Davis County Clipper | 1958-02-28 | Page 14 | Resolution

(Insert "A" or 'B" as well as coupon number, if interest s payable by two sets of coupons cou-pons rather than one set.) (The clause in paren-:heses paren-:heses shall be included in oupons maturing on and after September 1, 1973, nt'ached to bonds numbered 66 to 450, both inclusive, maturing on jnd after March 1, 1974, and :n and before March 1, 1995; ind said clause shall be included in-cluded in coupons maturing on and after September 1, 1966, in bonds numbered 451 to 525, both inclusive, maturing on and after March 1, 1996.) (Form of Certificate) DISTRICT CLERK'S CERTIFICATE I hereby certify that this bond Joes not constitute an indebtedness in-debtedness of the South Davis County Water Improvement District, in the County of Duvis and State of Utah, within any constitutional o r statutory limitation, and is issued according, ac-cording, to law. RESOLUTION ! A RESOLUTION AUTHORT7-' 1NO THE ISSUANCE OF THE SOUTH DAVIS COUNTY COUN-TY W A T F. R IMPROVE-1 ME XT DISTRICT WATER ! REVENUE BONDS. SERIES MARCH 1. 195!1, IN THE PRINCIPAL AMOUNT OKI 8525.00(1.00. P A Y A H L E i " SOLELY FROM THE NET I REVENUES D E R 1 V E D ' FROM THE OPERATION j OF THE DISTRICT'S WA-I TF.R SYSTEM, FOR THE' PURPOSE OF DEFRAYING! IN PART THE COST OF ACQUIRING A SYSTEM FOR THE SUPPLYING, TREATMENT AND D1S-TRIBUTION D1S-TRIBUTION OF BOTH CULIXAKY AND IRRIGATION IRRIGA-TION WATER; PRESCRIBING PRESCRIB-ING THE FORM, TERMS AND CONDITIONS OF SUCH BONDS, THE MANNER MAN-NER AND TERMS OF THEIR ISSUANCE, THE MANNER OF THEIR EXECUTION, EXE-CUTION, AND OTHER DETAILS DE-TAILS IN CONNECTION THEREWITH; PROVIDING FOR THE COLLECTION AND DISPOSITION OF THE REVENUES TO BE DERIVED FROM THE OPERATION OF SAID WATER WA-TER SYSTEM; PRESCRIBING PRESCRIB-ING OTHER DETAILS AND MAKING OTI I ER PROVISIONS CONCERNING CONCERN-ING SAID SYSTEM, SAID BONDS, AND THE ISSUANCE ISSU-ANCE OF ADDITIONAL BONDS PAYABLE FROM THE REVENUES OF THE SYSTEM; PROVIDING FOR THE PUBLICATION OF THIS RESOLUTION; STATING STAT-ING THE RIGHT OF ANY PERSON IN INTEREST TO CONTEST THE LEGALITY OF THIS RESOLUTION, THE PROVISIONS HEREOF, HERE-OF, AND THE BONDS HEREBY AUTHORIZED WITHIN- THIRTY DAYS AFTER THE DATE OF THE PUBLICATION OF THIS RESOLUTION, AND STATING STAT-ING THE LIMITATION UPON ACTIONS THEREAFTER; THERE-AFTER; RATIFYING ACTION AC-TION HERETOFORE TAKEN TOWARD ACQUIRING AC-QUIRING SUCH SYSTEM AND TOWARD THE ISSUANCE ISSU-ANCE OF SAID BONDS; AND PROVIDING THE EFFECTIVE EF-FECTIVE DATE OF THIS RESOLUTION. WHEREAS, the South Davis County Water Improvement District (herein sometimes designated des-ignated as the 'District"), in the County of Davis and State of Utah, has been duly organized, organ-ized, and its officers have been duly elected and qualified, pursuant to Title 17, Chapter 6, Utah Code Annotated, 1953, and all laws amendatory thereof there-of and supplemental thereto; and said election have heretofore I Keen duly canvassed and the ve-nltr, thereof diilv d-i l.a.d and WHEREAS, l.i.- Be. aid of Trustees of said Distr.et Jin determined, and dues hereby determine, to authorize the issuance is-suance of its water revenue bonds, in Hie principal amount of $52.1.000 00. WHEREAS, at said special election held in the District on Monday, the 24th day of October. Oc-tober. 19.1:1, there was also submitted to the electors, qualified qu-alified to vote thereon, the following question: "Shall the South Davis County Water Improvement Improve-ment District, in Davis County, Utah, issue its negotiable, coupon, general gen-eral obligation water bonds, in the principal amount of 8171,000 0(1, or so much thereof as may be necessary, tor the purpose pur-pose of acquiring, through construction, purchase, i i f I or condemnation, or any combination tin rcuf a system sys-tem for the supply, treatment, treat-ment, and distribution of both culinary and irrigation irriga-tion water, including, without limiting the generality gen-erality of the loregoing, the acquisition of water rights, of storage facilities, and of pumping facilities, with all necessary lines, facilities, equipment and appurtenances, bearing interest in-terest at a rate or rates not to exceed five per centum (5) per annum, payable semiannually, and maturing matur-ing serially eoniiincncing not later than three years and extending forty years from their date, payable from annual ad valorem tax levies, in such manner, upon such terms and conditions, con-ditions, and with such details de-tails as the Board of Trustees of said District shall determine?" and WHEREAS, at said special election such electors did carry in the affirmative said question ques-tion of issuing, and the District, Dis-trict, pursuant thereto, has heretofore issued its general obligation water bonds, in the principal amount of $175,-000.00, $175,-000.00, for said purpose; and WHEREAS, the District is authorized to acquire, and is acquiring, through construction, construc-tion, purchase, gift or condemnation, condem-nation, or any combination thereof, a system for the supply, sup-ply, treatment, and distribution distribu-tion of both culinary and irrigation irri-gation water, including, without with-out limiting the generality of the foregoing, the acquisition of water, rights, of storage facilities, fa-cilities, and of pumping facilities, facil-ities, with all necessary lines, facilities, equipment and appurtenances; ap-purtenances; and the District is authorized to issue such revenue rev-enue bonds therefor, pursuant to the aforesaid revenue bond question so approved by the qualified electors and pursuant to Title 17, Chapter ti. Utah Code Annotated, 1953, as amended and supplemented by Chapter 29, Laws of Utah, 1953, and by Chapter 31, Laws of Utah, 19,17, and all laws thereunto enabling; and WHEREAS, except as hero- shall they constitute general! obligations of the District, nor nail the toll l.nth credit and , ; . ri ' - r.r t:.i Fh ii a. t i .f pleuged for meir payment,;, land ' I WIir.REAS. the Board ofj Trustees of Hie District has' .aus d a comprehensive esti-'male esti-'male to be made of the ck! 'of so acquiring the system; and J WHEREAS, on the ba.-is of said estimate it has been de-jtermilled, de-jtermilled, and is hereby determined, deter-mined, that the cost of so ac-iquiring ac-iquiring the system is $700,-'oOD.OO, $700,-'oOD.OO, which co.-t will be defrayed de-frayed !y Hie procit ds of said general obligation bonds hcre-itofoie hcre-itofoie issued in the principal 'annum1, of S17.1.000.00 and by j 1 lit.: proceeds iif the revenue .bonds herein authorized in the principal amount of $12.1,-000 $12.1,-000 00; and WHEREAS, Section 17-6-3, .1, Utah Code Annotated, 19.13, Supplement, as enacted by Section 2. Chapter 29, Laws of 'Utah, 1953, provides in part that, lifter compliance with provisions pro-visions of Section 03-2-35, Utah Code Annotated. HI.13. all sales of bonds shall be ad vertised publicly and sealed bids shall be required. NOW. THEREFORE. BE II I RESOLVED BY THE BOARD OK TRUSTEES OF T II F SOUTH DAVIS COUNTY WATER IMPROVEMENT DIS TUICT. IN THE COUNTY OF DAVIS AND STATE O F UTAH: Section 1. That all action heretofore taken (not inconsistent incon-sistent with the provisions ol this resolution) by the Board of Trustees and the officers of the South Davis County Water Improvement District, in tin-County tin-County of Davis and Stale of Utah, directed toward the acquisition ac-quisition through construction purchase, gift or condemnation, condemna-tion, or any combination thereof, there-of, of a system for the supply treatment, and distribution of both culinary and irrigation water, including, without limiting lim-iting the generality of the foregoing, fore-going, the acquisition of water rights, of storage facilities, and of pumping facilities, with all necessary lines, facilities, eqiiipnvnl, and appurtenances, and toward the issuance of its bonds for that purpose be, and the same hereby is, ratified, approved and confirmed. Section 2. That by the ex-enditure ex-enditure of $700. 000. 00 derived de-rived from the sale of the District's Dis-trict's General Obligation Water Wa-ter Bonds, Series July 1, 1950. in the principal amount of $175,000.00, heretofore issuen, and the sale of the District's water nnenue bonds in the principal amount of $525,-000.00, $525,-000.00, herein authorized to be issued, the District shall acquire, ac-quire, through construction, purchase, gift or condemnation, condemna-tion, or any combination there- of, a system for the supply, treatment, and distribution of both culinary and irrigation water, including, without limiting lim-iting the generality of the foregoing, the acquisition of water rights, of storage facilities, facili-ties, and of pumping facilities, with all the necessary lines, facilities, equipment and appurtenances; ap-purtenances; and the acquisition, acquisi-tion, of said water system has jheretofoiv boon, and hereby is, authorized. is hereby authorized to issue1 its "South Davis County Wa-tr Wa-tr Improvement Distrid Warm Wa-rm II. venue P.ond Scri. -March 1, 19,18," in the principal prin-cipal amount of $.125,000.00. for the purpose of defraying in part the cost of acquiring a water svstom for the District. Section .1. Thai the bonds of -aid series shall be dated the irst day of March, 19.13, con--isting of 52.1 bonds in the denominations o f $1,000.00 each, numbered consecutively from 1 to 525, both inclusive, hearing interest until maturity it a rate or rales not exceeding exceed-ing five per centum (5'i ) per mnuni. payable semiannually on the first days of March and September of each year, commencing com-mencing on the first day of September, 19.1H, interest until the respective maturity dates of said bonds and the principal thereof being payable upon presentation and surrender of the annexed interest coupons and of said bonds as they severally become due, both principal and interest being payable, without deduction for xchange or collection charges, n lawful money of the United llatcs of America, at The 'ontinental Bank and Trust, "ompnny. Salt Lake City. Jtah, said bonds being num-ii-red and maturing serially in egular numerical order on the irst day of March in each of he designated years, as fol nws: iond Nos. Years Amounts (All 'nclusive) Maturing Maturing 1 1961 $ 1.000.00 2 1962 1.000.00 3 1903 1.000.00 4 1964 1,000.00 5 1965 1,000.00 6-10 1066 5.000.00 11- 15 1967 5,000.00 16-20 1068 5.000.00 21 - 25 1969 5.000.00 26 - 35 1970 10,000.00 36 -45 1971 10,000.00 46 - 55 1972 10,000.00 56 - 65 1973 10,000.00 66 - 75 1974 10.000.00 76 - 85 1975 10,000.00 66 - 95 1976 10.000.00 96 - 1 10 1977 15.000.00 111-12.1 1978 15.000.00 126 - 140 1979 15,000.00 141-155 I960 15,000.00 156 - 170 1981 15,000.00 171 - 185 1932 15,000.00 186-200 1983 15.000.00 201 - 220 1984 20,000.00 221 - 240 1985 .20,000.00 241 - 260 1986 20.000.00 261 - 280 1937 20,000.00 281 - 300 1988 20,000.00 301 - 320 1989 20,000.00 321 - 340 1990 20,000.00 341 - 360 1991 20,000.00 361 - 380 1992 20,000.00 381 - 400 1993 20,000.00 401 -425 1994 25,000.00 426 - 450 