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2016-017 Master Water and Sewer System Bond Resolution CITY OF OCOEE, FLORIDA MASTER WATER AND SEWER SYSTEM BOND RESOLUTION TABLE OF CONTENTS Page ARTICLE I AUTHORITY, DEFINITIONS AND FINDINGS 2 Section 1.01. Authority for this Resolution 2 Section 1.02. Definitions. 2 Section 1.03. Findings. 16 ARTICLE II AUTHORIZATION AND DESCRIPTION OF THE SERIES 2016 BONDS; EXCHANGE AND TRANSFER 17 Section 2.01 Authorization of the Refunding of the Refunded Obligations and 2016 Project;Authorization of Series 2016 Bonds. 17 Section 2.02 Authorization of Bonds. 17 Section 2.03 Description of the Series 2016 Bonds. 18 Section 2.04 Execution of Bonds 19 Section 2.05 Authentication of Bonds. 19 Section 2.06 Exchange of Bonds. 20 Section 2.07 Negotiability, Registration and Transfer of Bonds. 20 Section 2.08 Ownership of Bonds. 20 Section 2.09 Bonds Mutilated, Destroyed, Stolen or Lost. 21 ARTICLE III FUNDS AND ACCOUNTS 28 Section 3.01 Creation of Funds. 28 ARTICLE IV APPLICATION OF BOND PROCEEDS;SPECIAL OBLIGATIONS 29 Section 4.01 Application of Bond Proceeds. 29 Section 4.02 Disbursements from Project Fund. 30 Section 4.03 Special Obligations of City. 31 ARTICLE V COVENANTS OF THE CITY;DEFAULTS AND REMEDIES 31 Section 5.01 Covenants of the City 31 Section 5.02 Defaults;Events of Default and Remedies 45 ARTICLE VI MISCELLANEOUS 48 Section 6.01 Amending and Supplementing of Resolution without Consent of Holders of Bonds. 48 Section 6.02 Amendment of Resolution with Consent of Holders of Bonds. 49 Section 6.03 Defeasance. 50 Section 6.04 Governmental Reorganization. 51 Section 6.05 Additional Utility Functions 51 Section 6.06 [Reserved.] 52 Section 6.07 Qualified Agreements 52 Section 6.08 Payments to Credit Facility;Rights of Credit Facility Issuers 52 Section 6.09 Capital Appreciation Bonds 52 i Section 6.10 Tax Covenants 53 Section 6.11 Bond Anticipation Notes Authorized for Interim Financing. 54 Section 6.12 Additional Rights to Insurers. 54 Section 6.13 Severability. 54 Section 6.14 Sale of Bonds. 54 Section 6.15 General Authority. 54 Section 6.16 No Third Party Beneficiaries 55 Section 6.17 No Personal Liability. 55 Section 6.18 Repeal of Inconsistent Instruments 55 Section 6.19 Effective Date. 56 ii RESOLUTION NO. 2016-017 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF OCOEE, FLORIDA AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $26,000,000 WATER AND SEWER SYSTEM REVENUE AND REFUNDING REVENUE BONDS, SERIES 2016 (THE "BONDS"); AUTHORIZING AND PROVIDING FOR THE PROCEEDS OF THE BONDS TO BE USED FOR THE REFUNDING OF CERTAIN OBLIGATIONS OF THE CITY AND FOR THE CONSTRUCTION AND ACQUISITION OF CERTAIN IMPROVEMENTS TO THE CITY'S COMBINED WATER AND SEWER SYSTEM AND TO PAY COSTS RELATED TO THE ISSUANCE OF THE BONDS; PLEDGING CERTAIN NET REVENUES OF THE SYSTEM; PROVIDING FOR THE PLEDGE OF CERTAIN WATER AND SEWER CAPITAL FACILITIES CHARGES FOR THE PAYMENT OF SUCH BONDS;PROVIDING FOR THE RIGHTS, SECURITY AND REMEDIES OF THE HOLDERS OF SUCH BONDS; MAKING OTHER COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Commission (the "Commission") of the City of Ocoee, Florida (the "City") previously adopted Resolution 93-02 on February 2, 1993, as amended and supplemented from time to time, (collectively, the "Original Resolution"); and WHEREAS, pursuant to the Original Resolution, the City has previously issued its Water and Sewer System Refunding Revenue Note, Series 2012 (the "Series 2012 Note") and its Water and Sewer System Refunding Revenue Note, Series 2013 (the "Series 2013 Note") (collectively, the "Refunded Obligations"); and WHEREAS, the Series 2012 Note and the Series 2013 Note, are the only obligations currently outstanding under the Original Resolution; and WHEREAS, the Commission now desires to replace the Original Resolution in its entirety by adopting this resolution (the "Resolution"), in order to provide for the issuance of Bonds, initially to refund the Series 2012 Note and the Series 2013 Note and to provide proceeds for a Project (as herein defined) through the issuance of its Water and Sewer System Revenue and Refunding Revenue Bonds, Series 2016 (the "Series 2016 Bonds");and WHEREAS, the Commission also desires to authorize and finds it necessary, desirable and in the best interest of the City and the residents thereof that the initial Project be acquired, constructed and erected (the "2016 Project") and that the Refunded Obligations be refunded with the proceeds of the Series 2016 Bonds. 1 BE IT RESOLVED BY THE COMMISSION OF THE CITY OF OCOEE, FLORIDA THAT: ARTICLE I AUTHORITY, DEFINITIONS AND FINDINGS Section 1.01. Authority for this Resolution. This Resolution is adopted pursuant to the provisions of the Constitution of the State of Florida, the City Charter of the City, Chapter 166, Part II, Florida Statutes, and other applicable provisions of law(collectively, the "Act"). Section 1.02. Definitions. Unless the context otherwise requires, capitalized terms used in this Resolution shall have the meanings specified in this Section. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations. "Accounting Principles" shall mean generally accepted accounting principles including those applicable to governmentally owned and operated utility systems such as the Water and Sewer System. "Accreted Value" shall mean, as of any date of computation with respect to any Capital Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the Interest Date next preceding the date of computation or the date of computation if an Interest Date, such interest to accrue at a rate not exceeding the legal rate, compounded semiannually, plus, with respect to matters related to the payment upon redemption of the Capital Appreciation Bonds, if such date of computation shall not be an Interest Date, a portion of the difference between the Accreted Value as of the immediately preceding Interest Date and the Accreted Value as of the immediately succeeding Interest Date, calculated based on the assumption that Accreted Value accrues during any semi-annual period in equal daily amounts on the basis of a 360-day year. "Acquired Obligations" shall mean cash, direct non-callable obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, to which direct obligation or guarantee the full faith and credit of the United States of America has been pledged, Refcorp interest strips, CATS, TIGRS, STRPS, defeased municipal bonds rated AAA by S&P Global Markets or Aaa by Moody's Investment Services (or any combination thereof) or direct obligations or fully guaranteed certificates of beneficial ownership of the U.S. Export-Import Bank, certificates of beneficial ownership of the Farmers Home Administration, obligations of the Federal Financing Bank, participation certificates of the General Services Administration, Guaranteed Title XI financings of the U.S. Maritime Administration and project notes of the U.S. Department of Housing and Urban Development. With respect to any Series of Bonds, the definition of Acquired Obligations set forth above may be further limited as set forth in a Supplemental Resolution of the City adopted prior to the issuance of such Bonds. 2 "Additional Parity Obligations" shall mean additional obligations issued or incurred in compliance with the terms, conditions and limitations contained herein and which (i) shall have a lien on the Pledged Revenues equal to that of the Outstanding Bonds and any Parity Contract Obligations, (ii) shall be payable from the Pledged Revenues on a parity with the Outstanding Bonds and any Parity Contract Obligations, and (iii) shall rank equally in all other respects with the Outstanding Bonds and any Parity Contract Obligations. "Administrative Expenses" means the expenses of the various departments of the City properly allocable to the System under a reasonable allocation methodology determined by the City. "Amortization Installment" shall mean an amount designated as such by Supplemental Resolution of the City and established with respect to any Term Bonds. "Average Annual Bond Service Requirement" shall mean, as of each date on which a Series of Bonds is issued, the total amount of Bond Service Requirement which is to become due on all Bonds deemed to be Outstanding immediately after the issuance of such Series of Bonds divided by the total number of years for which Bonds are deemed to be Outstanding, except that with respect to any Bonds for which Amortization Installments have been established, the amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount of such Bonds that are to be redeemed from Amortization Installments to be made in prior Bond Years. "Balloon Indebtedness" shall mean debt 25% or more of the original principal amount of which matures during any one Fiscal Year. "Bond Anticipation Notes" shall mean notes described in Section 6.11 hereof of the City issued in anticipation of any Series of Bonds and shall be secured by, amongst other things, a first lien on the proceeds of the Bonds for which such Bond Anticipation Notes were issued. "Bond Counsel" shall mean Bryant Miller Olive P.A., or any other attorney at law or firm of attorneys of nationally recognized standing in matters pertaining to the exclusion from gross income for federal income tax purposes of interest on obligations issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America, approved by the City. "Bond Holder "or "Holder" or any similar term shall mean any Persons who shall be the registered owner of any outstanding Bonds. "Bond Insurance Policy" shall mean a municipal bond new issue insurance policy or policies issued by an Insurer guaranteeing the scheduled payment of principal of and interest on any portion of a Series of Bonds when due as determined by Supplemental Resolution, if any. A Bond Insurance Policy is a Credit Facility. 3 "Bond Service Fund" shall mean the Bond Service Fund created and established pursuant to Section 3.01 of this Resolution. "Bond Service Requirement" shall mean, for any Bond Year, at any time, the amount required to be deposited in such Bond Year into the Bond Service Fund, as provided herein including any Reimbursement Obligations (any interest shall not include interest to the extent it is to be paid from a direct subsidy payment expected to be received from the United States Treasury relating to Build America Bonds, or any other similar interest subsidy or payments made by the Federal government). In calculating such amount, the City shall subtract therefrom any amounts to be transferred from the Project Fund for the purpose of paying interest on the Bonds. With respect to Variable Rate Bonds which are not subject to a Qualified Agreement, if any, the interest rate used to calculate the Bond Service Requirement shall be the higher of (i) the actual rate on the date of calculation, or if the indebtedness is not yet outstanding, the initial rate (if established and binding), (ii) if the indebtedness has been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation, and (iii) if the indebtedness has been outstanding for twelve months or less, (1) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Internal Revenue Code, the most recently published Bond Buyer 25 Bond Revenue Index (or comparable index if no longer published), or (2) if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities plus fifty (50) basis points; provided, however, that for purposes of any rate covenant measuring actual debt service coverage during a test period, Variable Rate Bonds which are not subject to a Qualified Agreement shall be deemed to bear interest at the actual rate per annum applicable during the test period. The Bond Service Requirement on debt that constitutes Balloon Indebtedness, whether bearing interest at a fixed interest rate or, Balloon Indebtedness that constitutes Variable Rate Bonds, shall be determined assuming it is amortized over 20 years on an approximately level annual debt service basis. If Bonds are Option Bonds, the date or dates of tender shall be disregarded, unless actually tendered and not remarketed, and the stated maturity dates thereof shall be used for purposes of this calculation. If the City has entered into a Qualified Agreement with respect to all or a portion of certain Variable Rate Bonds Outstanding hereunder or to be issued hereunder, the interest coming due on such Variable Rate Bonds or portion thereof for purposes of this definition shall be deemed to be based upon the synthetic fixed interest rate under the Qualified Agreement, without giving any regard to fees and expenses incurred in connection with the purchase of a liquidity facility. If the City has entered into a Qualified Agreement with respect to certain Bonds Outstanding hereunder or to be issued hereunder which have a fixed rate of interest, the interest coming due on such Bonds for purposes of this definition shall be deemed to be based upon the assumptions described above for Variable Rate Bonds, without giving any regard to fees and expenses incurred in connection with the purchase of a liquidity facility. "Bond Year" shall mean the period commencing on October 2 of the preceding year and ending twelve months later on October 1. 4 "Bonds" shall mean (i) the Series 2016 Bonds herein authorized to be issued, and (ii) any Additional Parity Obligations issued hereafter in accordance with the provisions hereof. "Build America Bonds" shall mean any taxable bonds issued by the City pursuant to the Code for which either (1) the City receives direct subsidy payments in an amount equal to a percentage of the interest paid on such taxable bond, or (2) the holder of such taxable bond receives a tax credit in an amount equal to a percentage of the interest paid on such taxable bond. "Capital Appreciation Bonds" shall mean the aggregate principal amount of the Bonds that bear interest payable solely at maturity or upon redemption prior to maturity in the amounts determined by reference to the Accreted Value, all as shall be determined by Supplemental Resolution of the City. In the case of Capital Appreciation Bonds that are convertible to Bonds with interest payable prior to maturity or redemption of such Bonds, such Bonds shall be considered Capital Appreciation Bonds only during the period of time prior to such conversion. "Capital Appreciation Income Bonds" shall mean those Bonds initially issued as Capital Appreciation Bonds and which become Serial Bonds when the original issue amount and the Accreted Value equals $5,000 principal amount or an integral multiple thereof as determined by Supplemental Resolution of the City. "City"or"Issuer" shall mean the City of Ocoee, Florida. "City Attorney" shall mean the City Attorney of the City, or any assistant or deputy City Attorney of the City. "City Engineer" shall mean the City Engineer of the Issuer. "Clerk" shall mean the City Clerk or any authorized Deputy or Acting City Clerk of the City, or such other person as may be duly authorized by the City to act on his or her behalf. "Consulting Engineers" shall mean one or more independent, qualified and recognized consulting engineers or firm of consulting engineers having favorable repute, skill and experience with respect to the planning and operation of the System who shall be retained from time to time by the City. "Cost of Operation and Maintenance" shall mean the current expenses paid for the operation, maintenance and repair of the System based on Accounting Principles and include, without limiting the generality of the foregoing, (i)insurance premiums, (ii) charges for the accumulation of appropriate reserves not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with Accounting Principles, and (iii) the cost of product and services purchased by the City for resale to customers of the System in lieu of the production of such product and services by the City directly and, (iv) Administrative Expenses. "Cost Operation and Maintenance" shall not include (i) any allowance for 5 depreciation, amortization or other similar non-cash expenses, except to the extent expressly herein provided, (ii) any payments in lieu of taxes or (iii) expenses paid from the proceeds of Bonds. In determining Cost of Operations and Maintenance, there shall not be taken into account: (a) any gain or loss resulting from either the extinguishment or refinancing of any Series of Bonds or other long-term indebtedness; (b) loss from the sale, exchange or other disposition of capital assets not made in the ordinary course of business; (c) any capital expenditures for renewal, replacement, expansion or acquisition of capital assets (including any deposits or reserves therefor) and (d)payments in lieu of taxes. "Credit Facility" or "Credit Facilities" shall mean either individually or collectively, as appropriate, any Bond Insurance Policy, surety bond, letter of credit, line of credit, guaranty or other instrument or instruments that would enhance the credit of the Bonds. "Credit Facility Issuer" or "Credit Facility Issuers" shall mean the provider or providers of a Credit Facility or Credit Facilities. An Insurer is a Credit Facility Issuer. "Expansion Percentage," one to be calculated with respect to the Sewer System and one to be calculated with respect to the Water System, shall mean that number, expressed as a percentage, which represents that portion of the total cost of any Project or Projects financed from the proceeds of Bonds which is attributable to any improvements, extensions and additions to the Sewer System and/or the Water System, respectively, together with all lands or interest therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment and all property real or personal, tangible or intangible, heretofore or hereafter constructed or acquired in order to meet the increased demand upon the Sewer System and/or the Water System, respectively, whether actual or anticipated, created by new users connecting to the Sewer System and/or the Water System, respectively, as shall be calculated or re- calculated by the Qualified Independent Consultant and set forth in a certificate delivered each time a Series of Bonds are issued hereunder. Upon completion of a Project, the Qualified Independent Consultant shall adjust the respective Expansion Percentages to take into consideration proceeds expected to be utilized for Project purposes which in fact were not utilized for Project purposes. "Federal Securities" shall mean direct obligations of the United States of America and obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, none of which permit redemption prior to maturity at the option of the obligor. Federal Securities shall also include direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities and the interest component of Resolution Funding Corp. (REFCORP) strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form. With respect to any Series of Bonds, the definition of Federal Securities set forth above may be further limited as set forth in a Supplemental Resolution of the