2012-016 Water and Sewer System Refunding Revenue Note, Series 2012 RESOLUTION NO. 2012 -016
CITY OF OCOEE, FLORIDA
WATER AND SEWER SYSTEM REFUNDING REVENUE NOTE,
SERIES 2012
Adopted on November 6, 2012
TABLE OF CONTENTS
PAGE
ARTICLE I — GENERAL 2
SECTION 1.01. Authority for this Supplemental Resolution 2
SECTION 1.02. Definitions
•
2
SECTION 1.03. Resolution to Constitute Contract. 5
SECTION 1.04. Findings. 5
SECTION 1.05. Refunding of Refunded Note 6
SECTION 1.06. Negotiated Sale 6
ARTICLE II — AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF
SERIES 2012 NOTE 6
SECTION 2.01. Authorization of the Series 2012 Note. 6
SECTION 2.02. Description of the Series 2012 Note 6
SECTION 2.03. Application of Series 2012 Note Proceeds 8
SECTION 2.04. Funds and Accounts Secure Owners of the Series 2012 Note 8
SECTION 2.05. Execution of the Series 2012 Note 8
SECTION 2.06. Registration and Exchange of Notes; Persons Treated as Owners 9
SECTION 2.07. Prepayment 9
SECTION 2.08. Form of Series 2012 Note 9
SECTION 2.09. Note Mutilated, Destroyed, Stolen or Lost 9
ARTICLE III — TAX MATTERS AND ACCOUNTING MATTERS 10
SECTION 3.01. Federal Income Tax Covenants 10
SECTION 3.02. Annual Audit 10
SECTION 3.03. Operating Budget 10
ARTICLE IV - MISCELLANEOUS 10
SECTION 4.01. Rate Covenant 10
SECTION 4.02. Limitation of Rights 11
SECTION 4.03. Impairment of Contract 11
SECTION 4.04. Amendment. 11
SECTION 4.05. Event of Default Under This Supplemental Resolution. 11
SECTION 4.06. Severability of Invalid Provisions 11
SECTION 4.07. Remedies. 11
SECTION 4.08. Business Days. 12
SECTION 4.09. Applicable Provisions of Law. 12
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 13
SECTION 4.15. Repealer. 13
SECTION 4.16. No Third Party Beneficiaries. 13
SECTION 4.17. Effective Date 14
Exhibit A Form of Series 2012 Note
Exhibit B Form of Lender's Certificate
Exhibit C SunTrust Proposal
ii
RESOLUTION NO. 2012 -016
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
OCOEE, FLORIDA, PROVIDING FOR THE CURRENT
REFUNDING OF THE CITY'S WATER AND SEWER SYSTEM
REFUNDING REVENUE NOTE, SERIES 2008; AUTHORIZING
THE ISSUANCE BY THE CITY OF ITS WATER AND SEWER
SYSTEM REFUNDING REVENUE NOTE, SERIES 2012 IN THE
AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED
$5,400,000 TO FINANCE THE COST THEREOF AND TO PAY
THE COSTS OF ISSUANCE THE SERIES 2012 NOTE; PLEDGING
NET REVENUES OF THE SYSTEM TO SECURE PAYMENT OF
THE PRINCIPAL OF AND INTEREST ON SUCH SERIES 2012
NOTE ON PARITY WITH THE CITY'S OUTSTANDING SERIES
2003 BONDS AND SERIES 2010 NOTE; MAKING CERTAIN
COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE
OWNERS OF THE SERIES 2012 NOTE; DESIGNATING A
PORTION OF THE SERIES 2012 NOTE AS A "QUALIFIED TAX -
EXEMPT OBLIGATION" WITHIN THE MEANING OF SECTION
265(B)(3) OF THE CODE; PROVIDING FOR SEVERABILITY OF
INVALID PROVISIONS; AUTHORIZING THE NEGOTIATED
SALE OF THE SERIES 2012 NOTE TO SUNTRUST BANK;
PROVIDING FOR THE REPEAL OF ANY RESOLUTIONS IN
CONFLICT WITH THE PROVISIONS OF THIS SUPPLEMENTAL
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 Resolution. This Supplemental
Resolution is adopted pursuant to the Act.
SECTION 1.02. Definitions. When used in this Supplemental Resolution, capitalized
terms not otherwise defined shall be as defined in the Original Resolution (as defined below),
and the following terms shall have the following meanings, unless the context clearly otherwise
requires.
"Act" shall mean, collectively, the Constitution of the State of Florida, the Charter of the
City, Chapter 166, Part II, Florida Statutes, as amended, the Original Resolution and other
applicable provisions of law.
"Adjusted BQ Rate" shall mean, upon a Loss of BQ Status, the interest rate per annum
that shall provide the Owner with the same after tax yield that the Owner would have
otherwise received had the Loss of BQ Status not occurred, taking into account the increased
taxable income of the Owner as a result of such Loss of BQ Status. The Owner shall provide the
City with a written statement explaining the calculation of the Adjusted BQ Rate, which
statement shall, in the absence of manifest error, be conclusive and binding on the City. The
Adjusted BQ Rate shall be subject to adjustment as provided in Section 2.02(B) hereof.
"Adjusted Rate" shall mean a per annum rate equal to (a) the Interest Rate, multiplied,
prior to the occurrence of a Determination of Taxability, by (b) the Margin Rate Factor.
"Business Day" means any day except any Saturday or Sunday or day on which the
Principal Office of the Lender is closed.
