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HomeMy WebLinkAboutResolution 93-02 RESOLUTION NO. 93-02 . 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, AND FOR THE REFUNDING OF CERTAIN INDEBTEDNESS INCURRED BY THE CITY OF OCOEE, FLORIDA; AUTHORIZING THE ISSUANCE BY THE CITY OF NOT TO EXCEED $15,000,000 WATER AND SEWER SYSTEM REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1993, TO FINANCE THE COST THEREOF; PLEDGING NET REVENUES OF THE SYSTEM TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH BONDS; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS OF SUCH BONDS; PROVIDING FOR SEVERABILITY OF INVALID PROVI- SIONS; 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, and other applicable provisions of law. SECTION 1. 02. Definitions. When used in this Resolution, the following terms shall have the following meanings, unless the con- text clearly otherwise requires. Words importing singular number shall include the plural number in each case and vice versa, words importing the masculine gender include every other gender and words importing persons shall include firms and corporations. "Act" shall mean Chapter 166, Part II, Florida Statutes, and other applicable provisions of law. . "Additional Bonds" shall mean the obligations issued at any time under the provisions of Section 5.02 hereof on a parity with the Series 1993 Bonds and any other Additional Bonds previously issued. . "Additional 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 con- struction or acquisition or the operation thereof which are financed in whole or in part with the proceeds of Additional Bonds. "Amortization Installment" shall mean an amount designated as such by Supplemental Resolution of the Issuer and established with respect to any Term Bonds. There shall be no Amortization Installment with respect to the Series 1993 Bonds. "Authorized :j:ssuer Officer" shall mean initially the City Manager and the Director of Administrative Services as well as any person authorized by resolution of the Issuer to perform such act or sign such document. "Average Annual Bond Service Requirement" means, as of each date of calculation, the total amount of Bond Service Requirement which is to become due on all Bonds deemed to be Outstanding immediately after such date of calculation divided by the total number of years for which Bonds are deemed to be Outstanding, except that with respect to any Bonds for which Amortization Installments have been established, the amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount or Compounded Amounts of such Bonds that are to be redeemed from Amortization Installments to be made in prior Bond Years. "Bond Counsel" shall mean a firm of nationally recognized attorneys at law acceptable to the Issuer and experienced in the issuance of bonds or other debt obligations by governmental units such as the Issuer. "Bondholder" or "Holder of Bonds" or "holder" or any similar term shall mean any person who shall be the registered owner of any outstanding Bond. "Bond Service Requirement" shall mean for a given year the remainder after subtracting any accrued and funded interest for that year that has been deposited into the Debt Service Fund for that purpose from the sum of: (1) The amount required to pay the interest coming due on Bonds during that year; . (2) The amount required to pay the principal or Com- pounded Amounts of Serial Bonds in that year, and the princi- pal or Compounded Amounts of Term Bonds maturing in that year that are not included in the Amortization Installments for such Term Bonds; and 2 (3) The Amortization Installments for all series of Term Bonds for that year. "Bonds" shall mean the Series 1993 Bonds, herein authorized to be issued and any Additional Bonds issued hereafter. . "Business Day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions located in the State of Florida are required or authorized to remain closed. "Capital Appreciation Bonds" shall mean the aggregate prin- cipal amount of the Bonds that bear interest payable solely at maturity or upon redemption prior to maturity in the amounts determined by reference to the Compounded Amounts, all as shall be determined by subsequent resolution of the Issuer. "City Engineer" shall mean the City Engineer of the Issuer. "Clerk" shall mean the City Clerk of the Issuer, or such other person as may be duly authorized by the Issuer to act on his or her behalf. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules thereunder in effect or proposed. . "Compounded Amounts" shall mean, as of the date of computation with respect to any Capital Appreciation Bonds, an amount equal to the principal amount of such Bonds (the principal amount at the date of issuance) plus the interest accrued on such Bonds from the date of original issuance of such Bonds to the interest payment date next preceding the date of computation or the date of computation if an interest payment date, such interest to accrue at an approximate rate per annum of the Capital Appreciation Bonds, as set forth in the Series Resolution or the resolution awarding the sale of such Bonds, compounded on the interest payment dates of each year, plus, with respect to matters related to the payment upon redemption of such Bonds, if such date of computation shall not be an interest payment date, a portion of the difference between the Compounded Amount as of the immediately preceding interest payment date (or the date of original issuance if the date of computation is prior to the first interest payment date succeeding the date of original issuance) and the Compounded Amount as of the immediately succeeding interest payment date, calculated based on the assumption that the Compounded Amount accrued during any period in equal daily amounts on the basis of a year of twelve 30-day months. A table of Compounded Amounts for the Capital Appreciation Bonds shall be incorporated in the resolution awarding the sale of any Capital Appreciation Bonds. 3 "Connection Charges" shall mean the charges imposed on those connecting to the System for the actual cost of physically con- necting to the System. . "Construction Fund" shall mean the City of Ocoee Water and Sewer system Refunding and Improvement Revenue Bonds Construction Fund created and established pursuant to section 4.03 hereof. "Consulting Engineers" shall mean one or more independent, qualified and recognized consulting engineer or firm of consulting engineers having favorable repute, skill and experience with respect to the planning and operation of the System who shall be retained from time to time by the Issuer. "contributions in Aid of Construction" shall mean any amount or item of money, services, or property received by the Issuer, which represents an addition or transfer to the capital of the Sewer System or the Water System, and which is utilized to offset the acquisition, improvement or construction costs of the Sewer System or the Water System, as applicable. "Cost" when used in connection with a Project, shall mean, to the extent permitted by law, the Issuer's cost of physical con- struction; (2) costs of acquisition by or for the Issuer of such Project; (3) costs of land and interests therein and the cost of the Issuer incidental to such acquisition; (4) the cost of any indemnity and surety bonds and premiums for insurance during construction; (5) all interest due to be paid on the Bonds during the construction period of such Project and for a reasonable period thereafter; (6) engineering, legal and other consultant fees and expenses; (7) costs of machinery or equipment required by the Issuer for the commencement of operation of such Project; or (8) any other costs properly attributable to such construction or acquisition, as determined by generally accepted accounting prin- ciples and shall include reimbursement to the Issuer for any such items of Cost heretofore paid by the Issuer in anticipation of the issuance of the Bonds. Any Supplemental Resolution of the Issuer may provide for additional items to be included in the aforesaid Costs. . "Cost of Operation and Maintenance" of the System shall mean the then current expenses, paid or accrued, in the operation, maintenance and repair of the System, as calculated in accordance with generally accepted accounting principles, but shall not include expenses not annually recurring, such as any reserve for renewals and replacements, extraordinary repairs or any allowance for depreciation, any Bond Service Requirement or any paYments in lieu of taxes. "Current Interest Bonds" shall mean the aggregate principal amount of the Bonds that bear interest payable periodically on such dates as shall be determined by subsequent resolution of the 4 Issuer. The Current Interest Bonds include the aggregate principal amount of Serial Current Interest Bonds and such aggregate principal amount of Term Current Interest Bonds, as shall be deter- mined by subsequent resolution of the Issuer. . "Debt Service Fund" shall mean the City of Ocoee Water and Sewer System Refunding and Improvement Revenue Bonds Debt Service Fund created pursuant to section 4.04 hereof. "Federal Securities" shall mean: (A) u.S. Treasury certificates, Notes and Bonds (including State and Local Government Series -- "SLGS"), (B) Direct obligations of the Treasury which have been stripped by the Treasury itself, "CATS," "TIGRS" and similar securities, (C) Interest on obligations of the Resolution Funding Corporation (REFCORP), (D) Prerefunded municipal bonds rated "Aaa" by Moody's or "AAA" by S&P. If the issue is only rated by S&P (i.e., there is no Moody's rating), then the prerefunded bonds must have been prerefunded with cash, direct u.S. or u.S. guaranteed obligations, or AAA-rated prerefunded municipals that satisfy this condition, and (E) obligations issued by the following agencies which are backed by the full faith and credit of the u.S.: 1. U.S. Export-Import Bank (Eximbank): Direct obliga- tions or fully guaranteed certificates of beneficial ownership 2. Farmers Home Administration (FmHA): certificates of beneficial ownership 3. Federal Financing Bank 4. General Services Administration: Participation cer- tificates 5. u.S. Maritime Administration: Guaranteed Title XI financing 6. U. S. Department of Housinq and Urban Development (HUD): Project Notes; Local Authority Bonds; New Communities Debentures - u.S. government guaranteed debentures; u.S. Public Housinq Notes and Bonds - U.S. government guaranteed public housing notes and bonds . "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing through the next succeeding September 30, or such other period designated by the Issuer as its Fiscal Year. 5 J . . "Gross Revenues" or "Revenues" shall mean all income or earnings, including Connection Charges, received by the Issuer or accrued to the Issuer from the ownership, use or operation of the System and all parts thereof, including investment income, if any, earned on any fund or account created pursuant to this Resolution, and on any fund or account established by the Issuer for the System, all as calculated in accordance with generally accepted accounting principles, but "Gross Revenues" or "Revenues" shall not include proceeds from the sale or other disposition of the System or any part thereof, condemnation awards or proceeds of insurance received with respect to the System. Furthermore, "Gross Revenues" or "Revenues" shall not include Sewer System Development Charges or Water System Development charges or contributions in Aid of Construction. "Initial project" shall mean the acquisition, construction and erection of certain capital improvements to the System, all as more specifically set forth on Exhibit "A" attached hereto and made a part hereof, including, without limitation, all property rights, appurtenances, easements, franchises and equipment relating thereto and deemed necessary or convenient for the acquisition, construc- tion or erection thereof, in accordance with certain plans on file or to be on file with the Clerk, with such changes, deletions, additions or modifications to the enumerated improvements, equip- ment and facilities, or such other improvements as approved by the City Commission of the Issuer in accordance with the Act. "Interest Account" shall mean the separate account in the Debt Service Fund established pursuant to Section 4.04 hereof. "Interest Date" shall be such date or dates for the payment of interest on a Series of Bonds as shall be provided by Supplemental Resolution of the Issuer. "Issuer" or "City" shall mean the City of Ocoee, Florida. "Maximum Bond Service Requirement" shall mean, as of any particular date of calculation, the greatest amount of aggregate Bond Service Requirement for the then current or any future Bond Year, except that with respect to any Bonds for which Amortization Installments have been established, the amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount or Compounded Amounts of such Bonds that are to be redeemed from Amortization Installments, in each case to be made in prior Bond Years. "Maximum Interest Rate" shall mean, with respect to any par- ticular variable Rate Bonds, a numerical rate of interest, which shall be set forth in the Supplemental Resolution of the Issuer delineating the details of such Bonds, that shall be the maximum rate of interest such Bonds may at any time bear in the future in accordance with the terms of such Supplemental Resolution. If no 6 such Maximum Interest Rate is set forth in such Supplemental Resolution, the Maximum Interest Rate with respect to such Variable Rate Bonds shall be deemed to be the maximum rate permitted by law. . "Mayor" shall mean the Mayor of the Issuer, or such other person as may be duly authorized by the Issuer to act on his or her behalf. "MBIA" shall mean Municipal Bond Investors Assurance Corporation, insurer of the Series 1993 Bonds. "Net Revenues" of the System shall mean the Gross Revenues, after deduction of the Cost of Operation and Maintenance. "outstanding" or "Bonds outstanding" shall mean all Bonds which have been issued pursuant to this Resolution, except: (1) Bonds canceled after purchase in the open market or because of paYment at or redemption prior to maturity; (2) Bonds for the paYment or redemption of which cash funds or Federal Securities or any combination thereof shall have been theretofore irrevocably set aside in a special account with an escrow agent (whether upon or prior to the maturity or redemption date of any such Bonds) in an amount which, together with earnings on such Federal Securities, will be sufficient to pay the principal of and interest on such Bonds at maturity or upon their earlier redemption; provided that, if such Bonds are to be redeemed before the maturity thereof, notice of such redemption shall have been given according to the requirements of this Resolution or irrevocable instructions directing the timely publication of such notice and directing the paYment of the principal of and interest on all Bonds at such redemption dates shall have been given to the escrow agent; and (3) Bonds which are deemed paid pursuant to this Reso- lution or in lieu of which other Bonds have been issued under sections 2.07 and 2.08 hereof. . "paying Agent" shall mean any authorized depository designated by the Issuer to serve as a Paying Agent for the Bonds that shall have agreed to arrange for the timely paYment of the principal of, interest on and redemption premium, if any, with respect to the Bonds to the owners thereof, from funds made available therefor by the Issuer and any successors designated by subsequent resolution of the Issuer. Nothing in this Resolution shall be deemed to prohibit the Issuer from serving as Paying Agent hereunder or from appointing one or more Paying Agents to serve under this Resolution. 