City adopted prior to the issuance of such Bonds. "Finance Director" shall mean, for the purposes hereunder the Finance Director of the City, or any other officer of the City subsequently designated pursuant to law. 6 "Financial Advisor" shall mean FirstSouthwest, a Division of Hilltop Securities Inc., or any other financial advisor appointed from time to time by the City. "Fiscal Year" shall mean the period commencing on October 1 of each year and ending on the next succeeding September 30 or such other annual period as may be prescribed by law from time to time for the City. "Fitch"shall mean Fitch Ratings, Inc., and any assigns or successors thereto. "Gross Revenues" or "Revenues" shall mean all fees, rentals or other charges or other income received by the City in connection with the System, or accruing to the City or to any other board or agency of the City in control of the management and operation of the System, all as calculated in accordance with Accounting Principles. Gross Revenues include, without limitation, (a)unencumbered, non-ad valorem special assessments relating to the System not pledged for the repayment of, or as security for, any indebtedness of the City, whether currently outstanding or hereafter issued, other than the Bonds and which are legally available to be used as contemplated hereunder, and (b)Investment Earnings on moneys in all funds and accounts herein created or authorized, except the Project Fund and the Rebate Fund, to the extent that Investment Earnings are required to be deposited into the Revenue Fund herein created. Moneys deposited into the Rate Stabilization Fund shall be excluded from Gross Revenues for the purposes of calculating Gross Revenues hereunder for the Fiscal Year in which such transfer into the Rate Stabilization Fund occurs. Moneys on deposit in the Rate Stabilization Fund may be withdrawn at any time and redeposited into the Revenue Fund, and such moneys shall be included in Gross Revenues for the purpose of calculating Gross Revenues for the Fiscal Year in which such redeposit into the Revenue Fund occurs. Gross Revenues do not include (i) Sewer System Capital Facilities Charges, Water System Capital Facilities Charges or Investment Earnings thereon, (ii) any direct subsidy payments received from the United States Treasury relating to Build America Bonds or any other similar interest subsidy or payments made by the Federal government, (iii) non-ad valorem special assessments which are pledged for the repayment of, or as security for, any indebtedness of the City, whether currently outstanding or hereafter issued, other than the Bonds, and (iv) any "utility project charge" or the like as contemplated in Section 6.06 hereof. For purposes of calculating compliance with the rate covenant described in Section 5.01(E) hereof or the Additional Parity Obligations test described in Section 5.01(Q) hereof, "Gross Revenues" shall not include such income or earnings which are deposited into the Rate Stabilization Fund. "Insurer" shall mean, with respect to any Series of Bonds, such Person, as specifically designated by Supplemental Resolution, as shall be insuring or guaranteeing the scheduled payment of principal of and interest on such Series of Bonds, when due. An Insurer is a Credit Facility Issuer. "Interest Account" shall mean the special account of the same name created within the Bond Service Fund. "Interest Date" or "interest payment date" shall be such date or dates for the payment of interest on a Series of Bonds as shall be provided in Section 2.02 hereof. "Investment Earnings" means the interest received on, or the realized gain or loss from the purchase and sale of, the Permitted Investments held in the funds and accounts established hereunder, except to the extent such amounts are required to be rebated to the United States of America. 7 "Maximum Bond Service Requirement" shall mean, as of any particular date of calculation, the greatest amount of aggregate Bond Service Requirement for the then current or any future Bond Year, except that with respect to any Bonds for which Amortization Installments have been established, the amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount of such Bonds that are to be redeemed from Amortization Installments which were to be made in prior Bond Years. "Mayor" means the Mayor of the City, or such other person as may be duly authorized by the City to act on his or her behalf. "Moody's" shall mean Moody's Investors Services, Inc. and any assigns or successors thereto. Net Revenues" of the System shall mean the Gross Revenues or Revenues, after deduction of the Cost of Operation and Maintenance. fg- "Option Bonds" shall mean Bonds subject to tender for payment prior to their maturity at the option of the Holder thereof. "Outstanding" or "Bonds Outstanding" shall mean all Bonds which have been issued pursuant to this Resolution, except: (i) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity; (ii) Bonds for the payment or redemption of which cash funds or Acquired Obligations or any combination thereof shall have been theretofore irrevocably set aside in a special account with an escrow agent (whether upon or prior to the maturity or redemption date of any such Bonds) in an amount which, together with earnings on such Acquired Obligations, will be sufficient to pay the principal of, interest on and any redemption premium with respect to such Bonds at maturity or upon their earlier redemption; provided that, if such Bonds are to be redeemed before the maturity thereof, notice of such redemption shall have been given according to the requirements of this Resolution or irrevocable instructions directing the timely publication of such notice and directing the payment of the principal of and interest on all such Bonds at such redemption dates shall have been given; and (iii) Bonds which are deemed paid pursuant to this Resolution or in lieu of which other Bonds have been issued under Sections 2.07 and 2.09 hereof. "Parity Contract Obligation" shall mean the net payment obligations of the City arising under a Qualified Agreement, which are calculated on the basis of interest on a notional amount which may correspond with the principal amount of certain Bonds issued hereunder, or a particular series or maturity thereof, based upon a fixed or a variable rate index or formula, 8 taking into account any like payment obligations of the Qualified Agreement Provider to the City calculated in the same manner. Parity Contract Obligations include only regularly scheduled payments and/or receipts under a Qualified Agreement determined by reference to interest on a notional amount and shall not include any other payments and/or receipts under such Agreement (for example any termination fee, indemnification obligations or other fees payable to the Qualified Agreement Provider). "Parity Contract Obligation Account" shall mean the special account of the same name created within the Bond Service Fund. "Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant to a Supplemental Resolution and its successors or assigns, and any other Person which may at any time be substituted in its place pursuant to a Supplemental Resolution. Once appointed, no resignation or removal of the Paying Agent shall become effective until a successor has been appointed and has accepted the duties of Paying Agent. Each of the Insurers of Bonds, if any, shall be furnished with written notice of the resignation or removal of the Paying Agent and the appointment of any successor thereto. { "Permitted Investments" shall mean any of the following if and to the extent the same are legal for investment under the laws of the State and the written investment policy of the City: s, (1) Cash; (2) Obligations of, or obligations guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America, including: , U.S. Treasury obligations (including State and Local Government Series) • All direct or fully guaranteed obligations • Farmers Home Administration obligations • General Services Administration obligations • Guaranteed Title XI financing • Government National Mortgage Association(GNMA) obligations; (3) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: • Export-Import Bank • Rural Economic Community Development Administration 9 S 1 • U.S. Maritime Administration • Small Business Administration • U.S.Department of Housing&Urban Development(PHAs) • Federal Housing Administration • Federal Financing Bank; (4) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: • Senior debt obligations issued by the Federal National Mortgage Association t (FNMA) or Federal Home Loan Mortgage Corporation(FHLMC) • Obligations of this Resolution Funding Corporation(REFCORP) 1 • Senior debt obligations of the Federal Home Loan Bank System r fi • Senior debt obligations of other government sponsored agencies a,' approved by the Insurer; K (5) U.S. dollar denominated deposit accounts, federal funds and bankers' 4 acceptances with domestic commercial banks which have a rating on their short term t certificates of deposit on the date of purchase of P-1 by Moody's and A-1 or A-i+ by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating on the bank); (6) Commercial paper which is rated at the time of purchase in the single highest classification, "P-1" by Moody's and "A-1+" by S&P and which matures not more than 270 calendar days after the date of purchase; t (7) Investments in a money market fund rated "AAAm" or "AAAm-g" or better by E. S&P; !? (8) Pre-refunded Municipal Obligations defined as follows: any bonds or other 1 obligations of any state of the United States of America or of any agency, instrumentality or local government unit of any such state which are not callable at the option of the obligor prior 1 to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and t (A) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's or S&P or any successors thereto; or i L 10 s`. (B) (i) which are fully secured as to principal and interest and redemption premium, if any,by an escrow consisting only of cash or obligations described in paragraph A(2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (9) Municipal Obligations rated "Aaa/AAA" or general obligations of States with a rating of"A2/A"or higher by both Moody's and S&P; (10) the Local Government Surplus Funds Trust Fund created and established pursuant to Chapter 218,Part IV, Florida Statutes, as amended; (11) Investment agreements approved in writing by the Insurer, if any, and if no Insurer approved by the City (supported by appropriate opinions of counsel); and (12) Other forms of lawful investments (including repurchase agreements) approved by the City. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. "Pledged Revenues" shall mean the Net Revenues of the System and until applied in accordance with this Resolution, the moneys on deposit in the various funds and accounts created pursuant to this Resolution, except (A) as for the Rebate Fund, and (B) to the extent moneys on deposit in an account of the Reserve Fund or the Project Fund shall be pledged solely for the payment of the Series of Bonds for which it was established in accordance with the provisions hereof. Pledged Revenues shall also include the Sewer System Capital Facilities Charges and/or the Water System Capital Facilities Charges to the extent either or both are pledged to secure a Series of Bonds, based upon the calculation of the applicable Expansion Percentage,by the Qualified Independent Consultant. "Principal Account" shall mean the special account of the same name created within the Bond Service Fund. "Project" or "Projects" shall mean any actual, proposed or potential acquisition, addition, extension, supplement, or replacement of the System or joint ownership of similar properties or any interest therein or any right to use the capacity from any facilities or services thereof, or any other lawful purpose related to the System, all as determined by the City and in accordance with plans and specifications on file or to be filed with the City. 11 "Project Costs"shall mean all costs authorized to be paid from the Project Fund pursuant to Section 4.02 hereof to the extent permitted under the laws of the State. It is intended that this definition be broadly construed to encompass all costs, expenses and liabilities of the City related to the System which on the date of this Resolution or in the future shall be permitted to be funded with the proceeds of any Series of Bonds pursuant to the laws of the State. "Project Fund" shall mean the Project Fund created and established pursuant to Section 3.01 of this Resolution. "Prudent Utility Practice" shall mean, in respect of any particular municipal utility industry, any of the practices, methods and acts which, in the exercise of reasonable judgment, in light of the facts, including but not limited to the practices, methods and acts engaged in or approved by a significant portion of such utility industry prior thereto, known at the time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety, and expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather is a spectrum of possible practices, methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. � 'an ex p "Qualified Agreement" means, to the extent from time to time permitted pursuant to law, any contract or contracts entered into in connection with Bonds under which payments are, in whole or in part, based on interest rate, cash flow, or other basis desired by the City, including, without limitation, contracts commonly known as current or forward interest rate swap or swaption agreements and interest rate floors or caps. Notwithstanding anything herein to the contrary, "Qualified Agreement" shall not include goods and service supply contracts. "Qualified Agreement Provider" means, an entity whose senior long term obligations, other senior long term obligations or claims paying ability or whose payment obligations under a Qualified Agreement are guaranteed by an entity whose senior long term debt obligations, other senior unsecured long term obligations or claims paying ability are rated at the time of execution of such Qualified Agreement either (i) at least as high as A3 by Moody's, and A- by S&P, or the equivalent thereof by any successor thereto for so long as such rating agency is then maintaining a rating on the Bonds Outstanding, or (ii) any such lower rating categories which each such rating agency then maintaining a rating on the Bonds Outstanding indicates in writing to the City will not, by itself, result in a reduction or withdrawal of its rating on the Bonds Outstanding that is in effect prior to entering into such Qualified Agreement. "Qualified Independent Consultant" shall mean one or more qualified and recognized independent consultants, having favorable repute, skill and experience with respect to the acts and duties of the Qualified Independent Consultant to be provided to the City, as shall from time to time be retained by the City to perform the acts and carry out the duties herein provided for such consultants. 5 12 "Rate Stabilization Fund" shall mean the "Rate Stabilization Fund" established pursuant to Section 3.01 of this Resolution. ' "Rebate Amount" means the excess of the future value, as of a computation date, of all 1 receipts on nonpurpose investments (as defined in Section 1.148-1(b) of the Income Tax Regulations) over the future value, as of that date, of all payments on nonpurpose investments, all as provided by regulations under the Code implementing Section 148 thereof. "Rebate Fund" shall mean the City of Ocoee, Florida Water and Sewer System Revenue Bonds Rebate Fund established pursuant to Section 6.10 hereof. "Rebate Year" shall mean, with respect to a particular Series of Bonds issued hereunder, a one-year period (or shorter period from the date of issue) that ends at the close of business on the day in the calendar year selected by the City as the last day of a Rebate Year. The final Rebate Year with respect to a particular Series of Bonds issued hereunder, however, shall end on the date of final maturity of that Series of Bonds. "Record Date" shall mean each date that is on the 15th day of the calendar month immediately preceding an interest payment date on the Bonds. "Redemption Account" shall mean the special account of the same name created within the Bond Service Fund. "Refunding Bonds" shall mean that amount of any Series of Bonds, the proceeds of which will be applied to the refunding of any previously issued Bonds. "Registrar" shall mean any registrar for the Bonds appointed by or pursuant to Supplemental Resolution and its successors and assigns, and any other Person which may at any time be substituted in its place pursuant to Supplemental Resolution. Once appointed, no resignation or removal of the Registrar shall become effective until a successor has been appointed and has accepted the duties of Registrar. The Insurers of Bonds shall be furnished pP P g with written notice of the resignation or removal of the Registrar and the appointment of any successor thereto. "Reimbursement Obligations" shall have the meaning ascribed thereto in Section 6.08 hereof. "Renewal, Replacement and Improvement Fund" shall mean the Renewal, Replacement and Improvement Fund created and established pursuant to Section 3.01 of this Resolution. "Reserve Fund" shall mean the Reserve Fund created and established pursuant to Section 3.01 of this Resolution. "Reserve Fund Insurance Policy" shall mean an insurance policy or surety bond, if any, deposited in the Reserve Fund in lieu of or in substitution for cash on deposit therein pursuant to Section 5.01(B)(3)hereof. 