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HomeMy WebLinkAboutAcqvistition By Redemption Water and Sewage Revenue Bonds Augusta Richmond GA DOCUMENT NAME: ()CA{)//'5I-,hOi? 6y ?iedf'h1phon (J(}rfer Oil d 5 edcrIR';f-' 'K e-0J2.nu ~ i3>ond S DOCUMENT TYPE: '(Ie5/JlohOYi YEAR f qq& BOX NUMBER: :2- FILE NUMBER: ) J- ~ L/ ~ NUMBER OF PAGES: 1;26 .' ~i:&J=# /~PI/5 ;I BOND RESOLOTION A RESOLOTION TO PROVIDB POR THE ACQUISITION BY REDEMPTION, PAYMENT OR OTHERWISB BY RICHMOND COUNTY 01' ALL 01' TBB RICHMOND COUNTY WATBR AND, SBWBRAGB RBVBNOB BONDS, SBRIBS 1986 BERBTCPORE ISStrBD AND NOW OOTSTANDING IN THE AGGREGATB PRINCIPAL AMOUNT 01' $6,220,000, ~L 01' THE RICHMOND COUNTY WATBR AND SBWBRAGB RBVBNOB REPtJNDING BONDS, SBRIBS 1987 BBRETOPORB ISSUBD AND NOW OOTSTANDING IN THE AGGREGATB PRINCIPAL AMOUNT 01' $2,924,591.75 AND ALL 01' THE RICHMOND COUNTY WATBR AND SBWBRAGB RBVBNOB BONDS, SERIBS 1991 HBRBTOPORB ISSUBD AND NOW OOTSTANDING IN THE AGGREGATB PRINCIPAL AMOUNT 01' $7,655,224, TO PROVIDB POR THE ACQUISITION BY REDEMPTION, PAnmN'l' OR OTBBRWISB BY RICHMOND COUNTY 01' ALL 01' THE CITY COUNCIL 01' AUGUSTA WATER. AND SEWERAGB REVENO'B BONDS, SERIBS 1972 BBRBTOPORE ISStrBD AND NOW OOTSTANDING IN THE AGGREGATB PRINCIPAL AMOUNT 01' $1,125,000 AND ALL 01' THE CITY COUNCIL - 01' AUGUSTA WATBR AND SBWBRAGB R.EVEN'1J'B BONDS, SBRIES 1991 BBRETOPORE ISSUED AND NOW OUTSTANDING IN THE AGGREGATB PRINCIPAL AMOUNT 01' $8,420,000, TO PROVIDB POR ADDITIONS, EXTENSIONS AND IHPROVEMENTS TO THE COMBINED WATER AND SBWBRAGB SYSTEM 01' THE CITY COUNCIL 01' AUGUSTA AND R.ICHMOND COUNTY, TO PROVIDB POR THE ISSUANCB 01' WATBR AND SBWBRAGB REVENUE RBJ'tJNDING AND IHPROVEMENT BONDS, SBRIBS 199 6A, TAXABLE WATER. AND SEWERAGB RBVENOB REFUNDING BONDS, SBRIBS 1996B AND WATBR AND SBWBRAGB R.EVEN'1J'B REJ'tJNDING BONDS, SBRIBS 1997, TO PINANCB, IN WHOLE OR IN PART, THE COSTS 01' SUCH OVERALL ONDBRTAltING, TO PROVIDB POR THE CONSOLIDATION 01'- TBB WATBR AND SBWBRAGB SYSTEK 01' THE PORKER THE CITY COUNCIL 01' AUGUSTA AND TBB WATBR AND SEWERAGB SYSTEK 01' RICHMOND COUNTY INTO ONE REVBNOB PRODUCING tmDERTAltING, TO PROVIDE POR TBB ADOPTION 01' RATBS AND TBB COLLECTION 01' I'EBS AND CBARGESPOR THE SBRVICBS, PACILITIBS AND COMMODITIBS TO BE PORNISmm BY TBB COMBINED WATER. AND SEWERAGE SYSTBII, TO PROVIDB POR THE ISSUANCB tmDBR CBRTAIN TBRKS AND CONDITIONS 01' ADDITIONAL PARITY BONDS, TO PROVIDE POR THE CRBATIOH AND KAIHTBNANCE 01' CBRTAIN FONDS, TO PROVIDE R'I2M1mIBS IN THE BVBNT 01' DBPAOLT POR THE OWNERS 01' SAID BONDS, TO RATIJ'Y AND AUTHORIZE TBB PRBPARATION, USB AND DISTRIBOTION 01' A PRBLIKINARY OPPICIAL STATEMENT AND A PINAL OPPICIAL STATEHEH'l' IN CONHBCTXOH WXTJI TBB OPPER AND SALE 01' TBB SERXES 1996A BONDS, SRRXES 1996B BONDS AND SBRXBS 1997 BONDS, TO PROVIDE FOR TBB ANNUAL StmKISSION OF CERTAIN FINANCIAL INFORMATION AND OPBRATING DATA PtJRSUANT TO ROLE 15c2 -12 01' THE SBCt1RITIBS.. AND EXCHANGB COMHJ:SSION, TO PROVIDB POR TBB ADOPTION 01' A SUPPLEMENTAL RESOLOTION FINALIZING.THBTBRKS 01' THB SBRIBS 1996A, SBRIBS 1996B BONDS AND THE SBRIES 1997 BONDS, AND POR OTHER PURPOSBS. WHBREAS, under the provisions of Article IX, Section III, Paragraph II(a) of the Constitution of the State of Georgia and Georgia Laws 1995, p. 3648 et seq., known as the Richmond County-- Consolidation with the City ,of Augusta and the City of Hephzibah Act (the "Act") and pursuant_ to referenda held within The City Council of Augusta (the "City") and Richmond County (the "County"), the City consolidated with the County (such consolidated political 190016.7 subdivision hereinafter sometimes referred to as the KConsolidated Government"); and . WHEREAS, the referendum held within the City of Hephzibah, a municipality located withi.n the Cons,olidated Government, with respect to consolidation failed; and . WHEREAS, pursuant to the Act, the Consolidated Government now constitutes a county and a municipality under the laws and the Constitution of the State of Georgia, and is a political subdivision of the State of Georgia in the exercise of the respective powers of a municipality and a county governed by the Augusta-Richmond -County Commission-Council (the KCommission- Council"); and WHEREAS, pursuant to Article IX, Section II, Paragraph II of the Constitution of the-State of Georgia, the Municipal Home Rule Act of 1965 (O.C.G.A. S 36-35-1 et seq., as amended), and an ordinance adopted by the Commission-Council of the Consolidated Government on October 1, 1996, the commission-Council amended the designation of its governing body from the KAugusta-Richmond. County Commission-Council" to the KAugusta-Richmond County Commission" (the KCommission"); and ' WHEREAS, prior to the consolidation of the City and the County, the County and the City each owned, operated and maintained their own respective water and sewerage systems; and WHEREAS, the County and the City have previously issued bonds to finance and refinance additions and improvements to their respective water and sewerage systems; and WHEREAS, it is desirable that the City'S System (as hereinafter defined) and the County's System (as hereinafter defined) be combined and consolidated as one revenue producing undertaking and in furtherance of that purpose, that all of the City'S and the County's presently outstanding water and sewerage revenue bonds hereinafter described be defeased, by redemption, payment or otherwise; 'and ' WRR'DBAS, the Consolidated Government acting by and through the Commission, by virtue of the authority of the Constitution of the State of Georgia, the Act and Title 36, Chapter 82, Article 3 of the Official Code of Georgia Annotated, as amended (the KRevenue Bond Law"), is authorized to issue revenue bonds to acquire by redemption, payment or otherwise all or any part of the City'S and the County's outstanding water and sewerage revenue obligations, to fund in part a reasonably required debt service reserve and to acquire additional water and sewerage facilities by the addition thereto of improvements to the combined water and sewerage systems of the City and the Co~ty (the KSystem"), and to construct such additions, and to operate and maintain the System, as added to, , 190016.7 -2- extended, improved and equipped, for its own use, and for the use of the puPlic and to prescribe and revise rates, and to collect fees and' charges for the services, facilities and colTimodities furnished by the 'System, as now existent and as same is hereafter added to, extended; improved and equipped, and in anticipation of the collection of revenues from the System, to issue revenue bonds to finance, in whole or in. part, the acquisition of said outstanding water and sewerage revenue obligations, to fund in part a reasonably required debt service reserve and finance the cost of such additions, extensions and improvements to the System and to pay all expenses necessary to accomplish the foregoing; and WHEREAS, the County, pursuant to a resolution adopted on April 24, 1984 (the "1984 Resolution"), has heretofore issued and delivered $7,785,000 aggregate principal amount of Richmond County Water and Sewerage Revenue Bonds, Series 1984, which Series 1984 Bonds have been paid in full; and ' WHEREAS, the 1984 Resolution is the master resolution pursuant to which additional obligations payable from the revenues derived from the County's System ranking pari passu with the Series 1984 Bonds are authorized to be issued, and the hereinafter described Series 1986 Bonds, Series 1987 Bonds and the County's Series 1991 Bonds are the only outstanding bonds under the 1984 Resolution, as supplemented; and ' ~..BAS, the City', pursuant to Ordinance #3444 adopted May 20, 1963 (the "1963 Ordinance"), has heretofore issued and delivered , $6,000,000 aggregate principal amount of The City Council of Augusta Water and Sewerage Revenue Bonds, Series 1963, which Series 1963 Bonds have been paid in full; and WBBRBAS, the 1963 Ordinance is the master ordinance pursuant to which additional obligations payable from the revenues derived from the City'S System ranking pari passu with the Series 1963 Bonds are authorized to be issued, and the hereinafter described Series 1972 Bonds and the. City'S 1991 Bonds are the only outstanding bonds under the 1963 Ordinance, as supplemented; and WHEREAS, the County has heretofore, pursuant to the 1984 Resolution and a resolution adopted. on November 24, 1986 (the "1986 Resolution"), authorized the issuance of, and actually issued and delivered, $7,930,000 aggregate principal amount of Richmond County Water and Sewerage Revenue Bonds, Series 1986, dated December 1, 1986 (the "Series 1986 Bonds"), in the form of fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof, numbered from R-1 upward, transferable to subsequent owners as therein provided, bearing interest from date at the rates per annum set forth below opposite each principal maturity, all interest payable April 1, 1987 and semiannually thereafter on the 1st days of April and October in 190016.7 -3- each year and the principal maturing on the 1st day of April, in the years. and amounts, as follows: ~ 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 ' Amount $170,000 130,000 135,000 140,000 120,000 180,000 190,000 205,000 2i5,000 225,000 240,000 ~ 3.75% 4.35 4.75 4.90 5.10 5.30 5.50 5.70 5.90 6.05 6.15 ~ 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Amount $ 260,000 275,000 320,000 340,000 395,000 960,000 1,025,000 1,100,000 1,180,000 125,000 Rat& 6.25 % 6.35 6.45 6.55 6.65 6.70 6.75 6.80 6.875 6.875 of which Series 1986 Bonds there is now outstanding $6,220,000 principal amount thereof; and WHEREAS, the County has heretofore, pursuant. to the 1984 Resolution and a resolution adopted March 3, 1987 (the "1987 Resolution"), authorized the issuance of, and actually issued and delivered, $8,479,591.75 aggregate principal amount of, Richmond County Water and Sewerage Revenue Refunding Bonds, Series 1987 (the "Series 1987 Bonds"), of which Series 1987 Bonds $5,555,000 aggregate principal amount thereof are CUrrent Interest Paying , Bonds, dated April 1, 1987 (th~ "Series 1987 CUrrent Interest . Bonds"), in the form of fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof, numbered from CIPB-1 upward, transferable to subsequent owners as therein provided, bearing interest from date at the rates per annum set forth below opposite each principal maturity, all interest payable October 1, 1987 and semiannually thereafter on the 1st days of April and October in each year and the principal maturing on the 1st days of April and October, on the dates and in the amounts, as follows: 190016.7 -4- oat.a Principal Amount. Rate October 1, 1987 $ 45,000 3.50%' April 1, 1988 45,000. 4.00 October 1, 1988 50,000 4.00 April 1, 1989 50,000 4.25 October 1, .1989 50,000 4.25 April 1, 1990 50,000 4~50 October 1, 1990 170,000 4.50 April 1, 1991 310,000 4.75 October 1, 1991 175,000 4.75 April 1, 1992 650,000 5.00 October 1, 1992 180,000 5.00 April 1, 1993 685,000 5.20 October 1, 1993 185,000 5.20 April 1, 1994 725,000 5.40 October 1, 1994 195,000 5.40 April 1, 1995 765,000 5.50 October 1, 1995 205,000 5.50 April 1, 1996 810,000 5.60 October 1, 1996 210,000 5.60 which Series 1987 Current Interest Bonds have been paid in full; and the remaining $2,924,591.75 aggregate principal amount of Series 1987 Bonds are Compound Interest Bonds, dated April 2, 1987 (the "Series 1987 Compound Interest Bonds"), in the form of fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof, numbered from CIB-1, upward, transferable to subsequent owners as therein provided, bearing interest from date payable only at maturity or upon redemption prior to maturity in the amounts determdnedby reference to the Schedule of Compounded Amounts as' therein and in the 1987 Resolution set forth, and the principal amount of the Series 1987 Compound Interest Bonds maturing on the 1st days of April and October on the dates and in the amounts, as follows: 190016.7 -5- ~ Principal Amount per SS.OOO Maturity Amount Aggregate Principal Amount April 1, 1997 October 1, 1997 April 1, 1998 October 1, 1998 April 1, 1999 October 1, 1999 April 1, 2000 October 1, 2000 April 1, 2001 October 1, 2001 April 1, 2002 October 1, 2002 April 1, 2003 October 1, 2003 April 1, 2004 October. 1, 2004 April 1, 2007 $2,663.45 2,580.90 2,474.35 2,396.45 2,294.20 2,220.95 2,123.10 2,054.30 1,974.30 1,909.85 1,820.85 1,760.55 1,663.25 1,607.00. 1,527.35 1,475.00 1,203.55 $458,113.40 100,655.10 435,485.60 83,875.75 412,956.00 64,407.55 384,281.10 45,194.60 371,168.40 24,828.05 347,782.3'5 12,323.85 11,642.75 11,249.00 10,691.45 10,325.00 139,611.80; of which Series 1987 Compound Interest Bonds there is now outstanding $2,924,591.75 principal amount thereof; and WBBRBAS, the County has heretofore, pursuant to the 1984 Resolution and a resolution adopted December 3, 1991, as supplemented December 13, 1991 (the "1991 Resolution"), authorized the issuance of, and actually issued and delivered, $8,385,224 aggregate principal amount of Richmond County Water and Sewerage Revenue Bonds, Series 1991 (the "County's Series 1991 Bonds"), of which the County's Series 1991 Bonds $7,415,000 aggregate principal amount thereof are CUrrent Interest Paying Bonds, dated December 1, 1991 (the "Series 1991 CUrrent Interest Bonds"), in the form of fully registered bonds without coupons, in the denomination of $5 i 000 or any integral multiple thereof, numbered from CIPB-1 upward, transferable to subsequent owners as therein provided, bearing interest from date at the rates per annum set forth below opposite each principal maturity, all interest payable April 1, 1992 and semiannually thereafter on the 1st days of April and October in each year and the principal maturing on the 1st day of October, in the years and amounts, as follows: 190016.7 -6- Ye..a..t: Amount ~ Ye..a..t: Amount ~ 1992 $195,000 4.10% 2001 $ 215,000 5.90% 1993 125,000 4.40 2002 215,000 6.00 1994 125,000 4.65 2003 190,000 6.15 1995 135,000 4.90 2004 200,000 6.30 1996 150,000 5.00 2005 210,000 6.40 1997 155,000 5.25 2006 215,000 6.50 1998 160,000 5.50 2016 2,005,000 6.50 1999 180,000 5.70 2021 2,745,000 6.50 2000 195,000 5.80 and the remaining $970,224 aggregate principal amount of Series 1991 Bonds are Compound Interest Bonds, dated December 20, 1991 (the "Series 1991 Compound Interest Bonds"), in the form of fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof, numbered from CIB-1 upward, transferable to subsequent owners as therein provided, bearing interest from date payable only at maturity in the amounts determined by reference to the Table of Accreted Value for each respective maturity as provided in the 1991 Resolution, and the principal amount of the Series 1991 Compound Interest Bonds maturing on the first day of October, in the years and amounts, as follows: Ye..a..t: Principal Amount Per S5.000 Maturity Amount Aggregate Principal Amount Aggregate Maturity Amount 2007 2008 2009 2010 2011 $1,740.50 1,614.80 1,496.70 1,385.90 1,282.05 $565,662.50 113,036.00 104,769.00 97,013.00 89,743.50 $1,625,000 350,000 350,000 350,000 350,000 of which County's Series 1991 Bonds there is now outstanding $7,655,224 principal amount thereof; and WHBREAS, the City has heretofore, pursuant to the 1963 Ordinance and an ordinance adopted September '5, 1972, authorized the issuance of, and actually issued and delivered, $8,000,000 aggregate principal amount of The City Council of Augusta Water and Sewerage Revenue Bonds, Series 1972, dated May 1, 1972 (the "Series 1972 Bonds"), in bearer form, in the denomination of $5,000 or any integral multiple thereof, numbered from 1,201 to 2,800, inclusive, transferable to, subsequent owners as therein provided, bearing interest from date at the rates per annum set forth below opposite each principal maturity, all interest payable November 1, 1972 and semiannually thereafter on the 1st days of May and November in each year and the principal maturing on the 1st day of May, in the years and amounts, as follows: 190016.7 -7- ~ Amount ~, ~ Amount Rate 1974 $ 75,000 5.50% 1987 $330,000 5.10% 1975 80,000 5.50 1988 350,000 5.10 1976 85,000 5.50 1989 370,000 5.10 1977 90,000 5.50 1990 390,000 5.10 1978 195,000 5.50 1991 415,000 5.10 1979 205,000 5.50 1992 440,000 5.20 1980 220,000 5.50 1993 465,000 5.20 1981 230,000 5.50 1994 500,000 5.20 1982 245,000 5.50 1995 525,000 5.20 1983 260,000 5.50 1996 525,000 5.20 1984 275,000 5.50 1997 550,000 4.50 1985 295,000 5.10 1998 575,00'0 4.50 1986 310,000 5.10 of which Series 1972 Bonds there is now outstanding. $1,125,000 principal amount thereof; and WHBREAS, the City has heretofore, pursuant to the 1963 Ordinance and an ordinance adopted on December 18, 1991 (the "1991 Ordinance"), authorized the issuance of, and actually issued and delivered, $10,000,000 aggregate principal amount of The City Council of Augusta Water and Sewerage Revenue Bonds, Series 1991, dated December 1, 1991 (the "City'S Series 1991 Bonds"), in the form of fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof, numbered from R-1 upward, transferable to subsequent owners as therein provided, bearing interest from date at the rates per annum set forth below opposite each principal maturity, all interest payable May 1, 1992 and , semiannually thereafter on the 1st days of May and November in each year and the principal maturing on the 1st day of May, in the years and amounts, as follows: ~ Amount RaU ~ Amount RaU 1992 $290,000 4.10% 2000 $ 425,000 5.85% 1993 300,000 4.40 2001 450,000 5.95 1994 315,000 4.75 2002 480,000 6.05 1995 330,000 5.00 2003 505,000 6.20 1996 345,000 5.20 2004 540,000 6.30 1997 360,000 5.35 2005 570,000 6.40 1998 380,000 5.50 2006 ' 610,000 '6.45 1999 405,000 5.70 2011 3,695,000 6.50 of which City'S Series 1991 Bonds there is now outstanding $8,420,000 principal amount thereof; and WHBREAS, the County has . received a recommendation from The Robinson-Humphrey Company, Inc., Atlanta, Georgia and Jackson Securities In~orporated,' Atlanta, Georgia (collectively, the "Underwriter") and Ward & Associates, Inc., Atlanta, Georgia (the "Financial Advisor") that it is advisable, feasible and in the best 190016.7 .. 8- . interest of the Consolidated Government to consolidate the City's System and the County's System into a single revenue producing ,undertaking and to conform and make less restrictive all legal provisions pertaining to the respective outstanding water and sewerage revenue bonds of the City and the County, and in furtherance thereof, that all of the outstanding Series 1986 Bonds, Series 1987 Bonds, County's Series 1991 Bonds, Series 1972 Bonds and City's Series 1991 Bonds (collectively, the "Refunded Bonds") be refunded at this time, and the Consolidated Government has determined, after its own independent study and investig~tion, that it is in its best interest to refund the Refunded. Bonds as aforesaid; and WHEREAS, the Underwriter has further recommended, and the Consolidated Government has concurred, that such refunding of the Refunded Bonds should be accomplished by making due and legal provision for: ' (a) (i) the payment of the principal of and interest on the Series 1986 Bonds maturing April 1, 1997 in the aggregate principal amount of $240,000, as same mature; and (ii) the redemption on April 1, 1997 of the Series 1986 Bonds maturing April 1, 1998 and thereafter, in the aggregate principal amount of $5,980,000, by paying the principal amount thereof, the 2 percent redemption premium in connection therewith and the interest to accrue thereon until such date of redemption; (b) (i) the payment of the principal of and interest on the Series 1987 Compound Interest Bonds maturing April 1, 1997 in the principal amount of $458,113.40, as same mature; and (ii) the redemption on April 1, 1997 of the Series 1987 Compound Interest Bonds maturing October 1, 1997 and thereafter, in the aggregate principal amount of $2,466,478.35, by paying the principal amount thereof, the 1 percent r~demption premium in connection therewith and the interest to accrue thereon until such date of redemption; (c) (i) the payment of the principal of and interest on the Series 1991 CUrrent Interest Bonds maturing October 1, 1997 to October 1, 2001, inclusive, in the aggregate principal amount of $905,000, as same mature; (ii) the payment of the principal of and interest on the Series 1991 Compound Interest Bonds maturing October 1, 2007 to October 1, 2011,inclusive, in the aggregate principal amount of $970,224, as same mature; and (iii) the redemption on October 1, 2001 of the Series 1991 CUrrent Interest Bonds maturing October 1, 2002 and thereafter, in the aggregate principal amount of $5,.780,000, by paying the principal amount .thereof, the 2 percent 190016.1 -9- redemption premium in connection therewith and the ,'. interest to accrue thereon until such date of redemption; (d) (i) the payment of the principal of and interest on the Series 1972 Bonds maturing May 1, 1997 in the aggregate principal amount of $550,000, as same mature; and (ii) the redemption on May 1, 1997 of the Series 1972 Bonds maturing May 1, 1998, in the aggregate principal amount of $575,000 by paying the principal amount thereof, the 1~ percent redemption premium in connection therewith and the interest to accrue thereon until such date of redemption; , (e) (i) the payment of the principal of and interest on the City's Series 1991 Bonds maturing May 1" 1997 to May 1, 2002, inclusive, in the aggregate principal amount of $2,500,000, as same mature; and (ii) the redemption on May 1, 2002 of the City's Seri,es 1991 Bonds maturing May 1, 2003 and thereafter, in the aggregate principal amount of $5,920,000, by paying the principal amount thereof, the 2 percent redemption premium in connection therewith and the interest to accrue thereon until such date of redemption; and (f) the payment of all expenses necessary to accomplish the foregoing. WHEREAS, the Consolidated Government has further determined that it is necessary and essential to add to, extend, improve and equip the System and has further determined that by the expenditure on its part of approximately $42,700,000, the System can be added to, extended, improved and equipped in accordance with, or substantially in accordance with, the "1996 Revenue Bond Issue Engineering Report- dated October 18, 1996 and prepared by Zimmennan, Evans and Leopold, Inc. (the "Engineering Report-) ; ,and ~, due to the federal tax consequences of refunding the Series 1987 Bonds, the most economic method of refunding the Series 1987 Bonds is through the issuance of taxable water and sewerage revenue bonds; and WHEREAS, the Series 1986 Bonds are eligible only for current refunding, which requires that bonds issued to refund the Series 1986 Bonds must be issued and such Series 1986 Bonds must be defeased in full within 90 days of an interest payment date; and WHBREAS, the next succeeding interest payment date on which the Series 1986 Bonds may be refunded and defeased is April 1, 1997; and ~BAS, in order to expeditiously proceed with the refunding of the County's Series 1991 Bonds, the Series 1972 Bonds and the 190016.7 -10- City's Series 1991 Bonds which are eligible for refunding at this time and to obtain financing for certain costs relating to the extension, improvement and equipping of the System, all as described in the BngineeringReport, the Consolidated Government desires to issue its Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A (the uSeries 1996A Bonds") for such purposes aseoon as feasible, and in order to expeditiously proceed with the refunding of the Series 1987 Bonds which are eligible for refunding at this time, the Consolidated Government desires to issue its Taxable Water and Sewerage Revenue Refunding Bonds, Series,1996B (the uSeries 1996B Bonds" and, together with the Series 1996A Bonds, the uSeries 1996 Bonds"), and contemplates that its Water and Sewerage Revenue Refunding Bonds,. Series 1997 (the "Series 1997 Bonds") will be issued after January 1, 1997 in order to refund the Series 1986 Bonds; and WHEREAS, the Series 1972 Bonds and the City's Series 1991 Bonds are the only presently outstanding water and sewerage revenue obligations of the City having as security for the payment thereof and interest thereon a lien on the net revenues of the City's System; and WHEREAS, upon provision having bee~ duly and legally made for the acquisition of all of the Series 1972 Bonds~ and the City's Series 1991 Bonds now outstanding, the City's 1963 Ordinance, the 1972 Ordinance and 1991 Ordinance (the uPrior Lien Ordinances") shall be null and void and of no force and effect and the lien created thereunder on the revenues of the City'S System shall be fully and completely discharged and provision should be made to transfer, simultaneously with the issuance and delivery of the Series 1996 Bonds, all moneys then on hand, after the withdrawal of the sums to be applied toward the refunding of the Series 1972 Bonds and the City's Series 1991 Bonds, in the special funds heretofore created and now being maintained under the Prior Lien Ordinances and designated as UWater Revenue Fund" and UWater and Sewerage System Renewal and Extension ,Fund" into similar special funds hereinafter created and designated as uRichmond County Water and Sewerage System Revenue Fund- -1996" and uRichmond County Water and Sewerage System Utility General Fund" to be used and applied as provided in this Resolution; and WHEREAS, upon provision having been duly and legally made for the acquisition of all of the County's Series 1991 Bonds and the Series 1987 Bonds, the County's 1991 Resolution and the 1987 Resolution shall be null and' void and of no force and effect whatsoever, and the lien created thereunder on the revenues of the County's System shall be fully and completely discharged; and WHEREAS, until such time as the Series 1997 Bonds are issued and the Series 1986 Bonds (collectively, the uPrior Lien Bonds") are defeased, the 1984 Resolution, and the 1986 Resolution (collectively, 190016.7 -11- the ~Prior Lien Resolutions"} shall continue to be in full force and effect; a,nd WHEREAS, the Series 1996 Bonds will be issued as junior lien bonds pursuant to this Resolution and will be junior 'and subordinate in right of payment and as to the lien on the net revenues of the County's System to the Prior Lien Bonds; and WHEREAS, upon the issuance of the Series 1997 Bonds and 'provision having been duly and legally made for the acquisition of all of the Prior Lien Bonds, the Prior Lien Resolutions shall be null and void and of' no force and effect and the lien created thereunder on the revenues of the County's System shall be fully and completely discharged and provision should be made to transfer, simultaneously with the issuance of the Series 1997 Bonds, all moneys then on hand, after the withdrawal of the sums to be applied toward the refunding. of the Prior Lien Bonds, in the special funds heretofore created and now being maintained under the Prior Lien Resolutions and designated as ~Richmond County Water and Sewerage System Revenue Fund" and "Richmond County Wate,r and Sewerage System Renewal and Extension Fund" into similar funds hereinafter created and designated "Richmond County Water and Sewerage System Revenue Fund--1996" and ~Richmond County Water and Sewerage System Utility General Fund;" and . WHEREAS, upon the refunding of the Prior Lien Bonds, the Series 1996 Bonds and the Series 1997 Bonds shall be the only outstanding water and sewerage revenue bonds having a lien on the Pledged Revenues (hereafter defined), the Series 1996 Bonds shall no longer be junior lien obligations of the County's System and the Series 1996 Bonds and Series 1997 Bonds (collectively, the "Series 1996/1997 Bonds") shall have a first or prior lien on the Pledged Revenues; and ' WHEREAS, pursuant to the Prior Lien Ordinances, there was created and is now being maintained a special fund designated as "The City Council of Augusta Water and Sewerage System Sinking Fund" (the ~City's Sinking Fund") securing the payment of the Series 1972 Bonds and the City'S Series 1991 Bonds and such moneys as shall be necessary and proper shall be withdrawn therefrom,' simultaneously with the issuance and delivery of the Series 1996A, Bonds hereinafter authorized to be issued, and applied toward the refunding, of the Series 1972 Bonds and the City's Series 1991 Bonds; and ~BAS, pursuant to the 1984 Resolution, the 1986 Resolution, the 1987 Resolution and the 1991 Resolution, there was created and is now being maintained a special fund designated as "Richmond County Water and Sewerage System Sinking Fund", (the "County's Sinking Fund") securing the payment of the Series 1986 Bonds, the Series 1987 Bonds and County's Series 1991 Bonds and only such moneys that are allocable to the County's Series 1991 Bonds and the 190016.7 -12- series 1987 Bonds and as ,shall be necessary and proper shall be withdrawn therefrom, simultaneously with the issuance and delivery of the Series 1996 Bonds, and applied toward the refunding of the County's Series 1991 Bonds and the Series 1987 Bonds, respectively: and WHEREAS, the County, in connection with the issuance of its Water and Sewerage Revenue Bonds, Series 1978 (which were subsequently refunded by the Series 1987 Bonds), purchased a $3,615,000 aggregate principal amount of 70/8 percent Treasury Bonds (the "Sinking Fund Investments") on the dates, in the amounts and at the price provided for in the sinking Fund Investment Agreement, dated February 2, 1978, between the County and The Fulton National Bank of Atlanta (the "Sinking Fund Agreement") and such Sinking Fund Investments are on deposit in the "Richmond County Sinking Fund Investment Account" held within the County's sinking Fund and have been fully paid for by the County: and WHEREAS, the Consolidated Government, as successor to the County, desires to sell the Sinking Fund Investments and deposit the proceeds thereof with the 1996 Escrow Agent (as hereafter defined) to be applied toward the payment by redemption or otherwise of the Series 1987 Bonds: and WHEREAS, from the proceeds derived from the sale of the Series 1996 Bonds and certain moneys contributed the Consolidated Government, a sufficient sum will be deposited, simultaneously with the issuance and delivery'of the Series 1996 Bonds~ with Bank of 'New York, Jacksonville, Florida (the "1996 Escrow Agent"), and will be used to pay the cost of acquiring certain direct obligations of the United States of America (the "Direct Obligations") and to provide an initial cash balance, which Direct obligations and cash will be deposited in trust with the 1996 Escrow Agent under an Escrow Deposit Agreement to be entered into by and between the 1996 Escrow Agent and the Consolidated Government (the "1996 Escrow Deposit Agreement") , and the cash and principal of and interest on said Direct Obligations will provide funds in the amounts required to provide for the payment by redemption or otherwise of all of the county's Series 1991 Bonds, the Series 1972 Bonds, the City's Series 1991 Bonds ~nd the Series 1987 Botids (collectively, the "Refunded Prior Lien Bonds") as aforesaid and will be used for that purpose, all as hereinafter provided: and WHEREAS, from the proceeds derived from the sale of the Series 1997 Bonds and certain moneys contributed by the Consolidated Government, a sufficient sum will be deposited, simultaneously with the issuance and delivery of the Series 1997 Bonds, with Bank,of New York, Jacksonville, Georgia (the 1997 Escrow Agent"), and will be used to pay the cost of acquiring Direct Obligations and to provide an initial cash balance, which Direct Obligations and cash will be deposited in trust with the 1997 Escrow Agent under an Escrow Deposit Agreement to be entered into by and between the 1997 190016.7 -13- Escrow Agent and the Consolidated Government (the "1997 Escrow Deposit Agreement"), and the cash and principal of and interest on said Direct Obligations will provide funds in the amounts required to provide for the payment by redemption or otherwise of all of the Prior Lien Bonds as aforesaid and will be used for that purpose, all as hereinafter provided: and WHEREAS, it was determined by the Commission that the issuance by the Consolidated Government of its series 1996A Bonds was the most feasible method of raising the funds required to finance the cost of improvements to the System now contemplated as well as in the future: and WHEREAS, upon the recommendation, of the Underwriter, with which recommendation the Consolidated Government concurs, it has been determined that the Consolidated Government should make due and legal provision to fund a reasonably required debt service reserve for the Series 1996/1997 Bonds and the Consolidated Government anticipates funding the Reserve Account with a Reserve Account Surety Bond or Reserve Account Surety Bonds (as hereafter defined): and ' WHEREAS, the Consolidated Government has