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HomeMy WebLinkAboutResolution 96-32 EXECUTION COPY RESOLUTION NO. 96-32 CITY OF OCOEE, FLORIDA WATER AND SEWER SYSTEM IMPROVEMENT REVENUE BONDS SERIES 1997 Adopted on December 3, 1996 TABLE OF CONTENTS PAGE ARTICLE I GENERAL SECTION 1.01. Authority for this Resolution. . . . SECTION 1. 02 . Definitions. . . . . . . . . . . . . SECTION 1. 03 . Resolution to Constitute Contract. . . . SECTION 1. 04 . Findings. . . . . . . . . . . . . SECTION 1. 05. Additional 1997 Project. . . . . . . . . 1 1 3 3 4 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF SERIES 1997 BONDS SECTION 2.01. Authorization of Series 1997 Bonds. . .. 5 SECTION 2.02. Application of Series 1997 Bond Proceeds. . . . . . . . . . . . . . . . . . . . .. 6 SECTION 2.03 Funds and Accounts Secure Holders of the Series 1997 Bonds; Reserve Fund; Surety Bond. . .. 7 SECTION 2.04. Execution of Series 1997 Bonds. . . . 8 SECTION 2.05. Authentication. . . . . . .. .... 8 SECTION 2.06. Privilege of Redemption. ........ 9 SECTION 2.07. Form of Series 1997 Bonds. ....... 9 ARTICLE III REGISTRAR, PAYING AGENT, INSURER, AND ACCOUNTANT MATTERS SECTION 3.01. Registrar and Paying Agent for the Series 1997 Bonds. . . . . . . . . . . . . . . . . . . . . 20 SECTION 3.02. Preparation of Accountant's certificate. .... ....... .... 20 SECTION 3.03. Appointment of Bond Insurer for Series 1997 Bonds. . . . . . . . . . . . . . . . . . . . . 20 SECTION 3.04. Purchase of Bond Insurance and Surety Bond. . . . . . . . . . . . . . . . 20 SECTION 3.05. Terms Regarding Series 1997 Bonds In Po 1 icy. . . . . . . . . . . . . . . . .. ... 20 SECTION 3.06. Federal Income Tax Covenants. . . . . 25 ARTICLE IV MISCELLANEOUS SECTION 4.01. Preliminary Official Statement. SECTION 4.02. continuing Disclosure. . . . . 26 26 i SECTION 4.03. SECTION 4.04. Severability of Invalid provisions Effective Date. . . . . . . . . . . 26 27 Exhibit A - Exhibit B - Exhibit C - Exhibit D - continuing Disclosure certificate Preliminary Official Statement Municipal Bond Insurance Policy Guaranty Agreement ii RESOLUTION NO. 96-32 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA, PROVIDING FOR THE CONSTRUCTION AND ACQUISITION OF CERTAIN IMPROVEMENTS TO THE COMBINED WATER AND SEWER SYSTEM OF THE CITY OF OCOEE, FLORIDA; AUTHORIZING THE ISSUANCE BY THE CITY OF NOT TO EXCEED $11,000,000 WATER AND SEWER SYSTEM IMPROVEMENT REVENUE BONDS, SERIES 1997, TO FINANCE THE COST THEREOF; PLEDGING NET REVENUES OF THE SYSTEM TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH SERIES 1997 BONDS ON PARITY WITH THE CITY'S SERIES 1993 BONDS; AUTHORIZING THE EXECUTION OF A CONTINUING DISCLOSURE CERTIFICATE; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS OF SUCH BONDS; PROVIDING FOR SEVERABILITY OF INVALID PROVI- SIONS; AUTHORIZING THE PREPARATION OF A PRELIMINARY OFFICIAL STATEMENT; DESIGNATING AMBAC INDEMNITY CORPORATION AS THE BOND INSURER FOR THE SERIES 1997 BONDS; PROVIDING FOR THE REPEAL OF ANY RESOLUTIONS IN CONFLICT WITH THE PROVISIONS OF THIS RESOLUTION; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA: ARTICLE I GENERAL SECTION 1. 01. Authority for this Resolution. This Resolution is adopted pursuant to the provisions of the Constitution of the State of Florida, the Charter of the City of Ocoee, Chapter 166, Part II, Florida Statutes, Resolution 93-02 of the city of Ocoee, and other applicable provisions of law. SECTION 1. 02. Definitions. When used in this Resolution, capitalized terms not otherwise defined shall be as defined in Resolution 93-02 of the City of Ocoee, and the following terms shall have the following meanings, unless the context clearly otherwise requires. "Additional 1997 Project" shall mean the acquisition, construction or reconstruction of capital improvements to the System and shall include all property rights, easements, franchises and equipment relating thereto and deemed necessary or convenient for the construction or acquisition or the operation thereof which is financed from the Series 1997 Bonds, as more fully described in the plans on file with the Issuer. "Bond Insurer" shall mean, with respect to the Series 1997 Bonds, AMBAC Indemnity Corporation, a Wisconsin-domiciled stock insurance company. "Continuing Disclosure Certificate" shall mean that certain Continuing Disclosure Certificate related to the Series 1997 Bonds to be executed by the Issuer prior to the time the Issuer delivers the Series 1997 Bonds to the underwriter or underwriters, as it may be amended from time to time in accordance with the terms thereof, whereby the Issuer undertakes to assist the underwriter or underwriters in complying with the continuing disclosure requirements of the Continuing Disclosure Rule, in substantially the form attached hereto as Exhibit A. "Continuing Disclosure Rule" shall mean disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission, as amended. the continuing United States "Municipal Bond Insurance Policy" shall mean the municipal bond insurance policy issued by the Bond Insurer insuring the payment when due of the principal of and interest on the Series 1997 Bonds as provided therein. "Original Instrument" shall mean Resolution No. 93-02 adopted by the City Commission on February 2, 1993, as supplemented by Resolution No. 93-03 adopted by the City Commission on February 16, 1993. "Policy" shall mean the municipal bond insurance policy issued by the Bond Insurer insuring the Series 1997 Bonds. "Preliminary Official Statement" shall mean the preliminary official statement relating to the Series 1997 Bonds attached hereto as Exhibit B. "Series 1993 Bonds" or "Parity Bonds" shall mean the City of Ocoee, Florida, Water and Sewer System Refunding and Improvement Revenue Bonds, Series 1993, issued under the Original Instrument. "Series 1997 Bonds" shall mean the Series 1997 Bonds, herein authorized to be issued on parity with the Series 1993 Bonds. "Supplemental 1996 Resolution" shall mean this resolution of the Issuer supplementing the Original Instrument adopted and becoming effective in accordance with the terms of Section 7.01 of the Original Instrument. "Surety Bond" shall mean the surety bond issued by AMBAC Indemnity, the Bond Insurer for the Series 1997 Bonds, guaranteeing certain payments into the Reserve Fund with respect to the Series 2 1997 Bonds as provided therein and subject to the limitations set forth therein. SECTION 1.03. Resolution to Consti tute Contract. In consideration of the purchase and acceptance of any or all of the Series 1997 Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Issuer with the Holders of the Series 1997 Bonds and shall be deemed to be and shall constitute a contract between the Issuer and the Holders from time to time of the Series 1997 Bonds. 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 said Series 1997 Bonds. All of the Series 1997 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 Series 1997 Bonds over any other thereof except as expressly provided in or pursuant to this Resolution. SECTION 1. 04. Findings. It is hereby ascertained, determined and declared that: (A) The Issuer owns and operates a combined Water System and Sewer System. (B) The Issuer deems it necessary, desirable and in the best interests of the Issuer and the residents thereof that the Additional 1997 Project be acquired, constructed and erected. (C) The Additional 1997 Project shall be financed with the proceeds of the Series 1997 Bonds, together with certain other legally available funds of the Issuer. (D) No portion of the Pledged Funds are pledged or encumbered in any manner, except with respect to the payment of the Parity Bonds. (E) In order to preserve and protect safety and welfare of the inhabitants of necessary and desirable to acquire, design Additional 1997 Project. the public health, the Issuer, it is and construct the (F) The principal of and interest on the Series 1997 Bonds and all other payments provided for in this Resolution will be paid solely from the Pledged Funds; and the ad valorem taxing power of the Issuer will never be necessary or authorized to pay the principal of, premium, if any, and interest on the Series 1997 Bonds and the Series 1997 Bonds shall not constitute a lien upon any property of the Issuer other than the Pledged Funds. (G) The Issuer adopted this Resolution after a public hearing preceded by at least seven (7) days notice of the hearing and the 3 proposed action by publication in a newspaper of general circula- tion in the City in accordance with the requirements of the City Charter of the Issuer. SECTION 1.0S. Additional 1997 Project. The Issuer does hereby authorize the acquisition, construction and erection of the Additional 1997 Project in accordance herewith. 