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HomeMy WebLinkAbout12-09-1953 Regular MeetingSTATE OF ALABAMA County of Baldwin The Water and Sewer Board of the City of Fairhope met in regular session at the City Hall, Wednesday, December 9, 1953 with the following members present: Chairman R. Roy Moyers, L. A. Berglin, Sr., A. C. Mannich and C. B. Niemeyer City Manager. the minutes of the previous regular meeting were read and approved as read. Motion by Mr. Berglin seconded by Mr. Mannich that the follow- ing bills be approved for payment: Standard Equipment Co. McKesson & Robbins Ponder Co., Fairhope Service Center Gaston Motor Co. Western Auto Smith, Dukes & Buckalew Gas Dept. Supplies G. E. Perkins Agent Hardware Mutual Pay Roll George Dyson Motion by Mr. Mannich seconded by and Sewer Board pay half the cost the City for the Water and Sewer carried. 45.25 32.50 3.22 3.75 .90 6.70 300.00 156.50 16.91 8.00 883.30 200.00 Mr. Berglin that the Water of ditch digger purchased by and Gas Departments. Motion Motion by Mr. Berglin seconded by Mr. Mannich that the following Resolution be adopted: BE IT RESOLVED that the bill of Watkins, Morrow & Co., in the sum of $4,250.00; Mr. W. C: Beebe in the sum of $1,700.00 and hte Merchants National Bank of Mobile in the sum of $150.00 for services in connection with the issuance and sale of $85,004.00 Water and sewer Bends, second series, dated July 1, 1953, be and the same are hereby approved and ordered paid. BE IT FURTHER RESOLVED that statement of disbursement of pro- ceeds of the sale of $85,000 of Water and Sewer Revenue Bonds, second series, dated July 1, 1953 be recorded in minutes of this meeting. Motion carried. Motion by Mr. Mannich seconded by Mr. Berglin that the Water and Sewer Board purchase chlorinator from Wallace & Tiernan as requested by the State Health Department. Motion carried. It was duly moved and seconded that the meeting adjourn. Motion carried. Chairman oX the Se retary & Tr asurer MINUTES OF A MEETING OF THE BOARD OF DIRECTORS OF THE WATER WORKS AND SEWER BOARD OF THE CITY OF FAIRHOPE HELD ON THE DAY OF N��F� v ea %'�t��►"r i 1953, A �o OtCLOCK, _. M. The following were present at the meeting: Messrs. Arthur C. Mannich, R. Roy Moyers, and L. A. Berglin, Sr., being all of the members of the board of directors of the corporation. Mr. Moyers acted as chairman of the meeting, and Miss Marie Moore, the sec- retary of the corporation, who was also present, acted as secretary thereof. The chairman announced that a waiver of notice of the time, place and purpose of the meeting had been signed by all the members of the board of directors and, a quorum being present, that the meet- ing was open for the transaction of business. Upon mo- tion duly made, seconded, and unanimously carried, the said waiver was ordered spread upon the minutes of the meeting at the end thereof. The chairman stated that inasmuch as there had been at least one re -appointment to the membership of the board of directors since the last election of officers it would be in order to confirm the election of the of- ficers heretofore elected. Mr. 13 61 thereupon introduced the following -resolution and moved that the same be adopted, which motion was seconded by / Mr. ,"i Ci _R 7Zc c�v , and upon vote being taken thereon, the said resolution was unanimously adopted by the votes of all the members of the board of directors: 41 - 2 - BE IT RESOLVED by the Board of Directors of The Water Works and Sewer Board of the City of Fair - hope that the following be and hereby are elected to the offices of the corporation set opposite their respective names to serve until their suc- cessors are elected and qualified: R. Roy Moyers L. A. Berglin, Sr. Marie Moore Marie Moore Chairman of the Board of Directors Vice Chairman of the Board of Directors Secretary of the cor- poration Treasurer of the cor- poration Mr. introduced the follow- ing resolution and mo d that the same be adopted, which motion was seconded by Mr. 2?/I/,t. n2 U P�ij , and upon vote being taken thereon, the said resolution was unani- mously adopted by the votes of all the members of the board of directors. BE IT RESOLVED by the Board of Directors of The Water Works and Sewer Board of the City of Fair - hope (1) That such portion of the schedule of rates for water and sanitary sewer service fur- nished by and from the water works and sanitary sewer system of this corporation heretofore adopted by resolution of the board of directors on August 28, 1950, respecting meter rates for water shall be and hereby are amended to read as set out below, such changed meter rates for water to become effective on the first day of the month next following the issuance and delivery of any part of the Second Series Water and Sewer Revenue Bonds of this corporation to be hereinafter authorized: "METER RATES FOR WATER The following shall be the schedule of monthly charges for water furnished from the system: First 3,000 ,Gallons, or fraction thereof, per month: Minimum charge of $1.50. Next 5,000 Gallons, or fraction thereof, per month: At the rate of $.35 per 1,000 gallons. 4, -3- Next 10,000 Gallons, or fraction thereof, per month: At the rate of $.25 per 1,000 gallons. Next 32,000 Gallons, or fraction thereof, per month: At the rate of $.15 per 1,000 gallons. Next 50,000 Gallons,or fraction thereof, per month: At the rate of $.10 per 1,000 gallons. Next 50,000 Gallons, or fraction thereof, per month: At the rate of $.08 per 1,000 gallons. All over 1501,000 Gallons per month: At the rate of $.07 per 1,000 gallons." (2) Except as herein changed, the said schedule of rates adopted by resolution of the board of di- rectors on August 28, 1950, shall remain in full force and effect. Mr. T introduced the follow- ing resolution and mo ed that the same be adopted, which motion was seconded by Mr. ,,a _n 7_1_4ZI u , and upon vote being taken thereon the said resolution was unanimously adopted by the votes of all the members of the board of directors: BE IT RESOLVED by the Board of Directors of The Water Works and Sewer Board of the City of Fair - hope that the chairman of said board of directors is hereby authorized and directed to execute and deliver, in the name of and in behalf of this corporation, an agreement with the City of Fair - hope, in substantially the following form, to which agreement the secretary of this corpora- tion is authorized and directed to affix and attest the seal of this corporation: - 4 - AGREEMENT between THE WATER WORKS AND SEWER BOARD OF THE CITY OF FAIRHOPE, a public cor oration under the laws of Alabama (herein called "the boardll�, and the CITY OF FAIRHOPE, a municipal corporation under the'laws of Alabama (herein called "the city" : R E C I T A L S By unilateral contract dated August 29, 1950, for value received, the board agreed with the city that it would make no disbursement out of the revenues derived by it from the operation of its water works and sanitary sewer system (herein called f1the systems') in excess of 4'1,000 during any period of thirty consecutive days without prior approval by the governing body of the city, except as required byythe provisions of that certain indenture of mortgage and deed of trust between the board and The Merchants National Bank of Mobile dated July 1, 1950 (herein called "the underlying in- denture") executed by the board as security for its Mortgage Water and Sewer Revenue Bonds dated July 1, 1950. -The board now desires to construct extensions"and improvements to the system and proposes to finance such construction by the sale and issuance of its Water and Sewer Revenue Bonds to be dated July 1, 1953 (herein called "the new bonds't) payable out of the revenues to be derived ftom the system and secured by an indenture of mortgage and deed of trust from the board to The Merchants National Bank of Mobile, to be dated as of July 1, 1953 (herein called "the new indenture"). The board will, however, be unable to issue and sell the new bonds advantage- ously if the above described restriction on disbursements remains in effect. The city recognizes the need of the board for funds with which to construct extensions and improvements to the system and the substantial benefit that will accrue to the city and its inhabitants if such extensions and,.improve- ments are so constructed and advantageously financed. NOW, THEREFORE, in consideration of the agreements of the board hereinafter contained and in ccnsideration of the issuance and sale by the board of the new bonds, it is hereby agreed by and between the board and the city as follows: 1. The board and the city do hereby rescind and cancel that certain unilateral contract of the board running in favor of the city dated August 29, 1950, referred to above, and all covenants and agreements of the board therein contained shall be and hereby are terminated and cancelled. 2. The board hereby covenants and agrees with the city that it will make no disbursement from the revenues derived from the operation of its water works and sanitary sewer system in excess of V1,000 during any period of thirty consecutive days, unless such disbursement (exceeding $1,000 during any such period) shall have been approved by a reso- lution or ordinance duly adopted by the governing body of the city, provided however that the provisions of this paragraph 2 shall not apply to any sums that may be paid by the board into the bond fund, the reserve fund and the improvement fund created in the underlying indenture. -to any sums that May be paid by the board into the bond fund, the reserve fund, or the surplus fund created in the new indenture or to any sums re- quired by the new indenture to be paid into the improvement fund created in the underlying indenture, but shall apply=to all disbursements from the water and sewer revenue accounts created in both the underlying indenture and in the new in- denture (except disbursements from said accounts into said - 5. - special funds), and shall further apply to any disbursements from said improvement fund. IN WITNESS VJHERE09 the board and the city have caused this agreement to be executed in their respective cor- porate names and have caused their corporate seals to be here- unto affixed and attested by their respective officers, all of whom are hereunto duly authorized, in four counterparts, each of which shall be deemed an original, this the day of November, 1953. THE WATER WORKS AND SEWER BOARD OF THE CITY OF FAIRHOPE By Chairman of its Board o Directors Attest: Its Secretary CITY OF FAIRHOPE By is Mayor Attest: Its City Clerk Mr. resolution an d a 0w,4L �'c move that the introduced the following same be adopted, which motion was seconded by Mr. YI.1ZC. , and upon vote bdng taken thereon, the said resolution was unani- mously adopted by the votes of all the members of the board of directors: BE IT RESOLVED by the Board of Directors (herein called "the directors") of The Water Works and Sewer Board of the Cit of Fairhope (herein called "the board"T as follows: Section 1. In order to raise the funds to finance the making of improvements and ex- tensions to the water works and sanitary sewer systemcf the board, and to pay the ex- penses of issuing the bonds authorized in this resolution, there are hereby authorized to be issued the Water and Sewer Revenue Bonds, Second Series (herein called "the bonds") of the board in the amount and under the terms, conditions and provisions set out in the mortgage and deed of trust provided for in Section 6 of this resolution. All the provisions thereof respecting the bonds and the coupons applicable thereto are hereby adopted as a part of this resolution. Section 2. The principal of and interest on the bonds shall be payable solely from the revenues derived from the operation of the water works and sanitary sewer system of the board, together with all improvements thereon and additions thereto which may hereafter be made. Neither the bonds nor any of the agreements herein contained shall ever constitute an indebtedness of the board or of the City of Fairhope, Alabama, within the meaning of any constitutional or statutory provision or limitation. The general faith and credit of the board are not pledged to the payment of the bonds and the coupons, and the bonds and the coupons shall not be general obligations of the board. None of the agree- ments, representations or warranties made or implied in this resolution, or in the issuance of the bonds and the coupons, shall ever impose any personal or pecuniary liability or charge upon the board, whether before or after any breach by the board of any such agreement, repre- sentation or warranty, except with the moneys herein provided. The said city shall not in any manner be liable for payment of the principal of or the interest on the bonds or for the performance of any of the obligations of the board herein contained or contained in the bonds or the coupons. Nothing contained in this section, however, shall relieve the board from the performance of the several covenants and representations on its part herein contained. -7- Section 3. All remittances of princi- pal of and interest on the bonds and the coupons to the holders thereof sha 11 be made at par without any deduction for exchange or other costs, fees or expenses. The bank or banks at which the bonds or the coupons shall at any time be payable shall be considered by acceptance of their duties hereunder to have agreed that they will make or cause to be made remittances of principal of and interest on the bonds and the coupons out of the moneys provided for that purpose, in bankable funds at par without any deduc- tion for exchange or other costs, fees or expenses. The board will pay to such bank or banks all reasonable charges made and expenses incurred by them in making such remittances in bankable funds at par. Section 4. The provisions of this resolution shall constitute a contract between the board and each holder of the bonds and the coupons issued hereunder. Whenever all the bonds and the coupons and the interest thereon shall have been paid in full or provisions made for the payment thereof as provided in the mort- gage and deed of trust referred to in Section 6 hereof, and all the agreements on the part of the board herein and therein contained with respect thereto shall have been performed, then upon the happening of such events the obligations of the board hereunder shall thereupon cease. Section 5. The various provisions of this resolution are hereby declared to be severable. In the event any provision hereof shall be held invalid by a court of c-&iapetent jurisdiction, such invalid- ity shall not affect any other portion of this resolution.. Section 6. As security for the payment of the principal of and interest on the bonds pro rata and without preference of one over another, the board does hereby authorize and direct the chairman of the directors to execute and deliver, in the name of and in behalf of the board, to The Merchants National Bank of Mobile, a mortgage and deed of trust covering all property of any kind whatsoever now or hereafter owned by the board, which forms a part of or is used in connection with its water works and sanitary sewer system, and does hereby authorize and direct the secretary of the board to affix to such mortgage and deed of trust and attest the corporate seal of the board. Said mort- gage and deed of trust shall be in sub- stantially the form of Exhibit A attached -8- to the minutes,of the meeting at which this resolution is adopted and made a part hereof as if fully set forth herein. Mr. PiJ` ,QLcc. introduced the following resolution and moved that the same be adopted, which motion was seconded by Mr.