applied to Credit Issuers (as hereafter defined)' for the issuance of a Credit Facility to insure the payment of the principal of and interest on all or a part of the Series 1996/1997 Bonds: and WHEREAS, it is contemplated that the Series 1996/1997 Bonds will be sold in the near future and in finalizing the terms of the Series 1996/1997 Bonds and to accept the offer of the Underwriter to purchase the Series 1996/1997 Bonds, the Consolidated Government will adopt a resolution supplementing this resolution and said supplemental ~esolution will set forth, among other things, the aggregate principal amount of the Series 1996 Bonds and Series 1997 Bonds, respectively, to be issued, the interest rate or rates that the Series 1996/1997 Bonds hereinafter authorized to be issued will bear, the principal amount to mature in each year and the maturities of the Series 1996/1997 Bonds which will be designated as term bonds and subject to mandatory redemption and the terms of any Credit Facility and Reserve Account Surety Bonds (as so described, the "Supplemental Resolution"): and WHEREAS, prior to the actual issuance and delivery of the Series 1996/1997 Bonds, the Consolidated Government will enter into a contract with SunTrust Bank, Atlanta, Atlanta, Georgia (the "Paying Agent"), pursuant to which the Paying Agent will agree to act as Paying Agent and as Bond Registrar for the Series 1996/1997 Bonds and to perform various functions with respect to the Series 1996/1997 Bonds, including, but not limited to, the au"thentication of the Series 1996/1997 Bonds by the manual signature of a duly authorized officer of, the Paying Agent, as Bond Registrar, the registration, transfer, exchange and related mechanical and 190016.7 -14- clerical functions, .as well as the preparation, signing and issuance of checks and drafts in payment of the principal of and interest on the Series 1996/1997 Bonds as same become due and payable; and WHEREAS, it is anticipated that additional demands will be made from, time to time for additions, extensions and improvements to the System and in order to meet this situation, provision should be made for the issuance of additional revenue bonds for such purpose, said bonds to stand on a parity with and be of equal dignity as to, lien on the Pledged Revenues securing the payment of the Series 1996/1997 Bonds. ' NOW, THEREFORE, BE IT RESOLVED by the Augusta-Richmond County Commission of Richmond County and it is hereby resolved by authority of same, that the Series 1986 Bonds maturing April 1, 1997, outstanding in the aggregate principal amount of $240,000, be refunded by payment in full as to principal and interest on such maturity date and that the Series 1986 Bonds maturing April 1, 1998 and thereafter, outstanding in the aggregate principal amount of $5,980,000, be and the same are irrevocably called for redemption on April 1, 1997 and the owners of said series 1986 Bonds should present same for payment on April 1, 1997, and receive the principal amount thereof and the 2 percent redemption premium and accrued interest due thereon to April 1, 1997. BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that not less than 10 days nor more'than 30 days prior to April 1, 1997, a notice of the call for redemption of the Series 1986 Bonds being called for redemption on April 1, 1997 signed by an officer of The Bank of New York, New York, New York (successor to NationsBank of Georgia, National Association), as Bond Registrar for the Series 1986 Bonds, on behalf of the Consolidated Government, shall be mailed postage prepaid to all registered owners of the Series 1986 Bondi being called for redemption, at the addresses which appear on the bond registration book for such Series 1986 Bonds, which notice shall be in substantially the following form: 190016.7 -15~ NOTICB OP CALL POR RBDEMPTIOH RICBXOND COtJNTY WATBR AND SBWBRAGB RBVENOB BONDS SERIES 1986 DATED DECEMBER 1, 1986 NOTICE is hereby given to the owners of the following described Richmond County Water and Sewerage Revenue Bonds, that said bonds maturing in the years 1998 through 2007 have been called for redemption on April 1, 1997, said bonds being in the aggregate principal amount of $5,980,000 known as "Richmond County Water and Sewerage Revenue Bonds, Series 1986," bearing interest from date at the rate per annum set forth below opposite each principal maturity, all interest payable semiannually on the 1st days of April and October in each year and the principal maturing on the 1st day of April, in the years and amounts, as follows: CUSIP CUSIP ~ Amount ~ No. ~ Amount ~ NC. 1998 $260,000 6.25% 2003 $ 960,000 6.70 % 1999 275,000 6.35 2004 1,025,000 6.75 2000 320,000 6.45 2005 1,100,000 6.80 2001 340,000 6.55 2006 1,180,000 6.875 2002 395,000 6.65 2007 125,000 6.875 Funds for the redemption and payment of said bonds, the interest then due thereon to' April 1, 1997 and the required redemption premium (2 percent) will be available at the principal corporate trust office of The Bank of New York, New York, New York, on April 1, 1997 and said above-described bonds should be presented to said bank for redemption and payment on said date. Interest on the above-described bonds designated for redemption shall cease to accrue on and after the April 1, 1997 redemption date. For further information, concerning the redemption of the' above-described bonds, please contact Bond Redemption Unit, of The Bank of New York, 101 Barclay Street, New Yo~k, New York 10286, telephone (800) 254-2826. ' This' notice is given under and pursuant to a resolution of Augusta-Richmond County Commission of Richmond County adopted on the ____ day of October, 1996. TBB BANX OP NBW YOU, as Bond Registrar s/ 190016.7 -16- BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by "authority of same, that the Series 1987 Compound Interest Bonds maturing April 1, 1997, outstanding in the aggregate principal amount of $458,113.40, be refunded in full as to principal and interest by payment on the maturity date and that the Series 1987 Compound Interest Bonds maturing October 1, 1997 and thereafter, outstanding in the. aggregate principal amount of $2,446,478.35, be and the same are irrevocably called for redemption on April 1, 1997 and the owners of said Series 1987 Compound Interest Bonds should present same for payment on April 1, 1997, and receive the principal amount thereof and the 1 percent re~emption premium and accrued interest due thereon to April 1, 1997. BS IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that not less than 30 days prior to April 1, 1997, a notice of the call for redemption of the Series 1987 Compound,Interest Bonds being called for redemption on April 1, 1997 signed by an officer of SunTrust Bank, Atlanta, Atlanta, Georgia (successor to Trust Company Batik of Augusta, N.A~), Bond Registrar for the Series 1987 Compound Interest Bonds, on behalf of the Consolidated Government, shall be mailed postage prepaid to all registered owners of the Series 1987 Compound Interest Bonds being called for redemption, at the addresses which appear on the bond registration book for such Series 1987 Compound Interest Bonds, which notice shall be in substantially the following form: 190016.7 -17- NOTICE OP CALL POR RBDEMPTIOK RICBKOND COUNTY WATER AND SEWERAGE RBVENtJB REPUNDING BONDS SERIES 1987 DATED APRIL 2, 1987 Compound Interest Bonds , NOTICE is hereby given to the owners of the following described Richmond County Water and Sewerage Revenue Refunding Bonds, that said bonds maturing October 1, 1997 to October 1, 2004, inclusive, and April 1, 2007 have been called for redemption on April 1, 1997, said bonds being known as MRichmond County Water and Sewerage Revenue Refunding Bonds, Series 1987. and in the aggregate principal amount and originally issued in the principal amount per $5,000 maturity amount as set forth below. The Series 1987 Bonds hereby called ,for redemption are Compound Interest Bonds bearing interest determined by reference to the Schedule of Compounded Amounts printed thereon and payable only at maturity or upon prior redemption. l2sll Principal Amount Per 55.000 Maturitv Amount Compounded Amount Per 55.000 Maturitv Amount, October 1, 1997 April l, 1998 October 1, 1998 April 1, 1999 October 1, 1999 April 1, 2000 October 1, 2000 April 1, 2001 October 1; 2001 April 1, 2002 October 1" 2002 April 1, 2003 October 1, 2003 April 1, 2004 October 1, 2004 April 1, 2007 $2,580.90 2,475.35 2,396.45 2,294.20 2,220.95 2,123.10 2,054.30 1,974.30 1,909.85 1,820.85 1,760.55 1,663.25 1,607..00 1,527.35 1,475.00 1,203.55 $4,844.96 4,690.18 4,542.55 4,391.05 4,250.78 4,103.05 3,970.06 3,833.94 3,708.77 3,570.38 3,452.15 3,308.92 3,197.02 3,068.09 2,962.91 2,452.90 Aggregate Princical Amount $100,655.10 435,485.60 83,875.75 412,956.00 64,407.55 384,281.10 45,194.60 371,168.40 24,828.05 347,782.35 12,323.85 11,642.75 11,249.00 10,691.45 10,325.00 139,611. 80 Funds for the redemption and payment of said bonds will be available at SunTrust Bank, Atlanta, Atlanta, Georgia on April 1, 1997 and said above-described bonds should be presented to said bank for redemption and payment on said date. The redemption price payable on April 1, 1997 shall be. the Compounded Amount per $5,000 ma.turity amount set forth in the above table on such date plus a redemption premium of 1 percent of such Compounded Amount. For further information concerning the redemption of the above-described bonds, please contact Corporate Trust of SunTrust Bank, Atlanta, Corporate Trust Department, Room 400. Anb.ex, 58 190016.7 -18- Edgewood Avenue, Atlanta, Georgia 30303-2921, telephone (800)711- 1614. This notice is given under and pursuant to a resolution of Augusta-Richmond County Commission of Richmond County adopted on the ____ day of October, 1996. 190016.7 SUNTR.OST BANK, ATLANTA, as Bond Registrar sf -19- BE IT FtJR.TBBR. RESOLVED by the authority aforesaid and it is hereby resolved by authority of, same, that the County's Series 1991 Current Interest Bonds maturing October 1, 1997 to October 1, 2001, inclusive, outstanding in the aggregate principal amount of $905,000, be' refunded in full as to principal and interest by payment on such maturity dates, that the County's Series 1991 Compound Interest Bonds maturing October 1, 2007 to October 1, 2011, inclusive, outstanding in the aggregate principal amount of $970,224, be refunded by payment on such maturity dates and that the County's Series 1991 Current Interest Bonds maturing October 1, 2002 and thereafter, outstanding in the aggregate principal amount of $5,780,000, be and the same are irrevocably called for redemption on October 1, 200i and the owners of said County's Series 1991 Current Interest Bonds should present same for payment on October 1, 2001 and receive the principal amount thereof and the 2 percent redemption premium and accrued interest due thereon to October 1, 2001. BE IT FtJR.TBBR RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that not less than 30 days prior to October 1, 2001, a notice of the call for redemption of the County's Series 1991 CUrrent Interest Bonds being called for redemption on October 1, 2001 signed by an officer of The Bank of New York, New York, New York (successor to NationsBank of Georgia, National ASsociation), as Bond Registrar for the County's Series 1991 CUrrent Interest Bonds, on behalf of the Consolidated Government, shall be mailed postage prepaid to all registered owners of the County's Series 1991 Current Interest Bonds being called for redemption~ at the addresses which appear on the bond registration book for such County's Series 1991 CUrrent Interest Bonds, which notice shall be in substantially the following form.: . 190016.7 -20- NOTlCB or CALL rOR RBDEMPTlOH RlCBKOND COUNTY ,WATBR AND SEWBRAGB R.BVEHt1B BONDS SERIES 1991 DATED DECEMBER 1, 1991 CUrrent Interest .Bonds NO'l'ICE is hereby given to the owners of the following described Richmond County Water and Sewerage Revenue Bonds, that said bonds maturing in the years-2002 through 2006, inclusive, 2016 and 2021 have been called for redemption on October 1, 2001, said bonds being in the aggregate principal amount of $5,780,000 known as "Richmond County Water and Sewerage Revenue Bonds, Series 1991," bearing interest from date at the rate per annum set forth below opposite each principal maturity, all interest payable semiannually on the 1st days of April and October in each year and the principal maturing on the 1st day of October, in the years and amounts, as follows: ' CUSIP CUSIP xe.a..t: Amount Rate No. xe.a..t: Amount Rate No. 200'2 $215,000 6.00% 2006 $ 215,000 6.50% 2003 190,000 6.15 2016 2,005,000 6.50 2004 200,000 6.30 2021 2,745,000 6.50 2005 210,000 6.40 Funds for the redemption and payment of said bonds, the, interest then due thereon to October 1, 2001 and the required redemption premium (2 percent) will be available at the principal corporate trust office of The Bank of New York, New York, New York, on October 1, 2001 and said above-described bonds should be presented to said bank for redemption and paYment on said date. Interest on the above-described bonds designated for redemption shall cease to accrue on and after the October 1, 2001 redemption date. For further information concerning the redemption of the above-described bonds, please contact Bond Redemption Unit of The Bank of New York, 101 Barclay Street, New York, New York 10286, telephone (800) 254-2826. 190016.7 -21- This notice is given under and pursuant to a resolution of the Augusta-Richmond County Commission of Richmond County adopted on the ____ day of October, 1996. THE BANK OP NEW YORK, as Bond Registrar 190016.7 s/ -22- BB IT rURTHBR RESOLVID by the authority aforesaid and it is hereby resolved by authority of same, that the Series 1972 Bonds maturinq May 1, 1997, outstanding in the aggregate principal amount of $550,000, be refunded by payment in full as to principal and interest on such maturity date and that the Series 1972 Bonds maturing May 1, 1998, outstandinq in the aggregate principal amount of $575,000, be and the same are irrevocably called for redemption on May 1, 1997 and the oWners of said Series 1972 Bonds should present same for payment, on May 1, 1997, and receive the prinoipal amount thereof and the.i.~ percent redemption premium and accrued interest due thereon to May 1, 199j. BE !T FURTHER RmSOLVID by the authority aforesaid and .it is hereby resolved by authority of same, that not less than 30 days prior to May 1, 1997, a notioeof the call for redemption of the Series 1972 Bonds being called, for redemption on May 1, 1997 signed by the Mayor and attested by the Clerk of the Consolidated Government, shall be published in a financial publication of general circul~tion in the City of New York, New York and shall be filed at the place at which the principal of and the interest on the Series 1972 Bonds shall be payable and shall be ,mailed postage prepaid to all registered owners of the Series 1972 Bonds being cal+ed for redemption, at the addresses which appear on the bond registration book for such Series 1972 Bonds, which notice shall be in substantially the following form: I -23- NOTICE OF CALL FOR REDEMPTION THB CITY COUNCIL or AUGUSTA WATER AND BEWlRAGI UVIlNtJI BONDS SBRIIlS 1972 DATED HAY 1, 1972 NOTICI is hereby given to the owners of .the following described The city council of Augusta Water and Sewerage Revenue Bonds that said bonds maturing May 1, 1998 have been called for redemption on May 1, 1997, said bonds being in. the aggregate principal amount of $575,000 known as liThe City Courtcil of Auqusta Water and Sewerage Revenue Bonds, Series 1972," bearing interest from date at the rate per annum set forth below, all interest payable semiannually on the 1st days of May and November in each year and the principal maturing on the 1st day of May" in the .year and amount, as follows: 1998 Amount $575,000 ~ CUSIP No. I.e..aJ: 4.50% Fund.s for the redemption and payment of said bonds, the interest then due thereon to May 1, 1997 and the required redemption premium (1~ peroent) will be available at the principal corporate trust office of The Bank of New York, New York, New York, on May 1, 1997 and said above-described bonds should be presented to said bank for redemption and payment on said date. Interest on the above-described bonds designated for redemption shall cease to accrue on and after the May 1; 1997 redemption date. The Bonds maturing in 1998 are bond numbers 2,685 to 2,800, inolusive. For further information concerning the redemption of the above-described bonds, please contact Bond Redemption Unit of The Bank of New York, 101 Barclay street, New York, New York 10286, telephone (800) 254~2826. This notice is given under and pursuant to a resolution of Auqusta-Richmond County Commission of Riohmond County adopted on the ____ day of October, 1996. . RICHMOND COUNTY Attest: s/ Mayor s/ Clerk -24- BB IT FURTHER RESOLVED, by the authority aforesaid and it is hereby resolved by authority of same, that the, City'S Series 1991 Bonds maturing May 1, 1997 to May 1, 2002, inclusive, outstanding in the aggregate principal amount of $2,500,000, be refunded by payment in full as to principal and interest on such maturity dates and that the City'S Series 1991 Bonds maturing May 1, 2003 and thereafter, outstanding in the aggregate principal amount of $5,920,000, be and the same are irrevocably called for redemption on May 1, 2002 and the owners of said City'S Series 1991 Bonds should present same for payment on May 1, 2002, and receive the principal amount thereof and the 2 percent redemption premium and accrued interest due thereon to May 1, 2002. BB IT FURTHER RESOLVED by the authority aforesaid and it is ~ereby resolved by authority of same, that not less than 30 days nor more than 60 days prior to May 1, 2002, a notice of the call for redemption of the City'S Series 1991 Bonds being called for redemption on May 1, 2002 signed by an officer of First Union National Bank of Georgia, Charlotte, North Carolina, as Bond Registrar for the City'S Series 1991 Bonds, on behalf of the Consolidated Government, shall be mailed postage prepaid to all registered owners of the City'S Series 1991 Bonds being called for redemption, at the addresses which appear on the bond registration book for such City'S Series 1991 Bonds, which notice shall be in substantially the following form: H0016.7 -25- NOTICB OF CALL POR RBDBMPTleR THB CITY COUNCIL OF AUGUSTA WATER AND SBWBRAGB RBVEmJB BONDS SBRIBS 1991 DATBDDBCBMBBR 1, 1991 NOTICB is hereby given to the owners of the following described The City Council of 'Augusta Water and Sewerage Revenue Bonds, that said bonds maturing in the years 2003 through 2006, inclusive, and 2011 have been called for redemption on May 1, 2002, said bonds being in the aggregate principal amount of $5,920,000 known as "The City Council of Augusta Water and Sewerage Revenue Bonds, Series 1991," bearing interest from date at the rate per annum set forth below opposite each principal maturity, all interest payable semiannually on the 1st days of May and November in each year and the principal maturing on the 1st day of May, in the years and amounts, as follows: . J' CUSIP CUSIP ~ Amount R.a.t.e No. ~. Amount Rat.a No. 2-003 $505,000 6.20t 2006 $ 610,000 6.45t 2004 540,000 6.30 2011 3,695,000 6.50 2005 570,000 6.40 Funds for the redemption and payment of said bonds, the interest then due thereon to May 1, 2002 and the required redemption premium (2 percent) will be available at the principal corporate trust office of First Union National Bank of Georgia, 999 Peachtree Street, Atlanta, Georgia 30309, on May 1, 2002 and said above-described bonds shOuld be presented to said bank for redemption and payment on said date. Interest on the, above- described bonds designated for redemption shall cease to accrue on and after the May 1, 2002 redemption date. For further information concerning the redemption of the above-described bonds, please contact Emily Katt, Assistant Vice President of First Union National Bank of Georgia, 999 Peachtree Street, Atlanta, Georgia 30309, telephone (404) 827-7347. This notice is given under and pursuant to a resolution of Augusta-Richmond County Commission of Richmond County adopted on the _ day of October, 1996. PIRST UNleR NATIONAL BANK OF GBORGIA, as Bond Registrar sf 190016.7 -26- BS IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority pf same, that the Consolidated Government sell the Sinking Fund Investments and deposit the proceeds thereof with the 1996 Escrow Agent to be used and applied toward the acquisition by redemption or otherwise of the Series 1987 Bonds. BS IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that the Consolidated Government enter into the 1996 Escrow Deposit Agreement with the 1996 Escrow Agent, on the date of the issuance and delivery of the Series 1996 Bonds, and the 1996 Escrow Deposit Agreement be and the same is hereby approved and the Mayor be and is hereby authorized and directed to execute-the 1996 Escrow Deposit Agreement for and on behalf of the Consolidated Government and the Clerk be and is hereby authorized and directed to attest same and, affix the official seal of the Consolidated Government thereto and the 1996 Escrow Deposit Agreement shall be in substantially the form which is on file and of record in the Minute Book of the Consolidated Government and by this reference incorporated herein and made a part hereof, subject to such changes, insertions and omissions as may be required to effect the refunding of the Refunded Prior Lien Bonds as aforesaid and as same may be approved by the Mayor and the execution of the 1996 Escrow Deposit Agreement by the Mayor and Clerk as herein authorized shall be conclusive evidence of any such approval. BS IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that simultaneously with the issuance and delivery of the Series 1996 Bonds, an amount as shall be necessary derived from the sale of the Series 1996 Bonds, together with other moneys of the Consolidated Government, shall be deposited with the 1996 Escrow Agent under the 1996 Escrow Deposit Agreement, and immediately used to pay the cost of acquiring certain Direct Obligations which shall be deposited in trust with the 1996 Escrow Agent under the 1996 Escrow Deposit Agreement. The Direct Obligations so deposited with the 1996 Escrow Agent and the income derived from the Direct Obligations shall be subject to a lien and charge in favor of the owners of the Refunded Prior Lien Bonds and shall be held for the security of such owners until disbursed as hereinafter and in the.1996 Escrow Deposit Agreement provided. BS IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that the Consolidated Government enter into the 1997 Escrow Deposit Agreement with the 1997 Escrow Agent, on the date of the issuance and delivery of the Series 1997 Bonds, and the 1997 Escrow Deposit Agreement ~e and the same is hereby approved and the Mayor be and is hereby authorized and directed to execute the 1997 Escrow Deposit Agreement for and on behalf of the Consolidated Government and the Clerk be and is hereby authorized and directed to attest same and affix the 190016.7 -27- official seal of the Consolidated Government thereto and that the 1997 Escrow Deposit Agreement shall be in substantially the form which is on file and of record in the Minute Book of the Consolidated Government and by this reference incorporated herein and made a part hereof, subject to such changes, insertions and omissions as may be required to effect the refunding of the Prior Lien Bonds as aforesaid and as same may be approved by the Mayor and the execution of the 1997 Escrow Deposit Agreement by the Mayor and Clerk as herein authorized shall be conclusive evidence of any such approval. BB IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that simultaneously with the issuance and delivery of the Series 1997 Bonds, an amount as shall be necessary derived from the sale of the- Series 1997 Bonds, together with other moneys of the Consolidated Government shall be deposited with the 1997 Escrow Agent under the 1997 Escrow Deposit Agreement, and immediately used to pay the cost of acquiring certain Direct Obligations which shall be deposited in trust with the 1997 Escrow Agent under the 1997 Escrow Deposit Agreement. The Direct Obligations so deposited with the 1997 Escrow Agent and the income derived from the Direct Obligations shall be subject to a lien and charge in favor of the owners of the Prior Lien Bonds and shall be held for the security of such owners until disbursed as hereinafter and in the 1997 Escrow Deposit Agreement provided. BB IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that the principal of and income derived from the Direct Obligations so deposited in trust with the 1996 Escrow Agent and the 1997 Escrow Agent under the 1996 Escrow' Deposit Agreement and the 1997 Escrow Deposit Agreement, respectively, as received, together with said initial cash balance, have been calculated as being sufficient and shall be used to refund all of the Refunded Bonds by making the following payments, on ,the dates and 'in the amounts, as follows: . Series 1986 Bonds ~ Principal Premium Interest Total April 1, 1997 $6,220,000 $119,600 $207,838.13 $6,547,438.13 Series 1987 Co~ound Interest Bonds ~ Principal Premium Compounded Interest Total April, 1, 1997 $2,924,591.75 $47,644.40 $2,699,847.90 $5,672,084.05 190016.7 -28~ County's Series 1991 Current Interest Bonds l;2at& Principal Premium. Interest Total April 1, 1997 $ -0- $ -0- $212,271. 25 $212,271. 25 October 1, 1997 , 155,000 -0- 212,271.25 367,271.25 April 1, 1998, -0- -0- 208,202.50 208,202.50 October 1, 1998 160,000 -0- 208,202.50 368,202.50 April 1, 1999 -0- -0- 203,802.50 203,802.50 October 1, 1999 180,000 -0- 203,802.50 383,802.50 April 1, 2000 -0- -0- 198,672.50 198,672.50 October 1, 2000 195,000 -0- 198,672.50 393,672.50 April 1, 2001 -0- -0- 193,017.50 193,017.50 October 1, 2001 5,995,000 115,600 193,017.50 6,303,617.50 Coun~'s Series 1991 Co=pound Interest Bonds Compounded Dat.e Principal Premium. Interest Total October 1, 2007 $565,662.50 $-0- $1,059,337.50 $1,625,000.00 October 1, 2008 113,036.00 -0- 236,964.00 350,000.00 October 1, 2009 104,769.00 -0- 245,231.00 350,000.00 October 1, 2010 97,013.00 -0- 252,987.00 350,000.00 October 1, 2011 89,743.50 -0- 260,256.50 350,000.00 Series 1972 Bonds ~ principal Premium. Interest Total May 1, 1997 $1,125,000 $8,625 $25,312.50 $1,158,937.50 Ci~'s Series 1991,Bonds ~ Principal. Premium. Interest Total May 1, 1997 $ 360,000 $ -0- $262,626.25 $ 622,626.25 November 1, 1997 -0- -0- 252,996.25 252,996.25 May 1, 1998 380,000. -0- 252,996.25 632,996.25 November 1, 1998 -0- -0- 242,546.25 242,546.25 May 1, 1999 405,000 -0- 242,546.25 647,546.25 November 1, 1999 -0- -0- 231,003.75 231,003.75 May 1, 2000 425,000 -0- ,231 , 003 . 75 656,003.75 November 1, 2000 -0- -0- 218,572.50 218,572.50 May 1, 2001 450,000 -0- 218,572.50 668,572.50 November 1, 2001 -0- -0- 205,185.00 205,185.00 May 1, 2002 6,400,000 118,400 205,185.00 6,723,585.00 190016.7 -29~ BB IT POaTBBR RESOLVBD by the authority aforesaid and it is hereby resolved by authority of same, that simultaneously with the issuance and delivery of the Series 1996 Bonds, all moneys remaining on deposit in the City'S Sinking Fund (if any) and all moneys allocable to the County's Series 1991 Bonds and the Series 1987 Bonds remaining on deposit in the County's Sinking Fund (if any) shall be withdrawn therefrom and deposited in the 1996 Escrow Fund held by the 1996 Escrow Agent and applied toward the refunding of the Refunded Prior Lien Bonds. . BB IT POaTBBR RESOLVBD by the authority aforesaid and it is hereby resolved by authority of same, that simultaneously with the issuanGe and delivery of the Series 1997 Bonds, all moneys remaining on deposit in the County's Sinking Fund (if any) shall be withdrawn therefrom and deposited in the aggregate into the 1997 Escrow Fund held by the 1997 Escrow Agent and applied toward the refunding of ,the Prior Lien Bonds. BB IT POaTBER RESOLVBD by the authority aforesaid and it is hereby resolved by authority of same, that simultaneously with the issuance and delivery of the Series 1996A Bonds, all moneys then on hand in the special funds now being maintained under the 1~72 Ordinance and 1991 Ordinance and designated as "Water and Sewerage Revenue Fund" and "Water and Sewerage Renewal and Extension Fund" shall be withdrawn and deposited into similar special funds hereinafter created and designated as "Richmond County Water and Sewerage System Revenue Fund- -1996" and "Richmond County Water and Sewerage System Utility General Fund" to be used and applied as hereinafter provided in Article V hereof. BB IT POaTBER RESOLVBD by the authority aforesaid and it is hereby resolved by authority o~sam~, that simUltaneously wi~h the issuance and delivery of the Series 1997 Bonds, all moneys then on hand in the special funds now being maintained under, the 1986 Resolution, 1987 Resolution and 1991 Resolution and designated as "Richmond County Water and Sewerage System Revenue Fund" and "Richmond County Water and Sewerage System Renewal and Extension Fund" shall be withdrawn and deposited into similar special funds hereinafter created and designated as "Richmond CountY,Water and Sewerage System Revenue Fund-1996" and "Richmond Cowity Water and Sewerage System Utility General Fund-1996" to be used and applied as hereinafter provided in Article V hereof. BB IT POaTBBR RESOLVBD by the authority aforesaid and it is hereby resolved by the authority of same, that the Prior Lien Resolutions be, and the same are hereby, amended to provide that the payments into the "Water and Sewerage System Renewal . and Extension Fund" ,created and maintained pursuant to the Prior Lien Resolutions be suspended until the payments required to be made into the "Richmond County Water and Sewerage System Sinking Fund No.2" hereafter created have been made. 190016.7 -30- BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by the authority of same, that the Prior Lien Resolutions be, and the same hereby are, amended to provide that no additional bonds or obligations may be issued and secured thereunder. BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that the City's System and the County's System be consolidated into a single revenue producing undertaking of the Consolidated Government, provided, however, that the revenues and expenditures of the City's System and the County's System shall be separately accounted for until the issuance of the Series 1997 Bonds and the acquisition by redemption, payment or otherwise of the Prior Lien Bonds. BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, as follows: 190016.7 , -31- ARTICLB I DEFINITIONS , In addition to the terms hereinabove defined, whenever the following terms are used in this Resolution, the same, unless the context shall clearly indicate another or different meaning or intent, 'shall be construed or used and are intended to have the meanings as follows: -Act- shall mean the Richmond County--Consolidation with the City of Augusta and City of Hephzibah Act, Georgia Laws 1995 p. 3648, et seq., as amended.' -Additional Bonds- shall mean any revenue bonds of the Consolidated Government ranking on a parity with the Series 1996/1997 Bonds which may hereafter be issued pursuant to Article V, Section 8 hereof. -Additional Interest- means, for any period during which any Bank Bonds are owned by a Credit Issuer pursuant to a Credit Facility or Credit Facility Agreement, the amount of interest accrued on such Bank Bonds at the Bank Bond Rate less the amount of interest which would have accrued during such period on an equal principal amount of Bonds at the Bonds Rate. -Bank Bond- means any Bond purchased and held by a Credit Issuer pursuant to a Credit Facility Agreement. A Bond shall be deemed a Bank Bond only for the actual period during which such Bond is owned by a Credit Issuer pursuant to a Credit Facility. -Bank Bond Rate- means the rate of interest payable on Bank Bonds, as may be provided in a Credit Facili~y or Credit Facility Agreement. -Bond Rate- means the rate of interest per annum payable on specified Bonds other than Bank Bonds. -Bond Registrar- means initially SunTrust Bank, Atlanta, Atlanta, Georgia, its successors and assigns or any successor commercial bank or trust company appointed by the Consolidated Government to maintain, in accordance with the provisions of this . Resolution and any supplemental resolution, the registration books of the Consolidated Government for any series of Bonds secured by this Resolution. . -Bondholder- and "bondholder- means the registered owner of any of the outstanding Bonds., -Bonds- shall mean'any"revenue bonds authorized by and issued pursuant to this Resolution, including the Series 1996/1997 Bonds 190016.7 I-1 and any Additional Bonds of the Consolidated Government issued pursuant to this Resolution. "Capi talized Interest Fund- means the Richmond County Water and Sewerage System Capitalized Interest Fund created in Article IV, Section 6 of this Resolution. "Capitalized Interest PuDd Depository" means SunTrust Bank, Atlanta, Augusta, Georgia, its successors and assigns, or any successor commercial bank or trust company depository for the Capitalized Interest Fund hereafter appointed by the Consolidated Government. "City's Series 1991 Bonds- means the $10,000,000 original 'aggregate principal amount of the City'S Water and Sewerage Revenue Bonds, Series 1991 issued pursuant to the 1991 Ordinance. "City's Sys.tam- shall mean the water and sewerage system owned and operated by the City prior to the consolidation of the City with the County. "Code- shall mean the Internal Revenue Code of 1986, as amended. "Construction PuDd- shall mean the Richmond County Water and Sewerage System Construction Fund- -1996 created in Article IV, Section 3 of this Resolution. . "Construction PuDd Depository" means initially SunTrust Bank, Atlanta, Augusta, Georgia, its successors and assigns, or any successor custodian for the Construction Fund hereafter appointed by the Consolidated Government; provided, however, the Construction Fund Depository shall at all times be a commercial bank or trust company. "Consulting EngiDeer- shall mean Zimmerman, Evans and Leopold, Inc., Augusta, Georgia, or its successors or such other engineer, engineers or engineering firm that might hereafter be employed in relation to the supervision of the additions, extensions and improvements to be made to the System and in relation to the services to be rendered as contemplated by this Resolution. "COUDt~ shall mean Richmond County, a political subdivision of the State of Georgia, which pursuant to the Act is comprised of the consolidated governments of The City Council of Augusta and Richmond County. . "County's Series 1991 Bonds- means the $8,385,224 original aggregate principal amount of the County I s Water and Sewerage Revenue Bonds, Series 1991 issued pursuant to the 1991 Resolution of which $7,415,000 are CUrrent Interest Bonds and $970,224 are Compound Interest Bonds. 