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Res 1468-63 RESOLUTION NO. 1468 A RESOLUTION AUTHORIZING THE ISSUANCE OF $1,550,000 WATER AND SEWER REVENUE REFUND- ING BONDS AND PROVIDING FOR THE RIGHTS, REMEDIES AND SECURITY OF THE HOLDERS OF SAID WATER AND SEWER REVENUE REFUNDING BONDS. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DELRAY BEACH, FLORIDA: ARTICLE I STATUTORY AUTHORITY, FINDINGS AND DEFINITIONS 1.O1. AUTHORITY FOR THIS RESOLUTION. This resolution is adopted pursuant to the provisions of Cbmpter 18~, Florida Statutes, and other applicable provisions of law. 1.02o FINDINGS. It is hereby found and determined as follows: (A) That the City of Delray Beach now owns, operates and maintains a municipal water works plant and system for the supply and distribution of water within and without said City. (B) That the City has heretofore duly issued $1,378,000 Water Revenue Certificates, Series 1957, dated June l, 1957, payable from and secured by a first lien on and pledge of the net revenues derived from the operation of said waterworks plant and system pur- suant to an ordinance heretofore duly adopted on July 5, 1957; that as of now there are outstanding and unpaid $1,26~,000 of said Water Revenue Certificates, Series 1957, bearing interest at the rate of five and one-half per centum (5~ %) per annum on the certificates maturing in the years 196~ to 1968, inclusive, at the rate of four and one-half per centum (~ %) per annum on the certificates maturing in the years 1969 to 1988, inclusive, and at the rate of four and sixty-hundredths per centum (4.60%) per annum on the certificates maturing in the years 1989 to 1992, inclusive. (C) That all the outstanding Water Revenue Certificates, Series 1957, maturing in the years 1969 to 1992, inclusive, are redeem~ as a whole on June l, 1968 at the price of par and accrued interest to the date of redemption plus a premium of three per cent of the par value thereof. (D) That the City has heretofore duly issued $500,000 Water and Sewer Revenue Bonds, dated December l~ 1961, payable from and secured by a lien on and pledge of the net revenues derived from the operation of the waterworks plant and system pari passu with the lien thereon of said outstanding Water Revenue Certificates, Series 1957, and additionally secured by a lien on and pledge of the net ~venues derived from the operation of the sanitary sewer system of said City pursuant to a resolution hereto- fore duly adopted on November 6~ 1961; that as of now all of said $500~000 Water and Sewer Revenue Bonds are outstanding. (E) That the City has also heretofore duly issued $1,500,000 Water and Sewer Revenue Bonds, Series 1962, dated December l, 1962, payable from and secured by a lien on and pledge of the net revenues derived from the operation of the waterworks plant and system and the sanitary sewer system pari passu with said outstanding Water Revenue Certificates, Series 1957 and said outstanding Water and Sewer Revenue Bonds~ dated December l, 1961, pursuant to a resolution heretofore duly adopted on November 26th, 1962; that as of now all of said $1~500,000 Water and Sewer Revenue Bonds, Series 1962 are outstanding. (F) That it is deemed advisable and in the best economic interest of the City to provide funds sufficient to pay the interest on said outstanding Water Revenue Certificates, Series 1957 as the same becomes due on or prior to maturity or prior redemption of said certificates, to pay the maturing principal of said outstanding Water Revenue Certificates, Series 1957 which mature in the years 1964 to 1968, inclusive, and to pay the principal of and refund and refinance on June l, 1968~ said outstanding Water Revenue Certificates, Series 1957 which mature in the years 1969 to 1992~ inclusive. -2- (G) That pursuant to the provisions of Section 12 of the ordinance authorizing the outstanding Water Revenue Certificates, Series 1957 and Sections ll of each of said resolutions authorizing the issuance of the $500,000 Water and Sewer Revenue Bonds, dated December l, 1961, and the $1,500,000 Water and Sewer Revenue Bonds, Series 196~, dated December l, 196~, the City may issue obligations on a parity with said Water and Sewer Revenue Bonds, dated December l, 1961 and said Water and Sewer Revenue Bonds, Series 1962, dated December l, 1962 if certain conditions prescribed in said Sections are satisfied. (H) That said conditions have been met in that the average annual net revenues of the waterworks plant and system and the sanitary sewer system for the two completed fiscal years immediately preceding the issuance of the bonds herein authorized have been at least equal to one and one-half times the highest combined interest and principal requirements for any succeeding fiscal year on all obligations then outstanding payable from the revenues of the systems and on the bonds herein authorized to be issued. (I) That the principal of and interest on the Water and Sewer Revenue Refunding Bonds to be issued pursuant to this resolution and all the reserve, sinking fund and other payments provided for herein will be paid solely from the net revenues derived from the operation of the waterworks plant and system and the sanitary sewer system of the City and it will never be necessary or authorized to levy taxes on any real property in said City to pay the principal of and interest on the Water and Sewer Revenue Refunding Bonds to be issued pursuant to this resolution or to make any of the reserve, sinking fund or other payments provided in this resolution and the Water and Sewer Revenue Refunding Bonds herein auth~ized to be issued shall not constitute a lien upon the waterworks plant and system or the sanitary sewer system or upon any other property what- soever of or in the City of Delray Beach. -3- 1.03. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the bonds authorized to be issued hereunder by those who shall hold the same from time to time, this resolution shall be deemed to be and shall constitute a contract between the City of Delray Beach, Florida, and such bondholders, and the covenants and agreements herein set forth to be performed by said City shall be for the equal benefit, protection and security of the legal holders of any and all of such bonds and the coupons attached thereto, all of which shall be of equal rank and without preference, priority or distinction of any of the bonds or coupons over any other thereof except as expressly provided therein or herein. 1.04. DEFINITIONS. The following terms shall have the following meanings in this resolution unless the text otherwise expressly requires: (A) "City" shall mean the City of Delray Beach, Florida. (B) "Act" shall mean Chapter 159, Florida Statutes. (C) "Bonds" shall mean the $1,550,000 Water and Sewer Revenue Refunding Bonds authorized to be issued pursuant to this resolution, together with any pari passu additional bonds hereafter issued in the manner hereinafter provided, and the interest coupons attached to said bonds. (D) "Outstanding 1957 Certificates" shall mean the Water Revenue Certificates, Series 1957, of the City of Delray Beach, originally issued in the amount of $1,387,000, and now outstanding in the amount of $1,264,000, which are to be refunded from the pro- ceeds of the Bonds herein authorized. (E) "1961 Bonds" shall mean the Water and Sewer Revenue Bonds of the City of Delray Beach, dated December l, 1961, originally issued and now outstanding in the principal amount of $500,000. (F) "1962 Bonds" shall mean the Water and Sewer Revenue Bonds, Series 1962, dated December 1, 1962, originally issued and now outstanding in the principal amount of $1,500,000. (G) "Water Revenue Certificate Ordinance" shall mean the ordinance adopted by the City Council on July 5, 1957, authorizing the Water Revenue Certificates. (H) "1961 Bond Resolution" shall mean the resolution adopted by the City Council on November 6, 1961, authorizing the 1961 Bonds. (I) "1962 Bond Resolution" shall mean the resolution adopted by the City Council on November 26th , 1962, authorizing the 1962 Bonds. (J) "Parity Bonds" shall mean all obligations to be issued on a parity with the Bonds herein authorized in the manner herein- after provided. (K) "First Lien Obligations" shall mean the 1961 Bonds, the 1962 Bonds, the Bonds herein authorized and all obligations which may hereafter be issued on a parity with the 1961 Bonds, the 1962 Bonds, and the Bonds herein authorized. (L) "Holder of Bonds" or "Bondholder", or any similar term, shall mean any person who shall be the bearer or owner of any bond or bonds registered to bearer or not registered, or the registered owner of any outstanding bond or bonds which shall at the time be registered other than to bearer, or of any coupons representing interest accrued or to accrue on said bonds. (M) "Water System" shall mean