%%�Gt,72 �� , and upon vote being taken thereon, the said resolution was unanimously adopted by the votes of all the members of the board of directors: BE IT RESOLVED by the Board of Directors of The Water Works and Sewer Board of the City of Fairhope as follows: (1) Said board of directors does hereby determine and deem it most advan- tageous to said corporation that $85,000 principal amount of Water and Sewer Revenue Bonds, Second Series, of said corporation to be dated July 1, 1953, and numbered from 1 to 85, inclusive, issuance of which was authorized by resolution adopted by said board of directors on this date and which are referred to in and se- cured by the mortgage and deed of trust of said corporation authorized in said reso- lution, be and the same hereby are sold to Watkins, Morrow & Co. at and for the purchase price of $82,590 plus accrued interest to the date of delivery. (2) The chairman of said board of directors is hereby directed to execute said bonds and said mortgage and deed of trust in the name of and in behalf of this corporation, and the secretary of this corporation is hereby directed to affix to said bonds and to said mortgage and deed of trust the corporate seal of this corporation and attest the same, all in the manner provided in the aforesaid resolution under which said bonds and mortgage and deed of trust are authorized, and the chairman of said board of directors is hereby directed thereupon to deliver said mortgage and deed of trust and said bonds to The Merchants National Bank of Mobile, as trustee under said mortgage and deed of trust, and to direct said trustee to certify and deliver said bonds to the said Watkins, Morrow & Co., upon payment to this corporation of the said purchase price for said bonds. Mr. ?!� introduced the following resolutions and move that the same be adopted, which motion was seconded by Mr. _i.72 N.c ��v , and upon vote being taken thereon, the said resolutions were unanimously adopted by the votes of all the members of the board of directors: RESOLVED, that the proceeds re- ceived by this corporation from the sale of its Water and Sewer Revenue Bonds, Second Series, dated July 1, 1953, numbered from 1 to 85, inclu- sive, aggregating $85,000 in princi- pal amount, heretofore sold by this corporation, shall be deposited to the credit of this corporation in a separate account in The Merchants National Bank of Mobile, in the City of Mobile, Alabama; and that the funds so deposited may be withdrawn by checks, vouchers or drafts signed in the name of this corporation by the treasurer and countersigned by any one of the members of the board of directors of this corporation, or signed by any one of the members of the board of directors of this corporation and countersigned by another member of said board of di- rectors, and said bank is hereby authorized until further notice to it by a certified copy of a resolu- tion adopted by said board of di- rectors and delivered to said bank to honor any such checks, vouchers, or drafts when so signed, regardless of the person or persons to whom the same may be payable. RESOLVED, that &W# in the City of Alabama, is hereby appointed as the 4�9(Le pository for the Water and Sewer Revenue Account referred to and created in the mortgage and deed of trust of this cor- poration to be dated July 1, 1953, which was heretofore authorized by resolution adopted by the board of directors of this corporation at the meeting at which this resolution is adopted; and that any and all funds of this corporation at any time on deposit in said Water and Sewer Revenue Account may be withdrawn by checks, vouchers or drafts signed in the name of this corporation by its treasurer and countersigned by any one of the members of the board of directors of this corporation, or signed by any one of I - 10 - the members of the board of directors, of this corporation and countersigned by another member of said board of directors, and said bank is hereby authorized until further notice to it by -a certified copy of a resolution adopted by said board of directors and delivered to said bank to honor any such checks, vouchers or drafts when so signed, regardless ofthe person or persons to whom the same may be payable. There being no further business to come before the meeting the same was on motion duly adjourned. WAIVER OF NOTICE The undersigned, constituting all the members of the Board of Directors of The Water Works and Sewer Board of the City of Fairhope, a public corporation under the laws of Alabama, do hereby waive notice of the time, place and purpose of a meeting of said Board of Directors of, said corporation called to be held on the day of *v4mbei-, 1953, at 'ri0 o o'clock, f. M., and consent to the holding of said meeting and to the transaction of any business that may come before it. EXHIBIT A INDENTURE between THE WATER WORKS. AND SEWER BOARD OF THE CITY OF FAIRHOPE, a public corporation, party of the first part, and THE MERCHANTS NATIONAL BANK OF MOBILE a national banking association, party of the second party R E C I T A L S The party of the first part makes the following recitals of facts as the basis of the undertaking following: It is duly incorporated under the provisions of Sections 394 to 402, inclusive, of Title 37 of the Code of.Alabama of 1940, as amended by certificate of incorporation duly filed for record in the office of the Judge of Probate of Baldwin County, Alabama; it is not in default under any of the pro- visions contained in its certificate of incorporation or in the laws of the State of Alabama; by proper corporate action it has duly authorized the issuance of the bonds hereinafter referred to; and to secure the repayment of the principal of and interest on the said bonds it has by proper corporate action duly authorized the execution and delivery of this indenture. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For the aforesaid purpose and in consideration of the respective agreements herein contained,.it is hereby agreed between the parties signatory hereto and the holders of all bonds issued hereunder (the holders of the said bonds evidencing their consent hereto by their acceptance of the said bonds and the parties signatory hereto evidencing their consent hereto by their execution hereof), each with each of the others, as follows (provided, that in the performance of any of the agreements of the party of the first part herein contained any obligation it may thereby incur for the pay- ment of money shall not be a general debt on its part but shall be payable solely out of the revenues from the mort- gaged property hereinafter referred to): ARTICLE I D E F I N I T I O N S Section 1.1 The following words and phrases and others evidently intended as the equivalent thereof shall, in the absence of clear implication herein otherwise, be given the following respective interpretations herein: "The board" means the party of the first part hereto and, subject to the provisions of Section 9.8 hereof, includes its successors in title and assigns and any cor- poration resulting from any merger or consolidation to which it or,its successors may be a party. "Trustee" means the party of the second part hereto and its successors and any corporation resulting from any merger or consolidation to which it or its successors may be a party. r - 2 - "City" means the municipal corporation of Fairhope in the State of Alabama and any corporation resulting from any merger or consolidation to which it or its successors may be a party. board. "Directors" means the Board of Directors of the "Resolution: means a resolution duly adopted by the directors. "Bonds" means those issued hereunder. "Initial bonds" means those of the bonds numbered 1 to 85, inclusive. "Additional bonds" means those of the bonds num- bered 86 to 100, inclusive. o'Coupons" means those issued hereunder and evi- dencing the interest on the applicable bond or bonds. "Registered bonds" means those bonds registered pursuant hereto. "Redemption date" means the date fixed for the redemption of the bonds in any published notice of re- demption. "Redemption price" means the price at which the bonds called for redemption may be redeemed on the re- demption date. "Holder" when used in conjunction with bonds or coupons means the person in possession and the apparent owner of the designated item. "Indenture" means these presents and every sup- plemental agreement with the trustee in pursuance hereof. "Supplemental Indenture" means an agreement sup- plemental hereto. "Mortgaged property" includes all property and rights of every kind described or referred to or intended so to be in the granting clauses hereof (including the after -acquired property clauses hereof) or in any way sub- ject to the lien hereof. "Underlying first lien bonds" means those Water- works and Sewerage System Revenue Bonds of the city dated July 1, 1934, now outstanding in the aggregate principal amount of $5,000. "Underlying second lien bonds" means those.Mort- gage Water and Sewer Revenue Bonds of the board dated July 1, 1950, and authorized to be issued in -the aggregate prin- cipal amount of V260,000, of which $24.6,000 in aggregate principal amount is now outstanding. - 3 - 11Underlying indenture,' means that indenture of mortgage and deed of trust from the board to The Merchants National Bank of Mobile dated July 1, 1950, and executed as security for the underlying second lien bonds. "System" means the water works and sanitary sewer system of the board, together with all subsequent extensions thereof and additions thereto. "Independent engineer" means an engineer who is duly registered and qualified to practice the profession of engineering under the laws of Alabama and who is not a full time employee of the board. "Independent auditor" means (a) an accountant who is not a full time employee of the board and who is regu- larly engaged in the auditing of financial records, or (b) an employee of the State of Alabama whose official duties include the audit of books, records and accounts of munici- pal and other public corporations. "Counsel" means an attorney who is duly licensed to practice before the Supreme Court of Alabama. "Excepted encumbrances" means as of any particu- lar time liens for ad valorem taxes not then due and ease- ments, restrictions and exceptions that an independent engineer certifies will not interfere with or impair the operation of the mortgaged property, and, as long as'any of the underlying first lien bonds are outstanding and un- paid, the lien of such underlying first lien bonds on the revenues derived from the mortgaged property and the statutory mortgage lien created on such mortgaged property by the city for the benefit of the underlying first lien bonds. "Construction fund" means the System Construction Fund created in section 7.3 of the indenture. "Revenue account" means the System Revenue Account created in section 8.1 of the indenture. "Bond fund's means the System Bond Fund created in section 8.2 of'the indenture. "Reserve fund" means the System Reserve Fund created in section 8.3 of the indenture. "Improvement fund" means the Improvement Fund created in section 4 of Article V of the underlying indenture. "Surplus fund" means the System Surplus Fund created in section 8.0)of the indenture. "Fiscal year" means the period beginning on October 1 of one calendar year and ending on September 30 of the fol- lowing calendar year. "Newspapers' means a newspaper printed in the Eng- lish language and published not less than six days during each calendar week in the locality specified. -4- "Financial Journal" means a Journal devoted pri- marily to news of financial matters and having general cir- culation among those interested in financial matters. "Herein", "hereby", "hereunder", 11hereof1f, "here- inbeforepl, 'thereinafter", and other equivalent words refer to the indenture and not solely to the particular portion thereof in which any such word is used. IV Definitions include both singular and plural. Pronouns include both singular and plural and cover all genders. Any percentage of bonds is to be figured on the unpaid principal amount thereof then outstanding. ARTICLE II GRANTING CLAUSES Section 2.1 In order to secure to the holders thereof the payment of the principal of,and interest on tha bonds and the coupons and the performance and observance of the covenants and conditions therein and herein contained, and in consideration of their purchase and acceptance of the bonds and of the acceptance by the trustee of the trusts herein provided, the board does hereby grant, bargain, sell and convey, assign, transfer and pledge to and with the trustee the following described properties of the board now owned or hereafter acquired: The entire water works and sanitary sewer system of the board situated in the city, including wells, pumps and appurtenances thereto; reservoir, tank, pipes, -water transmission mains, water distribution system, including the meters, hydrants, valves, and services in connection therewith, -sanitary sewers, including both mains and laterals, manholes, all appurtenances to said sewers and manholes, outfall sewers, sewage disposal plant, lift or pumping station, and all of the boards other properties, real, personal and mixed, tangible and intangible, forming a part of or appertaining to or used or useful in connection with said water works and sanitary sewer system, whether any of said proper- ties are now owned by the board or may be hereafter acquired, including particularly, but without limit- ing the generality of -the language hereinbefore or hereinafter contained, the following described pro- perty located in the city, Baldwin County, Alabama; (a) Beginning at a point 77 feet East of the Southwest corner and on the South line of Lot 4, Block 5, Division 4, according to plat of the Fairhope Single Tax Corporation property recorded in the office of the Judge of Probate of Baldwin County, Alabama, in Miscl. Book 1, at pages 320-21; thence North 36 feet; thence West 19.5 feet; thence North 96 feet to a point on the North line of Lot 3 in said Block 5; thence East 42.5 -5- feet along the North line of said Lot 3; thence South 132 feet to the South line of said Lot 4; thence West 23 feet along the South line of said Lot 4 to the point of beginning; (b) Beginning at a point 46 feet•East and 20 feet South of the Northwest corner of Lot 11, Block 5, Divi.. sion 4, according to said plat of the Fairhope Single Tax Corporation property; thence West 14 feet; thence South 14 feet; thence East 14 feet; thence North 14 feet to the point of beginning; (c) Starting at the intersection of the center lines of Bayview Street and Magnolia Avenue in Div lion 1, according to said plat of the Fairhope Single Tax Corporation property; thence South 890 West 446.3 feet; thence South 350 521 West 248 feet; thence North ?30 18t West 420.2 feet to a point of beginning; thence from the point of beginning North 31 421 East 71 feet; thence South 730 181 East 65 feet; thence South 310 421 West 71 feet; thence North 730 18, West 65 feet to the point of beginning; (d) Starting at the Northwest corner of Block 6, Division 3, according to said plat of the Fairhope Single Tax Corporation property; thence North 33 feet; thence East 351 feet along the North line of Section 18, Township 6 South, Range 2 East; thence North 15.5 feet to a point of beginning; thence from the point of beginning North 850 301 East a distance of 122.5 feet; thence South-270 East a distance`of 61 feet; thence South 160 West -a distance of 67 feet; thence South 730 West a distance of 105.5 feet; thence North 430 West a distance of 122 feet; thence North 460 East a distance of 73.2 feet to the point of beginning; (e) Starting at -the Northwest corner of Block 6, Division 3, according to said plat of the Fairhope Single Tax Corporation property; thence North 33 feet; -thence East 351 feet; thence North 15.5 feet; thence North 