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HomeMy WebLinkAbout2010-016 Water and Sewer System Refunding Note 2010 RESOLUTION NO. 2010-016 CITY OF OCOEE, FLORIDA WATER AND SEWER SYSTEM REFUNDING REVENUE NOTE, SERIES 2010 Adopted on November 16, 2010 TABLE OF CONTENTS PAGE ARTICLE I - GENERAL 2 SECTION 1.01. Authority for this Supplemental 2010 Resolution 2 SECTION 1.02. Definitions 2 SECTION 1.03. Resolution to Constitute Contract. 4 SECTION 1.04. Findings. 4 SECTION 1.05. Refunding of Refunded Bonds 5 SECTION 1.06. Negotiated Sale 5 ARTICLE II - AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF SERIES 2010 NOTE 6 SECTION 2.01. Authorization of Series 2010 Note. 6 SECTION 2.02. Application of Series 2010 Note Proceeds 6 SECTION 2.03. Funds and Accounts Secure Owners of the Series 2010 Note 7 SECTION 2.04. Execution of Series 2010 Note 7 SECTION 2.05. Registration and Exchange of Notes; Persons Treated as Owners 7 SECTION 2.06. Prepayment 7 SECTION 2.07. Form of Series 2010 Note 7 SECTION 2.08. Sale of Series 2010 Note 8 SECTION 2.09. Note Mutilated, Destroyed, Stolen or Lost 8 ARTICLE III - ESCROW AGENT AND TAX MATTERS 9 SECTION 3.01. Escrow Agent; Escrow Deposit Agreement. 9 SECTION 3.02 Federal Income Tax Covenants. 9 ARTICLE IV - MISCELLANEOUS 10 SECTION 4.01. Rate Covenant. 10 SECTION 4.02. Limitation of Rights. 10 SECTION 4.03. Impairment of Contract 10 SECTION 4.04. Amendment. 10 SECTION 4.05. Redemption of Refunded Bonds 10 SECTION 4.06. Severability of Invalid Provisions 11 SECTION 4.07. Events of Default, Remedies of Owner. 11 SECTION 4.08. Business Days. 11 SECTION 4.09. Applicable Provisions of Law. 11 SECTION 4.10. Rules of Interpretation. 12 SECTION 4.11. Captions 12 SECTION 4.12. City Commission Members of the City Exempt from Personal Liability 12 SECTION 4.13. Authorizations 12 SECTION 4.14. Bank Qualified 12 SECTION 4.15. Repealer. 13 SECTION 4.16. No Third Party Beneficiaries. 13 SECTION 4.01. Effective Date 14 i Exhibit A Form of Promissory Note Exhibit B Form of Escrow Deposit Agreement Exhibit C SunTrust Commitment Letter ii RESOLUTION NO. 2010 -016 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA, PROVIDING FOR THE CURRENT REFUNDING OF A PORTION OF THE CITY'S WATER AND SEWER SYSTEM IMPROVEMENT REVENUE BONDS, SERIES 1997; AUTHORIZING THE ISSUANCE BY THE C11'Y OF ITS WATER AND SEWER SYSTEM REFUNDING REVENUE NOTE, SERIES 2010 IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $2,200,000 TO FINANCE THE COST THEREOF; PLEDGING NET REVENUES OF THE SYSTEM TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH SERIES 2010 NOTE ON PARITY WITH THE CITY'S OUTSTANDING SERIES 2003 BONDS AND THE CITY'S OUTSTANDING SERIES 2008 NOTE; AUTHORIZING THE EXECUTION OF AN ESCROW DEPOSIT AGREEMENT; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE OWNERS OF THE SERIES 2010 NOTE; DESIGNATING THE SERIES 2010 NOTE FOR EXEMPTION FOR CERTAIN TAX - EXEMPT OBLIGATIONS CONTAINED IN SECTION 265(B) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; PROVIDING FOR SEVERABILITY OF INVALID PROVISIONS; DELEGATING THE AWARD OF THE SALE OF THE SERIES 2010 NOTE TO THE MAYOR AND THE CITY MANAGER; PROVIDING FOR THE REPEAL OF ANY RESOLUTIONS IN CONFLICT WITH THE PROVISIONS OF THIS SUPPLEMENTAL 2010 RESOLUTION; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. 1 BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA: ARTICLE I — GENERAL SECTION 1.01. Authority for this Supplemental 2010 Resolution. This Supplemental 2010 Resolution is adopted pursuant to the provisions of the Constitution of the State of Florida, the Charter of the City of Ocoee, Chapter 166, Part II, Florida Statutes, Resolution No. 93 -02 of the City of Ocoee, and other applicable provisions of law. SECTION 1.02. Definitions. When used in this Supplemental 2010 Resolution, capitalized terms not otherwise defined shall be as defined in Resolution No. 93 -02 of the City of Ocoee, and the following terms shall have the following meanings, unless the context clearly otherwise requires. "Business Day" means any day except any Saturday or Sunday or day on which the Principal Office of the Original Purchaser is closed. "City" shall mean the City of Ocoee, Florida. "Determination of Taxability" shall mean the circumstance that shall have occurred if interest paid or payable on the tax - exempt Series 2010 Note becomes includable for federal income tax purposes in the gross income of the tax - exempt Owner as a consequence of any act, omission or event whatsoever, and regardless of whether the same was within or beyond the control of the City. A Determination of Taxability will be deemed to have occurred upon (a) the receipt by the City or an Owner of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency which holds that any interest payable on the tax - exempt Series 2010 Note is includable in the gross income of the Owner for federal income tax purposes; or (b) the issuance of any public or private ruling of the Internal Revenue Service that any interest payable on the tax - exempt Series 2010 Note is includable in the gross income of an Owner for federal income tax purposes; or (c) receipt by the City or the Owner of the opinion of Bond Counsel to the effect that any interest on the tax - exempt Series 2010 Note has become includable in the gross income of the Owner for federal income tax purposes. For all purposes of this definition, a Determination of Taxability will be deemed to occur on the date as of which the interest on the tax - exempt Series 2010 Note is deemed includable in the gross income of the Owner. A Determination of Taxability shall not occur in the event such interest is taken into account in determining adjusted current earnings for the purpose of the alternative minimum tax imposed on corporations. "Escrow Agent" shall mean U.S. Bank National Association, a national banking association, selected as a party to the Escrow Deposit Agreement pursuant to Section 3.01 hereof, together with any successors and assigns. "Escrow Deposit Agreement" shall mean an agreement or agreements by and between the City and an Escrow Agent, the purpose of which is to provide for the payment of the 2 Refunded Bonds. Such agreement shall be in substantially the form attached hereto as Exhibit B and incorporated herein by reference. "Financial Advisor" shall mean First Southwest Company, as financial advisor to the City. "Original Instrument" shall mean Resolution No. 93 -02 adopted by the City Commission on February 2, 1993, as supplemented by Resolution No. 93 -03 adopted by the City Commission on February 16, 1993, Resolution No. 96 -32 adopted by the City Commission on December 3, 1996, Resolution No. 2003 -23 adopted by the City Commission on November 18, 2003, and Resolution No. 08 -015 adopted by the City Commission on November 18, 2008. "Maximum Corporate Tax Rate" shall mean (a) on the date of issuance of the Series 2010 Note, 35% and (b) thereafter, the maximum marginal rate of income tax imposed on corporations under Section 11 of the Code. "Refunded Bonds" shall mean the remaining Outstanding Series 1997 Bonds. "Original Purchaser" means SunTrust Bank, a Georgia corporation. "Owner" or "Owners" means the Person or Persons in whose name or names the Series 2010 Note shall be registered on the books of the City kept for that purpose in accordance with provisions of this Supplemental 2010 Resolution including, initially, the Original Purchaser. "Person" means natural persons, firms, trusts, estates, associations, corporations, partnerships and public bodies. "Parity Bonds" shall mean the Outstanding Series 2003 Bonds and the Outstanding Series 2008 Note, each issued under the Original Instrument. "Preference Reduction Rate" shall mean (a) on the date of issuance of the Series 2010 Note, twenty percent (20 %) and (b) thereafter, the percentage reduction to be applied to the amount allowable as a deduction under Chapter I of the Code with respect to any financial institution preference item (as such term is defined in Section 291(e) of the Code). "Prime Rate" means the interest rate (not necessarily the best or lowest rate) announced by SunTrust Bank, from time to time as its prime rate (which rate is only a benchmark, is purely discretionary, and is not necessarily the best or lowest rate charged borrowing customers or any subsidiary of SunTrust Banks, with any change in the Prime Rate to be effective on the date any such change in the Prime Rate is announced by SunTrust Bank. "Principal Office" means, with respect to the Original Purchaser, the office located at 200 South Orange Avenue, Orlando, Florida 32801, Attention: Institutional and Governmental Banking, or such other office as the Original Purchaser may designate to the City in writing. 