the complete waterworks plant and system, within and without the City, now owned by the City, or hereafter constructed or acquired, including all improve- ments, extensions and additions thereto hereafter constructed or acquired, together with all lands or interest therein, plants, buildings, machinery, franchises, pipes, fixtures, equipment and all property, real or personal, tangible or intangible, now or -5- hereafter owned or used by said City i~ connection therewith. (N) "Sewer System" shall mean the complete sanitary sewer collection, treatment and disposal system of the City as it now exists and may hereafter be improved and extended consisting of all real and personal property of every nature owned by the City and used or~eful in the operation thereof whether within or without the City. (0) "Combined Public Utility" means the Water System and the Sewer System. (P) "Fiscal Year" shall mean the period commencing on October I to and including the next succeeding September 30. (Q) Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations. -6- ARTICLE ii AUTHORIZATION, TE~4S, EXECUTION AND REGISTRATION OF BONDS 2.01. AUTHORIZATION OF BONDS. Subject and pursuant to provisions of this resolution, obligations of the City of Delray Florida, to be known as "Water and Sewer Revenue Refunding are hereby authorized to be issued in the aggregate principal of not exceeding One Million Five Hundred Fifty Thousand ($1,550,000) for the purposes of refunding and refinancing Outstanding 1957 Certificates. 2.02. DESCRIPTION OF BONDS. The Bonds shall be dated 1, 1963; shall be in the denomination of $1,000 each or each as hereinafter determined; shall be numbered from one consecutively upwards in order of maturity; shall bear interest rate or rates not exceeding the legal rate, payable semi-annually 1 and December 1 of each year, and shall mature serially, numerical order, on June 1 of each year, in the years and amounts follows: Year Amount Year Amount 196 4 $50,000 1978 $50,000 1965 80,000 1979 50,000 1966 80,000 1980 55,000 1967 80,000 1981 55,000 1968 80,000 1982 55,000 1969 35,000 1983 60,000 1970 35,000 1984 60,000 1971 40,000 1985 65,000 1972 40,000 1986 65,000 1973 40,000 1987 70,000 1974 45,000 1988 70,000 1975 45,000 1989 75,000 1976 45,000 1990 75,000 1977 50,000 The Bonds maturing in the years 1974 to 1990, inclusive, redeemable prior to maturity, as a whole, or in part, in numerical order, at the option of the City on December 1, or on any interest payment date thereafter prior to maturity, redemption price of par and accrued interest to the date of redemption, plus the following premiums if called for redemption following times: -7- 4~ of the par value thereof if redeemed on or before December 1, 1976; 3~ of the par value thereof if redeemed there- after but on or before December 1, 1979; 2~ of the par value thereof if redeemed there- after but on or before December 1, 1982; 1~ of the par value thereof if redeemed there- after but on or before December 1, 1985, and Without premium if redeemed after December 1, 1985. A notice of such redemption shall be published at least once at least thirty (30) days prior to the date fixed for redemption in a financial newspaper or Journal published in the City of New York, New York. Interest shall cease on any of the Bonds duly called for redemption as provided above on the redemption date if payment thereof has been duly made or provided for. Said Bonds shall be issued in coupon form, shall be payable with respect to both principal and interest at The Chase Manhattan Bank, New York City, New York, in lawful money of the United States of America and shall bear interest from their date, payable in accord- ance with and upon surrender of the appurtenant interest coupons as they severally mature. 2.03. (A) EXECUTION OF BONDS AND COU?0NS. Said Bonds shall be executed in the name of the City by the Mayor, either manually or with his facsimile signature, and its corporate seal shall be affixed thereto or lithographed or reproduced thereon and attested by the City Clerk, either manually or with his facsimile signature; provided, however, that at least one of said signatures shall be a manual signature. In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer of the City before the Bonds so signed and sealed shall have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as herein pro¥ided and may be issued as if the person who -8- signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the City by such person as at the actual time of the execution of such Bond shall hold the proper office in the City, although at the date of such Bonds such person may not have held such office or may not have been so authorized. The coupons to be attached to the Bonds and the validation certificate on the Bonds shall be executed with the facsimile signa- ture of the present or any future Mayor and Clerk of said City, and the City may adopt and use for that purpose the facsimile signature of any person who shall have bean such Mayor or Clerk at any time on or after the date of the Bonds, notwithstanding that he may have ceased to be such Mayor or Clerk at the time when such Bonds shall be actually sold and delivered. The Bonds may be registered at the option of the holder as to principal only, or as to both principal and interest, at the office of the Treasurer of the City, such registration to be noted on the back of said Bonds in the space provided therefor. After such re- gistration as to principal only, or both principal and interest, no transfer of the Bonds shall be valid unless made at said office by the registered owner, or by his duly authorized agent or representative and similarly noted on the Bonds, but the Bonds may be discharged from registration by being in like manner transferred to bearer and thereupon transferability by delivery shall be restored. At the option of the holder the Bonds may thereafter again from time to time be registered or transferred to bearer as before. Such registration as to principal only shall not affect the negotiability of the coupons which shall continue to pass by delivery. (B) NEGOTIABILITYAND REGISTRATION. The Bonds shall be, and have all the qualities and incidents of negotiable instruments under the law merchant and the Negotiable Instruments Law of the State of Florida, and each successive holder, in accepting any of said Bonds -9- or the coupons appertaining thereto, shall be conclusively deemed to have agreed that such Bonds shall be, and have all of the qualities and incidents of negotiable instruments under the law merchant and the Negotiable Instruments Law of the State of Florida, and each successive holder shall be conclusively deemed to have agreed that said Bonds shall be incontestable in the hands of a bona fide holder for value in the manner provided hereinafter in the form of said Bonds. 2.04. BONDS MUTILATED, DESTROY~D, STOLEN OR LOST. In case any Bond shall become mutilated or be destroyed, stolen or lost, the City may in its discretion issue and deliver a new Bond with all un- matured coupons, if any, so mutilated, destroyed, stolen or lost in exchange and substitution for such mutilated Bond, upon surrender and cancellation of such mutilated Bond and attached coupons, if any, or in lieu of and substitution for the Bond and attached coupons, if any, destroyed, stolen or lost, and upon the holder furnishing the City proof of his ownership thereof and satisfactory indemnity and comply- ing with such other reasonable regulations and conditions as the City may prescribe and paying such expenses as the City may incur. Ail Bonds and coupons so surrendered shall be cancelled by the Clerk and held for the account of the City. If any such Bond or coupon shall have matured or be about to mature, instead of issuing a substituted Bond or coupon, the City may pay the same, upon being indemnified as aforesaid, and if such Bond or coupon be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds and coupons issued pursuant to this section shall constitute original, additional contractual obligations on the part of the City, whether or not the lost, stolen or destroyed bonds or coupons be at any time found by anyone, and such duplicate Bonds and coupons shall be entitled to equal and proportionate benefits and rights as to lien and source and security for payment from the -10- revenues of the Water System and Sewer System pledged herein, with all other Bonds and coupons issued hereunder. 