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HomeMy WebLinkAbout09-08-1958 Regular MeetingSTATE OF ALABAMA County of Baldwin The City Counc i I of the City of Fa i rhope met in regular session at the City Hall, Monday, September 8, 1958 at 7:00 P.M. with the following members present: Mayor E. B. Overton, (-Ity Manager C. B. Niemeyer, Councilmen: C. F. Belew, M. 0. Berglin, W. 0. Poser, W. R. Ruffles, Jr. -and B. L. Shull. Motion by Councilman Ruffles seconded by Councilman Shull that Eloise T. Wilson be appointed: acting clerk during the absence of Marie Moore, City Clerk. Motion carried. Motion by Councilman Ruffles seconded by Councilman Poser that the minutes of the previous meeting be approved as read. Motion carried. Byrd L. PAoore and T. H.Ingram of Moore Engineering Co­ipany were present to explain the engineering features of the proposed street paving program. The following verbal protests were entered: I. Liberty Street - Lawrence Stubblefield and A. B. Slaughter 2. Kumquat Street - E. R. Bain 3. Sea Cliff Drive - Frank Kearly, G. C. Hifiner, J. E. Johnston, Mrs.. Melville Nester, W'. M. West, �1elIington Johnston. 4. Gayferr Street - L. W. Valentine 5. Gayfer Court - George DuBrock 6.. Fig Street - R. G. Rosenquist, John and Amy Parker, L. J. Bernhardt. 7, N. Mobile, Ave. Mrs. Lillian Gregorius, L. C. Maury, Mrs. Viola Haberling. M;b'on by Councilman Ruffles seconded by Councilman Shull that Section 9 of Ordin n number 25 a opted on the 14th day of July, 1958, and amended on.. — the day , I. be and the same is hereby amended to-ta as follows: SECTION 9: That the City nciI of the C, y of Fairhope, Alabama, meet at 7:00 o'clock P.M. on the 2�n1 aye o 'September, 1958, at the City Hall for the purpose of hearing, and a ,ch time it will hear, any objections or remonstrances that may be maddeAfs' to the street improvement, the manner of making the same, or the character of materials to oe—used., , Approved At est: City Clerk Motionl/ Councilman Ruffles seconded by Council an Shull that the appl.icati-n f:or building permit of R.D.Hanby be approved. Motion carried. No action was taken on theapplication for bud ding permit by Jos. D. Bemis as his property is located outside of the City Limits. Deed received for a 50 f6ot street right of way between Jan Drive and Gayfer adjacent to Lot 34, FairWood Subdivision No. 6 from Rogert Nahrgang. Motion by Council- man Shull seconded by Councilnan Poser that Mr. Beebe be authorized to withdraw the condemnation suit against Lot 18, Fairwood Subdivison. Motion carried. Letter from the Junior Chamber of Commerce regarding the lift station at the Beach Skating Rink was turned over to Councilman Shull. Nomination of Irving Kampen to fill the unexpired term of Romeo E. Simpson on the Recreation Board was made by Councilman Belew, seconded by Councilman Poser. Councilman Shull moved that the nominations be closed and Mr. Kamper be electedunaminously. Motion carried. The Clerk was requested to notify Mr. Kamper of his election and adiise him that the Recreation Board meets Sept. 15. Mr. Dyson reported that C.B.Cummi6ssmade an oral bid of around $ 150.00 for repairs on Municipal Clinic roof. Mr. Dyson was instructed to request a written bid from Mr. Cummins and authorize him to proceed with the work. Motion by Council•-nan.Poser, seconded by Councilman Belew that the following bills be approved for payment.. Motion carried. -14- city and the trustee, and (b) in the case of any lost, stolen or destroyed securities, there shall first be furnished evidence of such loss, theft or destruction satisfactory to the city and the trustee, together with indemnity satisfactory to each of them. In the event any coupon is mutilated, lost, stolen or destroyed, the city may issue a duplicate coupon upon the same terms and con- ditions as those provided in the preceding sentence here- of respecting the replacement of mutilated, lost, stolen or destroyed securities. The city may charge the holder with the expense of issuing any such new securities or coupons. Section 5.4 Removal of Past Due Coupons. upon authentication of any of the securities by the trustee, all past due coupons evidencing interest not paid or made available for payment on the securities so authenti- cated shall be removed and cancelled by it. Section 5.5 Consideration for Sale of the Securities. Nothing herein contained shall affect in any way the power of the city to fix the consideration for which the securities may be sold by it except as provided in Section 8.2(b) hereof respecting the sale of additional securities. ARTICLE VI GENERAL PROVISIONS RESPECTING REDEMPTION OF CALLABLE SECURITIES Section 6.1 Manner of Effecting Redemption of Callable Securities. Any redemption of any callable secu- rities of any series shall be effected in the following manner: (a) The council shall adopt a resolution containing the following: (1) a call for re- demption, on a specified date when they are by their terms subject to redemption, of callable securities bearing stated numbers and series designation; (2) a statement that the city is not in default under this indenture; and (3) a summary of any applicable restrictions upon or conditions precedent to such redemption and the provisions made to comply therewith. (b) Not less than thirty (30) days prior to the redemption date, the City shall cause to be published one time in a newspaper pub- lished in the City of Birmingham, Alabama, a notice stating the following: that callable securities bearing stated numbers and series designations have been called for redemption and will become due and payable at the re- demption price or redemption prices on a -15- specified redemption date (which shall be the date provided for such redemption in the res- olution required in subsection (a) of this sec- tion); and that all interest thereon will cease after the redemption date. (c) In the event any of the callable securities so called for redemption should be a bond registered pursuant to the provisions of the supplemental indenture under which it is issued, the city shall forward by United States Registered or Certified ied Mail to the registered owner thereof, at the address of such registered owner as such address appears on the registry books pertaining to the regis- tration of such bond, a notice stating the matters set forth in subsection (b) of this section. Such notice shall be so mailed not less than thirty (30) days prior to the re- demption date, but the holder of such regis- tered bond may waive the requirements of this subsection with respect to the registered bond held by him without affecting the validity of the call for redemption of any other call- able securities. (d) On or prior to the redemption date the city shall deposit with the trustee the total redemption price of the callable secu- rities so called and shall further furnish to the trustee the following; a certified cop of the resolution required in subsection (a� of this section; an appropriate affidavit showing compliance with the requirements of subsections (b) and (c) of this section to the extent to which they may be applicable; and, in the case of redemption of any call- able securities on a date when such callable securities may be redeemed only with funds from a specified source, evidence satis- factory to the trustee showing compliance with such restriction or requirement. Section 6.2 Presentation c for Redemption. Securities to Cease t compliance by the city with the requirements contained in Section 6.1 hereof, and if the city is not on the redemp- tion date in default in payment of the principal of or the interest on any of the securities, the callable securities so called for redemption shall become due and payable at the place at which the same shall be payable at the redemp- tion price or redemption prices and on the redemption date specified in such notice, anything herein or in the callable securities to the contrary notwithstanding; the holders thereof shall then and there surrender them for redemption; all future interest on the callable securities so called for redemption shall cease to accrue after the redemption date and the coupons maturing after the redemption date shall be void; the callable securities so called and the -16- coupons applicable thereto which matured on and prior to the redemption date shall no longer be entitled to the benefit of the lien hereof but shall look solely to the moneys deposited with the trustee under the provisions of this article; and out of the moneys so deposited with it, the trustee shall make provision for payment of the callable securities so called for redemption at the re- demption price on the redemption date. 1VC1w1=L' w1C uvuu t vu nur tiny 1nuu7.LUL1on aL wnlcn Lne se— curities may at any time be payable shall be required to pay any coupon maturing on the redemption date which is applicable to any callable securities so called for re- demption unless the callable securities to which such coupons are applicable are also presented for payment; provided, however, that in the event any such coupons should be so paid without payment of the applicable callable securities no one shall be liable to the holder of such applicable callable securities,to the city, or to anyone whomsoever; and provided further, that the trustee and any such institution shall pay such coupons if the holder thereof shall present to the trustee or to such institution evidence satisfactory to the trustee or such institution, as the case may be, that such holder is the owner of the coupons so presented and is not the owner of the callable securities to which such coupons are ap- plicable. ART,,_ I�VII THE SERIES 1958 WARRANTS Section 7 issued to the extent Series 1958 warrants be numbered from 1 to nomination of $1,0o0 1 as follows: of $210,000 in principal amount. The shall be dated December 1, 1958, shall 2100 inclusive, shall be in the de - each, and shall be payable on December Warrant Numbers (all inclusive) Year of Maturity Aggregate Principal Amount Maturing to 10 1960 $15,000 16 to 3 31 46 to to 45 60 1961 1962 15,000 15,000 61 to to 75 1963 15,000 76 90 1964 15,000 91 lo6 to to 105 120 1965 1966 15,000 15,000 121 ,,-i36 to to 135 150,, 196 196; 15,000 51 to 165 1969 15,000 15,000 166 l81 to to 18o 195 1970 1971 15,000 15,000 196 to 210 1972 15,000 -17- Section 7.2 InterestRate_. The Series 1958 Warrants shall bear interest from their date until their respective maturities at the rate of 4-1/2% per annum, which interest shall be payable semiannually on June 1 and December 1 of each year. Section 7.3 Redemption Provisions. Those of the Series 1958 Warrants having specified maturities in 1969 and thereafter shall be subject to redemption prior to their respective maturities, at the option of the city, as a whole or in part and if in part then in inverse numerical order of those at the time outstanding, on December 1, 1968 and on any interest payment date there- after, at and for a redemption price for each warrant re- deemed equal to its face value plus accrued interest thereon to the redemption date and a premium equal to one year's interest thereon., Any such redemption shall be subject to the provisions of and shall be effected in the manner provided in Article VI hereof. Section 7.4 Execution and Delivery of the Series 1958 Warrants. The Series 1958 warrants shall be made 'payable to suM payee as may be designated by the purchaser thereof, and shall be executed by the mayor of the city and the seal of the city shall be affixed thereto and attested by the city clerk. The coupons applicable to the Series 1958 warrants shall be authenticated by the facsimile signature of the said mayor and shall be attested by the facsimile signature of the city clerk. The Series 1958 warrants shall be forthwith executed as provided in this section and delivered to the trustee, and shall be authenticated and delivered by the trustee from time to time upon receipt by the trustee of an order signed on behalf of the city by the mayor requesting such authenti- cation and delivery and designating the person or persons to receive the same or any part thereof. Section 7.5 Use of Proceeds from Sale of the Series 1958 Warrants. The"proceeds derived from the sale of the Series 195bwarrants shall be used for the follow- ing purposes only: (a) payment into the principal and interest fund of that part of the proceeds from the sale of the Series 1958 warrants that is allocable to accrued interest thereon; and (b) use of the entire balance of such proceeds for payment of the outstanding warrant which, upon such payment, shall be cancelled and re- tired. -18- (Form of the Series 1958 warrants) No. $1,000 UNITED STATES OF AMERICA STATE OF ALABAMA CITY OF FAIRHOPE WATER, SEWER AND GAS REVENUE REFUNDING WARRANT SERIES 1958 The City of Fairhope (herein called "the city"), a municipal corporation in the State of Alabama, hereby acknowledges that it is indebted to the limited extent hereinafter referred to, and hereby directs its treasurer to pay to or assigns, solely out of the revenues hereinafter referred to, the principal sum of O N E T H O U S A N D D 0 L L A R S on the 1st day of December, 1 with interest mean- while thereon at the rate of � 2 per annum payable semi- annually on June 1 and December 1 of each year until and at the maturity hereof upon presentation and surrender of the appropriate interest coupons hereto attached as the same respectively become due. Both the principal hereof and the interest hereon shall be payable in lawful money of the United States of America at the principal office of The Merchants National Bank of Mobile, in the City of Mobile in the State of Alabama. This warrant is one of an issue of securities issuable in series (herein called "the securities") not limited in aggregate principal amount except as provided in the indenture hereinafter referred to. The principal of and interest on the securities are payable solely out of the revenues from the city's water, sewer and gas systems as presently and hereafter constituted (herein called "the systems') remaining after payment of the costs of maintaining and operating the systems and after comply- ing with any prior requirements imposed by any instrument under which any other securities previously issued and secured by pledge of revenues from any one or more of the systems. The principal of and interest on the securities are secured, pro rata and without priority of one over another, by a valid pledge of the said revenues out of which they are payable and by an indenture of mortgage and deed of trust (herein called "the indenture") from the city to The Merchants National Bank of Mobile (herein called 'the trustee") dated December 1, 1958 covering the systems as at any time constituted. The indenture pro- vides, inter alia, that in the event of default by the city in the manner and for the time therein provided the trustee may declare the principal of this warrant as im- -19- mediately due and payable, whereupon the same shall become immediately due and payable and the trustee shall be en- titled to pursue the remedies provided in the indenture, but the indenture shall riot be subject to foreclosure. This warrant is not a general obligation of the city and neither its full faith and credit nor any of its taking powers are pledged or shall ever be used for payment of either the principal hereof or interest hereon. The series of the securities of which this is one is designated Series 1958, and is authorized to be issued in the aggregate principal amount of $210,000, consisting of warrants numbered from 1 to 210, inclusive (herein called "the warrants"), to refund an outstanding warrant of the city which was issued for the purpose of improving and extending its water and gas system. Those of the warrants having stated maturities in 1969 and thereafter are subject to redemption and payment prior to their respective maturities, at the option of the city as a whole or in part and if in part then inverse numerical order of those at the time outstanding, on December 1, 1968 and on any interest payment date there- after, at and for a redemption price for each warrant re- deemed equal to its face value plus accrued interest thereon to the date fixed for redemption and a premium equal to one yearts interest thereon. Notice of any such redemption shall be given by publication at least one time not less than thirty days prior to the date fixed for redemption in a news- paper printed in the English language and published in the City of Birmingham, Alabama. It is hereby certified and recited that the in- debtedness evidenced and ordered paid by this warrant is lawfully due without condition, abatement or offset of any description, that this warrant has been registered in the manner provided by law, that all conditions, actions and things required by the constitution and laws of the State of Alabama to exist, be performed or happen precedent to and in the issuance of this warrant exist, have been performed and have happened, and that the indebtedness evidenced and ordered paid by this warrant, together with all other indebtedness of the city, was at the time the same was created and is now within every debt and other limit prescribed by the constitution and laws of the State of Alabama. This warrant is nonnegotiable but is transfer- able by assignment. Each taker, owner, purchaser or holder hereof, by receiving or accepting this warrant or any interest coupon applicable hereto, shall consent and agree and shall be estopped to deny: (1) that title to the coupons hereunto appertaining may be transferred by delivery without the necessity of a written assignment, and any person making such delivery shall be deemed to have transferred to the person to whom such delivery