13 "Reserve Fund Letter of Credit" shall mean an unconditional irrevocable letter of credit or line of credit (other than a Reserve Fund Insurance Policy) deposited in the Reserve Fund in lieu of or in substitution for cash on deposit therein pursuant to Section 5.01(B)(3)hereof. "Reserve Requirement" for the Series 2016 Bonds shall be $0.00 (zero dollars). The Reserve Requirement for any future Series of Bonds shall be the lesser of(i) the Maximum Bond Service Requirement with respect to Bonds secured by the Reserve Fund, (ii) 125% of the Average Annual Bond Service Requirement with respect to Bonds secured by the Reserve Fund, or (iii) the largest amount as shall not adversely affect the exclusion of interest on the Bonds from gross income for Federal income tax purposes with respect to Bonds secured by the Reserve Fund; provided, however, the City shall establish by Supplemental Resolution a different Reserve Requirement for an account of the Reserve Fund which secures a Series of Bonds pursuant to Section 5.01(B)(3)hereof. "Resolution" shall mean this Master Resolution, in its entirety, as from time to time may be amended or supplemented by Supplemental Resolution, in accordance with the terms hereof. "Revenue Fund" shall mean the Revenue Fund created and established pursuant to Section 3.01 of this Resolution. "Serial Bonds"shall mean all of the Bonds other than Term Bonds. "Series" or "Series of Bonds" or "Bonds of a Series" shall mean all Bonds designated as being of the same Series issued and delivered on original issuance in a simultaneous transaction, and any Bonds thereafter delivered in lieu thereof or in substitution therefor pursuant to this Resolution. "Series 2016 Bonds" shall mean the City's Water and Sewer System Revenue and Refunding Revenue Bonds, Series 2016. References to "2016" may be changed if the Series 2016 Bonds are not issued in calendar year 2016 to reflect the calendar year of issuance. "Service Area" shall mean the geographical area in the City and certain contiguous areas served or to be served by the System or portions thereof "Sewer System" or "Wastewater System" shall mean the complete sewer, wastewater and residential and commercial reclaimed water system now owned, operated and maintained by the City and which the City is, or shall be responsible for maintaining, together with any and all acquisitions, improvements, extensions and additions thereto, hereafter constructed or acquired, together with all lands or interest therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment and all property, real or personal, tangible or intangible (including agreements for the providing of such services),now or hereafter constructed and/or owned or used in connection therewith. "Sewer System Capital Facilities Charges" shall mean the capacity or impact fees, if any, imposed by the City upon and collected from new users of the Sewer System which represent an equitable share of the capital costs of the Sewer System which are attributable to the increased demand such additional connections create upon the Sewer System. The term"Sewer 14 ti System Capital Facilities Charges" in each year shall not include any amounts in excess of the Bond Service Requirement for such Bond Year multiplied by the Expansion Percentage. "Sewer System Capital Facilities Charges Fund" shall mean the Sewer System Capital Facilities Charges Fund created and established pursuant to Section 3.01 of this Resolution. "State"shall mean the State of Florida. "Standard & Poor's" or "Standard & Poor's Corporation" or "S&P" shall mean S&P's Global Ratings and any assigns and successors thereto. "Subordinated Debt" shall mean any obligations payable on a junior, inferior and subordinate basis under Section 5.01(P) hereof. "Subordinated Debt" shall include,but shall not be limited to, (i) Subordinated Contract Obligations, (ii) payments to a Qualified Agreement Provider pursuant to a Qualified Agreement which the City has designated as Subordinated Debt, (iii) Reimbursement Obligations, and (iv) any other obligations payable from any of the Pledged Revenues on a junior, inferior and subordinate basis to the Bonds. "Subordinated Debt Service Fund" shall mean the Subordinated Debt Service Fund. "Supplemental Resolution" shall mean any resolution of the City amending or supplementing this Resolution adopted and becoming effective in accordance with the terms of Sections 6.01 and 6.02 hereof. "System" or"Utility System" shall mean, collectively,the Water System and Sewer System of the City. Upon compliance with the provisions of Section 6.05 hereof, the term "System" may be deemed to include other utility functions added to the System, including, but not limited to the acquisition, distribution and sale of natural gas, the providing of electricity, the providing of cable television services, the providing of telecommunication services or other utility functions that are authorized from time to time pursuant to the Act. Notwithstanding the foregoing definition of the term System, subject to satisfaction of the requirements in Section 5.01(G) hereof, such term shall not include any properties or interest in properties of the City which the City determines shall not constitute a part of the System for the purpose of this Resolution. "Term Bonds" shall mean the Bonds other than Serial Bonds which shall be stated to mature on one date, and shall have such Amortization Installments, as shall be determined by Supplemental Resolution of the City. "Variable Rate Bonds" shall mean obligations issued with a variable, adjustable, convertible or other similar rate which is not fixed in percentage at the date of issue for the entire term thereof as shall be determined by Supplemental Resolution of the City. "Water System" shall mean the complete water system now owned, operated and maintained by the City or which is proposed to be acquired by and operated and maintained by the City and which the City is, or shall be responsible for maintaining, together with any and all acquisitions, improvements, extensions and additions thereto, hereafter constructed or acquired, together with all lands or interests therein, including plants, buildings, machinery, 15 franchises, pipes, mains, fixtures, equipment and all property, real or personal, tangible or intangible (including agreements for the providing of such services), now or hereafter constructed and/or owned or used in connection therewith. "Water System Capital Facilities Charges" shall mean the capacity or impact fees, if any, imposed by the City upon and collected from new users of the Water System which represent an equitable share of the capital costs of the Water System which are attributable to the increased demand such additional connections create upon the Water System. The term "Water System Capital Facilities Charges" in each year shall not include any amounts in excess of the Bond Service Requirement for such Bond Year multiplied by the Expansion Percentage. "Water System Capital Facilities Charges Fund" shall mean the Water System Capital Facilities Charges Fund created and established pursuant to Section 3.01 of this Resolution. The terms "herein," "hereunder," "hereby," "hereto," "hereof" and any similar terms shall refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this Resolution; and the term"hereafter" shall mean after the date of adoption of this Resolution. Words importing the masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa. Section 1.03. Findings. It is hereby ascertained, determined and declared that: (A) The City now owns, operates and maintains the System and derives and will continue to derive revenues from rates, fees, and rentals and other charges made and collected for services of the System, and it is in the best interests of the City, and the health, safety and welfare of its inhabitants and serves a City purpose to provide for the refunding of the Refunded Obligations in terms of overall net debt service savings and the modernization of bond covenants to provide more flexibility for the City and the System. The City also desires to provide for the funding of improvements and capital expenditures to benefit the System to be financed from a portion of the proceeds of the Series 2016 Bonds. (B) The City will receive the Pledged Revenues, and such Pledged Revenues are not pledged or encumbered to pay any other debts or obligations of the City other than the Refunded Obligations. The City is authorized pursuant to the provisions of the Act to pledge the Pledged Revenues to secure the payment of debt service on the Series 2016 Bonds. (C) The Pledged Revenues are estimated to be sufficient to pay, as the same becomes due and payable, the Bond Service Requirement on the Series 2016 Bonds and to make all other payments required to be made by the provisions of this Resolution. (D) The costs associated with issuance of the Series 2016 Bonds shall be deemed to include, but not limited to, legal and financial advisory fees and expenses, engineering expenses, fiscal expenses, underwriting fees and expenses, rating agency fees, expenses for estimates of costs and of revenues, accounting expenses, municipal bond insurance premiums, 16 surety policy premiums, if applicable, costs of printing, fees and expenses for the paying agent and registrar, accrued and capitalized interest, if any, provisions for reserves, and such other fees and expenses as may be necessary or incidental for the financing herein authorized. (E) Any Series of Bonds, after the issuance of the Series 2016 Bonds shall be issued upon approval by Supplemental Resolution of the City and compliance with the terms hereof. The proceeds of any Series of Bonds shall be applied as provided in a Supplemental Resolution. (F) The principal of and interest and redemption premium on the Series 2016 Bonds and all reserve and other payments contemplated hereunder shall be payable solely from the Pledged Revenues. The City shall never be required to levy ad valorem taxes on any real or personal property therein to pay the principal of and interest on the Bonds herein authorized or to make any other payments provided for herein. The Bonds shall not constitute a lien upon any properties owned by or located within the boundaries of the Service Area or the City or upon any property other than the Pledged Revenues. Section 1.04. This Resolution to Constitute Contract. In consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the City and such Holders. The covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection and security of the legal Holders of any and all of the Bonds, all of which shall be of equal rank and without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided therein and herein. ARTICLE II AUTHORIZATION AND DESCRIPTION OF THE SERIES 2016 BONDS;EXCHANGE AND TRANSFER Section 2.01 Authorization of the Refunding of the Refunded Obligations and 2016 Project; Authorization of Series 2016 Bonds. The refunding of the Refunded Obligations and the financing of the 2016 Project are hereby specifically authorized. The "Water and Sewer System Revenue and Refunding Revenue Bonds, Series 2016" are hereby specifically authorized to be issued in an aggregate principal amount of not to exceed$26,000,000 to (i) refund all of the Series 2012 Notes and the Series 2013 Notes, (ii) to finance improvements to the System as the 2016 Project, and (iii)pay the cost of issuing the Series 2016 Bonds. Section 2.02 Authorization of Bonds. Subject and pursuant to the provisions hereof, obligations of the City to be known as "Water and Sewer System Revenue Bonds" which may be issued from time to time are hereby authorized to be issued. The aggregate principal amount of the Bonds which may be executed and delivered under this Resolution is not limited except as is or may hereafter be provided in this Resolution or as limited by the Act or by law. The Bonds may, if and when authorized by the City pursuant to this Resolution, be issued in one or more Series, with such further appropriate particular designations added to or 17 incorporated in such title for the Bonds of any particular Series as the City may determine and as may be necessary to distinguish such Bonds from the Bonds of any other Series. Each Bond shall bear upon its face the designation so determined for the Series to which it belongs. The Bonds shall be issued for such purpose or purposes; shall bear interest at such rate or rates not exceeding the maximum rate permitted by law; and shall be payable in lawful money of the United States of America on such dates; all as determined herein or by Supplemental Resolution of the City. The Bonds shall be issued in such denominations and such form, whether coupon or registered; shall be dated such date; shall bear such numbers; shall be payable at such place or places; shall contain such redemption provisions; shall have such Paying Agents and Registrars; shall mature in such years and amounts; and the proceeds shall be used in such manner; all as determined by Supplemental Resolution of the City, and, in the case of the Series 2016 Bonds, by Section 2.03 hereof. The City may issue Bonds which may be secured by a Credit Facility or by a Bond Insurance Policy all as shall be determined by Supplemental Resolution of the City. Section 2.03 Description of the Series 2016 Bonds. The Series 2016 Bonds are hereby authorized to be issued in the aggregate principal amount of not to exceed $26,000,000 with further details provided in a Supplemental Resolution prior to their delivery. The Series 2016 Bonds shall be issued hereunder in fully registered form without coupons; may be Capital Appreciation Bonds, Serial Bonds or Term Bonds; shall be dated; shall be numbered consecutively from one upward in order of maturity preceded by the letter "R" if Serial Bonds or Term Bonds, and preceded by the letters "CABR" if Capital Appreciation Bonds; shall be in the denomination of $5,000 each, or integral multiples thereof for the Serial Bonds and Term Bonds, and in $5,000 Accreted Values at maturity for the Capital Appreciation Bonds or in$5,000 multiples thereof, or such other denominations as shall be approved by the City in a Supplemental Resolution prior to the delivery of such Bonds shall bear interest at such rate or rates not exceeding the maximum rate allowed by State law, the actual rate to be approved by the governing body of the City prior to or upon the sale of such Bonds; such interest to be payable semiannually at such times as are fixed by Supplemental Resolution of the City if Serial Bonds or Term Bonds or payable at maturity if Capital Appreciation Bonds, and shall mature annually on such date in such years and such amounts as will be fixed by Supplemental Resolution of the City prior to or upon the sale of such Bonds, and may be issued with variable, adjustable, convertible or other rates with original issue discounts and as zero coupon bonds; all as the City shall provide herein or hereafter by Supplemental Resolution. Each Serial or Term Bond shall bear interest from the interest payment date next preceding the date on which it is authenticated, unless authenticated on an interest payment date, in which case it shall bear interest from such interest payment date, or, unless authenticated prior to the first interest payment date, in which case it shall bear interest from its date; provided, however, that if at the time of authentication, payment of any interest which is due and payable has not been made, such Serial or Term Bond shall bear interest from the date to which interest shall have been paid. 18 Unless otherwise set forth in a Supplemental Resolution adopted prior to the issuance of a Series of Bonds, interest shall be calculated based upon a 360 day year consisting of twelve-30 day months. Each Capital Appreciation Bond shall bear interest only at maturity or upon redemption prior to maturity in the amount determined by reference to the Accreted Value. The principal of and the interest and redemption premium, if any, on such Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The interest on the Serial or Term Bonds shall be payable by the Paying Agent on each interest payment date, or the first business day following an interest payment date if such interest payment date is not a business day, to the Person appearing on the registration books of the City hereinafter provided for as the registered Holder thereof, by check or draft mailed to such registered Holder at his address as it appears on such registration books or by wire transfer to Holders of $1,000,000 or more in principal amount of such Bonds. Payment of the principal of all Serial or Term Bonds (reduced by any Amortization Installments previously paid by the City on any Term Bonds) and the Accreted Value with respect to the Capital Appreciation Bonds shall be made upon the presentation and surrender of such Bonds as the same shall become due and payable. As long as any such Bonds are outstanding in book-entry form, the provisions of this Resolution inconsistent with such system of book-entry registration shall not be applicable to such Bonds, and the City covenants to cause adequate records to be kept with respect to the ownership of any Series of Bonds issued in book-entry form or the beneficial ownership of bonds issued in the name of a nominee. Section 2.04 Execution of Bonds. The Bonds in the form set forth in Section 2.11 of each Series shall be executed in the name of the City by the Mayor, and attested by the Clerk and the corporate seal of the City or facsimile thereof shall be affixed thereto or reproduced thereon. The signatures of the Mayor and the Clerk may be manual or facsimile signatures imprinted or reproduced thereon. In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer of the City before the Bonds so signed and sealed shall have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the Person who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the City by such Person as at the actual time of the execution of such Bond shall hold the proper office in the City, although at the date of such Bonds such Person may not have held such office or may not have been so authorized. Section 2.05 Authentication of Bonds. Only such of the Bonds as shall have endorsed thereon a certificate of authentication substantially in the form herein below set forth, duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security 19 under this Resolution. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Registrar, and such certificate of the Registrar upon any such Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The Registrar's certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Bonds that may be issued hereunder at any one time. Section 2.06 Exchange of Bonds. Any Bonds, upon surrender thereof at the designated corporate trust office of the Registrar, together with an assignment duly executed by the Bondholder or his attorney or legal representative in such form as shall be satisfactory to the Registrar, may, at the option of the Bondholder, be exchanged for an aggregate principal amount of Bonds of the same Series equal to the principal amount of the Bond or Bonds so surrendered. The Registrar shall make provision for the exchange of Bonds at the designated corporate trust office of the Registrar. Section 2.07 Negotiability, Registration and Transfer of Bonds. The Registrar shall keep books for the registration of and for the registration of transfers of Bonds as provided in this Resolution. The transfer of any Bonds may be registered only upon such books and only upon surrender thereof to the Registrar together with an assignment duly executed by the Bondholder or his attorney or legal representative in such form as shall be satisfactory to the Registrar. Upon any such registration of transfer, the City shall execute and the Registrar shall authenticate and deliver in exchange for such Bond, a new Bond or Bonds registered in the name of the transferee, and in an aggregate principal amount equal to the principal amount of such Bond or Bonds so surrendered and of the same Series. In all cases in which Bonds shall be exchanged, the City shall execute and the Registrar shall authenticate and deliver, at the earliest practicable time, a new Bond or Bonds of the same type (e.g., Serial Bonds will be exchanged for Serial Bonds and Capital Appreciation Bonds will be exchanged for Capital Appreciation Bonds) and of the same Series in accordance with the provisions of this Resolution. All Bonds surrendered in any such exchange or registration of transfer shall forthwith be canceled by the Registrar. The City or the Registrar may make a charge for every such exchange or registration of transfer of Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer,but no other charge shall be made to any Bondholder for the privilege of exchanging or registering the transfer of Bonds under the provisions of this Resolution. Neither the City nor the Registrar shall be required to make any such exchange, registration or transfer of Bonds after the Record Date. Section 2.08 Ownership of Bonds. The Person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal or redemption price of any such Bond, and the 20 interest on any such Bonds shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. Section 2.09 Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the City may, in its discretion, cause to be executed, and the Registrar shall authenticate and deliver, a new Bond of like date and tenor as the Bond so mutilated, destroyed, stolen or lost (e.g., Serial Bonds shall be issued in exchange for Serial Bonds and Capital Appreciation Bonds shall be issued in exchange for Capital Appreciation Bonds) in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the City and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the City and the Registrar may prescribe and paying such expenses as the City and the Registrar may incur. All Bonds so surrendered shall be canceled by the City. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the City may pay the same,upon being indemnified as aforesaid, and if such Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this Section 2.09 shall constitute original, additional contractual obligations on the part of the City whether or not the lost, stolen or destroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Bonds issued hereunder. Section 2.10. Provisions for Redemption. The Bonds shall be subject to redemption prior to their maturity, at the option of the City, at such times and in such manner as shall be fixed by Supplemental Resolution of the City prior to or at the time of sale of such Bonds. The provisions of this Section may be modified as to any Series of Bonds by Supplemental Resolution adopted prior to the issuance thereof. Notice of such redemption shall, at least thirty (30) days prior to the redemption date,be filed with the Registrar, and mailed by the Registrar on behalf of the City, first class mail, postage prepaid, to all Holders of Bonds to be redeemed at their addresses as they appear on the registration books hereinbefore provided for on the Record Date, but failure to mail such notice to one or more Holders of such Bonds, or any defect therein, shall not affect the validity of the proceedings for such redemption with respect to Holders of Bonds to which notice was duly mailed hereunder and no defect occurred. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, if less than all of such Bonds, of one maturity are to be called, the distinctive numbers of such Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. 21 Any notice of optional redemption given pursuant to this Section 2.10 may state that it is conditional upon receipt by the Paying Agent of moneys sufficient to pay the redemption price, plus interest accrued to the redemption date, or upon the satisfaction of any other condition, or that it may be rescinded upon the occurrence of any other event, and any conditional notice so given may be rescinded at any time before payment of such redemption price and accrued interest if any such condition so specified is not satisfied or if any such other event occurs. Notice of such rescission shall be given by the Paying Agent to affected Holders of such Bonds as promptly as practicable upon the failure of such condition or the occurrence of such other event. Official notice of redemption having been given as aforesaid, such Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar at the redemption price. Each check or other transfer of funds issued by the Registrar for the purpose of the payment of the redemption price of Bonds being redeemed shall bear the CUSIP number identifying, by issue and maturity, such Bonds being redeemed with the proceeds of such check or other transfer. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any such Bond, there shall be prepared for the Holder a new Bond or Bonds of the same maturity in the amount of the unpaid principal of such partially redeemed Bond. All such Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued. Section 2.11. Form of Bonds. The text of the Bonds, together with the certificate of authentication to be endorsed therein, shall be in substantially the following form, with such omissions, insertions and variations as may be necessary, desirable, authorized or permitted by this Resolution or by any Supplemental Resolution adopted prior to the issuance of a Series of Bonds, or as may be necessary if such Bonds or a portion thereof are issued as Capital Appreciation Bonds, Capital Appreciation Income Bonds, Option Bonds, Variable Rate Bonds, or as may be necessary to comply with applicable laws, rules and regulations of the United States and of the State in effect upon the issuance thereof. [Remainder of page intentionally left blank] 22 [FORM OF BOND] No. R- $ UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF OCOEE,FLORIDA WATER AND SEWER SYSTEM REVENUE [REFUNDING] BONDS, SERIES MATURITY DATE: INTEREST RATE: DATED DATE: CUSIP: Registered Owner: Principal Amount: City of Ocoee, Florida (hereinafter called the "City") for value received, hereby promises to pay to the order of the Registered Owner identified above or registered assigns, as herein provided, on the Maturity Date identified above, upon the presentation and surrender hereof at the designated corporate trust office of , Florida from the sources hereinafter mentioned, the Principal Amount identified above in any coin or currency of the United States of America which on the date of payment thereof is legal tender for the payment of public and private debts, and to pay, solely from said sources, to the Registered Owner hereof by wire transfer or check transmitted to the Registered Owner at his address as it appears on the Bond registration books of the City as it appears on the 15th day of the calendar month preceding the applicable interest payment date, interest on said Principal Amount at the Interest Rate per annum identified above on each 1 and 1 commencing 1, from the interest payment date next preceding the date of registration and authentication of this Bond, unless this Bond is registered and authenticated as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless this Bond is registered and authenticated prior to , in which event this Bond shall bear interest from , (Insert Optional and/or Mandatory Redemption Provisions) Notice of such redemption shall be given in the manner required by the Resolution (as defined below). This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $ of like date, tenor and effect, except as to number, principal amount, maturity, redemption provisions and interest rate, issued to , all in full compliance with the provisions of the Constitution of the State of Florida, the City Charter of the City, Chapter 166, Part II, Florida Statutes, and other applicable provisions of law, and Resolution No. 16-_ adopted by the City on November 1, 2016, as amended and supplemented, particularly as supplemented by Resolution No. adopted by the City on , 23 201_(collectively, "Resolution") and is subject to all the terms and conditions of such Resolution. All capitalized undefined terms used herein shall have the meaning set forth in the Resolution. On parity and equal status with the , this Bond is payable solely from and secured by a pledge of the Net Revenues of the System levied and collected by the City, [the Sewer System Capital Facilities Charges, the Water System Capital Facilities Charges,] and the moneys in certain funds and accounts created pursuant to the Resolution (the "Pledged Revenues") in the manner and to the extent provided in the Resolution. Reference is made to the Resolution for more complete definition and description of the System and the Pledged Revenues. This Bond 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 Bond that such Bondholder shall never have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the principal of and interest on this Bond or the making of any debt service fund, reserve or other payments provided for in the Resolution. It is further agreed between the City and the Holder of this Bond that this Bond and the indebtedness evidenced thereby shall not constitute a lien upon the System, or any part thereof, or on any other property of or in the City, but shall constitute a lien only on the Pledged Revenues all in the manner provided in the Resolution. The City has covenanted, in the Resolution, that it will fix, establish and maintain such rates and collect such fees, rentals, or other charges for the services and facilities of the System, and will revise the same from time to time whenever necessary, so as to provide Net Revenues in the upcoming Fiscal Year equal to the amounts set forth below: Net Revenues in such Fiscal Year equal to (a) one hundred fifteen percent (115%) of the Bond Service Requirement on the Bonds in the corresponding Bond Year, and (b) one hundred percent (100%) of the required deposits into (i) the Reserve Fund (less any portion thereof to be deposited from proceeds of Bonds) together with any Reimbursements Obligations due and owing in such Bond Year, and (ii) the Renewal, Replacement and Improvement Fund in such Bond Year. The City has entered into certain further covenants with the Holders of the Bonds of this issue for the terms of which reference is made to the Resolution. It is certified that this Bond is authorized by and is issued in conformity with the requirements of the Constitution and Statutes of the State of Florida. This Bond is and has all the qualities and incidents of a negotiable instrument under Article 8 of the Uniform Commercial Code, the State of Florida, Chapter 678, Florida Statutes, as amended. 24 The transfer of this Bond is registrable by the Bondholder hereof in Person or by his attorney or legal representative at the designated corporate trust office of the Registrar but only in the manner and subject to the conditions provided in the Resolution and upon surrender and cancellation of this Bond. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Resolution until it shall have been authenticated by the execution by the Registrar of the certificate of authentication endorsed hereon. [Remainder of page intentionally left blank] 25 IN WITNESS WHEREOF, the City of Ocoee, Florida, by resolution duly adopted by its Commission, has caused this Bond to bear the signatures of its Mayor, to be attested by the signature of its Clerk, and a facsimile of the official seal of the City to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the day of , 20_. (SEAL) CITY OF OCOEE, FLORIDA By: Mayor ATTESTED: By: City Clerk CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds issued under the provisions of the within mentioned Resolution. Date of Authentication: Registrar, as Authenticating Agent By: Authorized Officer 26 ASSIGNMENT AND TRANSFER For value received the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or other identifying number of transferee) the attached bond of the City of Ocoee, Florida, and does hereby constitute and appoint, , attorney, to transfer the said Bond on the books kept for Registration thereof, with full power of substitution in the premises. Date: Signature Guaranteed by [member firm of the New York Stock Exchange or a commercial bank or a trust company.] By: (manual or facsimile) Authorized Officer NOTICE: No transfer will be registered and no new Bonds will be issued in the name of the transferee, unless the signature to this assignment corresponds with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the transferee is supplied. [END OF FORM OF BOND] 27 ARTICLE III FUNDS AND ACCOUNTS Section 3.01 Creation of Funds. There are hereby created and established the following funds and accounts, which funds and accounts shall be trust funds held by the Clerk, for the purposes herein provided and used only in the manner herein provided: (A) The "City of Ocoee Water and Sewer System Revenue Fund" (hereinafter sometimes called the "Revenue Fund") to be held by the City and to the credit of which deposits of Gross Revenues shall be made as required by Section 5.01(A)hereof. (B) The "City of Ocoee Water and Sewer System Bond Service Fund" (hereinafter sometimes called the "Bond Service Fund") to be held by the City and to the credit of which deposits shall be made as required by Section 5.01(B)(2) hereof. In such fund there shall be maintained the following accounts: the Principal Account, the Interest Account, the Parity Contract Obligation Account and the Redemption Account. (C) The "City of Ocoee Water and Sewer System Reserve Fund" (hereinafter sometimes called the "Reserve Fund") to be held by the City and to the credit of which deposits shall be made as required by Section 5.01(B)(3) hereof. In such Fund, there may hereafter be established accounts pursuant to Supplemental Resolution. (D) The "City of Ocoee Water and Sewer System Subordinated Debt Service Fund" (hereinafter sometimes called the "Subordinated Debt Service Fund") to be held by the City and to the credit of which deposits shall be made as required by Section 5.01(B)(4)hereof. (E) The "City of Ocoee Water and Sewer System Renewal, Replacement and Improvement Fund" (hereinafter sometimes called the "Renewal, Replacement and Improvement Fund") to be held by the City and to the credit of which deposits shall be made as required by Section 5.01(B)(5)hereof. (F) The "City of Ocoee Water and Sewer System Project Fund" (hereinafter sometimes called the "Project Fund") to be held by the City and to the credit of which deposits shall be made as required by Section 4.02 hereof. Within such fund, there may be created, established and maintained separate accounts for each Series of Bonds, including the Series 2016 Bonds. (G) The "City of Ocoee Sewer System Capital Facilities Charges Fund" (hereinafter sometimes called the "Sewer Facilities Charges Fund") to be held by the City and to the credit of which deposits shall be made as required by Section 5.01(R)hereof. (H) The "City of Ocoee Water System Capital Facilities Charges Fund" (hereinafter sometimes called the "Water System Capital Facilities Charges Fund") to be held by the City and to the credit of which deposits shall be made as required by Section 5.01(S) hereof. 28 (I) The "City of Ocoee Water and Sewer System Rate Stabilization Fund" (hereinafter sometimes called the "Rate Stabilization Fund") to be held by the City and to the credit of which deposits may be made as required by Section 5.01(T) hereof. (J) The "City of Ocoee Water and Sewer System Surplus Fund" (hereinafter sometimes called the "Surplus Fund") to be held by the City and to the credit of which deposits may be made as required by Section 5.01 (B)(9) hereof. The Revenue Fund, the Bond Service Fund (including the accounts therein), the Reserve Fund (including any accounts therein), the Renewal, Replacement and Improvement Fund, the Project Fund, the Sewer System Capital Facilities Charges Fund, the Water System Capital Facilities Charges Fund, the Rate Stabilization Fund, the Surplus Fund and any other special funds herein established and created shall be deemed to be held in trust for the purposes provided herein for such funds. The money in all such funds shall be continuously secured in the same manner as state and municipal deposits are authorized to be secured by the laws of the State of Florida. Notwithstanding anything herein to the contrary, the cash required to be accounted for in each of the funds and accounts described in this Section 3.01 may be deposited in a single bank account, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the cash on deposit therein for the various purposes of such funds and accounts as herein and therein provided. The designation and establishment of the various funds in and by this Resolution shall not be construed to require the establishment of any completely independent, self-balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues and assets of the System for certain purposes and to establish certain priorities for application of such revenues and assets as herein provided. The City may at any time and from time to time appoint one or more depositaries to hold, for the benefit of the Bondholders, any one or more of the funds, and accounts established hereby. Such depository or depositaries shall perform at the direction of the City the duties of the City in depositing, transferring and disbursing moneys to and from each of such funds and accounts as herein set forth, and all records of such depositary in performing such duties shall be open at all reasonable times to inspection by the City and its agent and employees. Any such depositary shall be a bank or trust company duly authorized to exercise corporate trust powers and subject to examination by federal or state authority, of good standing, and having a combined capital, surplus and undivided profits aggregating not less than fifty million dollars ($50,000,000). ARTICLE IV APPLICATION OF BOND PROCEEDS; SPECIAL OBLIGATIONS Section 4.01 Application of Bond Proceeds. The proceeds, including accrued interest and premium, if any, received from the sale of a Series of the Bonds shall be applied by the City 29 simultaneously with the delivery of such Series of the Bonds to the purchaser thereof, as provided in a Supplemental Resolution adopted at or prior to sale of such Series of the Bonds. Section 4.02 Disbursements from Project Fund. Moneys on deposit from time to time in the Project Fund or in the accounts created therein shall be used to pay or reimburse the following Project Costs relating to the corresponding Project: (A) Costs incurred directly or indirectly for or in connection with a Project or a proposed or future Project or acquisition including, but not limited to, those for preliminary planning and studies, architectural, construction management services, legal, financial, engineering and supervisory services, labor, services, materials, equipment, accounts receivable, acquisitions, land, rights-of-way,improvements and installation; (B) Premiums attributable to all insurance required to be taken out and maintained during the period of construction with respect to a Project to be acquired or constructed, the premium on