4 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF SERIES 1997 BONDS SECTION 2.01. Authorization of Series 1997 Bonds. This Resolution creates an issue of Series 1997 Bonds of the Issuer to be designated as "City of Ocoee, Florida, Water and Sewer System Improvement Revenue Bonds". The aggregate principal amount of the Series 1997 Bonds which may be executed and delivered under this Resolution is not limited except as is or may hereafter be provided in this Resolution or as limited by the Act or by law. The Series 1997 Bonds 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 Supplemental Resolution of the Issuer. In no event shall the rate of interest on the Series 1997 Bonds exceed the maximum rate permitted by law. The Series 1997 Bonds shall be issued in such denominations and such form, whether coupon or registered; shall be dated such date; shall bear such numbers; shall be Serial and/or Term Bonds; 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; shall provide that the proceeds thereof be used in such manner, all as determined by Supplemental Resolution of the Issuer. The Series 1997 Bonds shall be issued in fully registered form without coupons; may be issued as Term and/or Serial Bonds; may be Capital Appreciation Bonds and/or Current Interest Bonds; shall be dated; shall be numbered consecutively from R-1 upward if Current Interest Bonds; shall be numbered from CABR-1 upward if Capital Appreciation Bonds; shall be in the denomination of $5,000 each, or integral multiples thereof for the Current Interest Bonds and in $5,000 maturity amounts for the Capital Appreciation Bonds or in $5,000 multiples thereof, or such other denominations as shall be approved by the Issuer in a Supplemental Resolution prior to the delivery of the Series 1997 Bonds; and shall mature on such dates in such years and amounts as will be fixed by Supplemental Resolu- tion of the Issuer prior to or upon the sale of the Series 1997 Bonds. Each Series 1997 Current Interest Bond shall bear interest from the interest payment date next preceding the date on which it is authenticated, unless authenticated on an interest payment date, in which case it shall bear interest from such interest payment date, or, unless authenticated prior to the first interest payment date, in which case it shall bear interest from its date; provided, however, that if at the time of authentication payment of any interest which is due and payable has not been made, such Series 5 1997 Current Interest Bond shall bear interest from the date to which interest shall have been paid. Any Series 1997 Capital Appreciation Bonds shall bear interest only at maturity or upon redemption prior to maturity in the amount determined by reference to the Compounded Amounts. The principal of and the interest and redemption premium, if any, on the Series 1997 Bonds shall be payable in any coin or currency of the united States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The interest on the Series 1997 Current Inter- est Bonds shall be payable by the Paying Agent on each interest payment date to the person appearing, as of the fifteenth day of the calendar month immediately preceding such interest payment date (the "Record Date"), on the registration books of the Issuer here- inafter provided for as the Holder thereof, by check or draft mailed to such Holder at his address as it appears on such registration books, or at the request and expense of a registered owner of $1,000,000 or more of Series 1997 Bonds, by wire transfer or other medium acceptable to the Issuer and Paying Agent. Payment of the principal of all Series 1997 Current Interest Bonds and the Compounded Amount with respect to the Series 1997 Capital Apprecia- tion Bonds shall be made upon the presentation and surrender at the office of the Paying Agent of such Series 1997 Bonds as the same shall become due and payable. SECTION 2.02. Application of Series 1997 Bond Proceeds. Except as otherwise provided by Supplemental Resolution of the Issuer, the proceeds derived from the sale of the Series 1997 Bonds, including accrued interest and premium, if any, shall, simultaneously with the delivery of the Series 1997 Bonds to the purchaser or purchasers thereof, be applied by the Issuer as follows: (A) Accrued interest, if any, shall be deposited in the Interest Account and shall be used only for the purpose of paying the interest which shall thereafter become due on the Series 1997 Bonds. (B) A sufficient amount of the Series 1997 Bond proceeds shall be applied to the payment of reasonable and necessary costs and expenses relating to delivery of the Series 1997 Bonds, including any premium for municipal bond insurance and the Surety Bond to the Bond Insurer. (C) Unless otherwise provided in a Supplemental Resolution of the Issuer prior to the issuance of the Series 1997 Bonds, Reserve Requirement for the Series 1997 Bonds shall be established and deposited in an account in the Reserve Fund for the benefit of the Series 1997 Bonds by the deposit of the Surety Bond as permitted by Section 4.05(A) (4) of the Original Instrument. 6 (D) The remainder of the proceeds of the Series 1997 Bonds after providing for the payments required by A, B, and C shall be deposited in the proper account in the Construction Fund relating to the series 1997 Bonds created and established pursuant to Section 4.03 of the Original Instrument and shall be used to acquire, construct and erect the Additional 1997 Project. SECTION 2.03 Funds and Accounts Secure Holders of the Series 1997 Bonds; Reserve Fund; Surety Bond. The funds and accounts created pursuant to Section 4.04 of the original Instrument shall be for the equal benefit and use of the Series 1997 Bonds as Outstanding Additional Bonds, provided, however, that the account in the Reserve Fund for the Series 1993 Bonds solely secures the Series 1993 Bonds. The deposits required in Section 4.05 of the Original Instrument shall be calculated commencing with the month in which the Series 1997 Bonds are delivered to provide for such deposits to reflect the issuance of the Series 1997 Bonds. There is hereby created a reserve account in the Reserve Fund for the Series 1997 Bonds as authorized by Section 4.05(A) (4) of the Original Instrument, which shall be funded with the Reserve Requirement for the Series 1997 Bonds as provided in Section 2.02(c) hereof with the deposit of the Surety Bond to solely secure the Series 1997 Bonds. To the extent funds are deposited in the account of the Reserve Fund such moneys shall be invested in Permitted Investments maturing not later than the maturity date of the Series 1997 Bonds, and such securities shall be valued at cost. As long as the Surety Bond shall be in full force and effect, the Issuer and the Paying Agent agree to comply with the following provisions: (a) In the event and to the extent that moneys on deposit in the Fund and the Debt Service Fund, plus all amounts on deposit in and credited to the Reserve Fund in excess of the amount of the Surety Bond, are insufficient to pay the amount of principal and interest coming due on the Series 1997 Bonds, then upon the later of: (i) one (1) day after receipt by the general counsel of the Bond Insurer of a demand for payment in the form attached to the Surety Bond as Attachment 1 (the "Demand for Payment"), duly executed by the Paying Agent certifying that payment due under the original Instrument has not been made to the Paying Agent; or (ii) the payment date of the Series 1997 Bonds as specified in the Demand for Payment presented by the Paying Agent to the general counsel of the Bond Insurer, the Bond Insurer will make a deposit of funds in an account with the Paying Agent or its successor, in New York, New York, sufficient for the payment to the Paying Agent, of amounts which are then due to the Paying Agent under the Original Instrument (as specified in the Demand for Payment) up to but not in excess of the Surety Bond Coverage, as defined in the 7 Surety Bond; provided, however, that in the event that the amount on deposit in, or credited to, the Reserve Fund, in addition to the amount available under the Surety Bond, includes amounts available under a letter of credit, insurance policy, surety bond or other such funding instrument (the "Additional Funding Instrument"), draws on the Surety Bond and the Additional Funding Instrument shall be made on a pro rata basis to fund the insufficiency. (B) Paying Agent shall, after submitting to the Bond Insurer the Demand for Payment as provided in (a) above, make available to the Bond Insurer all records relating to the Funds and Accounts maintained under the original Instrument. ( C) from the Payment, pursuant the Paying Agent shall, upon receipt of moneys received draw on the Surety Bond, as specified in the Demand for credit the Reserve Fund to the extent of moneys received to such Demand. (D) the Reserve Fund shall be replenished in the following priority: (i) principal and interest on the Surety Bond shall be paid from first available Revenues; (ii) after all such amounts are paid in full, amounts necessary to fund the