R-96-901
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RESOLUTION NO. 901
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A RESOLUTION OF THE CITY OF CLERMONT, FLORIDA,
PROVIDING FOR THE REFUNDING OF CERTAIN
OUTSTANDING OBLIGATIONS OF THE CITY AND THE
ACQUISITION, CONSTRUCTION AND INST ALLA TION OF
EXTENSIONS AND IMPROVEMENTS TO THE COMBINED
MUNICIPAL WATER AND SEWER SYSTEM OF THE CITY;
AUTHORIZING THE ISSUANCE BY THE CITY OF NOT
EXCEEDING $17,000,000 IN AGGREGATE PRINCIPAL
AMOUNT OF WATER AND SEWER REVENUE AND
REFUNDING BONDS, SERIES 2000, TO FINANCE A PART
OF THE COST THEREOF, FUND A DEBT SERVICE
RESERVE AND PAY THE COSTS OF ISSUANCE OF SUCH
BONDS; PLEDGING TO SECURE PAYMENT OF THE
PRINCIP AL OF AND INTEREST ON SUCH BONDS CERTAIN
PLEDGED FUNDS INCLUDING THE NET REVENUES OF
SUCH SYSTEM, ALL MONEYS ON DEPOSIT IN AND
INVESTMENTS HELD FOR THE CREDIT OF CERTAIN
FUNDS CREATED HEREUNDER AND THE EARNINGS ON
SUCH INVESTMENTS; MAKING CERTAIN COVENANTS
AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS
OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE.
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Section 1.1
Section 1.2
Section 1.3
Section 1.4
Section 1.5
Section 1.6
Section 1. 7
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Section 2.1
Section 2.2
Section 2.3
Section 2.4
Section 2.5
Section 2.6
Section 2.7
Section 2.8
Section 2.9
Section 3.1
Section 3.2
Section 3.3
Section 3.4
Section 3.5
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TABLE OF CONTENTS
PAGE
ARTICLE 1
GENERAL
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1
Authority for Resolution. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Resolution to Constitute Contract ..................... 14
Findings .................................... 14
Authorization of Initial Project . . . . . . . . . . . . . . . . . . . . . . . 15
Authorization of Refunding . . . . . . . . . . . . . . . . . . . . . . . . . 16
Refunding of Refunded Obligations . . . . . . . . . . . . . . . . . . .. 16
ARTICLE 2
AUTHORIZATION, TERMS, EXECUTION
AND REGISTRATION OF BONDS
Authorization of Bonds ........................... 16
Authorization and Description of Series 2000 Bonds . . . . . . . . .. 17
Application of Series 2000 Bond Proceeds . . . . . . . . . . . . . . .. 19
Execùtion of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Temporary Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Bonds Mutilated, Destroyed, Stolen or Lost. . . . . . . . . . . . . . . 20
Interchangeability, Negotiability and Transfer . . . . . . . . . . . . . . 21
Form of Bonds ................................ 22
ARTICLE 3
REDEMPTION OF BONDS
Privilege of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Selection of Bonds to be Redeemed . . . . . . . . . . . . . . . . . . . . 31
Notice of Redemption ............................ 31
Redemption of Portions of Bonds .. . . . . . . . . . . . . . . . . . . . 32
Payment of Redeemed Bonds . . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 4.1
Section 4.2
Section 4.3
Section 4.4
Section 4.5
Section 4.6
Section 4.7
Section 4.8
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Section 5.1
Section 5.2
Section 5.3
Section 5.4
Section 5.5
Section 5.6
Section 5.7
Section 5.8
Section 5.9
Section 5.10
Section 5. 11
Section 5.12
Section 5.13
Section 5.14
Section 5.15
Section 5. 16
Section 5.17
Section 5.18
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ARTICLE 4
SECURITY, SPECIAL FUNDS AND
APPLICATION THEREOF
Bonds not to be Indebtedness of Issuer. . . . . . . . . . . . . . . . . . 33
Security for Bonds .............................. 33
Construction Fund .............................. 34
Funds and Accounts ............................. 35
Flow of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Rebate Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Investments .................................. 43
Separate Accounts .............................. 44
ARTICLE 5
COVENANTS
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Operation and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . 45
Annual Budget ................................ 45
Rates ...................................... 46
Boo~ and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Annual' Audit ................................. 46
No Mortgage or Sale of the System . . . . . . . . . . . . . . . . . . . . 47
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
No Free Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
No Impairment ................................ 48
Compulsory Connections .......................... 48
Enforcement of Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Covenants With Credit Banks and Insurers ........."...... 49
Special Covenants Relating to Reserve Fund Insurance Policy or
Reserve Fund Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . 49
Collection of Impact Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Consulting Engineers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Federal Income Tax Covenants; Taxable Bonds ............ 50
Continuing Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 6
SUBORDINATED INDEBTEDNESS AND
ADDITIONAL BONDS
Section 6.1 Subordinated Indebtedness ......................... 51
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Section 6.2
Section 6.3
Section 6.4
Section 7.1
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.6
Section 7.7
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Section 8.1
Section 8.2
Section 8.3
Section 9. 1
Section 9.2
Section 9.3
Section 9.4
Section 9.5
Section 9.6
Section 9.7
Section 9.8
Section 9.9
Section 9. 10
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Issuance of Additional Bonds . . . . . . . . . . . . . . . . . . . . . . . . 51
Bond Anticipation Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Accession of Subordinated Indebtedness to Parity Status with
Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 7
DEFAULTS AND REMEDIES
Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Directions to Trustee as to Remedial Proceedings ........... 56
Remedies Cumulative ............................ 56
Waiver of Default .............................. 56
Application of Moneys After Default . . . . . . . . . . . . . . . . . . . 56
Control by Insurer or Credit Bank .................... 57
ARTICLE 8
SUPPLEMENTAL RESOLUTIONS
Supplemental Resolution Without Bondholders' Consent ....... 57
Suppremental Resolution With Bondholders', Insurer's and Credit
Bank's Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Amendment with Consent of Insurcr and/or Credit Bank Only ... 60
ARTICLE 9
MISCELLANEOUS
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Capital Appreciation Bonds. . . . . . . . . . . . . . . . . . . . . . . . . 62
General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
No Personal Liability ............................ 62
No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . 63
Sale of Bonds ................................. 63
Severability of Invalid Provisions ..................... 63
Repeal of Inconsistent Resolutions . . . . . . . . . . . . . . . . . . . . . 63
Table of Contents and Headings not Part Hereof . . . . . . . . . . . . 63
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CLERMONT,
FLORIDA:
ARTICLE 1
GENERAL
Section 1.1 Definitions. When used in this Resolution, the following terms shall
have the following meanings, unless the context clearly otherwise requires:
"Accountant" shall mean the independent certified public accountant or fIrm of
certified public accountants at the time employed by the Issuer under the provisions of this
Resolution to perform and carry out the duties imposed on the Accountant by this Resolution.
"Accreted Value" shall mean, as of any date of computation with respect to any
Capital Appreciation Bond, an amount equal to the principal amount of such Capital
Appreciation Bond (the principal amount at its initial offering) plus the interest accrued on such
Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the
Interest Date next preceding the date of computation or the date of computation if an Interest
Date, such interest to accrue at a rate not exceeding the legal rate, compounded semiannually,
plus, with respect to matters related to the payment upon redemption or acceleration of the
Capital Appreciation Bonds, if such date of computation shall not be an Interest Date, a portion
of the difference between the Accreted Value as of the immediately preceding Interest Date and
the Accreted Value as of toe immediately succeeding Interest Date, calculatcd based on the
assumption that Accreted Value accrues during any semiannual period in equal daily amounts
on the basis of a 360-day year. .
"Act" shall mean Chapter 166, Part II, Florida Statutes, as amended, and other
applicable provisions of law.
"Additional Bonds" shall mean the obligations issued at any time under the
provisions of Section 6.2 hereof on a parity with the Series 2000 Bonds.
" Additional Project" shall mean the acquisition, construction, erection, renovation
or reconstruction of additions, extensions and improvements to the System and shall include all
property rights, appurtenances, easements, rights of way, franchises and equipment relating
thereto and deemed necessary or convenient for the acquisition, construction, erection,
renovation, reconstruction, or the operation thereof which shall be financed or refinanced in
whole or in part with the proceeds of Additional Bonds.
"Amortization Installment" shall mean the amount designated and established as
an Amortization Installment with respect to any Term Bonds by Supplemental Resolution.
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"Annual Audit" shall mean the annual audit prepared pursuant to the requirements
of Section 5.6 hereof.
"Annual Budget" shall mean the annual budget prepared pursuant to the
requirements of Section 5.3 hereof.
"Assessments" shall mean the proceeds to be derived from the assessments to be
levied against the lands and properties to be specially benefitted by the construction of any
improvements to the System, including interest on such assessments and any penalties thereon
and moneys received upon the foreclosure of the liens of any such assessments.
"Authorized Depository" shall mean the State Board of Administration of Florida
or a bank or trust company in the State which is eligible under the laws of the State to receive
funds of the Issuer.
"Authorized Investments" shall mean any of the following which shall be
authorized from time to time by applicable laws of the State for deposit or purchase by the Issuer
for the investment of its funds:
(1) Direct obligations of (including obligations issued or held in book entry
form on the books of the Department of the Treasury of the United States of America and
stripped and zero coupon obligations), or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America.
(2) Bonds, debentures or notes or other evidences of indebtedness payable in
cash issued by anyone or a combination of any of the following federal agencies whose
obligations represent the full faith and credit of the United States of America: Export Import
Bank of the United States, Federal Financing Bank, Farmers Home Administration, Federal
Housing Administration, Maritime Administration, Public Housing Authority and Government
National Mortgage Association.
(3) Certificates of deposit properly secured at all times by collateÌ'al security
described in either or both of paragraphs (1) and (2) of this definition or in the collateral
provisions of Chapter 280, Florida Statutes, as amended, and issued by commercial banks,
savings and loan associations or mutual savings banks chartered by the State or the United States
of America, and bank trust receipts issued by commercial banks or trust companies chartered
by the State or the United States of America upon any securities described in paragraph (1) of
this definition.
(4) The following investments fully insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation: (A) certificates of deposit,
(B) savings accounts, (C) deposit accounts, or (D) depository receipts of a bank, savings and
loan association or mutual savings bank.
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(5) Commercial paper rated in one of the two highest rating categories by at
least two nationally recognized rating agencies or commercial paper backed by a letter of credit
or line of credit rated in one of the two highest rating categories by Moody's Investors Service
and Standard & Poor's.
(6) Written repurchase agreements with any bank, savings institution or trust
company which is insured by the Federal Deposit Insurance Corporation or the Federal Savings
and Loan Insurance Corporation, or with any broker-dealer with retail customers which falls
under Securities Investors Protection Corporation protection, provided that such repurchase
agreements are fully secured by collateral described in (1) above or obligations of any agency
or instrumentality of the United States of America, and provided further that (A) such collateral
is held by a bank or trust company chosen by the Issuer which has no interest in the repurchase
agreement during the term of such repurchase agreement, (B) such collateral is not subject to
liens or claims of third parties, (C) such collateral has a market value (determined at least once
every 30 days) at least equal to the amount invested in the repurchase agreement, (D) the entity
holding the collateral has a perfected first security interest in the collateral for the benefit of the
Bondholders, (E) the agreement shall be for a term not longer than 270 days and (F) the failure
to maintain such collateral at the level required in (C) above will require the entity holding the
collateral to liquidate the collateral.
(7) Money market funds rated in the highest rating category by Moody's
Investors Service and Standard & Poor's.
(8) Units òf participation in the Local Government Surplus Funds Trust Fund
established pursuant to Part IV, Chapter 218, Florida Statutes, as amended, or any similar
common trust fund which is established pursuant to State law as a legal depository of public
moneys.
(9) Obligations of state or local government municipal bond issuers that are
rated in one of the two highest rating categories by Moody's Investors Service and Standard &
Poor's.
(10) Such other obligations as shall be permitted to be legal investments of the
Issuer by the laws of the State.
Rating categories when referred to herein shall be without regard to gradations
within such categories, such as "plus" or "minus."
"Authorized Issuer Officer" for the performance on the behalf of the Issuer of any
act of the Issuer or the execution of any instrument on behalf of the Issuer shall mean any person
authorized by resolution or certificate of the Issuer to perform such act or sign such document.
"Available Impact Fees" shall mean the Impact Fees to the extent that such fees
or charges have been lawfully levied and collected by the Issuer and may under applicable law
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be used for the acquisition or construction of the Expansion Facilities or for Impact Fees Debt
Service Components.
"Bond Amortization Account" shall mean the separate account of that name in the
Sinking Fund established pursuant to Section 4.4 hereof.
"Bond Counsel" shall mean any attorney at law or firm of attorneys, of nationally
recognized standing in matters pertaining to the federal tax exemption of interest on obligations
issued by states and political subdivisions, and duly admitted to practice law before the highest
court of any state of the United States of America.
"Bond Insurance Policy" shall mean the municipal bond new issue insurance
policy or policies issued by an Insurer guaranteeing the payment of the principal of and interest
on any portion of the Bonds.
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"Bond Service Requirement" for any Series for any Bond Year shall mean the sum
of that portion of the Debt Service Requirement for such Bond Year allocable to the Bonds of
such Series and all other payments required by this Resolution to be paid in such Bond Year
with respect to the Bonds of such Series, which shall include such Series' pro rata share of all
deposits to the Reserve Fund in such Bond Year, and redemption premiums, if any, payable in
such Bond Year.
"Bond Year" pertaining to any Series shall mean the annual period commencing
each year on the day after' the day of the year on which the Bonds of such Series mature,
whether or not Bonds of such Series mature in every year or in the Bond Year under
consideration (except that the first Bond Year for every Series shall commence on the date of
issuance of the Bonds of such Series), and ending on the next succeeding day of the year which
shall be such day of the year on which the Bonds of such Series mature. Each Bond Year shall
be designated with the number of the calendar year in which such Bond Year ends.
"Bondholder" or "Holder" or "holder" shall mean any Person who, shall be the
registered owner of any Outstanding Bond or Bonds according to the registration books of the
Issuer.
"Bonds" shall mean the Series 2000 Bonds, together with any Additional Bonds
and any Subordinated Indebtedness which accedes to the status of Bonds pursuant to Section 6.4
hereof.
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"Book Entry Form" or "Book Entry System" means, with respect to the Series
2000 Bonds, a form of system, as applicable, under which (1) the ownership of beneficial
interests in Series 2000 Bonds and debt service payments on Series 2000 Bonds may be
transferred only through a book entry and (2) physical Series 2000 Bond certificates in fully
registered form are registered only in the name of a Depository or its nominee as Holder, with
the physical Series 2000 Bond certificates "immobilized" in the custody of the Depository.
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"Capital Appreciation Bonds" shall mean those Bonds so designated by
Supplemental Resolution, which may be either Serial Bonds or Term Bonds and which shall bear
interest payable at maturity or redemption. In the case of Capital Appreciation Bonds that are
convertible to Bonds with interest payable prior to maturity or prior to redemption of such
Bonds, such Bonds shall be considered Capital Appreciation Bonds only during the period of
time prior to such conversion.
"Clerk" shall mean the City Clerk of the Issuer or such other person as may be
duly authorized by the Issuer to act on his or her behalf.
"Code" shall mean the United States Internal Revenue Code of 1986, as the same
may be amended from time to time, and the regulations thereunder, whether proposed,
temporary or final, promulgated by the Department of the Treasury, Internal Revenue Service,
and all other promulgations of said service pertaining thereto.
"Construction Fund" shall mean the Construction Fund to be established pursuant
to Section 4.3 hereof.
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"Consulting Engineers" shall mean one or more qualified and recognized
consulting engineers or firm of consulting engineers having favorable repute, skill and
experience with respect to the planning, construction and operation of public utility systems
similar to the System, who shall be retained from time to time by the Issuer.
"Cost" when 'used in connection with a Project, shall mean (1) the Issuer's cost
of physical construction; (2) costs of acquisition by or for the Issuer of such Project; (3) costs
of land and interests therein and the cost of the Issuer incidental to such acquisition; (4) the cost
of any indemnity and surety bonds and premiums for insurance during construction; (5) all
interest due to be paid on the Bonds and other obligations relating to the Project during the
construction period of such Project and for a reasonable period thereafter; (6) engineering, legal
and other consultant fees and expenses; (7) costs and expenses incidental to the issuance of the
Bonds including bond insurance premium, rating agency fees and the fees and expenses of any
auditors, insurers, Paying Agent, Registrar, Credit Bank or depository; (8) payments, when due
(whether at the maturity of principal or the due date of interest or upon redemption) on any
indebtedness of the Issuer (other than the Bonds) incurred for such Project; (9) costs of
machinery or equipment required by the Issuer for the commencement of operation of such
Project; and (10) any other costs properly attributable to the issuance of the Bonds, and such
construction or acquisition, as determined by generally accepted accounting principles and may
include reimbursement to the Issuer for any such items of Cost heretofore paid by the Issuer.
Any Supplemental Resolution may provide for additional items to be included in the aforesaid
Costs.
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"Credit Bank" shall mean as to any particular Series of Bonds, the Person (other
than an Insurer) providing a letter of credit, a line of credit or another credit or liquidity
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enhancement facility, as designated in the Supplemental Resolution providing for the issuance
of such Bonds.
"Credit Facility" shall mean as to any particular Series of Bonds, a letter of credit,
a line of credit or another credit or liquidity enhancement facility (other than an insurance policy
issued by an Insurer), as approved in the Supplemental Resolution providing for the issuance of
such Bonds.
"Current Account" shall mean the separate account of that name in the Impact
Fees Fund established pursuant to Section 4.4 hereof.
"Debt Service Requirement" for any Bond Year shall mean the sum of:
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(1) The aggregate amount required to pay the interest becoming due on the
Bonds, other than Capital Appreciation Bonds, during such Bond Year, except to the extent that
such interest shall have been provided by payments into the Interest Account out of Bond
proceeds or other sources for a specified period of time. For purposes of this definition, the
interest due on any such Bonds which shall have a variable rate of interest shall be assumed to
be the greater of (a) 110% of the daily average interest rate on such Variable Rate Bonds during
the 12 months ending with the month preceding the date of calculation, or such shorter period
that such Bonds shall have been outstanding, or (b) the actual rate of interest borne by such
Variable Rate Bonds on the date of calculation.
(2) The aggregate amount required to pay the principal becoming due on the
Bonds, other than Capital Appreciation Bonds, for such Bond Year. For purposes of this
definition: (a) the stated maturity date of any Term Bonds shall be disregarded and the principal
of such Term Bonds shall be deemed to be due in the Bond Years and in the amounts of the
Amortization Installments applicable to such Term Bonds; and (b) the principal amount of any
single maturity of Term Bonds for which the Issuer shall have established no Amortization
Installments shall be deemed to be due in the Bond Years and in such amounts as shall provide
for the amortization of such principal amount over a term equal to the number of years such
Term Bonds shall be Outstanding to such maturity and in equal annual installments of combined
principal and interest; provided, however, that if the Issuer has employed a Credit Facility in
connection with any such Term Bonds having no Amortization Installments the amortization of
such Term Bonds shall be deemed to correspond to the applicable terms of such Credit Facility.
(3) The aggregate amount required to pay the Accreted Value due on any
Capital Appreciation Bonds maturing in such Bond Year.
