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HomeMy WebLinkAbout12-11-1961 Regular MeetingMINUTES OF A MEETING OF THE MAYOR AND CITY COUNCIL OF THE CITY OF FAIRHOPE, ALABAMA, HELD ON DECEMBER 11, 1961 The Mayor and City Council of the City of Fairhope, Alabama, met in regular session at the City Hall in said city on December 11, 1961, at 7:30 o'clock, P. M. On roll call the following were found to be present: Mayor Joe Schneider and the following members of the City Council: Lester I. Boone, James E. Gaston, Jr., William J. Nelson, Walter 0. Poser, and Alton E. Schermer. The following were found to be absent: 11 The mayor presided as chairman of the meeting, and Marie Moore, the city clerk, who was also present, acted as clerk of the meeting. The mayor declared that a quorum was present and the meeting open,for the transaction of business: The minutes of the preceding meeting were read and approved. Councilman then then presented and moved the final adoption of the following ordinance, which had been first introduced at the meeting of the Mayor and Council held on December 4, 1961: i r ORDINANCE NO. 2,1 V AN ORDINANCE TO PROVIDE FOR THE ISSUANCE OF AND SALE OF $1,000,000 PRINCIPAL AMOUNT OF WATER, GAS AND SEWER REVENUE BONDS, SERIES 1961, OF THE CITY OF FAIRHOPE, ALA- BAMA, FOR THE PURPOSE OF REFUNDING CERTAIN REVENUE BONDS OF THE CITY AND DEFRAYING THE COST OF CONSTRUCTING IMPROVEMENTS TO THE CITY'S WATER WORKS AND SANITARY SEWER SYS- TEM AND ITS NATURAL GAS DISTRIBUTION SYSTEM AND TO PROVIDE FOR A TRUST INDENTURE AS SECURITY THEREFOR BE IT ORDAINED by the Mayor and City Council (here- in together called "the governing body") of the City of Fairhope (herein called "the city") in the State of Alabama as follows: Section 1. Findings. The governing body of the city has ascertained an-a—foun7 and does hereby declare and recite as follows: (a) It is necessary and desirable 6?id in the best interests of the city and its inhabitants that the city construct certain capital improvements to its water works and sanitary sewer system (herein called "the water and sewer system") and its natural gas distribution system (herein called "the gas system"), said capital improvements to the water and sewer system being briefly described as follows: A new 1,000,000 gallon steel elevated tank, with water pipe lines connecting it to the existing water distribution system, and the said capital improvements to the gas system being briefly described as follows: A new gas supply line extending from the point of delivery from United Gas Com- pany's main to the gas distribution sys- tem of the city, and additional gas line extensions and service connections to approximately 200 new customers; (b) The city has employed qualified engineers for the purpose of ascertaining the costs of construction of said capital im- provements, and the said engineers have estimated that the total costs of constructing all of the said extensions and im- provements and of paying the incidental expenses estimated to be incurred in connection with said construction with the issuance of the bonds hereinafter authorized will be not less than $652,545.00, and the governing body hereby adopts the aforesaid estimate of costs; (c) Tn order to effectuate the financing of the said capital improvements it will be - 2 - 9 .�3 0 -necessary and it is in the best interests of the city that its outstanding First Mortgage Gas Revenue Bonds dated February 1, 1950, numbered 159 to 494, inclusive, aggregating $336,000 in principal amount (herein called "the 1950 gas bonds") be refunded by retirement thereof on February 1, 1962, such retirement to be -effected by payment at maturity of those having'a stated maturity on February 1, 1962, and by redemption of those having a stated maturity after that date; (d) The amount required to be applied, from the proceeds of the bonds hereinafter authorized, for retirement of the 1950 gas bonds on February 1, 1962, is $347,455.00, including the principal of the 1950 gas bonds and the redemption premium with respect to those having a stated maturity after February 1, 1962; and (e) In order to raise funds to refund the 1950 gas bonds and to pay the costs.of constructing the said capital improve- ments, it will be necessary that the city issue and sell its bonds hereinafter authorized in anticipation of the revenues that will be derived from the operation of the water and sewer system and the gas system (herein together called "the systems"); (f) The period of usefulness of the said capital improvements is hereby estimated to,be in excess of thirty years from Decem- ber 1, 1961; (g) The useful life of each of the systems is hereby estimated to be in excess of thirty years from December 1, 1961; and (h) The reserves provided for in Sections 9.6 and 9.7, respectively, of the trust indenture authorized in Section 8 hereof (said trust