190016.1 1-2 "County's System- shall mean the water and sewerage system owned and:,operated by the County prior to the consolidation of the City with the County. "Credit Pacili~ means any letter of credit, insurance policy, guaranty, surety bond, standby bond purchase agreement, revolving credit agreement, or similar obligation, arrangement, or instrument issued by a bank, insurance company, or other financial institution which is used by the Consolidated Government to perform one or more of the following tasks: (a) to enhance the Consolidated Government's credit by assuring owners of any of the Bonds that principal of and interest ,on such Bonds will be paid promptly when due; (b) to provide liquidity for the owners of Bonds through undertaking to cause the Bonds to be bought fram the owners thereof when . submitted pursuant to an arrangement prescribed by a supplemental bond resolution; or' (c) remarketing any Bonds so submitted to the Credit Issuer (whether or not the same Credit ,Issuer is remarketing the Bonds). ,The term Credit Facility shall not include a Reserve Account Surety Bond. "Credit Pacility Agreement- means an agreement' between the Consolidated Government and a Credit Issuer pursuant to which the Credit Issuer issues a Credit Facility and may include the promissory note or other instrument evidencing the Consolidated Government's obligations tO,a Credit Issuer pursuant to a Credit Facility Agreement. The term Credit Facility Agreement shall not include a Reserve Account Surety Bond. . "Credit Issuer- means any issuer of a Credit Facility then in effect for all or part of the Bonds. The term Credit Issuer shall not include any Reserve Account Surety Bond Provider. Whenever in the Resolution the consent of the Credit Issuer is required, such consent shall only be required from the Credit Issuer whose Credit Facility is issued with respect to the Bonds for which the consent is required, and such consent whenever required shall not be unreasonably withheld. "Debt Service Requirement" means the amounts required in each Sinking Fund Year to pay the principal of and interest on the Series ,1996/1997 Bonds and any Additional Bonds as same become due and payable; provided, however, with'respect to any term obligation which is required to be repaid prior to its stated maturity through the operation of a mandatory sinking fund, the amount of principal coming due in any Sinking Fund Year with respect to such obligation shall be the amount required to be deposited into the sinking fund for the retirement of the principal amount of such obligation rather than the entire principal amount of such debt coming due at the stated maturity. If any Bonds outstanding or proposed to be issued bear interest at a Variable Rate, the interest rate per annum on such Bonds for purposes of calculating the Debt Service Requirement shall be the lesser of (a) the 30-year Revenue' Bond Index, (b) the maximum interest rate for such Bonds permitted by 190016.7 I-3 the supplemental bond resolution authorizing the issuance thereof or. (c) the "cap" rate, if any, established with respect to such bonds in a related Hedge Agreement. With respect to any Bonds secured by a Credit. Facility, Debt Service Requirement shall include (a) any commission or commitment fee obligations with respect to such Credit Facility, (b) the outstanding amount of any Reimbursement Obligation owed to the relevant Credit Issuer and the interest thereon, (c) any Additional Interest owned on Bank Bonds to a Credit Issuer and (d) any rernarketing agent fees. With respect to Bonds for which there, exists a related Hedge Agreement, Debt Service Requirement shall include the net amounts paid with respect to such Hedge Agreement. ' "Designated Representative of the original purchasers" or "Representative of the original purchaser" shall be construed to mean The Robinson-Humphrey Company, Inc., Atlanta, Georgia, their successors or assigns. "Engineering Report" shall mean the report entitled "1996 Revenu~ Bond Issue Engineering Report" dated October 18, 1996, and prepared by Zimmerman, Evans and Leopold, Inc., Augusta, Georgia. "Expenses of Operation and Maintenance" means all expenses reasonably incurred in' connection with the operation and maintenance of the System, including salaries, wages, the cost of materials and supplies, rentals of leased property, if any, payments to others for the purchase of water, if any, and for the treatment and .disposal of sewage, the cost of audits, Paying Agent's and Bond Registrar's fe~s, payment of premiums for insurance required by the Resolution and other insurance which the Consolidated Government deems prudent to carry on the System and its operations and personnel, and, generally, all expenses, exclusive of interest on the Bonds and the Prior Lien Bonds and depreciation or amortization, which under accounting principles generally accepted for municipal utility purposes are properly allocable to operation and maintenance; however, only such expenses as are reasonably and properly necessary or desirable for the proper operation and maintenance of the System shall be included. "Expenses of Operation and Maintenance" also includes the Consolidated Government's obligations under any contract with any other political subdivision or public agency or authority of one or more political subdivisions pursuant to which the Consolidated Government undertakes to make payments measured by the expenses of operating and maintaining any facility which constitutes part of the System and which is owned or operated in part by the Consolidated Government and in part by others. "Piscal Year. shall mean the period commencing on the 1st day of January in each year and extending through the 31st day of December in the next year, or such other period as shall hereafter be adopted by the Consolidated Government as herein provided. 190016.7 1-4 "Porecast Period. means a period of five consecutive Fiscal Years co~encing with the Fiscal Year after the later of (1) the Fiscal Year in which any proposed Additional Bonds are to be issued' or (2) the Fiscal Year in which any project to be financed with the proceeds of any proposed Additional Bonds is expected to be completed. - "Government Obligations. means (a) direct obligations of the United States of America for the full and timely payment of which the full faith and credit' of the United States of America is pledged, or (b) obligations issued by a person controlled or supervised by and acting as an instrumentality of the United States of America, the full and timely payment of the principal of, premium, 'if any, and the interest on which is fully and unconditionally guaranteed as a full faith and credit obligation of the United States of America (including any securities described in (a) or (b) issued or held in book-entry form onthe'books of the Department of the Treasury of the United States of America), which obligations, in either case, are not subject to redemption prior to maturity at less than par by anyone other than the holder. "Hedge Agreement. means any agreement between the Consolidated Government and any Hedge Provider providing a swap, cap, or collar for any Bonds" in each case as such agreement is originally executed and as the same may from time to time be amended or supplemented in accordance with its terms. "Hedge Provider. means any counterparty with whom the Consolidated Government enters into a Hedge Agreement. "Independent Certified Public Accountant. means a certified public accountant, or a firm of certified public accountants, who or which is an "independent" as that term is defined in Rule 101 and related interpretations of the Code of Professional Ethics of the American Institute of Certified Public Accountants, of recognized standing, who or which does not devote his or its full time to the Consolidated Government (but who or which may be regularly retained by the Consolidated Government). "Interest Payment Date. shall mean April 1 and October 1 of each year, except that with respect to any series of Bonds which bear interest at a Variable Rate, the Consolidated Government may provide i~ the supplemental bond resolution authorizing such Bonds for any other interest payment dates, as it deems appropriate and with respect to any Bank Bond, the date such Bank Bond is rernarketed pursuant to a rernarketing agreement. "Invostment Earnings. means all interest received on and profits derived from investments made with Pledged Revenues or any moneys in the funds and accounts established under Article IV and Article V, but excluding any amounts held within Sinking Fund No. 1. I 190016.7 I-S I I I I I I "HOOd~'S" means Moody's Investor Services, Inc. or, if such corporatidn is dissolved or liquidated or otherwise ceases to perform, ~ecurities rating services, such other nationally recognizedl securities rating agericy as may be designated in writing by the Copsolidated Government. The notice address of Moody's shall be 19 Church Street, New York, New York 10007. "19961 Escrow Agent" means initially Bank of New York, Jacksonvil[e, Florida, its successors and assigns, or any'successor hereafter I appointed by the Consolidated Goyernment; provid7d, however, the 1996 Escrow Agent shall at all t1mes be a commerc1al I ' . ' bank or tI1ust company. . ' "19971 Escrow Agent" means initially Bank of New York, Jacksonvil~e, Florida, its successors and assigns, or any successor hereafter I appointed by the Consolidated Government; provided, however, ~he 1997 Escrow Agent shall at all times be a commercial' bank or trust company. "1996 Escrow Deposit Agreement" shall mean that certain Escrow Deposit Agreement dated the date of issuance of the Series 1996 Bonds, between the Consolidated Government and Bank of New'York, Jacksonville, Florida, as '1996 Escrow Agent. "1997 Escrow Deposit Agreement" shall mean that certain Escrow Deposit Agreement dated the date of issuance of the Series 1997 Bonds, between the Consolidated Government and Bank of New York, Jacksonville, Florida, as 1997 Escrow Agent. "1963 Ordinance" means the bond ordinance of the City adopted on May 20, 1963 authorizing the issuance of the Series 1963 Bonds, which ordinance serves as the master ordinance for purposes of the issuance by the City of obligations payable from the -revenues derived from the City's System ranking pari'passu with 'the Series 1963 Bonds. "1972 ordinance" means the bond ordinance of the city adopted on September 5, 1972 authorizing the issuance of the Series 1972 Bonds. "1991 Ordinance" means the, bond ordinance of the City adopted on December 18, 1991 authorizing the issuance of the city's 1991 Bonds. "1984 Resolution" means the bond' resolution of the County adopted on April 24, 1984 authorizing the issuance of the Series 1984 Bonds, which resolution serves as the master resolution for purposes of the issuance by the County of obligations payable from the revenues derived from th~ County's System ranking pari passu with the Series 1984 Bonds. 190016.7 1-6 "1986 Resolution" means the bond resolution of, the County adopted on November 24, 1986 authorizing the issuance of the Series 1986 Bonds. "1987 Resolution. means the bond resoiution of the County adopted on March 3, 1987 authorizing the issuance of the Series 1987 Bonds. "1991 Resolution" means the bond resolution of the County adopted on December 3, 1991, as supplemented December 13, 1991, authorizing the issuance of the Series 1991 Bonds. "Operating Revenues. means all income and revenues of any nature derived from the operation of the System, including monthly water and sewage billings, service charges, other charges for water and sewage service and the availability thereof (other than any special assessment proceeds), connection or tap fees (whether accounted for as revenues or as contributed capital), and hydrant rentals, but excluding local, state, or federal grants,' loans, capital improvements contract payments, or other moneys received for capital improvements to the System and excluding Investment Earnings. "Paying Agent. means initially SunTrust Bank, Atlanta, Atlanta, Georgia, its successors and assigns or any successor commercial bank or trust company appointed by the Consolidated Government to serve as paying agent, in accordance with the terms of this Resolution and ~y supplemental resolution, for any series of Bonds secured by this Resolution. - "Permitted Investments. shall mean and' inctude any of the following securities, if and to the extent the same are at,the time legal for investment of Consolidated Government funds: (i) any bonds or other obligations of the State of Georgia or of other counties, municipal corporations and political subdivisions of the State of Georgia; (ii) Government Obligations; (iii) obligations of agencies of the United States I government issued by the Federal Land Bank, the Federal Home Loan, Bank, Federal Intermediate Credit Bank, and the Central Bank for Cooperatives; (iv) bonds or other obligations issued by any public housing agency or municipal corporation in the United States, which such 'bonds or obligations are fully secured as to the payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or 'contracts with the United States government, or project notes issued by any public housing agency, urban renewal agency, or 190016.7 I-7 municipal corporation in the United States which are fully secured as to paYment of both principal and interest by a requisition, loan, or paYment agreement with the United States government; (v) certificates of deposit issued by any national or state bank located within the State of Georgia which have deposits insured by the Federal Deposit Insurance Corporation and certificates of deposit of federal savings and loan associations and state building and loan or savings and loan associations located within the State of Georgia which have deposits insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation and, provided that such certificates of deposit in excess of the amount, insured by the Federal Deposit Insurance, Corporation, the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation are continuously and fully secured by such securities as are described in clauses (i) and (ii) above which (1) have a principal amount (exclusive of accrued interest) at all times at least equal to the principal amount of such certificates of deposit, (2) are secured by deposit wi th the Federal Reserve Bank of Atlanta, Georgia or any financial institution listed in this subparagraph and located in the State of Georgia; (vii) pooled investment programs sponsored by the State of Georgia for the investment of local government funds; (viii) securities of or other interests in any no-load, open-end management type investment company or investment , trust registered under the Investment Company Act of 1940, as amended, or any common trust fund maintained ,by any bank or trust company which holds such proceeds as trustee or by an affiliate thereof so long as: (a) the portfolio of such investment company or investment trust or common trust fund is limited to the obligations referenced in paragraph (ii) above and repurchase agreements fully collateralized by any such obligations; (b) such investment company or investment trust or common trust fund takes delivery of such collateral either directly or through an authorized custodian; (c) such investment company or investment trust or common trUst fund is managed so as to maintain its shares at a constant net asset value; and (d) securities of or other interests in such ,investment company or investment trust or common trust fund are purchased and redeemed only through the use of national or state banks having corporate trust powers and located within the State of Georgia. 190016.7 1-8 "Pledged Revenues. means Operating Revenues, after provision for payment of all Expenses of Operation and Maintenance, and Investment Earnings. "Prior Lien Bonds. shall mean the outstanding Series 1986 Bonds. "Prior Lien Ordinances" shall mean, collectively, the 1963 Ordinance, 1972 Ordinance and 1991 Ordinance. "Prior Lien Resolutions. shall mean, collectively, the 1984 Resolution, the 1986 Resolution and the 1987 Resolution. "Rating Agencies" or "Rating AgencY' means Moody's and Standard & Poor's or any successors thereto and any other nationally recognized credit rating agency. If at any time a particular Rating Agency does not have a rating outstanding with respect to the relevant Bonds, then a reference to Rating Agency or Rating Agencies shall not include such Rating Agency. "Refunded Bonds. shall mean, collectively, the outstanding Series 1986 Bonds, the Series 19,87 Bonds, the County's Series 1991 Bonds, the Series 1972 Bonds and the City's Series 1991 Bonds. "Refunded Prior Lien Bonds. shall mean, collectively, the outstanding City's Series 1991 Bonds, Series 1972 Bonds, County's Series 1991 Bonds and Series 1987 Bonds. "Reimbursement Obligation. means the obligation of the Consolidated Government to directly reimburse any Credit Issuer for amounts paid by such Credit Issuer under a Credit Facility, whether or not such obligation to so reimburse is evidenced by a promissory notice or other similar instrument. "Reserve Account. means the Debt Service Reserve Account created in Article v, Section 2, Paragraph 5 of this Resolution and held within the Sinking Fund. "Reserve Account Surety Bond" means the letter of credit, insurance policy, or surety bond, together with any substitute or replacement therefor, if any, complying with the provisions of the Resolution, thereby fulfilling all or a portion of the' Reserve Requirement. "Reserve Account Surety Bond Provider" means any provider of a Debt Service Reserve Account Surety,Bond. "Reserve Requirement. 'means the least of (i) the highest Debt Service Requirement in the then current or any succeeding Sinking Fund Year, (ii) 10 percent of the aggregate principal amount of the Series 1996/1997 Bonds and Additional Bonds outstanding, or (iii) 190016.7 I-9 ~25 percent of the average annual Debt Service Requirement in the current or any succeeding Sinking Fund Year. "Resolution" means this Bond Resolu~ion as adopted on the date hereof authorizing the issuance of the Series 1996/1997 Bonds, and as same maybe supplemented from time to time. "Revenue Bond Law" means the Revenue Bond Law, Title 36, Chapter 82, Article 3 of the Official Code of Georgia Annotated, as amended, and as same may hereafter be amended from time to time. "Revenue PUnd. shall mean the "Richmond County Water and Sewerage System Revenue Fund--1996" created in Article v, Section 2 of this Resolution. ' "Series 1986 Bonds. means the $7,930,000 original aggregate principal amount of the County's Water and Sewerage Revenue Bonds, Series 1986 issued pursuant to the 1986 Resolution. "Series 1987 Bonds. means the $8,479,591.75 original aggregate principal amount of the County's Water and Sewerage Revenue Refunding Bonds, Series 1987 issued pursuant to the 1987 Resolution, of which $5,555,000 are CUrrent Interest Paying Bonds and $2,924,591.75 are Compound Interest Bonds. ' "Series 1972 Bonds" means the $8,000,000 original aggregate principal amount of the City'S Water and Sewerage Revenue Bonds, Series 1972 issued pursuant to the 1972 Ordinance. "Series 1996 Bonds. means, collectively, the Series 1996A Bonds and the Series 1996 Bonds. "Series 1996A Bonds. means the Consolidated Government's Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A in the aggregate principal amount not to exceed $69,670,000 and authorized to be issued pursuant to Article II of this Resolution. "Series 1996B Bonds" means the Consolidated Government's Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B in the aggregate principal amount not to exceed $3,760,000 and authorized to be issued pursuant to Article II of this Resolution. "Series 1996/1997 Bonds. means, collectively, the Series 1996 Bonds and the Series 1997 Bonds. "Series 1997 Bonds. means the Consolidated Government's Revenue Refunding Bonds, Series 1997 in the aggregate principal amount not to exceed $6,210,000 and authorized to be issued pursuant to Article II of this Resolution. "Sinking Pund"shall mean the "Richmond County Water and Sewerage System Sinking Fund No.2" created in Article V, Section 190016.7 I-10 2,' pa'ragraph 4 of this Resolution, and upon the issuance of the Series 1997 Bonds and the defeasance'of the Prior Lien Bonds, shall mean the Richmond County Water and Sewerage System Sinking Fund, as provided in Article V, Section 2, paragraph 2 of this Resolution. "Sinking Pund Custodian. means initially SunTrust Bank, 'Atlanta, Atlanta, Georgia, its, successors and assigns, or any successor custodian for the Sinking Fund hereafter appointed by the Consolidated Government; provided, however, the Sinking Fund CUstodian shall at all times be a commercial bank or trust company. "Sinking Pund No.1. shall mean the "Richmond County Water and, Sewerage System Sinking Fund" created and extended in the Prior Lien Resolutions. "Sinking PuIld Year. shall mean the period commencing on the 2nd day of October in each year and extending through the 1st day of October in the next year. "Standard a Poor's. or "SaP" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or, if such corporation is dissolved or ,liquidated or otherwise ceases to perform securities rating services, such other nationally recognized securities rating agency as may be designated in writing by the Consolidated Government. The notice address of Standard & Poor's shall be 25 Broadway, New York, New York 10004. "System. shall mean the consolidated water and sewerage facilities of the City and the County now owned, operated and maintained by the Consolida~ed Government, as now existent. and as hereafter added to, extended and improved and owned by the Consolidated Government and used by it in furnishing water and sewerage services and facilities. "Utility General Pund. shall mean the "Richmond County Water and Sewerage System Utility General Fund" created in Article V, Section 2, Paragraph 6 of this Resolution. "Utility General Fund Depository" means any commercial bank or trust company designated by the Consolidated Government, its successors and assigns, or any successor custodian for the Utility General Fund hereafter appointed by the Consolidated Government; provided, however, the Utility General Fund Depository shall at all times be a commercial bank or trust company. "Variable Rate- means a rate of interest applicable to the Bonds, other than a fixed rate of interest which applies to a particular maturity of Bonds so long as that maturity of Bonds remains outstanding. 190016.7 I-11 Whenever used in this Resolution, the singular shall include the plural and the plural shall include the singular, unless the context otherwise indicates. 190016.7 1-12 AR.'l'ICLB II AlJTHORIZA'l'ION, PORM AND R.BGIS'1'R.A'l'ION OF BONDS Section 1. Authorization of the Series 1996A Bonds. Under the authority of the Revenue Bond Law, there be and there is hereby authorized to be issued the Series 1996A Bonds in the aggregate principal amount not to exceed $69,670, 000 for the, purpose of providing funds: to be applied toward the cost of acquiring by redemption, payment or otherwise all of the County's Water and Sewerage Revenue Bonds, Series 1991 now outstanding in the aggregate principal amount of $7,655,224, the City's Water and Sewerage Revenue Bonds, Series 1972 now outstanding in the aggregate principal amount of $1,125,000 and the City's Water and Sewerage Revenue Bonds" Series' 1991 now outstanding in the aggregate principal amount of $8,420,000, to be applied toward the cost of additions, extensions and improvements to the System, to pay a portion of the interest accruing on the Series 1996A Bonds during the estimated period of construction of additions, extensions and improvements to the System and to pay all expenses necessary to accomplish the foregoing. The Series 1996A Bonds shall be payable solely from the Sinking Fund hereinafter created and all of the covenants, agreements and provisions of thls Resolution shall be for the equal and proportionate benefit and security of all owners of the Series 1996/1997 Bonds issued hereunder, including any Additional Bonds hereafter issued. Section 2. Authorization of the Series 1996B Bonds. Under the authority of the Revenue Bond Law, there be and there is hereby authorized to be issued the Series 1996B Bonds in the aggregate principal amount not to exceed $3,760,000 for the purpose of providing funds: to be applied toward the cost of acquiring by redemption, payment or otherwise all of the County's Water and Sewerage Revenue Bonds, Series 1987 now outstanding in the aggregate principal amount of $2,924,571.75 and to pay all expenses n-ecessary to accomplish the foregoing . The ,Series 1996B Bonds shall be payable solely from the Sinking Fund hereinafter created and all of the covenants, agreements and provisions of this Resolution, shall be for the equal and proportionate benefit and security of all owners of the Series 1996/1997 Bonds issued hereunder, ,including any,Additional Bonds hereafter issued. , Section 3. Authorizat.ion of t.he Series 1997 Bonds'. Under the authority of the Revenue Bond Law, there be and there is hereby authorized 'to be issued the Series 1997 Bonds in the aggregate principal amount not to exceed $6,210,000 for the purpose of providing funds: to be applied toward the cost of acquiring by redemption, payment or otherwise all of the County's Water and Sewerage Revenue Bonds, Series 1986 now outstanding in the aggregate principal amount of $6,220,000 and to pay all expenses necessary to accomplish the foregoing. The Series 1997 Bonds shall be payable solely from the Sinking Fund hereinafter created and all 190016.7 II-1 W...lll ..,1 ~nl...nlltnl ....n. ~o pC- 0- of the covenants, agreements' V\J-Lcl-O""to lr-Lthis Resolution shall be for the equal and pr iand security of all owners of the Series : ~Jlr~~d !ued hereunder, including any Additional Bonds ! " ' , 1 P-. - . d I s9ati~D 4. ~~rmB afS8~ ~ ~ (a) The Series 1996A Bonds shall be dated NOVE . be in the form of fully registered bonds'~ ~. lall be in the denomination of $5,000 9r any I ~ereof, shall be transferable to subsequent owne ovided, shall be numb~red RA-1 upward, shall bea lat such rate or rates per annum, not exceedi; 10 la-d-. lany year t with interest pay~ole semiannually 9 ~_ ~ril and October in each year, commencing on Ap, C) lh the principal ma tur in9 (or being acquired bi . _ n.. .._ _ _ _ _ _ __ngs) on the 1st day 9f October, in the years 1997 to 2028, inclusive, so that the highest amount of debt service payable on the Series 1996A Bonds in any Sinking Fund Year does not exceed $5,873,890. (b) The Series 1996B Bonds shall be dated November 15, 1996, shall be in the form of fully registered bonds without coupons, shall be in the denomination of $5,000 or any integral multiple thereof, shall be transferable to subsequent owners as hereinafter provided, shall be numbered RB-1 upward, shall bear interest from date at such rate or rates per annum, not exceeding 8.05 percent in any year, with interest payable semiannually on the' 1st days of April and October in each year, commencing on April 1, 1997, and with the principal maturing (or being acquired by mandatory proceedings) on the 1st day of October, in the years 1997 to 2007, inclusive, so that the highest amount of debt service payable on the series 1996B Bonds in any Sinking Fund Year does not exceed $863,565. (c) The Series 1997 Bonds shall be dated as of the first day of the month in which the Series 1997 Bonds are' issued and delivered, shall be in the form of fully registered bonds without coupons, shall be in the denomination of $5,000 or any integral multiple thereof, shall be transferable to subsequent owners as hereinafter provided, shall be numbared R-1 upward, shall bear interest from data at such rate or rates per annum, not exceeding 6.50 percent in any year, with interest payable semiannually on the 1st days of April and October in each year, commencing on April 1, 1997, and with the principal maturing (or being acquired by mandatory proceedings) on the 1st day of October, in the years 1997 to 2021, inclusive, so that the highest amount of debt service payable on the Series 1997 Bonds in any Sinking Fund Year does not exceed $504,960. The principal amount of the series 1996/1997 Bonds shall be payable at maturity, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender thereof at the principal corporate trust office of SunTrust Bank, Atlanta, Atlanta, Georgia, 190016.7 1I-2 of the covenants, agreements and provisions of this Resolution shall be ,for the equal and proportionate benefit and security of all owners of the Series 1996/1997 Bonds issued hereunder; including any Additional Bonds hereafter issued. Section 4. Terms of Series 1996/1997 Bonds. (a) The Series 1996A Bonds shall be dated November 15, 1996, shall be in the form of fully registered bonds without coupons, shall be in the denomination of $5,000 or any integral multiple thereof, shall be transferable to subsequent owners as hereinafter provided, shall be numbered RA-1 upward, shall bear interest from date at such rate or rates per annum, not exceeding 6.55 percent in any year, with interest payable semiannually on the 1st days of April and October in each year, commencing on April 1, 1997, and with the principal maturing (or being acquired by mandatory proceedings) on the 1st day of October, in the years 1997 to 2028, inclusive, so that the highest amount of debt service payable on the Series 1996A Bonds in any Sinking Fund Year does not exceed $5,873,890. (b) The Series 1996B Bonds shall be dated November 15, 1996, shall be in the form of fully registered bonds without coupons, shall be in the denomination of $5,000 or any integral multiple thereof, shall be transferable' to subsequent owners as hereinafter provided, shall be numbered RB-1 upward, shall bear interest from date at such rate or rates per annum, not exceeding 8.05 percent in any year, with interest payable semiannually on the 1st days of April and October in each year, commencing on April 1, 1997, and wi th the principal maturing (or being acquired by mandatory proceedings) on the 1st day of October, in the years 1997 to 2007, inclusive, so that the highest amount of debt service payable on the Series 1996B Bonds in any Sinking Fund Year does not exceed $863,565. ' (c) The Series 1997 Bonds shall be dated as of the first day of the month in which the Series 1997 Bonds are issued and delivered, shall be in the form of fully registered bonds without coupons, shall be in the denomination of $5,000 or any integral multiple thereof, shall be transferable to