, 1 ­0 subject to redemption prior'to maturity im on 1, 1953 and on any interest �� payment date thereafter to and including i�i1R mil, 1957 solely out of money available in the Redemption Fund created by said Deed of Trust, at a price of 9 par and accrued interest Jo the date so AW t6f rddemption plus a premium of 4% of the principal amount. Each of the Bonds of this issue maturing on and after W 1, 1950 is subject to redemption prior to maturity on'U 1, 1958 and on any interest payment date thereafter out of money available to the City it the price effective on such date determined as follows; par and accrued interest to the date so fixed for redemption plus a premium of 3 -1/2,$ if redeemed on or prior to !*' b , iir�iR 1, 1960, such premium to be reduced on'��� j1 1 �•^^_ iYp 1, 1961 to 3$, on , 1964 to 2 -1/2%, on-W 1, 1967 to 2 %, Svae on &W 1, 1970 to 1 -1/2%, on u¢ 1, 1973 to 1 %, and if redeemed on and after lra ]fag 1, 1976 without premium. Notice of intention to redeem Bonds is to be published In a financial publication in the City of New York, New York, and in the official newspaper of the City of Corpus Christi, at least once, not less than thirty (30) days before the date fixed for redemption, and thirty (30) days' notice in writing prior to the date fixed for redemption is to be given to the bank or banks of payment. If, by the date fixed for redemption, funds shall have been made available sufficient to pay any bond so called for redemption and accrued interest thereon plus the premium specified, it shall not thereafter bear interest. In the event leas than all of the bonds outstanding then eligible for prior redemption shall be thus called the bonds then proposed to be redeemed shall be called in the inverse order of their maturities, and if less than all outstanding bonds of a maturity are called the bonds of such maturity shall be called by lot.) THIS BOND is issued and the above mentioned Deed of Trust was made and entered into under and pursuant to the Constitution and Laws of the State of Texas, including particularly Chapter 349, Acts of the 49th legislature THIS BOND may be registered as to principal only in accordance with the provisions endorsed hereon, EACH MCCESSIVE holder of this bond during such time as it is payable to bearer, and each successive holder of each of the coupons hereto attached, is conclusively presumed to forego and renounce his equities in favor of subsequent holders for value without notice, and to agree that this bond while so payable to bearer, and each of the coupons hereto attached, may be negotiated by delivery by any person having possession hereof, howsoever such Possession may have been acquired, and that any holder who shall have taken thin bond or any of the coupons from any person for value and without notice,thereby /o has acquired absolute title thereto, free from any defenses enforceable against any prior holder and free from all equities and claims of ownership of any such prior holder. Neither the City of Corpus Christi nor its officials nor the paying agent hereinabove named shall be affected 'by any notice to the contrary. TO THE EXTENT permitted by the aforesaid Deed of Trust, modifications or alterations of the Deed of Trust and any Deed of Trust supple - mental thereto may be made, with the consent of the City Council of the City of Corpus Christi and the holders of at least seventy -five per cent in principal amount of the Bonds then outstanding, but such modification or alteration is not permitted to affect the maturity, amount or rate of interest of any such out- standing Bonds. The Deed of Trust provides for acceleration of the maturities of all of the Bonds then outstanding in the event of a default. The City reserves the right to issue additional bonds to the extent and under the conditions stated subject to the limitations prescribed in the ordinance authorizing the issuance of this issue of Bonds and in the Deed of Trust authorized by and uAdel a part of such ordinance. Such additional Bonds shall be payable from the same source and secux'ed by the same revenues, Deed of Trust, properties,and pledged franchise, and shall be on a parity with this issue of Bonds. IT IS HEREBY CERTIFIED AND RECITED that all acts and things required by the Constitution and Laws of the State of Texas, and the charter of the City, to happen, exist and be performed precedent to end in the issuance of this Bond and the passage of said ordinance and the execution of said Deed of Trust, have happened, exist and have been performed as so required. THIS BOND shall not be entitled to any benefit under said Deed of Trust or become valid or obligatory for any purpose until it shall haw been authenticated by the execution by the Trustee of the certificate hereon endorsed. IN ''rITNESS WHEREOF, the CITY OF CORPUS CHRISTI has caused this Bond to be signed by its Mayor and attested by its City Secretary, and the corporate seal of said City to be impressed hereon, and has caused the coupons hereto attached to be executed with the facsimile signature of said officials, J..'e all as of VW 1, 1946. Mayor, City of Corpus Christi, Texas. ATTEST: City Secretary, City of Corpus Christi, Te xas, (CITY SEAL) (FORM OF COUPON) NO. On the let day of 19 , the City of r3orpus Christi, Texas, Nueces County, Texas, will pay to bearer at the Mercantile National Bank at Dallas, Dallas, Texas, the sum of Dollars ($ ), in lawful money of the United States of America (unless the Bond to which this coupon is attached is previously called for redemption as therein provided and provision for the redemption thereof made)* payable out of the revenues specified in the Bond to which this coupon is attached, for the semi - annual interest in that amount then due on its waterworks Revenue Bond, Series 1948, and numbered The holder of this coupon shall never have the right to demand payment thereof out of any funds raised or to be raised by taxation, ATTEST: City Secretary. Mayor. ( ^Note: This parenthetical provision shall be inserted only in Bonds which the City has the right to redeem prior to maturity and while such option exists.) (TRUSTEE'S CERTIFICATE) This Bond is one of the Bonds described in the within mentioned Deed of Trust. MERCANTILE NATIONAL BMIK AT DALLAS, DALLAS, TEXAS Trustee, BY Authorized Officer. (FCRM OF COMPMOLLER'S CERTIFICATE) OFFICE OF COMPTROLLER STATE OF TEXAS Registration No. I HEREBY CERTIFY that there is on file and of record in my office a certificate of the Attorney General of the State of Texas, to the effect that this Bond has been examined by him as required by law, and that he finds that it has been issued in conformity with the Constitution and Laws of the State of Texas, and that it is a valid and binding special obligation of is the City of Corpus Christi, Tbxas, payable from the revenues pledged to its payment by and in the ordinance authorizing same, and said Bond has this day been registered by me. (MAL) WITNESS MY HAND AND SEAL OF OFFICE at Austin, Texas, Comptroller of Public Accounts of the State of Texas. (NO WRITING TO BE MADE HEREON EXCEPT BY ME BOND REGISTRAR OF THE CITY ) CERTIFICATE OF REGISTRATION It is hereby certified that, at the request of the holder of the within bond, I have this day registered it as to principal in the name of such holder as indicated in the registration blank below and on the books kept by me for such purpose. The principal of this bond shall be payable only to the registered holder hereof named in the below registration blank or his legal representative, and this bond shall be transferable only on the books of the /. Bond Registrar and by an appropriate notation in such registration blank. If the last transfer recorded on the books of the Bond Registrar and in the below registration blank shall be to bearer, the principal of this bond shall be payable to bearer and it shall be in all respects negotiable. In rib case, shall negotiability of the coupons attached hereto be affected by any registration as to principal. NAME OF REGISTERED HOLDER DATE ..OF REGISTRATION SIGNAnM3 OF REGISTRAR Trustee AND WHEREAS, the execution and delivery of this Deed of Trust have been duly authorized by the City Council of the City of Corpus Christi and all acts and things required to be done precedent to and in the execution of this Deed of Trust and precedent to and in the execution of said Bonds, have been done and performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the ordinance hereinbefore mentioned; NOW TBEREFCRE, in order to secure the payment of principal of and interest on the Bonds according to their tenor and effect and the terms of this Deed of Trust, and to secure the performance of the covenants and cbligatioa:, herein contained, and in consideration of the acceptance by the Trustee of the trust hereby created, of the purchase and acceptance of the said Bonds by the holders thereof, and of one dollar ($1.00) in hand paid by the Trustee to the City upon the execution and delivery of this Deed of Trust, the receipt whereof is hereby acknowledged, the City has executed and delivered this Deed of Trust and has granted, bargained, sold, conveyed, assigned, transferred, warranted, mortgaged, pledged and set over, and by these presents does grant, bargain, sell, convey, assign, transfer, warrant, mortgage, pledge and set over unto the Trustee and its successors in trust forever, subject to the terms of this Deed of Trust, the following property: All of the waterworks system of the City including all properties, real and personal, and everything pertaining thereto now owned or hereafter acquired, used or useful in connection with the storing, protection, production, filtration, purification, . transmission, supply, and distribution of water by and for the City, together with the revenues to be realized from the operation of such properties, after payment of the expenses of maintenance and operation as hereinafter in this Deed of Trust provided, hereinafter some- times called the "System'-, together vdth an operating franchise for the benefit of a purchaser of the System if sold under this Deed of Trust after default as hereinafter provided, the properties and rights comprising the system and such pledged franchise, hereinafter sometimes called the "Trust Estate." Included among the properties thus conveyed in trust, the following are described for greater certainty, but without the intention of limiting the general description hereinabov given, to -wit: A. Lake Corpus Christi The reservoir constituting the primary water supply of the City, situated on the Nueces River approximately 30 miles Northwest of the City, in the Counties of san Patricio, Jim ',Yells, and Live oak, Texas, on lands, to which the City owns necessary easements and flowage rights and in certain instances the fee simple title, described in conveyances listed briefly as follows: 1217.7 acres of land out of the S. G. Miller Ranch, (Patrick Nevan and Ed J. McGloin Grants), being the same land described in easement deed dated July 31, 1929, from Natalie M. Collins, joined by her husband, B. F. Collins, to the City of Corpus Christi, 'Texas, and which said deed is recorded in Volume 93, page 223 -226, Deed Records of San Patricio County, Texas. 925.86 acres of land out of the S. G. Miller Ranch, (Patrick Nevan and Ed J. McGloin Grants), being the same land described in easement deed dated July 31, 1929, from D. B. Miller, joined by his wife, Zepha L. Miller, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 33, page 319, Deed Records of Live Oak County, Texas. 902.53 acres of land out of the S. G. Mi11erRanch, (Patrick Nevan and Ed J. McGloin Grants), being the same land described in easement deed dated July 31, 1929, from H. D. Miller, joined by his wife, Bonita G. Miller, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 33, page 327, Deed Records of Live oak County, Texas. 73.85 acres of land out of the John McMullen Grant, being the same land described in easement deed dated July 3, 1928, from T. G. Parr to the City of Corpus Christi, Texas, and which said deed is recorded in - Volume 30, page 613, Deed Records of Live Oak County, Texas. 49.37 acres of land out of the James McGloin Grant, being the same land described in easement deed dated October 4, 1928, from V. B. Powers to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 30, page 618, Deed Records of Live Oak County, Texas. /3- 11116 acres of land out of the John McMullen Grant, being the same land described in easement dead dated April 5, 1928, from H. Roos and R. C. Roos, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 29, page 41, Deed Records of Live Oak County, Texas. 77.27 acres of land out of the James McGloin Tract, being the same land described in easement deed dated February 11, 1928, from Mary B. McGuffin, et al, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume _.LL, page /S!y, Deed Records of Live Oak County, Texas. 88.06 acres of land out of the Maria Bridget Kivlin Grant, being the same land described in easement deed dated August 3, 19283 from Joe Ramage and wife, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 31, page 7, Deed Records of Live Oak County, Texas. 36.18 acres of land out of the Maria Bridget Kivlin Grant, being the same land described in easement deed dated September 19, 1928, from Mrs. J. B. Dunning, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 30, page 636, Deed Records of Live Oak County, Texas. 385.56 acres of land out of the George VT. Lewis Survey, tieing the same land described in easement deed dated January 31, 1928, from A. M. Erskine, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 28, page 260, Deed Records of Live Oak County, Texas. 1805.60 acres of land out of the Casa Blanca Grant to Juan de la Garza Montemayor in'Jim Wells County and Delgado Original Survey in San Patricio County, being the same land described in easement deed dated betoiser '3, 1927; from Wallis D; Wade, to the City of Corpus Christi, Texas and which said deed is recorded in Volume 32, page 184, Deed Records of Jim Yrells County, Texas, and Volume 88, Page 151, Deed Records of San Patricia County, Texas /6 53.00 acres of land out of the Patrick Nevan Grant, being the same land described in easement deed dated January 16, 1928, from H. M. Wurzbach, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 28, page 257, Deed Records of Live Oak County, Texas. 220.79 acres of land out of the Ed J. McGloin Grant, being the same land described in easement deed dated November 2, 1927, from T. M. Luther, to the City of Corpus Christi, Texas, and which said deed is recorded in volume 88, pages 10-143, Deed Records of San Patricio County, Texas. 84.75 acres of land out of the Ed J. McGloin Grant, being the same land described in easement deed dated January 17, 1928, from H. P. Brown, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 88, pages, 346 -349, Deed Records of San Patricio County, Texas, 650.00 acres of land out of the Ed J. McGloin Grant, being the same land described in easement deed dated December 1, 1927, from V. G. Miller, et al, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 88, pages 143-147, Deed Records of San Patricio County, Texas. 83.01 acres of land out of the William J. Cannon Grant, being the same land described in easement deed dated December 22, 1927, from W. F.Mo Whorter, to the City,of Corpus Christi, Texasi and which said deed is recorded in Volume 28, page 123, Deed Records of San Patricia County, Texas. 922403 acres of land out of part of the S. G. Miller Ranch, (Ed J. McGloin and Patrick Nevan Grants) being the same lend described in easement deed dated April 29, 1929, from Callie Miller Freeman and husband, D. L. Freeman, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 32, page 66, Deed Records of Live Oak County, Texas, and in Volume 92, pages 207 -211, Deed Records of San Patricio County, Texas. 918.00 acres of land out of the Ed J. McGloin Grant, being the same land described in easement deed dated October 4, 1927, from Zenna H. Coffin, joined by her husband, A. B. Coffin, and Mrs. S. C. Miller, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 88, pages 137 -140, Deed Records of san Patricio County, Texas. 17 164,89 acres of land out of the Ed J. McGloin Grant, being the same land described in easement deed dated October 19, 1927, from J. A. Henderson, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 93, pages 77 -78, Deed Records of San Patricio County, Texas. 55:00 acres of land out of the Patrick Nevan Grant, being the same land described in easement deed dated October 20, 1928, from J. H. Hinnant, et al, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 31, page 417, Deed Records of Live Oak County, Texas. 29.49 acres of land out of the John McMullen Grant, being the same land described in easement deed dated May 4, 1928, from William Whalen, et al, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 29, page 445, Deed Records of Live Oak County, Texas. 