indenture being herein called "the inden- ture") constitute reasonable reserves respectively for payment of the principal of and the interest on all bonds that may be issued under the indenture and for capital improvements, betterments and extensions to the systems, and the periods of time provided for in said sections respectively constitute reasonable periods within which such reserves shall be built up. Section 2. Authorization of Series 1961 Bonds. Pur- suant to the provisions of Subdivision 3 of Article 2 of Chapter 6 of Title 37 (Sections 308 to 340, inclusive) of the Code of Alabama of 1940, as amended, and for the purpose of refunding the 1950 gas bonds and defraying the costs of con- structing the aforesaid capital improvements to the systems and of paying the incidental expenses to be incurred in connec- tion therewith and in connection with the issuance of the bonds herein authorized, there are hereby authorized to be issued $1, 000, 000 principal amount of Water, Gas and Sewer Revenue Bonds, Series 1961, of the city, to be dated December 1, 1961 (herein called "the bonds"). The bonds shall contain such provisions and shall be payable at such times and places as are specified in the indenture. Section 3. Source of Payment; Pledge. The principal of and the interest on the bonds, and any a tional bonds that may be issued under the provisions of the indenture, shall be payable solely from the revenues derived from the operation of the systems, including all additions thereto and extensions thereof that may hereafter be made, which said revenues are, to'the extent provided in the indenture, hereby specially and irrevocably pledged for payment of the principal of and the interest on the bonds and said additional bonds, pro rata and without preference or priority of one over another by reason of prior issuance or otherwise. The general faith and credit of the city are not pledged to the payment of the bonds and the coupons, and they shall not be general obligations of the city. Neither this ordinance nor the indenture nor any of the bonds or the coupons shall be deemed to impose upon the - 3 - city any obligation to pay the principal on the bonds and the coupons except with to be paid into the Water, Gas and Sewer Redemption Fund created in Article IX of the bonds and the coupons shall not cons of the city within the meaning of any st provisions of statutory limitation. Non representations or warranties made or im or in the issuance of the bonds and the impose any personal, pecuniary or genera upon the city, whether before or after a of any such agreement, representation or except with the moneys herein provided. this section shall, however, relieve the from the performance of the several agre tations on the part of the city containe of or the interest the moneys directed Bond and Interest the indenture, and ;itute indebtedness ite constitutional of the agreements, )lied in this ordinance, :oupon s, shall ever 1 liability or charge ny breach by the city warranty of the city, Nothing contained in city or its officers, sments and represen- t in this ordinance so long as suen performance caoes noti impose a personal, pecuniary or general liability or charge upon the city. No. bonds, other than the bonds authorized to be issued by this ordinance and the additional bonds authorized to be -issued from time to time'by the city under the provisions of the indenture, shall be deemed of the same issue as the bonds or said additional bonds or shall be entitled to payment from the same fund out of which the bonds and said additional bonds are payable, even though such bonds are issued for the purpose of providing funds for the amount of any deficit in the moneys available to defray the costs of acquiring and construv-ting the capital improvements described in Section 1 of this ordinance. Section 4. Gross Revenue Accounts. The gross revenues derived from operation of the water and sewer sys- tem and the gas system shall be deposited by the city, daily - as collected by it, into the several gross revenue accounts (herein called "the underlying revenue accounts") created in that certain mortgage and deed of trust by The Water Works and Sewer Board of the City of Fa1rhppe (herein called "the board") to The Merchants National Bank of Mobile dated as of July 1, 1950, that certain mortgage and deed of trust by the board to the said bank dated as of July 1, 1953, and that certain mortgage and deed of trust by the city to the said bank dated as of December 1, 1958 (the said three mort- gages and deeds of trust being herein together called "the underlying indentures"). Following satisfaction and dis- charge of all of the underlying indentures, the revenues derived from operation of the water and sewer system and, following satisfaction and discharge of that one of the underlying indentures dated as of December 1, 