is made all of his equities or rights in the coupons so de- livered; (2) that any person in possession of any such coupon, regardless of the manner in which he shall have acquired possession, is authorized to represent himself as the absolute owner thereof and has the power and -20- authority to transfer absolute title thereto by delivery thereof to a bona fide purchaser for value (present or antecedent) without notice of prior defenses or equities or claims of ownership enforceable against his trans- feror or any person in the chain of title and before the maturity thereof; and (3) that whenever and so long as this warrant may be assigned in blank by writ- ten assignment by the original payee hereof or by any subsequent assignee hereof in the chain of title to whom written assignment is made, the city and the trustee may treat any person in possession of this warrant, regard- less of how such possession may have been acquired and regardless of the genuineness or effectiveness of any assignment, as the absolute owner hereof for all purposes, and payment to any such person shall discharge all obliga- tions hereunder. Execution by the trustee of its certificate hereon is essential to the validity hereof and is con- clusive of the due issue hereof under the indenture. IN WITNESS WHEREOF, the city has caused this warrant to be executed in its name and behalf by its mayor, has caused its corporate seal to be hereunto affixed and attested by its city clerk, has caused the attached coupons to be executed with the facsimile sig- natures of said officers, and has caused this warrant to be dated December 1, 1958. Attest: City Clerk Coupon No. CITY OF FAIRHOPE By Its Mayor (Form of Coupon) $22.50 On the lst day of 19 , the Treasurer of the City of Fairhope in the State of Ala- bama is ordered and directed to pay to the bearer hereof, solely out of the revenues derived from said city's water, sewer and gas systems, upon surrender hereof at the prin- cipal office of The Merchants National Bank of Mobile in the City of Mobile, Alabama, Twenty Two and 50/100 Dollars in lawful money of the United States of America, being six months' interest then due on its Water, Sewer and Gas 46 _21- Revenue Refunding Warrant, Series 1958, dated December 1, 1958, and numbered ____0 Attest; CITY OF FAIRHOPE By Its Mayor City Clerk (Form of Certificate of Registration) I hereby certify that the within warrant and the interest coupons applicable thereto were at the time of issuance thereof duly registered by me as a claim against the revenues of said city out of which the same are made payable. City Treasurer of the City of Fairhope, Alabama (Form of Trustee's Certificate) The within warrant is one of those described in the within mentioned mortgage and deed of trust. THE MERCHANTS NATIONAL BANK OF MOBILE Trustee By Its Authorized Officer (Form of Assignment) For value received, this warrant and the interest coupons applicable thereto and the moneys ordered paid thereby are hereby transferred and assigned, without re- course or warranties, to -22- The following shall be inserted after the matu- rity date contained in the first line of the first para- graph of each of the Series 1958 warrants having stated maturities in 1969 and thereafter: "(unless this warrant shall have been duly called for prior payment)," The following shall be inserted after the matu- rity date of each coupon due on June 1, 1969 and there- after which is applicable to the Series 1958 warrants: "(unless the warrant to which this coupon is applicable shall have been duly called for prior pay- ment) " ARTICLE VIII THE ADDITIONAL SECURITIES Section 8.1 Additional Securities - General Provisions. Additional securities may be issued solely for the purpose of constructing or otherwise acquiring improvements (including real estate, or easements there- in, for location thereon of improvements) to any one or more of the systems which are of a nature that are prop. pray chargeable to fixed capital account by good account- ing practice, or to refund temporary securities issued for any such purpose. Additional securities may be issued at any time and from time to time at the option of the city, while the city is not in default under this indenture, within the limitations of and upon compliance with the provisions of Section 8.2 hereof. The additional secu- rities may be in such denomination or denominations, shall bear interest at such rate or rates, shall mature in such year or years,and may contain such provisions for redemption prior to maturity, all as may be provided in the supplemental indenture under which they are issued; provided, that any redemption of additional securities prior to maturity shall be effected in the manner set forth in and shall be subject to the provisions of Article VI hereof. Each of the additional securities shall contain an appro- priate series designation. Prior to issuance of the ad- ditional securities of any series, the city shall enter into a supplemental indenture with the trustee specify- ing the aggregate principal amount of the securities of such series, the denomination or denominations, the in- terest rate or rates and maturities thereof, any provi- sions for redemption prior to maturity, and any other pro- visions applicable to the additional securities which are contained herein, but neither the additional securities nor the supplemental indenture providing therefor shall contain any provision in conflict with the provisions hereof. Section 8.2 Conditions Precegent to o Issuance of Additional Securities. Pr or to £die issuance of any of r -23- the additional securities the city shall deliver to the trustee those of the additional securities proposed to be issued and the supplemental indenture providing therefor as required in Section 8.1 hereof, duly executed, sealed and acknowledged, accompanied by the following: (a) A certified copy of the proceedings taken by the council authorizing the sale and Issuance of the additional securities proposed to be issued and execution and delivery of the supplemental indenture providing therefor; (b) A resolution requesting the trustee to authenticate and deliver to the purchaser the additional securities proposed to be is- sued and reciting the following: (i) that the city is not at the time in default here- under or under either of the underlying in- dentures and that no such default is imminent; (ii) the number and series designations of the additional securities proposed to be is- sued; (III) the person or persons to whom the same have been sold and shall be deliver- ed, and the sale price thereof, which shall be not less than 95% of the face value thereof plus accrued interest thereon to the date of their delivery; (iv) a list of all additional securities previously issued and at the time outstanding, and of the supple- mental indentures under which they were issued; (v) a brief description of the improvements to the systems that will be or have been constructed or acquired with the proceeds of the additional securities so proposed to be issued or with the proceeds of temporary securities to be refunded by the additional .securities so proposed to be issued; (vi) the name of the contractor, if any, who will construct or has constructed such improvements or the person from whom such acquisition will be or -has been made; and (vii) the contract price for such improvements if there is any such contract; (c) Evidence satisfactory to the trustee that all payments required to be made into the special funds created in the underlying in- dentures and herein are current; (d) A certificate of an independent en- gineer satisfactory to the trustee ex ressing an opinion to the following effect: (M that the improvements proposed to be acquired or constructed by the city with the proceeds derived from the sale of the additional securities (or any temporary securities issued in anticipation thereof. acid to be refunded thereby) with respect to which such certif - -24- icate is made are of a nature that are prop- erly chargeable to fixed capital account by good accounting practice and will form a part of a complete water, sewer or gas system or systems; (ii) that the said improvements are needed to either supply water, sewer or gas service to prospective customers desiring the same or are needed for the efficient op- eration of one or more of the said systems; (iii) that the cost to the city of the said improvements plus the reasonable expenses estimated to be incurred by the city in the issuance and sale of the additional securities with respect to which such certificate is made will together be not less than the principal proceeds which will be realized by the city from the sale of the additional securities proposed to be issued; (iv) that the cost to the city of said improvements will repre- sent the reasonable value thereof; and (v) that the acquisition or construction of said improvements and the issuance of the additional securities proposed to be issued therefor will be feasible; (e) A certificate made by an independent auditor acceptable to the trustee certifying as follows: (1) If at the date of the issuance of the additional securities with respect to which such certificate is made any of the 1953 water and sewer bonds are then out- standing and any of the gas bonds are then outstanding, the said certificate shall re- cite that during each of the two fiscal years next preceding the date of issuance of the additional securities with respect to which such certificate is made an amount equal to 50% of the annual net income derived from the operation of the systems was not less than 1-1/2 times the maximum annual principal and interest thereafter payable during any subsequent fiscal year as prin- cipal of and interest on (i the underlying bonds then outstanding, (ii the Series 1958 warrants then outstanding, (iii) the additional securities theretofore issued and then outstanding, and (iv) the addi- tional securities with respect to which such certificate is made. (2) If at the date of the issuance of the additional securities with respect to which such certificate is made any of the 1953 water and sewer bonds are then out- standing and none of the gas bonds are then outstanding, the said certificate shall re- cite that during each of the two fiscal years next preceding the date of issuance of the additional securities with respect to which such certificate is made an amount equal to fifty per cent (50%) of the annual net income derived from the operation of the water and sewer system plus the whole of the annual net income derived from the operation of the gas system was not less than one and one-half times the maximum annual principal and interest thereafter pay- able during any subsequent fiscal year as -24a- principal of and interest on (i the underly- ing bonds then outstanding, (iii the Series 1958 warrants then outstanding, (iii) the additional securities theretofore issued and then outstanding, and (iv) the additional securities with respect to which such certifi- cate is made. (3) If at the date of the issuance of the additional securities with respect to which such certificate is made any of the gas bonds are then outstanding but none of the 1953 water and sewer bonds are then outstanding, the said certificate shall recite that during each of the two fiscal years next preceding the date of issuance of the additional securities with respect to which such certificate is made an amount equal to the whole of the annual net income derived from the operation of the water and sewer system plus fifty per cent (500) of the annual net income derived from the operation of the gas system was not less than one and one-half times the maximum annual principal and interest thereafter payable during any subsequent fiscal year as principal of and interest on (i) the underlying bonds then outstanding, (ii) the Series 1958 warrants then outstanding, (iii) the additional securities theretofore issued and then outstanding, and (iv) the additional securities with respect to which such certifi- cate is made. (4) If at the date of the issuance of the additional securities with respect to which such certificate is made none of the underlying bonds are then outstanding, the said certificate shall recite that during each of the two fiscal years next preceding the date of issuance of the additional securities with respect to which such certificate is made the annual net income derived from the operation of the systems was not less than one and one-half times the maxi mum annual principal and interest thereafter payable during any subsequent fiscal year as principal of and interest on (i) the Series 1958 warrants then outstanding, (1i) the additional securities theretofore issued and then outstanding, and (iii) the additional securities with respect to which such certifi- cate is made (f) An opinion of independent counsel satisfactory to the trustee approving the forms of all documents required in the preceding portions of this section to be delivered to the trustee and stating that in the opinion of such counsel they comply with the applicable require- ments of this article. Upon receipt of the documents required by the provisions of this section to be furnished to it, the trustee shall, un- less it has cause to believe any of the statements set out in said documents to be incorrect, thereupon execute the supplemental indenture so presented and cause the same to be filed for record at the expense of the city in that public office in Baldwin County, Alabama, in which such document is then required by law to be filed in order to constitute constructive notice thereof, and it shall fur- -25 - ther authenticate the additional securities with respect to which the said documents shall have been made and shall deliver the additional securities so authenticated to the purchaser thereof upon payment to the city of the purchase price thereof . ARTICLE IX AGREEMENTS RESPECTING CONSTRUCTION OF IMPROVEMENTS AND USE OF MONEYS IN CONSTRUCTION FUND Section 9.1 Agreement to Construct Improvements. The city will go forward continuously and with reasonable dispatch with the acquisition, by construction or other- wise, of improvements to the water and sewer system sub- stantially in accordance with plans and specifications therefor prepared by Donald Mills, Consulting Engineer. The city will complete the construction of said improve- ments, including the acquisition of such real estate as may be necessary therefor, as soon as may be practicable, delays incident to strikes, riots, acts of God and the -- public enemy and similar acts beyond the reasonable con- trol of the city only excepted. The city will promptly pay, as and when due, all expenses incurred in and about said construction, and it will not suffer or permit any mechanic's or materialmens' liens which might be filed or otherwise claimed or established upon or against the systems or any part thereof and which might be or become a lien superior to the lien hereof, to remain unsatisfied and un- discharged for a period exceeding thirty days after the filing or establishment thereof;. providdd, that the city may in good faith contest any such mechanic.'s or material - mend lien claims so filed or established and, in the event any such lien claims are so contested, may permit the mechanic's or materialmens' liens so contested to remain unsatisfied and undischarged during the period of such contest and any appeal therefrom, irrespective of whether such period extends beyond the thirty day period after the filing or establishment of such liens or not, unless the trustee shall be of the opinion that by such action the lien of this indenture as to any part of the systems shall be materially endangered.or shall be lost or forfeited, in which event such mechanic's or materialmens' liens shall be satisfied prior to the expiration of said thirty day period. Section 9.2 Creation of Construction Fund. There is hereby created a special trust fund the full name of which shall be the Water and Sewer System Con- struction Fund which shall be maintained until the comple- tion of the improvements to the water and sewer system re- ferred to in Section 9.1 hereof. The trustee shall be and remain the depository and trustee for the construction fund. Contemporaneously with the issuance of the Series 1958 warrants the city will pay into the construction fund all proceeds then on hand and remaining unexpended which were derived from the issuance of the outstanding warrant. -26- Section 9.3 Use of Honeys -in the Construction Fund. Moneys in the construction fund may be withdrawn t erefrom by checks, vouchers or orders signed in the name of the city by any officer or employee authorized by resolution of the council to make such withdrawals, but only for the following purposes; (a) Payment of the expenses incurred in issuing the outstanding warrant and the Series 1958 warrants, including the initial fee of the trustee hereunder, the legal, fiscal and record- ing fees and expenses incurred in connection with the issuance of the outstanding warrant and the Series 1958 warrants, and the initial fee of the construction engineer for the preparation of the plans and specifications for the improvements referred to in Section 9.1 hereof; (b) Payment of the cost of acquiring any real estate (including easements) necessary and suitable for the construction of any part or parts of said improvements; (c) Payment for labor, services, materials, supplies and equipment furnished in constructing said improvements but no such payment for said items shall be made to a contractor with the city for any of the construction referred to in Section 9.1 hereof until such contractor shall have deposited with the trustee the surety bond required in Section 9.7 