1995 25,000.00 451 - 475 1996 25,000.00 476 - 500 1997 25,000.00 501 - 525 1998 25,000.00 If, upon presentation at maturity, ma-turity, payment of any bond is not made as herein provided, interest thereon shall continue at the rate of five per centum (5) per annum until the principal thereof is paid in lull. Section 6. That bonds numbered num-bered 451 to 525, both inclusive, inclu-sive, maturing on and after the j first day of March, 1976, shall be subject to prior redemption in inverse numerical order, at I the option of the District, and original purchaser of the bonds, or to the original purchaser pur-chaser of each block of bonds if thev iu -old in more than one block, as representative or i epresentatives of the bond holder or holders. Such notice hall specify the number or numbers of the bonds to be so redeemed (if less than all are to be redeemed) and the date fixed for redemption, and shall further state that on such redemption date there will become be-come and be due and payable I upon lach bond so to be re-' re-' deemed at The Continental Bank and Trust Company, Salt Lake City, Utah, the principal amount thereof, accrued interest inter-est to the redemption date, and the stipulated premium, and that from and after such date interest will rease to accrue. Notice having been given in the manner hereinbefore pro-Ivided. pro-Ivided. the bond or bonds so called for redemption shall 'become due and payable on jthe redemption date so designated; desig-nated; and upon presentation thereof at said bank, together j with all appurtenant coupons inaturing subsequent to the redemption re-demption date, the South Davis County Water Improvement Improve-ment District will pay the bond or bonds so called for I redemption. I Section 7. That said bonds shall be executed in the name of and on behalf of the South .Davis County Water Improve-i Improve-i merit District and signed by the Chairman of the Board of ITrustees, countersigned by the Board's Treasurer, with' the seal of the District affixed thereto and attested by the Clerk of the Board. The coupons cou-pons attached to said bonds shall bear the facsimile signature signa-ture of the said Chairman. Treasurer and Clerk of the Board of Trustees, which officers, offi-cers, by the execution of said i bonds, shall adopt as and for their signatures the facsimiles i thereof appearing on said coupons. cou-pons. Said bonds and coupons bearing the signatures of the .officers in office at the time of the signing thereof shall be the valid and binding obligations I of the South Duvis County Water Improvement District, notwithstanding that before the delivery thereof and pay-.mrnt pay-.mrnt therefor any or all of the persons whose signatures appear ap-pear thereon shall have ceased to fill their respective offices. Section 8. That subject to the provisions specifically made or necessarily implied therein, the bonds hereby authorized au-thorized and the interest coupons cou-pons thereto attached shall be j fully negotiable in form and payab!e to bearer, and shall have all the qualities of negotiable ne-gotiable paper; and the holder or holders thereof shall possess pos-sess all rights enjoyed by the holders of negotiable instruments instru-ments under the provisions of t h e Negotiable Instrument Law. Pursuant to Section 17-6--3.T, Utah Code Annotated, 1953, 1957 Pocket Supplement, enacted by Section 2, Chapter 29, Laws of Utah, 1953, the bonds of said series shall recite re-cite that they are issued pursuant pur-suant to said chapter; such recital re-cital shall conclusively impart full compliance with all of the provisions of that chapter; and each bond issued containing such recital shall be incontestable incon-testable for any cause whatso ! date thereafter at a price equal to the principal amount thereof, accrued interest to the redemption date, and a premium prem-ium computed in accordance with the following schedule: 4 of the principal amount redeemed if redeemed re-deemed on or before September Sep-tember 1, 1977; 314 of the principal amount redeemed, if redeemed re-deemed on or after March 1, 1978; and on or before September 1 , 1982; and 2 of the p r i n c i p a 1 amount redeemed, if redeemed re-deemed on or after March 1. 1983. (Prlor to Marc'j 1, 1973. redemption may be made only from net revenues derived from, the operation of the District's Dis-trict's water system, and not from the proceeds of refunding refund-ing bonds.) Redemption shall be made upon not less .than thirty days' prior notice by publication in a newspaper of general circulation in the Dis trict in the manner and upon the condition provided in the resolution authorizing the issuance is-suance of this bond.) This bond is one of a' series issued by the Board of Trustees of the South Davis County Water Improvement District upon behalf of said District, and upon the credit thereof for the purpose of paying in part the cost of acquiring through construction, purchase, gift or condemnation, or any combination combi-nation thereof, a system for the supply, treatment, and distribution dis-tribution of both culinary and irrigation water, including, without limiting the generality of the foregoing, the acquisition acquisi-tion of water rights, of storage facilities, and of pumping facilities, fa-cilities, with all necessary lines, facilities, equipment and appurtenances, for said District, Dis-trict, under the authority of and in full conformity with the Constitution and laws of the State of Utah, and, in particular, par-ticular, the provisions of Title 17, Chapter 6, Utah Code Annotated, An-notated, 1953, as amended by Chapter 29, Laws of Utah, 1953, and by Chapter 31, Laws of Utah, 1957, and all acts thereunto enabling, and pursuant pur-suant to a resolution of said Board of Trustees duly adopted adopt-ed prior to the issuance of this bond. As this bond contains the recital that it is issued under the authority of said act, such recital conclusively imports full compliance with all of the provisions of that act, and this bond shall be incontestable for any cause whatsoever after its delivery for value. It is hereby here-by certified and warranted that the issuance of this bond has been authorized by the electors elec-tors of the South Davis County Water Improvement District qualified to vote on the question ques-tion at a special bond election held in said District on the 24th day of October, 1955. The bonds of said series and the interest thereon are payable, pay-able, and payment shall be made, solely from and secured . by a pledge of the net rev- enues derived by the District I from the operation of its water ; system, said net revenues be- ing defined as the gross rev- enues of the system after de- tions payable annually from the revenues of said system including the reserves therefor. there-for. The bonds of said series dc not constitute a debt nor and indebtedness of the District within the meaning of any constitutional or statutory limitation, lim-itation, nor do they constitute general obligations of the District, Dis-trict, nor are the full faith credit and resources of th District pledged for their payment; pay-ment; and the holder hereof may not look to any general or other fund for the payment hereof and the interest hereon except for said net revenues and the special funds herein designated and pledged therefor. there-for. This bond is subject to the conditions, and every holder hereof by accepting the same agrees with the obligor and every subsequent holder hereof, here-of, that (a) the delivery of this bond to any transforee shall vest title in this bond and in the interest coupons attached hereto in such transferee to the same extent for all purposes as would the delivery under like circumstances of any negotiable ne-gotiable instrument payable to bearer; (b) the obligor and any agent of the obligor may treat the bearer of this bond as the absolute owner hereof for all purposes, and shall not be affected by any notice to the contrary; (c) the principal of and the interest on this bond shall be paid, and this bond and each of the coupons appertaining apper-taining hereto are transferable, transfer-able, free from and without regard to any equities 'between the obligor and the original or any intermediate holder hereof, here-of, or any set-offs or cross-claims; cross-claims; and (d) the surrounder to the obligor or any agent of the obligor of this bond and of each of the coupons shall be a good discharge to the obligor for the same. It is hereby certified and warranted that all of the requirements re-quirements of law have been fully complied with by the proper officers of said District in the issue of this bond. IN TESTIMONY WHEREOF, WHERE-OF, the Board of Trustees of the South Davis County Water Improvement D is t r i c t has caused -this bond to be executed exe-cuted in the name of and on behalf of said District and to be signed by the Chairman of its Board of Trustees, countersigned counter-signed by the Board's Treasurer, Treas-urer, sealed with the seal of the District, attested by the Clerk, thereof, and the coupons cou-pons hereto attached to be signed by the facsimile signatures signa-tures of the said Chairman, Treasurer and Clerk of its Board of Trustees as of the first day of March, 1958. SOUTH DAVIS COUNTY WATER IMPROVEMENT DISTRICT By Chairman, Board of Trustees Countersigned: Treasurer , (SEAL) ATTEST: Clerk Clerk South Davis County Water Improvement District Section 10. That it is hereby determined and recited that the period of usefulness of the facilities fa-cilities to be acquired with the proceeds of the bonds herein authorized is not less than forty years from the date of said bonds, i. e., from the first day of March, 1958. Section 11. That the Chairman, Chair-man, Clerk and Treasurer of the District are hereby authorized author-ized and directed to prepare and execute said bonds as herein provided. When said bonds have been duly executed and sold, the Treasurer of the District shall deliver them to the lawful purchaser thereof on receipt of the agreed purchase pur-chase price. Except as hereinafter herein-after provided, the proceeds derived from the sale of the said bonds shall be deposited promptly upon the receipt thereof in a separate account in a bank in Salt Lake City, Utah, which is a member of the Federal Deposit Insurance Corporation, such account being be-ing heretofore created with the proceeds derived from the sale of the District's General Obligation Water Bonds, Series July 1, 1956, and such account being designated "The South Davis County Water Improvement Improve-ment District Water System Acquisition Account," herein sometimes designated the Acquisition Ac-quisition Account. The monies in the Acquisition Account shall be used solely for the purpose of so acquiring the system, except that after the system is acquired in the form ind to the extent designated by the maps, plans and specifications speci-fications now on file in the office of the Clerk, all money, if any, remaining in the Acquisition Ac-quisition Account shall be distributed