1958, the gross revenues derived from operation of the gas system shall be deposited by the city, daily as collected by it, into the Water, Sewer and Gas Revenue Account (herein called "the revenue account") created in Article IX of the indenture. The city will make transfers of moneys from the underlying revenue accounts and from the revenue account pursuant to the provisions of the said Article IX of the indenture, at the times and to the respective extents therein provided and to the extent that the moneys on deposit in the underlying revenue accounts or the revenue account, as the case may be, shall be available therefor. - 4 - Section 5. Maintenance of Rates. The governing body of the city covenants and agrees to maintain such rates and charges for water and sanitary sewer service furnished by the water and sewer system and gas furnished by the gas system as shall be sufficient to provide for payment of the principal of and the interest on the bonds as and when the same become due and payable, to create a bond and interest redemption fund therefor, to provide for payment of the ex- penses of administering and operating the systems and of maintaining them in good repair and working order, to build up a reserve for depreciation of the systems and to build up a reserve for improvements, betterments and extensions to the systems other than those necessary to maintain the same in good repair and working order as hereinabove provided. The governing body of the city hereby orders and determines that the systems shall be operated on the basis of a fiscal year commencing on October 1 of each calendar year and ending on September 30 of the following calendar year. Section 6. Bonds Payable at Par. All remittances of principal of and interest on the bon s and the coupons applicable thereto shall be made to the holders thereof at par without deduction for exchange or other costs, Fees or expenses. The bank or banks at which the bonds or the said 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, out of the moneys sup- plied to them for that purpose, remittances of the principal and the interest on the bonds and the said coupons to the holders thereof in bankable funds at par without any deduc- tion for exchange or other costs, fees or expenses. The city 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 7. This Ordinance a Contract. The provi- sions of this ordinance shall consEitute a contract.between the city and each holder of the bonds and the coupons. Section 8. Trust Indenture Authorized. As addi- tional security for payment of the principal of -and the interest on the bonds and'any additional bonds that may be issued under the indenture, pro rata and without preference or priority of one bond over another, the mayor of the city is hereby authorized and directed to execute and deliver, for and in the name -and behalf of the city, to The[Merchants National Bank of Mobile, a trust indenture in substantially the form presented to the governing body at the meeting thereof at which this ordinance is adopted, which form, marked Exhibit "A", shall be attached to the minutes of the meeting at which this ordinance is adopted and which is hereby adopted and made a part of this ordinance in all respects as if herein set out in full herein; and the city clerk of the city is hereby authorized and directed to affix the corporate seal of the city to the indenture and to attest the same. - 5 - Section 9. Sale of the Bonds. The bid of Hugo Marx & Co. and Associates for the bonds at a net interest cost to the city of 3.9790%, said bid resulting in a pur- chase price equal to 100.04642% of the face value of the bonds, viz., the sum of $1,000,464.20, plus accrued inter- est on the bonds from December 1, 1961, to the date of their delivery, is hereby declared to be the highest and best bid received by the city for the bonds. The said'bid is hereby accepted and the bonds are hereby sold to the said bidders at and for said purchase price. The mayor of the city is hereby authorized and directed to execute each of the bonds in the name of the city by subscribing his manual signature on each of the bonds, and the city clerk is hereby authorized and directed to affix to each of the bonds the seal of the city and to execute each of the bonds with her facsimile signature, the said facsimile signature of the city clerk on each of the bonds to constitute attestation of such bond and of the seal so affixed. The mayor is hereby authorized and directed to de- liver the bonds, when so executed, sealed and attested, to the said purchasers upon payment to the city of the said pur- chase price. Adopted and approved this llth day of December, 1961. Mayor Authenticated: City C er The motion for adoption of the foregoing ordinance was seconded by Councilman �and upon the motion being put to vote the following vote was record Schneider d