131.74 acres of lard out of the George W, Lewis Grant or Survey, being the same land, described in easement deed dated June 16, 1926, from A. C. Erskine, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 30, page 20, Deed Records of Live Oak County, Texas. 282.58 acres of land out of the Maria Bridget Kivlin Grant or Survey, being the same land described in easement deed dated November 10, 1928, from Boothe, Hampton and Boothe, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 30, page 629, Deed Records of Live Oak County, Texas. 50.35 acres of land out of the Browne and Kivlin Grant, being the same land described in easement deed dated September 22, 1928, from Josephine Peck, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 30, page 608, Deed Records of Live Oak County, Texas. 30.00 acres of land out of the Maria Bridget Kivlin Grant, being the same land described in easement deed dated November 10, 1928, from Ross Boothe, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 30, page 624, Deed Records of Live Oak County, Texas. 43.77 acres of land out of the Maria Bridget Kivlin Grant, being the same land described in easement deed dated July 11, 1928, from John Nesleney and wife, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 31, page 13, Deed Records of liv Oak County, Texas. 90,06 acres of land out of the Maria Bridget Kivlin Grant, being the same land described in easement deed dated July 17, 1928, from A. B. Cobb, to the City of Corpus Christi, Texas, and which said deed is recorded In Volume 31, page 1, Deed Records of Live Oak County, Texas. 15.26 acres of land out of the John McMullen Grant, being the same land described in easement deed dated January 31, 1928, from Tom L. said Webb, to the City of Corpus Christi, Texas, and which /deed is recorded in Volume 28, page 420, Deed Records of Live Oak County, Texas. 158.58 acres of land out of the John McMullen Grant, being the same land described in easement deed dated November 24, 1927, from R. J. sellers, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 28, page 116, Deed Records of Live Oak County, Texas. 50.00 acres of land out of the John McMullen Grant, being the same land described in easement deed dated August 7, 1929, from N. A. Brown and wife, Roma A. Brown to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 33, page 189, Deed Records of hive Oak County, Texas. 42.86 acres of land out of the Delgado Grant, being the same land described in easement deed dated December 24, 1927, from Minnie K. Beall, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 30, page 462, Deed Records of live Oak County, Texas, and in Volume 93, pages 579 -582, Deed Records of San Patridio County, Texas. 20.74 acres of land out of the Delgado Grant, being the same land described in easement deed dated October 20, 1928, from Kate Grimes Jones, to the City of Corpus Christi, Texas, and whx h said deed is recorded in Volume 31, page 17, Deed Records of Live Oak County, Texas. 37.30 acres of land out of the John McMullen Grant, being the same land described in easement deed dated February 25, 1928, from F. S. Sellers, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 29, page 46, Deed Records of Live Oak County, Texas. 51.96 acres of land out of the James McGloin Grant, being the same land described in easement deed dated January 30, 1928, from E. S. Adair and wife, W. A. Adair, to the City of Corpus Christi, Texas, and which said Deed is recorded in Volume 28, page 417, Deed Records of Live Oak County,Texas. If 23.29 acres of land out of the J. R. Simmons Grants being the same land described in easement deed dated September 12, 1929, from B. H. McCarley and wife, Mary Alice McCarley, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 93, pages 471 -474, Deed Records of San Patricio County, Texas. 211.00 acres of land out of the John McMullen Grant, being the same land described in easement deed dated February 25, 1928, from R. F. Sellers, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 29, page 42, Deed Records of Live Oak County, Texas. 717.81 acres of land out of the Ed J. McGloin Grant, John McMullen Grant and Patrick Nev. Grant, being the same land described in easement deed dated November 24, 1927, from Reeves Brown, to the City of Corpus Christi, Texdsj and which said deed is recorded in Volume 28, page 473, Deed Records of live Oak County, Texas. 62x42 acres of land out of the Patrick Nevan Grant, being the sage land described in easement deed dated March 19, 1928, from Fannie Braun, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 29, page 311, Deed Records of Live Oak County, Texas, 118.06 acres of land out of the Alm. S. Cannon Grant, being the same land described in easement deed dated February 7, 1928, from J. A. Stewart, to the City of Corpus Christi, Texas, and which deed is recorded in Volume 28, page 422, Deed Records of Live Oak County, Texas. 2450.10 acres of land out of the Jose Maria Colenado Grant and Jane Curry Grant, being the same land described in easement deed dated December 23, 1927, from Holman Cartwright, to the City of Corpus Christi, Texas, and which said deed is recorded in Volume 28, page 246, Deed Records of Live Oak County, Texas. All of which lands are more fully described by metes and bounds in such several conveyances, each of which is duly recorded in the County in which the land affected is situated, all of which conveyances and the record thereof are hereby incorporated by reference in aid of and for more particular description. The impounding dam at such reservoir and all works, appliances, equipment, buildings, and machinery used in connection therewith to facilitate the use of the reservoir as a water supply for the City. zo H. RIGHT -OF -WAY All of the rights and easements held or used by the City on lands, roads, highways and streets traversed by the water supply lines of the City from Lake Corpus Christi via'the City's Filtration Plant at Calallen, thence to the connections of the City's distribution system, and to any and all other points reached by such supply line or lines; All rights and easements held or used by the City in con- nection With the use of all other water supply and all of its water distribution_ and service lines. C. SPECIFIC PLANTS AND STCRACE TANKS . The filtration plant, storage tanks and reservoirs and pump stations briefly described and situated on City -owned lots, tracts, or parcels of land as follows: (1) SAM RANKIN S=T STORAGE TANK, 250,000 gallons, Being all of Lots 8 and 9, Block 61, Bluff Portion, situated in the City of Corpus Christi, Nueces County, Texas. (2) CALALLEN FILTRATICN PLANT, Being a tract of land lying between the North bank of the Nueces River and Taxis State Highway No. 9 and North of Calallen, in Nueces County, Texas, Beginning at the southeast corner of the City of Corpus Christi; Calallen Filtration Plant Property, said point - - being in the west right -o£ -way line of State Highway No. 9; thence N. 740 49' W a distance of 567.47' to a point for a corner of this description; Thence N 160 21' E a distance of 375.51 • to a point for a corner of this description; Thence S. 890 15' W. a distance of 375' to a point on the east bank of the Nueces River for a corner of this description; Thence in a north- easterly direction with the meanders of the Nueces River a distance of 1,855.881 to a point for the northwest corner of this description; Thence No. 740 53' W a distance of 434' to a point in the west right -of -way line of State Highway No. 9 for the northeast corner of this description; Thence in a southerly direction with the west right -of -way line of State Highway No, 9 a distance of 1,230.82' to a point for a corner of this description; Thence N 89015' E a distance of z/ 351 to a point for a corner of this deeptiption; Thence S 10081 W with the west right -of -way line of said State Highway No. 9 a distance of 800.811 to an angle point in the west right -of -way line of State Highway No. 9; thence S 30501 E with the west right -of -way line of State Highway No. 9 a distance of 376.061 to the place of beginning, containing 29.633 acres of land. (3) SAVAM LANE RESERVOIR AND PUMP STATION, Being located in Nueces County; Texas; and being part of Block 19, Russell Farm Blocks, Beginning at the southeast corner of the City of Corpus Christi, Savage Lane Reservoir and Pumping Station property, said point being in the east boundary line of Savage Lane; Thence N 20 181 E a distance of 361.61 to a point for the north corner of this description; Thence due west a distance of 417181 to a point for the northeast corner of this description; Thence S 20 181 W a distance of 521:31 to a point for the Southeast corner of this description; Thence due east 417.81 to a point in the east boundary line of Savage Lane to the southwest corner and beginning of this description. (4) HEN GARZA PARK RESERVOIR AND PUMP STATION, The beginning point is located by starting at the northeast comer of the tract of land conveyed to William J. Robertson by Thisbe Kinney and Marion F. Kinney by deed, dated August 20, 1885, of record in Volume Q, Page 539, Deed Records of Nueces County, Texas; Thence with the eastern boundary of the said Robertson tract S 20 01 E a distance of 400, to a point for -the beginning of this description; Thence 5 880 01 W a distance of 435.61 to a point for the north- west corner of this description; Thence 5 20 01 E a distance of 4001 to a point for the southwest corner of this description; Thence N 880 01 E a distance of 435.61 to a point for the southeast corner of this description; Thence N 20 01 W a distance of 4001 to the northeast corner and beginning of this description, all lying within the incorporated limits of the City of Corpus Christi, Texas. (5) 500,000 GALLON OVERHEAD STEEL STORAGE TANK, The beginning point is located by starting at the northeast corner of fractional Block 901, Bay Terrace No. 2, and following the east line of said Block 901 in a south- erly direction a distance of 2201 for the northeast corner and beginning of this description; Thence at right angles in a westerly direction to its zz intersection with the vest boundary line of said Block 901 for the northwest corner of this description; Thence with the west boundary line of said Block 901 in a southeasterly direction a distance of 62.96, to a point for the southwest corner of this description; Thence in an easterly direction parallel with the north line of this description a distance of 80.191 to a point in the east boundary line of said Block 901 for the southwest corner of this descrip- tion; 'thence in a northerly direction with the east boundary line of said Block 901 a distance of 60, to a place of beginning, being located in the corporate limits of the City of Corpus Christi, Texas. D. WATER SUPPLY MAINS, DIS IBUTICH MAINS AND LATERALS, VALVES, FIRE HYDRANTS, E : Water supply lines, including supply mains from Lake Corpus Christi Reservoir to the Calallen Filtration Plant to the City; water mains, laterals, fire hydrants and related facilities within the corporate limits of the City and in adjacent areas, including: 525,000 Linear Feet of 2" and 311 mains 234,000.Linear Feet of 4" mains 356,000 Linear Feet of 61t water mains 197,000 Linear Feet of 8" water mains 75,000 Linear Feet of 10" water mains 11,500 Linear Feet of 121, water mains 43,000 Linear Feet of 16." water mains 7,500 Linear Feet of 18" water mains 81,000 Linear Feet of 20" water mains 41 500 Linear Feet of 24" water mains 93,000 Linear Feet of 30" water main - 77,000 Linear Feet of 361, water mains 482 21, valves 75 311 valves 289 4" valves 689 61, valves 392 8-' valves 191 10" valves 46 121' valves 15 16" valves 22 20" valves 14 30" valves 36 36,, valves 864 Fire Hydrants. E. All other property, real and personal, now owned or here- after acquired while any of the Bonds or any Additional Bonds permitted under Article II hereof are outstanding, for or used in connection with the operation of the System, together with all and singular the tenements, hereditaments and �' 3 and appurtenances belonging or in any wise appertaining to the aforesaid properties or any part thereof, and with the reversion or reversions, remainder or remainders, rents, income and profits of all such properties, and all of the estate, right, title, interest and claim theretofore whatsoever at law as well as in equity. F. All of the income from the System after deduction of the expense properly chargeable to maintaining and operating the System as pro- vided in Article 1113 of the Revised Civil Statutes of Texas (1925) as amended and under Article V of this Deed of Trust. G. A franchise to operate such System for a period of twenty years as set forth more particularly in Article X of this Deed of Trust; TO HAVE AND TO HOID all and singular the said premises and property, real, personal and mixed, with all and singular their revenues, rents, issues, profits, privileges and appurtenances, and all the estate, right, title and interest of the City therein and thereto, unto the Trustee and its successors in trust forever; IN TRUST NEVERTHELESS, subject to the provisions of this Deed of Trust, for the equal and proportionate benefit, security and protect- ion of all holders of the Bonds and interest coupons issued, or bonds and interest coupons hereafter to be issued under and secured by this Deed of Trust, and within the amounts and under the conditions expressly permitted by this Deed of Trust without preference, priority or distinction as to lien or otherwise of any Bond over any other Bond by reason of priority in the issuance �k negotiation thereof or by reason of the date or dates of maturity thereof, or for any other reason whatsoever, so that each and all of said Bonds and bonds hereafter to be issued as aforesaid shall have the same rights, lien and privileges under this Deed of Trust; PROVIDED, HO;'EVER, and these presents are upon the express condition, that if the City, its successors and assigns shall well and truly pay or cause to be paid all bonds and interest coupons now or hereafter secured by this Deed of Trust at the tires and in the manner stipulated therein and shall well and truly keep, perform and observe all the covenants and conditions of said bonds and in this Deed zy of Trust expressed to be kept, performed and observed by the City and shall pay to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions hereof, then this Deed of Trust and the rights and estate hereby granted shall cease, determine and be void, said the Trustee in such case on demand of the City, upon payment by the City to the Trustee of its reasonable fees, costs and expenses, shall execute and deliver to the City such release as shall be requisite to discharge the lien hereof and to reconvey or revest in the City the properties hereby conveyed or intended to be conveyed; OTHER'IISE, this Deed of Trust is to be and shall remain in full force and effect. THIS DEED CF TRUST, FURTHER 17ITNESSETR, that the City has agreed and covenanted and does hereby agree and covenant with the Trustee and respective holders from time to time of such Bonds and coupons, as follows: ARTICLE I. FORM AUTHENTICATION. REGISTRATION AND ISSUANCE OF BOND$ SECTICN 1.01. The Bonds and the coupons attached thereto shall be in substantially the forms hereinbe£ ore recited, and shall be issued in the aggregate principal amount of not to exceed Two Million Two Hundred Thousand Dollars ($2,200,000.00). All Bonds to be secured hereby shall be signed by the Mayor of the City, shall be attested by the City Secretary, ..shall have the corporate seal of the City impressed thereon, and when so signed and sealed, the Bonds shall be submitted to the Attorney General of the State of Texas for approval and to the State Comptroller for registration. After the said Bonds have been approved by the Attorney General and registered by the State Comptroller, they shall be delivered to the Trustee for authenti- cation as provided in Section 14 of the ordinance authorizing the issuance of the Bonds and authorizing this Deed of Trust, which is in words and figures as follows: ,,(a) After said Bonds shall have been executed they shall be submitted to the Attorney General for his approval, and after such approval they shall be registered by the Comptroller of Public Accounts. -23 (b) Due to the fact that the amount of the judgment in said case of Hayward V. City of Corpus Christi is in the amount of $1,833,558.07, plus interest at the rate of 6% per annum from May 5, 1945, until paid, it cannot be determined definitely at the time of the passage of this ordinance vdiat amount of Bonds will be required for the payment of the judgment with interest accrued to the date the Bonds are sold and delivered. Accordingly, when the Bonds are ready for sale and delivery, the Mayor and City „recretary shall compute the amount of money which will be necessary to pay the judgment with interest to the date when delivery is to be made and execute a certificate showing such amount and designating by number or maturity the Bonds to be authenticated by the Trustee and to be sold and delivered. The amount of Bonds thus to be designated shall be as near the amount of the