7 "Permitted Investments" shall mean the following, if and to the extent authorized pursuant to the laws of the state of Florida: . A. Direct obligations of the United states of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury and CATS and TGRS)) or obligations the principal of and interest on which are unconditionally guaranteed by the united states of America. B. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the united States (stripped securities are only permitted if they have been stripped by the agency itself): 1. U.s. Export-Import Bank: Direct obligations or fully guaranteed certificates of beneficial ownership 2. Farmers Home Administration: beneficial ownership certificates of 3. Federal Financing Bank 4. Federal Housinq Administration Debentures 5. General Services Administration: Participation certificates 6. Government National Mortgaqe Association ("GNMA"): GNMA - guaranteed mortgage-backed bonds; GNMA - guaranteed pass-through obligations 7. U. S . Maritime Administration: Guaranteed Title IX financing 8_ U.S. Department of Housing and Urban Develop- ment: Project Notes; Local Authority Bonds; New Communities Debentures U_S. government guaranteed debentures; U.s. Public Housing Notes and Bonds - U.s. government guaranteed public housing notes and bonds . C. Bonds, debentures, notes or other evidence of indebt- edness issued or guaranteed by any of the following U. s. government agencies (non-full faith and credit agencies) (stripped securities are only permitted if they have been stripped by the agency itself): 1. Federal Home Loan Bank System: obligations Senior debt 8 2. Federal Home Loan Mortqage Corporation (FHLMC): Participation certificates; Senior debt obligations 3. Federal National Mortqaqe Association: Mortgage-backed securities and senior debt obligations . 4. Student Loan Marketinq Association: Senior debt obligations 5. Resolution Fundinq Corp. (REFCORP) obligations 6. Farm Credit System: Consolidated systemwide bonds and notes D. Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAm-G; AAAm; or AAm. E. Certificates of deposit secured at all times by col- lateral described in A and/or B above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. F. certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by Federal Deposit Insurance corporation or Federal Savings and Loan Insurance Corporation. G. Investment Agreements, including guaranteed invest- ment contracts, acceptable to MBIA. H. Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's or "A-1" or better by S&P. I. Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two highest rating categories assigned by such agencies. J. Federal funds or bankers' acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or "A3" or better by Moody's and "A-1" or "A" or better by S&P. . K. Repurchase agreements that provide for the transfer of securities from a dealer bank or securities firm (seller/ borrower) to a municipal entity (buyer/lender), and the trans- fer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the 9 municipal entity in exchange for the securities at a specified date. Repurchase Agreements must satisfy the following criteria or be approved by MBIA: . 1. Repurchase aqreements must be between the municipal entitv and a dealer bank or securities firm a. Primary dealers on the Federal Reserve reporting dealer list, or b. Banks rated "A" or above by S&P and Moody's. 2. The written repurchase aqreement must include the followinq: a. securi ties which are acceptable for transfer are: (i) Direct u.s. governments, or (ii) Federal agencies backed by the full faith and credit of the u.s. government b. The term of the repurchase aqreement mav be UP to 30 days c. The collateral must be delivered to the munici- pal entity, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is supplying the collateral) before/simultaneous with payment (perfection by posses- sion of certificated securities). d. Valuation of Collateral (i) The securities must be valued weeklv. marked-to-market at current market price plus accrued interest . (A) The value of collateral must be equal to 104% of the amount of cash transferred by the municipal entity to the dealer bank or security firm under the repurchase agreement plus accrued interest. If the value of securities held as collateral slips below 104% of the value of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value of the collateral must equal 105%. Securities on deposit in each subaccount in 10 the Reserve Account shall be valued as determined by the resolution of the Issuer authorizing the series of Bonds for which such subaccount was established. . 3. A legal opinion must be delivered to the municipal entity to the effect that the repurchase agreement meets guidelines under state law for legal investment of public funds. L. uni ts of participation in the Local Government Surplus Funds Trust Fund established pursuant to Chapter 218, Part IV, Florida Statutes, or any similar common trust fund which is established pursuant to the laws of the State of Florida as a legal depository of public moneys and for which the Florida State Board of Administration acts as custodian; and M. Any other investment permitted under applicable Florida and United States law and acceptable to MBIA, for so long as the Series 1993 Bonds shall be outstanding and such firm shall not be in default under its policy of municipal bond insurance securing such Series 1993 Bonds. "Person" shall mean an individual, a corporation, a partner- ship, an association, a joint stock company, a trust, any unincor- porated organization or governmental entity. "Pledged Funds" shall mean (1) the Net Revenues of the System, (2) the Sewer System Development Charges but only to the extent of the Sewer System Development Charges Bond Service Component, (3) the Water system Development Charges but only to the extent of the Water System Development Charges Bond Service Component, and (4) until applied in accordance with the provisions of this Resolution, all moneys, including investments thereof, in the funds and ac- counts established hereunder (except the Rebate Fund). "Policy" shall mean the municipal bond insurance policy issued by MBIA insuring the Series 1993 Bonds. "Project" shall mean, as applicable, the Initial Project and any Additional Project. . "Project certificate" shall mean that certificate of the Qualified Independent Consultant filed with the Issuer at or prior to the delivery of any series of Bonds setting forth (i) the estimated total cost of the Project or Projects, if any, (ii) the estimated cost of the Sewer Expansion Facilities portion of the Project or Projects, if any, and (iii) the estimated cost of the Water Expansion Facilities Portion of the Project or Projects, if any. 11 "---- . "Prudent utility Practice" shall mean, in respect of any particular utility industry, any of the practices, methods and acts which, in the exercise of reasonable judgment, in the light of the facts, including but not limited to the practices, methods and acts engaged in or approved by a significant portion of such utility industry prior thereto, known at the time such decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. It is recognized that Prudent utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather is a spectrum of possible practices, methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consis- tent with reliability, safety and expedition. "Qualif ied Independent Consultant" shall mean one or more qualified and recognized independent consultants, having favorable repute, skill and experience with respect to the duties of the Qualified Independent Consultant to be provided to the Issuer, as shall from time to time be retained by the Issuer to perform the acts and carry out the duties herein provided for such consultants. "Rebate Fund" shall mean the City of Ocoee Water and Sewer System Refunding and Improvement Revenue Bonds Rebate Fund established pursuant to section 5.17 hereof. "Record Date" shall have the same meanings as set forth in sections 2.02 and 2.08 of this Resolution. IIRedemption Account" shall mean the special account of the same name created within the Debt Service Fund. "Redemption Price" shall mean with respect to any Bond or portion thereof, the principal amount or portion thereof, plus the applicable premium, if any, payable upon redemption thereof pursu- ant to such Bond or this Resolution. "Refunded Bonds" shall mean the remaining bonds outstanding of the $6,160,000 City of Ocoee, Florida, Water and Sewer System Revenue Bonds, Series 1989A, and the $4,000,000 city of Ocoee, Florida, Water and Sewer System Revenue Bonds, Series 1989B. . "Registrar" shall mean a trust company or bank with trust powers appointed by subsequent resolution of the Issuer to serve as Registrar pursuant to this Resolution and any successors designated by subsequent resolution of the Issuer. Nothing in this Resolution shall be deemed to prohibit the Issuer from serving as Registrar hereunder or from appointing one or more Registrars to serve under this Resolution. IIReserve Fund" shall mean the Reserve Fund created in section 4.04 hereof and all accounts therein. 12 . . "Reserve Requirement" with respect to each Series of Bonds, if any, shall be determined by subsequent resolution of the Issuer adopted prior to the issuance of each such Series of Bonds, but shall not exceed the lesser of (i) Maximum Debt Service Require- ment, (ii) one and one-quarter times the Average Annual Debt Service Requirement on the Series 1993 Bonds or (iii) except with respect to Taxable Bonds, such amount as will not adversely affect the exclusion of interest on the Bonds from the gross income of the holders of the Bonds for purposes of federal income taxation. The Reserve Requirement for the Series 1993 Bonds shall be the lesser of (i) the Maximum Debt Service Requirement on the Series 1993 Bonds, (ii) one and one-quarter times the Average Annual Debt Service Requirement or (iii) such amount as will not adversely affect the exclusion of interest on the Series 1993 Bonds from the gross income of the holders of the Series 1993 Bonds for purposes of federal income taxation. "Resolution" shall mean this Resolution, as the same may from time to time be amended, modified or supplemented by Supplemental Resolution. "Revenue Fund" shall mean the City of Ocoee Water and Sewer System Refunding and Improvement Revenue Bonds Revenue Fund established pursuant to Section 4.04 hereof. "serial Bonds" shall mean all of the Bonds other than Term Bonds. "Serial Current Interest Bonds" shall mean the aggregate principal amount of Current Interest Bonds maturing on such dates and in such amounts as shall be determined by subsequent resolution of the Issuer and for which Amortization Installments have not been designated. "Series" shall mean all the Bonds delivered on original issuance in a simultaneous transaction and identified pursuant to Sections 2.01 and 2.02 hereof or a Supplemental Resolution autho- rizing the issuance by the Issuer of such Bonds as a separate Series, regardless of variations in maturity, interest rate, Amortization Installments or other provisions. "Series 1993 Bonds" shall mean the city of Ocoee, Florida, Water and Sewer System Refunding and Improvement Revenue Bonds, Series 1993, initially issued under this Resolution, which may be issued in one or more Series. "Sewer Expansion Facilities" shall mean improvements, exten- sions and additions to the Sewer System, together with all lands or interest therein, including plants, buildings, machinery, fran- chises, pipes, mains, fixtures, equipment and all property real or personal, tangible or intangible, heretofore or hereafter con- structed or acquired in order to meet the increased demand upon the 13 Sewer System, whether actual or anticipated, created by new users connecting to the Sewer System. . "Sewer Expansion Percentage" shall mean that number, expressed as a percentage, which represents that portion of the total cost of any Project or Projects financed from the proceeds of a particular Series of Bonds which is attributable to Sewer Expansion Facili- ties, if any, as shall be determined by the Qualified Independent Consultant and set forth in the Project certificate. "Sewer System" shall mean the complete sewer system now owned, operated and maintained by the Issuer, together with any and all improvements, extensions and additions thereto hereafter constructed or acquired, together with all lands or interests therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment and all property, real or personal, tangible or intangible, now or hereafter used in connection therewith. "Sewer System Development Charges" shall mean the impact fees and capital charges levied upon and collected from new users of the Sewer System (or the proceeds of any security provided for the payment thereof), if any, to the extent the same are lawfully available for the acquisition and construction of Sewer Expansion Facilities and for Sewer System Development Charges Bond Service component. Sewer System Development Charges do not include Connection Charges. "Sewer System Development Charges Bond Service Component" shall mean with respect to any Series of Bonds as of any particular date of calculation, the Sewer Expansion Percentage, if any, multi- plied by the Bond Service Requirement for said Series of Bonds. "Sewer System Development Charges Fund" shall mean the "City of Ocoee Sewer System Development Charges Fund" created pursuant to section 4.04 hereof. "Subordinated Indebtedness" shall mean that indebtedness of the Issuer, subordinate and junior to the Bonds, issued in accor- dance with the provisions