3 "Series 1997 Bonds" shall mean the City's Water and Sewer System Improvement Revenue Bonds, Series 1997. "Series 2003 Bonds" shall mean the City's Water and Sewer System Refunding and Improvement Revenue Bonds, Series 2003. "Series 2008 Note" shall mean the City's Water and Sewer System Refunding Revenue Note, Series 2008. "Series 2010 Note" shall mean the City's Water and Sewer System Refunding Revenue Note, Series 2010, herein authorized to be issued on parity with the Parity Bonds. "State" means the State of Florida. "Supplemental 2010 Resolution" shall mean this resolution of the City supplementing the Original Instrument adopted and becoming effective in accordance with the terms of Section 7.01 of the Original Instrument. "Taxable Rate" shall mean the interest rate applicable to the Series 2010 Note in the event of a Determination of Taxability. SECTION 1.03. Resolution to Constitute Contract. In consideration of the purchase and acceptance of any or all of the Series 2010 Note by those who shall hold the same from time to time, the provisions of this Supplemental 2010 Resolution shall be a part of the contract of the City with the Owners of the Series 2010 Note and shall be deemed to be and shall constitute a contract between the City and the Owners from time to time of the Series 2010 Note. The pledge made in this Supplemental 2010 Resolution and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the Owners of any and all of said Series 2010 Note. SECTION 1.04. Findings. It is hereby ascertained, determined and declared that: (A) The City owns and operates a combined Water System and Sewer System. (B) No portion of the Pledged Funds are currently pledged or encumbered in any manner, except with respect to the payment of the Parity Bonds and the Refunded Bonds. (C) The City 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 City because it will allow the City to realise debt service savings. 4 (D) The estimated sum required for the refunding of the Refunded Bonds will be derived from a portion of the proceeds of the sale of the Series 2010 Note, together with certain other legally available funds of the City. (E) A portion of the proceeds of the Series 2010 Note shall be deposited with the Escrow Agent pursuant to the Escrow Deposit Agreement, in amounts which, together with earnings thereon, will be sufficient to make timely payments of the interest on and outstanding principal of the Refunded Bonds to their scheduled redemption date. Such funds shall be invested pursuant to the Escrow Deposit Agreement in such Permitted Investments as will be sufficient to pay such principal and interest. (F) The principal of and interest on the Series 2010 Note and all other payments provided for in this Supplemental 2010 Resolution will be paid solely from the Pledged Funds and shall be on parity with the Parity Bonds; and the ad valorem taxing power of the City will never be necessary or authorized to pay the principal of, premium, if any, and interest on the Series 2010 Note and the Series 2010 Note shall not constitute a lien upon any property of the City other than the Pledged Funds. (G) The City has received an offer from the Original Purchaser to purchase the Series 2010 Note. (H) The City desires to qualify the Series 2010 Note for the exception contained in Section 265(b) of the Code which deny financial institutions any deduction for interest expense allocable to tax - exempt obligations acquired after August 7, 1986, and to designate the Series 2010 Note for the purpose of qualifying for such exception. (I) The City adopted this Supplemental 2010 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 circulation in the City in accordance with the requirements of the City Charter of the City. SECTION 1.05. Refunding of Refunded Bonds. The City does hereby authorize the refunding of the Refunded Bonds in accordance herewith. Notwithstanding the provisions of this Section 1.05 and Section 5.02(D) of the Original Instrument, prior to the issuance of the Series 2010 Note to refund the Refunded Bonds, there shall have been obtained and filed with the City a statement of the Financial Advisor that the minimum average annual savings resulting from the refunding of the Refunded Bonds is not less that twenty thousand dollars ($20,000) per year. SECTION 1.06. Negotiated Sale. Due to the willingness of the Original Purchaser to purchase the Series 2010 Note at interest rates favorable to the City and the critical importance of timing of the sale of the Series 2010 Note, it is hereby determined that it is in the best interest of the public and the City to sell the Series 2010 Note at a negotiated sale (rather than through a 5 competitive bid) and such sale to the Original Purchaser is hereby authorized and approved upon meeting the terms and conditions contained herein and in the Commitment Letter, the form of which is attached hereto as Exhibit C and incorporated herein by reference (the "Commitment Letter ") as further determined herein. ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF SERIES 2010 NOTE SECTION 2.01. Authorization of the Series 2010 Note. Subject and pursuant to the provisions of this Supplemental 2010 Resolution, obligations of the City to be known as "City of Ocoee, Florida, Water and Sewer System Refunding Revenue Note, Series 2010" is hereby authorized to be issued under and secured by this Supplemental 2010 Resolution, in the aggregate principal amount not to exceed $2,200,000, for the purpose of providing funds to pay the costs of refunding the Refunded Bonds and paying the costs of issuing the Series 2010 Note. Because of the characteristics of the Series 2010 Note, prevailing market conditions, and additional savings to be realized from an expeditious sale of the Series 2010 Note, it is in the best interest of the City to accept the offer of the Original Purchaser to purchase the Series 2010 Note at a private negotiated sale. Prior to the issuance of the Series 2010 Note, the City shall receive from the Original Purchaser a disclosure letter containing the information required by Section 218.385, Florida Statutes. SECTION 2.02. Application of Series 2010 Note Proceeds. Except as otherwise provided by Supplemental Resolution of the City, the proceeds derived from the sale of the Series 2010 Note, including accrued interest and premium, if any, shall, simultaneously with the delivery of the Series 2010 Note to the Original Purchaser, be applied by the City 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 2010 Note. (B) A sufficient amount of the Series 2010 Note proceeds shall be applied to the payment of reasonable and necessary costs and expenses relating to the issuance and delivery of the Series 2010 Note. (C) The City hereby elects not to fund a Reserve Requirement for the Series 2010 Note as permitted by Section 4.05(A)(4) of the Original Instrument. (D) A sum as specified by the City shall, together with other legally available funds of the City, if any, be used to defease the Refunded Bonds by depositing such sums of money for investment in appropriate Permitted Investments pursuant to the Escrow Deposit Agreement so as to produce sufficient funds to make all the payments described in such Escrow Deposit Agreement. At the time of execution of such Escrow Deposit Agreement, the City shall furnish to the Escrow Agent appropriate documentation to demonstrate that the sums being 6 deposited and the investment to be made will be sufficient for such purposes. Simultaneously with the issuance of the Series 2010 Note, the City shall enter into an Escrow Deposit Agreement substantially in the form attached hereto as Exhibit B with the Escrow Agent. Such escrowed funds and earnings on Permitted Investments thereof shall be kept separate and apart from all other funds of the City and the moneys on deposit under the Escrow Deposit Agreement shall be withdrawn, used and applied by the Escrow Agent solely for the purpose set forth in the Escrow Deposit Agreement. SECTION 2.03. Funds and Accounts Secure Owners of the Series 2010 Note. The funds and accounts created pursuant to Section 4.04 of the Original Instrument shall be for the equal benefit and use of the Series 2010 Note as Outstanding Additional Bonds on parity with the Parity Bonds, provided, however, that each respective account in the Reserve Fund for the Parity Bonds solely secures the Parity Bonds. The deposits required in Section 4.05 of the Original Instrument shall be calculated commencing with the month in which the Series 2010 Note is delivered to provide for such deposits to reflect the issuance of the Series 2010 Note. SECTION 2.04. Execution of Series 2010 Note. The Series 2010 Note shall be signed by, or bear the facsimile signature of, the Mayor and shall be signed by, or bear the facsimile signature of, the Clerk and a facsimile or an original impression of the official seal of the City shall be imprinted on the Series 2010 Note. In case any officer whose signature or a facsimile of whose signature shall appear on any Series 2010 Note shall cease to be such officer before the delivery of such Series 2010 Note, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he has remained in office until such delivery. Any Series 2010 Note may bear the facsimile signature of or may be signed by such persons who, at the actual time of the execution of such Series 2010 Note, shall be the proper officers to sign such Series 2010 Note although at the date of such Series 2010 Note such persons may not have been such officers. SECTION 2.05. Registration and Exchange of Notes; Persons Treated as Owners. The Series 2010 Note is initially registered to the Original Purchaser. So long as the Series 2010 Note shall remain unpaid, the City will keep books for the registration and transfer of the Series 2010 Note. The Series 2010 Note shall be transferable only upon such registration books. The Person in whose name the Series 2010 Note shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of principal and interest on such Series 2010 Note shall be made only to or upon the written order of the Owner. