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R-80-351f • tJ ~ '~' RESOLUTION NO.~ RESOLUTION PROVIDING FOR THE ACQUISITION, CONSTRUCTION AND ERECTION OF EXTENSIONS AND IMPROVEMENTS TO THE MUNICIPAL WATER AND SEWER SYSTEM OF THE CITY OF CLERMONT, FLORIDA; AUTHORIZING ISSUANCE BY THE CITY OF NOT EXCEEDING $1,700,000 WATER AND SEWER REVENUE BONDS, SERIES 1980, TO FINANCE THE COST THEREOF; PLEDGING THE NET REVENUES OF SAID SYSTEM AND CERTAIN MUNICIPAL EXCISE TAXES TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF THE BONDS; AND AUTHORIZING ISSUANCE BY THE CITY OF NOT EXCEEDING $1,700,000 WATER AND SEWER REVENUE BOND ANTICIPATION NOTES IN ANTICIPATION OF THE ISSUANCE OF SAID BONDS, PROVIDING FOR THE PAYMENT OF SAID NOTES AND ENTERING INTO CERTAIN COVENANTS AND AGREEMENTS WITH THE HOLDERS THEREOF. -1- r ~ r t TABLE OF CONTENTS ARTICLE I GENERAL Section 1.01 Definitions .................................... 4 Section 1.02 Authority for this Instrument .................. 7 Section 1.03 Findings ....................................... 7 Section 1.04 Project Authorized ............................. 8 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION Section 2.01 Authorization of Bonds ......................... 8 Section 2.02 Description of Bonds ........................... 8 Section 2.03 Places of Payment .............................. 9 Section 2.04 Provisions for Redemption ...................... 9 Section 2.05 Execution of Bonds and Notes ................... 10 Section 2.06 Negotiability, Registration and Exchange....... ll Section 2.07 Bonds Mutilated, Destroyed, Stolen or Lost..... 12 Section 2.08 Form of Bonds .................................. 12 ARTICLE III COVENANTS, SPECIAL FUNDS AND APPLICATION THEREOF Section 3.01 Bonds and Notes Not to Be General Indebtedness of Issuer ......................................24 Section 3.02 Security for Bonds and Notes ...................24 Section 3.03 Application of Note Proceeds ...................25 Section 3.04 Covenants of the Issuer ........................26 (A) Application of Provisions of Original Instrument ................................26 -2- ~ Y • • (B) Increased Deposits to Reserve Account.....27 (C) Maintenance of System .....................27 (D) Compliance with Laws and Regulations......27 (E) Creation of Superior Liens ................27 ARTICLE IV AUTHORIZATION OF NOTES Section 4.01 Authorization of Notes .........................27 Section 4.02 Description of Notes ...........................27 Section 4.03 Additional Covenants of the Issuer .............32 (A) Notes Payment Account .....................32 (B) Sale of Bonds .............................33 (C) Supplemental Instruments ..................33 ARTICLE V MISCELLANEOUS PROVISIONS Section 5.01 Modification or Amendment ......................33 Section 5.02 Sale of Obligations ............................33 Section 5.03 Severability of Invalid Provisions .............33 Section 5.04 Validation Authorized ..........................34 Section 5.05 Table of Contents and Headings not Part Hereof .........................................34 Section 5.06 Conflicts Repealed .............................34 Section 5.07 Effective Date .................................34 -3- ,' ~~ • BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CLERMONT, FLORIDA, as follows: ARTICLE I GENERAL 1.01 Definitions. When used in this Instrument, the following terms shall have the following meanings, unless the text clearly otherwise requires: "Bonds" shall mean the obligations of the Issuer authorized to be issued pursuant to Section 2.01 of this Instrument. "Clerk" shall mean the City Clerk of the Issuer. "Construction Account" shall mean the account or accounts created pursuant to Section 3.03 of this Instrument for the purpose of receiving bond proceeds and/or note proceeds and other funds to pay the Cost of the Project. "Cost," when used in connection with the Project, shall mean all expenses necessary, appurtenant or incidental to the acquisition and construction of the Project, including without limitation the cost of any land or interest therein or of any fixtures, equipment or personal property necessary or convenient therefor, the cost of labor and materials to complete such construction, engineering and legal expenses, fiscal expenses, expenses for estimates of costs and of revenues, expenses for plans, specifications and surveys, interest during construction, administrative expenses related solely to the acquisition and construction of the Project and all expenses incident to the financing of the Project and the issuance of the Bonds and the Notes. "Excise Taxes" shall mean the proceeds to be derived by the Issuer by reason of its levy and collection of its Public Service Tax and its Franchise Tax. "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing to and including the suc- ceeding September 30. "Franchise Tax" shall mean the excise tax levied and collected by the Issuer pursuant to an agreement with Lake Apopka Natural Gas District for a period of thirty (30) years from the date thereof, by reason of having granted to said company the right to supply natural gas to the Issuer and its inhabitants, under the authority of an ordinance duly enacted by the Issuer on November 17, 1959, and the excise tax levied and collected by the -4- t • Issuer pursuant to an agreement with Florida Power and Light Company, for a period of thirty (30) years from the date thereof, by reason of having granted to said company the right to supply electric light and power facilities and services to the Issuer and its inhabitants, under the authority of an ordinance duly enacted by the Issuer on September 20, 1970. "Government" shall mean the United States of America, acting through the Farmers Home Administration, U.S. Department of Agriculture. "Gross Revenues" shall mean all moneys derived from Rates or otherwise received by the Issuer or accruing to it in the management and operation of the System, all calculated in accordance with accepted accounting methods employed in the operation of public water and sewer systems similar to the System. "Instrument" shall mean this resolution and all resolu- tions amendatory hereof which may be hereafter duly adopted by the Issuer. "Issuer" shall mean the City of Clermont, Florida. "Mayor" shall mean the Mayor of the Issuer. "Net Revenues" shall mean Gross Revenues less Operating Expenses. "Notes" shall mean the obligations of the Issuer authorized to be issued pursuant to Section 4.01 of this Instrument. "Notes Payment Account" shall mean the account created pursuant to Section 4.03(A) of this Instrument for the purpose of receiving bond proceeds, a portion of note proceeds and other moneys required to pay the principal of and interest on the Notes as the same shall become due. "Operating Expenses" shall mean the current expenses, paid or accrued, for the operation, maintenance and repair of all facilities of the System, as calculated in accordance with such accepted accounting methods, and shall include, without limiting the generality of the foregoing, insurance premiums, administra- tive expenses of the Issuer related solely to the System, labor, cost of materials and supplies used for such operation and charges for the accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may rea- sonably be expected to be incurred in accordance with such accepted accounting methods, but shall exclude payments into the Sinking Fund or the Reserve Account therein and any allowance for -5- • N depreciation or for renewals or replacements of capital assets of the System. "Original Instrument" shall mean the resolution adopted by the Issuer on May 27, 1975 authorizing issuance of the Parity Obligations. "Parity Obligations" shall mean the Issuer's outstanding Water and Sewer Revenue Bonds, Series 1975 dated January 25, 1y77. "Pledged Funds" shall mean the Net Revenues and the Excise Taxes. "Prior Lien Obligations" shall mean the Issuer's outstanding Water and Sewer Revenue Bonds dated November 1, 1970 and Water and Sewer Revenue Refunding Bonds, Series 1972 dated November 1, 1972. "Project" shall mean the extensions and improvements to the System to be constructed pursuant to the authorization con- tained in this Instrument in