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607Y RESOLUTION NO. 4L)7 RESOLUTION PROVIDING FOR THE ACQUISITION, CONSTRUCTION AND ERECTION OF EXTENSIONS AND IMPROVEMENTS TO THE MUNICIPAL WATER AND SEWER SYSTEM OF THE CITY OF EDGEWATER, FLORIDA; AUTHORIZING THE ISSUANCE BY THE CITY OF NOT EXCEEDING $900,000.00 WATER AND SEWER REVENUE BONDS TO FINANCE A PART OF THE COST THEREOF; PLEDGING THE NET REVENUES OF SAID SYSTEM, CERTAIN MUNICIPAL EXCISE TAXES, AND ALL MONEYS OF THE CITY DERIVED FROM SOURCES OTHER: THAN AD VALOREM TAXATION AND LEGALLY AVAILABLE FOR SUCH PURPOSE, TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS; AND PROVIDING FOR THE RIGHTS OF THE HOLDERS OF THE BONDS. BE IT RESOLVED BY THE PEOPLE OF THE CITY OF EDGEWATER, FLORIDA, as follows: ARTICLE I GENERAL 1.01 Authority for this Resolution. This Resolution, hereinafter called the "instrument," is adopted pursuant to the provisions of Chapter 159, Part I, Florida Statutes, and other applicable provisions of law. that: 1 .0 2 Findings. It is hereby found and determined (A) For the benefit of its inhabitants, the City of Edgewater, Florida (the "Issuer") presently owns a water and a 0 sewer system (the "System"); and it is necessary for the continued preservation of the health, welfare, convenience and safety of the Issuer and its inhabitants to construct extensions and improvements i to the System (the "Project"), in accordance with certain plans and specifications now on file with the City Clerk of the Issuer (the "Clerk"). (B) The Issuer has been advised by its consulting engineers that the cost of constructing the Project in accordance with said plans and specifications is estimated at $900,000.00, which shall be paid with the proceeds of the sale of the bonds herein 6417 authorized (the "Bonds"), and shall be deemed to include all expenses necessary, appurtenant or incidental thereto, including the cost of any land or interest therein or of any fixtures or equipment, or property necessary or convenient therefor, the cost of labor and materials to complete such construction, engineering and legal expenses, fiscal expenses, expenses for estimates of costs and revenues, expenses for plans, specifications and surveys, interest during construction, if any, administrative expenses and all other necessary miscellaneous expenses. (C) (1) Pursuant to Section 167.431, Florida Statutes, the Issuer did, on January 23, 1952, enact non -emergency Ordinance No. 13 levying and imposing a utilities services tax on every purchase of electricity, metered or bottled gas (natural liquefied pertoleum gas or manufactured), telephone service and telegraph service within the corporate limits of the Issuer. The proceeds to be derived by the Issuer from the utilities services tax are hereinafter referred to as the "Excise Taxes." (ii) The revenues to be derived annually from the rates, rentals, fees and other charges made and collected for the services and facilities of the System are estimated to be $224,250.00 and, together with the Excise Taxes will be sufficient to pay, as the same shall become due and payable, the principal of and interest on the Bonds and the annual cost of operating, repairing and maintaining the System, the aggregate annual amount of which is estimated to be $301,500.00. It is estimated that the period of usefulness of the System will exceed forty-one years. The amounts listed above reflect a 15% increase in present water and sewer rates as to be enacted by the City Council pursuant to the recomendation of May -Zama and Company dated October 23, 1975. (D) It is deemed necessary and desirable to pledge the net revenues of the System, and the Excise Taxes to the payment of the principal of and interest on the Bonds. No part of such revenues or Excise Taxes will be pledged or hypothecated except with respect to the Bonds, and except that such revenues and Excise Taxes have been pledged first to the payment of the principal of and interest on -2- the Issuer's outstanding Water Works and Sewer System Refunding and Improvement Revenue Bonds, dated February 1, 1964, originally authorized in the aggregate principal amount of $1, 692, 000. 00, hereinafter sometimes referred to as the "prior lien obligations". It is deemed necessary and desirable to pledge as additional security for the payment of the principal of and interest on the Bonds all moneys of the Issuer derived from sources other than ad valorem taxation which shall be legally available for such purpose. (;) This instrument is declared to be and shall constitute a contract between the Issuer and all of the holders of the Bonds; and the covenants and agreements herein set forth to be performed by the Issuer are and shall be for the equal benefit, protection and security of all of the legal holders of any and all of the Bonds, all of which shall be of equal rank and without preference, priority or distinction of any of the Bonds over any other, except as hereinafter provided. (F) The Issuer is not, under this instrument, obligated to levy any ad valorem taxes on any real or personal property situated within its corporate territorial limits to pay the principal of or interest on the Bonds or to pay the cost of maintaining, repairing and operating the system. The Bonds shall not constitute a lien upon the System or any other property of the Issuer or situated within its corporate territorial limits. 1.03 Definitions. The following terms In this instrument shall have the following meanings unless the text otherwise expressly requires: (A) "Gross Revenues" shall mean all moneys received from rates, fees, rentals or other charges or income received by the Issuer or accruing to it in the management and operation of the System, all calculated in accordance with sound accounting practice. (B) "Operating Expenses" of the System shall mean all current expenses, paid or accrued, for the operation, maintenance and -3- repair of the System and Its facilities, as calculated in accordance with sound accounting practice, and shall include, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the Issuer related solely to the System, labor, cost of materials and supplies used for current operation, and charges for the accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may reasonably be expected to be Incurred in accordance with sound accounting practice. "Operating Expenses" shall not include any allowance for depreciation or for renewals or replacements of capital assets of the System. (C) "Net Revenues" of the System shall mean the gross revenues thereof, as defined In subsection (A), after deducting therefrom only the operating expenses of the same, as defined in subsection (B). (D) "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing to and including the succeeding September 30. 1.04 Project Authorized. The Issuer is hereby authorized to construct the Project as defined in Section 1.02 (A) above. ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF REVENUE BONDS 2.01 Authorization of Revenue Bonds. Subject and pursuant to the provisions of this Instrument, obligations of the Issuer to be known as "City of Edgewater and Sewer Revenue Bonds" (the "Bonds") are hereby authorized to be issued in an aggregate principal amount not exceeding Nine Hundred Thousand Dollars ($900, 000. 00) for the purpose of providing funds to pay a part of the cost of the Project provided for in Section 1.02 hereof. 