Councilmen(# '/ Nays: : Yeas: Mayor The mayor thereupon announced that the motion for adoption of said ordinance had been unanimously carried and he then signed the same. Councilman ' J then presented and moved the final adoption of the following resolution, which had been first introduced at the meeting of the Mayor and Council held on December 4, 1961: A RESOLUTION PROVIDING FOR NOTICE OF PASSAGE OF THE CITY'S ORDINANCE NO. BE IT RESOLVED by the Mayor and City Council of the City of Fairhope, Alabama, that in order to comply with the requirements of Section 340 of Title 37 of the Code of Alabama of 1940, as amended, the city clerk of the said city is hereby authorized and directed to cause a copy of the following notice to be published in The Fairhope Courier, a newspaper published and having general c rcu ation within the corporate limits of said city, once.a week for two con- secutive weeks: NOTICE OF PASSAGE OF ORDINANCE OF THE CITY OF FAIRHOPE, ALABAMA An ordinance authorizing the issuance of $1,000,000 principal amount of Water, Gas and Sewer Revenue Bonds, Series 1961, of the City of Fairhope, Alabama, under the provisions of Title 37, Chapter 6, Article 2, Subdivision 3, of the Code of Alabama of 1940, as amended, was duly passed by the Mayor and City Council of the City of Fairhope, Alabama, on the 4i4 11 day of December, 1961, for the purpose of pro- viding funds necessary to refund the city's outstanding First Mortgage Gas Revenue Bonds dated February 1, 1950, and to construct capital improvements to the water works and sanitary sewer system and the natural gas distribution system of said city, and payment of incidental costs in connection therewith. The said bonds authorized to be issued, as aforesaid, will be secured by a pledge of revenues derived from the operation of the said water works and sanitary sewer system and the said natural gas distribution system of the city. Any action or proceeding questioning the validity of the said ordinance must be commenced within thirty days after the first publication of this notice. /s/ Marie Moore City Clerk Adopted and approved this llth day of December, 1961. Authenticated: May6r City Clerk - 7 - The motion for adoption of said resolution was seconded by Councilmank.,n , , and upon the motion being put to vote the following vote was recorded: Yeas: Mayor Schneider anCo/Juncilmen , bi.C'�t� ��c1 Nays The mayor thereupon announced that the motion for adoption of said resolution had been unanimously carried and he then signed the same. i Councilman introduced the follow- ing resolution in writing, which was read to the meeting: BE IT RESOLVED by the Mayor and City Council of the City of .Eairhope, Alabama, that the proceeds from the sale of the city's Water, Gas and Sewer Revenue Bonds, Series 1961, aggregating $1,000,000 in principal amount which were authorized to be issued by Ordinance No. Ayr of the city adopted December 11, 1961, shall be deposited to the credit of the city in a separate Clearance Account in The Merchants National Bank of Mobile, in Mobile, Ala- bama; that the funds so deposited may be withdrawn,by checks, vouchers, or drafts signed in the name of the city by its treasurer and countersigned by its mayor; and that said bank is hereby authorized,until further notice to it by a certified copy of a resolution adopted by the govern- ing body of the city and delivered to the said bank, to honor any such checks, vouchers, or drafts when so signed and countersigned regardless of the person or persons to whom the same may be payable. Councilman1"P., moved that the foregoing reso- lutio be adopted, which motion was seconded by Councilman r and upon the same being put to vote the following vote was regorded : Yeas: Mayor Schne,,�der and Counci The mayor thereupon declared the resolution had been duly adopted. r. Councilman p following resolution which was read to 0 then introduced the the meeting: 5 A RESOLUTION APPOINTING DEPOSITORIES FOR A SPECIAL ACCOUNT AND A SPECIAL FUND CREATED IN TRUST INDENTURE OF THE CITY OF FAIRHOPE, ALABAMA, TO BE DATED AS OF DECEMBER 1, 1961 BE IT RESOLVED by the City Council of the City of Fairhope (herein called "the city") in the State of Alabama as follows: (1) Bank of Fairhope, a banking institution in the City of Fairhope, Alabama, is hereby appointed as de- pository for the Water, Sewer and Gas Revenue Account created in Section 9.2 of the trust indenture between the city and The Merchants National Bank of Mobile, the trustee thereunder, to be dated as of De ember 1, 1961, which was authorized in Ordinance No. Ire of the city adopted December 11, 1961; (2 ) Bank of Fairhope, a banking institution in the City of Fairhope, Alabama, is hereby appointed as de- pository for the Water, Sewer and Gas Operation and Main- tenance Fund created in Section 9.5 of the said trust indenture; (3) Any and all funds of the