2010-016 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
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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.
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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
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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.
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"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.
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(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
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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
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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
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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
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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
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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
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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.
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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
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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.
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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
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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
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