subsequent owners as hereinafter provided, shall be numbered R-1 upward, shall bear interest from date at such rate or rates per annum, not exceeding 6.50 percent in any year, with interest payable semiannually on the 1st days of April and October in each year, commencing on October 1, 1997, and with the principal maturing (or being acquired by mandatory proceedings) on the 1st day of_ October, in the years 1997 to 2021, inclusive, so that the highest amount of debt service payable on the Series 1997 Bonds in any Sinking Fund Year does not exceed $504,960. The principal amount of the Series 1996/1997 Bonds shall be payable at maturity, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender thereof at the principal corporate trust office of SunTrust Bank, Atlanta, Atlanta, Georgia, 190016.7 1I-2 Paying Agent, and payments of interest on the Series 1996/1997 Bonds shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on the fifteenth day of the 'calendar month next preceding the Interest Payment Date (the "Record Date") and such paYments of interest shall be rnailedto the registered owner at the address shown on the bond registration book. The owner of not less than $1,000,000 in aggregate principal amount of Series 1996A Bonds, Series 1996B Bonds or Series 1997 Bonds may request the Bond Registrar and Paying Agent to make paYments of interest by deposit of immediately available funds to the account of the registered owner maintained with the Paying Agent or transmitted by wire transfer to such registered owner at any account maintained at a commercial bank located within the United States if the Paying Agent receives from such registered owner written deposit or wire transfer instructions prior to the Record Date preceding the Interest Payment Date for which the deposit or wire transfer is requested. Both the principal of and interest on the Series 1996/1997 Bonds shall be payable in lawful money of the United States of America. Section 5. Executions Por.ms of Series 1996/1997 Bonds. The 'Series 1996/1997 Bonds shall be executed by use of the facsimile signature of the Mayor and attested by the facsimile signature of the Clerk of the Consolidated Government and a facsimile of the official seal of the Consolidated Government shall be imprinted thereon, and the Series 1996/1997 Bonds shall be authenticated by the manual signature of a duly authorized signatory of the Bond Registrar. The Clerk be and is hereby authorized to certify by use of her facsimile signature as to the authenticity of a true and correct copy of the, text of the legal opinion to be rendered by Sutherland, Asbill & Brennan, Bond Counsel, which opinion will be printed on the Series 1996/1997 Bonds. The validation certificate to be printed on the Seri~s, 1996/1997 Bonds shall be executed by use of the facsimile signature of the Clerk of the Superior Court ' of Richmond County and a facsimile of the official seal of said court shall be imprinted thereon. In case any signatory whose signature shall appear on the Series 1996/1997 Bonds shall cease to be such signatory before delivery of the Series 1996/1997 Bonds, such signature shall nevertheless be valid and sufficient for all purposes the same as if such signatory had remained in office until such delivery. The Series 1996/1997 Bonds, the certificate of authentication and registration, form of assignment and the certificate of validation to be endorsed upon the Series 1996/1997 Bonds, ,shall be in substantially the following forms, with such variations, omissions and insertions as are required or permitted by this Resolution: 190016.7 1I-3 No. RA- $ UNITED STATES OP AMERICA STATB OP GBORGIA RICHMOND COUNTY WATBR AND SBWERAGE RBV'ENt7B RBPONDING AND IKPROVBMBHT BOND SBRIES 1996A BOND DATE I MATURITY DATE I November 15, 1996 INTBRBST RATE I Ct1SIPI 'POR VALtJB RBCBIVBD, Richmond County (the "Consolidated' Government") a political subdivision of the' State of Georgia, hereby promises to pay solely from the special fund provided therefor, as hereinafter set forth, to or registered assigns, the principal sum of DOLT.a.RS in lawful money of the United States of America on the date specified above, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender hereof at the principal corporate trust office of SunTrust Bank, Atlanta, Atlanta, Georgia, Paying Agent and Bond Registrar, and to pay to the registered owner hereof solely from said special fund interest on the principal amount from date hereof or from the most recent Interest PaYment Date (hereinafter defined) to which interest has been paid, at the rate per annum specified above semiannually on the 1st days of April and October in each year (each an "Interest PaYment Date"), commencing on April 1, 1997, until paYment of the principal amount hereof. PaYments of interest on this Series 1996A Bond shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on the fifteenth day of the calendar month next preceding each Interest PaYment D~te and such interest paYments shall be mailed to the registered owner at the address shown on the bond registration book. ' , This Series 1996A Bond is one of a duly authorized issue of Richmond County Water and Sewe~age Revenue Refunding and _Improvement Bonds, Series 1996A, in the aggregate principal amount of $ , of like tenor, except as to numbers, denominations, interest rates, dates of maturity and redemption provisions (hereinafter sometimes referred to collectively as the "Series 1996A Bonds") issued for the purpose of providing funds: to be applied toward the cost of acquiring by redemption, paYment or otherwise all of the Richmond County Water and Sewerage Revenue Bonds, Series 1991 now outstanding in the aggregate principal 190016.7 1I-4 amount of $7,655,224, The City Council of Augusta Water and Sewerage ,Revenue Bonds, Series 1972 now outstanding in the aggregate principal amount of $1,125,000 and The City Council of Augusta Water and Sewerage Revenue Bonds, Series 1991 , now outstanding in the aggregate principal amount of $8,420,000, to be applied toward the cost of additions, extensions and improvements to the System (hereinafter defined), to pay a portion of the interest accruing on the Series 1996A Bonds during the estimated period of construction of the additions, extensions and improvements to the System and to pay ~11 exPenses necessary to accomplish the foregoing, and is issued under authority of the Revenue Bond Law of the S~ate of Georgia (Title 36, Chapter 82, Article 3 of the Official Code of Georgia Annotated, as amended), ~d the Richmond County--Consolidation with the City of Augusta and the City of Hephzibah Act' (the "Act"), and was duly authorized by a resolution of the Augusta-Richmond County Commission adopted on October 21, 1996, as supplemented on November , ,1996 (the "Resolution"). Simultaneously with the issuance of the Series 1996A Bonds, the Consolidated Government is issuing its Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B in the aggregate principal amount of $ (the "Series 1996B Bonds" and, together with the Series 1996A Bonds, the "Bonds") . Effective January 1, 1996, the former The City Council of Augusta (the "City") and' Richmond County (the "County") were consolidated pursuant to the Act and referenda held in the City and the County. Prior to consolidation, the City and the County each owned and operated a water and sewerage system. Pursuant to the Act, the water and sewerage systems of the City and the County are owned and operated by the Consolidated Government, and pursuant to the Resolution, have been combined into, one revenue producing undertaking, hereinafter referred to as the .System." Upon the issuance of the Bonds, there will be outstanding $6,220,000 aggregate' principal amount of the County's Water and Sewerage Revenue Bonds, Series 1986 which are secured by a first and prior lien on the net revenues of the County's water and sewerage system (the "Prior Lien Bonds"). The Prior Lien Bonds were issued pursuant to resolutions adopted by the County on April 24, 1984. and November 24, 1986 (collectively, the "Prior Lien Resolutions"). The Bonds are junior and subordinate in right of payment tb the Prior Lien Bonds and are secured by a lien on the net revenues of the County's water and sewerage system" which is a part of, the System, subordinate to the lien pn the net revenues of the County's water and sewerage system created for the benefit of the owners of the' Prior Lien Bonds. Upon the deposit of moneys sufficient to acquire by redemption, payment or otherwise of the Prior Lien Bonds, the Bonds shall have a first and prior lien on the Pledged Revenues (hereafter defined) . In addition to the Bonds, the Consolidated Government may issue, under certain terms and conditions as provided in the Resolution, additional revenue bonds or obligations, and if issued 190016.1 II-s such additional bonds or oblig~tions will rank on a parity as to lien on the Pledged Revenues with the lien securing the paYment of the Bonds. Reference to the Resolution and the Prior Lien Resolutions is hereby made for a complete description of the fund charged with, and pledged to, the payment of the principal of and ,the interest on the Series 1996A Bonds, the nature and extent of the security, a statement of rights, duties and obligations of the Consolidated Government, the rights of the owners of the Series 1996A Bonds, and the terms and conditions under which additional bonds may be issued, to all the provisions of which the owner hereof, by the acceptance of this Series 1996A Bond, assents. The terms and provisions of this Series 1996A Bond and definitions of certain terms used herein are continued on the reverse side hereof and such continued terms and provisions and definitions shall for all purposes have the same effect as though fully set forth at this place. This Series 1996A Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until this Series 1996A Bond shall have been authenticated and registered upon the bond registration book kept by the Bond Registrar for that purpose, which authentication and registration shall be evidenced by the execution by the manual signature of a duly authorized signatory of the Bond Registrar of the certificate hereon. 190016.7 1I-6 IN WITNESS WBEREOP, the consolidated government of Richmond County has caused this Series 1996A Bond to be executed by use of the facsimile signature of the Mayor of its Augusta-Richmond County , Commission and a facsimile of its official seal to be imprinted hereon and attested by use of the facsimile signature of the Clerk of said Augusta-Richmond County Commission of Richmond County as of the 15th day of November, 1996. RICHMOND COtm'l'Y (S E A L) By:' (facsimile) Mayor, Augusta-Richmond County Commission Attest: (facsimile) Clerk Date of Authentication and Registration:" CERTIPICATB OP AUT~ICATION AND REGISTRATION This Bond is one of the Bonds described in the resolution of , 1996. S1JHTR.1J'ST BANK, ATLANTA, as Bond Registrar By: Authorized Signatory * * * * * * 190016.7 II-7 VALIDATION CERTIPICATE STATE OF GEORGIA ) ) COUNTY OP RICHMOND ) The undersigned Clerk of the Superior Court of County, State of Georgia, HEREBY CERTIPIES that this validated and confirmed by judgment of the Superior Richmond County, Georgia, on the ___ day of 1996, and that no intervention or obj ection proceedings validating same and that no appeal of validation has been taken. Richmond Bond was Court of , was filed in the from said judgment WITNESS my facsimile signature and seal of the Superior Court of Richmond County, Georgia. (8 E A L) Clerk, Superior Court, Richmond County, Georgia *********** 190016.7 1I-8 [THE POLLOWING SHALL BB PRINTED ON THB BACK OW THB SERIBS 1996A BONDS] , This Series 1996A Bond is transferable only upon' the bond registration book kept for that purpose at the principal corporate trust office of the Bond Registrar by the registered owner hereof in person, or by attorney duly authorized in writing, upon the surrender and presentation to the Bond Registrar of this Series 1996A Bond duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or attorney duly authorized in writing, and thereupon a new registered bond, in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor. ' The Series 1996A Bonds are issuable in the form 'of fully registered bonds in the denomination of $5,000 or any integral ,multiple thereof and are exchangeable at the principal corporate trust office of th~ Bond Registrar in the manner, subject to the conditions and upon paYment of charges, if any, provided in the Resolution. ' The Bonds and such revenue bonds of the Consolidated Government as may in the future be issued on a parity therewith, are eqUally and ratably secured by a pledge of and a lien on the "Pledged Revenues," which are defined in ,the Resolution to include net operating revenues of the System (gross operating revenues of the System after provision for paYment of all reasonable expenses of operation and maintenance) and earnings on investments made with moneys and securities from time to time on deposit in the funds and accounts established in the Resolution, excluding any amounts held within the sinking fund for the Prior Lien Bonds. The Resolution provides, among other things, for prescribing and revising rates and collecting fees and charges for the services, facilities and commodities furnished by the System, as now existent and as hereinafter added to, extended, improved and equipped to the extent necessary to produce revenues sufficient (i) to pay the reasonable and necessary costs of operating and maintaining the System, including any contractual obligations incurred pertaining to the operation of the System, (ii) to produce Pledged Revenues (excluding earnings on investments made with moneys and securities from time to time on deposit in the Construction Fund and any amounts held within the sinking fund for the Prior Lien Bonds) in each Fiscal Year (as defined in the Resolu~ion) equal to at last 110 percent of the amount required to discharge the payment of the Bonds and any bondS issued on a parity therewith then outstanding as the same become due and payable, (iii) to pay into a special fund designated "Richmond County Water and Sewerage System Sinking Fund No.1" the amounts required to pay the principal of and the interest on the Prior Lien Bonds as the same become due and payable, either at maturity or by proceedings for mandatory redemption, and to create and maintain a reserve 190016.7 1I-9 therein for that purpose, (iv) to pay into the special fund designated "Richmond County Water and Sewerage System Sinking Fund No.2" the amounts required to pay the principal of and the interest on the Bonds and any other bonds here~fter issued on a parity therewith as the same become due payable, either at maturity or by proceedings for mandatory redemption, and to create and 'maintain a reserve therein for that purpose, and (v) to create and maintain a reserve for extensions and improvements to the System. This Series 1996A Bond shall not be deemed to constitute a debt of the State of Georgia or the Consolidated Government nor a pledge of the faith and credit of said State or Consolidated Government, nor shall the State or' Consolidated Government be subject to any pecuniary liability hereon. This Series 1996A Bond shall not be payable from, nor be a charge upon, any funds other than the Pledged Revenues, and is payable solely from th~ special fund provided therefor from the Pledged Revenues, including all future additions thereto and any other moneys deposited therein. No owner of this Series 1996A Bond shall ever have the right to enforce paYment hereof against any other property of the State of Georgia or the Consolidated Government, nor shall this, Bond constitute a charge, lien or encumbrance, legal or equitable, upon any other property of the Consolidated Government ,other than the Pledged Revenues pledged to the paYment hereof. The issuance of this Series 1996A Bond shall not directly, indirectly or contingently obligate the State or the Consolidated Government to levy or to pledge any form of taxation whatever therefor or to make any appropriation for its paYment. , The Series 1996A Bonds may be redeemed prior to their respective maturities~ either in whole at any time or in part on any Interest PaYment Date, in any year not earlier than October 1, , from any moneys available for such purpose as provided in the Resolution by paYment of the principal amount thereof and accrued interest thereon to date of redemption, together with a premium of 2 percent of such principal amount if redeemed on or prior to September 30, " 1 percent of such principal amoUnt if redeemed thereafter and on or prior to September 30, , and at par without a premium if redeemed thereafter and before maturity. In addition, the Series 1996A Bonds maturing October 1, are subject to mandatory redemption prior to maturity in accordance with the provisions of the Resolution, in part, by lot in such manner as may be designated by the Bond Registrar at par plus accrued interest to the redemption date, in the following principal amounts on October 1, in the years, as follows: ' Yeax: Amount 190016.7 II-10 $ principal amount of Bonds maturing October 1, shall be paid at maturity. ' , Notice designating the Bonds (or the portion of the principal amount of the Series 1996A Bonds in multiples of $5,000) to be acquired by redemption, as aforesaid, shall be mailed, postage prepaid, not less than 30 days nor more than 60 days prior to the redemption date to all registered owners of Series 1996A Bonds to be redeemed in whole or in part at the addresses which appear in the bond registration book, but failure so to mail any such notice shall not affect the validity of the proceedings for such redemption or cause the interest to accrue on the principal amount of the Series 1996A Bonds so designated for redemption after the . redemption date. To the extent and in the manner permitted by the Resolution, modifications, alterations, amendments, additions and recisions of the provisions of the Resolution, or of any resolution supplemental thereto or of the Series 1996A Bonds, may be made by the Consolidated Government with the consent of the owners of at least 65 percent in aggregate principal amount of the Series 1996A Bonds then outstanding, including any parity obligations therewith then outstanding, and without the necessity for notation hereon of reference thereto. This Series 1996A Bond is issued with the intent that the laws of the State of Georgia shall govern its construction. In case of default, the owner of this Series 1996A Bond shall " be entitled to the remedies provided in the Resolution authorizing its issuance and in said Revenue Bond Law and any amendments thereto. It is hereby recited and certified that all acts, conditions and things required to be done precedent to and in the issuance of this Series 1996A Bond have been done, have happened and have been performed in due and legal form as required by law, and that provision has been made for the allocation from the anticipated revenues of the System, as now existent and as hereafter added to, extended, improved and equipped, of amounts sufficient to pay the principal of and the interest on the Series 1996A Bonds as the same mature, or are acquired by mandatory redemption, and to create and maintain a reserve for that purpose, and that said revenues are irrevocably allocated and pledged to the payment of the Series 1996A Bonds and the interest thereon. .......* [STATEMENT OP INSURAHCB] 190016.7 II-11 ASSIGNMENT POR VALUE RECBIVED the undersigned hereby sells, assigns and transfers unto [please print or typewrite name and address [Please insert Social Security or Tax Identification Number] the within Bond and all including postal zip code of assignee] rights thereunder, hereby constituting and appointing attorney to transfer this Bond on the bond registration book kept for such purpose by the Bond Registrar, with full power of substitution in the premises. DATED Notice: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in, every particular, without alteration or enlargement or any change whatever. Signature Guaranteed 190016.7 II-12 No. RB- $ UNITED STATES 01' AMERICA , STATE OP GEORGIA RICBHOND COtJHTY TAXABLE WATER AND SEWERAGE RBVENtJE REPONDIHG BOND SERIES 1996B BOND DATB I MATURITY DATE I November 15, 1996 INTEREST RATE I CUSIP, POR VALUE RECBIVED, Richmond County (the "Consolidated Government") a political subdivision of the State of Georgia, hereby promises to pay solely from the special fund provided therefor, .as hereinafter set forth, to or registered assigns, the principal sum of DOLLARS in lawful money of the United States of America on the date specified above, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender hereof at the principal corporate trust office of' SunTrust Bank, Atlanta, Atlanta, Georgia, Paying Agent, and Bond Registrar, and to pay to the registered owner hereof solely from said special fund interest on the principal amount from date hereof or from the most recent Interest PaYment Date (hereinafter defined) to which interest has been paid, at the rate per annum specified above semiannually on the 1st days of April and October in each year (each an "Interest Payment Date"), commencing on April 1, 1997, until paYment of the principal amount hereof. PaYments of interest on this Series 1996B Bond shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on the fifteenth day of the calendar month next preceding each Interest PaYment Date and such interest paYments shall be mailed to the registered owner at the address shown on the bond registration book. This Series 1996B Bond is one of a duly authorized issue of Richmond County Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B, in the aggregate principal amount of $ , of l,ike tenor, except as to numbers, denominations, interest rates, dates of maturity and redemption provisions (hereinafter sometimes referred to collectively as the "Series 1996B Bonds") issued for the purpose of providing funds: to be applied toward the cost of acquiring by redemption, paYment or otherwise all of the Richmond County Water and Sewerage Revenue Bonds, Series 1987 now 190016.7 1I-13 outstanding in the aggregate principal amount of $2,924,591.75, and to pay all expenses necessary to accomplish the foregoing, and is issued under authority of the Revenue Bond Law of the State of Georgia (Title 36, Chapter 82, Article 3 of the Official Code of Georgia Annotated, as amended), and the Richmond County-- Consolidation with the City of Augusta and the City of Hephzibah Act (the "Act"), and was duly authorized by a resolution of the Augusta-Richmond County Commission adopted on October 21, 1996, as supplemented on November _, 1996 (the' "Resolution"). Simultaneously with the issuance of the Series 1996B Bonds, the 'Consolidated Government is issuing its Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A in the aggregate principal amount of $ (the "Series 1996A Bonds" and, together with the Series 1996B Bonds, the "Bonds"). Effective January 1, 1996, the former The City Council of Augusta (the "City") and Richmond County (the "County") 'were consolidated pursuant to the Act and referenda held in the City and the County. Prior to consolidation, the City and the County each owned and operated a water and, sewerage system. Pursuant to the Act, the water and sewerage systems of the City and the County are owned and operated by,the Consolidated Government, and pursuant to the Resolution, have been combined into one revenue producing undertaking, hereinafter referred to as the "System." Upon the issuance of the Bonds, there will be outstanding $6,220,000 aggregate principal amount of the County's Water and Sewerage Revenue Bonds, Series 1986 which are secured by a first and prior lien on the net revenues of the County's water and sewerage system (the "Prior Lien Bonds"). The Prior Lien Bonds were issued pursuant to resolutions adopted by the County on April 24, 1984 and November 24, 1986 (collectively, the "Prior Lien Resolutions"). The Bonds are junior and subordinate in right of paYment to the Prior Lien Bonds and are secured by a lien on the net revenues of the County's water and sewerage system, which is a part of the System, subordinate to the lien on the net revenues of the County's water and sewerage system created for the benefit of the owners of the Prior Lien Bonds. Upon the deposit of moneys sufficient to acquire by redemption, paYment or otherwise of the Prior Lien Bonds, the Bonds shall have a first and-prior lien on the Pledged Revenues (hereafter defined) . In addition to the Bonds, the Consolidated Government may issue, under certain terms and conditions as provided in the Resolution, additional revenue bonds or obligations, and if issued such additional bonds or obligations will rank on a parity as to lien on the Pledged Revenues with the lien securing the payment of the Bonds. Reference to the Resolution and the Prior Lien Resolutions is hereby made for a complete description of the fund charged with, and pledged to, the payment of the principal of and the interest on the Series 1996B Bonds, the nature and extent of the security, a statement of right,s, duties and obligations of the Consolidated Government, the rights of the owners of the Series 190016.7 II-14 1996B Bonds, and the terms and conditions under which additional bonds may be issued, to all the provisions of which the owner hereof, by the acceptance of this Series 199GB Bond, assents. The terms and provisions of this Bond and definitions of certain terms used herein are continued on the reverse side hereof and such continued terms and provisions and definitions shall for all purposes have the same effect as though fully set forth at this place. This Series 1996B Bond shall not be valid or become obligatory for any purpose or be entitled to any security 'or benefit under the Resolution until this Series 1996B Bond shall have been authenticated and registered upon the bond registration book kept by the Bond Registrar for that purpose, which authentication and registration shall be evidenced 'by the execution by the manual signature of a duly authorized signatory of the Bond Registrar of the certificate hereon. ' 190016.7 II-1s IN WITNESS WBER.EOP, the consolidated government of Richmond County has caused this Series 1996B Bond to be executed by use of the facsimile signature of the Mayor of its Augusta-Richmond County Commission and a,facsimile of its official seal to be imprinted hereon and attested by use of the facsimile signature of the Clerk of said Augusta-RiChmond County Commission of Richmond County as of the 15th day of November, 1996. RICBMOND COUNTY (S E A L) By: (facsimile) Mayor, Augusta-Richmond County Commission Attest: (facsimile) Clerk Date of Authentication and Registration: CERTIPICATB 01' AUTHENTICATION AND REGISTRATION This Bond is one of the Bonds described in the resolution of ~, 1996. SlJNTRt7ST BANlt, ATLANTA, as Bond Registrar By: Authorized Signatory * * * * * * 190016.7 1I-16 VALIDATION CERTIPICATB STATE OP GBORGIA ) ) COUNTY OP RICHKOHD ) The undersigned Clerk of the Superior Court of' Richmond County, State of Georgia, HEREBY CBRTIPIBS that this Bond was validated and confirmed by judgment of the Superior. Court of Richmond County, Georgia, on the _____ day of , 1996, and that no intervention or obj ection was, filed in the proceedings validating same and that no appeal from said judgment of validation has been taken. ' WITNESS my facsimile signature and seal of the Superior Court of Richmond County, Georgia. (S B A L) Clerk, Superior Court, Richmond County, Georgia *********** 190016.7 1I-17 [THE POLLOWING SHALL BE PRINTED ON TBB BACK OP TBB SERIES 1996B BONDS] This Series 1996B Bond is transferable only upon the bond registration book kept for that purpose at the principal corporate trust office of the Bond Registrar by the registered owner hereof in pe~son, or by attorney duly authorized in writing, upon the surrender and presentation to the Bond Registrar of this Series 1996B Bond duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or attorney duly authorized in writing, and thereupon a new registered bond, in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor. The Series 1996B Bonds are issuable in the form of fully registered bonds in the denomination of $5,000 or any integral multiple thereof and are exchangeable at the principal corporate trust office of the Bond Registrar in the manner, subject to the conditions and upon payment of charges, if any, provided in the Resolution. The Bonds and such revenue bonds of the Consolidated Government as may in the future be issued on a parity therewith, are equally and ratably secured by a pledge of and a lien on the "Pledged Revenues," which are defined in the Resolution to include net operating revenues of the System (gross operating revenues of the System after provision for payment of all reasonable expenses of operation and maintenance) and earnings on investments made with moneys and securities from time to time on deposit in the funds and accounts established in ,the Resolution, excluding any amounts held within the sinking fund for the Prior Lien Bonds.' ' The Resolution provides, among other things, for prescribing and revising rates and collecting fees and charges for the services, facilities and commodities furnished by the System, as now existent and as hereinafter added to, extended, improved and equipped to the extent necessary to produce revenues sufficient (i) to pay the reasonable and necessary costs of operating and maintaining the System, including any contractual obligations incurred pertaining to the operation of the System, (ii) to produce Pledged Revenues (excluding earnings on investments made with moneys and securities: from time to time on deposit in the Construction Fund and any amounts held within the sinking fund for the Prior Lien Bonds) in each Fiscal ,Year (as defined in the Resolution) equal to at least 110 percent of the amount required to discharge the payment of the Bonds and any bonds issued on a parity therewith then outstanding as the same become due and payable, (iii) to pay into a special fund designated "Richmond County Water and Sewerage System Sinking Fund No.1" the amounts required to pay the principal of and the interest on the Prior Lien Bonds as the same become due and payable, either at maturity or by proceedings for mandatory redemption" and to create and maintain a reserve 190016.7 1I-18 therein, for that purpose, (iv) to pay into the special fund designated "Richmond County Water and Sewerage System Sinking Fund No.2" the amounts' required to pay the principal of and the interest on the Bonds and any other bonds hereafter issued on a parity therewith as the same become due payable, either at maturity or by proceedings for mandatory redemption, and to create and maintain a reserve therein for that purpose, and (v) to create and maintain a ~eserve for extensions and.improvements to the System. This Series 1996B Bond shall not be deemed to constitute a debt of the State of Georgia or the Consolidated Government nor a pledge of the faith and credit of said State or Consolidated Government, nor shall the State or, Consolidated Government be subject to any pecuniary liability hereon. This Series 1996B Bond, shall not be payable from, nor be a charge upon, any funds other than the Pledged Revenues, and is payable solely from the special fund provided therefor from the Pledged Revenues, including all future additions thereto and any other moneys deposited therein. No owner of this Series 1996B Bonds shall ever have the right to enforce paYment hereof against any other property of the State of Georgia or the Consolidated Government, nor shall this Series 1996B Bonds constitute a charge, lien or encumbrance, legal or equitable, upon any other property of the Consolidated Government other than the Pledged Revenues pledged to the paYment hereof. The issuance of this Series' 1996B Bond shall not directly, indirectly or contingently obligate the State or the Consolidated Government to levy or to pledge any form of taxation whatever therefor or to make any appropriation for its paYment. The Series 1996B Bonds, may be redeemed prior to their respective maturities, either in whole at any time or in part on any Interest Payment Date, in any year not earlier than October 1, from any moneys available for such purpose as provided in the Resolution by paYmen.t of th~ principal amount thereof and accrued interest thereon to date of redemption, together with a premium of 2 percent of such principal amount if redeemed on or prior to September 30, , 1 percent of such principal amount if redeemed thereafter and on 'or prior to September 30, , and at par without, a premium if redeemed thereafter and before maturity. In addition, the Series 1996B Bonds maturing October 1, are subject to mandatory redemption prior to maturity in accordance with the provisions of the Resolution, in part, by lot in such manner as may be designated by the Bond Registrar at par plus accrued interest to the redemption date, in the following principal amounts on October 1, in the years, as follows: . ~ Amount 190016.7 1I-19 principal amount of Series 1996B Bonds maturing shall be paid at maturity. $ October 1, Notice designating the Series 1996B Bonds (or the portion of the principal amount of the Series 1996B Bonds in multiples of $5,000) to be acquired by redemption, as aforesaid, shall be mailed, postage prepaid, not less than 30 days nor more than 60 days prior to the redemption date to all registered owners of Series 1996B, Bonds to be redeemed in whole or in part at the addresses which appear in the bond registration book, but failure so to mail any such notice shall not affect the validity of the proceedings for such redemption or cause the interest to accrue on the principal amount of the Series 1996B Bonds so designated for redemption after the redemption date. To the extent and in the manner permitted by the Resolution, modifications, alterations, amendments, additions and recisions of the provisions of the Resolution, or of any resolution supplemental thereto or of the Series 1996B Bonds, may be made by the Consolidated Government with the consent of the owners of at least 65 percent in aggregate principal amount of the Series 1996B Bonds then outstanding, including any parity obligations therewith then outstanding, and without the necessity for notation hereon of reference thereto. This Series 1996B Bond is issued with the'intent that the laws of the State of Georgia shall govern its construction. In case of default, the owner of this Series 1996B Bond shall be entitled to the remedies provided in the Resolution authorizing its issuance and in said Revenue Bond Law and any amendments thereto. It is hereby recited and certified that all acts, conditions and things required to be done precedent to and in the issuance of this Series 1996B Bond have been done, have happened and have been performed in due and legal form as required by law, and that provision has-been made for the allocation from the anticipated revenues of the System, as now existent and as hereafter added to, extended, improved and equipped, of amounts sufficient to pay the principal of and the interest on the Series 1996B Bonds as the same mature, or are acquired by mandatory redemption, and to create and maintain a reserve for that purpose~ and that said revenues are irrevocably allocated and pledged to the payment of the Series 1996B Bonds and the interest thereon. .....