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HomeMy WebLinkAbout1970-09-01; City Council; Resolution 1779*. * ' d '3 Q CITY CARESBAD RESOLUTION NO. 1.7 7.9 RESOLUTION OF THE cIn COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE ISSUANCE OF $1,225,000 WATERWORKS REVENUE BONDS OF SAID CITY AND PROVIDING THE TERMS AND CONDITIONS FOR THE ISSUANCE OF SAID BONDS. WHEREAS, pursuant to Article 8, Chapter 3, Division 2, Title 5 (commencing at Section 53540) of the Government Code of the State of California, this City Council, without a vote of the electors, may issue revenue bonds of the City if: (a) The principal amount of such bonds does not exceed the then unissued balance of the principal amount of bonds of the same type authorized at an election heretofore held in the City; (b) The bonds are issued for the same purpose as that for which said unissued bonds were authorized ; and (c) The bonds are issued in accordance with the laws governing the issuance of bonds of the City, except for the requirement of a bond election; and WHEREAS, pursuant to Resolution No. 1545 of the City Council of the City of Carlsbad, a special municipal election was held in said City on November 5, 1968, for the purpose of sub- mitting to the qualified voters of said city the following proposition of issuing water revenue bonds pursuant to the Revenue Bond Law of 1941 (Chapter 6, Part 1, Division 2, Title 5 of the Government Code of the State of California), to wit: PROPOSITION IC'- BOND PROPOSITION : Shall the City of Carlsbad issue water revenue bonds in the principal sum of $1,800,000 for the acquisition, construction and financing of extensions, enlargements and improvements of the water system of said city, including works and facilities for the storage. transmission and distribution of water, the reconstruction of parts of said system, and the acquisition of land, easements, rights of way and other property necessary therefor, and including all engineering, inspection and legal fees, costs of the issuance of said revenue bonds, bond reserve funds, and other costs and expenses incidental to or connected with such acquisition. construction and financing? and WHEREAS, said proposition was approved by the votes of more than a majority of all the voters voting on said proposition at said special election; and WHEREAS, the bonds authorized at said election have not been issued and it is deemed necessary that $1,225,000 of said unissued bonds be canceled and that pursuant to said Article 8 revenue bonds in the principal amount of $1,225,000 of the same type and for the same purpose be issued; and WHEREAS, $767,000 Waterworks Revenue Bonds, 1958 and $300,000 Waterworks Revenue Bonds, 1960, payable out of revenues derived from the operation of the enterprise, as hereinafter 1 , c defined, have been issued pursuant to Resolution No. 397 and Resolution No. 71 1, respectively, of the City Council of the City of Carlsbad ; and WHEREAS, the conditions set forth in Sections 21, Covenants 11 of said Resolution Nos. 397 and 711 having been satisfied, said $1,225,000 bonds when issued and outstanding shall be on a parity with said $767,000 Waterworks Revenue Bonds, 1958 and $300,000 Waterworks Revenue Bonds, 1960, and the provisions set forth in this resolution are supplementary to the provision in said Resolution Nos. 397 and 711; NOW, THEREFORE, the City Council of the City of Carlsbad, California, DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows: Section 1. Definitions. As used in this resolution the following terms shall have the follow- ing meanings unless the context requires otherwise : (a) “City” means the City of Carlsbad, California. (b) “City Council” or “Council” means the City Council of said City. (c) “Revenue Bond Law” means The Revenue Bond Law of 1941 as cited in the recitals hereof. (d) “The bonds”, “said bonds” or “1970, Series A bonds” means the bonds authorized by this resolution. (e) “Enterprise” means the enterprise defined in said Resolution No. 1515, calling said election, as follows : “The entire water system of the City of Carlsbad including all improvements and extensions later constructed or acquired.” (f) “Gross revenues of the enterprise” means all revenues (as defined in Section 54315 of the Government Code, which include all charges received for, and all other income and receipts derived by the City of Carlsbad from the operation of the enterprise or arising from the enterprise) received by the City of Carlsbad from the services, facilities and water of the enterprise, provided that any inclusion fee or fees which the City is required to charge under paragraph 5 of the Agreement for Purchase, made August 30, 1957, between the City and the Carlsbad Mutual Water Company, shall not be included therein. (g) “Necessary and reasonable maintenance and operation costs of the enterprise” includes the reasonable expenses of management, repair and other expenses necessary to maintain and preserve the enterprise in good repair and working order. (h) “Net revenues of the enterprise” means the amount of the gross revenues of the enterprise remaining after payment therefrom of the necessary and reasonable maintenance and operation costs of the enterprise. (i) “Maximum amount of annual debt service” means the maximum amount required to be paid in any fiscal year on account of interest and principal coming due on said bonds. (j) “Fiscal year” means the year period beginning on July 1st and ending on the next (k) “1958 bonds” means the $767,000 Waterworks Xevenue Bonds, 1958. (1) “1960 bonds” means the $300,000 Waterworks Revenue Bonds, 1968. following June 30th. 2 (m) “Parity boads” means the outstanding 1958 bonds and the 1960 bonds. (n) “Reserve Funds” means the Reserve Funds created by Resolution Nos. 397, 711 and the Reserve Fund created by this resolution. Section 2. Amount, Issuance, Purpose and Nature of Bonds. That under and pursuant to Article 8, Chapter 3, Division 2, Title 5 of the Government Code o€ the State of California and said Revenue Bond Law, revenue bonds of the City of Carlsbad in the amount of $1,225,000 shall be issued for the purposes stated in the recitals hereof. Said revenue bonds shall be and are special obligations of the City of Carlsbad and shall be and are secured by a pledge of and lien upon, and shall be and are a charge upon, and shall be and are payable as to the principal thereof and interest thereon and any premiums upon the redemption of any thereof, solely from the gross revenues of the enterprise, such gross revenues being hereby pledged, charged and assigned for the security 9f the bonds. Section 3. Equality of Bonds, Pledge of Revenues. Pursuant to the Revenue Bond Law of 1941 and this resolution, bonds of this issue shall be equally secured by a pledge, charge and lien upon the gross revenues of the enterprise without priority for number, date of bonds, date of sale, date of execution, or date of delivery, and the payment of the interest on and principal of said bonds and the parity bonds and any premiums upon the redemption of any thereof shall be and are secured by an exclusive pledge, charge and lien upon all of the gross revenues of the enterprise, and all of the gross revenues of the enterprise (including revenues of improvements and extensions later constructed or acquired and revenues of existing systems, plants, works or undertakings to be acquired, improved or extended or for the acquisition, improvement or extension of which said bonds are to be issued) are hereby pledged, charged and assigned for the security of said bonds, and such gross revenues and any interest earned on the revenues shall constitute a trust fund for the security and payment of the interest on and principal of said bonds, and so long as any of the bonds or interest thereon are unpaid said gross revenues and interest thereon shall not be used for any other purpose, except as permitted by Resolution Nos. 397, 711 and this resolution, and shall be held in trust for the benefit of the bondholders and shall be applied pursuant to Resolution Nos. 397, 711 and this resolution, or to Resolution Nos. 397, 711 and this resolution as modified pursuant to their provisions. The bonds authorized hereby when issued and outstanding shall be on a parity with the 1958 bonds and 1960 bonds. Nothing in this resolution shal! preclude: (a) the redemption prior to maturity, at the times and in the manner stated in this resolution, and payment of bonds of this issue, including premiums thereon if any be payable, from proceeds of refunding bonds