"City" shall mean the City of Ocoee, Florida.
"City Attorney" shall mean the City Attorney of the City.
"City Commission" shall mean the governing body of the City.
"City Manager" shall mean the City Manager or assistant, deputy, interim or acting City
Manager of the City.
"Default Rate" shall mean the sum of the Prime Rate plus 2% per annum.
"Determination of Taxability" shall mean a final decree or judgment of any federal court
or a final action of the Internal Revenue Service determining that interest paid or payable on the
Series 2012 Note is or was includable in the gross income of the Owner of the Series 2012 Note
for federal income tax purposes; provided, that no such decree, judgment, or action will be
2
considered final for this purpose, however, unless the City has been given written notice and, if
it is so desired and is legally allowed, has been afforded the opportunity to contest the same,
either directly or in the name of any Owner of the Series 2012 Note, and until the conclusion of
any appellate review, if sought.
"Finance Director" means the Finance Director of the City or in her absence or inability
to act, such other person as may be duly authorized to act on her behalf.
"Financial Advisor" shall mean First Southwest Company, as financial advisor to the
City.
"Interest Rate" shall be as defined in Section 2.02(A) hereof, and shall be subject to
adjustment as provided in Section 2.02(B) hereof.
"Lender" means SunTrust Bank, a Georgia corporation.
"Loss of BQ Status" shall mean a determination by the Owner that the Series 2012 Note
is not a "qualified tax - exempt obligation" within the meaning of Section 265(b)(3) of the Code
(or any successor provision).
"Margin Rate Factor" shall mean the fraction, the numerator of which is equal to one (1)
minus the Maximum Federal Corporate Tax Rate on the date of calculation, and the
denominator of which is 0.65. The Margin Rate Factor shall be 0.65/0.65 or 1.0 so long as the
Maximum Federal Corporate Tax Rate is 35 %, and thereafter shall increase from time to time
effective as of the effective date of any decrease in the Maximum Federal Corporate Tax Rate.
"Maturity Date" means October 1, 2026.
"Maximum Federal Corporate Tax Rate" means the maximum rate of income taxation
imposed on corporations pursuant to Section 11(b) of the Code, determined without regard to
tax rate or tax benefit make -up provisions such as the last two sentences of Section 11 (b) (1) of
the Code, as in effect from time to time (or, if as a result of a change in the Code the rate of
income taxation imposed on corporations shall not be applicable to the Owner, the maximum
statutory rate of federal income taxation which could apply to the Owner). The Maximum
Federal Corporate Tax Rate on the date of issuance of the Series 2012 Note is 35 %.
"Original Resolution" shall mean Resolution No. 93 -02, adopted by the City
Commission of the City on February 2, 1993, as amended and supplemented from time to time.
"Owner" or "Owners" means the Person or Persons in whose name or names the Series
2012 Note shall be registered on the books of the City kept for that purpose in accordance with
provisions of this Supplemental Resolution including, initially, the Lender.
"Parity Bonds" shall mean the Outstanding Series 2003 Bonds and the Outstanding
Series 2010 Note, each issued under the Original Resolution.
3
"Prime Rate" shall mean the per annum rate which the SunTrust Bank announces from
time to time to be its prime rate, as in effect from time to time. SunTrust Bank's prime rate is a
reference or benchmark rate, is purely discretionary and does not necessarily represent the
lowest or best rate charged to borrowing customers. SunTrust Bank may make commercial
loans or other loans at rates of interest at, above or below SunTrust Bank's prime rate. Each
change in SunTrust Bank's prime rate shall be effective from and including the date such
change is announced as being effective.
"Principal Office" means, with respect to the Lender, the office located at 200 South
Orange Avenue, SOAB 6t" Floor, Orlando, Florida 32801, Attention: Not for Profit and
Governmental Banking, or such other office as the Lender may designate to the City in writing.
"Proposal" means the proposal to purchase the Series 2012 Note submitted to the City
by the Lender and attached hereto as Exhibit C.
"Refunded Note" shall mean the City's Outstanding Water and Sewer System
Refunding Revenue Note, Series 2008.
"Series 2003 Bonds" shall mean the City's Water and Sewer System Refunding and
Improvement Revenue Bonds, Series 2003.
"Series 2010 Note" shall mean the City's Water and Sewer System Refunding Revenue
Note, Series 2010.
"Series 2012 Note" shall mean the City's Water and Sewer System Refunding Revenue
Note, Series 2012, herein authorized to be issued on parity with the Parity Bonds.
"State" means the State of Florida.
"Supplemental Resolution" shall mean this resolution of the City, supplementing the
Original Resolution and adopted and becoming effective in accordance with the terms of
Section 7.01 of the Original Resolution.
"Taxable Period" shall mean the period of time between (a) the date that interest on the
Series 2012 Note is deemed to be includable in the gross income of the Owner thereof for federal
income tax purposes as a result of a Determination of Taxability, and (b) the date of the
Determination of Taxability.
"Taxable Rate" shall mean, upon a Determination of Taxability, the interest rate per
annum that shall provide the Owner with the same after tax yield that the Owner would have
otherwise received had the Determination of Taxability not occurred, taking into account the
increased taxable income of the Owner as a result of such Determination of Taxability. The
Owner shall provide sufficient evidence supporting such rate calculation to the City, which
statement shall, in the absence of manifest error, be conclusive and binding on the City.