judgment and interest to the delivery date as is possible because of the denomination of the Bonds, but not in excese thereof. A copy of such certificate shall be furnished to the Trustee. (c) Upon receipt of the certificate mentioned in the pre- ceding sub - section (b), the Trustee shall authenticate only the Bonds specified in said certificate. In authenticating such bonds, the Trustee may rely upon said certificate. (d) At or immediately after sale and delivery of the - - Bonds the judgment with interest shall be paid in Pull The difference, if any, between the par value of the Bonds thus sold and the amount of the judgment with interest to date of payment shall be paid from the system Fund. (e) After full payment of said judgment and interest, the Bonds not thus sold for the purpose shall be cancelled and not issued." In case any officer or officers who shall have signed any of the Bonds shall cease to be such officer or officers of the City after delivery of such Bonds to the Trustee, but before the Bonds so signed shall have been actually authenticated and delivered to the purchaser thereof, such Bonds may nevertheless be authenticated and delivered as though the person or persons who signed and sealed such Bonds had not ceased to be such officer or officers of the City. z6 The coupons to be attached to the Bonds shall be signed by the facsimile signatures of the Mayor and City Secretary in office at the time of the signing of the Bonds, and delivery of such Bonds thereafter shall be valid for all purposes even though one or both of said officials shall have ceased to hold office at the time of delivery. Prior to the authentication of Bonds under this Deed of Truss. all matured coupons thereto attached shall be detached and cancelled and such cancelled coupons shall be delivered to the City Secretary. SECTICN 1.02. Only such of the Bonds as shall have endorsed thereon the duly executed certificate of the Trustee substantially in the form hereinabove set forth shall be entitled to any lien or benefit hereunder, but such certificate of the Trustee upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered hereunder and that the holder is entitled to the benefit of the trust hereby created. SECTION 1.03. In case any Bond issued hereunder with the coupons appertaining shall become mutilated or be lost, stolen or destroyed prior to the payment thereof a new Bond, including coupons, of like tenor and date and bearing the same number may, at the discretion of the City and the Trustee, be executed, certified and delivered either in exchange for and upon cancellation of the mutilated Bond and its coupons, or in substitution for the Bond or coupons lost, stolen or destroyed, but such exchange or sub- stitution shall be made only upon receipt of satisfactory evidence of loss, theft, or destruction of such Bond and its coupons, proof of ownership thereof, satisfactory indemnity to the Trustee and the City, and payment of the cost of preparing such bond and coupons. ARTICIE II. SPECIAL COVENANTS THE CITY HEREBY COVENANTS AS FOLLOWS: SECTION 2.01. The City is dulv authorized under the laws of the State of Texas to create and issue the Bonds and to execute and deliver this Deed of Trust and to pledge the revenues pledged hereunder, and that all necessary action on the part of the City and its City Council for the creation and issuance of the Bonds and the execution and delivery of this Deed of Trust z'2 has been duly and effectively taken, and that the Bonds in the hands of the holders thereof are and will be valid and enforceable obligations of the City in accordance with their terms. SECTION. 2.02. The City is lawfully seized and possessed of the Trust Estate, free and clear of all liens or encumbrances; it has good right and lawful authority to mortgage and pledge the Trust Estate as provided in this Deed of Trust; and it will warrant and defend unto the Trustee, its successors and assigns, for the benefit of the holders and the Trustee under this Deed of Trust, such authority and title against all claims and demands of any persons whomsoever. SECTICN 2.03. At any and all times the City will duly execute, acknowledge and deliver, or will cause to be done, executed and delivered, all and every such further acts, deeds, conveyances, mortgages, transfers and assurances in law as the Trustee shall reasonably require for the better conveying, transferring, mortgaging, and pledging and confirming unto the Trustee, all and singular the hereditaments, premises, estates, and property hereby conveyed, transferred, mortgaged, pledged or assigned, or intended so to be. SECTION 2.04. Except to the extent otherwise provided in this Article 11, the City will not create or volumtarily permit to be created any debt, lien or charge which would be on a parity with or prior to the lien of this Deed of Trust on the Trust Estate or any part thereof; and will not do or omit to do or suffer to be done or omitted to be done any matter or thing whatsoever whereby the lien of this Deed of Trust or the priority of such lien as to the Bonds hereby secured might or could be lost or impaired; and that it will pay or cause to be paid or will make adequate provision for the satis- faction and discharge of all lawful claims and demands for labor, materials, supplies or other obligations which if unpaid might by law be given precedence to or an equality with this Deed of Trust as a lien or charge upon the Trust Estate or any part thereof, provided, that nothing in this section shall require the City to pay, discharge or make provision for any such lien, charge, claim or demand so long as the validity thereof shall be by it in good faith con- tested, unless thereby, in the opinion of the Trustee, the Trust Estate or some material part thereof will be lost, forfeited or materially endangered z'�' (as to any such item it being the duty of the City to advise with the Trustee as to such action). If prior to the payment of all of the Bonds, it shall be found desirable to refund part of said Bonds under the provisions of any law then applicable, said Bonds may be refunded with the consent of the holders thereof, and the refunding bonds so issued shall enjoy complete equality of lien with the portion of the bonds which is not refunded, and the refunding bonds in like principal amount shall continue to enjoy in all respects the lien and right to security under this Deed of Trust enjoyed by the Bonds refunded thereby, including the priorities enjoyed by such refunded bonds; provided, however, that if any refunding bond is to bear a higher rate of interest than the bond to be refunded, or if any refunding bond is to mature at a date earlier than the maturity date of the outstanding Bond thereby refunded, then such refunding bond may not be issued without the consent of the holders of the unrefunded portion of the Bonds, to be evidenced as provided in Section 11.01 of Article XI hereof. The Trustee shall, subject to the provisions of this section, authenticate and deliver any refunding bonds so authorized, upon the written order of the Mayor of the City and upon receipt by the Trustee oft (a) A certified copy of the ordinance of the City Council of the City of Corpus Christi authorizing the issuance of such refunding Bonds; (b) A copy of an opinion of the Attorney General of the State of Texas approving the validity of such refunding bonds, if such opinion shall then be authorized by the laws of Texas; (c) A certificate of the State Comptroller evi- dencing registration of such refunding Bonds in his office, if such registration shall then be authorized by the laws of Texas; (d) Bonds duly cancelled, in principal amount not less than the principal amount of the refunding bonds, to- gether with a certificate executed by the Comptroller of Public Accounts of the State of Texas to the effect that said Bonds have been surrendered to and cancelled by him and that the refunding bonds offered to the Trustee have been registered by him in lieu of such Bonds. In lieu of the showings in this subsection (d) hereinabove prescribed, the following procedure shall be sufficient if.and when authorized by laws then in effect; t +then it is proposed to refund Bonds which are unmatured but which have been called for redemption in accordance with 2f their tenor and effect and applicable provisions of this Deed of Trust, if the proceeds from the sale of the refund- ing bonds together with other money available for the purpose, in an amount sufficient to redeem such called Bonds according to their tenor and effect, shall have been deposited with the Trustee to be held by the Trustee for the sole purpose of redeeming such called Bonds; and in the event that such procedure is followed if, as and when the called Bonds shall be presented for redemption they shall be paid by the Trustee in accordance with the call for redemption, shall be cancelled by the Trustee and shall not be reissued nor shall they be the basis there- after of additional Refunding bonds. (e) If required by the Trustee, an opinion by counsel acceptable to the Trustee that such refunding bonds have been legally authorized and, upon delivery thereof pursuant to the terms of this section, will have become effectively subrogated to the rights of the Bonds refunded thereby and entitled to be secured by the lien of this Deed of Trust. All Bonds received by the Trustee in exchange for refunding bonds and all Bonds redeemed and paid under the provisions of this section shall be by the Trustee cancelled and delivered to the City Secretary of said City. To accomplish the issuance of refunding bonds, as permitted by this Section 2.04, an extension of this Deed of Trust, or an amendatory or supplemental Deed of Trust may be executed by the City and the Trustee without the procedure required by Article XI hereof. SECTION 2.05. Additional Bonds. The City of Corpus Christi reserves the right to issue additional bonds (hereinafter called "Additional Bonds ") %Bich, along with the Bonds shall, when issued, be secured ratably by a first lien on the Trust Estate (including the pledged revenues.) Addi- tional Bonds may be issued only for improvements or extensions or repairs or replacements of and to the Waterworks System or for any one or more or all of such purposes. Additional Bonds may be issued from time to time. The right to issue Additional Bonds at any time is subject to the following limitations and conditions; (1) Any such Additional Bonds shall be issued pursuant to an authorizing ordinance duly passed by the City Council which shall prescribe the date, interest rate or rates, maturity dates and other details necessary to identify the Bonds, the purpose for which the proceeds of such Bonds are to be issued and shall provide that they are to be issued pursuant L?o to Section 15 of the Bond ordinance authorizing the Bonds and pursuant to Article II of this Deed of Trust; which is a part of the Bond Ordinance. The ordinance authorizing Additional Bonds, or the supplement to or amendment of the Deed of Trust, executed pursuant to such ordinance shall contain adequate and appropriate provisions assuring the application and use of the proceeds thereof for the specific purposes set forth in such ordinance, or supplement to or amendment of the Deed of Trust, and for safeguarding said funds during the period of construction, or of their use, including the escrow of construction funds. (2) On each occasion before arty such Additional Bonds are issued an appropriate supplement to this Deed of Trust shall be executed, describing such Bonds and by reference making the provisions of this Deed of Trust applicable thereto. None of the Additional Bonds shall be issued and sold until they shall have been authenticated by the Trustee. (3) The City agrees that it will not seek to have the Trustee authenticate any Additional Bonds until it shall have filed or caused to be filed with the Trustee: (a) A certified copy of the ordinance authorizing the issuance of such Additional Bonds; (b) A certificate by the Mayor and City Secretary showing the Net Revenues of the System for each of the three calendar years next preceding, and for all completed months of the then calendar year; (c) A certificate by an independent auditor acceptable to the Trustee, or by a Certified Public Accountant attesting to the correct- ness of the figures contained in the certificate by the Mayor and City secre- tary prescribed in paragraph (b) of this subsection (3); (d) A balance sheet and such additional data as may be necessary to show the status of each of the Funds created under this Deed of Trust, certified by said auditor or Certified Public Accountant, effective at a time not more than 30 days prior to the date of such certificate re- quired under paragraph (b) of this subsection (3); (e) An estimate by an independent engineer or engineer- ing firm employed by the City and acceptable to the Trustee, of the Net Revenues which will be received from the operation of the System (for the 31 remainder of the then Current bilendar year and for each year thereafter) from the date of said certificate until the final maturity date of the last maturing Bond either of this issue or of the Additional Bonds whichever date is the later. (4) The Trustee shall not authenticate any Additional Bonds authorized in such ordinance if within the knowledge of the Trustee the City shall be in default in any of its obligations under the Deed of Trust or if the Balance Sheet or other instruments filed by such auditor or Certified Public Accountant shows that any of the Funds required under the Deed of Trust, including the Reserve are not current and intact according to the standards prescribed in this Deed of Trust, and to determine such facts the Trustee is authorized to require of the City any additional showing con- sidered by it as necessary. (5) After having been furnished the evidence required under this Article the Trustee shall authenticate such Additional Bonds if, but only if; (a) The certificates of the Mayor and City Secretary under paragraph (b) and by the auditor under paragraph (c) of subsection 3 of this section 2.05, show that the Net Revenues of the System for each of the three calendar years next preceding were equal to at least one and three - fourths times the highest total amount of principal and interest to become due in any future twelve -month period on all obligations then outstanding and then to be issued. (b) The certificate by such engineer or engineering firm shows that, in his or their opinion, the Net Revenues of the system from the date of such certificate until the final maturity date of the last maturing bond will be equal to at least one and three - fourths times the amount required to pay principal of and interest on all of the Bonds of this issue and such Additional Bonds. (c) payments have been made into the various Funds as required by Article V of this Deed of Trust, even though the Reserve has not reached the total required amount. -7-01 (6) The provisions of Article XI for consent by the holders of the Bonds shall be inapplicable to the exercise of the rights reserved by the City in this Section 2.05. The exercise of such rights does not require consent by the holders of the Bonds. SECTION 2.06. The City will cause this Deed of Trust, and any and all supplemental Deeds of Trust and instruments of further assurance at all times to be recorded and filed In such gunner and in the office of the County Clerk of Nueces County, Texas, and in such other places as may in the opinion of counsel f6t the Trustee be required by law in order fully to pre- serve and protect the rights of the bondholders and the Trustee hereunder, and upon the request of the Trustee it will furnish to the Trustee promptly after the execution and delivery of this Deed of Trust an opinion of counsel satisfactory to the Trustee stating that in the opinion of such counsel this Deed of Trust has been properly recorded and filed so as to make effective the lien intended to be created thereby, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to make such lien effective. SECTION 2.07. The City will from time to time promptly pay and discharge all taxes, assessments and other governmental charges, the lien of which would be prior to the lien hereof, lawfully imposed upon the Trust Estate or any part thereof or upon the income and proceeds thereof, so that the lien of this Deed of Trust and the priority of such lien shall at all times be wholly preserved at the cost of the City and without expense to the Trustee or the holders of the Bonds, provided, however, that nothing in this section contained shall require the City to pay or discharge any such tax assessment or governmental charge so long as the validity thereof be by it in good faith contested, unless thereby in the opinion of the Trustee or its counsel the Trust Estate or some material part thereof will be lest, forfeited or materially endangered. SECTION 2.06. The City will maintain, preserve and keep the Trust Estate in a state of good repair, working order and condition and will not dispose of the Trust Estate in whole or in part except in the manner and upon the terms provided in Section 7.02 of Article VII hereof. -.r..w SECTION 2169+ The City will duly and punctually keep, observe and perform each and sj6r� term; covenant and condition on its part to be kept, observed and performed, contained in this Deed of Trust, and will punctually perform all duties with reference to the Trust Estate required by the Constitution and laws of the State of Lbxas, and the City will make and collect such reasonable and sufficient rates and charges for services supplied by its Waterworks system to the City and to all other Consumers, as will be fully sufficient to meet all the requirements of this Deed of Trust, and the proper segregation and application of the revenues of said System. SECTION 2.10. The City will not grant a franchise for the operation of any competing Waterworks system in the City of Corpus Christi until all Bonds issued hereunder (including the Additional Bonds permitted hereby and bonds to refund the Bonds) shall have been retired. SECTION 2.11. 