each surety bond, if any, required with respect to work on such facilities, and taxes, assessments and other charges hereof that may become payable during the period of construction with respect to such a Project; (C) Costs incurred directly or indirectly in seeking to enforce any remedy against a contractor or subcontractor in respect of any default under a contract relating to a Project or costs incurred directly or indirectly in defending any claim by a contractor or subcontractor with respect to a Project; (D) Financial, legal, accounting, appraisals, title evidence and printing and engraving fees, charges and expenses, and all other such fees, charges and expenses incurred in connection with the authorization, sale, issuance and delivery of such Series of Bonds; (E) Capitalized interest funded from Bond proceeds, if any, for a reasonable period of time; (F) Any other incidental and necessary costs including without limitation any expenses, fees and charges relating to the acquisition, construction or installation of a Project, and the making of extraordinary repairs, renewals and replacements, decommissioning or retirement of any portion of the System, including the cost of temporary employees of the City retained to carry out duties in connection with the acquisition, construction or erection of a Project and costs related to transition of such Project into ownership by the City; (G) Costs incurred directly or indirectly in placing any Project in operation in order that completion of such Project may occur; (H) Costs of acquiring an existing utility system from a Person, including but not limited to the costs relating to any real estate transaction related thereto; 30 (I) Any other costs relating to the System authorized pursuant to a Supplemental Resolution of the City and permitted under the laws of the State subject to the prior written approval of Bond Counsel;and (J) Reimbursements to the City for any of the above items hereinbefore paid by or on behalf of the City, to the extent deemed permissible by Bond Counsel and advisable by the Financial Advisor. Notwithstanding anything else in this Resolution to the contrary, in the Event of Default, the trustee acting for the Holders of Bonds shall, to the extent there are no other available funds held hereunder, use the remaining funds in each account in the Project Fund to pay principal and interest on the Series of Bonds for which it was established. Section 4.03 Special Obligations of City. The Bonds and any Parity Contract Obligations shall not be or constitute general obligations or indebtedness of the City as "bonds" within the meaning of the Constitution of the State, but shall be payable solely from and secured by a first lien upon and a pledge of the Pledged Revenues as herein provided. No Holder or Holders of any Bonds issued hereunder or Qualified Agreement Provider shall ever have the right to compel the exercise of the ad valorem taxing power of the City or taxation in any form of any real or personal property therein, or to compel the City to pay such principal and interest from any other funds of the City. The payment of principal of and interest on the Bonds and any Parity Contract Obligations shall be secured forthwith equally and ratably by, and the City hereby grants to the Bondholders and any Qualified Agreement Provider (to the extent set forth in the related Qualified Agreement) an irrevocable lien on the Pledged Revenues, prior and superior to all other liens or encumbrances on such Pledged Revenues and the City does hereby irrevocably pledge such Pledged Revenues to the payment of the principal of, redemption premium, if any, and interest on the Bonds and any Parity Contract Obligations, for the reserves therefor and for all other payments required hereunder. Such amounts hereby pledged and assigned shall immediately be subject to the lien of this pledge without any further physical delivery thereof or any further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the City, irrespective of whether such parties have notice thereof. ARTICLE V COVENANTS OF THE CITY; DEFAULTS AND REMEDIES Section 5.01 Covenants of the City. For so long as any of the principal of and interest on any of the Bonds shall be outstanding and unpaid or amounts shall be owed by the City under any Qualified Agreement or until the City has made provision for payment of principal, interest and redemption premiums, if any, with respect to the Bonds, as provided herein, the City covenants with the Holders of any and all Bonds and any Qualified Agreement Provider as follows: 31 (A) REVENUE FUND. All Gross Revenues of the System, and any direct subsidy payments received from the United States Treasury relating to Build America Bonds or any other similar interest subsidy or payments made by the Federal government, shall, upon receipt thereof, be deposited in the Revenue Fund. All deposits into such Revenue Fund shall be deemed to be held in trust for the purposes herein provided and used only for the purposes and in the manner herein provided. (B) DISPOSITION OF REVENUES. All amounts on deposit in the Revenue Fund shall be disposed of monthly, but not later than the twenty-fifth (25th) day of each month commencing in the month immediately following the delivery of the first Series of Bonds issued hereunder only in the following manner and the following order of priority: (1) The City shall first fund the Cost of Operation and Maintenance for the next month. (2) The City shall next deposit into the Bond Service Fund and credit to the following accounts, in the following order (except that payments into the Interest Account and the Parity Contract Obligations Account shall be on parity with each other, and the payments into the Principal Account and the Redemption Account shall be on a parity with each other), the following identified sums: (a) Interest Account: Taking into account actual and anticipated earnings in the Interest Account of the Bond Service Fund within the current Bond Year, such sum as will be sufficient to pay one-sixth(1/6th) (or such greater fractional amount if less than six months will transpire before the next interest payment date) of all interest coming due on all Outstanding Bonds on the next interest payment date; provided, however, that monthly deposits of interest, or portions thereof, shall not be required to be made to the extent that money on deposit within such Interest Account is sufficient for such purpose. In the event the City has issued Variable Rate Bonds pursuant to the provisions hereof, amounts transferred from the Revenue Fund shall be deposited at such other or additional times and amounts as necessary to pay any interest coming due on such Variable Rate Bonds on the next interest payment date, all in the manner provided in a Supplemental Resolution of the City. Any monthly payment from such amounts to be deposited as set forth above, for the purpose of meeting interest payments for any Series of Bonds, shall be adjusted, as appropriate, to reflect the frequency of interest payment dates applicable to such Series. Moneys in the Interest Account may be used only for the purposes set forth in this paragraph (a). Deposits required pursuant to the foregoing shall be increased or decreased each month to the extent required to timely pay interest next becoming due and payable after making allowance for any accrued and capitalized interest, and to make up any deficiency or loss that may otherwise arise in such fund or account. Any direct subsidy payments received from the United States Treasury relating to Build America Bonds or any other similar 32 interest subsidy or payments made by the Federal government shall be used to pay interest on Bonds issued as Build America Bonds. (b) Parity Contract Obligations Account: Taking into account the actual and anticipated earnings in the Parity Contract Obligations Account in the Bond Service Fund within the current Bond Year, a pro rata estimated amount necessary to build up over time the amount of any Parity Contract Obligation which will next be due and payable or reasonably expected to be due and payable under any Qualified Agreement on the next payment date thereunder; provided, however, that the monthly amount to be so deposited may be adjusted, as appropriate, to reflect the frequency of payment dates thereunder (e.g., if such Parity Contract Obligations are required to be paid semi-annually, the City shall be required to deposit monthly an amount which is estimated to equal one-sixth (1/6th) of the next such payment). Moneys in the Parity Contract Obligations Account may be used only for the purposes set forth in this paragraph (b). Deposits required pursuant to the foregoing shall be increased or decreased each month to the extent required to timely pay Parity Contract Obligations next becoming due and payable and to make up any deficiency or loss that may otherwise arise in such fund or account. (c) Principal Account: Taking into account actual and anticipated earnings in the Principal Account of the Bond Service Fund within the current Bond Year, such sum as will be sufficient to pay one-twelfth (1/12th) (or such greater fractional amount if less than twelve (12)months will transpire before the next principal is due) of the principal amount of the Outstanding Bonds which will mature and become due on such annual maturity dates beginning the month which is twelve (12) months prior to the first principal maturity date (or such month which is the month after the issuance of Bonds which may be less than a twelve (12) months prior); provided, however, that monthly deposits for principal, or portions thereof, shall not be required to be made to the extent that money on deposit within such Principal Account is sufficient for such purpose. Any monthly payment from amounts transferred from the Revenue Fund to be deposited as set forth above, for the purpose of meeting principal payments for any Series of Bonds, shall be adjusted, as appropriate, to reflect the frequency of principal payment dates applicable to such Series. Moneys in the Principal Account may be used only for the purposes set forth in this paragraph (c). Deposits required pursuant to the foregoing shall be increased or decreased each month to the extent required to timely pay principal next becoming due and payable and to make up any deficiency or loss that may otherwise arise in such fund or account. (d) Redemption Account: Taking into account actual and anticipated earnings in the Redemption Account of the Bond Service Fund within the current Bond Year, such sum as will be sufficient to pay one-twelfth (1/12th) of any 33 Amortization Installment established for the mandatory redemption of Outstanding Bonds on such annual maturity date beginning the month which is twelve (12) months prior to the first Amortization Installment date; provided, however, that monthly deposits into the Redemption Account, or portions thereof, shall not be required to be made to the extent that money on deposit in the Redemption Account is sufficient for such purpose. Any monthly payment from amounts transferred from the Revenue Fund to be deposited as set forth above, for the purpose of meeting Amortization Installments for any Series of Bonds, shall be adjusted, as appropriate, to reflect the frequency of dates or the number of months prior to such dates established for Amortization Installments applicable to such Series. The moneys in the Redemption Account shall be used solely for the purchase or redemption of the Term Bonds payable therefrom. The City may at any time purchase any of said Term Bonds at prices not greater than the then redemption price of said Term Bonds. If the Term Bonds are not then redeemable prior to maturity, the City may purchase said Term Bonds at prices not greater than the redemption price of such Term Bonds on the next ensuing redemption date. If Term Bonds are so purchased by the City, the City shall credit the account of such purchased Term Bonds against any current Amortization Installment to be paid by the City. If the City shall purchase or call for redemption in any year Term Bonds in excess of the Amortization Installment requirement for such year, such excess of Term Bonds so purchased or redeemed shall be credited in such manner and at such times as the City shall determine. Moneys in the Redemption Account in the Debt Service Fund may be used only for the purposes set forth in this paragraph (d). Deposits required pursuant to the foregoing shall be increased or decreased each month to the extent required to timely pay Amortization Installments next becoming due and payable and to make up any deficiency or loss that may otherwise arise in such fund or account. (3) To the extent that the amounts on deposit in the Reserve Fund (or any account therein) are less than the applicable Reserve Requirement, the City shall next make deposits into the Reserve Fund (or any account therein) in the manner described below from moneys remaining in the Revenue Fund. Any withdrawals from the Reserve Fund (or any account therein) shall be subsequently restored from the first moneys available in the Revenue Fund, after all required current payments for Cost of Operation and Maintenance as set forth above and all current applications and allocations to the Bond Service Fund, including all deficiencies for prior payments have been made in full. Notwithstanding the foregoing, in case of withdrawal from the Reserve Fund (or any account therein), in no event shall the City be required to deposit into the Reserve Fund (or any account therein) an amount greater than that amount necessary to ensure that the difference between the applicable Reserve Requirement and the amounts on deposit in the Reserve Fund (or any account therein) on the date of calculation shall be restored not later than sixty (60) months after the date of such deficiency (assuming equal monthly payments into the Reserve Fund (or any account therein) for such sixty (60) month period). 34 Notwithstanding anything herein to the contrary, the City may establish a separate account in the Reserve Fund for any Series of Bonds and provide a pledge of such account to the payment of such Series of Bonds apart from the pledge provided herein. To the extent a Series of Bonds is secured separately by an account of the Reserve Fund, the Holders of such Bonds shall not be secured by any other moneys in the Reserve Fund or any other account therein. Moneys in a separate account of the Reserve Fund shall be maintained at the Reserve Requirement applicable to such Series of Bonds secured by the account; provided the Supplemental Resolution authorizing such Series of Bonds may establish the Reserve Requirement relating to such separate account of the Reserve Fund at such level as the City deems appropriate. Moneys shall be deposited in the separate accounts in the Reserve Fund on a pro-rata basis. Notwithstanding the foregoing, in lieu of or in substitution for the required deposits into the Reserve Fund (or any account therein), the City may cause to be deposited into the Reserve Fund (or any account therein) a Reserve Fund Insurance Policy and/or a Reserve Fund Letter of Credit in an amount equal to the difference between the applicable Reserve Requirement and the sums then on deposit in the Reserve Fund (or any account therein) plus the amounts to be deposited therein pursuant to the preceding paragraph. In the event the Reserve Fund (or any account therein) contains both a Reserve Fund Insurance Policy or Reserve Fund Letter of Credit and cash, the cash shall be drawn down completely prior to any draw on the Reserve Fund Insurance Policy or Reserve Fund Letter of Credit. In the event more than one Reserve Fund Insurance Policy or Reserve Fund Letter of Credit is on deposit in the Reserve Fund (or any account therein), amounts required to be drawn thereon shall be done on a pro-rata basis calculated by reference to the maximum amounts available thereunder. Moneys in the Reserve Fund and accounts therein shall be used only for the purpose of the payment of Amortization Installments, principal of, or interest on the Outstanding Bonds secured thereby when the other moneys allocated to the Bond Service Fund are insufficient therefor, and for no other purpose. Permitted Investments on deposit in the Reserve Fund (or any account therein) shall be valued at fair value pursuant to Accounting Principles at least annually. In the event of the refunding of any Series of Bonds, the City may withdraw from the Reserve Fund or account securing such Series, all or any portion of the amounts accumulated therein with respect to the Bonds being refunded and deposit such amounts as required by the Supplemental Resolution authorizing the refunding of such Series of Bonds; provided that such withdrawal shall not be made unless (a) immediately thereafter, the Bonds being refunded shall be deemed to have been paid pursuant to the provisions hereof, and (b) the amount remaining in the Reserve Fund (or any account therein) after giving effect to the issuance of such refunding obligations and the disposition of the 35 proceeds thereof shall not be less than the applicable Reserve Requirement for any Bonds then Outstanding which are secured thereby. (4) From the moneys remaining in the Revenue Fund, the City shall next deposit into the Subordinated Debt Service Fund an amount required to be paid as provided in the resolution or agreement of the City authorizing such Subordinated Debt, but for no other purposes. (5) The City shall next apply and deposit monthly from the moneys remaining on deposit in the Revenue Fund into the Renewal, Replacement and Improvement Fund, an amount at least equal to one-twelfth (1/12th) of five percent(5%) of the Gross Revenues received during the immediately preceding Fiscal Year, subject to the minimum account balance set forth below. The moneys in the Renewal, Replacement and Improvement Fund shall be used only for the purpose of paying the cost of extraordinary repairs, extensions, enlargements or additions to, or the replacement of capital assets of the System or emergency repairs thereto. No further deposits shall be required to be made into the Renewal, Replacement and Improvement Fund when there shall be on deposit therein an amount equal to or greater than $500,000, or such other amount as may be determined from time to time by the Consulting Engineers upon the request of the City. Funds on hand in the Renewal, Replacement and Improvement Fund may be used to pay current Cost of Operation and Maintenance to the extent moneys on deposit in the Revenue Fund are insufficient for such purposes. The moneys on deposit in such fund may also be used to supplement the Reserve Fund (or any account therein), if necessary, in order to prevent a default in the payment of the principal and interest on the Bonds. (6) Moneys may next, in the discretion of the Commission, be deposited into the Rate Stabilization