hereof; (d) Payment of all expenses (including reasonable fees and expenses of engineers and attorneys, and recording fees) incurred by the city or the trustee in connection with matters referred to in the preceding subsections (b) and (c) of this section; and (e) Payment of the reasonable expenses and charges (if any) of the depository for the construction fund. The depository for the construction fund shall be fully pro- tected in paying out moneys on deposit therein for purposes specified in subsection (a) of this section on checks, vouchers or orders signed in the name of the city by any duly authorized officer or employee thereof. The depository for the construction fund shall be fully protected in paying out moneys on de osit therein for any of the purposes provided in subsections , (c) and (d) of this section on checks, vouchers or orders of the city signed by any duly authorized officer or employee thereof other than the city manager when accompanied by estimates or bills in the amount of such checks, vouchers or orders approved by the city manager. The depository for the construction fund shall not be liable for the misapplication by the city of any moneys withdrawn -27- by the city from the construction fund without knowledge or reason on the part of such depository to believe that such disbursement constitutes a misapplication of funds. Upon certification by the construction engineer that the construc- tion referred to in Section 9.1 hereof has been compl6ted in substantial accordance with the plans and specifications therefor, and upon certification by the city manager that the items referred to in subsections (b), (c) and (d) of this section have been fully paid for, and upon payment of all of the items referred to in subsections (a) and (e) of this sec- tion, any moneys then remaining in the construction fund may be withdrawn by the city at its option and the depository for the construction fund shall no longer have any responsibility in connection therewith, but the city agrees to use hny moneys so withdrawn by it under the provisions of this sentence solely for the construction of improvements (including exten- sions) to the water and sewer system which by good accounting practice are properly chargeable to capital account. Section 9.4 Security for Construction Fund Moneys* The moneys at any time on deposit in the construction fund shall be and at all times remain public funds impressed with a trust for the purposes specified in Section 9.3 hereof, The depository for the construction fund shall at all times keep the construction fund moneys on deposit with it contin- uously secured, for the benefit of the city and the holders of the securities, either (a) by holding on deposit, as collateral security, federal securities or other marketable securities eligible as security for the deposit of trust funds under regulation of the Board of Governors of the Federal Reserve System, having a market value (exclusive of accrued interest) not less than the amount of construction fund moneys on deposit with it, or (b) if the furnishing of security in the manner provided by the foregoing clause (a) of this section is not permitted by the then applicable law and regulation, then in such other manner as may be required or permitted by the then applicable state and federal laws and regulations respecting the security for, or granting a preference in the case of, the deposit of trust funds; pro- vided however, that it shall not be necessary for any such depository so to secure any portion of the construction fund moneys on deposit with it that is insured by the Federal Deposit Insurance Corporation or other agency of the United States of America that may succeed to its functions. Section 9.5 Investment of Construction Fund. The provisions of Section .3 hereofto the contrary not- withstanding, the trustee shall, without any direction from the city, invest in federal securities having a maturity date not later than twelve (12) months after the date of such investment that part of the moneys in the construction fund which in the opinion of the city manager will not be needed for sixty days for any of the purposes specified in subsec- tions (a) to (e), inclusive, of Section 9.2 hereof. The trustee shall make any such investment when furnished with a written opinion of the city manager that the amount of money specified in such opinion will not be needed for sixty days for any of the purposes specified in said subsections (a) to me (e), inclusive. In the event of any such investment the federal securities in which the moneys are so invested, together with all income derived therefrom, shall be deemed to be a part of the construction fund to the same extent as if they were moneys on deposit therein, except that security for said federal securities shall not be required. The trustee shall from time to time sell or otherwise convert into cash all or such part of said federal securities as may be necessary to supply funds for any of the purposes specified in said subsections (a) to (e), inclusive, whereupon the net proceeds there- from shall promptly be paid into the construction fund. In any determination of the amount of moneys at any time forming a part of the construction fund, all such federal securities in which any portion of the construction fund is at the time so invested shall be included therein at their then market value. Section 9.6 Construction Engineer. Donald Mills, of Selma, Alabama, is hereby designated by the city as the construction engineer, and is hereby author- ized to take the actions provided in this indenture to be taken by the construction engineer. In the event he should become unavailable or unable to take any action provided in this indenture to be taken by the construction engineer, another engineer or engineering firm or corporation licensed under the laws of Alabama and acceptable to the trustee and to the original purchaser of the Series 1958 warrants from the city shall thereupon by resolution be appointed con- struction engineer and authorized to take such actions. If the city fails to appoint such successor construction engineer for a period of thirty days following the date when Donald Mills becomes unavailable or unable to take any of the said actions, the trustee may then appoint as successor construction engineer any engineer or engineering firm or corporation licensed under the laws of Alabama. Any approval or certification made by any successor construction engineer appointed under the provisions of this section shall have the same effect as an approval or certification by Donald Mills. Section 9.7 Deposit of Surety Bond by Con= tractor Required. Whenever the city shall enter into a contract with a contractor for any of the construction referred to in Section 9.1 hereof or for any part there- of, it will cause such contractor to deposit with the trustee a surety bond signed by a surety company author- ized to do business in the State of Alabama and guaranteeing to the city and to the trustee the performance of such contract, the completion of the work provided for therein, and the payment of all bills incurred thereunder for material and labor, which bond shall be in such amounts as shall be approved by the construction engineer. If the city has previously entered into any such contract, it will cause the contractor thereunder to deposit such performance and surety bond with the trustee prom tly following the sale and issuance of the Series 1959 war- rants. If such a performance and surety bond has previously been furnished the city by any such con- tractor, the city will deposit it with the trustee promptly following the execution and delivery of this in- denture. Nothing contained in this section shall, however -29- impose on the trustee any duty or liability with respect to the appropriateness or sufficiency of such contract or surety bond with respect to the completion of the said construction. ARTICLE X DISPOSITION OF REVENUES FROM THE SYSTEMS AND CREATION OF SPECIAL FUNDS Section 10.1 Disposition of Revenues While Un- derlying Bonds Remain Outstanding. So long as any of the underlying bonds are outstanding and unpaid, the city will operate the water and sewer system separate from the gas system and will continue in effect the special funds re- spectively created for the underlying bonds in the under- lying indentures and will make deposits into the said special funds of the revenues from the respective systems required in the underlying indentures to be deposited therein and will make withdrawals from said special funds only for the purposes provided therefor in the respective underlying indentures. The revenues derived from the operation of the systems remaining at the expiration of each period provided for in the respective underlying indentures which are not required in any of the under- lying indentures to be paid into any of the special funds therein created shall, to the extent hereinafter provided, be paid into the principal and interest fund and into the reserve fund created in Sections 10.3 and 10.4 hereof. Section 10.2 Disposition of Revenues Aft Pavment of the Underlvina Bonds - Creation of the Re Account, mere is nereay createa a specia.i trust Tuna the full name of which shall be the Utilities Systems Revenue Account. When there are no longer outstanding and unpaid any of the 1934 water and sewer bonds or the 1950 water and sewer bonds or the 1953 water and sewer bonds, the city will pay into the revenue account, as received by it, all of the revenues derived from the operation of -the water and sewer system. Whenever there are no longer out- standing and unpaid any of the gas bonds, the city will pay into the revenue account, as received by it, all of the revenues derived from the' operation of the gas system. The moneys so paid into the revenue account shall be uti- lized by the city from time to time for payment of all reasonable and necessary expenses incurred during the then current or any then preceding calendar month in the efficient and economical administration and operation of the systems and in the maintenance thereof in good repair and in good operating condition (but not including payment for items which by good accounting ractice are properly chargeable to fixed capital account , and all charges and expenses of the trustee under this indenture and under any supplemental indenture. After payment of said expenses and charges, the city will transfer moneys from the rev- enue account remaining therein on or before the last day of each successive month and pay the same into the prin- cipal and interest fund and the reserve fund, in the -30- order in which the same are hereinafter created, to the re- spective extents hereinafter provided and to the extent that the moneys on deposit in the revenue account shall be available therefor. Section 10.3 The Principal and Interest Fund. There is hereby created a special trust fund the full name of which shall be Utilities Systems Principal and Interest Fund and which shall be continued until the principal of and interest on the securities shall have been paid in full. There shall be paid into the principal and interest fund the following: Series 195 Simultaneously with therethe shallissuance of the Sr into the principal and interest fund that part of the proceeds from the sale thereof that is allocable to interest accrued on the Series 1958 warrants from their date to the date of their issuance. The amount paid into the principal and interest fund under the provision of this subsection (a) shall be credited against the first payments required to be made into the principal and interest fund under the provisions of subsection (b) of this section in the order of such payments until such credit shall be exhausted. (b) On or before the last day of each successive month beginning with the month of December, 1958 and continuing thereafter until the principal of and interest on the securities shall have been paid in full, the city will pay into the principal and interest fund an amount equal to 1/6th of the semiannual installment of interest that will mature on the securities on the then next succeeding interest payment date plus 1/12th of the principal of the securities that will mature on the then next succeeding December 1. (c) Simultaneously with the issuance of any of the additional securities, the city will pay into the principal and interest fund such sum as, when added to the subsequent payments which are herein required to be made into the principal and interest fund, will make avail- able on the then next succeeding interest pay- ment date an amount equal to the interest matur- ing on that date with respect to such additional securities. The sum provided in this subsection (c) to be paid into the principal and interest fund shall be paid therein out of moneys derived from the operation of the systems; provided how- ever that such sum shall be paid into the prin- cipal and interest fund out of the proceeds from the sale of such additional securities if and to whatever extent the supplemental indenture under which such additional securities are issued shall so provide. (d) Simultaneously with the issuance of any of the additional securities the city will pay into the principal and interest fund, out of -31- the moneys derived from the operation of the systems, such sum as, when added to the sub- sequent payments which are herein required to be made into the principal and interest fund, will make available on the then next succeeding December 1 an amount equal to the principal of such additional securities as may mature on that date. (e) In the event any of the securities or any of the coupons should remain unpaid on the date when due, then on or before the last day of each month beginning with the month during which such unpaid securities or coupons become due and continuing each month thereafter until an amount sufficient to pay the securities or coupons so delinquent shall have been paid into the principal and interest fund, the city will pay into the principal and interest fund (in addition to the payments provided for in subsection (b) of this section) all moneys re- maining in the revenue account at the end of said month after payment of the expenses and charges referred to in Section 10.2 hereof and after payment of the amount required in sub- section (b) of this section to be paid into the principal and interest -fund during the same month. All moneys paid into the principal and interest fund shall be used only for payment of the principal of and interest on the securities upon or after the respective maturities of such principal and interest; provided, that if at the final maturity of the securities, however the same may mature, there shall be in the principal and interest fund a sum in excess of the amount required to pay in full the principal of and the interest on the securities, then any such excess shall thereupon be returned to the city. When the amount on deposit in the principal and interest fund equals or exceeds the aggregate of the principal of and interest on the securities then remaining unpaid, no fur- ther payments need be made into the principal and interest fund except to make good moneys paid therein which may become lost or which may not be immediately available for withdrawal under the provisions of this section; provided, however, that in the event any additional securities should be thereafter issued, monthly payments into the principal and interest fund shall be resumed in accordance with the provisions of subsections (b) and (e) of this section and the payments required by subsections (c) and (d) of this section shall also be made with respect to such additional securities. Section 10.4 The Reserve Fund. There is here- by created a special trust fund the full name of which shall be the Utilities Systems Debt Service Reserve Fund which shall be continued until the principal of and interest on the securities shall have been paid in full. So long as the total of the amounts on deposit in the debt service reserve fund created in the 1950 water and sewer indenture and in the system reserve fund created in the 1953 water and sewer indenture shall be as much as $20,000 and no additional securities shall have been issued, the city shall not be obligated to make any payments into the reserve fund. In the event the total of the amounts on deposit in the debt ser- vice -reserve fund created in the 1950 water and sewer indenture and in the system reserve fund created in the 1953 water and _32 - sewer indenture should at any time while those funds are in existence be less than $20,000, the city shall pay into the reserve fund, out of moneys derived from the operation of the systems, the sum of $225.00 on or before the last day of each successive month, commencing with the first month next succeeding that month in which the total on deposit in the said debt service reserve fund,created in the 1950 water and sewer indenture and in the system reserve fund created in the 1953 water and sewer indenture shall be less than $20,000 and continuing thereafter until the total of the amounts on deposit in the said debt service reserve fund created in the 1950 water and sewer indenture and in the said system reserve fund created in the 1953 water and sewer indenture and in the reserve fund shall be not less than $20,000. Upon payment in full of all of the 1950 water and sewer bonds any moneys which may then remain in the debt service reserve fund created in the 1950 water and sewer in- denture and which may be available and may lawfully be used for such purpose without violating any of the provisions of the 1950 water and sewer indenture shall be transferred into the reserve fund. Upon payment in full of the 1953 water