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"Depository" means any securities depository that is a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934,
operating and maintaining, with its participants or otherwise, a Book Entry System to record
ownership of beneficial interests in Series 2000 Bonds, and to effect transfers of Series 2000
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Bonds, in Book Entry Form, and includes and means initially The Depository Trust Company
(a limited purpose trust company), New York, New York.
"Escrow Account" shall mean the Escrow Account held for the benefit of the
holders of the Refunded Obligations by the Escrow Holder under the Escrow Deposit
Agreement.
"Escrow Deposit Agreement" shall mean the Escrow Deposit Agreement which
shall be executed and delivered by and between the Issuer and the Escrow Holder, which
agreement shall be in substantially the form approved by the Issuer by Supplemental Resolution
adopted prior to the issuance of the Series 2000 Bonds.
"Escrow Holder" shall mean the bank or trust company which shall execute the
Escrow Deposit Agreement with the Issuer and which will be named by Supplemental Resolution
adopted prior to the issuance of the Series 2000 Bonds.
"Escrow Requirement" shall have the meaning assigned to such term In the
Escrow Deposit Agreement.
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"Expansion Facilities" shall mean all those improvements, extensions and
additions to the System, including all lands and interests therein, franchises, plants, buildings,
machinery, fixtures, equipment, pipes, mains, and all other property, real and personal, tangible
and intangible, which shall be constructed or acquired in order to meet the increased demand
upon the System, whether actual or anticipated, created by new users connecting to the System.
"Expansion Percentage" as applied to each Series of Bonds issued wholly or in
part to finance or refinance Expansion Facilities shall mean a fraction having a numerator equal
to the principal amount of the Bonds of such Series which are attributable to Expansion
Facilities, as shall be determined by the Qualified Independent Consultant and set forth in the
Project Certificate relating to such Series, and a denominator equal to the original aggregate
principal amount of all Bonds of such Series. Provided, however, that if amounts on deposit
in the Impact Fee Stabilization Account are, pursuant to Section 4.5(A) hereof, withdrawn
therefrom and applied to the purchase or redemption of Bonds prior to maturity, then the
numerator of the foregoing fraction shall be reduced by· the amounts so withdrawn and the
denominator shall be reduced by the total principal amount of the Bonds so purchased or
redeemed. For purposes of the preceding sentence, Term Bonds redeemed from amounts on
deposit in the Bond Amortization Account shall not be considered to have been redeemed prior
to their maturity date.
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"Federal Securities" shall mean direct obligations of the United States of America
and obligations the principal of and interest on which are unconditionally guaranteed by the
United States of America, none of which permit redemption prior to maturity at the option of
the obligor. Federal Securities shall include any certificates or any other evidences of an
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ownership interest in the aforementioned obligations or in specified portions thereof (which may
consist of specified portions of the interest thereon).
"Fiscal Year" shall mean the period commencing on October 1 of each year and
continuing through the next succeeding September 30, or such other period as may be prescribed
by law.
"Governing Body" shall mean the City Council of the Issuer or its successor in
function.
"Gross Revenues" shall mean all income and moneys, excluding Assessments and
Impact Fees, received by the Issuer from the Rates, or otherwise received by the Issuer or
accruing to the Issuer in the management and operation of the System, calculated in accordance
with generally accepted accounting principles employed in the operation of public utility systems
similar to the System, including, without limiting the generality of the foregoing, all earnings
and income derived from the investment of moneys under the provisions of this Resolution which
are transferred to the Revenue Fund or the Interest Account as herein provided.
"Impact Fees" shall mean all non-refundable (except at the option of the Issuer)
system development fees, capital expansion fees, utility improvement fees or other similar fees
and charges separately imposed by the Issuer upon new customers of the System as a nonuser
capacity charge for a proportionate share of the cost of the acquisition or construction of
Expansion Facilities, which are imposed by the Issuer for the purpose of allocating to such
customers a portion of the cost of the additional System capacity made necessary by the
extension or expected extension of System services to such new customers.
"Impact Fees Debt Service Component" for any Bond Year shall mean the amount
of Available Impact Fees equal to the total of the products determined for all Series of Bonds
issued wholly or in part to finance Expansion Facilities by multiplying the Bond Service
Requirement for each such Series by the Expansion Percentage for such Series.
"Impact Fees Fund" shall mean the Impact Fees Fund established pursuant to
Section 4.4 hereof.
"Impact Fees Stabilization Account" shall mean the separate account of that name
in the Impact Fees Fund established pursuant to Section 4.4 hereof.
"Initial Project" shall mean the acquisition, construction, erection, renovation or
reconstruction of additions, extensions and improvements to the System, as more particularly
described in and in accordance with certain plans on file or to be on file with the Issuer, with
such changes, deletions, additions or modification to the enumerated improvements, equipment
and facilities, or such other improvements as shall be designated and approved by Supplemental
Resolution in accordance with the Act.
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"Insurer" shall mean such Person as shall be in the business of insuring or
guaranteeing the payment of principal of and interest on municipal securities and whose credit
is such that, at the time of any action or consent required or permitted by the Insurer pursuant
to the terms of this Resolution, all municipal securities insured or guaranteed by it are then
rated, because of such insurance or guarantee, in one of the two most secure grades by either
Moody's Investors Service or Standard and Poor's, and with respect to any Series of Bonds, the
Insurer which shall have insured or guaranteed payment of the principal of or interest on such
Bonds.
"Interest Account" shall mean the separate account of that name in the Sinking
Fund established pursuant to Section 4.4 hereof.
"Interest Date" shall mean such date or dates for the payment of interest on a
Series of Bonds as shall be provided by Supplemental Resolution.
"Issuer" shall mean the City of Clermont, Florida.
"Loan" shall mean the indebtedness and other obligations of the Issuer under and
pursuant to the Loan Agreement.
"Loan Agreement" shall mean that certain Loan Agreement, dated as of July 1,
1993, among NationsBank of Florida, N.A., as trustee, the City of Arcadia, Florida and the
Issuer.
"Maximum Debt Service Requirement" shall mean, as of any particular date of
calculation, the greatest annual Debt Service Requirement for the Bonds for the then current or
any future Bond Year.
"Maximum Interest Rate" shall mean, with respect to any particular Variable Rate
Bonds, a numerical rate of interest, which shall be set forth in the Supplemental Resolution
delineating the details of such Bonds, that shall be the maximum rate of interest such Bonds may
at any time bear in the future in accordance with the terms of such Supplemental Resolution.
"Mayor" shall mean the Mayor of the Issuer or such other person as may be duly
authorized by the Issuer to act on his or her behalf.
"Moody's Investors Service" shall mean Moody's Investors Service, the nationally
recognized securities rating firm, and any successor or successors thereto; and if such
corporation shall be dissolved or liquidated or shall no longer perform securities rating functions,
shall mean any other nationally recognized securities rating firm designated by the Issuer and
approved by the Insurer and/or the Credit Bank, as applicable.
"Net Revenues" shall mean Gross Revenues less Operating Expenses.
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"Notes" shall mean the Issuer's Water and Sewer Revenue and Refunding Bond
Anticipation Notes, Series 1996, dated as of February 1, 1996, or any series of refunding notes
issued pursuant to the Note Resolution to refund any series of refunding notes previously issued
pursuant to the Note Resolution.
"Note Resolution" shall mean the resolution adopted by the Governing Body of
the Issuer on February 13, 1996, as supplemented, authorizing the issuance of the Notes.
.
"Operating Expenses" shall mean the Issuer's expenses for operation,
maintenance, repairs and replacements with respect to the System and shall include, without
limiting the generality of the foregoing, administration expenses, insurance and surety bond
premiums, the fees to the provider of a Reserve Fund Insurance Policy or Reserve Fund Letter
of Credit (but excluding any expenses or reimbursement obligations for draws made thereunder),
the fees of any rebate compliance service or of Bond Counsel relating to compliance with the
provisions of Section 148 of the Code, legal and engineering expenses, ordinary and current
rentals of equipment or other property, refunds of moneys lawfully due to others, payments to
others for disposal of sewage or other wastes, payments to pension, retirement, health and
hospitalization funds, and any other expenses required to be paid for or with respect to proper
operation or maintenance of the System, all to the extent properly attributable to the System in
accordance with generally accepted accounting principles employed in the operation of public
utility systems similar to the System, and disbursements for the expenses, liabilities and
compensation of any Paying Agent or Registrar under this Resolution, but does not include any
costs or expenses in respect of original construction or improvement other than expenditures
necessary to prevent an inteÌrt1ption or continuance of an interruption of the Gross Revenues or
minor capital expenditures necessary for the proper and economical operation or maintenance
of the System, or any provision for interest, depreciation, amortization or similar charges.
"Outstanding" shall mean all Bonds theretofore and thereupon being authenticated
and delivered, except (1) any Bond in lieu of which another Bond or other Bonds have been
issued under an agreement to replace lost, mutilated or destroyed Bonds, (2) any Bond
surrendered by the Holder thereof in exchange for another Bond or other Bonds under Sections
2.6 and 2.8 hereof, (3) Bonds deemed to have been paid pursuant to Section 9.1 hereof, and (4)
Bonds canceled after purchase in the open market or because of payment at or redemption prior
to maturity.
"Paying Agent" shall mean any paying agent for the Bonds appointed by or
pursuant to Supplemental Resolution and its successors or assigns, and any other Person which
may at any time be substituted in its place pursuant to Supplemental Resolution.
"Person" shall mean an individual, a corporation, a partnership, an association,
a joint stock company, a trust, any unincorporated organization or governmental entity.
e
"Pledged Funds" shall mean the Pledged Revenues and, until applied in
accordance with the provisions of this Resolution, the proceeds of the Bonds and all moneys,
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including investments thereof, in the funds and accounts established hereunder, except the Rebate
Fund and the Impact Fee Stabilization Account.
"Pledged Revenues" shall mean the Net Revenues and the Impact Fees Debt
Service Components.
.
"Prerefunded Obligations" shall mean any bonds or other obligations of any state
of the United States of America or of any agency, instrumentality or local governmental unit of
any such state (1) which are (a) not callable prior to mafurity or (b) as to which irrevocable
instructions have been given to the fiduciary for such bonds or other obligations by the obligor
to give due notice of redemption and to call such bonds for redemption on the date or dates
specified in such instructions, (2) which are fully secured as to principal, redemption premium,
if any, and interest by a fund consisting only of cash or Federal Securities, secured in the
manner set forth in Section 9.1 hereof, which fund may be applied only to the payment of such
principal of, redemption premium, if any, and interest on such bonds or other obligations on the
maturity date or dates thereof or the specified redemption date or dates pursuant to such
irrevocable instructions, as the case may be, (3) as to which the principal of and interest on the
Federal Securities deposited in such fund with any cash on deposit in such fund, are sufficient.
as verified by an independent certified public accountant, to pay principal of, redemption
. premium, if any, and interest on the bonds or other obligations on the maturity date or dates
thereof or on the redemption date or dates specified in such irrevocable instructions, and (4)
which are rated in the highest rating category of Standard & Poor's and of Moody's Investors
Service.
"Principal Account" shall mean the separate account of that name in the Sinking
Fund established pursuant to Section 4.4 hereof.
"Project" shall mean the Initial Project and any Additional Project.
"Project Certificate" shall mean that certificate of the Qualified Independent
Consultant filed with the Issuer at or prior to the delivery of any Series of Bonds issued wholly
or in part to finance Expansion Facilities setting forth the estimated total cost of the Project, the
estimated cost of the Expansion Facilities portion of the Project and the Expansion Percentage.
"Qualified Independent Consultant" shall mean one or more qualified and
recognized independent consultants, having favorable repute, skill and experience with respect
to the acts and duties required of a qualified independent consultant to be provided to the Issuer,
as shall from time to time be retained by the Issuer to perform the acts and carry out the duties
herein provided for such consultants. The Qualified Independent Consultant may be also the
Accountant or the Issuer's Consulting Engineers.
.
"Rates" shall mean the rates, fees, rentals and other charges which shall be made
and collected by the Issuer for the use of the product, services and facilities to be provided by
the System.
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"Rate Stabilization Fund" shall mean the Rate Stabilization Fund established
pursuant to Section 4.4 hereof.
"Rebate Fund" shall mean the Rebate Fund established pursuant to Section 4.4
hereof.
"Redemption Price" shall mean, with respect to any Bond or portion thereof, the
principal amount or portion thereof, plus the applicable premium, if any, payable upon
redemption thereof pursuant to such Bond or Supplemental Resolution.
"Refunded Obligations" shall mean the Issuer's outstanding Notes and the Loan.
"Registrar" shall mean any registrar for the Bonds appointed by or pursuant to
Supplemental Resolution and its successors and assigns, and any other Person which may at any
time be substituted in its place pursuant to Supplemental Resolution.
"Renewal and Replacement Fund" shall mean the Renewal and Replacement Fund
established pursuant to Section 4.4 hereof.
.
"Renewal and Replacement Fund Requirement" shall mean, on the date of
calculation, an amount of money equal to the lesser of (1) five percent (5%) of the Gross
Revenues received by the Issuer in the immediately preceding Fiscal Year or (ii) such other
amount as may be recommended to the Issuer by the Qualified Independent Consultant and
approved by the Governing Body as an amount appropriate for the purposes of this Resolution.
"Reserve Fund" shall mean the Reserve Fund established pursuant to Section 4.4
hereof.
"Reserve Fund Insurance Policy" shall mean the insurance policy deposited in the
Reserve Fund in lieu of or in partial substitution for cash on deposit therein pursuant to Section
4.5(D).
"Reserve Fund Letter of Credit" shall mean a Credit Facility (other than a Reserve
Fund Insurance Policy) issued by any bank or national banking association, insurance company
or other financial institution and then on deposit in the Reserve Fund in lieu of or in partial
substitution for cash on deposit therein pursuant to Section 4.5(D) hereof.
"Reserve Fund Requirement" shall mean, as of any date of calculation, an amount
equal to the lesser of (1) the Maximum Debt Service Requirement, (2) 125 % of the average
annual Debt Service Requirement, or (3) 10% of the proceeds of each Series of Outstanding
Bonds. In computing the Reserve Fund Requirement, the interest rate on Variable Rate Bonds
shall be assumed to be the greater of (a) 110% of the daily average interest rate on such
. . Variable Rate Bonds during the twelve (12) months ending with the month preceding the date
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of calculation, or such shorter period of time that such Bonds shall have been Outstanding, or
(b) the actual rate of interest borne by the Variable Rate Bonds on such date of calculation.
"Resolution" and "this Resolution" shall mean this instrument, as the same may
from time to time be amended, modified or supplemented by any and all Supplemental
Resolutions.
"Revenue Fund" shall mean the Revenue Fund established pursuant to Section 4.4
hereof.
"Securities" shall mean Federal Securities and Prerefunded Obligations.
"Serial Bonds" shall mean all of the Bonds other than the Term Bonds.
"Series" shall mean all the Bonds delivered on original issuance in a simultaneous
transaction and identified pursuant to Sections 2.1 and 2.2 hereof or in a Supplemental
Resolution authorizing the issuance by the Issuer of such Bonds as a separate Series, regardless
of variations in maturity, interest rate, Amortization Installments or other provisions.
"Series 2000 Bonds" shall mean the Issuer's Water and Sewer Revenue and
Refunding Bonds, Series 2000, authorized pursuant to Section 2.2 hereof.
"Sinking Fund" shall mean the Sinking Fund established pursuant to Section 4.4
hereof.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a division
of The McGraw Hill Companies, Inc., the nationally recognized securities rating firm, and any
successor and successors thereto; and if such corporation shall be dissolved or liquidated or shall
no longer perform securities rating functions, shall mean any other nationally recognized
securities rating firm designated by the Issuer and approved by the Insurer and/or the Credit
Bank, as applicable.
"State" shall mean the State of Florida.
"Subordinated Indebtedness" shall mean that indebtedness of the Issuer,
subordinate and junior to the Bonds, issued in accordance with the provisions of Section 6.1
hereof and any Variable Rate Bonds which become Subordinated Indebtedness in accordance
with Section 6.2 hereof.
"Supplemental Resolution" shall mean any resolution of the Issuer amending or
supplementing this Resolution, adopted and becoming effective prior to the issuance of the Series
2000 Bonds or in accordance with the terms of Sections 8.1, 8.2 or 8.3 hereof.,
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"System" shall mean any and all water production, transmission, purification and
distribution facilities and appurtenant facilities, and all sewage collection, transmission, treatment
and disposal facilities and appurtenant facilities now owned and operated or hereafter owned and
operated by the Issuer, which System shall also include any and all improvements, extensions
and additions thereto hereafter constructed or acquired which shall be financed either from the
proceeds of Bonds or from any other funds or sources, together with all property, real or
personal, tangible or intangible, now or hereafter owned or used in connection therewith.
"Taxable Bond" shall mean any Bond which states, in the body thereof, that the
interest income thereon is includable in the gross income of the Holder thereof for federal
income taxation purposes.
"Term Bonds" shall mean those Bonds which shall be designated as Term Bonds
hereby or by Supplemental Resolution· and which are subject to mandatory redemption by
Amortization Installments.
"Variable Rate Bonds" shall mean Bonds issued with a variable, adjustable,
convertible or other interest rate which at the date of issue is not fixed as one or more stated
percentages for the entire term of such Bonds.
The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar
terms, shall refer to this Resolution; the term "heretofore" shall mean before the date of adoption
of this Resolution; and the term "hereafter" shall mean after the date of adoption of this
Resolution. .
Words importing the singular number include the plural number, and vice versa.
Section 1.2 Authority for Resolution. This Resolution is adopted pursuant to
the provisions of the Act.
Section 1.3 Resolution to Constitute Contract. In consideration of the purchase
and acceptance of any or all of the Bonds by those who shall hold the same from time to time,
the provisions of this Resolution shall be deemed to be and shall constitute a contract between
the Issuer and the Holders from time to time of the Bonds and shall be a part of the contract of
the Issuer with any Credit Bank and any Insurer. The pledge made in this Resolution and the
provisions, covenants and agreements herein set forth to be performed by or on behalf of the
Issuer shall be for the equal benefit, protection and security of the Holders of any and all of the
Bonds and for the benefit, protection and security of any Credit Bank and any Insurer. All of
the Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank
without preference, priority or distinction of any of the Bonds over any other thereof except as
expressly provided in or pursuant to this Resolution.
Section 1.4 Findings. It is hereby ascertained, determined and declared as
follows:
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(A) For the benefit of its inhabitants, the Issuer presently owns, operates and
maintains the System for the supply and distribution of water for domestic, commercial and
industrial use and for the collection, treatment and disposal of sewage.
(B) The Issuer deems it necessary, desirable and in the best interest of the
Issuer that the Initial Project be acquired and constructed. The Cost of the Initial Project shall
be financed with the proceeds of the Series 2000 Bonds.
(C) The Issuer has heretofore issued and has presently outstanding and unpaid
the Refunded Obligations.
(D) The Issuer deems it necessary, desirable and in the best financial interest
of the Issuer that the Refunded Obligations be refunded. Simultaneously with the issuance of
the Series 2000 Bonds, a sufficient portion of the proceeds of the Series 2000 Bonds and other
funds available will be paid by the Issuer to the Escrow Holder for deposit by the Escrow
Holder into the Escrow Account established pursuant to the Escrow Deposit Agreement, to
effectuate the refunding and defeasance of (i) the Notes pursuant to the provisions of the Note
Resolution and (ii) the Loan pursuant to the Loan Agreement, as provided in the Escrow Deposit
Agreement.
