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HomeMy WebLinkAboutResolution 97-01 RESOLUTION NO. 97- 01 A RESOLUTION AUTHORIZING THE PURCHASE OF A SURETY BOND FROM AMBAC INDEMNITY CORPORATION FOR DEPOSIT TO THE RESERVE FUND ESTABLISHED FOR THE $8,555,000 CITY OF OCOEE, FLORIDA WATER AND SEWER SYSTEM REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1993; AUTHORIZING THE WITHDRAWAL OF CERTAIN MONEYS IN THE RESERVE FUND FOR DEPOSIT IN A CONSTRUCTION FUND FOR EXPENDITURE WITH RESPECT TO CERTAIN PROJECTS; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Ocoee, Florida (the "Issuer"), has by Resolution No. 93-02 adopted on February 2, 1993, Resolution No. 93-03 adopted on February 16, 1993, Resolution No. 96-32 adopted on December 3, 1996, and Resolution No. 96-35 adopted on December 17, 1996 (collectively, the "Resolution"), authorized the issuance of $8,555,000 City of Ocoee, Florida Water and Sewer System Refunding and Improvement Revenue Bonds, Series 1993, issued to refund certain outstanding obligations and to finance an Initial Project (as defined in the Resolution) and authorized the issuance of $10,150,000 City of Ocoee, Florida Water and Sewer System Improvement Revenue Bonds, Series 1997, to finance the Additional 1997 Project (as defined in the Resolution); and WHEREAS, the Issuer now desires to deposit to the Reserve Fund created to secure the Series 1993 Bonds a surety bond from AMBAC Indemnity Corporation (the "Surety Bond Provider") in accordance herewith; and WHEREAS, the Issuer further desires to withdraw from the Reserve Fund for the Series 1993 Bonds, upon the deposit of the surety bond, the monies comprising the Reserve Requirement for the Series 1993 Bonds in the amount of $649,875 and to deposit such monies to pay certain costs of the Additional 1997 Project as defined in the Resolution; and WHEREAS, in order to preserve and protect the public health, safety and welfare of the inhabitants of the Issuer, it has been found to be necessary and desirable to acquire, design and construct the Additional 1997 Project, and the Issuer requires additional monies in order to fund the Additional 1997 Project; and WHEREAS, the Issuer has received the consent for the bond insurer for the Series 1993 Bonds, MBIA, to the deposit of the surety bond from the Surety Bond Provider pursuant to Section 4.5(A)( 4) of the Resolution. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA: SECTION 1. DEFINITIONS. All capitalized terms used herein and not otherwise defined shall be as defined in the Resolution. This resolution constitutes a Supplemental Resolution as defined in the Resolution. SECTION 2. PURCHASE OF SURETY BOND. A commitment has been received for a surety bond to be issued by AMBAC Indemnity Corporation, who is also acting as the bond insurer for the Series 1997 Bonds, guaranteeing certain payments into the Reserve Fund with respect to the Series 1993 Bonds. The Issuer is hereby authorized and directed to purchase a surety bond from the Surety Bond Provider (the "Reserve Fund Policy") relating to the Series 1993 Bonds to be deposited in the Reserve Fund for the Series 1993 Bonds, and payment for such Reserve Fund Policy to the Surety Bond Provider is hereby authorized from Issuer revenues. The Issuer hereby authorizes the execution of a Reserve Fund Guaranty Agreement with the Surety Bond Provider (the "Agreement") in the form attached as Exhibit A relating to the issuance of the surety bond for the Reserve Fund and 2 to deliver said Agreement to the Surety Bond Provider, and does hereby direct the execution and delivery of said Agreement by the Mayor, attested to by the City Clerk. All of the provisions of said Agreement, when executed and delivered by the Issuer is authorized herein and when duly authorized, executed and delivered by the Surety Bond Provider, shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated verbatim in the appropriate sections. SECTION 3. USE OF FUNDS CURRENTLY IN RESERVE FUND FOR SERIES 1993 BONDS. The funds currently in the Reserve Fund for the Series 1993 Bonds in the amount of $649,875 shall only be withdrawn upon the deposit of the surety bond from the Surety Bond Provider. Upon such withdrawal, the funds shall be held in a licensed and insured depository authorized to hold such funds of the Issuer and expended for costs of the Additional 1997 Project by the Issuer. SECTION 4. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. DULY ADOPTED this 21st day of January, 1997. CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA By: ~~~~ ayor [SEAL] 3 FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, APPROVED AS TO .xORM AND I)IDALITY, THIS ~ DAY OF \...)u.".JU'^1 ' 1997 ::LEif:;~~ City Attorney J:\BONOS\4128\RES01.SBI1/14/971 GEOj R APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON JANUARY 21, 1997 UNDER AGENDA ITEM NO. V J t3 4 EXHIBIT A TO RESOLUTION GUARANTY AGREEMENT GUARANlY AGREEMENT dated as of , 1997 by and between City of Ocoee, Florida, a public body corporate orgitni7.ed and existing under the laws of the State of Florida (the issuer, as "Obligor"); and AMBAC INDEMNITY CORPORATION ("AMBAC"), a Wisconsin-domiciled stock insurance company. WITNESSETH: WHEREAS, the Obligor will issue $ , Series , dated in aggregate principal amount of (the "Obligations"), pursuant to the terms of the Resolution; and WHEREAS, AMBAC will issue its Surety Bond (the "Surety Bond"), substantially in the form set forth in Annex A to this Agreement, guaranteeing certain payments by the Obligor subject to the terms and limitations of the Surety Bond; and WHEREAS, to induce AMBAC to issue the Surety Bond, the Obligor has agreed to pay the premium for such Surety Bond and to reimburse AMBAC for all payments made by AMBAC under the Surety Bond from Legally Available Funds, all as more fully set forth in this Agreement; and WHEREAS, the Obligor understands that AMBAC expressly requires the delivery of this Agreement as part of the consideration for the execution by AMBAC of the Surety Bond. NOW, TIffiREFORE, in consid~ration of the premises and of the agreements herein contained and of the execution of the Surety Bond, the Obligor and AMBAC agree as follows: 1 ARTICLE I DEFINITIONS; SURETY BOND Section 1.01. Definitions. Except as otherwise expressly provided herein or unless the context otherwise requires, the tenns which are capitalized herein shall have the meanings specified in Annex B hereto. Section 1.02. Surety Bond. (a) AMBAC will issue the Surety Bond in accordance with and subject to the tenns and conditions of the Commitment. (b) The maximum liability of AMBAC under the Surety Bond and the coverage and term thereof shall be subject to and limited by the Surety Bond Coverage and the tenns and conditions of the Surety Bond. (c) Payments made under the Surety Bond will reduce the Surety Bond Coverage to the extent of that payment, provided that the Surety Bond Coverage shall be automatically reinstated to the extent of the reimbursement of principal by the Obligor of any payment made by AMBAC. AMBAC shall notify the Paying Agent in writing no later than the fifth (5th) day following the reimbursement by the Obligor that the Surety Bond has been reinstated to the extent of such reimbursement. Section 1.03. Premium. In consideration of AMBAC agreeing to issue the Surety Bond hereunder, the Obligor hereby agrees to payor cause to be paid from the proceeds of the obligations the premium set forth in the Commitment. Section 1.04. Certain Other Expenses. The Obligor will pay all reasonable fees and disbursements of AMBAC's counsel related to any modification of this Agreement or the Surety Bond requested by the Obligor. 2 ARTICLE IT REIMBURSEMENT OBLIGATIONS OF OBLIGOR AND SECURITY THEREFOR Section 2.01. Reimbursement for Payments Under the Surety Bond and Expenses. (a) The Obligor will reimburse AMBAC, from Legally Available Funds within the Reimbursement Period, without demand or notice by AMBAC to the Obligor or any other person, to the extent of each Surety Bond Payment with interest on each Surety Bond Payment from and including the date made to the date of the reimbursement by the Obligor at the Effective Interest Rate. The Obligor agrees that it shall make monthly level principal repayments for each Surety Bond Payment during the Reimbursement Period. Interest on each Surety Bond Payment shall be paid monthly during the Reimbursement Period. To the extent that interest payments due hereunder are not paid on a monthly basis, or are not paid as each principal repayment is made, interest shall accrue on such unpaid amounts at a rate equal to the Effective Interest Rate. (b) The Obligor also agrees to reimburse AMBAC, from Legally Available Funds, immediately and unconditionally upon demand for all reasonable expenses incurred by AMBAC in connection with the Surety Bond and the enforcement by AMBAC of the Obligors obligations under this Agreement together with interest on all such expenses from and including the date which is 30 days from the date a statement for such expenses is received by the Obligor incurred to the date of payment at the rate set forth in subsection (a) of this Section 2.01. Section 2.02. Allocation of Pa)'1l1ents. AMBAC and the Obligor hereby agree that each repayment of principal received by AMBAC from or on behalf of the Obligor as a reimbursement to AMBAC as required by Section 2.01(a) hereofshall be applied to reinstate all or a portion of the Surety Bond Coverage to the extent of such repayment. Any