4
SECTION 1.03. Resolution to Constitute Contract. In consideration of the purchase
and acceptance of any or all of the Series 2012 Note by those who shall hold the same from time
to time, the provisions of the Original Resolution, as supplemented by this Supplemental
Resolution, shall be a part of the contract of the City with the Owners of the Series 2012 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 2012 Note. The pledge made in the Original Resolution, as
supplemented by this Supplemental 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 2012 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 Note.
(C) The City deems it necessary, beneficial and in its best interest to provide for the
refunding of the Refunded Note. Such refunding will be advantageous to the City and serve a
paramount public purpose because it will allow the City to realize debt service savings.
(D) The estimated sum required for the refunding of the Refunded Note will be derived
from the proceeds of the sale of the Series 2012 Note, together with other legally available funds
of the City.
(E) The principal of and interest on the Series 2012 Note and all other payments
provided for in this Supplemental 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
2012 Note and the Series 2012 Note shall not constitute a lien upon any property of the City
other than the Pledged Funds.
(F) The City has received an offer from the Lender to purchase the Series 2012 Note.
(G) The City desires to designate the portion of the Series 2012 Note that exceeds the
outstanding principal amount of the Refunded Note as a "qualified tax - exempt obligation"
within the meaning of Section 265(b)(3) of the Code. The portion of the Series 2012 Note equal
to the outstanding principal amount of the Refunded Note is deemed designated as a "qualified
tax exempt obligation" under Section 265(b)(3)(D)(ii) of the Code.
(H) The City is adopting this Supplemental 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 Charter
of the City.
5
SECTION 1.05. Refunding of Refunded Note. The City does hereby authorize the
refunding of the Refunded Note in accordance herewith. Notwithstanding the provisions of
this Section 1.05 and Section 5.02(D) of the Original Resolution, prior to the issuance of the
Series 2012 Note to refund the Refunded Note, there shall have been obtained and filed with the
City a statement of the Financial Advisor that the issuance of the Series 2012 Note will not result
in an increase in the aggregate amount of principal of and interest on the Outstanding Bonds
under the Original Resolution becoming due in the current Fiscal Year and all subsequent Fiscal
Years.
SECTION 1.06. Negotiated Sale. Due to the willingness of the Lender to purchase the
Series 2012 Note at an interest rate favorable to the City, the characteristics of the Series 2012
Note, prevailing market conditions and additional savings to be realized from an expeditious
sale of the Series 2012 Note, it is hereby determined that it is in the best interest of the public
and the City to sell the Series 2012 Note through a negotiated sale (rather than through a
competitive bid) and such sale to the Lender is hereby authorized and approved upon meeting
the terms and conditions contained herein and in the Proposal, the form of which is attached
hereto as Exhibit C. Prior to the issuance of the Series 2012 Note, the City shall receive from the
Lender a disclosure letter containing the information required by Section 218.385, Florida
Statutes: The City Manager, upon the advice of the City's Financial Advisor, Finance Director
and City Attorney, is hereby authorized to executed a commitment letter and /or rate lock
agreement with the Lender.
ARTICLE II
AUTHORIZATION, TERMS, EXECUTION
AND REGISTRATION OF SERIES 2012 NOTE
SECTION 2.01. Authorization of the Series 2012 Note. Subject and pursuant to the
provisions of the Original Resolution and this Supplemental Resolution, an obligation of the
City to be known as "City of Ocoee, Florida, Water and Sewer System Refunding Revenue Note,
Series 2012" is hereby authorized to be issued under and secured by the Original Resolution, as
supplemented by this Supplemental Resolution, in the aggregate principal amount not to
exceed $5,400,000, for the purpose of providing funds to pay the costs of refunding the
Refunded Note and paying the costs of issuing the Series 2012 Note.
SECTION 2.02. Description of the Series 2012 Note. The Series 2012 Note shall be
issued in registered form, in a single denomination equal to the principal amount of the Series
2012 Note and dated the date of its execution and delivery, which shall be a date agreed upon
by the City and the Lender, subject to the following terms:
(A) Interest Rate. The Series 2012 Note shall have a fixed interest rate of not to
exceed 2.38 %. The interest rate shall be subject to adjustment as described below, and is herein
referred to as the "Interest Rate," calculated on a 360 day year consisting of twelve thirty (30)
day months basis; provided, however, that the Interest Rate shall in no event exceed the
6
maximum interest rate permitted by applicable law.
(B) Adjustments to Interest Rate. The Interest Rate on the Series 2012 Note may be
adjusted as provided below; provided, however, the Interest Rate on the Series 2012 Note shall
not exceed the maximum interest rate permitted by applicable law:
(1) Upon the occurrence of a Determination of Taxability and for as long as the
Series 2012 Note remains outstanding, the Interest Rate on the Series 2012 Note shall
be converted to the Taxable Rate. In addition, upon a Determination of Taxability,
the City shall pay to the Owner (i) an additional amount equal to the difference
between (A) the amount of interest actually paid on the Series 2012 Note during the
Taxable Period and (B) the amount of interest that would have been paid during the
Taxable Period had the Series 2012 Note borne interest at the Taxable Rate, and (ii)
an amount equal to any interest, penalties on overdue interest and additions to tax
(as referred to in Subchapter A of Chapter 68 of the Code) owed by the Owner as a
result of the Determination of Taxability.