'Ihe City will enforce the provisions of its applicable ordinances requiring meter deposits by its water customers. The money derived from such deposits will be maintained in a special fund to the end that each such meter deposit shall serve as security for the payment of such customer's indebtedness to the City for any water service rendered to such customer. within its discretion the City may invest all or any part of such moneys in accordance with applicable law. ARTICLE III ACCOUNTS AND BECCJRDS SECTION 3.01. The City shall keep full and proper books of records and account, in which full, true and proper entries will be made of all dealings, business and affairs of the City which in any way kfect or pertain to the operation of the Trust Estate, and will furnish to the Trustee each month a statement in reasonable detail showing the earnings and expenditures of the System, and the application of funds in the system Fund hereinafter established, for the preceding month. The City shall also furnish to the Trustee from time to time such other data as to the plant, properties and equipment comprising a part of the Trust Estate, as the Trustee shall reasonably request. As soon after the close of each operating year as may reasonably be done, the City will furnish to the Trustee and to all bond- holders who may so request, full audits and reports made by a qualified Certified Public Accountant or a Public Accountant registered as provided by Chapter 315, Acts of the 49th Legislature of Texas, 1945, kncln as °PUBLIC ACCOUNTANCY ACT CF 194511, covering the operations of the System, for the �y Preceding operating year, and '9i8,dpg the earnings and expenses of the properties and the disposition made of all revenues for said operating year the amounts available for the purposes set forth in Article V hereof, and, in such detail as the Trustees may request, the assets, liabilities and financial condition of the ,stem at the close of such operating year, The City at the same time Shall furnish to the Trustee an estimate of cash receipts and dis- bursements for the ensuing year do sufficient detail to indicate the probable total net income from operations and amounts available for the several fund accounts established herein. If any such audit discloses any discrepancies or misapplication of funds, the City shall be charged with the duty of rectifying such misapplications as far as possible and of remedying any deficiencies in payments hereunder from the first funds available for such purpose, The City will at its expense, upon mitten request of the Trustee, permit the Trustee at all reasonable times, acting by Trustee's agents, engineers, accountants and attorneys, to examine and inspect the System, property, books of accounts, records, reports and other data relating to the Trust Estate and to take copies and extracts therefrom, and will afford a reasonable opportunity to make any such examination and inspection and will furnish the Trustee any and all such other information as it may reasonably request, The Trustee shall be under no duty to make any such examination unless requested so to do by the holders of twenty -five per cent in principal amount of the Bonds at the time outstanding and unless such holders shall have offered the Trustee security and indemnity satisfactory to it against any costs, expenses and liabilities which might be incurred thereby. The City shall keep its books and records in the manner conforming to standard accounting practices as Usually followed by private corporations owning and operating Alaterxorks Systems. ARTICIE IV RMRMCE SECTIM 4.01. The City covenants and agrees that at all times it will insure and keep insured all properties subject to the lien hereof which are of a character usually insured by companies operating Like Properties, in good and responsible insurance companies, against risks customarily insured against by companies engaged in a similar business, and in the same manner and to the same extent, all loss therefrom (except any 1r single loss which does not exceed $50,000.00) being payable to the Trustee as its interest shell appear, by th6 customary mortgage or trustee clause to be attached to or inserted in the policies. The City shall furnish to the Trustee a list /of such policies, showing the character of the insurance, the property and risk covered, the name of the insurance company, and other pertinent details, and shall keep the Trustee fully informed of any change in or addition to such list. Upon the written request of the Trustee such policies will be deposited with it. the Trustee, subject to the provisions of Article IX hereof, shall be under no obligation or duty to obtain any such schedule and shall have no duty or responsibility with respect to the sufficiency or effect of any of such policies of insurance, the renewal thereof, or the responsibility of the insurers, or with respect to any such schedule or the matters shown therein, except to display any such schedule to any holder of Bonds desiring to inspect the same. In case of loss or damage to any of the insured property, the proceeds of any such insurance or any one loss amounting to not more than $50,000.00 shall either be promptly applied by the City to the repair or replacement of the property destroyed or damaged, or otherwise to the improvement of the Trust Estate, or if not so applied within one year of the date of receipt thereof by the City, such proceeds shall be deposited in the Reserve created by Article V hereof. In any case vdiere the proceeds of any such insurance shall amount to a sum in excess of $50,000.00 on account of any one loss, all such moneys shall be promptly deposited with the Trustee and shall be paid out from time to time to the City upon its written request signed by the Mayor and City Secretary, and accompanied by a certified copy of the resolution of the City Council directing such request, and specifying that certain expenditures have been made or incurred in repairing or replacing the property so impaired or destroyed, and the amount thereof, and requesting the payment by the Trustee to the City of an amount not in excess of the amount of such expenditure. If in the judgment of the City Council and of a recognized public utility engineer selected by the Council and approved by the Trustee, the interest of the City and the bondholders will be best served through the application of all or part of such insurance proceeds to improvements to the mortgaged property which do not constitute the repair or replacement of the property for the destruction or impairment of which the -il6 insurance proceeds are so paid, the amount of such proceeds may be applied by the city to the making of such improvements, and payment thereof shall be made to the City by the Trustee as expended in the manner provided in the last preceding sentence hereof. The Trustee may in its discretion require such additional proof of the matters certified in such resolution as it may consider necessary or desirable. Any insurance proceeds not so paid out by the Trustee within a period of two years from the date of receipt thereof may be used for the retirement of Bonds purchased in the open market at prices of not more than the par amount thereof. In the event the monies thus available are to be used to purchase Bonds in the open market, the City shall exert its beat efforts to use the monies so available to purchase Bonds at the lowest price possible in the then existing open market, and any Bonds so contracted to be purchased shall be presented to the Trustee for payment with such monies and when paid shall be cancelled and shall not be reissued or refunded. Any adjustment of any loss under any policy of insurance made by the City may be consented to by the Trustee without investigation as to the fairness thereof. The payments of premiums for all insurance policies required under the provisions of this Section and the payment of premiums for all types of insurance customarily carried by a private utility company oper- ating a waterworks system shall be considered to be a maintenance and oper- ation expense within the provisions of Article V hereof. SECT1oN 4.02. The City shall obtain and keep continually in force such employee fidelity and indemnity insurance and Bonds as would ordinarily be maintained by a private utility company operating a waterworks system. ARTICLE V. APPLICATION OF REVENUES SECTION 5.01. SYSTEM FUND. There is hereby created and ordered to be established in the bank, heretofore duly selected by the City in accordance with the laws of Texas and its Charter, ae "the depository of the City, hereinafter called the "City Depository ", a fund to be designated the "System Fund ". There shall be deposited in the System Fund as collected from and after June 1, 1948, all revenues derived from the operation of the System, together with all cash to the credit of the ^later Department on that date. J7 SECTION 5.02. MAIRTENALCE AND OPERATION FOND. There is hereby created and ordered to be established in the City Depository a fund to be designated the "Maintenance and Operation Fund." Out of monies available in the System Fund at the time of the execution of this Deed of Trust there shall be deposited in said Maintenance and Operation Fund a sum of money estimated to be sufficient to pay the expense of maintaining and operating the System for the calendar month of June, 1948, to -wit- 051,000.00. On or be- fore June 30, 19148, and on or before the 10 day of each month thereafter if said monies are available at such time, but in no event later than the last day of said month, while any of the Bonds or any Additional Bonds are outstanding there shall be withdrawn from the System Fund and deposited in the Maintenance and Operation Fund an amount of money estimated by the City to be sufficient to pay the reasonable expenses of operation and maintenance of the System for the next succeeding calendar month. SECTION 5.03. There is hereby created and ordered to be established with the Trustee the City of Corpus Christi'Saterworks Revenue Bonds Interest and Sinking Fund, hereinafter called "The Interest and Sinking Fund." On or before July 10, 1948, and on or before the 10 day of each month thereafter the City shall withdraw from the System Fund and deposit in the Interest and Sinking Fund an ame,mt of money not less than the total of: 112th of the next installment of principal scheduled to mature of the Bonds and of any Additional Bonds then outstanding; 16th of the next semi- annual installment of interest on the Bond" and on any Additional Bonds then outstand- ing; and an additional amount equal to 259 of both such items, provided, however, that it shall not longer be necessary to remit such additional amount of 25% whenever and so long as the following conditions exist: (a) There shall he— bean no default in the payment of any Bonds or Additional Bonds or interest thereon; (b) All of the payments required by this Section 5.03 to have been made into the Interest and Sinking Fund prior to and on such date, shall have been made; (o) There shall have been accumulated and shall exist in the interest and Sinking Fund an amount of money equivalent to all monthly J.- installments of interest, and all monthly installments of principal required by this Section 5.03 to have been paid into the Interest and Sinking Fund subsequent to the last preceding maturity of interest, and subsequent to the last preceding maturity of principal, plus an additional amount (herein called the aReserve % which shall be an amount of money equivalent to the highest total amount of principal and interest to become due in any future twelve month period on all Bonds (and any Additional Bonds) than outstanding. So long as the Reserve contains the amount of money stipulated in subsection (c) of this section it will be considered to be intact and while the Reserve is intact the monthly payments to the Interest and Sinking Fund may be made without the 25m, margin requirement; but if at any time it becomes necessary to use temporarily any part of such Reserve for the payment of principal or interest, or such Reserve is otherwise depleted, then to the extent of such use or derleticr such mor_ey sh_11 be restored by t'' immediate resumption of such margined payments until the Reserve is again intact. Out of monies remaining in the System Fund after the initial payment to the Maintenance and Operation Fund required by Section 5.02 hereof, there shall be deposited in the Interest and Sinking Fund immediately after said initial payment has been made, an amount of money equivalent to the install- ment payment for principal and interest anc the 26' additional az.:ount which otherwise should be made on or before June 10, 19x8. Any deficiency in said payment shall be paid out of the first monies available in the System Fund. The moneys in the Interest and Sinking Fund shall be used solely for the purpose of paying interest on and principal of the Bonds, and any Additional Bonds issued pursuant to .article II hereof; provided, that, when the total amount of money in the Interest and Sinking Fund (including the Reserve) is equal to the aggregate principal amount of the Bonds(and Ad- ditional Bonds, if my) outstanding plus all unpaid coupons thereto appertain- ing unmatured and matured, no further payments need be made into the Interest and Sinking Fund. SECTION 5.04. The moneys paid into the Interest and Sinking Fund shall be continuously secured by a valid pledge of direct J9 obligations of, or obligations unconditionally guaranteed by the United states of America, having a par value or market value when less than par, exclusive of accrued interest, at all times at least equal to the money deposited in the Interest and Sinking Fund. The Reserve, at the option of the City, may be invested in direct obligations of, or unconditionally guaranteed by, the United States of America, and deposited in escrow under an .escrow agreement, or deposited in the trust department of the Trustee. If such money is so invested and the bonds deposited in escrow or in the trust department of the Trustee Bank, the City shall have the right to have sold through the escrow agent or through the said trust department on the open market a sufficient amount of said securities in order to met its obligations of principal and interest in event it does not have sufficient funds uninvested on hand for such purpose. Under such circumstances, the Mayor is hereby authorized, ordered and directed to give written notice to such escrow agent, or the Trustee of the necessity to sell said securities on the open market. After such sale, the monies resulting therefrom shall belong to the interest and Sinking Fund and shall be available to pay such obligation of principal or interest or both principal and interest. In the event the Reserve is depleted in instances as provided in this section, it shall be the duty of the City to restore such monies by resuming the monthly deposit of funds margined by 25% in excess of the actual requirements for payment of principal and interest as hereinabove in this section provided. SECTIIN 5.05. There is hereby created and ordered to be established in the City Depository a fund to be designated as the "Extension and Improvement Fund. 11 Money in such fund shall be used only for such extensions of, improvements to, or renewals or replacements of the System, or for any one or more of said purposes, except as hereinafter in this Section provided, such as are not ordinarily considered payable as maintenarc- and operation expenditures. Payments into such fund shall be made and the money in the Fund shall be used in the following manner: (a) At all times money in such Fund which shall not actually be committed under construction contracts shall remain available and shall be used by the City to prevent or relieve any default in the payment of the principal of or interest on the Bonds; ya (b) At any time when the Extension and Improvement Fund shall contain not less than $100,000.00 not committed under construction contracts, any money in e.