of Section 5.01 hereof. "Supplemental Resolution" shall mean any Resolution of the Issuer amending or supplementing this Resolution adopted and becoming effective in accordance with the terms of sections 7.01 and 7.02 hereof. . "System" shall mean collectively the Water System and the Sewer System. "Taxable Bond" shall mean any Bond which states in the body thereof that the interest income thereon is includable in the gross 14 income of the holder thereof for federal income tax purposes or that such interest is subject to federal income taxation. . "Term Bonds" shall mean Term Current Interest Bonds and Term Capital Appreciation Bonds. "Term Capital Appreciation Bonds" shall mean the aggregate principal amount of Capital Appreciation Bonds maturing on such dates and in such amounts as shall be determined by subsequent resolution of the Issuer and for which Amortization Installments have been designated. "Term Current Interest Bonds" shall mean the aggregate princi- pal amount of Current Interest Bonds maturing on such dates and in such amounts as shall be determined by subsequent resolution of the Issuer and for which Amortization Installments have been designated. "Variable Rate Bonds" shall mean Bonds issued with a variable, adjustable, convertible or other similar rate which is not fixed in percentage for the entire term thereof at the date of issue. "Water Expansion Facilities" shall mean improvements, exten- sions and additions to the Water system, together with all lands or interest therein, including plants, buildings, machinery, fran- chises, pipes, mains, fixtures, equipment and all property real or personal, tangible or intangible, heretofore or hereafter con- structed or acquired in order to meet the increased demand upon the Water system, whether actual or anticipated, created by new users connecting to the Water System. "Water Expansion Percentage" shall mean that number, expressed as a percentage, which represents that portion of the total cost of any Project or Projects financed with the proceeds of any particu- lar Series of Bonds which is attributable to Water Expansion Facilities, if any, as shall be determined by the Qualified Independent Consultant and set forth in the Project certificate. "Water System" shall mean the complete water system now owned, operated and maintained by the Issuer, together with any and all improvements, extensions and additions thereto hereafter constructed or acquired, together with all lands or interests therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipments and all property, real or personal, tangible or intangible, now or hereafter used in connection therewith. . "Water System Development Charges" shall mean the impact fees and capital charges levied upon and collected from new users of the Water System (or the proceeds of any security provided for the payment thereof), if any, to the extent the same are lawfully available for the acquisition and construction of Water Expansion 15 Facilities and for Water System Development Charges Bond Service Component. Water System Development Charges do not include Connection Charges. . "Water System Development Charges Bond Service component" shall mean with respect to any Series of Bonds as of any particular date of calculation, the Water Expansion Percentage, if any, multiplied by the Bond Service Requirement for said Series of Bonds. "Water System Development Charges Fund" shall mean the "City of Ocoee Water system Development Charges Fund" created pursuant to section 4.04 hereof. The terms "herein," "hereunder," "hereby," "hereto," "hereof" and any similar terms, shall refer to this Resolution; the term heretofore shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. SECTION 1.03. Resolution to Constitute Contract. In consideration of the purchase and acceptance of any or all of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Issuer with the Holders of the Bonds and shall be deemed to be and shall constitute a contract between the Issuer and the Holders from time to time of the 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 Bonds. All of the Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in or pursuant to this Resolution. SECTION 1.04. Findinqs. 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 Initial Project be acquired, constructed and erected and that the Refunded Bonds be refunded with the proceeds of the Series 1993 Bonds. . (C) The Initial Project and the refunding of the Refunded Bonds shall be financed with the proceeds of the Series 1993 Bonds, together with certain other legally available funds of the Issuer. 16 . (D) No portion of the Pledged Funds are pledged or encumbered in any manner, except with respect to the payment of the Refunded Bonds. Such lien in favor of the holders of the Refunded Bonds on a portion of the Pledged Funds shall be defeased upon the issuance of the Series 1993 Bonds, and the city hereby covenants that it will not issue any additional bonds under the resolution of the City authorizing the Refunded Bonds. (E) In order to preserve and protect the public health, safety and welfare of the inhabitants of the Issuer, it is necessary and desirable to acquire, design and construct the Initial Project. (F) The Issuer deems it necessary, beneficial and in its best interest to provide for the refunding of the Refunded Bonds. Such refunding will be advantageous to the Issuer by revising certain terms and covenants previously made for the benefit of the holders of the Refunded Bonds and by providing interest cost savings to the Issuer. (G) The principal of and interest on the 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 Bonds and the Bonds shall not constitute a lien upon any property of the Issuer other than the Pledged Funds. (H) The Issuer adopted this Resolution after a public hearing preceded by at least seven (7) days notice of the hearing and the 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. 05. Initial Proiect. The Issuer does hereby autho- rize the acquisition, construction and erection of the Initial Project in accordance with Exhibit "A" attached hereto and made a part hereof. SECTION 1.06. Refunding of Refunded Bonds. The Issuer does hereby authorize the refunding of the Refunded Bonds. . 17 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS . SECTION 2.01. Authorization of Bonds. This Resolution creates an issue of Bonds of the Issuer to be designated as "City of Ocoee, Florida, Water and Sewer system Refunding and Improvement Revenue Bonds" which may be issued in one or more Series as hereinafter provided. The aggregate principal amount of the Bonds which may be executed and delivered under this Resolution is not limited except as is or may hereafter be provided in this Resolution or as limited by the Act or by law. The Bonds may, if and when authorized by the Issuer pursuant to this Resolution, be issued in one or more Series, with such further appropriate particular designations added to or incorpo- rated in such title for the Bonds of any particular Series as the Issuer may determine and as may be necessary to distinguish such Bonds from the Bonds of any other Series. Each Bond shall bear upon its face the designation so determined for the Series to which it belongs. The Bonds shall be issued for such purpose or purposes; shall bear interest at such rate or rates not exceeding the maximum rate permitted by law; and shall be payable in lawful money of the united States of America on such dates; all as determined by Supplemental Resolution of the Issuer. In no event shall the rate of interest on the Bonds exceed the maximum rate permitted by law. The 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. SECTION 2.02. Authorization and Description of Series 1993 Bonds. Subject and pursuant to the provisions hereof, obligations of the Issuer to be known as "City of Ocoee, Florida, Water and Sewer System Refunding and Improvement Revenue Bonds, Series 1993," are authorized in the aggregate principal amount of not exceeding $15,000,000. . The Series 1993 Bonds shall be issued in fully registered form; may be issued in one or more series of 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 18 . . 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 subsequent resolution prior to the delivery of the Series 1993 Bonds; shall bear interest at such rate or rates not exceeding the maximum rate allowed by Florida law, the actual rate or rates to be determined by subsequent resolution of the Issuer prior to or upon the sale of the Series 1993 Bonds; such interest, computed on the basis of a 360-day year of twelve 30-day months, to be payable semiannually at such times as are fixed by resolution of the Issuer if Current Interest Bonds and to be payable at maturity if Capital Apprecia- tion Bonds; and shall mature on such dates in such years and amounts as will be fixed by resolution of the Issuer prior to or upon the sale of the Series 1993 Bonds; and may be Serial and/or Term Bonds. Each Series 1993 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 1993 Current Interest Bond shall bear interest from the date to which interest shall have been paid. The Series 1993 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 1993 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 1993 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 immediately preceding such interest payment date (the "Record Date"), on the registration books of the Issuer hereinafter provided for as the Holder thereof, by check or draft mailed to such Holder at his address as it appears on such registration books. Payment of the principal of all Series 1993 Current Inter- est Bonds and the Compounded Amount with respect to the Series 1993 Capital Appreciation Bonds shall be made upon the presentation and surrender at the office of the Paying Agent of such Bonds as the same shall become due and payable. SECTION 2.03. Application of Series 1993 Bond Proceeds. Except as otherwise provided by Supplemental Resolution of the 19 Issuer, the proceeds derived from the sale of the Series 1993 Bonds, including accrued interest and premium, if any, shall, simultaneously with the delivery of the Series 1993 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 1993 Bonds. (B) A sufficient amount of the Series 1993 Bond proceeds shall be applied to the payment of reasonable and necessary costs and expenses relating to delivery of the Series 1993 Bonds. (C) A sum sufficient to pay principal, interest and redemption premium, if any, of the Refunded Bonds shall be deposited with the Paying Agent of the Refunded Bonds for payment to the owner of the Refunded Bonds. (D) Unless otherwise provided in a Supplemental Resolution of the Issuer or unless provided through the purchase of municipal bond insurance or any combination thereof, a sum equal to the Reserve Requirement for the Series 1993 Bonds shall be deposited in an account in the Reserve Fund for the benefit of the Series 1993 Bonds. (E) The remainder of the proceeds of the Series 1993 Bonds after providing for the payments required by A, B, C and D shall be deposited in the Construction Fund created and established pursuant to section 4.03 hereof and shall be used to acquire, construct and erect the Initial Project. The proceeds of any other Series of Bonds shall be applied as provided by Supplemental Resolution of the Issuer. SECTION 2.04. Execution of Bonds. The Series 1993 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 of the official seal of the Issuer shall be imprinted on the Bonds. . In case any officer whose signature or a facsimile of whose signature shall appear on any Series 1993 Bond shall cease to be such officer before the delivery of such Series 1993 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 1993 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 1993 Bond, shall be the proper officers to sign such Series 1993 Bond although at the date of such Series 1993 Bond such persons may not have been such officers. 20 . . SECTION 2.05. Authentication. Only such of the Series 1993 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. No Series 1993 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 such certificate of the Regis- trar upon any such Series 1993 Bond shall be conclusive evidence that such Series 1993 Bond has been duly authenticated and delivered under this Resolution. The Registrar's certificate of authentication on any Series 1993 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 1993 Bonds that may be issued hereunder at anyone time. SECTION 2.06. Temporary Bonds. until the definitive Bonds of any Series are prepared, the Issuer may execute, in the same manner as is provided in section 2.04 hereof, and deliver, upon authentication by the Registrar pursuant to section 2.05 hereof, in lieu of definitive Bonds, but sUbject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof, one or more temporary Bonds substanti- ally of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations authorized by the Issuer by subsequent Resolution, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Issuer, at its own expense, shall prepare and execute defini- tive Bonds, which shall be authenticated by the Registrar. Upon the surrender of such temporary Bonds for exchange, the Registrar, without charge to the Holder thereof, shall deliver in exchange therefor definitive Bonds, of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pursuant to this Resolution. All temporary Bonds surrendered in exchange for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith canceled by the Registrar. SECTION 2.07. Bonds Mutilated. Destroved. Stolen or Lost. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and deliver, and the Registrar shall authenticate, a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon surrender and cancella- tion of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of such Holder's ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer or the Registrar may prescribe and paying such expenses as the Issuer and the Registrar 21 . may incur. All Bonds so surrendered or otherwise substituted shall be canceled by the Registrar. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same or cause the Bond to be paid, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this section 2.07 shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal and proportionate benefits and rights as to lien on the Pledged Funds to the same extent as all other Bonds issued hereunder. SECTION 2.08. Transfer. Bonds, upon surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory to the Registrar, duly executed by the Holder thereof or such Holder's attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same type and maturity of the Bonds so surrendered. The Bonds issued under this Resolution shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State of Florida, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain outstanding, the Issuer shall maintain and keep, at the office of the Registrar, books for the registration and transfer of the Bonds. . Each Bond shall be transferable only upon the books of the Issuer, at the office of the Registrar, under such reasonable regulations as the Issuer may prescribe, by the Holder thereof in person or by such Holder's attorney duly authorized in writing upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed and guaranteed by the Holder or such Holder's duly authorized attorney. Upon the trans- fer of any such Bond, the Issuer shall issue, and cause to be authenticated, in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and Series and maturity as the surrendered Bond. The Issuer, the Registrar and any Paying Agent or fiduciary of the Issuer may deem and treat the Person in whose name any Outstanding Bond shall be registered upon the books of the Issuer as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price, if applicable, and interest on such Bond and for all other purposes, and all such payments so made to any such Holder or upon such Holder's order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid and neither 22 . . the Issuer nor the Registrar nor any Paying Agent or other fiduci- ary of the Issuer shall be affected by any notice to the contrary. The Registrar, in any case where it is not also the paying Agent in respect to any Series of Bonds, forthwith (A) following the fifteenth day prior to an interest payment date for such Series; (B) following the fifteenth day next preceding the date of first mailing of notice of redemption of any Bonds of such Series; and (C) at any other time as reasonably requested by the Paying Agent of such Series, shall certify and furnish to such Paying Agent the names, addresses and holdings of Bondholders and any other relevant information reflected in the registration books. Any Paying Agent of any fully registered Bond shall effect payment of interest on such Bonds by mailing a check or draft to the Holder entitled thereto or may, in lieu thereof, upon the request and at the expense of such Holder, transmi t such payment by bank wire transfer for the account of such Holder. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Issuer shall execute and the Registrar shall authenticate and deliver such Bonds in accordance with the provisions of this Resolution. Execution of Bonds by the Mayor and the Clerk for purposes of exchanging, replacing or transferring Bonds may occur at the time of the original delivery of the Series of which such Bonds are a part. All Bonds surren- dered in any such exchanges or transfers shall be held by the Registrar in safekeeping until directed by the Issuer to be canceled by the Registrar. For every such exchange or transfer of Bonds, the Issuer or the Registrar may make a charge sufficient to reimburse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or transfer. The Issuer and the Registrar shall not be obligated to make any such exchange or transfer of Bonds of any Series during the fifteen (15) days next preceding an Interest Date on the Bonds of such Series, or, in the case of any proposed redemption of Bonds of such Series, then during the fifteen (15) days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date. SECTION 2.09. Coupon Bonds. The Issuer, at its discretion, may by Supplemental Resolution authorize the issuance of coupon Bonds, registrable as to principal only or as to both principal and interest. Such Supplemental Resolution shall provide for the negotiability, transfer, interchangeability, denominations and form of such Bonds and coupons appertaining thereto. Coupon Bonds (other than Taxable Bonds) shall only be issued if an opinion of Bond Counsel is received to the effect that issuance of such coupon Bonds will not adversely affect the exclusion from gross income of interest earned on such Bonds for federal income tax purposes. SECTION 2.10. Form of Series 1993 Bonds. The text of the Series 1993 Bonds, together with the certificate of authentication, 23 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 Bonds to the purchaser or purchasers . thereof) : . 24 [FORM OF CURRENT INTEREST BOND] No. R- $ . UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF ORANGE CITY OF OCOEE WATER AND SEWER SYSTEM REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1993 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 principal 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. 25 . . (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 refund certain outstanding obligations of the Issuer and 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, and Resolution No. duly adopted by the City on , , as amended and supple- mented (hereinafter collectively called "Resolution"), and is sub- ject 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. [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 consti tute 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 constitute a lien only on the Pledged Funds all in the manner provided in the Resolution. 26 ~ . . 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 subj ect to the condi tions 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. 27 . . 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 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 , _. 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 28 . . 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. [member firm of the New York Stock Exchange or a commercial bank or a trust company.] By: (manual siqnature) Title: [Bond Counsel Opinion] [END OF CURRENT INTEREST BOND FORM] 29 . . [FORM OF CAPITAL APPRECIATION BONDS] No. CABR- Amount: Bond Date: Maturity $ 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 REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1993 MATURITY DATE: INTEREST RATE: CUSIP DATED DATE: 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) 30 . . Notice of such redemption shall be gi ven 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 refund certain outstanding obligations of the Issuer and 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, and Resolution No. duly adopted by the City on , ____, as amended and supplemented (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. 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. 31 . . 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 subj ect 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. 32 . . 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 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 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 33 . . 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 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. Signature Guaranteed by [member firm of the New York Stock Exchange or a commercial bank or a trust company.] By: (manual siqnature) Title: [Bond Counsel Opinion] [Attach Schedule of Compounded Amounts] [END OF CAPITAL APPRECIATION BOND FORM] 34 ARTICLE III REDEMPTION OF BONDS . SECTION 3.01. privileqe of Redemption. The Issuer shall have the right to redeem any or all of the Bonds in whole or in part, as shall be determined by supplemental Resolution of the Issuer. SECTION 3.02. Selection of Bonds to be Redeemed. The Bonds to be redeemed shall be selected in such manner as shall be deter- mined by Supplemental Resolution of the Issuer. In the event of a partial redemption of the Bonds, such early payments shall be applied to the particular principal installments selected by the Issuer. SECTION 3.03. Notice of Redemption. All notices of redemp- tion shall specify the Bond or Bonds (or portions thereof) to be redeemed, and the date and place for redemption, shall be given by the Registrar on behalf of the Issuer, and (i) shall be filed with the Paying Agent for such Bonds, (ii) shall be mailed by first class mail, postage prepaid, at least thirty days and not more than sixty days before the proposed redemption date to all Holders of Bonds to be redeemed at their addresses as they appear on the registration books kept by the Registrar as of fifteen days before the mailing date, and (iii) shall be mailed by registered or certi- fied mail, postage prepaid, or by telecopy or facsimile trans- mission at least thirty-five days before the redemption date to the registered securities depositaries and two or more nationally recognized municipal bond information services. Failure to mail notice to the Holders of Bonds to be redeemed, or any securities depositaries or any defect therein, shall not affect the validity of the proceedings of redemption of such Bonds as to which no such failure or defect has occurred. Notice of any optional redemption of Bonds shall be given only upon the prior deposit into the Redemption Account of amounts sufficient to pay the principal or Compounded Amount of, interest accrued from the last interest payment date to the proposed redemption date on Current Interest Bonds, and premium, if any, with respect to the Bonds to be redeemed. . Each redemption notice shall state: (i) the CUSIP numbers of all Bonds being redeemed, (ii) the original issue date of such Bonds, (iii) the maturity date and rate of interest borne by each Bond being redeemed, (iv) the redemption price, (v) the date on which such notice is mailed, (vi) if less than all Outstanding Bonds are to be redeemed, the certificate number (and, in the case of a partial redemption of any Bond, the principal amount or Compounded Amount of each Bond to be redeemed; (vii) that on the redemption date there shall become due and payable upon each Bonds to be redeemed the redemption price thereof, or the redemption price of the specified portions of the principal amount or 35 . . Compounded Amount thereof in the case of Bonds to be redeemed in part only, together with interest accrued on Current Interest Bonds to the redemption date, and that from and after such date interest thereon shall cease to accrue or value shall cease to accrete and be payable; (viii) that the Bonds to be redeemed, whether as a whole or in part, are to be surrendered for payment of the redemption price and accrued interest, if any, at the principal office of the Registrar at an address specified; and (ix) the name and telephone number of a person designated by the Registrar to be responsible for such redemption. When notice of redemption is given, Bonds called for redemption will become due and payable on the redemption date at the redemption price stated in such notice. When a notice of redemption is given and funds sufficient for redemption are depos- ited with the Registrar, interest on the Bonds to be redeemed will cease to accrue on the date fixed for redemption, such Bonds shall cease to be entitled to any lien, benefit or security under this Resolution and the Holders of such Bonds will have no right in respect thereof except to receive payment of the redemption price plus interest accrued to the redemption date. Upon surrender of any Bond for redemption in part only, the Registrar shall authenticate and deliver to the Bondholder thereof, the cost of which shall be paid by the Issuer, a new Bond of an authorized denomination equal to the unredeemed portion of the Bond surrendered. 36 ,--- -- . . ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 4.01. Bonds not to be Indebtedness of Issuer. The Bonds shall not be or constitute general obligations or indebted- ness of the Issuer as "bonds" within the meaning of any constitu- tional or statutory provision, but shall be special obligations of the Issuer, payable solely from and secured by a lien upon and pledge of the Pledged Funds. No Holder of any Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond, or be entitled to payment of such Bond from any moneys of the Issuer except from the Pledged Funds in the manner provided herein. The Pledged Funds shall be trust funds held by the Finance Director or such other person as shall be designated by the City commission and shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer. SECTION 4.02. Security for Bonds. The payment of the principal of or Redemption Price, if applicable, and interest on the Bonds shall be secured forthwith equally and ratably, except to the extent provided herein, by a pledge of and lien upon the Pledged Funds. The Issuer does hereby irrevocably pledge the Pledged Funds to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds in accordance with the provisions hereof. SECTION 4.03. Construction Fund. The Issuer covenants and agrees to establish a separate fund to be known as the "City of Ocoee Water and Sewer System Refunding and Improvement Revenue Bonds Construction Fund," which shall be used only for payment of the Cost of the Project. within such Construction Fund there shall be established separate accounts for each Series of Bonds. Moneys in the Construction Fund, until applied in payment of any item of the Cost of a Project, in the manner hereinafter provided, shall be held in trust and shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders. SECTION 4.04. Funds and Accounts. The Issuer covenants and agrees to establish with a bank or trust company in the State of Florida, which is eligible under the laws of such State to receive funds of the Issuer, separate funds to be known as the "City of Ocoee Water and Sewer System Refunding and Improvement Revenue Bonds Revenue Fund," the "City of Ocoee Water and Sewer System Refunding and Improvement Revenue Bonds Debt Service Fund," the 37 . "city of Ocoee, Water and Sewer System Refunding and Improvement Revenue Bonds Reserve Fund," the "City of Ocoee Sewer System Development Charges Fund," and the "City of Ocoee Water System Development Charges Fund." The Issuer shall maintain in the Debt Service Fund three accounts: the Interest Account," the "Principal Account" and the "Redemption Account." within the Reserve Fund the Issuer shall maintain separate accounts for each Series of Bonds. Moneys in the aforementioned funds and accounts, until applied in accordance with the provisions hereof, shall be held in trust and, except as provided in this Resolution, be subject to a lien and charge in favor of the Holders and for further security of the Holders. SECTION 4.05. Flow of Funds. (A) Except as otherwise provided in section 4.09 of this Resolution, the Issuer shall deposit the Gross Revenues into the Revenue Fund promptly upon receipt thereof. Moneys in the Revenue Fund shall first be used for payments of Cost of Operation and Maintenance of the system. The moneys remaining in the Revenue Fund shall be deposited or