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 2010 Note to the extent of the sum or sums so paid. SECTION 2.06. Prepayment. The Series 2010 Note shall be subject to prepayment in accordance with the provisions in the Series 2010 Note. SECTION 2.07. Form of Series 2010 Note. The Series 2010 Note shall be dated the date of its execution and delivery, which shall be a date agreed upon by the City and the Original 7 Purchaser, and shall have such other terms and provisions, including the interest rates not exceeding the maximum interest rates permitted by the Act, which rate shall be a tax - exempt rate, principal and interest payment dates, maturity dates, and redemption provisions as stated herein and /or in the form of the Series 2010 Note attached hereto as Exhibit A. The Series 2010 Note is to be in substantially the form set forth on Exhibit A, attached hereto, together with such changes as shall be approved by the Mayor, such approval to be conclusively evidenced by the execution thereof by the Mayor. SECTION 2.08. Sale of Series 2010 Note. Subject to the terms and conditions of this Section 2.08, the Series 2010 Note may be sold in a negotiated sale to the Original Purchaser upon the terms and conditions set forth herein and in the Commitment Letter, the form of which is attached hereto as Exhibit C and incorporated by reference. The form of the Commitment Letter is hereby approved by the City, and the City hereby authorizes the Mayor or Mayor Pro -Tem of the City to execute and deliver and the Clerk to attest to said Commitment Letter in the name of and on behalf of the City, the form and legality of which is to be approved by the City Attorney, all of the provisions of which, when executed and delivered by the City as authorized herein shall be deemed to be a part of this instrument as fully and to the same extent as if incorporated verbatim herein. The City hereby delegates to the Mayor and the City Manager of the City, with the advise of the Financial Advisor, the authority (a) to determine (i) the dated date, (ii) the maturity dates and amounts, (iii) the interest rates and payment dates, (iv) the Amortization Installments for the Term Bonds, if any, (v) the delivery date prior to December 31, 2010, and (vi) all other details of the Series 2010 Note not otherwise set forth herein; and (b) to take such further action as shall be required for carrying out the purposes of this Supplemental 2010 Resolution all with respect to the Series 2010 Note; and (c) to execute and deliver, on behalf of the City, the Commitment Letter as provided above; provided, however, that the Mayor and the City Manager shall not take any action pursuant to this Section 2.08 unless the Mayor and the City Manager shall have received from the Original Purchaser such information as the Mayor and the City Manager shall deem necessary, upon the advice of the City's Financial Advisor and the City's Bond Counsel, in order to demonstrate that (i) the par amount of the Series 2010 Note is not to exceed $2,200,000, (ii) the true interest cost rate of the Series 2010 Note is not more than 3.00 %, and (iii) the final maturity of the Series 2010 Note is not later than October 1, 2016. The savings criteria set forth in Section 1.05 hereof shall also be met. SECTION 2.09. Note Mutilated, Destroyed, Stolen or Lost. In case a Series 2010 Note shall become mutilated, or be destroyed, stolen or lost, the City shall issue and deliver a new Series 2010 Note of like tenor as the Series 2010 Note so mutilated, destroyed, stolen or lost, in exchange and in substitution for such mutilated Series 2010 Note, or in lieu of and in substitution for the Series 2010 Note destroyed, stolen or lost and upon the Owner furnishing the City proof of ownership thereof and indemnity reasonably satisfactory to the City and complying with such other reasonable regulations and conditions as the City may prescribe and 8 paying such expenses as the City may incur. The Series 2010 Note so surrendered shall be canceled. ARTICLE III ESCROW AGENT, TAX MATTERS AND ACCOUNTING MATTERS SECTION 3.01. Escrow Agent; Escrow Deposit Agreement. The City hereby authorizes and directs the Mayor and the City Clerk to execute the Escrow Deposit Agreement and to deliver the Escrow Deposit Agreement to U.S. Bank National Association, a national banking association, which is hereby appointed as Escrow Agent thereunder. All of the provisions of the Escrow Deposit Agreement when executed and delivered by the City as authorized herein and when duly authorized, executed and delivered by the Escrow Agent, shall be deemed to be a part of this Supplemental 2010 Resolution as fully and to the same extent as if incorporated verbatim herein, and the Escrow Deposit Agreement shall be in substantially the form of the Escrow Deposit Agreement attached hereto as Exhibit C with such changes, amendments, modification, omissions and additions, including the date of such Escrow Deposit Agreement, as may be approved by said Mayor and the City Clerk. Execution by the Mayor and the City Clerk of the Escrow Deposit Agreement shall be deemed to be conclusive evidence of approval of such changes. The Mayor, the City Clerk, the Finance Director, City Attorney, Bond Counsel, the City's financial advisor and the Escrow Agent are hereby authorized and directed to execute and file all documents necessary to purchase or subscribe to the Escrow Securities (as defined in the Escrow Deposit Agreement) on behalf of the City. The redemption notice for the Refunded Bonds is authorized to be submitted in accordance with the Original Instrument, and the securities required for deposit to the escrow secured by the Escrow Deposit Agreement are authorized to be subscribed for by the Finance Director, the Financial Advisor or the Escrow Agent. SECTION 3.02. Federal Income Tax Covenants. (A) The City covenants with the Owners of the Series 2010 Note, that it shall not use the proceeds of such Series 2010 Note in any manner which would cause the interest on such Series 2010 Note to be or become includable in the gross income of the Owner thereof for federal income tax purposes. (B) The City covenants with the Owners of the Series 2010 Note (other than Taxable Bonds) that neither the City nor any Person under its control or direction will make any use of the proceeds of the Series 2010 Note (or amounts deemed to be proceeds under the Code) in any manner which would cause the Series 2010 Note to be "arbitrage bonds" within the meaning of Section 148 of the Code and neither the City nor any other Person shall do any act or fail to do any act which would cause the interest on the Series 2010 Note to become includable in the gross income of the Owner thereof for federal income tax purposes. (C) The City hereby covenants with the Owners of the Series 2010 Note that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the 9 Series 2010 Note from the gross income of the Owner 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. SECTION 3.03. Annual Audit. Notwithstanding the provisions of Section 5.05 of the Original Instrument, the City hereby covenants with the Original Purchaser that it will provide such Original Purchaser a copy of the audited financial statements of the City (as more fully described in Section 5.05 of the Original Instrument) not more than two hundred seventy (270) days after the close of each Fiscal Year. SECTION 3.04. Operating Budget. Notwithstanding the provisions of Section 5.13 of the Original Instrument, the City hereby covenants with the Original Purchaser that it will provide such Original Purchaser a copy of the detailed budget of the estimated expenditures for the operation and maintenance of the System (as more fully described in Section 5.13 of the Original Instrument) (the "Operating Budget ") not more than thirty (30) days after the adoption of such Operating Budget. • ARTICLE IV MISCELLANEOUS SECTION 4.01. Rate Covenant. The City agrees to comply with the terms of the rate covenant as set forth in Section 5.07 of the Original Instrument. SECTION 4.02. Limitation of Rights.With the exception of any rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Supplemental 2010 Resolution or the Series 2010 Note is intended or shall be construed to give to any Person other than the City and the Owner any legal or equitable right, remedy or claim under or with respect to this Supplemental 2010 Resolution or any covenants, conditions and provisions herein contained; this