and sewer bonds,.any moneys then remaining in the system reserve fund created in the 1953 water and sewer indenture and which may be available and may lawfully be used for such purpose without violating any of the provisions of the 1953 water and sewer indenture shall likewise be transferred into the reserve fund. whenever any additional securities shall be issued, the city shall thereafter pay into the reserve fund, out of the moneys derived from the operation of the systems, in addition to the sums required in the preceding sentences of this section to be paid into the reserve fund, on or before the last day of each successive month, beginning with the month in which any additional securities may be issued and continuing for fifty-nine (59) successive months thereafter, an amount equal to 1/60th of the maximum of principal and interest that will mature during any sub- sequent fiscal year with respect to the additional secu- rities so issued. If the moneys derived from the opera- tion of the systems and available for such purpose shall at any time be insufficient to make the total monthly pay- ments required in this section to be made into the reserve fund, then an amount equal to any deficiency in any such monthly payment shall be added to the amount of the pay- ment required to be made -into the reserve fund on or be- fore the last day of the then next succeeding month. Moneys forming a part of the reserve fund shall be trans- ferred to the principal and interest fund for payment of the principal of and interest on the securities, but may be so transferred only during those fiscal years in which the moneys on deposit in the principal and interest fund shall not be sufficient to pay the principal of and in- terest on the securities maturing during such fiscal year, and such moneys shall be so transferred only for payment of the principal of and interest on the securities so maturing as to which there would otherwise be a default: Whenever any of the moneys forming a part of the reserve fund shall be so transferred to the principal and interest fund, the city will restore the same by thereafter paying into the reserve fund, in addition to the monthly payments provided for in the second, fifth and sixth sentences of this section, on or before the last day of each successive month commencing with the month during which such transfer shall be made and continuing until the sum transferred shall have been restored, all of the moneys remaining at the end of each such month derived from the opera- tion of the systems after payment of the expenses and charges referred to in Section 10.2 hereof and after making all payments required to be made during such month under the provisions of the underlying inden- tures and under the provisions of Section,10.3 hereof and the second, fifth and sixth sentences of this sec- tion. When the amount of moneys in the reserve fund plus the amount of moneys in the principal and interest fund equals or exceeds the aggregate of the principal of and interest on the securities then outstanding and re- maining unpaid, the moneys on deposit in the reserve fund shall be transferred to the principal and interest fund, in which event no further payments need be made into the reserve fund; provided, that in the event any additional securities should be thereafter issued then the city shall thereafter make the monthly payments into the reserve fund that are required to be made therein under the provisions of this section. Section 10.5 Disposition of Remaining Revenues. After compliance with the then applicable provisions of the preceding sections of this article, the balance of the revenues derived from the operation of the systems remaining at the end of each successive calendar month shall, to the extent necessary, be paid into the princi- pal and interest fund and the reserve fund, in the order named, for the purpose of making good any delinquency or deficit existing in either of said funds by reason of failure to pay therein the amounts respectively required to be paid therein under the provisions of this indenture. Thereafter, and while all of the payments at the time re- quired by the provisions of this article to have been made into the principal and interest fund and the reserve fund have been made and while each thereof is in current condi- tion and no delinquency exists with respect thereto, any moneys then remaining derived from the operation of the systems may be utilized by the city for any lawful pur- pose. Section 10.6 Additional Special Funds Per- mitted. The city shall have the right to create addi- tional special funds in connection with the issuance by it of any of the additional securities, but no such ad- ditional special funds shall have priority over the prin- cipal and interest fund or the reserve fund, and in the event of creation of any such additional special funds the same shall be created for the equal and pro rata benefit of all of the securities. Section 10.7 Security for Special Funds. The moneys at any time on deposit in the revenue account, the principal and interest fund, and the reserve fund shall be and at all times remain public funds impressed with a trust for the purposes for which said account and funds are respectively created. The depository for each such account and fund shall at all times keep the moneys on -34 - deposit in the account, fund or funds for which it is de- pository continuously secured, for the benefit of the city and the holders of the securities, either (a) by holding on deposit, as collateral security, federal securities or other marketable securities eligible as security for the deposit of trust funds under regulation of the Board of Governors of the Federal Reserve System and having a mar- ket value (exclusive of accrued interest) not less than the amount of moneys on deposit in the account or fund being secured, or (b) if the furnishing of security in the manner provided by the foregoing clause (a) of this section is not permitted by the then applicable law and regulation, then in such other manner as may be required or permitted by the then applicable state and federal laws and regulations respecting the security for, or granting a preference in the case of, the deposit of trust funds; pro- vided however, that it shall not be necessary for any such depository so to secure any portion of the moneys on de- posit in any such account or fund that is insured by the Federal Deposit Insurance Corporation or by any agency of the United States of America that may succeed to its functions. Section 10.8 Investment of Reserve Fund Moneys. So long as the city shall not be in default hereunder, it may at any time and from time to time at its option cause any or all of the moneys in the reserve fund which the council may by resolution determine will not be needed during the then ensuing six calendar months for the pur- pose for which said fund was created, to be invested in federal securities which shall become due not later than twenty-four (24) calendar months following the date of such investment or which by their terms are redeemable at the option of the holder thereof at a stated price not later than twenty-four (24) calendar months following the date of such investment. In the event of any such invest- ment, such federal securities, together with all income therefrom, shall become a part of the reserve fund and shall be held by the depository therefor to the same ex- tent as if they were moneys on deposit in such fund. The city may, by resolution of the council, likewise at any time and from time to time cause any such federal securi- ties to be sold or otherwise converted into cash, and the trustee may cause any federal securities forming a part of the reserve fund to be sold or otherwise converted into cash if in its sole discretion it deems such sale or con- version necessary to obtain funds to prevent a default in payment of the principal of or the interest on the securi- ties. In the event of any such sale or conversion, the net proceeds derived therefrom shall become a part of the fund of which the federal securities so sold or converted formed a part. The depository for the reserve fund shall be fully protected in making any such investment, sale or conversion into cash of any such federal securities upon directions given by the council in a resolution, and the trustee shall be fully protected in making any such sale or conversion into cash of federal securities forming a part of the reserve fund if in its sole discretion it deems such sale or conversion necessary to obtain funds to prevent a default in payment of the principal of or the interest on the securities. In the event any moneys -35- in the reserve fund shall be so invested it shall not be necessary for the depository therefor to secure any such investment (in any case where security for such moneys might otherwise be required) so long as such moneys shall remain so invested. In any determination of the amount of moneys at any time forming a part of the reserve fund all evidences of such investments shall be computed at their then market value. Interest Fund and Reserve Fund. The trustee shall at all times be the depository, custodian and disbursing agent for the principal and interest fund and the reserve fund; and all moneys herein required to be paid into either of said funds shall be remitted to the trustee. Out of the moneys deposited with it in the principal and interest fund or transferred thereto, the trustee shall make provi- sion for payment of the securities and the coupons as the same shall respectively mature. The trustee shall apply the moneys in the reserve fund in accordance with the ap- plicable provisions of Section 10.4 hereof. Section 10.10 Depositories for Revenue Account. The council may at any time and from time to time designate any banking institution or institutions,as depository or depositories for the revenue account. Each such depository so designated shall at all times while acting as such be and remain a member of the Federal Deposit Insurance Cor- poration or of any agency of the United States of America that may succeed to its functions, if there be any such, and shall be and remain duly qualified and doing business in the State of Alabama. Each such depository shall be fully protected in paying out moneys from the revenue ac- court f or which it is the depository on checks, vouchers or orders signed by any duly authorized officer or em- ployee of the city, and any such depository shall not be liable for the misapplication by,the city of any moneys so withdrawn if such moneys shall be so withdrawn without knowledge or reason on the part of such depository to be- lieve that such disbursement constitutes'a misapplication of funds. ARTICLE XI RELINQUISHMENT OF RIGHT TO ISSUE THE UNISSUED 1953 WATER AND SEWER BONDS Section 11.1 Agreement Not to Issue Those of the 1953 Water and Sewer Bonds Remaining Unissued. Under the provisions of the 1953 water and sewer indenture the board was authorized to issue the 1953 water and sewer bonds in the aggregate principal amount of $100,000, of which those numbered from 1 to 85, inclusive, aggregating $85,000 in principal amount, have heretofore been issued, and of which those numbered 86 to 100, inclusive, aggregat- ing'$15,000 in principal amount, have not heretofore been issued. As a part of the contract whereunder the securities are issued, the city hereby relinquishes the right to issue -36- those of the•1953 water and sewer bonds numbered from 86 to 100, inclusive, and specifically agrees that it will not at any time hereafter issue any thereof. ARTICLE XII PARTICULAR COVENANTS OF THE CITY Section 12.1 To Pay Securities and Coupons and to Perform the Obligations of the Underlying Inden- tures. The city will pay, out of the revenues derived from the operation of the systems, the principal of and the interest on the securities as specified therein, and it will otherwise perform all obligations which, either expressly or by reasonable implication, are imposed on it in this indenture, and on the board in each of the underlying indentures, and it will not permit any default hereunder or thereunder. Section 12.2 To Maintain Proper Books and Records. The city will maintain complete books and rec- ords pertaining to the systems and all receipts and dis- bursements with respect thereto which shall be kept separate and apart from all other records of the city. Section 12.3 To Furnish Annual Audits. (a) The city will operate the systems on a fiscal year basis beginning on October 1 in each calendar year and contin- uing until and including September 30 in the following calendar year. The city will, within thirty days follow- ing the close of each such fiscal year, cause to be made by an independent auditor who is acceptable to the trustee the following audits: for such fiscal year regardless of whether any of the underlying bonds may be then outstanding: an audit of its books pertaining to the water and sewer system, and a separate audit of its books pertaining to the gas system. Each such audit, in addition to whatever other matters may be thought proper by the auditor to be included therein, shall include the following matters in- sofar as it pertains to that system with respect to which it is made: (1) a statement in reasonable detail of the revenues from and expenditures made with respect to the system during such fiscal year; (2) a balance sheet as of the end of such fiscal year with respect to the system; (3) the auditor's comments regarding the manner in which the city has carried out the requirements of this indenture, and the auditor's recommendations for any than es or im- provements in the operation of the system; (4� a list of the insurance policies and fidelity bonds in force with respect to the system at the end of the fiscal year, setting out with respect to each such policy the amount thereof, the risk covered, the name of the insurer and the expiration date of the policy; (5) a statement of all deposits into and withdrawals from the special funds herein created during such fiscal year, and a statement of the balance on deposit in each of said funds at the end of such fiscal year; and (6) the following information as of the end of the fiscal year as the same shall be disclosed by the records of the city and without requirement of any physical verification -37 - of such information: the number of properties connected with and served by the system; the number of metered cus- tomers served by the system; the number of unmetered cus- tomers served by the system; and the total amount of money expended for capital improvements or extensions to the system during such fiscal year. All expenses incurred in the making of such audits shall constitute and be paid as an operating expense of the system with respect to which it is made. Within ten days following receipt of each such audit report, the city will furnish a copy there- of to the trustee, to the original purchasers of any of the Series 1958 warrants from the city, and to the holder of any of the securities who may request the same, and each of them is granted the right to discuss the contents of the audit with the auditor making the same and to secure from the auditor such additional information respecting the matters herein or therein set out as may be reasonably required. (b) In the event any audit required by the provisions of subsection (a) of this section has not been furnished the trustee within ninety (90) days following the close of any fiscal year, the trustee may, at the ex- piration of said period of ninety (90) days, employ an independent auditor satisfactory to it to make such audit for such fiscal year, and the city hereby agrees to permit any auditor so employed to inspect any and every part of the systems and the books and records of the city pertain- ing thereto and to assist in furnishing facilities for such Inspection. The city agrees to pay an auditor employed by the trustee for such purposes reasonable compensation for his services. The trustee may at its option advance to the city the amount of such compensation by paying directly to the auditor so employed by the trustee a reasonable amount as compensation for his services, which amount so advanced by the trustee, together with interest thereon at the rate of 6% per annum from the date of such advancement, shall be tacked to the indebtedness hereby secured and shall be entitled to the benefit of the lien hereof and the city agrees to repay the same upon demand with interest at the said rate. Section 12.4 To Furnish No Free Service. The city will not furnish or permit to be furnished or from the systems any free service of any kind to the city or any county or incorporated municipality or to any agency, in- strumentality, person, firm or corporation whatsoever. All water, sewer and gas service furnished from the systems shall be charged for at the rates at the time established therefor. Section 12.5 To -Maintain -Adequate Rates. The city agrees to make and maintain such rates and charges for the water, sewer and gas service supplied from the systems and to make collections from the users thereof in such manner as shall, during each fiscal year, produce revenues sufficient to pay, when due during such fiscal year, all operating and maintenance expenses with respect to the systems, to pay into the special funds created in the underlying indentures, and into the principal and in- terest fund and the reserve fund, at the times and in the -38- manner required in the underlying indentures and herein, the amounts respectively required to be paid therein. The city agrees to make from time to time such increases and other changes in such rates and charges as may be necessary to produce said amounts. Section 