dis-tributed as net revenues of the system pursuant to Section 13 of this resolution. Monies shall be withdrawn from such account ac-count for the purpose of so acquiring ac-quiring the system only upon warrants drawn by the Chairman Chair-man of said District and its Clerk. No such warrant for any sum for construction work shall be issued until the Board of Trustees has received a cer- WHEREAS, the interest of the District and of the inhabitants inhabi-tants thereof, and the public interest and necessity, demand the acquisition of a water system sys-tem for the supply, treatment and distribution of both culinary culi-nary and irrigation water; and WHEREAS, at a special election held in the District on Monday, the 24th day of October, 1955, there was submitted sub-mitted to the electors, qualified quali-fied to vote thereon, the following fol-lowing question: "Shall the South Davis County Water Improvement Improve-ment District, in Davis County, Utah, issue its negotiable, coupon, water revenue bonds, in the principal amount of $525,-000.00, $525,-000.00, or so much thereof as may be necessary, for the purpose of acquiring, through construction, purchase, pur-chase, gift or condemnation, condemna-tion, or any combination thereof, a system for the supply, treatment, and distribution dis-tribution of both culinary and irrigation water, including, in-cluding, without limiting the generality of the foregoing, fore-going, the acquisition of water rights, of storage facilities, and of pumping facilities, with all necessary neces-sary lines; facilities, equipment equip-ment and appurtenances, bearing interest at a rate or rates not to exceed five per centum (5',"e ) per annum, an-num, payable semiannually, semiannu-ally, and maturing serially commencing riot later than three years and extending forty years from their date, payable solely from, revenues derived from the operation of the water facilities fa-cilities of said District, in such manner, upon such terms and conditions, and with such details as the Board of Trustees of said District shall determine'.'" and duction only for the cost of operation and maintenance, including in-cluding but not limited to the costs of acquiring water for the system; and as security for such payment there are irrevocably irre-vocably and exclusively pledged pledg-ed two special funds created by a resolution passed and adopted February 18, 1958, identified as the "South Davis County Water Improvement District Water Revenue Bonds, Series March 1, 1958, Interest and Bond Retirement Fund," and as the "South Davis County Coun-ty Water Improvement District Water Revenue Bonds, Series March 1, 1958, Reserve Fund," into which the District covenants coven-ants to pay said net revenues sums sufficient to pay when due the principal of and the interest on the bonds of said series, and to create and maintain main-tain a reasonable reserve for such purpose. For a description descrip-tion of said funds and the nature na-ture and extent of the security afforded thereby for the payment pay-ment of and the interest on said bonds, reference is made to said resolution. The District covenants and agrees with the holder of this bond and with each and every (The paragraph in parentheses paren-theses shall be inserted in bonds numbered 66 to 525, both inclusive, maturing on and after March 1, 1974.) (Substitute March 1, 1968 for March 1, 1973 in bonds numbered 451 to 525, both inclusive, in-clusive, maturing on and after March 1, 1996.) (The sentence in brackets brack-ets shall be included in said bonds numbered 451 to 525, both inclusive, maturing on and after March 1, 1996; but the sentence shall be excluded from the remaining bonds subject sub-ject to prior redemption, i. e., bonds numbered 66 to 450, both inclusive, maturing on and after March 1, 1974, and on and before March 1, 1995.) (Form of Coupon) Coupon No. $ March, On the first day of September, Septem-ber, 19 . (unless the bond to which this coupon is attached has been culled for prior redemption,) the South Davis County Water Improvement Improve-ment District, in the County of Davis and State of Utah, will pay to bearer DOLLARS Section 3. That for the im-t mediate promotion of- the health, safely, prosperity, se-! curity and general welfare ofi lite inhabitants of the District' by providing funds to defray! in part the cost of so acquiring a water system, it is hereby de-1 jchued necessary (a) that thej District authorize and issue its "South Davis County Water ImprovciiK'nt District Water Revenue Bonds, Series March I, 1953." payable, both as to principal and interest, solely fioniiand secured by a pledge of those net revenues to be derived by the District from the operation of its water facilities, fa-cilities, i. e., derived by it from the rates and charges for the use of, and the service rendered rend-ered by, such water system, saiil net revenues being the gross revenues after deduction only for all expenses of operation oper-ation and maintenance, and ib) that the District pledge irrevocably, but not necessarily necessar-ily exclusively, such net revenues rev-enues to the payment of said bonds and the interest thereon, i he proceeds thereof to be used solely for tiie purpose of defraying de-fraying in part the costs of so .acquiring a water system 'for (lie District, pursuant to Title 17, Chapter 6, Utah Code 'Annotated, 1953, as amended and supplemented by chapter j'9. Laws of Utah, 1953. and all laws thereunto enabling. Said water revenue bonds 'shall not constitute a debt nor an indebtedness of Un payable solely from net revenues rev-enues derived from the system's sys-tem's operation and available therefor (and not from the proceeds of refunding bonds), (in the first day of March, 1968, iir on any interest payment date thereafter prior to the jiirst day of March, 1973, at a price equal to the principal amount thereof, accrued in-jterest in-jterest to the redemption date, land a premium consisting of four per centum (4';,) of the 'principal amount redeemed, i Bonds numbered 66 to 525, both inclusive, ninluring on the first day of M.arch. 1974, shall be subject to prior redemption re-demption with any monies legally available therefor, in inverse numerical order, at the option of the District on the first day of March, 1973. or on any interest payment date thereafter prior to maturity, at a price equal to the principal prin-cipal amount thereof, accrued interest to the redemption date, and a premium computed com-puted in accordance with the following schedule. 4 of the principal amount redeemed, if redeemed re-deemed on or before September Sep-tember 1, 1977; 3 of the principal amount redeemed, if redeemed re-deemed on or after March 1, 1978, and on or before September 1, 1982; and 2'1 of the principal amount redeemed, if redeemed re-deemed on or after March I, 1983. mailer provided, the District has never pledged, hypothecated hypothe-cated nor otherwise encumbered encum-bered the revenues to be derived de-rived from, the water system' of, and boini! acquired by, the District (herein sometimes designated as the "system") for the payment of any bonds, other obligations, or otherwise, with the result that the revenues rev-enues to be derived from the operation of the system may now be lawfully and irrevocably irrevoc-ably pledged for the redemption redemp-tion of the water revenue bonds, principal and interest, herein authorized and issued for the purpose before recited; re-cited; provided that the District Dis-trict has agreed to purchase water for municipal purposes from the Weber Basin Water Conservancy District, a political po-litical subdivision organized under the laws of the State of Utah and having its principal ;Placc of business at Ogden, Utah, by a contract dated the 27th day of December, 1955. and also to purchase water for irrigation purposes from the said Weber Basin Water Conservancy Con-servancy District by another contract dated the 27th day of December, 1955; and provided, further, that Article 9 of said contract for irrigation water (but not the contract for "municipal" water) provides that "The Improvement District Dis-trict hereby grants to the Conservancy Con-servancy District a fust Jieu upon the proceeds fmm 1 lie sale of water and upon revenues rev-enues obtained by taxation and 1 1 assessments upon the lands in the Imtprovemeiit District to :lhe extent necessary to secure lithe payments clue the Conservancy Conser-vancy District under this con- evcr after its delivery for value. Section 9. That said bonds, the coupons attached thereto, and the certificate to be endorsed en-dorsed thereon, shall be in substantially t h e. following form: (Form of Bond) I'nitid States of America Stale of Utah, C'ountv of Davis SOUTH DAVIS COUNTY WATER IMPROVEMENT DISTRICT WATER REVENUE BOND SERIES MARCH 1, 1958 No, $1,000.00 The South Davis County Water Improvement District, in the County of Davis and Slate of Utah, for value received, re-ceived, hereby promises to pay to the bearer hereof, solely from the special funds provided pro-vided therefor, as hereinafter set forth, on the first day of March, 19 , the principal sum of ONE THOUSAND DOLLARS and to pay solely from said special funds interest hereon until maturity according to the interest coupons hereto attached, attach-ed, payable semi-annually on the first days of March and September in each year, upon presentation and surrender of this bond and the annexed interest in-terest coupons as they severally sever-ally become due. If, upon presentation pre-sentation at maturity, payment of this bond is not made as .lerein provided, interest shall continue at the rate of five per centum (5'.' v ) per annum until the principal hereof is paid in full. Both principal and interest inter-est are payable in lawful money of the United States of America, without deduction for exchange or collection charges, at The Continental iBank and Trust Company, Salt Lake City, Utah. MThis bond is one of a series ser-ies subject to prior redemption in inverse numerical order at i .lie iption of the South Davis County Water Improvement ; District on March 1. 