Supplemental 2010 Resolution and all of the covenants, conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the City and the Owner. SECTION 4.03. Impairment of Contract. The City covenants with the Owner of the Series 2010 Note that it will not, without the written consent of the Owner of the Series 2010 Note, enact any ordinance or adopt any resolution which repeals, impairs or amends in any manner adverse to the Owner the rights granted to the Owner of the Series 2010 Note hereunder. SECTION 4.04. Amendment. This Supplemental 2010 Resolution shall not be modified or amended in any respect subsequent to the issuance of the Series 2010 Note except with the written consent of the Owner of the Series 2010 Note. SECTION 4.05. Redemption of Refunded Bonds. The Refunded Bonds shall be irrevocably called for redemption at 100% of the principal amount thereof. The Clerk is hereby 10 authorized and directed to provide written notice of such redemption to the paying agent for the Refunded Bonds being called for redemption and such paying agent shall provide written notice at least thirty (30) days prior to the redemption date to each of the registered owners of such Refunded Bonds at their respective addresses as they appear on the registration books of the registrar for the Refunded Bonds. SECTION 4.06. Severability of Invalid Provisions. If any one or more of the covenants, agreements or provisions of this Supplemental 2010 Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, or shall in any manner adversely affect the validity of the Series 2010 Note, 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 Supplemental 2010 Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Series 2010 Note issued hereunder. SECTION 4.07. Events of Default; Remedies of Owner.The following shall constitute Events of Default: (i) if the City fails to pay any payment of principal of or interest on the Series 2010 Note as the same becomes due and payable; (ii) if the City defaults in the performance or observance of any covenant or agreement contained in this Supplemental 2010 Resolution or the Series 2010 Note (other than set forth in (i) above) and fails to cure the same within thirty (30) days; or (iii) filing of a petition by or against the City relating to bankruptcy, reorganization, arrangement or readjustment of debt of the City or for any other relief relating to the City under the United States Bankruptcy Code, as amended, or any other insolvency act or law now or hereafter existing, or the involuntary appointment of a receiver or trustee for the City, and the continuance of any such event for ninety (90) days undismissed or undischarged. Upon the occurrence and during the continuation of any Event of Default, the Owner of the Series 2010 Note may, in addition to any other remedies set forth in this Supplemental 2010 Resolution or either Note, either at law or in equity, by suit, action, mandamus or other proceeding in any court of competent jurisdiction, protect and enforce any and all rights under the laws of the State of Florida, or granted or contained in this Supplemental 2010 Resolution, and may enforce and compel the performance of all duties required by this Supplemental 2010 Resolution, or by any applicable statutes to be performed by the City or by any officer thereof. SECTION 4.08. Business Days. In any case where the due date of interest on or principal of the Series 2010 Note is not a Business Day, then payment of such principal or interest need not be made on such date but may be made on the next succeeding Business Day, provided that credit for payments made shall not be given until the payment is actually received by the Owner. Section 4.09. Applicable Provisions of Law. This Supplemental 2010 Resolution shall be governed by and construed in accordance with the laws of the State. 11 Section 4.10. Rules of Interpretation.Unless expressly indicated otherwise, references to sections or articles are to be construed as references to sections or articles of this instrument as originally executed. Use of the words "herein," "hereby," "hereunder," "hereof," "hereinbefore," "hereinafter" and other equivalent words refer to this Supplemental 2010 Resolution and not solely to the particular portion in which any such word is used. Section 4.11. Captions. The captions and headings in this Supplemental 2010 Resolution are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Supplemental 2010 Resolution. Section 4.12. City Commission Members of the City Exempt from Personal Liability. No recourse under or upon any obligation, covenant or agreement of this Supplemental 2010 Resolution or the Series 2010 Note or for any claim based thereon or otherwise in respect thereof, shall be had against any City Commission Members, as such, of the City, past, present or future, either directly or through the City it being expressly understood (a) that no personal liability whatsoever shall attach to, or is or shall be incurred by, the City Commission Members of the City, as such, under or by reason of the obligations, covenants or agreements contained in this Supplemental 2010 Resolution or implied therefrom, and (b) that any and all such personal liability, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such City Commission Member of the City, as such, are waived and released as a condition of, and as a consideration for, the execution of this Supplemental 2010 Resolution and the issuance of the Series 2010 Note, on the part of the City. Section 4.13. Authorizations. The Mayor and any member of the City Commission, the City Manager, the City Attorney, the City Clerk and such other officials and employees of the City as may be designated by the City are each designated as agents of the City in connection with the issuance and delivery of the Series 2010 Note and are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, a tax return, a tax certificate, all documents, and contracts on behalf of the City that are necessary or desirable in connection with the execution and delivery of the Series 2010 Note, and which are specifically authorized or are not inconsistent with the terms and provisions of this Supplemental 2010 Resolution. Section 4.14. Bank Qualified. The City hereby designates the Note as "qualified tax - exempt obligation" within the meaning of Section 265(b)(3) of the Code. The City and any subordinate entities of the City and any issuer of "tax- exempt" debt that issues "on behalf of" the City do not reasonably expect during the calendar year 2010 to issue more than $30,000,000 of "tax- exempt" obligations including the tax - exempt Series 2010 Note, exclusive of any private activity bonds as defined in Section 141(a) of the Code (other than qualified 501(c)(3) bonds as defined in Section 145 of the Code). 12 Section 4.15. Repealer. All resolutions or parts thereof in conflict herewith are hereby repealed. Section 4.16. No Third Party Beneficiaries. Except such other persons as may be expressly described in this Supplemental 2010 Resolution or in the Series 2010 Note, nothing in this Supplemental 2010 Resolution or in the Series 2010 Note, expressed or implied, is intended or shall be construed to confer upon any person, other than the City and the Original Purchaser or subsequent holders, any right, remedy or claim, legal or equitable, under and by reason of this Supplemental 2010 Resolution, or any provision thereof, or of the Series 2010 Note, all provisions thereof being intended to be and being for the sole and exclusive benefit of the City, the Original Purchaser, and the persons who shall from time to time be the holders. [Remainder of this page intentionally left blank] 13 SECTION 4.17. Effective Date.This Supplemental 2010 Resolution shall take effect immediately upon its adoption. DULY ADOPTED this 16th day of November, 2010. CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA (SEAL) — _ /�.