*.* [STATEMENT OP INSURANCE] 190016.7 1I-20 ASSIGNMENT POR VALUE RECBIVED the undersigned hereby sells, assigns and transfers unto [please print or typewrite name and address [Please insert Social Security or Tax Identification Number] the within Bond and all including postal zip code of assignee] rights thereunder, hereby constituting and appointing attorney to transfer this Bond on the bond registration book kept for such purpose by the Bond Registrar, with full power of sUbstitution in the premises. DATED Notice: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever. Signature Guaranteed 190016.7 1I-21 No. R- $ ONI'l'ED STATES 01' AMERICA STATE OP GBORGIA RICHMOND COONTY WATER AND SEWERAGE R.BVENtJE REPONDING BOND - SERIBS 1997 BOND DATE z MATORITY DATE z January 1, 1997 INTEREST RATB z CUSIPz POR VALt7B RECBIVED, Richmond County (the "Consolidated Government"), a political subdivision of the State of Georgia, hereby promises to pay solely from the special fund provided therefor, as hereinafter set forth, to or registered assigns, the principal sum of DOT.T.JUtS in lawful money of the United ,States of America on the date specified above, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender hereof at the principal corporate trust office of SunTrust Bank, Atlanta, Atlanta, Georgia, Paying Agent and Bond Registrar, and to pay to the registered owner hereof solely from said special fund interest on the principal amount from date hereof or from the most recent Interest PaYment Date (hereinafter defined) to which interest has been paid, at the rate per annum specified above semiannually on the 1st days of .April and October in each year (each an "Interest PaYment Date"), commencing on April 1, 1997, until paYment of the principal amount hereof. PaYments of interest on this Bond shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on the fifteenth day of the calendar month next preceding each Interest Payment Date and such interest paYments shall be mailed to the registered owner at the address shown on the bond registration book. This Bond is one of a duly authorized issue of Richmond County Water and Sewerage Revenue Refunding Bonds, Series 1997, in the aggregate principal amount of $ , of' like tenor, except as to numbers, denominations, interest rates, dates of maturity and redemption provisions, (hereinafter sometimes referred to collectively as the "Bonds") issued for the purpose of providing funds: to be applied 'toward the cost of acquiring by redemption, paYment or otherwise all of the Richmond County Water and Sewerage Revenue Bonds,' Series 1986 now outstanding in the aggregate principal amount of $6,220,000 '(the "Refunded Bonds"), and to pay , 190016.7 1I-22 all expenses necessary to accomplish the foregoing, and is issued under authority of the Revenue Bond Law of the State of Georgia (Title 36, Chapter 82, Article 3 of the Official Code of Georgia Annotated, as amended), and the Richmond County--Consolidation with the City of Augusta and the City of Hephzibah Act (the, "Act"), and was duly authorized by a resolution of the Augusta-Richmond County Conuniss ion of Richmond County adopted on October 21, 1996, as supplemented on November , 1996 (the "Resolution"). Pursuant to the Resolution and simultaneously with the authorization of the Bonds, the Consolidated Government authorized the issuance of and did issue $ , aggregate principal amount of the Richmond County Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A (the "Series 1996A Bonds") and $ aggregate principal amount of the Richmond County Taxable Water and Sewerage Revenue Refunding Bonds~ Series 1996B (the "Series 1996B Bonds") . Effective January 1; 1996, the former The City Council of Augusta (the "City") and Richmond County (the "County") were consolidated pursuant to the Act and referenda held in the City and the County. Prior to consolidation, the City and the County each owned and operated a water and sewerage system. Pursuant to the ,Act, the water and sewerage systems of the City and the County are oWned and operated by the Consolidated Government, and pursuant to the Resolution, have been combined into one revenue producing undertaking, hereinafter referred to as the "System." Upon the issuance of the Bonds, the Bonds, the Series 1996A Bonds and the Series 1996B Bonds shall be the only obligations secured by a first and prior lien on the Pledged Revenues (hereafter defined) In addition to the Bonds, the Series 1996A Bonds and the Series 1996B Bonds, the Consolidated Government may issue, under certain terms and conditions as provided in the Resolution, additional revenue bonds or oblig~tions, and if issued such additional bonds or obligations will rank on a parity as to lien on the Pledged Revenues with the lien securing the payment of the Bonds and the Series 1996A Bonds and the Series 1996B Bonds. Reference to the Resolution, is hereby made for a complete description of the fund charged with, and pledged to, the paYment of the principal of and the interest on the Bonds, the nature and extent of the security, a statement of rights, duties and obligations of the Consolidated Government, the rights of the owners of the Bonds, and the terms and conditions under' which additional bonds may be issued, to all the provisions of which the owner hereof, by the acceptance of this Bond, assents. The terms and provisions of this Bond and definitions of certain tenns used hereIn are continued on the reverse side hereof arid such continued terms and provisions and definitions shall for all purposes have the same effect as though fully set forth at this place. 190016.7 1I-23 This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until this Bond shall have been authenticated and registe'red upon the bond registration book kept by the Bond Registrar for that purpose, which authentication and registration shall be evidenced by the execution by the manual signature of a duly authorized signatory of the Bond Registrar of the certificate hereon. ' 190016.7 1I-24 IN WITNESS WBER.EOP, the consolidated government of Richmond County has caused this Bond to be executed by use of the facsimile signature of the Mayor' of its Augusta-Richmond County Commission and a facsimile of its official seal to be imprinted hereon and attested by use of the facsimile signature of the Clerk of said Augusta~Richmond County Commission of Richmond County as of the 1st day of January, 1997. RICHMOND COmrrY (S' B A L) By: (facsimile) Mayor, Augusta-Richmond County Commission Attest: (facsimile) Clerk Date of Authentication and Registration: CERTIPICATB OP AUT~ICATION AND R.EGISTRATIOR This Bond is one of the Bonds described in the resolution of ___, 1996. SUN'l'RtJST BANlt, A'l'LAH'l'A" as Bond Registrar By: Authorized Signatory * * * * * *' 190016.7 II-2s VALIDATION CERTIPICATB STATB OF GEORGIA ) ) COUNTY OP RICHMOND ) The undersigned Clerk' of the Superior Court of County, State of Georgia, HEREBY CERTIPIBS that this validated and confirmed by judgment of the Superior Richmond County, Georgia, on the _____ day of 1996, and that no intervention or obj ection proceedings validating same and that no appeal of validation has been taken. Richmond Bond was Court of , was filed in the from said judgment WITNESS my facsimile signature and seal of the Superior Court of Richmond County, Georgia. (S B A L) Clerk, Superior Court, Richmond County, Georgia *********** , 190016.7 1I-26 [THEPOLLOWING SHALL BE PRINTED ON THE BACK, 01' THE SERIES 1997 BONDS] This Bond is transferabl'e only upon the bond registration book kept for that purpose at the principal corporate trust office of the Bond Registrar by the registered owner hereof in person, or by attorney, duly authorized in writing, upon the surrender and presentation to the Bond Registrar of this Bond duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or attorney duly authorized in writing, and thereupon a new registered bond, in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor. The Bonds are issuable in the form of fully registered bonds in the denomination of $5,000 or any integral multiple thereof and are exchangeable at the principal corporate trust office of the Bond Registrar in the manner, subject to the conditions and upon paYment of charges, if any, provided in the Resolution. The Bonds, the Series 1996A Bonds, the Series 1996B Bonds and such revenue bonds of the Consolidated Government as may in the future be issued on a parity therewith, are equally and ratably secured by a pledge of and a lien on the "Pledged Revenues," which are defined in the Resolution to include net operating revenues of the System (gross operating revenues of the System after provision for paYment of all reasonable expenses of operation and maintenance) and earnings on investments made with moneys and securities from 'time to time on deposit in the funds and accounts established in the Resolution, excluding any amounts held within ~he sinking fund for the Refunded Bonds. The Resolution provides, among other things, for prescribing and revising rates and collecting fees and charges for the services, facilities and commodities furnished by the System, as now existent and as hereinafter added to, extended, improved and equipped to the extent necessary to produce revenues sufficient (i) to pay the reasonable and necessary costs of operating and maintaining the System, including any contractual obligations incurred pertaining to the operation of the System, (ii) to produce Pledged Revenues (excluding earnings on investments made with moneys and securities from- time to time on deposit in the Construction Fund and any amounts held within the sinking fund for the Prior Lien Bonds)' in each Fiscal Year (as defined in the Resolution) equal to at least 110 percent of the amount required to discharge the payment of the, Bonds, the Series 1996A Bonds, the Series 1996B Bonds and any bonds issued on a parity therewith then outstanding as the same become' due and payable, (iii), to pay into the special fund designated ,"Richmond County Water and Sewerage System Sinking Fund" the amounts required to pay the principal of and the interest on the Bonds, the Series 1996A Bonds, the Series 1996B Bonds and any other bonds hereafter issued on a parity 190016.7 1I-27 therewith as the same become due payable, either at maturity or by proceedings for mandatory redemption, and to create and maintain a reserve therein for that purpose and (iv) to create and maintain a reserve for extensions and improvements to the System. This Bond shall not be deemed to constitute a debt of the State of Georgia or the Consolidated Government nor a pledge of the faith and credit of said State or Consolidated Government, nor shall the State or Consolidated Government be, subject to any pecuniary liability hereon. This Bond shall not be payable from, nor be a charge upon, any funds other than the Pledged Revenues, and is payable solely from the special fund provided therefor from the Pledged Revenues, including all future additions thereto and any other moneys deposited therein. No owner of this Bond shall ever have the right to enforce paYment hereof against any other property of the State of Georgia or the Consolidated Government, nor shall this Bond constitute a charge" lien or encumbrance, legal or equitable, upon any other property of the Consolidated Government other than the net revenues pledged to the payment hereof. The issuance of this Bond shall not directly, indirectly or contingently obligate the State or the Consolidated Government to levy or to pledge any form of taxation whatever therefor or to make any appropriation for its paYment. The Bonds may be redeemed prior to their respective maturities, either in whole at any time or in part on any Interest Payment Date, in any year not earlier than October 1, from any moneys available for such purpose as provided in the Resolution by payment of the principal amount thereof and accrued interest thereon to date of redemption, together with a premium of 2 percent of ,such principal amount if redeemed on or prior to September 30, , 1 percent of such principal amount if redeemed thereafter and on or prior to September 30, , and at par without a premium if redeemed thereafter and before maturity. In addition, the Bonds maturing October 1, are subject to mandatory redemption prior to maturity in accordance with the provisions of the Resolution, in part, by lot in such manner as may be designated by the Bond Registrar at par plus accrued interest to the redemption date, in the following principal amounts on October 1, in the years, as follows: ~ Amount $ principal amount of Bonds maturing October 1, shall be paid at maturity. 190016.7 1I-28 Notice designating the Bonds (or the portion of the principal amount o~ the Bonds in multiples of $5,000)' to be acquired by redemption, as aforesaid, shall be mailed, postage prepaid, not less than 30 days nor more than 60 days prior to the redemption date to all registered,owners of Bonds to be redeemed in whole or in part at the addresses which appear in the bond registration book, but failure so to mail any such notice shall not affect the validity of the proceedings for such redemption or cause the interest to accrue on the principal amount of the Bonds so designated for redemption after the redemption date. , ' To the extent and in the manner permitted by the Resolution, modifications, alterations, amendments, additions and recisions of the provisions of the Resolution, or of any resolution supplemental thereto or of the Bonds, may be made by the Consolidated Government with the consent of the owners of at least 65 percent in aggregate principal amount of the Bonds then outstanding, including any pari ty obligations therewith then outstanding, and without the necessity for notation hereon of reference thereto. This Bond is issued with the intent that the laws of the State of Georgia shall govern its construGtion. In case of default, the owner of this Bond shall be entitled to the remedies provided in the Resolution authorizing its issuance and in said Revenue Bond Law and any amendments thereto. It is hereby recited and certified that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have been done, have happened and have been performed in due and legal form as required by law, and that provision has been made for the allocation from the anticipated revenues of the System, as now existent and as hereafter added to, extended, improved and equipped, of amounts sufficient to pay the principal of ,and the interest on the Bonds as the same mature, or are acquired by mandatory redemption, and to create and maintain a reserve for that purpose, and that said revenues are irrevocably allocated and pledged to the payment of the Bonds and the interest thereon. ******** [STATEMENT O. INSURANCE] 190016.7 1I-29 ASSIGNMENT POR VALOB RECEIVED the undersigned hereby sells, assigns and transfers unto [please print or typewrite name and address [Please" insert Social Security or Tax Identification Number] the within Bond and all including postal zip code of assignee] rights thereunder, hereby constituting and appointing attorney to transfer this Bond on the bond registration book kept for such purpose by the Bond Registrar, with full power of substitution in the premises. DATED Notice: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond ,in every particular, without alteration or enlargement or any change whatever. Signature Guaranteed 190016.7 1I-30 ,Section 6. ReWlired Authentication. Proof of Ownership. Only those Ser~es 1996/1997 Bonds which shall have endorsed thereon a certificate of authentication and registration substantially in the form hereinbefore set forth, duly executed by the manual signature of an authorized signatory of the Bond Registrar shall be entitled to any benefit or security under this Resolution and such certificate upon any of the Series 1996/1997 Bonds when duly executed shall be conclusive evidence that such Series 1996/1997 Bond has been duly authenticated, registered and delivered. It shall not be' necessary that the same signatory of the Bond Registrar sign the certificate of authentication and registration on all of the Series 1996/1997 Bonds that may be issued hereunder at anyone time. The person in whose name any Series 1996/1997 Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and the paYment of the principal amount, interest and premium, if any, shall be made only to or upon the order of the registered owner thereof. A1l,such paYments shall be valid and effectual to satisfy and discharge the liability upon such Series 1996/1997 Bond, including redemption premium, if any, and the interest thereon to the extent of the sums so paid. Section 7. Bond Registrar. Transfer and Exchange. The Bond Registrar shall keep the bond registration book for the registration of the Series 1996/1997 Bonds and for the registration of transfers of the Series 1996/1997 Bonds as herein provided. The transfer of any Series 1996/1997 Bond shall be registered upon the bond registration book upon the surrender and presentation of the Series 1996/1997 Bond to the Bond Registrar duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or attorney authorized in writing in such form as shall be satisfactory to the Bond Registrar. Upon any such registration of transfer, the Bond Registrar shall authenticate and deliver in exchange for such Series 1996/1997 Bond or Series 1996/1997 Bonds so surrendered, a new Series 1996/1997 Bond or Series 1996/1997 Bonds registered in the name of the transferee of the same series and, of any denomination or denominations authorized by this Resolution, and in an aggregate principal amount equal to the aggregate principal amount of the Series 1996/1997 Bonds so surrendered and of the same maturi ty . 'Any Series 1996/1997 Bond, upon presentation and surrender thereof to the Bond Registrar, together with an assignment duly executed by the registered owner or duly authorized attorney, in such form as may be satisfactory to the Bond Registrar, may be exchanged, at the option of the registered-owner, for an aggregate principal amount of Series 1996/1997 Bonds of the same series and maturity equal to the principal amount of the Series 1996/1997 Bond,so surrendered and of any authorized denomination or denominations. The Bond, Registrar may make a charge for every exchange or registration of transfer of the Series 1996/1997 Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other 190016.7, 1I-31 charge shall be made to the owner for the privilege of transferring or exchanging the Series 1996/1997 Bonds under this Resolution. Section 8. Lost. Destroyed. Mutilated Bonds. If any Series 1996/1997 Bond shall become mutilated, the Bond Registrar-in its discretion and at the expense of the owner of such Series 1996/1997 Bond shall authenticate and deliver a new Series 1996/1997 Bond of like tenor and series registered in the name of the owner in exchange and substitution for such mutilated Series 1996/1997 Bond. If any Series 1996/1997 Bond shall become lost, destroyed or wrongfully taken, evidence of such loss, destruction or wrongful taking within a reasonable time thereaf~er may be submitted to the Consolidated Government and if such evidence shall be satisfactory and indemnity of a character and in an amount satisfactory shall be given, then the Consolidated Government at the expense of the owner shall cause a new Series 1996/1997 Bond of like tenor and series registered in the name of the owner to be authenticated by the Bond Registrar and delivered to the registered owner. Secti~n 9. Blank Bonds. The Consolidated Government shall make all necessary and proper provisions for the transfer and exchange of the Series 1996/1997 Bonds by the Bond Registrar and the Consolidated Government shall deliver or cause to be delivered to the Bond Registrar a sufficient quantity of blank Series 1996/1997 Bonds duly executed on behalf of the Consolidated Government, together with the certificate of validation pertaining thereto duly executed by the Clerk of the Superior Court of Richmond County, as herein provided, in order that the Bond Registrar shall at all times be able to register and authenticate the Series 1996/1997 Bonds at the earliest practicable time in accordance with the provisions of this Resolution. All Series 1996/1997 Bonds surrendered in any such exchange or registration of transfer ,shall be forthwith canceled by the Bond Registrar and a record thereof duly entered in the permanent records pertaining to the Series 1996/1997 Bonds maintained by the Bond Registrar. 190016.7 1I-32 ARTICLE III REDEMPTION OP BONDS BBPORB MATURITY Section 1. Optional Red~tioD of Series 1996/1997 Bonds. (a) The Series 1996 Bonds may be redeemed at the option of the Consolidated Government in whole at any time or in part on any Interest PaYment Date in any year not earlier than October- 1, 2006, from any moneys which may be available for such purpose and deposited with the Paying Agent on or before the date fixed for redemption. The optional redemption of the Series 1996 Bonds shall be made by the paYment of the principal amount of the Series 1996 Bonds to be redeemed and accrued interest thereon to date of redemption, together with a premium of 2 percent of such principal amount if redeemed on or prior to September 30,2007, 1 percent of such principal amount if redeemed thereafter and on or prior to September 30, 2008 and at par without a premium if redeemed thereafter and before maturity. (b) The Series 1997 Bonds may be redeemed at the option of the Consolidated Government in whole at any time or in parton any Interest PaYment Date in any year not earlier than October 1 of the year that is 10 years after the date of issuance of the Series 1997 Bonds, from any moneys which may be available for such purpose and deposited with the Paying Agent on or before the date fixed for redemption. The optional redemption of the Series 1997 Bonds shall be made by the paYment of the principal amount of the Series 1997 Bonds to be redeemed and accrued interest thereon' to date of redemption, together with a premium of 2 percent of such principal amount if redeemed after 10 years, 1 percent of such principal amount if redeemed after 11 years and at par without a premium if redeemed thereafter and before maturity. Section 2. Procedure for. and Notice of. Red~tion. The Consolidated Government shall select the maturities of Series 1996/1997 Bonds to be redeemed in part. If less than all of the Series 1996/1997 Bonds of a single series and maturity are to be redeemed, the Bond Registrar shall treat any Series 1996/1997 Bond of such series and maturity outstanding in a denomination of greater than $5,000 as two or more separate Series 1996/1997 Bonds of such series in the denomination of $5,000 each and shall assign separate numbers to each for the purpose of determining the Series 1996/1997 Bonds or the principal amount of such Series 1996/1997 Bonds in a denomination greater than $5,000 to be redeemed by lot. With respect to any Series 1996/1997 Bond called for partial redemption, the registered owner thereof shall surrender such Series 1996/1997 Bond to the Bond Registrar in exchange for one or more Series 1996/1997 Bonds in any authorized denomination in the same' series and the aggregate principal amount equal to the unredeemed principal amount of such Series 1996/1997 Bond so surrendered. 190016.7 III-l The Bond Registrar shall furnish the Consolidated Government on or before the 45th day next preceding each mandatory redemption date (or optional redemption date if such option is exercised) with its certificate setting forth the Series 1996/1997 Bon~s that have been selected for mandatory redemption (or optional redemption) either in whole or in part on such date. Not less than 30 days nor more than 60 days before any date upon which any such optional redemption or mandatory redemption is to be made a notice of such redemption signed by a ,duly authorized signatory of the Bond Registrar designating the Series 1996/1997 Bonds to be redeemed (in whole or in part) shall be filed at the place at which the principal of and interest on the Series 1996/1997 Bonds shall be payable and shall be mailed, postage prepaid, to all registered owners of Series 1996/1997 Bonds to be redeemed (in whole or in part) at addresses which appear upon the bond registration book. It is expressly provided, however, that the failure so to mail any such notice of the optional redemption or mandatory redemption of the Series 1996/1997 Bonds shall not affect the validity of the 'proceedings for such redemption or cause the interest to continue to accrue on the prin~ipal amount of such Series 1996/1997 Bonds so designated for redemption after the redemption date. However, it is expressly understood arid agreed that should the Consolidated Government hereafter elect to issue any Additional, Bonds, as herein authorized, it shall have the right to exercise any optional redemption provision to redeem the Bonds of any such future issue or issues before it redeems either series of the Series 1996/1997 Bonds, or it may redeem either series of the Series 1996/1997 Bonds' before it redeems the Bonds of any such future issue or issues, or it may redeem some of the Series 1996/1997 Bonds and some of the Bonds of any such future issue or issues at the same time. If less than a full maturity within an issue of Bonds is redeemed, then such redemption shall be by lot in such manner as may be designated by the Bond Registrar. Section 3. MAndatory Red~tioD. The mandatory redemption provisions applicable to the Series 1996/1997 Bonds shall be set forth in the Supplemental Resolution. Section 4. Pur~hAse in Qpen Market. Nothing herein contained shall be construed to limit the right of the Consolidated Government to purchase with any excess moneys, as hereinabove defined, in the Sinking Fund and for Sinking Fund purposes, the Series 1996/1997 Bonds in the open market at a price not exceeding the' callable price hereinabove set forth. Any such Series 1996/1997 Bonds so purchased cannot be reissued and same shall be disposed ,of as is hereinafter provided in this Resolution. 190016.7 1II-2 Section 5. Effect of Call for Red~tion. Notice having been given in the manner and under the conditions hereinabove'provided, the Series 1996/1997 Bonds so designated for redemption or the portion of the Series 1996/1997 Bonds so designated for partial redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price hereinabove specified, and from and after the date of redemption so designated, unless default shall be made in the payment of the Series 1996/1997 Bonds so designated for redemption or the portion of the Series 1996/1997 Bonds so designated for partial redemption, interest on the principal amount of said Series 1996/1997 Bonds so designated for redemption shall cease to accrue on the redemption date. Section 6. Cancellation of Bonds. All Bonds paid, purchased or redeemed shall be canceled or otherwise destroyed upon their payment and a record of such', destruction shall be made and preserved in the permanent records of the Consolidated Government and in the records of the Bond Registrar pertaining to the Series 1996/1997 ,Bonds. 