2.02 Description of Bonds. The Bonds shall be dated as of the date of their delivery; shall bear Interest at not exceeding the legal rate per annum, payable on September 1, 1975 and annually thereafter on September 1 of each year; shall be numbered consecutively from one upward in order of maturity; and shall be in the denominations, be numbered and mature on September 1 of each year as follows: -4- BOND YEAR DENOMINATION NUMBER 1978 $ 81000 1 1979 9,000 2 1980 9,000 3 1981 9,000 4 1982 10,000 5 1983 11,000 6 1984 11,000 7 1985 12,000 8 1986 12,000 9 1987 13,000 10 1988 14,000 11-12 1989 14,000 13-14 1990 15,000 15-16 1991 16,000 17-18 1992 16,000 19-20 1993 17,000 21-22 1994 19,000 23-24 1995 19,000 25-26 1996 20,000 27-28 1997 21,000 28-30 1998 22,000 31-32 1999 22,000 33-34 YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $24,000 26,000 27,000 28,000 30,000 31,000 33,000 35,000 36,000 38,000 40,000 42,000 44,000 46,000 49,000 51,000 BOND NUMBER 35-36 37-38 39-40-41 42-43-44 45-46-47 48-49-50 51-52-53 54-55-56 57-58-59 60-61-62 63-64-65-66 87-68-69-70 71-72-73-74 75-76-77-78 79-80-81-82 83-84-85-86 2.03 Places of Payment. The Bonds shall be Issued in coupon form; shall be payable as to both principal and interest at such place or places as the Issuer shall hereafter by resolution designate, in lawful money of the United States of America; and shall bear interest from the date of issue, in accordance with and upon surrender of the appurtenant interest coupons as they severally mature, unless registered; provided, however, that Bonds held by the United States of America, acting through the Farmers Home Administration, U. S. Department of Agriculture (the "Government'), shall be payable at "Finance Office, U. S. Department of Agriculture, Farmers Home Administration, 1520 Market Street, St. Louis, Missouri 63103," or at such other places as the Gobernment shall from time to time in writing designate to the Issuer. -5- 2.64 Provisions for Redemption. -Bonds maturing on or before September 1, 1985 are not subject to redemption prior to their respective stated dates of maturity. Bonds maturing September 1, 1986 and thereafter shall, at the option of the Issuer, be redeemable in whole or in part, in inverse numerical and maturity order, on September 1, 1985 or on any interest payment date thereafter at par and accrued interest, plus the following premiums, expressed as percentages of the par value of the Bonds so redeemed, if redeemed in the following years: 5%, if redeemed on September 1, 1985 or thereafter, to and including September 1, 1987; 4%, if redeemed on September 1, 1988 or thereafter , to and including September 1, 1991; 3%, if redeemed on September 1, 1992 or thereafter, to and including September 1, 1995; 2%, redeemed on September 1, 1996 or thereafter, t and including September 1, 1999; 1%, if redeemed on September 1, 2000 or thereafter, to and including September 1, 2003; Without premium, If redeemed September 1, 2004 or thereafter, but prior to maturity; provided, however, that at least thirty (30) days prior to the redemption date written notice of such redemption shall be given to the paying agents for the Bonds and to each of the registered owners at their respective addresses as they appear upon the registration books of the Clerk of the Issuer and shall be published at least once in a financial newspaper published in the City of New York, New York. Bonds held by Government may be redeemed by the Issuer on any interest payment date prior to maturity at the price of par and accrued interest, without premium. 2.05 Execution of Bonds. The Bonds shall be executed in Si the name of the Issuer with the manual or facsimile signature of its Mayor and the corporate seal of the Issuer shall be impressed thereon, attested and countersigned with the manual or facsimile signature of its City Clerk, provided that the signature of one of such officers shall be manually executed thereon. In case any one or more of the officers who shall have signed or sealed any of the Bonds or whose facsimile signature shall appear thereon shall cease to be such officer of the Issuer before the Bonds so signed and sealed have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. The balidation certificate endorsed on the Bonds shall be executed with the manual or facsimile signature of the Mayor, Any Bond may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bond shall hold the proper office of the Issuer, although at the date of such Bonds such person may not have have held such office or may not have been so authorized. The coupons attached to the Bonds shall be authenticated with the facsimile signatures of any present or future Mayor and City Clerk of the Issuer. The Issuer may adopt and use for such purposes the facsimile signatures of any such persons who shall have held such offices at any time after the date of the adoption of this instrument, notwithstanding that either or both shall have ceased to hold such office at the time the Bonds shall be actually sold and delivered. 2.06 Negotiability and Registration. The Bonds shall be and shall have all the qualities and incidents of negotiable instru- ments under the law merchant and the Laws of the State of Florida, and each successive holder, in accepting any of the Bonds or the coupons appertaining thereto, shall be conclusively deemed to have agreed that the Bonds shall be and have all of said qualities and incidents of negotiable instruments. -7- The Bonds may be registered, at the option of the holder, as to both principal and interest upon the books kept for the registration and transfer of Bonds by the City Clerk, as Bond Registrar, and endorsed upon the Bonds by the Bond Registrar in the space provided thereon. After such registration, no transfer of the Bonds shall be valid unless made at the office of the Bond Registrar by the registered owner or by his duly authorized agent or representative and similarly noted on the Bonds, but at the expense of the holders the Bonds may be discharged from registration by being in like manner transferred to bearer, and thereupon trans- ferability by delivery shall be restored. At the option and expense of the holder, the Bonds may thereafter again from time to time be registered or transferred to bearer as before. The Bond Registrar shall not be required to make any such transfer of Bonds during fifteen (15) days next preceding an interest payment date on the Bonds, or in the case of any proposed redemption of Bonds, after such Bonds have been selected for redemption. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any Bond and the interest on any Bond shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond including the interest thereon to the extent of the sum or sums so paid. 2.07 Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion issue and deliver a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrender and cancellation of such mutilated Bond, or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the owner furnishing the Issuer satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer may prescribe -8- and paying such expenses as the Issuer may incur. All Bonds so surrendered shall be cancelled by the City Clerk. If any such Bonds shall have matured or be about to mature, instead of issuing a substitute Bond the Issuer may pay the same, upon being indemnified as aforesaid, and if such Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this section shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Bonds issued hereunder. 