� , S. Scott Vandergrift ayor ATTEST: . eth Eik nberry, Clerk , FOR USE AND RELIANCE ONLY BY THE APPROVED BY THE OCOEE CITY CITY OF OCOEE, APPROVED AS TO FORM COMMISSION AT A MEETING HELD ON AND LEGALITY, THIS 16th DAY OF NOVEMBER 1010 UNDER AGENDA N MB ITEM NO. . r.)et y FOL 1 Y & LARDNER LLP C l f v, j: \wdox \docs\ clients \25136 \005 \ordres \00473457.doc 14 EXHIBIT A FORM OF SERIES 2010 NOTE A -1 PROMISSORY NOTE ANY HOLDER SHALL, PRIOR TO BECOMING A HOLDER, EXECUTE A PURCHASER'S CERTIFICATE CERTIFYING, AMONG OTHER THINGS, THAT SUCH HOLDER IS AN "ACCREDITED INVESTOR" AS SUCH TERM IS DEFINED IN THE SECURITIES ACT OF 1933, AS AMENDED, AND REGULATION D THEREUNDER. November , 2010 Maturity: October 1, 2016 $ CITY OF OCOEE, FLORIDA WATER AND SEWER SYSTEM REFUNDING REVENUE NOTE, SERIES 2010 The City of Ocoee, Florida (the "City "), a municipal corporation created and existing pursuant to the Constitution and the laws of the State of Florida, for value received, promises to pay from the sources hereinafter provided, to the order of SunTrust Bank or registered assigns (hereinafter, the "Owner "), the principal sum of $ together with interest on the principal balance outstanding hereunder from time to time at the rate per annum of % as set forth herein (as the same may be adjusted) based upon a year of 360 days consisting of twelve 30 -day months. This Series 2010 Note is issued pursuant to Article VIII, Section 2 of the Constitution of the State of Florida, Chapter 166, Florida Statutes, the Charter of the City and a Resolution duly adopted by the City on November 16, 2010, and the Original Instrument, as from time to time amended and supplemented (herein referred to as the "Supplemental 2010 Resolution "), and the Original Instrument, and is subject to all the terms and conditions of the Supplemental 2010 Resolution and the Original Instrument. All terms, conditions and provisions of the Supplemental 2010 Resolution including without limitation remedies in the Event of Default are by this reference thereto incorporated herein as a part of this Series 2010 Note. Payment of the Series 2010 Note is secured by the Pledged Revenues. Terms used herein in capitalized form and not otherwise defined herein shall have the meanings ascribed thereto in the Supplemental 2010 Resolution. If the tax laws or regulations are amended to decrease the Maximum Corporate Tax Rate, to cause the interest on this Series 2010 Note to become taxable or be subject to a minimum tax or an alternative minimum tax to the extent not otherwise taxable or subject on the date of issuance, or to otherwise decrease the yield on the Series 2010 Note to the Owner (directly or indirectly) then the interest rate on this Series 2010 Note shall be adjusted to cause the yield on this Series 2010 Note to equal what the yield on the Series 2010 Note would have been in the absence of such change or amendment in the tax laws or regulations. Any such interest rate 1 adjustment shall be calculated by the Owner and shall be conclusive and binding upon the City absent manifest error. The adjustments to the interest rate shall not apply to any Owner other than a bank. If the Series 2010 Note is transferred by the Owner to any entity other than a bank, the interest adjustment provisions set forth in this and the preceding paragraph shall be deemed deleted from this Series 2010 Note and the rights of the Owner and any non -bank transferee to any further payments on account of any interest adjustment theretofore completed shall terminate on the date of transfer. Notwithstanding the foregoing, the Original Purchaser shall have the right to any additional interest that it would have been entitled to receive for any period during which it held the Series 2010 Note if it should be determined that the Series 2010 Note was not Qualified Tax - Exempt Obligations from the date of issuance thereof. If a Determination of Taxability shall occur, the Series 2010 Note will bear interest from the earliest effective date on which such Determination of Taxability is deemed to have occurred at a floating interest rate per annum equal to the Taxable Rate. The City will also pay the holder of the Series 2010 Note or assigns any penalties and any interest owed by the holder of the Series 2010 Note due to the failure of the holder of the Series 2010 Note to include interest on the Series 2010 Note in its gross income for federal income tax purposes and any arrears in interest resulting from a Determination of Taxability, and any penalties in the form of interest or otherwise shall be paid by the City on the next succeeding interest payment date. Principal of and interest on this Series 2010 Note is payable in lawful money of the United States of America at such place as the Owner may designate to the City in writing. The principal of and interest on this Series 2010 Note shall be payable in the amounts set forth in Schedule A, attached hereto due each October 1, with an initial principal payment date of October 1, 2011. Interest shall be payable semi - annually, with interest payments due each April 1 and October 1, commencing on April 1, 2011. If any date for the payment of principal and interest hereon shall fall on a day which is not a Business Day (as defined in the Supplemental 2010 Resolution (hereinafter defined)) the payment due on such date shall be due on the next succeeding day which is a Business Day, but the City shall not receive credit for the payment until it is actually received by the Owner. All payments by the City pursuant to this Series 2010 Note shall apply first to accrued interest, then to other charges due the Owner, and the balance thereof shall apply to principal. This Series 2010 Note shall be subject to optional prepayment in whole or in part on any date. Prepayments of principal shall be applied to the scheduled payments of principal in the inverse order of their due dates. The City shall give notice to the Owner at least three business days in advance of any prepayment, which notice may be revocable by the City. The prepayment calculation below results in a prepayment penalty if in fact interest rates are lower 2 at the time of refunding that the original issue date of this Series 2010 Note. Any prepayment fee shall be calculated as follows: The fee shall be equal to the present value of the difference between (1) the amount that would have been realized by the Owner on the prepaid amount for the remaining term of this Series 2010 Note at % (the Federal Reserve H.15 Statistical Release rate for fixed -rate payers in interest rate swaps for a term corresponding to the term of this Series 2010 Note, interpolated to the nearest month, if necessary, that was in effect three Business Days prior to the issuance date of this Series 2010 Note) and (2) the amount that would be realized by the Owner by reinvesting such prepaid funds for the remaining term of this Series 2010 Note at the Federal Reserve H.15 Statistical Reserve rate for fixed -rate payers in interest rate swaps, interpolated to the nearest month, that was in effect three Business Day's prior to this Series 2010 Note repayment date; both (1) and (2) discounted at the current rate. Should the present value have no value or a negative value, the City may repay this Series 2010 Note with no additional fee. Should the Federal Reserve no longer release rates for fixed -rate payers in interest rate swaps, the Owner may substitute the Federal Reserve H.15 Statistical Release with another similar index. The Owner shall provide the City with a written statement explaining the calculation of the prepayment fee due, which statement shall, in absence of manifest error, be conclusive and binding. During such time as this Series 2010 Note is outstanding and notwithstanding any other provision of the Supplemental 2010 Resolution or the Original Instrument, the City agrees and covenants with the Owner not to issue any debt payable from the Pledged Funds unless the amount of Pledged Funds for the preceding twelve (12) months exceed 1.10x the maximum annual debt service coverage for all outstanding debt payable from the Pledged Funds and the proposed debt. Certification of the previous sentence shall be set forth in the certificate required by Section 5.02(A) of the Original Instrument. In case of an Event of Default, the Owner may declare the entire debt then remaining unpaid hereunder immediately due and payable; and in any such default and acceleration, the City shall also be obligated to pay as part of the indebtedness evidenced by this Series 2010 Note, all costs of collection and enforcement hereof, including such reasonable legal fees and expenses as may be incurred, including on appeal or incurred in any proceeding under bankruptcy laws as they now or hereafter exist. Upon the occurrence of and during the continuation of an Event of Default, the interest rate on this Series 2010 Note shall be increased to the lesser of 25% per annum or the maximum rate permitted by law. The City to the extent permitted by law hereby waives presentment, demand, protest and notice of dishonor. THIS SERIES 2010 NOTE DOES NOT CONSTITUTE A GENERAL INDEBTEDNESS OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER PROVISION OR LIMITATION, AND IT IS EXPRESSLY AGREED BY THE 3 HOLDER OF THIS SERIES 2010 NOTE THAT SUCH SERIES 2010 NOTEHOLDER 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 AND INTEREST ON THIS SERIES 2010 NOTE OR THE MAKING OF ANY OTHER PAYMENTS PROVIDED FOR IN THE SUPPLEMENTAL 2010 RESOLUTION. This Series 2010 Note may be exchanged or transferred by the Owner hereof but only upon the registration books maintained by the City and in the manner provided in the Supplemental 2010 Resolution. It is hereby certified, recited and declared that all acts, conditions and prerequisites required to exist, happen and be performed precedent to and in the execution, delivery and the issuance of this Series 2010 Note do exist, have happened and have been performed in due time, form and manner as required by law, and that the issuance of this Series 2010 Note is in full compliance with and does not exceed or violate any constitutional or statutory limitation. The City has designated this Series 2010 Note as a "qualified tax - exempt" obligation within the meaning of Section 265(b)(3) of the Code. THE