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HomeMy WebLinkAboutResolution 491 Refunding Revenue Bonds ~ ~ ... .~, - - RESOLUTION NO. 491 A RESOLUTION AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $5,615,000 WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1985, OF THE CITY OF WINTER SPRINGS, FLORIDA TO BE APPLIED TO REFUND THE PRINCIPAL, INTEREST AND REDEMPTION PREMIUMS, IF ANY, IN RESPECT TO CERTAIN PRE- SENTLY OUTSTANDING OBLIGATIONS; PLEDGING THE NET REVENUES OF THE WATER AND SEWER SYSTEM OF THE CITY FOR THE PAYMENT OF SAID BONDS; MAKING OTHER COVENANTS AND AGREEMENTS IN CON- NECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the Constitution of the State of Florida; Chapter 166, Part I I, Florida Statutes, as amended and supple- mented, the Charter of the Issuer and other applicable provisions of law. SECTION 2. DEFINITIONS. Unless the context otherwise re- quires, the terms defined in this section 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. (A) "ACQUIRED OBLIGATIONS" shall mean and include any of the following securities, if and to the extent the same are at the time legal for investment of funds of the Issuer under the laws of the State of Florida: (i) any bonds or other obligations which as to princi- pal and interest constitute direct obligations of, or are uncondi- tionally guaranteed by, the United States of America, including obligations of any Federal agency or corporation which has been or may hereafter be created pursuant to an act of Congress as an agency or instrumentality of the United States of America to the extent unconditionally guaranteed by the United States of America or any other evidences of an ownership interest in obligations or in specified portions thereof (which may consist of specified portions of the interest thereon) of the character described in this clause (i); and (ii) any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (a) which are not call- able at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to give . .. ~ e e ~~ due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (b) which are fully secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obli- gations of the character described in clause (i) hereof which fund may be applied only to the payment of such principal of and inter- est and redemption premium, if any, on such bonds or other obliga- tions on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instruc- tions, as appropriate, and (c) as to which the principal of and interest on the bonds and obligations of the character described in clause (i) hereof which have been deposited in such fund along with any cash on deposit in such fund is sufficient to pay princi- pal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (ii) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (ii), as appropriate. (B) "ACQUISITION AND IMPROVEMENT FUND" shall mean the City of winter Springs Acqusition and Improvement Fund created pursuant to Section 19 hereof. (C) "ACT" shall mean Chapter 166, Part II, Florida Statutes, as amended and supplemented, the Charter of the Issuer and other appl icable prov isions of law. (D) "ADDITIONAL PARITY OBLIGATIONS" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained herein which have an equal lien on the Net Revenues and rank equally in all respects with the Series 1985 Bonds issued hereunder. (E) "AGREEMENT" shall mean that certain Escrow Deposit Agreement by and between the Issuer and a trust company or bank with trust powers selected by subsequent resolution of the Issuer for the purpose of providing for the payment of the Refunded Bonds hereinafter mentioned, which Agreement shall be in substantially the form attached hereto as Exhibit A and incorporated herein by reference. (F) "AMORTIZATION INSTALLMENT" wi th respect to any Term Bonds of a series, shall mean an amount so designated for mandatory principal installments (for mandatory call or otherwise) payable on any Term Bonds issued under the provisions of this Resolution or any subsequent resolution authorizing Additional Parity Obligations. (G) "AVERAGE ANNUAL BOND SERVICE REQUIREMENT" means as of each date on which a series of Bonds is issued, the total amount of Bond Service Requirement to become due on all Bonds deemed to be Outstand ing immed iately afer 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 2 , " . ,. e e for which Amortization Installments have been established, the amount of principal coming due on the final maturity date wi th 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. (H) "BOND SERVICE REQUIREMENT" for any Bond Year shall mean the sum of: (1 ) The amount required to pay the interest becoming due on the Outstanding Bonds during such Bond Year, except to the extent that such interest shall have been provided by payments into the Interest Account in the Debt Service Fund out of Bond proceeds for a specified period of time. (2) The amount requi red to pay the princ ipal of Out- standing Serial Bonds maturing in such Bond Year. (3) The Amortization Installment for the Outstand ing Term Bonds due in such Bond Year. When determining the amount of principal of and interest on Outstanding Bonds which mature in any