2.08 Form of Bonds. The text of the Bonds shall be in substantially the following form, with only such omissions, insertions and variations as may be necessary and/or desirable and approved by the Mayor prior to the issuance thereof (which necessity and/or desirability and approval shall be presumed by his execution of the Bonds and the Issuer's delivery of the Bonds to the purchaser thereof): No. S UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF VOLUSIA CITY OF EDGEWATER WATER AND SEWER REVENUE BOND KNOW ALL MEN BY THESE PRESENTS, that the City of Edgewater, Florida, a public body created and existing under and by virtue of the Laws of the State of Florida (hereinafter sometimes referred to as the "Issuer"), 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 September, 19_, from the special funds hereinafter mentioned, the principal sum of THOUSAND DOLLARS and to pay interest thereon, from the date of the delivery of this Bond to the purchaser thereof, solely from said special funds, at the rate of per centum ( %) per annum, payable on September 1, 1975 and annually thereafter on the first day of September 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 in lawful money of the United States of America. This Bond is one of an authorized Issue of Bonds in the aggregate principal amount of $900,000. 00 of like date, tenor and effect, except as to number, denomination, interest rate (if all Bonds do not bear the same rate of interest) and date of maturity, issued to finance a part of the cost of acquiring, erecting and constructing extensions and improvements to the combined municipal water and sewer system of the Issuer (the "System"), under the authority of and in full compliance with the Constitution and Statutes of the State of Florida, particularly Chapter 159, Part I, Florida Statutes, and a resolution duly adopted by the Issuer on 19_ (the "Resolution"), and is subject to all the terms and conditions of the Resolution. This Bond and the Interest thereon are payable solely from and secured by a lien upon and a pledge of the net revenues to be derived from the operation of the System, the proceeds of certain municipal Excise Taxes, and all moneys of the Issuer derived from sources other than ad valorem taxation and legally available for such purpose, in the manner described in the Resolution. It is expressly agreed by the holder of this Bond that the full faith and credit of the Issuer are not pledged to the payment of the principal of and interest on this Bond and that such holder shall never have the right to require or compel the exercise of any taxing power of the Issuer to the payment of such principal and interest or the cost of maintaining, repairing and operating the System. This Bond and the obligation evidenced hereby shall not constitute a lien upon the System or any part thereof or upon any other property of the -10- Issuer or situated within its corporate limits, but shall constitute a lien only on the net revenues derived from the operation of the System and said Excise Taxes. The lien of the holders of the Bonds of the issue of which this Bond is one on the revenues of the System is junior, subordinate and inferior in every respect to the lien on such revenues in favor of the Issuer's outstanding Water Works and Sewer System Refunding and Improvement Revenue Bonds dated February 1, 1964 (the "prior lien obligations"). The Issuer in the Resolution has covenanted and agreed with the holders of the Bonds of the issue of which this Bond is one that it will not hereafter issue any additional obligations payable from the revenues of the System on a parity with the prior lien obligations. In and by the Resolution, the Issuer has covenanted and agreed with the holders of the Bonds of this issue that it will fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the product, services and facilities of the System which, together with the proceeds of the Excise Taxes will always produce cash revenues sufficient to pay, and out of such funds pay, as the same shall become due, the principal of and interest on the prior lien obligations and the Bonds, the necessary expenses of operating and maintaining the System and all reserve, Sinking Fund or other payments required by the Resolution, and that such rates, , rentals, fees and other charges will not be reduced so as to be insufficient to provide funds for such purposes, and that It will levy and collect the Excise Taxes at such rates, not exceeding the maximum rates permitted by law, as shall be necessary to provide funds which, together with the revenues of the System, will be sufficient to pay, and out of such funds pay, as the same shall become due, the principal of and interest on the Bonds, the necessary expenses of operating and maintaining the System and all reserve, -11- Sinking Fund or other payments required by the Resolution, and that the rates of such Excise Taxes will not be reduced so as to be insufficient to provide funds for such purposes. The Bonds of this issue maturing on or before September 1, 1985 are not subject to redemption prior to their respective stated dates of maturity. Bonds maturing September 1, 1986, and thereafter shall, at the option of the Issuer, be redeemable in whole or in part, in inverse numerical and maturity order, on September 1, 1985 or on any interest payment date thereafter at par and accrued interest, plus the following premiums, expresses as per- centages of the par value of the Bonds so redeemed, if redeemed in the following years: 5%, if redeemed on September 1, 1985 or thereafter, to and including September 1, 1987; 4%, if redeemed on September 1, 1988 or thereafter, to and including September 1, 1991; 3%, if redeemed on September 1, 1992 or thereafter, to and including September 1, 1995; 2%, if redeemed on September 1, 1996 or thereafter, to and including September 1, 1999; 1%, if redeemed on September 1, 2000 or thereafter, to and including September 1, 2003; Without premium, if redeemed on September 1, 2004 or thereafter, but prior to maturity; provided, however, that notice of such redemption shall be given in the manner required by 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 of the issue of Bonds of which this Bond is one, does not violate any con- stitutional, statutory or charter limitations or provisions. This Bond and the coupons appertaining thereto are and have all the qualities and incidents of negotiable instruments under the law merchant -12- and the Laws of the State of Florida. This Bond may be registered as to both principal and interest in accordance with the provisions endorsed hereon. IN WITNESS WHEREOF, the City of Edgewater, Florida, has issued this Bond and has caused the same to be executed in its name and on its behalf by its Mayor and its corporate seal to be impressed hereon, attested and countersigned by its City Clerk, all as of 29_ (SEAL) ATTESTED AND City CITY OF EDGEWATER, FLORIDA By Mayor FORM OF COUPON On the 1st day of September, 19, unless the Bond to which this coupon is attached is callable and shall have been previously duly called for prior redemption and payment thereof duly made or provided for, the City of Edgewater, Florida, will pay the bearer at Florida, from the special funds described in the Bond to which this coupon is attached, the amount shown hereon in lawful money of the United States of America, upon presentation and surrender of this coupon, being one year's interest then due on its Water and Sewer Revenue Bond, dated 19 , No. (SEAL) ATTESTED AND C ity CITY OF EDGEWATER, FLORIDA By Mayor -13- FORM OF VALIDATION CERTIFICATE This Bond is one of a series of Bonds which were validated by judgment of the Circuit Court for Volusia County, Florida rendered on 19 Mayor PROVISIONS FOR REGISTRATION This Bond may be registered as to both principal and interest on the books kept by said City Clerk, as Bond Registrar, such registration blank below, the coupons being surrendered