credited on or before the twentieth (20th) day of each month, commencing with the month following delivery of the Bonds to the purchaser or purchasers thereof, or such later date as hereinafter provided, in the following manner and in the following order of priority: (1) Interest Account. To the extent not substituted or supplemented by other Pledged Funds, the Issuer shall deposit into or credit to the Interest Account in the Debt Service Fund the sum which, together with the balance in said account, shall equal the interest on all outstanding Bonds accrued and unpaid and to accrue to the end of the then current calendar month. Moneys in the Interest Account shall be used to pay interest on the Bonds as and when the same become due, whether by redemption or otherwise, and for no other purpose. The Issuer shall adjust the amount of the deposit into the Inter- est Account not later than the month immediately preceding any Interest Date so as to provide sufficient moneys in the Inter- est Account to pay the interest on the Bonds coming due on such Interest Date. . (2) Principal Account. Next, to the extent not substi- tuted or supplemented by other Pledged Funds, the Issuer shall deposit into or credit to the Principal Account in the Debt Service Fund, the sum which, together with the balance in said account, shall equal the principal amounts on all Outstanding Bonds due and unpaid and that portion of the principal next due which would have accrued on said Bonds during the then current calendar month if such principal amounts were deemed to accrue monthly (assuming that a year consists of twelve (12) equivalent calendar months of thirty (30) days each) in equal amounts from the next preceding principal payment due 38 . date, or, if there is no such preceding principal payment due date, from a date one year preceding the due date of such principal amount. Moneys in the Principal Account shall be used to pay the principal of the Bonds as and when the same shall mature, and for no other purpose. The Issuer shall adjust the amount of deposit to the principal Account not later than the month immediately preceding any principal payment date so as to provide sufficient moneys in the Principal Account to pay the principal on Bonds becoming due on such principal payment date. (3) Redemption Account. commencing in the month which is one year prior to any Amortization Installment due date, the Issuer shall, to the extent not substituted or supplemented by other Pledged Funds, deposit into or credit to the Redemption Account in the Debt Service Fund, the sum which, together with the balance in said account, shall equal the Amortization Installments on all Bonds outstanding due and unpaid and that portion of the Amortization Installments of all Bonds outstanding next due which would have accrued on such Bonds during the then current calendar month if such Amortization Installments were deemed to accrue monthly (assuming that a year consists of twelve (12 ) equivalent calendar months having thirty (30) days each) in equal amounts from the next preceding Amortization Installment due date, or, if there is no such preceding Amortization Installment due date, from a date one year preceding the due date of such Amortization Installment. Moneys in the Bond Amortization Account shall be used to purchase or redeem Term Bonds in the manner herein provided, and for no other purpose. The Issuer shall adjust the amount of the deposit into the Bond Amortization Account not later than the month immediately preceding any date for payment of an Amortization Installment so as to provide sufficient moneys in the Bond Amortization Account to pay the Amortization Installments on the Bonds coming due on such date. Payments to the Bond Amortization Account shall be on a parity with payments to the Principal Account. . Amounts accumulated in the Bond Amortization Account with respect to any Amortization Installment (together with amounts accumulated in the Interest Account with respect to interest, if any, on the Term Bonds for which such Amortization Install- ment was established) may be applied by the Issuer, on or prior to the sixtieth (60th) day preceding the due date of such Amortization Installment (a) to the purchase of Term Bonds of the Series and maturity for which such Amortization Installment was established, at a price not greater than the Redemption Price at which such Term Bonds may be redeemed on the first date thereafter on which such Term Bonds shall be subject to redemption, or (b) to the redemption at the appli- cable Redemption Price of such Term Bonds, if then redeemable 39 . by their terms. The applicable Redemption Price (or principal amount of maturing Term Bonds) of any Term Bonds so purchased or redeemed shall be deemed to constitute a part of the Bond Amortization Account until such Amortization Installment date, for the purposes of calculating the amount of such Account. As soon as practicable after the sixtieth (60th) day preceding the due date of any such Amortization Installment, the Issuer shall proceed to call for redemption on such due date, by causing notice to be given as provided in section 3.03 hereof, Term Bonds of the series and maturity for which such Amorti- zation Installment was established (except in the case of Term Bonds maturing on an Amortization Installment date) in such amount as shall be necessary to complete the retirement of the unsatisfied balance of such Amortization Installment. The Issuer shall payout of the Bond Amortization Account and the Interest Account to the appropriate Paying Agents, on or before the day preceding such redemption date (or maturity date), the amount required for the redemption (or for the payment of such Term Bonds then maturing), and such amount shall be applied by such Paying Agents to such redemption (or payment). All expenses in connection with the purchase or redemption of Term Bonds shall be paid by the Issuer from the Revenue Fund. . (4) Reserve Fund. The Issuer shall next deposit from moneys remaining in the Revenue Fund an amount required by each Series Resolution into each account within the Reserve Fund. Any withdrawals from any account in the Reserve Fund shall be subsequently restored from the first moneys available in the Revenue Fund, on a pro rata basis as to all accounts in the Reserve Fund, after all required current payments for Cost of Operation and Maintenance and all current applications and allocations to the Debt Service Fund, including all defi- ciencies for prior payments have been made in full. Notwith- standing the foregoing, in no event shall the Issuer be required to deposit into any account in the Reserve Fund an amount greater than that amount necessary to ensure that the difference between the Reserve Requirement for the series of Bonds for which such account was established and the amounts on deposit in such account on the date of calculation shall be restored not later than sixty (60) months after the date of such deficiency (assuming equal monthly payments into such account for such sixty (60) month period. To the extent the Issuer determines pursuant to a Supplemental Resolution to fund an account within the Reserve Fund for a respective Series of Bonds, the Issuer may provide that the difference between the amounts on deposit in such account and the Reserve Requirement for such Series of Bonds shall be an amount covered by obtaining bond insurance or a surety bond issued by a reputable and recognized municipal bond insurer, by a letter of credit rated in one of the two highest categories by one of two nationally recognized rating agencies, or any combination 40 . thereof. Notwithstanding the foregoing, the Issuer may not deposit bond insurance, a surety bond or a letter of credit in the account in the Reserve Fund established for the benefit of the Series 1993 Bonds without the consent of MBIA. Moneys in the Reserve Fund shall be used only for the purpose of the payment of Amortization Installments, principal of, or interest on the outstanding Bonds when the other moneys allo- cated to the Debt Service Fund are insufficient therefor, and for no other purpose. Moneys in each account in the Reserve Fund shall be valued as determined by a resolution of the Issuer adopted at or prior to the issuance. Notwithstanding any provision of the Resolution to the contrary, moneys on deposit in each respective account in the Reserve Fund shall only be applied for payment of Amortization Installments, principal of or interest on the outstanding Series of Bonds for which such account was established and for no other Series of Bonds and for no other purpose. In the event of the refunding of any Series of Bonds, the Issuer may withdraw from the account within the Reserve Fund for such Series of Bonds, all or any portion of the amounts accumulated therein with respect to the Bonds being refunded and deposit such amounts as required by the resolution authorizing the refunding of such Series of Bonds; provided that such withdrawal shall not be made unless (a) immediately thereafter the Bonds being refunded shall be deemed to have been paid pursuant to the provisions of the Resolution and (b) the amount remaining in such account after giving effect to the issuance of such refunding obligations and the disposition of the proceeds thereof shall not be less than the Reserve Requirement for any Bonds of such Series then outstanding. The balance of any moneys after the deposits required by sections 4.05(A) (1), 4.05(A) (2), 4.05(A) (3) and 4.05(A) (4) hereof may be transferred, at the discretion of the Issuer, to any other fund or account of the Issuer, including funds and accounts not established pursuant to this Resolution, and be used for any lawful purpose. (B) The Issuer, in its discretion, may use moneys in the Principal Account and the Interest Account to purchase or redeem Bonds coming due on the next principal payment date, provided such purchase or redemption does not adversely affect the Issuer's abil- ity to pay the principal or interest coming due on such principal payment date on the Bonds not so purchased or redeemed. . (C) At least one (1) business day prior to the date estab- lished for payment of any principal of or Redemption Price, if applicable, or interest on the Bonds, the Issuer shall withdraw sufficient moneys from the Debt Service Fund to pay such principal or Redemption Price, if applicable, or interest and deposit such moneys with the Paying Agent for the Bonds to be paid. 41 . SECTION 4.06. Sewer System Development Charqes Fund. All Sewer System Development Charges shall, upon receipt thereof, be deposited in the Sewer System Development Charges Fund. All moneys remaining on deposit in said fund shall be utilized on or before the 21st day of each month, as follows: (1) Such moneys shall, in the case of a deficiency in the Debt Service Fund, first be applied and allocated to the Debt Service Fund to supplement Revenues to be deposited therein or may be applied and allocated to the Debt Service Fund in substitution of Revenues to be deposited therein. (2) Thereafter, all moneys in the Sewer System Develop- ment Charges Fund may be applied by the Issuer for any use allowed by law. Notwithstanding the foregoing, the aggregate amount of Sewer System Development Charges applied and allocated in a Fiscal Year to the Bond Service Requirement for any Series of Bonds shall never exceed said Sewer System Development Charges Bond Service Component for such Series of Bonds in such Fiscal Year. SECTION 4.07. Water System Development Charqes Fund. All Water System Development Charges shall, upon receipt thereof, be deposited in the Water System Development Charges Fund. All moneys remaining on deposit in said fund shall be utilized on or before the 21st day of each month, as follows: (1) Such moneys shall, in the case of a deficiency in the Debt Service Fund, first be applied and allocated to the Debt Service Fund to supplement Revenues to be deposited therein or may be applied and allocated to the Debt Service Fund in substitution of Revenues to be deposited therein. (2) Thereafter, all moneys in the Water System Develop- ment Charges Fund may be applied by the Issuer for any use allowed by law. Notwithstanding the foregoing, the aggregate amount of Water system Development Charges applied and allocated in a Fiscal Year to the Bond Service Requirement for any Series of Bonds shall never exceed said Water System Development Charges Bond Service Component for such Series of Bonds in such Fiscal Year. . SECTION 4.08. Investments. The Construction Fund, the Revenue Fund, the Debt Service Fund, the Reserve Fund and all accounts and subaccounts in such funds shall be continuously secured in the manner by which the deposit of public funds are authorized to be secured by the laws of the State of Florida. Moneys on deposit in the Construction Fund, the Debt Service Fund, the Reserve Fund, the Revenue Fund, the Sewer System Development Charges Fund, the Water System Development Charges Fund and all 42 . accounts and subaccounts in such funds may be invested and reinvested by the Issuer and as directed by the Issuer in Permitted Investments maturing no later than the date on which the moneys therein will be needed. Any and all income received by the Issuer from the investment of moneys in each fund or account created pursuant to this Resolution, except the Construction Fund, shall be retained in such respecti ve fund or account until the amount required to be on deposit therein shall be on deposit in such fund or account, and thereafter shall be transferred to the Revenue Fund. Any and all income received from the investment of moneys in the Construction Fund shall remain on deposit in such fund until the amounts required to complete the Proj ect are on deposit therein, and thereafter shall be transferred to the Revenue Fund. Nothing contained in this Resolution shall prevent any Permitted Investments acquired as investments of or security for funds held under this Resolution from being issued or held in book- entry form on the books of the Department of the Treasury of the united states. SECTION 4.09. Separate Accounts. The moneys required to be accounted for in each of the foregoing funds, accounts and sub- accounts established herein may be deposited in a single bank account, and funds allocated to the various funds, accounts and subaccounts established herein may be invested in a common invest- ment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein and such investments for the various purposes of such funds, accounts and subaccounts as herein provided. The designation and establishment of the various funds, accounts, and subaccounts in and by this Resolution shall not be construed to require the establishment of any completely indepen- dent, self-balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to establish certain priorities for application of such revenues as herein provided. . 