(2) So long as no Determination of Taxability shall have occurred, upon the
occurrence of a Loss of BQ Status and for as long as the Series 2012 Note remains
outstanding, the Interest Rate on the Series 2012 Note shall be converted to the
Adjusted BQ Rate. In addition, upon a Loss of BQ Status, the City shall pay to the
Owner (i) an additional amount equal to the difference between (A) the amount of
interest actually paid on the Series 2012 Note during the period of time from the date
of issuance of the Series 2012 Note and the next succeeding Interest Payment Date
(as defined below), and (B) the amount of interest that would have been paid during
the period in clause (A) had the Series 2012 Note borne interest at the Adjusted BQ
Rate, and (ii) an amount equal to any interest, penalties on overdue interest and
additions to tax (as referred to in Subchapter A of Chapter 68 of the Code) owed by
the Owner as a result of the Loss of BQ Status.
(3) If the Maximum Federal Corporate Tax Rate decreases, the Owner shall have the
right to adjust (increase) the Interest Rate otherwise borne by the Series 2012 Note to
the Adjusted Rate. If the Owner elects to exercise its right to adjust the Interest Rate
to the Adjusted Rate pursuant to this paragraph (3), then the Owner shall give notice
of such adjustment to the City, providing sufficient evidence supporting such
Adjusted Rate calculation, which statement shall, in the absence of manifest error, be
conclusive and binding on the City. Such notice of the Adjusted Rate from the
Owner to the City shall state the date the Adjusted Rate will take effect, which shall
be an Interest Payment Date that is at least thirty (30) days from the date of such
notice.
7
(4) Upon the occurrence of an Event of Default as described in Section 6.01 of the
Original Resolution or Section 4.05 of this Supplemental Resolution, the Interest Rate
shall be adjusted to the Default Rate.
(C) Interest Payment Dates. Interest on the Series 2012 Note shall be paid semi -
annually, commencing April 1, 2013, and on each April 1 and October 1 thereafter (each an
"Interest Payment Date ") until the Maturity Date, unless earlier redeemed.
(D) Principal Payment Dates. Principal on the Series 2012 Note shall be paid
annually, commencing October 1, 2013, and on the first (1st) day of each October thereafter (each
a "Principal Payment Date ") until the Maturity Date, unless earlier redeemed.
SECTION 2.03. Application of Series 2012 Note Proceeds. Except as otherwise
provided in a certificate of the City delivered in connection with the issuance of the Series 2012
Note, the proceeds derived from the sale of the Series 2012 Note shall, simultaneously with the
delivery of the Series 2012 Note to the Lender, be applied by the City as follows:
(A) A sufficient amount of the Series 2012 Note proceeds shall be applied to the
payment of reasonable and necessary costs and expenses relating to the issuance and delivery of
the Series 2012 Note.
(B) The City hereby elects not to fund a Reserve Requirement for the Series 2012
Note as permitted by the Original Resolution.
(C) A sum as specified by the City shall, together with other legally available funds
of the City, if any, be used to prepay, in whole, the Refunded Note by depositing such sums of
money with SunTrust Bank, as the Owner of the Refunded Note.
SECTION 2.04. Funds and Accounts Secure Owners of the Series 2012 Note. The
funds and accounts created pursuant to Section 4.04 of the Original Resolution shall be for the
equal benefit and use of the Series 2012 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 Resolution shall be calculated commencing with the month in which the Series 2012
Note is delivered to provide for such deposits to reflect the issuance of the Series 2012 Note.
SECTION 2.05. Execution of the Series 2012 Note. The Series 2012 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 2012 Note.
In case any officer whose signature or a facsimile of whose signature shall appear on any
Series 2012 Note shall cease to be such officer before the delivery of such Series 2012 Note, such
signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as
8
if he has remained in office until such delivery. Any Series 2012 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 2012 Note, shall be the proper officers to sign such Series 2012 Note although at the date
of such Series 2012 Note such persons may not have been such officers.
SECTION 2.06. Registration and Exchange of Notes; Persons Treated as Owners. The
Series 2012 Note is initially registered to the Lender. So long as the Series 2012 Note shall
remain unpaid, the City will keep books for the registration and transfer of the Series 2012 Note.
The Series 2012 Note shall be transferable only upon such registration books; provided,
however, that the Series 2012 Note may be transferred only in whole and not in part and any
such transfer shall be made only to an "accredited investor" as such term is defined in the
Securities Act of 1933, as amended, and Regulation D thereunder. Notwithstanding the
foregoing, nothing in this Supplemental Resolution or in the Series 2012 Note shall be construed
to prohibit the Lender from granting a participation or participations in the Series 2012 Note to
any other bank or banks affiliated with the Lender or any subsidiary thereof.
The Person in whose name the Series 2012 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 2012 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
2012 Note to the extent of the sum or sums so paid.
SECTION 2.07. Prepayment. The Series 2012 Note may be prepaid by the City in
whole or in part at any time on or after the date that is two (2) years after the date of issuance of
the Series 2012 Note, as provided in the Series 2012 Note, without penalty or premium upon
two (2) Business Days' prior written notice to the Owner.
SECTION 2.08. Form of Series 2012 Note. The Series 2012 Note is to be in substantially
the form set forth on Exhibit A, attached hereto, together with such non- material changes as
shall be approved by the Mayor, following review by the City Manager, Finance Director and
City Attorney, such approval to be conclusively evidenced by the execution thereof by the
Mayor.