city at any time on deposit in said account or in said fund may be withdrawn by checks, vouchers, or drafts signed in the name of the city by its treasurer and countersigned by its mayor, or signed by either the mayor or the city treasurer and countersigned by a member of the city council of the city; and each bank named herein is hereby authorized, until receipt by it of further notice in the form of a certified copy of a resolution adopted by the governing body of the city, to honor any such checks, vouchers, or drafts when so signed regardless of the person or persons to -whom the same may be payable. Adopted and approved this llth day of December, 1961. Ma or Authenticated: Councilman moved that the said resol tion be adopted, which motion was seconded by Councilman , and upon the motion being put to vote the following vote was recorded: Yeas: i ti. Mayor Schneider and Councilmen a : Nays: The mayor thereupon announced that the motion for adoption of said resolution had been unani- mously carried and he then signed the same. Councilman �Gi �y_Q.t� then introduced the following resolution which was read to the meeting: - 10 - A RESOLUTION CALLING FOR REDEMPTION ON FEBRUARY 1, 1962, THOSE OF THE CITY'S FIRST MORTGAGE GAS REVENUE BONDS DATED FEBRUARY 1, 1950, NOW REMAINING OUTSTANDING THAT HAVE STATED MATURITIES ON FEBRUARY 1, 1963, OR THEREAFTER BE IT RESOLVED by the Mayor and City Council �herein herein together called "the council") of the City of Fairhope called "the city") in the State of Alabama as'follows: (1) The council hereby finds and recites that (a) the city is not in default in payment of the principal of or interest on any of the bonds issued under that certain mort- gage and deed of trust (herein called "the 1950 gas indenture") by the city to The Merchants National Bank of Mobile dated as of February 1, 1950, and (b) the city is not in default under any of the provisions of the 1950 gas indenture. (2) Acting pursuant to the provisions of Article IV of the 1950 gas indenture, the city does hereby elect to re- deem and pay, and does hereby call for redemption and payment, on February 1, 1962, the First Mortgage Gas Revenue Bonds of the city numbered 181 to 494, inclusive, being all of the bonds of the said issue that now remain outstanding and that have maturities after February 1, 1962; such redemption to be effected at the face value of each bond herein called for redemption plus accrued interest thereon to February 1, 1962, and a premium equal to twelve months' interest thereon computed at the cou- pon rate thereof. (3) The mayor and the city clerk and city treasurer of the city are hereby authorized and directed to cause to be taken in the name and behalf of the city all of the actions re- quired by Article IV of the 1950 gas indenture to be taken in order to effedt the redemption on February 1, 1962, of the aforesaid bonds herein called for redemption; and in particular, (a) the mayor of the city is hereby authorized and directed to cause to be published one time on or prior to December 31, 1961, in The Birmingham Post -Herald , a newspaper published not —less than six days each calendar -w-e—e-7 in the City of Birming- ham, Alabama, an appropriate notice of such call for redemption, such notice to be in substantially the following form: NOTICE OF CALL OF BONDS FOR REDEMPTION _ Notice is hereby given that the City of Fairhope, a municipal corporation in the State of Alabama, has called for redemption and will redeem and pay on February 1, 1962, its First Mortgage Gas Revenue Bonds dated February 1, 1950, numbered 181 to 494, inclusive, and hav- ing stated maturities on February 1, 1963, and thereafter. The bonds so called for redemption constitute all bonds of the same issue that now remain outstanding except those having a stated maturity on February 1., 1962. Each bond so called for redemption will become due and pay- able on February 1, 1962, at a redemption price equal to the face value thereof plus accrued in- terest thereon to February 1, 1962, and a premium equal to twelve months' interest on each bond redeemed computed at the coupon rate thereof. Each bond so called for redemption should be presented at the principal office of The Merchants National Bank of Mobile, in the City of Mobile, Alabama, and will cease to bear interest after February 1, 1962. CITY OF FAIRHOPE By Joe Schneider Its Mayor and (b) the city clerk of the city is hereby authorized and directed to file with the trustee under the 1950 gas inden- ture a certified copy of this resolution and appropriate affidavits',showing compliance with the requirements of Sec- tion 2 of Article IV of the 1950 gas indenture with respect to the call for redemption herein made. Adopted and approved this day of , 1961. Mayor Authenticated: City Clerk - 12 - Councilman �� moved that the foregoing reso- lution be adopted, which