=ess thereof mays within the discretion of the City Council, be withdrawn for the purpose and used for the purpose of redeeming Bonds prior to their maturity in accordance with the redemption provisions contained in this ordinance and in the Bonds; (c) On the 10th day of *, 1948, and on the loth day of each month thereafter, after the monthly payments required to be made 'into the Interest and Sinking Fund have been made, the City shall transfer from the System Fund to said Extension and improvement Fund not less than Five Thousand ($5,000.00) Dollars until there shall be accumulated in said fund the amount of $100,000.00. Whenever said fund shall be diminished below that amount, said payments shall be resumed. SECTION 5.06. REDEMPTION FUND. There is hereby created and ordered to be established in the City Depository a fund to be designated the IrRedemption Fund. 11 Said Fund shall be used only for the purpose of redeeming bonds prior to their respective maturities, except that if, at any time, money in the Interest and Sinking Fund is insufficient to pay an installment of principal or interest which is about to mature or has matured, to the extent necessary to supply the deficiency money in the Redemption Fund shall be transferred to the Interest and Sinking Fund. (a) when there shall have been accumulated in and there shall be in the Reserve the total amount required by Section 5.03 hereof for the Bonds and for any Additional Bonds, and there shall have been accumulated in and there shall be in the Extension and IxProvement Fund an amount not less than $100,000.00, exclusive of any amounts committed under construction contracts, and so long as and while such conditions exist, on or before the 10th day of each month the City shall transfer all of the amount remaining in the System Fund into the Redemption Fund, or into the Extension and Improvement Fund, or into both Funds in such proportion as may be determined by the City Council. And in the absence of an affirmative determination, 50% of the amount available for such purposes shall be trans- ferred to each the Extension and Improvement Fund and the Redemption Fund. (b) Money in the Redemption Fund shall be used by the City to retire the Bonds prior to their respective maturity dates through the exercise of the Cityfs option to retire Bonds, to the extent that such option exists. Money in excess of that which can be used in retiring Bonds under such option may be used by the City in purchasing and retiring Bonds at the mast favorable price or prices reasonably obtainable by the City. Bonds thus redeemed or repurchased shall be cancelled by the City end shall not be reissued or refunded and shall be submitted by the City to the Trustee for its inspection. provided, however, that no bonds shall be thus redeemed unless through such redemption an economy of interest will result to the City. SECTICN 5.07. All moneys which are to be paid into the City Depository under the provisions of this Article V shall be secured in accordance with the laws of the State of Texas applicable thereto, and the City covenants especially that such moneys shall be continuously secured by a valid pledge of direct obligations of, or obligations unconditionally guaranteed by the United States of America, having a par value or market value when less than par, exclusdve of accrued interest, at all times at least equal to the total amount of money on deposit in said several Funds in the City Depository. SECTICN 5.08. If and when the City from time to time shall issue Additional Bonds the ordinance authorizing such bonds, or the supplement or amendment to the Deed of Trust securing such bonds shall contain adequate and appropriate provisions for payments into the several Funds created by this Article V so that the security of the Bonds will not be impaired. ARTICIE VI COVENANTS SECTION 6.01. The City Council hereby covenants and agrees that it will, at all times while any of the Bonds or Additional Bonds, or any interest thereon, are outstanding and unpaid, charge and collect for services rendered by said System rates sufficient to pay all maintenance, depreciation, replacement, betterment and interest charges and to provide J'1 an Interest and Sinking Fund sufficient td,pay the interest and principal of the bonds as such interest and principal mature and any outstanding indebtedness against the System, as is required by Article 1113, Revised Civil Statutes of Texas, as amended, Fos` the benefit of the original purchaser, and for the benefit of any and all subsequent holders of said Bonds, Additional Bonds, coupons, or any part thereof, and in addition to all other provisions and covenants in the laws of the State of Texas and in this ordinance, it is expressly covenanted that the City shall fix and maintain rates and collect charges for the &6iliti6s and services afforded by the System, which will provide revenues sufficient at all times: (a) To pay all operating, maintenance, depreciation, replacement and betterment charges of the System, as required under Article 1113, Revised Statutes of Texas, as amended; (b) To establish and maintain the Interest and Sinking Fund (including the Reserve Account) for the Bonds and for any Additional Bonds; Improvement Fund; (c) To establish and maintain the Extension and (d) To establish and maintain the Redemption Fund; (e) To pay all outstanding indebtedness against the system other than the Bonds, as and when the same becomes due. SECTION 6.02. No free water service shall be rendered by the City for any purpose. No such free water service shall be rendered to the County, the School District or any other public agency. Expressly the City shall pay into the System Fund annual rentals for each fire hydrant the sum of $3.00. ARTICIE VII POSSESSION OF MOiTGACED PROPERTY SECTION 7.01. while not in default in the payment of principal of or interest on any of the Bonds secured hereby, or in respect to any of the covenants, agreements or conditions in this Deed of Trust contained, the City shall be permitted and suffered to possess, use and enjW the Trust Estate and all property and appurtenances, franchises and rights S13 conveyed by this Deed of Trust (except money or property, if any, expressly required to be deposited with the Trustee) and to receive and use the revenues, rents, issues, income, produce and profits thereof with power in the ordinary courae of business freely and without let or hindrance on the part of the Trustee or of the holders of the Bonds, to use and consume supplies; to alter, repair, dismantle and change the position of any of its buildings and structures, plants, mains, pipe lines or other property what- soever (provided that no such change shall impair the lien of this Deed of Trust upon any such building, structure, plant, main, pipe line, or other property); to replace and renew any of its equipment, machinery or other property; and to acquire any and all rights under choses in action and contracts. SECTICE 7.02. The City covenants that so long as the Bonds or any of then. shall be outstanding and except as in this Article otherwise permitted, it will not sell, lease or otherwise dispose of or encumber any part of the System or any of the revenue derived therefrom. The City may, however, from time to time sell any machinery, fixtures, apparatus, tools, instruments, or other movable property and any materials used in connection therewith, if the City Council shall determine that such articles are no longer needed or are no longer useful in connection with the operation and maintenance of the System and if the proceeds thereof shall be applied to the replacement of the properties so sold or disposed of, or shall be placed in the Interest and Sinking Fund or the Redesption Fund, The City may from time to time sell such real estate as it shall declare by resolution is not needed or serves no useful purpose in connection with the maintenance and operation of the system. The proceeds of any sale of real estate shall be disposed of as hereinabove provided for the proceeds of the sale or disposal of movable property. It is provided, however, that not more than $15,000.00 in value of property, real or personal, shall be sold during any twelve months' period without the consent of the Trustee evidenced by a release signed by the Trustee. The sale price of such property shall be presumed to be the value thereof for the purpose of this Section 7.02. In executing yy such release the Trustee may rely upon a certified copy of a resolution by the City Council of the City declaring that the properties released are no longer needed or are no longer useful in connection with the operation and maintenance of the System, but the Trustee may require a certificate of such facts by an engineer acceptable to it. The Trustee shall incur no liability, If in any instance, it does not require such certificate. SECTIW 7.03. The City may, notwithstanding any other Provisions of this Deed of Trust, lease any of its lands not necessary to the operation and maintenance of the Systems for any purpose which will not result in any damage to or diminution of the value of the property leased or of arp other property of the City and will not in any manner divert, andan&r or contaminate the City's water supply or water transportation facilities. The rental to be charged under all such leases shall be not less than the fair and reasonable rental in relation to the character and value of the property leased. The Trustee may rely upon declarations contained in a resolution adopted by the City Council as to the fairness and reasonableness of such rental consideration. All rentals, revenues, and receipts derived by the City from soy and all leases so made shall upon the receipt thereof be deposited with the Trustee for the credit of the Interest and Sinking Fund or the Redemption Fund. ARTICLE VIII DEFAULTS AND REMEDIES SECTIW 8.01. For the purpose of this Deed of Trust, the following events are hereby defined as and are declared to be "events of default,,; interest on (a) Default in the due and punctual payment of any any of the bonds and the continuance thereof for a period of nlrr ®ty (90) days after written notice thereof by the Trustee to each member of the City Council of the City of Corpus Christi stati Payment has been demanded and default made; ng that principal of any of the Punctual bonds at maturity thereof and hepco�ntinuance thereoi for a period of ninety (90) days after written notice thereof by the Trustee tc each member of the City Council of the City of Corpus Christi stating that payment has been demanded and default made; yv- (c) Default in the performance or observance of any Other of the covenants, agreements or conditions on the part of the City to be kept, observed and performed contained in this Deed of Trust or in the bonds, and continuation of such default for a period of ninety (90) days after written notice thereof by the Trustee to each member of the City Council of the City of Corpus Christi; (d) The institution of bankruptcy proceedings, either voluntary or involuntary, under any state or federal statute, whereby the City's duty to carry out all of the covenants and agreements in this Deed Of Trust contained might be in any wise affected. Any notice herein provided to be given to a member of the City Council and the City secretary shall be deemed sufficiently given if sent by registered mail with postage prepaid to the person to be notified. addressed to him at the post office in the City of Corpus Christi. The Trustee may give any such notice in its discretion and shall give such notice if requested so to do by the holders of not less than twenty per cent (20%) in principal amount of the bonds at the time outstanding. Wherever "Bonds" are referred to in this article and in Article %I hereof, the term shall be understood to mean not only all outstanding Bonds of the issue originally secured hereby, but also the Additional Bonds issued as authorized by this Deed of Trust and all out- standing refunding bonds which may be issued under the provisions of this Deed of Trust in such manner as, to be entitled to the security of this Deed of Trust on an equality with the Bonds of said original issue. SECTION 8.02. Upon the happening of any event of default as defined in Section 8.01 of this Article, the Trustee shall, but only upon the written request of the holders of not less than sixty per cent (60%) in principal amount of the bonds then outstanding hereunder, and upon being indemnified to its satisfaction, by notice in writing to the City secretary to be sent as provided in Section 8.01 hereof, declare the principal of all:,ponds then outstanding hereunder to be due and payable immediately, and upon any such declaration the said principal shall becoma and be due and payable immediately, anything in this Deed of Trust or in the said Bonds to the contrary notwithstanding. This provision, however, is subject to the condition that if at any time after the principal of said Bonds shall have been declared due and payable and before any sale of the Trust Estate shall have been made, all arrears of interest upon all such �� Bonds, with interest upon all past due installments of interest at the rate borne by the Bonds, and all past due principal of the bonds, together with the reasonable charges and expenses of the Trustee, its agents, attorneys and counsel, shall be paid by the City and after all other defaults which may have occurred shall have been remedied or cured to the satisfaction of the Trustee, then and in every such case the holders of sixty per cent (60%) in principal amount of the Bonds then outstanding may, by notice in waiting given to the Trustee, and to the City Secretary in the manner provided in Section 8.01 of this Article, waive such default ant. its consequences, and rescind such declaration, but no such waiver or rescission shall extend to or affect any subsequent default or impair or exhaust any right or power consequent thereon. SECTION 8.03. Upon the happening of any event of default as defined in Section 8.01 of this Article, the Trustee, personally or by its attorneys or agents, may to the extent not prohibited by law enter into and upon and take possession of all the Trust Estate and each and every partthereof and exclude the City and its agents, servants and employees niolly therefrom, and have, hold, use, operate, manage and control the same and each and every part thereof, and in the name of the City or otherwise, as they shall deem best, conduct the business thereof and exercise the franchises pertaining thereto and all the rights and powers of the City and use all of the then existing property, materials, current supplies, stores., and other assets for that purpose, and at the expense of the Trust Estate from time to time maintain, restore, insure and keep insured, the properties, plants, equipment and apparatus provided or re- quired for use in connection with such business, and likewise from time to time, at the expense of the Trust Estate, make all such necessary or proper repairs, renewals and replacements and all such useful alterations, additions, betterments and improvements as to it may seem judicious, and collect and receive all tolls, earnings, income, rents, issues, profits and revenues of the same and of every part thereof, and after deducting therefrom the e2penses of operation and all other proper outlays herein authorized, and all payments of ,just and reasonable compensation for its own services, and for the services of its attorneys, agents and assistants, the Trustee shall apply the residue of the moneys received by the Trustee as follows: (a) In case the principal of none of the bonds shall have become due, to the payment of the interest in default, in order of the maturity of the installments of such interest, with interest on the overdue installments thereof at the same rates, respectively, as were borne by the Bonds on which such interest shall be in default, such payments to be made ratably to the persons entitled thereto without discrimination or preference; (b) In case the principal of any of the Bonds shall have become due by declaration or otherwise, first to the payment of the interest in default, in the order of the maturity of the installments thereof, with interest on overdue installments thereof at the same rates, respectively, as were borne by the Bonds on which such interest shall be in default, and next to the payment of the principal of all Bonds then due, such payment to be made ratably to the persons entitled thereto without discrimination or preference. When such payments and such other payment required by any provision of this Deed of Trust, shall have been made in full and if no suit to enforce this Deed of Trust shall have been begun or sale made as hereinafter provided, and if the City shall have complied with all other provisions of this Deed of Trust as to which the City shall be in default, the Trustee after making such provision as to it may seem