1973, or on any interest payment .tificate from the District Engineer Engi-neer certifying that such sum is due and owing for the work1 of such construction for the system, nor until said' Board has adopted a resolution accepting ac-cepting such certificate and directing di-recting the drawing of such warrant. All monies received as accrued ac-crued interest at the time of delivery of said revenue bonds from the sale thereof, and the premium therefor, if any, shall be deposited into the Bond Fund hereinafter created in Section 13 of this resolution. Twelve Thousand Dollars ($12,000.00) of the proceeds derived from the sale of said water revenue bonds shall be deposited promptly upon the receipt thereof in the Reserve Fund hereinafter created in Paragraph C of Section 13 of this resolution. In the event that there has not been deposited de-posited in the Bond Fund the amounts required by Paragraph Para-graph B of Section 13 of this resolution to pay interest on and the principal of said bonds as the same accrue, and thai monies to the extent of the deficiency and sufficient to prevent a default in the puy-menl puy-menl of such interest and principal have not been otherwise other-wise deposited in the Reserve Re-serve Fund herein after created in Section 13 of this resolution, such payment or payments shall be made with said $12,000.00 of bond pro-seeds pro-seeds in the Reserve Fund to the extent of the remaining deficiency, and after the withdrawal with-drawal from the Bond Fund ind the Reserve Fund of monies mon-ies therein otherwise available for the payment of interest and principal. After the payments lave been made us required by Paragraphs A, B, and C of Action 13 of this resolution, he amount or amounts so withdrawn from the Reserve Fund for the payment of guch interest and principal shall be restored thereto from the first jmonies then available remain- person who may become the holder hereof that it will keep and perform all the covenants of said resolution, including, without limiting the generality of the foregoing, its covenants against the sale or mortgage of .said system or any part thereof there-of unless provision shall be made for the payment of the principal of and the interest on the bonds of the series of which this is one, and its covenant cov-enant that it will fix, maintain and collect rates for services rendered by said system sufficient suffi-cient to produce revenues or earnings to pay the operating and maintenance charges and , prior to March 1, 1961, one . hundred per centum and there-; there-; after one hundred fifty per ; centum of boih the principal , of and the interest on the bonds and any other obliga- in lawful money of the United States of America, at The Continental Con-tinental Bunk and Trust Company, Com-pany, Salt Lake City, Utah, solely from and secured by a pledge of two special funds created from the net revenues derived from the operation of the District's water system, and providing for the payment pay-ment of six months' interest on its Water Revenue Bond, Series Ser-ies March 1, 1958, and bearing Bond No, (Facsimile Signature) Chairman (Facsimile Signature) Treasurer (Facsimile Signature) Clerk WHEREAS, at said special I election such electors did, by! a vote of 602 ballots ' For the Bonds" and 19 ballots "Against! the Bonds" carry in the affirmative, affir-mative, by a majority of 583 ballots of the qualified electors of the District as had paid a property tax in said District in the year next preceding such1 election who voted thereupon, the question of issuing the water revenue bonds of the District in the principal amount of $525,000.00, or so much thereof as may be necessary, neces-sary, for said purpose; and WHEREAS, Hie returns of District within the meaning of any c o n s t i t u t i o n a 1 oi statulary limitation, nor shall they constitute general obliga tions of the District, nor shall the full faith, credit and resources re-sources of the District be pledged for their payment: and i the holder or holders of said bands may not look to anj i general or oilier fund for the payment of the principal o ; and the interest on such obligations obli-gations except for said ne1 i'v. no. s and the special funds herein prescribed and pledgee! I Die rotor. i- Section 4. That the District Notice of redemption shall bC jiven by the Treasurer of the1 'South Davis County Water mj.irovement District, in the tame of the District, by publication publi-cation of such notice at least nice, not more than sixty nor ess than thirty days, prior to lie redemption date, in a lewspaper of general circula-:on circula-:on in the District, and a copy f such notice shall lie sent by egistered mail, at least thirty lays prior to the redemption 'ate, to Tiie Continental Bank ind Trust Company, at Salt .,ake City, U.ah; and to tiie tract;" and WHEREAS, said water revenue rev-enue bonds shall be payable solely from and secured by a pledge of those revenues to be derived by the District from the operation of its water faeil-ties, faeil-ties, as hereinafter prescribed; and said bonds shall not constitute con-stitute a debt nor an indebtedness indebted-ness of the District within Unmeaning Un-meaning of any constitutional or statutory limitation, nor rinding but not necessarily IimiU-d to the bonds herein here-in authorized as the same ficerue. Sueli monies may also be expanded from time to lime for improvements, improve-ments, extensions or repairs, re-pairs, or any combination thereof, to the system, resulting re-sulting from unforeseen find unanticipated catastrophe, catas-trophe, if the District's consulting engineer certifies certi-fies such catastrophe occurred oc-curred and such expenditure expendi-ture results therefrom. Section 14. That the bonds authorized herein constitute a first and irrevocable lien (but not necessarily an exclusive first lien) on all the net revenues rev-enues of said system, subject to the provisions of Section 16 of this resolution. Section IS. That nothing in this resolution contained shall be construed in such a manner as to prevent the issuance by the District of additional bonds or other obligations payable from the income derived from the operation of the system and constituting a lien upon said revenues on a parity with, but not prior nor superior to, the lien of the bonds herein authorized, nor to prevent the issuance of bonds or other obligations refunding all or a part of the bonds herein authorized; au-thorized; provided, however, that before any such additional parity bonds or other parity obligations are authorized or actually issued, other than refunding re-funding bonds or other refunding refund-ing obligations, firstly, the District is not, and has not been, in default as to any payments pay-ments required to be made in Section 13 of this resolution for a period of not less than twenty-four months immediately immed-iately preceding the issuance of such additional bonds or other obligations, secondly the monies in the Bond Fund gations; so issued shall enjoy complete equality of lien with the portion of said bonds or -other obligations which is not refunded, if any there be, and the holders of the refunding bonds or oilier obligations shall be subrogated to all of the rights and privileges enjoyed en-joyed by the holders of the bonds or other obligations refunded re-funded thereby. The refunding refund-ing bonds or other obligations shall be issued with such details de-tails as the Hoard of Trustees may, by resolution, 'provide: provided, however, that if only a part of the outstanding bonds or other obligations is refunded, refund-ed, the interest rate of the refunded re-funded bonds or other obligations obliga-tions may not be increased, except ex-cept if refunded to pay maturing matur-ing bonds or other obligations; that the refunding bonds may not mature at a date earlier than the maturity date of any of the bonds or other obligations obliga-tions not refunded: and that the refunding bonds or other obligations shall either be sold for cash at not less than the par value and accrued interest, inter-est, and the proceeds thereof shall be used to pay the bonds refunded, or, if so permitted by law and then only with the consent of the holder or holders hold-ers of the bonds or other obligations obli-gations refunded, the refunding refund-ing bonds or other obligations shall be delivered dollar for dollar in exchange for the bonds or other obligations refunded. re-funded. Section 17. That the bonds authorized to be issued hereunder here-under and from time to time outstanding shall not be entitled en-titled to any priority one over I ho other in the application of the revenues of the system, regardless of the time or times i of their issuance, it being the intention of the Board of Trustees that there shall be no I priority among the bonds au-. au-. thorized to be issued pursuant i of the obligations evidencing evi-dencing such investments shall be subject to redemption re-demption at face value by the holder thereof at the option of such holder, or shall mature not later than eighteen months from the date of such investment. in-vestment. The obligations so purchased as an investment invest-ment of monies in either fund shall be deemed at all times to be a part of such fund; and interest accruing on such investments invest-ments and any profit realized real-ized therefrom shall be credited to such fund. Such investments may be liquidated by redemption at maturity or sale at the prevailing market price from time to time whenever when-ever the proceeds of such fund are needed for the purposes for which fund is created. F. Fourthly, any remaining re-maining monies in the Income Fund may be used concurrently or subsequently subse-quently for the payment of interest on and the principal of additional bonds or other obligations, including reasonable reserves re-serves therefor, payable from the income derived from the operation of the system, issued hereafter pursuant to the provisions of Section 14, 15 and 16 of this resolution, and constituting a lien upon such income on a parity with, or inferior and junior jun-ior to, the lien thereon to secure the payment of the bonds herein authorized. G. Fifthly, after the accumulation of the Reserve Re-serve Fund in the amount of 840,000.00, as hereinabove herein-above provided, fifty -per centum (50) of any remaining re-maining monies in the Income In-come Fund shall be deposited de-posited into a bank account ac-count to be kept separate from all other accounts and to be known as the "South Davis County Water Wa-ter Improvement District, System Improvements Fund," herein sometimes referred to as the System Improvements Fund. The monies therein shall be expanded from time to time in making good any depreciation in said system, sys-tem, and in making such improvements, extensions, exten-sions, or repairs, or any combination thereof, to the system, as is authorized author-ized by law, as the Board of Trustees may consider advisable. The monies in the System Improvements Fund may be used whenever when-ever necessary to meet interest in-terest and principal requirements re-quirements of outstanding bonds or other obligations Ing in the Income Fund hereinafter here-inafter created in said Section 13, as otherwise provided. After the monies in the Reserve Re-serve Fund equal not less than SfA000.00, $12,000.00 thereof shall be deposited in the Acquisition Ac-quisition Account, if the system sys-tem is then not acquired in the form and 1o the extent hereinabove here-inabove designated and if the monies in the Acquisition Account Ac-count have not been distributed distri-buted as net revenues of the system pursuant to said Section Sec-tion 13, but if the system is so acquired and it the monies in the Acquisition Account have been so distributed, the $12,000.00 shall also be so distributed dis-tributed as net revenues of the system. The purchasers of said bonds, however, shall in no manner be responsible for the application or disposal