850 30f East a distance of 122.5 feet to a point of begin- ning; Thence from the point of beginning North 850 301 East a distance of 9.5 feet; thence South 270 East a distance of 91.5-feet; thence South 60 159 West a distance of 227 feet; thence South 780 071 West a distance of 79 feet; thence North 250 151 West a distance of 290 feet; thence North 460 East a distance of 0.2 feet; thence South 430 East a distance of 122 feet; thence North 730 East a distance of 105.5 feet; thence North 160 East a distance of 67 feet; thence North 270 West a distance of 61 feet to the point of beginning; (f) Starting at the Southwest corner of the intersection of Beach View Avenue and Pier Street in the Magnolia Beach Addition, thence running in a Southwesterly direction along the West side of Beach View Avenue, 130 feet; thence in a Northwesterly direction and parallel to the South side of Pier Street, 30 feet to a point. of beginning, thence from -6- the point of beginning parallel to the West side of Beach View Avenue in a Northeasterly direction 25 feet; thence parallel to the South side of Pier Street and in a Northwesterly direction 25 feet; thence parallel to the West side of Beach View Avenue and in a Southwesterly direction 25 feet; thence parallel to the South side of Pier Street and in a Southeasterly direction 25 feet to the point of beginning; all according to plat of the Magnolia Beach Addition to Fairhope, recorded in the office of the Judge of Probate of Baldwin County, Alabama, in Miscl. Book 1, at page 331; (g) Easements for the installation and main- tenance -of sewers in and under the following lands: (1) A strip of land 20 feet wide, 10 feet on each side of a line described - as follows: Begin- ning at a point 80 feet North and 988.6 feet West of the Northeast corner of Block 26, Division 4, according to said plat of the Fairhope Single Tax Corporation property recorded In the office of the Judge of Probate of Baldwin County in Miscl. Book 1, at pages 320-21, said point being on the North line of Fairhope Avenue; thence North 310 391 West a distance of 303.7 feet; thence North 370.52+ West a distance of 869 feet; thence North 440 421 West a distance of 605 feet; thence North 180 431 East a distance of 301 feet; thence North 570 57' West a distance of 392 feet; thence North 570 24# West a distance of 149.6 feet to a point on the East line of the High School lot; said point on the East line of the High School lot being described as follows: South 200 West a distance of 361.8 feet from the Southwest cor- ner of lot 23, Block 12, Volanta, as shown on said plat, along the East side of Section Street; thence South 700 East a distance of 695 feet; thence South 934.6 feet to the said point; (2) A strip of land 20 feet wide, 10 feet on each side of a line described as follows:' Begin- ning at a point 219.1 feet South of the Northeast corner of Section.18, Township 6 South, Range>2 East, and on the East line of said Section 18; thence North 730 471 West a distance of 133 feet; thence South 700 459 West to a point on the North boundary line of Bayou Charbon: Also from the above beginning point South 730 47T East to the West side of Section Street; All according to said plat of the Fairhope Single Tax Corporation.; (3) Beginning at a point described as follows: from the Southwest corner of Lot 23, Block 12, Volanta, according to said plat of the Fairhope Single Tax Corporation property; South 200 West a distance of 361.8 feet along the East side.of Section Street; thence South 700 East a distance of 695 feet; thence South a distance of 934.6 feet to said beginning point: A strip of land 20 feet wide, 10 feet on each side of a line described as follows: From the -7- above beginning point North 570 241 West a dis- tance of 173.4 feet; thence North 520 54 t . West a distance of 280 feet'; thence North 640 410 West a distance of 212 feet; thence North 420 261-West a distance of 330 feet; thence North 730 471 West to a point on the East side of Section Street: The line North 730 47' West if continued for a total distance of 177.5 feet goes to a.point on the East line of said Section 18, 219.1 feet South of the Northeast corner of said Section 18; (4) A strip of land 20 feet wide, 10 feet on each side of a line described as follows: Starting at the Northwest corner of Block 6, Division 3, according to said plat of the Fairhope Single Tax Corporation property; thence North 33 feet; thence East 351 feet; thence North 15.5 feet; thence North 850 301 East a distance of 35.5 feet to a point of beginning: Thence from the point of beginning North 20 20t East a distance of 86.8 feet; . ( 5 ) A strip of land 20 feet wide, 10 feet on each side of a line described as follows: Starting at the Northwest corner of Block 6, Division 3,' according to said plat of the Fairhope Single Tax Corporation property; thence North 33 feet; thence East 351 feet; thence North 15.5 feet; thence North 850 30' East a distance of 35.5 feet; thence North 20 201 East a distance of 86.8 feet to a point of beginning: Thence from the point of beginning North 20 201 East a distance of 112.6 feet; thence North 630 171 West a distance of 178.3 feet; thence North 840 031 West a distance of 300 feet; thence North 740 231 West a distance of 160 feet; thence North 560 171 West a distance of 140 feet; thence North 860 52t West a distance of 250 feet; thence South 860 55t West a distance of 200 feet; thence North 810 501 West a distance of 300 feet more or less to Mobile Bay, and thence along the same line 200 feet, more or less out into. Mobile Bay to existing crib; (6) A strip of land 20 feet wide, 10 feet on each side of a line described as.follows: Start at the Southeast corner, Division 4, according to said plat of the Fairhope Single Tax Corporation property; thence East 1266.9 feet along the North side of Morphy Avenue to a point of beginning: Thence from the point of beginning North 360 561.,West a distance of 361.7 feet; thence North 250 31t.West a distance of 153. feet; thence North 490 5.6A West a distance of 743.6 feet; thence North 220 llt West a distance of 150.-1 feet to the South side of Fairhope Avenues;. (7) A strip of land 20 feet wide, 10 feet on each side of a line described as follows: Start at the Southeast corner of Block A, Division 4, ac- cording to said plat of the Fairhope Single Tax Corporation property; thence South.10 feet; thence East 20 feet to point of beginning:.Thence from point of beginning East 176 feet; thence South 340 feet to North side of Stimpson Street; - 8 - Also together with all lands and interests in lands which are used in the operation of the system owned by the board, and all franchises, permits, easements, rights of way, crossing agreements, privileges, immunities and li- censes of the board under and purpuant to which the board is authorized to engage in the operation in the city and the territory contiguous thereto of the system,.including parti- cularly that certain water franchise.granted to the board by the city by ordinance adopted by the city council of the city and approved on August 7, 1950, entitled "An ordinance granting a water franchise to The Water Works and Sewer Board of the City of Fairhope, its successors and assigns", and that certain sewer franchise granted to the board by the city by ordinance adopted by the city council of the city and approved on August 7, 1950, entitled "An ordinance grant- ing a sewer franchise to The Water Works and Sewer Board of the City of Fairhope, its successors and assigns"; Also all personal property forming a part of and all tolls, rents, revenues, issues, earnings, income, and profits from, the system; Also all property, rights, and privileges, whether real or personal and tangible or intangible, which the board may hereafter acquire as a part of or as an improvement to or extension of the system and any extensions thereof and. additions thereto; it being the intention hereof that all property, rights, and privileges acquired by the board after the date hereof for use as a part of its -system shall be as fully covered hereby as if such property, rights and privi- leges were now owned by the board and were specifically des- cribed herein and conveyed hereby; Saving and exce tin , however, from the property hereby mortgagee ge , all of the following (whether now owned by the board or hereafter acquired by it); Cash on hand and on deposit (but moneys or securities in the bond fund and in the reserve fund are not so excepted), accounts and notes receivable, choses in action, customerst service 7 and extension deposits, and water and other properties acquired for sale in the ordinary course of business of the board or for consumption in the operation of the mortgaged property. TO HAVE AND TO HOLD the same unto the trustee, its successor trustees and assigns forever; IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth for the equal and pro rata protection and benefit of the holders, present and future, of the bonds and the coupons equally and ratably, without preference, priority, or dis- tinction of any over others -by reason of priority in issuance or acquisition or otherwise, as if -all of the bonds at any time outstanding had been executed; sold, certified, delivered and negotiated simultaneously with the execution and delivery hereof. upon condition thatliifDtheO oard�shall paythatsorpcause ttoare be paid ale1 bonds and coupons secured hereby, or shall provide for payment by depositing with the trustee moneys sufficient for the purpose, as provided for in section 14.1 hereof, together with any evidence or instruments required by said section, -9- and shall pay or cause to be paid all other sums payable hereunder by it, then the indenture and the estate and rights granted hereby shall cease, determine and be void; otherwise the indenture shall be and remain in full force and effect. ARTICLE III AMOUNT, MATURITIES, INTEREST RATE AND FORM OF BONDS Section 3.1 The total principal amount of bonds authorized to be issued hereunder is limited to y;';100,000. The bonds shall from 1 to 100, inclusive, be dated July 1, 1953, shall be numbered shall be in the denomination �A,000 each, and shall be payable on July of 1 as follows: Bond Numbers -(both inclusive) Year of Maturity Aggregate Principal Amount Maturing 1 to 12 13 to 25 1981 1982 l(W12,000 26 to 39 1983 13,000 14,000 40 to 54 55 to 69 1984 1985 15;000 70 to 85 1986 ,15,000 16,000 86 to 100 1987 15,000 Section 3.2 The initial bonds shall bear interest from their date until January 1, 1958, at the rate of 5-3/4f per annum, and from and after January 1, 1958, until their respective maturities at the rate of 4-3/4% per annum. The additional bonds shall bear interest at such rate or rates from their date until maturity as may hereafter be fixed at the time of issuance and 'sale thereof. All such interest shall be payable semi-annually on January 1 and July 1 in each year and shall be evidenced by the coupons attached to the bonds. Each semi-annual installment of interest on .he initial bonds from the date thereof until January 1, -958, shall be evidenced by two separate coupons, one com- puted at the rate of 4-3/4% per annum and one computed at the rate of if per annum. Each bond and coupon shall bear interest at the rate of 6% per annum after maturity until paid or until money sufficient for payment thereof shall have been deposited for that purpose with the trustee. The bonds and the coupons 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, Alabama. Section 3.3 The bonds, the coupons, the certi- ficate of registration and the trusteets certificate shall be in substantially the following forms, respectively, with such insertions, omissions and other variations as may be necessary to conform to the provisions hereof: No. - 10 - ( Form of Bond) UNITED STATES OF AMERICA STATE OF ALABAMA THE WATER WORKS AND SEWER BOARD OF THE CITY OF FAIRHOPE WATER AND SEWER REVENUE BOND SECOND SERIES $1,000 On the 1st day of July, 19 , (unless this bond shall have been duly called for prior payment), for value received, The Water Works and Sewer Board of the City of Fairhope, a public corporation under the laws of Alabama (herein called "the board"), agrees to pay to the bearer here- of, or if this bond be registered then to the registered holder hereof, solely out of the revenues hereinafter referred to, the sum of O N E T H O U S A N D D 0 L L A R S with interest thereon from the date hereof until the maturity hereof at the rate of / per annum, payable semi-annually on January 1 and July in each year until and at the maturity hereof upon surrender of the annexed interest coupons as they severally mature. Both the principal hereof and interest here- on are 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 bond is one of a duly authorized issue limited to the aggregate principal amount of �100,000 and numbered from 1 to 100, inclusive (herein called tithe bonds"). The principal of and interest on the bonds are payable solely out of the revenues from the water works and sanitary sewer system of the board as presently or hereafter constituted (herein called "the systemtt) remaining after payment of the costs of maintaining and operating the system. The principal of and the interest on the bonds are secured, pro rata and without priority of one bond over another, by a valid pledge of the revenues out of which they are payable and by a mort- gage and deed of trust (herein called "the indenture") from the board to The Merchants National Bank of Mobile (herein called tithe trustee',) of Mobile, Alabama, dated as of July 1, 1953, covering the system. The indenture provides, inter alia, that in the event of default by the board in the manner and for the time therein provided the trustee may declare the principal of this bond as immediately due and payable, whereupon the same shall thereupon become immediately due and payable and the trustee shall be entitled to pursue the remedies provided in the indenture but the indenture shall not be subject to foreclosure. The bonds are subject to redemption prior to their respective maturities at the option of the board on July 1, 1963, and on any interest payment date thereafter as a whole or in part in their inverse numerical order, after not less than thirty days' prior notice given in the manner provided in the indenture, at the face value of the bonds redeemed plus accrued interest thereon to the redemption date and, with respect to each bond redeemed, a premium equal to twelve months interest thereon computed at the rate borne by such bond on the redemption date, had it not been so called for redemption. The board is a public corporation organized under the provisions of Sections 394 to-402, inclusive, of Title 37 of the Code of Alabama of 1940, as amended, and the bonds are authorized to be issued for purposes for which bonds may be issued under the provisions of said sections. The covenants and representations herein contained or contained in the in- denture do not and shall never constitute a personal or pecun- iary liability or charge against the general credit of the board, and the City of Fairhope, Alabama, shall not in any manner be liable for payment of the principal of or interest on the bonds or for the performance of the undertakings of the -board contained herein or in the indenture. It is hereby certified that all conditions, actions, and things required by the constitution and laws of Alabama to exist, be performed and happen precedent to or in the is- suance of this bond exist, have been performed and have happened in due and legal form, and that provision has been made for the deposit in a separate fund of revenues from the operation of the system in amounts sufficient to pay the prin- cipal of and interest on she bonds at the time outstanding as said principal