advisable for the payment of the next maturing installment of interest to fall due upon the Bonds, shall restore the possession of the Trust Estate (other than any cash at the time required to be held by the Trustee hereunder) to the City. SECTION 8.04. Upon the happening of any event of default as defined in Section 8.01 of this Article, if the principal of all of the Bonds outstanding hereunder shall have been declared due and payable as provided in Section 8.02 of this Article, and whether or not remedies authorized by Section 8.03 of this Article shall have been pursued in whole or in part, the Trustee may cauee the Trust Estate to be sold, and YV may proceed to protect and enforce the rights of the Trustee and the bond- holders hereunder in such manner as counsel for the Trustee shall advise, whether for the specific performance of any covenant, condition, agreement or undertaking herein contained, or in aid of the execution of any power herein granted; or for the enforcement of such other appropriate legal or equitable remedies as may No in the opinion of such counsel be more effectual to protect and enforce the rights aforesaid. The Trustee shall take any such action or actions if requested so to do by the holders of at least sixty per cent (6(X) in principal amount of the Bonds then outstanding hereunder: SECTION 8:05: Upon the happening of any event of default as defined in Section 8.01 of this Article, and if the principal of all of the outstanding Bonds shall have been declared due and payable as provided in section 8:02 of this Article, then and in every such case, and whether or not the remedies authorized by section 8.03 of this Article shall have been pursued in whole or in part, the Trustee shall, but only upon the written request of the holders of not less than sixty per cent (00 %) in principal amount of the Bonds then outstanding hereunder, with or without entry, sell to the highest bidder the Trust Estate and all right, title, interest, claim and demand thereto and the right of redemption thereof, at any.such .place or places, and at such time or tunes and upon such notice and terms as the Trustee may fix and spaci.fy and as may be required by law. In case of such sale of any of the property subject to this Deed of Trust, notice of such sale shall first be given by publication in at least one newspaper published in Nueces County, at least once a week for four successive weeks next preceding such sale, and by like publication in at least one daily newspaper published in the City of New York, New York, and by the giving of any other notices which may be required by law, and upon such sale the Trustee may make and deliver to the purchaser or purchasers a good and sufficient deed or deeds for the same, which sale shall be perpetual bar both at law and in equity against the City and all persons and corporations claiming or to claim such properties. No purchaser at any sale shall -'be bound to see to the application of the purchase money SV14 or to inquire as to the authorization, necessity, expediency or regularity of any such sale. Nevertheless, the City if so requested by the Trustee, shall ratify and confirm any sale or sales by executing and delivering to the Trustee or to such purchaser or purchasers all such instruments as may be necessary or in the judgment of the Trustee proper for the purpose which may be designated in such request. Such notice of sale shall state that the City has granted to the purchaser of the mortgaged property a franchise for the operation thereof for a period of twenty (20) years dating from such purchase. SECTION 8A. In the event of any sale, whether made under the power of sale, hereby granted and conferred or under or by virtue of judicial proceedings, the whole of the Trust Estate shall be sold in one lot and as an entirety, unless such sale as an entirety is impossible or impracticable by reason of some statute or otherwise. SECTICN 8.07. The Trustee may from time to time ad- journ any sale to be made by it hereunder by announcement at the time and place of such adjourned sale, and without further notice or publication except as otherwise required by law may make such sale at the time and place to which the same may be so adjourned. SECTIM 8.08. In case an event of default as defined in Section 8.01 of this Article occurs, and if all of the Bonds outstanding hereunder shall have been declared due and payable as provided in section 8.02 hereof, and in case any judicial proceedings is commenced to enforce any right of the Trustee or of the bondholders under this Deed of Trust or otherwise, then as a matter of right, the Trustee shall be entitled to the appointment of a receiver of the Trust Estate and of the earnings, income or revenues, routs, issues and profits thereof with such powers as the Court making such appointments may confer. SECTIM 8.09. In case the Trustee shall have proceeded to enforce any rights under this Deed of Trust by sale or otherwise, and such proceedings shall have been discontinued or appealed, or shall have been determined adversely to the Trustee, then and in every such case the City and the Trustee shall be restored to their former respective positions S'd and the rights hereunder in respect to the Trust Estate, and all rights, remedies and powers of the Trustee and in the bondholders shall continue as though no such proceedings had been taken. SECTICN 8.10. In case of any such sale of the Trust Estate, any bondholder or bondholders or committee of bondholders, or Trustee, may bid for and purchase such property and upon compliance with the terms of sale may hold, retain possession and dispose of such property as the absolute right of the purchaser or purchasers without further accountability and shall be entitled, for the purpose of making settlement or payment for the property purchased, to use and apply any bonds hereby secured and any interest thereon due and unpaid, whether or not such interest be evidenced by coupons, by presenting such Bonds and coupons in order that there may be credited thereon the sum apportionable and applicable thereto out of the net proceeds of such sale, and thereupon such purchaser or purchasers shall be credited on account of such purchase price payable by him or them with the sum apportionable and applicable out of such net proceeds to the payment of or as credit on the Bonds and coupons so presented. SECTION 8.11. The proceeds of any sale of the Trust Estate, together with any funds at the time held by the Trustee and not otherwise appropriated, shall be applied by the Trustee as follows: First: To the payment of the costs, expenses, fees and other charges of such sale and a reasonable compensation to the Trustee, its agents and attorneys, and to the discharge of all expenses and liabil- ities incurred and advances or disbursements made by the Trustee hereunder. Second: Arty surplus then remaining to the payment of the whole amount then due or unpaid upon the Bonds issued hereunder and then outstanding for principal and interest, with interest on overdue principal and overdue installments of interest at the same rates, respectively, as were borne by the Bonds whereof the principal or installments of interest may be overdue, and in case such proceeds shall be insufficient to pay in full the whole amount so due and unpaid, then to the payment of such Principal and interest ratably according to the aggregate amount owing on all Bonds then outstanding without preference or priority, of principal over interest or of interest over principal, Third; Any surplus then remaining to the City or whom- soever shall be lawfully entitled thereto. J SECTION 8.12. In case of a sale under any of the foregoing provisions of this Article, whether made under the power of sale herein granted, or under or by virtue of judicial proceedings, the principal of all Bonds issued hereunder and then outstanding, if not previously due, shall immediately thereupon become due and payable, anything in said Bonds or in this Deed of Trust to the contrary notwithstanding. SECTION 8.13. The remedies herein conferred upon or reserved to the Trustee or to the holders of bonds hereby secured are not intended to be exclusive of any other remedy, but each remedy herein pro- vided shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, and every power and remedy hereby given to,the Trustee or to the holders of Bonds issued hereunder may be exercised from time to time as often as may be deemed expedient. No delay or omission of the Trustee or of any holder of Bonds issued here - under to exercise any power or right arising from any default hereunder shall impair any such right or power or shall be construed to be a waiver of any such default or to be acquiescence therein. SECTICN 8.14. Anything in this Deed of Trust contained notwithstanding, the holders of sixty per cent (60%) in principal amount of the Bonds hereby secured and then outstanding, shall have the right . by an instrument or instruments in writing delivered to the Trustee to direct and control the Trustee as to the method of taking any and all Proceedings for any sale of any or all of the Trust Estate, or for the appointment of a receiver, and may at any time cause any proceedings authorized by the terms hereof to be so taken or to be discontinued or delayed, provided however, that such holders shall not be entitled to cause the Trustee to take any proceedings which in its opinion would be unjustly prejudicial to non - assenting bondholders, but the Trustee shall be entitled to assume th-t the action requested by the holders of 60% of the then outstanding Bonds will not be prejudicial to non - assenting bondholders unless such non - assenting bondholders, in writing, show the Trustee how they will be prejudiced. J-2 SECTICI 8.15. No holder of any Bond or coupon issued hereunder shall have any right as such holder to institute any suit, action or proceedings for the enforcement of the provisions of this Deed of Trust or for the execution of any trust hereunder or for the appointment of a receiver or for any other remedy, hereunder, all rights of action hereunder being vested exclusively in the Trustee, unless and until such holder shall have previously given to the Trustee written notice of a default hereunder and of the continuance thereof, and also unless the holders of the requisite principal amount of the Bonds then outstanding shall have made written request upon the Trustee and shall have afforded it a reasonable opportunity to institute such action, suit or proceeding in its own name, and unless the Trustee shall have been offered reasonable indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for thirty (30) days after receipt of such notification, request or offer of indemnity shall have failed to institute any such action, suit or proceeding, it being understood and intended that no one or more holders of the Bonds shall have the right in any manner whatever by his or their action to affect, disturb or prejudice the lien of this Deed of Trust or to enforce any right hereunder except in the manner herein provided and for the equal benefit of all holders, of such outstanding Bonds. However, it is further provided that notwithstanding any other provision contained in this Article or elsewhere in this Deed of Trust, the holders of not less than sixty per cent (60 %) in principal amount of the Bonds then outstanding, without previous notice to or consent by the Trustee, and without joinder by the Trustee, shall have the right to institute, intervene in or defend any litigation affecting the Bonds. SECTION 8.16. In any suit or action by the Trustee, arising under this Deed of Trust or on all or any of the Bonds or coupons issued hereunder, the Trustee shall not be required to produce such Bond;: or coupons, but shall be entitled in all things to maintain any such suit or action without their production. J SECTION 8.17. If any covenant, agreement, waiver or part thereof in this Article or elsewhere in this Deed of Trust contained be forbidden by any pertinent law, or under any pertinent law be effective to render this Deed of Trust invalid or unenforceable or to impair the lien hereof, then each such covenant, agreement, waiver or part thereof shall itself be and is hereby declared to be wholly ineffective and this Deed f Trust shall be construed as if the same were not included herein. ARTICIE IX. THE TRUSTEE SECTION 9.01. The Trustee accepts the trusts herein created, but only upon the terms and conditions set forth in this Article IX. SECTION 9.02. The recitals of fact herein and in said Bonds contained shall be taken as the statements of the City and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the value of the mortgaged and pledged property, or any part thereof, or as to the title of the City thereto, or as to the security afforded thereby and hereby, or as to the validity of this Deed of Trust or of the bonds or coupons issued hereunder, and the Trustee shall incur no responsibility in respect of such matters. SECTION 9.03. The Trustee shall be under no duty to file or record or cause to be filed or recorded this Deed of Trust or any instrument supplemental thereto as a deed of trust, conveyance or transfer of real or personal property or otherwise, or to re -file or re- record or renew the same, or to procure any further, other or additional instruments of further assurance, or to see to the delivery to it of any property intended to be subjected to the terms hereof or pledged hereunder, or to do any act which may be suitable to be done for the better maintenance or continuance of the lien or security hereof, or for giving notice of the existence of such lien, or for extending or supplementing the same or to see that any property intended now or hereafter to be conveyed in trust hereunder is subjected to the lien hereof. The Trustee shall not be liable for failure of the City to insure or renew insurance or for responsibility ,� y of insurers, or for the amount of insurance carried by the city on any part of the [rust Estate, or for the failure of the City to pay any tax or tames in respect of the mortgaged and pledged property, or any part thereof, or the income therefrom or otherwise, nor shall the Trustee be under any duty in respect of any tax which may be assessed against it or the owners of tie Bonds in respect of the said property. SECTION 9.04. The Trustee may execute any of the trusts or powers hereof and perform any duty hereunder, either by itself or by or through its attorneys, agents, or employees, and they shall not be anawsr- able or accountable for any act, default, neglect or misconduct of any such attorneys, agents or employees, if reasonable care has been exercised in the appointment and retention thereof, nor shall the Trustee be otherwise answerable or accountable under any ciredmstances whatsoever, a ept for its own negligence or bad faith. SECTION 9.05, The Trustee shall be under no obligation or duty to perform any act hereunder or to institute or defend any suit in respect hereof, unless properlyiniemnified to its satisfaction. The Trustee shall not be required to take notice, or be deemed to have knowledge of any default of the City hereunder, (except as to the performance of obli- gations of which the Trustee has primary knowledge such as those under Section 5.03 and Section 5.04) and may conclusively assume that there has been no such default unless and until it shall have been specifically notified in writing of such default by the holders of the percentage in principal amount of the Bonds then outstanding hereinabove specified. SECTION 9.06. The Trustee shall not be bound to recognize any person as the holder of a Bond unless and until his Bond is submitted to such Trustee for inspection, if required, and his title thereto satisfactorily established, if disputed. SECTION 9.07. The Trustee shall be protected in actin.,; upon any notice, resolution, request, consent, order, certificate, report, appraisal, opinion, bond, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. J3- The Trustee may consult with counsel (who may be of counsel for the City or for a bondholder), and with other experts, and the opinion of such counsel or other experts shall be full and complete authorization and protection in respect of any action taken or suffered and in respect of any determination made by it hereunder in good faith and in accordance with the opinion of such counsel. SECTION 9.08. The Trustee shall not be obligated or liable to allow to the City interest on agp moneys received by it here- under, except that the Trustee shall pay the City interest on money in the Reserve account at the rate or rates it is currently paying its depositors on checking account balances of similar accounts, if interest on balances is then being so paid. SECTION 9.09. The City shall pay to the Trustee from time to time a reasonable compensation for all services rendered by it hereunder and shall reimburse all its reasonable expenses, charges and other disbursements and those of its attorneys, agents and employees, incurred