2.05. FORM OF BONDS AND COUPONS. The text of the Bonds and coupons, shall be of substantially the following tenor, with such omissions, insertions and variations as may be necessary and desirable and authorized or permitted by this resolution or any subsequent resolution or ordinance adopted prior to the issuance thereof: -11- No. UNITED STATES 0P AMERICA $ STATE 0P FLORIDA COUNTY 0F PALM BEACH CITY OF DELRAY BEACH WATER AND SEWER I%EVENUE REFUNDING BOND Yd~0W ~I.!. MEN BY THESE PRES~TS that the City of Delray Beach, in Palm Beach County, Florida, for value received, hereby promises to pay to the bearer, or if this bond be registered, to the registered holder as herein provided, on the first day of June, 19 , from the revenues hereinafter mentioned, the principal sum of THOUSAND DOLLARS with interest thereon at the rate of per centum per annum, payable semi-annually on the first day of June and the first day of December of each year upon the presentation and surrender of the annexed coupons as they severally fall due. Both principal of and interest on this bond are payable at the principal office of The Chase Manhattan Bank, New York City, New York, in lawful money of the United States of America. The bonds of the issue of which this bond is one, maturing in the years 1974 to 1990, both inclusive, are redeemable prior to their stated dates of maturity, as a whole, or in part, in inverse numerical order at the option of the City on December l, 1973 or on any interest payment date thereafter prior to maturity, at a redemp- tion price of par and accrued interest to the date of redemption, plus the following premiums if called for redemption at the follow- ing times: 4% of the par value thereof if redeemed on or before December l, 1976; 3~ of the par value thereof if redeemed thereafter but on or before December l, 1979; 2% of the par value thereof if redeemed thereafter but on or before December l, 1982; 1% of the par value thereof if redeemed thereafter but on or before December l, 1935, and without premium if redeemed after December l, 1985. A notice of any such redemption shall be published at least once at least thi~rty (30) days prior to the date fixed for redemp- tion in a financial newspaper or journal published in the City of New York, New York. Interest shall cease on any of the bonds duly called for redemption as provided above on the redemption date if payment thereof has been duly made or provided for. This bond is one of an authorized issue of bonds in the aggregate principal amount of not exceeding $1,550,000 of like date, tenor and effect, except as to number and date of maturity, issued to provide for the payment, refunding and refinancing of certain outstanding certificates of said City, under the authority of and in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 154, Florida Statutes, and other applicable provisions of law, and a resolution duly adopted by the City Council of the City of Delray Beach on , 1965 (hereinafter called "resolution"), and is subject to all the tems and conditions of said resolution. This bond and the coupons appertaining thereto are payable solely from and, together with certain Water and Sewer Revenue Bonds, dated December 1, 1961, and certain Water and Sewer Revenue Bonds, Series 1962, dated December 1, 1962, of said City and such obliga- tions as may hereafter be issued on a parity therewith, secured by a lien upon and pledge of the net revenues derived from the operation of the waterworks plant and system and sewer system of the City of Delray Beach all in the manner provided in the resolution. This bond does not constitute an indebtedness of the City of Delray Beach ~ithin the meaning of any constitutional, statutory or charter pro- ¥ision or limitation, and it Ks expressly agreed by the holder of this bond and the coupons appertaining thereto that such holder shall never have the right to require or compel the exercise of the ad valorem taxing power of said City for the payment of the principal of and interest on this bond or the making of any sinking fund, -13- reserve or other payments provided for in the resolution. It is further agreed between the City of Delray Beach and the holder of this bond that this bond and the obligation evidenced thereby shall not constitute a lien upon the City's waterworks plant and system and its sewer system, or any part thereof, or on any other property of or in the City of Delray Beach, but shall constitute a lien only on the net revenues derived from the operation of said systems, in the manner provided in the resolution. The City, in the resolution, has covenanted and agreed with the holders of the bonds of this issue to fix and establish and main- tain such rates and collect such fees, rentals or other charges for the services and facilities of said waterworks plant and system and said sewer system, and to revise the same from time to time whenever necessary, as will always provide funds sufficient to pay, and out of said revenues to pay, as the same mature and become due, the principal of and interest on said bonds, and all other obligations ranking on a parity therewith, all reserve or sinking funds or other payments provided for in the resolution, the necessary expenses of operating and maintaining said systems, and all other obligations payable out of the revenues of said waterworks plant and system and said sewer system, and that such rates, fees, rentals or other charges shall not be reduced so as to be insufficient to provide adequate funds for such purposes; and said City has entered into certain further covenants with the holders of the bonds of the issue of which this bond is one, for the ~act terms of which reference is made to the resolution. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this bond, exist, have happened and have been performed in regular and due form and time as required by the Laws and Constitution of the State of Florida applicable thereto, and that the issuance of this bond and the issue of bonds of which this bond is one, does not violate any constitutional, statutory or charter debt limitations or provisions. This bond and the coupons appertaining hereto, is, and has all the qualities and incidents of, a negotiable instrument under the law merchant and the Negotiable Instruments Law of the State of Florida, and the original holder and each successive holder of this bond, or of the coupons appertaining hereto, shall be conclusively deemed by his acceptance hereof to have agreed that this bond, and the coupons appertaining hereto, shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Negotiable Instruments Law of the State of Florida. The original holder and each successive holder of this bond, and of the coupons appertaining hereto, shall be conclusively deemed to have agreed and consented to the fol- lowing terms and conditions: (a) Title to this bond, unless registered as herein pro- vided, and to the annexed interest coupons, may be transferred by delivery in the manner provided for negotiable instruments payable to bearer in the law merchant and the Netobiable Instr%~ents Law of the State of Florida; (b) Any person in possession of this bond, unless regis- tered as herein provided, or of the interest coupons hereunto appertaining, regardless of the manner in which he shall have acquired possession, is hereby authorized to represent himself as the absolute owner hereof, and is hereby granted power to transfer absolute title hereto by delivery hereof to a bona fide purchaser,that is, to any one who shall purchase the same for value (present or antecedent) without notice of prior defenses or equities or claims of ownership enforceable against his transferror; every prior taker or owner of this bond, unless registered as herein provided, and of the interest coupons appertaining hereto, waives and renounces all of his equities -15- and rights herein in favor of every such bona fide purchaser, and every such bona fide purchaser shall acquire absolute title hereto and to all rights represented hereby; and (c) The City of Delray Beach, Florida, may treat the bearer of this bond, unless registered as herein provided, and of the interest coupons hereunto appertaining, as the absolute owner hereof for all purposes without being affected by any notice to the contrary. This bond may be registered as to principal only, or as to both principal and interest, in accordance with the provisions endorsed hereon. IN WITNESS WHEREOF said City of Delray Beach, Florida, has issued this bond and has caused the same to be executed by the manual or facsimile signature of its Mayor and the corporate seal of said City to be affixed hereto or lithographed or reproduced hereon, and attested by the manual or facsimile signature of the City Clerk of said City, and has caused the interest coupons hereto attached to be executed with the facsimile signatures of said Mayor and said City Clerk, all as of the first day of December, 1963. CITY OF DELRAY BEACH, FLORIDA Mayor Attest: -16- (FORM OF COUPON) $ On the day of , 19 , the City of Delray Beach, Florida, will pay to the bearer at the principal office of The Chase Manhattan Bank, New York City, New York, in lawful money of the United States of