43 . . ARTICLE V SUBORDINATED INDEBTEDNESS, ADDITIONAL BONDS, AND COVENANTS OF ISSUER SECTION 5.01. Subordinated Indebtedness. Except under the conditions and in the manner provided herein, the Issuer will not issue any other obligations (i) payable from the Pledged Funds or (ii) voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien thereon and pledge thereof in favor of the Bonds and the interest thereon. The Issuer may at any time or from time to time issue evidences of indebtedness payable in whole or in part out of the Pledged Funds and which may be secured by a pledge of the Pledged Funds; provided, however, that such pledge shall be, and shall be expressed to be, subordinated in all respects to the pledge of the Pledged Funds created by this Resolution. The Issuer shall have the right to covenant with the holders from time to time of any Subordinated Indebtedness to add to the conditions, limitations and restrictions under which any Additional Bonds may be issued pursuant to section 5.02 hereof. The Issuer agrees to pay promptly any Subordinated Indebtedness as the same shall become due. SECTION 5.02. Issuance of Additional Bonds. No Additional Bonds, payable on a parity with the Bonds then Outstanding pursuant to this Resolution, shall be issued except upon the conditions and in the manner herein provided. The Issuer may issue one or more Series of Additional Bonds for anyone or more of the following purposes: financing the Cost of an Additional Project, or the completion thereof or of the Initial Project, or refunding any or all Outstanding Bonds or of any Subordinated Indebtedness of the Issuer. No such Additional Bonds shall be issued unless the following conditions are complied with: (A) Except as otherwise provided in section 5.02(D) hereof, there shall have been obtained and filed with the Issuer a state- ment of an independent certified public accountant of reasonable experience and responsibility: (1) stating that the books and records of the Issuer relating to the Pledged Funds have been examined by him or her; (2) setting forth the amount of the Pledged Funds which have been received by the Issuer during any twelve (12) consecutive months designated by the Issuer within the twenty-four (24) months immediately preceding the date of delivery of such Additional Bonds with respect to which such statement is made; (3) stating that the amount of the Net Revenues received during the aforesaid twelve-month period equals at least one hundred percentum (100%) of the Maximum Annual Debt Service of all Bonds then Outstanding and such Additional Bonds with respect to which such 44 . certificate is made, (4) stating that the amount of the Net Revenues together with the Sewer System Development Charges in an amount not greater than the Sewer System Development Charges Bond Service Component and the Water System Development Charges in an amount not greater than the Water System Development Charges Bond Service Component received during the aforementioned twelve-month period equals at least one hundred ten percentum (110%) of the Maximum Annual Debt Service of all Bonds then outstanding and such Additional Bonds with respect to which such statement is made; (5) stating that the Net Revenues projected for the twelve-month period following the issuance of such Additional Bonds is projected by the Consulting Engineer to equal not less than one hundred percentum (100%) of the Maximum Annual Debt Service on the Bonds and any proposed Additional Bonds; and (6) stating that the Net Revenues together with the Sewer System Development Charges in an amount not greater than the Sewer System Development Charges Bond Service Component and the Water System Development Charges in an amount not greater than the Water System Development Charges Bond Service Component projected for the twelve-month period following the issuance of such Additional Bonds is projected by the Consulting Engineer to equal not less than one hundred ten percentum (110%) of the Maximum Annual Debt Service on the Bonds and any proposed Additional Bonds. (B) Upon recommendation of the Consulting Engineers, the Pledged Funds certified in (A) above may be adjusted by including (i) 100% of the additional Gross Revenues which in the opinion of the Consulting Engineer would have been derived from rate increases adopted before the Additional Bonds are issued, if such rate increases had been implemented before the commencement of the period for which such Pledged Funds are being certified, and (ii) 100% of the additional Gross Revenues estimated by the Consulting Engineer to be derived during the first full twelve month period after the date of placing in service the Additional Project financed with the proceeds of the Additional Bonds. (C) Additional Bonds shall be deemed to have been issued pursuant to this Resolution the same as the outstanding Bonds, and, except as provided in this Resolution, all of the other covenants and other provisions of this Resolution (except as to details of such Additional Bonds inconsistent therewith) shall be for the equal benefit, protection and security of the Holders of all Bonds issued pursuant to this Resolution. Except as provided in this Resolution, all Bonds, regardless of the time or times of their issuance, shall rank equally with respect to their lien on the Pledged Funds and their sources and security for payment therefrom without preference of any Bond over any other. . (D) In the event any Additional Bonds are issued for the purpose of refunding any Bonds then Outstanding, the conditions of this section 5.02 shall not apply, provided that the issuance of such Additional Bonds shall not result in an increase in the 45 . aggregate amount of principal of and interest on the outstanding Bonds becoming due in the current Fiscal Year and all subsequent Fiscal Years. The conditions of section 5.02 (A) hereof shall apply to Additional Bonds issued to refund Subordinated Indebtedness and to Additional Bonds issued for refunding purposes which cannot meet the conditions of this paragraph. (E) For purposes of determining the Maximum Annual Debt Service with respect to Variable Rate Bonds, if any, the interest rate on such Variable Rate Bonds shall be assumed to be the highest variable rate borne over the preceding 12 months by Variable Rate Bonds issued under this Resolution and containing the same interest rate index as the Variable Rate Bonds proposed to be issued or, if no such Variable Rate Bonds are at the time outstanding under this Resolution, by variable rate debt for which the interest rate is computed by reference to an index comparable to that to be utilized in determining the interest rate for the debt then proposed to be issued. SECTION 5.03. Bond Anticipation Notes. The Issuer may issue notes in anticipation of the issuance of Bonds which shall have such terms and details and be secured in such manner, not inconsis- tent with this Resolution, as shall be provided by Resolution of the Issuer. SECTION 5.04. Books and Records. The Issuer will keep books and records of the receipt of the Pledged Funds in accordance with generally accepted accounting principles, and any Holder or Holders of Bonds shall have the right at all reasonable times to inspect the records, accounts and data of the Issuer relating thereto. . SECTION 5.05. Annual Audit. The Issuer shall after the close of each Fiscal Year, cause the financial statements of the Issuer to be properly audited by a recognized independent certified public accountant or recognized independent firm of certified public accountants, and shall require such accountants to complete their report on the annual financial statements in accordance with applicable law. Such annual financial statements shall contain, but not be limited to, a balance sheet, a statement of revenues, expenditures and changes in fund balance, and any other statements as required by law or accounting convention, and a report by such accountants disclosing any material default on the part of the Issuer of any covenant or agreement herein which is disclosed by the audit of the financial statements. The annual financial state- ments shall be prepared in conformity with generally accepted accounting principles. A copy of the audited financial statements for each Fiscal Year shall be furnished to any Holder of a Bond who shall have furnished such Holder's address to the Clerk and requested in writing that the same be furnished to such Holder. The Issuer shall be permitted to make a reasonable charge for furnishing such audited financial statements. 46 . . SECTION 5.06. No Impairment. While any of the Bonds are Outstanding, the pledging of the Pledged Funds in the manner provided herein shall not be subject to repeal, modification or impairment by any subsequent ordinance, resolution or other proceedings of the city commission. SECTION 5.07. Rate Covenant. Beginning with a Fiscal Year in which the Bonds are issued, the Issuer will fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the products, services and facilities of the System which will always provide Revenues in each year sufficient to pay (a) the aggregate of the amount needed to pay all Cost of Operation and Maintenance as the same shall become due in such year, one hundred percentum (100%) of the Bond Service Requirement becoming due in such year on the outstanding Bonds, and one hundred (100%) of all other deposits to be made pursuant to this Resolution and (b) together with the Sewer System Development charges in an amount not greater than the Sewer System Development Charges Bond Service Component and the Water System Development Charges in an amount not greater than the Water system Development Charges Bond Service Component, the aggregate of the amount needed to pay the Cost of Operation and Maintenance as the same shall become due in such year, one hundred ten percentum (110%) of the Bond Service Requirement coming due in such year on the Outstanding Bonds, and one hundred percentum (100%) of all other deposits to be made pursuant to this Resolution. Such rates, fees, rentals or other charges shall not be reduced so as to render them insufficient to provide revenues for such purposes. For purposes of this Section, the interest rate on variable Rate Bonds shall be assumed to be the average variable rate borne over the preceding twelve months (or such shorter period of time as such Variable Bonds shall be outstanding) by Variable Rate Bonds issued under this Resolution. SECTION 5.08. Disposition of System. The Issuer shall not sell, lease, encumber or in any manner dispose of the System as a whole until all of the Bonds shall have been paid in full as to both principal and interest. The City may sell or dispose of, for fair market value, any properties or parts of the System which the Consulting Engineer shall certify in writing are not necessary for the continuing operation of the System, and that the sale or disposal of which will not adversely affect the Revenues to such an extent that the Issuer might fail to comply with the covenants of this Resolution. To the extent the amount to be received therefor is not in excess of one-half (1/2) of one per centum (1.0%) of the value of the gross plant investment in the System, the finding set forth above and required to be made by the Consulting Engineer may be made by an authorized representative of the Issuer. 47 . . The proceeds derived from any sale or disposal of any properties or parts of the System as provided for in the above paragraph, shall be used exclusively for the purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and for any unusual or extraordinary repairs, or for the construction or acquisition of additions, extensions and improvements to the System. However, if the Consulting Engineer certifies that it is neither necessary nor desirable to use all or any portion of the proceeds for such purposes, the Issuer may use such certified portion of the proceeds for the purchase or redemption of the Bonds. SECTION 5.09. Insurance. The Issuer shall provide protection for the System in accordance with Prudent utility Practice. Said protection may consist of insurance, self insurance and indemni ties. The Issuer will keep, or cause to be kept, the works, plants and facilities comprising the properties of the System insured, and will carry such other insurance against fire and other risks, accidents or casualties at least to the extent and of the kinds that insurance is usually carried by utilities operating like properties. Any insurance shall be in the form of policies or contracts for insurance with insurers of good standing, shall be payable to the Issuer and may provide for such deductibles, exclu- sions, limitations, restrictions, and restrictive endorsements customary in policies for similar coverage issued to enti ties operating properties similar to the properties of the System. Any self insurance shall be in the amounts, manner and of the type provided by entities operating properties similar to the properties of the System. In the event of any loss or damage to the System covered by insurance, the Issuer will, with respect to each such loss, promptly repair, reconstruct or replace the parts of the System affected by such loss or damage to the extent necessary to the proper conduct of the operation of the business of the System in accordance with Prudent utility Practices, shall cause the proceeds of such insurance to be applied for that purpose to the extent required therefor, and pending such application shall hold the proceeds of any insurance policy covering such damage or loss in trust to be applied for that purpose to the extent required therefor. Any excess insurance proceeds received by the Issuer shall be used to purchase or redeem Bonds. SECTION 5.10. No Free Services. So long as any Bonds are Outstanding, the Issuer shall not furnish or supply the facilities, services and commodities of the System either free of charge or for a nominal charge to any person, firm or corporation, public or private. The Issuer shall promptly enforce the payment of any and all accounts owing to the Issuer and delinquent, by discontinuing service or by filing suits, actions or proceedings, or by both discontinuance of service and filing suit. Notwithstanding the foregoing, nothing in the Resolution shall prohibit the Issuer from paying (on behalf of the Issuer or on behalf of any person, firm or 48 . corporation) for such facilities, services and commodities with legally available funds of the Issuer, other than