interest payable pursuant to Section 2.01(a) hereof shall not be applied to the reinstatement of any portion of the Surety Bond Coverage. Section 2.03. Security for Pa)'1l1ents; Instruments of Further Assurance. To the extent, but only to the extent, that the Resolution, pledges to the Owners or any paying agent therefor, or grants a security interest or lien in or on any collateral property, revenue or other payments ("Collateral and Revenues") in order to secure the Obligations or provide a source of payment for the Obligations, the Obligor hereby grants to AMBAC a security interest in or lien on, as the case may be, and pledges to AMBAC all such Collateral and Revenues as security for payment of all amounts due hereunder, which security interest, lien and/or pledge created or granted under this Section 2.03 shall be subordinate only to the interests of the O\wers and any paying agent therefor in such Collateral and Revenues. The Obligor agrees that it will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all financing statements, if applicable, and all other further instruments as may be required by law or as shall reasonably be requested by AMBAC for the perfection of the security interest, if any, granted under this Section 2.03 and for the preservation and protection of all rights of AMBAC under this Section 2.03. Section 2.04. Unconditional Obligation. The obligations of the Obligor hereunder are absolute and unconditional and will be paid or perfonned strictly in accordance with this Agreement, irrespective of: 3 (a) any lack of validity or enforceability of, or any amendment or other modification of, or waiver with respect to the Resolution or the Obligations; (b) any exchange, release or nonperfection of any security interest in property securing the Obligations or this Agreement or any obligations hereunder; (c) any circumstances which might otherwise constitute a defense available to, or discharge of, the Obligor with respect to the Obligations; (d) whether or not such Obligations are contingent or matured, disputed or undisputed, liquidated or unliquidated. ARTICLE ill EVENTS OF DEFAULT; REMEDIES Section 3.01. Events of Default. The following events shall constitute Events of Default hereunder: (a) The Obligor shall fail to pay to AMBAC any amount payable under Sections 1.04 and 2.01 hereof and such failure, with respect to amounts owed pursuant to Section 2.01 shall have continued for a period in excess of the Reimbursement Period; (b) Any material representation or warranty made by the Obligor hereunder or under the Resolution or any statement in the application for the Surety Bond or any report, certificate, financial statement or other instrument provided in connection with the Commitment, the Surety Bond or herewith shall have been materially false at the time when made; (c) Except as otherwise provided in this Section 3.01, the Obligor shall fail to perform any of its other obligations hereunder, provided that such failure continues for more than thirty (30) days after receipt by the Obligor of notice of such failure to perform; (d) The Obligor shall (i) voluntarily commence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law, (ii) consent to the institution of, or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, paying agent, custodian, sequestrator or similar official for the Obligor or for a substantial part of its property, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take action for the purpose of effecting any of the foregoing; or 4 (e) An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Obligor, or of a substantial part of its property, under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law or (ii) the appointment of a receiver, paying agent, custodian, sequestrator or similar official for the Obligor or for a substantial part of its property; and such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for thirty (30) days. Section 3.02. Remedies. If an Event of Default shall occur and be continuing, then AMBAC may take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due under this Agreement or any related instrument and any obligation, agreement or covenant of the Obligor under this Agreement; provided, however, that AMBAC may not take any action to direct or require acceleration or other early redemption of the Obligations or adversely affect the rights of the Owners. All rights and remedies of AMBAC under this Section 3.02 are cumulative and the exercise of anyone remedy does not preclude the exercise of one or more of the other available remedies. ARTICLE N SETILEMENT AMBAC shall have the exclusive right to decide and determine whether any claim, liability, suit or judgment made or brought against AMBAC, the Obligor or any