190016.7 1II-3 ARTICLE IV CUSTODY AND APPLICATION OP PROCEEDS, CON'STRt1CTION POND The Consolidated Government covenants and agrees: Section 1. (a) ~lication of Series 1996A Bond Proceeds. From the proceeds derived from the sale of the Series 1996 Bonds, including accrued interest to date of delivery, the following ,paYments shall be made, simultaneously with the issuance and' delivery of the Series 1996A Bonds, to the extent and in the manner herein set forth: (i) An amount of said proceeds as may be necessary, together with moneys to be contributed by the Consolidated Government, shall, be deposited with ,the 1996 Escrow Agent and shall be used and applied by the 1996 Escrow Agent toward the cost of acquiring by redemption, paYment or otherwise all of the Refunded Prior Lien Bonds (except the Series 1987 Bonds) now outstanding in the aggregate principal amount of ,$17,200,224 and to pay certain expenses incident thereto, all pursuant to the terms of the 1996 Escrow Deposit Agreement. - (ii) The accrued interest so received shall be deposited into the Sinking Fund hereinafter created in Article V and ~redited to the special account designated as "Debt Service Account" to be used and applied toward the payment of interest on the Series 1996A Bonds coming due on April 1, 1997. (iii) The amount of proceeds received allocable to capitalized interest, shall be deposited in~o the Capitalized Interest Fund to be used and applied toward the payment of the interest on the Series 1996A Bonds coming due on April 1, 1997, October 1, 1997, April 1, 1998 and October 1, 1998. (i v) The premium for any Reserve Account Surety Bond for deposit into the Sinking Fund and credited to the special account designated,as "Debt Service Reserve Account" to fund the Reserve Requirement for the Series 1996A Bonds shall be paid to the Reserve Account Surety Bond Provider of such Reserve Account Surety Bond. (v) The premium for any Credit Facility insuring the payment of the principal of and interest on the Series 1996A Bonds shall be paid to the Credit Facility Provider of such Credit Facility. (vi) The Consolidated Government shall retain such amount as shall be necessary to be used and applied toward the payment of fees, charges and expenses incurred in connection with the issuance and delivery of the Series 1996A Bonds. ' 190016.7 IV-1 (vii) The balance of the proceeds derived from the sale of the Series 1996A Bonds shall be deposited into the Construction Fund hereinafter described. (B) ApplieatioD of Series 1996B Bond Proeeeds. From the proceeds derived from the sale of the Series 1996B Bonds, including accrued interest to date of delivery, the following payments shall be made, simultaneously with the issuance and delivery of the Series 1996B Bonds, to 'the extent and in the manner herein set forth: (i) An amount of said proceeds as may be necessary', together with moneys to be contributed by the Consolidated Government, shall be deposited with the 1996 Escrow Agent and shall be used and applied by the 1996 Escrow Agent toward the cost of acquiring by redemption, payment or otherwise all of the Series 1987 Bonds now outstanding in the aggregate principal amount of $2,924,591.75 and to pay certain expenses incident thereto, all pursuant to the terms of the 1996 Escrow Deposit Agreement. (ii) The accrued interest so received shall be deposited into the Sinking Fund hereinafter created in Article V and credited to the special account designated as "Debt Service Account" to be used and applied toward the payment of interest on the Series 1996B Bonds coming due on April 1, 1997. (iii)- The premium for any Reserve Account, Surety Bond for deposit into the Sinking Fund and credited to the special account designated as "Debt Service Reserve Account" to fund the Reserve Requirement for the Series 1996BBonds shall be paid to the Reserve Account Surety Bond Provider of such Reserve Account Surety Bond. (iv) The premium for any Credit Facility insuring the payment of the principal of and interest on the Series 1996B Bonds shall be paid to, the Credit Facility Provider of such Credit Facility. (v) The balance of the proceeds shall be retained by the Consolidated Government shall retain and used and applied toward the payment of fees, charges and expenses incurred in connection with the issuance and delivery of the Series 1996B Bonds. Section 2. Application of Series 1997 Bond Proceeds. From the, proceeds derived from the sale of the Series 1997 Bonds, including accrued interest to date of delivery, the following payments 'shall be made, simultaneously with the issuance and delivery of the Series 1997 Bonds, to the extent and in the manner herein set forth: (a) An amount of said proceeds as may be necessary, together with moneys to be contributed by the Consolidated Government, shall be deposited with the 1997 Escrow Agent and shall be used and applied by the 1997 Escrow Agent toward the cost of acquiring by IV-2 190016.7 redemption, payment or otherwise all of the Prior Lien Bonds now outstanding in the aggregate principal amount of $6,220,000, all pursuant to the terms of the 1997 Escrow Deposit Agreement. (b) The accrued interest so received shall be deposited into the Sinking Fund hereinafter created in Article V and credited to , the special account designated as "Debt Service Account" to be used and applied toward the paYment of interest on the Series 1997 Bonds coming due on April 1, 1997. (c) The premium for, any Reserve Account Surety Bond for deposit into the Sinking Fund and credited to the special account designated as "Debt Service Reserve Account" to fund the Reserve Requirement for the Series 1997 Bonds shall be paid to the Reserve Account Surety Bond Provider for such Reserve Account Surety Bond. (d) The premium for any Credit Facility insuring the paYment of the principal of and interest on the Series 1997 Bonds shall be paid to the Credit Facility Provider of such Credit, Facility. (e) The balance of the proceeds shall be retained by the Consolidated Government to be used and applied toward the paYment of fees, charges and expenses incurred in connection with the issuance and delivery of the Series 1997 Bonds. Section 3. Construetion Fund. (a) A special fund is hereby created and designated "Richmond County Water and Sewerage System Construction Fund,--1996" (the "Construction Fund"), for the credit of which there shall be deposited with the Construction Fund Depository all of the remaining proceeds derived from the sale of the Series 1996A Bonds, after complying with the provisions of Section 1 of this Article IV, and any other funds acquired for this purpose by gift, donation, grant or otherwise. (b) The additions to, extensions, improvements and equipping of the System shall be accomplished in accordance with, or substantially in accordance with, the Engineering Report, which is duly recorded in the Minute Book of the Consolidated Government, said Minute Book being kept in the office of the Clerkqf the Commission and the Engineering Report, by this reference thereto, is incorporated herein and made a part hereof. (c) The moneys in the Construction Fund'shall be held by the Construction Fund Depository and withdrawn and applied in accordance with, or substantially in accordance with, the Engineering Report and subject to the provisions and restrictions set forth in this Article, and the Consolidated Government will not cause or permit to be paid'from the Construction Fund any sums , except in accordance with, or substantially in accordance with, the Engineering Report. and in accordance with such provisions and 190016.7 IV-3 restrictions; provided, however, that any moneys in the Construction Fund not presently needed for the paYment of current obligations during the course of construction, as properly certified by the, Consulting Engineers, may be invested in such securities as authorized pursuant to Code Section 36-82-7 of the Official Code of Georgia Annotated, as amended, upon passage of a resolution of the governing body to that effect and proper evidence of the same being delivered to the Construction Fund Depository. Any such securities shall be held by the Construction Fund Depository for the account of the Construction Fund until maturity or until sold, and at maturity or upon such sale, the proceeds received therefrom, including interest income andpremiurn, if any, shall be immediately deposited into the Construction Fund and shall be disbursed in the manner and for the purposes hereinafter set forth. (d) Withdrawals from the Construction Fund may be made for the purpose of paying the cost of the undertaking herein contemplated, including the purchase of such property and equipment as may be useful in connection therewith, and without intending thereby to limit or restrict or to extend any definition of such cost contained in the Revenue Bond Law, as amended and as it may hereafter be amended, shall include: (i) the cost of indemnity and fidelity bonds either to secure deposits in the Construction Fund or to insure the faithful completion of any contract pertaining to said improvements; (ii) any taxes or any charges lawfully levied or assessed against the undertaking; (iii) fees and expenses of Consulting Engineers for engineering studies, surveys and estimates, and the preparation of plans and supervising the construction; (iv) legal expenses and fees and all other items of expense not elsewhere in this Section specified incident to said undertaking; (v) paYments made for labor, contractors, builders and materialmen in connection with the improvements contemplated by the undertaking and paYment for machinery and equipment and for the restoration of property damaged or destroyed in connection therewith and the repayment of advances or loans made for the purpose of paying any of the aforementioned costs; (vi) the cost of acquiring by purchase, and the amount of any award or final judgment in any proceeding to acquire by condemnation, lands and rights of way necessary for the improvements and appurtenances in connection therewith, and options and paYments thereon, and any easements or rights or any damages incident to or resulting from the making of such improvements; and (vii) to reimburse the Consolidated Government for the advance paYment of costs pertaining to the undertaking now contemplated as set forth in the Engineering Report prior to the receipt of the proceeds ,derived from the sale of the Series 1996 Bonds. ' , (e) All paYments fro~ the Construction Fu~d shall be made upon checks signed by the officers of the Consolidated Government properly authorized to sign in its behalf, but before they shall sign any such checks there shall be filed with the Construction IV-4 190016.7 Fund Depository: (i) a requisition for such paYment (the above- mentioned checks may be deemed a requisition for the purpose of this Section), stating each amount to be paid and the name of the person, firm or corporation to whom paYment thereof is, due; and (ii) a certificate attached to the requisition and certifying: (1) that an obligation in the stated amount has been incurred, and that the same is a proper charge against the Construction Fund and has not been paid, specifying the purpose and circumstances of such obligation in reasonable detail and to whom such obligation is owed, accompanied by the bill or statement of account for such obligation, or a copy thereof; (2) that they have, no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or any security interest, which should be satisfied or discharged before such paYment is made; and (3) that such requisition contains no item representing paYment on account or any retained percentages which the Consolidated Government is" at the date of such certificates, entitled to retain; and (iii) no requisition for paYment shall be made until the Consolidated Government has been furnished with a proper certificate of the Consulting Engineers that insofar as such, obligation was incurred for work, materials, supplies or equipment in connection with the undertaking, such work was actually performed or such materials, supplies or equipment were actually installed in or about the construction or delivered at the site of the work for that purpose,~ (f) No certificate of said Consulting Engineers shall be required for the Consolidated Government to make paYments for the costs and expenses incurred pursuant to Section 3 (d) of this Article and not subject 'to the supervision of said Consulting Engineers. Section 4. Other proj eet Covenants. The Consolidated Government will do all things, and take all re~sonable and prudent measures, necessary to effect the completeness of the construction program and to expend the moneys deposited in the Construction FUnd as ,expeditiously as possible in order to assure the completion of the project, in accordance with, or substantially in accordance with, the Engineering Report, on the earliest practicable date, and will indemnify itself against the usual hazards incident to the construction of an undertaking of this type, and without in any way limiting the generality of ~he foregoing, agrees to: (a) require each construction contractor, and each subcontractor to furnish a letter of credit, bond, or bonds" of such type and in ,amounts adequate to assure the faithful performance of their contracts and the paYment of all bills and claims for labor and material arising by virtue of such contract; and (b) require each construction, contractor or the subcontractor to maintain at all times until the completion and acceptance of the undertaking adequate compensation insurance for all of their employees and adequate public liability and property damage insurance for the full and complete protection of the Consolidated Government from any and all claims of every 190016.7, IV-S kind and character which may arise by virtue of the operations under their contracts, whether such operations be by themselves or by anyone directly or indirectly for them, or under their control. Section 5. Availability of Re~isitions and Certifi~ates. (a) All requisitions and certificates required by this' Article shall be retained either by the Construction Fund Depository or by the Consolidated Government, subject at all times to inspection by an officer of the Consolidated Government, the Consulting Engineers and the duly authorized Representative of the original purchaser of the Series 1996 Bonds issued hereunder. (b) When the additions and improvements to the System shall have been completed, such fact shall be evidenced by a certificate from the Consulting Engineers stating the date of completion, and should there then be any balance in the Construction Fund, such balance, unless otherwise provided, shall be paid into the special account designated as, Debt Service Account held within the Sinking Fund created in Article V hereof. Section 6. Creation of Capitalized :Interest Pundl Use o~ Mon~s in C~italized :Interest Fund. There is hereby created by the Consolidated Government a fund designated "Richmond County Water and Sewerage System Capitalized Interest FundR (the "Capitalized Interest FundR). There shall be paid into the Capitalized Interest Fund such ,amount from the proceeds of the sale of the Series 1996A Bonds allocable to capitalized interest. Such moneys shall be transferred to the Debt Service Account held within the Sinking Fund and used to pay interest coming due on the Series 1996A Bonqs on April 1, 1997, October 1, 1997, April 1, 1998 and October 1, 1998. 190016.7 IV-6 ARTICLE V REVENUES AND, FONDS The Consolidated Government covenants and agrees: , Section 1. Piscal Year. The System is now being and will continue to be operated on a Fiscal Year basis ending December 31; however, should it be deemed advisable at some later date to change the Fiscal Year, same may be done by the adoption of proper proceedings to that effect. ' Section 2. Plow of Punds. Commencing with the month in which the Series 1996 Bonds are actually issued and delivered, all revenues arising from the ownership or operation of the System and properties in connection therewith as then existent and as thereafter added to, extended and improved shall be collected by the Consolidated Government or by its agents or employees and deposited promptly with the depository to the credit of a special fund which is hereby created and designated as "Richmond County Water and Sewerage System Revenue Fund--1996" (the "Revenue Fund") and the Consolidated Government shall continue to maintain the 'Revenue, Fund separate and apart from its other funds so long as the Series 1996/1997 Bonds and any future issue or issues of Additional Bonds therewith hereafter issued are outstanding and unpaid or until provision shall have been duly made for the paYment thereof. Said revenues shall be disbursed from the Revenue Fund to the extent and in the following manner, and order: 1. Costs of County's System. As long as the Prior Lien Bonds are outstanding, there shall first be paid from the Revenue Fund the Expenses of Operation and Maintenance allocable to the County's System. 2. Sinking Fund No.1. As long as the Prior Lien Bonds , are outstanding, after there have been paid from the Revenue Fund the payments required or permitted to be made pursuant to the foregoing paragraph 1, there shall next be paid from the Revenue Fund into Sinking Fund No. 1 at the times set forth in the Prior Lien Resolutions the amounts set forth in the Prior Lien Resolutions. Upon the issuance of the Series 1997 Bonds and the deposit into the 1997 Escrow Fund of adequate moneys sufficient to acquire by redemption, paYment or otherwise of the Prior Lien Bonds, (i) the Prior Lien Resolutions shall no longer be of any force and effect, (ii) the, Consolidated Government shall no longer be required to make" the payments into Sinking Fund No. 1 described in this paragraph 2 of this Section 2, (iii) the Expenses of Operation and Maintenance of the System shall be paid without preference or priority as to the County's System or the City'S System, from the Revenue Fund pursuant to paragraph 3 of this Section 2, and (iv) the "Richmond County Water, and Sewerage Sinking Fund No.2," 190016.7 V-1 hereinafter described in paragraph 4 of this Section 2, shall be redesignated the "Richmond County Water and Sewerage S inking Fund." 3. Costs of th~ Remaining Portion of the System. After there shall have been paid from the Revenue Fund the ,sums required or permitted to be paid pursuant to the foregoing, there shall next be paid from the Revenue Fund the Expenses of Operation and Maintenance allocable to the remaining portion of the System. 4. Sinking Fund No.2. After there shall have been paid from the Revenue Fund the sums required or permitted to be paid pursuant to the foregoing, there shall next be paid from the Revenue Fund into the special fund which is hereby created and designated as "Richmond County Water and Sewerage System Sinking Fund No.2" (the "Sinking Fund")" and which shall contain two accounts, one of which is hereby created and designated as "Debt Service Account" and the other of which is hereby created and designated as "Debt Service Reserve Account" (the "Reserve Account"), the following amounts: (a) Commencing with the month in which the Series 1996 Bonds are actually issued and delivered and, taking into consideration the moneys then on hand and the moneys to be deposited therein simultaneously with the issuance and delivery of the Series 1996 Bonds, 'there shall be deposited into the Debt Service Account for the purpose of paying the principal of and interest on the Series 1996 Bonds as same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year, substantially equal monthly payments from December, 1996 to September, 1997, inclusive, in amounts sufficient to pay the interest on the Series 1996 Bonds coming due on April 1, 1997 and the principal of and interest on the Series 1996 Bonds coming due on October 1, 1997 and commencing with the month of October, 1997 from month to month thereafter an amount equal to one-sixth of the interest on the Series 1996 Bonds coming due on the next ensuing Interest Payment Date and, 'one-twelfth of the principal on the Series 1996 Bonds coming due on the next ensuing principal payment date, such aggregate monthly payments to continue from month to month until sufficient funds are on hand in the Sinking Fund to pay all of the outstanding Series 1996 Bonds as same mature or are acquired by mandatory redemption and the interest which will become due and payable thereon. (b) Commencing with the month in which the Series 1997 Bonds are actually issued and delivered and, taking into consideration the moneys then on hand and the moneys 190016.7 V-2 190016.7 to be deposited therein simultaneously with the issuance and delivery of the Series 1997 Bonds, there shall be deposited into the Debt Service Account for the purpose of paying the principal of and interest on the Series 1997 Bonds as same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year, substantially equal monthly paYments from the month of issuance of the Series 1997 Bonds to September 1997, inclusive, in amounts sufficient to pay the interest on the Series 1997 Bonds coming due on April 1, 1997 and the principal of and interest on the Series 1997 Bonds coming due on October 1, 1997 and commencing with the month of October, 1997 and from month to month thereafter an amount equal to one-sixth of the interest on the Series 1997 Bonds coming due on the next ensuing Interest PaYment Date and one- twelfth of the principal on the Series 1997 Bonds coming due on the next ensuing principal _ paYment date, such aggregate monthly payments to continue from month to month until sufficient funds are on hand in the Sinking Fund to pay all of the outstanding Series 1997 Bonds as same mature or are acquired by mandatory redemption and the interest which will become due and payable thereon. (c) Upon the issuance of the Series 1996 Bonds and the Series 1997 Bonds, the Consolidated Government shall purchase a Reserve Account Surety Bond for the credit of the Reserve Account. With respect to the issuance of Additional Bonds, there shall be deposited into the Reserve Account such amount, 'if any, as may be required to create in the Reserve Account a reserve equal to the Reserve Requirement upon the date of issuance of any Additional Bonds. The Reserve Account shall be maintained for the purpose of paying the principal of and interest on the Series 1996/1997 Bonds and any Additional Bonds falling due in any year as to which there would otherwise be a' default and if money is taken from the Reserve Account for the paYment of such principal and interest, the money so taken shall be replaced in the Reserve Account,from the first moneys in the Revenue Fund thereafter available and not required to be used for Expenses of' Operation and Maintenance of the System and not required to be paid into Sinking Fund No. 1 and the Debt Service Account as hereinabove provided in this subparagraph 4(a). (d) All sums required to be paid to comply with the provisions ot subparagraphs (a), (b) and (c) above shall be paid on or before the 25th day of the month in which the paYment is due, and if, in any month, for any reason, the full amount herein required to be paid in such month V-3 shall not be paid into the Sinking Fund, any deficiency shall be added to and shall become a part of the amount required to be paid into the Sinking Fund in the next succeeding month; provided, however, the Consolidated Government covenants and agrees that in the event it hereafter elects to issue Additional Bonds, pursuant to the provisions of this Resolution, the above stated paYments into the Sinking Fund will be increased to the extent necessary to pay the principal of and interest on the Series 1996/1997 Bonds and on any Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued coming due, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year and to create upon the issuance of the bonds to be issued and"thereafter maintain a reserve for that purpose in an amount at least equal to the Reserve Requirement on the then outstanding Series 1996/1997 Bonds, any outstanding Additional Bonds and on the proposed Additional Bonds to be issued. All Pledged Revenues immediately shall become subject to a lien to secure the paYment by the Consolidated Government of the amounts herein agreed to be paid; and the Consolidated Government hereby pledges such Pledged Revenues and hereby covenants and agrees that the Pledged Revenues are hereby pledged to the extent necessary to secure the paYment by the Consolidated Government of the amounts herein agreed to be paid with respect to the Series 1996/1997 Bonds and any Additional Bonds and that the lien of this pledge shall be junior and subordinate to the lien thereon created under the Prior Lien Resolutions until such time as the proceeds of the Series 1997 Bonds are deposited with the 1997 Escrow Agent pursuant to the 1997 Escrow Deposit, Agreement in an amount sufficient to defease, in full, the Prior Lien Bonds and such pledge shall be valid and binding against the Consolidated Government and against all other parties and against all claims of any kind against the Consolidated Government, whether arising in tort, contract or otherwise, irrespective of whether or not such parties have notice hereof. upon deposit of the proceeds of the Series 1997 Bonds with the 1997 Escrow Agent in an amount sufficient to defease, in full, the Prior Lien Bonds, the Prior Lien Resolutions shall be null and void and of no further force and effect and no paYments s~all be required from the revenues of the System pursuant to Article V, Section 2, paragraphs (1) and (2) of this Resolution. S. Debt Service Reserve Account. In the event a withdrawal of moneys is made from the Reserve Account or any draw is made upon any Reserve Account Surety Bond held within the Reserve Account for the payment of principal of or interest on the Series 1996/1997 Bonds, the first moneys available in the Revenue Fund and not required to pay Expenses of Operation and Maintenance, not required to be used to make payments into Sinking Fund No. 1 and not required to make the monthly payments into the Debt Service Account 190016.7 V-4 as hereinabove provided, shall be immediately paid into the Reserve Account or paid to the Reserve Account Surety Bond Provider as hereinafter described until the amount on deposit in the Reserve Account after payments of any amounts payable under the succeeding sentence equals the Reserve Requirement; provided, however, such paYments will in any event be,at least sufficient to restore the Reserve Account to its proper balance within 12 months after the date upon which money is taken from the Reserve Account or the date upon which a draw on any Reserve Account Surety Bond is made. In the event of a draw down on any Reserve Account Surety Bond, the Consolidated Government shall on a pro rata basis make (I) all payments (if any) into the Reserve Account necessary to' restore the amount of cash or securities, if any, on deposit, therein immediately prior to such draw and (2) make all payments to any Reserve Account Surety Bond Providers as a repayment of such draw down (such payments to be made on a pro rata basis to each Reserve Account Surety Bond Provider based upon the amount drawn and not reimbursed under each Reserve Account Surety .Bond in the event there is ever more than one Reserve Account Surety Bond issued), and (3) upon making full repayment to any Reserve Account Surety Bond Provider, shall thereafter make payments into the Reserve Account, to the extent that the then applicable Reserve Requirement exceeds the aggregate of the amount available to be drawn on a Reserve Account Surety Bond and the amoune of cash or securities, if any, on deposit therein immediately prior to such draw. Repayment ,or any draw- down on the Reserve' Account Surety Bond (other than repayments which reinstate the Reserve Account Surety Bond) and any interest or fees due the Reserve Account Surety Bond Provider under such Reserve Account Surety Bond shall be secured by a lien on the Pledged Revenues subordinate to payments into the Debt Service Account, the Reserve Account and payments to any Credit Issuer securing the Series 1996/1997 Bonds and any Additional Bonds. Any such Reserve Account Surety Bond shall be pledged to the benefit of the owners of all of the Series 1996/1997 Bonds and any Additional Bonds. The Consolidated Government reserves the right, if it deems it necessary in order to acquire such a Reserve Account Surety Bond, to amend the Resolution without the ,consent of, any of the owners of the Series, 1996/1997 Bonds and any Additional Bonds in order to grant the Reserve Account Surety Bond Provider such additional rights as it may demand, provided that such amendment shall not, in the written opinion of Bond Counsel filed with the Consolidated Government, impair or reduce the security granted to the owners of the Series 1996/1997 Bonds and any Additional Bonds or any of them. It is expressly provided, however, that if on the 2nd day of October in any year' there are on deposit in the Debt Service Account of the Sinking Fund any money and securities, same shall be withdrawn therefrom and immediately deposited into the Revenue Fund. It is expressly provided further, however, that if on the 190016.7 v-s 2nd day of October in any year there are on deposit in the Reserve Account of the Sinking Fund moneys and securities (such securities to be valued at their market value plus accrued interest thereon to October 2nd) the aggregate amount of which, together with the amounts available under any Reserve, Account Surety Bond, is in excess of the then required Reserve Requirement, such excess moneys shall be withdrawn from the Sinking Fund and immediately deposited into the Revenue Fund. The calculation and determination of such excess amount in accordance with this provision shall be the responsibility of' the chief financial officer of the Consolidated Government and such firiancial,officer shall notify the Sinking Fund Custodian and make or cause to be made any transfer of funds required pursuant to the provisions of this sUbparagraph. The Consolidated Gqvernment may at any time fulfill any portion of its obligation to fund the Reserve Account by depositing in the Reserve Account a Reserve Account Surety Bond payable on any interest and/or principal paYment date in an amount equal to any portion of the reserve requirement then required to be maintained within the Reserve Account. Before any such Reserve Account Surety Bond is substituted for cash or deposited in lieu of cash within the Reserve Account, '(A) there shall be filed with the Consolidated Government and the Sinking Fund Custodian (i) an opinion of nationally recognized bond counsel to the effect that such substitution will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes; (ii) a certificate of Moody'S or Standard & Poor's, whichever rating agency maintains a rating on the outstanding Bonds, to the effect that (a) if the issuer(s) of the Reserve Account Surety Bond were insuring paYment of principal and interest on the Bonds to which the Reserve Account relates, such Bonds would receive the highest rating available from such rating agency (or any similar rating agency then in existence) and (b) that the substitution of such Reserve Account Surety Bond for cash within the Reserve Account will not, in and of itself, result in a reduction of the ratings issued for the Series 1996/1997 Bonds or any Additional Bonds outstanding, and (iii) a copy of the Reserve Account Surety Bond issued to fulfill the Consolidated Government's obligation to fund the Reserve Account together with an opinion of counsel satisfactory to the Sinking Fund Custodian to the effect that the Reserve Account Surety Bond is valid and enforceable in accordance with its terms, (B) the Consolidated Government shall not secure any obligation to the Reserve Account Surety Bond Provider by a lien equal to or superior to the lien granted to the related series of Bonds; (C) the Reserve. Account Surety Bond shall permit a, drawing by the Consolidated Government for the full stated amount in the event (i) the Reserve Account Surety Bond expires or terminates for any reason prior to the final maturity of the related series of Bonds, arid (ii) the Consolidated Government fails to satisfy the Reserve Requirement by the deposit to the Reserve Account of cash, obligations, a sUbstitute Reserve Account Surety Bond, or any combination thereof, on or before the date of such 190016.7 V-6 expiration or termination; (D) if the rating issued by the Rating Agency to the Reserve Account Surety Bond Provider is withdrawn or reduced below the rating assigned to that of the related series of Bonds immediately prior to such action by the Rating Agency, the Consolidated Government shall provide a sUbstitute Reserve Account Surety Bond within 60 days after such rating change, and, if no substitute Reserve Account Surety Bond is obtained by such date, shall fund the Reserve Requirement in not more than 24 equal monthly paYments commencing not later than the first day of the month immediately succeeding the date representing the end of such 60 day period; and (E) if the Reserve Account Surety Bond Provider commences any insolvency proceedings or is determined, to be insolvent or fails to make paYments when due on its obligations, the Consolidated Government shall provide a, sUbstitute Reserve Account Surety Bond within 60 days thereafter, and, if no substitute Reserve Account Surety Bond is obtained by such date, shall fund the Reserve Requirement in not more than 24 equal monthly paYments commencing not later than the first day of the month immediately succeeding the date representing the end of such _60 day period. If the events described in either clauses (D) or (E) above occur, the Consolidated Government shall not relinquish the Reserve Account Surety Bond at issue until after the Reserve Requirement is fully satisfied by the provision of cash, obligations, or a substitute Reserve Account Surety Bond or any combination thereof. Each such Reserve Account Surety Bond shall be unconditional and irrevocable and shall provide liquidity for the life of the Bonds with respect to which the Reserve Account Surety Bond is purchased and, if the Reserve Account Surety Bond is purchased with respect to more than one issue of Bonds hereunder, then for the term of the Bonds for which it was purchased. So long as the balance of the Reserve Account equals the Reserve Account Requirement on the Series 1996/1997 Bonds and any Additional Bonds, any reimbursement agreement entered into between the Consolidated Government and any such Reserve Account Surety Bond Provider may provide that the Consolidated Government will be obligated to repay such provider an amount equal to any drawdown on the Reserve Account Surety Bond plus a market rate of interest over a specified period of time not t9 exceed three years but such obligation shall be junior and subordinate in right of payment to all outstanding Bonds. 