and the interest being payable only to the registered holder, remitted by mail, after which registration no transfer shall be valid unless made on said books by the registered holder or his legal representative 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, or it may again be registered as before. Upon reconversion of this Bond into a coupon Bond, coupons representing the interest to accrue upon the Bond to date of maturity shall be attached hereto. Date of Name and Address of Signature of Registration Registered Owner Bond Registrar ARTICLE III COVENANTS, SPECIAL FUNDS AND APPLICATION THEREOF 3.01 Bonds Not to Be Indebtedness of Issuer. Neither the Bonds nor the coupons attached thereto shall be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of Article VII, Section 12 of the Constitution of Florida, but shall be payable soley from and secured by a lien upon and pledge of said net revenues, Excise Taxes and a -14- pledge of all moneys of the Issuer derived from sources other than ad valorem taxation and legally available for such purpose, as herein provided. No owner or holder of any Bond or coupon Issued hereunder shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond or coupon or the cost of operating and maintaining the System, or be entitled to payment of such Bond or coupon from any funds of the Issuer except from the net revenues derived from the operation of the System, the Excise Taxes and all moneys of the Issuer derived from sources other than ad valorem taxation and legally available for such purpose, in the manner provided herein. 3.02 Security for Bonds. The payment of the debt service of all of the Bonds issued hereunder shall be secured forthwith equally and ratably by a pledge of and a lien upon the net revenues derived from the operation of the System, as now or hereafter constituted, and the Excise Taxes, and by a pledge of all moneys of the Issuer derived from sources other than ad valorem taxation and legally available for such purpose. The Issuer does hereby irrevocably pledge such funds to the payment of the principal of and interest on the Bonds issued pursuant to this instrument and to the payment into the Sinking Fund at the times provided of the sums required to secure to the holders of the Bonds issued hereunder the payment of the principal of and interest thereon at the respective maturities of the Bonds and coupons so held by them. The lien on and pledge of the revenues of the System in favor of the Bonds is junior, subordinate and inferior in every respect to the pledge of and lien on such revenues in favor of the outstanding prior lien obligations. 3.03 Application of Bond Proceeds. The Issuer hereby covenants that It will establish with the Bank, Florida, a separate account or accounts (herein collectively called the " Construction Account") into which shall be deposited the proceeds from the sale of the Bonds herein authorized -15- (except such portion thereof as shall be necessary to pay interest on the Bonds during the construction of the Project, which shall be deposited in the Sinking Fund) required :to assure payment in full of the cost of the Project. Withdrawals from the Construction Account shall be made only for such purposes as shall have been previously specified in the Project cost estimates and as shall be approved by the Issuer's consulting engineers for the Project. The Issuer's share of any liquidated damages or other moneys paid by defaulting contractors or their sureties, and all proceeds of insurance compensating for damages to the Project during the period of construction, shall be deposited in the Construction Account to assure completion of the Project. Moneys in the Construction Account shall be secured by the depository bank in accordance with U. S. Treasury Department Circular 176 and in the manner prescribed by the Laws of the State of Florida relating to the securing of public funds. When the moneys on deposit in the Construction Account exceed the estimated disbursements on account of the Project for the next 90 days, the Issuer may direct the depository bank to invest such excess funds in direct obligations of or obligations the principal of and interest on which are guaranteed by the United States of America, which shall be subject to redemption at any time at face value by the holder thereof. The earnings from any such investment shall be deposited in the Construction Account. When the Construction of the Project has been completed and all construction costs have been paid in full, all funds remaining in the Construction Account shall be deposited in the Sinking Fund hereinafter established, and the Construction Account shall be closed. All moneys deposited in said Construction Account shall be and constitute a trust fund created for the purposes stated, and there is hereby created a lien upon such fund in favor of the holders of the Bonds until the moneys thereof shall have been applied in accordance with this instrument. -16- 3.04 Covenants of the Issuer. So.long as any of the principal of or interest on any of the Bonds shall be outstanding and unpaid, or until there shall have been set apart in the Sinking Fund herein established, including the Reserve Account therein, a sum sufficient to pay, when due, the entire principal of the Bonds remaining unpaid, together with interest accrued and to accrue thereon, the Issuer covenants with the holders of any and all of the Bonds issued pursuant to this instrument as follows: (A) Annual Budget of Current Expenses. The Issuer covenants and agrees that on or before the date of delivery of the Bonds to the purchaser thereof, it will adopt a budget of Current Expenses for the System for the remainder of the then current fiscal year and thereafter, on or before the first day of each fiscal year during which any of the Bonds are outstanding, it will adopt an Annual Budget of Current Expenses for the ensuing fiscal year, and will mail a copy of such budget or amendments thereto to any requesting bondholder. Current Expenses shall include all reasonable and necessary costs of operating, repairing, maintaining and inusring the System, but shall exclude depreciation, payments into the Sinking Fund and payments into the Reserve Account. The Issuer covenants that the Current Expenses incurred in any year will not exceed the reasonable and necessary amounts required therefor, and that it will not expend any amount or incur any obligations for the operation, maintenance and repair of the System in excess of the amount provided for Current Expenses in the Annual Budget, except upon resolution of the City Council that such expenses are necessary to operate and maintain the System. (B) Revenue Fund. The Issuer covenants and agrees that on or before the date of delivery of the Bonds to the purchaser thereof, it will establish with a depository in the State of Florida, which is a member of the Federal Deposit Insurance Corporation and which is eligible under the Laws of the State of Florida to receive municipal funds, and maintain so long as any of the Bonds are outstanding, a special fund to be known as the "City of Edgewater Water and Sewer System Revenue Fund" , herein- after called the " Revenue Fund -17- The Issuer further covenants and agrees that whenever, from time to time, at any time deposits from the revenues of the System and from the proceeds of the Excise Taxes shall have been made sufficiently for minimum compliance with the covenants, requirements and provisions of the ordinance enacted by the Issuer authorizing issuance of the prior lien obligations, and such required deposits shall be made monthly, the