Pledged Funds. SECTION 5.11. Failure to Pay. Upon failure of any user to pay for services rendered by the System within forty-five (45) days, the Issuer shall, to the full extent permitted by law, shut off the connection of such user and shall not furnish him or permit him to receive from the System further service until all obliga- tions owed by him to the Issuer on account of services shall have been paid in full. This covenant shall not, however, prevent the Issuer from causing the System connection to be shut off sooner, to the extent permitted by law. SECTION 5.12. Enforcement of Collections. In accordance with the provisions of section 5.10 hereof, the Issuer will diligently enforce and collect the rates, fees and other charges for the services and facilities of the System and will take all steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become delinquent to the full extent permitted or authorized by law and required by said section 5.10; and will maintain accurate records with respect thereof. All such fees, rates, charges and revenues shall, as collected, be held in trust to be applied as herein provided. SECTION 5.13. operatinq Budqet. The Issuer shall annually, prior to commencement of each of its Fiscal Years, prepare and adopt a detailed budget of the estimated expenditures for the operation and maintenance of the System during such next succeeding Fiscal Year. The Issuer shall mail copies of such annual budgets (including any amendments thereto) to any Holder or Holders of Bonds who shall file his address with the Issuer and request in writing that copies of all such budgets be furnished him and shall make available such budgets of the System at all reasonable times to any Holder or Holders of Bonds or to anyone acting for and on behalf of such Holder or Holders. Bondholders shall pay reasonable actual cost of printing and mailing of such copies. SECTION 5.14. Supervisorv Personnel. The Issuer in operating the System will employ or designate as manager one or more of its qualified employees who have demonstrated ability and experience in operating similar facilities, and will require all employees who may have possession of money derived from the operation of the System to be covered by a fidelity bond, written by a responsible indemnity company in amounts fully adequate to protect the Issuer from loss. . SECTION 5.15. PaYment of Taxes. Assessments and other Claims. The Issuer shall from time to time duly pay and discharge, or cause to be paid and discharged, all taxes, assessments and other govern- mental charges, or payments in lieu thereof, lawfully imposed upon the properties constituting the System or the Pledged Funds when the same shall become due, as well as all lawful claims for labor 49 and materials and supplies which, if not paid, might become a lien or charge upon such properties or any part thereof, or upon the Pledged Funds or which might in any way impair the security of the Bonds, except taxes, assessments, charges or claims which the Issuer shall in good faith contest by proper legal proceedings. . SECTION 5.16. No Competing System. To the full extent permitted by law, the Issuer will not grant, or cause, consent to, or allow the granting of any franchise, or allow any person, firm, corporation or body, or agency or instrumentality whatsoever, to furnish water or sewer services in the territorial area served by the Issuer as of the date of issuance of the Series 1993 Bonds which the Issuer determines will materially adversely affect the Net Revenues. SECTION 5.17. Federal Income Tax Covenants; Taxable Bonds. (A) The Issuer covenants with the Holders of the Series 1993 Bonds (other than Taxable Bonds), that it shall not use the proceeds of such Series 1993 Bonds in any manner which would cause the interest on such Series 1993 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 1993 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 1993 Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause the Series 1993 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 1993 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 1993 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 1993 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. . (D) The Issuer may, if it so elects, issue one or more Series of Taxable Bonds the interest on which is (or may be) includable in the gross income of the Holder thereof for federal income tax purposes, so long as each Bond of such Series states in the body thereof that interest payable thereon is (or may be) subject to federal income taxation and provided that the issuance thereof will not cause the interest on any other Bonds theretofore issued hereunder to be or become includable in the gross income of the Holder thereof for federal income tax purposes. The covenants set 50 . . forth in paragraphs (A), (B) and (C) above shall not apply to any Taxable Bonds. (E) In order to ensure compliance with the rebate provisions of section 148(f) of the Code with respect to any Series of Bonds for which the Issuer intends on the date of issuance thereof to be excluded from gross income for purposes of Federal income taxation, the Issuer hereby creates the "City of Ocoee Water and Sewer System Refunding and Improvement Revenue Bonds Rebate Fund" to be held by the Issuer. within such fund there shall be maintained for each Series of Bonds a subaccount. The Rebate Fund need not be maintained so long as the Issuer timely satisfies its obligation to pay any rebatable earnings to the United States Treasury; however, the Issuer may, as an administrative convenience, maintain and deposit funds in the Rebate Fund from time to time. Any moneys held in the Rebate Fund shall not be considered Pledged Funds and shall not be pledged in any manner for the benefit of the Holders of the Bonds. Moneys in the Rebate Fund (including earnings and deposits therein) shall be held for future payment to the united States Government as required by the Code and as set forth in instructions of Bond Counsel delivered to the Issuer upon the issuance of such Bonds. Notwithstanding any provision of this Resolution to the contrary, to the extent the Issuer is required or elects to make deposits to the Rebate Fund, such amounts may be taken from any fund or account created hereunder. SECTION 5.18. Issuance of Bonds Under Refunded Bond Resolu- tion. The Issuer hereby covenants and agrees with the Holders of the Bonds that it will not issue any bonds or other debt obliga- tions under the resolution authorizing the Refunded Bonds. 51 ARTICLE VI DEFAULTS AND REMEDIES . SECTION 6.01. Events of Default. The following events shall each constitute an "Event of Default": (A) Default shall be made in the payment of the principal of, Amortization Installment, redemption premium or interest on any Bond when due. (B) There shall occur the dissolution or liquidation of the Issuer, or the filing by the Issuer of a voluntary petition in bankruptcy, or the commission by the Issuer of any act of bank- ruptcy, or adjudication of the Issuer as a bankrupt, or assignment by the Issuer for the benefit of its creditors, or appointment of a receiver for the Issuer, or the entry by the Issuer into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Issuer in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction which may now be in effect or hereafter enacted. (C) The Issuer shall default in the due and punctual perfor- mance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Resolution on the part of the Issuer to be performed, and such default shall continue for a period of thirty (30) days after written notice of such default shall have been received from the Holders of not less than twenty-- five percent (25%) of the aggregate principal amount of Bonds Outstanding. Notwithstanding the foregoing, the Issuer shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the Issuer in good faith institutes curative action and diligently pursues such action until the default has been corrected. SECTION 6.02. Remedies. Any Holder of Bonds issued under the provisions of this Resolution or any trustee or receiver acting for such Bondholders may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdic- tion, protect and enforce any and all rights under the laws of the State of Florida, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution or by any applicable statutes to be performed by the Issuer or by any officer thereof. . The Holder or Holders of Bonds in an aggregate principal amount of not less than twenty-five percent (25%) of the Bonds then outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to this Resolution 52 . with authority to represent such Bondholders in any legal proceed- ings for the enforcement and protection of the rights of such Bond- holders and such certificate shall be executed by such Bondholders or their duly authorized attorneys or representatives, and shall be filed in the office of the Clerk. Notice of such appointment, together with evidence of the requisite signatures of the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Bonds outstanding and the trust instrument under which the trustee shall have agreed to serve shall be filed with the Issuer and the trustee and notice of appointment shall be given to all Holders of Bonds in the same manner as notices of redemption are given hereunder. After the appointment of the first trustee hereunder, no further trustees may be appointed; however, the Holders of a majority in aggregate principal amount of all the Bonds then Outstanding may remove the trustee initially appointed and appoint a successor and subsequent successors at any time. As long as any Series 1993 Bonds are Outstanding, the consent of MBIA must be obtained before the Bondholders, or any trustee appointed to represent the Bondholders, may pursue the remedies set forth in this section 6.02. MBIA shall have the same right to pursue any such remedies as the Bondholders. SECTION 6.03. Directions to Trustee as to Remedial proceed- inqs. The Holders of a majority in principal amount of the Bonds then Outstanding have the right, by an instrument or concurrent instruments in writing executed and delivered to the trustee, to direct the method and place of conducting all remedial proceedings to be taken by the trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provi- sions hereof, and that the trustee shall have the right to decline to follow any such direction which in the opinion of the trustee would be unjustly prejudicial to Holders of Bonds not parties to such direction. SECTION 6.04. Remedies Cumulative. No remedy herein con- ferred upon or reserved to the Bondholders is intended to be exclu- si ve of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. . SECTION 6.05 . Waiver of Default. No delay or omission of any Bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by section 6.02 of this Resolution to the Bondholders may be exercised from time to time, and as often as may be deemed expedient. SECTION 6.06. Application of Monevs After Default. If an Event of Default shall happen and shall not have been remedied, the 53 Issuer or a trustee or receiver appointed for the purpose shall apply all Pledged Funds as follows and in the following order: (A) To the payment of the reasonable and proper charges, expenses and liabilities of the trustee or receiver, Registrar and . Paying Agent hereunder; and (B) To the payment of the interest and principal or Redemption Price, if applicable, then due on the Bonds, as follows: (1) Unless the principal of all the Bonds shall have become due and payable, all such moneys shall be applied: FIRST: to the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or preference; SECOND: to the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due at maturity or upon mandatory redemption prior to maturity (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of section 8.01 of this Resolution), in the order of their due dates, with interest upon such Bonds from the respective dates upon which they became due, and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment first of such interest, ratably according to the amount of such interest due on such date, and then to the payment of such principal, ratably according to the amount of such principal due on such date, to the Persons entitled thereto without any discrimination or preference; and THIRD: to the payment of the Redemption Price of any Bonds called for optional redemption pursuant to the provi- sions of this Resolution. . (2) If the principal of all the Bonds shall have become due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, with interest thereon as aforesaid, without prefer- ence or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference. 54 . . (C) To the payment of Cost of Operation and Maintenance of the System. 