year, for purposes of this instrument or the issuance of any Additional parity Obligations, the stated maturity date of Term Bonds shall be disregarded and the Amortization Installment, if any, appl icable to Term Bond s in such year shall be deemed to mature in such year. (I) "BOND YEAR" shall mean the period beg inning wi th October 2 of each year and extend ing for a period of twelve (12) months thereafter. (J) "BONDS" shall mean the Series 1985 Bonds issued hereun- der, together wi th any Add i tional parity ObI ig ations hereafter issued under the terms, conditions and limitations contained herein. (K) "CONNECTION CHARGES" shall mean all connection fees and charges assessed by the Issuer to users for the purpose of provid- ing initial connection to the System, but excluding Impact Fees. (L) "CONSULTING ENGINEERS" shall mean qualified and recog- nized consulting engineers, having a favorable reputation for skill and experience in the management and operation of facilities of comparable size and character as the System, at the time retained by the Issuer to perform the acts and carry out the du- ties as herein provided for such consulting engineers. (M) "COST OF OPERATION AND MAINTENANCE" of the System shall mean the current expenses, paid or accrued, in the operation, maintenance and repair of the System, as calculated in accordance with generally accepted accounting principles, but shall not 3 , ~ ~ ." e e include any reserve for renewals and replacements, extraordinary repairs or any allowance for depreciation. (N) "DEBT SERVICE FUND II shall mean the City of winter Springs Water and Sewer Debt Service Fund, which fund shall have within it an Interest Account, a Principal Account, a Redemption Account and a Reserve Account. (0) "FEDERAL SECURITIES" shall mean direct obligations of, or obligations the principal of and interest on which are uncondi- tionally guaranteed by the united States of America, which are not redeemable prior to maturity at the option of the obligor. (P) "FISCAL YEAR" shall mean the period commencing on October 1 of each year and ending on the succeeding September 30. (Q) "GROSS REVENUES" or "REVENUES" shall mean all income or earnings, including Connection Charges, from any source received by the Issuer or accrued to the Issuer from the ownership or oper- ation of the System and all parts thereof, including investment income, if any, earned on any fund or account, all as calculated in accordance wi th generally accepted accounting principles, but "Gross Revenues" or "Revenues" shall not include proceeds from the sale or other disposition of the System or any part thereof, con- demnation awards or proceeds of insurance received with respect to the System. Provided however, "Gross Revenues" or "Revenues" shall include proceeds from the sale or other disposition of the System or any part thereof to any unit of local government created by special act of the Florida Legislature for the purpose of owning and operating water and sewer facilities. (R) "IMPACT FEES" shall mean those. fees and charges assessed by the Issuer to users of the System for the purpose of prov id ing ini tial connection to the System, in excess of the phys ical cost of connection. (S) "INVESTMENT SECURITIES" shall mean any of the following, if and to the extent that the same are legal for the investment of the proceeds of the Bonds and the Net Revenues: (i) direct obli- gations of, or obligations the principal of and interest on which are uncond i tionally guaranteed by the Uni ted States of America; (ii) bonds, debentures, notes or participation certificates issued by the Federal Banks for Cooperatives, the Federal Intermediate Credit Banks, the Federal Home Loan Banks, the Export-Import Bank of the United States, the Federal Land Banks, the Federal National Mortgage Association, the Government National Mortgage Associa- tion, and direct and general obligations of any agency or instru- mental i ty of the Uni ted States of America not incl uded in the foregoing listing; (iii) Public Housing Bonds and Project Notes 4 . .~ - e fully secured by contracts with the united States; and (iv) nego- tiable or non-negotiable certificates of deposit or time deposits issued by any bank, trust company or national banking association which is a member of the Federal Reserve System, provided that (a) such certificates of deposit or time deposits shall continuously be collaterally secured by investments listed under clauses (i) through (iii) above having a market value (exclusive of accrued interest) at all times at least equal to such certificates of deposit or time deposits and such investments securing such certi- ficates of deposit or time deposits, and collateral therefor if required by law, shall be deposited with such public officer or public or private institution as shall be provided for the deposit of secur i ty for the depos its of publ ic moneys under the laws of the State of Florida, or, if there is no such provision, with such officer of the Issuer as designated by the City; or (b) the amount of such certificates of deposit or time deposits purchased or obtained from any bank, trust company or national association shall not exceed