(E) The Issuer deems it necessary, desirable and in the best interest of the
Issuer that the Pledged Funds be pledged to the payment of the principal of and interest on the
Bonds. No part of the Pledged Funds has been pledged or encumbered in any manner except
that a portion of the Pledged Funds are presently pledged for the payment of the principal of and
interest on the Refunded Obligations.
(F) The estimated Gross Revenues to be derived in each year hereafter from
the operation of the System will be sufficient to pay Operating Expenses, the principal of and
interest on the Bonds, as the same become due, and all other paymcnts provided for in this
Resolution.
(G) The principal of and interest on the Bonds and all other payments provided
for in this Resolution will be paid solely from the sources herein provided in accordance with
the terms hereof; and no ad valorem taxing power of the Issuer will ever be exercised nor will
any Holder of any Bond or any Credit Bank or any Insurer have the right to compel the exercise
of such ad valorem taxing power to pay the principal of or interest on the Bonds or to make any
other payments provided for in this Resolution, and the Bonds shall not constitute a lien upon
the System or upon any other property of the Issuer or situated within its corporate territorial
limits, except the Pledged Funds.
Section 1.5 Authorization of Initial Project. The acquisition and construction
of the Initial Project in the manner herein provided is hereby authorized.
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Section 1.6 Authorization of Refundin~. The refunding of the Refunded
Obligations in the manner herein provided is hereby authorized.
Section 1.7 Refundin~ of Refunded Obligations. Simultaneously with the
delivery of the Series 2000 Bonds to the purchaser or purchasers thereof, the Issuer will enter
into the Escrow Deposit Agreement with the Escrow Holder. At the time the Escrow Deposit
Agreement is executed, the Issuer will furnish to the Escrow Holder appropriate documentation
to demonstrate that the sum being deposited with the Escrow Holder pursuant to this Resolution,
together with other funds deposited into the Escrow Account pursuant to the provisions of the
Escrow Deposit Agreement, shall be equal to the Escrow Requirement and that such moneys and
the investments to be made pursuant to the Escrow Deposit Agreement will be sufficient to
produce the moneys required to make all payments described in the Escrow Deposit Agreement
for the full and complete refunding and defeasance of the Refunded Obligations.
ARTICLE 2
AUTHORIZATION, TERMS, EXECUTION
AND REGISTRATION OF BONDS
Section 2.1 Authorization of Bonds. The Issuer hereby authorizes the issuance
of Bonds of the Issuer to be designated as "City of Clermont, Florida, Water and Sewer Revenue
Bonds," which may be issued in one or more Series as hereinafter provided. The aggregate
principal amount of the Bonds which may be executed and delivered under this Resolution is not
limited except as may hereafter be provided by Supplemental Resolution or as limited by the Act
or by other applicable law.
The Bonds may, if and when authorized by the Issuer pursuant to this Resolution
or Supplemental Resolution, be issued in one or more Series, with such further appropriate
particular designations added to or incorporated in such title for the Bonds of any particular
Series as the Issuer may determine and as may be necessary to distinguish such Bonds from the
Bonds of any other Series. Each Bond shall bear upon its face the designation so determined
for the Series to which it belongs.
The Bonds shall be issued for such purpose or purposes; shall bear interest at such
rate or rates not exceeding the maximum rate permitted by law; and shall be payable in lawful
money of the United States of America on such dates; all as determined by this Resolution or
by Supplemental Resolution. From and after any maturity date of any of the Bonds (deposit of
moneys and/or Securities for the payment of the principal and interest on such Bonds having
been made by the Issuer with the Paying Agents), notwithstanding that any of such Bonds shall
not have been surrendered for cancellation, no further interest shall accrue upon the principal
or upon the interest which shall have accrued and shall then be due on such date, and such
Bonds shall cease to be entitled to any lien, benefit or security under this Resolution, and the
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Holders shall have no rights in respect of such Bonds except to receive payment of such
principal and unpaid interest accrued to the maturity date.
The Bonds shall be issued in such denomination or denominations and such form,
whether coupon or registered; shall be dated such date or dates; shall bear such numbers; shall
be payable at such place or places; shall contain such redemption provisions; shall have such
Paying Agents and Registrars; shall mature in such years and amounts; and the proceeds shall
be useq in such manner all as determined by this Resolution or by Supplemental Resolution,
The Issuer may issue Bonds which may be secured by a Credit Facility or by a Bond Insurance
Policy all as shall be determined by this Resolution or by Supplemental Resolution.
Section 2.2 Authorization and Description of Series 2000 Bonds. A Series of
Bonds entitled to the benefit, protection and security of this Resolution is hereby authorized to
be issued in an aggregate principal amount not to exceed $17,000,000 for the principal purpose
of financing a part of the cost of acquiring and constructing the Initial Project, refunding the
Refunded Obligations, funding the Reserve Fund and paying certain costs of issuance incurred
with respect to such Series. Such Series shall be designated as, and shall be distinguished from
the Bonds of all other Series by the title "City of Clermont, Florida, Water and Sewer Revenue
and Refunding Bonds, Series 2000," provided the Issuer may change such designation in the
event that the Series 2000 Bonds are not issued in calendar year 2000.
.
The Series 2000 Bonds shall be dated as of the first day of the month in which
occurs the delivery of the Series 2000 Bonds to the purchaser or purchasers thereof or such other
date as may be set forth by Supplemental Resolution; shall be issued as fully registered Bonds;
and shall be numbered consecutively from one upward in order of maturity preceded by the
letter "R;" shall be in such'denominations and shall bear interest at a rate or rates not exceeding
the maximum rate permitted by law (calculated on the basis of a 360-day year of twelve 3O-day
months), payable in such manner and on such dates; shall consist of such amounts of Serial
Bonds, Term Bonds, Variable Rate Bonds and Capital Appreciation Bonds, maturing in such
amounts and in such years not exceeding thirty (30) years from their date; shall have such
Paying Agents and Registrars; and shall contain such redemption provisions; all as the Issuer
shall hereafter provide by Supplemental Resolution.
The principal of or Redemption Price, if applicable, on the Series 2000 Bonds is
payable upon presentation and surrender of the Series 2000 Bonds at the office of the Paying
Agent. Interest payable on any Series 2000 Bond on any Interest Date will be paid by check or
draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close
of business on the date which shall be the fifteenth day (whether or not a business day) of the
calendar month next preceding such Interest Date, or, unless otherwise provided by
Supplemental Resolution, at the option of the Paying Agent, and at the request and expense of
such Holder, by bank wire transfer for the account of such Holder. In the event the interest
payable on any Series 2000 Bond is not punctually paid or duly provided for by the Issuer on
such Interest Date, such defaulted interest will be paid to the Holder in whose name such Bond
shall be registered at the close of business on a special record date for the payment of such
.
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defaulted interest as established by notice to such Holder, not Jess than ten (10) days preceding
such special record date. All payments of principal of or Redemption Price, if applicable, and
interest on the Series 2000 Bonds shall be payable in any coin or currency of the United States
of America which at the time of payment is legal tender for the payment of public and private
debts.
A Depository may act as securities depository for the Series 2000 Bonds. The
ownership of one fully-registered, certificated Series 2000 Bond for each maturity, each in the
aggregate principal amount of such maturity, may be registered in the name of a Depository or
its nominee.
The Series 2000 Bonds in a Book Entry System registered in the name of a
Depository or its nominee shall be payable in lawful money of the United States of America in
immediately available funds (i) in the case of principal of and any premium on such Series 2000
Bonds, delivered or transmitted to the Depository or its authorized representative when due, and
(ii) in the case of interest on the Series 2000 Bonds, delivered or transmitted on any date interest
is due to the Depository or nominee that was the Holder of that Series 2000 Bond (or one or
more predecessor Series 2000 Bonds) at the close of business on the record date applicable to
that interest payment date.
.
The Issuer will recognize the Depository or its nominee as the Holder for all
purposes, including notices. Conveyance of notices and other communications by the Depository
to participants, by participants to indirect participants, and by participants and indirect
participants to beneficial owners will be governed by arrangements among them, subject to any
statutory and regulatory requirements as may be in effect from time to time.
In the event that (i) the Depository determines to discontinue providing its service
with respect to the Series 2000 Bonds by giving written notice to the Issuer and discharging its
responsibilities with respect thereto under applicable law, and the Issuer fails to appoint a
successor Depository for the Series 2000 Bonds, or (ii) the Issuer determines to discontinue the
Book Entry System through a Depository, then bond certificates are required to be delivered as
described in the Series 2000 Bonds. The purchasers of beneficial ownership interests in the
Series 2000 Bonds (the "Beneficial Owners"), upon registration of certificates held in the
Beneficial Owner's name, will become the registered owner of the Series 2000 Bonds.
Neither the Issuer nor the Registrar and Paying Agent will have any responsibility
or obligation to any Beneficial Owner or any other person with respect to (i) the accuracy of any
records maintained by the Depository or any persons participating by or through the Depository;
(ii) the payment by the Depository or any persons participating by or through the Depository of
any amount with respect to the principal or Redemption Price, if applicable, or interest on the
Series 2000 Bonds; (iii) any notice which is permitted or required to be given to Holders
pursuant to this Resolution; (iv) the selection by the Depository or any persons participating by
or through the Depository of any person to receive payment in the event of a partial redemption
.
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. of the Series 2000 Bonds; or (v) any consent given or other action taken by the Depository as
Holder.
Section 2.3 Application of Series 2000 Bond Proceeds. Except as otherwise
provided by Supplemental Resolution, the proceeds derived from the sale of the Series 2000
Bonds, including accrued interest and premium, if any, shall, simultaneously with the delivery
of the Series 2000 Bonds to the purchaser or purchasers thereof, be applied by the Issuer as
follows:
(A) Accrued and capitalized interest shall be deposited in the Interest Account.
(B) An amount shall be deposited in the Reserve Fund which, together with
any moneys and securities on deposit therein and any Reserve Fund Insurance Policy and/or
Reserve Fund Letter of Credit obtained in accordance with Section 4.5(D) hereof, shall equal
the Reserve Fund Requirement.
(C) A sufficient amount of the Series 2000 Bond proceeds which, together with
other funds deposited in the Escrow Account pursuant to the provisions of the Escrow Deposit
Agreement, shall equal the Escrow Requirement, shall be deposited with the Escrow Holder
under the Escrow Deposit Agreement and applied only in the manner provided in the Escrow
Deposit Agreement.
. (D) The Issuer covenants and agrees to establish a separate account with an
Authorized Depository to be known as the "City of Clermont Water and Sewer Revenue Bonds
Costs of Issuance Account- (the "Costs of Issuance Account"), which shall be used only for the
payment of costs and expenses described in this subsection. A sum sufficient to pay all costs
and expenses in connection with the preparation, issuance and sale of the Series 2000 Bonds,
including fees of financial advisors, insurers, engineering and other consulting fees, legal fees,
bond insurance premiums, printing fees, rating agency fees and other similar costs shall be
deposited to the credit of the Cost of Issuance Account, and all such costs and expenses shall
be promptly paid by the Issuer to the persons respectively entitled to receive the same. When
all moneys on deposit to the credit of the Costs of Issuance Account shall have been disbursed
by the Issuer for the payment of such costs and expenses, the Costs of Issuance Account shall
be closed; provided, however, that if any balance shall remain in the Costs of Issuance Account
six months after issuance of the Series 2000 Bonds, such moneys shall be transferred by the
Issuer to the Construction Fund and the Costs of Issuance Account shall be closed. After the
Cost of Issuance Account shall be closed, the Issuer may pay from the Construction Fund any
unpaid issuance expenses.
(E) The balance of the Series 2000 Bond proceeds shall be deposited in the
Construction Fund.
.
Section 2.4 Execution of Bonds. The Bonds shall be executed in the name of
the Issuer with the manual or facsimile signature of the Mayor and the official seal of the Issuer
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shall be imprinted thereon, attested and countersigned with. the manual or facsimile signature of
the Clerk. In case anyone or more of the officers who shall have signed or sealed any of the
Bonds or whose facsimile signature shall appear thereon shall cease to be such officer of the
Issuer before the Bonds so signed and sealed have been actually sold and delivered such Bonds
may nevertheless be sold and delivered as herein provided and may be issued as if the person
who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed
and sealed on behalf of the Issuer by such person who at the actual time of the execution of such
Bond shall hold the proper office of the Issuer, although at the date of such Bond such person
may not have held such office or may not have been so authorized. 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 Resolution, notwithstanding that either
or both shall have ceased to hold such office at the time the Bonds shall be actually sold and
delivered.
Section 2.5 Authentication. No Bond of any Series shall be secured hereunder
or entitled to the benefit hereof or shall be valid or obligatory for any purpose unless there shall
be manually endorsed on such Bond a certificate of authentication by the Registrar or such other
entity as may be approved by the Issuer for such purpose. Such certificate on any Bond shall
be conclusive evidence that such Bond has been duly authenticated and delivered under this
Resolution. The form of such certificate shall be substantially in the form provided in Section
2.9 hereof.
Section 2.6 Temporary Bonds. Until the definitive Bonds of any Series are
prepared, the Issuer may execute, in the same manner as is provided in Section 2.4, and deliver,
upon authentication by the Registrar pursuant to Section 2.5 hereof, in lieu of definitive Bonds,
but subject to the same provisions, limitations and conditions as the definitive Bonds, except as
to the denominations thereof, one or more temporary Bonds substantially of the tenor of the
definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations
authorized by the Mayor and the Clerk, such authorization to be evidenced conclusively by their
execution of such temporary Bond or Bonds, and with such omissions, insertions and variations
as may be appropriate to temporary Bonds. The Issuer, at its own expense, shall prepare and
execute definitive Bonds, which shall be authenticated by the Registrar. Upon the surrender of
such temporary Bonds for exchange, the Registrar, without charge to the Holder thereof, shall
deliver in exchange therefor definitive Bonds, of the same aggregate principal amount and Series
and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds
shall in all respects be entitled to the same benefits and security as definitive Bonds issued
pursuant to this Resolution. All temporary Bonds surrendered in exchange for another
temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith canceled by the
Registrar.
Section 2.7 Bonds Mutilated. Destroyed. Stolen or Lost. In case any Bond shallmbecome mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and
deliver, and the Registrar shall authenticate, 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
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and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed,
stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of such
Holder's ownership thereofand satisfactory indemnity and complying with such other reasonable
regulations and conditions as the Issuer or the Registrar may prescribe and paying such expenses
as the Issuer and the Registrar may incur. All Bonds so surrendered or otherwise substituted
shall be canceled by the Registrar. If any of the Bonds shall have matured or be about to
mature, instead of issuing a substitute Bond, the Issuer may pay the same or cause the Bond to
be paid, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed,
without surrender thereof.
Any such duplicate Bonds issued pursuant to this Section 2.7 shall constitute
original, additional contractual obligations on the part of the Issuer whether or not the lost,
stolen or destroyed Bond be at any time found by anyone, and such duplicate Bond shall be
entitled to equal and proportionate benefits and rights as to lien on the Pledged Funds to the
same extent as all other Bonds issued hereunder and shall be entitled to the same benefits and
security as the Bond so lost, stolen or destroyed.
Section 2.8 Interchangeability. Negotiability and Transfer. Bonds, upon
surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory
to the Registrar, duly executed by the Holder thereof or such Holder's attorney duly authorized
in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate
principal amount of registered Bonds of the same Series and maturity of any other authorized
denominations.
.
The Bonds issued under this Resolution shall be and have all the qualities and
incidents of negotiable instruments under the laws of the State of Florida, subject to the
provisions for registration and transfer contained in this Resolution and in the Bonds. So long
as any of the Bonds shall remain Outstanding, the Issuer shall cause to be maintained and kept,
at the office of the Registrar, books for the registration and transfer of the Bonds.
Each Bond shall be transferable only upon the books of the Issuer, at the office
of the Registrar, under such reasonable regulations as the Issuer may prescribe, by the Holder
thereof in person or by such Holder's attorney duly authorized in writing upon surrender thereof
together with a written instrument of transfer satisfactory to the Registrar duly executed and
guaranteed by the Holder or such Holder's duly authorized attorney. Upon the transfer of any
such Bond, the Issuer shall issue, and cause to be authenticated, in the name of the transferee
a new Bond or Bonds of the same aggregate principal amount and Series and maturity as the
surrendered Bond. The Issuer, the Registrar and any Paying Agent or fiduciary of the Issuer
may deem and treat the Person in whose name any Outstanding Bond shall be registered upon
the books of the Issuer as the absolute owner of such Bond, whether such Bond shall be overdue
or not, for the purpose of receiving payment of, or on account of, the principal or Redemption
Price, if applicable, and interest on such Bond and for all other purposes, and all such payments
so made to any such Holder or upon such Holder's order shall be valid and effectual to satisfy
and discharge the liability upon such Bond to the extent of the sum or sums so paid and neither
'.
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the Issuer nor the Registrar nor any Paying Agent or other fiduciary of the Issuer shall be
affected by any notice to the contrary.
The Registrar, in any case where it is not also the Paying Agent in respect to any
Series of Bonds, shall forthwith (a) following the fifteenth day prior to an Interest Date for such
Series, (b) following the fifteenth day next preceding the date of first mailing of notice of
redemption of any Bonds of such Series, and (c) at any other time as reasonably requested by
the Paying Agent of such Series, certify and furnish to such Paying Agent the names, addresses
and holdings of Bondholders and any other relevant information reflected in the registration
books.
In all cases in which the privilege of exchanging Bonds or transferring Bonds is
exercised, the Issuer shall execute and the Registrar shall authenticate and deliver such Bonds
in accordance with the provisions of this Resolution. Execution of Bonds by the Mayor and the
Clerk for purposes of exchanging, replacing or transferring Bonds may occur at the time of the
original delivery of the Series of which such Bonds are a part. All Bonds surrendered in any
such exchanges or transfers shall be canceled by the Registrar. For every such exchange or
transfer of Bonds, the Issuer or the Registrar may make a charge sufficient to reimburse it for
any tax, fee, expense or other governmental charge required to be paid with respect to such
exchange or transfer. The Issuer and the Registrar shall not be obligated to make any such
exchange or transfer of Bonds of any Series during the fifteen (15) days next preceding an
Interest Date on the Bonds of such Series (other than Capital Appreciation Bonds and Variable
Rate Bonds), or, in the case of any proposed redemption of Bonds, during the fifteen (15) days
next preceding the redemption date established for such Bonds.
The Issuer may elect to issue any Bonds as uncertificated registered public
obligations (not represented by instruments), commonly known as book-entry obligations,
provided it shall establish a system of registration therefor by Supplemental Resolution.