America from the revenues described in the bond to which this coupon is attached, the sum of Dollars ($ ), upon presentation and surrender of this coupon, being interest then due on its Water and Sewer Revenue Refunding Bond, dated December 1, 1963, No. . CITY OF DELRAY BEACH, FLORIDA By Attest: Mayor C'it~ 'Cle~ (To be inserted in coupons maturing after callable date on callable bonds - "unless the bond to which this coupon appertains has been previously called for prior redemption and payraent thereof duly made or provided for".) (Form of Validation Certificate) This bond is one of a series of bonds which were validated and confirmed by decree of the Circuit Court of the Fifteenth Judicial Circuit of the State of Florida, in and for Palm Beach County, rendered on the day of , 1963. City C"lerk,-City'""~of De~ray Beach, F~lorid~ Mayor, City of Delray Beach, Florida -17- PROVISION FOR REGISTRATION This bond may be registered in the name of the holder on the books to be kept by the City Clerk, as Registrar, or such other Registrar as may hereafter be duly appointed, as to principal only, such registration being noted hereon by such Registrar, in the registration blank below, after which no transfer shall be valid un- less made on said books by the registered holder or attorney duly authorized and similarly noted in the registration blank below, but it may be discharged from registration by being transferred to bearer, after which it shall be transferable by delivery, but it may be again registered as before. The registration of this bond as to principal shall not restrain the negotiability of the coupons'by delivery merely, but the coupons may be surrendered and the interest made payable only to the registered holder, in which event the Registrar shall note in the registration blank below that this bond is registered as to interest as well as principal, and thereafter the interest will be remitted by mail to the registered holder. With the consent of the holder and of the City of Delray Beach, this bond, when converted into a bond registered as to both principal and interest, may be reconverted into a coupon bond and again converted into a bond registered as to both principal and interest as hereinabove provided. Upon reconversion of this bond, when registered as to principal and interest, into a coupon bond, coupons representing the interest to accrue upon the bond to date of maturity shall be attached hereto by the Registrar and the Registrar shall note in the registration blank below whether the bond is registered as to principal only or payable to bearer. DATE OF IN WHOSE N~E MANNER OF SIGNATURE OF REGISTRATION REGISTERED REGISTRATION REGISTRAR -18- ARTIC ~I~ Iit APPLICATION OF BOND PROCEEDS 3.01. APPLICATION OF BOND PROCEEDS. The proceeds, includ- ing accrued interest, if any, received from the sale of the Water and Sewer Revenue Refunding Bonds issued under the provisions of this resolu- tion (herein referred to as "Bond Proceeds") shall be applied by the City forthwith upon the delivery of and payment for said Water and Sewer Revenue Refunding Bonds as follows: (A) From said Bond Proceeds, an amount equal to the accrued interest received from the sale of the Water and Sewer Revenue Refunding Bonds herein authorized shall be deposited in the Bond Fund hereinafter referred to in this resolution. (B) From said Bond Proceeds, an amount sufficient to pay the principal of and interest on said Outstanding 1957 Certificates as the same mature and become due to and including June l, 1968 and to pay, on June l, 1968, the principal of and redemption premium on said Outstanding 1957 Certificates which mature after June 1, 1968, shall next be deposited in a trust fund herein designated as the Outstanding Certificates Redemp- tion Fund to be held by The Chase Manhattan Bank (hereinafter called "Escrow Bank"), under the Escrow Deposit Agreement hereinafter referred to between the City and said Escrow Bank. (C) The balance of said proceeds shall be applied to the payment of administrative, legal and fiscal expenses incurred in connec- tion with the issuance of the Bonds herein authorized. The deposit of said moneys in the Outstanding Certificates Redemption Fund shall be and constitute an irrevocable deposit of said moneys in trust for the sole purpose of providing for the payment of the principal of and interest on said Outstanding 1957 Certificates as the same mature and become due to and including June l, 1968 and payment, on June l, 1968, of the principal of and redemption premium on said Outstand- ing 1957 Certificates which mature after June l, 1968. Said moneys shall be deposited irrevocably in trust with the Escrow Bank under an Escrow Deposit Agreement to be hereafter entered into by and between the City and the Escrow Bank and the Mayor and City Clerk are hereby authorized to enter into said Escrow Deposit Agreement for and on behalf of the City. Said Escrow Deposit Agree- ment shall provide that said Escrow Bank shall promptly after the -19- delivery of the Water and Sewer Revenue Refunding Bonds herein au- thorized publish a notice in the name of the City calling the Out- standing 1957 Certificates which mature after June l, 1968 for prior redemption on June l, 1968 and that said Escrow Bank shall again publish said notice at least once not more than sixty (60) days and not less than thirty (30) days prior to the date of redemption, both such publications to be made in a financial paper published in the City of New York, New York. All of the moneys in the Outstanding Certificates Redemp- tion Fund shall be invested by the Escrow Bank in direct obligations of the United States of America which shall mature or shall be liquidated by the Escrow Bank not later than the dates upon which such moneys will be needed to pay the principal of and interest on the Outstanding 1957 Certificates as the same mature and become due to and including June 1, 1968 and to pay, on June 1, 1968, the principal of and redemption premium on the Outstanding 1957 Certificates which mature after June 1, 1968; provided, however, that all interest income or profits on said investments realized in cash shall be trans- ferred by the Escrow Bank to the City for deposit into the Bond Fund hereinafter referred to, within ten (10) days of receipt of such interest income or profits. (D) Any moneys remaining in the Outstanding Certificates Redemption Fund after the final payment of all principal of and interest and redemption premiums on the Outstanding 1957 Certificates on the maturity or prior redemption thereof or the reservation in the Outstanding Certificates Redemption Fund of sufficient funds for such purposes shall be returned by the Escrow Bank to the City for deposit (1) in the Bond Fund hereinafter referred to, to the extent necessary to make the sum on deposit therein equal to the maximum amount required to be on deposit therein and (2) the balance, if any, to the Renewal and RePlacement Fund hereinafter mentioned. -20- ARTICLE IV COVENANTS, SPECIAL FUNDS AND APPLICATION THEREOF 4.01. BONDS NOT TO BE INDEBTEDNESS OF THE CITY. Neither the Water and Sewer Revenue Refunding Bonds nor coupons shall be or constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter debt limitation but shall be payable solely from the net revenues derived from the operation of said Water System and Sewer System as herein provided. No holder or holders of any bond issued hereunder, or of any coupon appertain- ing thereto, shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or taxation in any form of any real property therein to pay said bonds or the interest thereon. 