twenty-five percent (25%) of its capital and surplus or such other limit, if any, as may be required by the laws of the State of Florida. (T) "ISSUER" or "CITY" shall mean the City of winter Springs, Florida. (U) "MAXIMUM BOND SERVICE REQUIREMENT" shall mean, as of any particular date of calculation, the greatest amount of aggregate Bond Serv ice Requirement for the then current or any future Bond Year. (V) "NET REVENUES" of the System shall mean the Revenues or Gross Revenues after deduction of the Cost of Operation and Main- tenance. (W) "OUTSTANDING" when used in reference to the Bonds, means as of a particular date, all Bonds authorized and issued by the Issuer, except: (i) any Bonds canceled at or before such date; (ii) any Bonds for which provisions for payment pursuant to this Resolution have been made and (iii) any Bond in lieu of or in substitution for which another Bond shall have been authorized and del ivered pursuant to Section 11 or Section 13 of this Resolu- tion. (X) "OWNER OF BONDS" or "OWNER" or any similar term shall mean any person who shall be the registered owner of any such Bond or Bonds. (Y) "PAYING AGENT" shall mean the paying agent, the co-paying agent or any successor paying agent to be appointed by subsequent resolution of the Issuer and at the time serving under this Resolution. 5 . ~ e e (Z) "REFUNDED BONDS" shall Winter Springs, Florida Water and 1984. mean the $5,035,000 City of Sewer Revenue Bonds, Series (AA) "REGISTRAR" shall mean the Paying Agent. (BB) "RENEWAL AND REPLACEMENT FUND" shall mean the City of Winter Springs Water and Sewer Renewal and Replacement Fund cre- ated and established pursuant to Section 18B (4) of this Resolu- tion. (CC) "RESERVE REQUIREMENT" shall mean, in any year, the lesser of Maximum Bond Service Requirement, if any, on the Bonds becoming due in any ensuing Fiscal Year or the Average Annual Bond Service Requirement. (DO) "RETAINED EARNINGS" shall have the same meaning as is ascribed to such term by generally recognized principles and standards of public financial reporting, and notwithstanding the generality of the foregoing, shall mean the accumulated earnings of the System which have been retained in the Revenue Fund and which are not reserved for any specific purpose. (EE) "SERIES 1985 BONDS" shall mean the not to exceed $5,615,000 City of Winter Springs, Florida Water and Sewer Refund- ing Revenue Bonds, Series 1985, authorized pursuant to this Reso- lution. (FF) "SERIAL BONDS" shall mean the Bonds of a series which shall be stated to mature in annual or semi-annual installments. (GG) "SINKING FUND DEPOSIT" shall mean, in any Bond Year, the amount required to be deposited for the benefit of the Bonds into the Debt Service Fund in such year pursuant to this Resolution, and any supplemental resolution as provided herein. (88) "SYSTEM" shall mean the properties and assets, real and personal, tangible and intangible, owned or operated by the Issuer, used or useful for the collection, transmission, treat- ment, and disposal of sewage, and for the supply, storage, treat- ment, transmission and distribution of water, and all properties and assets hereafter constructed or acquired as additions, im- provements, betterments or replacements thereto and extensions thereof. (II) "TERM BONDS" shall mean the Bonds of a series, all of which shall be stated to mature on one date. SECTION 3. and declared: FINDINGS. It is hereby ascertained, determined (A) The Issuer now owns, operates and maintains the System and derives revenues from rates, fees rentals and other charges made and collected for the services of the System. 6 e e (B) The Issuer has previously issued the Refunded Bonds, of which $5,035,000 principal amount is outstanding and unpaid as of May 1, 1985. (C) The Issuer deems it necessary, beneficial and in its best interest to provide for the refunding of the Refunded Bonds. Certain covenants in the resolution and indenture of trust secur- ing the Refunding Bonds are restrictive to the extent that failure to carryout the refunding program authorized herein will lead to confusion and increased costs for the Issuer. The refunding pro- gram herein described will be advantageous to the Issuer by (1) effecting an overall reduction in debt service applicable to bonded indebtedness issued to finance the System, and (2) revising certain terms and covenants previously made for the benefit of the holders of the Refunded Bonds and restructuring of debt to the advantage of the Issuer. (D) The estimated sum required for such refunding program is the sum of not exceeding $5,615,000 which will be derived from the proceeds of the sale of the Series 1985 Bonds, together with certain other funds available to the Issuer more fully described herein. (E) A portion of the proceeds of the Bonds and other funds available for such purpose, shall be deposited pursuant to the Agreement, in suff icient amounts to make timely payments of all presently outstanding principal, interest and redemption premiums, if any, in respect to the Refunded Bonds, as the same become due or are redeemed prior to maturity as hereinafter provided. Such funds shall be invested pursuant to the Agreement in such