Reserve Fund to the Reserve Requirement, after taking into account the amounts available under the Surety Bond shall be deposited from next available Revenues. SECTION 2.04. Execution of Series 1997 Bonds. The Series 1997 Bonds shall be signed by, or bear the facsimile signature of, the Mayor and shall be signed by, or bear the facsimile signature of, the Clerk and a facsimile or an original impression of the official seal of the Issuer shall be imprinted on the Series 1997 Bonds. In case any officer whose signature or a facsimile of whose signature shall appear on any Series 1997 Bond shall cease to be such officer before the delivery of such Series 1997 Bond, such signature or such facsimile shall nevertheless be valid and suffi- cient for all purposes the same as if he has remained in office until such delivery. Any Series 1997 Bond may bear the facsimile signature of or may be signed by such persons who, at the actual time of the execution of such Series 1997 Bond, shall be the proper officers to sign such Series 1997 Bond although at the date of such Series 1997 Bond such persons may not have been such officers. SECTION 2.05. Authentication. Only such of the Series 1997 Bonds as shall have endorsed thereon a certificate of authentication substantially in the form hereinbelow set forth, duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Resolution and the Original Instrument. No Series 1997 Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Registrar, and 8 such certificate of the Registrar upon any such Series 1997 Bond shall be conclusive evidence that such Series 1997 Bond has been duly authenticated and delivered under this Resolution. The Regis- trar's certificate of authentication on any Series 1997 Bond shall be deemed to have been duly executed if signed by an authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Series 1997 Bonds that may be issued hereunder at anyone time. SECTION 2.06. privilege of Redemption. The Issuer shall have the right to redeem any or all of the Series 1997 Bonds in whole or in part, as shall be determined by Supplemental Resolution of the Issuer prior to the issuance of the Series 1997 Bonds. SECTION 2.07. Form of Series 1997 Bonds. The text of the Series 1997 Bonds, together with the certificate of authentication, 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 prior to the issuance thereof (which necessity and/or desirability and approval shall be presumed by the Issuer's delivery of the Series 1997 Bonds to the purchaser or purchasers thereof): 9 [FORM OF CURRENT INTEREST BOND] No. R- $ UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF ORANGE CITY OF OCOEE WATER AND SEWER SYSTEM IMPROVEMENT REVENUE BONDS SERIES 1997 MATURITY DATE: INTEREST RATE: DATED DATE: CUSIP Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS that the city of Ocoee, Florida (hereinafter called "City"), for value received, hereby promises to pay to the order of the Registered Owner identified above, or registered assigns, as herein provided, on the Maturity Date set forth above, upon the presentation and surrender hereof at the designated corporate trust office of , Florida (the "Paying Agent"), from the special funds hereinafter mentioned, the Principal Amount set forth above in any coin or currency of the United States of America which on the date of payment thereof is legal tender for the payment of public and private debts, and to pay, solely from said sources, to the Registered Owner hereof by check mailed to the Registered Owner at his address as it appears on the Bond registration books of the City maintained by (the "Registrar"), at the Interest Rate per annum set forth above, interest on said Principal Amount on each 1 and 1 commencing , 19__ from the interest payment date next preceding the date of registration and authentication of this Bond, unless this Bond is registered and authenticated as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless this Bond is registered and authenticated prior to , 19 , in which event such Bond shall bear interest from , 19 ; provided, however, that if at the time of authentication interest is in default, this Bond shall bear interest from the date to which interest shall have been paid. [The Bonds of this issue shall be subject to redemption prior to their maturity at the option of the City.] 10 (Insert Optional or Mandatory Redemption provisions) Notice of such redemption shall be given in the manner required by the Resolution described below. This Bond is one of an authorized issue of Bonds in the aggre- gate principal amount of $ of like date, tenor and effect, except as to number, principal amount, maturity, redemption provisions and interest rate, issued to finance the cost of acquiring, designing and constructing certain improvements to the combined water and sewer system of the Issuer in full compli- ance with the Constitution and statutes of the state of Florida, including particularly the Charter of the City of Ocoee, Chapter 166, Part II, Florida statutes, Resolution No. 93-02 duly adopted by the City on February 2, 1993 (the "Original Instrument"), and Resolution 96- duly adopted by the City on , 1996 (hereinafter collectively called "Resolution"), and is subject to all the terms and conditions of such Resolution. This Bond is payable solely from and secured by a prior lien upon and pledge of the Pledged Funds, as defined in the Resolution, in the manner provided in the Resolution on parity with the City's Water and Sewer System Refunding and Improvement Revenues Bonds, Series 1993 (the "Parity Bonds"). [The Series of Bonds of which this Bond is a part includes $ aggregate principal amount of Bonds as to which interest is payable semi-annually. Such Bonds are referred to herein and in the Resolution as "Current Interest Bonds." The Series of Bonds of which this Bond is a part also includes $ aggregate principal amount of Bonds as to which interest is payable only at maturity or upon redemption prior to maturity. Such Bonds are referred to herein and in the Resolution as "Capital Appreciation Bonds."] This Bond does not constitute a general indebtedness or general obligation of the City within the meaning of any constitu- tional, statutory or charter provision or limitation, and the City has not pledged its full faith and credit for the payment of the principal of, redemption premium, if any, and interest on this Bond or the making of any reserve or other payments provided for in the Resolution. It is expressly agreed by the Holder of this Bond that such Bondholder shall never have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the prin- cipal of, redemption premium, if any, and interest on this Bond or the making of any reserve or other payments provided for in the Resolution. It is further agreed between the City and the Holder of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien upon any property of or in the City, but shall 11 constitute a lien only on the Pledged Funds all in the manner provided in the Resolution. The payment of the principal and interest of the Bonds shall be secured by a lien upon and pledge of the Pledged Funds in the manner provided in the Resolution. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed prece- dent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and Constitution of the state of Florida applicable thereto, and that the issuance of the Bonds of this issue does not violate any constitutional, statutory, or charter limitation or provision. This Bond is and has all the qualities and incidents of a negotiable instrument under Article 8 of the Uniform Commercial Code, the state of Florida, Chapter 678, Florida statutes. The transfer of this Bond is registrable by the Bondholder hereof in person or by his attorney or legal representative at the designated corporate trust office of the Registrar (or if the City Clerk is the Registrar, at the office of the City Clerk) but only in the manner and subject to the conditions provided in the Resolution and upon surrender and cancellation of this Bond. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Resolu- tion until it shall have been authenticated by the execution by the Registrar of the certificate of authentication endorsed hereon. 