6. Utility General Fund. After there have been paid from the Revenue Fund in each month all amounts required or permitted to be paid as provided herein, all moneys remaining in the Revenue Fund shall be paid at the end of each month into the special fund which is hereby created and designated the "Richmond County Water and Sewerage System Utility General Fund" (the "Utility General Fund"). Except as set forth below, expenditures shall be made from the Utility General Fund only for the purpose of: (a) paying principal of and/or interest on, or Compounded Amounts (as defined in the Prior Lien Resolutions) with respect to, all of the Prior Lien Bonds, the Series 1996/1997 Bonds and any Additional Bonds then V-7 190016.7 SENT BY;ATLANT~ G~ ; 10-Z4-SI5 ; 11 ; OZAM e sutner I ana, AS0111-; 7015 7ZZ oSe4j; Z e outstanding and falling due at any time for the payment of which money is not available in the sinking Fund securing the payment of same: prov ided, however, no moneys shall be usea to pay the principal of or interest on the Series 1996/1997 Bonds or any Additional Bonds unless Sinking Fund No. 1 is at its proper balance; (b) making paymeftts into Sinking Fund No. 1 and the Sin~ing Fund in the amounts required in order to accumulate and maintain the Reserve Accounts created therein at their respective proper balances; provided, however, no monQYs shall be deposited into the Sinking Fund unless sinking Fund No. 1 is at its proper balance; (c) paying such expenses as may be necessary to alleviate or remove the effects of an emergency having a major impact on the System caused by some extraordinary occurrence which makes it necessary to use the funds of the System, to the extent that moneys on deposit in the Revenue Fund are insufficient to meet such emergencies: (d) paying Expenses of Operation and Maintenance for which moneys are not available in the Revenue Fundr (e) making replacements, additions, extensions and improvements and a,cquiring equipment and paying the cost of any engineering studies, surveys or plans and specifications pertaining to the future development or expansion of the system deemed to be reasonable and in the best interest of the Consolidated Government and the holders of the Bonds and the Prior Lien Bonds; (f) payment of the charges of the utility General Fund Depository for investment services: and (g) paying to any Reserve Account Surety Bond Provider interest on amounts drawn under such Reserve Account Surety Bond. The Consolidated Government ,shall maintain at all times a minimum balance' in the utility General Fund equal to the li!aeer of $2,500,000 or 5 percent of the Operating Revenues of the system for the immediately preceding Fiscal Year. The Consolidated Government may wit.hdraw amounts not exceeding the following amounts from the utility General Fund and use such amounts for any lawful corporate purpose, provided further that the requir~d payments into sinking Fund No. 1 and the Sinking Fund and each of the accounts therein have been made and that the required minimum balance is on deposit in the utility General Fund: (a) $558,335 per month in Fiscal Year 1996; (b) $5,200,000 in Fiscal Year 1997; (c) $3,700,000 in Fiscal Year 1998; (d) $2,500,000 in Fiscal Year 1999 and (e) $1,000,000 in each succeeding Fiscal Year. It is expressly provided, however, that should bonds be hereafter issued ranking as to lien on the Pledged Revenues junior and subordinate to the lien- securing the payment of the series 1996/1997 Bonds authorized to be issued hereunder, including any issue or issues of Additional Bonds hereafter issued, then such payments into the utility.Ceneral Fund as provided in Paragraph 6 of this Section may be suspended and such moneys shall be available to the extent necessary to pay the principal of and interest on such junior lien bonds and to create and maintain a reasonable 190016.7 v-a 'reserve therefor and such moneys may be allocated and pledged for that purpose. Section 3. Schedule of Rates. Pees and Cll&rges.The Consolidated'Government has placed into effect a schedule of rates, fees and charges for the services, facilities and commodities furnished by the System and as often as it shall appear necessary the Consolidated Government shall revise and adjust such schedule of rates, fees and charges for either water or sewerage services and facilities, or both, to the extent necessary to produce funds sufficient to operate and maintain the System on a sound business- like basis and to create and maintain the Sinking Fund as herein provided and produce Pledged Revenues (excluding Investment Earnings, if any, on the Construction Funds created under this , Resolution or the Prior Lien Resolutions) equal to 1.1 times the amount required to discharge the paYment of the principal of and the interest on the Series 1996/1997 Bonds and any future parity issues as the same become due and payable in the then current Sinking Fund Year, either at maturity or by proceedings for, mandatory redemption but in no event, however, will said amount be less than that required to create and maintain the Debt Service Account held within Sinking Fund No.1, and the Debt Service Reserve Account held within Sinking Fund No. 1 as required by the Prior Lien Resolutions and the Debt Service Account and the Reserve Account as required by this Resolution, and to create and maintain a reserve therefor in the amount as required herein or such larger amounts as may be required in any 'proceedings authorizing any such issue or issues of Additional ,Bonds, as well as to create and maintain a reserve for extensions and improvements to the System. The rates, fees' and charges shall be classified in a reasonable manner to cover users of the services and facilities furnished by the System so that as near as practicable such rates, fees and charges shall be uniform in application to all users falling within any reasonable class. No free services shall at any time be furnished from the System and it will undertake within its health powers or such other applicable powers now or hereafter provided by law, to require the owners of all improved property abutting any water line or sewerage line to connect with the System. No customer shall be connected to the System or served by the Consolidated Government without a proper meter having been' first installed. All services shall be furnished in accordance with rates now or hereafter established, including services furnished to any county, municipal corporation or other public board or body. In the event the Consolidated Government shall fail to adopt a schedule or schedules of rates, fees and charges, or to revise its schedule or schedules of rates, fees and charges, in accordance with the provisions of this Section, any Bondholder without regard to whether any Event of Default, as defined in Article VIII of this Resolution, shall have occurred, may institute and prosecute in any 190016.7 V-9 court ,of competent jurisdiction, an appropriate action to compel the Consolidated Government to adopt a schedule or schedules of rates, fees and charges, or to revise its schedule or, schedules of rates, fees and charges in accordance with the requirements of this Section. Section 4. Transfer from Revenue Fund. All transfers from the Revenue Fund and all paYments from said Revenue Fund shall be made by checks or wire transfers authorized by the proper officers of the Consolidated Government duly authorized for such purpose. Section 5. Sinking Pund Custodian. The Sinking Fund herein provided shall be kept as a trust account in a bank separate from other deposits of the Consolidated Government, said bank to be designated as "Sinking Fund CUstodian," and is hereinafter named in Article VI hereof and it shall comply with all of the applicable provisions of this Resolution. Section 6. Sinking Pund Disbursements. Subj ect to the terms and conditions set forth in this Resolution, moneys in the Sinking ,Fund shall be disbursed for', (a) the payment of the interest on the Series 1996/1997 Bonds secured hereby as such interest becomes due and payable; (b) the payment of the principal of the Series 1996/1997 Bonds secured hereby as same becomes due and payable, either at maturity or by proceedings for mandatory redemption; (c) the optional redemption of Series 1996/1997 Bonds secured hereby before maturity at the price and under the conditions provided therefor in Article III hereof; (d) the purchase of Series 1996/1997 Bonds in the open market; provided, however, the price paid shall not exceed the authorized call price; (e) the transfer of excess moneys, if any, in the Sinking Fund (as described in the second paragraph of subparagraph (c) of Section 4 of this Article V) to the Revenue Fund; (f) the paYment of charges for paying the Series 1996/1997 ,Bonds and interest thereon and the charges for the registration of the Series 1996/1997 Bonds secured hereby ,and their transfer or exchange in accordance with the terms thereof; and (g) the paYment of any charges for investment services. ' Moneys in the Sinking Fund not' immediately required to pay the interest falling due on April 1, and not immediately required to pay the principal and interest falling due on October 1 in any year shall be held, managed, invested and reinvested by the Sinking Fund Custodian in Permitted Investments as said CUstodian may deem in its discretion to serve the best interest of the Sinking Fund without the necessity for any other specific authorization from the Consolidated Government to that effect. Any such securities so purchased shall be held by the Sinking Fund CUstodian in trust until paid at maturity or sold, and all income - or increments therefrom shall be immediately deposited to the credit of the Sinking Fund. The moneys in the Sinking Fund and all securities held in and for said Sinking Fund, and all income and increments ,190016.7 V-10 therefrom are hereby pledged to and charged with the payments mentioned in this Section. Section 7. Investment of Maneys in the Utili~ General Fund. Moneys in the Utility General Fund, not immediately needed for the purposes set forth in Paragraph 6 of Section 2 of this Article, may be invested in Permitted Investments upon passage of a resolution of the governing body to that effect and proper evidence of same being delivered to the Utility General Fund Depository. Any such securities so purchased shall be held by the Utility General Fund Depository in trust until paid at maturity or sold, and all income or increments therefrom shall be immediately deposited to the credit of the Utility General Fund. The money~ in the Utility General Fund and all securities held in and for the Utility General Fund, ,and all income and increments therefrom are hereby pledged to and charged with the paYments set forth in Paragraph 6 of Section 2 of this Article. Section 8. Refunding Bonds. Any or all of the Series 1996/1997 Bonds and Additional Bonds may be refunded at maturity, upon redemption in accordance with their terms, or with the consent of the owners of such Bonds, and the refunding Bonds so issued shall constitute Additional Bonds, if: (a) The Consqlidated Government shall have executed a certificate: (i) setting forth the aggregate amount of interest and principal of the Series 1996/1997 Bonds and Additional Bonds falling due during the ,then current Sinking Fund Year and for each subsequent Sinking Fund Year to and including the Sinking Fund Year of the last maturity of any Series 1996/1997 Bonds and Additional Bonds then outstanding (A) with respect to all Series 1996/1997 Bonds and Additional Bonds outstanding immediately prior to the date of authentication and delivery of such refunding Bonds and (B) with respect to all Series 1996/1997 Bonds and Additional Bonds to be outstanding immediately thereafter; and (ii) demonstrating that the amount s'et forth for each Sinking Fund Year pursuant to (i) (B) above is no greater than the amount set forth for such Sinking Fund Year pursuant to (i) (A) above; or (b) The Consolidated Government shall have executed a certificate: (i) setting forth with respect to the Bonds being refunded by the refunding Bonds, the aggregate interest and principal on such refunded Bonds falling due from the date of the proposed authentication and issuance of the refunding, Bonds to and through the final maturity date of the refunded Bonds; (ii) setting forth with respect to the proposed refunding Bonds, the aggregate interest and principal on such Bonds falling due on such refunding Bonds from the date of the authentication and delivery thereof to the final maturity of 190016.7 V-:11 the refunding Bonds; (iii) demonstrating that the amount set forth in (ii) above is less than the amount set forth in (i) above and (iv) demonstrating that, with respect to all Series 1996/1997 Bonds and Additional Bonds to be outstanding immediately after the date of authentication and issuance of the refunding Bonds, the maximum interest and principal falling due on such bonds in any Sinking Fund Year shall not exceed the least amount of interest and principal falling due on such bonds in any Sinking Fund Year by more than 20 percent; or (c) As an alternative to, and in lieu of, satisfying the requirements of paragraphs (a) and (b), all outstanding Series 1996/1997 Bonds and Additional Bonds are being refunded under arrangements which immediately result in making provision for ,the payment of the refunded Bonds; and (d) The requirements of section 9, paragraphs (a), (e) and (f) are met with respect to such refunding Bonds. section 9. Add! tional Bonds Generally. The Consol idated Government covenants that no other bonds or obligations of any kind or nature will hereafter be issued which are payable from or enjoy a lien on the Pledged Revenues prior to the lien created for the payment of the Prior Lien Bonds and the Series 1996/1997 Bonds and any future issue or issues of Additional Bonds herein authorized to be issued. It is expressly provided that nothing contained herein, however, restricts the issuance of additional bonds or obligations from time to time payable from the Pledged Revenues and secured by a lien on the Pledged Revenues junior and subordinate to the lien h~rein created (WSubordinate Bonds"). It is expressly provided, however, that Additional Bonds (including refunding Bonds, which do not meet the requirements of Article V, section 8) or obligations may be issued, from time to time, ranking as to lien on the Pledged Revenues of the System on a parity with the Prior Lien Bonds and the Series 1996/1997 Bonds herein authorized to be issued, provided the following conditions are met: (a) The payments covenanted to be made into Sinking Fund No. 1 and the Sinking Fund, as the same may have been enlarged and extended in any proceedings authorizing the issuance of any Additional Bonds, must be currently being made in full amount as required and the Debt Service Account and Reserve Account held within Sinking Fund No.1, and the Debt'Service Account and the Reserve Account held within the Sinking Fund must be at their proper respective balances. 190016.7 V-12 (b) Except in the case of Additional Bonds issued for refunding purposes pursuant to Article V, section 8, there shall have been procured and filed with the Consolidated Government (i) a report by Independent certified Public Accountants to the effect that the Pledged Revenues (excluding Investment Earnings, if any, on the Construction Funds created under this Resolution and, the Prior Lien Resolutions) for a period, of 12 consecutive months out of ,the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance of such Additional Bonds must have been equal to at least 1.25 times the maximum Debt Service Requirement for any succeeding Sinking Fund Year on the Series 1996/1997 Bonds and any other issue or issues of Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued, or in lieu of the foregoing formula, if a new schedule of rates and charges for the services, ,facilities and commodities furnished by the System shall have been adopted and shall be in effect and Independent certified Public Accountants shall certify that had this new rate schedule been in effect during the period described above, the Pledged Revenues of the System would have equaled the requirements of the above formula; or (ii) (x) a report by Independent Certified Public Accountants to the effect that the historical Pledged Revenues (excluding Investment Earnings, if any, on the Construction Funds created under this Resolution and the Prior Lien Resolutions) for a period of 12 consecutive months out of the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance , of the proposed Additional Bonds were equal to at least 1.10 times the historical Debt Service Requirement on all Bonds (other than Subordinate Bonds) which were outstanding during such 12-month period, and (y) a report by the Consulting Engineers to the effect that the forecasted Pledged ,Revenues (excluding Investment Earnings, if any, on the Construction Funds created under this Resolution and the Prior Lien Resolutions) for each Fiscal Year in the Forecast Period are expected to equal at least 1.25 times the maximum' annual Debt service Requirement on all Bonds (other than Subordinate Bonds) which will be outstanding immediately after the issuance of the proposed Additional Bonds, in the then current or any succeeding Sinking Fund Year. The reports by the Independent certified Publid Accountant that are 'required by this paragraph (b) may contain pro forma adjustments to historical Pledged Revenues equal to 100 percent of, the increased, annual amount attributable to any revision in the schedule of rates, fees, and charges for the services, facilities, 190016.7 V-13 and commodities furnished by the System, imposed prior to the date of delivery of the proposed Additional Bonds and not fully reflected in the historical Pledged Revenues actually received during such 12-month period. Such pro forma adjustments shall be based upon a report of the Consul ting Engineers as to the amount of Operating Revenues which would have been received during such 12- month period had the new rate schedule been in effect throughout such 12-month period. For the purpose of calculating the maximum Debt service Requirements under this subparagraph (b), the maximum annual Debt service Requirements shall be reduced by an amount equal to any capitalized interest funded from the proceeds of the Additional Bonds proposed to be issued in each succeeding Sinking Fund Year for the period for which said interest has been capitalized. (c) An Independent Certified Public Accountant shall certify in triplicate to the Consolidated Government that the requirements of subparagraph (a) above are being complied with and that the requirements of subparagraph (b) above have been met. A copy of such certificate shall be furnished to the Designated Representative of the original purchasers of the Additional Bonds herein authorized. (d) Except wh~n Bonds are being issued solely for the purpose of refunding outstanding revenue Bonds, the Consul ting Engineers for the Consolidated Government shall provide the Consolidated Government with a written report recommending the additions, extensions and improvements to be made to the System and stating that same are feasible, designating in reasonable detail the work and installation proposed to be done and the estimated cost of accomplishing the undertaking; The Consulting Engineers shall set forth in said report the forecasted Pledged Revenues to be derived from the System which will be available for debt service payments in each of the next 10 years and shall indicate the projected coverage of such debt service payments in each succeeding, Sinking Fund Year. ' ' An executed duplicate original of such report of the Consulting Engineers as required by this provision shall be furnished to the Designated Representative of the original purchasers of the Series 1996/1997 Bonds issued hereunder not less than ten days before any proceedings are taken to ,actually issue such Additional Bonds. (e) The Consolidated Government shall pass proper proceedings reciting that all of the above requirements 190016.7 V-14 have been met, shall authorize the issuance of the Additional Bonds and shall,provide in such proceedings, among other things, the date such Additional Bonds shall 'bear, the rate or rates of interest and maturity dates, as well as the registration and redemption provisions. Except for Additional Bonds that bear interest at a Variable Rate, the interest on the Additional Bonds of any such issue shall fall due on April 1 and october 1 of each year, and the Additional Bonds shall mature in installments on October 1, but, as to principal, not necessarily in each year or in equal installments. Any such proceeding or proceedings shall require the Consolidated Government to increase the monthly payments then being made into the sinking Fund to the extent necessary to pay the principal of and the interest on the Series 1996/1997 Bonds and on all such Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued as same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year, and to create upon the issuance of the proposed Additional Bonds to be issued a reserve in the Reserve Account at least equal to the Reserve Requirement on the Series 1996/1997 Bonds and any Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be, issued and to maintain said reserve in an amount sufficient for that purpose; provided, however, the Consolidated Government may satisfy funding of the 'required reserve through the purchase of a Reserve Account Surety Bond meeting the requirements of the Resolution. Any such proceeding or proceedings shall restate and reaffirm, by reference~ all of the applicable terms, conditions and provisions of this Resolution. If any Additional Bonds would bear interest at a Variable Rate, the resolutiori under which such Additional Bonds are issued shall provide a maximum rate of interest per annum which such Additional Bonds may bear. In connection wi th the issuance of any Additional Bonds under the Resolution, the Consolidated Government may obtain or cause, to be obtained one or more Credit Facilities providing for payment of all or a portion of the principal of, premium, if any, 'or interest due or to become due on such Additional Bonds, providing for the purchase of such Additional Bonds by the Credit Issuer, or providing funds for the purchase of such Additional Bonds by the Consolidated Government. ' In connection therewith the Consolidated Government shall enter into Credit Facility Agreements with such Credit Issuers providing for, among other things, (i) the payment of fees and expenses to such Credit Issuer for the issuance of such Credit Facility; (ii)the terms and conditions of such Credit Facility and the Additional Bonds affected thereby; and (iii) the security, if any, 190016.7 V-15 to be provided for the issuance of such Credit Facility. The Consolidated Government may, in a Credit Facility Agreement agree to directly reimburse such Credit Issuer for amounts paid under the terms of such Credit Facility, together with interest thereon; provided, however, that no Reimbursement Obligation shall be created, for purposes of the Resolution, until amounts are paid under such Credit Facility. Any such Reimbursement Obligation shall be deemed to be, a part of the Additional Bonds to which the Credit Facility relates which gave rise to such Reimbursement obligation, and references to principal and interest payments with respect to such Additional Bonds shall include principal and interest (except for Additional Interest) due on the Reimbursement Obligation incurred as a result of payment of such Additional Bonds with the Credit Facility . All other amounts payable under the, Credit Facility Agreement (including any Additional Interest) shall be fully subordinate to the payment of debt service on Bonds (other than Subordinate Bonds) . Any such Credit Facility shall be for the benefit of and secure such Additional Bonds or portion thereof as specified in the applicable bond resolution authorizing such Additional Bonds. (f) Such Additional Bonds or obligations and all proceedings relative thereto, and the security therefor, shall be validated as prescribed by law. section 10. Accession of Subordinate Bonds to Parity status. By proceedings authorizing Subordinate Bonds, the Consolidated Government may provide for the accession of such Subordinate Bonds to the status of complete parity with the Series 1996/1997 Bonds and any Additional Bonds then outstanding if, as of the date of accession, the conditions of Section 9, subparagraphs (a), (b) (i), (d) ~nd(e) are satisfied~ on a basis which includes all Seriei 1996/1997 Bonds and any Additional Bonds then outstanding and such Subordinate Bonds, and if on the date of accession: (a) the Reserve Account contains an amount equal to the Reserve Requirement computed on a basis which includes all Series 1996/1997 Bonds and any Additional Bonds then outstanding and such Subordinate Bonds; and (b) the Debt service Account contains the amount which would have been required to be accumulated therein on the date of accession if' the Subordinate Bonds had originally been issued as Additional Bonds. Section 11. Defeasance. When sufficient moneys or sufficient Government Obligations are deposited with the Sinking Fund Custodian or the Pay ing Agent, as the case may be, to pay any series of outstanding Series 1996/1997 Bonds or the bonds of any V-16 190016.7 issue or issues of Additional Bonds therewith hereafter issued, and the interest due or to become due thereon, and also including any premium required to be paid should such bonds be called for redemption, or provision having been duly made therefor, same shall constitute payment in full of such bonds of such issue or issues. Government Obligations shall be considered sufficient for purposes of this section only: (i) if such Government Obligations are not callable by the issuer of the Government obligations prior to their stated maturity, and (ii) if such Government obligations fall due and bear interest in such amounts and at such times as will assure sufficient cash (whether or not, such Government obligations are redeemed by the Consolidated Government pursuant to any right of redemption) to pay currently maturing interest and to pay principal and redemption premium, if any, when due on the Bonds without rendering the interest on any Bonds includable in gross income of any owner thereof for federal income tax purposes. section 12. No Prior LieD Bonds. Notwi thstanding any provision of the Prior Lien Resolutions to the contrary, so long as any Bonds are outstanding under this Resolution, no additional bonds or obligations may be issued and secured under the Prior Lien Resolutions on a parity with the Prior Lien Bonds. 190016.7 V-17 ARTICLE VI DEPOSITORIES OP MONEYS' AND SECUR.ITIES POR DEPOSIT The Consolidated Government covenants and agrees: Section 1. Depository. Sinking Fund Custodian. Security for Deposits. (a) Except as otherwise provided in this Resolution, all moneys received by the Consolidated Government under the terms hereof shall, subject to the giving of security as hereinafter provided, be deposited with the proper Depository or with the Siriking Fund CUstodian in the name of the Consolidated Government. All moneys deposited under the provisions hereof shall be deposited in banks insured by the Federal Deposit Insurance Corporation and such moneys shall be applied in accordance with the terms and for the purposes set forth in this Resolution and shall not be subject to lien or attachment or any type of security interest by any creditor of the Consolidated Government. (b) No moneys belonging to any of the funds created hereunder shall be deposited or remain on deposit with the Depository and/or Sinking Fund CUstodian in an amount in excess of the amount guaranteed by the Federal Deposit Insurance Corporation., unless such institution shall have pledged for the benefit of the Consolidated Government and the owners, of the Bonds as collateral security for the moneys deposited direct obligations of or obligations the principal and interest of which are unconditionally guaranteed by the United States of America, or other marketable securities eligible as security for the deposit of trust funds under regulations of the ,Board of Governors of the Federal Reserve System and having a market value, (exclusive of accrued interest) at least equal to the amount of such deposits. Section 2. SunTrust Bank, Atlanta, Augusta, Georgia is hereby designated as the Construction Fund Depository; SunTrust Bank, Atlanta, Augusta, Georgia, is hereby designated as the Revenue Fund Depository; SunTrust Bank, Atlanta, Atlanta, Georgia is hereby . designated as the Sinking Fund CUstodian; and SunTrust Bank, Atlanta, Atlanta, Georgia, is hereby designated as Paying Agent and Bond Registrar for the Series 1996/1997 Bonds. The Consolidated Government may, from time to time, designate ,a successor Sinking Fund Custodian; provided said Custodian complies with all of 'the provisions of this Article and the applicable provisions of this Resolution, and the Consolidated Government may, from time to time~ designate a successor Depository or . Depositories of any or all of said funds, provided said successor Depository or Depositories complies or comply with all of the provisions of this Article and the applicable provisions of this Resolution. 190016.7 VI-1 In the event the Sinking Fund CUstodian and the paying Agent for the Series 1996/1997 Bonds and all issues of Additional Bonds then outstanding is the same bank acting in both capacities, then the Sinking Fund CUstodian shall, without any further direction on the part of or any further authorization from the Consolidated Government, use and disburse the moneys in the Sinking Fund as provided, in this Resolution; except that, if, as provided under Article III of this Resolution, it redeems or buys any Series 1996/1997 Bonds issued hereunder with moneys in the Sinking Fund, then proper authorization and direction from the governing body of, the Consolidated Government shall be furnished for such use and disbursement of said moneys. 190016.7 VI-2 ARTICLB VII PARTICULAR COVENANTS The Consolidated Government covenants: Section 1. P~ent. That it will promptly pay the principal of and interest on, every'Series 1996/1997 Bond issued hereunder and secured hereby at the place, on the dates and in the manner herein and in the Series 1996/1997 Bonds specified, and any premium required for the redemption of the Series 1996/1997 Bonds, according to the true intent and meaning thereof. The principal, interest and premiums, if any, and the charges of the Paying Agent and Bond Registrar are payable solely out of the revenues of the System, which revenues are hereby pledged to the payment thereof in the manner and to the extent hereinbefore particularly specified, and nothing herein or in the Series 1996/1997 Bonds shall be construed as an obligation of the Consolidated Government to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment, except from the revenues of the System, and no Bondholder shall ever have any recourse to the power of taxation. - Section 2. Rules and Regulations. That it has and will continue to enforce reasonable rules and regulations governing the System and the 'operation thereof, and that all compensation, salaries, fees and wages paid by it in connection with the operation, repair and maintenance of the System will be reasonable, and that no more persons will be employed by it than are necessary, and that it will operate same in an efficient and economical manner, and will at all times maintain the same in good repair and in sound operating condition, and will make all necessary repairs, renewals and replacements, and that it will comply with all valid acts, rules, regulations, orders and directions of any legislative, executive, administrative or judicial body applicable to' such undertaking and enterprise. The Consolidated Government will also cause to be bonded its officials, employees or agents handling funds of the System, same to be in such amount or amounts as are customarily carried by like organizations engaged in like businesses of compa~able size. Section 3. 