Section 2.9 Form of Bonds. Except for Capital Appreciation Bonds and
Variable Rate Bonds, the form of which shall be provided by Supplemental Resolution, the
Bonds shall be in substantially the following form with 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 evidenced
conclusively by the Issuer's delivery of the Bonds to the purchaser or purchasers thereof):
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No. R-
$
UNITED STATES OF AMERICA
STATE OF FLORIDA
COUNTY OF LAKE
CITY OF CLERMONT
WATER AND SEWER REVENUE AND REFUNDING BOND, SERIES
Interest
Rate
Maturity
Date
Date of
Original Issue
CUSIP
%
'-
-
Registered Holder:
Principal Amount:
KNOW ALL MEN BY THESE PRESENTS, that the City of Clermont, a
municipality created and existing under and by virtue of the laws of the State of Florida (the
"Issuer"), for value received, hereby promises to pay, solely from the sources of payment
hereinafter described, to the Registered Holder identified above, or registered assigns as
hereinafter provided, the Principal Amount identified above on the Maturity Date identified
above and interest (calculated on the basis of a 360-day year of twelve 30-day months) on such
Principal Amount from the Date of Original Issue identified above or from the most recent
interest payment date to which interest has been paid, at the Interest Rate per annum identified
above on and of each year commencing ,
until such Principal Amount shall have been paid or provided for, except as the
provisions hereinafter set forth with respect to redemption prior to maturity may be or become
applicable hereto.
Such Principal Amount and interest and the premium, if any, on this bond are
payable in any coin or currency of the United States of America which, on the respective dates
of payment thereof, shall be legal tender for the payment of public and private debts. Such
Principal Amount and the premium, if any, on this bond, are payable, upon presentation and
surrender hereof, at the office of ,
, , as paying agent, or such other
paying agent as the Issuer shall hereafter duly appoint (the "Paying Agent"). Payment of each
installment of interest shall be made to the person in whose name this bond shall be registered
on the registration books of the Issuer maintained by ,
, , as registrar, or such other registrar
as the Issuer shall hereafter duly appoint (the "Registrar"), at the close of business on the date
which shall be the fifteenth day (whether or not a business day) of the calendar month next
preceding each interest payment date and shall be paid by a check or draft of the Paying Agent
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mailed to such Registered Holder at the address appearing on such registration books or, at the
option of the Paying Agent, and at the request and expense of such Registered Holder, by bank
wire transfer for the account of such Holder. In the event interest payable on this bond is not
punctually paid or duly provided for by the Issuer on such interest payment date, payment of
each installment of such defaulted interest shall be made to the person in whose name this bond
shall be registered at the close of business on a special record date for the payment of such
defaulted interest as established by notice to such Registered Holder, not less than ten (10) days
preceding such special record date.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE SIDE HEREOF AND SUCH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET
FORTH IN THIS PLACE.
This bond shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the Registrar.
IN WITNESS WHEREOF, the City of Clermont, Florida, has issued this bond
and has caused the same to be executed by the manual or facsimile signature of its Mayor and
attested and countersigned by the manual or facsimile signature of its City Clerk. and its official
seal or a facsimile thereof to be affixed or reproduced hereon, all as of the day of
,20_.
CITY OF CLERMONT, FLORIDA
(SEAL)
By
Mayor
ATTESTED AND COUNTERSIGNED:
City Clerk
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CERTIFICATE OF AUTHENTICATION
This bond is one of the Bonds of the issue described in the within-mentioned
Resolution.
DATE OF AUTHENTICATION:
Registrar
By:
Authorized Signatory
(Provisions on Reverse Side of Bond)
This bond is one of an authorized issue of bonds of the Issuer in the aggregate
principal amount of $ (the "Bonds") of like date, tenor and effect, except
as to maturity date, interest rate, denomination and number, issued to finance the cost of
, in and for the Issuer, under the authority of and in full
compliance with the Constitution and laws of the State of Florida, particularly Chapter 166, Part
II, Florida Statutes, as amended, and other appJicable provisions of law (the "Act"), and a
resolution duly adopted b¥. the City Council of the Issuer on February _, 1996, as
supplemented (the "Resolution"), and is subject to all the terms and conditions of the Resolution.
The principal of, premium, if any, and interest on this bond are payable solely
from and secured by a lien upon and a pledge of the Pledged Revenues (as defined in the
Resolution), including the Net Revenues (as defined in the Resolution) to be derived from the
operation of the Issuer's water and sewer system (the "System"), and, until applied in
accordance with the provisions of the Resolution, the proceeds of the Bonds and. all moneys,
including investments thereof, in certain of the funds and accounts established pursuant to the
Resolution, all in the manner and to the extent described in the Resolution (collectively, the
"Pledged Funds"). It is expressly agreed by the Registered Holder of this bond that the full faith
and credit of neither the Issuer, the State of Florida, nor any political subdivision thereof, is
pledged to the payment of the principal of or premium, if any, or interest on this bond and that
the Registered Holder shall never have the right to require or compel the exercise of any taxing
power of the Issuer, the State of Florida, or any political subdivision thereof, to the payment of
such principal, premium, if any, and interest. This bond and the obligation evidenced hereby
shall not constitute a lien upon the System or any other property of the Issuer, except the
Pledged Funds, and shall be payable solely from the Pledged Funds in accordance with the terms
of the Resolution.
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Neither the members of the City Commission of the Issuer nor any person
executing this bond shall be liable personally hereon or be subject to any personal liability or
accountability by reason of the issuance hereof.
The Bonds maturing prior to , shall not be subject to
redemption prior to maturity. The Bonds maturing on , or thereafter may be
redeemed prior to maturity at the option of the Issuer, as a whole on ,
or on any date thereafter, or in part, from such maturity or maturities as the Issuer shall
designate and by lot within a maturity, on , or on any interest payment date
thereafter, at the following redemption prices (expressed as a percentage of the principal amount
of the Bonds to be redeemed) plus accrued interest to the redemption date, if redeemed during
the following periods:
Redemption Period
(both dates inclusive)
Redemption
Price
through
through
and thereafter
%
The Bonds maturing , are subject to mandatory redemption
in part prior to maturity by lot at a redemption price equal to the principal amount thereof,
without premium, plus accrued interest to the redemption date, beginning on
, and on each thereafter in the years and in the principal
amounts corresponding to' the Amortization Installments (as defined in the Resolution) as
follows:
Year
Amortization
Installments
$
(maturity)
Notice of redemption, unless waived, is to be given by the Registrar by mailing
an official redemption notice by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to the registered holders of the Bonds to be
redeemed at such holders' addresses shown on the registration books maintained by the Registrar
or at such other addresses as shall be furnished in writing by such registered holders to the
Registrar; provided, however, that no defect in any such notice to any registered holder of Bonds
to be redeemed nor failure to give such notice to any such registered holder nor failure of any
such registered holder to receive such notice shall in any manner defeat the effectiveness of a
call for redemption as to all other registered holders of Bonds to be redeemed. Notice of
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redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall,
on the redemption date, become due and payable at the redemption price therein specified, and
from and after such date (unless the Issuer shall default in the payment of the redemption price)
such Bonds or portions of Bonds shall cease to bear interest.
This bond is and has all the qualities and incidents of a negotiable instrument
under the laws of the State of Florida, but may be transferred only in accordance with the terms
of the Resolution only upon the books of the Issuer kept for that purpose at the office of the
Registrar by the Registered Holder in person or by such Holder's attorney duly authorized in
writing, upon the surrender of this bond together with a written instrument of transfer
satisfactory to the Registrar duly executed by the Registered Holder or such Holder's attorney
duly authorized in writing, and thereupon a new Bond or Bonds in the same aggregate principal
amount shall be issued to the transferee in exchange therefor, and upon the payment of the
charges, if any, prescribed in the Resolution. Each of the Bonds is issuable in fully registered
form in the denomination of $5,000 or any integral multiple thereof not exceeding the aggregate
principal amount of the Bonds having the same maturity. The Issuer, the Registrar and any
Paying Agent may treat the Registered Holder of this bond as the absolute owner hereof for all
purposes, whether or not this bond shall be overdue, and shall not be affected by any notice to
the contrary. The Issuer and the Registrar shall not be obligated to make any exchange or
transfer of any Bonds during the fifteen (15) days next preceding an interest payment date or,
in the case of any proposed redemption of any Bonds, during the fifteen (15) days next preceding
the redemption date established for such Bonds.
[The Bonds when issued will be registered initially in the name of Cede & Co.,
as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act
as the initial securities depository for the Bonds. Individual purchases of the Bonds may be
made in book entry form bnly, and such purchasers will not receive certificates representing
their interests in the Bonds. While the Bonds are registered in the name of a securities
depository (a "Depository") or its nominee the Issuer will recognize the Depository or its
nominee as the Holder of the Bonds for all purposes, including notices. Conveyance of notices
and other communications by the Depository to participants, by participants to indirect
participants, and by participants and indirect participants to beneficial owners will be governed
by arrangements among them, subject to any statutory and regulatory requirements as may be
in effect from time to time.
The Bonds are issuable only as fully-registered bonds and, except as hereinafter
provided, in printed or typewritten form, registered in the name of Cede & Co., as nominee of
DTC, which shall be considered to be the Registered Holder for all purposes of the Resolution,
including without limitation, payment by the Issuer of principal of, premium, if any, and interest
on the Bonds, and receipt of notices and exercise of rights of holders of the Bonds. There shall
be a single Bond which shall be immobilized in the custody of DTC with the beneficial owners
having no right to receive the Bonds in the form of physical securities or certificates.
Ownership of beneficial interest in the Bonds shall be shown by book entry on the system
maintained and operated by DTC and its participants, and transfers of ownership or beneficial
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interests shall be made only by DTC and its participants, by book entry, the Issuer having no
responsibility therefor. DTC is expected to maintain records of the positions of participants in
the Bonds, and the participants and persons acting through participants are expected to maintain
records of the purchasers of beneficial interests in the Bonds. The Bonds as such shall not be
transferable or exchangeable, except for transfer to another Depository or to another nominee
of a Depository, without further action by the Issuer.
If any Depository determines not to continue to act as a Depository for the Bonds
for use in a book entry system, the Issuer may attempt to have established a securities
depository/book entry system relationship with another qualified Depository under the
Resolution. If the Issuer does not or is unable to do so, the Issuer and the Registrar and Paying
Agent, after the Registrar and Paying Agent has made provision for notification of the beneficial
owners by the then Depository, shall permit withdrawal of the Bonds from the Depository, and
authenticate and deliver Bond certificates in fully registered form (in denominations of $5,000
or multiples thereot) to the assigns of the Depository or its nominee.
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 connection with the issuance of this
bond, exist, have happened and have been performed, in regular and due form and time as
required by the Constitution and laws of the State of Florida applicable thereto, and that the
issuance of the bonds does not violate any constitutional or statutory limitations or provisions.]
LEGAL OPINION
[Insert appropriate approving opinion of bond counsel.]
The above is a true copy of the opinion rendered by Foley & Lardner,
Jacksonville, Florida, in connection with the issuance of, and dated as of the original delivery
of, the Bonds of the issue of which this bond is one. An executed copy of that opinion is on me
in my office.
City Clerk
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The following abbreviations, when used in the inscription on the face of the within
bond, shall be construed as though they were written out in full according to applicable laws or
regulations:
TEN COM
as tenants in common
TEN ENT
as tenants by the entireties
IT TEN
as joint tenants with right of survivorship and not as tenants in common
UNIF TRANS MIN ACT
(Cust.)
Custodian for
under Uniform Transfer to Minors Act of
(State)
Additional abbreviations may also be used though not in list above.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
Insert Social Security or Other
Identifying Number of Assignee
(Name and Address of Assignee)
the within bond and does hereby irrevocably constitute and appoint
,
as attorneys to register the transfer of the said bond on the books kept for registration thereof
with full power of substitution in the premises.
Dated :
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by
an institution which is a participant in the
Securities Transfer Agent Medallion Program
(STAMP) or similar program.
NOTICE: The signature to this assignment
must correspond with the name of the
Registered Holder as it appears upon the face
of the within bond in every particular, without
alteration or enlargement or any change
whatever and the Social Security or other
identifying number of such assignee must be
supplied.
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ARTICLE 3
REDEMPTION OF BONDS
Section 3.1 Privilege of Redemption. The terms of this Article 3 shall apply to
redemption of Bonds other than Capital Appreciation Bonds or Variable Rate Bonds. The terms
and provisions relating to redemption of Capital Appreciation Bonds and Variable Rate Bonds
shall be provided by Supplemental Resolution.
Section 3.2 Selection of Bonds to be Redeemed. The Bonds shall be redeemed
only in the principal amount of $5,000 each and integral multiples thereof. The Issuer shall, at
least sixty (60) days prior to the redemption date (unless a shorter time period shall be
satisfactory to the Registrar) notify the Registrar of such redemption date and of the principal
amount of Bonds to be redeemed. For purposes of any redemption of less than all of the
Outstanding Bonds of a single maturity, the particular Bonds or portions of Bonds to be
redeemed shall be selected not more than forty-five (45) days prior to the redemption date by
the Registrar from the Outstanding Bonds of the maturity or maturities designated by the Issuer
by such method as the Registrar shall deem fair and appropriate and which may provide for the
selection for redemption of Bonds or portions of Bonds in principal amounts of $5,000 and
integral multiples thereof.
e If less than all of the Outstanding Bonds of a single maturity are to be redeemed,
the Registrar shall promptly notify the Issuer and Paying Agent (if the Registrar is not the
Paying Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for
redemption and, in the case of any Bond selected for partial redemption, the principal amount
thereof to be redeemed.
Section 3.3 Notice of Redemption. Unless waived by any Holder of Bonds to
be redeemed, notice of any redemption made pursuant to this section shall be given by the
Registrar on behalf of the Issuer by mailing a copy of an official redemption notice by first class
mail, postage prepaid, at least thirty (30) days and not more than sixty (60) days prior to the
date fixed for redemption to each Holder of Bonds to be redeemed at the address of such Holder
shown on the registration books maintained by the Registrar or at such other address as shall be
furnished in writing by such Holder to the Registrar; provided, however, that no defect in any
notice given pursuant to this section to any Holder of Bonds to be redeemed nor failure to give
such notice shall in any manner defeat the effectiveness of a call for redemption as to all other
Holders of Bonds to be redeemed.
Every official notice of redemption shall be dated and shall state:
(1) the redemption date,
e
(2)
the Redemption Price,
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.
(3) if less than all outstanding Bonds are to be redeemed, the number (and,
in the case of a partial redemption of any Bond, the principal amount) of each Bond to be
redeemed ,
(4) that on the redemption date the Redemption Price will become due and
payable upon each such Bond or portion thereof called for redemption, and that interest thereon
shall cease to accrue from and after said date, and
(5) that such Bonds to be redeemed, whether as a whole or in part, are to be
surrendered for payment of the Redemption Price plus accrued interest at the office of the
Paying Agent.
Prior to any redemption date, the Issuer shall deposit with the Paying Agent an
amount of money sufficient to pay the Redemption Price of and accrued interest on all the Bonds
or portions of Bonds which are to be redeemed on that date.
In addition to the foregoing notice, further notice may be given by the Issuer as
set out below, but no defect in said further notice nor any failure to give all or any portion of
such further notice shall in any manner defeat the effectiveness of a call for redemption if notice
thereof is given as above prescribed.
. (1) Each further notice of redemption given hereunder shall contain the
information required above for an official notice of redemption plus (a) the CUSIP numbers of
all Bonds being redeemed; '(b) the date of issue of the Bonds as originally issued; (c) the rate
of interest borne by each Bond being redeemed; (d) the maturity date of each Bond being
redeemed; and (e) any other descriptive information needed to identify accurately the Bonds
being redeemed.
(2) Each further notice of redemption shall be sent at least thirty-five (35) days
before the redemption date by registered or certified mail or overnight delivery service to any
Insurer which shall have insured, or any Credit Bank which shall have provided a Credit Facility
for, any of the Bonds being redeemed and to all registered securities depositories then in the
business of holding substantial amounts of obligations of types similar to the type of which the
Bonds consist (such depositories now being Depository Trust Company of New York, New
York, Midwest Securities Trust Company of Chicago, Illinois, and Philadelphia Depository
Trust Company of Philadelphia, Pennsylvania) and to one or more national information services
that disseminate notices of redemption of obligations such as the Bonds.
.
Section 3.4 Redemption of Portions of Bonds. Any Bond which is to be
redeemed only in part shall be surrendered at any place of payment specified in the notice of
redemption (with due endorsement by, or written instrument of transfer in form satisfactory to
the Registrar duly executed by, the Holder thereof or such Holder's attorney duly authorized in
writing) and the Issuer shall execute and the Registrar shall authenticate and deliver to the
Holder of such Bond, without service charge, a new Bond or Bonds, of the same interest rate
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and maturity, and of any authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the unredeemed portion of the principal of the
Bonds so surrendered.
Section 3.5 Payment of Redeemed Bonds. Official notice of redemption having
been given substantially as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on
the redemption date, become due and payable at the Redemption Price therein specified, and
from and after such date (unless the Issuer shall default in the payment of the Redemption Price)
such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for
redemption in accordance with said notice, such Bonds shall be paid by the Registrar and/or
Paying Agent at the appropriate Redemption Price, plus accrued interest. Each check or other
transfer of funds issued by the Registrar and/or Paying Agent for the purpose of the payment
of the Redemption Price of Bonds being redeemed shall bear the CUSIP number identifying, by
issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.
Installments of interest due on or prior to the redemption date shall be payable as herein
provided for payment of interest. AU Bonds which have been redeemed shall be canceled by
the Registrar and shall not be reissued.
ARTICLE 4
.
SECURITY, SPECIAL FUNDS AND
APPLICATION THEREOF
Section 4.1 Bonds not to be Indebtedness of Issuer. The Bonds shall not be or
constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of any
constitutional or statutory provision, but shall be special obligations of the Issuer, payable solely
from and secured by a lien upon and pledge of the Pledged Funds in accordance with the terms
of this Resolution. The Issuer may cause any Series of Bonds to be payable from and secured
by a Credit Facility or a Bond Insurance Policy not applicable to anyone or more other Series
of Bonds. No Holder of any Bond or any Credit Bank or any Insurer shall ever have the right
to compel the exercise of the ad valorem taxing power of the Issuer to pay such Bond or shall
be entitled to payment of such Bond from any moneys of the Issuer except the Pledged Funds,
in the manner provided herein.
The Pledged Funds shall be subject to the lien of this pledge immediately upon
the issuance and delivery of the Series 2000 Bonds, without any physical delivery by the Issuer
of the Pledged Funds or further act, and the lien of this pledge shall be valid and binding as
against all parties having claims of any kind against the Issuer, in tort, contract or otherwise.
.
Section 4.2 Security for Bonds. The payment of the principal of or Redemption
Price, if applicable, and interest on the Bonds shall be secured forthwith equally and ratably by
a pledge of and lien upon the Pledged Funds; provided, however, a Series of Bonds may be
further secured by a Credit Facility or a Bond Insurance Policy not applicable to anyone or
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more other Series of Bonds, as shall be provided by Supplemental Resolution, in addition to the
security provided herein. The Issuer does hereby irrevocably pledge the Pledged Funds to the
payment of the principal of or Redemption Price, if applicable, and interest on the Bonds.
Section 4.3 Construction Fund. The Issuer covenants and agrees to establish a
separate fund with an Authorized Depository to be known as the "City of Clermont Water and
Sewer Revenue Bond Construction Fund," which shall be used only for payment of the Cost of
Projects. Moneys in the Construction Fund, until applied in payment of any item of the Cost
of a Project in the manner hereinafter provided, shall be held in trust by the Issuer and shall be
subject to a lien and charge in favor of the Bondholders and for the further security of such
Holders.