by said District or by its officers of the funds derived from the sale thereof. Section 12. That for the purpose pur-pose of this resolution the water wa-ter system shall be operated upon a fiscal year basis commencing com-mencing on the first day of March in each year and ending on the last day of February of the next succeeding year. Section 13. That so long as any of the bonds hereby authorized au-thorized shall be outstanding, either as to principal or interest, in-terest, all income and revenues derived from the operation of the system shall be deposited into a bank account to be kept separate from all other accounts ac-counts and to be known as the "South Davis County Water Improvement District Income Water System Fund," hereinafter herein-after referred to as the Income Fund. The following payments shall be made from the Income Fund: A. Firstly, there shall be set aside each month as an operation and maintenance main-tenance fund such reasonable reason-able percentage of the Income In-come Fund as the Board of Trustees shall determine deter-mine to be necessary for the proper operation and maintenance of said system, sys-tem, including, without limiting the generality of the foregoing, the acquisition acquisi-tion of water, and said monies shall be used solely therefor. Any surplus remaining at the end of the fiscal year and not needed for operation and maintenance purposes, shall be transferred to the Income Fund and be used ' for the purposes thereof, there-of, as herein provided. B. Secondly, from any monies remaining in the Income Fund, i. e., from the net revenue, there shall, be deposited into a bank account-' to be kept, separate' from all "'blfiVr' accounts and to be known .as the "South Davis County Coun-ty Water Improvement District Water Revenue Bonds, Series March 1, 1958, Interest and Bond Retirement Fund," herein sometimes referred to as the Bond Fund, the following: fol-lowing: 1. Monthly, commencing on the first day of March, 1953, one-sixth of the amount necessary to pay 1 the next maturing install-' install-' ment of interest on the bonds authorized hereby; except that to the extent accrued interest on said bonds and the premium therefor, if any, paid by the purchaser or purchasers pur-chasers thereof are deposited de-posited into the Bond Fund pursuant to Section 11 of this resolution, the deposits therein hereinabove herein-above required to be made from the Income Fund may be reduced in an of this resolution, and thereafter such amount or amounts, if any, shall be deposited monthly from any monies remaining in the Income Fund into the Reserve Fund necessary to maintain said Reserve Fund as a continuing reserve re-serve to an amount not less than $40,000.00 (excluding, (ex-cluding, and after the withdrawal of. said $12,-000.00 $12,-000.00 pursuant to said Section 11) to meet possible pos-sible deficiencies in said Bond Fund. No payment need be made into said Reserve Fund so long as the monies therein shall equal not less than $40,-000.00. $40,-000.00. The monies in the Reserve Fund shall be ac-rulaled ac-rulaled and maintained as a continuing reserve to be used, except as hereinafter provided in said Paragraphs Para-graphs D & 7 of said Section Sec-tion 13, only to prevent deficiencies in the payment pay-ment of the principal of and interest on the bonds hereby authorized resulting result-ing from the failure to deposit de-posit into said Bond Fund sufficient funds to pay said principal and interest as the same accrue. D. No payment need be made into the Bond Fund, the Reserve Fund, or both, if the amount in the Bond Fund and the amount in the Reserve Fund not exceeding ex-ceeding $40,000.00 total a sum at least equal to the entire amount of outstanding outstand-ing bonds herein authorized, author-ized, both as to principal and interest to their re-succtive re-succtive maturities, and both accrued and not accrued, ac-crued, in which case monies mon-ies in said two funds in an amount at least equal to such principal and interest in-terest requirements shall be used solely to pay such as the same accrue, and any monies in excess thereof in said two funds and any other monies derived from the operation opera-tion of the system may be used in any lawful manner determined by the Board of Trustees of said District. E. If, in any month, the District shall, for any reason, fail to pay into the Bond Fund the full amount above stipulated from the net income of I said system, then an amount shall be paid into said Bond Fund in such month from said Reserve Fund equal to the difference differ-ence between that paid from said net income and the full amount so stipulated. stipu-lated. The money so used , shall be replaced in the Reserve Fund from the first revenues thereafter received from the opera-lions opera-lions of the system not required to be otherwise spplied. If, in any month, the District shall, for any reason, fail to pay into the Reserve Fund the full amount above stipulated from the net income of said system, the difference differ-ence between the amount paid and the amount so stipulated shall in a like manner be paid therein from the first revenues thereafter received from the operation of the system sys-tem not required to be otherwise applied. The monies in the Bond fund and the Reserve Fund shall be used solely and only for the purpose of paying ihe principal of and the interest on the bonds issued hereunder; provided, however, that any monies at any time in excess of $40,000.00 in the Reserve Fund may be re- prior to the first, day of March, 1961, one hundred hun-dred percentum (100) of both the principal of and t ho interest on bonds and any other obligations payable pay-able from the revenues of the system, including reserves re-serves therefor, and thereafter, there-after, one hundred fifty per centum ( 150r; ) of both the principal of and the interest on bonds and any other obligations payable pay-able from the revenues thereof, including the reserves re-serves therefor, all of which revenues, including those received from the District shall be subject to distribution to the payment pay-ment of the cost of operation oper-ation and maintaining the system and the payment of principal of and interest inter-est on all bonds payable from the revenues of the system, including reasonable reason-able reserves therefor; that no free service shall be furnished by said system: sys-tem: that any use thereof or of the services rendered rend-ered thereby by (he District, Dis-trict, or any department thereof, will be paid for from the District's general gen-eral fund or other available avail-able revenues at the reasonable rea-sonable value of the services serv-ices so rendered; that all the income so derived from the District shall be deemed to be income derived de-rived from the operation of the system, to be used and accounted for in the same munner as any other income derived from the operation of said system; and that the District covenants and agrees that it will take all steps necessary nec-essary to enforce the immediate im-mediate collection of delinquent de-linquent fees and charges, together w i t li penalty charges, imposed hereunder here-under for water, services or facilities supplied by or furnished through the system sys-tem as to each piece of properly for which the owner shall be delinquent for more than six months in the payment of such charges imposed hereunder. here-under. D. That the District' will forthwith and in any event prior to the delivery of any of the bonds herein here-in authorized, fix, establish estab-lish and levy the rates and charges which are required re-quired by Paragraph C of Section 18 of this resolution. resolu-tion. No reduction in the initial rates schedule for the system may be made unless: 1. The District has fully complied with the provisions of Section 13 of this resolution for at least the full fiscal year immediately preceding such reduction of the initial rate schedule. 2. The audit required to be made by a certified certi-fied public accountant by Paragraph 1 of this Section 18 of this resolution res-olution for the full fiscal year immediately immed-iately preceding s u c h reduction discloses that the estimated revenues resulting from the proposed rate schedule, after its proposed reduction, reduc-tion, will be sufficient to pay an amount at least equal to the annual an-nual cost for said period of operation and maintenance, main-tenance, and, in addition, addi-tion, one hundred fifty per centum (150) of both the principal of and the interest on bonds and any other obligations ob-ligations payable from the revenues of the sys- 11 io event of default under such contract and upon being notified in writing of such default by the Chairman of the District, the District Treasurer shall sell nny securities so deposited at the prevailing market to the extent requested re-quested by the Chairman, and will apply the proceeds pro-ceeds to the removal of such default as directed by the Chairnihn. Any such contract for labor or materials of construction will provide that payment thereunder shall not be made by the District in excess of ninety per centum cen-tum (90 ) of the current estimates until the com-. com-. pletion of the project and its acceptance bv the District. Dis-trict. G. That so long as any of the bonds remain outstanding, out-standing, proper books of record and account will be kept by the district, separate and apart from all other records and accounts, ac-counts, showing complete and correct entries of all transactions relating to the system. II. That the holders of any of the bonds, or any duly authorized agent or agents of such holders, shall have the right at all reasonable times to inspect in-spect all records, accounts and data relating thereto and to inspect the system and all properties comprising com-prising said system. I. That the District further fur-ther agrees that it will, within sixty days following follow-ing the close of each fiscal fis-cal year, cause an audit of such books and accounts to made by a certified public accountant, showing show-ing the receipts and disbursements dis-bursements for the account ac-count of the system, and that such audit will be available for inspection by the holders of any of the bonds. Each such audit, in addition to whatever what-ever matters may bo thought proper by the accountant to be included therein, shall include the following: 1. A statement in detail de-tail of the income and expenditures of the system sys-tem for such fiscal year. 2. A balance sheet as of the end of such fiscal year, including all funds created by the various resolutions authorizing the issuance of outstanding out-standing bonds payable from the revenues of the system. "' 3. The accountant's comment regarding the munner in which the District has carried out the requirements of this resolution, and "any other resolution authorizing author-izing the issuance of outstanding bonds payable pay-able from the revenues of the system, and the accountant's r c c o m -mendation for any change or improvement in the operation of the system. 