Fund in such sums as shall be determined by the Commission. (7) The balance of any moneys remaining in the Revenue Fund after the above required payments have been made shall be deposited into the Surplus Fund and may be used for any lawful purpose; provided, however, that none of such moneys shall be used for any purposes other than those hereinabove specified unless all current payments, including any deficiencies for prior payments, have been made in full and unless the City shall have complied fully with all the covenants and provisions of this Resolution. (C) INVESTMENTS. Moneys in any fund or account created hereunder may be invested and reinvested in Permitted Investments which mature not later than the dates on which the moneys on deposit therein will be needed for the purpose of such fund. All income on such investments, except as otherwise provided, shall be deposited in the respective funds and accounts from which such investments were made and be used for the purposes thereof unless and until the maximum required amount (or, with respect to the Project Fund, the 36 amount required to acquire, construct and erect the Project) is on deposit therein, and thereafter shall be deposited in the Revenue Fund. In determining the amount of any of the payments required to be made pursuant to this Section 5.01(C), credit may be given for all investment income accruing to the respective funds and accounts described herein, except as otherwise provided. (D) OPERATION AND MAINTENANCE. The City will maintain the System and all parts thereof in good condition and will operate the same in an efficient and economical manner, making such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. (E) RATE COVENANT. The City will fix, establish and maintain such rates and collect such fees, rentals, or other charges for the services and facilities of the System, and will revise the same from time to time whenever necessary, so as to provide Net Revenues in the upcoming Fiscal Year equal to the amounts set forth below: Net Revenues in such Fiscal Year equal to (a) one hundred fifteen percent (115%) of the Bond Service Requirement on the Bonds in the corresponding Bond Year, and (b) one hundred percent (100%) of the required deposits into (i) the Reserve Fund (less any portion thereof to be deposited from proceeds of Bonds) together with any Reimbursements Obligations due and owing in such Bond Year, and (ii) the Renewal, Replacement and Improvement Fund in such Bond Year. The City further covenants that, from time to time and as often as shall be necessary, it will revise rates, fees and charges of the System or the Cost of Operation and Maintenance, and methods of operations of the System as may be necessary so that Net Revenues in each Fiscal Year will, subject to applicable requirements and restrictions imposed by law, not be less than the amount required for such Fiscal Year (1) under this Section 5.01(E) and (2) to make all deposits and payments required by the provisions of Section 5.01(B) hereof. The City further covenants and agrees that it will annually, within thirty (30) days after adoption of the annual budget, revise its rates, fees and charges to the extent necessary to cause the estimated Net Revenues during the Fiscal Year to which such budget pertains to be not less than the amount of Net Revenues (1) required by this Section 5.01(E) and (2) needed to make the deposits and payments required by Section 5.01(B)hereof. Nothing herein will obligate the City to impose Sewer System Capital Facilities Charges or Water System Capital Facilities Charges other than in accordance with law. (F) BOOKS AND ACCOUNTS; AUDIT. The City shall keep proper books, records and accounts, separate and apart from all other records and accounts, showing correct and complete entries of all transactions of the System, and the Holders of any of the Bonds or any duly authorized agent or agents of such Holders shall have the right at any and all reasonable times to inspect such books, records and accounts. The City shall, within two hundred forty 37 (240) days following the close of each Fiscal Year of the City, cause an audit of such books, records and accounts to be made by an independent firm of certified public accountants. Copies of each such audit report shall be placed on file with the City and be made available at reasonable times for inspection by Holders of the Bonds. (G) SALE OF THE SYSTEM.(1) The System may be sold, mortgaged, leased or otherwise disposed of only as a whole or substantially as a whole, and only if the net proceeds to be realized from such transaction shall be sufficient fully to retire all of the Bonds and all other obligations Outstanding pursuant to the provisions of this Resolution which have a lien on the Pledged Revenues. The proceeds from such sale, mortgage, lease or other disposition of the System pursuant to this paragraph(i) shall be used only for the purpose of providing for the payment of the principal of and interest on the Bonds and other obligations Outstanding pursuant to the provisions of this Resolution as the same shall become due, or for the redemption of callable Bonds, provided, however, that any excess of such proceeds not needed for such purpose may be used by the City for any purpose permitted by law. (2) The foregoing provision notwithstanding, the City shall have and hereby reserves the right to sell, lease or otherwise dispose of any of the property comprising a part of the System which may hereafter be determined in the manner provided herein to be no longer necessary, useful, or profitable in the operation thereof. Prior to any such sale, lease, or other disposition of said property pursuant to this paragraph (2) the duly authorized officer in charge of the System shall make a finding in writing determining that such property comprising a part of the System is no longer necessary, useful, or profitable in the operation thereof. If (a) the amount to be received as a result of such sale or other disposition is in excess of five percent (5%) of the market value of the gross plant of the System, such finding shall be approved by resolution of the Commission; and, if (b) the amount to be received as a result of such sale or other disposition is in excess of ten percent (10%) of the market value of the gross plant of the System, such finding shall be approved by the Qualified Independent Consultant and by resolution of the Commission. Any proceeds of such sale or other disposition shall be deposited in the Renewal, Replacement and Improvement Fund created by this Resolution and used only as provided herein for moneys on deposit in such fund. Such payment of such proceeds into the Renewal, Replacement and Improvement Fund shall not reduce the amounts required to be paid into such fund by other provisions of this Resolution. (3) The foregoing provision notwithstanding, the City shall have and hereby reserves the right to sell, lease, or transfer operating control of, or otherwise dispose of, the property comprising the System as a whole to any public board or body, whether created by the City or created pursuant to the laws of the State, for the purpose of owning and operating the System, whether independent of or together with any other utility systems of the City. Any such transfer shall be expressly made subject to the rights of the Holders of any Bonds issued hereunder and then Outstanding, and in particular subject to the lien upon the Pledged Revenues of the Bonds. 38 (4) The foregoing provisions notwithstanding, the City shall have the right to merge or consolidate the System with any other City-owned and/or operated utility system, including a sewer utility system and to combine the Gross Revenues and the Sewer Capital Facilities Charges with corresponding receipts from the other utility system, and to subject such combined Gross Revenues, Water Capital Facilities Charges and receipts to the lien of the Bonds and any obligations secured by the receipts of such other utility system, provided that (i) the requirements for the issuance of Additional Parity Obligations set forth in Section 5.01(Q) hereof calculated with respect to the combined revenues, capital facilities charges, receipts and debt obligations of the System and such other utility system are satisfied, and (ii) the Qualified Independent Consultants shall certify as to the good condition of the other utility system and operating feasibility of such merger and/or consolidation. (H) INSURANCE. The City shall provide protection for the System both in accordance with the requirements of all agreements, if any, to which the City may at the time be a party with respect to joint ownership of properties by the City with others, if any, which are part of the System, and in accordance with Prudent Utility Practice. Said protection may consist of insurance, self-insurance and indemnities. The City will keep, or cause to be kept, the works, plants and facilities comprising the properties of the System insured, and will carry such other insurance against fire and other risks, accidents or casualties at least to the extent and of the kinds that insurance is usually carried by utilities operating like properties. Any insurance shall be in the form of policies or contracts for insurance with insurers of good standing, shall be payable to the City and may provide for such deductibles, exclusions, limitations, restrictions, and restrictive endorsements customary in policies for similar coverage issued to entities operating properties similar to the properties of the System. Any self-insurance shall be in the amounts, manner and of the type provided by entities operating properties similar to the properties of the System. In the event of any loss or damage to the System covered by insurance, the City will, with respect to each such loss, promptly repair, reconstruct or replace the parts of the System affected by such loss or damage to the extent necessary to the proper conduct of the operation of the business of the System in accordance with Prudent Utility Practice, shall cause the proceeds of such insurance to be applied for that purpose to the extent required therefor, and pending such application, shall hold the proceeds of any insurance policy covering such damage or loss in trust to be applied for that purpose to the extent required therefor. Any excess insurance proceeds received by the City may be used by the City for any lawful purpose of the System. Notwithstanding the foregoing or any provisions of this Resolution to the contrary, the City shall not be required to maintain insurance with respect to facilities for which insurance shall not be available at reasonable cost or for facilities which, in accordance with Prudent Utility Practice, are not customarily insured. (I) NO FREE SERVICE; SERVICES RENDERED TO THE CITY; NO PREFERENTIAL RATES. The City will neither render nor cause to be rendered any free services of any nature by the System, or any part thereof, nor will any preferential rates be established for users of the same class; in the event the City, or any department, agency, or instrumentality, or any officer or employee thereof, shall avail itself of the facilities or services provided by the System, or any part thereof, the same rates, fees, or charges applicable to other 39 customers receiving like services under similar circumstances shall be charged to the City and to any such department, agency, instrumentality, officer, or employee. Such charges shall be paid as they accrue, and the City shall transfer from its general funds sufficient sums to pay such charges. The moneys so received shall be deemed to be Gross Revenues derived from the operation of the System, and shall be deposited and accounted for in the same manner as other Gross Revenues derived from the operation of the System. The foregoing paragraph shall not require the City to have the same rates for(a)different classes of users or (b) for users of the services and facilities of the System residing or located within different geographical areas, and the City may have different rates for(i)different classes of users or(ii)for users of the services and facilities of the System located within and without the boundaries of the City, as long as such rates comply with the foregoing paragraph, insofar as they relate to the users within (A)any class or (B)any particular area or areas located within and without the City. The foregoing provisions notwithstanding, the City shall set rates for customers of the System residing within the corporate limits of the City in accordance with any applicable provisions of law. (J) MANDATORY CUT OFF. To the full extent permitted by law, the City shall abide by its established written policy consistent with Prudent Utility Practice for the disconnection from the System of any customer who fails to pay for services rendered by the System, and shall enforce such policy diligently and fairly. (K) ENFORCEMENT OF COLLECTIONS. The City will diligently enforce and collect the rates, fees and other charges for the services and facilities of the System and will take all steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become delinquent to the full extent permitted or authorized by law; and will maintain accurate records with respect thereof. All such fees, rates, charges and revenues shall, as collected,be held in trust to be applied as herein provided. (L) OPERATING BUDGET. The City shall annually,prior to commencement of each of its Fiscal Years, prepare and adopt a budget of the estimated expenditures for the operation and maintenance of the System during such next succeeding Fiscal Year. The City shall mail copies of such annual budgets (including any amendments thereto) to any Holder or Holders of Bonds who shall file his address with the City and request in writing that copies of all such budgets be furnished him and shall make available such budgets of the System at all reasonable times to any Holder or Holders of Bonds or to anyone acting for and on behalf of such Holder or Holders. Bondholders shall pay reasonable actual cost of printing and mailing of such copies. (M) MANDATORY CONNECTIONS; NO COMPETING SYSTEM. So long as service is in fact available as reasonably determined by the City, the City will, to the full extent permitted by law, require all lands, buildings and structures within the Service Area being served by the System (other than the residential and commercial reuse/reclaimed system), to connect with and use such facilities within one year after notification. To the extent permitted by law, the City will not grant a franchise for the operation of any competing utility system or systems within the Service Area until all Bonds issued hereunder, together with the interest thereon, and premium, if any, have been paid in full. Notwithstanding the foregoing, the City 40 shall not be required to duplicate services being provided by private or public utilities in the area being served by such private or public utilities on the date of issuance of the first Series of Bonds hereunder. In addition, the City shall not be prohibited from allowing other private or public utilities to provide services within the Service Area, if it would be uneconomical for the City to provide service in such portions of the Service Area. Nothing herein shall be deemed to constitute the approval of the City for any private or public utility (other than the System) to provide any services within the boundaries of the Service Area or the City or within any other area of the City. (N) SUPERVISORY PERSONNEL. The City, in operating the System, will employ or designate, as manager, one or more of its qualified employees, or an independent contractor, who have demonstrated ability and experience in operating similar facilities, and will require all such employees or independent contractors, as the case may be, who may have possession of money derived from the operation of the System to be covered by a fidelity bond, written by a responsible indemnity company in amounts fully adequate to protect the City from loss. (0) PAYMENT OF TAXES, ASSESSMENTS AND OTHER CLAIMS. The City shall from time to time duly pay and discharge, or cause to be paid and discharged, all taxes, assessments and other governmental charges, or payments in lieu thereof, lawfully imposed upon the properties constituting the System, the Gross Revenues, Sewer System Capital Facilities Charges or Water System Capital Facilities Charges when the same shall become due, as well as all lawful claims for labor and materials and supplies which, if not paid, might become a lien or charge upon such properties or any part thereof, or upon the Gross Revenues, Sewer System Capital Facilities Charges or Water System Capital Facilities Charges or which might in any way impair the security of the Bonds, except assessments, charges or claims which the City shall in good faith contest by proper legal proceedings. (P) ISSUANCE OF OTHER OBLIGATIONS. The City shall issue no bonds or obligations of any kind or nature payable from or enjoying a lien on the Pledged Revenues if such obligations have priority over the Bonds or any Parity Contract Obligations with respect to payment or lien, nor shall the City create or cause or permit to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien of the Bonds and any Parity Contract Obligations upon said Pledged Revenues. Notwithstanding any other provision in this Section 5.01(P), the City may issue Additional Parity Obligations under the conditions and in the manner provided herein. Any obligations of the City, other than the Bonds and any Parity Contract Obligations, which are payable from the Pledged Revenues shall contain an express statement that such obligations are junior and subordinate in all respects to the Bonds and any Parity Contract Obligations as to lien on and source and security for payment from such Pledged Revenues. (Q) ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. No Additional Parity Obligations shall be issued after the issuance of the Series 2016 Bonds herein authorized, except upon the conditions and in the manner hereinafter provided: 41 (1) There shall have been obtained and filed with the Clerk a certificate of the Finance Director stating: (a) that the books and records of the City relative to the System and the Net Revenues, and if applicable, the Sewer System Capital Facilities Charges and/or the Water System Capital Facilities Charges, have been reviewed by the Finance Director;and (b) that the amount of the Net Revenues derived for any consecutive twelve (12) months out of the preceding thirty (30) months preceding the date of issuance of the proposed Additional Parity Obligations (the "Test Period") adjusted as provided in paragraphs (2), (3), (4), (5) and/or(6)below, is equal to not less than 115% of the Maximum Bond Service Requirement becoming due in any Bond Year thereafter on (A) all Bonds issued under this Resolution, if any, then