There shall be paid into the Construction Fund the amounts required to be so paid
by the provisions of this Resolution or any Supplemental Resolution, and there may be paid into
the Construction Fund, at the option of the Issuer, any moneys received for or in connection
with a Project by the Issuer from any other source.
The Issuer shall establish within the Construction Fund a separate account for the
Initial Project and each Additional Project, the Cost of which is to be paid in whole or in part
out of the Construction Fund.
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The proceeds of insurance maintained pursuant to this Resolution against physical
loss of or damage to a Project, or of contractors' performance bonds with respect thereto
pertaining to the period of construction thereof, shall be deposited into the appropriate account
of the Construction Fund.
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The Issuer covenants that the acquisition and construction of each Project will be
completed without delay and in accordance with sound engineering practices. The Issuer shall
make disbursements or payments from the Construction Fund to pay the Cost of a Project upon
the filing with the Clerk of documents and/or certificates signed by an Authorized Issuer Officer
stating with respect to each disbursement or payment to be made: (1) the item number of the
payment, (2) the name and address of the Person to whom payment is due, (3) the amount to
be paid, (4) the Construction Fund account from which payment is to be made, (5) the purpose,
by general classification, for which payment is to be made, and (6) that (A) each obligation, item
of cost or expense mentioned therein has been properly incurred, is in payment of a part of the
Cost of a Project and is a proper charge against the account of the Construction Fund from
which payment is to be made and has not been the basis of any previous disbursement or
payment, or (B) each obligation, item of cost or expense mentioned therein has been paid by the
Issuer, is a reimbursement of a part of the Cost of a Project, is a proper charge against the
account of the Construction Fund from which payment is to be made, has not been theretofore
reimbursed to the Issuer or otherwise been the basis of any previous disbursement or payment
and the Issuer is entitled to reimbursement thereof. The Clerk shall retain all such documents
and/or certificates of the Authorized Issuer Officers for seven (7) years from the dates of such
documents and/or certificates. The Clerk shall make available the documents and/or certificates
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at all reasonable times for inspection by any Bondholder or the agent or representative of any
Bondholder.
Notwithstanding any of the other provisions of this Section 4.3, to the extent that
other moneys are not available therefor, amounts in the Construction Fund shall be applied to
the payment of principal of or Redemption Price, if applicable, and interest on Bonds when due.
The date of completion of a Project shall be determined by the Authorized Issuer
Officer who shall certify such fact in writing to the Governing Body. Promptly after the date
of the completion of a Project, and after paying or making provisions for the payment of all
unpaid items of the Cost of such Project, the Issuer shall deposit in the following order of
priority any balance of moneys remaining in the Construction Fund in (1) another account of the
Construction Fund for which the Authorized Issuer Officer has stated that there are insufficient
moneys present to pay the Cost of the "related Project, (2) the Reserve Fund, to the extent of a
deficiency therein, and (3) such other fund or account of the Issuer, including those established
hereunder, as shall be determined by the Governing Body, provided the Issuer has received an
opinion of Bond Counsel to the effect that such transfer shall not adversely affect the exclusion,
if any, of interest on the Bonds from gross income for federal income tax purposes.
Section 4.4 Funds and Accounts. The Issuer covenants and agrees to establish
. with one or more Authorized Depositories the following separate funds and accounts:
(A) Wate~ and Sewer System Revenue Fund.
(B) Water and Sewer Revenue Bond Sinking Fund. The Issuer shall establish
in the Sinking Fund three accounts: the "Interest Account," the "Principal Account" and the
"Bond Amortization Account."
(C) Water and Sewer Revenue Bond Reserve Fund.
(D) Water and Sewer System Impact Fees Fund. The Issuer shall establish in
the Impact Fees Fund two accounts: the "Current Account" and the "Impact Fee Stabilization
Account. "
(E) Water and Sewer System Rate Stabilization Fund.
(F) Water and Sewer System Renewal and Replacement Fund.
(G) Water and Sewer Revenue Bond Rebate Fund.
The Issuer may establish by Supplemental Resolution such other funds and accounts as it shall
deem necessary or advisable.
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The Issuer shall at any time and from time to time appoint one or more
Authorized Depositories to hold, for the benefit of the Issuer and/or the Bondholders, anyone
or more of the funds and accounts established hereby. Such depository or depositaries shall
perform at the direction of the Issuer the duties of the Issuer in depositing, transferring and
disbursing moneys to and from each of such funds and accounts as herein set forth, and all
records of such depository in performing such duties shall be open at all reasonable times to
inspection by the Issuer and its agents and employees.
Section 4.5 Flow of Funds.
(A) Impact Fees. The Issuer shall deposit into the Current Account all
Available Impact Fees, promptly upon receipt thereof, until there shall have been deposited
therein an amount equal to the Impact Fees Debt Service Component for the then current Bond
Year, together with the amount of any èontinuing deficiency in the deposits for the Impact Fees
Debt Service Component for any prior Bond Year, and thereafter the Issuer shall deposit into
the Impact Fee Stabilization Account all additional Available Impact Fees received in such Bond
Year.
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On or before the last day of each month, the Issuer shall withdraw from the
moneys on deposit to the credit of the Current Account and deposit in the Sinking Fund a sum
equal to one-twelfth (1/12) of the Impact Fees Debt Service Component for the then current
Bond Year, together with the amount of any continuing deficiency in prior monthly transfers
from the Current Account to the Sinking Fund.
The moneys in the Impact Fee Stabilization Account may, to the extent such
moneys may be lawfully used for such purpose, be applied at the discretion of the Issuer (1) for
deposit to the Current Account whenever the moneys on deposit therein are insufficient for the
purposes set forth herein, (2) for the acquisition and construction of Expansion Facilities, and
(3) for the purchase or redemption of Bonds; provided, however, that the aggregate amount of
Available Impact Fees applied by the Issuer pursuant to clauses (1) and (3) and pursuant to the
second paragraph of this subsection (A) to Bond Service Requirements shall never exceed the
aggregate Impact Fees Debt Service Components determined for all Bonds.
(B) Revenues. The Issuer shall deposit all Gross Revenues into the Revenue
Fund, promptly upon the receipt thereof. On or before the last day of each month, commencing
with the month in which delivery of the Series 2000 Bonds shall be made to the purchasers
thereof, the moneys in the Revenue Fund shall be deposited or credited in the following manner
and in the following order of priority:
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(1) Operation and Maintenance. Amounts in the Revenue Fund shall
be used first to pay reasonable and necessary Operating Expenses for the next ensuing
month; provided, however, that no such payment shall be made unless the provisions of
Section 5.3 hereof in regard to the current Annual Budget are complied with.
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(2) Sinking Fund. Next, the Issuer shall deposit into or credit to the
Sinking Fund such sums as are described in Section 4.5(C) hereof.
(3) Reserve Fund. Next, the Issuer shall deposit into or credit to the
Reserve Fund such sums as are described in Section 4.5(D) hereof.
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(4) Renewal and Replacement Fund. Next, the Issuer shall deposit into
or credit to the Renewal and Replacement Fund such sums as shall be sufficient to pay
one-twelfth (1/12) of the Renewal and Replacement Fund Requirement until the balance
on deposit in the Renewal and Replacement Fund equals the Renewal and Replacement
Fund Requirement. If the balance on deposit in the Renewal and Replacement Fund
exceeds the Renewal and Replacement Fund Requirement such excess amount shall be
transferred by the Issuer from the Renewal and Replacement Fund and deposited into the
Revenue Fund. The moneys in the Renewal and Replacement Fund shall be applied by
the Issuer for the purpose of paying the cost of extensions, improvements or additions
to, or the replacement or renewal of capital assets of, the System, or extraordinary
repairs of the System; provided, however, that on or prior to each principal and interest
payment date for the Bonds (in no event earlier than the fifteenth day of the month next
preceding such payment date), moneys in the Renewal and Replacement Fund shall be
deposited into the Interest Account, the Principal Account and the Bond Amortization
Account when the moneys therein are insufficient to pay the principal of and interest on
the Bonds coming due, but only to the extent moneys available in the Reserve Fund and
the Rate Stabilization Fund for such purpose pursuant to Section 4.5(D) hereof shall be
inadequate to fully ptovide for such insufficiency.
(5) Rate Stabilization Fund. The balance of any moneys remaining in
the Revenue Fund after the payments and deposits required by part (1) through (4) of this
subsection 4.5(B) shall be deposited or credited to the Rate Stabilization Fund. The
moneys on deposit in the Rate Stabilization Fund may be transferred, at the discretion
of the Issuer, to any other appropriate fund or account of the Issuer and be used by the
Issuer for any lawful purpose, including, but not limited to, the payment of the principal
of, premium, if any, and interest on the Bonds or any Subordinated Indebtedness
hereafter issued by the Issuer; provided, however, that on or prior to each principal and
interest payment date for the Bonds (in no event earlier than the fifteenth day of the
month next preceding such payment date), moneys in the Rate Stabilization Fund shall
be deposited into the Interest Account, the Principal Account and the Bond Amortization
Account when the moneys therein are insufficient to pay the principal of and interest on
the Bonds coming due.
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(C) Sinking Fund. The Issuer shall deposit into or credit to the Sinking Fund
from moneys in the Current Account the sums required by Section 4.5(A) hereof. To the extent
that moneys in the Current Account are insufficient or unavailable to make all of the deposits
into the Sinking Fund required by this subsection 4.5(C), such deposits shall be made by the
Issuer from moneys in the Revenue Fund. The moneys on deposit in the Sinking Fund shall be
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applied in the manner provided herein solely for the payment of the principal of or Redemption
Price, if applicable, and interest on the Bonds and shall not be available for any other purpose.
The moneys transferred from the Current Account and from the Revenue Fund to the Sinking
Fund shall be deposited or credited in the following manner and in the following order of
priority:
(1) Interest Account. The Issuer shall deposit into or credit to the
Interest Account the sum which, together with the balance in said account, shall equal
the interest on all Outstanding Bonds accrued and unpaid and to accrue to the end of the
then current calendar month (assuming that a year consists of twelve (12) equal calendar
months of thirty (30) days each). Moneys in the Interest Account shall be applied by the
Issuer to pay interest on the Bonds as and when the same shall become due, whether by
redemption or otherwise, and for no other purpose. The Issuer shall adjust the amount
of the deposit into the Interest Account not later than the month immediately preceding
any Interest Date so as to provide sufficient moneys in the Interest Account to pay the
interest coming due on the Bonds on such Interest Date.
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(2) Principal Account. Next, the Issuer shall deposit into or credit to
the Principal Account the sum which, together with the balance in said account, shall
equal (a) the principal amount of all Outstanding Bonds other than Term Bonds due and
unpaid, (b) that portion of the principal amount of the Bonds other than Term Bonds next
due which would have accrued on such Bonds next due during the then current calendar
month if such principal amount thereof were deemed to accrue monthly (assuming that
a year consists of twelve (12) equal calendar months of thirty (30) days each) in equal
installments from a date one year preceding the due date of such Bonds next due and (c)
the portion of the principal amount of the Bonds other than Term Bonds next due which
shall have accrued on such basis in prior months. Serial Capital Appreciation Bonds
(including their respective interest components) shall be payable entirely from moneys
in the Principal Account on their respective maturity dates, and monthly deposits or
credits to the Principal Account to provide funds for such purpose shall commence in the
month which is one year prior to each such maturity date. Not later than the month
immediately preceding any principal payment date, the Issuer shall adjust the amount of
the deposit into the Principal Account so as to provide sufficient moneys in the Principal
Account to pay the principal on the Bonds other than Term Bonds becoming due on such
principal payment date. Moneys in the Principal Account shall be applied by the Issuer
to pay the principal of the Bonds other than Term Bonds as and when the same shall
become due, whether at maturity or otherwise, and for no other purpose.
.
(3) Bond Amortization Account. Payments to the Bond Amortization
Account shall be on a parity with payments to the Principal Account. Commencing in
the month which is one year prior to the due date of each Amortization Installment, the
Issuer shall deposit into or credit to the Bond Amortization Account the sum which,
together with the balance in said account held for the credit of such Amortization
Installment and all Outstanding Term Bonds due and unpaid, shall equal (a) the principal
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amount of all such Outstanding Term Bonds due and unpaid, (b) that portion of such
Amortization Installment which would have accrued during the then current calendar
month if such Amortization Installment were deemed to accrue monthly (assuming that
a year consists of twelve (12) equal calendar months of thirty (30) days each) in equal
amounts from a date one year preceding such due date and (c) the portion of such
Amortization Installment which shall have accrued on such basis in prior months. Term
Capital Appreciation Bonds (including their respective interest components) shall be
payable entirely from moneys in the Bond Amortization Account on the respective due
dates of the Amortization Installments applicable thereto, and monthly deposits or credits
to the Bond Amortization Account to provide funds for such purpose shall commence in
the month which is one year prior to each such Amortization Installment due date. The
Issuer shall adjust the amount of the deposit into the Bond Amortization Account not later
than the month immediately preceding any date for payment of an Amortization
Installment so as to provide sufficient moneys in the Bond Amortization Account to pay
such Amortization Installment on such date. Moneys in the Bond Amortization Account
shall be applied by the Issuer to purchase or redeem Term Bonds in the manner herein
provided, and for no other purpose.
Amounts accumulated in the Bond Amortization Account with respect to any
Amortization Installment may be applied by the Issuer, on or prior to the sixtieth (60th) day
preceding the due date of such Amortization Installment (i) to the purchase of Term Bonds of
the Series and maturity for which such Amortization Installment was established, at a price not
greater than the Redemption Price at which such Term Bonds may be redeemed on the fIrst date
thereafter on which such Tèrm Bonds shall be subject to redemption, or (ii) to the redemption
at the applicable Redemption Price of such Term Bonds. The applicable Redemption Price (or
principal amount of maturing Term Bonds) of any Term Bonds so purchased or redeemed shall
be deemed to constitute part of the Bond Amortization Account until such Amortization
Installment date, for the purposes of calculating the amount of such Account. As soon as
practicable after the sixtieth (60th) day preceding the due date of any such Amortization
Installment, the Issuer shall proceed to call for redemption on such due date, by causing notice
to be given as provided in Section 3.3 hereof, Term Bonds of the Series and matu~ty for which
such Amortization Installment was established (except in the case of Term Bonds maturing on
an Amortization Installment date) in such amount as shall be necessary to complete the
retirement of the unsatisfied balance of such Amortization Installment. The Issuer shall payout
of the Bond Amortization Account and the Interest Account to the respective Paying Agents, on
or before the day preceding such redemption date (or maturity date), the amount required for
the redemption (or for the payment of such Term Bonds then maturing), and such amount shall
be applied by such Paying Agents to such redemption (or payment). All expenses in connection
with the purchase or redemption of Term Bonds shall be paid by the Issuer from the Restricted
Revenue Fund.
(D) Reserve Fund. The Issuer shall deposit into or credit to the Reserve Fund
such sum, if any, as will be necessary to immediately restore the funds on deposit therein to an
amount equal to the Reserve Fund Requirement including the reinstatement of any Reserve Fund
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Insurance Policy or Reserve Fund Letter of Credit on deposit therein or the cash replacement
thereof. On or prior to each principal and interest payment date for the Bonds, moneys in the
Reserve Fund shall be applied by the Issuer to the payment of the principal of or Redemption
Price, if applicable, and interest on the Bonds to the extent moneys in the Interest Account, the
Principal Account and the Bond Amortization Account shall be insufficient for such purpose, but
only to the extent moneys available in the Rate Stabilization Fund for such purpose pursuant to
Section 4.5(B)(5) hereof shall be inadequate to fully provide for such insufficiency. Whenever
there shall be surplus moneys in the Reserve Fund by reason of a decrease in the Reserve Fund
Requirement or as a result of a deposit therein of a Reserve Fund Insurance Policy and/or a
Reserve Fund Letter of Credit, such surplus moneys shall be deposited by the Issuer into the
Principal Account, or such other appropriate fund or account of the Issuer, provided such deposit
to such other fund or account shall not adversely affect the exclusion from gross income of
interest on the Bonds for federal income tax purposes.
Upon the issuance of any Series of Bonds, under the terms, limitations and
conditions as herein provided, the Issuer shall provide for the funding of the Reserve Fund in
an amount equal to the Reserve Fund Requirement. Such required amount may be paid in full
or in part from the proceeds of such Series of Bonds or may be accumulated in equal monthly
payments from the Revenue Fund, on a parity with the payments required by the first sentence
of this subsection 4.5(D), to the Reserve Fund over a period of months from the date of issuance
of such Series of Bonds, which shall not exceed the greater of (a) sixty (60) months, or (b) the
number of months for which interest on such Series of Bonds has been capitalized, as determined
by Supplemental Resolution.
Whenever moneys on deposit in the Reserve Fund, together with the other
available amounts in the Sinking Fund, are sufficient to fully pay all Outstanding Bonds
(including principal and interest thereon) in accordance with their terms, the funds on deposit
in the Reserve Fund shall be 'applied to the payment of Bonds.
Notwithstanding the foregoing provisions, in lieu of the required deposits into the
Reserve Fund, the Issuer may, at its sole option and discretion, cause to be deposited a Reserve
Fund Insurance Policy and/or Reserve Fund Letter of Credit in an amount equal to the difference
between the Reserve Fund Requirement applicable thereto and the sums, if any, remaining on
deposit in the Reserve Fund after the deposit of such Reserve Fund Insurance Policy and/or
Reserve Fund Letter of Credit. Such Reserve Fund Insurance Policy and/or Reserve Fund
Letter of Credit shall be payable to the Paying Agent for such Series (upon the giving of notice
as required thereunder) on any interest payment or redemption date on which a deficiency exists
which cannot be cured by funds in any other fund or account held pursuant to this Resolution
and available for such purpose. The issuer providing such Reserve Fund Insurance Policy
and/or Reserve Fund Letter of Credit shall be either (a) an insurer (i) whose municipal bond
insurance policies insuring the payment, when due, of the principal of and interest on municipal
bond issues results in such issues being rated in one of the two highest rating categories (without
regard to gradations, such as "plus" or "minus" of such categories) by either Standard & Poor's
or Moody's Investors Service, or (ii) who holds one of the two highest policyholder ratings
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accorded insurers by A. M. Best & Company, or any comparable service, or (b) a commercial
bank, insurance company or other financial institution the bonds payable or guaranteed by which
have, or whose obligation to pay is guaranteed by a commercial bank, insurance company or
other financial institution which has, been assigned a rating by either Moody's Investors Service
or Standard & Poor's in one of the two highest rating categories (without regard to gradations,
such as "plus" or "minus" of such categories).
If fifteen (15) days prior to an interest payment or mandatory redemption date,
the Issuer shall determine that a deficiency exists in the amount of moneys available to pay in
accordance with the terms hereof interest and/or principal due on Bonds on such date, the Issuer
shall immediately notify (a) the issuer of the applicable Reserve Fund Insurance Policy and/or
the issuer of the Reserve Fund Letter of Credit, and (b) the Insurer, if any, of the amount of
such deficiency and the date on which such payment is due, and shall take all action to cause
such issuer or Insurer to provide moneys sufficient to pay all amounts due on such interest
payment or redemption date.