and interest shall respectively mature. This bond shall pass by delivery unless registered as to principal in the owner's name on the books of the trustee, such -registration being noted hereon by the trustee. If registered, no transfer of this bond shall be valid unless it is presented at the office of the trustee with written power to transfer, properly stamped if required, -in form and with guaranty of signature satisfactory to the trustee, with such new registration noted hereon by the trustee. If re- gistered this bond may be discharged from registration by being in like manner transferred to bearer. It may again from time to time be registered or discharged from registra- tion in the same manner. Such registration shall not affect the negotiability of the coupons appertaining hereto, which shall continue to be transferred by delivery. The trustee shall not be required to register or transfer any bond during the ten day period next preceding any semi-annual interest payment date; shall not be required to register or transfer any bond that is subject to redemption during the period of ten days next preceding the thirty day period prior to any date on which such bond is subject to be redeemed; and shall not be required to register or transfer any bond that has been'duly,called for redemption during the period of thirty days 'next preceding the date fixed for its redemption. Execution by the trustee of its certificate hereon is essential to the validity hereof and is conclusive of the due issue hereof under the indenture. - 12 - IN WITNESS WHEREOF, the board has caused this bond to be executed in its name and behalf by the chairman of its Board of Directors and has caused its: corporate seal to be hereunto affixed and attested by its secretary,. and has caused the attached coupons to be executed with the: facsimile signa- ture of said chairman, both of whom are hereunto duly auth- orized, and has caused this bond to be dated July 1, 1953• Attest: Secretary Coupon No. THE WATER WORKS AND` SEWER BOARD OF THE CITY OF FAIRHOPE By Chairman of t e Board o Directors (Form of Coupon) On the 1st day of , 19 ; The Water Works and Sewer Board of the City of FairhUp—e, a public corporation under the laws of Alabama, will pay to the bearer hereof, solely out of the revenues derived from the operation of its water works and sanitary sewer system, upon surrender hereof at the principal office of The Merchants National Bank of Mobile in the City of Mobile in the State of Alabama Dollars in lawful money of the United States of America,, beiiig six months' interest.at the rate of % per annum then due -on its Water and Sewer Revenue Bond, Second Series, dated July 1, 1953, and numbered Chairman of the Board of Directors (Form of Registration) (No writing on this bond except by registrar) Date of Registration Registered O:Pner Registrar . . o - 13 - (Form of Trustee's Certificate) The within bond is one of those described in the within mentioned mortgage and deed of trust. THE MERCHANTS NATIONAL BANK OF MOBILE, Trustee By Its Authorized icer Following -the maturity date of each coupon due on and after January 1, 1964, there shall be inserted the fol- lowing: "(unless the bond to which this coupon is applicable shall have been duly called for prior payment)," Section 3.4 The initial bonds shall be forthwith executed and delivered to the trustee, and shall be certi- fied and delivered by the trustee from time to time upon receipt by the trustee of an order signed on behalf of the board by the chairman of the directors requesting such certification and delivery and designating the person or persons to receive the same or any part thereof. Section 3.5 So long as the board is not to the knowledge of the trustee in default hereunder or under the underlying indenture, the board may at any time and from time to time issue all or any part of the additional bonds, and the trustee shall certify and deliver all or any part thereof upon receipt of a certified copy of a resolution of the di- rectors reciting that the board is not at the time in default hereunder or under the underlying indenture and that no such default is imminent, specifying the numbers of the additional bonds so proposed to be issued,.the interest rate or rates thereof, the person or persons to whom the same shall be is- sued and the sale price thereof (which shall not be less than 95% of the face value thereof plus accrued interest to the date of delivery), and further reciting that the proceeds from the sale thereof shall be used for making improvements to or enlargements of the mortgaged property. ARTICLE IV EXECUTION AND CERTIFICATION OF THE BONDS Section 4.1 The bonds shall be executed by the chairman of the directors and the seal of the board shall be affixed thereto and attested by the secretary of the board. The coupons shall be authenticated by the facsimile signature of the said chairman. Signatures on the bonds and the coupons by persons who were officers of the board at the - 14 - time such signatures were written shall continue effective although such persons cease to be such officers prior to the certification of the bonds or the delivery of the bonds and the coupons. Section 4.2 A duly executed certificate by the trustee in the form hereinabove recited shall be endorsed on each of the bonds and shall be essential to its validity. Such certificate shall be conclusive of the due issue of such bond hereunder. Section 4.3 The board may execute, and the trustee may certify and deliver, bonds with unmatured coupons attached to replace'in all respects mutilated bonds which are sur- rendered with all unmatured coupons attached. The board may also execute, and the trustee may certify -and deliver, bonds with unmatured coupons attached to replace in all respects bonds which may have been lost, stolen, or destroyed, or bonds all or -any part of whose unmatured coupons have been lost, stolen, or destroyed; provided, there is first furnished to the board and the trustee evidence of such loss, theft, or destruction together with -indemnity satisfactory to the board and the trustee. The board may charge the holder with the expense of issuing any such new bond. Section 4.4 Upon certification of any bond by the trustee, all past due coupons shall be removed and cancelled by it. Section 4.5 Nothing herein contained shall affect in any way the power of the board to fix the consideration for which the bonds may be sold by it, except as provided in Section 3.5 hereof. ARTICLE V REGISTRATION AND NEGOTIABILITY, OF THE BONDS Section.5.1 The trustee shall be the registrar and transfer agent of the board, and shall keep at its office proper registry books in which it will register as to principal only such bonds as are presented for that purpose, noting the registry on the bond. Such registra- tion shall conclusively designate the registered owner as the sole person to whom or on whose order payment of the principal of the bond may be made, but shall not affect the negotiability of the coupons. All bonds shall pass by delivery unless so registered. After such registration no transfer of a registered bond shall be valid unless it is presented at said office with written power to transfer, properly stamped if required, in form and with guaranty of signature satisfactory to the trustee, with such registra- tion noted thereon by the trustee. Any registered bond may be discharged from registration by being in like manner trans- ferred to bearer, after which transferability by delivery shall be restored. Any bond may from time to time be regis- tered or discharged from registration in the same manner. The trustee shall not be required to register or transfer any bond during the period of ten days next preceding any - 15 - semi-annual interest payment date, or to register or trans- fer any bond during the period of ten days next preceding the thirty -day period immediately prior to any date on which such bond is subject to be redeemed; and, if any bond shall be duly called for redemption, the trustee shall not be re- quired to register or transfer such bond during the period of thirty days next preceding the date fixed for its re- demption. Section 5.2 The board, the trustee and any in- stitution at which the bonds and the coupons are or may be payable may deem and treat the holder of a coupon as the absolute owner thereof for all purposes; they may deem and treat the holder of an unregistered bond as the abso- lute owner thereof for all purposes other than to receive payment of outstanding coupons; they may deem and treat the person in whose name a registered bond is registered as the absolute owner thereof for all purposes other than to re- ceive payment of outstanding coupons; they shall not be affected by notice to the contrary; and all payments by any of them to the holders of such coupons and unregistered bonds, and to the person in whose name a registered bond is regis- tered, shall to the extent thereof fully discharge and satisfy all liability for the same. ARTICLE VI REDE141PTION OF BONDS Section 6.1 While the board is not in default hereunder or under the underlying indenture it may -at its option call for redemption all�r_any par_t_of _-the_bonds_o July 1, 1963,_ and- on any interest Davment_date__the_reaf_ter 3.n Lne inverse numerical-order—of—thpse then out.s_tanding. at a redemption price equal to the face value of the bonds redeemed plus accrued interest thereon -to the redemption date and, with respect to each bond redeemed, a premium _. equal to twelve months' interest thereon computed at the rate borne by such bond on the redemption date, had it not, so been called for redemption.. Section 6.2 Any such redemption shall be effected in the following manner: (a) The directors by resolution shall call for redemption on a date when they are by their terms subject to redemption bonds bearing stated numbers, shall recite in such resolution that the board is not in default under the indenture or under the underlying indenture, and shall summarize in such resolution any applicable restrictions upon or conditions precedent to such redemption and the pro- visions made to comply therewith.,, (b) Not less than thirty (30) days prior to the redemption date, the board shall cause to be published one time in a newspaper published in the City of Birmingham in the State of Alabama a notice stating the following; that bonds bearing stated numbers have been called for redemption and will become due and payable at the redemption price or redemption prices on a specified redemption date (which shall be the date provided for such redemption in the resolution - 16 - required in subsection (a) of this section); and that all interest thereon will cease after the redemption date; pro- vided, however, that if all the bonds which are to be called for redemption are registered bonds then at the option of the board publication of the notice of redemption with res- pect to such bonds may be omitted. If publication of such notice shall be so omitted, mailing of the notice provided for in subsection (c) of this section shall be a sufficient compliance with the notice requirements contained in this section. (c) In the event any of the bonds.so called for redemption shall be also a registered bond, the board shall forward by United States Registered Mail to the registered owner thereof, at the address of such registered owner as such address appears on the registry books of the trustee pertaining to the registration of the bonds, a notice stat- ing the following: that bonds bearing stated numbers have been called for redemption and will become due and payable at the redemption price or redemption prices on a specified redemption date (which shall be the date provided for such redemption in the resolution required in subsection (a) of this section); and that all interest thereon will cease after the redemption date. Such notice shall be so mailed not less than thirty (30) days prior to the redemption date, but holders of any registered bonds may waive the requirements of this paragraph with respect to the registered bonds held by them without affecting the validity of the call for redemption of any other bonds. (d) On or prior to the redemption date the board shall deposit with the trustee the total redemption price of the bonds so called and shall further furnish to the trustee the following: a certified copy of the resolution required in subsection (a) of this section; appropriate affidavits showin compliance with -the requirements of subsections (b) and (cf of this section, or in the event that all the bonds which are to be redeemed are registered bonds, appropriate affidavits showing compliance with or waiver -of the require- ments of subsection (c) of this section; and, in the case of the redemption of any bonds on a date when such bonds may be redeemed only with funds from a specified source, evidence satisfactory to the trustee showing compliance with such restriction or requirement. Section 6.3 Upon compliance by the board with the requirements contained in section 6.2 hereof, and if the board is not on the redemption date in default in payment of the principal of or interest on any of the bonds or on any of the underlying second lien bonds, the bonds so-called for redemption shall become due and payable at.the place at which the same shall be payable at the redemption price or redemption prices and on the redemption date specified in such notice, anything herein or in the bonds to the contrary notwithstand- ing; the holders thereof shall then and there surrender them for redemption; all future interest on the bonds so called for redemption shall cease to accrue after the redemption date and the coupons maturing after the redemption date shall be void; the bonds so called and the 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 - 17 - under the provisions of this article; and out of the moneys so deposited with it, the trustee shall make provision for payment of the bonds so called for redemption at the redemption price on the redemption date. Section 6.4 Neither the trustee nor any insti- tution at which the bonds may at any time be payable shall be required to pay any coupon maturing on the redemption date which is applicable to any bond so called for redemption unless the bond to which such coupon is applicable is also presented for payment; provided, that in the event any such coupon should be so paid without payment of the applicable bond -no one shall be liable to the holder of such applicable bond, or to the board, or to anyone whomsoever; and provided further, that the trustee and any such institution shall pay such coupon if the holder thereof shall present to the trustee or to such institution evidence satisfactory to the trustee or to such institution that such holder is the owner of the coupon so presented and is not the owner of the bond to which such coupon is applicable. ARTICLE VII AGREEMENTS RESPECTING CONSTRUCTION OF IMPROVEMENTS AND USE OF PROCEEDS FROM SALE OF THE INITIAL BONDS Section 7.1 The board will go forward continu- ously and with reasonable dispatch with construction of the proposed improvements and extensions to the system. The board will complete said construction, 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 control of the board only excepted. The board will promptly pay, as and when due, all expenses incurred in and about said construction, and it will not suffer or permit any mechanicst or materialments liens which might be filed or otherwise claimed or established upon or against the mortgaged property or any part thereof," and which might be or become a lien superior to the lien hereof, to remain unsatisfied and undischarged for a period exceeding thirty (30) days after the filing or establish- ment thereof. Section 7.2 The proceeds