issued under said Revenue Bond Law of 1941 as the same now exists or as hereafter amended, or under the charter of said City (in the event that the City should adopt a charter), or under any other law of the State of California; (b) the issuance, subject to the limitations in the covenants in Section 21 hereof, of additional indebtedness evidenced by revenue bonds, revenue notes or other similar evidences of indebtedness payab!e out of the revenues derived from the enterprise and ranking on a parity with the bonds of this issue. Section 4. No General City Liability. The general fund of the City of Carlsbad is not liable for the payment of the bonds or their intercst, nomr is the credit or taxing power of the City of Carlsbad pledged for the payment of the bonds or their interest. The holder of the bonds or coupons shall not compel the exercise of the txing- power by the City of Carlsbad or the forfeiture of any of its property. The principal of ar,d interest on the bonds and any premiums upon the redemption of any thereof are not a debt of the City of Carlshad nor a legal or equitable pledge, charge, lien, or encumbrance, upon any oi its property, or upon any of its income, receipts, or 3 e e revenues, except the gross revenues 0.f the enterprise which are, under the terms of this resolution and said Revenue Bond Law, pledged to the payment of said bonds and interest. Section 5. Description of Bonds. Said bonds shall be in ;he principal sum of $1,225,000, shall be 245 in number, numbered 1 to 245, inclusive, and shall be of the denomination of $5,000 each. Said bonds shall be designated WATERWORKS REVENUE BONDS, 1970, Series A, shall be dated July 1. 1970, and shall be payable in consecutive numerical order on July 1, in each year of maturity in the amounts for each of the several years as follows: Year of Maturity Principal Amount 1972 ................ .$ 35,000 1973 ................. 40,000 1974 ................. 40,000 1975 ................. 40,000 1976 ................. 45,000 1977 ................. 50,000 1978 ................. 55,000 1979 ................. 55,000 1980 ................. 55,000 1981 ................. 60,000 Year of Maturity Principal Amount 1982 ................ .$ 60,000 1983 ................. 65,000 1984 ................. 75,000 1985 ................. 80,000 1986 ................. 85,000 1987 ................. 90,000 1988 ................. 95,000 1989 ................. 100,000 1990 ................. 100,000 Section 6. Interest. Said bonds shall bear interest at a rate or rates to be hereafter fixed by resolution or resolutions, but not to exceed seven per cent (7%) per annum, payable semi- annually on the 1st days of January and July of each year. Each bond shall bear interest until the principal sum thereo,f has been paid, provided, however, that if at the maturity date of any bond, or if the same is redeemable prior to maturity and has been duly called for redemption, funds are available for the payment or redemption thereof in full accordance with the terms of this resolution, said bond shall then cease to bear interest. Said bonds and the interest thereon shall be payable in lawful money of the United States of America at the main office of Security Pacific National Bank in the City of Los Angeles, California, or, at the option omf the holder, at any fiscal agency of the City of Carlsbad in Chicago, Illinois, or in New York, New York. Section 7. Execution of Bonds. The Mayor and the City Treasurer of said City are hereby authorized and directed to sign all of said bonds by their printed. lithographed or engraved facsimile signatures, and the City Clerk of said City is hereby authorized and directed to counter- sign said bonds and to affix thereto the corporate seal of said City, and the City Treasurer of said City is hereby authorized and directed to sign the interest coupons of said bonds by his printed, !ithographed or engraved facsimile signature. Section 8. Registration. Said bonds may be registered either as to principal only or as to both principal and interest, and the form of registration of any registered bond may be changed, or any registered bond may be discharged from registration in the manner and with the effect set forth in the provisions for registration contained in the form of bond set forth in Section 32 hereof. Section 9. Call and Redemption of Bonds Prior to Maturity. The bonds maturing on or prior to Jaly 1, 1981, shall not be subject to call or redemption prior to maturity. The bollds maturicg on or after July 1, 1982, or any of them, may he called before maturity and redeemed, 4 at the option of the City Council, on July 1, 1981, or on any interest payment date thereafter prior to maturity, at a redemption price for each redeemable bond equal to the principal amount thereof plus the following premiums (percentage of par value) if redeemed at the following times: REDEMPTION DATES AND PREMIUMS On or After July 1 1981 1982 1983 1984 1985 1986 1987 1988 And Prior to July 1 1982 1983 1984 1985 1986 1987 1988 1989 Revenue Premium 475% 4% 375% 3% 2%% 2% l%% 1% 1989 Maturity 5% All or any of the bonds subject to call may be called for redemption at any oae time. If less than all of the bonds subject to such call are redeemed at any one time, such bonds shall be redeemed only in inverse order of maturity and number, beginning with the highest numbered bond. The interest payment date on which bonds are to be presented for redemption is hereinafter some- times called the “redemption date”. Sectiojn 10. Notice of Redemption. Notice of the intended redemption shall be published by one insertion in a newspaper of general circulation in the City of Carlsbad, California, and in a financial newspaper or journal of national circulation published in the City of New York, New York, said publications to be at least 30 days but not more than 60 days prior to the redemption date. The notice of redemption shall (a) state the redemption date; (b) state the redemption price; (c) state the numbers and dates of maturity of the bonds to be redeemed, provided, however, that whenever any call includes all of the bonds of a maturity the numbers of the bonds of such maturity need not be stated ; (d) require that such bonds be surrendered with all interest coupons maturing subsequent to the redemption date (except that no coupons need be surrendered on bonds registered as to both principal and interest) at the main office of Security Pacific National Bank in the City of Los Angeles, California, or at any fiscal agency of the City of Carlsbad in Chicago, Illinois, or in New York, New York; (e) require that bonds which at the time of call are registered so as to be payable otherwise than to bearer shall be accompanied by appropriate instruments of assignment duly executed in blank; and (f) give notice that further interest on such bonds will not accrue after the designated redemption date. The City Treasurer shall, on or before the date of publication of said notice of redemption, mail a similar notice, postage prepaid to any person, firm or corporation that originally purchased any of the bonds from the City. If any of the bonds designated for redemption shall be registered so as to be payable otherwise than to bearer, the City Treasurer shall, on or before the date of publication of said notice of redemption, mail a similar notice, postage prepaid, to the respective registered owners thereof at the addresses appearing on the bond registry books. 