accordance with certain plans and specifications now on file with the Clerk. "Public Service Tax" shall mean the excise tax levied and collected by the Issuer on every purchase of electricity, metered or bottled gas (natural, liquified, petroleum gas or manufactured), water service, telephone service and telegraph service within the corporate territorial limits of the Issuer pursuant to the provisions of nonemergency Ordinance No. 156 duly enacted by the Issuer on October 10, 1957 pursuant to Section 166.231, Florida Statutes, formerly Section 167.431, Florida Statutes. "Rates" shall mean the rates, fees, rentals and other charges to be made and collected by the Issuer for the use of the products, services and facilities to be provided by the System. "Reserve Account" shall mean the account created pur- suant to the provisions of Section 3.04(C)(3) of the Original Instrument. "Revenue Fund" shall mean the account created pursuant to the provisions of Section 3.04(B) of the Original Instrument. "Sinking Fund" shall mean the account created pursuant to Section 3.04(D) of this Instrument, into which moneys shall be transferred from the Revenue Fund for the payment of the prin- cipal of and interest on the Bonds. "System" shall mean the complete water and sewer system now owned, operated and maintained by the Issuer, together with -6- ~ ~ any and all improvements, extensions and additions thereto hereafter constructed or acquired, including the Project. 1.02 Authority for this Instrument. This Instrument is adopted pursuant to the provisions of Part II, Chapter 166, Florida Statutes (1979), Section 3.04(J) of the Original Instrument and other applicable provisions of law. 1.03 Findings. It is hereby found and determined that: (A) For the benefit of its inhabitants, the Issuer presently owns and operates the System, and the Project is necessary for the continued preservation of the health, welfare, convenience and safety of the Issuer and its inhabitants. (B) The Issuer has been advised by its consulting engi- neers and it is hereby found and determined that the estimated Cost of the Project is $1,700,000, which shall be paid initially with the proceeds of the sale of the Notes and which shall ulti- mately be financed through the issuance of the Bonds. (C) The revenues to be derived annually from the Rates and the Excise Taxes will be sufficient to pay, as the same shall become due and payable, the principal of and interest on the Prior Lien Obligations, the Parity Obligations and the Bonds and Operating Expenses. It is estimated that the period of use- fulness of the System will exceed forty-one years. (D) It is deemed necessary and desirable to pledge the Pledged Funds to the payment of the principal of and interest on the Bonds and the Notes. No part of the Pledged Funds have been pledged or hypothecated except with respect to the Notes, the Bonds and the Parity Obligations, except that the Pledged Funds have been pledged first to the payment of the principal of and interest on the Prior Lien Obligations. The Original Instrument, in Section 3.04(J) thereof provides for the issuance of addi- tional parity obligations under the terms, limitations and con- ditions provided therein; and the Issuer will issue the Bonds and the Notes as additional parity obligations pursuant to written consent of the Government, owner and holder of all of the Parity Obligations, and waiver of the provisions of Section 3.04(J) of the Original Instrument. The Bonds and the Notes shall be on a parity and rank equally as to lien on and source and security for payment from the Pledged Funds, and in all other respects, with the Parity Obligations. (E) This Instrument is declared to be and shall consti- tute a contract between the Issuer and all of the holders of the Bonds and the Notes; and the covenants and agreements herein set forth to be performed by the Issuer are and shall be for the equal benefit, protection and security of all of the legal -7- • holders of any and all of the Bonds shall be of equal rank and without distinction of any of the Bonds or except as hereinafter provided. and the Notes, all of which preference, priority or the Notes over any other, (F) The Issuer is not, under this Instrument, obligated to levy any ad valorem taxes on any real or personal property situated within its corporate territorial limits to pay the prin- cipal of or interest on the Bonds or the Notes or to pay Operating Expenses. Neither the Bonds nor the Notes shall constitute a lien upon the System or any other property of the Issuer or situated within its corporate territorial limits. (G) Pursuant to an agreement by and between the Issuer and the Government, the Government has contracted to purchase the Bonds from the Issuer upon substantial completion of the Project. It is necessary and urgent that funds be made immediately available in order to provide money for the commencement of the Project at this time and for the continued construction of the Project until its substantial completion. The Issuer must, therefore, anticipate the receipt by it of the proceeds to be derived from the sale of the Bonds, and the Issuer has determined that it is in the best interest of the Issuer and its residents and inhabitants that the Notes be issued pursuant to this resolu- tion in anticipation of the receipt by the Issuer of the proceeds from the sale of the Bonds. 1.04 Project Authorized. The Project is hereby authorized. ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION 2.01 Authorization of Bonds. Subject and pursuant to the provisions of this Instrument, obligations of the Issuer to be known as "Water and Sewer Revenue Bonds, Series 1980," are hereby authorized to be issued in an aggregate principal amount not exceeding One Million Seven Hundred Thousand Dollars ($1,700,000) for the purpose of providing funds to pay the prin- cipal of the Notes on the maturity date thereof and thereby pro- vide the long-term financing of the Cost of the Project, or for the purpose of providing funds directly to pay the Cost of the Project in the event that the Issuer shall elect not to issue the Notes pursuant to Section 5.02 of this Instrument. 2.02 Description of Bonds. The Bonds shall be dated as of the date of their delivery; shall bear interest at a rate or rates not exceeding the maximum rate permitted by law, payable on September 1, 1981 and annually thereafter on September 1 of each -8- r year; and shall be issued as a single fully-registered Bond payable in installments in the amounts and on September 1 of the years as follows or as coupon Bonds registrable as to both prin- cipal and interest, numbered consecutively from one upward in order of maturity, in the denomination of $1,000 each and maturing on September 1 in the years and amounts as follows: Years Amounts Years Amounts 1983 $16,000 2002 $40,000 1984 17,000 2003 42,000 1985 17,000 2004 44,000 1986 18,000 2005 46,000 1987 19,000 2006 48,000 1988 20,000 2007 51,000 1989 21,000 2008 53,000 1990 22,000 2009 56,000 1991 23,000 2010 59,000 1992 24,000 2011 62,000 1993 26,000 2012 65,000 1994 27,000 2013 68,000 1995 28,000 2014 72,000 1996 30,000 2015 75,000 1997 31,000 2016 79,000 1998 33,000 2017 83,000 1999 34,000 2018 87,000 2000 36,000 2019 91,000 2001 38,000 2020 99,000 Provided, however, if the Bonds shall be issued on September 1, 1981 or thereafter, each of such installment or maturity dates shall be deferred by one year for each year or fraction of a year that the issuance of the Bonds shall be deferred beyond August 31, 1981, and all other dates herein shall be deferred correspondingly. 2.03 Places of Payment. The Bonds and the Notes shall be payable as to both principal and interest at such place or places as the Issuer shall hereafter by resolution designate, in lawful money of the United States of America; provided, however, that Bonds held by the Government shall be payable at "Finance Office, U. S. Department of Agriculture, Farmers Home Administration, 1520 Market Street, St. Louis, Missouri 63103," or at such other places as the Government shall from time to time in writing designate to the Issuer. The Bonds shall bear interest from the date of issue, and in the case of coupon Bonds in accordance with and upon surrender of the appurtenant interest coupons as they severally mature, unless registered. 