If a disbursement is made from a Reserve Fund Insurance Policy and/or Reserve
Fund Letter of Credit provided pursuant to this Section 4.5(D), the Issuer shall reinstate the
maximum limits of such Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit
immediately following such disbursement from moneys available in the Reserve Fund in
accordance with the provisions of the first paragraph of this Section 4.5(D), by depositing funds
in the amount of the disbursement made under such instrument, with the issuer thereof, together
with interest thereon to the date of reimbursement at the rate set forth in such Reserve Fund
Insurance Policy or such Reserve Fund Letter of Credit, but in no case greater than the
maximum rate of interest permitted by law. In addition, and in the same manner, the Issuer
shall reimburse the issuer of the Reserve Fund Insurance Policy and/or the issuer of the Reserve
Fund Letter of Credit for all reasonable expenses incurred by such issuer in connection with the
draw on such Reserve Fund Insurance Policy or the Reserve Fund Letter of Credit, as the case
may be.
The Issuer may evidence its obligation to reimburse the issuer of any Reserve
Fund Letter of Credit or Reserve Fund Insurance Policy by executing and delivering to such
issuer a promissory note therefor and/or an agreement relating thereto, which shall be approved
by Supplemental Resolution, provided, however, any such note and any payment obligations of
the Issuer under such agreement (a) shall not be a general obligation of the Issuer the payment
of which is secured by the full faith and credit or taxing power of the Issuer, and (b) shall be
payable solely from moneys available in the Reserve Fund in accordance with the provisions of
the first paragraph of this Section 4.5(D). All of the provisions of such promissory note or such
agreement, when executed and delivered by the Issuer, shall be deemed to be a part of this
Resolution as fully and to the same extent as if incorporated verbatim herein.
To the extent the Issuer causes to be deposited into the Reserve Fund, a Reserve
Fund Insurance Policy and/or a Reserve Fund Letter of Credit for a term of years shorter than
the life of the Series of Bonds so insured or secured, then the Reserve Fund Insurance Policy
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and/or the Reserve Fund Letter of Credit shall provide, among other things, that the issuer
thereof shall provide the Issuer with notice as of each anniversary of the date of the issuance of
the Reserve Fund Insurance Policy and/or the Reserve Fund Letter of Credit of the intention of
the issuer thereof to either (a) extend the term of the Reserve Fund Insurance Policy and/or the
Reserve Fund Letter of Credit beyond the expiration dates thereof, or (b) terminate the Reserve
Fund Insurance Policy and/or the Reserve Fund Letter of Credit on the initial expiration dates
thereof or such other future date as the issuer thereof shall have established. If the issuer of the
Reserve Fund Insurance Policy and/or the Reserve Fund Letter of Credit notifies the Issuer
pursuant to clause (b) of the immediately preceding sentence or if the Issuer terminates the
Reserve Fund Letter of Credit and/or Reserve Fund Insurance Policy, then the Issuer shall
deposit into the Reserve Fund, on or prior to the fifteenth (15th) day of the first full calendar
month following the date on which such notice is received by the Issuer, such sums as shall be
sufficient to pay an amount equal to a fraction, the numerator of which is one (1) and the
denominator of which is equal to the number of months remaining in the term of the Reserve
Fund Insurance Policy and/or the Reserve Fund Letter of Credit of the Reserve Fund
Requirement on the date such notice was received (the maximum amount available, assuming
full reimbursement by the Issuer, under the Reserve Fund Letter of Credit and/or the Reserve
Fund Insurance Policy to be reduced annually by an amount equal to the deposit to the Reserve
Fund during the previous twelve (12) month period) until amounts on deposit in the Reserve
Fund, as a result of the aforementioned deposits, and no later than upon the expiration of such
Reserve Fund Insurance Policy and/or such Reserve Fund Letter of Credit, shall be equal to the
Reserve Fund Requirement applicable thereto.
If any Reserve Fund Letter of Credit or Reserve Fund Insurance Policy shall
terminate prior to the stated expiration date thereof, the Issuer agrees that it shall fund the
Reserve Fund over a period not to exceed sixty (60) months during which it shall make
consecutive equal monthly payments in order that the amount on deposit in such account at the
end of such period shall equal the Reserve Fund Requirement; provided, the Issuer may, with
the prior written consent of the Insurer, if any, obtain a new Reserve Fund Letter of Credit or
a new Reserve Fund Insurance Policy in lieu of making the payments required by this paragraph.
Prior to deposit in the Reserve Fund, any Reserve Fund Letter of Credit or
Reserve Fund Insurance Policy shall be approved in writing by each Insurer and" Credit Bank
and shall conform to such additional or different restrictions as such Insurer or Credit Bank shall
reasonably require.
(E) Purchase or Redemption of Bonds. The Issuer, in its discretion, may use
moneys in the Principal Account and the Interest Account to purchase or redeem Bonds coming
due on the next principal payment date, provided such purchase or redemption does not
adversely affect the Issuer's ability to pay the principal or interest coming due on such principal
payment date on the Bonds not so purchased or redeemed.
(F) Deoosit of Moneys with Payine: Agents. At least one (1) business day
prior to the date established for payment of any principal of or Redemption Price, if applicable,
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or interest on the Bon! the Issuer shall withdraw from the s!ng Fund sufficient moneys to
pay such principal or Redemption Price, if applicable, or interest and deposit such moneys with
the Paying Agent for the Bonds to be paid.
(G) Reimbursement of Credit Bank. In the case of Bonds secured by a Credit
Facility, amounts on deposit in any funds or accounts established for such Bonds may be applied
as provided in the applicable Supplemental Resolution to reimburse the Credit Bank for amounts
drawn under such Credit Facility to pay the principal of or Redemption Price, if applicable, and
interest on such Bonds or to pay the purchase price of any such Bonds which are tendered by
the Holders thereof for payment.
Section 4.6 Rebate Fund. Amounts on deposit in the Rebate Fund shall be held
in trust by the Issuer and used solely to make required rebates to the United States Treasury
(except to the extent the same may be transferred to the Revenue Fund) and the Bondholders
shall have no right to have the same applied for debt serviCe on the Bonds. The Issuer agrees
to undertake all actions required of it in its arbitrage certificate relating to each Series of Bonds
(other than Taxable Bonds), and other instructions from Bond Counsel, delivered in connection
with or subsequent to the issuance of such Bonds, including, but not limited to:
(A) making a determination in accordance with the Code of the amount
required to be deposited in the Rebate Fund;
(B) depositing from moneys in the Revenue Fund or from other moneys of the
Issuer derived from sources other than ad valorem taxation and legally available for such
purpose the amount determined in subsection 4.6(A) above into the Rebate Fund;
(C) paying on the dates and in the manner required by the Code to the United
States Treasury from the Rebate Fund and any other legally available moneys of the Issuer such
amounts as shall be required by the Code to be rebated to the United States Treasury; and
(D) keeping such records of the detenninations made pursuant to this Section
4.6 as shall be required by the Code, as well as evidence of the fair market value of any
investments purchased with proceeds of the Bonds.
The provisions of the above-described arbitrage certificate and instructions of
Bond Counsel may be amended from time to time as shall be necessary, in the opinion of Bond
Counsel, to comply with the provisions of the Code.
Section 4.7 Investments. Each fund and account established hereby shall be
continuously secured in the manner by which the deposit of public funds are authorized to be
secured by the laws of the State. Moneys on deposit in each fund and account, other than the
Reserve Fund, may be invested and reinvested in Authorized Investments maturing not later than
the date on which the moneys therein will be needed. Moneys on deposit in the Reserve Fund
may be invested or reinvested in securities provided in clauses (1) through (9) of the definition
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of Authorized Investments which shall mature no later than five (5) years from the date of
acquisition thereof.
Any and all income received by the Issuer from the investment of moneys in the
Revenue Fund, the Construction Fund, the Rate Stabilization Fund and the Rebate Fund, in the
Interest Account, the Principal Account and the Bond Amortization Account in the Sinking Fund,
in the Current Account and the Impact Fee Stabilization Account in the Impact Fees Fund, in
the Renewal and Replacement Fund (to the extent such income and the other amounts in the
Renewal and Replacement Fund do not exceed the Renewal and Replacement Fund
Requirement), and in the Reserve Fund (to the extent such income and the other amounts in the
Reserve Fund do not exceed the Reserve Fund Requirement) shall be retained in such respective
fund or account.
Any and all income received from the investment of moneys in the Renewal and
Replacement Fund (only to the extent such income and other amounts therein exceed the
Renewal and Replacement Fund Requirement) shall be deposited upon receipt thereof in the
Revenue Fund. Any and all income received from the investment of moneys in the Reserve
Fund (only to the extent such income and other amounts therein exceed the Reserve Fund
Requirement) shall be deposited upon receipt thereof in the Interest Account.
All investments shall be valued at cost. Nothing contained in this Resolution shall
prevent any Authorized Investments acquired as investments of or security for funds held under
this Resolution from being issued or held in book-entry form on the books of the Department
of the Treasury of the United States.
Section 4.8 Separate Accounts. The moneys required to be accounted for in
each of the foregoing funds and accounts established herein may be deposited in a single bank
account, and funds allocated to the various funds and accounts established herein may be
invested in a common investment pool, provided that adequate accounting records are maintained
to reflect and control the restricted allocation of the moneys on deposit therein and such
investments for the various purposes of such funds and accounts as herein provided.
The designation and establishment of the various funds and accounts in and by this
Resolution shall not be construed to require the establishment of any completely independent,
self-balancing funds as such term is commonly defined and used in governmental accounting,
but rather is intended solely to constitute an earmarking of certain revenues for certain purposes
and to establish certain priorities for application of such revenues as herein provided.
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ARTICLE 5
COVENANTS
Section 5.1 General. In addition to all of the other covenants of the Issuer
contained in this Resolution, the Issuer hereby covenants with each and every successive Holder
of any of the Bonds so long as any of the Bonds shall remain Outstanding each and every one
of the covenants contained in this Article 5.
Section 5.2 Operation and Maintenance. The Issuer will maintain or cause to
be maintained the System and all portions thereof in good condition and will operate or cause
to be operated the same in an efficient and economical manner, making or causing to be made
such expenditures for equipment and for renewals, repairs and replacements as may be proper
for the economical operation and maintenance thereof.
Section 5.3 Annual Budget. The Issuer shall annually prepare and adopt, prior
to the beginning of each Fiscal Year, an Annual Budget in accordance with applicable law. No
expenditure for the operation and maintenance of the System shall be made in any Fiscal Year
in excess of the amount provided therefor in the Annual Budget (A) without a written finding
and recommendation by an Authorized Issuer Officer, which finding and recommendation shall
state in detail the purpose of and necessity for such increased expenditures, and (B) until the
e Governing Body shall have approved such finding and recommendation by resolution.
If for any reason the Issuer shall not have adopted the Annual Budget before the
first day of any Fiscal Year, other than the first Fiscal Year, the preliminary budget for such
Fiscal Year, if it be approved by the Consulting Engineers, shall be deemed to be in effect for
such Fiscal Year until the Annual Budget for such Fiscal Year shall be adopted; and if the
preliminary budget shall not have been approved by the Consulting Engineers, the Annual
Budget for the preceding Fiscal Year shall be deemed to continue in effect.
The Issuer may at any time adopt an amended Annual Budget for the then current
Fiscal Year, but no such amended Annual Budget shall supersede any prior budget u"ntil it shall
be approved by the Consulting Engineers as reasonable and necessary.
The Issuer shall mail copies of such Annual Budgets and amended Annual Budgets
and all resolutions authorizing increased expenditures for operation and maintenance to any
Holder who shall file an address with the Clerk and request in writing that copies of all such
Annual Budgets and resolutions be furnished to such Holder and shall make available all such
Annual Budgets and resolutions authorizing increased expenditures for operation and
maintenance of the System at all reasonable times to any Holder or to anyone acting for or on
behalf of any Holder. The Issuer shall be permitted to make a reasonable charge for furnishing
to any Holder such Annual Budgets and resolutions.
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Section 5.4 Rates. The Issuer shall fix, establish, maintain and collect such
Rates and revise the same from time to time, whenever necessary, as will always provide in each
Fiscal Year (A) Net Revenues, together with moneys on deposit in the Rate Stabilization Fund,
adequate at all times to pay in each Fiscal Year at least one hundred ten percent (110%) of the
current annual Debt Service Requirement becoming due in such Fiscal Year on each Series of
Outstanding Bonds and at least one hundred percent (100%) of any amounts required by the
terms hereof to be deposited in the Reserve Fund or in the Renewal and Replacement Fund or
with any issuer of a Reserve Fund Letter of Credit or Reserve Fund Insurance Policy in such
Fiscal Year, or (B) (i) Net Revenues, together with moneys on deposit in the Rate Stabilization
Fund, adequate at all times to pay in each Fiscal Year at least one hundred percent (100%) of
the current annual Debt Service Requirement becoming due in such Fiscal Year on each Series
of Outstanding Bonds, (ii) Net Revenues, together with amounts deposited in the Current
Account in the Impact Fees Fund and moneys on deposit in the Rate Stabilization Fund, adequate
at all times to pay in each Fiscal Year at least one hundred fifteen percent (115 %) of the current
annual Debt Service Requirement becoming due in such Fiscal Year on each Series of
Outstanding Bonds and (iii) at least one hundred percent (100%) of any amounts required by the
terms hereof to be deposited in the Reserve Fund or in the Renewal and Replacement Fund or
with any issuer of a Reserve Fund Letter of Credit or Reserve Fund Insurance Policy in such
Fiscal Year. Such Rates shall not be so reduced so as to be insufficient to provide Net Revenues
fully adequate for the purposes provided therefor by this Resolution.
If, in any Fiscal Year, the Issuer shall fail to comply with the requirements
contained in Section 5.4(A) above, it shall cause the Consulting Engineers to review its Rates,
Gross Revenues, Operating Expenses and methods of operation and to make written
recommendations as to the .methods by which the Issuer may promptly seek to comply with the
requirements set forth in Section 5.4(A) above. The Issuer shall forthwith commence to
implement such recommendations to the extent required so as to cause it to thereafter comply
with said requirements.
Section 5.5 Books and Records. The Issuer shall keep books, records and
accounts of the operation of the System, and of Gross Revenues, Operating Expenses and Impact
Fees, and the Holders of any Bonds Outstanding or the duly authorized representatives thereof
shall have the right at all reasonable times to inspect all books, records and accounts of the
Issuer relating thereto.
Section 5.6 Annual Audit. The Issuer shall, immediately after the close of each
Fiscal Year, cause the books, records and accounts relating to the System to be properly audited
by a recognized independent firm of certified public accountants, and shall require such
accountants to complete their report of such Annual Audit in accordance with applicable law.
Such Annual Audits shall contain, but not be limited to, a balance sheet, an income statement,
a statement of changes in financial position, a statement of changes in retained earnings, a
statement of the number and classification of users and services of the System and rates
associated with such services, a statement of insurance coverage, and any other statements as
required by law or accounting convention, and a certificate by such accountants disclosing any
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material default on the part of the Issuer of any covenant or agreement herein. Each Annual
Audit shall be in conformity with generally accepted accounting principles. A copy of each
Annual Audit shall regularly be furnished to any Insurer, to any Credit Bank and to any Holder
who shall have furnished an address to the Clerk and requested in writing that the same be
furnished to such Holder. The Issuer shall be permitted to make a reasonable charge for
furnishing to any Holder such Annual Audit.
Section 5.7 No Mortgage or Sale of the System. The Issuer irrevocably
covenants, binds and obligates itself not to sell, lease, encumber or in any manner dispose of
the System as a whole or any substantial part thereof (except as provided below) until all of the
Bonds and all interest thereon shall have been paid in full or provision for payment has been
made in accordance with Section 9.1 hereof.
The foregoing provision notwithstanding, the Issuer shall have and hereby reserves
the right to sell, lease or otherwise dispose of any of the property comprising a part of the
System in the following manner, if anyone of the following conditions exist: (A) such property
is not necessary for the operation of the System, (B) such property is not useful in the operation
of the System, (C) such property is not profitable in the operation of the System, or (D) in the
case of a lease of such property, will be advantageous to the System and will not adversely affect
the security for the Bondholders.
Prior to any such sale, lease or other disposition of said property: (1) if the
amount to be received therefor is not in excess of one-half (112) of one percent (1 %) of the value
of the gross plant of the System at original cost, an Authorized Issuer Officer shall make a
finding in writing determining that one or more of the conditions for sale, lease or disposition
of property provided for in the second paragraph of this Section 5.7 have been met; or (2) if the
amount to be received from such sale, lease or other disposition of said property shall be in
excess of one-half (112) of one percent (1 %) of the value of the gross plant of the System at
original cost, an Authorized Issuer Officer and the Consulting Engineers shall each fIrst make
a finding in writing determining that one or more of the conditions for sale, lease or other
disposition of property provided for in the second paragraph of this Section 5.7 have been met,
and the Governing Body of the Issuer shall, by resolution, duly adopt, approve and concur in
the finding of an Authorized Issuer Officer and the Consulting Engineers.
The proceeds from such sale, lease or other disposition shall be deposited into the
Renewal and Replacement Fund to the extent necessary to make the amount therein equal to the
Renewal and Replacement Fund Requirement, and second, into the Revenue Fund.
The transfer of the System as a whole from the control of the Governing Body
to some other board or authority which may hereafter be created for such purpose and which
constitutes a governmental entity, interest on obligations issued by which is excluded from gross
income of the holders thereof for federal income tax purposes undcr Section 103 of the Code.
shall not be deemed prohibited by this Section 5.7 and such successor board or authority shall
fall within the definition of "Issuer" in Section 1.1 hereof.
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.
Notwithstanding the foregoing provisions of this Section 5.7, the Issuer shall have
the authority to sell for fair and reasonable consideration any land comprising a part of the
System which is no longer necessary or useful in the operation of the System and the proceeds
derived from the sale of such land shall be disposed of in accordance with the provisions of the
fourth paragraph of this Section 5.7.
The Issuer may make contracts or grant licenses for the operation of, or grant
easements or other rights with respect to, any part of the System if such contract, license,
easement or right does not, in the opinion of the Consulting Engineers, as evidenced by a
certificate to that effect filed with the Issuer, impede or restrict the operation by the Issuer of
the System, but any payments to the Issuer under or in connection with any such contract,
license, easement or right in respect of the System or any part thereof shall constitute Gross
Revenues.
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Section 5.8 Insurance.. The Issuer will carry such insurance as is ordinarily
carried by private or public corporations owning and operating utilities similar to the System
with a reputable insurance carrier or carriers, including public and product liability insurance
in such amounts as the Issuer shall determine to be sufficient and such other insurance against
loss or damage by fire, explosion (including underground explosion), hurricane, tornado or other
hazards and risks, and said property loss or damage insurance shall at all times be in an amount
or amounts equal to the fair appraisal value of the buildings, properties, furniture, fixtures and
equipment of the System, or such other amount or amounts as the Consulting Engineers shall
approve as sufficient.
The Issuer may establish certain minimum levels of insurance for which the Issuer
may self-insure. Such minimum levels of insurance shall be in amounts as recommended in
writing by an insurance consultant who has a favorable reputation and experience and is qualified
to survey risks and to recommend insurance coverage for Persons engaged in operations similar
to the System.
Section 5.9 No Free Service. The Issuer will not render, or cause to be
rendered, any free services of any nature by its System or any part thereof, nor will any
preferential rates be established for users of the same class.