balance of any and all revenues of the System and the Excise Tax and/or any balance of moneys on deposit in the "Revenue Fund" heretofore created and established for the benefit of the prior lien obligations which shall be in excess of the minimum requirements for compliance with such covenants, requirements and provisions of said ordinance shall forthwith, and not less frequently than monthly, be deposited into said Revenue Fund hereby created. Whenever the said covenants, requirements and provisions of such ordinance shall no longer require deposits of revenues of the System and of the Excise Tax for the debt service of the prior lien obligations, the Issuer shall deposit into the Revenue Fund, promptly as received, all cash Income received from the ownership and operation of the System and all of the proceeds of the Excise Tax. (C) Bond and Interest Sinking Fund. The Issuer covenants and agrees to establish with a depository in the State of Florida, which is a member of the Federal Deposit Insurance Corporation, and which is eligible under the Laws of the State of Florida to receive municipal funds a special fund or funds, collectively called "City of Edgewater Water and Sewer System Bond and Interest Sinking Fund", hereinafter called the "Sinking Fund", to be used exclusively for the purposes hereinafter mentioned. After delivery of the bonds to the purchaser thereof, and after first making any deposits into the Operation and Maintenance Fund required by Paragraph 3.04 (D) hereof, the Issuer shall transfer on or before the 15th day of each month from the Revenue Fund and deposit to the credit of the Sinking Fund the following amounts: (1) A sum equal to V12 of the amount of one year's interest on all the Bonds then outstanding, together with the amount of any deficiency in prior deposits for interest; and (2) Beginning on September 1, 1977, a sum equal to 1/12 of the principal of the Bonds maturing on the next succeeding anniversary date, together with the amount of any deficiency in prior deposits for principal. (3) After fulfillment of the requirements of paragraphs (c) (1) and (2), the Issuer shall transfer on or before the 15th day of each month from the Revenue Fund and deposit to the credit of a special account in the Sinking Fund, herein called the "Reserve Account", the sum of Four Hundred Forty -Five Dollars ($445.00) until such time as the funds and investments therein shall equal Fifty -Three Thousand Four Hundred Dollars ($53,400), and monthly thereafter such amount as may be necessary to maintain in the Reserve Account the sum of Fifty -Three Thousand Four Hundred Dollars ($53,400) but not exceeding Four Hundred Forty -Five Dollars ($445,00) monthly. Moneys in the Reserve Account shall be used only for (1) paying the cost of repairing or replacing any damage to the System which shall be caused by an unforeseen catastrophe, (2) con- structing improvements or extensions to the System which shall increase its net revenues and which shall be approved by said consulting engineers, if the Issuer shall not then be in default under any of the provisions of this instrument, and (3) paying the principal of and interest on the Bonds in the event that the moneys in the Sinking Fund shall ever be insufficient to meet such payments. (D) Operation and Maintenance Fund. Whenever provision for the payment of the reasonable current expenses of the operating, main- taining and repairing of the System pursuant to the provisions of said ordinance authorizing issuance of the prior lien obligations shall expire or cease by reason of the terms of such ordinance, or for any other reason, the Issuer covenants and agrees to establish with a depository in the State of Florida, which is a member of the Federal Deposit Insurance Corporation, and which is eligible under the Laws of the State of Florida to receive municipal funds, a special fund to be known as the "City of -19- Edgewater Water and Sewer System Operation and Maintenance Fund", herein called the "Operation and Maintenance Fund," which shall be used exclusively for the purpose of receiving funds to be transferred monthly by the Issuer from the Revenue Fund, and for paying, as they accrue, the Current Expenses of the System pursuant to the Annual Budget. Before making the deposits to the Sinking Fund as provided in paragraph (C) above, the Issuer shall transfer on or before the fifteenth day of each month from the Revenue Fund and deposit to the credit of the Operating and Maintenance Fund a sum sufficient to pay the Current Expenses of the system for the current month, all in accordance with the Annual Budget. Any balance remaining in the Operation and Maintenance Fund at the end of the fiscal year and not required to pay costs incurred during said fiscal year shall be deposited promptly into the Revenue Fund. (E) Deficiency or Excess Funds. Whenever by reason of the insufficiency of moneys on deposit in the Revenue Fund the Issuer is not able to make promptly the current monthly payments required to be made pursuant to the provisions of paragraph (C) above, the Issuer covenants and agrees that it will pay into the Revenue Fund from any moneys of the Issuer derived from sources other than ad valorem taxation and legally available for such purpose whatever sums are necessary to cure such existing deficit. Subject to the provisions for the disposition of revenues in paragraphs (C) and (D), which are cumulative, the Issuer shall, on or before the 15th day of each month, transfer to the Reserve Account in the Sinking Fund the balance of moneys remaining in the Revenue Fund until the funds and investments in the Reserve Account equal the amount of Fifty -Three Thousand Four Hundred Dollars ($53,400), and thereafter whenever funds and investments in the Reserve Account equal $53,400 the Issuer may use the surplus funds in the Revenue Fund for the purchase or redemption of Bonds or for any other lawful municipal purpose. (F) Trust Funds. The funds and accounts created. and established by this instrument shall constitute trust funds for the -20- purpose provided herein for such funds. All of such funds, except as hereinafter provided, shall be continuously secured in the same manner as municipal deposits of funds are required to be secured by the Laws of the State of Florida. Moneys on deposit to the credit of the Reserve Account shall be invested by the depository bank, upon request by the Issuer, in direct obligations of, or obligations the principal of and interest on which are guaranteed by the United States of America and which shall be subject to redemption at face value at any time by the holder thereof at the option of such holder; and the moneys on deposit to the credit of the Sinking Fund may be so invested In such obligations which shall mature not later than fifteen (15) days prior to the date on which such moneys shall be needed to pay the principal of and interest on the Bonds in the manner herein provided, but moneys on deposit to the credit of the Revenue Fund and the Operation and Maintenance Fund shall not be invested at any time. The securities so purchased as an investment of funds shall be deemed at all times to be a part of the account from which the said investment was withdrawn, and the interest accruing thereon and any profit realized therefrom shall be credited to such account and any loss resulting from such investment shall likewise be charged to said account. (G) Rates and Charges. The Issuer covenants and agrees to maintain and collect, so long as any of the Bonds are outstanding, such schedule of rates and charges for the services and facilities of the System