2.U4 Provisions for Redemption. In this section the word "Bonds" shall be deemed to include the respective -9- • h installments of principal of the fully-registered single Bond corresponding to the serially maturing coupon Bonds. Bonds maturing on or before September 1, 1990 are not subject to redemption prior to their respective stated dates of maturity. Bonds maturing September 1, 1991 and thereafter shall, at the option of the Issuer, be redeemable in whole or in part, in inverse numerical and maturity order, on September 1, 1990 or on any interest payment date thereafter at par and accrued interest, plus the following premiums, expressed as percentages of the par value of the Bonds so redeemed, if redeemed in the following years: 5~, if redeemed on September 1, 1990 or thereafter, to and including September 1, 1992; 4~, if redeemed on September 1, 1993 or thereafter, to and including September 1, 1997; 3~, if redeemed on September 1, 1998 or thereafter, to and including September 1, 2001; 2g, if redeemed on September 1, 2002 or thereafter, to and including September 1, 2005; 1~, if redeemed on September 1, 2006 or thereafter, to and including September 1, 2009; With out premium, if redeemed Sep tember 1, 2010 or ther eafter, but prior to maturit y; provided, however, that at least thirty (30) days prior to the redemption date written notice of such redemption shall be given to the paying agents for the Bonds and to each of the registered owners at their respective addresses as they appear upon the registration books of the Clerk and shall be published at least once in a financial newspaper published in the City of New York, New York. Bonds held by the Government may be redeemed by the Issuer on any interest payment date prior to maturity at the price of par and accrued interest, without premium. 2.05 Execution of Bonds and Notes. The Bonds and the Notes shall be executed in the name of the Issuer with the manual or facsimile signature of the Mayor and the corporate seal of the Issuer shall be impressed or imprinted thereon, attested and countersigned with the manual or facsimile signature of the Clerk, provided that the signature of one of such officers shall be manually executed thereon. In case any one or more of the officers who shall have signed or sealed any of the Bonds or Notes or whose facsimile signature shall appear thereon shall cease to be such officer of the Issuer before the Bonds or Notes -10- • w so signed and sealed have been actually sold and delivered such Bonds or Notes may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds or Notes had not ceased to hold such office. Any Bond or Note may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bond or Note shall hold the proper office of the Issuer, although at the date of such Bonds or Notes such person may not have held such office or may not have been so authorized. The coupons attached to the Bonds shall be authenticated with 'the facsimile signatures of any present or future Mayor and Clerk. The Issuer may adopt and use for such purposes the facsimile signatures of any such persons who shall have held such offices at any time after the date of the adoption of this Instrument, notwithstanding that either or both shall have ceased to hold such office at the time the Bonds or the Notes shall be actually sold and delivered. 2.06 Negotiability, Registration and Exchange. The Bonds and the Notes shall be and shall have all the qualities and incidents of negotiable instruments under the law merchant and the Laws of the State of Florida, and each successive holder, in accepting any of the Bonds or the Notes shall be conclusively deemed to have agreed that the same shall be and have all of said qualities and incidents of negotiable instruments. The coupon Bonds may be registered, at the option of the holder, as to both principal and interest upon the books kept for the registration and transfer of Bonds by the Clerk, as Bond Registrar, and endorsed upon the Bonds by the Bond Registrar in the space provided thereon. After such registration, no transfer of the Bonds shall be valid unless made at the office of the Bond Registrar by the registered owner or by his duly authorized agent or representative and similarly noted on the Bonds, but at the expense of the holder the Bonds may be discharged from registra- tion by being in like manner transferred to bearer, and thereupon transferability by delivery shall be restored. At the option and expense of the holder, the Bonds may thereafter again from time to time be registered or transferred to bearer as before. The Bond Registrar shall not be required to make any such registra- tion or transfer of Bonds during fifteen (15) days next preceding an interest payment date on the Bonds, or in the case of any pro- posed redemption of Bonds, after such Bonds have been selected for redemption. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any Bond and the interest on any Bond shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond including the interest thereon to the extent of the sum or sums so paid. -11- • N The single fully-registered Bond may be exchanged by the owner and holder thereof at any time, not more than ninety days after surrender of such Bond to the Bond Registrar, for an equal aggregate principal amount of coupon Bonds maturing in the years and amounts corresponding to the years and amounts of the unpaid installments of principal of the single fully-registered Bond and in the form prescribed for coupon Bonds in Section 2.08 of this Instrument; and if all of the coupon Bonds outstanding shall be owned and held by a single bondholder such Bonds may, in like manner, be exchanged at the expense of such bondholder at any time, not more than ninety days after surrender of such Bonds to the Bond Registrar, for a single fully-registered Bond in prin- cipal amount equal to the aggregate principal amount of such coupon Bonds surrendered, maturing in installments in the years and amounts corresponding to the years and amounts of the maturi- ties of such coupon Bonds so surrendered and in the form prescribed for the single Bond in Section 2.08 of this Instrument. 2.07 Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion issue and deliver a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrender and cancellation of such mutilated Bond, or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the owner furnishing the Issuer satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer may prescribe and paying such expenses as the Issuer may incur. All Bonds so surrendered shall be cancelled by the Clerk. If any such Bonds shall have matured or be about to mature, instead of issuing a substitute Bond the Issuer may pay the same, upon being indemnified as aforesaid, and if such Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this section shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bonds be at any time found by anyone, and such dupli- cate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the Pledged Funds to the same extent as all other Bonds issued hereunder. 