invest- ments as will produce escrow deposit income sufficient to make timely payments of all principal of, redemption premiums and interest on the Refunded Bonds. (F) The principal of and interest on the Bonds and all required reserve and other payments shall be payable solely from the Net Revenues as provided herein. The Issuer 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 Issuer. (G) The Net Revenues are estimated to be sufficient to pay all principal of and interest on the Bonds to be issued hereunder, as the same become due, and to make all required payments required by this Resolution, including payments required to be made to the Debt Service Fund. SECTION 4. AUTHORIZATION OF REFUNDING. There is hereby authorized the refunding of the Refunded Bonds in the manner pro- vided herein. 7 e e SECTION 5. THIS RESOLUTION TO CONSTITUTE CONTRACT. In con- sideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall own the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the Issuer and such Owners. The covenants and agreements herein set forth to be performed by the Issuer shall be for the equal benefit, protection and security of the legal Owners of any and all of the Bonds, all of which shall be of equal rank and wi thout preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided therein and herein. SECTION 6. AUTHORIZATION OF SERIES 1985 BONDS. Subject and pursuant to the provisions hereof, obligations of the Issuer to be known as "Water and Sewer Refunding Revenue Bonds, Series 1985", are authorized to be issued in the aggregate principal amount of not exceeding $5,615,000. SECTION 7. DESCRIPTION OF SERIES 1985 BONDS. The Series 1985 Bonds shall be issued in fully registered form~ shall be dated~ shall be numbered consecutively from R-l upward~ shall be in the denomination of $5,000 each, or integral multiples thereof~ shall bear interest at such rate or rates not exceeding the maxi- mum rate allowed by Florida law, the actual rate or rates to be determined by the governing body of the Issuer by resolution prior to or upon the sale of the Series 1985 Bonds~ such interest to be payable semiannually on April 1 and October 1 of each year~ and shall mature on October 1 in such years and amounts as will be fixed by resolution of the Issuer prior to or upon the sale of the Series 1985 Bonds and may be Serial and/or Term Bonds. Each Series 1985 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 interest is in default, such Series 1985 Bond shall bear interest from the date to which inter- est shall have been paid. The principal of and the interest on the Series 1985 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 principal of the Series 1985 Bonds shall be payable only to the registered Owner or his legal representative at the principal corporate trust office of the Paying Agent, and payment of the interest on the Series 1985 Bonds shall be made by the Paying Agent on each inter- est payment date to the person appearing on the registration books of the Issuer hereinafter provided for as the registered Owner thereof, by wire transfer or check mailed to such registered Owner 8 e e at his address as it appears on such registration books. of the principal of all Series 1985 Bonds shall be made presentation and surrender of such Series 1985 Bonds as shall become due and payable. Payment upon the the same SECTION 8. EXECUTION OF SERIES 1985 BONDS. The Series 1985 Bonds shall be signed by, or bear the facsimile signature of the Mayor and shall be signed by, or bear the facsimile signature of the City Clerk and a facsimile of the official seal of the Issuer shall be imprinted on the Series 1985 Bonds. In case any officer whose signature or a facsimile of whose signature shall appear on any Series 1985 Bonds shall cease to be such officer before the delivery of such Series 1985 Bonds, such signature or such facsimile shall nevertheless be valid and suffi- c ient for all purposes the same as if he has remained in off ice unt il such del i very, and al so any Series 1985 Bond may bear the facsimile signature of or may be signed by such persons who, as at the actual time of the execution of such Series 1985 Bond, shall be the proper officers to sign such Series 1985 Bonds although at the date of such Series 1985 Bond such persons may not have been such officers. SECTION 9. AUTHENTICATION OF SERIES 1985 BONDS. Only such of the Series 1985 Bonds as shall have endorsed thereon a certifi- cate of authentication substantially in the form hereinbelow set forth, duly executed by the Paying Agent, as authenticating agent, shall be entitled to any benefit or security under this Resolu- tion. No Series 1985 Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the paying Agent, and such certificate of the paying Agent upon any such Series 1985 Bond shall be con- clusive evidence that such Series 1985 Bond has been duly authen- ticated and del ivered under this Resolution. The paying Agent's certificate of authentication on any Series 1985 Bond shall be deemed to have been duly executed if signed by an authorized offi- cer of the Paying Agent, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Series 1985 Bonds that may be