motion, on.being seconded by Council- man U-t _A,) was put to vote and the following vote as recorded: Yeas: Mayor hneider and Councilmen 24- r)a Nays: . The mayor thereupon announced that the motion for adoption of said resolution had been unanimously carried and he then signed --the resolution. Councilman1 �c l then introduced the following resolution which was read to the meeting: BE IT RESOLVED by the Mayor and City Council (herein called "the council") of the City of Fairhope (herein called "the city") in the State of Alabama as follows: (1) Upon delivery by the city to the purchasers thereof of the cityfs Water, Gas and Sewer Revenue Bonds, Series 1961, to be dated December 1, 1961 (herein called "the Series 1961 bonds"), the Mayor of the city is hereby authorized and directed to execute and deliver, for and in the name and behalf of the city, an agreement with The Merchants National Bank of Mobile in substantially the fol- lowing form, and the city clerk of the city is hereby authorized and directed to affix to the said agreement the corporate seal of the city and to attest the same: - 13 - AGREEMENT between the CITY OF FAIRHOPE, a munici- pal corporation in the State of Alabama, party of the first part (herein called "the city") and THE MERCHANTS NATIONAL BANK OF MOBILE, a national banking association existing under the laws of Congress and authorized to administer trusts, party of .the second part (herein called "the trus- tee"); R E C I T A L S: (a) The city has heretofore issued and there are presently outstanding under a mortgage and deed of trust by the city to the trustee dated as of February 1, 1950 (herein called "the 1950 gas indenture"), three hundred thirty-six (336) First Mortgage Gas Revenue Bonds of the city dated February 1, 1950, numbered 59 to 494, inclu,ivej aggregating �')336,000 in principal amount each in -the denomination of $1,000, and each bearing interest payable semiannually on Viebruary 1 and August 1 and evidenced by interest coupons (the said, bonds being nevein called 'the outstanding gas bonds'). Those of the outstanding gas bonds numbered 159 to 180, inclusive, aggregating $22,000 in principal amount, mature on February 1, 1962; and those of the outstanding gas bonds numbered 181 to 494, inclusive, aggregating $314,000 in principal amount (herein called "the redeemable bonds") have stated maturities after February 1, 1962, but they are by their terms subject to redemption at the option of the board on February 1, 1962, at a redemption price for each bond redeemed equal to the face value thereof plus accrued interest thereon to the redemption date and a premium equal to twelve months' interest thereon. Those of the out- standing gas bonds having stated maturities in 1962 to 1967•; inclusive, aggregating $150,000 in principal amount, bear interest at the rate of 3-1/2P per annum, and those of the outstanding gas bonds having stated maturities in 1968 or thereafter, aggregating :;186,000 in principal amount, bear interest at the rate of 3-3/4,' per annum. Both the princi- pal of and interest on the outstanding gas bonds are payable at the principal office of the trustee. (b) The city's First Mortgage Gas Revenue Bonds dated February 1, 1950, numbered 1 to 158, inclusive, and 495 to 755, inclusive, have been paid in full, cancelled and retired, and all interest that has matured with respect to any of the bonds issued under the 1950 gas indenture has been paid in full and the interest coupons evidencing such interest have been cancelled and retired. The only securities now outstanding under the 1950 gas indenture are the outstanding gas bonds and the unmatured interest coupons applicable thereto due on February 1, 1962, and thereafter. (c) The Mayor and City Council (herein together called "the council") of the city have adopted a resolution duly calling for redemption on February 11 1962, the redeemable bonds, a newspaper publication of notice of the said call for redemption has been made in accordance with the requirements of Paragraph (2) of Section 2 of Article IV of the 1950 gas indenture; (d) The sum of $353,567.50 is the amount required for payment of all principal and interest that will mature with respect to the outstanding gas bonds on or prior to February 1, 1962 and for payment on February 1, 1962 of the redemption price of the redeemable bonds; and - 14 - (e) In order to provide for retirement of all of the outstanding gas bonds on or prior to February 1, 1962, the city has made the deposit hereinafter referred to, and the city and the trustee have entered into this agreement. NOW, THEREFORE, THIS AGREEMENT WITNESSETH: In consideration of the premises and the re- spective agreements of the parties herein contained, it is hereby agreed by and between the parties as follows: Section 1. The city has contemporaneously with the delivery hereof deposited with the