derived from the sale of the initial bonds shall be applied for the following purposes only and in the following order-, (a) Payment of the accrued interest received on the sale of the initial bonds into the bond fund; (b) payment of the expenses in- curred in the issuance and sale of.the initial bonds, in- cluding the initial -charge of the trustee under the inden- ture, and the legal, advertising, recording and engineerin fees and expenses incurred in connection therewith; and (c) payment of the balance of said proceeds into the construction fund created in section 7.3 hereof. The trustee shall be and remain the depository for the construction fund. Section 7.3 There is hereby created a special trust fund, the full name of which shall be the "System Construction Fund". for the purpose of providing funds for -18- the construction required in section 7.1 hereof. The moneys in the construction fund shall be paid out from time to time for the following purposes only and in the following manner: (a) Payment of the cost of acquiring any real estate (including easements) which may be certified by the superintendent of the board (1.) to be.necessary and suitable for con- struction thereon of any part or parts of the aforesaid extensions and improvements to the system, and (2) to have a value not less than the cost of the acquisition of such real estate; provided, that the trustee shall be furnished also with a certificate of counsel acceptable to the trustee (who may be counsel to the board) approving the title of the board to such real estate and the validity of the indenture as a first mortgage thereon, subject only to'excepted encumbrances, provided however, that in the event any of the underlying second lien bonds are then outstanding and unpaid, the furnishing of a cer- tificate of counsel acceptable to the trustee approving the title of the board to such real estate and the validity of the indenture as a second mortgage thereon, subject only to,excepted encumbrances, shall be a sufficient compliance with the title requirements contained in this subsection (a). (b) Payment for labor, services, materials, and supplies furnished in constructing the afore- said improvements to the system, provided that all such payments shall be based upon,bills approved by any two members of the -directors and by the superintendent of the board, and shall be accompanied by a certificate of the super- intendent of the board with respect to each such estimate or bill stating that the labor, materials, services, and supplies referred to therein (except any water meter that may be in- stalled on property occupied by a water customer of the board pursuant to agreement permitting the removal thereof on discontinuance of service) are or will be located upon or in one of the following: (1) the real estate particularly described in section 2.1 of the indenture, or (2) real estate with respect to which a certificate of counsel meeting the requirements of the proviso in the foregoing subsection (a) of this section has been furnished to the trustee, or (3) public streets and other public ways; (c) Payment of all expenses (including reasonable fees and expenses of engineers and attorneys, and recording fees) in connection with the matters referred to in subsections (a) and (b) ,of this section, provided such payments shall be approved by any two members of the directors; (d) Payment of the reasonable expenses and charges of the trustee in connection with the construction fund. Upon certification by the superintendent of the board that the construction of the said extensions and improvements referred - 19 - to in section 7.1 hereof has been completed, and upon certi- fication by the chairman of the directors that all of the items referred to in subsections (a), (b) and (c) of this section have been paid in full, and upon payment of the expenses and charges referred to in subsection (d) of this section, any moneys then remaining in the construction fund shall thereupon be paid over to the board, which agrees to use such moneys only for the construction of improvements to the system which by good accounting practice are of a capital nature. Section 7.4 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 acquisition and construction required in section 7.1 hereof. The trustee shall be fully protected in making withdrawals and payments out of the construction fund for the purposes specified in section 7.3 hereof upon presentation to it of the respective approvals and certificates provided for in said section, but the trustee may in its discretion, and shall, when requested' in writing so to do by the holders of not less than twenty- five per centum of the bonds then outstanding, require as a condition precedent to any withdrawal or disbursement from the construction fund such additional evidence as it may deem appropriate respecting the application of any moneys previously disbursed from the construction fund, or as to the correctness of any estimate or bill presented to it pursuant to the pro- visions of said section 7.3. Section 7.5 If the moneys on deposit in the con- struction fund shall not be sufficient -to make all payments provided for in�subsections (a) to (d), inclusive, of sec- tion 7.3 hereof, or if the board should abandon or un- reasonably delay the construction of the improvements referred to in section 7.1 hereof, or if for any reason whatsoever said construction shall not be completed as provided in sec- tion 7.1 hereof, the trustee may at its election, but without prejudice to any other right which it may have in case of such default, complete the said construction. For such pur- pose the trustee may make any and all necessary contracts, either in -its own name -or in the name of the board, for engineers, contractors, labor, materials, and supplies in connection with the completion of said construction and the acquisition of real estate for location thereon of any -part or parts thereof. In the event that the trustee shall,. pursuant to the provisions of this section, elect to com- plete said construction, the trustee may thereafter make disbursements from the construction fund without any approval of such disbursements by -the board, the directors, or by any officer of the board, for the purpose of paying the cost of completing the said construction and also of discharging any unpaid bills previously incurred by the board for such construction; provided that if any such disbursement is for the payment of the cost of acquiring real estate the trustee shall obtain a certificate of counsel meeting the require- ments of the proviso -in section 7.3(a) hereof. Such a certificate of title, when required by the preceding sentence, shall fully protect the trustee in making disbursements from the construction fund pursuant to the provisions of this section. Regardless of whether or not the trustee may under- take the completion of said construction as herein provided, and regardless of whether -or not any lien claims may have been filed or established, the trustee may at its option -20- advance any funds necessary to make up any deficit in paying the cost of completing the said construction, including the acquisition of real estate for location thereon of any part or parts thereof. All amounts so advanced by the trustee, together with interest thereon at the rate of 6f'per annum from the respective dates of any such advancements, shall be tacked to the indebtedness hereby secured and shall be entitled to the benefit of the lien hereof, and the board agrees to repay the same upon demand with interest at said rate. Section 7.6 The board shall furnish monthly to the original purchaser of the bonds from the board and t*o the holder of any bonds who may request the same reports of all expenditures from the construction fund during the preceding month. Section 7.7 Nothing contained in the indenture shall impose on the trustee any duty or liability with respect to the completion of the construction of said improve- ments referred to in section 7.1 hereof. ARTICLE VIII DISPOSITION OF REVENUES FROM THE MORTGAGED PROPERTY AND CREATION OF SPECIAL FUNDS Section 8.1(a) So long as there are outstanding and unpaid any of the underlying second lien bonds, the board will deposit in a special trust fund hereby created, the full - name of which shall be the "System Revenue Accounts' and which, until there are no longer outstanding and unpaid any of the underlying second lien bonds, may be the same as the Water and Sewer Revenue Account created in section 1 of Article V of the underlying indenture, daily as received by it, all the revenues derived from operation of the mortgaged pro- perty and, after making only those withdrawals from the revenue account as are required by the provisions of Article V of the underlying indenture, the board will utilize the balance each month in�the revenue account,to the extent neces- sary for such purpose, for payment of all charges and ex- penses of the trustee and for the purpose of making the pay- ments into the bond fund, the reserve fund,the improvement fund and the surplus fund as provided in sections 8.2 to 8.4, inclusiv( (b) When there are no longer outstanding and un- paid any of the underlying second lien bonds, the board there- after will continue the revenue account so long as any of the bonds remain outstanding and unpaid and will deposit therein,. daily as. received by it, all the revenues derived from the operation of the mortgaged property and will make withdrawals therefrom for the following purposes in the following order, to the extent necessary for such purposes and to the extent moneys may be available therefore (1) For payment of all expenses incurred during the then current or in any then preceding calendar month in the efficient and economical administration of the mortgaged property and in. the maintenance thereof in good repair and good operating condition (but not including payment for items properly chargeable by ood accounting practice to fixed capital account; - 21 - (2) For payment of the charges and expenses of the trustee under the indenture; and (3) For the purpose of making the payments into the bond fund, the reserve -fund, the improvement fund and the surplus fund in -the order named, as pro- vided in sections 8.2 to 8.4, inclusive. Section 8.2 There is hereby created a special trust fund, the full name of which shall be the "Water and Sewer System Bond Fund" and which shall be continued until the prin- cipal of and interest on the bonds shall have been paid in full. There shall be paid into the bond fund the following: A a) There shall be paid into the bond fund, simultaneously with the issuance of the initial bonds, the accrued interest thereon received by the board on the sale thereof. -(b) On or before the last days of November, 1953, and December, 1953, the board will pay into the bond fund, out of the moneys in the revenue account, one-half of an amount, which, when added to the moneys paid into the bond fund pursuant to the provisions of subsection (a) of this sec- tion, shall equal the semi-annual installment of interest which will mature on the bonds on the next interest payment date. (c) On or before the last day of each successive month, beginning with the month of January, 1954, and continuing thereafter until and including the month of June, 1980, the board will pay into the bond fund, out of the moneys in the revenue account, an amount equal to one - sixth of the semi-annual installment of interest which will mature on the bonds on the next inter- est payment date. (d) On or before the last day of each successive -month, beginning with the month of July, 1980, and continuing thereafter until the principal of and the interest on the bonds shall have been paid in full,the board will pay into the bond fund, out of the moneys in the revenue account, an amount equal to one -sixth of the semi-annual installment of interest which will mature on the bonds on the next interest payment date plus one -twelfth of the principal of the bonds which will mature on the next principal payment date. 1. (e) In the event any bond or•coupon 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 bond or cou- pon became due and continuing each month there- after until an amount sufficient to pay the delinquent bond or coupon shall have been paid into the bond fund, the board will pay into the bond fund (in addition to the monthly payments provided for in subsections (b), (c) and (d) of -22- this section) all moneys remaining in the reve- nue account at the end of said month after pay- ment of the expenses and charges provided in section 8.1 hereof to be paid at the time from the revenue account and after payment of the amounts required in subsections (b), (c) and (d) of this section to be paid into the bond fund. All moneys paid into the bond fund shall be used only for payment of the principal of and interest on the bonds upon or after the respective maturities of such principal and interest; provided, that if at the -final maturity of the bonds, however the same may mature, there shall be in the bond fund moneys in excess of what shall be required to pay in full the principal of and interest on the bonds, then any such excess shall thereupon be returned to the board. When the amount of money on deposit in the bond fund equals or exceeds the aggregate of the principal of and interest on the bonds then remaining unpaid, no fur- ther payments need be made into the bond 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. Section 8.3 There is hereby created a special trust fund the full name of which shall be the "System Reserve Fund." The board shall pay into the reserve fund, out of the moneys in the revenue account, the sum of V225.00 on or before the last day of each successive month, beginning with the month in which the board -is authorized, under the terms of the underlying indenture, to discontinue making payments into the "Reserve Fund" created -in Section 3 of Article V of the underlying indenture and continuing thereafter until the amount on deposit in the reserve fund equals or exceeds the sum of $4,137.50. The moneys form- ing a part of the reserve fund shall be transferred to the bond fund for payment of the principal of and interest on the bonds, but may be so transferred only in those fiscal years in which the moneys on deposit in the bond fund shall not be sufficient to pay the principal of and interest on the bonds maturing during such fiscal year, and such moneys may be so transferred only for payment of the principal of and interest on the bonds 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 bond fund, the board will restore the same by thereafter paying into the reserve fund (in addition to the monthly payments provided for in the second sentence of this sec- tion), on or before the last day of each successive month beginning with the month next following the month during which said transfer shall be made and continuing .until the sum transferred shall have been restored, all moneys remain- ing in the revenue account after payment of the charges and expenses provided in section 8.1 hereof to be paid at the time out of the moneys in the revenue account and after compliance with section 8.2 hereof and the second sentence of this section. When the amount of moneys in the reserve fund plus the amount of moneys in the bond fund equals or exceeds the aggregate of the principal of and interest on the bonds then remaining unpaid, the moneys on deposit in the reserve fund may be transferred to the bond fund, in which event no further payments need be made into the reserve fund. - 23 - Section 8.4 After compliance with the provisions of Sections 8.1 to 8.3, inclusive, of the indenture, the balance remaining in the revenue account at the end of each successive