0 * The actual receipt by the holder of any bond (hereinafter referred to as “bondholder”) or by any original purchaser of notice of such redemption shall not be a condition precedent to redemp- tion, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such bonds or the cessation of interest on the date fixed for redemption. The notice or notices required by this section shall be given by the City Treasurer. A certificate by the City Treasurer that notice of call and redemption has been given to holders of registered bonds and to original purchasers as herein provided shall be conclusive as against all parties, and no bondholder whose registered bond is called for redemption may object thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that he failed to actually receive such notice of call and redemption. Section 11. Redemption Fund. Prior to the date fixed for redemption there shall be estab- lished in the City Treasury a redemption fund to be described or known as WATERWORKS REVENUE BONDS, 1970, Series A, REDEMPTION FUND (hereinafter sometimes referred to as “Redemption Fund”), and prior to the redemption date there must be set aside in said Redemption Fund moneys available for the purpose and sufficient to redeem, at the premiums payable as in this resolution provided, the bonds designated in such notice for demeption. Said moneys must be set aside in said fund solely for that purpose and shall be applied on or after the redemption date to payment (principal and premium) for the bonds to be redeemed upon presentation and surrender of such bonds and (except as to bonds registered as to both principal and interest) all interest coupons maturing after the redemption date, and shall be used only for that purpose. Any interest coupon due on or prior to the redemption date shall be paid from the Bond Service Fund provided in Section 16 hereof upon presentation and surrender thereof. Any interest due on or prior to the redemption date upon bonds registered as to both principal and interest shall be paid from said Bond Service Fund. Each bond presented (if unregistered or registered as to principal only) must have attached thereto or presented therewith all interest coupons maturing after the redemption date. If after all of the bonds have been redeemed and cancelled or paid and cancelled there are moneys remaining in said Redemption Fund, said moneys shall be transferred to the Water Fund; provided, however, that if said moneys are part of the proceeds of refunding bonds said moneys shall be transferred to the fund created for the payment of principal of and interest on such refunding bonds. Section 12. Effect of the Notice of Redemption. When notice of redemption has been given, substantially as provided in Section 10 hereof, and when the amount necessary for the redemption of the bonds called for redemption (principal and premium) is set aside for that purpose in the Redemption Fund, as provided in Section 11 hereof, the bonds designated for redemption shall become due and payable on the date fixed for redemption thereof, and upon presentation and surrender of said bands and (except as to bonds registered as to both principal and interest) all interest coupons maturing after the redemption date, at the place specified in the notice of redemp- tion, and, if any of said bonds be registered, upon the appropriate assignment thereof in blank, such bonds shall be redeemed and paid at said redemption price out of the Redemption Fund, and no interest will accrue on such bonds called for redemption or on any interest coupons thereof after the redemption date specified in such notice, and the holders of said bonds so called for redemption after such redemption date shall look for the payment of such bonds and the premium thereon only to said Redemption Fund. All bonds redeemed and all interest coupons thereof shall be cancelled forthwith by the City Treasurer and shall not be reissued. All interest coupons pertaining to any redeemed bonds, which coupons have matured on or prior to the time fixed for redemption, shall continue to be payable to the respective holders thereof but without interest thereon. All unpaid interest payalJle at or prior to the date fixed for redemption upon bonds registered in such manner that the interest is payable only to the registered 6 olwners shall continue to be payable to the respective registered owners of such bonds, or their order, but without interest thereon. Section 13. Funds. Pursuant to Resolution No. 397 there were created in the City Treasury of the City of Carlsbad the following funds: 1. Water Fund; 2. Waterworks Maintenance and Operation Fund (hereinafter sometimes called “Main- tenance and Operation Fund”) ; Said funds were created under and pursuant to said Revenue Bond Law and are hereby expressly continued and shall be applied pursuant to said Resolution Nos. 397, 711 and this resolution and under and pursuant to said Revenue Bond Law of 1941. There are hereby created in the City Treasury of the City of Carlsbad the following funds: 1. Waterworks Revenue Bonds, 1970, Construction Fund (hereinafter sometimes called “Construction Fund”) ; 2. Waterworks Revenue Bonds, 1970, Series A, Bond Service Fund (hereinafter some- times called “Bond Service Fund”) ; 3. Waterworks Revenue Bonds, 1970, Series A, Reserve Fund (hereinafter sometimes called “Reserve Fund”) ; Said funds are created under and pursuant to said Revenue Bond Law and shall be applied pursuant to this resolution and under and pursuant to said Revenue Bond Law. Section 14. Construction Fund. To insure the application of the proceeds received from the sale of the bonds to the purposes set forth in the recitals hereof, for which said bonds hereof are to be issued, the proceeds of the sale of the bonds shall be placed in the Construction Fund, to remain therein until from time to time expended for the purposes set forth in Proposition N in the recitals hereof, except for the accrued interest which shall be placed in the Bond Service Fund and the amount to be placed in the Reserve Fund as prosvided in Section 17 hereof. The City may deposit money received from any other source in the Construction Fund. Money in the Construction Fund may be temporarily invested in any authorized negotiable direct obliga- tions of the United States, provided that the maturity shall not be later than 91 days from the date of investment. If any sum remains in said Fund after the full accomplishment of the purposes for which the bonds were issued, it shall be transferred to and placed in the Reserve Fund to the extent necessary at that time to bring said Fund to the amount required in Section 17 hereof and, as to any remaining balance, to the Bond Service Fund. Section 15. Water Fund. All gross revenues of the enterprise shall be paid into the Water Fund, and payments from said fund shall be made only as provided by law, Resolution Nos. 397, 711 and this resolution. Section 16. Bond Service Fund. So long as any of said bonds are outstanding, on the first day of each calendar month there shall be set aside and transferred fom the Water Fund to the Bond Service Fund sums in equal aliquot parts for each one-half year so that at least the full amount required to pay, as it becomes due, the interest on the bonds and/or any maturity or installment of principal of the bonds shall be set aside in the Bond Service Fund at least one month prior to the date the installment of interest and/or principal becomes due. No such transfer need be made prior to the actual delivery of the bonds to the purchaser thereof; provided, how- ever, that if the bonds are issued and delivered subsequent to their date there shall be set aside, 7 transferred to and placed in the Bond Service Fund on the first day of the calendar month next subsequent to the date of delivery sums at least sufficient, together with other transfers of the same amount made on the first day of each calendar month thereafter, to provide in said Bond Service Fund one month prior to the maturity of the first installment of interest and/or principal of the bonds the full amount of such interest and/or principal. Any amount required to be set aside, transferred to and placed in the Bond Service Fund may be prepaid in whole or in part by being earlier set aside, transferred to and placed in the Bond Service Fund and in that event the monthly transfer which has been so prepaid need not be made at the time appointed therefor. In any event at least one month prior to the due date of any maturity or installment of principal of and/or interest on the bonds all sums required for the payment thereof must be in such Bond Service Fund in cash. Such sums shall be so transferred out of the Water Fund. The City Council directs that such sums be so set aside through transfers or payments made in such amounts as may be necessary to comply with the foregoing provisions of this section. Money set aside and placed in said Bond Service Fund shall remain therein until from time to time expended for the payment of such principal and/or interest, and shall not be used for any other purpose whatever, except that any such money so set aside and placed in said Bond Service Fund which at any time may be in excess of the amount which at that time is required by the terms of this section to be in the Bond Service Fund in cash may be temporarily invested in any authorized negotiable direct obligations of the United States, provided that the maturity shall not be later than 18 months from the date of investment but such investment shall not affect the obligation of the City to cause the full amount required by the terms of this section to be