SECTION 2.09. Note Mutilated, Destroyed, Stolen or Lost. In case the Series 2012
Note shall become mutilated, or be destroyed, stolen or lost, the City shall issue and deliver a
new Series 2012 Note of like tenor as the Series 2012 Note so mutilated, destroyed, stolen or lost,
in exchange and in substitution for such mutilated Series 2012 Note, or in lieu of and in
substitution for the Series 2012 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
paying such expenses as the City may incur. The Series 2012 Note so surrendered shall be
canceled.
9
ARTICLE III
TAX MATTERS AND ACCOUNTING MATTERS
SECTION 3.01. Federal Income Tax Covenants.
(A) The City covenants with the Owners of the Series 2012 Note, that it shall not use
the proceeds of such Series 2012 Note in any manner which would cause the interest on such
Series 2012 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 2012 Note that neither the City
nor any Person under its control or direction will make any use of the proceeds of the Series
2012 Note (or amounts deemed to be proceeds under the Code) in any manner which would
cause the Series 2012 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 2012 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 2012 Note that it will
comply with all provisions of the Code necessary to maintain the exclusion of interest on the
Series 2012 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 3.02. Annual Audit. Notwithstanding the provisions of Section 5.05 of the
Original Resolution, the City hereby covenants with the Lender that it will provide such Lender
a copy of the audited financial statements of the City (as more fully described in Section 5.05 of
the Original Resolution) not more than two hundred ten (210) days after the close of each Fiscal
Year.
SECTION 3.03. Operating Budget. Notwithstanding the provisions of Section 5.13 of
the Original Resolution, the City hereby covenants with the Lender that it will provide such
Lender 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 Resolution)
(the "Operating Budget ") not more than thirty (30) days after the adoption of such Operating
Budget together with any other information the Lender may reasonably request.
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 Resolution.
10
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
Resolution or the Series 2012 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 Resolution or any covenants, conditions and provisions herein contained;
this Supplemental 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 2012 Note that it will not, without the written consent of the Owner of the Series 2012
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 2012 Note
hereunder.
SECTION 4.04. Amendment. This Supplemental Resolution and Sections 5.02, 5.07 and
6.01 of the Original Resolution shall not be modified or amended in any respect subsequent to
the issuance of the Series 2012 Note except with the written consent of the Owner of the Series
2012 Note. The City will provide to the Owner of the Series 2012 Note copies of all other
amendments to the Original Resolution to the Owner.
SECTION 4.05. Event of Default Under This Supplemental Resolution. Failure by the
City to comply with the covenants, conditions, agreements and provisions contained in this
Supplemental Resolution shall constitute an Event of Default under this Supplemental
Resolution.
SECTION 4.06. Severability of Invalid Provisions. If any one or more of the covenants,
agreements or provisions of this Supplemental 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 2012 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 Resolution and shall in no way affect the
validity of any of the other covenants, agreements or provisions hereof or of the Series 2012
Note issued hereunder.
SECTION 4.07. Remedies. The Owner of the Series 2012 Note shall have available the
remedies specified in Section 6.02 of the Original Resolution.
In addition to the foregoing, in case of an Event of Default hereunder or under the
Original Resolution, the Owner may declare the entire debt remaining unpaid hereunder
immediately due and payable, and in any such default and acceleration, the Issuer shall also be
obligated to pay as part of the indebtedness evidenced by the Series 2012 Note, all costs of
collection and enforcement thereof, including such reasonable attorneys' fees as may be
11
incurred, including on appeal or incurred in any proceeding under any bankruptcy laws as they
now or hereafter exist.
SECTION 4.08. Business Days. In any case where the due date of interest on or
principal of the Series 2012 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,
with the same force and effect as if made on the nominal date provided herein, and interest
shall cease to accrue on the date on which such payment was due if such payment is made on
the immediately succeeding Business Day.
Section 4.09. Applicable Provisions of Law. This Supplemental Resolution shall be
governed by and construed in accordance with the laws of the State.
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 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 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 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
Resolution or the Series 2012 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 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
Resolution and the issuance of the Series 2012 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 Finance Director, the 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 2012 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 2012 Note,
12
and which are specifically authorized or are not inconsistent with the terms and provisions of
this Supplemental Resolution.
Section 4.14. Bank Qualified. The City hereby designates the portion of the Series 2012
Note that exceeds the outstanding principal amount of the Refunded Note as a "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 2012 to issue more than $10,000,000
of "tax- exempt" obligations including the tax - exempt Series 2012 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).
The City has previously designated the Refunded Note as a "qualified tax - exempt
obligation" within the meaning of Section 265(b)(3) of the Code. The City did not issue more
than $10,000,000 of "tax- exempt" obligations during calendar year 2008. So long as the
weighted average maturity of the Series 2012 Note does not exceed the remaining weighted
average maturity of the Refunded Note (within the meaning of Section 147(b) of the Code), the
portion of the Series 2012 Note equal to the outstanding principal amount of the Refunded Note
will be deemed designated as a "qualified tax - exempt obligation" as provided in Section
265(b)(3)(D)(ii) of the Code.
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 Resolution or in the Series 2012 Note, nothing in this
Supplemental Resolution or in the Series 2012 Note, expressed or implied, is intended or shall
be construed to confer upon any person, other than the City and the Lender or subsequent
holders, any right, remedy or claim, legal or equitable, under and by reason of this
Supplemental Resolution, or any provision thereof, or of the Series 2012 Note, all provisions
thereof being intended to be and being for the sole and exclusive benefit of the City, the Lender,
and the persons who shall from time to time be the holders.
[Remainder of page intentionally left blank]
13
SECTION 4.17. Effective Date. This Supplemental Resolution shall take effect
immediately upon its adoption.