issued hereunder at anyone time. SECTION 10. EXCHANGE OF SERIES 1985 BONDS. Any Series 1985 Bond, upon surrender thereof at the principal corporate trust office of the Paying Agent, together with an assignment duly exe- cuted by the Owner or his attorney or legal representative in such form as shall be satisfactory to the Paying Agent, may, at the option of the Owner, be exchanged for an aggregate principal amount of Series 1985 Bonds equal to the principal amount of the Series 1985 Bond or Series 1985 Bonds so surrendered. The Paying Agent shall make prov is ion for the exchange of Series 1985 Bonds at the principal corporate trust office of the paying Agent. SECTION 11. SERIES 1985 BONDS. NEGOTIABILITY, REGISTRATION AND TRANSFER OF The Paying Agent shall keep books for the 9 .'1, e e registration of and for the registration of transfers of Series 1985 Bond s as prov ided in this Resol ut ion. The transfer of any Series 1985 Bonds may be reg istered only upon such books upon surrender thereof to the Paying Agent together wi th an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be satisfactory to the paying Agent. Upon any such registration of transfer the Issuer shall execute and the paying Agent shall authenticate and del iver in exchange for such Series 1985 Bond, a new Series 1985 Bond or Series 1985 Bonds reg istered in the name of the transferee, and in an aggreg ate principal amount equal to the principal amount of such Series 1985 Bond or Series 1985 Bonds so surrendered. In all cases in which Series 1985 Bonds shall be exchanged, the Issuer shall execute and the Paying Agent shall authenticate and deliver, at the earliest practicable time, Series 1985 Bonds in accordance with provisions of this Resolution. All Series 1985 Bonds surrendered in any such exchange or registration of transfer shall forthwith be cancelled by the Paying Agent. The Issuer or the paying Agent may make a charge for every such exchange or registration of transfer of Series 1985 Bonds sufficient to reim- burse it for any tax or other governmental charge required to be paid with respect to such exchange or reg istration of transfer, but no other charge shall be made to any Owner for the privilege of exchang ing or reg istering the transfer of Series 1985 Bonds under the provisions of this Resolution. Neither the Issuer nor the paying Agent shall be required to make any such exchange or reg istration of transfer of Series 1985 Bonds during the fifteen (15) days immediately preceding any interest payment date. SECTION 12. OWNERSHIP OF SERIES 1985 BONDS. The person in whose name any Series 1985 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 Series 1985 Bond, and the interest on any such Series 1985 Bonds, shall be made only to or upon the order of the regis- tered Owner thereof or his legal representative. All such pay- ments shall be val id and effectual to satisfy and discharge the liability upon such Series 1985 Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. SECTION 13. SERIES 1985 BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Series 1985 Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion cause to be executed r and the Paying Agent shall authenticate and del iver, a new Series 1985 Bond of like date and tenor as the Series 1985 Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Series 1985 Bond upon surrender and cancellation of such mutilated Series 1985 Bond or in lieu of and substitution for the Series 1985 Bond destroyed, stolen or lost, and upon the Owner furnishing the Issuer and the Paying Agent proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and cond i tions as the Issuer and the paying Agent may prescribe and 10 - e paying such expenses as the Issuer and the Paying Agent may incur. All Series 1985 Bonds so surrendered shall be canceled by the Issuer. If any of the Series 1985 Bonds shall have matured or be about to mature, instead of issuing a substitute Series 1985 Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Series 1985 Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Series 1985 Bonds issued pursuant to this section shall constitute original, additional contractual obliga- tions on the part of the Issuer whether or not the lost, stolen or destroyed Series 1985 Bonds be at any time found by anyone, and such dupl icate Series 1985 Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and secur i ty for payment from the fund s, as here inafter pledged, to the same extent as all other Series 1985 Bonds issued hereunder. SECTION 14. PROVISIONS FOR REDEMPTION. The Series 1985 Bonds shall be subj ect to redemption prior to their maturi ty, at the option of the Issuer, at such times and in such manner as shall be fixed by resolution of the Issuer prior to or at the time of sale of the Series 1985 Bonds. Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the paying Agents; and mailed, postage prepaid, to all Owners of Series 1985 Bonds to be redeemed at their addresses as they appear on the reg istration books hereinbefore prov ided for, but fail ure to mail such notice to one or more Owners of Series 1985 Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 1985 Bonds to which notice was duly mailed here- under. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, if less than all of the Series 1985 Bonds of one maturity are to be called, the distinctive numbers of such Series 1985 Bonds to be redeemed and in the case of Series 1985 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. Upon surrender of any Series 1985 Bond for redemption in part only, the paying Agent shall authenticate and deliver to the Owner thereof, the cost of which shall be paid by the Issuer, a new Series 1985 Bond of an authorized denomination equal to the unredeemed portion of the Series 1985 Bond surrendered. SECTION 15. FORM OF SERIES 1985 BONDS. The text of the Series 1985 Bonds shall be in substantially the following form, with such omissions, insertions and variations as may be necessary and desirable and authorized and permitted by this Resolution or by any subsequent resolution adopted prior to the issuance thereof: 11 , , '. e - No. R - $ UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF SEMINOLE CITY OF WINTER SPRINGS WATER AND SEWER REFUNDING REVENUE BOND, SERIES 1985 KNOW ALL MEN BY THESE PRESENTS, that the City of winter Springs, Florida (hereinafter called "Ci ty"), for value received, hereby promises to pay to the order of , or reg istered assigns, as herein prov ided, on the day of , upon the presentation and surrender hereof at the principal corporate trust office of , in the City of , Florida (the "paying Agent"), from the revenues hereinafter mentioned, the principal sum of DOLLARS 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 reg istered owner hereof by check mailed to the registered owner at his address as it appears on the Bond registration books of the City, interest on said principal sum on each April 1 and October 1 commencing , 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 reg istered and authenticated prior to , in which event this bond shall bear interest from , The Bonds of this issue shall be subject to redemption prior to their maturity at the option of the City. (Insert Optional or Mandatory Redemption Provisions) Notice of such redemption shall be given in the manner re- quired by the Resolution. This Bond is one of an authorized issue of Bonds in the ag- gregate principal amount of $ of like date, tenor and effect, except as to number, maturity and interest rate, issued to finance the cost of refunding certain obligations of the City issued to acquire and improve a water and sewer system, pursuant to the authority of and in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chap- ter 166, Part II, Florida Statutes, and a resolution duly adopted by the Ci ty on , 1985, as amended and supplemented (hereinafter collectively called "Resolution"), and is subject to all the terms and conditions of such Resolution. 12 - e This Bond is payable solely from and secured by a prior lien upon and pledge of the Net Revenues, as defined in the Resolution, derived and collected by the City from the operation of the City's water and sewer system (the "System"), in the manner provided in the Resolution. This Bond does not constitute an indebtedness of the City wi thin the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the Owner of this Bond that such Owner shall never have the right to require or compel the exerc ise of the ad valorem tax ing power of the City or taxation of any real or personal property therein for the pay- ment of the principal of and interest on this Bond or the making of any Debt Serv ice Fund, reserve or other payments prov ided for in the Resolution. It is further agreed between the City and the Owner 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 Net Revenues derived from the operation of the System all in the manner provided in the Resolution. The City in the Resolution has covenanted and agreed with the Owners of the Bonds of this issue to fix, establish, maintain and collect such rates, fees, rental s and other charges for the ser- v ice of the System so as to always prov ide in each year Revenues, as defined in the Resolution, sufficient to pay the costs of operation and maintenance of the System in such year and all reserve or other payments provided for in the Resolution, and 125% of all debt service requirements coming due in such year on the Bonds and all outstanding additional parity obligations, and that such rates, fees, rentals and other charges will not be reduced so as to be insufficient to provide Revenues for such purposes. The City has entered into certain further covenants with the Owners of the Bonds of this issue for the terms of which reference is made to the Resolution. It is hereby certified and recited that all acts, conditions and things required to ex ist, to happen and to be performed prece- dent to and in the issuance of this Bond ex ist, have happened and have been performed in regular and due form and time as required by the laws and Consti tut ion of the State of Florida appl icable thereto, and that the issuance of the Bonds of this issue does not violate any constitutional or statutory limitations or provisions. This Bond is and has all the qual i ties and incidents of a negotiable instrument under the Uniform Commercial Code - Invest- ment Securities Law of the State of Florida. 