which, together with the Excise Taxes, will produce revenues which shall be sufficient to provide for current debt service and reserve requirements for the outstanding prior lien obligations and for the Bonds and pay the reasonable expenses of operation and maintenance of the System; and the Issuer covenants and agrees that so long as any of the Bonds are outstanding and unpaid, at the same time and in like manner that the Issuer prepares its Annual Budget of the Current Expenses, the Issuer shall annually prepare an estimate of gross revenues to be derived from the operation of the System for the ensuing fiscal year, and to the extent that said gross revenues, -21- together with the Excise Taxes, are insufficient to pay debt service requirements during such ensuing year on all outstanding Bonds payable from the revenues of the System, build up and maintain the required reserves for all such outstanding Bonds and pay Current Expenses, the Issuer shall revise the fees and rates charged for the use of the services and facilities of the System sufficiently to provide the funds required. (H) Levy of Excise Taxes. The Issuer covenants and agrees that It will not repeal the ordinances now in effect levying the Excise Taxes and will not amend or modify said ordinances in any manner so as to impair or adversely affect the power and obligation of the Issuer to levy and collect the Excise Taxes or impair or adversely affect In any manner the pledge of the Excise Taxes made herein or the rights of the holders of the Bonds. The Issuer shall be unconditionally and irrevocably obligated, so long as any of the Bonds or the interest thereon are outstanding and unpaid, to levy and collect the Excise Taxes at such rates, not exceeding the maximum rates permitted by law, as shall be necessary to provide funds Which, together with the gross revenues of the System shall be sufficient to .pay, as the same shall become due, the principal of and interest on the Bonds, the principal of and interest on the prior lien obligations, the Current Expenses of operating and maintaining the System and the other payments provided for herein. This provision shall not be construed to prevent reasonable re- visions of the rates of the Excise Taxes as long as the proceeds of the Excise Taxes to be collected by the Issuer in each year thereafter, together with the gross revenues of the System, will be sufficient to pay the principal of and interest on the Bonds and the prior lien obligations as the same shall become due and pay the Current Expenses of operating and maintaining the System and to make the other payments herein required in such year. (I) Issuance of Other Obligations. (1) The Issuer covenants and agrees that in the event the cost of construction or completion of the Project shall exceed the dollar amount _P2- of Bonds herein authorized , it shall deposit into the Construction Account the amount of such excess out of funds available to it for such purpose, and the Issuer may provide such excess, and only such excess, through the issuance of parity Bonds conforming to the requirements of paragraph (3) of this subsection; but except to complete the Project, it will not issue any other obligations payable from or secured by the revenues of the System, the Excise Taxes or any other security pledged to secure payment of the Bonds, unless the conditions hereinafter set forth shall be met, or unless the lien of such obligations is junior and subordinate in all respects to the lien of the Bonds. The Issuer covenants and agrees that it will not issue any additional obligations payable from the revenues of the System on a parity with the outstanding prior lien obligations. (2) The Issuer shall have the right to add new water or sewer facilities and related auxiliary facilities, by the issuance of one or more additional series of bonds to be secured by a parity lien on and ratably payable from the gross revenues of the System and any other security pledged to the Bonds, provided in each instance that: (a) The facility or facilities to be built from the proceeds of the additional parity bonds is or are made a part of the System and its or their revenues are pledged as additional security for the additional parity bonds and the outstanding Bonds. (b) The Issuer is in compliance with all covenants and undertakings in connection with all of its Bonds then outstanding and payable from the revenues of the System or any part thereof and has not been in default as to any payments required to be made under this instrument for a period of at least the next preceding 24 months, or if at such time the Bonds shall not have been outstanding for 24 months then for the period that the Bonds shall have been outstanding. (c) The annual net revenues (plus the Excise Taxes, if the Excise -23- Taxes shall be pledged as security for the outstanding Bonds and the additional parity bonds) for the fiscal year next preceding the issuance of additional parity bonds are certified by an independent certified public accountant not regularly employed by the Issuer, to have been equal to at least one and twenty -hundredths (1. 20) times the average annual requirements for principal and interest on all the Bonds then outstanding and payable from such pledged revenues. (d) The estimated average annual net revenues of the facility or facilities to be constructed and acquired with the proceeds of such additional bonds (and any other funds pledged and set aside for such purpose), when added to the estimated future average annual net revenues of the then existing System (plus the Excise Taxes, if the Excise Taxes shall be pledged as security for the outstanding Bonds and the additional parity bonds) shall be at least one and twenty -hundredths (1. 20) times the average annual debt service requirements for principal and interest on all outstanding Bonds payable from the revenues of the System and on the additional bonds proposed to be issued. Estimates of future revenues and operating expenses shall be furnished by recognized independent consulting engineers and approved by the City Council of the Issuer and by the Mayor thereof, and shall be forecast over a period of not exceeding ten years from the date of the additional bonds proposed to be issued. Provided, however, the conditions provided by this paragraph and by the next preceding paragraph (c) may be waived or modified by the written consent of the holders of seventy-five per centum (75%) of the Bonds then outstanding. (3) The Issuer hereby covenants and agrees that in the event additional series of parity bonds are issued, it will provide that said parity bonds shall mature according to a schedule which most closely approximates equal annual installments of combined principal and interest payments for such parity bonds and all other Bonds payable from the revenues of theSystem; it will adjust the required deposits into and the maximum amount to be main- tained in the Sinking Fund, including the Reserve Account therein, on the _24- same basis as hereinabove prescribed, to reflect the average annual debt service on the additional bonds; and it will make such additional bonds payable as to principal on September 1 of each year in which principal falls due and the coupons attached thereto payable on September 1 of each year. If in any subsequently issued series of bonds secured by a parity lien on the revenues of the System it is provided that excess revenues shall be used to redeem bonds in advance of scheduled maturity, or if the Issuer at its option undertakes to redeem outstanding bonds in advance of scheduled maturity, the Issuer covenants that