available in said Bond Service Fund in cash at the time required by the terms of this section. Any money remaining in said Bond Service Fund in excess of the amount required to accomplish the purpose of its estab- lishment shall be transferred to the Water Fund. The bonds and interest coupons shall recite that they are payable from the Water Fund, but said bonds and coupons, notwithstanding such recital, shall be paid from the Bond Service Fund, which is derived from the Water Fund and is a subdivision thereof. If at the time any bond or interest coupon is presented for payment the moneys in the Eond Service Fund are insufficient to make such payment, funds sufficient for such payment shall be transferred from the Reserve Fund to said Bond Service Fund. Section 17. Reserve Fund. Immediately upon receiving the proceeds of the sale of the bonds there shall be placed in the Reserve Fund an amount equal to the maximum amount of annual debt service on said bonds and thereafter there shall be maintained in said Reserve Fund a sum equal to said maximum amount of annual debt service. Moneys in the Reserve Fund shall be used solely for the purpose of paying the principal of and interest on the bonds in the event that the moneys in the Bond Service Fund are insufficient therefor and for that purpose may be withdrawn and transferred to the Bond Service Fund, except that said moneys may be invested in any authorized negotiable direct obligations of the United States, provided that the maturity shall not be later than 36 months from the date of investment. Any interest earned from invest- ment of money in the Reserve Fund shall be deemed to be a part of the gross revenues of the enterprise and shall be placed in the Mrater Fund. No payment need be made into the Reserve Fund so long as there shall be in said fund a sum at least equal to said maximum amount of annual debt service. Whenever moneys are withdrawn from the Reserve Fund to pay principal and interest of bonds, the amount in the Reserve Fund shall be restored to the amount required in this section by transfers from surplus. Any amount in the Reserve Fund in excess of the maxi- mum amount of annual debt service shall be transferred to the Bond Service Fund and money in the Reserve Fund may be used for paying the last outstanding maturity of said bonds. Section 18. Maintenance and Operation Fund. Monthly sums sufficient for the necessary and reasonable maintenance and operation costs of the enterprise shall be apportioned from the revenues and paid from the Water Fund into the Maintenance and Operation Fund after the payment of the principal and interest on the parity bonds and the 1970, Series A bonds and after the payment of sums into the Reserve Funds. Section 19. Additional Fund Uses. After the monthly transfers required or permitted by Sections 16, 17 and 18 hereof have been made and all other covenants of the City contained herein and in Resolution Nos. 397 and 711 hare been duly performed, except for the amount needed in said Water Fund as working capital, equal to at least three months’ estimated necessary and reasonable maintenance and operation costs, any money remaining in the Water Fund (herein sometimes referred to as “surplus”) shall be used to build up the Reserve Funds to the maximum amount of annual debt service, or for their restoration, if necessary, as provided in Sections 17 in Resolution Nos. 397, 711 and in this resolution and after the above use said surplus may be used in any or all of the following ways: (a) investment in any authorized negotiable direct obligations of the United States provided that the maturity shall not be later than 5 years from the date of investment, (h) the redemption of any of said bonds which are subject to redemption prior to maturity, (c) the purchase from time to time of any bonds which are subject to redemption prior to maturity (irrespective of the maturity or number of such bonds) at such prices and in such manner, either at public or private sale, or otherwise as the City Council in its discretion may determine, but the purchase price (including brokerage or other charges but excluding accrued interest) shall not exceed 104%% of the principal amount thereof, (d) the payment of the costs of extensions of or additions to and improvements of the enterprise, (e) the payment of principal and interest of general obligation bonds of the City issued for waterworks purposes, (f) any of the ways set forth in Sections 19 of said Resolution Nos. 397 and 711, (g) any other waterworks purpose, and, except as otherwise permitted by this resolution, no other transfer or uses of said revenues may he made. Section 20. Warranty. The City shall preserve and protect the security of the bonds and the rights of the bondholders and warrant and defend their rights against all claims and demands of all persons. Section 21. Covenants. So long as any of the bonds issued hereunder are outstanding and unpaid, or so long as provision for the full payment and discharge thereof at maturity or upon redemption thereof prior to maturity through the setting apart in the Bond Service Fund or in the Redemption Fund or in a special trust fund to insure the payment or redemption thereof (as the case may be) of money sufficient for that purpose has not been made, the City makes the following covenants with the bondholders tlnder the provisions of the Revenue Bond Law of 1941 (to he performed by the City or its proper officers, agents or employees) which covenants are necessary, convenient and desirable to secure the bonds and tend to make them more marketable; provided however, that said covenants do not require the City to expend any funds other than the revenues received or receivable from the enterprise. The City covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every bond issued hereunder, together with the premium thereon, if any be payable on the date, at the place and in the manner mentioned in the honds and coupons and in accordance with this resolution, and that the payments into the Bond Service Fund, and Reserve Fund will be made, all in strict conformity with the terms of said bonds and of this resolution, and that it will faithfully observe and perform all of the con- ditions, covenants 2nd requirements of Resolution Nos. 397, 711, this resolution and all reso- lutions supplemental thereto and of the bonds issued hereunder and the parity bonds, and that time of such payment and performance is of the essence of the City’s contract with the bondholders. The City covenants that in order to fully preserve and pro- tect the priority and security of the bonds the City shall pay from the Water Fund and discharge Covenant 1. Punctual Payment. Covenant 2. Discharge Claims. 9 all lawful claims for labor, materials and supplies furnished for or in connection with the enterprise which, if unpaid, may become a lien or charge upon the revenues prior or superior to the lien of the bonds and impair the security of the bonds. The City shall also pay from the Water Fund all taxes and assessments or other governmental charges lawfully levied or assessed upon or in respect of the enterprise or upon any part thereof or upon any of the revenues therefrom. Covenant 3. Commence Acquisition. As soon as funds are available therefor, the City will commence the accomplishment of the purposes for which the bonds are issued and will continue the same to completion with all practical dispatch and in an economical manner. Covenant 4. Operate Enterprise in Efficient and Economical Manner. The City covenants and agrees to operate the enterprise in an efficient and economical manner and to operate, maintain and preserve the enterprise in good repair and working order. Covenant 5. Against Sale. The City covenants that the enterprise shall not be mortgaged or otherwise encumbered, sold, leased, pledged, any charge placed thereon, or disposed of as a whole or substantially as a whole unless such sale or other disposition be so arranged as to provide for a continuance of payments into the Water Fund sufficient in amount to permit payment there- from of the principal of and interest on and premiums, if any, due upon the redemption thereof, of the parity bonds and the 1970, Series A bonds, payment of which is required to be made out of the revenues of the enterprise, and also to provide for such payments into the Reserve Funds as are required under the terms of Resolution Nos. 397, 711 and this resolution. The revenues from the enterprise or any other funds pledged or otherwise made available to secure payment