2.08 Form of Bonds. The text of the Bonds shall be in substantially the following forms, with only such omissions, insertions and variations as may be necessary and/or desirable and approved by the Mayor or the Clerk prior to the issuance thereof (which necessity and/or desirability and approval shall be presumed by such officer's execution of the Bonds and the Issuer's delivery of the Bonds to the Government or other purchaser thereof): -12- • M (FORM OF COUPON BOND) No. UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF LAKE CITY OF CLERMONT $1,000 WATER AND SEWER REVENUE BOND, SERIES 1980 KNOW ALL MEN BY THESE PRESENTS, that Clermont, a municipal corporation created and by virtue of the Laws of the State of Florida value received, hereby promises to pay to the Bond be registered to the registered holder a on the first day of September, 19 from the hereinafter mentioned, the principal sum of ONE THOUSAND DOLLARS the City of existing under and (the "Issuer"), for bearer, or if this s herein provided, special funds and to pay interest thereon, from the date of the delivery of this Bond to the purchaser thereof, solely from said special funds, at the rate of per centum ( ~) per annum, payable on September 1, 1981 and annually thereafter on the first day of September of each year upon the presentation and surrender of the annexed coupons as they severally fall due, unless registered. Both principal of and interest on this Bond are payable at , , in lawful money of the United States of America. This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $1,700,000 of like date, tenor and effect, except as to number and date of maturity, issued to finance the cost of acquiring, erecting and constructing exten- sions and improvements to the combined municipal water and sewer system of the Issuer (the "System"), under the authority of and in full compliance with the Constitution and Statutes of the State of Florida, particularly Part II, Chapter 166, Florida Statutes (1979), and a resolution duly adopted by the Issuer on May 27, 1975, as supplemented by a resolution duly adopted by the Issuer on , 1980 (jointly, the "Resolution"), and is subject to all the terms and conditions of the Resolution. This Bond and the interest thereon are payable solely from and secured by a lien upon and a pledge of the net revenues to be derived from the operation of the System and certain muni- cipal Excise Taxes (defined in the Resolution), in the manner described in the Resolution. It is expressly agreed by the holder of this Bond that the full faith and credit of the Issuer are not pledged to the payment of the principal of and interest -13- • N on this Bond and that such holder shall never have the right to require or compel the exercise of any taxing power of the Issuer to the payment of such principal and interest or the cost of maintaining, repairing and operating the System. This Bond and the obligation evidenced hereby shall not constitute a lien upon the System or any part thereof or upon any other property of the Issuer or situated within its corporate limits, but shall consti- tute a lien only on the net revenues derived from the operation of the System and said Excise Taxes. The Bonds of this issue are payable on a parity, equally and ratably, from such net revenues and Excise Taxes with the Issuer's outstanding Water and Sewer Revenue Bonds, Series 1975 dated January 25, 1977 (the "parity obligations"). The lien of the holders of the Bonds of the issue of which this Bond is one on the revenues of the System and the Excise Taxes is junior, subordinate and inferior in every respect to the lien on such revenues and Excise Taxes in favor of the Issuer's outstanding Water and Sewer Revenue Bonds dated November 1, 1970 and Water and Sewer Revenue Refunding Bonds, Series 1972 dated November 1, 1972 (the "prior lien obligations"). The Issuer in the Resolution has covenanted and agreed with the holders of the Bonds of the issue of which this Bond is one that it will not hereafter issue any additional obligations payable from the revenues of the System and the Excise Taxes on a parity with the prior lien obligations. In and by the Resolution, the Issuer has covenanted and agreed with the holders of the Bonds of this issue that it will fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the product, services and facilities of the System which, together with the Excise Taxes, will always produce cash revenues sufficient to pay, and out of such funds pay, as the same shall become due, the principal of and interest on the parity obligations, the prior lien obligations and the Bonds, the necessary expenses of operating and maintaining the System and all reserve, Sinking Fund or other payments required by the Resolution, and that such rates, rentals, fees and other charges will not be reduced so as to be insufficient to provide funds for such purposes, and that it will levy and collect said Excise Taxes at such rates, not exceeding the maximum rates per- mitted by law, as shall be necessary to provide funds which, together with the revenues of the System, will be sufficient to pay, and out of such funds pay, as the same shall become due, the principal of and interest on the parity obligations, the prior lien obligations and the Bonds, the necessary expenses of operating and maintaining the System and all reserve, Sinking Fund or other payments required by the Resolution, and that the rates of such Excise Taxes will not be reduced so as to be insuf- ficient to provide funds for such purposes. -14- • N As provided in the Resolution, this Bond and all of the Bonds then outstanding are exchangeable at the expense of the holder or registered owner hereof at any time, not less than ninety days after surrender of this Bond and all of the Bonds then outstanding to the Clerk hereinafter mentioned, as Bond Registrar, for a single fully-registered Bond in the denomination equal to the aggregate principal amount of this Bond plus all of the Bonds then outstanding and in the form of such single Bond as provided for in the Resolution. The Bonds of this issue maturing on or before September 1, 1990 are not subject to redemption prior to their respective stated dates of maturity. Bonds maturing September 1, 1991 and thereafter shall, at the option of the Issuer, be redeemable in whole or in part, in inverse numerical and maturity order, on September 1, 1990 or on any interest payment date thereafter at par and accrued interest, plus the following premiums, expressed as percentages of the par value of the Bonds so redeemed, if redeemed in the following years: 5~, if redeemed on September 1, 1990 or thereafter, to and including September 1, 1992; 4~, if redeemed on September 1, 1993 or thereafter, to and including September 1, 1997; 3~, if redeemed on September 1, 1998 or thereafter, to and including September 1, 2001; 2$, if redeemed on September 1, 2002 or thereafter, to and including September 1, 2005; 1$, if redeemed on September 1, 2006 or thereafter, to and including September 1, 2009; With out premium, if redeemed September 1, 2010 or ther eafter, but prior to maturity; provided, however, that notice of such redemption shall be given in the manner required by the Resolution. It is hereby certified and recited that all acts, conditions, and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond, exist, have happened and have been performed, in regular and due form and time as required by the Laws and Constitution of the State of Florida applicable thereto, and that the issuance of this Bond, and of the issue of Bonds of which this Bond is one, does not violate any constitutional, statutory or charter limitations or provisions. -15- a~ This Bond and the coupons appertaining thereto are and have all the qualities and incidents of negotiable instruments under the law merchant and the Laws of the State of Florida. This Bond may be registered as to both principal and interest in accordance with the provisions endorsed hereon. This Bond and the issue of which this Bond is one were validated by Judgment of the Circuit Court for Lake County, ren- dered on 19 IN WITNESS WHEREOF, the City of Clermont, Florida, has issued this Bond and has caused the same to be signed by its Mayor and attested and countersigned by its Clerk, either manually or with their facsimile signatures, and its corporate seal or a facsimile thereof to be affixed, impressed, imprinted or engraved hereon, and the interest coupons hereto attached to be executed with the facsimile signatures of such officers, all as of CITY OF CLERMONT, FLORIDA By Mayor (SEAL) ATTESTED AND COUNTERSIGNED: City Clerk (FORM OF COUPON) No. On the 1st day of September, 19 unless the Bond to which this coupon is attached is callable and shall have been previously duly called for prior redemption and payment thereof duly made or provided for, the City of Clermont, Florida, will pay to bearer at , Florida, from the special funds described in the Bond to which this coupon is attached, the amount shown hereon in lawful money of the United States of America, upon presentation and surrender of this coupon, being one year's interest then due on its Water and Sewer Revenue Bond, Series 1980, dated 19 No. -16- r (SEAL) ATTESTED AND COUNTERSIGNED: City Clerk CITY OF CLERMONT, FLORIDA By Mayor (PROVISIONS FOR REGISTRATION ON COUPON BONDS) PROVISIONS FOR REGISTRATION