4. A list of the insurance insur-ance policies in force at the end of the fiscal year, setting out as to each policy the amount of the policy, the risks covered, the name of the insurer and the expiration ex-piration date of the policy. 5. A recapitulation of each fund or account created by the various resolutions authorizing the issuance of outstanding outstand-ing bonds payable from revenues of the system, into which fund are put monies derived from the operation of the system sys-tem or derived from the sale of securities, such analysis to show the balance in such fund at the beginning of the fis-cial fis-cial year, the deposits and withdrawls during said year, and the bal- i ance at the end of said of said bonds, after such audit and report has been prepared, and that any such holder shall have the right to discuss with the accountant or persons making the audit the contents con-tents of the audit and to ask for such additional information ns he may reasonably require. J. That all bills for water, wa-ter, water service or facilities, fa-cilities, or any combination combina-tion thereof, furnished or served by or through the system shall be rendered to customers on a regularly regu-larly established day of each and every alternate month next succeeding the niMiths in which the services were rendered and in the event said bills are not paid within forty days after the dale when rendered, water and water wa-ter service shall be discontinued, dis-continued, and the rates and charges due shall be collected in a lawful manner, man-ner, K. That the "South Davis Da-vis County Water Improvement Im-provement District Water Wa-ter Revenue Bonds, Series Ser-ies March 1, 1958, Interest Inter-est and Bond Retirement Fund," and the "South Davis County Water Improvement Im-provement District Water Revenue Bonds, Series March 1, 1958, Reserve Fund," shall be used solely and only, and said funds are hereby pledged, for the purpose of paying the interest on and the principal of the bonds herein authorized, except ex-cept such monies in said Bond Fund and in said Reserve Fund as are in excess of the interest on and principal of said bonds, both accrued and not accrued, to their respective re-spective maturities, as hereinabove prescribed. L. That from the revenues rev-enues of the system the District will pay all taxes and assessments or other municipal or governmental govern-mental charges, if any, lawfully levied, assessed upon or in respect of said system, or any part thereof, there-of, when the same shall ' become due, and it will duly observe and comply with all valid requirements require-ments of any municipal or governmental authority relative to any part of said systenii, that it will not create or suffer to be created any lien or ..charge upon said system sys-tem or upon the revenues rev-enues therefrom except as permitted by this resolution, reso-lution, or that it will make adequate provision to satisfy sat-isfy and discharge within sixty days after the same shall accrue all lawful claims and demands for labor, materials, supplies or other objects, which, if unpaid, might by law become a lien upon said system or upon the revenues rev-enues therefrom; provided, pro-vided, however, that nothing noth-ing herein shall require the District to pay or cause to be discharged, or make provision for any such tax assessments, lien or charge before the time when payment thereof shall be due or so long as the validity thereof shall be contested in good faith by appropriate legal proceedings. M. That as long as any of the bonds hereby authorized au-thorized are outstanding, the District shall not grant any franchise or license li-cense to a competing system sys-tem in the area within the District to be served with facilities acquired and to be acquired with the proceeds of the general obligation bonds and the revenue bonds authorized au-thorized at said election held on October 24, 1955. N. That the District in its operation of the system sys-tem will carry fire and and the Reserve Fund shall be sufficient to pay an amount at least equal to the principal of and interest on the bonds herein here-in authorized as the same accrue ac-crue for a period of not less than eighteen months immediately immed-iately succeeding the issuance of such additional bonds or other obligations, and, thirdly, the annual earnings derived from the operation of said system sys-tem for the fiscal year immediately immed-iately preceding the date of the authorization and issuance shall have been sufficient to pay the costs of operation and maintenance, and, in addition, sufficient to pay an amount representing one hundred fifty per centum (150) of the combined maximum annual principal and interest requirements require-ments on the outstanding revenue rev-enue bonds and other obligations obliga-tions of the District payable from the revenues of the system, sys-tem, and the bonds or other obligations proposed to be issued. to this resolution regardless of the fact that they may be actually issued and delivered at different limes. It is hereby here-by expressly agreed and covenanted cov-enanted that the District will not hereafter issue any bonds or obligations payable from the revenues of the system and having a lien on a parity with or junior to the bonds herein authorized until all bonds herein authorized have been paid in full, unless such additional addi-tional bonds or other obligations obliga-tions (other than refunding bonds or other obligations) on a parity with or junior to the bonds herein authorize d are issued in such manner as provided pro-vided in Section 15 of this resolution. res-olution. Section 18. That the District hereby covenants and agrees , with each and every holder of the bonds issued hereunder: A. That the District, with the proceeds derived from the sale of said i bonds, will proceed so to acquire the system wilh-I wilh-I out delay, as hereinabove payable from the revenues of the system, including but not necessarily limited to the bonds herein authorized, au-thorized, as the same accrue. ac-crue. Any accumulations in the fund which, in the opinion of said Board shall not be needed for the purpose thereof, may be transferred to the Bond Redemption Surplus Sur-plus Account, hereinafter created. H. The remaining fifty percentum (50) of monies, mon-ies, if any, remaining in the Income Fund shall be deposited into a bank account ac-count to be kept separate from all other accounts and to be known as the "South Davis County Water Wa-ter Improvement District, Bond Redemption Surplus Account," herein sometimes some-times referred to as the Bond Redemption Surplus Account. The monies therein shall be used to pay and discharge the in- A written certification by a lciensed engineer, or at the District's option, a certified public accountant, to be employed em-ployed by the District, that . said annual earnings are sufficient suf-ficient to pay said amounts, shall be conclusively presumed to be accurate in determining the right of said District to authorize, issue, sell and deliver de-liver said additional bonds or other obligations on a parity with the bonds herein authorized. au-thorized. Nothing herein contained shall be construed so as to prevent the District from issuing is-suing bonds or other obligations obliga-tions payable from the revenues rev-enues of the system and having hav-ing a lien thereon inferior and junior to the lien of the bonds authorized to be issued by this resolution, provided that the District is not in default as to any payments required to be made in Section 13 of this resolution for a period of not less than twenty-four months provided. B. That the District will promptly pay the principal of and interest on every bond issued hereunder and secured hereby at the place, on the dates and in the manner man-ner specified herein and in said bonds and in the coupons thereto appertaining appertain-ing according to the true intent and meaning hereof. here-of. Such principal and interest are payable solely from the net income to be derived from the operation opera-tion of and the resultant rates and charges for the use of, and the products and service rendered by, the water system; and nothing in the bonds or coupons or in this resolution resolu-tion shall be construed as obligating the District to redeem any of said bonds, principal or interest, from,, amount not exceeding the amount of accrued interest and premium deposited therein. 2: Monthly, commencing commenc-ing on the first day of March, I960, one-twelfth of the amount necessary to pay the next maturing installment in-stallment of principal on the bonds authorized hereby. C. Thirdly, except as provided in Paragraphs D and E of this Section 13 of this resolution, and in addition to the monies required re-quired to be deposited in the Reserve Fund by Section Sec-tion 11 of this resolution, any monies remaining in the Income Fund shall be deposited in an amount not less than 53,000.00 by the first day of February, 1959, and in an amount annually thereafter of not less than $5,000.00 by the same mouth and day in each subsequent year, into in-to a bank account to be kept separate from all other accounts and to be known as the "South Davis Da-vis County Water Improvement Im-provement District Water Revenue Bonds, Series March 1, 1958, Reserve Fund," herein sometimes referred to as tin- Reserve Fund, until a reserve has been accumulated in an amount equal to not less than $40,000.00, excluding exclud-ing the $12,000.00 of bond proceeds deposited therein there-in pursuant to Section 11 deposited in the Income Fund and used as herein provided therefor, and provided that any monies in the Bond Fund and Reserve Fund in excess of principal and interest requirements re-quirements may be used as hereinabove provided in Paragraph D of Section 13 of this resolution. The monies in each of said funds shall be continuously continu-ously secured by direct obligations of the United States of America in an amount at all times at least equal to the amount required to meet the aggregate ag-gregate principal and interest in-terest requirements for the current fiscal year. Any monies in either or botli of said funds, except monies mon-ies in the Bond Fund in an amount not exceeding the principal and interest requirements for the current cur-rent and next succeeding fiscal year, may be invested in-vested or reinvested at the District's option in direct obligations of, or obligations obliga-tions the payment of the principal of and interest on which is uncondion-ally uncondion-ally guaranteed by, the United States of America; and such monies shall consist con-sist either of such obligations obliga-tions or of cash deposited in a bank or banks in Suit Lake City, Utah, each of which shall be a member of the Federal Deposit In- surance Corporation. Each teresl on and principal of notes, bonds or other obligations which constitute con-stitute a lien, charge or encumbrance on the revenues rev-enues of the system and which may have been issued for