4.02. BONDS SECURED BY PLEDGE OF REVENUES. The payment of the debt service on all of the Water and Sewer Revenue Refunding Bonds issued hereunder shall be secured forthwith equally and ratably by a lien on and pledge of the net revenues derived from the operation of the Water System and Sewer System, pari passu with the lien on said net revenues with the holders of said 1961 Bonds and said 1962 Bonds. The net revenues derived from said Water System and said Sewer System, in an amount sufficient to pay the principal of and interest on the bonds herein authorized and said 1961 Bonds and said 1962 Bonds, and to make payments into the reserve and sinking funds and all other payments provided for in this resolution, are hereby irrevocably pledged to the payment of the principal of and interest on the bonds authorized herein, and other payments provided for herein, as the same become due. 4.03. COVENANTS OF THE CITY. So long as any of the principal of or interest on the Bonds shall be outstanding and un- paid, or until there shall have been set aside in the Bond Fund herein established, including the reserve therein, a sum sufficient to pay, when due, the entire principal of the Bonds remaining unpaid, -21- together with interest accrued and to accrue thereon, the City covenants with the holders of any and all of the Bonds issued pursuant to this resolution as follows: (A) WATER REVENUE FUND AND S~ER REVENUE FUND. That from and after the issuance of any of the Bonds herein authorized the Combined Public Utility shall continue to be operated on the basis~ of a Fiscal Year as defined in Section 1.04 (P) hereof. On that basis, so long as any of the 1961 Bonds are outstanding, all income and revenues of every nature derived from the operation of the Water System shall be set aside into the Revenue Fund created by Section 7 of the Water Revenue Certificate Ordinance (hereinafter sometimes called the "Water Revenue Fund"), and all income and revenues of every nature derived from the operation of the Sewer System shall be set aside into the Sewer Revenue Fund created by Section 7 of the 1961 Bond Resolution; provided, however, that after retirement of all of said 1961 Bonds, all revenues of the Combined Public Utility may be set aside into a separate and special fund to be known as the "Water and Sewer Revenue Fund" to be held by the Delray Beach National Bank of Delray Beach, Florida, or such other bank or banks as may be designated from time to time by the Council of the City of Delray Beach. Any such bank must be a member of the Federal Deposit Insurance Corporation and all such funds so deposited must be secured as required for municipal funds under the laws of the State of Florida. Such fund or funds shall be held by the said bank or banks in accounts separate from all other city accounts, to be paid out only for the purposes and under the circumstances herein provided. (B) DISPOSITION OF WATER AND SEWER REVENUES. That all revenues at any time remaining on deposit in the Water Revenue Fund and the Sewer Revenue Fund or the Water and Sewer Revenue Fund shall be disposed of only in the following manner and order of priority: (1) There shall first be paid from the money in the Water Revenue Fund and the Sewer Revenue Fund or the Water and Sewer Revenue -22- Fund into a fund, to be held by a bank selected by the City, k~own as the Operation and Maintenance Fund, from time to time as needed, money sufficient to pay the reasonable and necessary expenses of operating and maintaining the Combined Public Utility. Said expenses are hereby defined as those expenses reasonably incurred in the normal operation of the Combined Public Utility and do not include the cost of additions, extensions or other capital improvements, nor any allowance for depreciation of capital assets. Money in the Operation and Maintenance Fund shall be expended as needed by the City for such expenses of operating and maintaining the Combined Public Utility, but to the extent required by the rights of the holders of the outstanding 1961 Bonds, payments for operating and maintaining each system shall be made only from the revenues of that system. Joint expenses shall be equitably allotted between the two system as the Council may detern~tne. (2) From the money in the Water Revenue Fund and the Sewer Revenue Fund or the Water and Sewer Revenue Fund remaining after the aforementioned payments into the Operation and Maintenance Fund, there shall be paid into the Bond Fund created by the Water Revenue Certificate Ordinance such amount of the gross revenues of the Combined Public Utility in each Fiscal Year as will be fully sufficient to pay all principal of and interest on all First Lien Obligations falling due in such fiscal year and to accumulate and maintain the reserve therein as hereinafter required. The Bonds herein author- ized shall be payable from said Bond Fund as to principal and interest on a parity with said 1961 Bonds and said 1962 Bonds and there shall be paid into the Bond Fund all accrued interest received from the purchaser upon delivery of the bonds. Ail payments into the Bond Fund shall be made monthly, on or before the fifteenth day of each month, as herein provided by the Treasurer to the First National Bank of Delray Beach, Delray Beach, Florida, and shall be held by said bank as a trust account solely for the purpose of paying principal of and interest and re- demption premiums on all First Lien Obligations. The Bond Fund, including the reserve, shall be continually secured to the fullest extent permitted or required by the banking laws of the State of Florida for the securing of public funds, and shall be irrevocable and not withdrawable by anyone for any purpose other than for the payment of principal of and interest and redemption premiums on obligations payable therefrom. It shall be the duty of said bank on May 15 and November 15 of each year to transmit from the money in said fund to the paying agent bank such amount as may be needed for the payment of interest, or principal and interest, falling due on the next succeeding June 1 or December 1, as the case may be. (5) In addition to the amounts above required to be paid into the Bond Fund there shall be paid into the reserve portion of said fund such amount in each Fiscal Year as will cause the reserve to be built up, in a period of sixty months to an amount equal to the largest amount of principal and interest which will be payable from the Bond Fund in any future year, except the years 1964 to 1968, inclusive. The reserve comprising such surplus shall be maintained for the purpose of paying principal and interest payable from the Bond Fund falling due in any year as to which there would otherwise be default. If at any time it is necessary to use moneys in said reserve for the payment of interest or principal, the moneys so used shall be replaced from the first revenues thereafter received from the operation of either system not required to be used for maintenance and operation expenses and for the payment of current principal and interest, it being the intention hereof that there shall be maintained in the Bond Fund, in addition to the amount required for payments during the current Fiscal Year, an amount sufficient to pay the largest amount of principal and interest payable from the Bond Fund in any future twelve monthst period as aforesaid. The money in the reserve may, in the discretion of the Council, be invested in direct obligations of the United States of America, in which event the obligations so acquired shall be held to the cred~t of the Bond Fund, and in the event the money in the reserve which has been so invested shall be needed for the payment of principal or interest, the bank holding the Bond Fund shall, without specific instructions from the City, liquidate as many of the obligations so held as may be necessary and have the proceeds of such liquida- tion applied to t~e payment of principal and interest. (4) In addition to the amounts above required to be paid into the Bond Fund, there shall be paid in each Fiscal Year into the Renewal and Replacement Fund created by the Water Revenue Certificate Ordinance, whenever and to the extent necessary to accumulate and maintain said fund in the amount of $50,000, a sum equivalent to five per cent of the gross revenues derived from the operation of both systems in the preceding Fiscal Year. Money in said fund shall be used to pay the cost of making renewals, extensions, replacements or improvements to the Water System and to the Sewer System when the making thereof has been recommended by the engineer who is at the time serving as the consulting engineer for said systems. Money in said fund shall also be used for the purpose of paying principal or interest, or both, payable from the Bond Fund falling due in any year for the payment of which there is not money in the Bond Fund, including the reserve therein, and as to which there would otherwise be default. The money in the Renewal and Replacement Fund may, in the discretion of the Council, be invested in direct obligations of the United States of America maturing not later than five years from date of purchase, in which event the obligations so acquired shall be held to the credit of said fund. In the event money so invested is needed for the purposes for which the fund is herein created such investment shall be liquidated to the extent necessary. Interest on and profits derived from the sale of invest- ments shall be added to the fund from which said investments were -25- made. When the amount in the Bond Fund, including the reserve, and in the Renewal and Replacement Fund shall in the aggregate be equal to the amount of all principal and interest to maturity or all principal and interest to the next redemption date plus redemption premiums then applicable on all First Lien Obligations outstanding, further payments into said ftunds may be discontinued, and the money in said funds shall be used for retirement or redemption of such outstanding obligations. Ail money remaining in the