55 ARTICLE VII SUPPLEMENTAL RESOLUTION . SECTION 7.01. Supplemental Resolution without Bondholders' Consent. The Issuer, from time to time and at any time, may adopt such Resolution or Supplemental Resolutions, without the consent of the Bondholders (which Resolution or Supplemental Resolution shall thereafter form a part hereof) for any of the following purposes: (A) To cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution or to clarify any matters or questions arising hereunder. (B) To grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders. (C) To add to the conditions, limitations and restrictions on the issuance of Bonds under the provisions of this Resolution other conditions, limitations and restrictions thereafter to be observed. (D) To add to the covenants and agreements of the Issuer in this Resolution other covenants and agreements thereafter to be observed by the Issuer or to surrender any right or power herein reserved to or conferred upon the Issuer. (E) To specify and determine the matters and things referred to in sections 2.01, 2.02 or 2.09 hereof, and also any other matters and things relative to such Bonds which are not contrary to or inconsistent with this Resolution as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination at any time prior to the first delivery of such Bonds. (F) To authorize Additional Projects or to change or modify the description of the Initial Project or any Additional Project. (G) To specify and determine matters necessary or desirable for the issuance of Variable Rate Bonds. (H) To authorize the issuance of Additional Bonds. For so long as the Series 1993 Bonds shall be Outstanding, notice of the adoption of any such amendment shall be given to MBIA. . SECTION 7.02. Supplemental Resolution wi th Bondholders' Consent. Subject to the terms and provisions contained in this section 7.02 and section 7.01 hereof, the Holder or Holders of not less than a majority in aggregate principal amount of the Bonds 56 J . . then outstanding shall have the right, from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption of such Supplemental Resolution or Resolutions hereto as shall be deemed necessary or desirable by the Issuer for the purpose of supplementing, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution; provided, how- ever, that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any specified Series or maturity remain Outstanding, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be outstanding for the purpose of any calculation of Outstanding Bonds under this section 7.02. No Supplemental Resolution may be approved or adopted which shall permit or require (A) an extension of the maturity of the principal of or the payment of the interest on any Bond issued hereunder, (B) reduction in the principal amount of any Bond or the Redemption Price or the rate of interest thereon, (C) the creation of a lien upon or a pledge of other than the lien and pledge created by this Resolution which adversely affects any Bondholders, (D) a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (E) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Resolution. Nothing herein contained, however, shall be construed as making necessary the approval by Bondholders of the adoption of any Supplemental Resolution as authorized in section 7.01 hereof. If at any time the Issuer shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursuant to this section 7.02, the Clerk shall cause the Registrar to give notice of the proposed action and to cause the form of consent to such adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they appear on the registration books and to MBIA (for so long as the Series 1993 Bonds shall be Outstanding). Such notice shall briefly set forth the nature of the proposed Supple- mental Resolution and shall state that copies thereof are on file at the offices of the Clerk and the Registrar for inspection by all Bondholders. The Issuer shall not, however, be subject to any liability to any Bondholder by reason of its failure to cause the notice required by this section 7.02 to be mailed and any such failure shall not affect the validity of such Supplemental Resolution when consented to and approved as provided in this section 7.02. Whenever the Issuer shall deliver to the Clerk an instrument or instruments in writing purporting to be executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then outstanding and by MBIA if the Series 1993 Bonds shall then be Outstanding, which instrument or instruments shall refer to the proposed Supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such 57 . . notice, thereupon, but not otherwise, the Issuer may adopt such Supplemental Resolution in substantially such form, without liabil- ity or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. If the Holders of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of the adoption of such Supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no Holder of any Bond shall have any right to object to the adoption of such Supplemental Resolution, or to obj ect to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from taking any action pursuant to the provisions thereof. Upon the adoption of any Supplemental Resolution pursuant to the provisions of this section 7.02, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolution of the Issuer and all Holders of Bonds then outstanding shall there- after be determined, exercised and enforced in all respects under the provisions of this Resolution as so modified and amended. A copy of any Supplemental Resolution adopted pursuant to this section 7.02 shall be sent to Standard & Poors Corporation. 58 . . ARTICLE VIII MISCELLANEOUS SECTION 8.01. Defeasance. If the Issuer shall payor cause to be paid or there shall otherwise be paid to the Holders of all Bonds the principal or Redemption Price, if applicable, and inter- est due or to become due thereon, at the times and in the manner stipulated therein and in this Resolution, then the pledge of the Pledged Funds, and all covenants, agreements and other obligations of the Issuer to the Bondholders, shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Paying Agents shall pay over or deliver to the Issuer all money or securities held by them pursuant to this Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. Any Bonds or interest installments appertaining thereto, whether at or prior to the maturity or redemption date of such Bonds, shall be deemed to have been paid within the meaning of this section 8.01 if (A) in case any such Bonds are to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such Bonds for redemption and notice of such redemption shall have been duly given or provision shall have been made for the giving of such notice, and (B) there shall have been deposited in irrevocable trust with a banking institution or trust company by or on behalf of the Issuer either moneys in an amount which shall be sufficient, or Federal Securities the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with such bank or trust company at the same time shall be sufficient, to pay the principal of or Redemption Price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as the case may be. Except as hereafter provided, neither the Federal Securities nor any moneys so deposited with such bank or trust company nor any moneys received by such bank or trust company on account of principal of or Redemption Price, if applicable, or interest on said Federal Securities shall be withdrawn or used for any purpose other than, and all such moneys shall be held in trust for and be applied to, the payment, when due, of the principal of or Redemption Price, if applicable, of the Bonds for the payment or redemption of which they were deposited and the interest accruing thereon to the date of maturity or redemption; provided, however, the Issuer may substitute new Refunded Securities and moneys for the deposited Federal Securities and moneys if the new Federal Securities and moneys are sufficient to pay the principal of or Redemption Price, if applicable, and interest on the refunded Bonds. For purposes of determining whether Variable Rate Bonds shall be deemed to have been paid prior to the maturity or redemption 59 . . date thereof, as the case may be, by the deposit of moneys, or specified Federal Securities and moneys, if any, in accordance with this section 8.01, the interest to come due on such Variable Rate Bonds on or prior to the maturity or redemption date thereof, as the case may be, shall be calculated at the Maximum Interest Rate; provided, however, that if on any date, as a result of such Variable Rate Bonds having borne interest at less than the Maximum Interest Rate for any period, the total amount of moneys and speci- fied Federal Securities on deposit for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited on such date in respect of such Variable Rate Bonds in order to satisfy this section 8.01, such excess shall be paid to the Issuer free and clear of any trust, lien, pledge or assignment securing the Bonds or otherwise existing under this Resolution. In the event the Bonds for which moneys are to be deposited for the payment thereof in accordance with this section 8.01 are not by their terms subject to redemption within the next succeeding sixty (60) days, the Issuer shall cause the Registrar to mail a notice to the Holders of such Bonds that the deposit required by this section 8.01 of moneys or Federal Securities has been made and said Bonds are deemed to be paid in accordance with the provisions of this section 8.01 and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of or Redemption Price, if applicable, and interest on said Bonds. Nothing herein shall be deemed to require the Issuer to call any of the outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the Issuer in determining whether to exercise any such option for early redemption. SECTION 8.02. Sale of Bonds. The Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the Act, the requirements of this Resolution and other applicable provisions of law and as shall be approved by subsequent resolution of the Issuer. SECTION 8.03. Pavrnents under the Policy. A. In the event that on the second Business Day, and again on the Business Day prior to the payment date on the Series 1993 Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Series 1993 Bonds due on the second following or following, as the case may be, Business Day, the paying Agent shall immediately notify MBIA or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. 60 B. If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify MBIA or its designee. . C. In addition, if the Paying Agent has notice that any Bondholder has been required to disgorge payments of principal or interest on the Series 1993 Bond to a trustee in Bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify MBIA or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. D. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the Series 1993 Bonds as follows: 1. If and to the extent there is a deficiency in amounts required to pay interest on the Series 1993 Bonds, the Paying Agent shall (a) execute and deliver to Citibank, N.A., or its successors under the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing MBIA as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to MBIA of the claims for interests to which such deficiency relates and which are paid by MBIA, (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and 2. If and to the extent of a deficiency in amounts required to pay principal of the Series 1993 Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing MBIA as agent for such holder in any legal proceeding relating to the payment of such principal and an assignment to MBIA of any of the Series 1993 Bond surrendered to the Insurance Paying Agent or so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be deli vered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders. . E. Payments wi th respect to claims for interest on and principal of Series 1993 Bonds disbursed by the Paying Agent from proceeds of the Policy shall not be considered to discharge the obligation of the Issuer with respect to such Series 1993 Bonds, 61 and MBIA shall become the owner of such unpaid Series 1993 Bond and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. . F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby agree for the benefit of MBIA that, 1. They recognize that to the extent MBIA makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Series 1993 Bonds, MBIA will be subrogated to the rights of such Holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in this Resolution and the Series 1993 Bonds; and 2. They will accordingly pay to MBIA the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Resolution and the Series 1993 Bond, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Series 1993 Bonds to Holders, and will otherwise treat MBIA as the owner of such rights to the amount of such principal and interest. G. In connection with the issuance of Additional Bonds, the Issuer shall deliver to MBIA a copy of the disclosure document, if any, circulated with respect to such Additional Bonds. SECTION 8.04. Notices to MBIA. For so long as the Series 1993 Bonds are outstanding, MBIA shall receive a notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto and will be furnished a copy of all notices with respect to this Resolution or the Bonds and on an annual basis, copies of the Issuer's audited financial statements and annual budget as follows: Municipal Bond Investors Assurance Corporation 113 King Street Armonk, New York 10504 Attention: Surveillance Department . SECTION 8.05. Severability 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 62 . . validity of the 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 Bonds issued hereunder. SECTION 8.06. Preliminary Official statement. The distribution of a Preliminary Official Statement relating to the Series 1993 Bonds is hereby approved in such form and substance as shall be approved by the City Manager of the Issuer. The City Manager is 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 8.07. No Personal Liabilitv. Neither the members of the City Commission of the Issuer nor any person executing the Bonds shall be personally liable therefor or be subj ect to any personal liability or accountability by reason of the issuance thereof. SECTION 8.08. Repeal of Inconsistent Resolutions. All Reso- lutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict. SECTION 8.09. Effective Date. This Resolution shall take effect immediately upon its adoption. 63 . . DULY ADOPTED this ~~ day of February, 1993. CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA (SEAL) :5' S:ur ~"4'.e, J~k Mayor FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, APPROVED AS TO FORM AND LEGALITY, this ~eu:>~D day of ~euAer--' 1993 FOLEY & LARDNER ;;:\<:~ city Attorney APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON F6.&f.l(,frLJ.,)- , 1993 UNDER AGENDA ITEM NO. III A 64 EXHIBIT "A" Initial Project . . 65 . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plant site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 $6,650,000 Total . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plant site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 $6,650,000 Total ~ . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plant site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 $6,650,000 Total . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plant site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 $6,650,000 Total . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plant site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 $6,650,000 Total . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plant site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 Total $6,650,000 . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plant site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 $6,650,000 Total 1--- . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plant site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 $6,650,000 Total . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plant site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 $6,650,000 Total . . Exhibit A Initial Project Wastewater Treatment Facility (3mgd) Well (3,000 gpm) Forest Oaks WTP Water Main Expansions Effluent Pond Modifications (plaut site) Well and Storage Tank - South WTP Force Main (south to west connector) Design of New Water Treatment Facility $4,500,000 350,000 500,000 300,000 500,000 250,000 250.000 $6,650,000 Total