calls of bonds will be applied to each series of bonds on an equal pro rate basis (reflecting the proportion that the amount originally issued of each series bears to the amount originally issued of each of the other series) to the extent that this may be accomplished in accordance with the call provisions of the respective bond series, but the Issuer shall have the right to call any or all outstanding bonds which may be called at par prior to calling any bonds that are callable at a premium. (J) Disposal of Facilities. The Issuer covenants and agrees that, so long as any of the Bonds are outstanding, it will maintain its corporate identity and existence and will not sell or otherwise dispose of any of the System facilities or any part thereof, and, except as provided for above, it will not create or permit to be created any charge or lien on the revenues thereof ranking equal or prior to the charge or lien of the Bonds. Notwithstanding the foregoing, the Issuer may at any time permanently abandon the use of, or sell at fair market value, any of its System facilities, provided that: (a) It is In compliance with all covenants and undertakings in connection with all of its Bonds then outstanding and payable from the revenues of the System, and the debt service reserve for such Bonds has been fully established; (b) It will, in the event of sale, apply the proceeds to either (1) redemption of outstanding Bonds in accordance with the provisions -25- governing repayment of Bonds in advance of maturity, or (2) replacement of the facility so disposed of by another facility the revenues of which shall be incorporated into the System as hereinbefore provided; (c) It is certified, prior to any abandonment of use, that the facility to be abandoned is no longer economically feasible of producing net revenues; and (d) It is certified that the estimated net revenues of the remaining System facilities for the next succeeding fiscal year, plus the estimated net revenues of the facility, if any, to be added to the System, satisfy the earnings test hereinbefore provided in this subsection governing issuance of additional parity bonds. (K) Insurance on System. While any of theBonds shall remain outstanding, the Issuer shall carry at least the following insurance coverage: (1) Fire and extended coverage on the insurable portions of the System, in amounts sufficient to provide for not less than full recovery whenever a loss from perils insured against does not exceed eighty per centum (80%) of the full insurable value of the damaged facility. In the event of any damage to or destruction of any facility or facilities of the System, the Issuer shall deposit the insurance proceeds in the Reserve Account and promptly arrange for the application thereof to the repair or reconstruction of the damaged or destroyed portion thereof. (2) Public liability insurance relating to the operation of the System, with limits of not less than $100, 000 for one person and $300, 000 for more than one person involved in one accident, to protect the Issuer from claims for bodily injury and/or death and not less than $10, 000 for claims for damage to property of others which may arise from the Issuer's operation of the System. (3) If the Issuer owns or operates a vehicle in the operation of the System, vehicular public liability insurance with limits of not less -26- than $100,000 for one person and $300,000 for more than one person involved in one accident to protect the Issuer from claims for bodily injury and death, and not less than $10,000 against claims for damage to property of others which may arise from the Issuer's operation of vehicles. (4) All such insurance shall be carried for the benefit of the holders of the Bonds. All moneys received for losses under any of such insurance, except public liability, are hereby pledged by the Issuer as security for the Bonds, until and unless such proceeds are used to remedy the loss or damage for which such proceeds are received, either by repairing the property damaged or replacing the property destroyed within ninety (90) days from the receipt of such proceeds. (L) Maintenance of System, The Issuer will complete the construction of the Project in an economical and efficient manner with all practicable dispatch, and thereafter will maintain the System in good condition and continuously operate the same in an efficient manner and at a reasonable cost. (M) No Free Services. The Issuer will not render or cause to be rendered any free services of any nature by its System, nor will any preferential rates by established for users of the same class; and if the Issuer shall avail itself of the facilities or services provided by the System, or any part thereof, then the same rates, fees or charges applicable to other customers receiving like service under similar circumstances shall be charged to the Issuer. Such charges shall be paid as they accrue, and the Issuer shall transfer from its general funds sufficient sums to pay such charges. The revenues so received shall be deemed to be revenues derived from the operation of the System, and shall be deposited and accounted for in the same manner as other revenues derived from such operation of the System. (N) Failure of User to Pay for Services. Upon failure of any user of any product, services of facilities of the System to pay for the _29_ same within sixty (60) days after the Issuer shall have billed such user therefor, the Issuer shall shut off the connection of, such user and shall not furnish him or permit him to receive from the System further service until all obligations owed by him to the Issuer on account of services, Including disconnection and reconnection charges, shall have been paid in full. This covenant shall not, however, prevent the Issuer from causing any System connection to be shut off sooner. (0) Enforcement of Collections. The Issuer will diligently enforce and collect the rates, fees and other charges for the services and facilities of the System; and will take all steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become dellquent to the full extent permitted or authorized by law; and will maintain accurate records with respect thereof. All such fees, rates, charges and revenues herein pledged shall, as collected, be held in trust to be applied as provided in this instrument and not otherwise. (P) Sufficiency of Rates. The Issuer covenants and agrees that it will fix, establish, revise from time to time whenever necessary and maintain always such fees, rates, rentals and other charges for the use of the product, services and facilities of the System which, together with the Excise Taxes, will always produce cash revenues sufficient to pay, and out of such funds pay, as the same shall become due, the principal of and interest on the prior lien obligations and the Bonds, the necessary expenses of operating and maintaining the System and all reserve, Sinking Fund or other payments required by this Instrument, and that such rates, fees, rentals or other charges will not be reduced so as to be insufficient to provide funds for such purposes. (Q) Compliance with Laws and Regulations. The Issuer covenants and agrees to perform and comply with, in every respect, the Loan and Grant Agreements which it might have with the Government or with any other governmental agency and all applicable Federal and State son Laws and regulations. (R) Remedies. Any holder of the Bonds or any coupons appertaining thereto Issued under the provisions of this instrument, or any trustee acting for the holders of such Bonds and coupons, may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights, including