This Bond may be registered as to both principal and interest on books kept for such purpose by said Clerk, as Bond Registrar, such registration being noted hereon by the Bond Registrar in the registration blank below, the coupons being surrendered and the interest being payable only to the registered holder, remitted by mail, after which registration no transfer shall be valid unless made by the registered holder or his legal representative and similarly noted by the Bond Registrar on said books and in the registration blank below, but it may be discharged from registration by being transferred to bearer, after which it shall be transferable by delivery, or it may again be registered as before. Upon reconversion of this Bond into a coupon Bond, coupons representing the interest to accrue upon the Bond to date of maturity shall be attached hereto. Date of ~ Registration ~ Name Re and Address of ~ istered Owner ( Signature of Bond Re istrar I ~ ~ -17- • (FORM OF SINGLE BOND) $1,700,000 $1,700,000 UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF LAKE CITY OF CLERMONT WATER AND SEWER REVENUE BOND, SERIES 1980 KNOW ALL MEN BY THESE PRESENTS, that the City of Clermont, a municipal corporation created and existing under and by virtue of the Laws of the State of Florida (the "Issuer"), for value received, hereby promises to pay to from the special funds hereinafter mentioned, the principal sum of One Million Seven Hundred Thousand Dollars ($1,700,000) on the first day of September in the years and installments as follows: Principal Year Amount Year Principal ~mn~int 1983 $16,000 2002 $40,000 1984 17,000 2003 42,000 1985 17,000 2004 44,000 1986 18,000 2005 4n,000 1987 19,000 2006 48,000 1988 20,000 2007 51,000 1989 21,000 2008 53,000 1990 22,000 2009 56,000 1991 23,000 2010 59,000 1992 24,000 2011 62,000 1993 26,000 2012 65,000 1994 27,000 2013 68,000 1995 28,000 2014 72,000 1996 30,000 2015 75,000 1997 31,000 2016 79,000 1998 33,000 2017 83,000 1999 34,000 2018 87,000 2000 36,000 2019 91,000 2001 38,000 2010 99,000 and to pay, solely from said special funds, interest on the balance of said principal sum from time to time remaining unpaid, from the date of the delivery of this Bond to the purchaser thereof, at the rate of per centum ( $) per annum, payable on September 1, 1981 and annually thereafter on the first day of September of each year. Both principal of and interest on -18- • r this Bond are payable at , in lawful money of the United States of America. Payments of principal and interest, including pre- payments of installments of principal as hereinafter provided, shall be noted by the owner and holder hereof on the Payment Record made a part of this Bond, and written notice of the making of such notation shall be promptly sent to the Issuer. Upon final payment of principal and interest this Bond shall be surrendered to the Issuer. This Bond is issued to finance the cost of acquiring, erecting and constructing extensions and improvements to the com- bined municipal water and sewer system of the Issuer (the "System"), under the authority of and in full compliance with the Constitution and Statutes of the State of Florida, particularly Part II, Chapter 166, Florida Statutes (1979), and a resolution duly adopted by the Issuer on May 27, 1975, as supplemented by a resolution duly adopted by the Issuer on 1980 (jointly, the "Resolution"), and is subject to all the terms and conditions of the Resolution. This Bond and the interest thereon are payable solely from and secured by a lien upon and a pledge of the net revenues to be derived from the operation of the System and certain muni- cipal Excise Taxes (defined in the Resolution), in the manner described in the Resolution. It is expressly agreed by the holder of this Bond that the full faith and credit of the Issuer are not pledged to the payment of the principal of and interest on this Bond and that such holder shall never have the right to require or compel the exercise of any taxing power of the Issuer to the payment of such principal and interest or the cost of maintaining, repairing and operating the System. This Bond and the obligation evidenced hereby shall not constitute a lien upon the System or any part thereof or upon any other property of the Issuer or situated within its corporate limits, but shall consti- tute a lien only on the net revenues derived from the operation of the System and said Excise Taxes. This Bond is payable on a parity, equally and ratably, from such net revenues and Excise Taxes with the Issuer's outstanding Water and Sewer Revenue Bonds, Series 1975 dated January 25, 1977 (the "parity obligations"). The lien in favor of the holder of this Bond on the revenues of the System and the Excise Taxes is junior, subor- dinate and inferior in every respect to the lien on such revenues and the Excise Taxes in favor of the Issuer's outstanding Water and Sewer Revenue Bonds dated November 1, 1970 and Water and Sewer Revenue Refunding Bonds, Series 1975 dated November 1, 1972 (the "prior lien obligations"). The Issuer in the Resolution has covenanted and agreed with the holder of this Bond that it will -19- `~ • not hereafter issue any revenues of the System prior lien obligations. • additional obligations payable from the and the Excise Taxes on a parity with the In and by the Resolution, the Issuer has covenanted and agreed with the holder of this Bond that it will fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the product, services and facilities of the System which, together with the Excise Taxes, will always produce cash revenues sufficient to pay, and out of such funds pay, as the same shall become due, the principal of and interest on the parity obligations, the prior lien obligations and this Bond, the necessary expenses of operating and maintaining the System and all reserve, Sinking Fund or other payments required by the Resolution, and that such rates, rentals, fees and other charges will not be reduced so as to be insufficient to provide funds for such purposes, and that it will levy and collect said Excise Taxes at such rates, not exceeding the maximum rates permitted by law, as shall be necessary to provide funds which, together with the revenues of the System, will be sufficient to pay, and out of such funds pay, as the same shall become due, the principal of and interest on the parity obligations, the prior lien obliga- tions and this Bond, the necessary expenses of operating and maintaining the System and all reserve, Sinking Fund or other payments required by the Resolution, and that the rates of such Excise Taxes will not be reduced so as to be insufficient to pro- vide funds for such purposes. As provided in the Resolution, this Bond is exchangeable at the expense of the owner and holder hereof at any time, not more than ninety days after surrender of this Bond to the Clerk hereinafter mentioned, as Bond Registrar, for an equal aggregate principal amount of coupon Bonds, payable to bearer, registrable as to both principal and interest, in the denomination of $1,000 each and maturing in the amounts and on September 1 of the years corresponding to the years and amounts of the unpaid installments of principal of this Bond, and in the form of such coupon Bonds as provided for in the Resolution. The installments of principal payable upon this Bond on or before September 1, 1990 are not subject to prepayment prior to their respective dates of payment. The installments of prin- cipal payable on this Bond on September 1, 1991 and thereafter may, at the option of the Issuer, be prepaid in whole or in part, but only in multiples of $1,000, in inverse chronological order of said installments, on September 1, 1990 or on any interest payment date thereafter at par and accrued interest, plus the following premiums, expressed as percentages of the principal amount of said installments so prepaid, if prepaid in the following years: -20- • • 5~, if paid on September 1, 1990 or thereafter, to and including September 1, 1992; 4~, if paid on September 1, 1993 or thereafter, to and including September 1, 1997; 3$, if paid on September 1, 1998 or thereafter, to and including September 1, 2001; 2~, if paid on September 1, 2002 or thereafter, to and including September 1, 2005; 1~, if