month, to the extent necessary for such purpose, shall be paid into the bond fund and the reserve fund, in the order named, for the purpose of making good any delin- quency or deficit existing in either of said funds by reason of failure to pay therein the amounts respectively provided to be paid therein by the provisions of. Sections 8.2 and 8.3 hereof. Thereafter while all monthly payments so pro- vided to be made into the bond fund and the reserve fund are current, one-half the entire balance remaining in the revenue account at the end of each successive month shall be disbursed as follows: (a) So long as the amount on deposit in the improvement fund shall be less than ;10,000, one-half the entire balance remaining in the revenue account at the end of each successive month shall be paid into the improvement fund until the amount on deposit therein shall equal or ex-: ceed the sum of V10,000, provided that when any of the moneys on deposit in the improvement fund are used to such extent that the amount remaining on deposit therein shall be less than Q`10,000, the board shall resume paying into the improvement fund one-half the entire balance remaining in the revenue account at the end of each successive month until the moneys on deposit therein shall again equal or exceed the sum of v110,000, provided further that such pay- ments herein required to be made into the improvement fund shall be made only so long as any of the underlying second lien bonds are outstanding and unpaid; (b) So long as the moneys on deposit in the improvement fund equal or exceed the sum of `10,000, one- half of the mcneys remaining in the revenue account at the end of each successive month shall be paid into a special_ trust fund hereby created, the full name of which shall be the "System Surplus Fund." The moneys on deposit in the surplus fund shall be used only for the following purposes and in the following order: _ (1) Whenever any of the moneys on deposit in the improvement fund shall be used to such extent that the amount remaining on deposit therein shall be less than 4$10,000, that portion of the moneys on deposit in the surplus fund (which may be all) necessary to cause the amount on deposit in the improvement fund to again equal the sum of �10,000 shall be so paid into the improvement fund; (2) During the period from July 1, 1958 to January 1, 1963, the moneys on deposit in the surplus fund shall be used for the purpose of purchasing bonds in the open market with the con- sent of the holders thereof, -provided however that no such purchase shall be made unless the purchase price of each such bond so purchased shall be less than the redemption price applicable thereto as if such bond were redeemed on the earliest possible redemption date after such pur- chase; and -24- (3) Thereafter, the moneys on deposit in the surplus fund shall be used for the purpose of redeeming prior to maturity those of -the bonds which may then be subject to redemption, but any such redemption shall be subject to the provisions therefor contained in Article VI. Any such purchase may be made at any time and from time to time as the board may deem advisable and as moneys shall be available therefor. Any such redemption may be made at any time the board may deem advisable and as said Article VI permits; provided that whenever and as often as moneys in the surplus fund shall be sufficient to effect redemption of as much as $5,000 principal amount of bonds, then the board shall thereupon take such steps as may be necessary under the provisions of Article VI to exhaust as nearly as may be possible the moneys in the surplus fund by effecting such redemption on the next date on which redemption may be made under the provisions of Article VI. Section 8.5 Any balance remaining in the revenue account at the end of each month, after compliance with the provisions of sections 8.1 to 8.40 inclusive, hereof may be used by the board for any lawful purpose. Section 8.6 Any payments required in this article to be made into any of the special funds created in this article may be anticipated by the board at any time; pro- vided, that no such anticipation shall be made if it will prevent or jeopardize the making of the payments herein required to be made into any other special fund herein created. Section 8.7 So long as the board 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 board may determine shall not be needed dur- ing the then ensuing six calendar months for the purpose for which said fund was created to be invested in any securi- ties which are direct general obligations of the'United States of America or which are unconditionally guaranteed as to both principal and interest by the United States of America and, except with respect to those securities of the United States of America for which there is provided, as of any particular time, a stated redemption rice, which shall become due not later than twenty-four (24� calendar months following the date of such investment. In the event of any such invest- ment, such securities together with all -income therefrom shall become apart of the reserve fund, and shall be held by the depository therefor to the same extent as if they were moneys on deposit in such fund. The board may likewise from time to time cause any such securities to be sold or other- wise converted into cash, whereupon the net proceeds derived from any such sale or conversion shall become a part of the reserve fund. The depository for said fund shall be fully protected in making any such investment or sale of any such securities upon direction given in a resolution. In the event any of said moneys 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. -25- Section 8.8 The trustee shall at all times be the depository;,for the bond fund, the reserve fund and the surplus fund, and all moneys herein required to be paid into said funds shall be remitted to the trustee. Out of the moneys deposited with it in the bond fund or transferred thereto, the trustee shall make provision for payment of the bonds and the coupons as the same shall respectively mature. The trustee shall apply the moneys in the reserve fund and the surplus fund in accordance with the applicable provi- sions of sections 8.3 and 8.4 hereof. Section 8.9 The directors may at any time and from time to time designate any banking institution or in- stitutions as depository for the revenue account. Any such depository so designated shall at all times while acting as such be and -remain a member of the Federal Deposit Insurance Corporation, or of any agencies which may succeed to it if there be any such, and shall be and remain duly qualified and doing business in the State of Alabama. Any such de- pository for the revenue account shall be fully protected in paying out any moneys at any time therein on checks, vouchers, or drafts signed by any duly authorized officer or employee of the board, and any such depository shall not be liable for the misapplication by the board of any moneys at any time forming a part of the revenue account if such moneys shall be so disbursed without knowledge or reason on the part of such depository to believe that such disbursement consti- tutes a misapplication of funds. ARTICLE IX PARTICULAR COVENANTS OF THE BOARD Section 9.1(a) The board will not permit any de- fault to occur in the payment of the principal of and the interest on the underlying first lien bonds. To that end the board has heretofore caused the city to enter into a separate trust agreement with the trustee whereunder the city has deposited with the trustee moneys which, with'the accumu- lations thereon, the board represents are sufficient to retire the underlying first lien bonds and the interest coupons, applicable thereto. In the event the moneys deposited under said trust agreement should be insufficient to retire the underlying first lien bonds and said coupons applicable,thereto, the board will supply from the revenues derived from the mort- gaged property such additional moneys as may be necessary to prevent any default in the payment of the principal of and the interest on the underlying first lien bonds. (b) The board will perform, at the times and in the manner therein provided, all obligations which, either expressly or by reasonable implication, are imposed on it in the underlying indenture, and the board will not default thereunder. The board specifically agrees that it will pay the principal of and the interest on the underlying second lien bonds at their respective maturities; provided however, that the board may, pursuant to the terms of the underlying indenture, effect redemption prior to their respective maturities of the underlying second lien bonds that by their terms are callable for redemption prior to maturity. -26- Section 9.2 The board will pay, out of the reve- nues derived from the operation of the mortgaged property, the principal of and interest on the bonds as specified therein, and it;will otherwise perform all obligations which, either expressly or by reasonable implication, are imposed on it in the indenture, and it will not default hereunder. Section 9.3 The board will maintain complete books and records pertaining to the mortgaged property and all receipts and disbursements with respect thereto, which shall be kept separate and apart from all other records of the board. Section 9.4(a) The board will operate the mort- gaged property on a fiscal year basis, the first fiscal year to comprise the period between the October 1 next pre- ceding the date of execution hereof and September 30 next following, and thereafter to comprise the period from October 1 in each calendar year until and including September 30 in the following calendar year. The board will within thirty days following the close of each fiscal year cause an audit of its books for such fiscal year to be made by an independent auditor who is acceptable to the trustee. Each such audit, in addition to whatever matters may be thought proper by the auditor to be included therein, shall include the following matters insofar as they.pertain to the mortgaged property: (1) a statement in reasonable detail of the revenues received and the expenditures made during such fiscal year- (2) a balance sheet as of the end of such fiscal year; b ) the auditor's comments regarding the manner in which the board has carried out the requirements of the indenture, and the auditor's recommendations for any changes or improvements in the operation of the mortgaged propert ; (4) a list of the insurance policies -and fidelity bonds in force 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; and (5) the following information as of the end of the fiscal year as the same shall be disclosed by the records of the board and without requirement of any physical verification of such information: the number of properties connected with and served by the water system; the number of properties con- nected with and served by the sewer system; the number of metered water customers and the number of unmetered water customers of the board. All expenses incurred in the making of such audits shall constitute and be paid as an operating expense. Within ten days following the receipt of each audit report the board will furnish a copy thereof to the trustee, to the original purchaser of the bonds from the board, and to the holder of any of the bonds 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 re- specting the matters herein or therein set out as may be reasonably required. (b) The board will, following the close of each calendar month,commencing with the month of November, 1953, cause to be made such reasonably detailed monthly operating reports as the trustee may require, the cost of which shall constitute and be paid as an operating expense of the board. -27- The board also will, within fifteen (15) days following the close of each such calendar month, cause a copy of each such report to be furnished to the trustee and to the original purchaser of the bonds from the board. If no such report has been made within fifteen (15) days following the close of any such calendar month, the trustee may employ any per- son satisfactory to it to make such report and the board hereby covenants and agrees to permit any such person so employed to inspect any and every part of the mortgaged property and the books and records of the board appertaining thereto and to assist in furnishing facilities for such in- spection. In case the report herein provided for is made by such person employed by the trustee, the trustee may pay to such person 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 board agrees to repay the same upon de- mand with interest at the said rate. Section 9.5 The board will not furnish or permit to be -furnished by or from the mortgaged property any free water, free sanitary sewer service or free service of any kind to the city or to any county or incorporated munici- pality or to any agency, instrumentality, person, firm or corporation whatsoever. All water and sanitary sewer service furnished from the mortgaged property shall be charged for at the rates at the time established therefor. Section 9.6 The board will maintain such rates and charges for the water and sanitary sewer service supplied from the mortgaged property and make collections from the users thereof in such manner as shall produce amounts suffi- cient at all times to pay all expenses of administering and operating the mortgaged property and maintaining the same in good repair and operating condition and all charges and expenses of the trustee, and further to pay into the bond fund and the reserve fund all payments herein required to be paid therein, all to the respective extents and at the respective times herein provided. The board will make from time to time such increases and other changes in such rates and charges as may be necessary to produce said amounts. Section 9.7 The pledge of revenues from the opera- tion of the mortgaged property 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 board other than the bonds, and the 'board agrees that in the event it should hereafter issue any securities or make any contract payable out of the revenues from the operation of the mortgaged property other than the bonds, or for which any part of said revenues may be pledged or any part of the mortgaged property may be mortgaged, the board 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 bonds. Section 9.8 The board agrees that it will not here- after sell or lease the whole or any integral part of the mortgaged property until all of the bonds and the coupons shall have been paid in full, or unless and until provision for such -28- payment shall. have been made. The board mill continuously operate the mortgaged property or cause the same to be operated so long as,any of the bonds and coupons remain un- paid, and it will keep the same in good repair and in effi- cient 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 board with, or merger of the board into, any public col^pora::ion having corporate authority to carry on the business of operating the mortgaged proper�y, or the transfer by the board of the mortgaged property as an entirety to the city or 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 interest on the bonds accord- ing to their tenor and the due and punctual performance and observance of all the agreements and conditions of the inden- ture to be kept and performed by the board shall be expressly assumed in writing by the corporation formed by such conso- lidation or into which such merger shall have been made or to which the mortgaged property shall be transferred as -an entirety; and provided further, that such consolidation, merger or transfer shall not cause or result in any mortgage or other lien being affixed to or imposed