other party on the Surety Bond shall or shall not be paid, compromised, resisted, defended, tried or appealed, and AMBAC's decision thereon, ifmade in good faith, shall be final and binding upon the Obligor. An itemized statement of payments made by AMBAC, certified by an officer of AMBAC, or the voucher or vouchers for such pa)'ments, shall be prima facie evidence of the liability of the Obligor, and if the Obligor fails to reimburse AMBAC, pursuant to subsection (b) of Section 2.01 hereof: upon the receipt of such statement of payments, interest shall be computed on such amount from the date of any payment made by AMBAC at the rate set forth in subsection (a) of Section 2.01 hereof ARTICLE V MISCELLANEOUS Section 5.01. Computations. All computations ofpremiwn, interest and fees hereunder shall be made on the basis of the actual number of days elapsed over a year of360 days. Section 5.02. Exercise of Rights. No failure or delay on the part of AMBAC to exercise any right, power or privilege under this Agreement and no course of dealing between AMBAC and the Obligor or any other party shall operate as a waiver of any such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other 5 right, power or privilege. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which AMBAC would otherwise have pursuant to law or equity. No notice to or demand on any party in any case shall entitle such party to any other or further notice or demand in similar or other circumstances, or constitute a waiver of the right of the other party to any other or further action in any circumstances without notice or demand. Section 5.03. Amendment and Waiver. Any provision of this Agreement may be amended, waived, supplemented, discharged or tenninated only with the prior written consent of the Obligor and AMBAC. The Obligor hereby agrees that upon the written request of the Paying Agent, AMBAC may make or consent to issue any substitute for the Surety Bond to cure any ambiguity or formal defect or omission in the Surety Bond which does not materially change the tenns of the Surety Bond nor adversely affect the rights of the Owners, and this Agreement shall apply to such substituted Surety Bond. AMBAC agrees to deliver to the Obligor and to the company or companies, ifany, rating the Obligations, a copy of such substituted Surety Bond. Section 5.04. Successors and Assigns; Descriptive Headings. (a) This Agreement shall bind, and the benefits thereof shall inure to, the Obligor and AMBAC and their respective successors and assigns, so long as the conditions in the Resolution are satisfied; provided that the Obligor may not transfer or assign any or all of its rights and obligations hereunder without the prior written consent of AMBAC. (b) The descriptive headings of the various provisions of this Agreement are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. Section 5.05. Other Sureties. If AMBAC shall procure any other surety to reinsure the Surety Bond, this Agreement shall inure to the benefit of such other surety, its successors and assigns, so as to give to it a direct right of action against the Obligor to enforce this Agreement, and "AMBAC," wherever used herein, shall be deemed to include such reinsuring surety, as its respective interests may appear. Section 5.06. Signature on Bond. The Obligor's liability shall not be affected by its failure to sign the Surety Bond nor by any claim that other indemnity or security was to have been obtained nor by the release of any indemnity, nor the return or exchange of any. collateral that may have been obtained. Section 5.07. Waiver. The Obligor waives any defense that this Agreement was executed subsequent to the date of the Surety Bond, admitting and covenanting that such Surety Bond was executed pursuant to the Obligor's request and in reliance on the Obligor's promise to execute this Agreement. Section 5.08. Notices, Requests, Demands. Except as otherwise expressly provided herein, all written notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been given or made when actually received, or in the case of telex or telecopier notice sent over a telex or a telecopier machine Omted or operated by a party hereto, when sent, addressed as specified below or at such other address as either of the parties hereto or the Paying Agent may hereafter specify in writing to the others: 6 If to the Obligor: City of Ocoee, Florida 150 North Lakeshore Drive Ocoee, Florida 34761-2258 Attention: Finance Director If to the Paying Agent: First Union National Bank of Florida 214 Hogan St. Jacksonville, Florida 32202-0122 Attention: Steve Eason IftoAMBAC: AMBAC Indemnity Corporation One State Street Plaza 17th Floor New York, New York 10004 Telephone: (212) 668-0340 Attention: General Counsel Section 5.09. Survival of Representations and Warranties. All representations, warranties and obligations contained herein shall survive the execution and delivery of this Agreement and the Surety Bond. Section 5.10. Governing Law. This Agreement and the rights and obligations of the parties under this Agreement shall be governed by and construed and interpreted in accordance with the laws of the State. Section 5.11. Counterparts. This Agreement may be executed in any number of copies and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instnunent. Complete counterparts of this Agreement shall be lodged with the Obligor and AMBAC. Section 5.12. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 7 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be du1y executed and delivered as of the date first above written. (Seal) CITY OF OCOEE, FLORIDA tity Clerk By:' Hayor Attest: AMBAC INDEMNITY CORPORA nON By 8 ANNEX A SURE1Y BOND 9 SURElY BOND ANfBAC Indemnity Corporation One State Street Plaza New York, New York 10004 Telephone: (212) 668-0340 Policy No. , ANfBAC Indemnity Corporation ("ANfBAC"), in consideration of the payment of the premium and subject to the terms of this Surety Bond, hereby unconditionally and irrevocably guarantees the full and complete payments which are to be applied to payment of principal of and interest on the Obligations (as hereinafter defined) and which are required to be made by or on behalf of the CITY OF OCOEE, .. FLORIDA (the issuer, as "Obligor") to First Union National Bank of Florida, Jacksonville, Florida (the "Paying Agent") as such payments are due by the Obligor but shall not be so paid pursuant to Resolution No. 9:3-02, adopted by the City Commission of the Obligor on February 2, 1993, as amended and supplemented, in particular as amended and supplemented by Resolution No. " adopted by the City Commission of the Obligor on . (collectively, the "Resolution") authorizing the issuance of $' in aggregate principal amount of " Series , dated ~ (the "Obligations") of said Obligor and providing the terms and conditions for the issuance of said Obligations; provided that the amount available at any particular time to be paid to the Paying Agent under the terms hereof shall not exceed the Surety Bond Coverage, defined herein as the lesser of $ or the Reserve Requirement for the Obligations, as that term is defined in the Resolution (the "Reserve Requirement"). The Surety Bond Coverage shall be reduced and may be reinstated from time to time as set forth herein. 1. As used herein, the term "Owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the applicable Paying Agent, the Obligor or any designee of the Obligor for such purpose. The term "Owner" shall not include the Obligor or any person or entity whose obligation or obligations by agreement constitute the underlying security or source of payment of the Obligations. - 2. Upon the later of (i) one (1) day after receipt by the General Counsel of ANfBAC ofa demand for payment in the form attached hereto as Attachment 1 (the "Demand for Payment"), duly executed by the Paying Agent certifYing that payment due as required by the Resolution has not been made to the Paying Agent; or (ii) the payment date of the Obligations as specified in the Demand for Payment presented by the Paying Agent to the General Counsel of AMBAC, AMBAC will make a deposit of funds in an account with the Paying Agent or its successor, in Jacksonville, Florida, sufficient for the payment to the Paying Agent, of amounts which are then due to the Paying Agent (as specified in the Demand for Payment) up to but not in excess of the Surety Bond Coverage. 1 3. Demand for Payment hereunder may be made by prepaid telecopy, telex, or telegram of the executed Demand for Payment do the General Counsel of AMBAC. If a Demand for Payment made hereunder does not, in any instance, confonn to the terms and conditions of this Surety Bond, AMBAC shall give notice to the Paying Agent, as promptly as reasonably practicable that such Demand for Payment was not effected in accordance with the terms and conditions of this Surety Bond and briefly state the reason(s) therefor. Upon being notified that such Demand for Payment was not effected in accordance with this Surety Bond, the Paying Agent may attempt to correct any such nonconforming Demand for Payment it: and to the extent that, the Paying Agent is entitled and able to dose. 4. The amount payable by AMBAC under this Surety Bond pursuant to a Demand for Payment shall be limited to the Surety Bond Coverage. The Surety Bond Coverage shall be reduced automatically to the extent of each payment made by AMBAC hereunder and. will be reinstated to the extent of each reimbursement of AMBAC by the Obligor pursuant