CITY, AND THE OWNER, BY ACCEPTANCE OF THIS SERIES 2010 NOTE, AGREE TO WAIVE TRAIL BY JURY IN ANY CONTROVERSY OR CLAIM BETWEEN THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS. [Remainder of page intentionally left blank] 4 IN WITNESS WHEREOF, the City of Ocoee, Florida has caused this Series 2010 Note to be executed in its name by the manual signature of its Mayor and attested by the manual signature of its City Clerk, and its seal to be impressed hereon, all this _ day of November, 2010. CITY OF OCOEE, FLORIDA [SEAL] By: S. Scott Vandergrift, Mayor Attest: Beth Eikenberry, City Clerk j: \ wdox \ does \ clients \ 25136 \ 005 \ agrmnt \ 00479201. d oc 5 SCHEDULE A (October 1) Amount 6 EXHIBIT B FORM OF ESCROW DEPOSIT AGREEMENT B -1 ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT, dated as of November 1, 2010, by and between the CITY OF OCOEE, FLORIDA (the "Issuer "), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States of America, as Escrow Agent and its successors and assigns (the "Escrow Agent "); WITNESSETH: WHEREAS, the Issuer has previously authorized and issued its Water and Sewer System Improvement Revenue Bonds, Series 1997 (the "Series 1997 Bonds "); and WHEREAS, the Issuer has determined to provide for payment of the Total Debt Service of the October 1, 2016 maturity of the Series 1997 Bonds (the "Refunded Bonds ") by depositing with the Escrow Agent an amount which is at least equal to such Total Debt Service (as hereinafter defined); and WHEREAS, in order to obtain the funds needed for such purpose, the Issuer has authorized and is, concurrently with the delivery of this Agreement, issuing its Water and Sewer System Refunding Revenue Note Series 2010; and WHEREAS, the execution of this Escrow Deposit Agreement and full performance of the provisions hereof shall defease and discharge the Issuer from the aforestated obligations; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Issuer and the Escrow Agent agree as follows: SECTION 1. Definitions. As used herein, the following terms mean: (a) "Agreement" means this Escrow Deposit Agreement. (b) "Annual Debt Service" means the interest and principal on the Refunded Bonds coming due December 20, 2010 as shown on Schedule A attached hereto and made a part hereof. (c) "Eligible Securities" means direct, full faith and credit, non - callable obligations of the United States of America. (d) "Escrow Account" means the account hereby created and entitled Escrow Account established and held by the Escrow Agent pursuant to this Agreement, in which cash will be held for payment of the principal of and accrued interest on the Refunded Bonds as they become due and payable. (e) "Escrow Agent" means U.S. Bank National Association, a national banking association, and its successors and assigns. (f) "Escrow Requirement" means, as of any date of calculation, the sum of an amount in cash in the Escrow Account which will be sufficient to pay the Total Debt Service on the Refunded Bonds in accordance with Schedule A. (g) "Issuer" means the City of Ocoee, Florida, and its successors and assigns. (h) "Resolution" means collectively, Resolution No. 93 -02 adopted February 2, 1993, as amended and supplemented from time to time, particularly as amended and supplemented by Resolution No. 10- adopted by the governing body of the Issuer on November 16, 2010, authorizing issuance of the Series 2010 Note. (i) "Refunded Bonds" means the October 1, 2016 maturity of the Issuer's City of Ocoee, Florida Water and Sewer System Improvement Revenue Bonds, Series 1997 as shown on Schedule D. (j) "Series 2010 Note" means the $ City of Ocoee, Florida Water and Sewer System Refunding Revenue Note, Series 2010, issued under the Resolution (k) "Total Debt Service" means the sum of the principal and interest remaining unpaid with respect to the Refunded Bonds in accordance with Schedule A attached hereto. SECTION 2. Deposit of Funds. The Issuer hereby deposits $ with the Escrow Agent for deposit into the Escrow Account, in immediately available funds, which funds the Escrow Agent acknowledges receipt of, to be held in irrevocable escrow by the Escrow Agent separate and apart from other funds of the Escrow Agent and applied solely as provided in this Agreement. $ of such funds are being derived from proceeds of the Series 2010 Note. The Issuer represents that such funds are at least equal to the Escrow Requirement as of the date of such deposit. SECTION 3. Use and Investment of Funds. The Escrow Agent acknowledges receipt of the sum described in Section 2 and agrees: (a) to hold the funds purchased pursuant to this Agreement in irrevocable escrow during the term of this Agreement for the sole benefit of the holders of the Refunded Bonds; (b) to hold $ of such funds derived from the proceeds of the Series 2010 Note [which includes $ from funds transferred from the Refunded Bonds], and other legally available funds of the Issuer in cash as set forth on Schedule C attached hereto and to hold such cash in accordance with the terms of this Agreement; (c) there will be no investment of funds except as set forth in this Section 3 and Section 5 hereof. 2 SECTION 4. Payment of Series 2010 Note and Expenses. (a) Refunded Bonds. On the date and in the amount set forth on Schedule A, the Escrow Agent shall transfer to U.S. Bank National Association, Jacksonville, Florida, the Paying Agent for the Refunded Bonds (the 'Paying Agent "), in immediately available funds solely from amounts available in the Escrow Account, a sum sufficient to pay that portion of the Annual Debt Service for the Refunded Bonds coming due on such date, as shown on Schedule A. (b) Expenses. On the due date as shown on Schedule B, the Escrow Agent shall pay the portion of the expenses coming due on such date to the appropriate payee or payees designated on Schedule B or designated by separate certificate of the Issuer. (c) Surplus. After making the payments from the Escrow Account described in Subsection 4(a) and (b) above, the Escrow Agent shall retain in the Escrow Account any remaining cash in the Escrow Account in excess of the Escrow Requirement until the termination of this Agreement, and shall then pay any remaining funds to the Issuer for deposit to pay interest on the Series 2010 Note. (d) Priority of Payments. The holders of the Refunded Bonds shall have an express first priority security interest in the funds and Eligible Securities in the Escrow Account until such funds and Eligible Securities are used and applied as provided in this Agreement. SECTION 5. Reinvestment. (a) Except as provided in Section 3 and in this Section, the Escrow Agent shall have no power or duty to invest any funds held under this Agreement or to sell, transfer or otherwise dispose of or make substitutions of the Eligible Securities held hereunder. (b) At the written request of the Issuer, and upon compliance with the conditions hereinafter stated, the Escrow Agent shall sell, transfer or otherwise dispose of any of the Eligible Securities acquired hereunder and shall substitute other Eligible Securities and reinvest any excess receipts in Eligible Securities. Any costs involved will be borne by the Issuer. The Issuer will not request the Escrow Agent to exercise any of the powers described in the preceding sentence in any manner which will cause interest on the Series 2010 Note to be included in the gross income of the holders thereof for purposes of Federal income taxation. The transactions may be effected only if (i) an independent certified public accountant selected by the Issuer shall certify or opine in writing to the Issuer and the Escrow Agent that the cash and principal amount of Eligible Securities remaining on hand after the transactions are completed will be not less than the Escrow Requirement, and (ii) the Escrow Agent shall receive an opinion from a nationally recognized bond counsel acceptable to the Issuer to the effect that the transactions, in and by themselves will not cause interest on such Series 2010 Note to be included in the gross income of the holders thereof for purposes of Federal income taxation and such substitution is in compliance with this Agreement. SECTION 6. No Redemption or Acceleration of Maturity. Except as set forth in the Resolution and reflected on Schedule A hereto, the Issuer will not accelerate the maturity of, or exercise any option to redeem before maturity, any Refunded Bonds. 