the right to the appointment of a receiver, existing under the Laws of the State of Florida, or granted and contained In this instrument, and may enforce and compel the performance of all duties required by this Instrument or by any applicable State or Federal statutes to be performed by the Issuer or by any officer thereof, including the levy and collection of the Excise Taxes. Nothing herein, however, shall be construed to grant to any holder of such Bonds or coupons any lien on any real property of the Issuer. (S) Records and Audits. The Issuer shall keep books and records of the revenues of the System, the Excise Taxes, which such books and records shall be kept separate and apart from all other books, records and accounts of the Issuer, and any holder of a Bond or Bonds or the coupons applicable thereto issued pursuant to this instrument shall have the right to, at all reasonable times, inspect all records, accounts and data of the Issuer relating thereto. So long as any of the Bonds shall be outstanding, the Issuer will furnish on or before ninety (90) days after the close of each fiscal year, to any bondholder who shall request the same in writing, copies of any annual audit report prepared by an independent certified public accountant or an auditing official of the State of Florida, covering for the preceding fiscal year, in reasonable detail, the financial condition and record of operation of the System and any other facilities the revenues of which are pledged to the payment of the Bonds and the collection of the Excise Taxes. _29_ (T) Connection with System. The Issuer will, to the full extent permitted by law, require all lands, buildings, residences and structures within its corporate limits which can use the facilities and services of the System to connect therewith and use the facilities and services thereof and to cease the use of all other facilities. The Issuer will not grant a franchise for the operation of any competing water or sewer System until all Bonds issued hereunder, together with interest thereon, shall have been paid in full. (U) Fidelity Bond. The Issuer will require each employee who may have possession of the revenues of the System or the Excise Taxes to be covered by a fidelity bond written by a responsible indemnity company in an amount fully adequate to protect the Issuer from loss. (1) Government Approval of Extensions and Financing. Anything herein to the contrary notwithstanding, while the Government is the holder of any of the Bonds, the Issuer will not borrow any money from any source or enter into any contract or agreement or incur any other liability in connection with making extensions or improvements other than normal maintenance of the System, or make any extensions or enlargements of the System, or permit others to do so, without obtaining the prior written consent of the Government. (W) Reimbursement of Advances and Interest Thereon. While the Government shall be the holder of any of the Bonds, the Government shall have the right to make advances for the payment of insurance premiums and/or other advances which, in the opinion of the Government, may be required to protect the Government's security interest. In the event of any such advances, the Issuer covenants and agrees to repay the same, together with interest thereon at the same rate per annum as specified in the Bonds, upon demand made at any time after any such expenditure by the Government. Any such amount due the Government shall take priority over any other payments from the Reserve Account. -30- (X) Release of Excise Taxes. At such time as the Issuer may be able to obtain and file in the minutes of its City Council a certificate of a certified public accountant not regularly employed by the Issuer stating that for the immediately preceding fiscal year the net revenues derived from the operation of the System equaled at least one hundred forty percentum (140%) of the combined maximum principal and interest maturing in any one ensuing fiscal year on all outstanding obligations payable from the revenues of the System, then upon a declaration by resolution of the City Council the lien hereby impressed upon the Excise Taxes as security for payment of the Bonds and the interest thereon shall be permanently released, and thereafter the payment of the Bonds and the interest thereon shall be solely secured by a lien upon and pledge of the revenues to be derived from the operation of the System; provided, however, the Excise Taxes shall not be so released unless all payments required by this instrument to have been made to the several accounts and Funds herein specified shall have been made in full, and the Reserve Account shall have on deposit therein at least the sum of Forty -One Thousand Five Hundred Dollars ($41,500). ARTICLE IV MISCELLANEOUS PROVISIONS 4.01 Modification or Amendment. No material modification or amendment of this instrument or of any instrument amendatory hereof or supplemental hereto , may be made without the consent in writing of the holders of two -thuds or more in principal amount of the Bonds then outstanding; provided, however, that no modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon, or in the amount of the principal obligation, or affect the unconditional promise of the Issuer to charge and collect such rates, fees and charges for the use of the product, services and facilities of the System and to levy and collect the Excise Taxes and apply the same -31- as herein provided, or reduce the number of such Bonds the written consent of the holders of which are required by this Section for such modifications or amendments, without the consent of the holders of all such Bonds. 4.02 Creation of Superior Liens. The Issuer covenants that except as herein provided it will not issue any other Bonds, certificates or obligations of any kind or nature or create or cause or permit to be created any debt, lien, pledge, assignment or encumbrance or charge payable from or enjoying a lien upon the revenues of the System or the Excise Taxes ranking prior and superior to the lien created by this instrument for the benefit of the Bonds. 4.03 Severability of Invalid Provisions. If any one or more or the covenants, agreements or provisions of this instrument or of the Bonds should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this instrument and of the Bonds. 4.04 Validation Authorized. The Issuer's Attorney is hereby authorized and directed to institute appropriate proceedings In the Circuit Court for Volusia County, Florida, for the validation of the Bonds and the proper officers of the Issuer are hereby authorized to verify on behalf of the Issuer any pleadings in such proceedings. 4.05 Sale of Bonds. The Bonds are hereby sold and awarded to the Government at the price of par and bearing interest at the rate of five per centum (5%) per annum. 4.06 Conflicts Repealed. All resolutions or parts of resolutions in conflict herewith are hereby repealed. 4.07 Effective Date. This instrument shall take effect Immediately upon its passage. -32- The above nnand foregoing Resolution was presented by Councilman 6[1ft�PJ who moved Its adoption, said motion being seconded by Councilman and upon roll call vote said Resolution was duly declared adopted at a Regular meeting of the City Council of the City of Edgewater, Florida, held on the 3D.�, day of LYcitIYld— , 1975; the vote of said Council upon roll call being as follows: { JMayor C ncilman Councilman Counci man Odr Councilman ATTEST: N City Clerk Approved this 80 ay of , A.D., 1975. Mayor This Resolution was prepared by: Joseph E. Weaver City Attorney