Section 5.10 No Impairment. The Issuer will not enter into any contract or
contracts, nor take any action, the results of which might impair the rights of the Holders and
will not permit the operation of any competing water or sewer service facilities in the Issuer;
provided, however, the Issuer reserves the right to permit the ownership and operation of water
or sewer service facilities or both by itself or by others in any territory which is not in any
service area now or hereafter served by the System.
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Section 5.11 Compulsory Connections. In order better to secure the prompt
payment of principal and interest on the Bonds, as well as for the purpose of protecting the
health and welfare of the inhabitants of the Issuer, and acting under authority of the Act or other
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. applicable laws of the State, the Issuer will require (A) every owner of each lot in the Issuer
which abuts upon any street or public way containing a water line forming a part of the water
facilities of the System and upon which lot a building shall subsequently be constructed for
residential, commercial or industrial use, to connect such building to such water facilities, and
(B) every owner of each lot in the Issuer which abuts upon any street or public way containing
a sewer line forming a part of the sewer facilities of the System and upon which lot a building
shall subsequently be constructed for residential, commercial or industrial use, to connect such
building to such sewer facilities and to cease to use any other method for the disposal of sewage
waste or other polluting matter.
Section 5.12 Enforcement of Charges. The Issuer shall compel the prompt
payment of Rates for service rendered on every lot or parcel connected with the System, and to
that end will vigorously enforce all of the provisions of any ordinance or resolution of the Issuer
having to do with connections to the facilities of the System and charges therefor, and all of the
rights and remedies permitted the Issuer under law, including the requirement for the making
of a reasonable deposit by each user, the requirement for disconnection of all premises
delinquent in the payment, and the securing of injunction against the disposition of sewage or
industrial waste into the sewer facilities of the System by any premises delinquent in the payment
of such charges.
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Section 5.13 Covenants With Credit Banks and Insurers. The Issuer may make
such covenants as it may in its sole discretion determine to be appropriate with any Insurer,
Credit Bank or other financial institution that shall agree to insure or to provide for Bonds of
anyone or more Series credit or liquidity support that shall enhance the security or the value
of such Bonds. Such covenants may be set forth in the applicable Supplemental Resolution and
shall be binding on the Issuer, the Registrar, the Paying Agent and all the Holders the same as
if such covenants were set forth in full in this Resolution.
Section 5.14 Special Covenants Relating to Reserve Fund Insurance Policy or
Reserve Fund Letter of Credit.
(A) The Issuer shall annually submit to the issuer of the Reserve Fund
Insurance Policy and/or the Reserve Fund Letter of Credit records of withdràwals on such
Reserve Fund Insurance Policy or such Reserve Fund Letter of Credit, as the case may be,
received by the Paying Agent and remaining unpaid, the respective dates of such withdrawals,
the interest accrued on such withdrawals and the aggregate amount of interest due by the Issuer
to the issuer of such Reserve Fund Insurance Policy or such Reserve Fund Letter of Credit, as
the case may be.
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(B) The Issuer hereby acknowledges that the issuer of the Reserve Fund
Insurance Policy and/or the Reserve Fund Letter of Credit shall be deemed a third-party
beneficiary of this Resolution for the purpose of enforcing the terms, conditions and obligations
of this Resolution which benefit the issuer of such Reserve Fund Insurance Policy or such
Reserve Fund Letter of Credit, as the case may be.
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Section 5.15 Collection of Impact Fees. The Issuer shall proceed diligently to
perform legally and effectively all steps required in the imposition and collection of the Impact
Fees. Upon the due date of any such Impact Fees, the Issuer shall diligently proceed to collect
the same and shall exercise all legally available remedies to enforce such collections now or
hereafter available under State law.
Section 5.16 Consulting Engineers. The Issuer shall employ Consulting Engineers
from time to time whenever necessary for compliance with the provisions of this Resolution,
whose duties shall be to make any certificates and perform any other acts required or permitted
of the Consulting Engineers under this Resolution, and also to review the construction and
operation of the System.
Section 5.17 Federal Income Tax Covenants: Taxable Bonds.
(A) The Issuer covenants with the Holders of each Series of Bonds (other than
Taxable Bonds), that it shall not use the proceeds of such Series of Bonds in any manner which
would cause the interest on such Series of Bonds to be or become includable in the gross income
of the Holder thereof for federal income tax purposes.
.
(B) The Issuer covenants with the Holders of each Series of Bonds (other than
Taxable Bonds) that neither the Issuer nor any Person under its control or direction will make
any use of the proceeds of such Series of Bonds (or amounts deemed to be proceeds under the
Code) in any manner which would cause such Series of Bonds to be "arbitrage bonds" within
the meaning of Section 148 of the Code, and neither the Issuer nor any other Person shall do
any act or fail to do any act which would cause the interest on such Series of Bonds to become
includable in the gross income of the Holder thereof for federal income tax purposes.
(C) The Issuer hereby covenants with the Holders of each Series of Bonds
(other than Taxable Bonds) that it will comply with all provisions of the Code necessary to
maintain the exclusion of interest on such series of Bonds from the gross income of the Holder
thereof for federal income tax purposes, including, in particular, the payment of any amount
required to be rebated to the United States Treasury pursuant to the Code.
(D) The Issuer may, if it so elects, issue one or more Series of Taxable Bonds
the interest on which is (or may be) includable in the gross income of the Holder thereof for
federal income taxation purposes, so long as each Bond of such Series states in the body thereof
that interest payable thereon is (or may be) subject to federal income taxation and provided that
the issuance thereof will not cause the interest on any other Bonds theretofore issued hereunder
to be or become includable in the gross income of the Holder thereof for federal income tax
purposes.
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Section 5.18 Continuing Disclosure. The Issuer agrees that it will comply with
and carry out all of the provisions of the Continuing Disclosure Certificate executed by the
Issuer and dated the date of issuance of the Series 2000 Bonds, as originally executed and as it
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may be amended from time to time in accordance with the terms thereof (the "Continuing
Disclosure Certificate"). Notwithstanding any other provision of this Resolution, failure of the
Issuer to comply with the Continuing Disclosure Certificate shall not be considered an Event of
Default; however, any Bondholder or Beneficial Owner (as hereinafter defined) may take such
actions as may be necessary and appropriate, including seeking mandamus or specific
performance by court order, to cause the Issuer to comply with its obligations under this
Section 5.18. For purposes of this Section 5.18, "Beneficial Owner" means any person which
(a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of
ownership of, any Series 2000 Bonds (including persons holding Series 2000 Bonds through
nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2000
Bonds for federal income tax purposes.
ARTICLE 6
SUBORDINATED INDEBTEDNESS AND
ADDmONALBONDS
Section 6.1 Subordinated Indebtedness. The Issuer will not issue any other
obligations, except under the conditions and in the manner provided herein, payable from the
Pledged Funds or voluntarily create or cause to be created any debt, lien, pledge, assignment,
encumbrance or other charge having priority to or being on a parity with the lien thereon in
favor of the Bonds and the interest thereon. The Issuer may at any time or from time to time
issue evidences of indebtedness that are not Additional Bonds and that are payable in whole or
in part out of the Pledged Funds and which may be secured by a pledge of the Pledged Funds;
provided, however, that such pledge shall be, and shall be expressed to be, subordinated in all
respects to the pledge of the Pledged Funds created by this Resolution. The Issuer shall have
the right to covenant with the holders from time to time of any Subordinated Indebtedness to add
to the conditions, limitations and restrictions under which any Additional Bonds may be issued
pursuant to Section 6.2 hereof. The Issuer agrees to pay promptly any Subordinated
Indebtedness as the same shall become due.
Section 6.2 Issuance of Additional Bonds. The Issuer may issue one or more
Series of Additional Bonds for anyone or more of the following purposes: financing the Cost
of any Project, or the completion thereof or of the Initial Project, or refunding any or all
Outstanding Bonds or of any Subordinated Indebtedness of the Issuer. Additional Bonds shall
be deemed to have been issued pursuant to this Resolution the same as the Outstanding Bonds,
and all of the other covenants and other provisions of this Resolution (except as to details of
such Additional Bonds inconsistent therewith) shall be for the equal benefit, protection and
security of the Holders of all Bonds issued pursuant to this Resolution; provided, however, any
Supplemental Resolution authorizing the issuance of Additional Bonds may provide that any of
the covenants herein contained will not be applicable to such Additional Bonds, provided that
such provision shall not, in the opinion of Bond Counsel, adversely affect the rights of the
Holders of any Bonds which shall then be Outstanding. Except as provided in Sections 4.2 and
4.5 hereof, all Bonds, regardless of the time or times of their issuance, shall rank equally with
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. respect to their lien on the Pledged Funds and their sources and security for payment therefrom
without preference of any Bonds over any other; provided, however, that the Issuer shall include
a provision in any Supplemental Resolution authorizing the issuance of Variable Rate Bonds
pursuant to this Section 6.2 that in the event the principal thereof is accelerated due to such
Bonds being held by the issuer of a Credit Facility, the lien of such Bonds on the Pledged Funds
shall be subordinate in all respects to the pledge of the Pledged Funds created by this Resolution.
No such Additional Bonds shall be issued by the Issuer unless the following conditions are
complied with:
(A) The Issuer shall certify that it is current in all deposits into the various
funds and accounts established hereby and all payments theretofore required to have been
deposited or made by it under the provisions of this Resolution and has complied with the
covenants and agreements of this Resolution.
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(B) There shall have been obtained and filed with the Issuer a certificate of an
independent certified public accountant: (1) stating that such accountant has examined the books
and records of the Issuer relating to the collection and receipt of Gross Revenues and Impact
Fees and relating to Operating Expenses; (2) setting forth the amount of Net Revenues for, and
the Impact Fees actually deposited into the Current Account during, the immediately preceding
Fiscal Year or any twelve (12) consecutive months selected by the Issuer of the twenty-four (24)
months immediately preceding the issuance of such Additional Bonds; (3) stating that such Net
Revenues, adjusted as provided in Section 6.2(E) hereOf, together with such Impact Fees
deposited into the Current Account during such period, equal at least (a) 1.15 times the
Maximum Debt Service Requirement for all Outstanding Bonds and such Additional Bonds then
proposed to be issued, and (b) 1.00 times the maximum annual debt service for all Subordinated
Indebtedness then outstanding, or stating that such Net Revenues, adjusted as provided in Section
6.2(E) hereof, equal at least (a) 1.10 times the Maximum Debt Service Requirement for all
Outstanding Bonds and such Additional Bonds then proposed to be issued, and (b) 1.00 times
the maximum annual subordinated debt service for all Subordinated Indebtedness then
outstanding; and (4) stating that no Event of Default was disclosed in the report of the most
recent Annual Audit, or if such Event of Default was so disclosed, that it shall have been cured.
(C) In computing Maximum Debt Service Requirement for purposes of this
Section 6.2, the interest rate on outstanding Variable Rate Bonds, and on additional parity
Variable Rate Bonds then proposed to be issued, shall be deemed to be the Maximum Interest
Rate applicable thereto.
(D) For the purpose of this Section 6.2, the phrase "immediately preceding
Fiscal Year or any twelve (12) consecutive months selected by the Issuer of the twenty-four (24)
months immediately preceding the issuance of such Additional Bonds" shall be sometimes
referred to as "twelve (12) consecutive months."
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(E) Such Net Revenues may be adjusted by the independent certified public
accountant upon the written advice of the Consulting Engineers, at the option of the Issuer, as
follows:
(1) If the Issuer, prior to the issuance of the proposed Additional Bonds,
shall have increased the Rates, the Net Revenues for the twelve (12) consecutive months
shall be adjusted to show the Net Revenues which would have been derived from the
System in such twelve (12) consecutive months as if such increased Rates had been in
effect during all of such twelve (12) consecutive months.
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(2) If the Issuer, prior to the issuance of the proposed Additional Bonds,
shall have acquired or has contracted to acquire any privately or publicly owned existing
water or sewer system, the cost of which shall be paid from all or part of the proceeds
of the issuance of the proposed Additional Bonds, then the Net Revenues derived from
the System during the twelve (12) consecutive months immediately preceding the issuance
of said Additional Bonds shall be increased by adding to the Net Revenues for said
twelve (12) consecutive months the Net Revenues which would have been derived from
said existing water or sewer system as if such existing water or sewer system had been
a part of the System during such twelve (12) consecutive months. For the purposes of
this paragraph, the Net Revenues derived from said existing water or sewer system
during such twelve (12) consecutive months shall be adjusted to determine such Net
Revenues by deducting the cost of operation and maintenance of said existing water or
sewer system from the gross revenues of said system.
(3) . .If the Issuer, in connection with the issuance of Additional Bonds,
shall enter into a contract (with a duration not less than the final maturity of such
Additional Bonds) with any public or private entity whereby the Issuer agrees to furnish
services in connection with any water or sewer system, then the Net Revenues of the
System during the twelve (12) consecutive months immediately preceding the issuance
of said Additional Bonds shall be increased by the least amount which said public or
private entity shall guarantee to pay in anyone year for the furnishing of said services
by the Issuer, after deducting therefrom the proportion of operating expenses and repair,
renewal and replacement cost attributable in such year to such services. .
(4) In the event the Issuer shall be constructing or acquiring additions,
extensions or improvements to the System from the proceeds of such Additional Bonds
and shall have established Rates to be charged and collected from users of such facilities
when service is rendered, such Net Revenues may be adjusted by adding thereto the Net
Revenues estimated by the Consulting Engineers to be derived during the first twelve
(12) months of operation after completion of the construction or acquisition of said
additions, extensions and improvements from the proposed users of the facilities to be
financed by Additional Bonds together with other funds on hand or lawfully obtained for
such purpose.
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(F) In the event any Additional Bonds are issued for the purpose of refunding
any Bonds then Outstanding, the conditions of Section 6.2(B) shall not apply, provided that the
issuance of such Additional Bonds shall not result in an increase in the aggregate amount of
principal of and interest on the Outstanding Bonds becoming due in the current Fiscal Year and
all subsequent Fiscal Years. The conditions of Section 6.2(B) hereof shall apply to Additional
Bonds issued to refund Subordinated Indebtedness and to Additional Bonds issued for refunding
purposes which cannot meet the conditions of this paragraph.
(G) In the event that the total amount of any Series of Bonds authorized to be
issued shall not be issued simultaneously, such Bonds which shall be issued subsequently shall
be subject to the conditions of Section 6.2(B) hereof.
(H) If at any time the Issuer shall enter into an agreement or contract for an
ownership interest in any public or privately owned water or sewer system or for the reservation
of capacity therein whereby the Issuer has agreed as part of the cost thereof to pay part of the
debt service on the obligations of such public or privately owned water or sewer system issued
in connection therewith, such payments to be made by the Issuer shall be junior, inferior and
subordinate in all respects to the Bonds issued hereunder, unless such obligations (when treated
as Additional Bonds) shall meet the conditions of Section 6.2(B) hereof, in which case such
obligations shall rank on parity as to lien on the Pledged Funds with the Bonds.
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(I) In addition to all of the other requirements specified in this Section 6.2,
the Issuer must comply with any applicable provisions of any financing documents relating to
outstanding Subordinated Indebtedness to the extent such provisions impact on the ability of the
Issuer to issue Additional }3onds.
Section 6.3 Bond Anticipation Notes. The Issuer may issue notes in anticipation
of the issuance of Bonds which shall have such terms and details and be secured in such manner,
not inconsistent with this Resolution, as shall be provided by resolution of the Issuer.
Section 6.4 Accession of Subordinated Indebtedness to Parity Status with Bonds.
The Issuer may provide for the accession of Subordinated Indebtedness to the status of complete
parity with the Bonds, if (A) the Issuer shall meet all the requirements imposed upon the
issuance of Additional Bonds by Section 6.2 hereof, assuming, for purposes of said
requirements, that such Subordinated Indebtedness shall be Additional Bonds, (B) the facilities
financed by such Subordinated Indebtedness shall be, or become part of the System, and (C) the
Issuer shall provide for the funding of the Reserve Fund, upon such accession, in an amount
equal to the increase in the amount of the Reserve Fund Requirement occasioned by such
accession in accordance with Section 4.5(D) hereof. If the aforementioned conditions are
satisfied, the Subordinated Indebtedness shall be deemed to have been issued pursuant to this
Resolution the same as the Outstanding Bonds, and such Subordinated Indebtedness shall be
considered Bonds for an purposes provided in this Resolution.
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ARTICLE 7
DEFAULTS AND REMEDIES
Section 7.1 Events of Default. The following events shall each constitute an
"Event of Default" hereunder:
(A) Default shall be made in the payment of the principal of, Amortization
Installment, redemption premium or interest on any Bond when due.
(B) There shall occur the dissolution or liquidation of the Issuer, or the filing
by the Issuer of a voluntary petition in bankruptcy, or the commission by the Issuer of any act
of bankruptcy, or adjudication of the Issuer as a bankrupt, or assignment by the Issuer for the
benefit of its creditors, or appointment of a receiver for the Issuer, or the entry by the Issuer
into an agreement of composition with its creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the Issuer in any proceeding for its reorganization
instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any similar
act in any jurisdiction which may now be in effect or hereafter enacted.
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(C) The Issuer shall default in the due and punctual performance of any other
of the covenants, conditions, agreements and provisions contained in the Bonds or in this
Resolution on the part of the Issuer to be performed, and such default shall continue for a period
of thirty (30) days after written notice of such default shall have been received from any Insurer
or the Holders of not less than twenty-five percent (25 %) of the aggregate principal amount of
Bonds Outstanding or any Credit Bank. Notwithstanding the foregoing, the Issuer shall not be
deemed in default hereunder if such default can be cured within a reasonable period of time and
if the Issuer in good faith institutes curative action and diligently pursues such action until the
default has been corrected.
Section 7.2 Remedies. Any Holder of Bonds issued under the provisions of this
Resolution or any trustee or receiver acting for such Bondholders may either at law or in equity,
by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect
and enforce any and all rights under the laws of the State, or granted and contained in this
Resolution, and may enforce and compel the performance of all duties required by this
Resolution or by any applicable statutes to be performed by the Issuer or by any officer thereof.
·
The Holder or Holders of Bonds in an aggregate principal amount of not less than
twenty-five percent (25%) of the Bonds then Outstanding may by a duly executed certificate in
writing appoint a trustee for Holders of Bonds issued pursuant to this Resolution with authority
to represent such Bondholders in any legal proceedings for the enforcement and protection of
the rights of such Bondholders and such certificate shall be executed by such Bondholders or
their duly authorized attorneys or representatives, and shall be filed in the office of the Clerk.
Notice of such appointment, together with evidence of the requisite signatures of the Holders of
not less than twenty-five percent (25 %) in aggregate principal amount of Bonds Outstanding and
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the trust instrument under which the trustee shall have agreed to serve shall be filed with the
Issuer and the trustee and notice of appointment shall be given to all Holders of Bonds in the
same manner as notices of redemption are given hereunder. After the appointment of the first
trustee hereunder, no further trustees may be appointed; however, the Holders of a majority in
aggregate principal amount of all the Bonds then Outstanding may remove the trustee initially
appointed and appoint a successor and subsequent successors at any time.