12 IN WITNESS WHEREOF, the city of Ocoee, Florida, has issued this Bond and has caused the same to be signed by the Mayor and attested to by the City Clerk (the signatures of the Mayor and the City Clerk being authorized to be a facsimile of such officers' signatures) and its seal or a facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the day of 1996. CITY OF OCOEE, FLORIDA (SEAL) (manual or facsimile) Mayor ATTESTED: (manual or facsimile) City Clerk CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds issued under the provisions of the within-mentioned Resolution. Registrar, as Authenticating Agent Date of Authentication: By (manual siqnature) Authorized Officer 13 ASSIGNMENT AND TRANSFER For value received the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or other identifying number of transferee) the attached Bond of the City of Ocoee, Florida, and does hereby constitute and appoint , attorney, to transfer the said Bond on the books kept for registration thereof, with full power of substitution in the premises. Date Signature Guaranteed by NOTICE: No transfer will be registered and no new Bonds will be issued in the name of the Transferee, unless the signature to this assignment corresponds wi th the name as it appears upon the face of the within Bond in every particular, without al ter- ation or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. Notice: Signature must be guaranteed by an eligible guarantor institution which is a participant in a recognized signature program, i.e., the Securities Transfer Agent Medallion Program (STAMP), Stock Exchanges Medallion Signature Program (MSP) By: (manual siqnature) Title: [Bond Counsel Opinion] [END OF CURRENT INTEREST BOND FORM] 14 [FORM OF CAPITAL APPRECIATION BONDS] Maturity Amount: No. CABR- Bond Date: $ Principal Value at Issuance: $ per $5,000 Maturity Amount UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF ORANGE CITY OF OCOEE WATER AND SEWER SYSTEM IMPROVEMENT REVENUE BONDS SERIES 1997 MATURITY DATE: INTEREST RATE: DATED DATE: CUSIP Registered Owner: Maturity Amount: KNOW ALL MEN BY THESE PRESENTS that the City of Ocoee, Florida (hereinafter called "City"), for value received, hereby promises to pay to the order of the Registered Owner identified above, or registered assigns, as herein provided, on the Maturity Date set forth above, upon the presentation and surrender hereof at the principal corporate trust office of , Florida (the "paying Agent"), from the special funds hereinafter mentioned, the Maturity Amount set forth above or the Compounded Amounts (as reflected on the Schedule of Compounded Amounts set forth herein) if redeemed prior thereto as hereinafter provided in any coin or currency of the United States of America which on such date is legal tender for the payment of public and private debts, and to pay, solely from said sources, to the Registered Owner hereof by check mailed to the Registered Owner at his address as it appears on the Bond registration books of the City maintained by (the "Registrar"). [The Bonds of this issue shall be subject to redemption prior to their maturity at the option of the city.] (Insert Optional or Mandatory Redemption Provisions) 15 Notice of such redemption shall be given in the manner required by the Resolution described below. This Bond is one of an authorized issue of Bonds in the aggre- gate principal amount of $ of like date, tenor and effect, except as to number, principal amount, maturity, redemption provisions and interest rate, issued to finance the cost of acquiring, designing and constructing certain improvements to the combined water and sewer system of the Issuer in full compliance with the Constitution and statutes of the state of Florida, including particularly the Charter of the City of Ocoee, Chapter 166, Part II, Florida statutes, Resolution No. 93-02 duly adopted by the City on February 2, 1993 (the "Original Instrument"), and Resolution 96- duly adopted by the City on , 1996 (hereinafter collectively called "Resolution"), and is subject to all the terms and conditions of such Resolution. This Bond is payable solely from and secured by a prior lien upon and pledge of the Pledged Funds, as defined in the Resolution, in the manner provided in the Resolution on parity with the City's Water and Sewer System Refunding and Improvement Revenue Bonds, Series 1993 (the "Parity Bonds"). The Series of Bonds of which this Bond is a part includes $ aggregate principal amount of Bonds as to which interest is payable semi-annually. Such Bonds are referred to herein and in the Resolution as "Current Interest Bonds." The Series of Bonds of which this Bond is a part also includes $ aggregate principal amount of Bonds as to which interest is payable only at maturity or upon redemption prior to maturity. Such Bonds are referred to herein and in the Resolution as "Capital Appreciation Bonds." This Bond does not constitute a general indebtedness or general obligation of the City within the meaning of any constitu- tional, statutory or charter provision or limitation, and the City has not pledged its full faith and credit for the payment of the principal of, redemption premium, if any, and interest on this Bond or the making of any reserve or other payments provided for in the Resolution. It is expressly agreed by the Holder of this Bond that such Bondholder shall never have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the principal of, redemption premium, if any, and interest on this Bond or the making of any reserve or other payments provided for in the Resolution. It is further agreed between the City and the Holder of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien upon any property of or in the City, but shall constitute a lien only on the Pledged Funds all in the manner provided in the Resolution. 16 The payment of the principal and interest of the Bonds shall be secured by a lien upon and pledge of the Pledged Funds in the manner provided in the Resolution. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed prece- dent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and Constitution of the state of Florida applicable thereto, and that the issuance of the Bonds of this issue does not violate any constitutional, statutory, or charter limitation or provision. This Bond is and has all the qualities and incidents of a negotiable instrument under Article 8 of the Uniform Commercial Code, the state of Florida, Chapter 678, Florida statutes. The transfer of this Bond is registrable by the Bondholder hereof in person or by his attorney or legal representative at the principal corporate trust office of the Registrar (or if the City Clerk is the Registrar, at the office of the City Clerk) but only in the manner and subject to the conditions provided in the Resolution and upon surrender and cancellation of this Bond. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Reso- lution until it shall have been authenticated by the execution by the Registrar of the certificate of authentication endorsed hereon. 17 IN WITNESS WHEREOF, the City of Ocoee, Florida, has issued this Bond and has caused the same to be signed by the Mayor and attested to by the City Clerk (the signatures of the Mayor and the City Clerk being authorized to be a facsimile of such officers' signatures) and its seal or a facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the day of , 1996. CITY OF OCOEE, FLORIDA (SEAL) (manual or facsimile) ATTESTED: Mayor (manual or facsimile) City Clerk CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds issued under the provisions of the within-mentioned Resolution. Registrar, as Authenticating Agent Date of Authentication: By (manual siqnature) Authorized Officer 18 ASSIGNMENT AND TRANSFER For value received the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or other identifying number of transferee) the attached Bond of the City of Ocoee, Florida, and does hereby constitute and appoint , attorney, to transfer the said Bond on the books kept for registration thereof, with full power of substitution in the premises. Date Signature Guaranteed by NOTICE: No transfer will be registered and no new Bonds will be issued in the name of the Transferee, unless the signature to this assignment corresponds with the name as it appears upon the face of the within Bond in every particular, without alter- ation or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. Notice: Signature must be guaranteed by an eligible guarantor institution which is a participant in a recognized signature program, i.e., the Securities Transfer Agent Medallion Program (STAMP), Stock Exchanges Medallion Signature Program (MSP) By: (manual siqnature) Title: [Bond Counsel Opinion] [Attach Schedule of Compounded Amounts] [END OF CAPITAL APPRECIATION BOND FORM] 19 ARTICLE III REGISTRAR, PAYING AGENT, INSURER, AND ACCOUNTANT MATTERS SECTION 3.01. Registrar and Paying Agent for the Series 1997 Bonds. The Registrar and Paying Agent for the Series 1997 Bonds shall be appointed prior to the issuance of the Series 1997 Bonds; and the Mayor and the Clerk are hereby authorized to execute and deliver on behalf of the Issuer a registrar and paying agency agreement in a form which shall be approved by the Issuer's attorney. SECTION 3.02. Preparation of Accountant's Certificate. Prior to the issuance of the Series 1997 Bonds, the accounting firm of McDirmit, Davis, Lauteria & Co., as independent certified public accountants shall prepare and file the certificate required by section 5.02 of the Original Instrument, in order to issue the Series 1997 Bonds as Additional Bonds under the Original