in and about the administration and execution of the trusts hereby created. All payments so made to the Trustee by way of compensation, and for reimbursement by expenses, charges and other disbursements shall be regarded as a maintenance and operation expense and paid from the System Fund accordingly. In default of such payments by the City, and as security for such payment the Trustee shall have a lien therefor on the Trust Estate and the proceeds thereof prior to any rights of the holders of the Bonds and coupons. SECTION 9.10.. The Trustee hereunder or any successor Trustee may became the owner of Bonds and coupons with the same rights it would have if not a Trustee. The Trustee may act as depositary for, and permit any of its officers or directors to act as a member of, or in any other capacity in respect of any committee formed to protect the rights f the holders of Bonds or to effect or aid in any reorganization growing out of the enforcement of the said Bonds or of this Deed of Trust, whether or not any such committee shall represent the holders of more than fifty per cent (50%) in principal amount of the Bonds. '5-6 SECTION 9.11. The Trustee and any successor to the Trustee may resign and be discharged from the trust created by this Deed of Trust by giving to the City Secretary notice in writing and by giving the bondholders notice through publication thereof at least once a week for three successive calendar weeks, the first publication to be not less than thirty (30) days and not more than sixty (60) days prior to the effective date of such resignation, in one newspaper published and having general circulation in the City of Corpus Christi and in a financial newspaper or journal pub- lished in the City of New York, New York. Each of-such notices shall specifv the date on which such resignation is to take effect( Such resignation shall take effect on the day specified in such notice, unless previously a successor Trustee shall have been appointed, either by the bondholders or by the City as hereinafter provided, in which event such resignation shall take effect icnndiately upon the appointment of such successor Trustee.. SECTICN 9.12. The Trustee or any successor Trustee may be removed at any time by the holders of a majority in principal amount Of the Bonds secured hereby and at the time outstanding, upon payment to the Trustee so removed of all moneys then due to it hereunder, by an instrument or concurrent instruments in writing executed in duplicate by such holders. One copy shall be filed with the City Secretary and the other with the Trustee so removed. SECTION 9.13. In case at any time the Trustee or any successor Trustee shall resign, die, be dissolved, or be removed, or otherwise shall become disqualified to act or incapable . of acting, or in case control of the Trustee or of any successor Trustee or of its officers shall be taken over by any public officer or officers, a successor Trustee may be appointed by the holders of a majority in principal amount of the Bonds secured hereby and at the time outstanding, by an instrument or concurrent instruments in writing signed and duly acknowledged by such bondholders or by their attorney- in -fact duly authorized, and filed, one copy with the retiring Trustee, and the other with the successor Trustee, notification thereof being given to the City Secretary by such successor Trustee; but until a successor Trustee shall be so appointed by the bondholders as herein authorized the City by an 'S-9 instrument in writing duly authorized by resolution shall in such case appoint a successor to the Trustee. In the case of any appointment by the City of a successor to the Trustee, the City shall forthwith cause notice to be pub- lished once in each week for two consecutive calendar weeks in one newspaper published and having general circulation in the City of Corpis Christi and in one financial newspaper or journal published in the City of New York, New York. Every such successor Trustee so appointed by the bondholders, by a court of competent jurisdiction, or by the City shall be a bank or trust company in good standing, organized and doing business under the lank of the Unitee. States or of any State, end having its principal office in the State of Texas or in the Borough of Manhattan, the City of New York, New York, or in the City of Chicago, Illinois, and having a combined capital and surplus of not less than $2,500,000.00 which is authorized under the laws of the jurisdiction of incorporation to exercise corporate trust powers and is subject to supervision or examination by a Federal or State authority. SECTION 9.14. Any successor Trustee appointed here- under shall execute, acknowledge and deliver to its predecessor Trustee, and also to the City, an instrument accepting such appointment hereunder, and thereupon such successor Trustee, without any further act, deed or conveyance shall- become fully vested with all the estate, properties, rights,- powers, trusts, duties and obligations of its predecessor in trust hereunder, with like effect as if originally named as Trustee herein; but the Trustee ceasing to act shall, nevertheless, on the written request of the City, or of the successor Trustee, execute, acknowledge and deliver such instruments of con- veyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirminC in such successor Trustee all the right, title and interest of the Trustee which it succeeds, in and to the property subject to the terms hereof and such rights, powers, trusts, duties and obligati ns, and the Trustee ceasing to act shall also, upon like request, pay over, assign and deliver to the successor Trustee any money or other property subject to the lien of this Deed of Trust, including any pledged securities which may then be in its possession. Should any deed, conveyance or instrument in writing from the City be required by the new .S V Trustee for more fully and certainly vesting in and confirming to such new Trustee such estate, properties, rights, powers and duties, any and all such deeds, conveyances and instrw nts in writing shall, on request, be executed, acknowledged and delivered by the City. In case any of the Bonds to be issued hereunder shall have been authenticated but not delivered, any successor Trustee may adopt the certificate of authentication of the Trustee or of any sudcessor to the Trustee; and in case any of the Bonds shall not have been authenticated any successor to the Trustee may authenticate such Bonds in its own name; and in all such cases such certificates shall have the full force which it is anywhere in the Bonds or in this Deed of Trust provided that the certificate of the Trustee shall have. SECTION 9.15, Any notice, request or other instrument required by this Deed of Trust to be served on the City or sent to the City shall, unless othervdae expressly provided, be considered to have been sufficient]y given when sent by registered mail to the City Secretary ad- dressed to the City Hall in the City of Corpus Christi. Any notice, request or other writing by or in behalf of the City or any of the bondholders delivered to the Trustee at ?ts office in Dallas, Texas, shall constitute proper delivery of such notice. SECTION 9.16. The Trustee shall authenticate and turn over to the City Official then performing the duties of City Treasurer, or his order, for delivery the Bonds secured by this Deed of Trust. SECTION 9.17. The City Secretary shall file with the Trustee annually a certificate showing the names of the then members of the City Council of the City of Corpus Christi. The Trustee shall be entitled for all purposes of this Deed of Trust to assume that the persons whose names appear on the latest list filed with it continue to hold their offices until it is notified to the contrary by the City secretary. SECTION 9.18. The Trustee shall not be accountable in any manner whatsoever for any action of the City or failure of the City to act or for aqv action or failure to act by the City's depository or for any funds unless and until such funds shall have been received by the Trustee. Nor shall. the Trustee be liable for application by the City of revenues from the Trust Estate. 0 f SECTICK 9.19. All cash collected by, or payable to, the Trustee shall be paid to, and deposited with, and all Bonds and other obligations or securities shall be held by, the Trustee, except as otherwise required by law. SECTION 9.20. The holder of a Bond shall be permitted at reasonable times during regular business hours and in accordance with reasonable regulations prescribed by the Trustee, to examine at the principal office of the Trustee a copy of any current report theretofore filed with the Trustee showing the condition of the Trust Estate. ARTICLE X FRANCHIIIE SECTION 10.01. In the event that any sale of the Trust Estate shall be made under any of the provisions of this Deed of Trust for the enforcement of the lien of this Deed of Trust, the City of Corpus Christi hereby grants to the purchaser or purchasers at such sale a franchise to operate the property so purchased for a term of twenty (20) years dating from such purchase, subject to all laws regulating same then in force. ARTICLE XI. MODL')CATION OF THIS DEED OF TRUST SCCT ON 11.01. The holders of seventy-five per cent (75 %) in principal amount of the Bonds at any time outstanding (not including in any case any Bonds which may then be held or owned by or for the account of the City, but including the Additional Bonds issued under the provision as of this Dead of Trust, an: such refunding bonds /are specified in Section 2.04 of Article II hereof and are not owned by the City) shall have the right from time to time to consent to and approve the execution by the City and the Trustee of such Deed of Trust or Deeds of Trust supplemental hereto as shall be deemed necessary cr desirable by the City for the purpose of modifying or amending any of the terms or provisions contained in this Deed of Trust, or in any Deed of Trust or Deeds of Trust supplemental thereto, or contained in the ordinance authorizing the Bonds secured by this Deed of Trust, provided however, that nothing herein contained shall permit or be construed as permitting the modification or amendment of the terms and conditions contained in this Deed of Trust or in said ordinance 6a or in the Bonds so as to: (a) Make any change in the hattrity of the Bonds, (b) Reduce the rate of interest borne by any of the Bonds; (c) Reduce the amount of the principal payable on the Bonds; (d) Modify the terms of payment of principal or of interest upon the Bonds or any of them or imposa any conditions with respect to such payment; (e) Affect the rights of the holders of less than aLl of the Bonds then outstanding; (f) Change the minimum percentage of the principal amount of bonds necessary for consent to such modification. If at any time the City shall request the Trustee to enter into such supplemental Deed of Trust, the Trustee, unless it shall deem that such proposed supplemental Deed of Trust shall contain provisions which affect its rights or obligations and to which it is unwilling to assent, shall, at the expense of the City cause notice of the proposed execution of such supplemental Deed of Trust to be published in a newspaper or journal pub- lished in the City of New York, New York, and in a newspaper of general circulation published in the City of Corpus Christi, once during each calendar week for at least four successive calendar weeks. Such notice - shall briefly set forth the nature of such proposed supplemental Deed of Trust and shall state that a copy thereof is on file at the principal office of the Trustee for inspection by all holders of Bonds. A substantial copy of such notice shall be mailed by the Trustee to each holder of registered Bonds, but the failure to mail such notice in any instance shall not affect the efficiency of the consent by the holders of 75% of the Bonds. such mailed notice is for the convenience of such registered holders and is not a prerequisite to the modification of the Deed of Trust. Whenever at any time within one year from the date of the first publication of said notice, the City shall deliver to the Trustee an instrument or instruments executed by the holders of at least seventy -five per cent (75 %) in aggregate principal amount of the Bonds then outstanding as in this section defined, which instrument or instruments shall refer to 6i the proposed supplemental Deed of Trust described in said notice and shall specifically consent to and approve the execution thereof in substantially the form of the copy thereof on file with the Trustee, thereupon, but not otherwise, the Trustee shall execute the said supplemental Deed of Trust in substantially the said form without liability or responsibility to any holder of any Bond, whether or not such holder shall have consented thereto. If the holders of at least seventy -five per cent (75%) in aggregate principal amount of the Bonds outstanding as in this section defined at the time of execution of any such supplemental Deed of Trust, or the predecessors in title of such holders, shall have consented to and approved the execution thereof as herein provided, no holder of any Bond, whether or not such holder shall have consented to or shall have revoked any consent as in this section provided, shall have any right or interest to object to the execution of such supplemental Deed of Trust or to object to any of the terms or provisions therein contained or to the operation thereof, or to enjoin or restrain the Trustee of the City from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any supplemental Deed of Trust pursuant to the provisions of this section, this Deed of Trust and the -- ordinance authorizing the Bonds shall be and be deemed to be modified and amended in accordance with such supplemental Deed of Trust, and the respec- tive rights, duties and obligations under this Deed of Trust of the City, the Trustee, and all the holders of outstanding Bonds shall thereafter be determ- ined, exercised and enforced hereunder, subject in all respects to such modifications and amendments. Any consent given by the holder of a Bond pursuant to the provisions of this section shall be irrevocable for a period of six months from the date of the first publication of the notice provided for in this section, and shall be conclusive and binding upon all future holders of the same Bond during such period. Such consent may be revoked at any tine after six months from the date to the first publication of such notice by the holder who gave such consent or by a successor in title, by filing notice with the Trustee in form satisfactory to it of such revocation of 62 consent, but such revocation shall not be effective if the holders of seventy five per cent (75 %) aggregate principal amount of the Bonds out - standing as in this section defined have, prior to the attempted revocation, consented to and approved the supplemental Deed of Trust referred to in such revocation. For the purposes of this section, ownership of Bonds shzl' be established in the manner provided in Section 12.01 of Article XII of this Deed of Trust. Any supplemental Deed of Trust executed in accordance with the provisions of this Article shall thereafter form a part of this Deed of Trust and all the terms and conditions in any such supplemental Deed of Trust as to any provision authorized to be contained therein shall be and be deemed to be part of the terms and conditions of this Deed of Trust for any and all purposes. ARTICLE XII MORAL PR.OVISICNs MCTION ]2.01. Any notice, request or other in- strument required by this Deed of Trust to be signed or executed by bond- holders may be executed by the execution of any number of concurrent instruments of similar tenor, and may be signed or executed by such bond- holders in person or by agent appointed in writing. As a condition for acting thereunder the Trustee may demand proof of the execution of any such instrument and of the fact that any person claiming to be the owner of . any of said Bonds is such owner and may further require the actual deposit of such Bond or Bonds with the Trustee. The fact and date of the execution of such instrument may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is authorized to take acknowledgments of deeds within such jurisdiction, that the person signing such instrument acknowledged before him the execution thereof, or may be proved by an affidavit of a witness to such execution sworn to before such officer. The amount of Bonds held by any person executing such instrument as a bondholder and the fact, amount and n—her. of the Bonds held by such person and the date of his holding the same may be proved by a certificate executed by any responsible trust company, bank, bankers, or 63 other depositary, in a form approved by the Trustee, showing that at the date therein mentioned such person had on deposit with such depositary the Bonds described in such certificate; provided, however, that at all times the Trustee may require the actual deposit of such