to Article IT of the Guaranty Agreement, dated as of , by and between AMBAC and the Obligor (the "Guaranty Agreement"); provided, that in no event shall such reinstatement exceed the Surety Bond Coverage. AMBAC will notify the Paying Agent, in writing within five (5) days of such reimbursement, that the Surety Bond Coverage has been reinstated to the extent of such reimbursement pursuant to the Guaranty Agreement and such reinstatement shall be effective as of the date AMBAC gives such notice. The notice to the Paying Agent will be substantially in the fonn attached hereto as Attachment 2. The Surety Bond Coverage shall be automatically reduced to the extent that the Reserve Requirement for the Obligations is lowered or reduced pursuant to the terms of the Resolution. 5. Any service of process on AMBAC may be made to AMBAC or the office of the General Counsel of AMBAC and such service of process shall be valid and binding as to AMBAC. During the tenn of its appointment, General Counsel will act as agent for the acceptance of service of process and its offices are located at One State Street Plaza, New York, New York 10004, Telephone: (212) 668- 0340. 6. This Surety Bond is noncancelable for any reason. The tenn of this Surety Bond shall expire on the earlier of (i) or (ii) the date on which the Obligor, to the satisfaction of AMBAC, has made all payments required to be made on the Obligations pursuant to the ReSolution. The premium on this Surety Bond is not refundable for any reason, including the payment prior to maturity of the Obligations. 7. This Surety Bond shall be governed by and interpreted under the laws of the State of WlSCOnsin, and any suit hereunder in connection with any payment may be brought only by the Paying Agent within one year after (i) a Demand for Payment, with respect to such payment, is made pursuant to the tenns of this Surety Bond and AMBAC has failed to Inake such payment or (n) payment would otherwise have been due hereunder but for the failure on the part of the Paying Agent to deliver to AMBAC a Demand for Payment pursuant to the tenns of this Surety Bond, whichever is earlier. 2 8. The insurance provided by the Surety Bond is not covered by the Florida Insurance Guaranty Association. IN WITNESS WHEREOF, AMBAC has caused this Surety Bond to be executed and attested on its behalf this day of AMBAC Indemnity Corporation Assistant Secretary By: ",. First Vice President and General Counse~ Public Finance Attest: By: Countersignature Agent 3 Attachment 1 Surety Bond No. DEMAND FOR PAYMENT , 19 AMBAC Indemnity Corporation One State Street Plaza New York, New York 10004 Attention: General Counsel Reference is made to the Surety Bond No. (the "Surety Bond") issued by AMBAC Indemnity Corporation (" AMBAC"). The tenns which are capitalized herein and not otherwise defined u.have the meanings specified in the Surety Bond unless the context otherwise requires. The Paying Agent hereby certifies that: (a) Payment by the Obligor to the Paying Agent was due on _ [a date not less than one (1) day prior to the applicable payment date for the Obligations] under the . attached hereto as Exhibit A, in an amount equal to $ (the "Amount Due"). The Amount Due is payable to the Owners of the Obligations on (b) $ has been deposited in the [Account] from moneys paid by the Obligor or from other funds legally available to the Paying Agent for payment to the Owners of the Obligations, which amount is $ less than the Amount Due (the "Deficiency"). (c) The Paying Agent has not heretofore made demand under the Surety Bond for the Amount Due or any portion thereof. The Paying Agent hereby requests that paYment of the Deficiency (up to but not in excess of the Surety Bond Coverage) be made by AMBAC under the Surety Bond and directs that payment under the Surety Bond be made to the fonowing account by bank wire transfer of federal or other immediately available funds in accordance with the terms of the Surety Bond: [paying Agent's Account] [pAYING AGENT] By: Its: 4 Attachment 2 Surety Bond No. NOTICE OF REINSTATEMENT , 19 [paying Agent] [Address] Reference is made to the Surety Bond No. (the "Surety Bond") issued by AMBAC Indemnity Corporation (" ~AC"). The terms which are capitalized herein and not otherwise defined have the meanings- specified in the Surety Bond Unless the context otherwise reqUIres. A11BAC hereby delivers notice that it is in receipt of payment from the Obligor pursuant to Article II of the Guaranty Agreement and as of the date hereof the Surety Bond Coverage is $ . subject to a reduction as the Reserve Requirement for the Obligations is lowered or reduced pursuant to the terms of the Resolution. AMBAC INDEMNITY CORPORATION Attest: By: Title Title 5 ANNEX B DEFINITIONS