Section 7.3 Directions to Trustee as to Remedial Proceedines. The Holders of
a majority in principal amount of the Bonds then Outstanding (or any Insurer insuring, or any
Credit Bank providing a Credit Facility for, any then Outstanding Bonds) have the right, by an
instrument or concurrent instruments in writing executed and delivered to the trustee, to direct
the method and place of conducting all remedial proceedings to be taken by the trustee
hereunder, provided that such direction shall not be otherwise than in accordance with law or
the provisions hereof, and that the trustee shall have the right to decline to follow any such
direction which in the opinion of the trustee would be unjustly prejudicial to Holders of Bonds
not parties to such direction.
Section 7.4 Remedies Cumulative. No remedy herein conferred upon or
reserved to the Bondholders is intended to be exclusive of any other remedy or remedies, and
each and every such remedy shall be cumulative, 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 7.5 Waiver of Default. No delay or omission of any Bondholder to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default, or an acquiescence therein; and every
power and remedy given by Section 7.2 of this Resolution to the Bondholders may be exercised
from time to time, and as often as may be deemed expedient.
Section 7.6 Application of Moneys After Default. If an Event of Default shall
happen and shall not have been remedied, the Issuer or a trustee or receiver appointed for the
purpose shall apply all Pledged Funds as follows and in the following order:
(A) To the payment of the reasonable and proper charges, expenses and
liabilities of the trustee or receiver, Registrar and Paying Agent hereunder; and
(B) To the payment of the interest and principal or Redemption Price, if
applicable, then due on the Bonds, as follows:
(1) Unless the principal of all the Bonds shall have become due and
payable, all such moneys shall be applied:
FIRST: to the payment to the Persons entitled thereto of all installments of
interest then due, in the order of the maturity of such installments, and. if the amount
available shall not be sufficient to pay in full any particular installment, then to the
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payment ratably, according to the amounts due on such installment, to the Persons
entitled thereto, without any discrimination or preference;
SECOND: to the payment to the Persons entitled thereto of the unpaid principal
of any of the Bonds which shall have become due at maturity or upon mandatory
redemption prior to maturity (other than Bonds called for redemption for the payment of
which moneys are held pursuant to the provisions of Section 9.1 of this Resolution), in
the order of their due dates, with interest upon such Bonds from the respective dates
upon which they became due, and, if the amount available shall not be sufficient to pay
in full Bonds due on any particular date, together with such interest, then to the payment
first of such interest, ratably according to the amount of such interest due on such date,
and then to the payment of such principal, ratably according to the amount of such
principal due on such date, to the Persons entitled thereto without any discrimination or
preference; and
THIRD: to the payment of the Redemption Price of any Bonds called for optional
redemption pursuant to the provisions of this Resolution.
(2) If the principal of all the Bonds shall have become due and payable,
all such moneys shall be applied to the payment of the principal and interest then due and
unpaid upon the Bonds, with interest thereon as aforesaid, without preference or priority
of principal over interest or of interest over principal, or of any installment of interest
over any other installment of interest, or of any Bond over any other Bond, ratably,
according to the amounts due respectively for principal and interest, to the Persons
entitled thereto without any discrimination or preference.
.
Section 7.7 Control by Insurer or Credit Bank. Upon the occurrence and
continuance of an Event of Default, each Insurer or Credit Bank, if such Insurer or Credit Bank
shall have honored all of its commitments under its Bond Insurance Policy or its Credit Facility,
as the case may be, shall be entitled to direct and control the enforcement of all rights and
remedies with respect to the Bonds it shall insure or for which such Credit Facility is provided.
ARTICLE 8
SUPPLEMENTAL RESOLUTIONS
Section 8.1 Supplemental Resolution Without Bondholders' Consent. TheIssuer,
from time to time and at any time, may adopt such Supplemental Resolutions without the consent
of the Bondholders (which Supplemental Resolution shall thereafter form a part hereof) for any
of the following purposes:
(A) To cure any ambiguity or formal defect or omission or to correct any
inconsistent provisions in this Resolution or to clarify any matters or questions arising hereunder.
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(B) To grant to or confer upon the Bondholders any additional rights,
remedies, powers, authority or security that may lawfully be granted to or conferred upon the
Bondholders.
(C) To add to the conditions, limitations and restrictions on the issuance of
Bonds under the provisions of this Resolution other conditions, limitations and restrictions
thereafter to be observed.
(D) To add to the covenants and agreements of the Issuer in this Resolution
other covenants and agreements thereafter to be observed by the Issuer or to surrender any right
or power herein reserved to or conferred upon the Issuer.
(E) To specify and determine at any time prior to the fIrst delivery of any
Series of Bonds the matters and things referred to in Sections 2.1 or 2.2 hereof, and also any
other matters and things relative to such Bonds which are not contrary to or inconsistent with
this Resolution as theretofore in effect, or to amend, modify or rescind any such authorization,
specification or determination.
(F) To authorize an Additional Project or to change or modify the description
of the Initial Project or any Additional Project.
(G) To specify and determine matters necessary or desirable for the issuance
of Capital Appreciation Bonds or Variable Rate Bonds.
(H) To authorize Additional Bonds or Subordinated Indebtedness.
(I) To make any other change that, in the opinion of Bond Counsel, would
not materially adversely affect the security for the Bonds. In making such determination, Bond
Counsel shall not take into consideration any Bond Insurance Policy.
Except Supplemental Resolutions described in subsections (E), (F) and (H) of this
Section 8.1, no Supplemental Resolution adopted pursuant to this Article 8 shall become
effective unless approved by every Insurer; and the Issuer covenants and agrees to furnish to
each Insurer an executed original transcript of the Issuer's proceedings with respect to the
adoption of each Supplemental Resolution.
Section 8.2 Supplemental Resolution With Bondholders'. Insurer's and Credit
Bank's Consent. Subject to the terms and provisions contained in this Section 8.2 and Section
8.1 hereof, the Holder or Holders of not less than a majority in aggregate principal amount of
the Bonds then Outstanding shall have the right, from time to time, anything contained in this
Resolution to the contrary notwithstanding, to consent to and approve the adoption of such
Supplemental Resolution or Resolutions hereto as shall be deemed necessary or desirable by the
Issuer for the purpose of supplementing, modifying, altering, amending, adding to or rescinding,
in any particular, any of the terms or provisions contained in this Resolution; provided,
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however, that if such modification or amendment will, by its terms, not take effect so long as
any Bonds of any specified Series or maturity remain Outstanding, the consent of the Holders
of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for
the purpose of any calculation of Outstanding Bonds under this Section 8.2. Any Supplemental
Resolution which is adopted in accordance with the provisions of this Section 8.2 shall also
require the written consent of the Insurer of, or any Credit Bank providing a Credit Facility for,
any Bonds which are Outstanding at the time such Supplemental Resolution shall take effect.
No Supplemental Resolution may be approved or adopted which shall permit or require (A) an
extension of the maturity of the principal of or the payment of the interest on any Bond issued
hereunder, (B) reduction in the principal amount of any Bond or the Redemption Price or the
rate of interest thereon, (C) the creation of a lien upon or a pledge of the Pledged Funds other
than the lien and pledge created by this Resolution which adversely affects any Bondholders, (D)
a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (E) a reduction
in the aggregate principal amount of the Bonds required for consent to such Supplemental
Resolution. Nothing herein contained, however, shall be construed as making necessary the
approval by Bondholders, the Insurer or the Credit Bank of the adoption of any Supplemental
Resolution as authorized in Section 8.1 hereof.
If at any time the Issuer shall determine that it is necessary or desirable to adopt
any Supplemental Resolution pursuant to this Section 8.2, the Clerk shall cause the Registrar to
give notice of the proposed adoption of such Supplemental Resolution and the form of consent
to such adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they
appear on the registration books and to all Insurers of, and Credit Banks providing a Credit
Facility for, Bonds Outstanding. Such notice shall briefly set forth the nature of the proposed
Supplemental Resolution and shall state that copies thereof are on file at the offices of the Clerk
and the Registrar for inspeCtion by all Bondholders. The Issuer shall not, however, be subject
to any liability to any Bondholder by reason of its failure to cause the notice required by this
Section 8.2 to be mailed and any such failure shall not affect the validity of such Supplemental
Resolution when consented to and approved as provided in this Section 8.2.
Whenever the Issuer shall deliver to the Clerk an instrument or instruments in
writing purporting to be executed by the Holders of not less than a majority in aggregate
principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to
the proposed Supplemental Resolution described in such notice and shall specifically consent to
and approve the adoption thereof in substantially the form of the copy thereof referred to in such
notice, thereupon, but not otherwise, the Issuer may adopt such Supplemental Resolution in
substantially such form, without liability or responsibility to any Holder of any Bond, whether
or not such Holder shall have consented thereto.
If the Holders of not less than a majority in aggregate principal amount of the
Bonds Outstanding at the time of the adoption of such Supplemental Resolution shall have
consented to and approved the adoption thereof as herein provided, no Holder of any Bond shall
have any right to object to the adoption of such Supplemental Resolution, or to object to any of
the terms and provisions contained therein or the operation thereof, or in any manner to question
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the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same
or from taking any action pursuant to the provisions thereof.
Upon the adoption of any Supplemental Resolution pursuant to the provisions of
this Section 8.2, this Resolution shall be deemed to be modified and amended in accordance
therewith, and the respective rights, duties and obligations under this Resolution of the Issuer
and all Holders of Bonds then Outstanding shall thereafter be determined, exercised and enforced
in all respects under the provisions of this Resolution as so modified and amended.
Section 8.3 Amendment with Consent of Insurer and/or Credit Bank Only. If
all of the Bonds Outstanding hereunder are insured or secured as to payment of principal and
interest by an Insurer or Insurers and/or by a Credit Facility provided by a Credit Bank or
Credit Banks, and the Insurer or Insurers and/or the Credit Bank or Credit Banks, as applicable,
are not in default, and the Bonds, at the time of the hereinafter described amendment, shall be
rated by the rating agencies which shall have rated the Bonds at the time such Bonds were
insured or such Credit Facility was provided no lower than the ratings assigned thereto by such
rating agencies on the date such Bonds were insured or such Credit Facility was provided, the
Issuer may enact one or more Supplemental Resolutions amending all or any part of Articles 1,
4, 5, 6 and 7 hereof with the written consent of said Insurer or Insurers and/or said Credit Bank
or Credit Banks, as applicable, and the acknowledgment by said Insurer or Insurers and/or said
Credit Bank or Credit Banks that its Bond Insurance Policy or its Credit Facility, as the case
may be, will remain in full force and effect. The consent of the Holders of any Bonds shall not
be necessary. The foregoing right of amendment, however, does not apply to any amendment
to Section 5.17 hereof with respect to the exclusion, if applicable, of interest on said Bonds from
the gross income of the Holders thereof for federal income tax purposes nor may any such
amendment deprive the Hoiders of any Bond of right to payment of the Bonds from, and their
lien on, the Pledged Funds and any additional security pledged hereunder. Upon filing with the
Clerk of evidence of such consent of the Insurer or Insurers and/or the Credit Bank or Credit
Banks as aforesaid, the Issuer may adopt such Supplemental Resolution. After the adoption by
the Issuer of such Supplemental Resolution, notice thereof shall be mailed in the same manner
as notice of an amendment under Section 8.2 hereof.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Defeasance. If the Issuer shall payor cause to be paid or there shall
otherwise be paid to the Holders of all Bonds the principal or Redemption Price, if applicable,
and interest due or to become due thereon, at the times and in the manner stipulated therein and
in this Resolution, then the pledge of the Pledged Funds and any additional security pledged
hereunder, and all covenants, agreements and other obligations of the Issuer to the Bondholders,
shall thereupon cease, terminate and become void and be discharged and satisfied. In such
event, the Paying Agents shall pay over or deliver to the ISsuer all money or securities held by
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them pursuant to this Resolution which are not required for the payment or redemption of Bonds
not theretofore surrendered for such payment or redemption.
·
Any Bonds or interest installments appertaining thereto, whether at or prior to the
maturity or redemption date of such Bonds, shall be deemed to have been paid within the
meaning of this Section 9.1 if (A) in case any such Bonds are to be redeemed prior to the
maturity thereof, there shall have been taken all action necessary to call such Bonds for
redemption and notice of such redemption shall have been duly given or provision shall have
been made for the giving of such notice, and (B) there shall have been deposited in irrevocable
trust with a banking institution or trust company by or on behalf of the Issuer either moneys in
an amount which shall be sufficient, or Securities the principal of and the interest on which when
due will provide moneys which, together with the moneys, if any, deposited with such bank or
trust company at the same time shall be sufficient, to pay the principal of or Redemption Price,
if applicable, and interest due and to become due on said Bonds on and prior to the redemption
date or maturity date thereof, as the case may be. Neither the Securities nor any moneys so
deposited with such bank or trust company nor any moneys received by such bank or trust
company on account of principal of or Redemption Price, if applicable, or interest on said
Securities shall be withdrawn or used for any purpose other than, and all such moneys shall be
held in trust for and be applied to, the payment, when due, of the principal of or Redemption
Price, if applicable, of the Bonds for the payment or redemption of which they were deposited
and the interest accruing thereon to the date of maturity or redemption thereof; provided,
however, the Issuer may substitute new Securities and moneys for the deposited Securities and
moneys if the new Securities and moneys are sufficient to pay the principal of or Redemption
Price, if applicable, and interest on such Bonds.
For purposes' of determining whether Variable Rate Bonds shall be deemed to have
been paid prior to the maturity or the redemption date thereof, as the case may be, by the
deposit of moneys, or specified Securities and moneys, if any, in accordance with this Section
9.1, the interest to come due on such Variable Rate Bonds on or prior to the maturity or
redemption date thereof, as the case may be, shall be calculated at the Maximum Interest Rate;
provided, however, that if on any date, as a result of such Variable Rate Bonds having borne
interest at less than the Maximum Interest Rate for any period, the total amount of moneys and
specified Securities on deposit for the payment of interest on such Variable Rate Bonds is in
excess of the total amount which would have been required to be deposited on such date in
respect of such Variable Rate Bonds in order to satisfy this Section 9.1, such excess shall be
paid to the Issuer free and clear of any trust, lien, pledge or assignment securing the Bonds or
otherwise existing under this Resolution.
In the event the Bonds for which moneys are to be deposited for the payment
thereof in accordance with this Section 9.1 are not by their terms subject to redemption within
the next succeeding sixty (60) days, the Issuer shall cause the Registrar to mail a notice to the
Holders of such Bonds that the deposit required by this Section 9.1 of moneys or Securities has
been made and said Bonds are deemed to be paid in accordance with the provisions of this
Section 9.1 and stating such maturity or redemption date upon which moneys are to be available
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for the payment of the principal of or Redemption Price, if applicable, and interest on said
Bonds.
Nothing herein shall be deemed to require the Issuer to call any of the Outstanding
Bonds for redemption prior to maturity pursuant to any applicable optional redemption
provisions, or to impair the discretion of the Issuer in determining whether to exercise any such
option for early redemption.
In the event that the principal of or Redemption Price, if applicable, and interest
due on the Bonds or any portion thereof shall be paid by an Insurer or Insurers or a Credit Bank
or Credit Banks, such Bonds or any portion thereof shall remain Outstanding, shall not be
defeased and shall not be considered paid by the Issuer, and the pledge of the Pledged Funds and
any additional security pledged hereunder, and all covenants, agreements and other obligations
of the Issuer to the Bondholders shall continue to exist and such Insurer or Insurers or such
Credit Bank or Credit Banks shall be subrogated to the rights of such Bondholders.
·
Section 9.2 Capital ApJ'reciation Bonds. For the purposes of (A) receiving
payment of the Redemption Price if a Capital Appreciation Bond is redeemed prior to maturity,
or (B) receiving payment of a Capital Appreciation Bond if the principal of all Bonds becomes
due and payable under the provisions of this Resolution, or (C) computing the amount of Bonds
held by the Holder of a Capital Appreciation Bond in giving to the Issuer or any trustee or
receiver appointed to represent the Bondholders any notice, consent, request or demand pursuant
to this Resolution for any purpose whatsoever, the principal amount of a Capital Appreciation
Bond shall be deemed to be its Accreted Value. For the purpose of determining the aggregate
principal amount of Capital Appreciation Bonds which may be issued hereunder, only the
aggregate principal amounf of such Bonds at their initial offering shall be counted, without
regard to the aggregated Accreted Value or face amount of such Bonds which shall be payable
at their respective maturities.
Section 9.3 General Authority. The members of the Governing Body and the
Issuer's officers, attorneys and other agents and employees are hereby authorized to do all acts
and things required of them by this Resolution or desirable or consistent with the requirements
hereof for the full, punctual and complete performance of all of the terms, covenants and
agreements contained in the Bonds and this Resolution, and they are hereby authorized to
execute and deliver all documents which shall be required by Bond Counselor the initial
purchasers of the Bonds to effectuate the sale of the Bonds to said initial purchasers.
Section 9.4 No Personal Liability. No representation, statement, covenant,
warranty, stipulation, obligation or agreement herein contained, or contained in the Bonds, or
in any certificate or other instrument to be executed on behalf of the Issuer in connection with
the issuance of the Bonds, shall be deemed to be a representation, statement, covenant,
warranty, stipulation, obligation or agreement of any member of the Governing Body, officer,
employee or agent of the Issuer in his or her individual capacity, and none of the foregoing
persons nor any officer of the Issuer executing the Bonds, or any certificate or other instrument
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to be executed in connection with the issuance of the Bonds, shall be liable personally thereon
or be subject to any personal liability or accountability by reason of the execution or delivery
thereof.
Section 9.5 No Third Party Beneficiaries. Except such other Persons as may
be expressly described herein or in the Bonds, nothing in this Resolution, or in the Bonds,
expressed or implied, is intended or shall be construed to confer upon any Person other than the
Issuer and the Holders any right, remedy or claim, legal or equitable, under and by reason of
this Resolution or any provision hereof, or of the Bonds, all provisions hereof and thereof being
intended to be and being for the sole and exclusive benefit of the Issuer and the Persons who
shall from time to time be the Holders.
Section 9.6 Sale of Bonds. The Bonds shall be issued and sold at public or
private sale at one time or in installments from time to time and at such price or prices as shall
be consistent with the provisions of the Act, the requirements of this Resolution and other
applicable provisions of law.
Section 9.7 Severability of Invalid Provisions. If anyone or more of the
covenants, agreements or provisions of this Resolution shall be held contrary to any express
provision of law or contrary to the policy of express law, though not expressly prohibited, or
against public policy, or shall for any reason whatsoever be held invalid, then such covenants,
agreements or provisions shall be null and void and shall be deemed separable from the
remaining covenants, agreements and provisions of this Resolution and shall in no way affect
the validity of any of the ~ther covenants, agreements or provisions hereof or of the Bonds
issued hereunder. .
Section 9.8 Repeal of Inconsistent Resolutions. All resolutions or parts thereof
in conflict herewith are hereby superseded and repealed to the extent of such conflict.
Section 9.9 Table of Contents and Headings not Part Hereof. The Table of
Contents preceding the body of this Resolution and the headings preceding the several articles
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and sections hereof shall be solely for convenience of reference and shall not constitute a part
of this Resolution or affect its meaning, construction or effect.
Section 9.10 Effective Date. This Resolution shall take effect immediately upon
its adoption.
PASSED, APPROVED AND ADOPTED this 27th day of February, 1996.
CITY COUNCIL OF TIlE CITY OF
CLERMONT, FLORIDA
#cfb
Mayor -----
(OFFICIAL SEAL)
A TrEST:
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