12.6 To Discontinue Service on Non- payment -of Bills. If the account of any user of water, sewer or gas service from the systems shall remain unpaid for a period of thirty (30) days after such account shall become due, the city thereupon will promptly discontinue furnishing water, sewer and gas service to such user whose account shall so remain unpaid, but upon subsequent pay- ment of such account, including any penalties or charges for connection and disconnection, or either of them, which may be provided for in the schedule of rates of the city, the city may thereafter resume such service to such user until such time as his account shall again re- main unpaid for a period of thirty (30) days after such account becomes due, whereupon the furnishing of such service shall again be discontinued. Each schedule of rates shall provide that all charges for service supplied from the systems shall become due not less often than once during each calendar month. Section 12.7 To Respect Priority of Pledge of Revenues and of Indenture. The pledge of revenues from the operation of the systems herein made shall be prior and superior to any pledge thereof hereafter made for the benefit of any securities hereafter issued or any contract hereafter made by the city other than the securities, and the city agrees that in the event it should hereafter issue any evidence of obligation or make any contract payable out of the revenues from the operation of any one or more of the systems, other than the securities, or for which any part of said revenues may be pledged or any part of the systems may be mort- gaged, the city will recognize in the proceedings under which any such securities or contract are hereafter authorized the priority of the pledge of said revenues made herein for the benefit of the securities. Section 12.8 ept Under Certain C Rehr. Tne city agrees that it will not hereafter sell or lease the whole or any integral part of the systems until all of the securities and the coupons shall have been paid in full or unless and until provi- sion for such payment shall have been made. The city will continuously operate the systems or cause the same to be operated so long as any of the securities and coupons remain unpaid, and it will keep the same in good repair and in efficient operating condition, making from time to time all needful repairs and replacements thereto and thereof. If the laws of Alabama at the time shall permit such action to be taken, nothing contained in this section shall prevent the consolidation of the city with, or merger of the city into, any public corporation having corporate authority to carry on the business of -39- operating the systems, or the transfer by the city . of any of the systems as an entirety to another public corporation whose property and income are not subject to taxation; provided that upon any such consolidation, merger or transfer, the due and punctual payment of the principal of and the interest on the securities accord- ing to their tenor and the due and punctual performance and observance of all the agreements and conditions of this indenture to be kept and performed by the city shall be expressly assumed in writing by the corporation result- ing from such consolidation or surviving such merger or to which any of the systems shall be transferred as an entirety; and provided further, that such consolidation, merger or transfer shall not cause or result in any mort- gage or other lien being affixed to or imposed on or be- coming a lien on the systems or any of them or the revenues therefrom that will be prior to the lien of this indenture and of the pledge herein made for the benefit of the secu- rities. Nothing contained in this section shall be con- strued to prevent the city from disposingg of property pursuant to the provisions of Sections 14.2, 14.3 and 14.4 hereof. Section 12.9 To Keep Systems Free from Prior Liens. The city will keep the systems free from all liens and encumbrances prior to the lien hereof (other than excepted encumbrances), but it may defer payment pending the bona fide contest of any claim unless by such action the trustee shall be of the opinion that the lien of the indenture as to any of the systems shall be materially endangered or the systems shall be subject to loss or forfeiture, in which event any such payment then due shall not be deferred. Nothing herein contained shall be construed to prevent the city from hereafter purchasing additional property on con- ditional or lease sale contract or subject to vendor's lien or purchase money mortgage, and as to all property so purchased this indenture shall be subject and subor- dinate to such conditional or lease sale contract, ven- dor's lien or purchase money mortgage; provided however, that the provisions contained in this sentence shall not be applicable to property purchased under the provisions of Section 14.2 hereof to replace inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary property then subject to the lien hereof, which substituted pro- perty shall be acquired and shall become subject to the lien hereof free of all liens and encumbrances prior to the lien hereof other than excepted encumbrances. Section 12.10 To Repay Advances etc. b Trustee. The city will discharge, pay or satisfactorily provide to the trustee all liabilities, expenses and ad- vances reasonably incurred, disbursed or made by the trustee in the execution of the trusts hereby created, and it will from time to time pay to the trustee reason- able compensation for the trustee's services hereunder, including extra compensation for unusual or extraordinary services. All such liabilities, expenses, advances and compensation shall be secured hereby, shall be entitled to priority of payment over any of the securities and -4o- coupons and shall bear interest until paid at the rate of six per centum (6%) per annum from the respective dates on which such liabilities, expenses and advances are in= curred, disbursed or made, and on which such compensation shall be earned. Section 12.11 To Permit Inspection of Systems. The city will permit the trustee and the holders of any of the securities to inspect, at any reasonable time,z any and every part of the system and the books and records of the city appertaining thereto and will assist in furnishing facilities for such inspection. Section 12.12 To Warrant Title. The city war - ,rants its title to all and every part of the systems pres- ently in existence as being free and clear of every lien, encumbrance, trust or charge prior hereto, other than ex cepted encumbrances; warrants that it has power and author- ity to subject the systems to the lien hereof and that it has done so hereby; and convenants that it will forever war- rant and defend the title to the systems under the trustee against the lawful claims of all persons whomsoever except those claiming under excepted encumbrances. Section 12.13 To Grant Franchises for 0 eration of the Systems upon Appointment of Receiver. In the event a receiver or receivers should be appointed by any court of competent jurisdiction to administer and operate any one or more of the systems following any default by the city here- under, the city agrees that such receiver or receivers or any successors thereto may use the streets, avenues, alleys and other public ways within the corporate limits of the city for the construction, operation, maintenance, replacement, extension and enlargement therein and thereover of the system or systems with respect to which such receiver or receivers shall be appointed. The city agrees that upon request so to do by such receiver or receivers the city will thereupon forthwith grant to such receiver or receivers a franchise conveying said rights. The franchise so granted shall be in the following form with appropriate provisions and changes therein for the nature of the system or systems with respect to which the franchise is granted and for the name of the grantee or grantees therein, the name of the then governing body of the city, and appropriate phraseology applicable thereto: AN ORDINANCE GRANTING A FRANCHISE TO AND HIS (ITS OR THE SUCCESSORS IN OFFICE FOR THE CONSTRUCTION, OPERATION, MAINTENANCE, REPLACEMENT, EXTENSION AND ENLARGEMENT OF A SYSTEM (OR _.SYSTEMS INTHE CITY OF FAIRHOPE, ALABAMA BE IT ORDAINED by the (here will be inserted the name of the governing body of the city) of the City of Fairhope, in the State of Alabama, as follows: -41- (1) The word "city" as used herein means the City of Fairhope in the State of Alabama as it is now constituted, together with any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party. The word "receiver" as used herein (here will be inserted the name of the receiver or receivers), in his (or their) capacity as receiver under appointment by a (here will be inserted the name of the court making the appointment) in that certain cause in said court entitled (here will be inserted the title of the proceeding in which the appointment is made). (2) There is hereby granted to the receiver the right, privilege, authority and franchise to ac- quire, own, construct, operate, maintain, replace, enlarge and extend in the city (here will be inserted the character or characters of the system or s stems with respect to which the franchise is granted to- gether with the right, privilege, authority, and fran- chise to lay, construct and maintain pipes, mains, meters, fixtures, conductors and related appurtenances in, along, across and under the streets, avenues, alleys, and other public places of the city for the purpose of conveying and distributing (water, sewage, gas) in any form in and through the city, and to repair, renew, re- lay and extend such pipes, mains, meters, fixtures, conductors and related appurtenances thereto and make all excavations therefor. (3) The receiver shall, and by accepting this franchise agrees, that he (it, they) will, upon making any excavations of the streets, avenues, alleys, public ways and public places in the city, restore the surface of the paving at the point of such excavations in sub- stantially the same condition as before the work was done, all as promptly as may be practicable and within a reasonable length of time thereafter. (4) The rights, privilege, franchise and authority hereby granted may be exercised by the re- ceiver or any successors in office to him (it, them) subject, nevertheless, to the conditions and obliga- tions herein contained, for such period or periods of time as the receiver and any successor or successors in office thereto shall legally be in control of such plant and system (or systems), but in no event to ex- ceed the maximum time, if any, from the effective date hereof which may be permitted or limited by the con- stitution and laws of Alabama in effect on the effective date hereof. Section 12.14 To Grant Further Assurances. The city will, upon reasonable request, execute and deliver such further instruments and do such further acts as may be necessary or proper to carry out more effectually the purpose of this indenture and in particular (without in any way limiting the generality of the foregoing) to -42- make subject to the lien hereof any property hereafter ac- quired by it for use as a part of the systems and to trans- fer to any successor trustee or trustees the assets, powers, instruments and funds held in trust hereunder and to confirm the lien of this indenture with respect to any securities issued hereunder. No failure to request such further in- struments or further acts shall be deemed a waiver of any right to the execution and delivery of such instruments or the doing of such acts or be deemed to affect the interpreta- tion of any provisions of this indenture. ARTICLE XIII PROVISIONS RESPECTING INSURANCE Section 13.1 Insurance on Physical Properties. The city will keep those portions of the systems that are of the character and type customarily insured by organiza- tions operating a business similar to the systems insured in responsible insurance companies, satisfactory to the trustee, against loss by fire, including extended coverage, to the ex- tent of the full insurable value thereof. The policies evidencing the insurance provided for in this section 13.1 shall contain standard mortga a clauses providing for any loss thereunder in excess of V.000 to be payable to the trustee as its interest may appear; and all such policies shall be delivered to and deposited with the trustee. Prior to the expiration date of any policy evidencing the insurance provided for in this section, the city will furnish the trustee satisfactory evidence that such policy has been renewed or replaced by another policy or that there is no necessity therefor hereunder. Section 13.2 Disposition of Insurance Proceeds. If at the time of any loss to the systems for which insurance is carried as required in Section 13.1 hereof any of the un- derlying indentures should then be unsatisfied, the proceeds of insurance coming into the hands of the trustee shall be applied by the trustee in such way as may be required in the underlying indenture or indentures covering that portion of the systems with respect to which the loss shall be sustained. If at the time of any such loss there shall be outstanding none of the underlying indentures covering that portion of the systems with respect to which the loss is sustained, then the proceeds of said insurance coming into the hands of the trustee shall be applied by the trustee in that one of the following ways which may be directed by a resolution; (a) To the purchase of additional property which the city shall deem of utility, in the operation of the systems, equal to that of the property damaged or destroyed, which additional property shall thereupon become a part of the systems; (b) To the construction of additional property subject to the lien of this indenture which in the opinion of the city shall have in the operation of the systems utility equal to that of the property damaged or destroyed; or (c) To the repairing or renewing of the property damaged or destroyed; -43- provided, that the trustee may pay such proceeds to the city upon being furnished by the city with the following: (l) A certificate of an independent engineer acceptable to the trustee stating that additional property described in said certificate (and with respect to which no such certificate has been previously made) is of utility in the operation of the systems equal to that of the property damaged or destroyed, together with a cer- tificate of counsel acceptable to the trustee approving title of the city to said additional property and the validity of this.indenture as a f iret mortgage thereon, subject only to excepted en- cumbrances; (2) A certificate of an independent engineer acceptable to the trustee stating that the property damaged or destroyed has been repaired in a workmanlike and suitable manner satisfactory to such engineer, to- gether with a certificate of counsel ac- ceptable to the trustee stating that there are and can be no mechanics' or material- men's liens caused by such repair. Section 13.3 Other Insurance. The city will carry workmen's compensation insurance and public liability insurance in such amounts and to such extent as is cus- tomarily carried by like organizations engaged in like business of comparable size. Section 13.4 Fidelity Bonds. The city will at all times carry fidelity bonds on all its officers and employees who may handle funds of the city pertaining to any of the systems, such bonds to be in such amounts as are customarily carried by like organizations engaged in like business of comparable size. Section 13.5 Premiums to be Operating Expense. The premiums payable on all insurance and fidelity bonds required to be carried by the provisions hereof shall con- stitute a part of the expense of operating the systems. ARTICLE XIV POSSESSION, USE AND RELEASE OF THE SYSTEMS Section 14.1 Retention of Po session of Sygtems by City. While the city is not in default here- under,, it may retain actual possession of the systems and may manage, operate and use the same, and may collect, use and enjoy the rents, revenues, income and profits thereof -44 - to such extent as is in nowise violative of the city's covenants herein contained. Section 14.2 Release of Worn Out Personal Property. While the city is not in default hereunder, it may at any time and from time to time, without any release or consent by the trustee, sell or otherwise dispose of, free from the lien of this indenture, any of its movable personal property (including that em- bedded in land not including land itself or any building thereon) that shall have become inadequate, obsolete, worn out, unsuitable for use or undesirable or unnecessary for use as a part of the systems, upon replacing the same with, or substituting for the same, subject to the lien of this indenture and free from all prior liens, except for excepted encumbrances, other property useful as a part of the systems and having value at least equal to the value at the -time of disposal of the property disposed of. 14.3 or Lne uas bysrem in the gown or pa nne. by option agree- ment dated January 23, 1950 the city granted to the Town of Daphne an option for the purchase from the city of that portion of the gas system lying within the corporate limits of said town and of an interest in the properties whereby gas is supplied thereto. In the gas indenture the city agreed that in the event the said town should exercise the option granted by said option agreement, then upon payment to the city of the full purchase price pro- vided for in the said option agreement the city would pay over to the trustee under the gas indenture the entire of the said purchase price and would exhaust as nearly