For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, all capitalized terms shall have the meaning as set out below. "Agreement" means this Guaranty Agreement. "AMBAC" has the same meaning as set forth in the:first paragraph of this Agreement. "Collateral and Revenues" has the same meaning as set forth in Section 2.03 hereof "Commitment" means the AMBAC Commitment for Surety Bond in the form attached hereto as Annex C. "Debt Service Payments" means those payments required to be made by the Obligor which will be applied to payment of principal of and interest on the Obligations. "Effective Interest Rate" means the lesser of the Reimbursement Rate or the maximum rate of interest permitted by then applicable law; provided, however, that the Effective Interest Rate shall in no event be less than the interest rate on the Obligations. "Event of Default" shall mean those events of default set forth in Section 3.01 of this Agreement. "Legally Available Funds" shall mean the Pledged Funds (as defined in the Resolution) available after all required current payments for Cost of Operation and Maintenance (as defined in the Resolution) and Debt Service Payments have been made. . "Obligations" has the same meaning as set forth in the second paragraph of this Agreement. "Obligor" has the same meaning as set forth in the:first paragraph of this Agreement. "Owners" means the registered owner of any Obligation as indicated in the books maintained by the applicable paying agent, the Obligor or any designee of the Obligor for such purpose. The term "Owner" shall not include the Obligor or any person or entity whose obligation or obligations by agreement constitute the underlying security or source of payment for the Obligations. "Paying Agent" means The First Union Bank of Florida, Jacksonville, Florida. "Reimbursement Period" means, with respect to a particular Surety Bond Payment, the period commencing on the date of such Surety Bond Payment and ending 12 months following such Surety Bond Payment. 10 "Reimbursement Rate" means Citibank's prime rate plus two (2) percent per annUItl, as of the date of such Surety Bond Payment, said "prime rate" being the rate of interest annoWlced from time to time by Citibank, New York, New York, as its prime rate. The rate of interest shall be calculated on the basis of a 360-day year. "Resolution" means Resolution No. 93-02, adopted by the City Commission of the Obligor on February 2, 1993, as amended and supplemented, in particular as amended and supplemented by Resolution No. adopted by the City Commission of the Obligor on "State" means the State of Florida. "Surety Bond" means the surety bond issued by AMBAC substantially in the form attached to this Agreement as Annex A. "Surety Bond Coverage" means the amount available at any particular time to be paid to the Paying Agent under the terms of the Surety Bond, which amoWlt shall never exceed $ "Surety Bond Payment" means an amoWlt equal to the Debt Service Payment less (i) that portion of the Debt Service Payment paid by the Obligor, and (ii) other funds legally available to the Paying Agent for payment to the Owners, all as certified by the Paying Agent in a demand for payment rendered pursuant to the terms of the Surety Bond. 11 ANNEX C COMMITMENT 12 AMBAC INDE1\1NITY CORPORA nON - COMMlTM:ENT FOR SURETY BOND Issuer. CITY OF OCOEE. FLORIDA Commitment Nwnber. Date of Commitment: E.'cpiration Date: Bonds: Premiwn: % of the Debt Sel'\ice Reserve FWld Requirement - . Surety Bond Amount S AMBAC Indemnity Corporation (" AMBAC" or .. AMBAC Indemnity"), A Wisconsin Stock: Insurance Company, hereby commits to issue a Surety Bond (the "Commitment") relating to the Debt Service Reserve Fund for the above-described debt obligations (the "Bonds"), substmtially in the form attached hereto, subject to the terms and conditions contained herein or added hereto (see conditions set forth herein). To e:rtend this Commitment after the expiration date set forth above, an oral (subsequently confirmed in writing) or "lritten request for renewal must be submitted to AMBAC at least one business day prior to such expiration date. AMBAC reserves the right to refuse to grant a renewa1 or may renew this Commitment subject to additional tenns and conditions. The Surety Bond (the "Surety") shall be issued if the follO\\ing conditions are satisfied: 1. AMBAC shall receive an opinion of counsel or a certificate of an officer of the Issuer or ultimate obligor stating that the iiiformation supplied to AMBAC in order to obtain the Surety and the documents to be executed and delivered in connection with the issuance and sale of the Bonds do not contain any untrue or misleading statement of a material fact and do not WI to state a material13ct required to be swed therein or necessary in order to make the information contained therein not misleading. 