Water Revenue Fund and the Sewer Revenue Fund or the Water and Sewer Revenue Fund in each month in which all installments due during that month and all previous months (assuming equal monthly installments of payments required to be made annually) have been paid may be used to pay the cost of improvements and extensions to the Combined Public Utility, to pay principal of and interest and redemption premiums on junior lien obligations issued for such purpose, to retire First Lien Obligations prior to maturity either through call for redemption or purchase on the open market at a price no higher than that at which the same First Lien Obligations may be called for redemption on the next available redemption date, or for any other lawful purpose. Ail moneys on deposit in the Bond Fund as a reserve for the Outstanding 1957 Certificates shall remain on deposit in said Bond Fund and shall be used only for the purposes provided herein for such reserve. (C) INSURANCE. That so long as any of the Bonds herein authorized remain outstanding, the City will maintain and carry, for the benefit of the holders of the Bonds insurance on the -26- physical properties of the Combined Public Utility of the kinds and in the amounts normally carried by private companies engaged in the operation of similar properties. The City will also carry adequate public liability insurance. Ail moneys received for losses under any such insurance policies, except public liability policies, are hereby pledged by the City of Delray Beach as security for the obligations payable from the revenues of the damaged property until and unless such proceeds are paid out in making good the loss or damage in respect of which such proceeds are received, either by repairing the property damaged or,placing the property destroyed, and adequate provisions for making good such loss and damage made within ninety days from the date of the loss. The payment of premiums for all insurance policies required under the provisions of this section shall be considered to be maintenance and operation expenses. (D) BOOKS AND RECORDS. That the City covenants and agrees that so long as any of the First Lien Obligations remain outstanding proper books of record and account will be kept by the City, separate and apart from all other records and accounts, showing complete and correct entries of all transactions relating to the Water System and the Sewer System, and that the holders of any of the First Lien Obligations, or any duly authorized agent or agents of such holders, shall have the right at all reasonable times to inspect all records, accounts and data relating thereto and to inspect the systems and all properties comprising the systems. The City further agrees that it will within sixty days following the close'of each Fiscal Year cause an audit of such books and accounts to be made by an inde- pendent firm of certified public accountants, showing the receipts -27- and disbursements for account of each system, and that such audit will be available for inspection by the holder of any of the first lien obligations. Each such audit in addition to whatever matters may be thought proper by the accountant to be included therein, shall include the following: 1. A statement in detail of the income and expenditures of each system for such fiscal year. 2. A balance sheet as of the end of such Fiscal Year. ~. The accountant's comment regarding the manner in which and extent to which the City has carried out the requirements of this resolution, the Water Revenue Certificate Ordinance, the 1961 Resolution and the 1962 Resolution and the accountant's recon~nendation for any change or improvement in the operation of either system. 4. A list of the insurance policies in force at the end of the fiscal year, setting out as to each policy the amount of the policy, the risks covered, the name of the insurer and the expiration date of the policy. 5. The number of metered water customers, the number of unmetered water customers, if any, the number of hydrants con- nected to the Water System, and the number of applications for water service on hand existing at the end of the year. 6. The number of gallons of water shown to have passed through the master meter of the City during such Fiscal Year, the number of gallons of water billed, the estimated nu~aber of gallons of water used for flushing mains and for extinguishing fires, and the number of gallons of water unaccounted for. 7. The number of properties connected to the Sewer System at the end of the Fiscal Year and the number of properties to which sewer service is available and which are not connected to said system at the end of the Fiscal Year. 8. The number of applications for sewer service on hand at the end of the year and the number of applications for such -28- service received during such Fiscal Year. 9. A statement showing the balances existing at the beginning and end of the fiscal year in the Bond Fund, including the reserve therein, together with all deposits and withdrawals made during said Fiscal Year and the monthly deposit requirements for each such fund during the next succeeding Fiscal Year. 10. The total billings for such Fiscal Year and the average monthly billing per customer. 11. Ail schedules of rates and charges imposed for water and sewer service during the Fiscal Year. The City agrees to furnish a copy of each such audit to the holder of any of the First Lien Obligations at his request after the close of each Fiscal Year, and that any such holder shall have the right to discuss with the accountant making the audit the contents of the audit and to ask for such additional information as he may reasonably require. The City further agrees that it will furnish the original purchaser of the Bonds and all parity bonds and any holder, upon request, monthly operating reports of both systems in reasonable detail, and that it will mail each such report to the last lmaown address of such purchaser or holder not later than fifteen days after the close of the month covered thereby. (E) RATES. That the City of Delray Beach covenants and agrees with the holder or holders of any of said First Lien Obliga- tions that it will faithfully and punctually perform all duties with respect to each system required by the laws of the State of Florida, and that it will fix and collect sufficient rates and charges for water and sewer services furnished by the Combined Public Utility and will segregate and apply the income derived therefrom in the manner provided by this resolution so that said revenues will at all times be fully sufficient to operate and maintain the Combined Public Utility and to pay principal of and interest on said First -29- Lien Obligations promptly as each falls due and to make available for purposes junior in priority to current principal and interest requirements of all First Lien Obligations an amount at least equal to twenty-five per cent of such requirements. The City of Delray Beach further irrevocably covenants, binds and obligates itself not to sell, lease, encumber or dispose of either system or any substan- tial part thereof until all of the First Lien Obligations have been paid in full as to both principal and interest, and further covenants and agrees with the holders of said First Lien Obligations to maintain said Corabined Public Utility in good condition and to maintain a contin~ous and sufficient supply of water for distribution by the Water System. The City further covenants and agrees that every officer, agent or employee of the City having custody or control of any of the moneys derived from the operation of the Combined Public Utility shall be bonded by a responsible corporate surety in an amount not less than the greatest amount reasonably anticipated to be within the custody or control of such officer, agent or employee at one time. The premiums on such surety bonds shall be paid by the City as reasonable and necessary expense of operation. (F) BILLS. That the City agrees to submit unit bills for water and sewer service to each person or firm liable for the payment of water and sewer charges and not to accept payment for one type of service only. If any water user shall become delinquent for more than sixty days in the payment of water or sewer charges, or both, the City will promptly shut off the supply of water to such user and will not resume such supply until all delinquent charges and penalties, including a reconnection charge of not less than $1.50, have been paid. A user shall be deemed delinquent if he has not paid the full amount of any bill within thirty days after it shall have been mailed to him. -30- (G) ISSUANCE OF PARI PASSU OBLIGATIONS. That all first lien obligations shall enjoy complete parity of lien on the revenues of each system despite the fact that any of said obligations may be delivered at an