Outstanding, and (B) on the Additional Parity Obligations with respect to which such certificate is made. (2) Upon recommendation of the Qualified Independent Consultants, the Net Revenues certified pursuant to (b) in the previous paragraph may be adjusted for purposes of this Section 5.01(Q) by including: (a) 100% of the additional Net Revenues which in the opinion of the Qualified Independent Consultant would have been derived by the City from rate increases adopted before the Additional Parity Obligations are issued, if such rate increases had been in place throughout the Test Period, and (b) 100% of the additional Net Revenues estimated by the Qualified Independent Consultant to be derived during the first full twelve month period after the facilities of the System are extended, enlarged, improved or added to with the proceeds of the Additional Parity Obligations with respect to which such certificate is made. (3) Upon recommendation of the Qualified Independent Consultants, if the Additional Parity Obligations are to be issued for the purpose of acquiring an existing water system and/or sewer system and/or any other utility system in accordance with Section 6.05 hereof, the Net Revenues certified pursuant to Section 5.01(Q)(1)(b) may be adjusted by including: 100% of the additional estimated Net Revenues which in the written opinion of the Qualified Independent Consultants will be derived from the acquired facilities during the first full 12-month period after the issuance of such Additional Parity Obligations (the Qualified Independent Consultants' report shall be based on the actual operating revenues of the acquired utility for a recent 12-month period adjusted to reflect the City's ownership and the City's rate structure in effect with respect to the System at the time of the issuance of the Additional Parity Obligations). (4) Upon recommendation of the Qualified Independent Consultants, if the number of connections as of the first day of the month in which the proposed Additional Parity Obligations are to be issued exceeds the average number of such connections during such twelve (12) consecutive month period, then the Net Revenues certified pursuant to Section 5.01(Q)(1)(b) may be adjusted to include the Net Revenues which 42 would have been received in such twelve (12) consecutive months if those additional connections had also been connected to the System during all of such twelve (12) consecutive months. (5) Upon recommendation of the Qualified Independent Consultant, if the City shall have entered into a contract, which contract shall be for a duration of not less than the final maturity of the proposed Additional Parity Obligations, with any public body, whereby the City shall have agreed to furnish services for the collection, treatment or disposal of sewage or agreed to furnish services in connection with any water system or any other utility system, then the Net Revenues certified pursuant to Section 5.01(Q)(1)(b) may be increased (to the extent such amounts were not reflected in such Net Revenues) by the minimum amount which the public body shall guarantee to pay in any one year for the furnishing of services by the City, after deducting from such payment the estimated Cost of Operation and Maintenance attributable in such year to such services. (6) Upon recommendations of the Qualified Independent Consultants, if there is an estimated increase in Net Revenues to be received by the City as a result of additions, extensions or improvements to the System during the period of three (3)years following the completion of such additions, extensions or improvements financed with the proceeds of Bonds or Additional Parity Obligations, then the Net Revenues derived from the System certified pursuant to Section 5.01(Q)(1)(b) may be increased by fifty percent (50%) of the average annual additional Net Revenues calculated for such three year period. (7) The City need not comply with the provisions of paragraph (1) of this Section 5.01(Q) if and to the extent the Additional Parity Obligations to be issued are refunding bonds, if the City shall cause to be delivered a certificate of the Finance Director of the City setting forth the Maximum Annual Bond Service Requirement(i) for the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that the Maximum Annual Bond Service Requirement pursuant to (ii) above is not greater than that set forth pursuant to (i) above. (8) The City need not comply with the provisions of paragraph (1) of this Section 5.01(Q) if and to the extent the Bonds to be issued are for the purpose of providing any necessary additional funds required for completion of any improvements to the System ("Completion Bonds") if originally financed with the proceeds of Bonds; provided that such Completion Bonds for which the City need not comply with the provision of such paragraph (1) of this Section 5.01(Q) may not exceed 10% of the total principal amount of Bonds estimated to be required for such improvements to the System at the time of issuance of the initial Series of Bonds to finance such improvements. 43 (9) The Finance Director of the City shall have certified that the City is not in default in the carrying out of any of the obligations assumed under this Resolution and no event of default shall have occurred under this Resolution and shall be continuing, and all payments required by this Resolution to be made into the funds and accounts established hereunder shall have been made to the full extent required. (10) The Supplemental Resolution authorizing the issuance of the Additional Parity Obligations shall recite that all of the covenants contained herein will be applicable to such Additional Parity Obligations. (11) Notwithstanding anything herein to the contrary, no Additional Parity Obligations shall be issued if an Event of Default would continue beyond such issuance. (R) SEWER SYSTEM CAPITAL FACILITIES CHARGES. All Sewer System Capital Facilities Charges, if any, shall be deposited into the Sewer System Capital Facilities Charges Fund. All moneys remaining on deposit in such fund shall be utilized on or before the 26th day of each month and shall be applied by the City as follows: (1) Such moneys shall, in the case of a deficiency in the Bond Service Fund, first be applied and allocated, together with Water System Capital Facilities Charges pursuant to Section 5.01(S) hereof on a pro rata basis, to the Bond Service Fund to supplement other Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein to the extent the Sewer System Capital Facilities Charges are pledged to the Bonds. (2) Thereafter, all moneys in the Sewer System Capital Facilities Charges Fund may be applied by the City for any use allowed by law. Notwithstanding any provision of this Resolution to the contrary, the amount of Sewer System Capital Facilities Charges used for the payment of principal of, redemption premium, if any, and interest on the Bonds in any Bond Year shall never exceed the maximum amount permitted by law. (S) WATER SYSTEM CAPITAL FACILITIES CHARGES. All Water System Capital Facilities Charges, if any, shall be deposited into the Water System Capital Facilities Charges Fund. All moneys remaining on deposit in such fund shall be utilized on or before the 26th day of each month and shall be applied by the City as follows: (1) Such moneys shall, in the case of a deficiency in the Bond Service Fund, first be applied and allocated, together with Sewer System Capital Facilities Charges pursuant to Section 5.01(R) hereof on a pro rata basis, to the Bond Service Fund to supplement other Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein to the extent the Water System Capital Facilities Charges are pledged to the Bonds. 44 (2) Thereafter, all moneys in the Water System Capital Facilities Charges Fund may be applied by the City for any use allowed by law. Notwithstanding any provision of this Resolution to the contrary, the amount of Water System Capital Facilities Charges used for the payment of principal of, redemption premium, if any, and interest on the Bonds in any Bond Year shall never exceed the maximum amount permitted by law. (T) RATE STABILIZATION FUND. Moneys on deposit in the Rate Stabilization Fund may be used only for redeposit into the Revenue Fund. Moneys redeposited into the Revenue Fund shall be included in Gross Revenues for the purposes of calculating Gross Revenues hereunder for the Fiscal Year in which the redeposit occurs. (U) UNCLAIMED MONEYS. Any moneys deposited into the Bond Service Fund, including the Redemption Account, for the payment of principal of, premium, if any, and interest on the Bonds and remaining unclaimed for a period of one (1)year from the date on which such moneys were due to pay maturing principal of, premium, if any, or interest on such Bonds may be withdrawn by the City and used for any lawful purpose of the System; provided that (1) such withdrawal shall not give rise to any claim for additional interest due on such Bonds on account of payment thereof not having been duly provided for under the terms of this Resolution; and (2) such withdrawal shall not affect the right, to the extent existing under the provisions of this Resolution or of the laws of the State, of the Holders of such Bonds to payment of the principal and interest thereon to the interest payment date with respect to which such moneys were originally deposited. Section 5.02 Defaults; Events of Default and Remedies. Except as provided below, if any of the following events occur, it is hereby defined as and declared to be and to constitute an "Event of Default:" (A) Default in the due and punctual payment of any interest on the Bonds; (B) Default in the due and punctual payment of the principal of and premium, if any, on any Bond, at the stated maturity thereof, or upon proceedings for redemption thereof; (C) Default in the performance or observance of any other of the covenants, agreements or conditions on the part of the City contained in this Resolution or in the Bonds and the continuance thereof for a period of thirty (30) days after written notice to the City given by the Holders of not less than twenty-five percent (25%) of aggregate principal amount of Bonds then Outstanding (provided, however, that with respect to any obligation, covenant, agreement or condition which requires performance by a date certain, if the City performs such obligation, covenant, agreement or condition within thirty (30) days of written notice as provided above, the default shall be deemed to be cured); 45 (D) Failure by the City promptly to remove any execution, garnishment or attachment of such consequence as will materially impair its ability to carry out its obligations hereunder;or (E) Any act of bankruptcy or the rearrangement, adjustment or readjustment of the obligations of the City under the provisions of any bankruptcy or moratorium laws or similar laws relating to or affecting creditors' rights. The term "default" shall mean default by the City in the performance or observance of any of the covenants, agreements or conditions on its part contained in this Resolution, any Supplemental Resolution or in the Bonds, exclusive of any period of grace required to constitute a default or an"Event of Default" as hereinabove provided. Notwithstanding the foregoing, the occurrence of any default under a Qualified Agreement, including without limitation failure on the part of the City to pay Parity Contract Obligations or to pay a termination fee under a Qualified Agreement, shall not be construed as or deemed to constitute an "Event of Default" hereunder; rather, such occurrence shall be remedied pursuant to such Qualified Agreement and applicable legal and equitable principles taking into account the parity status as to lien on Pledged Revenues which the counterparty to such Qualified Agreement enjoys as to Parity Contract Obligations only, relative to that of the Bondholders and their rights to payments hereunder. For purposes of Section 5.02(A) and (B) hereof, no effect shall be given to any payments made under any Bond Insurance Policy. Any Holder of Bonds issued under the provisions hereof or any trustee acting for the Holders of such Bonds may, either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights, including the right to the appointment of a receiver, existing under State or federal law, or granted and contained herein, and may enforce and compel the performance of all duties required herein or by any applicable law to be performed by the City or by any officer thereof. Nothing herein, however, shall be construed to grant to any Holder of the Bonds any lien on any property of the City, except the Pledged Revenues. The foregoing notwithstanding: (i) No remedy conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy, but each remedy shall be cumulative and shall be in addition to any other remedy given to the Bondholders hereunder. (ii) No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised as often as may be deemed expedient. 46 (iii) No waiver of any default or Event of Default hereunder by the Bondholders shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. (iv) Acceleration of the payment of principal of and interest on the Bonds shall not be a remedy hereunder in the case of an Event of Default. Upon the occurrence of an Event of Default, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Bondholders under this Resolution, the Bondholders shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the System and the funds pending such proceedings, with such powers as the court making such appointment shall confer. Notwithstanding any provision of this Resolution to the contrary, for all purposes of this Section 5.02, except the giving of notice of any Event of Default to the Holder of the Bonds, any Insurer shall be deemed to be the Holder of the Bonds it has insured,unless otherwise provided in the Supplemental Resolution pursuant to which such insured Bonds are issued. On the occurrence of an Event of Default, to the extent such rights may then lawfully be waived, neither the City nor anyone claiming through or under it, shall set up, claim or seek to take advantage of any stay, extension or redemption laws now or hereafter in force, in order to prevent or hinder the enforcement of this Resolution, and the City, for itself and all who may claim through or under it, hereby waives, to the extent it may lawfully do so, the benefit of all such laws and all right of redemption to which it may be entitled. Within 30 days of knowledge thereof, both the City and the Paying Agent shall provide notice to any and all Insurers of Bonds of the occurrence of any Event of Default. The respective Insurers of Bonds shall be included as a party in interest and as a party entitled to (i) notify the City or any applicable receiver of the occurrence of an Event of Default, and (ii) request the receiver to intervene in judicial proceedings that affect the Bonds or the security therefor. The receiver is required to accept notice of default from each Insurer of Bonds. Upon the occurrence and continuance of an Event of Default, the Insurers of Bonds in default shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders insured by the Insurer under this Resolution, and the Insurers of Bonds in default shall also be entitled to approve all waivers of events of default related to the insured Bonds, subject to any provisions in the Supplemental Resolution which is adopted and which governs the issuance of such insured Bonds. 47 ARTICLE VI MISCELLANEOUS Section 6.01 Amending and Supplementing of Resolution without Consent of Holders of Bonds. The City, from time to time and at any time and without the consent or concurrence of any Holder of any Bonds, may adopt a Supplemental Resolution amendatory hereof or supplemental hereto if the provisions of such Supplemental Resolution shall not materially adversely affect the rights of the Holders of the Bonds then Outstanding, for any one or more of the following purposes: (A) To make any changes or corrections in this Resolution as to which the City shall have been advised by Bond Counsel that are required for the purpose of curing or correcting any ambiguity or defective or inconsistent provisions or omission or mistake or manifest error contained in this Resolution, or to insert in this Resolution such provisions clarifying matters or questions arising under this Resolution as are necessary or desirable; (B) To add additional covenants and agreements of the City for the purpose of further securing the payments of the Bonds and any Parity Contract Obligations; (C) To surrender any right, power or privilege reserved to or conferred upon the City by the terms of this Resolution; (D) To confirm, as further assurance, any lien, pledge or charge or the subjection to any lien, pledge or charge,created or to be created by the provisions of this Resolution; (E) To grant to or confer upon the Holders or any Qualified Agreement Provider any additional right, remedies, powers, authority or security that lawfully may be granted to or conferred upon them; (F) To assure compliance with federal "arbitrage" provisions in effect from time to time; (G) To provide such changes as may be necessary in order to adjust the terms hereof (but not including the provisions of Section 5.01(E) and Section 5.01(Q) hereof) so as to facilitate the issuance of Variable Rate Bonds, Option Bonds, the execution of any Qualified Agreement, or to obtain a Credit Facility; (H) To provide for the combination of the System with any other utility provided the conditions set forth in Section 6.05 hereof are satisfied; (I) To provide for the transfer of the ownership and/or operation of the System pursuant to a governmental reorganization as set forth in Section 6.04 hereof; 48 (J) To facilitate the issuance of utility cost containment bonds by some legal entity other than the City to be secured by a "utility project charge" or the like as contemplated in Section 6.06 hereof; (K) To modify any of the provisions of this Resolution in any other aspects provided that such modifications shall not be effective until after the Bonds Outstanding at the time such Supplemental Resolution is adopted shall cease to be Outstanding, or until the holders thereof consent thereto pursuant to Section 6.02 hereof, and any Bonds issued subsequent to any such modification shall contain a specific reference to the modifications contained in such Supplemental Resolution. (L) To amend Section 6.10 hereof to make covenants relating to Build America Bonds, if appropriate. Except for Supplemental Resolutions providing for the issuance of Bonds pursuant hereto, the City shall not adopt any Supplemental Resolution authorized by the foregoing provisions of this Section unless, in the opinion of Bond Counsel, the adoption of such Supplemental Resolution is permitted by the foregoing provisions of this Section. Any Insurers of the Bonds shall be provided with a full transcript