DULY ADOPTED this 6th day of November, 2012.
CITY COMMISSION OF THE CITY OF
OCOEE, FLORIDA
(SEAL)t -�; l`�t
S. Scott Vandergrift, MaYbor
ATTEST:
•
Beth Eikenberry, Clerk
i
FOR USE AND RELIANCE ONLY BY THE APPROVED BY THE OCOEE CITY
CITY OF OCOEE, APPROVED AS TO COMMISSION AT A MEETING HELD ON
FORM AND LEGALITY, THIS 6TH DAY OF NOVEMBER 6, 2012 UNDER AGENDA
NOVEMBER. ITEM NO. \
•
1
CITY ATT • NEY
j: \ wdox\ does \ clients \25136\ 008 \ordres\ 00704811.doc
14
EXHIBIT A
FORM OF SERIES 2012 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.
DATED DATE: November 9, 2012
MATURITY DATE: October 1, 2026
PRINCIPAL AMOUNT: $
INTEREST RATE: % (subject to adjustment as provided herein)
CITY OF OCOEE, FLORIDA
WATER AND SEWER SYSTEM REFUNDING REVENUE NOTE,
SERIES 2012
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 amount set forth above, together with interest on the
principal balance outstanding hereunder from time to time at the Interest Rate per annum set
forth above (subject to adjustment as provided herein) based upon a year of 360 days consisting
of twelve 30 -day months.
This Series 2012 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 Resolution No. 93-
20, adopted by the City Commission of the City on February 2, 1993 (the "Original Resolution "),
as amended and supplemented from time to time, and as particularly supplemented by
Resolution No. 2012 -15, adopted by the City Commission of the City on November 6, 2012
(herein referred to as the "Supplemental Resolution" and, together with the Original Resolution,
the "Note Resolution "), and is subject to all the terms and conditions of the Note Resolution.
All terms, conditions and provisions of the Note Resolution, including, without limitation,
remedies in the Event of Default, are by this reference thereto incorporated herein as a part of
this Series 2012 Note. Payment of this Series 2012 Note is secured by the Pledged Funds. Terms
used herein in capitalized form and not otherwise defined herein shall have the meanings
ascribed thereto in the Note Resolution.
•
A -1
Principal of and interest on this Series 2012 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 this Series 2012 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, 2013. Interest shall be payable semi - annually, with interest payments due each
April 1 and October 1, commencing on April 1, 2013.
In any case where the due date of interest on or principal of this Series 2012 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, with the same force and effect as if made on
the nominal date provided in the Supplemental Resolution, and interest shall cease to accrue on
the date on which such payment was due if such payment is made on the immediately
succeeding Business Day.
All payments by the City pursuant to this Series 2012 Note shall apply first to accrued
interest, then to other charges due the Owner, and the balance thereof shall apply to principal.
The Interest Rate on this Series 2012 Note may be adjusted as provided below; provided,
however, the Interest Rate on this Series 2012 Note shall not exceed the maximum interest rate
permitted by applicable law:
(1) Upon the occurrence of a Determination of Taxability and for as long as this
Series 2012 Note remains outstanding, the Interest Rate on this Series 2012 Note
shall be converted to the Taxable Rate. In addition, upon a Determination of
Taxability, the City shall pay to the Owner (i) an additional amount equal to the
difference between (A) the amount of interest actually paid on this Series 2012
Note during the Taxable Period and (B) the amount of interest that would have
been paid during the Taxable Period had this Series 2012 Note borne interest at
the Taxable Rate, and (ii) an amount equal to any interest, penalties on overdue
interest and additions to tax (as referred to in Subchapter A of Chapter 68 of the
Code) owed by the Owner as a result of the Determination of Taxability.
(2) So long as no Determination of Taxability shall have occurred, upon the
occurrence of a Loss of BQ Status and for as long as this Series 2012 Note remains
outstanding, the Interest Rate on this Series 2012 Note shall be converted to the
Adjusted BQ Rate. In addition, upon a Loss of BQ Status, the City shall pay to
the Owner (i) an additional amount equal to the difference between (A) the
amount of interest actually paid on this Series 2012 Note during the period of
time from the date of issuance of the Series 2012 Note and the next succeeding
interest payment date, and (B) the amount of interest that would have been paid
during the period in clause (A) had this Series 2012 Note borne interest at the
Adjusted BQ Rate, and (ii) an amount equal to any interest, penalties on overdue
A -2
interest and additions to tax (as referred to in Subchapter A of Chapter. 68 of the
Code) owed by the Owner as a result of the Loss of BQ Status.
(3) If the Maximum Federal Corporate Tax Rate decreases, the Owner shall have the
right to adjust (increase) the Interest Rate otherwise borne by this Series 2012
Note to the Adjusted Rate. If the Owner elects to exercise its right to adjust the
Interest Rate to the Adjusted Rate pursuant to this paragraph (3), then the Owner
shall give notice of such adjustment to the City, providing sufficient evidence
supporting such Adjusted Rate calculation, which statement shall, in the absence
of manifest error, be conclusive and binding on the City. Such notice of the
Adjusted Rate from the Owner to the City shall state the date the Adjusted Rate
will take effect, which shall be an Interest Payment Date that is at least thirty (30)
days from the date of such notice.
(4) Upon the occurrence of an Event of Default as described in Section 6.01 of the
Original Resolution or Section 4.05 of the Supplemental Resolution, the Interest
Rate shall be adjusted to the Default Rate.