earlier date than any other of said obligations. The City of Delray Beach expressly covenants and agrees that it will issue no other bonds or obligations of any kind or nature payable from or enjoying a lien on the revenues of either system prior to or on a parity with the Bonds herein authorized. The provisions of the above paragraph are subject to the exception that if prior to the payment of the Bonds herein author- ized, it shall be found desirable to refund any First Li~n Obligation, said obligations or any part thereof may be refunded with the consent of the holders thereof (except that as to matured obligations or obligations which have been properly called for redemption, such consent shall not be necessary) and the refunding obligations so issued shall enjoy complete equality of lien with the portion of the obligations which is not refunded, if any there be, and the refund- ing obligations shall ~o~tinue to enjoy whatever priority of lien over subsequent issues may have been enjoyed by the obligations refunded, provided, however, that if only a portion of the outstand- ing First Lien Obligations is so refunded, no refunding obligation may bear interest at a rate higher or mature at a date earlier than the obligation refunded thereby without the consent of the holders of the unrefunded portion of said First Lien Obligations. The provisions of the second above paragraph are subject to the further exception that the City may issue additional obliga- tions on a parity with the 1961 Bonds, the 1962 Bonds and the Bonds herein authorized upon compliance with all terms and conditions set out for the issuance of such parity obligations in Section 12 of the Water Revenue Certificate Ordinance. -31- Upon retirement of all 1961 Bonds, such additional obliga- tions may be issued if all the following conditions are met: (a) The average annual net revenues of the Combined Public Utility for the two completed Fiscal Years immediately preceding the issuance of the additional obligations must have been equal to one and one-half times the highest combined interest and principal requirements for any succeeding Fiscal Year on all First Lien Obliga- tions then outstanding and on the obligations so proposed to be issued. "Net revenues" for the purposes of this paragraph and the other paragraphs of this section shall be understood to refer to the gross revenues of the combined public utility remaining after there have been deducted therefrom the reasonable expenses of operat- ing and maintaining the Combined Public Utility. If during the aforesaid two completed Fiscal Years rates imposed for services furnished by all or any part of said Combined Public Utility shall have been increased the engineer who is serving as the consulting engineer for the Combined Public Utility may determine the additional net revenues resulting from such rate increase for the period it shall have been in effect and may add to the net revenues determined as above prescribed seventy-five per cent (755) of the additional net revenues which in his opinion, based on such determination, would have been derived from the operation of the Combined Public Utility during the part of said two completed Fiscal Years prior to the making of such rate increase, had such increase been in effect during such part of said two completed Fiscal Years. If the average annual net revenues of the Combined Public Utility for the two completed Fiscal Years immediately preceding the issuance of the additional obligations, adjusted as above provided, shall have been equal to one and one-fifth times the highest combined interest and principal requirements for any succeeding Fiscal Year of all First Lien Obligations then outstanding and the obligations so proposed to be issued, there may also be added to the net revenues -32- of the Combined Public Utility for the two completed Fiscal Years in~ediately preceding, for purposes of the above computation, seventy- five per cent (75~) of the additional net revenues estimated by the aforesaid engineer to be received by reason of the operation of such additional facilities during the first two completed Fiscal Years following the placing in operation of the additional facilities to be acquired with the proceeds of such additional obligations. If there shall be pledged to the payment of such additional obligations revenues to be derived by the City from the imposition of a utilities service tax on the sale or purchase of utility services in the City (other than the sale or purchase of water or water services) there may also be added to the net revenues of the Combined Public Utility for the two completed Fiscal Years immediately preceding the issuance of the additional obligations for the purposes of the second above paragraph the net revenues derived by the City from the proceeds of such utilities service tax during said two Fiscal Years. If only a part of such utilities service tax proceeds is so pledged, then there may be added to the aforesaid net revenues the net revenues derived by the City from the proceeds of the part of said utilities service tax during said two Fiscal Years which is to be so pledged to the payment of such additional obligations. (b) The payments required to be made into the Bond Fund including the reserve therein must be current. (c) The additional obligations must be payable as to principal on June 1 of each year in which principal falls due and must be payable as to interest on June 1 and December 1 of each year. (d) The proceeds of the additional obligations must be used solely for the making of improvements, extensions, renewals, replacements or repairs to the Combined Public Utility or refunding any junior lien obligations hereafter issued for any such purpose or refunding any or all of the $1,100,000 Utilities Tax Revenue Certificates, Series 1962, which the City has issued for paying the cost of certain improvements to the Sewer System. -33- It is hereby declared that the foregoing conditions show the intention of the corresponding provisions of the Water Revenue Certificate Ordinance, the 1961 Bond Resolution and the 1962 Bond Resolution and, to the extent not in conflict with the rights of the holders of the 1961 Bonds and the 1962 Bonds, said provisions shall hereafter be so interpreted. (H) NO COMPETING FRANCHISE AND RELATED COVENANTS. That so far as it legally may, the City of Delray Beach covenants and agrees for the protection and security of the First Lien Obligations: (a) That it will not grant a franchise to any competing Water System or Sewer System to operate in the City of Delray Beach, until all First Lien Obligations have been retired; (b) That so long as any of the First Lien Obligations remain outstanding the City will maintain its corporate identity, will make no attempt to cause its corporate existence to be abolished, and will resist all attempts by other municipal corporations to annex all or any part of the territory now or hereafter in the City or served by either system. (c) That the owner, tenant or occupant of each lot or parcel of land within the City of Delray Beach which abuts upon any street or other public way containing a sanitary sewer, which is served or which can be served by the Sewer System and upon which lot or parcel a building shall have been constructed for residential, commercial or industrial use shall connect such building with such sanitary sewer and shall cease to use any other method for the dis- posal of sewage, sewage waste or other polluting matter. All such connections shall be made in accordance with rules and regulations which shall be adopted from time to time by the City Council, which rules and regulations may provide for a charge for making any such connection in such reasonable amount as the City Council may fix and establish. (d) That the City of Delray Beach hereby covenants and agrees that whenever and to the extent that it may levy any tax -34- on or measured by the purchase of water distributed or sold by the Water System, the proceeds of such tax shall be considered part of the revenues of said system for the purposes of this resolution, and such proceeds are hereby made subject to the same pledge herein made as other revenues of said system. (I) SALE OF BONDS. That the Bonds herein authorized shall be sold in such manner and at such time or times as may hereafter be determined by resolution of the City Council. (J) REMEDIES. That in addition to all other rights enjoyed by the holders of the First Lien Obligations, such holders shall have the right by mandamus or other appropriate suit or action in any court of competent Jurisdiction to enforce his or their rights against the City of Delray Beach, the governing body thereof, and any and all officers and agents thereof, including but without limitation, the right to require said City and its governing