as may be practicable all of the said purchase price by redeeming under the provisions of the gas indenture gas bonds subject to redemption on the earliest date or dates thereafter on which such redemption may be effect- ed. In the event the said option should be exercised at any time while any of the gas bonds are outstanding, then upon compliance by the city with the said provisions of the gas indenture the trustee hereunder shall, at the expense of the city, execute and deliver to the city any and all instruments that may be necessary to release from the lien of this indenture the properties and rights cov- ered by the said option agreement. If the said option should be exercised at any time while any of the gas bonds are outstanding and the purchase price paid pur- suant to said option agreement should exceed the amount necessary to redeem all the gas bonds then outstanding, the city agrees to pay to the trustee under this in- denture all that portion of said purchase price not required to redeem all the gas bonds then outstanding. If the said option should be exercised at a time when none of the gas bonds are outstanding, or at a time when the proceeds from the said purchase price should be more than sufficient to redeem all the gas bonds at the time outstanding, the city agrees that it will pay to the trustee under this indenture the entire of said purchase price. Upon compliance by the city with those provisions of the two preceding paragraphs which may be applicable, -45- the city shall be authorized to convey to the said town the properties specified in the said option agreement and the trustee under this indenture shall, at the ex- pense of the city, execute and deliver to the city any and all instruments that may be necessary to release from the lien of this indenture the properties specified in the said option agreement, whereupon the city may ex- haust as nearly as may be practicable all of the said purchase price by redeeming callable securities pursuant to the provisions of Article VI hereof on the earliest date or dates thereafter on which such redemption may be effected, and the trustee hereunder shall utilize for such redemption the moneys so paid to it. The city agrees that it will not make any sale to the said town of any portion of the gas system other than pursuant to the pro- visions of the said option agreement. Section 14.4 Release of Other Property. While the city is not in default to the knowledge of the trustee in the payment of any securities or coupons outstanding hereunder or in respect of any of the covenants on the part of the city contained herein or in the underlying indentures, the city may obtain the release of any part of the systems not needed by it in the operationthereof, and the trustee shall release the same from the lien hereof upon deposit by the city with the trustee of the following: (a) A resolution describing the property to be released in reasonable detail, stating that the city is not in default under any of the provisions of this indenture or the under- lying indentures, and requesting such release; (b) A certificate of an independent en- gineer acceptable to the trustee made and dated not more than sixty (60) days prior to the date of the release stating the full value, in the opinion of the signer, of the property to be released, and stating that such property is not and will not be needed by the city in the operation of the systems; that such release is in the opinion of the signer desirable in the operation of the systems and that the city is not to the knowledge of the signer in default under the provisions of this indenture.or the underlying indentures; and (a) An amount in cash equal to the full value of the property to be released as speci- fied in said engineer's certificate. Upon compliance by the city with the foregoing conditions the trustee shall, at the expense of the city, execute and 6eliver to the city any and all instruments that may be necessary to release from the lien of this indenture that portion of the system with respect to which said conditions shall have been complied with. r -46- Section 14.5 Eminent Domain Provisions. If any part of the systems shall be taken by any eminent domain proceedings the whole compensation therefor shall be paid direct to the trustee. Upon payment of such compensation as provided in the preceding sentence, the trustee shall, at the expense of the city, execute and deliver to the city or any corporation or governmental agency successfully conducting such condemnation pro- ceedings any and all instruments that may be necessary to release from the lien of this indenture that portion of the systems which may have been taken by such eminent domain proceedings. Section 14.6 Dis osition of Release and Condem- nation Moneys. All sums of money coming into the hands ofofthe trustee under the provisions of either or both of Sections 14.4 and 14.5 hereof shall be applied by the trustee in that one of the following ways which may be directed by a resolution: (a) To the purchase of additional prop- erty which the city may deem of utility in the operation of the systems, which additional prop- erty shall thereupon become a part of the systems; or (b) To the construction of other property subject to the lien of this indenture which the city may deem of utility in the operation of the systems; provided that prior to the application of such moneys in any manner so designated by the city, the city shall fur- nish to the trustee the following: (1) A certificate of an independent engi- neer acceptable to the trustee stating (i) that the property so acquired or constructed has been acquired or constructed in a manner satis- factory to such engineer, (ii) that in his opinion such property is of utility in the operation of the systems, and (iii) that the value of such property is not less than the sum of money to be applied by the trustee to its acquisition or construction; and (2) A certificate of counsel acceptable to the trustee approving the title of the city to any property so acquired or constructed and the validity of this indenture as a first mort- gage thereon, subject only to excepted encum- brances, and stating further, with respect to any property so constructed, that there is and can be no mechanics' or materialmen's lien resulting from such construction. -47- ARTICLE XV REMEDIES OF TRUSTEE AND BONDHOLDERS Section 15.1 Events of Default Defined. Any of the following shall constitute default hereunder by the city: (a) Failure by the city to pay the principal of or the interest on any of the securities when such principal and interest respectively become due and payable, whether by maturity or other- wise; (b) Failure by the city to perform any of the agreements on its part herein contained (other than payment of the principal of and interest on the securities and coupons after thirty (30) days' written notice to it of such failure made by the trustee or by the holders of 25% of the securities then outstanding; or (c) Appointment by a court having juris- diction of a receiver for all or a substantial part of the systems, or approval by a court of competent jurisdiction of any petition for re- organization of the systems or any of them or rearrangement or readjustment of the obliga- tions of the city under any provisions of the bankruptcy laws of the United States. Section 15.2 Remedies on Default. Upon any default by the city in any one of the ways defined in Section 15.1 hereof, the trustee shall have the following rights and remedies: (a) Acceleration. The trustee may, by written nonce to the city, declare the principal of all the securities then outstanding to be forth- with due and payable, and thereupon they shall so be, anything herein or therein to the contrary not- withstanding.'If, however, the city shall make good that default and every other default hereunder (except the principal so declared payable), with interest on all overdue payments of principal and interest, and make reimbursement of all the ex- penses of the trustee, then the holders of a majority in principal amount of the then out- standing securities, by written notice to the trustee, may waive such default and its conse- quences, but no such waiver shall affect any subsequent default or right relative thereto. (b) Suits at Law or. in Equity. The trus- tee is empowered to sue on the securities, (ii) by mandamus, suit or other proceedings, to enforce all agreements of the city herein contained, including the fixing of rates, the collection and proper segregation of the reve- nues from the systems and the proper application thereof, (iii) by action or suit in equity, to require the city to account as if it were the trustee of an express trust for the holders of the securities, and (iv) by action or suit in equity, to enjoin any act or things which may be unlawful or a violation of the rights of the holders of the securities. (c) Receivership. The trustee shall be entitled to and shall have, regardless of the sufficiency of any security or the availability of any other remedy, the appointment of a re- ceiver to administer and operate the systems and perform the covenants on the part of the city herein contained. Any receiver so ap- pointed shall be entitled to take over and administer all of the following then on hand which shall be applicable to the systems: Cash on hand or on deposit, accounts and notes receivable, stocks, evidences of indebtedness, choses in action, customer's service and ex- tension deposits, and property held for sale in the ordinary course of business or for con- sumption in the operation of the systems. Nothing herein contained, however, shall be construed to give any authority to the trustee or the holders of any of the securities or coupons to compel a sale of the systems or any part thereof, and no foreclosure proceedings or sale shall ever be had with respect to the systems or any part thereof. Section 15.3 Disposition of Receivership Moneys. Any moneys received from operation of the systems by a receiver appointed pursuant to the provisions of sub- section (a) of Section 15.2 hereof shall be applied to the payment of the following items in the following order: (a) All costs of the receivership, in- cluding receivers fees, the costs of adminis- tration and operation of the systems and the maintenance thereof in good repair and good working order and all charges and expenses of the trustee under this indenture; (b) All due and unpaid installments of interest on the securities, in the order of the maturity of such installments, with interest on overdue installments of interest; (c) All amounts of the principal of the securities which are due (whether by maturity -49 - or otherwise) and unpaid, with interest on all overdue principal, payment thereof to be made to the holders of the securities then outstand- ing pro rata and without any preference or priority whatever; (d) All amounts required by this indenture to be paid into the special funds herein created; and (e) The surplus, if any there be, to the city. Section 15.4 Remedies Vested in Trustee. All remedies hereunder are vested exclusively in the trustee for the equal and pro rata benefit of all holders of the securities and the coupons, unless the trustee refuses or neglects to act within a reasonable time after written request so to act addressed to the trustee by the holders of twenty-five per centum (25%) of the outstanding secu- rities, accompanied by indemnity satisfactory to the trustee, in which event the holder of any of the securi- ties or coupons may thereupon so act in the name and be- half of the trustee or may so act in his own name in lieu of action by or in the name and behalf of the trustee. Except as provided in the preceding sentence, no holder of any of the securities or coupons shall have the right to enforce any remedy hereunder, and then only for the equal and pro rata benefit of the holders of all the securities and coupons. Section 15.5 Delay No Waiver. No delay or omission by the trustee or by the holl Uers of any of the securities to exercise any available right, power or remedy hereunder shall impair or be construed a waiver thereof or an acquiescence in the circumstances giving rise thereto; every right, power or remedy given herein to the trustee or to the holders of the securities may be exercised from time to time and as often as deemed expe- dient. ARTICLE XVI CONCERNING THE TRUSTEE Section 16.1 Acceptance of Trusts. The trus- tee accepts the trusts hereby created and agrees to perform the duties herein required of it, either expressly or by reasonable implication, subject however, to the following conditions: (a) It shall not be answerable for any- thing whatever in connection with this trust, except its wilful misconduct or gross neglect. -50- (b) It may employ agents and attorneys in fact and shall not be answerable, except as to moneys received by it or by its authorized agents, for the default or misconduct of any such agents or attorneys in fact selected by it with reasonable care. (c) It may consult counsel on any matters connected herewith and shall not be answerable for any action taken or failure to take any action in good faith on the advice of counsel. (d) It need not recognize a holder of securities as such without the submission of his securities for inspection and the satis- factory establishment of his title thereto. (e) It shall not be answerable for any action taken in good faith on any notice, re- quest, consent, certificate or other paper or document which it believes to be genuine and signed or acknowledged by the proper party. (f) It need not notice any default by the city hereunder nor need it exercise any of its rights or powers consequent thereon unless so requested in writin by the holders of twenty- five per centum (25;) of the then outstanding securities; it may do so, if it thinks advis- able, without any such request; it shall do so when so requested. Whenever it has a choice of remedies or a discretion as to de- tails in the exercise of its powers hereunder it must follow any specific written directions given by the holders of a majority of the securities at the time outstanding, anything therein or herein to the contrary notwithstand- ing, unless the observance of such directions would, in the opinion of the trustee, unjustly prejudice the non -assenting holders of the securities; but satisfactory indemnity to the trustee by the holders requesting such action against its prospective expenses and liabili- ties is a condition precedent to its duty to take or continue any such action hereunder which in its opinion would involve it in such expenses and liabilities. (g) It shall be entitled to reasonable compensation for its services hereunder, in- cluding extra compensation for unusual or extraordinary services. (h) Any action taken by it at the request of and with the consent of the holder of any securities will bind all subsequent holders of the same securities or any securities issued hereunder in lieu thereof. ..51- (i) It may be the holder of securities as if not trustee hereunder. (j) It shall not be liable for the proper application of any moneys other than those which may be paid to or deposited with it. (k) All moneys received by the trustee to be held by it hereunder shall be held as trust funds until disbursed in the manner here- in provided therefor. The trustee shall not be liable to pay or allow interest thereon and shall not be required to set aside or deposit any security therefor, except as is herein expressly required. (1) The recitals of facts herein and in the securities are statements by the city and not by the trustee, and the trustee is in no way responsible for the validity of or security for the securities, the existence of the systems, the value thereof, the title of the city thereto, the security afforded thereby, or the validity or priority of the lien hereof . Section 16.2 Trustee Authorized to Pay Prior Charges. Without relieving the c ty from he consequences odefault in connection therewith, the trustee may pay any charge which the failure of the city to pay has made or,will make an encumbrance or lien prior hereto on any of the systems, and in the event the city shall fail to take out insurance on the systems to the extent required by this indenture, the trustee may take out such insurance on the systems which the city has failed to furnish and may pay the premiums thereon. The trustee, however, shall not be required to pay any such charge or take out any such insurance, and it shall not be liable in any manner for any failure to do so. All sums ex- pended by the trustee under the provisions of this sec- tion shall be secured by this indenture, shall bear in- terest at the rate of 6% per annum from the date of pay- ment thereof, and shall be entitled to priority of pay- ment over any of the securities or coupons. The city agrees to reimburse the trustee on demand for all sums so expended by the trustee, together with interest at said rate. Section 16.3 Filing of Claims bX Trustee. The trustee may at any time. i e a claim in its own name or for the benefit of the holders of the securities and coupons in any court proceeding where any such claim may be permitted or required, whether such proceeding be by way of reorganization, bankruptcy, receivership or of any other nature. The holders of the securities and of the coupons do hereby constitute and appoint the trustee as their irrevocable agent and attorney in fact for the -52- purpose of filing any such claim, but such authorization shall not include the power to agree to accept new secu- rities of any nature in lieu of the securities and coupons or to alter the terms of the securities or coupons. - Section 16.4 Resignation and Removal of