This Series 2012 Note may be prepaid by the City in whole or in part at any time on or
after the date that is two (2) years after the Dated Date indicated on the first page of this Series
2012 Note, without penalty or premium upon two (2) Business Days' prior written notice to the
Owner.
THIS SERIES 2012 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
HOLDER OF THIS SERIES 2012 NOTE THAT SUCH SERIES 2012 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 2012 NOTE OR THE MAKING OF ANY OTHER PAYMENTS PROVIDED FOR
IN THE BOND RESOLUTION.
This Series 2012 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 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 2012 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 2012 Note is in full
compliance with and does not exceed or violate any constitutional or statutory limitation.
A -3
The City has designated this Series 2012 Note as a "qualified tax - exempt" obligation
within the meaning of Section 265(b)(3) of the Code.
IN WITNESS WHEREOF, the City of Ocoee, Florida has caused this Series 2012 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 9th day of November,
2012.
CITY OF OCOEE, FLORIDA
[SEAL]
By: - - S. Scott Vaildergrift, Mayor
Attest:
Beth Eikenberry, City Clerk
A -4
ASSIGNMENT AND TRANSFER
For value received the undersigned hereby sells, assigns and transfers unto
(Please insert Social Security or other identifying number of transferee) the attached Note of the
City of Ocoee, Florida, and does hereby constitute and appoint
, attorney, to transfer the said Series 2012 Note on
the books kept for registration thereof, with full power of substitution in the premises.
Date:
By: (manual signature) NOTICE: No transfer will be registered and no
Title: new Series 2012 Note will be issued in the name of
the Transferee, unless the signature to this
assignment corresponds with the name as it
appears upon the face of the within Series 2012
Note every particular, without alteration or
enlargement or any change whatever and the
Social Security or Federal Employer
Identification Number of the Transferee is
supplied.
Signature Guaranteed by
[member firm of the New York
Stock Exchange or a commercial
bank or a trust company.]
A -5
SCHEDULE A
Period Ending
(October 1) Principal
2013 $
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
TOTAL $
A -6
EXHIBIT B
FORM OF LENDER CERTIFICATE
This is to certify that SUNTRUST BANK (the "Lender ") has made a loan (the "Loan ") to
the City of Ocoee, Florida (the "Issuer "). The Loan is evidenced by the Issuer's Water and
Sewer System Refunding Revenue Note, Series 2012 dated November 9, 2012 (the "Note "). The
Lender acknowledges that the Loan is being made as a direct loan and not through the purchase
of a municipal security and that the Issuer will not make a filing with the Municipal Securities
Rulemaking Board's Electronic Municipal Market Access repository. Any capitalized
undefined terms used herein not otherwise defined shall have the meaning set forth in
Resolution No. 93 -02 adopted by the City Commission of the Issuer on February 2, 1993, as
supplemented by Resolution No. 2012 -015 adopted by the City Commission of the Issuer on
November 6, 2012 (together, the "Resolution ").
The Lender has conducted its own investigation, to the extent it deems satisfactory or
sufficient, into matters relating to business affairs or conditions (either financial or otherwise) of
the Issuer in connection with the Loan and no inference should be drawn that the Lender, in the
acceptance of said Note, is relying on Note Counsel or Issuer's Counsel as to any such matters
other than the legal opinion rendered by Note Counsel, Bryant Miller Olive P.A., and by
Issuer's Counsel, Shuffield, Lowman & Wilson, P.A.
We acknowledge that no CUSIP numbers or credit ratings have been obtained with
respect to the Note. We further acknowledge that we are making the Loan for our own account,
we do not currently intend to syndicate the Loan, and we will take no action to cause the Note
to be characterized as a security.
We are not acting as a broker or other intermediary and are funding the Loan with our
own capital and for our own account and not with a present view to a resale or other
distribution to the public. The Note will only be sold to an Accredited Investor as such term is
defined in the Securities Act of 1933, as amended, and Regulation D. We are a bank as
contemplated by Section 517.061(7), Florida Statutes. We are not purchasing the Note for the
direct or indirect promotion of any scheme or enterprise with the intent of violating or evading
any provision of Chapter 517, Florida Statutes.
We are an "accredited investor" as such term is defined in the Securities Act of 1933, as
amended, and Regulation D thereunder.
This Certificate is furnished by us as Lender based solely on our knowledge on the day
hereof and is solely for the benefit of the Issuer and may not be relied upon by, or published or
communicated to, any other person without our express written consent. We disclaim any
obligation to supplement this letter to reflect any facts or circumstances that may hereafter come
to our attention.
B -1
Dated this 9th day of November, 2012.
SUNTRUST BANK
By:
Name: William C. Jones
Title: First Vice President
B -2
EXHIBIT C
SUNTRUST PROPOSAL
TERM SHEET
FIXED RATE
Borrower: City of Ocoee, Florida (the "City ")
Bank: SunTrust Bank
Contact: William C. Jones
First Vice President
SunTrust Bank
200 S. Orange Avenue, SOAB 6 Floor
Mail Code: FL -ORL -2063
Orlando, FL 32801
Phone: 407 - 237 -5909
Facility Type:
Bank Qualified Loan in the form of a tax - exempt Note (the "Note ") issued
by the City of Ocoee. The issuance must be a "tax exempt obligation"
under Section 265(b)(3) of the Internal Revenue Code.