Instrument. SECTION 3.03. Appointment of Bond Insurer for Series 1997 Bonds. The Bond Insurer for the Series 1997 Bonds shall be AMBAC Indemnity Corporation. SECTION 3.04. Purchase of Bond Insurance and Surety Bond. The purchase of Municipal Bond Insurance Policy from the Bond Insurer to irrevocably guarantee the payment of principal and interest on the Series 1996 Bonds is hereby authorized in accordance with the terms of the Commitment for the Municipal Bond Insurance Policy attached hereto as Exhibit C. The purchase of the Surety Bond from the Bond Insurer is hereby authorized. The Issuer is hereby authorized and directed to purchase a surety bond from the Bond Insurer (the "Reserve Fund Policy") relating to the Series 1996 Bonds to be deposited in the Reserve Fund, and payment for such Reserve Fund Policy to the Bond Insurer is hereby authorized from Series 1996 Bond proceeds. The Issuer hereby authorizes the execution of the Reserve Fund Guaranty Agreement with the Bond Insurer (the "Agreement" ) in the form attached as Exhibit D relating to the issuance of the Surety Bond for the Reserve Fund in conjunction with the issuance of the Series 1997 Bonds and to deliver said Agreement to the Bond Insurer, and does hereby direct the execution and delivery of said Agreement. All of the provisions of said Agreement, when executed and delivered by the Issuer as authorized herein and when duly authorized, executed and delivered by the Bond Insurer, 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 3.05. Terms Regarding Series 1997 Bonds In policy. The Issuer hereby covenants, represents, and expressly agrees to 20 the following terms and provisions as such are necessary and desirable in order to obtain the Municipal Bond Insurance Policy: A. Consent of the Bond Insurer. Any provision of this Resolution or the Original Instrument expressly recognizing or granting rights in or to the Bond Insurer may not be amended in any manner which affects the rights of the Bond Insurer hereunder without the prior written consent of the Bond Insurer. B. Consent of the Bond Insurer in Addition to Bondholder Consent. Unless otherwise provided in this Section, the Bond Insurer's consent shall be required in addition to Bondholder consent, when required, for the following purposes: (i) execution and deli very of any supplemental resolution or any amendment, supplement or change to or modification thereto, (ii) removal of the Paying Agent and selection and appointment of any successor paying agent for the Series 1997 Bonds; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires Bondholder consent. C. Consent of the Bond Insurer in the Event of Insolvency. Any reorganization or liquidation plan with respect to the Issuer must be acceptable to the Bond Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall have the right to vote on behalf of all Series 1997 Bondholders who hold the Series 1997 Bond Insurer-insured Bonds absent a default by the Bond Insurer under the applicable Municipal Bond Insurance Policy insuring such Series 1997 Bonds. D. Consent of the Bond Insurer unon Default. Anything in this Resolution to the contrary notwithstanding, upon the occurrence and continuance of an event of default as defined in the Original Instrument, the Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Series 1997 Bondholders for the benefit of the Series 1997 Bondholders under this Resolution and original Instrument. E. Notification and Documents to be Furnished. While the Municipal Bond Insurance Policy is in effect, the Issuer shall furnish to the Bond Insurer (to the attention of the Surveillance Department, unless otherwise indicated): (i) as soon as practicable after the filing thereof, a copy of any financial statement of the Issuer and a copy of any audit and annual report of the Issuer; (ii) a copy of any notice to be given to the registered owners of the Series 1997 Bonds, including, without limitation, notice of any redemption of or defeasance of the Series 1997 Bonds, and any certificate rendered pursuant to this Resolution or relating to the security for the Series 1997 Bonds; 21 (iii) such additional information it may reasonably request; (iv) notice of any failure of the Issuer to provide relevant notices, certificates, etc.; and (v) immediate notification if at any time there are insufficient moneys to make any payments of principal and or interest as required and immediate notification upon the occurrence of any event of default. F. Access to Issuer Information. The Issuer will permit the Bond Insurer to discuss the affairs, financings and accounts of the Issuer or any information the Bond Insurer may reasonably request regarding the security for the Series 1997 Bonds with appropriate officers of the Issuer. The Issuer will permit the Bond Insurer to have access to the Additional 1997 Project and to have access to and make copies of all books and records relating to the Series 1997 Bonds at any reasonable time. G. Riqht to Direct an Accountinq. The Bond Insurer shall have the right to direct an accounting at the Issuer's expense, and the Issuer's failure to comply with such direction within thirty (30) days after receipt of written notice of the direction from the Bond Insurer shall be deemed a default hereunder; provided, however, that if compliance cannot occur within such period, then such period will be extended so long as compliance is begun within such period and diligently pursued, but only if such extension would not materially adversely affect the interests of any registered owner of the Series 1997 Bonds. I. Payment Procedure. As long as the Municipal Bond Insurance Policy shall be in full force and effect, the Issuer and the Paying Agent agree to comply with the following provisions: (a) At least one (1) day prior to all interest payment dates the Paying Agent will determine whether there will be sufficient funds in the funds and accounts to pay the principal of or interest on the Series 1997 Bonds on such interest payment date. If the Paying Agent determines that there will be insufficient funds in such funds or accounts, the Paying Agent shall so notify the Bond Insurer. Such notice shall specify the amount of the anticipated deficiency, the Series 1997 Bonds to which such deficiency is applicable and whether such Series 1997 Bonds will be deficient as to principal or interest, or both. If the Paying Agent has not so notified the Bond Insurer at least one day prior to an interest payment date, the Bond Insurer will make payments of principal or interest due on the Series 1997 Bonds on or before the first (1st) day next following the date on which the Bond Insurer shall have received notice of nonpayment from the Paying Agent. (b) Insurer The Paying Agent shall, after giving notice to the Bond as provided in (a) above, make available to the Bond 22 Insurer and, at the Bond Insurer's direction, to the United states Trust Company of New York, as insurance trustee for the Bond Insurer or any successor insurance trustee (the "Insurance Trustee"), the registration books of the Issuer maintained by the Paying Agent and all records relating to the funds and accounts maintained under the Original Instrument or this Resolution. (c) The Paying Agent shall provide the Bond Insurer and the Insurance Trustee with a list of registered owners of Series 1997 Bonds entitled to receive principal or interest payments from the Bond Insurer under the terms of the Municipal Bond Insurance Policy, and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the registered owners of Series 1997 Bonds entitled to receive full or partial interest payments from the Bond Insurer and (ii) to pay principal upon Series 1997 Bonds surrendered to the Insurance Trustee by the registered owners of Series 1997 Bonds entitled to receive full or partial principal payments from the Bond Insurer. (d) The Paying Agent shall, at the time it provides notice to the Bond Insurer pursuant to (a) above, notify registered owners of Series 1997 Bonds entitled to receive the payment of principal or interest thereon from the Bond Insurer (i) as to the fact of such entitlement, (ii) that the Bond Insurer will remit to them all or a part of the interest payments next coming due upon proof of Bondholder entitlement to interest payments and delivery to the Insurance Trustee, in form satisfactory to the Insurance Trustee, of an appropriate assignment of the registered owner's right to payment, (iii) that should they be entitled to receive full payment of principal from the Bond Insurer, they must surrender their Series 1997 Bonds (along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee to permit ownership of such Series 1997 Bonds to be registered in the name of the Bond Insurer) for payment to the Insurance Trustee, and not the Paying Agent, and (i v) that should they be entitled to receive partial payment of principal from the Bond Insurer, they must surrender