Trustee. The trustee may resign and be discharged of the trusts here- by created upon written notice specifying the effective date of such resignation, such notice to be given to the city and published by the trustee one time in a newspaper published in the City of Birmingham, Alabama. The effective date of the resignation shall be at least thirty (30) days after the notice to the city and the first published notice unless it be coincident with the appointment by the holders of the securities of a successor trustee as herein provided. The trustee may at any time be removed by a written instru- ment signed by the holders of a majority of the securities then outstanding. If the trustee resign or be removed, it shall be reimbursed for all its proper prior expenses reason- able under the circumstances. Section 16.5 Appointment of Successor Trustee. If the trustee resign, be removed, be placed by a court of governmental authority under the control of a receiver or other public officer or otherwise become incapable of acting, a successor may be appointed by a written instru- ment signed by the holders of a majority of the securites then outstanding (which instrument shall be filed for record in the office of the Judge of Probate of the county or counties in which the systems are located) and in the interim by an instrument executed by the city, such interim successor trustee to be immediately and ipso facto super- seded by one appointed as above by the said holders. The city shall advertise such interim appointment, in the event such is made, one time in a newspaper published in the City of Birmingham, Alabama, and when the appointment of a successor trustee, as selected by the holders of a majority of the securities then outstanding, becomes ef- fective, the city shall advertise that fact one time in a newspaper published in the City of Birmingham, Alabama. Section 16.6 Vesting Title to Systems in Successor Trustee. Any successor trustee shall execute and deliver to the city an instrument accepting the trust and shall thereupon ipso facto succeed to all the estate and title of the retiring trustee to the systems and to the rights, powers and responsibilities of the retiring trustee hereunder. The city will, upon request of the successor trustee, execute and deliver to it any instru- ment reasonably requested in further assurance thereof. Any such instrument so executed shall be filed for record in the office of the Judge of Probate of the county or counties in which the systems are located. Any successor trustee may effectively adopt the authentication certificate of a predecessor trustee on securities already certified and not delivered and may so deliver them, and it may effectively authenticate securities in its own name. -53- Section 16.7 Applicability of Indenture to Successor Trustee. Each of the provisions of this in- denture as to the trustee shall apply to its successor or successors. ARTICLE XVII PAYMENT AND CANCELLATION OF THE SECURITIES AND SATISFACTION OF THIS INDENTURE Section 17.1 Satisfaction of Indenture. When- ever all securities secured by this indenture and all prop- er charges of the trustee hereunder shall have been fully paid, the trustee shall cancel, satisfy and discharge the lien of this indenture and shall execute and deliver to the city such instruments as shall be requisite to satisfy of record the lien hereof and to reconvey and transfer the systems to the city. For the purposes of this section, any of the securities and any of the coupons shall be deemed to have been paid when the city shall have deposited with the trustee for payment thereof the entire amount due or to be due thereon until and at maturity, and any of the callable securities shall be deemed to have been paid when the city shall have deposited with the trustee the follow- ing; the redemption price of such callable securities pursuant to the provisions of Article VI hereof, an amount equal to the interest that will accrue with respect to such callable securities to the earliest date or dates on which they may be redeemed, a certified copy of the resolution required in Section 6.l hereof,and either (a) evidence satisfactory to the trustee that notice of redemption of such callable securities has been given as provided in said article, or (b) irrevocable powers authorizing the trustee to give such redemption notice. Section 17.2 Cancellation of Paid Securities and Coupons. When and as the securities and coupons are paid, those so paid shall be forthwith cancelled by the trustee and delivered to the city. Likewise all mutilated securities replaced by new securities shall, forthwith be cancelled by the trustee and delivered to the city. ARTICLE XVIII MISCELLANEOUS PROVISIONS Section 18.1 Disclaimer of General Liability. Any covenants or representations herein contained or con- tained in the securities or the coupons do not and shall never constitute a personal or pecuniary liability or charge against the general credit of the city, and in the event of a breach of any such covenant or representation no personal or pecuniary liability or charge payable directly or indirectly from the general revenues of the city shall arise therefrom. Nothing contained in this 1 -54 - section, however, shall relieve the city from the perform- ance of the several covenants and representations on its part herein contained. Section 18.2 No Cross -Lien Created for Benefit of Underlying Bonds. Nothing herein contains shall be construed to create a cross -lien on any of the systems or the revenues from any thereof for the benefit of any of the underlying bonds which were not issued with respect to that one of the systems out of the revenues from which such underlying bonds are respectively made payable. Section 18.3 Retention of Moneys for Payment of Securities and Cou ons. Shou�any of the securities or he coupons not be presented for payment when due, whether by maturity or otherwise, the trustee shall retain from any moneys transferred to it for the purpose of paying said securities and coupons so due, for the benefit of the hold- ers thereof, a sum of money sufficient to pay such securities or coupons when the same are presented by the holders there- of for payment (upon which sum the trustee shall not be re- quired to pay interest). All liability of the city to the holders of such securities and coupons and all rights of such holders against the city under the securities and coupons or under this indenture shall thereupon cease and determine, and the sole right of such holders shall there- after be against such deposit. If any securities or coupons shall not be presented for payment within the period of ten years following the date when such securities or coupons become due, whether by maturity or otherwise, the trustee shall return to the city the moneys theretofore held by it for payment of such securities or coupons, and such securities or coupons shall (subject to the de- fense of any applicable statute of limitation) thereafter be an unsecured obligation of the city payable solely out of the revenues of the systems. Section 18.4 Form of Requests by Holders of the Securities. Any request, direction or other instrument required to be signed or executed by holders of the secu- rities may be in any number of concurrent instruments of similar tenor, signed, or executed in person or by agent appointed in writing. Such signature or execution may be proved by the certificate of a notary public or other of- ficer at the time authorized to take acknowledgments to deeds to be recorded in Alabama, stating that the signer was known to him and acknowledged to him the execution thereof. Section 18.5 Limitation of Rights. Nothing herein or in the securities shall confer any right on any- one other than the city, the trustee and the holders of the securities and coupons. Section 18.6 Indemnity Bonds. Any indemnity herein provided for shall be in the form of a bond of a surety company having paid in capital of not less than -55 - One Million Dollars indemnifying the city and the trustee, or either of them, as the case may be, against loss as a result of the action for which such indemnity is required. Section 18.7 Manner of Proving Ownership of Securities. The ownership at any given time of any of the securities may be proved by the certificate, if deemed satisfactory to the trustee, of any trust company, bank or bankers, wherever situated, stating that on the date stated the stated party had on deposit with or ex- hibited to it the securities described. The ownership at any given time of a registered bond may be proved by a certificate of the trustee stating that on the date stated the bonds described were registered on its books in the name of the stated party. Section 18.8 Indenture Governed by Alabama Law. It is the intention of the parties hereto that this inden- ture shall in all respects be governed by the laws of the State of Alabama. Section 18.9 Notices to City. The trustee or the holder of any of the securities may serve any notice upon the city by depositing the same in a post office in a sealed and duly stamped envelope addressed to the council at Fairhope, Alabama. IN WITNESS WHEREOF, the city has caused this indenture to be executed in its corporate name and in its behalf by its mayor and its corporate seal to be hereunto affixed and attested by its city clerk, and the trustee, to evidence its acceptance of the trusts hereby created, has caused this indenture to be executed in its corporate name and in its behalf and its corporate seal to be hereunto affixed and attested by its officers, all of whom are hereunto duly authorized by proper corporate action, in three counterparts, each of which shall be deemed an original, and has caused this indenture to be dated as of December 1, 1958, although actually executed on January,` 19r, 9. Attest: City Clerk CITY OF FAIR By Mayor THE MERCHANTS NATIONAL BANK OF MOBI By Its VICE-PRES, AND TRUST 0. 1GE3 Attest, Its w. -56- STATE OF ALABAMA COUNTY OF I� a Notary Public in an4f,r's�NLd county in salld state, hereby certify that E.B. Overton, whose name as Mayor of the City of Fairhope, a nicipal corporation under the laws of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the within instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said municipal corporation. Given under my hand and official seal of office this,-�,,`fiay of January, 1959, Notary Public STATE OF ALABAMA COUNTY OF MOBILE I, �r��r AAkro-gr , a Notary Public in and or said counn said she, hereby certify that �4u �3a.0 �x, IT. , whose name as VICE- ES. AND TRUST OFFICER of The Merchants National Bank of Mobile, a an ng corpora- tion, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the within instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corpora- tion. Givunder my hand and official seal of office this /1'—day of January, 1959. INCUMBENCY, NO -LITIGATION AND SIGNATURE CERTIFICATE The undersigned officers of the City of Fairhope (herein called "the city") in the State of Alabama do here- by certify as follows: (1) The officers of the city hereinafter named are the duly elected, qualified and acting officers of the city as hereunder designated, the dates of the beginning and ending of their respective terns of office being like- wise hereunder designated opposite their respective names: Date of mate of Beginning Ending Office Name of Officer of Term off Mayor E. B. Overton Member of the City Council Charles F. Belew Member of the City Council Marvin 0. Berglin Member of the City Council Walter 0. Poser Member of the City Council Sim. R. Ruffles, Jr. Member of the City Council Barney L. Shull City Clerk Marie Moore City Treasurer Marie Moore /40 46i: /, I (M4 - . r2(-77AV, /96d eCT11 ,�76 — , /�740 The said members of the City Council (herein called "the council") constitute all the members of the council and the said mayor and council together constitute the governing body of the city. Those of said officers who are required to post bond as security for any funds handled by these have duly posted with the proper officers all bonds with sufficient surety required of them, wh*h bonds have been duly approved by the officers who are required by law to approve the same. Those of said officers who are required by law to take an oath of office have duly taken such oath of office before the officers required by law. All of said officers are now and have been since their respective terms of office began, performing the dutioappe�rtaining to their re- spective offices. The seeona and fourth Mondays of each month at 7t30 o'clock, F. M., have heretofore been fixed by the council as the date and time for the hold- ing of regular meetings of the council. (2) The city is now and has been for more than 50 years a municipal corporation duly organized and exist- ing under the general laws of Alabama pertaining to the mayor and council form of government for municipalti.es. c 2 " To the beet of our knowledge and belief, there art no local or special laws of said state pertaining to or having any bearing on or restricting the borrowing of money by the city, or the execution, issuance or sale of notes, warrants or bonds by the city in evidence of any money so borrowed. No proceedings for the dissolution of the city have over boon taken. The population of the city, according to the federal census of 1950 was 3,354. No census or enumeration of the in- habitants of the city has been made subsequent to the federal census of 1950. (3) There is no' litigation pending and, to the best of our knowledge and belief there is no litiga- tion threatened, in any court in any way questioning any of the followingt the corporate existence of the city$ the territorial boundaries of the city; the election or ehoumbeney or right of any of the officers above named to their respective offices; the power of the council to authorize the execution and issuance of the $210,000 principal amount of Water, Bower and Gas Revenue Refund- ing Warrants, Series 1958, of the city dated Docember 1, 1958, numbered from 1 to 210, inclusive (herein called "the warrants") that were authorized to be issued by an ordinance adopted by the council on January 12, 1959 (herein called "the authorising ordinance"); the validity of any of the provisions of the authorising ordinance$ the validity of any of the warrants; the power of the city to own and operate its water and sewer system and its gas system (herein together called "the systems"); the power of the city to acquire and annstract the improvements to the systems, or any of them, for payment of the cQAt of which the warrants were authorized to be issuedf the title of the city to the systems or either of then; the power of the city to pledge for payment of the warrants the revenues derived from the operation of the systems; the power of the city to execute and deliver u security for the warrants and such additional warrants an night hereafter be issued under the provisions thereof, the indenture of mortgage and deed of trust (herein called "the indenture") between the city and The Merchants National Bank of Mobile, the trustee thereunder, dated as of December 1, 1958 and actually executed and delivered on the date of this certificate; the validity of the pledge and assign- ment of the revenues contained in the indenture; the validity of the indenture; the power or duty of the under- signed mayor to execute the warrants and to cause the official seal of the city to be affixed thereto; the power or duty of the undersigned city clerk to attest the same by affixing her signature thereto; the power or duty of the city treasurer to register the warrants in the records of the city maintained by her; the power or duty of the mayor to execute and deliver the indenture in behalf of the city; the power or duty of the city clerk to affix the seal of the city to the indenture and attest the same; the validity of the sale of the warrants to Watkins, Morrow i Co. the purchaser thereof; the validity of the warrants, or any of them, or the indenture or of the provisional of any thereof$ the power or duty of the council to cause the warrants to be delivered to -3- the said purchaser; and the power or duty of the council to cause the indenture to be delivered to the said trustee. That certain ordinance of the city numbered entitled"An ordinance to provide for the issuance o $210,000 principal amount of hater, Surer and teas Revenue Refunding Warrants, Series 1958, of the city for the pur- pose of refunding a like principal amount of outstanding warrants of the city, and providing for a pledge of revenues and mortgage and deed of trust as security therefor" which was adopted by the council on January 12, 1959 has not been repealed, revoked or amended and the saw is in full force and effect. Done of the proceedings heretofore taken by the council pertaining to the authorization and sale of the Warrants and the authorization of the indenture have been repealed, revoked or amended and the same are in full force and effect. As shown by the records of the city every motion, resolution or &dinanee adopted at the meetings of the council on December 2, 1958 and January l2s 1959 were reduced to writing before any vote was taken thereon and has been recorded in a well bound book. (4) The undersigned mayor has officially signed the indenture and the undersigned city clerk has caused the official seal of the city to be affixed thereto and has duly attested the indenture as therein provided, whereupon the indenture was delivered to the said trustee and was executed in its behalf and its seal affixed and attested by its officers as therein provided. The in- denture so executed and delivered was in the form pro- vided for in the aulwizing ordinance. (5) The undersigned mayor has Officially