of all proceedings relating to the execution of any such amendment or supplement. Section 6.02 Amendment of Resolution with Consent of Holders of Bonds. Except as provided in Section 6.01 hereof, no material modification or amendment of this Resolution or of any resolution supplemental hereto shall be made without the consent in writing of the Holders of fifty-one percent (51%) or more in the principal amount of the Bonds of each Series so affected and then Outstanding and any Qualified Agreement Provider; provided, however, written consent by an underwriter of Bonds who intends to resell the Bonds to the public may not be counted towards meeting the fifty-one percent (51%) requirement. For purposes of this Section, so long as legally permitted, to the extent any Bonds are insured by a Bond Insurance Policy or are secured by a Credit Facility and such Bonds are then rated in as high a rating category as the rating category in which such Bonds were rated at the time of initial issuance and delivery thereof by either S&P, Moody's or Fitch or successors and assigns, then the consent of the Insurer or Insurers of such Bond Insurance Policy or the issuer or issuers of such letter of credit shall be deemed to constitute the consent of the Holder of such Bonds. No modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof or reduce the percentage of the Holders of the Bonds required to consent to any material modification or amendment hereof without the consent of the Holder or Holders of all such obligations. For purposes of the immediately preceding sentence only, the issuer or issuers of a Bond Insurance Policy or a Credit Facility shall not consent on behalf of the Holders of the Bonds. No amendment or supplement pursuant to this Section 6.02 (but not including Section 6.01 hereof) shall be made without the consent of each of the Insurers of Bonds, if any. 49 Section 6.03 Defeasance. The covenants and obligations of the City shall be defeased and discharged under terms of this Resolution as follows: (A) If the City shall pay or cause to be paid, or there shall otherwise be paid, to any Qualified Agreement Provider any and all Parity Contract Obligations and to the Holders of all Bonds the principal, redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein, then the pledge of the Pledged Revenues and all covenants, agreements and other obligations of the City to any Qualified Agreement Provider and the Bondholders shall thereupon cease, terminate and become void and be discharged and satisfied. If the City shall pay or cause to be paid, or there shall otherwise be paid, to any Qualified Agreement Provider any and all Parity Contract Obligations and to the Holders of any Outstanding Bonds the principal, redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein, such Parity Contract Obligations and such Bonds shall cease to be entitled to any lien, benefit or security under this Resolution, and all covenants, agreements and obligations of the City to any Qualified Agreement Provider and the Holders of such Bonds shall thereupon cease, terminate and become void and be discharged and satisfied. (B) The Bonds, redemption premium, if any, and interest due or to become due for the payment or redemption of which moneys shall have been set aside and shall be held in trust (through deposit by the City of funds for such payment or redemption or otherwise) at the maturity or redemption date thereof shall be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section 6.03. Subject to the provisions of paragraph (C) and (D) of this Section 6.03, any Outstanding Bonds shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section if(i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the City shall have given to the escrow agent instructions accepted in writing by the escrow agent to notify Holders of Outstanding Bonds in the manner required herein of the redemption of such Bonds on said date, and (ii) there shall have been deposited with the escrow agent either moneys in an amount which shall be sufficient, or Acquired Obligations (including any Acquired Obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States) the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with the escrow agent at the same time, shall be sufficient, to pay when due the principal of and premium, if any, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof, as the case may be. In the event of a defeasance pursuant to clause (ii) above, the City shall cause to be delivered a verification report of an independent nationally recognized certified public accountant or such other firm recognized as providing the skill and expertise necessary to deliver a verification report. If a forward supply contract is employed in connection with the refunding, (i) such verification report shall expressly state that the adequacy of the escrow to accomplish the refunding project relies solely on the initial escrowed investments and the maturing principal thereof and interest income thereon and does not assume performance under or compliance with the forward supply contract, and (ii) the applicable escrow agreement shall provide that in the event of any 50 discrepancy or difference between the terms of the forward supply contract and the escrow agreement and this Resolution, the terms of the escrow agreement and this Resolution shall be controlling. (C) For purposes of determining whether Variable Rate Bonds shall be deemed to have been paid prior to the maturity or redemption date thereof, as the case may be, by the deposit of moneys, or Acquired Obligations and moneys, if any, in accordance with paragraph (B) of this Section 6.03, the interest to come due on such Variable Rate Bonds on or prior to the maturity date or redemption date thereof, as the case may be, shall be calculated assuming that interest thereon will accrue at the maximum rate of interest such Variable Rate Bonds may bear pursuant to the Supplemental Resolution authorizing the issuance thereof, or the maximum rate permitted by law if such Supplemental Resolution provides no maximum rate of interest. (D) Option Bonds shall be deemed to have been paid in accordance with the second sentence of paragraph (B) of this Section 6.03 only if, in addition to satisfying the requirements of clauses (i) and (ii) of such sentence, there shall have been deposited with the escrow agent moneys in an amount which shall be sufficient to pay when due the maximum amount of principal of and redemption premium, if any, and interest on such Bonds which could become payable to the Holders of such Bonds upon the exercise of any options provided to the Holders of such Bonds; provided, however, that if, at the time a deposit is made with the escrow agent pursuant to paragraph (B) of this Section 6.03, the options originally exercisable by the Holder of an Option Bond are no longer exercisable, such Bond shall not be considered an Option Bond for purposes of this paragraph (D). If any portion of the moneys deposited with the escrow agent for the payment of the principal of and redemption premium, if any, and interest on Option Bonds is not required for such purpose, the escrow agent shall, if requested by the City, pay the amount of such excess to the City free and clear of any trust, lien, security interest, pledge or assignment securing said Bonds or otherwise existing under the Resolution. Section 6.04 Governmental Reorganization. Notwithstanding any other provisions of this Resolution, this Resolution shall not prevent any lawful reorganization of the governmental structure of the City, including a merger or consolidation of the City with another public body or the transfer of a public function of the City to another public body, provided that any reorganization which affects the System shall provide that the System shall be continued as a single enterprise and that any public body which succeeds to the ownership and operation of the System shall also assume all rights, powers, obligations, duties and liabilities of the City under this Resolution and pertaining to all Bonds and any Qualified Agreement. Section 6.05 Additional Utility Functions. The City may expand the utility functions of the System as they exist on the date hereof as permitted in the definition of "System" contained herein, provided that the City has received the prior written consent of any Insurer (provided such Insurer is not in default of its obligations under its Credit Facility), and adopted resolutions of the City to the effect that, based upon such certificates and opinions of its Consulting Engineers, independent certified public accountants, Bond Counsel, Financial Advisor or other Qualified Independent Consultants as the City shall deem necessary, desirable 51 or appropriate, the addition of such utility functions (a) will not impair the ability of the City to comply with the provisions of this Resolution, and (b) will not materially adversely affect the rights of the Holders of the Bonds. Section 6.06 [Reserved.] Section 6.07 Qualified Agreements. Any payments received by the City from a Qualified Agreement Provider shall constitute Gross Revenues hereunder. Any payments to a Qualified Agreement Provider under a Qualified Agreement so designated by the City, can constitute Parity Contract Obligations or Subordinated Debt. Notwithstanding the foregoing, termination payments, indemnification payment, or other fees to be paid by the City to a Qualified Agreement Provider under a Qualified Agreement and which do not constitute regularly scheduled payments determined by reference to interest on a notional amount may only constitute Subordinated Debt, and may not constitute Parity Contract Obligations. The City may enter into one or more Qualified Agreements with respect to one or more Series of Bonds (or portions thereof); provided, however, that if such Qualified Agreement is not entered into at the time of initial issuance of the Series of Bonds to which it relates, the requirements of Section 5.01(Q)(1) hereof must be met, applying the same as if$1.00 in principal amount of Additional Parity Obligations are being issued as of the effective date of such Qualified Agreement. Section 6.08 Payments to Credit Facility; Rights of Credit Facility Issuers. (A) In connection with any Bonds, the City may obtain or cause to be obtained one or more Credit Facilities and agree with any Credit Facility Issuer to reimburse such City directly for amounts paid under the terms of such Credit Facility, together with interest thereof; provided, however, that no obligation to reimburse a Credit Facility Issuer shall be created, for purposes of this Resolution, until amounts are paid under such Credit Facility. Such payments are referred to herein as "Reimbursement Obligations." Any Reimbursement Obligation may be secured by a pledge of and a lien on the Pledged Revenues on a subordinate basis to the lien created herein in favor of the Holders of the Bonds and any Qualified Agreement Provider. Any such Reimbursement Obligation shall be deemed to be a part of the Series to which the Credit Facility which gave rise to such Reimbursement Obligation relates. Payments to reimburse the provider of a Credit Facility shall constitute Subordinated Debt. (B) Notwithstanding any provision hereof granting consent and approval rights to a Credit Facility Provider, if such Credit Facility Provider shall be in default under the terms of the Credit Facility, the rights and powers shall be restricted as set forth in the Supplemental Resolution relating to the Bonds secured by such Credit Facility. Section 6.09 Capital Appreciation Bonds. For the purposes of (i) receiving payment of the redemption price of a Capital Appreciation Bond if redeemed prior to maturity, (ii) computing Bond Service Requirement, and (iii) computing the amount of Holders required for any notice, consent, request or demand hereunder for any purpose whatsoever, the principal amount of a Capital Appreciation Bond shall be deemed to be its Accreted Value. 52 Section 6.10 Tax Covenants. (A) The City covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that it shall not use the proceeds of such Series of Bonds in any manner which would cause the interest on such Series of Bonds to be or become includable in the gross income of the Holder thereof for federal income tax purposes. (B) The City covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that neither the City nor any Person under its control or direction will make any use of the proceeds of such Series of Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such Series of Bonds 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 such Series of Bonds to become includable in the gross income of the Holder thereof for federal income tax purposes. (C) The City hereby covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Bonds from the gross income of the Holder thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code. (D) The City may, if it so elects, issue one or more Series of Taxable Bonds the interest on which is (or may be) includable in the gross income of the Holder thereof for federal income tax purposes, so long as each Bond of such Series states in the body thereof that interest payable thereon is (or may be) subject to federal income taxation and provided that the issuance thereof will not cause the interest on any other Bonds theretofore issued hereunder to be or become includable in the gross income of the Holder thereof for federal income tax purposes. The covenants set forth in paragraphs (A), (B) and (C) above shall not apply to any Taxable Bonds. (E) There is hereby created and established a fund to be known as the "City of Ocoee Utilities System Revenue Bonds Rebate Fund" (the "Rebate Fund"), and a separate account therein for each Series of Bonds. The City shall deposit into the appropriate account in the Rebate Fund, from investment earnings on moneys deposited in the other funds and accounts created hereunder, or from any other legally available funds of the City, an amount equal to the Rebate Amount for such Rebate Year. The City shall use such moneys deposited in the appropriate account in the Rebate Fund only for the payment of the Rebate Amount to the United States as required by this Section 6.10. In complying with the foregoing, the City may rely upon any instructions or opinions from Bond Counsel. If any amount shall remain in the Rebate Fund after payment in full of all Bonds issued hereunder that are not Taxable Bonds and after payment in full of the Rebate Amount to the United States in accordance with the terms hereof, such amounts shall be available to the City for any lawful purpose of the System. 53 The Rebate Fund shall be held separate and apart from all other funds and accounts of the City, shall not be impressed with a lien in favor of the Bondholders and the moneys therein shall be available for use only as herein provided. Section 6.11 Bond Anticipation Notes Authorized for Interim Financing. Pursuant to authority granted by Section 215.431, Florida Statutes, the City is authorized to issue Bond Anticipation Notes, in one or more series, from time to time for the purposes authorized by this Resolution, and for the purpose of obtaining interim financing. Prior to the sale of Bonds authorized by this Resolution, the City may issue its Bond Anticipation Notes as provided herein and as provided in Section 215.431, Florida Statutes. Any such Bond Anticipation Notes authorized by the City shall be issued upon the adoption of a resolution by the City specifying the amount of Bond Anticipation Notes to be issued, the series designation, the maturity of such Bond Anticipation Notes, the denomination, date and the rate of interest which shall be borne by such Bond Anticipation Notes which shall not be at a rate greater than the highest rate authorized by law. Any such Bond Anticipation Notes issued may be sold in the manner provided by Section 215.431, Florida Statutes and shall satisfy all other requirements contained therein, including those related to the maturity of such Bond Anticipation Notes. Section 6.12 Additional Rights to Insurers. All notices required to be given to any party hereunder shall also be given to any Insurer. Pursuant to one or more Supplemental Resolutions, the City may provide additional rights, covenants, agreements and restrictions relating to any Insurer and any Bond Insurance Policy. Section 6.13 Severability. If any one or more of the covenants, agreements or provisions of this Resolution should 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 be held to adversely affect the validity of the Bonds, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Resolution or of the Bonds issued hereunder. Section 6.14 Sale of Bonds. The Bonds may be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the requirements of this Resolution and other applicable provisions of law. Section 6.15 General Authority. The members of the Commission of the City and the City's officers, attorneys and other agents and employees are hereby authorized to perform all acts and things required of them by this Resolution or desirable or consistent with the requirements hereof for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents which shall be required by Bond Counsel to effectuate the sale of the Bonds to said initial purchasers. 54 Section 6.16 No Third Party Beneficiaries. Except such other Persons as may be expressly described herein, in the Bonds, or in a Qualified Agreement, nothing in this Resolution, or in the Bonds, expressed or implied, is intended or shall be construed to confer upon any Person, other than the City, an Insurer and the Holders, any right, remedy or claim, legal or equitable, under and by reason of this Resolution or any provision hereof, or of the Bonds or any Qualified Agreement, all provisions hereof and thereof being intended to be and being for the sole and exclusive benefit of the City, an Insurer and the Persons who shall from time to time be the Holders and any Qualified Agreement Provider. Section 6.17 No Personal Liability. Neither the members of the Commission of the City, any Person executing the Bonds, nor employees of the City shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. Section 6.18 Repeal of Inconsistent Instruments. All resolutions or parts or resolutions in conflict herewith are hereby repealed to the extent of such conflict. 55 Section 6.19 Effective Date. This Resolution shall become effective immediately upon (i) its adoption as provided by law, and (ii) at such time as the Series 2012 Note and Series 2013 Note are no longer Outstanding. Passed and Adopted this 1st day of November, 2016, at a regular meeting duly called and held. CITY COMMISSION OF THE CITY OF e OE . • (SEAL) !NO `' Rusty Johns l yor ATTEST: •Jtitze Melanie Sibbitt, City 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 1ST DAY OF NOVEMBER 1, 2016,UNDER AGENDA ITEM NOVEMBER, 2016. NO. Co a CITY • O;. 56