10 PerC!ent Retention. That, subject to the provisions of Code Section 13-10-2 of the Official Code of Georgia Annotated, as amended, any contract relating to the installation, extension, improvement, maintenance or repair of the System, shall provide for the retention of 10 percent of the gross value of the completed work; provided, however, that no amounts shall be retained on estimates or progress payments submitted after 50 percent of the work has been completed, if, in the opinion of the Consolidated Government, such work is satisfactory and has been completed on schedule. If, after discontinuing the retention, the Consolidated Government determines that the work is unsatisfactory 190016.7 VlI-1 or has fallen behind schedule , the 10 percent retention may be resumed. Nothing herein contained shall affect the retained amounts on the first 50 percent of the work which shall continue to be held to ensure satisfactory completion of the work. Final payment shall be made after certification by the Consulting Engineers that the work has been satisfactorily completed and is accepted in accordance with the contract and plans and specifications pertaining thereto. Section 4. Liens. That, except for the liens' created pursuant to the Prior Lien Resolutions and this Resolution, it will not create or suffer to be created, in the operation and maintenance of the System, any lien, security interest or charge thereon, or any part thereof, or upon the reveriues derived therefrom, ranking equally with or prior to the lien and charge herein authorized upon such revenues, and that it will pay, or cause to be discharged, or will make adequate provisions to satisfy and discharge, within 60 days after the same shall occur, all lawful claims and demands for labor, materials, supplies or other objects, which, if unpaid, might by law become a lien upon such System, or any part thereof, or upon the revenues derived therefrom; provided, however, that nothing contained in, this Section shall require the Consolidated Government to pay, or cause to be discharged, or make provision for, any such lien, security interest or charge, so long as the validity thereof shall be contested in good faith and by appropriate legal proceedings; and provided further that nothing contained in this Section shall prohibit the issuance of Additional Bonds in accordance with the terms hereof. Section S. Insurance. That it shall procure and maintain or cause to be procured and maintained so long as the Series 1996/1997 Bonds and any Additional Bonds' therewith are outstanding: (a) fire and extended coverage insurance on the insurable portions of the System in a responsible insurance company or companies authorized and qualified to do business Under the laws of the State of Georgia inarnounts not less than 80 percent of the full insurable value; (b) public liability insurance relating to the operation of the System within the limits of not less than $100,000 for injury to or death of one individual, $500,000 for injury or death growing out of anyone accident and $50,000 property damage insurance for any one acc'ident; (c) vehicular public liability insurance on any vehicle owned or leased by the Consolidated Government and used in the operation of the System within the limits of not less than $100,000 for injury to or death of one individual, $500,000 for injury or death growing out of anyone accident and $50,000 property damage insurance - for anyone accident. In lieu of maintaining the insurance 'policies described in clauses (b) and (c), the Consolidated Government may self-insure against the risks covered by such policies. The proceeds of such fire and extended coverage policies are pledged as security for the Series 1996/1997 Bonds, but shall be available for and shall, to the extent 190016.7 VII-2 necessary and desirable, be applied to the repair and replacement of the damaged or destroyed property. In the event the proceeds of such policies are not used for that purpose, then same shall be deposited in the Utility General Fund. All insurance policies shall be open to the inspection of the Bondholders or their duly authorized representatives at all reasonable times. Section 6. Records and Accounts. That it will keep the funds and accounts of the System separate from all other funds and accounts of the Consolidated Government, or any of its departments, and no paYment will be made from the revenues derived from the System which is not properly payable from such revenues, and that it will keep accurate records and accounts of all items of cost and all expenditures relating to the System, and of the revenues collected' and the application thereof, and of the number of customers, and that it will keep said records and accounts with respect to the physical properties in such manner that it will be possible at all times to identify both the amounts and the items of all additions and retirements. Such records and accounts shall be open to the inspection of all interested persons. , 'Section 7. Annual Audi t. That in the month immediately following the end of each Fiscal, Year, or as soon thereafter as practicable, it will cause an annual audit to be made of the books ,and accounts pertaining to, the System by an independent and' recognized firm of certified public accountants of suitable experience and responsibility, to be chosen by the governing body of the Consolidated Government. The annual audit shall include, among others, a statement of the income and expenses and a balance sheet, both in reasonable detail, a list of insurance policies paid for and in force respecting the System and its operation, comments by the auditor respecting compliance by the Consolidated Government with the provisions of this Resolution and that it is complying therewith or point out where, if any, 'the Consolidated Government is not in compliance therewith. Such annual audit shall be open to the inspection of all interested persons and a copy of the same shall be sent annually to the Designated Representative of the original purchasers of the Series 1996/1997 Bonds. It will also cause any additional reports or audits relating to the System to be made, as required by law, and that from time to time, as often as may be requested, it will furnish to the Designated Representative of the original purchasers of the Series 1996/1997 Bonds issued hereunder such, other information concerning the System, or the operation thereof, as may be reasonably requested. Section 8. Sale of Assets. That so long as any of the Bonds shall be outstanding, it will not encumber the System or any part thereof, and it will not sell or ,otherwise dispos~ of the System or any integral part thereof, except it may sell such System as a' ,whole, or substantially as a whole, if the proceeds of such sale be . 190016.7 VII-3 at least sufficient to provide for the payment and redemption of all outstanding Prior Lien Bonds and all outstanding Bonds and any interest accrued or to accrue thereon, and that the proceeds of any such sale shall be deposited with the Sinking Fund CUstodian for the Prior Lien Bonds and the Bonds in trust and applied by them to the extent necessary to purchase or redeem such outstanding Prior Lien Bonds or Bonds. Nothing contained herein, however, shall preclude sale of a part of the System where the sale would not, in any way, adversely affect the revenues of the System, and provided further that the proceeds from such sale are used for extensions and improvements to the System, or are paid into Sinking Fund No. 1 for deposit into the Debt Service Account held therein, or, if no Prior Lien Bonds are outstanding, paid into the Sinking Fund for deposit into the Debt Service Account in trust and applied toward the purchase or redemption of the Bonds. Section 9. Non-Arbitrage Covenant. The Consolidated Government hereby covenants and agrees that it will not, subsequent to the date of the issuance and delivery of the Series 1996/1997 Bonds, intentionally use any portion of the proceeds of th~ Series 1996/1997 Bonds to acquire higher yielding investments, or to replace funds which were used directly or indirectly to acquire higher yielding investments, except as may otherwise be permitted by the Code or the regulations promulgated thereunder, including, but not limited to" complying with the requirements of Section 148(f) of the Code and the regulations promulgated thereunder and the payment of rebate, if any, required to be made, and,that it will expend the proceeds of the Series 1996/1997 Bonds in compliance with the applicable provisions of Sections 141 to 149, inclusive, of the Code. Anything herein notwithstanding, earnings on amounts in any fund or account may, and shall to the extent necessary, be used to make the payments required under this Section 9. ' Section 10. Certificate as to Use of Proceeds. The Mayor and the Clerk of the Commission are hereby authorized and directed to execute, for and on behalf of the Consolidated Government, a certification, based upon facts, .estimates and circumstances, as to the reasonable expe~tations regarding the amount, expenditure and use of the proceeds derived from the sale of the Series 1996/1997 Bonds, as well as such other documents as may be necessary or desirable in connection with the issuance and delivery, of the Series 1996/1997 Bonds. ' Section 11. Use of Proceeds. The Series 1996A Bonds and Series 1997 Bonds are being issued by the Consolidated Government 'in compliance with the conditions necessary for interest income on the Series 1996A Bonds and Series 1997 Bonds to be excluded from gross income for federal income tax purposes pursuant to the provisions of Section 103 (a) of the Code relating to 'obligations of the State or political subdivisions ,thereof. It is the intention of the Consolidated Government that the interest on the Series 190016.7 VII-4 1996A Bonds and Series 1997 Bonds be and remain excludable from gross income for federal income tax purposes, and, to that end, the Consolidated Government hereby covenants with the holders of the Series 1996A Bonds and Series 1997 Bonds as follows: ' (a) that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the tax exempt status of interest on the Series 1996A Bonds and Series 1997 Bonds under Section 103 of the Code. (b) that they will not directly or indirectly use or permit the use of any proceeds of the Series 1996A Bonds or Series 1997 Bonds or any other funds of, the Consolidated Government or take or omit to take any action that would cause the Series 1996A Bonds and Series 1997 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. To that end', the Consolidated Government will comply with all requirements of Section 148 of the Code to the extent applicable to the Series 1996A Bonds and Series 1997 Bonds. In the event that at anytime the Consolidated Government is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investment of 'any moneys held under this Resolution, the Consolidated Government shall take such , action as may be necessary. 190016.7 , VI I - 5 ARTICLE VIII EVENTS OP DEPAtJLT, RRlnmIES Section 1. Events of Default. Each of the following events is hereby declared an "Event of Default," that is to say, if: (a) paYment of the principal of any of the Series 1996/1997 Bonds or any Additional Bonds shall-not be made when the same shall become due and payable, at its maturity or by proceedings for mandatory redemption or optional redemption; or (b) payment of any installment of interest on any Series 1996/1997 Bonds or any Additional Bond shall not be made when the same becomes due and payable, or within 30 days thereafter; or (c) the Consolidated Government shall, for any reason, be rendered incapable of fulfilling its obligations hereunder; or (d) an order or decree shall be entered, with the consent or acquiescence of the Consolidated Government, appointing a Receiver (as defined in the Revenue Bond Law), or Receivers, of the System, or of the revenues thereof, or any proceedings shall be instituted, with the consent or acquiescence of the Consolidated Government, for the purpose of effecting a composition between the Consolidated Government and its creditors, or for the purpose of adjusting claims of such creditors, pursuant to any federal or state statute now or hereafter enacted, if the claims of such creditors are under any circumstances payable'out of the revenues of the System, or if such order or decree, having been entered wi thout the consent and acquiescence of the Consolidated Government, shall not be vacated or discharged or stayed on appeal within 60 days after entry thereof, or if such proceeding, having been instituted without the consent or acquiescence of the Consolidated Government, shall not be withdrawn, or any orders entered shall not be vacated, discharged or stayed on appeal, within 60 days after the institution of such proceedings, or the entry of such orders; or (e) the Consolidated Government shall make a default in the due and punctual performance of any other of the covenants, conditions, agreements or provisions contained in the Series 1996/1997 Bonds or any Additional Bonds or in this Resolution, on the part of the Consolidated Government to 'be performed, and such default shall continue for 30 days after written notice, specifying such default and requiring same to be remedied, shall have been given to the Consolidated Government by any Bondholder; or (f) any Credit Issuer shall fail to pay the purchase price of Bonds (other than Subordinate Bonds) under any Credit Facility then in effect; or (g) a Credit Issuer delivers to the Consolidated Government a written notice stating that an "Event of Default" has occurred under the Credit Facility Agreement. Section 2. Acceleration. Upon the happening and continuance of any Event of Default specified in Section 1 of this Article (except in sub-paragraphs (f)--and (g)), then and in every such case the owners of not less than 55 percent in the principal amount of the Series 1996/1997 Bonds or any Additional Bonds then outstanding VllI-1 ,190016.7 may, by a notice in writing to the Consolidated Government, declare the principal of all, of ,the Series 1996/1997 Bonds or any Additional Bonds then outstanding (if not then due and payable) to be due and payable immediately, and upon such declaration the same shall become and be immediately due and payable, anything in the Series 1996/1997 Bonds or any Additional Bonds or herein contained to the contrary notwithstanding. Upon any declaration of acceleration under the Resolution, the Consolidated Government shall immediately draw under the applicable Credit Facility to the extent permitted by the terms thereof that amount which, together with, other amounts on deposit under the Resolution, shall be sufficient to pay the principal of and accrued interest on the related Bonds so accelerated. The above provisions are subject to the condition that if at any time after the principal of the Series 1996/1997 Bonds or any Additional Bonds shall have been so declared to be due and payable, all arrears of interest, if any, upon the Series 1996/1997 ~onds or any Additional Bonds then outstanding, and,all other indebtedness secured hereby, except the principal of any Series 1996/1997 Bonds and any Additional Bonds not then due by their terms, and the interest accrued on such Bonds since the last Interest PaYment Date, shall have been paid, or shall have been provided for any deposit with the paying Agent for such Bonds of a sum sufficient to pay the same, and every other default in the observance or performance of any covenant, condition or agreement in the Series 1996/1997 Bonds and any Additional Bonds, or herein contained, shall be made good, or provisions therefor satisfactory to such Bondholders shall have been made, then and in every such case the owners of not less than 55 percent in principal amount of such Bonds then outstanding may, by written notice to the Consolidated Government, rescind arid annul such declaration and its consequences, but no such rescission or annulment shall extend to, or affect, any subsequent default or impair any right consequent thereto. Section 3. Remedies. Upon the happening and continuance of any Event of Default, as provided in Section 1 of this Article, then and in every such case any Bondholder may proceed, subject to the provisions of Section 5 of this Article, to protect and enforce the rights of the Bondholders hereunder by a suit, action or special proceedings in equity, or at law, either for the appointment of a Receiver of the System as authorized by the Revenue Bond Law, or for the special performance of any covenant or agreement contained herein or in aid or execution of any power herein granted, or for, the enforcement of any proper legal or equitable remedy as such Bondholder shall deem most effectual to protect and enforce the rights aforesaid, insofar as such may be authorized by law. Section 4. Restoration. In case any proceeding taken by any Bondholder on account of any def~ult shall have been discontinued or abandoned for any reason, or shall have been determined adversely to such Bondholder, then and in every such case the 190016.7 VIII-2 Consolidated Government and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all ,rights, remedies, powers and duties of the Bondholders shall continue as though no such proceedings had been taken. Section s. Equa1 Benefit.. No one 'or more owners of the Bonds secured hereby shall have any right in any manner whatever by his or their action to affect, disturb, or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted; had and maintained for the equal benefit of all owners of such outstanding Bonds. Section 6. Nonexc1usivity of Remedies. No remedy herein conferred upon the Bondholders is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be curnulative~ and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity, or by statute. Section 7. No Waiver. No delay or omission of any Bondholder to exercise any right or power accruing upon any default occurring and continuing as aforesaid, shall impair any such default or be construed as an acquiescence therein and every power and remedy given by this Article to the owners of the Series 1996/1997 Bonds and any Additional Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient. Section 8. Rights of Credit Issuer. ,Notwithstanding any other provisions of the Resolution, in the event that the Consolidated Government shall draw under the Credit Facility any, amount for the payment of principal of or interest on any Bonds, then upon such payment the rights of the recipients of such payments and such principal or interest shall be deemed to continue to be unpaid and outstanding for all purposes and shall continue to be fully secured by the Resolution until the Credit Issuer, as successor and subrogee, has been paid all amounts owing in respect thereof. Such rights shall be limited and evidenced by having the Consolidated Government note the Credit Issuer's rights as successor and subrogee on its records, and the Consolidated Government shall, upon request, deliver to the Credit Issuer (i) in the case of interest on the Bonds, an acknowledgment of the Credit' Issuer's ownership of interest to be paid on the Bonds specifying the amount of interest owed, the period represented by such interest, and the numbers. of the Bonds on which such interest is owed and (ii) in the case of principal of the Bonds, either the Bonds themselves duly assigned to the Credit Issuer or new Bonds registered in the ~ame of the Credit Issuer or in such other name as the Credit Issuer shall specify. Whenever moneys become available for the paYment of any interest when overdue, the Credit Issuer shall be treated as to interest owed to it as successor and 190016.7 VIII-3 subrogee as if it had been the Bondholder of the Bonds on which such interest is payable on any special record date therefor. ~ 190016.7 VIII-4 ARTICLB IX SUPPLEMENTAL PROCBBDINGS Section 1. Ado.ption of S~lemental Proceedings. The Consolidated Government may, from time to time and at any time, adopt such resolution or resolutions supplemental hereto as shall be deemed necessary or desirable for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in this Resolution or in any supplemental resolution or in the Bonds; provided, however, that nothing herein contained shall permit, or be construed as permitting: (a) the extension of the maturity of any Bond issued hereunder; (b) the reduction in the principal amount of any Bond or the alteration of the rate or rates of interest thereon or any other modification of the terms of paYment of such principal or interest; and (c) the reduction of the percentage of the principal amount of Bonds required for consent to such supplemental resolution. A modification or amendment of the provisions with respect to the Sinking Fund is not to be deemed a change in the terms of paYment. Nothing herein contained, however, shall be construed as making necessary the approval by the Bondholders of any resolution ,not inconsistent with the terms and provisions of this Resolution and any supplemental proceedings forming a part hereof to cure any ambiguity or formal defect or omission in this Resolution or in any supplemental proceedings or to grant any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders by the Consolidated Government. Section 2. Notice. After any supplemental resolution requiring the consent of the Bondholders shall have been adopted, the Consolidated Government shall cause a notice of the adoption of such resolution to be mailed, postage prepaid, to all registered owners of Bonds 'appearing on the bond registration book kept by the Bond Registrar and a copy of such supplemental resolution shall be mailed, postage prepaid, ~o the Designated Representative of the original purchasers of any Bonds. Section 3. Re~ired Approval. No such supplemental resolution shall become effective unless the owners of at least 65 percent in aggregate principal amount of the Bonds issued hereunder then outstanding shall have filed with the Clerk of the Commission within three months after the date of adoption of such resolution properly executed instruments approving the adoption of such supplemental resolution, each such instrument to be accompanied by proof of ownership of the Bonds to which such instrument refers, which proof shall be such as is permitted by the provisions of Section 7 of this Article. 190016.7 IX-1 Section 4. Legal Action. (a) Any action or proceeding in any court objecting to such supplemental resolu~ion or to any of the_terms and provisions therein contained or the operation thereof, or in any manner questioning the propriety of the adoption thereof, or the execution by any Bondholder of any instrument purporting to approve the adoption of such resolution, or to enjoin or restrain the Consolidated Government from taking any action pursuant to the provisions thereof, must be commenced within 30 days after the Consolidated Government shall have determined that the owners of at least 55 percent in aggregate principal amount of the Bonds then outstanding, including any' Additional Bonds, have approved the adoption of such supplemental resolution. (b) Upon the expiration of such 30-day period, or, if any such action or proceedings shall be commenced, upon any judgment or decree sustaining such supplemental resolution becoming final, this Resolution and any resolution authorizing the issuance of Additional Bonds with the Bonds shall be, and be deemed to be, modified and amended in accordance with such supplemental resolution, and the respective rights, duties and obligations under this Resolution and any re,solution authorizing the issuance of Additional Bonds with the Bonds of this issue and all owners of outstanding Bonds shall thereafter be determined, exercised and enforced hereunder; Subject, in all respects, to such modifications and amendments. ' Section 5. Inco%1)oration. Any supplemental resolution adopted and becoming effective in accordance with the provisions of this Article shall thereafter form a part of this Resolution and all conditions of this Resolution for any and all purposes, and shall be effective as to all owners of Bonds then outstanding and no notation or legend of such modifications and amendments shall be required to be made thereon. Whenever referred to herein as "supplemental resolution" same shall be construed to mean such action as shall be taken by the Consolidated Government, as may be required to comply with the law then in force and effect. Section 6. Effect on Additional Bonds. In the event of the issuance of any Additional Bonds ranking pari passu with the Series 1996/1997 Bonds, then the provisions of this Article shall likewise be applicable in all respects to any such proceedings so authorizing such Additional Bonds and in any supplemental resolution amending such proceedings and the notice of such supplemental resolution shall be given such parity Bondholders and any such modification and amendment shall apply to any such Additional Bonds and the owners of such Additional Bonds. 190016.7 IX-2 Section 7., Proof of Ow.Iiership. Any request, waiver, direction, consent or other instrument required by this Resolution to be signed or executed by Bondholders may be in any number of concurrent writings of similar tenor and may be signed or executed by such Bondholders in person or by agent appointed in writing. Proof of the execution of any such instrument, or of the written appointment of such agent, and of the ownership of Bonds, if made in the following manner, shall be sufficient for any purpose of this Resolution and shall be conclusive in favor of the Consolidated Government with regard to any action taken under such instrument: , (a) The fact and date of the execution by any person of any such instrument may be proved by the certificate of any officer in any jurisdiction, who by the laws thereof, has power to take acknowledgments within such jurisdiction, to the effect that the person signing such instrument acknowledged before him the execution thereof, or by, an affidavit of a witness to such execution. (b) The fact of the ownership of the Bonds or any issue of Additional Bonds therewith shall be determined and proved by reference to the bond registration book kept by the Bond Registrar for such issue or issues of Bonds and the Consolidated Government may conclusively assume that such ownership continues until written notice to the contrary is served upon it. Any request or consent of the owner of any Bond shall bind every future owner of the same Bond in respect of anything done by the Consolidated Government pursuant to such request or consent. 190016.7 IX-3 ARTICLE X MISCELLANEOUS PROVISIONS Section 1. Severabili~. In case anyone or more of the provisions of this Resolution, or the Bonds issued hereunder, shall for any reason be held illegal or invalid, such illegality or invalidity shall not affect any other provisions of this Resolution or the Bonds, but this Resolution and the Bonds shall be construed and enforced as if such illegal or invalid provisions had not been contained therein. ' Section 2. Contract. (a) The provisions of this Resolution shall constitute a contract by and between the Consolidated Government and the owners of the Series 1996/1997 Bonds authorized to be issued hereunder and the owners of any Additional Bonds subsequently issued by the Consolidated Government, and after the issuance of the Series 1996/1997 Bonds this Resolution shall not be repealed or amended in any respect which will adversely affect the rights and interest of 'the owners of the Bonds, nor shall the Consolidated Government pass any proceedings in any way adversely affecting the rights of such owners or issuers, so long as any of the Bonds authorized by this Resolution, or the interest thereon, shall remain unpaid; provided, however, that this covenant shall not be construed as prohibiting modifications hereof or amendments hereto to the extent and in the manner as provided in Article IX hereof. (b) The provisions of this ,Resolution and every appropriate sentence hereof shall be construed as including and as being applicable to any Additional Bonds issued by the Consolidated Government, as well as to the Series 1996/1997 Bonds, and any 'Additional Bonds issued by the Consolidated Government shall be treated for all intents and purposes, unless otherwise specifically stated, just as if they had been issued together with the Series 1996/1997 Bonds and pursuant to the terms of this Resolution. (c) Any subsequent proceedings authorizing the issuance of Additional Bonds issued by the Consolidated Government as provided in this Resolution shall in nowise conflict with the', terms, and conditions of this Resolution, but shall, for all legal ,purposes, reaffir.m all of the applicable covenants, agreements and provisions of this Resolution for the equal protection and benefit of all Bondholders. Section 3. Validation. The Series 1996/1997 Bonds herein authorized shall be validated in the manner provided by law, and to that end notice of, the adoption of this Resolution and a copy thereof shall be served upon the District Attorney of the Augusta Judicial Circuit, in order that proceedings for the above purpose be instituted in the Superior Court of Richmond County. 190016.7 X-1 Section 4. Offerings Doeuments. The Consolidated Government hereby ratifies the distribution of that certain Preliminary Of,fi'cial Statement with respect to the Series 1996/1997 Bonds. The Preliminary Official Statement is hereby "deemed final" for purposes of Rule lSc2-12 of the Securities and Exchange Conunission. , The preparation and distribution of a final Official Statement with respect to the Series 1996/1997 Bonds in substantially the same form as said Preliminary Official Statement but containing the information included in this Resolution is hereby authorized and approved. An officer of the Consolidated Government' is authorized to execute such final Official Statement on behalf of the Consolidated Government. Section 5. Continuing Diselosure. The Consolidated Government hereby covenants and agrees that it will, to the extent allowed by applicable law, comply with and carry out all provisions of the Continuing Disclosure Certificate to be executed by the Consolidated Government and dated as of the date of issuance and delivery of the Series 1996/1997 Bonds, as originally executed and as it may be amended from time to time in accordance with its terms (the "DisGlosure Certificate"). Notwithstanding any other provision of this' Resolution, failure of the Consolidated Government to comply with the Disclosure Certificate shall not be considered a default hereunder, and under no circumstances shall such failure affect the validity or the security for the payment of the Series 1996/1997 Bonds., It is expressly provided, however, that any beneficial owner of the Series 1996/1997 Bonds may take such action, to the extent 'and in such manner as may be allowed by applicable law, as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Consolidated Government to comply with its obligations under this Section. The cost to the Consolidated Government of performing its obligations set forth in this Section shall be paid solely from funds lawfully available for such purpose. Nothing contained in this Resolution shall obligate the levy of any tax for the' Consolidated Government's obligations set forth in, this Section. Section 6. Sqpplemental Resolution. The Commission, after the Series 1996/1997 Bonds have actually been sold, shall adopt a resolution supplementing this resolution and among other things will specify in said supplernentalresolution the interest rate or rates per annum which the Series 1996/1997 Bonds shall bear, the principal amount of Series 1996/1997 Bonds, the maturities of the Series 1996/1997 Bonds which shall be designated' as term bonds subject to mandatory redemption, will authorize and approve the execution and delivery of a bond purchase agreement, will provide for the terms of any Credit Facility and Reserve Account Surety Bond and will provide for the actual issuance and delivery of the Series 1996/1997 Bonds upon payment therefor by the purchaser' thereof. ' 190016.7 X-2 Section 7. Repealer. Any and all resolutions or parts of resolutions in conflict with this Resolution this day adopted be and the same are hereby repealed, and this Resolution shall be in full force and effect from and after its adoption. 190016.7 X-3 ~ CLERK'S CERTIPICATE GEORGIA, RICHMOND COUNTY I, Lena Bonner, Clerk of the Augusta-Richmond County Commission (the "Commission"), DO HEREBY CERTIFY that the foregoing pages constitute a true and correct copy of the resolution adopted by said Commission at an open publ ic meeting duly called and lawfully assembled at 5:00 p.m., on the 21st day of October, 1996, authorizing the issuance of not to exceed $69,670,000 Richmond County Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A, not to exceed $3,760,000 Richmond County Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B and not to exceed $6,210,000 Richmond County Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1997, the original of said resolution being duly recorded in the Minute Book of said Commission, which Minute Book is in my custody and control. I do hereby further certify that the following members of said Commission were present at said meeting: Lee Beard Moses Todd Ulmer Bridges James B. Powell Rob Zetterberg Jerry Brigham Freddie Handy William H. Mays Larry E. Sconyers, Mayor and that the following members were absent: Henrv Bri2:ham Bill Kuhlke and that said resolution was duly adopted by a vote of Aye 7 Nay 1 Abstain WITNESS my hand and the official seal of Richmond County this the 21st day of October, 1996. #... ~,-:~....':<" ""\~.:..~~~, ~... ~.. ~ ,-,;'> ~i:\"\.\t';Ti" ' ;.-> A\'Pt'- 'b".~ ' ?....., It .~, 4;._--..::.,9.a.... : I(j;.. '. '"' ~ '" ,ro':"" :: ~'"...-- .(.~_E~U)e.: :: ~ ,..'" ~, ~- .~~'i~~ ~ ~ , ~ ~-<;:::;\ '\ --..,.,,' ~ ~ f i ,-':~0:-;-~\\:~i ~ ~ ~;,. ,.r' \\ :-"'J _~.~.... ; ~ o ~ r.l, ,.-.~- .~ I'f ,..<): ~ ~ ,6- :;..... " ~r90016.1. 1\ Y"' """"" ~ /' \ "'-.... -~ ;. '-\.~ -..........-.",.-- .:'\ ~.....,. " ...~ ~- '\ r- ,,~ I. ~ -'~.... ~,~.;..-:-.--,-.