paid on September 1, 2006 or thereafter, to and including September 1, 2009; With out premium, if paid September 1, 2010 or ther eafter, but prior to maturity; provided, however, that notice of such prepayment shall be given in the manner required by the Resolution. It is hereby certified and recited that all acts, conditions, and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond, exist, have happened and have been performed, in regular and due form and time as required by the Laws and Constitution of the State of Florida applicable thereto, and that the issuance of this Bond does not violate any constitutional, statutory or charter limita- tions or provisions. This Bond is and has all the qualities and incidents of a negotiable instrument under the law merchant and the Laws of the State of Florida. This Bond was validated by Judgment of the Circuit Court for Lake County, rendered on , 19_ IN WITNESS WHEREOF, the City of C1 issued this Bond and has caused the same to Mayor and attested and countersigned by its porate seal to be impressed hereon, and for poses only has caused such officers to sign page 2 hereof, all as of ~rmont, Florida, has be signed by its Clerk, and its cor- identification pur- in the margins of -21- • • CITY OF CLERMONT, FLORIDA By Mayor (SEAL) ATTESTED AND COUNTERSIGNED: City Clerk (FORM OF ASSIGNMENT) ASSIGNMENT For valuable consideration, the UNITED STATES OF AMERICA, acting through the U.S. DEPARTMENT OF AGRICULTURE, FARMERS HOME ADMINISTRATION, does hereby assign, transfer and deliver to all of its right, title and interest in and to this Bond and all rights belonging or appertaining to the assignor under and by virtue of this Bond. U.S. DEPARTMENT OF AGRICULTURE, FARMERS HOME ADMINISTRATION By Title: Witnesses: -22- • Due Date Principal (Sept. 1) Payment 1983 $16,000 1984 17,000 1985 17,000 1986 18,000 1987 19,000 1988 20,000 1989 21,000 1990 22,000 1991 23,000 1992 24,000 1993 26,000 1994 27,000 1995 28,000 1996 30,000 1997 31,000 1998 33,000 1999 34,000 2000 36,000 2001 38,000 2002 40,000 2003 42,000 2004 44,000 2005 46,000 2006 48,000 2007 51,000 2008 53,000 2009 56,000 2010 59,000 2011 62,000 2012 65,000 2013 68,000 2014 72,000 2015 75,000 2016 79,000 2017 83,000 2018 87,000 2019 91,000 2020 99,000 (FORM OF PAYMENT RECORD) PAYMENT RECORD -23- Principal Name of Paying Balance Interest Date Agent Authorized Due Payment Paid Official and Title ., t.. ~ C~ PRINCIPAL INSTALLMENTS ON WHICH PAYMENTS HAVE BEEN MADE PRIOR TO DUE DATE ARTICLE III COVENANTS, SPECIAL FUNDS AND APPLICATION THEREOF 3.01 Bonds and Notes Not to Be General Indebtedness of Issuer. Neither the Bonds nor the coupons attached thereto nor the Notes shall be or constitute general obligations or indebted- ness of the Issuer as "bonds" within the meaning of Article VII, Section 12 of the Constitution of Florida, but shall be payable solely from and secured by a lien upon and pledge of the Pledged Funds or the proceeds of the sale of the Bonds as herein provided. No owner or holder of any Bond or coupon appertaining thereto or Note shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond or coupon or Note or Operating Expenses, or be entitled to payment of such Bond or coupon or Note from any moneys of the Issuer except from the Pledged Funds or the proceeds of the sale of the Bonds in the manner provided herein. 3.02 Securit for Bonds and Notes. The payment of the principal of and interest on the Bonds sha 1 be secured forthwith equally and ratably by a pledge of and lien upon the Pledged Funds. The Issuer does hereby irrevocably pledge the Pledged Funds to the payment of the principal of and interest on the Bonds and to the payment into the Sinking Fund at the times pro- vided of the sums required to secure to the holders of the Bonds the payment of the principal thereof and interest thereon at the respective maturities of the Bonds and coupons so held by them. The payment of the principal of and interest on the Notes shall be secured forthwith equally and ratably by a prior -24- Principal Name of Paying Principal Due Principal Balance Date Agent Authorized Date Amount Prepaid Due Paid Official and Title • ~ lien on and pledge of the proceeds to be derived from the sale of the Bonds and, if necessary, by a lien on and pledge of the Pledged Funds, subject to the lien on and pledge of the Pledged Funds in favor of the Prior Lien Obligations and the Parity Obligations. The Bonds are payable from the Pledged Funds on a parity, equally and ratably, with the Parity Obligations. The lien on and pledge of the Pledged Funds in favor of the Bonds is junior, subordinate and inferior in every respect to the pledge of and lien on such revenues in favor of the outstanding Prior Lien Obligations. 3.03 Application of Note Proceeds. The Issuer hereby covenants that it will establish with the Bank, , Florida, a separate account or accounts into w is s a e deposited the proceeds from the sale of the Notes (except such portion thereof as shall be necessary to pay interest on the Notes during the construction of the Project, which shall be deposited in the Notes Payment Account) and the additional funds, if any, required to assure payment in full of the Cost of the Project. Withdrawals from the Construction Account shall be made only for such purposes as shall have been previously specified in the Project Cost estimates and as shall be approved by the Issuer's consulting engineers for the Project. The Issuer's share of any liquidated damages or other moneys paid by defaulting contractors or their sureties, and all proceeds of insurance compensating for damages to the Project during the period of construction, shall be deposited in the Construction Account to assure completion of the Project. Moneys in the Construction Account shall be continuously secured by the depository bank in accordance with U.S. Treasury Department Circular 176 and in the manner prescribed by the Laws of the State of Florida relating to the securing of public funds. When the moneys on deposit in the Construction Account exceed the estimated disbursements on account of the Project for the next 90 days, the Issuer may direct the depository bank to invest such excess funds in direct obligations of or obligations the prin- cipal of and interest on which are guaranteed by the United States of America, which shall be subject to redemption at any time at face value by the holder thereof. The earnings from any such investment shall be deposited in the Construction Account. When the construction of the Project has been completed and all construction costs have been paid in full, all funds remaining in the Construction Account shall be deposited in the Sinking Fund, and the Construction Account shall be closed. -25- 1 ~ All moneys deposited in the Construction Account shall be and constitute a trust fund created for the purposes stated, and there is hereby created a lien upon such fund in favor of the holders of the Notes and the Bonds until the moneys thereof shall have been applied in accordance with this Instrument. In the event that the Issuer shall elect not to issue the Notes pursuant to the provisions of Section 5.02 of this Instrument, then the Issuer shall deposit into the Construction Account the proceeds from the sale of the Bonds (except such por- tion thereof as shall be necessary to pay interest on the Bonds during the construction of the Project, which shall be deposited in the Sinking Fund), and Bond proceeds in the Construction Account shall be applied and invested in the manner provided in this Section for the application and investment of Note proceeds. 