of the principal of and interest on the bonds shall not be mortgaged, encumbered, sold, leased, pledged, any charge placed thereoa, or disposed ozf or used except as authorized by the terms of Resolution Nos. 397, 711 and this resolution. The City further covenants that it will not enter any agreement which impairs the operation of the enterprise or any part of it necessary to secure adequate revenues to pay the principal and interest of the parity bonds and the 1970, Series A bonds or which otherwise would impair the rights of the bondholders with respect to the revenues or the operation of the enterprise. If any substantial part of the enterprise is sold the payment therefor shall be placed in the Bond Service Funds or the Redemption Funds created by Resolution Nos. 397, 711 and this resolution in the proportion that the then outstanding parity bonds and the then out- standing 1970, Series A bonds bear to the total of all of the then outstanding bonds of both issues, and shall be used to pay or call outstanding parity bonds and the 1970, Series A bonds in the manner provided in Resolution Nos. 397, 711 and this resolutioln. Covenant 6. Insurance. The City covenants that it shall at all times maintain with respon- sible insurers all such insurance on the enterprise as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to such works or properties. If any useful part of the enterprise shall be damaged or destroyed, such part shall be restored to use. The money collected from insurance against accident to or destruction of the physical enterprise shall be used for repairing or rebuilding the damaged or destroyed enterprise, and to the extent not so applied, shall be paid into the Bond Service Funds created by Resolution Nos. 397, 711 and this resolution in the proportion that the then outstanding parity bonds and the then outstanding 1970, Series A bonds bear to the total of all of the then outstanding bonds of both issues to be applied to the retirement of any outstanding and unredeemed bonds issued for the enterprise. The City shall also maintain with responsible insurers workmen's compensation insurance and insurance against public liability and property damage to the extent reasonably necessary to protect the City and the bondholders. e Covenant 7. Records and Accounts. The City covenants that it shall keep proper books of record and accounts of the enterprise, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the enterprise. Said books shall at all times be subject to the inspection of the holders of not less than 10% of the outstanding bonds or their representatives authorized in writing. The City covenants that it will cause the books and accounts of the enterprise to be audited annually by an independent certified public accountant or firm of certified public accountants and will make available for inspection by the bondholders at the office of the City Clerk of said City and at the office of the City Treasurer thereof, a copy of the report of such accountant or accountants and will also upon request furnish a copy thereof to any bondholder and to any person, firm or corporation who originally purchased the bonds from the City. The City covenants that it will cause to be published annually, not more than 120 days after the close of each fiscal year, a summary statement showing the amount of gross revenues and the amount of all other funds collected which are required to be pledged or otherwise made available as security for payment of principal of and interest on the bonds, the disbursements from such revenues and other funds in reasonable detail, and a general statement of the financial and physical condition of the enterprise. The City shall furnish a copy of the statement to any bondholder upon request. Covenant 8. No Free Service. The City covenants that no water or other service from the enterprise may be furnished or rendered to the United States of America, the State of California, the City, any other municipal or public corporation or public agency or any private corpo- ration or person free nor at rates lower than those charged other persons for similar service, except that charges to the City for water used for street or sewer flushing and for fire hydrants may be made at rates lower than those charged private persons, and all rates for service rendered the City shall be at a reasonable charge for the service rendered. No building or other real property of the enterprise shall be furnished free to the City, but the City shall pay into the Water Fund the reasonable rental value of any property so used, and reasonable and proper charges for service rendered or quarters furnished to the enterprise shall be paid to the City from the Water Fund. The City covenants that it will at all times during the period any of the bonds are outstanding maintain and enforce valid regulations for the payment of bills for water service and that such regulations shall at all times during such period provide that the City shall discontinue service to any user whose water bill has not been paid within the time fixed by said regulations, and such time shall not be more than 45 days from the date the water bill became delinquent. Covenant 9. Rates and Charges. The City shall and hereby covenants that it shall prescribe, revise and collect such charges for the services, facilities and water of the enterprise which, after malting allowances for contingencies and error in the estimates, shall be at least sufficient to pay the following amounts in the order set forth : (a) The interest on and principal of the parity bonds and the 1970, Series A bonds as they become due and payable; (b) All payments required for co,mpliance with Resolution Nos. 397, 711 and this (c) All current expenses for the necessary and reasonable maintenance and operation (d) A11 payments to meet any other obligations of the City which are charges, liens, resolution including the payments required to be made into the Reserve Funds; costs of the enterprise; encumbrances upon or payable from the revenues of the enterprise; 11 and the charges shall be so fixed that after the payment of item designated (c) of this covenant the net revenues of the enterprise available for the payment of items designated (a), (b) and (d) of this covenant shall be at least 1.35 times the amounts payable under said (a) and (b) and 1 times the amounts payable under said (d). Covenant 10. No Priority for Additional Bonds. The City covenants that no additional bonds sha!l be issued pursuant to said Revenue Bond Law or any other law of the State of Cali- fornia or under the charter of said City (in the event said City should hereafter adopt a charter) having any priority in payment of principal or interest out of the revenues of the enterprise over the bonds hereby authorized and payable out of said revenues. Covenant 11. Limits on Additional Debt. The City covenants that (except for bonds issued to refund these bonds) no additional indebtedness evidenced by revenue bonds, revenue notes or other similar evidences of indebtedness payable out of revenues derived from the enterprise and ranking on a parity with these bonds shall be created or incurred unless: First: SecaPed: The City is not in default under the terms of this resolution. The net revenues of the enterprise, calculated on sound accounting principles, as shown by the books of the City for the latest fiscal year ending prior to the incurring of such additional indebtedness as shown by an audit certificate or opinion of an independent certified public accountant or firm of certified public accountants employed by the City, plus, at the option of the City either or both of the items hereinafter in this Covenant 11 designated (a) and (b), shall have amounted to at least 1.35 times the maximum amount of annual debt service in any fiscal year thereafter on all indebtedness to be outstanding immediately sub- sequent to the incurring of such additional indebtedness. The items either or both of which may be added to such net revenues for the purpose of applying the restriction contained in this Covenant 11 are the following : (a) An allowance for estimated increase in net revenues from any additions to or improve- ments or extensions ol the enterprise which have been made but which, during all or any part of such fiscal year, were not in service and from any such additions, improvements or exten- sions to be made with the proceeds of such additional indebtedness or with the proceeds of I2onds previously issued, all in an amount equal to 755% of the estimated