Bond or Bonds with the Trustee. SECTION 12.02. The covenants, agreements, conditions, promises and undertakings in the Deed of Trust shall extend to and be bind- ing upon the succeasors and assigns of the City and all of the covenant. hereof shall bind such successors and assigns, and each of them, jointly and severally. All the covenants, conditions and provisions hereof shall be held to be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the holders from time to time of said Bonds and coupons. No transfer of the Trust Estate, or any part thereof, by the City and no extension of the time of payment of any of said Bonds or coupons after such transfer shall operate to release or discharge the City, it being agreed that the liability of the City shall continue as principal until all of said Bonds and coupons are paid in full, notwithstanding any transfer of said property or subsequent extension of time to the then owner, or other act which might serve as a legal or equitable discharge of a surety. SECTION 12.03. This Deed of Trust shall operate effectually as a lien on all property conveyed, mortgaged or pledged hereby, whether real, personal or nixed. Failure to file said instrument in the office of the County Clerk of the County in which the Trust Estate is situated shall in no wise invalidate such lien, but this instrument may be filed and recorded in the records of each and every County in which the Trust Estate or any part thereof is situated in the manner in which a Deed of Trust on real estate is filed and recorded, and may remain in his office on file as a Chattel Mortgage covering the personal property encumbered hereby. The City covenants and agrees that this Deed of Trust will be so filed as a Deed of Trust and as a Chattel Mortgage in each and every County in which any part of the Trust Estate is situated. iy SECTION 12.04. If the lien of this Deed of Trust shall be or shall ever become ineffectual, invalid or unenforceable against any property hereby mortgaged or pledged because of want of pourer or title in the City, the inclusion of any such property described herein shall not in any way affect or invalidate the provisions or lien hereof against such property as the City had the right to mortgage or pledge. , . SECTION 12.05. No holder of Bonds issued under this Deed of Trust nor of any coupons representing interest on such Bonds shall ever have the right to demand payment of such Bonds or coupons out of funds raised or to be raised by taxation. SECTION 12.06. Any request or consent of the holder of any Bonds secured hereby given for any of the purposes of this Deed of Trust shall bind all future holders of the same Bond or Bonds issued in exchange therefor or in substitution thereof in respect of anything done or suffered by the City or the Trustee in pursuance of such request or consent. SECTION 12.07. Although this Deed of Trust for con- venience and for the purpose of reference is dated as of` 1, 1948, the actual dates of execution by the City and by the Trustee are as indicated by their respective acknowledgments hereto annexed. ARTICIE XIII IEFEASANCE SECTION 13.01. !Vhen all of the Bonds and coupons hereby secured shall have been paid or redeemed, or, all of the Bonds having become due by reason of maturity, the City shall have provided for such payment by depositing in cash with the Trustee the amount necessary for such payment or redemption and shall also have paid, or caused to be paid, all sums accrued and payable hereunder by the City, then and in that case the City shall be entitled to have all of the Trust Estate revert to it and to have the estate, right, title and interest of the Trustee in respect thereof cease, determine and become void. Then, if the City shall so request in writing, the Trustee upon the cancellation of all Bonds and coupons for the payment of which money shall not have been deposited in accordance with the provisions of this Deed of Trust, shall at the cost and expense of the City 6 a- execute and deliver to the City proper inatruluadbas acknowledging satisfac- tion of the Deed of Trust. Money deposited for the payment of Bonds and coupons under the provisions hereof shall be held by the Trustee as a special trust fund for the account of the holder or holders of such Bonds and coupons and so far as necessary for such purposes shall be applied to the payment of such Bonds and coupons upon presentation and surrender thereof. IN '-an ESS 4 EREOF, the City of Corpus Christi, Texas, acting through and being duly authorized thereunto by its governing body, the City Council,has caused this Deed of Trust in duplicate originals to be signed in its name by its Mayor, and its corporate seal to be hereunto affixed, and to be attested by its City Secretary and said Mercantile National Bank at Dallas, to evidence its acceptance of the trusts hereby created, has caused its corporate name and seal to be hereunto affixed, and this Deed of Trust to be signed by Clarence E. Sample, its Trust Officer, and to be countersigned and said seal to be attested by its Cashier or Assistant Cashier, all as of the day and year first above written. CITY OF CORPUS CHRISTI, VMS, ATTEST: City secretary. (City seal) ATTEST: Its Assistant Cashier. (Bank Seal) `t BY Mayor MERCANTILE NATIONAL BANK AT DALLAS, DALLAS, TEXAS, TRUSTEE, BY Its Trust Officer. THE STATE OF TEXAS COUNTY OF NUECES BEFORE ME, THE UNDERSIGNED AUTHORITY; in and for Nueces County, Texas, on this day personally appeared Uesley E. Seale, Mayor, and M. A. Cage, Jr., City Secretary, respectively, of the City of Corpus Christi, Texas, known to me to be the persons whose names are subscribed to the foregoing instrument and known to me to be, respectively, the Mayor and City Secretary of the City of Corpus Christi, a municipal corporation, and each acknowledged to me that he executed the same for the purposes and consideration therein expressed and in the capacity therein stated, as the act and deed of said City of Corpus Christi, Texas, GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of , 1946. (SEAL) 6 9 Notary fablic in and for Nueces County, Texas. THE STLTE OF TM S COUNTY OF DALLAS BEFORE MFf THE UNDERSIGNED AUTHORITY, in and for Dallas County, Texas, on this day personally appeared CL.RENCE E. SIXPLE, Trust Officer, and . I.ssistant Cashier, respectively, of MERCANTILE NATIONAL 164K AT DALLAS, known to me to be the persons whose names are subscribed to the foregoing instrument and known to me to be, respectively, the Trust Officer and assistant Cashier of MERC MILE NATIONAL B:NK AT DALhLS, a corporation, and each acknowledged to me that he-axecutdd the same for the purposes and consideration therein expressed and in the capacity therein stated as the act and deed of said NMCANTILE N..TICNLL BI.NK AT DI.LLiZ. GIVEN UNDER MY iUM :.ND SE11 OF OFFICE, this the day of 1948. (SELL) Notary Public, in and for Dallas County, Texas 61P THE STATE OF TEXAS COUNTY OF NUECES 1 , County Clerk of Nueces County, Texas do hereby certify that the foregoing instrument of writing dated on the 1;; ' nE day of *W, 1948, with its certificates of authentication, was filed for record in my office on the day of , A. D. 1948, at o'clock . M., and duly recorded this day of 1946, at o'clock M., in the Deed of Trust Records of said County, in Volume , on pages I do further certify that an executed and acknowledged copy of said instrument was filed in my office on the day of 1946, at o'clock DS. as a chattel mortgage. VFITNESS MY OFFICIAL HAIM and seal of office this the day of , 1948. (SEAL) 19 County Clerk Nueces County, Texas 11. After passage of the ordinance specifying the interest rate or rates and the option of redemption, the same shall be expressed in the Deed of Trust before it shall be executed. 12. Said Deed of Trust and all of the provisions thereof are hereby made a part of this ordinance. 13. (a). That in the event of a sale of the properties encumbered by the Deed of Trust which is set out in the preceding section hereof in order to enforce the payment of the Bonds secured thereby, the City of Corpus Christi herein and hereby grants to the purchaser or purchasers at any such sale which may be so held under the provisions of such Deed of Trust the right, privilege and franchise to operate the properties and facilities so purchased for a term of twenty years dating from such purchase, subject to all laws regulating same then in force, as is provided in Article 1111, Texas Revised Civil Statutes of 1925, as amended, it being the intent hereof to grant a franchise which shall become operative and effective only in the event that said mortgaged properties are sold under the provisions of said Deed of Trust. (b) The granting of this franchise, which shall became effective end operative only after sale under said Deed of Trust, is supported by an adequate consideration, including: the acceptance of the trust by the Trustee, the money paid to the City by the Trustee upon execution of said Deed of Trust, and the payment to the City by the purchasers of the purchase price of said waterworks Revenue Bonds. The grantee of this franchise shall pay annually to the City while such franchise is operative and effective a fixed charge of Five (,$5.00) Dollars, on such date or dates as shall be pre- scribed by the City when the franchise becomes operative and effective. (c) when the right to this franchise shall have become vested because of the purchase of the encumbered properties pursuant to sale under said Deed of Trust, the purchaser of such properties, by filing a written acceptance of this franchise with the City Secretary of the City of Corpus Christi shall be the grantee of such franchise. 7v _: (d) In the event that the holder Of the franchise shall at any time fail to comply with reasonable rates for service theretofore established by the City, or shall fail or refuse to render efficient service to the public, or to maintain such properties in good order throughout the period of the grant, and shall continue in such failure or refusal for a period of 120 days after mitten notice by the City of such violation, the City shall be authorized to institute proceedings in a court of competent jurisdiction to enforce compliance with such rates, rendition of such service or to affect such proper maintenance as the case may be, or in the alternative for the forfeiture of the franchises provided that so long as the validity of any such rate or requirement by' the City shall be questioned in good faith by such holder through litigation in a eburt of competent jurisdiction, the City shall not be authorized to institute such proceedings. (e) Upon the termination of the grant of the franchise) the City upon the payment of the fair valuation thereof shall have the right to acquire all of the properties which shall have been operated under such franchise; provided that such grantee shall not be entitled to any payment or valuation because of any value derived from the franchise or the fact that it is or may be a going concern duly installed and operated. The fair valuation of such properties shall be determined in the following manner: Upon determining to propose to purchase such properties the governing body of the City (at this time called the "City Council'r) shall adopt a resolution showing such intention and shall deliver to the holder of the franchise a certified copy of such resolution. In the resolution the City Council shall appoint an appraiser who shall be an engineer skilled in the appraisal of waterworks properties, and the holder of such franchise shall within 30 days after receiving a copy of such resolution appoint another engineer skilled in the appraisal of waterworks properties, and the two engineers thus appointed shall select a third engineer having like qualifications. The three engineers thus selected shall serve as V the Board of Appraisement. Such Board shall take such steps as it msy deem proper to determine the then fair valuation of such properties and by a majority vote shall determine such valuation, In the event that the holder of such franchise shall fail or refuse to appoint an appraiser within 30 days after receiving the copy of such resolution, the appraiser selected by the City may proceed to determine such valuation. And if the two appraisers first selected shall be unable to or fail to select a third appraiser within 30 days after the second appraiser shall have been selected, the two appraisers shall proceed to determine such valuation. The valuation thus fixed shall be binding upon the parties and shall be considered the price at which the City shall have the right to purchase said properties. If such right is not exercised finally within 6 months after the filing with the respective parties of a copy of said report the right thus to purchase the properties shall no longer be vested in the City and the holder of such franchise upon its expiration shall have the right to remove or otherwise dispose of said properties in the event that a renewal of the franchise is not granted by the City, but shall be responsible to the City for prompt restoration of any part of the streets or alleys damaged through such removal. 14 (a). After said Bonds shall have been executed they shall be submitted to the Attorney General for his approval, and after such approval they shall be registered by the Comptroller of Public Accounts. (b) Due to the fact that the amount of the judgment in said case of Hayward V. City of Corpus Christi is in the amount of 72 $1,833,558.07, plus interest At the rate of 0 per annum from May 5, 1945, until paid, it cannot be determined definitely at the time of the passage of this ordinance what amount of Bonds will be required for the payment of the judgment with interest accrued to the date the Bonds are sold and delivered.. Accordingly, when the Bonds are ready for sale and delivery, the Mayor and City Secretary shall compute the amount of money which will be necessary to pay the judgment with interest to the date when delivery is to be made and execute a certificate showing such amount and designating by number or maturity the Bonds to be authenticated by the Trustee and to be sold and delivered. The amount of Bonds thus to be designated shall be as near the amount of the judgment and interest to the delivery date as is possible because of the denomination of the Bonds, but not in excess thereof. A copy of such certificate shall be furnished to the Trustee. (c) Upon receipt of the certificate mentioned in the preceding only sub - section (b), the Trustee shall authenticate/the Bonds specified in said certificate. In authenticating such bonds, the Trustee may rely upon said certificate. (d) At or immediately after sale and delivery of the Bonds the judgment with interest shall be paid in full. The difference, if any, between the par value of the Bonds thus sold and the amount of the judgment with interest to date of payment shall be paid from the System Fund.' (e) After full payment of said judgment and interest, the Bonds not thus sold for the purpose shall be cancelled and not issued. 15. Additional Waterworks System Revenue Bonds may be issued to --,e secured by a pledge of the revenues and a lien upon the properties of the Waterworks System and upon the franchise of the System (as authorized in Section 13 hereof) of equal dignity with the pledge and liens securing the Waterworks Revenue Bonds, Series 1948, provided that such additional WNater- works Revenue Bonds shall be issued for improvements or extensions or repairs or replacements of and to the Waterworks System or for any one or more or all of such purposes, subject to the limitations contained in Article II of such Deed of Trust, hereinabove in Section 10 made a part of this ordinance. 7J 16. That all ordinances, resolutions and orders or parts thereof in conflict herewith are, to the extent of such conflict, hereby tepealed. 17. That if any section, provision or part hereof shall be field to be invalid or ineffective for any reason, the remainder hereof shall nevertheless remain in full force and effect. J` y J PASSED AND APPROVED P ,1948. v AT1E Mayor Ci S e ary (City Sea The foregoing ordinance, Deed of Trust, and form of bond and coupon therein contained have been approved as to form and correctness this day of April, 1948. City Attorney 7K The foregoing Ordinance was read the first time and passed to the second reading, on the /,3_ day of �i�l_ , 1948, by the following vote: �+�✓ -- "Yesley S. Seale George R. Clark, Jr. John A. Perris R. R. Henry Joe T. Dawson The foregoing Ordinance was read th s and time and passed to the third reading, on the ,jgV_ day of , 1948, by the following vote: Wesley E. Seale George R. Clark, Jr. John A. Ferris R. R. Henry Joe T. Dawson The foregoing Ordinance was read t third time and passed and ordered approved by the F&yor, on the day of�s 1948, by the following vote: Wesley E. Seale George R. Clark, Jr. John A. Ferris R. R. Henry Joe T. Uawaon AFPROVED this day of , 19118. a City of Corpus Christi, Texas -. ATTr,ST: y ry APPROVED AS TO LEGAL FO M, C t Asaie en y e—y %3