body to fix and collect rates and charges fully adequate to carry out all of the provisions and agreements in this resolution contained. (K) MODIFICATION OF RESOLUTION. That the holders of seventy-five per cent (75~) in principal amount of the First Lien Obligations at any time outstanding (not including in any case any obligations which may then be heId or owned by or for the account of the City, but including such refunding obligations as may be issued for the purpose of refunding any First Lien Obligations if such refunding obligations are not owned by the City), shall have the right from time to time to consent to and approve the adoption by the City of resolutions or ordinances modifying or amending any of the terms or prov±sions contained in this resolution, the 1961 Bond Resolution, the 1962 Bond Resolution or the Water Revenue Certificate Ordinance in the manner and to the extent set out below. This right, however, shall not be construed to authorize the amendment of the Water Revenue Certificate Ordinance, the 1961 Bond Resolution, the 1962 Bond Resolution without obtaining the consent of 75~ in principal amount of the holders of the Bonds outstanding under said 1961 Bond Resolution and said 1962 Bond Resolution. No modification hereunder may: (a) Make any change in the maturity of any of the First Lien Obligations. (b) Make any change in the rate of interest borne by any of said obligations. (c) Reduce the amount of the principal or redemption premium payable on any First Lien Obligation. (d) Modify the terms of payment of principal or of interest or of redemption premiums on the First Lien Obligations or any of them or impose any conditions with respect to such payment. (e) Affect the rights of the holders of fewer than all of the First Lien Obligations then outstanding. Whenever the City shall propose to amend or modify an ordi~a~ce or resolution under the provisions of this section, it shall cause notice of the proposed amendment to be published one time in a financial newspaper or journal published in the City of New York, New York, or Chicago, Illinois. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory ordinance or resolution is on file in the office of the City Clerk for public inspection. Whenever at any time within one year from the date of the publication of said notice there shall be filed in the office of said City Clerk an instrument or instruments executed by the holders of at least seventy-five per cent (75~) in aggregate principal amount of the First Lien Obligations then outstanding as in this section defined, which instrument or instruments shall refer to the proposed amendatory ordinance or resolution described in said notice and shall specifically consent to and approve the adoption thereof, -36- thereupon, but not otherwise, the Council may adopt such amendatory ordinance or resolution and it shall become effective. If the holders of at least seventy-five per cent (755) in aggregate principal amount of the First Lien Obligations outstanding as in this section defined, at the time of the adoption of such amendatory ordinance or resolution, or the predecessors in title of such holders, shall have consented to and approved the adoption thereof as herein provided, no holder of any First Lien Obligation whether or not such holder shall have consented to or shall have re- yoked any consent as in this section provided, shall have any right or interest to object to the adoption of such amendatory ordinance or resolution or to object to any of the terms or provisions therein contained or to the operation thereof or to enjoin or restrain the City from taking any action pursuant to the provisions thereof. Any consent given by the holder of a First Lien Obligation pursuant to the provisions of this section shall be irrevocable for a period of six months from the date of the publication of the notice above provided for and shall be conclusive and binding upon all future holders of the same first lien obligation during such period. Such consent may be revoked at any time after six months from the date of the publication of such notice by the holder who gave such consent or by a successor in title by filing notice of such revocation with the City Clerk, but such revocation shall not be effective it the holders of seventy-five per cent (75~) in aggre- gate principal amount of the first lien obligations outstanding as in this section defined have, prior to the attempted revocation, consented to and approved the amendatory ordinance or resolution re- ferred to in such revocation. The fact and date of the execution of any instrument under the provisions of this section may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is authorized to take acknowledgments of deeds within such jurisdiction, that the -37- person signing such instrument acknowledged before him the execution thereof, or may be proved by an affidavit of a witness to such exe- cution sworn to before such officer. The amount and numbers of the First Lien Obligations held by any person executing such instrument and the date of his holding the same may be proved by a certificate executed by any responsible bank or trust company showing that on the date therein mentioned such person had on deposit with such bank or trust company the first lien obligations described in such certificate. (L) VALIDATION. That JOHN ROSS ADAMS , as attorney for the City of Delray Beach, is hereby authorized and directed to take appropriate proceedings in the Circuit Court of the Fifteenth Judicial Circuit of Florida in and for Palm Beach County for the validation of said Bonds, and the Mayor and City Clerk are hereby authorized to sign any pleadings in such proceedings for and on behalf of the commission of the City of Delray Beach. (M) SEYERABILITY OF INVALID PROVISIONS. That if any section, paragraph, clause or provision of this resolution shall be held to be invalid for any reason, such invalidity shall not affect the validity or enforceability of any of the remaining provisions hereof. (N) REPEALER. That all resolutions or orders or parts thereof in conflict herewith are to the extent of such conflict hereby repealed. Adopted and approved December 12th , 1963. ..... MayO~/ Attest: CTt7 ..... -38- (Other business not pertinent to the above appears in the minutes of the meeting.) Pursuant to motion duly made and carried, the council adjourned. /s/ Walter Dietz MAYOR ATTEST: /s/ R. D. Worthing City Clerk STATE OF FLORIDA ) ) COUNTY OF PALM BEACH ) I, R. D. WORTHING, do hereby certify that I am the duly qualified and acting City Clerk of the City of Delray Beach, Palm Beach County, Florida. I further certify that the above and foregoing consti- tutes a true and correct copy of the minutes of a meeting of the City Council of said city held on December 12 . , 1963, and of a resolution adopted at said meeting, as said minutes and resolution are officially of record in my possession. IN WITNESS WHEREOF, I have hereunto subscribed my official signature and impressed/hereon the official seal of the City of Delray Beach this day of~ ' ~ City Clerk (SEAL) ~I~E,~.CODE 305 ~' "' · PRIVATE W~RES *"~0 ~'*~RIN¢IPAL CITIES GOODBODY & CO. ,,-.,,, NEW YORK STOCK EXCHANGE MANAGER OTHER PRINCIPAL STOCK WILLIAM ~. SHAW 1001 FIRST NATIONAL BANK BLDG. ~ Co.~om~ EXCHAN=;S 100 BISCAYNE B~VD., SOUTH .oMe o;F:ce A. D. HARRISON, JR. M lAM I, F~. 33132 CAeL= ADDRESS "ACCURATE" December 11, 1963 Honorable Mayor and Members of the City Council City of Delray Beach, Florida Gentlemen: In accordance with the terms of our letter of September 19th, we will pay you 100 and accrued interest for $1,550,000 Delray Beach Water and Sewer Revenue Refunding Bonds, as described in the attached bond resolution prepared by Messrs. Caldwell, Trimble & Mitchell, with annual principal payments and coupon rates as follows: Du__~e Amount Coupon Due Amount Coupon 1964 $50,000 3.90% 1978 $50,000 3.90% 1965 80,000 3.90 1979 50,000 3.90 1966 80,000 3.90 1980 55,000 3.90 1967 80,000 3.90 1981 55,000 3.80 1968 80,000 3.90 1982 55,000 3.80 1969 35,000 3.90 1983 60,000 3.80 1970 35,000 3.90 1984 60,000 3.80 1971 40,000 3.90 1985 65,000 3.80 1972 40,000 3.90 1986 65,000 3.75 1973 40,000 3.90 1987 70,000 3.75 1974 45,000 3.90 1988 70,000 3.75 1975 45,000 3.90 1989 75,000 3.75 1976 45,000 3.90 1990 75,000 3.75 1977 50,000 3.90 Interest Cost - 3.8125% This purchase offer is conditioned only upon continuance of an investment rating by Moody's Investors Service of not less than the present "Baa" rating and upon delivery of the bonds to us accompanied by the unqualified legal opinion of Messrs. Caldwell, Trimble & Mitchell. We will continue to assist you to expedite validation, preparation and delivery of the bonds at the earliest possible date. Yours very truly, G~.~BODY & ~O. y C. T. McCreeuy B. ~AN INGEN & CO. Robert H. Cook