their Series 1997 Bonds for payment thereon first to the Paying Agent who shall note on such Series 1997 Bonds the portion of the principal paid by the Paying Agent, if any, and then, along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal. (e) In the event that the Paying Agent has notice that any payment of principal of or interest on a Series 1997 Bond which has become due for payment and which is made to a Bondholder by or on behalf of the Issuer has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the Uni ted States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying Agent shall, at the time the Bond Insurer is notified pursuant to (a) above, notify all 23 registered owners that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from the Bond Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Paying Agent shall furnish to the Bond Insurer its records evidencing the payments of principal of and interest on the Series 1997 Bonds which have been made by the Paying Agent and subsequently recovered from registered owners and the dates on which such payments were made. (f) In addition to those rights granted to the Bond Insurer under this Resolution, the Bond Insurer shall, to the extent it makes payment of principal of or interest on Series 1997 Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Municipal Bond Insurance Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books of the Issuer maintained by the Paying Agent upon receipt from the Bond Insurer of proof of the payment of interest thereon to the registered owners of the Series 1997 Bonds, and (ii) in the case of subrogation as to claims for past due principal, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books of the Issuer maintained by the Paying Agent upon surrender of the Series 1997 Bonds by the registered owners thereof together with proof of the payment of principal thereof. K. The Bond Insurer as Third Party Benef iciary . To the extent that the Resolution or the Original Instrument confers upon or gives or grants to the Bond Insurer any right, remedy or claim under or by reason of this Resolution or the Original Instrument, the Bond Insurer is hereby explicitly recognized as being a third- party beneficiary and may enforce any such right, remedy or claim conferred, given or granted. L. Parties Interested Herein. Nothing in this Resolution or expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Issuer, the Bond Insurer, the Paying Agent, and the registered owners of the Bonds, any right, remedy or claim under or by reason of this Resolution or any covenant , condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Resolution or the Original Instrument contained by and on behalf of the Issuer shall be for the sole and exclusive benefit of the Issuer, the Bond Insurer, the Paying Agent and the registered owners of the Series 1997 Bonds. M. Defeasance Provisions. Notwithstanding anything in the Resolution to the contrary, in the event that the principal and/or interest due on the Series 1997 Bonds shall be paid by the Bond Insurer pursuant to the Municipal Bond Insurance POlicy, the Series 24 1997 Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, and the assignment and pledge of the security for the Series 1997 Bonds and all covenants, agreements and other obligations of the Issuer to the registered owners shall continue to exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of such registered owners. SECTION 3.06. Federal Income Tax Covenants. (A) The Issuer covenants with the Holders of the Series 1997 Bonds (other than Taxable Bonds), that it shall not use the proceeds of such Series 1997 Bonds in any manner which would cause the interest on such Series 1997 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 the Series 1997 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 the Series 1997 Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause the Series 1997 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 the Series 1997 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 the Series 1997 Bonds (other than Taxable Bonds) that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Series 1997 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 u.S. Treasury pursuant to the Code. 25 ARTICLE IV MISCELLANEOUS SECTION 4.01. Preliminary Official Statement. The preparation of a Preliminary Official statement relating to the Series 1997 Bonds is hereby authorized in such form and substance as shall be approved by the Mayor of the Issuer. The Mayor and the City Manager are hereby authorized to deem such Preliminary Official Statement as "final" within the meaning of Rule 15c-2-12 of the Securities and Exchange Commission, except for certain "permitted omissions" as defined in such rule. SECTION 4.02. continuing Disclosure. The Issuer hereby covenants and agrees that, in order to assist the underwriter or underwriters in complying with the continuing Disclosure Rule with respect to the Series 1997 Bonds, it will comply with and carry out all of the provisions of the continuing Disclosure certificate to be executed by the Issuer prior to the time the Issuer delivers the Series 1997 Bonds to the underwriter or underwriters, as it may be amended from time to time in accordance with the terms thereof. The Continuing Disclosure Certificate, substantially in the form attached hereto as Exhibit A, is hereby approved and ratified. Notwithstanding any other provision of this Resolution, failure of the Issuer to comply with such continuing Disclosure certificate shall not be considered an Event of Default hereunder or thereunder. However, the Continuing Disclosure certificate shall be enforceable by the Series 1997 Bondholders in the event that the Issuer fails to cure a breach thereunder within a reasonable time after written notice from a Series 1997 Bondholder to the Issuer that a breach exists. Any rights of the Series 1997 Bondholders to enforce the provisions of the covenant shall be on behalf of all Series 1997 Bondholders and shall be limited to a right to obtain specific performance of the Issuer's obligations thereunder. SECTION 4.03. Severabili ty of Invalid Provisions. If anyone or more of the covenants, agreements or provisions of this Resolu- tion shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohib- ited, or against public policy, or shall for any reason whatsoever be held invalid, or shall in any manner adversely affect the validity of the Series 1997 Bonds, 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 other covenants, agreements or provisions hereof or of the Series 1997 Bonds issued hereunder. 26 SECTION 4.04. Effective Date. This Resolution shall take effect immediately upon its adoption. DULY ADOPTED this 3rd day of December, 1996. ( SEAL) CITY COMMISSION O~ THE CITY OF. OCOEE, FLO..R... I..D.A. r! 37 i ' :5"' ~"" ~ftt ..... Mayor ! FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, APPROVED AS TO FORM AND LEGALITY, THIS 3rJ DAY OF DECEMBER, 1996 APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON DECEMBER 3, 1996 UNDER AGENDA ITEM NO. V c... FOLE~ LARDNER By: . ~ >' ,~ City Attorney 27 EXHIBIT A FORM OF CONTINUING DISCLOSURE CERTIFICATE CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Ocoee, Florida (the "Issuer") in connection with the issuance of $ Water and Sewer System Improvement Revenue Bonds, Series 1997 (the "Bonds"). The Bonds are being issued pursuant to Resolution No. adopted by the governing board of the Issuer on , 1996, as amended and supplemented (the "Resolution"). The Issuer covenants and agrees as follows: SECTION 1. PURPOSE OF THE DISCLOSURE CERTIFICATE. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the continuing disclosure requirements of Securities and Exchange Commission Rule lSc2-12. SECTION 2. DEFINITIONS. In addition to the definitions set forth in the Resolution which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meamngs: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean the Issuer, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Listed Events" shall mean any of the events listed in Section Sea) of this Disclosure Certificate. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The National Repositories currently approved by the Securities and Exchange Commission are set forth in Exhibit B. "Participating Underwriter" shall mean the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Repository" shall mean each National Repository and each State Repository. "Rule" shall mean the continuing disclosure requirements of Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Florida. "State Repository" shall mean any public or private repository or entity designated by the State as a state information depository for the purpose of the Rule and recognized as such by the Securities and Exchange Commission. As of the date of this Certificate, there is no State Repository. SECTION 3. PROVISION OF ANNUAL REPORTS. (a) The Issuer shall, or shaH cause the Dissemination Agent to, not later than 180 days after the end of the Issuer's fiscal year (presently ends September 30), commencing with the report for the 1996 Fiscal Year, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). (b) Not later than fifteen (15) Business Days prior to said date, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). If the Issuer is unable to provide to the Repositories an Annual Report by the date required in subsection (a), the Issuer shall send a notice to (i) each National Repository or the Municipal Securities Rulemaking Board, and (ii) the State Repository in substantially the form attached as Exhibit A. ( c) The Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Report the name and address of each National Repository and the State Repository, if any; and (ii) if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the Repositories to which it was provided. 2 SECTION 4. CONTENT OF ANNUAL REPORTS. The Issuer's Annual Report shall contain or include by reference the following: (a) the audited financial statements of the Issuer for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Issuer's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) an update of the following financial information and operating data from the Official Statement which are in tabular form: [Insert financial info to be updated] The information provided under Section 4(b) may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other document so included by reference. (c) a description of any material litigation which would have been disclosed in the Official Statement if such litigation had occurred and been ongoing at the time that the Official Statement is dated. SECTION 5. REPORTING OF SIGNIFICANT EVENTS. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: 1. delinquencies in the payment of principal and interest on the Bonds; 2. non-payment related defaults; 3. unscheduled draws on the debt service reserves reflecting financial difficulties; 4. unscheduled draws on credit enhancements reflecting financial difficulties; 3 5. substitution of credit or liquidity providers, or their failure to perform; 6. adverse tax opinions to or events affecting the tax-exempt status of the Bonds; 7. modifications to rights of the Holders of the Bonds; 8. any call of the Bonds (other than scheduled mandatory redemption) or any acceleration of the maturity thereof; 9. defeasance in whole or in part of the Bonds; 10. release, substitution, or sale of property securing repayment of the Bonds; and 11. any change in the rating assigned to the Bonds or other obligations of the Issuer. (b) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, the Issuer shall as soon as possible, determine if such event would be material under applicable federal securities laws. (c) If the Issuer determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Issuer shall promptly file a notice of such occurrence with (i) each National Repository or the Municipal Securities Rulemaking Board, and (ii) the State Repository. Notwithstanding the foregoing, notice of Listed Events described in Sections 5(a)(8) and (9) need not be given under this Section 5 any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Resolution. SECTION 6. TERMINATION OF REPORTING OBLIGATION. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5(c). SECTION 7. DISSEMINATION AGENT. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. 4 SECTION 8. AMENDMENT; WAIVER. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or Sea), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Issuer, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section S( c), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 9. ADDITIONAL INFORMATION. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. S SECTION 10. DEFAULT. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate; provided, however, the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with the provisions of this Disclosure Certificate shall be an action to compel performance. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolution. SECTION 11. DUTIES, IMMUNITIES AND LIABILITIES OF DISSEMINA nON AGENT. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or wilful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 12. BENEFICIARIES. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. ,199_ Date: (SEAL) A TIEST: Mayor City Clerk 6 EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Ocoee, Florida Name of Bond Issue: Water and Sewer System Improvement Revenue Bonds, Series 1997 (the "Bonds") Date of Issuance: 199 , - NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section [8.02] of Resolution No. duly adopted by the Issuer on , 1996, as amended and supplemented, authorizing the issuance of the Bonds, and Sections 3 and 4(b) of the Continuing Disclosure Statement dated , 199 . The Issuer anticipates that the Annual Report will be filed by Dated: ISSUER By Name: Title: A-I EXHIBIT B Nationally Recognized Municipal Securities Information Repositories approved by the Securities and Exchange Commission: Bloomberg Municipal Repositories P.O. Box 840 Princeton, NJ 08542-0840 (609) 279-3200 FAX (609) 279-5962 Kenny Information Services, Inc. Attn: Kenny Repository Service 65 Broadway, 16th Floor New York, NY 10006 (212) 770-4595 FAX (212) 797-7994 Thomson NRMSIR Attn: Municipal Disclosure 395 Hudson Street, 3rd Floor New York, NY 10014 (212) 807-5001 FAX (212) 989-2078 Moody's NRMSIR Public Finance Information Center 99 Church Street New York, NY 10007 (800) 339-6306 FAX (212) 553-1460 Disclosure, Inc. Attn: Document Acquisitions/ Municipal Securities 5161 River Road Bethesda, MD 20816 (301) 951-1450 FAX (301) 718-2329 Donnelly Financial Municipal Securities Disclosure Archive 559 Main Street Hudson, MA 01749 (800) 580-3670 According to a Securities and Exchange Commission press release dated June 26, 1995, a list of names and addresses of all designated Nationally Recognized Municipal Securities Information Repositories as of any point in time is available by calling the SEe's FAX On Demand Service at (202) 942-8088 from a telecopier machine and requesting document number 0206. B-1 EXHIBIT B PRELIMINARY OFFICIAL STATEMENT ~E( o ~.l (-1 ( N .A L c 0 \;~ EXHIBIT C MUNICIPAL BOND INSURANCE POLICY AMBAC~ Municipal Bond Insurance Policy AMBAC Indemnity Cotporation c/o CT Cocporation Systems 44 East Mimin St., Madison, Wisconsin 53703 Administrative Office: One State Street Plaza, New York, NY 10004 Telephone: (212) 668-0340 Issuer: CfIY OF OCOEE, FLORIDA Policy Number: 13450BE Bonds: Premium: $10,150,000 Water and Sewer System Improvement Revenue Bonds. Series 1997, dated January I, 1997; consisting of: $2,905,000 in aggregate principal amount of Serial Bonds maturing on October 1 in the years 1997 through 2010, both inclusive; and AMBAC(~~~~Kr~~t~ol}!~M>B~~ N*~~&:WJW~KiJ Company in consideration of the payment of the premium and subject to the terms of this Policy, hereby agrees to pay to the United States Trust Company of New York, as trustee. or its successor (the -Insurance Trustee-). for the benefit of Bondholders, that portion of the prin- cipal of and interest on the above-described debt obligations (the -Bonds-) which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. AMBAC will make such paymenu to the Insurance Trustee within one (1) business day following notification to AMBAC of Nonpay- ment. Upon a Bondholder's presentation and surrender to the Insurance Trustee of such unpaid Bonds or appurtenant coupons, un- canceled and in bearer form and free of any adverse claim, the Insurance Trustee will disburse to the Bondholder the face amount of principal and interest which is then Due for Payment but is unpaid. Upon such disbursement. AMBAC shall become the owner of the surrendered Bonds and coupons and shall be fully subrogated to all of the Bondholder's rights to payment. In cases where the Bonds are issuable only in a form whereby principal is payable to regiStered Bondholders or their assigns, the Insurance Trustee shall disburse principal to a Bondholder as aforesaid only upon presentation and surrender to the Insurance Trustee of the unpaid Bond, uncanceled and free of any adverse claim, together with an instrument of assignmenr, in form satisfactory to the Insurance Trustee, duly executed by the Bondholder or such Bondholder's duly authorized representative, so as to permit ownership of such Bond to be registered in the name of AMBAC or its nominee. In cases where the Bonds are issuable only in a form whereby interest is payable to registered Bondholders or their assigns, the Insurance Trustee shall disburse interest to a Bondholder as aforesaid only upon presentation to the Insurance Trustee of proof that the claimant is the person entitled to the payment of interest on the Bond and delivery to the Insurance Trustee of an instrument of assignment, in form satisfactory to