2. No event shall occur which would pennit any purchaser of the Bonds. othernise required. not to be required to purchase the Bonds on the date scheduled for the issuance and delivery thereof: 3. There shall be no material change in or affecting the Bonds, the Issuer or ultimate obligor (mduding, but not limited to, the security for the Bonds), the Official Statement. if any (or any similar- disclosure document), including any financial statements theiein contained, the financing documents or any legal opinions to be e.xecuted and delivered in connection with the issuance and sale of the Bonds, or any other information submitted to AMBAC in order to obtain the Surety, from the descriptions thereof provided to AMBAC at any time prior to the issuance of the Bonds and there shall not have occum:d or come to the attention of the issuer or purchaser any material change of fact or law adverse to the interests of AMBAC, unless approved by AMBAC in writing. 4. Unless expressly waived in whole or in part by AMBAC, the financing documents shall contain a) the terms and provisions provided in the AMBAC STANDARD PACKAGE transmitted herewith, and b) any provisions or conunents given orally by AMBAC. 5. No later than five (5) business days prior to closing, AMBAC shall be provided with: (a) proposed copies of all financing documents, and (b) the proposed official statement (or any similar disclosure document); and (c) the proposed various legal opinions delivered in connection with the issuance and sale of the Bonds, including, without limitation, the unqualified approving opinion of bond counsel rendered by a law finn acceptable to AMBAC. The form ofbond counsel's approving opinion must be acceptable to AMBAC. The form ofbond counsel's approving opinion shall indicate that the Issuer must comply with certain CXJVenallts under and pursuant to the Internal Revenue Code of 1986, as amended and that the Issuer bas the legal power to comply with such covenants. AMBAC shall also be provided with executed copies of all financing documents, including but not limited to the Official Statement (or any similar disclosure document) and the various legal opinions rendered. The executed opinion of bond counsel shall be addressed to AMBAC or in lieu thereof, a letter shall be provided to AMBAC to the effect that AMBAC may rely on such opinion as if it were addressed to AMBAC and such letter shall be delivered with an executed opinion; and (d) any provisions of the Purchase Contract or Bond Purchase Agreement referencing AMBAC or the issuer of the Surety in general. If such provisions are not received in a timely manner or if provisions are inserted in the Purchase Contract or Bond Purchase Agreement without AMBAC Indemnity's knowledge, compliance with such provisions may not be po5S1ble; and (e) a letter from bond counselor counsel to the purchaser or otherwise from another counsel aa:eptable to AMBAC to the effect that the financing documents, the Official Statement (or any similar disclosure document) and the various legal opinions executed and delivered in connection with the issuance and sale of the Bonds, are substantially in the forms previously submitted to AMBAC for review, with only such amendments, modifications or deletions as may be approved by AMBAC; and (1) a copy of any insurance policy, surety bond, guaranty or indemnification or any other policy, contract or agreement which provides for payment of all or any portion of the debt, the costs of reconstruction, the loss of business income or in any way so:ures, ensures or enhances the income stream anticipated to pay the Bonds; and (g) a certified or cashier's check for or evidence of wire transfer of an amount equ:ll to the payment for the Surety at the time of the issuance and delivery of the Bonds. Wire transfer shall be used for any payment for the Surety in an amount greater than SI00,OOO; and (h) the final debt service schedule. 2 6. AMBAC Indemnity must receive at least (5) business days prior to closing an opinion addressed to AMBAC by coWlSCl aco:ptable to AMBAC that the Guaranty Agreement is a legal. valid and binding obligation of the Obligor thereof, enforceable in accordance with its terms. Authorized Officer 3 STATE OF FLORIDA COUNTY OF ORANGE CITY OF OCOEE I HEREBY CERTIFY THAT THE ATTACHED IS A TRUE COPY OF Resolution No. 97-01, authorizing the purchase of a Surety Bond for AMBAC Indemnity Corporation (for 1993 Bond Issue) adopted by Ocoee City Commission January 21, 1997, THE ORIGINAL OF WHICH IS ON FILE IN MY OFFICE. IN WITNESS WHEREOF, I HEREBY SET MY HAND AND CAUSE THE SEAL OF THE CITY OF OCOEE TO BE AFFIXED ON THIS 23rd day of January, 1997. (SEAL)