3 SECTION 7. Responsibilities of Escrow Agent. The Escrow Agent and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Account, the acceptance of the funds deposited therein, the purchase of the Eligible Securities, the retention of the Eligible Securities or the proceeds thereof or for any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Agreement or by reason of any non - negligent or non - willful act, omission or error of the Escrow Agent made in good faith in the conduct of its duties. The Escrow Agent shall, however, be responsible for its negligent or willful failure to comply with its duties required hereunder, and its negligent or willful acts, omissions or errors hereunder. The duties and obligations of the Escrow Agent may be determined by the express provisions of this Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the Issuer, at the Issuer's expense and in reliance upon the opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the Issuer. SECTION 8. Resignation of Escrow Agent. The Escrow Agent may resign and thereby become discharged from the duties and obligations hereby created, by notice in writing given to the Issuer, any rating agency then providing a rating on either the Refunded Bonds or the Series 2010 Note, and the Paying Agent for the Refunded Bonds not less than sixty (60) days before such resignation shall take effect. Such resignation shall not take effect until the appointment of a new Escrow Agent hereunder. SECTION 9. Removal of Escrow Agent. (a) The Escrow Agent may be removed at any time by an instrument or concurrent instruments in writing, executed by the holders of not less than fifty -one percentum (51 %) in aggregate principal amount of the Refunded Bonds then outstanding, such instruments to be filed with the Issuer, and notice in writing given by such holders to the original purchaser or purchasers of the Series 2010 Note and published by the Issuer once in a newspaper of general circulation in the territorial limits of the Issuer, and in a daily newspaper or financial journal of general circulation in the City of New York, New York, not less than sixty (60) days before such removal is to take effect as stated in said instrument or instruments. A photographic copy of any instrument filed with the Issuer under the provisions of this paragraph shall be delivered by the Issuer to the Escrow Agent. (b) The Escrow Agent may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provisions of this Agreement with respect to the duties and obligations of the Escrow Agent by any court of competent jurisdiction upon the application of the Issuer or the holders of not less than five 4 percentum (5 %) in aggregate principal amount of the Series 2010 Note then outstanding, or the holders of not less than five percentum (5 %) in aggregate principal amount of the Refunded Bonds then outstanding. (c) The Escrow Agent may not be removed until a successor Escrow Agent has been appointed in the manner set forth herein. SECTION 10. Successor Escrow Agent. (a) If at any time hereafter the Escrow Agent shall resign, be removed, be dissolved or otherwise become incapable of acting, or shall be taken over by any governmental official, agency, department or board, the position of Escrow Agent shall thereupon become vacant. If the position of Escrow Agent shall become vacant for any of the foregoing reasons or for any other reason, the Issuer shall appoint an Escrow Agent to fill such vacancy. The Issuer shall either (i) publish notice of any such appointment made by it once in each week for two (2) successive weeks in a newspaper of general circulation published in the territorial limits of the Issuer and in a daily newspaper or financial journal of general circulation in the City of New York, New York, or (ii) mail a notice of any such appointment made by it to the holders of the Refunded Bonds within thirty (30) days after such appointment. (b) At any time within one year after such vacancy shall have occurred, the holders of a majority in principal amount of the Series 2010 Note then outstanding or a majority in principal amount of the Refunded Bonds then outstanding, by an instrument or concurrent instruments in writing, executed by either group of such holders and filed with the governing body of the Issuer, may appoint a successor Escrow Agent, which shall supersede any Escrow Agent theretofore appointed by the Issuer. Photographic copies of each such instrument shall be delivered promptly by the Issuer, to the predecessor Escrow Agent and to the Escrow Agent so appointed by the bondholders. In the case of conflicting appointments made by the bondholders under this paragraph, the first effective appointment made during the one year period shall govern. (c) If no appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this Section, the holder of any Refunded Bonds then outstanding, or any retiring Escrow Agent may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Escrow Agent. (d) Any corporation or association into which the Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer the bond administration portion of its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, ipso facto, shall be and become successor Escrow Agent hereunder and vested with all the trust, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any 5 further act, deed or conveyance on the part of any parties hereto, anything herein to the contrary notwithstanding, provided such successor shall have reported total capital and surplus in excess of $150,000,000, provided that such successor Escrow Agent assume in writing all the trust, duties and responsibilities of the Escrow Agent hereunder. SECTION 11. Payment to Escrow Agent. The Escrow Agent hereby acknowledges that it has agreed to accept compensation under the Agreement in the sum of $ {450], payable at closing, for services to be performed by the Escrow Agent pursuant to this Agreement, plus out -of- pocket expenses (including attorneys fees) to be reimbursed at cost from legally available funds of the Issuer. The Escrow Agent shall have no lien or claim against funds in the Escrow Account for payment of obligations due it under this Section. SECTION 12. Term. This Agreement shall commence upon its execution and delivery and shall terminate when the Refunded Bonds have been paid and discharged in accordance with the proceedings authorizing the Refunded Bonds. SECTION 13. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the Issuer or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law such covenant or agreements herein contained shall be null and void and shall in no way affect the validity of the remaining provisions of this Agreement. SECTION 14. Amendments to this Agreement. This Agreement is made for the benefit of the Issuer and the holders from time to time of the Refunded Bonds and the Bonds and it shall not be repealed, revoked, altered or amended in whole or in part without the written consent of all affected holders, the Escrow Agent and the Issuer; provided, however, that the Issuer and the Escrow Agent may, without the consent of, or notice to, such holders, enter into such agreements supplemental to this Agreement as shall not adversely affect the rights of such holders and as shall not be inconsistent with the terms and provisions of this Agreement, for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; (b) to grant to, or confer upon, the Escrow Agent, for the benefit of the holders of the Series 2010 Note and the Refunded Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Agent; and (c) to subject to this Agreement additional funds, securities or properties. The Escrow Agent shall, at its option, be entitled to request at the Issuer's expense and rely exclusively upon an opinion of nationally recognized attorneys on the subject of municipal bonds acceptable to the Issuer with respect to compliance with this Section, including the extent, if any, to 6 which any change, modification, addition or elimination affects the rights of the holders of the Refunded Bonds or that any instrument executed hereunder complies with the conditions and provisions of this Section. SECTION 15. Indemnity. To the extent permitted by law, the Issuer hereby assumes liability for, and hereby agrees to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, agents and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against at any time, the Escrow Agent (whether or not also indemnified against the same by the Issuer or any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Agreement, the establishment of the Escrow Account established hereunder, the acceptance of the . funds and securities deposited therein, the purchase of the Eligible Securities, the retention of the Eligible Securities or the proceeds thereof and any payment, transfer or other application of funds or securities by the Escrow Agent in accordance with the provisions of this Agreement; provided, however, that the Issuer shall not be required to indemnify the Escrow Agent against its own negligence or willful misconduct. In no event shall the Issuer be liable to any person by reason of the transactions contemplated hereby other than to the Escrow Agent as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Agreement. The Escrow Agent shall not be liable for any deficiencies in the amounts necessary to pay the Escrow Requirement. Furthermore, the Escrow Agent shall not be liable for the accuracy of the calculation as to the sufficiency of moneys and the principal amount of Eligible Securities and the earnings thereon to pay the Escrow Requirement. SECTION 16. Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. SECTION 17. Governing Law. This Agreement shall be construed under the laws of the State of Florida. 