03-10-10 Regular Meeting of the La Porte Area Water Authority

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Holder of a Parity Bond may require the Authority, its officials and employees to carry out, respect, or enforce the covenants and obligations of the Parity Bonds Resolutions by all legal and equitable means, including specifically, but without limitation, the use and filing of mandamus proceedings in any court of competent jurisdiction against the Authority, its officials and employees. C. Legal Authority. The Authority is a duly created and eXIstmg political subdivision of the State of Texas and is duly authorized under the laws of the State of Texas to create and issue the Parity Bonds. It has the lawful power to pledge the Pledge Revenues supporting the Bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas, including powers existing under the Act. The Bonds issued hereunder shall be ratably secured by Pledged Revenues, in such manner that one Bond shall have no preference over any other Bond. All action on the part of the Authority for the creation and issuance of the Bonds has been duly and effectively taken. Bonds in the hands of the Holders thereof are and will be valid and enforceable special obligations of the Authority in accordance with their terms. D. Title. The Authority has or will obtain lawful title to the lands, buildings, structures and facilities constituting the System. It will defend the title to all of the aforesaid lands, buildings, structures and facilities, and every part thereof, for the benefit of the Holders of the Parity Bonds, against the claims and demands of all Persons. E. Liens. The Authority will from time to time and before the same become delinquent pay and discharge all taxes, assessments and governmental charges, if any, which shall be lawfully imposed upon it or the System. It will pay all lawful claims for rents, royalties, labor, materials and supplies which if unpaid might by law become a lien or charge thereon, the lien of which would be prior to or interfere with the liens hereof, so that the priority of the liens granted hereunder shall be fully preserved in the manner provided herein. It will not create or suffer to be created any mechanic's, laborer's, materialman's or other lien or charge with might or could be prior to the liens hereof, or do or suffer any matter or thing whereby the liens hereof might or could be impaired; provided however, that no such tax, assessment, or charge, and that no such claims which might be used as the basis of a mechanic's, laborer's, materialman's or other lien or charge shall be required to be paid so long as the validity of the same shall be contested in good faith by the Authority. F. Operation of System: No Free Service. The Authority shall continuously and efficiently operate the System and maintain the System in good condition, repair and working order, all at reasonable cost. No free service of the System shall be allowed, and should the Authority or any of its agencies or instrumentalities, lessees or concessionaires make use of the services and facilities of the System, payment monthly of the standard retail price of the services provided shall be made by such Person out of funds from sources other than the Pledged Revenues of the System, unless made from surplus Net Revenues. G. Further Encumbrance. The rents, revenues and income of the system have not in any manner been pledged to the payment of any debt or obligations of the Authority or of the System and it shall not sell or encumber the Pledged Revenues in any manner, except as permitted in the Parity Bonds Resolutions in connection with Additional Bonds, unless said encumbrance is made junior and subordinate in all respects to the liens, pledges, covenants and 21 HOU:3003369. ]