3.04 Covenants of the Issuer. So long as any of the principal of or interest on any o the Bonds or the Notes shall be outstanding and unpaid, or until there shall have been set apart in the Sinking Fund, including the Reserve Account therein, a sum sufficient to pay, when due, the entire principal of the Bonds or the Notes remaining unpaid, together with interest accrued and to accrue thereon, the Issuer covenants with the holders of any and all of the Notes and the Bonds as follows: (A) Application of Provisions of Original Instrument. The Notes and the Bonds shall for all purposes (except as herein expressly changed) be considered to be additional parity obliga- tions issued under the authority of Section 3.04(J) of the Original Instrument and shall be entitled to all the protection and security provided therein for the Parity Obligations, as respectively issued, and shall be in all respects entitled to the same security, rights and privileges enjoyed by the Parity Obligations. The covenants and pledges contained in Section 3.04 of the Original Instrument shall be applicable to the Notes and the Bonds in like manner as applicable to the Parity Obligations. The principal of, interest on and redemption premiums on the Notes and the Bonds shall be payable from the Sinking Fund established by the Original Instrument on a parity with the Parity Obligations, and payments shall be made into such Sinking Fund by the Issuer in amounts fully sufficient to pay the prin- cipal of and interest on the Parity Obligations and on the Notes and the Bonds as such principal and interest become due. The Reserve Account established by the Original Instrument shall be applicable pro rata to the Notes and the Bonds in the same manner as applicable to the Parity Obligations. (B) Increased Deposits to Reserve Account. The monthly deposits to the Reserve Account pursuant to the provisions of Section 3.04(C)(3) of the Original Instrument shall be in the amount of One Thousand Dollars ($1,000), until such time as the - 26- • ~ funds and investments in the Reserve Account shall equal One Hundred Twenty Thousand Dollars ($120,000), and monthly thereafter such amount as shall be necessary to maintain in the Reserve Account the sum of One Hundred Twenty Thousand Dollars ($120,000) but not exceeding One Thousand Dollars ($1,000) monthly. (C) Maintenance of System. The Issuer will complete the construction of the Project in an economical and efficient manner with all practicable dispatch, and thereafter will main- tain the System in good condition and continuously operate the same in an efficient manner at a reasonable cost. (D) Com liance with Laws and Re ulations. The Issuer covenants and agrees to per orm an comp y with, in every respect, the loan and grant agreements which it might have with the Government or with any other governmental agency and all applicable Federal and State Laws and regulations. (E) Creation of Superior Liens. The Issuer covenants that it will not issue any other notes, bonds, certificates or obligations of any kind or nature or create or cause or permit to be created any debt, lien, pledge, assignment or encumbrance or charge payable from or enjoying a lien upon any of the Pledged Funds ranking prior and superior to the lien created by this Instrument for the benefit of the Notes and the Bonds. ARTICLE IV AUTHORIZATION OF NOTES 4.01 Authorization of Notes. Subject and pursuant to the provisions of this Instrument, obligations of the Issuer to be known as "Water and Sewer Revenue Bond Anticipation Notes, Series 1980," are hereby authorized to be issued in an aggregate principal amount not exceeding One Million Seven Hundred Thousand Dollars ($1,700,000) for the purpose of providing funds to pay the Cost of the Project pending issuance of the Bonds. 4.02 Description of Notes. The Notes shall be dated as of the date of or prior to the date of their delivery to the ini- tial purchaser or purchasers thereof, shall mature on or prior to the fifth anniversary of the date of the adoption of this Instrument and may be in such denomination or denominations as shall be acceptable to such purchaser or purchasers. The Notes shall bear such rate or rates of interest not exceeding the legal rate and shall be in substantially the following forms, with only such omissions, insertions and variations as may be necessary and/or desirable and approved by the Mayor or the Clerk prior to the issuance thereof (which necessity and/or desirability and approval shall be presumed by such officer's execution of the -27- Notes and the Issuer's delivery of the Notes to the purchaser or purchasers thereof): (FORM OF NOTES FOR PURCHASERS OTHER THAN GOVERNMENT) UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF CLERMONT WATER AND SEWER REVENUE BOND ANTICIPATION NOTE SERIES 1980 FOR VALUE RECEIVED, the City of Clermont, Florida (the "Issuer") hereby promises to pay to the order of at the principal office of in the City of , Florida, on , 19 , solel from the special funds hereinafter mentioned, in law~l moneyyof the United States of America, the principal sum of Dollars ($ ) and interest on such principal sum from the date hereof to the maturity date hereof at the rate of per centum ( ~) per annum. This Note is issued pursuant to the Constitution and Laws of the State of Florida, particularly Part II, Chapter 166, Florida Statutes (1979), and a resolution duly adopted by the Issuer on , 19 (the "Resolution"), in anticipation of the receipt by the Issuer of the proceeds from the sale of not exceeding $1,700,000 principal amount of Water and Sewer Revenue Bonds, Series 1980 of the Issuer (the "Bonds"). This Note and the interest due thereon are payable solely from and secured by a prior lien upon and a pledge of the proceeds to be derived from the sale of the Bonds and, if necessary, from and secured by a lien upon and a pledge of the net revenues to be derived from the operation of the Issuer's combined municipal water and sewer system and the Excise Taxes described in the Resolution, all in the manner provided in the Resolution. The lien of the holder of this Note on the revenues of the System and the Excise Taxes is junior, subordinate and inferior in every respect to the lien on such revenues and Excise Taxes in favor of the Issuer's outstanding Water and Sewer Revenue Bonds dated November 1, 1970, Water and Sewer Revenue Refunding Bonds, Series 1972 dated November 1, 1972 and Water and Sewer Revenue Bonds, Series 1975 dated January 25, 1977. This Note shall not constitute a general obligation of the Issuer, and the holder thereof shall never have tt;e right to require or compel the exercise of the power of the Issuer to levy ad valorem taxes for the payment of the principal of and interest on this Note. - 28- • ~ It is hereby certified, recited and declared that all acts, conditions and things required to exist, to happen and to be performed precedent to and in connection with the issuance of this Note, exist, have happened, and have been performed in reg u- lar and due form and time as required by the Laws and Constitution of the State of Florida applicable thereto, and that the issuance of this Note and of the issue of Notes of which this Note is one does not violate any constitutional or statutory limitations or provisions. This Note is and shall have all of the qualities and incidents of a negotiable instrument under the law merchant and the Laws of the State of Florida. This Note and the issue of which this Note is one were validated by Judgment of the Circuit Court for Lake County, ren- dered on , 19 IN WITNESS WHEREOF, the City of Clermont, Florida, has issued this Note and has caused the same to be signed by its Mayor and its corporate seal to be impressed hereon and attested and countersigned by its Clerk, all as of the day of 19 CITY OF CLERMONT, FLORIDA (SEAL) ATTESTED AND COUNTERSIGNED: City Clerk By Mayor - 29- .. '* (FORM OF NOTE IF PURCHASED BY GOVERNMENT) UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF LAKE CITY OF CLERMONT WATER AND SEWER REVENUE BOND ANTICIPATION NOTE SERIES 1980 FOR VALUE RECEIVED, the City of Clermont, Florida (the "Issuer") hereby promises to pay on demand (but not later than 19 ) to the order of the United States of America, Farmers Home Administration, U.S. Department of Agriculture (the "Government"), at the Farmers Home Administration County Office at , Florida, solely from the sources hereinafter mentione , in aw ul money of the United States of America, the principal sum of One Million Seven Hundred Thousand Dollars ($1,700,000) and, upon payment of such principal sum, solely from such sources, interest on each portion of such principal sum from the date such portion shall be advanced pur- s-want to the terms herein, at the rate of 5$ per annum, until such principal sum shall be paid. The Government and the Issuer intend that the funds loaned hereunder shall be advanced by the