additional average annual net rerenues to be derived from such additions, improvements and extensions for the first 36 month period in which each addition, improvement or extension is respectively to be in operation, all as shown by the certificate or opinion of a qualified independent engineer employed by the City, (b) An allowance for estimated increases in net revenues arising from any increase in water rates which has become effective prior to the incurring of such additional indebtedness but which, during all or any part of such fiscal year, was not in effect, in an amount equal to 75% of the amount by which the net revenues of the enterprise would have been increased if such increase in rates had been in effect during the whole of such fiscal year, as shown by the certificate or opinion of a qualified independent engineer employed by the City. Section 22. Investment of Funds. Obligations purchased as an investment of moneys in any funds created by Resolution Nos. 397, 711 and this resolution which are authorized to be invested shall be deemed at all times to be a part of such funds and any profit realized from the investment shall be credited to such funds and any loss resulting from such investment shall be charged to such funds and, except for the Reserve Funds, the interest accruing thereunder shall be credited to such funds. The City shall sei1 at the best price obtainable or present for redemption any obligations so purchased whenever it shall be necessary to do so in order to provide moneys to meet any payment or transfer from such account or from such funds. For the purpose of deter- mining at any given time the balance in any such fund, any such investment constituting a part of such fund shall be valued at the then estimated or appraised market value of such investment. Section 23. Lost, Destroyed or Mutilated Bonds. In the event that any bond or any interest coupon pertaining thereto is lost, stolen, destroyed or mutilated, the City will cause to be issued a new bond or coupon similar to the original to replace the same in such manner and upon such reasonable terms and conditions, including the payment of costs and the posting of a surety bond if the City deems such surety bond necessary, as may from time to time be determined and prescribed by resolution. The City Council may authorize such new bond or coupon or coupons to be signed and authenticated in such manner as it determines in said resolution. Section 24. Cancellation of Bonds. All bonds and coupons surrendered to any fiscal agent of the City for payment upon maturity or for redemption shall upon payment therefor be cancelled immediately and forthwith transmitted to the Treasurer of the City. All of the bonds and interest coupons surrendered to the Treasurer for payment upon maturity or for redemption shall upon payment therefor be cancelled immediately. All of the cancelled bonds and interest coupons shall remain in the custody of the Treasurer until destroyed pursuant to due authorization. Section 25. Consent of Bondholders. The consents of bondholders provided for in Sections 25 to 31 inclusive, hereof shall relate solely to the amendment, waiver or modification of the covenants specified in Section 21 hereof and shall not be effective to waive or modify any other provisions of this resolution or any of the proceedings for issuance of said bonds. Any act relating to the amendment, waiver or modification of any of the said covenants consented to by bondholders holding sixty per cent (60%) in aggregate principal amount of the outstanding bonds, exclusive of bonds, if any, owned by the City, shall be binding upon the holders of all of the bonds and interest coupons, whether such coupons be attached to bonds or detached therefrom, and shall not be deemed an infringement of any of the provisions of this resolution or of said Revenue Bond Law, whatever the character of such act may be, and may be done and performed as fully and freely as if expressly permitted by the terms of this resolution, and after such consent relating to such specified matters has been given, no bondholder or holder of any interest coupon, whether attached to a bond or detached therefrom, shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the City Council or any officer of said City from taking any action pursuant thereto. Section 26. Calling Bondholders’ Meeting. If the City Council shall desire to obtain any such consent it shall duly adopt a resolution calling a meeting of bondholders for the purpose of considering the action, the consent to which is desired. Section 27. Notice of Meeting. Notice specifying the purpose, place, date and hour of such meeting shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New York not less than sixty (60) days and not more than ninety (90) days prior to the date fixed for the meeting. Such notice shall set forth the nature of the proposed action, consent to which is desired. If any of the bonds shall be so registered as to be payable otherwise than to bearer, the City Clerk shall, on or before the first publication of such notice, mail a similar notice, postage prepaid, to the respective registered owners thereof at their addresses appearing on the bond registry books. The place, date and hour of holding such meeting and the date or dates of publishing and mailing such notice shall be determined by the City Council, in its discretion. 13 e The actual receipt by any bondholder of notice of any such meeting shall not be a condition precedent to the holding of such meeting, and failure to receive such notice shall not affect the validity of the proceedings thereat. A certificate by the City Clerk, approved by resolution of the City Council of said City, that the meeting has been called and that notice thereof has been given as herein provided shall be conclusive as against all parties and it shall not be open to any bondholder to show that he failed to receive notice of such meeting. Section 28. Voting Qualifications. Any bondholder may, prior to any such meeting, deliver his bond or bonds to any agency designated by the City Council of the City for the purpose, and shall thereupon be entitled to receive an appropriate receipt for the bond or bonds so deposited, calling for the redelivery of such bond or bonds at any time after the meeting. The City Treasurer shall prepare and deliver to the Chairman of the meeting a list of the names and addresses of the registered owners of bonds, with a statement of the maturities and serial numbers of the bonds held and deposited by each of such bondholders, and no bondholder shall be entitled to vote at such meeting unless his name appears upon such list or unless he shall present his bond or bonds at the meeting or a certificate of deposit thereof, satisfactory to the City Coucil, executed by a bank or trust company. No bondholder shall be permitted to vote with respect to a larger aggregate principal amount of bonds than is set against his name on such list, unless he shall produce the boads upon which he desires to vote, or a certificate of deposit thereof as above provided. Section 29. Issuer-owned Bonds. The City Council covenants that it will present at the meeting a certificate, signed and verified by one member thereof and by the City Treasurer, stating the maturities and serial number of all bonds owned by, or held for account of, the City, directly or indirectly. No person shall be permitted at the meeting to vote or consent with respect to any bond appearing upon such certificate, or any bond which it shall be established at or prior to the meeting is owned by the City, directly or indirectly, and no such bond (in this resolution referred to as “issuer-owned bond”) shall be counted in determining whether a quorum is present at the meeting. Section 30. Quorum and Procedure. A representation of at least sixty per cent (60%) in aggregate principal amount of the bonds then outstanding (exclusive of bonds, if any, owned by the City) shall be necessary to constitute a quorum at any meeting of bondholders, but less than a quorum may adjourn the meeting from time to time, and the meeting may be held as so adjourned without further notice, whether such adjournment shall have been had by a quorum or by less than a quorum. The City Council shall, by an instrument in writing, appoint a temporary chairman of the meeting, and the meeting shall be organized by the election of a permanent chairman and a secretary. At any meeting each bondholder shall be entitled to one vote for every $1,000 principal amount of bonds with respect to which he shall be entitled to vote as aforesaid, and such vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The City Council, by its duly authorized representative, may attend any meeting of the bondholders, but shall not be required to do so. Section 31. Vote Required. At any such meeting held as aforesaid there shall be submitted for the consideration and action of the bondholders a statement of proposed action, consent to which is desired, and if such action shall be consented to and approved by bondholders holding at least sixty per cent (60%) in aggregate amount of the bonds then outstanding (exclusive of issuer-owned bonds) the chairman and secretary of the meeting shall so certify in writing to the City Council, and such certificate shall constitute complete evidence of consent of bondholders under the provisions of this resolution. -4 certificate signed and verified by the chairman and the secretary of any such meeting, shall be conclusive evidence and the only competent evidence of matters stated in such certificate relating to proceedings taken at such meeting. 