signed the warrants and caused the official seal of the city to be affixed thereto, and the undersigned city clerk has attested the Warrants by subscribing her signature there- to. An impression of said seal is hereunder affixed, which seal has been heretofore adopted as the official seal of the city. At the time the warrants were .so signed and sealed there were attached to each thereof the semiannual interest coupons evidencing the installments of interest payable thereon as provided in the authorising ordinance, which coupons were signed with the facsimile signature of the undersigned Mayor and were attested with the facsimile signature of the undersigned city clerk, each of whom hereby adopts his or her respective signature appearing on said coupons in all respects as if he or she had signed the same in person. Bach, of the warrants and each of the said coupons was in the fors and contained the provisions provided therefor in the authorizing ordinance. The undersigned mayor has delivered all of the said executed and sealed warrants to the said trustee, accompanied by are order addressed to the said trustee directing it to certify and deliver the warrants to the said purchaser thereofppursuant to authority so to do granted by the authorizing ordinance, No warrants other than those hereindbove described have been executed pursuant to the provisions of the authorizing ordinance. - 4 - (6) The city has no obligations or indebtedness of any kind whatsoever, other than the warrants, that are payable out of the revenues,from the systems except as follows: (a) $ a a a'l principal amount of First Mortgage Etas Revenue Bonds of the city dated Febru- ary 1, 1950 which were issued under the provisions of an indenture of mortgage and deed of trust covering the said gas system from the city to The Merchants Rational Hank of Mobile dated as of February 1, 1950 covering the said gas system and represents the -..unpaid portion of an issue in the original principal amount of $755,OOOx (b) 000- ;,_,_ principal amount of Mortgage Water an ewer' Revenue fonds of The Water Works and Sewer Board of the City of Fairhope dated July 1, 1950 which were issued under the provisions of an indenture of mortgage and deed of trust from said board to the said bank covering the said water and sewer system dated July 1, 1950 and represents the unpaid portion of an issue in the original principal amount of $260,000$ and (o) $ .S, o o o . o; dollars ptinc ipal amount of Water and S er Revenue onds, Second Series, of the said The Water Works, and Sewer Board of the City of Fairhope dated July x, 1953 which were issued under the provisions of an Indenture of mortgage and deed of trust from, the said board.to the said bank dated its of July 1, 1953 covering the said water and sewer system and represents the unpaid gortion of an issue in the original principal amount of 45,000. No unsatisfied appropriation or pledge of any kind of, or outstanding contract respecting, said revenues has heretofore been made other than the pledge thereof for the payment of the warrants and the pledges of revenues from the said respective systems for the payment of the said outstanding bonds with re- spect to which systems they were issued. (7) We have no knowledge or information of any agreement, representation, condition, understanding or stipulation, whether oral or written or expressed or implied, respectingthe authorisation of the warrants, the terms of the sale thereof, the use of the proceeds from said sale, or the terns, provisions or validity of the indenture, other than as is set forth in the closing papers of which this certificate forms a part and in the other documents which have been furnished to Messrs. White, Bradley, Arant, All & Rose for their examination preliminary to the approval by them of the validity of the warrants and of the indenture. WI2`f 3 our signatures in our respective capacities hereunder noted, under th eal of the city, this Z Zs, day of January, 9 . -Na,vor'of Elig City of Yairhope City Cldrk of the Citlr-;f Fairhope - 5 o- TRHASURBR'S RXCFIPT AND REGISTRATION CERTIFICATE The undersi ed City Treasurer of the City Of Fairhope, Alabama (herein called "the city") hereby acknowledges receipt on this date from Watkins, Morrow & Co. of the purchase price in full for the 4210,000 principal amount of 4-1/2% Water, Sever and (has Revenue Refunding Warrants, Series 1958, of the city dated December 1, 1958 and numbered from 1 to 2100 inclusive, as follows; 97-1/2% of the face value of said warrants Accrued interest from December 1, 1958 to the date of this receipt Total ?ayment $204,750.00 The undersigned City Treasurer further acknowledges that on the date of this certificate she did register in the records of the city maintained by her the aforesaid warrants as claims against and payable solely out of the revenues from the operation of the water, eever and gas systems of the city. Dated this 4 �ay of January, 1959. City a urer of the oity of Fairhope ORDER REQUESTING CERTIFICATION AND DELIVERY OF THE WARRANTS TO: THE MCHANTS NATIONAL BAND OF NOBITS, AS . UST13 UMR INOF KORTQAG1 AND DIMD OF TRUST OF THE CITY OF FATA TOPE, ALABANA, DATED AS OF DICE$= 1, 1958s Pursuant to authority so to do contained in Ordinance No. W adopted by the city council of the City of Fairhope, Alabama on January 12, 1959, I hand you herewith the 4-1/2% dater, Sewer and Ciao Revenue Refunding warrants, Series 1958, of said city dated December 1, 1958, numbered from I to 910, inclusive, aggregating $210,000 in principal amount, together with • Y w -6- all interest coupons applicable thereto due June 1, .1959 and thereafter,and a receipt for the payment of the purchase price of said warrants signed by the treasurer of said city. I do hereby order and direct you to certify the said war- rants and deliver the same to Watkins, Morrow & Co. together with all semianrnual interest coupons applicable thereto due Jtane 1, 1959 and thereafter. Dated this may of J 1959. ayor of t i y o a rhope OUAP OF SIONATUitBS The undersigned bank hereby guarantees the sign&- tunes signed to the foregoing certificates and signed to the 4-1/2% Water, Sewer and gas Revenue Refunding Warrants, Series 1958, of the City of Fairhope, Alabama, dated December 1, 1958, and numbered from 1 to 2100 inclusive, to bethe true signatures of the persons whose signatures purport they to be, � ME MERUANTS NATION4L BANKS M�;BILE 9KS TRUCTEU By Its VIC. I ��r�; CICRTIFICATZ of TRtiME RESPECTING - CUTION AND DICLIVERY OF MORTGA6Z AND DEED OF TRUST AND MTIFICATION AND IISLIVSRY OF THS WAR LM"S The undersigned The Merchants National Sank Of Mobile hereby certifies as follows: (1 ) The undersigned has duly executed and delivered the indenture of mortgage and deed of trust of the City of Fairhope, Alabama dated as of December 1, 1958 which was authorized by Ordinance No. S g adopted by the city council of said city on January 12, 1959) and (2) Pursuant to the "Order requesting certifica- tion and delivery of the warrants" signed by the mayor of the said city and attaehed hereto, the undersigned, acting -Air', - T w in its capacity as trustee under said indenture of mortgage and deed of trust,has duly executed the authentication certificate attached to each of the 4-1/2% dater, Sewer and Gas Revenue Refunding Warrants, Series 1958, of the said city dated December 1, 1958, numbered consecutively from 1 to 210, inclusive, and aggregating $210,000 in principal amount., and has delivered the same together with all interest coupons applicable thereto due June 1, 1959 and thereafter, to the purchaser thereof, all as directed in the aforesaid order. Dated this 1-6ay of January, 1959 • TH= MUCHANTS NATIONAL DAB CW MMILIC By �&' '�' Its V:CE-PP_-, AND liFJST U. FTER TiECi�.... �PT w: The undersigned hereby acknowledges receipt of $210,000 principal amount of 4-►1/2% Water, Sewer and Gas Revenue Refunding Warrants, Series 1958, of the City of Fairhope, Alabama dated December 1, 1958, numbered from 1 to 220, inclusive, together with all interest cou- pons applicable thereto due June 1, 1959 and thereafter. Dated this ZZ&y of JAnuary, 1959. WATKINS, 140FROW & Co. f The wcederraignsd offloors or #her City of ftir le" (min 0 4 '�$he ,a .7) in the Stat* of Aasbam do ran by eetsr lry as tollows$ (I) The offiaers Imes the aay *I t , W the oa�aUM offfl ' rm thnowis eIIW air hei"'�under eatelf ast�ed, fte dates of tipe beglanfng and OWUM of th V tivwe tents of offs+ berift A wIAm her under devigru� soms#.te their r*sVoctive nmesX mgxWW YAWbOt 6f tha city Cot mil Newer of the City CII 9e0er at the city Cauma Xm*o v or tho City counall !gior the p' City Mil City Mom Im St WMAL g. B. Overton Charles F4 Below Date of � M iIF 6 Met N acm Q. semi in � �3, lys7 Walter 0. r Wt. R. RurrUs. yr. 629CI -/, / >-r(. - Barmy Z. Shull Muria Moore City Troksurer Mario Scow:. 3o,/16a ja /y� 6 -3 a. / /6 3 / 96 , J66 194 6 -fto # &IA members of the City Coil (herr oln +&.led "the ill") 4w ttituto all the =Woors at the aoumil and the &*$A avow and cvunall together esmtitute the jpovers4tng body of the 41ty. Those of said, offU ers who are roel drod to p bond Its aetawl.ty for mW Reads hwMoed by tbestl haw duly p oted with the proper offioers all bogs with rAfftelaut mwe ty required of thy, mbl ah bwds have beset► dully #*proved by the officers ow av mquimd by law to wpm" the same. T"" ar staid *m"rer who aft rewired by last to tAke an Oath of orffioe have duly tat ouch oath or *Mae before the *Mears ;cequirwrd by law. All of Wd officer* am now and nave been vine* their rompoetiv* term of *Moe bet , per!'errrat ng the duties Pertaining to their r+iesp"tivet Offl.err* 4 The 266and-VA teUrth KandaYS err each smith at o W elereko . 9. , bAvo heretaferet b fixed by then c as the dater and beer tar the hold- ing ar ro=3ar seeertinge of the ao ail. (p) The *ItY is "m ubd has for, vAft that 50 YOS06 a rst on. dA97 esrSOViead MA WdSt- UW err the Swaral low *f dlWm" po rtmudng to the mWqOr and Ocumil tom of fol* .e10611tiss. INO the best bf our Iftov2ofte a belief j there a* ns S004e3. or vocial 1.sres ©f saw staeu P*rtainuq to g , r %p a 40. 4w xjestriet thee ba�ae• ttlrlr city, or the Ozoa uticei, uwaamm at r tos, a tw► OV bonds by the city in ovid ino* cC &W mrsey near beorr d, 90 paOrcea "IMP fw the dis"lutiaa or the +elty have ewer belt tahrn*Tho fro pdation of the e t r, ocomdUe to the f dozoal aeuxe of 1950 %= 3 354y No r► aomme o �►�atien ` at the l bitsats of a; city No boon ae�ubs+ equ nt to federale�eenaft o 19500 (3) There to a* litIZAtion psrAUW imrA,, to the boat or our knimledpr and besrU f tare I* no litigation t eato"d„ In court aerttam' .%u4u� or In questi no - in at the �a�rr� lel the coarp4Yai1 exl�e 9f the c WS the, territorial boLmdariim of the citys the es►Uttiewn or titlo Of alb of thel offUero of the city as fee minabovo aatae►t*41 the powwer or duty of the ea ail to aeaAkoftze the oAomtl*A aid issue at t sera mhrsr► gear Re vear" pasTant of Char city dated y 1�w��i the principal. aeap��ap►t or 4920 t (heroin 4&Uo i e at) ublah, rags wAthariswed to be 3sa roped W r mluti . *dopted ill. an *dwv ,2y 1901 p*%*I* ewe 4�a�� l lw*v to +exweeuter the xsrreat arm to -Mews the Offic eaeea3. of Cho aity tie In of lxod therot s, err peoos, or +duty' of thio aity cleans of tics city t* attest t% time 'ty Offixir `her stgcratur a ttarreteel as tt* paa "r or duty of the city to regirte * the 1 i In i!e soaorft of the city Malutafned by herrj or the Y&Udlty Of the o*rrw* as a 13tr3,tead elb .lawtUt of the altg Ilv1pak2e nolaly out or the Memo* o* fr 4m the water and Wftr systm mA the gage systeaa of the► *Ityj or the vialdity at the vu4p at ramries frem the water and wver ayytem and the SAX tenet or the eelt�y i+ ift for the benefit of f °the M� in M said ra moluution or the po wlr or dut7 of tho city troat+tur+er to 4oliver thr 114e"3"'alMl' t to vutkirtei, aML 14090 & � 04 vom Fmmwft to the city treMawrr or the rino1w aaftm* themof j or theparer orotft of the city treaetu"r to ANY' the primlye . o►f aid in- test an the warrant, cut of the rursds of the city out oat %bleh the saw was =We v e! The said se. oolution amth lxUW the Sss»uee m v4 rant has root been r*- pealod, revoked or mendeds ano the eskaem in in p4l .farce. mad offtat. (is) The --l—sived mar has officUdly r the gar nt old uffiawd the OffiCial +nosed Of the city r- te, WA the tUAWS.18reed Citya zk of the city tm attested'the awntt bar vAbscrIbIngr° sj4pature theex« mo. An i"ression Of said se &I is 1-- m mer affix", rrblah seal has been heerotorseE*re vet i a s the offlaW saali at the6i11, VSS usnrdersi hectr+e elolett,eted ns Wwratt lc'aumt to a havixatim inthe errs►td r+eae+alrtti+sen other the the uom4ftt herein deesE#sribeld.. J AMtrA,e_r -3- WITNZSS our signatures in our respective capacities hereunder noted, under the seal of the cit this [2rtAay of peee'r-, 1951P. ayor City Clork TAMMM I S RBCNIF'T., D�BLIVERY AND REQISTRATION a TIFICATN ^ll �/ y«lIy��rl� I, the undersigned Fairhopo (herein called the do hereby certify as follows: City Treasurer of the City of city") in the State of Alabama, (1) On the date of this certificate l did receive from Watkins, Norrow & Co. the sum of $2200000 representing the proceeds of the sale by the city to the said coepoW of the dater, darer and 0" Revenue Warrant of the oity bearing even date herewith in the principal amount of $210,000 which sale was **de by a. resolution adopted by the governing body of the city and approved on December 2, 1958. (2) At the time of the aforesaid pp►tont of the proceeds of said :saie, them was delivered to said Watkins, Morrow & Go. t 41122r, Sever and Gas Revenue Warrant of the city dated 19517, in the principal amount of $210,000, which was in�a form and was executed in the manner and by the officials provided in the aforesaid resolution authorizing the same, (3) On the date of this certificate I did register in the records of the city maintained by in the aforesaid warrant as a elaiaa against the revenues from the operation of water and sewer system and the gas systva of the city. Dated this 4day of or'•, 1950r. y Tftasurer of thO City o F&:Lrhopo, Alabama UAAANTY OF gLd +i&UM The undersigned bank hereby guarantees the signa- tures signed to the foregoing certificates and signed on the Water, Sewer and teas Revenue Warrant of the City of Fairhope, Alabama, in the principal amount of $210,000 and dated Reeembo 1,�, 195F* to be the true signatures of the respective persons mhose signatures they respectively purport to be. Tt{E WRmwiis NA' it.4L BAI : By Its 'VICE -Pi AtIU Ii,u.)i UFFI;im R $210,000 $210,000 UNITED STATES OF AMERICA STATE OF ALABAMA CITY OF FAIRHOPE WATER, SEWER AND GAS REVENUE WARRANT Ninety days after the date hereof the City Treas- urer of the City of Fairhope (herein called "the city"), a municipal corporation in the State of Alabama, is hereby ordered to pay to Watkins, Morrow & Co., or its assigns, solely out of the revenues hereinafter referred to, the principal sum of TWO HUNDR TEN THOUSAND DOLLARS with interes theonvfrot'fie date hereof until the maturity hereof at the to '6f er annum, payable at the maturity hereof. Both t pric al reof and interest hereon shall be payable at the pr3-nc 1 f is of The Merchants National Bank of Mobile, in the of ile in the State of Alabama. The city reserves th pri of paying all or any part of the principal of this arra at y time prior to its maturity by paying the teres w ch shall have accrued on this warrant to the dated�a ch repayment and the principal so prepaid, witlTot60 It or prior notice. The principal of a?Ld to s th warrant are payable solely out of the revenu th a derived from the operation by the city of the ter .sa a msewer system and the natural gas d tribu m bot of which upon the issuance of -i wa r t wil be the city. The said revenues are h r vocab pl d, to the ex- tent necessary for su pu os to e e nt uthorized by law, for payment of he nci al te on this warrant, and the city ag es th i wi gre to he sa;W revenues and deposit them n a s al s to nd a,�axyCf from all other revenues of a cit d This warrant has been s e p u t to a p- plicable provisions of the constitu io `a 1 s of he State of Alabama, including particul Sec io s 46 and 466 of Title 37 of the Code of Alabama of 19 and a � resolution duly adopted by the governing iy of t e ci for the purpose of raising funds to pa o t con- structing improvements and extensions to th sai ter and sanitary sewer system. ' It is hereby certified that the obligatio vi- denced hereby has been duly and legally incurred and 1 at the maturity hereof become lawfully due without con - tion, abatement or offset 6f any description; and that al k J f~ conditions, actions and things required by the constitution and laws of the State of Alabama to exist, be performed or happen precedent to and in the issuance of this warrant exist, have been performed and have happened. IN WITNESS WHEREOF, the city has caused this warrant to be executed and its official seal to be here- unto affixed by its mayor and has caused the same to be attested by its city clerk, both of whom have hereunto subscribed th- s natures, and has caused this warrant to be dated /y 195F. Attest: CITY OF FAIRHO 0 By _ Mayor s City Clerk CERTIFICATE OF REGISTRATION I hereby certify that this warrant was at the time of issuance thereof duly registered by me as a claim against the City of Fairhope in the State of Alabama, payable solely out of the revenues from the operation of the water and san- itary sewer system and the natural gas distribution system of said city. City treasurer of the City of Fairhope, Alabama ASSIGNMENT The within warrant and the indebtedness thereby ordered paid are hereby transferred and assigned, without recourse or warranty, to 71)1 a C'o