trustee the sum of $353,567.50 in cash (which, together with any securities in which any of said cash may be invested as hereinafter provided, and the proceeds of any such investment, are herein called "the trust fund"). The trustee acknowledges receipt of the said sum in cash and agrees to hold, handle and dispose of the trust fund in the manner herein provided. Section 2. The trustee is..hereby authorized and directed to hold the trust fund in trust and to apply the same solely for the following purposes and in the following manner: (a) The trustee shall apply moneys in the trust fund for payment at maturity of the prin- cipal and interest maturing with respect to the outstanding gas bonds on February 1, 1962, and shall on February 1, 1962 apply moneys in the trust fund for payment of the redemption price of the redeemable bonds, including interest that will become due thereon on February 1, 1962; all upon presentment and surrender of the appropriate bonds and coupons. r (b) Upon receipt of directions so to do set forth in a resolution adopted by the council, the trustee shall at any time and from time to time invest cash forming a part of the trust fund in securities that are direct general obligations of the United States of America, and that shall be designated in such resolution; provided, that any securities so designated must have stated maturities or be by their terms redeemable at the option of the holders prior to February 1, 1962, and must be acquired on such terms as will assure their being on deposit in the trust fund on February: 1, 1962, cash suffi- cient for payment of all principal and interest matur- ing on that date with respect to the outstanding 1950 bonds and for payment on that date of the redemption price of the redeemable bonds. The trustee shall take or causeto be taken all steps necessary to convert into cash prior to February 1, 1962, any securities in which any such investment may be made, and will receive all remittances that may be made with respect to any such securities by the United States of America. - 15 - (c) Upon receipt of directions so to do set forth in a resolution or resolutions adopted by the council, the trustee shall at any time and from time to time apply moneys in the trust fund for the purchase for retirement of all or any part of the outstanding gas bonds (including all unma- tured interest coupons applicable thereto), the numbers of which and the purchase price for which shall be d6vignated in such resolution; provided, that the purchase price for each of the outstanding gas bonds so purchased shall not exceed the face value thereof plus the interest accrued thereon to the date of such purchase and, with.:respect to the redeemable bonds only, a premium equal to twelve monthst interest thereon; and provided, further, that the trustee shall not make any such pur- chase unless the amount of cash and securities remain- ing in the trust fund after such purchase will be sufficient to pay all principal and interest maturing on February 1, 1962, with respect to those of the out- standing gas bonds that will remain outstanding after such purchase and to redeem on February 1, 1962, all of the redeemable bonds that will remain outstanding after such purchase. (d) In the event that following any in- vestment that may be made pursuant to paragraph (b) of this section, the trustee shall be directed to purchase for retirement any of the outstanding gas bonds, in accordance with the provisions of para- graph (c) of this section, and if cash shall be needed for such purpose, the trustee shall convert into cash such amounts of securities in the trust fund, as when added to the cash then in the trust fund, shall be sufficient to supply the cash requirement for such purchase; provided, that any securities shall be con- verted into cash for the purchase of any of the out- standing gas bonds only in compliance with the condi- tions set forth in the said paragraph (c) and only if such conversion into cash and purchase for retirement will not jeopardize in any way the retirement on February 1, 1962, of all of the outstanding ga& bonds that will remain outstanding after such purchase. Section 3. The city agrees that it will not repeal, revoke or amend its aforesaid resolution calling the redeemable bonds for redemption on February 1, 1962. In the event that any of the redeemable bonds should be registered in accordance with the provisions of paragraph (3) of Section 2 of Article IV of the 1950 gas indenture, the city hereby authorizes and directs the trustee, and hereby confers on it irrevocable powers, to cause a notice of the aforesaid call for redemption of the redeemable bonds to be forwarded by United States Registered Mail to the registered dwner of any bond that shall be so registered, at the address of such registered owner as such address shall appear on the registry