the purpose of paying the costs of acquiring, acquir-ing, improving, extending, enlarging, repairing or bettering the system, or any combination thereof, including but not limited to the bonds herein authorized. au-thorized. Such revenues may be used to purchase in the open market such obligations at the best price obtainable, not, however, in ex'cess of the call price then applicable or if none be then not in excess of a reasonable price therefor, or in the event such obligations cannot be purchased in in the open market at said price such revenues may be used for the prior redemption re-demption of such obligations obliga-tions in accordance with the provisions thereof and of the authorizing proceedings. pro-ceedings. Any obligations so purchased or redeemed shall thereupon be cancelled can-celled by the District. The monies in the Bond Redemption Surplus Account Ac-count may be used whenever when-ever necessary to pay the interest on and principal of such revenue bonds or other such obligations, m- immediately preceding the issuance is-suance of such additional bonds or other obligations. ' Nothing herein contained shall be construed so as to permit per-mit the District to issue bonds or other obligations payable from the revenues of the system sys-tem and having a lien thereon prior and superior to the bonds herein authorized to be issued. Any additional parity or junior jun-ior lien bonds or other obligations obliga-tions issued in compliance with the terms hereof shall have interest payable semiannually on the first days of March and September in each year and shall mature on the first day of March in each year during the term of said bonds or other obligations. Section 10. That the provisions pro-visions of Sections 14 and 15 hereof are subject to the exception ex-ception that if at any time after the bonds or ether obligations obli-gations herein or hereafter authorized, or any part thereof, there-of, shall have been issued, the Board of Trustees of said District Dis-trict shall find it desirable to refund said bonds or other obligations, said bonds or other obligations, or any part thereof, may be refunded (but I only with the consent of the holders thereof, unless the bonds or other obligations have matured, or are then callable for prior redemption, as herein provided and have been properly called, and the refunding bonds or other obb- and the holder or holders thereof may not look to, any general or other fund except the income which is pledged under the provisions pro-visions of this resolution. C. That while the bonds authorized herein or any of them remain outstanding outstand-ing and unpaid, the rates for all services rendered by the system to said District Dis-trict and to its inhabitants and to all consumers within with-in or without the boundaries bound-aries of said District shall be reasonable and just, taking into account and consideration the cost and value of the system and the cost of maintaining and operating the system, and the proper and necessary neces-sary allowances for the depreciation thereof and the amounts necessary for the retirement of all bonds payable from the revenues of the system, the accruing ac-cruing interest on all such bonds, and reserves therefor; there-for; and there shall be charged against all purchasers pur-chasers of service, includ ing said District, such rates and amounts as shall be adequate tu meet the requirements of this and the preceding sections hereof, and which shall be sufficient to produce revenues or earnings to pay thi' operating and maintenance charges, and tern. E. That the District will operate said system so long as any of the bonds herein authorized are outstanding, out-standing, to maintain said system in efficient, operating oper-ating condition and to make such improvements, extensions, enlargements, repairs and betterments thereto as may be necessary neces-sary or advisable to insure in-sure its economical and efficient operation at all times and to an extent sufficient to supply public pub-lic or private demands for service within the District and the territory adjacent thereto. F. That the District will require each person, firm I or corporation with whom it may contract for labor or materials of construction construc-tion to furnish a performance perfor-mance bond in the full amount of any contract exceeding $5,000.00 in amount, or in lieu thereof to deposit with the District Dis-trict Treasurer, tu insure completion and performance, perfor-mance, marketable securities secur-ities having a market value equal to the amount of such contract, eligible as security for the deposit of trust funds under the regulations of the Board of Governors of the Federal Fed-eral Reserve System. In year, 6. The number of water wa-ter connections at the beginning and at the end of the year. 7. The number of customers cus-tomers per class of customers, cus-tomers, if there be classes of customers, and revenues per class of customers. All expenses incurred in the making of the audits and reports required by this section shall be regarded re-garded and paid as a maintenance and operation opera-tion expense. The District agrees to furnish a copy of each of such audits to the holder of any of the bonds' at his request, and without request to The Continental Bank and Trust Company, Salt Lake City, Utah. i. o., the paying pay-ing agent, and to the original orig-inal purchaser of said bonds from the District, or if the bonds are sold in blocks to the original purchaser of each block extended coverage insurance, insur-ance, workmen's compensation com-pensation insurance, public pub-lic liability insurance and other types of insurance in such amounts and to such extent as is normally carried car-ried by private corporations corpora-tions operating public utilities of the same type. The cost of such insurance shall be considered one of the operating costs of the system. In the event of loss or damage, insurance insur-ance proceeds shall be used first for the purpose of restoring or replacing Ihe property lost or damaged, dam-aged, any remiainder shall be desposited in the Reserve Re-serve Fund. O. That the District will not sell, lease, mortgage, pledge, or otherwise encumber, en-cumber, or in any manner dispose of, the system or any part thereof, including includ-ing any and all improvements improve-ments and extensions tb.at may be made thereto, un- til all the bonds hereto nu-thorized nu-thorized to be issued shall huve been paid in full, both principal and interest, except that the District niiy sell tiny Portion Por-tion of said property which shall h:ue been replaced by oilier property prop-erty of iit least equal value, or which shall not, lie necessary for the efficient effi-cient operation of the sys-t( sys-t( ni, provided. however, that in the event of iiny sale as aforesaid, the proceeds pro-ceeds of such sale shall be used to defray costs of improving im-proving or extend inn the system, or both, or at the District's option distributed distrib-uted as net income or revenues rev-enues of the system in accordance with the provisions pro-visions of Section 111 of this resolution. T That in order to prevent pre-vent ati.v accumulation of coupons or claims for in-w.niti in-w.niti nfinr maturity the ance being made for do- linquent tax collections nnticipaled at the time of each such levy, at the time and in the manner provided pro-vided by law for levying other taxes: and the Hoard of Trustees shall require re-quire the officers of said District to levy, extend and collect such taxes in the manner provided by law for the purpose of creating a fund for the p:iment of the principal ol said bunds, oilier in-di in-di btedness or general obligations and the interest. inter-est. accruiiiH thereon. Such taxes, when collected, shall lie kept for and applied ap-plied only to the payment of interest and principal of said bonds, other indebtedness in-debtedness or general obligations, as hereinbefore hereinbe-fore specified, Section ID. That, each oT the following events is-hereby is-hereby declared an "event ,.r ,i..r..,,i ' ii,,. i i, c'iii the payment of Interest on nndj the. principal of said bonds. j issued pursuant to the nro-1 nro-1 visions of t his resolution, shall constitute a first and prior; chnrg.? on the revenues- received re-ceived from said system, anything any-thing in this resoh -in', con -, 'tuned to 1he contrary not with-j landing. Section 23. That, not'iwllh-l landing any provisions eon-..lined eon-..lined herein, the term 'n v-j rules" or "income" horn the; y.stem shall include all in nine and tevenue derived by he District from tlie operal Ion ,f the water system, or an )ait thereof, whethe.- i esultinji rom improvements, exlen-ions, exlen-ions, repairs or betterments o the system, or otherwise, and shall include all revenues received by the District, or my municipal corporal ion sue-ceding sue-ceding to the rights of the District, Iroin s.iid system and from the sale of water, water -orvice or facilities, or any combination thereof, to the Inhabitants, of what, is now the olutlon. but shall be confined1 in its operation to the specific, sect inns, sentences, clauses or parts of tin's resolution so held unconstitutional and invalid, and the inapplicability nnd in- validity of tiny section, sen-i tence, clause or part of this resolution in any one or more Instances shall not affect or, prejudice in tiny way the ap- plicibility and validity of thi esolulion in any other in--tanees.. Section .'?.'). That this rcsolu- ion will promote the health. afc ty, prosperity, scurity, "d general wolf. 'ire of the inhabitants in-habitants of said District, that in emergency is hereby dec lar-(d lar-(d to exist, and that this res olution shall become effective iikI be ill force immcdatcly upon its adoption. Section 31, Thai tins resolution, resolu-tion, immediately upon its passage, shall be published for it least one publication in the Davis County Clipper, a newspaper news-paper published weekly and having general circulation in said District. In the County of Davis find Slate of ltah. For n period of thirty days after the date of such publication, any person in interest shall have the right to contest the legibly leg-ibly of such resolution or proceedings pro-ceedings or any bonds authorized au-thorized hereby or by the provisions pro-visions hereof made for the security and payment of any such bonds, nnd after such .time no one shall have any ause of aclion to contest the regularity, formality or legal-Sty legal-Sty thereof for any cause whatsoever, what-soever, pursuant to Section 17--:. 1 1 , Utah Code Annotated. l().r:i, as enacted by Section 2, Chapter 2!t, Laws of Utah, If).").'