on or becoming a lien on the mortgaged property or the revenues therefrom that will be prior to the liens of the indenture and of the pledge herein for the benefit of the bonds. Nothing contained in this section shall be construed to prevent the board from disposing of property pursuant to the provisions of sections 11.2 and 11.3 hereof. Section 9.9 The board will keep the mortgaged pro- perty free from all liens and encumbrances prior to the lien hereof (other than excepted encumbrances and the lien of the underlying indenture), 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 this indenture as to any of the mortgaged property shall be materially endan- gered or the mortgaged property 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 board from hereafter purchasing additional pro- perty on conditional or lease sale contract or subject to ven- dor's lien or purchase money mortgage, and as to all property so purchased this indenture shall be subject and subordinate to such conditional or lease sale contract, vendorts lien or purchase money mortgage; provided, however, that the provi- sions contained in this sentence shall not be applicable to property purchased under the provisions of section 11:2 hereof to replace inadequate, obsolete, worn out, unsuitable, un- desirable, or unnecessary property then subject to the lien hereof, which substituted property shall be acquired and shall become subject to the lien hereof free of all liens and en- cumbrances prior to the lien hereof. Section 9.10 If the account of any user of water or sanitary sever service supplied from the mortgaged property shall remain unpaid for a period of thirty (30) days after such account shall become due, the board thereupon will promptly discontinue the furnishing of both water and sanitary sewer service to such user whose account shall so remain unpaid, but upon subsequent payment of such account, including any penalties which may be provided for in the schedule of rates of the board the board may thereafter furnish water and.sanitary sewer ser- vice to such user until such time as his account shall again remain unpaid for a period of thirty (30)' days after such account shall become due, whereupon the furnishing of both water -29- and sanitary sewer service shall again be discontinued. The schedule of rates for water and sanitary sewer service furn- ished from the mortgaged property shall provide that all charges for water shall become due not less often than once each month. Section 9.11 The board will discharge, pay or satisfactorily provide to -the trustee all liabilities, ex- penses and advances 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 reasonable compensation for the trustee's services hereunder, including extra compensation for unusual or extra -ordinary services. All such liabilities, expenses, advances, and compensation shall be secured hereby, shall be entitled to priority of payment over any of the bonds and 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 incurred, disbursed or made, and on which such compensation shall be earned. Section 9.12 The board will permit the trustee and the holders of any of the bonds to inspect, at any reasonable time, ,any and every part of the mortgaged property and the books and records of the board appertaining thereto, and will assist in furnishing facilities for such inspection. Section 9.13 The board warrants its title to all and every part of the mortgaged property as free and clear of every lien, encumbrance, trust or charge prior hereto, other than excepted encumbrances and other than the lien of the underlying indenture; warrants that it has power and authority to subject the mortgaged property to the lien hereof and that it has done so hereby; and warrants that it will for- ever warrant and defend the title to the mortgaged property unto the trustee against the lawful claims of all persons whomsoever except those claiming under excepted encumbrances and under the underlying indenture. Section 9.14 The board 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 the indenture, and in particular (without in any gray limiting the generality of the foregoing) to make subject to the lien hereof any prop- erty hereafter acquired by it for use as a part of the mortgaged property, and to -transfer to any successor trus- tee or trustees the assets, powers, instruments and funds held in trust hereunder and to confirm the lien of the in- denture with respect to any bonds issued hereunder. No failure to request such further instruments 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 interpretation of any provision of the indenture. ARTICLE X PROVISIONS RESPECTING.INSURANCE Section 10.1 The board will keep the buildings and other structures at any time forming a part of the mort- gaged property insured in responsible insurance companies, a - 3 0 - satisfactory to the trustee, against loss by fire, including extended coverage, tornado and windstorm to the extent of the full insurable value thereof° provided that it shall not be required to carry such insurance in any amount in excess of the principal amount of the bonds at the time outstand*!.nr.ro and provides' further, that if the carrying of such insurance of any such class in an amount less than the full insurable value of the mortgaged property shall result in the board's being a co-insurer, then the board will carry insurance of such class to such extent as will fully cover the value of the property insured. The policies evidencing such insurance shall contain stc-nd^rd mortgage clauses providing for : ny loss there- v. -der n excess of "' 1, 000 to be payable to the tri.istee as its interest may appear. All such policies evidencin the insurance herein. provided for. !` e e ivere by i% Sz+,o� ID.I and deposited with the trustee. Prior to the expiration A�h,-Ia date of any such policy the board will furnish the trustee satisfactory evidence that such policy has been renewed or replaced by another police or th-.t there is no necessity therefor hereunder. Section 10.2 All proceeds of insurance coming into the hands of the trustee shell be applied by the trustee in that one of the following i-rays i-rhi.ch rau.y be directed by a resolution: (a) To the purchase of additional prop- erty which the board shall deem of utility equal to that of the property damaged or destroyed in the operat-Lon of the mortgaged property, which additional property shall thereupon become a part of the mortgaged property (b) To the construction of additional prop- erty subject to the lien of the indenture which in the opinion of the board shall have in the opera- tion of the mortgaged property utility equal to that of the property damaged or destroyed- or (c) To the repairing or renewing of the property damaged or destroyed, provides?, that the trustee may pay such proceeds to the board upon being furnished by the board with the following! (1) A certificate of an -independent en-,ineer acceptable to the trustee stating that additional property described in said certificate (and with respect to which no such certificate has been pre- viously made) is of utilit;T in the operation of the mortgaged property equal to that of the property damaged or destroyed, together with a certificate of independent counsel acceptable to the trustee approving the title of the board to said additional property and the validity of the indenture as a first mortgage thereon,subject only to excepted encunibres* or (2) A certificate of an independent engineer acceptable to the trustee stating that the property damaged or destroyed has been repaired in a workman- like and suitable manner satisfactory to such engi- neer, together with a certificate of counsel ac- ceptable to the trustee stating that there are and can be no mechanics' or materialmen's liens caused by such repair. - 31 - Section 10.3 The boc-.rd will carry workmen's com- pensation insurance and public liability insurance in such amounts and to such extent as is customarily carried by like organizations engaged in like business of comparable size. Section 10.4 The board will at all times carry fidelity bonds on all of its officers and employees who may handle funds of the board, such bonds to be in such amounts as are customarily carried by like organizations engaged in like business of comparable size. Section 10.5 The premiums payable on all insur- ance and fidelity bonds shall be a part of the expense of operating the mortgaged property. ARTICLE, XI POSSESSION, USE AND RELEASE OF THE kIORTGAGED PROPERTY Section 11.1 While the board is not in default hereunder, it may retain actual possession of the mortgaged property and may manage, operate and use the same, and may collect, use and enjoy the rents, revenues, income and pro- fits thereof to such extent as is in nowise violative of the board's covenants herein contained. Section 11.2 While the board 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 embedded in land but not including land itself or any building thereon) that shall have become inadequate, obsolete, worn out, un- suitable for use or undesirable or unnecessary for use as a part of the mortgaged property, upon replacing the -same with, or substituting for the same, subject to the lien of the indenture and free from all prior liens, except for ex- cepted encumbrances, other property useful as a part of the mortgaged property and having value at least equal to the value at the time of disposal of the property disposed of. Section 11.3 While the board is not in default to the knowledge of the trustee in the payment of any bond or coupon outstanding hereunder or in respect of any of the covenents on the part of the board herein contained, the board may obtain the release of any part of the mortgaged property not needed by it in the operation thereof and the trustee shall release the same from the lien hereof upon deposit by the board with the trustee of the following., (a) A resolution describing the property to be released in reasonable detail, stating that the board is not in default under any of the provisions of this indenture, and requesting such release. (b) A certificate of an independent engi- neer 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 -32- not be needed by the board in the operation of the mortgaged property, that such release is in the opinion of the signer desirable in the operation of the mortgaged property, and that the board is not to the knowledge of the signer in default under the provisions of this indenture. (c) An amount in cash equal to the full value of the property to be released as specified in said engineer's certificate. Upon compliance by the board with the foregoing conditions the trustee shall, at the expense of the board, execute and deliver to the board any and all instruments that may be necessary to release from the lien of the indenture that portion of the mortgaged property with respect to which said conditions shall have been complied with. Section 11.4. If any part of the mortgaged prop- erty shall be taken by any eminent domain proceedings tle 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 ex- pense of the board, execute'and deliver to the board or any corporation or governmental agency successfully conducting such condemnation proceedings any and all instruments that may be necessary to release from the lien of this indenture that portion of the mortgaged property which may have been taken by such eminent domain proceedings. Section 11.5 All sums of money coming into the hands of the trustee under the provisions of Sections 11.3 or 11.4hereof 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 prc.,perty which the board may deem of utility in the opera- tion of the mortgaged property, which additional property shall thereupon become a part of the mortgaged property; or (b) To the construction of other property subject to the lien of the indenture which the board may deem of utility in the operation of the'mortgaged property^ provided that prior to the application of such moneys in any manner so designated by the board, the board shall fur- nish to the trustee the following° (1) A certificate of an independent engineer acceptable to the trustee stating (a) that the property so acquired or constructed has been ac- quired or constructed in a manner satisfactory to such engineer, (b) that in his opinion such prop- erty is of utility in the operation of the mort- gaged property, and (c) that the value of such property is not less than the sum of money to be applied by the trustee to its acquisition or con- struction! and (2) A certificate of counsel acceptable to the trustee approving the title of the board to any property so acquired or constructed and the validity of the indenture as a first mortgage there- on, subject only to excepted encumbrances, and stat- - 33 - ing further, with respect to any property so constructed, that there is and can be no me- chanics? or material.men's lien resulting from such construction. ARTICLE XII REIIEDIES OF TRUSTEE AND BONDHOLDERS Section 12.1 Any of the following shall con- stitute default hereunder.by the board: (a)' Failure by the board to pay the prin- cipal of or interest on any bond when such prin- cipal and interest respectively become due and payable, whether by maturity or otherwise; (b) Failure by the board to perform any of the agreements on its part herein contained (other than payment of the principal of and in- terest on the bonds and coupons) after thirty (30) days' written notice to it of such failure made by the trustee or by the holders of 2510 of the bonds then outstanding; or (c) Determination by a court having juris- diction that the board is insolvent or bankrupt, or appointment by a court having jurisdiction.of a receiver for the board or for a substantial part of the mortgaged property, or approval by a court of competent jurisdiction of any petition for re- organization of the board or rearrangement or re- adjustment of its obligations under any provisions of the bankruptcy laws of the United States. Section 12.2 Upon default by the board in any one of the ways defined in Section 12.1 hereof, the trus- tee may, by written notice to the board, declare the prin- cipal of all the bonds forthwith due and payable, and thereupon they shall so be, anything herein or therein to the contrary notwithstanding. If, however, the board shall thereafter make good that default and every other default hereunder (except the principal so declared pay- able), with interest on all overdue payments of principal and interest, and make reimbursement of all the expenses of the trustee, then the holders of a majority in prin- cipal amount of the then outstanding bonds, by written notice to the trustee, may waive such default and its conseouences, but no such waiver shall affect any sub- sequent default or right relative thereto. Section 12.3 Upon default by the board in any one of the ways defined in Section 12.1 hereof, the trus- tee is empowered to proceed, either at lai,.r or in e^uity, by suit, action, mandamus or other proceedings to enforce and compel performance of all agreements of the board here- in contained, including the fixing of rates, the collection and proper segregation of the revenues from the mortgaged property, and the proper application thereof, and 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 receiver to administer and operate the mortgaged property and perform the covenants on the part -34- of the board herein contained. Any receiver so appointed shall be entitled to take over and administer all of the following then on hand which shall be applicable to the mortgaged property: Cash on hand or on deposit, accounts and notes receivable, stocks, evidences of indebtedness, choses in action, customerts service and extension de- posits, and property held