14 Section 32. Bond and Coupon Forms. Said bonds shall be payable to bearer, shall be issued in negotiable form, and shall be negotiable, and the form of said bonds and interest coupons thereof shall be substantially as follows : UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF SAN DIEGO CITY OF CARLSBAD WATERWORKS REVENUE BOND, 1970, SERIES A No.. ........... $5,000 THE CITY OF CARLSBAD, a municipal corporation situated in the County of San Diego, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from the Water Fund, as hereinafter provided, to the bearer or, if this bond be registered, to the registered owner hereof, on July 1, 19.. .. upon presentation and surrender of this bond, the sum of FIVE THOUSAND DOLLARS, with interest thereon at the rate of ... % per annum, payable semiannually on the first days of January and July of each and every year from the date hereof until this bond is paid upon presentation and surrender of the respective interest coupons hereto attached; provided, however, that if at the maturity date of this bond or, if the same is redeemable prior to maturity and shall be duly called for redemption, then at the date fixed for redemption, funds are available for the payment or redemption thereof, as provided in the resolution of the City Council of said City authorizing the bonds adopted on ............. 19. .. designated Resolution No. ............ (hereinafter sometimes referred to as “said resolution”), this bond shall then cease to bear interest. Both principal and interest are payable in lawful money of the United States of America at the main office of Security Pacific National Bank in the City of Los Angeles, California, or, at the option of the holder hereof, at any fiscal agency of the City of Carlsbad in Chicago, Illinois, or in New York, New York. This bond and the interest hereon and any premium upon the redemption hereof are not a debt of the City of Carlsbad, nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts, or revenues except the revenues of the municipal waterworks system pledged to its payment, and the principal and interest of this bond and any premium upon the redemption hereof are payable solely from the revenues pledged to its payment, to wit, gross revenues from the waterworks system of the City of Carlsbad, and said City is not obligated to pay such principal, interest and premium except from said revenues. The Water Fund is established under and pursuant to the Revenue Bond Law of 1941, and under the provisions of Resolution No. 397 of the City Council of said City and said Resolution No. ..... the gross revenues received from the services, facilities and water or arising from the entire waterworks system of the City (except for inclusion fees as defined in said resolutions) are required to be deposited in the City Treasury to the credit of said Water Fund and only used for the purposes authorized by Resolution Nos. 397, 711 and said Resolution No. .... including the payment of principal and interest of the issue of bonds of which this is one. This is one of a duly authorized issue of bonds of the City designated “Waterworks Revenue Bonds, 1970, Series A,” hereinafter called (‘the bonds,” all of which have been issued pursuant to Article 8, Chapter 3, Division 2, Title 5 of the Government Code of the State of California and the Revenue Bond Law of 1941 (being Chapter 6, Part 1, Division 2, Title 5 of said Government Code) and the creation of said issue and the terms and conditions of the 15 e 0 bonds are provided for by said Resolution No. .... and this reference incorporates said resolu- tion and said Chapter 6 herein, and by acceptance hereof the holder of this bond and the coupons hereto attached assents to said terms and conditions. Said resolution is adopted under, and this bond and the interest coupons hereto attached are issued under and are to be construed in accordance with the laws of the State of California. By the terms of said Revenue Bond Law and by covenant expressed in said resolution, officers of the City are obligated to fix rates and collect charges for service from the water- works system of the City such as to provide revenues sufficient to pay the interest on and principal of the bonds as they become due and payable in addition to all other obligations and indebtedness payable from such Water Fund or any fund derived therefrom and all current expenses for the necessary and reasonable maintenance and operation costs of the waterworks system, are prohibited from issuing bonds having any priority with respect to payment from the waterworks revenues, and are subject to conditions with respect to any sale of said waterworks system. In the manner provided in said resollution, any or all of the obligations referred to in this paragraph and certain other obligations mentioned in said resolution may be waived with the consent of the holders of 60% in aggregate principal amount of the outstanding bonds, exclusive of issuer-owned bonds. If this bond matures on or after July 1, 1982, it is callable and redeemable prior to maturity, all in accordance with the provisions for redemption endorsed hereon. This bond and the coupons hereto attached are negotiable instruments and shall be negotiable by delivery. This bond may be registered as to principal only or as to both principal and interest, in accordance with the provisions for registration endorsed hereon. It is hereby certified and recited that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the incurring of the indebtedness evidenced by this bond and in the issuance of this bond exist, have happened, and have been performed in due time, form and manner as required by the Constitution and Statutes of the State of California, and that this bond, together with all other indebtedness of the City pertaining to the aforesaid waterworks system, is within every debt and other limit prescribed by the Constitution and Statutes of the State of California. IN WITNESS WHEREOF, said City of Carlsbad has caused this bond to be signed by the Mayor and the City Treasurer of said City by their facsimile signatures, countersigned by the City Clerk of said City, and sealed with the corporate seal of said City, and the interest coupons hereto attached to be signed by the City Treasurer by his facsimile sipnature, and has caused this bond to be dated the first day of July, 1970. Mayor of'the City of Carlsbad, California \ COUNTERSIGNED : ........................................... City Treasurer of the City of Carlsbad, California ........................................... City Clerk of the City of Carlsbad, California (SEAL) 16 (COUPON FORM) Coupon No.. .. 19.. ......... On the first day of.. ............ THE CITY OF CARLSBAD, CALIFORNIA, will pay to the bearer, at the main office of Security Pacific National Rank in the City of Los Angeles, California, oc at the option of the holder hereof, at any fiscal agency of the City of Carlsbad in Chicago, Illinois, or in New York, New York, out of the Water Fund of said City and not out of any other fund or moneys of the City, the sum of in lawful money of the United States of America, being the interest then due on WATERWORKS REVENUE BOND, 1970, Series A, No. dated July 1, 1970, subject to the provisions on the reverse hereof. $ ............ ............. .......................................... City Treasurer of the City of Carlsbad, California On the reverse side of the coupon there shall be printed substantially the following: (REVERSE OF COUPON) If the bond to which this coupon is attached is redeemable and is duly called for redemp- tion on a date prior to the maturity date of this coupon, this coupon will be void. Substantially the following provisions for redemption prior to maturity and for registration shall be printed on the reverse side of the bond: PROVISIONS FOR REDEMPTION PRIOR TO MATURITY If this bond matures on or after July 1, 1982, it is redeemable prior to maturity in the manner and subject to the terms and provisions, and with the effect, set forth in Resolution No. .... at the option of said Council, on July 1, 1981, or on any interest payment date thereafter prior to maturity, upon at least 30 days’ prior notice published in a newspaper circulated in the City of Carlsbad, California, and in a financial newspaper or journal of national circulation published in the City of New York, New York, at a redemption price for each redeemable bond equal to the principal amount thereof plus the following premiums (percentage of par value) if redeemed at the following times: On or After July 1 1981 1982 1983 1984 1985 1986 1987 1988 1989 REDEMPTION DATES AND PREMIUMS And Prior to July 1 1982 1983 1984 1985 1986 1987 1988 1989 Maturity Refunding Premium 454% 4% 354% 3% 254% 2% l%% 1% %% 17 .. PROVISIONS FOR REGISTRATION This bond may be registered in the name of any person as the registered owner hereof, either as to principal only or as to both principal and interest, and, if registered in either of said forms may be changed to registration in the other of said forms or discharged from registration. Each registration, transfer after registration, change of form of registration, or discharge from registration of this bond shall be entered by the City Treasurer in books kept by him for the purpose and noted by him in the registration blank below. Registration as to principal only shall not affect the negotiability by delivery of the coupons pertaining hereto. Upon registration as to both principal and interest, all unmatured coupons pertaining hereto shall be surrendered to the Treasurer and may be preserved or cancelled in his discretion. So long as this bond is registered no transfer hereof shall be valid for any purpose unless made by the registered owner and entered and noted as herein provided, and the principal hereof and any redemption premium shall be payable only to the registered owner, or to his order. Interest on this bond, if registered as to both principal and interest, shall be payable to the person whose name appears upon the registry books as the registered owner hereof at the close of business on the tenth day preceding the interest payment date, or to his order. If this bond is registered as to both principal and interest and its registration is changed to registration as to principal only, or if it is discharged from registration, there shall be attached hereto coupons representing interest hereon to become due thereafter to the date of maturity hereof. In lieu thereof, and upon surrender and cancellation hereof, the Treasurer in his discretion may issue in exchange therefor a new bond, with such coupons attached, identical with this bond, except for the previous notations on the registration blank hereon, and except that the signatures on the new bond shall be those of the persons holding the offices at the time of affixing such signatures. The issuance of any such new bond or new coupons shall be at the expense of the registered owner. Each discharge hereof from registration shall be effected by an entry on the registry books, and a notation in the blank below, that this bond is payable to bearer, whereupon this bond shall become an unregistered bearer instrument, negotiable by delivery as if it had never been registered. Each request for registration, transfer, change or discharge must be in form satisfactory to the Treasurer and must be made in writing, signed by the registered owner, or by his agent duly authorized in writing, or by the bearer, as the case may be. Date of In Whose Name Manner of Signature of Registration Registered Registration City Treasurer .................. .................. .................. .................. .................. .................. .................. .................. .................. .................. .................. .................. .................. .................. .................. .................. Section 33. Proceedings Constitute Contract. The provisions of this resolution and of the resolutions providing for the sale of the bonds and awarding the bonds and fixing the interest rate or rates thereon shall constitute a contract between the City and the bondholders and the provisions thereof shall be enforceable by any bondholder for the equal benefit and protection of all bondholders similarly situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is now or may hereafter be authorized under the laws of the State of California in any court of competent jurisdiction. Said contract is made under and is to he construed in accordance with the laws of the State of California. 18 ’ 0 a No remedy conferred hereby upon any bondholder it intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by the Revenue Bond Law of 1941 or any other law of the State of California. No waiver of any default or breach of duty or contract by any bondholder shall affect any subsequent default or breach of duty or contract or shall impair any rights or remedies on said subsequent default or breach. No delay or omission of any bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the bondholders may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and the bondholder shall prevail, said bondholder shall be entitled to receive from the Water Fund reimbursement for reasonable costs, expenses, outlays and attorney’s fees and should said suit, action or proceeding be abandoned, or be determined adversely to the bondholders then, and in every such case, the City and the bondholders shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. After the issuance and delivery of the bonds this resolution and supplementary resolutions thereto shall be irrepealable, but shall be subject to modification to the extent and in the manner provided in Sections 25 to 31, inclusive, of this resolution, but to no greater extent and in no other manner. Section 34. Future Contracts. Nothing herein contained shall be deemed to restrict or pro- hibit the City from making contracts or creating bonded or other indebtedness payable from the general fund of the City or from taxes or any source other than the revenues of the enter- prise as defined herein, and from and after the sale of the bonds the general fund of the City shall not include the revenues of the enterprise and no contract or other obligation payable from the general fund of the City shall be payable from the revenues of the enterprise, except as provided in Section 19 hereof. Section 35. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this resolution, or the application thereof to any person or circumstance, is held to he unconstitutional, invalid or unenforceable, the remainder of this resolution and the application of any such covenant, agreem-ent or provision, or portion thereof, to other persons or circum- stances, shall be deemed sei-erable and shall not be affected thereby, and this resolution and the bonds issued pursuant hereto shall remain valid and the bondholders shall retain all valid rights and benefits accorded to them under this resolution and the Constitution and laws of the State of California. Section 36. Effective Date. ADOPTED, SIGNED AND APPROVED this . .’I 5.t day of September, 1970. This resolution shall take effect upon adoption. ATTEST : (SEAL) U 19 -. STATE OF CALIFORNIA COUNTY OF SAN DIEGO CITY OF CARLSBAD 1 ss. I, MARGARET E. ADAMS, City Clerk of the City of Carlsbad, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the City Council of said City and was approved by the Mayor of said City at a regular meeting of said City Council held on the .I .s t. day of September, 1970, and that it was adopted by the following vote, to wit : AYES: Counci lmen Dunne, Jardi ne Castro and Lewis ABSENT: CEunci lman McComas (SEAL) STATE OF CALIFORNIA COUNTY OF SAN DIEGO CITY OF CARLSBAD 1 ss. I, MARGARET E. ADAMS, City Clerk of the City of Carlsbad, California, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. .I 7.7 9 and that the same has not been amended or repealed. Dated September 1. ., 1970. i/ Carlsbad, California (SEAL) 20