Purpose: The proceeds from the Water & Sewer System Refunding Revenue
Note, Series 2012 will be used to current refund the City's outstanding
Water & Sewer System Refunding Revenue Note, Series 2008.
Amount: Up to $5,400,000.00
Terms: Interest shall be payable semi - annually on April 1 and October 1,
beginning on April 1, 2013. Principal payments shall be due annually on
October 1 of each year, commencing October 1, 2013, with a final
maturity date of October 1, 2026. Debt service payments are based on
the current principal amortization schedule as follows:
10/1/13 $20,000
10/1/14 $20,000
10/1/15 $25,000
10/1/16 $25,000
10/1/17 $430,000
10/1/18 $445,000
10/1/19 $465,000
10/1/20 $485,000
10/1/21 $505,000
10/1/22 $525,000
10/1/23 $550,000
10/1/24 $570,000
10/1/25 $595,000
10/1/26 $620,000
C -1
Security: Payable solely from and secured by a prior lien upon and pledge of the
Net Revenues of the Water and Sewer System as defined in Resolution
93 -02.
Interest Rate Options:
14 Year fully amortizing structure (pre - payable without penalty):
The Bank Qualified interest rate shall be 2.34% and will be fixed through
the Maturity Date. Interest is payable based on a 30/360 day count basis.
The indicative interest rate is shown as of October 16, 2012.
Rate Lock Option: For any of the above mentioned options, a rate
lock is available for thirty (30) days from the date of this letter,
October 16, 2012 to November 15, 2012, at an additional cost of 4
basis points added to the applicable interest rate option.
Maturity Date: October 1, 2026
Prepayment: Prepayable without penalty
After -Tax Yield Maintenance:
• The interest rates quoted herein take into consideration a marginal
maximum federal corporate tax rate of 35 %. In the event of a decrease
in the marginal maximum corporate tax rate, the Bank shall have the
right to adjust the interest rate upwards in order to maintain the same
after tax yield for the Bank.
a If a determination of taxability event occurs the rate will be adjusted
upward to a fixed rate equal to a rate determined necessary by Bank to
maintain the same after -tax yield effective as of the date of the
determination of taxability event. Upon an occurrence of a Determination
of Taxability, the Borrower hereby agrees to pay to the Bank (i) an
additional amount equal to the difference between (A) the amount of
interest paid on the Note during the Taxable Period and (B) the amount
of interest that would have been paid on the Note during the Taxable
Period had the Bonds borne interest at the Taxable Rate, plus (ii) an
amount equal to any interest, penalties on overdue interest and additions
to tax (as referred to in Subchapter A of Chapter 68 of the Code) owed
by the Bank as a result of the occurrence of a Determination of
Taxability.
• If it is determined that the Note does not qualify as BQ, the Bank shall
have the right to adjust the interest rate upwards in order to maintain the
same after tax yield if the Note fails to be eligible as a qualified tax -
exempt obligation under Section 265(b)(3) of the Internal Revenue Code.
Financing Documents: Financing Documents will include, but not be limited to, a Note, Loan
Agreement and authorizing Resolution.
C -2
Legal Fees: Our proposed bank counsel is Ed Vogel at Holland & Knight in
Lakeland, Florida. Fees for our counsel will be:
(a) $3,500.00 if our counsel reviews documentation prepared by the
counsel to the Borrower
Covenants and Conditions
A) 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 the Bank's Counsel.
B) Borrower shall submit to the Bank annual financial statements within 210 days of fiscal year end
and an annual budget within 30 days of adoption, together with any other information the Bank
may reasonably request.
C) Borrower shall be required to deliver a written opinion from Borrower's Counsel, in form and
substance acceptable to the Bank and Bank's Counsel, that all documents are valid, binding and
enforceable in accordance with their terms, that execution and delivery of said documents has
been duly authorized, and addressing such other matters as the Bank and the Bank's Counsel
deem appropriate.
D) The Borrower shall comply with and agree to such other covenants, terms, and conditions that
may be reasonably required by the Bank and its counsel and are customary in financings of this
nature. These covenants would include, but are not to be limited to, covenants regarding
compliance with laws and regulation, remedies in the event of default and the right of Bank to
transfer and assign the Bond.
E) The Borrower agrees to have the principal and interest payments collected via ACH Direct Debit
from a SunTrust Bank account of their choice.
F) The City shall agree not to refinance this debt for two (2) years from the date of closing.
G) The Borrower shall not issue additional parity debt secured Water and Sewer System Revenues
unless the maximum annual debt service coverage for both the existing and proposed debt
service exceeds 1.10:1.0 for the preceding twelve months.
H) The "Bank- Qualified" interest rate quoted herein assumes the obligation is a "qualified tax - exempt
obligation" as defined in Section 265(b) (3) of the Internal Revenue Service Code.] Receipt of
opinion from Bond Counsel in form and substance satisfactory to the Bank, which shall include,
without limitation, opinion that the interest on the Note is excludable from gross income of the
owners thereof for federal income tax purposes and that the Note is a qualified tax - exempt
obligation under Section 265 (b)(3) of the Internal Revenue Code..
I) The City covenants to fix, establish, revise from time to time, whenever necessary, maintain and
collect always such fees, rates, rentals and other charges for the use of the products, services
and facilities of the System which will always provide System Revenues in each year sufficient to
pay all operating and maintenance expenses of the System, 110% of the Bond Debt Service
Requirement coming due in such year on all Outstanding Bonds and 100% of all other deposits
required to be made pursuant to applicable Bond Resolutions.
C -3