7 • IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers and their corporate seals to be hereunto affixed and attested as of the date first above written. CITY OF OCOEE, FLORIDA (SEAL) S. Scott Vandergrift, Mayor ATTEST: Beth Eikenberry, Clerk U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent By: Title: Trust Officer ATTEST: Title: • [Signature page to Escrow Deposit Agreement] wdox `, docs \ clients \ 25136 \ 005 \ a grmnt \ 00479202. doc 8 SCHEDULE A TOTAL DEBT SERVICE FOR REFUNDED BONDS [Schedule Attached] SCHEDULE B EXPENSES TO BE PAID BY ESCROW AGENT Name of Payee Amount NONE SCHEDULE C Cash Deposited $ SCHEDULE D [Schedules attached] EXHIBIT C SUNTRUST COMMITMENT LETTER C -1 October 5, 2010 SUNTRUST Mrs. Wanda B. Horton Finance Director City of Ocoee 150 North Lakeshore Drive Ocoee, Florida 34761 Subject: Commitment Letter Dear Wanda: SunTrust Bank is pleased to present our commitment to advance refund a portion of the existing City of Ocoee, Florida, Water and Sewer System Improvement Revenue Bonds, Series 1997 in the aggregate amount of $2,100,000. SunTrust appreciates the opportunity to respond to the City's financing request and has provided a comprehensive financing structure that we believe offers you competitive terms based on current market conditions. Although the following provisions, terms and conditions are intended to be all- inclusive, they do not necessarily contain all of the anticipated terms that will be applicable to the credit. All such terms will be set forth in the final, definitive loan documents, and all such terms must be acceptable to the Bank and its counsel. This Commitment is contingent upon the accuracy of all facts, statements and fmancial information submitted to the Bank by the Borrower and is conditioned upon the terms outlined below. Borrower: City of Ocoee, Florida (the "City") Bank: SunTrust Bank Amount: Up to $2,100,000 Maturity: Final maturity — October 1, 2016 Terms: Interest payable semi - annually on April 1 and October 1, beginning April 1, 2011. The initial principal payment shall be October 1, 2011. Thereafter, principal is payable annually on each October 1 until final maturity. The principal shall be due according to the schedule below: 10 /1 /11 $320,000 10/1/12 $334,000 10/1/13 $340,000 10/1/14 $350,000 10/1/15 $359,000 10/1/16 $368,000 Security: Payable solely from and secured by a prior lien upon and pledge of the Net Revenues of the Water and Sewer System (to be further defined) on parity with the lien and pledge granted to the holders of the City's Water and Sewer System Improvement Revenue Bonds, Series 2003. Purpose: The proceeds shall be used to advance refund a portion of the Series 1997, City of Ocoee, Water and Sewer System Improvement Revenue Bonds, and pay certain costs of issuance. Interest Rate: Bank Qualified Tax - Exempt Rate Options: Option 1: Fixed Rate w/o any prepayment restrictions • The bank qualified, tax - exempt, fixed interest rate shall be based on the 5 -year U.S. Dollar Swap Curve, as published on http://www.federalreserve.gov/Releases/h15/update/ . The interest rate shall be calculated on a 30/360 day basis. As of October 5, 2010, the interest rate would equal 2.18 %. The actual rate shall be set three (3) days prior to closing using the following formula: 67% x (5 -year U.S. Dollar Swap Rate + 1.84 %) Option 2: Fixed Rate with standard "make- whole" provision The bank qualified, tax - exempt, fixed interest rate shall be based on the 5 -year U.S. Dollar Swap Curve, as published on www .federalreserve.gov /releases/h15 /update /. As of October 5, 2010, the interest rate would equal 2.11% (based on a 30/360 day count). The actual rate shall be set at the close of business 3 days prior to the date of closing using the following formula: 67% x (5 -year U.S. Dollar Swap Rate + 1.74 %) ** *Please note: SunTrust will allow unscheduled principal prepayments of up to 15% of the prior year's ending loan balance without charging a prepayment penalty. Prepayment Penalty: If Option 2 is selected the following will apply: The prepayment calculation below results in a prepayment penalty if in fact interest rates are lower at the time of refunding than the original issue date of the Bank Loan. Prepayment of the Note: Any Prepayment Fee shall be calculated as follows: The fee shall be equal to the present value of the difference between (1) the amount that would have been realized by SunTrust on the prepaid amount for the remaining term of the loan at _% (the Federal Reserve H.15 Statistical Release rate for fixed- rate payers in interest rate swaps for a term corresponding to the term of the Note, interpolated to the nearest month, if necessary, that was in effect three Business Days prior to the origination date of the Note) and (2) the amount that would be realized by SunTrust by reinvesting such prepaid funds for the remaining term of the loan at the Federal Reserve H.15 Statistical Release rate for fixed -rate payers in interest rate swaps, interpolated to the nearest month, that was in effect three Business Day's prior to the loan repayment date; both (1) and (2) discounted at the current rate. Should the present value have no value or a negative value, the Borrower may repay with no additional fee. Should the Federal Reserve no longer release rates for fixed -rate payers in interest rate swaps, SunTrust may substitute the Federal Reserve H.15 Statistical Release with another similar index. SunTrust shall provide the Borrower with a written statement explaining the calculation of the premium due, which statement shall, in absence of manifest error, be conclusive and binding. Legal Fees: Borrower shall be responsible for Bond Counsel Fees. Bank legal fees shall not exceed $3,500 for the Bank's legal counsel to review documents. The Bank shall be using Hank Morgan from Gray Robinson, P.A. Conditions: (1) All matters relating to this loan, including all instruments and documents required, are subject to the Bank's policies and procedures in effect, applicable governmental regulations and /or statutes, and approval by the Bank and Bank's Counsel. (2) A written opinion from Borrower's attorney, in form and substance acceptable to Bank and Bank's Counsel, that all documents are valid, binding and enforceable in accordance with their terms, that the execution and delivery of said documents have been duly authorized. The opinion should also address such other matters as the Bank and Bank's Counsel deem appropriate. (3) Borrower shall submit annual audited statements within 210 days of fiscal year end, together with an annual budget within 30 days of adoption, together with any other information the Bank may reasonably request. (4) Borrower shall maintain compliance with all federal, state and local regulations regarding the purpose of the proposed loan. (5) The Borrower and the Bank shall agree on the content of final documentation, to include events of default, covenants, resolutions from the Borrower and all other legal documentation relating to the facility. (6) The tax - exempt interest rates quoted herein take into consideration a corporate tax rate of 35 %. In the event of a change in the maximum corporate tax rate, the Bank shall have the right to adjust the interest rate in order to maintain the same after tax yield. (7) The Bank shall have the right to adjust the tax - exempt interest rate in order to maintain the same after tax yield if any amendments to existing law are enacted NOTICE OF REDEMPTION CITY OF OCOEE, FLORIDA WATER AND SEWER SYSTEM IMPROVEMENT REVENUE BONDS, SERIES 1997 NOTICE IS HEREBY GIVEN that the remaining portion of the City of Ocoee, Florida (the "City ") Water and Sewer System Improvement Revenue Bonds, Series 1997, dated January 1, 1997 have been irrevocably called for redemption, without premium, on December 20, 2010, at the principal amount thereof plus accrued interest. The CUSIP number of the Bonds so called for redemption is set forth below: Maturity Date Principal Amount Interest Rate CUSIP Number October 1, 2016 $2,025,000 5.375% 67556H Payment of the principal amount of said Bonds, and accrued interest, will be made on or after said redemption date of December 20, 2010, through the designated corporate trust office of U.S. Bank National Association (as successor to First Union National Bank of Florida), 225 Water Street, 3 Floor, Jacksonville, Florida, as Paying Agent for said Bonds. Interest on said Bonds accruing to or prior to said redemption date, if any, will be paid in the usual manner. Interest, if any, on said Bonds will cease to accrue from and after the redemption date. CUSIP numbers are assigned by Standard & Poor's Corporation and are included solely for the convenience of owners of the Bonds. Neither the Issuer nor the Trustee shall have any responsibility with respect to the selection or use of any CUSIP number, nor is any representation made as to the correctness of any CUSIP number, either as printed on any Bond or in this Notice of Redemption. DATED this day of November, 2010. U.S. BANK NATIONAL ASSOCIATION, as Paying Agent j: \ wdox \ docs \ clients \ 25136 \ 005 \ closing \ 00454216.doc