for sale 'in the ordinary course of business or for consumption in the operation of the mortgaged property. Nothing herein contained, however, shall be construed to give any authority to the trustee or the holders of any of the bonds cr coupons to compel a sale of the mortgaged property or any part thereof, and no foreclosure proceedings or sale shall ever be had with respect to the mortgaged property or any part thereof. Section 12.4 Any moneys received from operation of the mortgaged property by a receiver appointed pursuant to the provisions of Section 12.3 hereof shall be applied to the payment of the following items in the following order: (a) All costs of the receivership, including receiver's fees, the costs of administration and operation of the mortgaged property and the mainte- nance thereof in good repair and good working order, and all charges and expenses of the trustee under the indenture; (b) All"due and unpaid installments of interest on the bonds, in the order of the maturity of such installments, with interest on overdue installments of interest; (c) All amounts of the principal of the bonds i,,hich are due(whether by maturity or otherwise) and unpaid, with interest on all overdue principal, pay- ment thereof to be made to the holders of t:1e bonds then outstanding pro rata and without any preference or priority whatever; (d) All amounts required by the indenture to be paid into the special funds herein created* (e) The surplus, if any there be, to the board. Section 12.5 All remedies hereunder are vested exclusively in the trustee for the equal and pro rata bene- fit of all holders of the bonds 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 (255) of the out- standing bonds, accompanied by indemnity satisfactory to the trustee, in which event the holder of any of the bonds or coupons may thereupon so act in the name and behalf 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 pro- vided in the preceding sentence, no holder of any of the bonds or coupons shall have the right tc enforce any rerrcdy hereunder, and then only for the equal and pro rata benefit of the holders of all the bonds and coupons. Section 12.6 As a condition hereof, the trustee and the bondholders waive and release any right, cause of - action or remedy now or hereafter existing or imposed in any jurisdiction against any past, present or future in- - 35 - corporator, director or officer of the board for the pay- ment of the principal of or interest on the bonds. or for the performance of any agreements by the board herein con- tained. Nothing contained in this section, however, shall relieve any such incorporator, director or officer from the cbligation of performing all duties of their respective offices and of taking all actions that may be necessary to enable the board to perform the agreements on its part herein contained. Section 12.7 No delay or omission by the trustee or by any bondholder to exercise any available right, power or remedy hereunder shall impair or be construed a waiver thereof or an acquiescence in the circumstances riving rise thereto° every right, power or remedy given herein to the trustee or to the bondholders may be exercised from time to time and as often as deemed expedient. ARTICLE XIII CONCERNING THE TRUSTEE Section 13.1 The trustee 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 anything whatever in connection vrith this trust, except its wilful misconduct or gross neglect. (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 reason- able 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 bondholder as such without the submission of his bonds for in- spection and the satisfactory establishment of his title thereto. (e) It shall not be answerable for any ac- tion taken in good faith on any notice, request, 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 board hereunder nor need it exercise any of its rights or powers consequent thereon unless so re- quested in writing by the holders of twenty-five per centum (25go) of the then outstanding bonds; it may do so, if it thinks advisable, without any such renuest° it shall do so when sc recuested. Whenever- it has a choice of remedies or a discre- tion as to details in the exercise of its powers hereunder it must follow any specific written di- rections given by the holders of a majority of the bonds at the time outstanding, anything therein or herein to the contrary notwithstanding, unless -36- the observance of such directions would, in the opinion of the trustee, unjustly prejudice the nonassenting bondholders° but satisfactory in- demnity to the trustee by the holders request- ing such action against its prospective expenses and liabilities is a condition precedent to its duty to take or continue any such action here- under which in its opinion would involve it in such expenses and liabilities. (g) The trustee shall be entitled to reason- able compensation for its services hereunder, in- cluding extra compensation for unusual or extra- ordinary services. (h) any action taken by the trustee at the request of and with the consent of the holder of a bond will bind all subsequent holders of the same bond or any bond issued hereunder in lieu thereof. (i) It may be the holder of bonds as if not trustee hereunder. (j) It shall not be liable for the proper ap- plication of any moneys other than those which may be paid to or deposited with it. (k) all moneys received by the trustee tc be held by it hereunder shall be held as trust funds until disbursed in the manner herein provided there- for. The trustee shall not be liable to pay or allow interest thereon and shall not be renuired to set aside or deposit any security therefor. (1) The recitals of facts herein and in the bonds are statements by the board and not by the trustee, a'id the trustee is in no way responsible for the validity or security of the bonds, the existence of the mortgaged property, the value thereof, the title of the board thereto the se- curity afforded thereby, or the valid-Ltr or Priority of the lien hereof. Section 13.2 TTithout relieving the board from the conseouences of any default in connection therewith, the trustee may pay ai.y charge which the failure of the board to pay has made or irill make an encumbrance or lien prior hereto on the mortgaged property, and in the event the board shall fail to take out insurance on the mortgaged prop- erty to the extent renuired by the indenture, the trustee may take out a-ny such insurance on the mortgaged property which the board has failed to furnish and may pay the premiums thereon. The trustee, however, shall not be renuired 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 expended by the trustee under the provisions of this section shall be secured by this indenture shall bear in- terest at the rate of 6 o7 per annum from the date of payment thereof, and shall be entitled to priority of payment over any of the bonds or cOuPons. The board agrees to reimburse the trustee on demand for all sums so expended by the trus- tee, together with interest at said rate. Section 13.3 The trustee may at any time file a claim in its own name or for the benefit of the holders of the bonds and coupons in any court proceeding where any such - 37 - claim -may be permitted or required, whether suc proceeding be by way of reorganization, bankruptcy, receivership, or of any other nature. The holders of the bonds and of the coupons do hereby constitute and appoint the trustee as their irrevocable agent and attorney in fact for the purpose of filing any such claim, but such authorization shall not include the power to agree to accept new securities of any nature in lieu of the bonds and coupons or to alter the terms of the bonds and coupons. Section 13.4 The trustee may resign and be dis- charged of the trusts hereby created upon written notice speci- fying the effective date of such resignation, such notice to be given to the board and published by the trustee one time in a daily 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 board and the first published notice unless it be coincident with the appointment by the holders of the bonds of a successor trustee as herein provided. The trustee may at any time be removed by a written instrument signed by the holders of a majority of the bonds then out- standing. If the trustee resign or be removed, it shall be reimbursed for all its proper prior expenses reasonable under the circumstances. Section 13.5 If the trustee resign, be removed, be placed by a court or 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 instrument signed by, the holders of a majority of the bonds then outstanding (which instrument shall be filed for record in the office of the Judge of Probate of the county in which the mortgaged property is or will be located) and in the in- terim by an instrument executed by the board, such interim successor trustee to be immediately and ipso facto superseded by one appointed as above by the said holders. The board shall advertise such interim appointment, in the event such is made, one time in a daily 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 bonds then outstanding, becomes effective, the board shall advertise that fact one time in a daily newspaper published in the City of Birmingham, Alabama. Section 13.6 Any successor trustee shall execute and deliver to the board an instrument accepting the trust and shall thereupon ipso facto succeed to all the estate and title of the retiring trustee to the mortgaged property and to its rights, powers and responsibilities hereunder. The board will, upon request of the successor trustee, execute and deliver to it any instrument 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 in which the mortgaged property is or will be located. Any suc- cessor trustee may effectively adopt the certificate of a pre- decessor trustee on bonds already certified and not delivered, and may so deliver them and it may effectively certify bonds in its own name. Section 13.7 Each of the provisions of this inden- ture as to the trustee shall apply to its successor or succes- sors. ARTICLE XIV PAYMENT AND CANCELLATION OF THE BONDS AND SATISFACTION OF THE INDENTURE Section 14.1 Whenever the entire indebtedness se- cured by the indenture, including all proper charges of the trustee hereunder, shall have been fully paid, the trustee shall cancel, satisfy and discharge the lien of the indenture and shall execute and deliver to the board such deeds and in- struments as shall be requisite to satisfy of record the lien -38- hereof and to reconvey and transfer to the board the mortgaged property. For the purposes of this section, any of the bonds and any of the coupons shall be deemed to have been paid when the board 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 bonds shall be deemed to have been paid when the board shall have deposited with the trustee the follow- ing: the redemption price of such callable bond pursuant to the provisions of Article VI hereof, a certified copy of the reso- lution required in section 6.2 of the indenture, and either (a) evidence satisfactory to the trustee that notice of redemption of such callable bond has been given as provided in said article or (b) irrevocable powers authorizing the trustee to give such redemption notice. Section 14.2 When and as the bonds and coupons are paid, those so paid shall be forthwith cancelled by the trustee and delivered to the board. Likewise all mutilated bonds re- placed by new bonds shall forthwith be cancelled by the trustee and delivered to the board. ARTICLE XV MISCELLANEOUS PROVISIONS Section 15.1 It is hereby expressly made a con- dition of this indenture that any covenants or representations herein contained or contained in the bonds or the coupons do not and shall never constitute a personal or pecuniary lia- bility or charge against the general credit of the board, and in the event of a breach of any such covenant or representa- tion no personal or pecuniary liability or charge payable directly or indirectly from the general revenue of the board shall arise therefrom. Nothing contained in this section, however, shall relieve the board from the performance of the several covenants and representations on its part herein contained. Section 15.2 Should any of the bonds or the 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 bonds and coupons so due, for the benefit of the holders thereof, a sum of money sufficient to pay such bonds or coupons when the same are presented by the holders thereof for payment (upon which sum the trustee shall not be re- quired to pay interest). All liability of the board to the holders of such bonds and coupons and all rights of such holders against the board under the bonds and coupons or under the indenture shall thereupon cease and determine, and the sole right of such holders shall thereafter be against such deposit. If any bond or coupon shall not be presented for payment within the period of ten years following the date when such bond or coupon becomes due, whether by ma- turity or otherwise, the trustee shall return to the board the moneys theretofore held by it for payment of such bond or coupon, and such bond or coupon shall (subject to the defense of any applicable statute of limitation) there- after be an unsecured obligation of the board. Section 15.3 Any request, direction, or other instrument required to be signed or executed by holders of the bonds 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 offi- cer 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. - 39 - Section 15.4 Nothing herein or in the bonds shall confer any right on anyone other than the board, the trustee and the holders of the bonds and coupons. Section 15.5 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 One -Million Dollars in- demnifying the board 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 15.6 The ownership at any given time of an unregistered bond 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 exhibited to it the bonds 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. hereto that etheoindenture'It shall thine iallnrespectsof tbe he parties by the laws of the State of Alabama. p governed Section 15.8 The trustee or the holder of any of the bonds may serve any notice upon the board by deposit- ing the same in a post office in a sealed and duly stamped envelope addressed to the board at Fairhope, Alabama. IN WITNESS WHEREOF, the board has caused this in- denture to be executed in its corporate name and in its be- half by the chairman of its directors and its corporate seal to be hereunto affixed and attested by its secretary, 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 corpo- rate action, all in three counterparts, this day of 1953, and has caused this indentureto be aateTas'o the 1st day of July, 1953. Attest: Its Secretary Attest: THE WATER WORKS AND SEWER BOARD OF THE CITY OF FAIRHOPE By Chairman o its oar of - Directors THE MERCHANTS NATIONAL BANK OF MOBILE By Its Its -40- STATE OF ALABAMA COUNTY OF I, , a Notary Public in and for said county in said state, ereby certify that R. Roy Moyers, whose name as Chairman of the Board of Di- rectors of THE WATER WORKS AND -SEWER BOARD OF THE CITY OF FAIRHOPE, a public corporation, 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 auth- ority, executed the same voluntarily for and as the act of said corporation. Given under my hand and official seal of office this day of _ , 1953. STATE -OF COUNTY OF ALABAMA ) } Notary Public I, , a Notary Public in and for said county in said state, hereby.certify that whose name as of THE NERTHANTS AT ANK OF MOBILE, a nation an - ing association, 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 association. Given under my hand and official seal of office this day of _ , 1953• Notary Public