!. ADOPTED AND APPROVED APPROV-ED this Iflth clay of February. I USB. P. K. PETERSON Chairman of the Hoard of Trustees- i SEAL) Attest: ,J. W. HESS, C I erk. A. Payment of the principal of any of the bonds herein authorized to be issued shall not. be made when the same shall become due and payable, pay-able, either at maturity or by proceedings for prior redemption or otherwise. other-wise. B. Payment of any installment in-stallment of interest shall not be made when the same becomes due and payable or within thirty davs thereafter. C. The District shall for any reason be rendered incapable in-capable of fullfilling its obligations hereunder. D. The District shall make default in the clue and punctual performance jf its covenants or conditions, condi-tions, agreements and provisions pro-visions contained in the bonds or in this resolution resolu-tion on its part to be performed, per-formed, and if such default de-fault shall continue for sixty clays after written notice specifying such default de-fault and requiring the same to be remedied slvll have been given to the District hv the holders of sevnty-five per centum ( 75 ) in principal ami'mnt of the bonds then outstanding. South Davis County Water Improvement District, (including (includ-ing all territorial annexations which may lie made while said revenue bonds or any part thereof are outstanding), or from the stile of water, water ervice or facilities, or any combination thereof, by means if said system owned and operated by said District as the same msiy at any time exist to serve customers oul-: ide the District limits as well' as customers within the Dis-j Irict limits-. j Section 24. That the officers! of the District be, and lh"y hereby are, authorized and directed di-rected to take all action neces-' sary or appropriate to effectuate effec-tuate the provisions of this resolution, including, without limiting the generality of the foregoing, the printing of said bonds and the execution of such certificates as may be reasonably required bv the mirchasers thereof relating, inter alia, to the signing of the bonds, the tenure find identity of the District officials, delivery deliv-ery of the bonds and the receipt re-ceipt of the bond purchase nrice and the absence of liliun-tion, liliun-tion, pending or threatened, affecting the validity thereof Section 2f). That this resolution resolu-tion may be amended or supplemented sup-plemented by r e s n I u I i o n ; adopted by the Board ol District will not direclly or indirectly, extend or assent to the extension of the time for the payment of any coupon or claim for interest on any of the bonds issued hereunder nnd it will not directly or indirectly be a party to or approve any arrangement ar-rangement for any such extension or for the purpose pur-pose of keeping alive any of said coupon: and in case the time for payment of any such coupons shall be extended, such coupon or installment or installments install-ments of interest after such extension or arrangement ar-rangement shall not Ik? entitled in ease of default de-fault hereunder to the benefit or security of this resolution except subject to the prior payment in full of the principal of all bonds issued hereunder and then outstanding, and of matured interest on such bonds the payment of which has not been extended. Q. That the District will appoint a general manager man-ager for the svstem. having hav-ing qualifications and experience ex-perience deemed adequate bv the Trustees of the District, which manager shall b" an expert therein, there-in, shall have full control over the system, shall operate the system for said District, shall enforce en-force such reasonable fees and charges as will be sufficient to make the payments required bv this resolution, and shall in all things so operate the system as to comply fully with all of the requirements re-quirements and provisions of this resolution. The Board of Trustees at the expense of the District shall also employ a licensed, li-censed, skilled management manage-ment consulting engineer, skilled in the operation of water and sewer systems, sys-tems, on a retainer basis, who shall make recommendations recom-mendations from tinvj to time concerning the proper operation and maintenance of the system. sys-tem. The right of the holder or holders of the bonds herein authorized to require the appointment appoint-ment of either such manager man-ager or such engineer, or both, shall not be exclusive, ex-clusive, and in the event of default as herein outlined, out-lined, such holder or holders hold-ers shall have the right to proceed in law or equity to require the performance perfor-mance of the covenants herein contained in any action which to them shall Section 20. That upon the lj happening and continuance ofic any of the events of default asc provided in Section 19 of thisl' resolution, then and in every j case the holder or holders of j j not less than seventy-fiye per h centum (75) in principal I j amount of the bonds then out-jj standing may proceed against ( the District to protect and en- , force the rights of the bond- , holders under this resolution . by suit, action or special pro- ' ceedings in equity or at law, either for the appointment of a receiver or for the specific performance of any covenant or agreement contained herein here-in or in an award of execution of any power herein granted for the enforcement of any proper, legal or equitable remedy as such bondholder or bondholders may deem most effectual to protect and on-enforce on-enforce the rights aforesaid. All such proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all holders of the bonds and coupons then outstanding. Any receiver appointed ap-pointed in any proceedings to protect the rights of the bondholders bond-holders hereunder may enter and take possession of the system, sys-tem, operate and maintain the same, prescribe rates, fees or charges and collect, receive and apply all revenues arising after the appointment of such receiver in the same manner as the District itself might do. I'rustees of the District in accordance ac-cordance w-ith the laws of the 5tate of Utah, without receipt jy the District of any additional addi-tional consideration, but with he written consent of the holders of two-thirds of the bonds authorized by this resolution reso-lution and outstanding at the time of the adoption of such amendatory or supplemental resolution (not including in any case any bonds which may then be held or owned for the account of the District, but including in-cluding such refunding bonds as may be issued for the purpose pur-pose of refunding ae.y of the Ibonds herein authorized if such refunding bonds- are not owned by the District); provided, pro-vided, however, that no such resolution shall have the effect of permitting: A. An extension of the maturity of any bond authorized au-thorized by this resolution; resolu-tion; or B. A reduction in the? principal amount of any bond or the rale of interest inter-est thereon; or C. The creation of a lien upon or a pledge of revenues rev-enues rankling prior to tlie lien or pledge created by this resolution; or D. A reduction of the principal amount of bonds ; required for consent to i such amendatory or sup-; sup-; plemental resolution; or E. The establishment of : priorities as b e t w e e n seem appropriate, as hereinafter provided in Sections 19, 20 and 21 of this resolution. R. That each District official having custody of funds derived from operation oper-ation of the system shall be bonded in an amount at least equal to total funds in his custody at any one time. The cost of each such bond shall be considered one of the operating costs of the system. sys-tem. S. That the District will faithfully and punctually punc-tually perforin all duties with respect to ihc system sys-tem required by the- Constitution Con-stitution and laws of the State r.f Utah, and the resolutions of the District. T. That other than as provided by this resolution, resolu-tion, there are no liens or eneunihrances of any nature na-ture whatsoever on or against said system or the revenues derived or to be derived from the operation opera-tion of the same. U. That the Board of Trustees annually shall levy, or cause to be levied, general (ad valorem) taxes on all taxable properly prop-erly in the District fully sufficient to pay the principal prin-cipal of and interest on outstanding General Obligation Obli-gation Water Bonds, Series July 1, 1 950, and any other indebtedness or general gen-eral obligations of the District, as the same accrue, ac-crue, a reasonable allow- The failure of any bondholders o to proceed shall not relieve the District or any of its officers, of-ficers, agents or employees of any liability for failure to perform per-form any duty. Section 21. Thai upon the happening of 'any of the events of default as provided in Section Sec-tion 1!) of this resolution, the District, in addition, will do and perform all proper acts on hehalf of and for the bondholders bond-holders to protect and preserve the security created for the payment of their bonds and to insure the payment of the principal of and interest on aid bonds promptly as the same beconil' due. All proceeds pro-ceeds derived therefrom, so iong as any of the bonds lerein authorized, either us to principal or interest are outstanding out-standing and unpaid, shall be paid into the Bond Fund and used for the purposes therein provided. In the event the District Dis-trict fails or refuses to proceed is in this section provided, the holder or holders of not less han seventy-five per centum '75"-;.) in principal amount ol he bonds then outstanding .ifter demand in writing, nittj proceed to protect and enforce he rights of the bondholders is hereinabove provided. Section 22. That if it shoulc oe legally determined that an egislativc or other body, com nission or authority has po-.vei i? lawfully prescribe a lowei schedule of rates than tha contemplated by this or otlni resolution, and if such lowe: rate shall be prescribed, tbei ikiikis issued and outstanding out-standing under the provisions pro-visions of this resolution. Section 2fi. That the provisions pro-visions of this resolution shall constitute an irrevocable' contract con-tract between the South Davis County Water Improvement District and the holder or Holders of the bonds issued hereunder, and after the issuance issu-ance of any of the bonds hereby here-by authorized, no change, variation or alternation of any kind in the provisions of this resolution shall be made in any manner, except as hereinabove herein-above provided in Section 2a of this resolution, until such lime as all of the bonds issued jiercunder and the interest accruing ac-cruing thereon shall hc"e been paid in full Section 27. That a certified copy of this resolution shall be Jfiled by the Clerk of said District in the records thereof Section 2!!. That all orders by-laws and resolutions, or oarts t h e r e o f , inconsistent herewith are .hereby repealed o the extent only of such inconsistency. in-consistency. Tins repealer shall . lot be construed to revive any i inter, by law or resolution, oi oart tlvreof, heretofore re 1 )ealed. Section 29, That if any oiu r ni'ire sections, sentences lauses or parts of this resolu ion shall for any reason !' t piestioned or held invalid , -uch judgment shall not affect r mpair or invalidate the re i muining provisions of this res