Government as the same shall be needed by the Issuer for the payment of the cost of the project described in the Resolution hereinafter mentioned. The Mayor and the Clerk of the Issuer will acknowledge receipt of each portion of the principal sum so advanced and the date of such receipt upon the schedule hereon. This Note is issued pursuant to the Constitution and Laws of the State of Florida, particularly Part II, Chapter 166, Florida Statutes (1979), and a resolution duly adopted by the Issuer on , 19 (the "Resolution"), in anticipation of the receipt by the Issuer of the proceeds from the sale of not exceeding $1,700,000 principal amount of Water and Sewer Revenue Bonds, Series 1980 of the Issuer (the "Bonds"). This Note and the interest due thereon are payable solely from and secured by a prior lien upon and a pledge of the proceeds to be derived from the sale of the Bonds and, if necessary, the net revenues to be derived by the Issuer from the operation of the Issuer's water and sewer system and the Excise Taxes described in the Resolution, all in the manner provided in the Resolution. The lien of the holder of this Note on the revenues of the System and the Excise Taxes is junior, subordinate and inferior in every respect to the lien on such revenues and Excise Taxes in favor of the Issuer's outstanding Water and Sewer - 30- i., j ~ 1'~ The lien of the holder of this Note on the revenues of the System and the Excise Taxes is junior, subordinate and inferior in every respect to the lien on such revenues and Excise Taxes in favor of the Issuer's outstanding Water and Sewer Revenue Bonds dated November 1, 1970 and Water and Sewer Revenue Refunding Bonds, Series 1972 dated November 1, 1972. This Note shall not constitute a general obligation of the Issuer, and the holder thereof shall never have the right to require or compel the exercise of any power of the Issuer to levy ad valorem taxes for the payment of the principal of and interest on this Note. It is hereby certified, recited and declared that all acts, conditions and things required to exist, to happen, and to be performed precedent to and in connection with the issuance of this Note, exist, have happened, and have been performed in regu- lar and due form and time as required by the Laws and Con- stitution of the State of Florida applicable thereto, and that the issuance of this Note does not violate any constitutional or statutory limitations or provisions. This Note and the issue~of which this Note is one were validated by judgment of the Circuit Court for Lake County, ren- dered on 19 IN WITNESS WHEREOF, the issued this Note and has caused Mayor and its corporate seal to and countersigned by its Clerk, 19~. ,~ City of Clermont, Florida, has the same to be signed by its be impressed hereon and attested all as of the ~ day of CITY OF CLERMONT, FLORIDA (SEAL ATTE:iTED AND COUNTERSIGNED: a City Clerk Mayor -31- • ~ 4.03 Additional Covenants of the Issuer. For so long as the principal of and interest on the Notes shall be outstanding and unpaid or until there shall have been irrevocably set apart in the Notes Payment Account a sum sufficient to pay, when due, the principal of or entire sum advanced under the Notes, together with interest accrued and to accure thereon, the Issuer covenants with the holders of the Notes as follows: (A) Notes Payment Account. The Issuer hereby covenants that it will establish with the Bank, , Florida, a separate account to be known as the "Clermont Water and Sewer Revenue Bond Anticipation Notes, Series 1980, Payment Account," into which there shall be depos- ited from the proceeds of the sale of the Notes the sum required to pay interest on the Notes on the maturity date thereof and into which there shall be deposited from the proceeds of the sale of the Bonds the sum required to pay the principal of the Notes on the maturity date thereof. Moneys on deposit to the credit of the Notes Payment Account shall be applied only to the payment of the principal of and interest on the Notes and, until such moneys shall have been applied to such purpose, there shall be a lien upon all Notes Payment Account moneys in favor of the holders of the Notes. Moneys in the Notes Payment Account shall be con- tinuously secured by the depository bank in the manner prescribed by the Laws of the State of Florida relating to the securing of public funds. The Issuer may direct the depository bank to invest such moneys in direct obligations of or obligations the principal of and interest on which are guaranteed by the United States of America maturing not later than the maturity date of the Notes. Any funds remaining on deposit to the credit of the Notes Payment Account after the principal of and interest on the -32- AMOUNT OF DATE OF SIGNATURE OF SIGNATURE OF ADVANCE ADVANCE MAYOR- COMMISSIONER CLERK ~. ' ~ ~ ~^ ! Notes shall have been paid in full shall be deposited in the Construction Account or, if the Project shall have been completed and the Construction Account closed, in the Sinking Fund, whereupon the Notes Payment Account shall be closed. (B) Sale of Bonds. The Issuer shall in good faith endeavor to sell a sufficient principal amount of the Bonds in order to have funds available to pay the Notes on the maturity date thereof. (C) Supplemental Instruments. The Issuer shall, from time to time and at any time, adopt such resolutions and/or ordi- nances not inconsistent with the provisions of this instrument as shall be necessary or desirable to cure any ambiguity, defect or omission herein and/or secure, extend or renew to the holders of the Notes the pledges and covenants made herein for the payment of the Notes and the interest to accure thereon. ARTICLE V MISCELLANEOUS PROVISIONS 5.01 Modification or Amendment. No material modifica- tion or amendment of this Instrument may be made without the con- sent in writing of the holders of two- thirds or more in principal amount of the Bonds then outstanding; provided, however, that no modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon, or in the amount of the principal obligation, or affect the Issuer's unconditional covenants herein with respect to the maintenance and collection of sufficient Rates and with respect to the levy and collection of the Excise Taxes and to the application of the same as herein provided, or reduce the number of such Bonds the written consent of the holders of which are required by this Section for such modification or amendment, without the consent of the holders of all such Bonds. 5.02 Sale of Obligations. The Notes and the Bonds shall be sold in such manner and upon such terms as the Issuer shall provide by resolution adopted any time prior to the respec- tive dates of delivery thereof to the respective original pur- chasers thereof. Anything herein to the contrary notwithstanding, the Issuer may elect not to issue the Notes and is hereby authorized to issue the Bonds initially and deposit the proceeds thereof to the Construction Account for application in payment of items of the Cost of the Project. 5.03 Severability of Invalid Provisions. If any one or more of the covenants, agreements or provisions of this Instrument or of the Bonds should be held contrary to any express provision of law or contrary to the policy of express law, though -33- .. ~~ r not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or pro- visions of this Instrument and of the Bonds. 5.04 Validation Authorized. Leonard H. Baird, Jr., City Attorney, is hereby authorized and directed to institute appropriate proceedings in the Circuit Court foz Lake County, Florida, for the validation of the Bonds and the proper officers of the Issuer are hereby authorized to verify on behalf of the Issuer any pleadings in such proceedings. 5.05 Table of Contents and Headings not Part Hereof. The table of contents preceding the body of this Instrument and the headings preceding the several Articles and Sections hereof shall be solely for convenience of reference and shall not constitute a part of this Instrument or affect its meaning, construction or effect. 5.06 Conflicts Repealed. All resolutions or parts of resolutions in conflict herewith are hereby repealed. 5.07 Effective Date. This Instrument shall take effect immediately upon its passage. - 34-