the Insurance Trustee, duly executed by the claimant Bondholder or such Bondholder's duly authorized represenrative, transferring to AMBAC all righn under such Bond to receive the interest in respeCt of which the insurance disbursement was made. AMBAC shall be subrogated to all the Bondholders' rights to payment on registered Bonds to the extent of the insurance disbursemenrs so made. In the evenr the ttustee or paying agent for the Bonds has notice that any payment of principal of or interest on a Bond which has become Due for Payment and which is made co a Bondholder by or on behalf of the Issue:r of thc Bonds has been deemed a preferential transfer and theretofore recovered from its registered owner pursuanr co the United States Bankruptcy Code in accordance with a final, nonappealable order of a coure of compc:tent jurisdiction, such registered o",ner will be enrirled (0 payment from AMBAC to the extent of such recovery if sufficienr funds are not othe:rwise available. As used herein, the term -Bondholder" means any person other than the Issuer ....ho. at the time of Nonpaymenr. is the owner of a Bond or of a coupon appertaining to a Bond. As used herein, -Due lor Payment-, whcn referring co the principal of Bonds, is when the stated maturity date or a mandatory redemption date for the applicuion of a required sinking fund installment has been reached and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by application of required sinking fund installmenn), acceleration or other advancement of maturity; and, when referring to interest on the Bonds, is when the stated date for payment of interest has been reached. As used herein, -~onpa)'menr- means the failure of the Issuer to have provided sufficient funds to the paying agent for payment in full of all principal of and interest on the Bonds which are Due for Payment. Th,s Policy is noncancdable. The premium on this Pulicy is not re:fundable: fi.. any reason, including payment of the Bonds prior to maturity. This Fblicy does nor insure: against loss of any prepayment or othc:r accdcration paymenr which at any time may become due in respect of any Bond, other than ar the sole option of A~IBAC, nor against an" risk other than Nonpayment. In witness whereof. AMBAC has caused this PoliC)' to be affixed with a facsimile of its corporate seal and co be signed by in duly authorized officers in facsimile to become effective as its original seal and signatures and binding upon AMBAC by virtue of the counter- signature of its duly authorized represenrati\'e. $60,139.95 &(~ ..,....- #"..,,'r~ ~~, ""'~~,o;.POi.;,f.';~~.o'. ~~rI &it- ,..~..' ~ "~. ,-:' - '.~' ~. '~. I ,~: SEAL ~o " : : s, . . . , , : ; . : :' Secr,.,."rv .\.. - i:~--' 4l,.......~/I<:O..\\~.....',' A.L~ _ ,.......,~ ~ -..--.. . ___ e '"...--. Authorized Rcprescnwive Effective Date: January 9. 1997 UNITED STATES TRUST CUMPA1\;Y OF NEW YORK acknowkdgl:s Ihal il has agreed 10 perfonn lhe dUlies of Insurancc TruS[Cl: undcr [his I'olky. form " (M).UIIIH I" IJ.!) A- 6563 ~cer~ Bonds: $2,025,000 in aggregate principal amount of Term Bonds maturing on October 1, 2016; and $5,220,000 in aggregate principal amount of Term Bonds maturing on October 1, 2026. The Paying Agent is First Union National Bank of Florida, Jacksonville, Florida. AMBAC. AMBAC Indemnity Corporation clo CT Corporation Systems 44 East Miftlln Street Madison, Wisconsin S3703 AdmJnistrative Office: One Sute Street Pl2Z2 New York, New York 10004 Endorsement Policy issued to: CITY OF OCOEE, FLORIDA Attached to and forming part of POLICY NO. 13450BE Effective Date of Endorsement: January 9, 1997 The insurance provided by this policy is not covered by the Florida Insurance Guaranty Association. Nothing herein contained shall be held to vary. alter. waive or extend any of the term.~. COnditions. provi.'iions, agreement.'i or limitationo; of the above mentioned Policy other than as above stated In Witness Whereo( the Company has caused iB Corporate Seal to be hereto atfbced and these presents to be signed by its duly authorized officers in facsimile to become effective as its original seal and signatures and binding on the Company by virtUe of countersignature by its duly authorized agent AMBAC Indemnity Corporation ..,....- #"....,,~ ("~ ~~~~c.o.;o"i:;";#~~~.'. ~~ ,-/ - ,..... ~ ~l \" I~! SEAL \<<i, , : : , .. . . i : : , y\ - /# . ... ./ 11 .,..........,ICO..\\~.... " Secretary , .....-----. .. '.......-.. ~~ ~~.~ tf2.rh Autliorized Representative Form . lB-0004 UI901 EXHIBIT D GUARANTY AGREEMENT EXHIBIT D GUARANTY AGREEMENT GUARANTY AGREEMENT dated as of . 19 by and between , a public body corporate orB~mi7en and existing under the laws of the State of (the "Obligor"); and AMBAC INDEMNITY CORPORATION ("AMBAC"), a Wisconsin domiciled stock insurance company. WITNESSETH: WHEREAS, the Obligor has or will issue (the "Obligations"); 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; and NOW, THEREFORE, in consideration of the premises and of the agreements herein contained and of the execution of the Surety Bond, the Obligor and AMBAC agree as follows: ARTICLE I DEFINITIONS; SURETY BOND Section 1.01. Definitions. Except as otherwise expressly provided herein or unless the context otherwise requires, the terms 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 terms and conditions of the Conunitment. (b) 1be 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 terms 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 Legally Available Funds 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. ARTICLE II REIMBURSEMENT OBLIGA nONS OF OBLIGOR AND SECURITY THEREFORE Section 2.01. Reimbursement for Pavrnents 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 BoOd and the enforcement by AMBAC of the Obligor's 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 Pavrnents. 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) hereof shall 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 Payments: 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 Revenuesj 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 Owners 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 instiuments 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 performed strictly in accordance with this Agreement, irrespective of (a) any lack of validity or enforceability ot: or any amendment or other modification at: 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 III 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 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 under this Agreement or 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 (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 IV SETTLEMENT 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, if made 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 payments, 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 of premium, interest and fees hereunder shall be made on the basis of the actual number of days elapsed over a year of 360 days. Sectioo 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 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 terminated 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 fonnal 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, if any, rating the Obligations, a copy of such substituted Surety Bond. Section 5.04. Successors and Assigns: Descriotive Headings. (a) This Agreement shall bind, and the benefits thereof shall inure to, the Obligor and AMBAC and their respective successors and assigns; 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 owned 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: If to the Obligor: > If to the Paying Agent: > If to AMBAC: AMBAC Indemnity Corporation One State Street Plaza 17th Floor New York. New York 10004 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 instrument. Complete counterparts of this Agreement shall be lcxiged 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. IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written. (Seal) Attest: Title By Title AMBAC INDEMNITY CORPORATION By Title ANNEX A - SURETY BOND 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 3.0 I of this Agreement. "Legally Available Funds" means any moneys legally available to the Obligor for the payment of its obligations. "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 "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. "Reimbursement Rate" means Citibank's prime rate plus two (2) percent per annum, as of the date of such Surety Bond Payment, said "prime rate" being the rate of interest announced from time to time by Citibank, New York, New York, as its prime rate. The rate of interest shall be calculated on the basis ofa 360 day year. "Resolution" means "State" means the State of ~ "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 amount shall never exceed $ "Surety Bond Payment" means an amount 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. ANNEX C COMMITMENT