books of the trus- tee pertaining to the registration of the outstanding gas bonds, such notice to be mailed not less than thirty days prior to February 1, 1962, and to be in substantially the following fo=: - 16 - NOTICE OF CALL OF BONDS FOR REDEMPTION _ Notice is hereby given that the City of Fairhope, a municipal corporation in the State of Alabama, has called for redemption and will redeem and pay on February 1, 1962, its First Mortgage Gas Revenue Bonds dated February 1, 1950, numbered 181 to 494, inclusive, and hav- ing stated maturities on February 1, 1963, and thereafter. The bonds so called for redemption constitute all bonds of the same issue that now remain outstanding except those having a stated maturity on February 1, 1962. Each bond so called for redemption will become due and pay- able on February 1, 1962, at a redemption price equal to the face value thereof plus accrued in- terest thereon on '' �) 71c...prVarY, _1, �1 62,: and a. premium equal to twelve months' interest on each bond redeemed computed at the coupon rate thereof. Each bond so called for redemption should be presented at the principal office of The Merchants National Bank of Mobile, in the City of Mobile, Alabama, and will cease to bear interest after February 1, 1962. CITY OF FAIRHOPE By Joe Schneider Its Mayor The trustee accepts the powers herein conferred on it by the city and agrees, in the event any of the redeemable bonds shall be registered as aforesaid, to cause the notice provided for in this section to be mailed to the registered owner of such bond.in accordance with the provisions of this section. Section 4. As any of the outstanding gas bonds and the interest coupons applicable thereto shall be paid, redeemed or purchased pursuant to the provisions hereof, they shall be canceled by perforation and shall not again be issued or refunded. Section 5. Promptly upon receipt of 'statemeAt therefor, the city will pay to the trustee the reasonable and customary charges of the trustee for its services here- under and will reimburse the trustee for all reasonably necessary expenses incurred hereunder. Section 6. Any moneys that remain in the trust fund after retirement of all the outstanding gas bonds and all interest coupons applicable thereto shall be forthwith returned by the trustee to the city. - 17 - Section 7. This agreement is made not only for the benefit of the city but also for the benefit of the holders at any time of any of the outstanding gas bonds, and the holders at any time of any of the Water, Gas and Sewer Revenue Bonds, Series 1961, of the city dated December 1, 1961. IN V1ITNESS WHEREOF, the parties have caused this agreement to be executed in five counterparts, each of which shall be deemed an original, and their respective seals to be hereunto affixed and attested by their duly authorized officers, and this agreement to be dated the day of , 1961. Attest: City Clerk Attest: Its CITY OF FAIRHIIE By Its ayor THE MERCHANTS NATIONAL BANK OF MOBILE i0 Its - 13 - 6 �.'Y e (2) Simultaneously with the delivery of the agreement authorized in the foregoing paragraph (1), the mayor of the city and the city treasurer are hereby author- ized and directed to deposit with said The Merchants National Bank of Mobile in the trust fund created in the said agree- ment the sum of $ a53,567_50, $347,455.00 of the sum to be so deposited, being an amount equal to the principal of the city's presently outstanding First Mortgage'Gas Revenue Bonds dated October 1, 1950 (herein called "the 1950 gas bonds"), and .the redempJt.igrn premium with respect to those of the 1950 gas bonds that have stated maturities after February 1, 1962, shall con- sist of a portion of, and shall be paid from, the proceeds from the sale of the Series 1961 bonds; and $6,112.50 of the sum so deposited, being an amount equal to the interest that will become due on February 1, 1962, with respect to the 1950 gas bonds, shall be paid out of the moneys on deposit in the Gas System Bond and Interest Redemption Fund created in Article V of the mortgage and deed of trust,b:7­.the city to The-rmerchants National Bank of Mobile dated as of February 1, 1950, whereunder the 1950 gas bonds were issued. Adopted and approved this llth day of December, 1961. Mayor Authenticated: City Cle k Councilman moved that the foregoing reso- lution be adopted, which motion, on being seconded by Council- . � man was put to vote and the following vote was recorded: Yeas: Mayor Achneider and Councilmen �tiry 0a f*1L �,� � Nays: . The mayor thereupon announced that the motion for adoption of said resolution had been unanimously carried and he then signed the resolution. There,being no further business to come before the meet- ing, the same was on motion duly made, seconded and adopted, adjourned until December 15, 1961, at 7:30 o'clock, P. M. Authenticated: Mayor City ClRrk - 19 -