13 e e The transfer of this Bond is registrable by the Owner hereof in person or by his attorney or legal representative at the prin- cipal corporate trust office of the Paying Agent 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 Reso- lution until it shall have been authenticated by the execution by the paying Agent of the certificate of authentication endorsed hereon. IN WITNESS WHEREOF, the City of winter Springs, Florida, has issued this Bond and has caused the same to be signed by the Mayor and countersigned and attested to by the City Clerk, (the signa- tures of the Mayor and the Ci ty Clerk being authorized to be fac- simile of such officers' signatures) and its seal or a facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the day of CITY OF WINTER SPRINGS, FLORIDA (SEAL) (manual or facsimile) Mayor ATTESTED AND COUNTERSIGNED: (manual or facsimile) City Clerk 14 e e CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds issued under the provisions of the within mentioned Resolution. Paying Agent, as Authenticating Agent Date of Authentication: By (Manual Signature) Authorized Officer ASSIGNMENT AND TRANSFER For value received the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or assignee) of Winter Springs, Florida, and does other identifying number of the attached bond of the City 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: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or a trust company. NOTICE: No transfer will be reg- istered and no new Bonds will be issued in the name of the Trans- feree, 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. If the Transferee is a trust, the names and Social Security or Fed- eral Employer Identification Num- bers of the settlor and benefi- ciaries of the trust, the Federal Employer Identification Number and date of the trust and the name of the trustee should be supplied. [End of Form of Series 1985 Bond] 15 e e SECTION 16. APPLICATION OF SERIES 1985 BOND PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of any or all of the Series 1985 Bonds shall be appl ied by the Issuer simul taneously with the del i very of such Series 1985 Bonds to the purchaser thereof, as follows: ( A) Account for the Bond s . The accrued interest shall be deposited in the Interest in the Debt Service Fund created and shall be used only purpose of paying interest becoming due on the Series 1985 (B) Simul taneously wi th the del ivery of the Series 1985 Bonds to the orig inal purchasers thereof, the Issuer shall enter into the Agreement in substantially the form attached hereto as Exhibit A with a bank with trust powers or trust company approved by the Issuer, which shall provide for the deposits of sums and for the investment of moneys in appropriate Federal Securities so as to produce sufficient funds to make all the payments described in the Agreement. At the time of execution of the Agreement, the Issuer shall furnish to the Escrow Holder named therein appropri- ate documentation to demonstrate that the sums being deposited and the investments to be made and investment income therein will be sufficient for such purposes. A sum specified in the Agreement which together with the other funds described in the Agreement to be deposited in escrow, will be sufficient to pay, as of any date of calculation, the principal, interest and redemption premium on the Refunded Bonds, as the same shall become due or are redeemed as provided by subse- quent resolution of the Issuer, whichever is earlier, shall be deposited into the Escrow Account. Such escrowed funds shall be kept separate and apart from all other funds of the Issuer and the moneys on deposit therein shall be wi thd rawn, used and appl ied by the Issuer solely for the pur- poses set forth herein and in the Agreement. (C) Unless prov ided from other fund s of the Issuer on the date of issuance of the Series 1985 Bonds or unless provided for through the purchase of municipal bond insurance issued by reputable and recogni zed munic ipal bond insurer, the Issuer shall deposit to the Reserve Account the Reserve Requirement. (D) To the extent not reimbursed therefor by the original purchaser of the Series 1985 Bonds, or provided for in the Escrow Deposi t Agreement, the Issuer shall pay all costs incurred in connection with the issuance of the Series 1985 Bonds. SECTION 17. SPECIAL OBLIGATIONS OF ISSUER. The Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of the Constitution of 16 e e Florida, but shall be payable solely from and secured by a lien upon and a pledge of the Net Revenues as herein provided. No Owner or Owners of any Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form of any real or personal property therein to pay such principal and interest from any other funds of the Issuer except from the special funds in the manner provided herein. The payment of the principal of and interest on the Bonds shall be secured forthwith equally and ratably by an irrevocable lien on the Net Revenues from the operation of the System, and the Issuer does irrevocably pledge such Net Revenues to the payment of the principal of and interest on the Bonds, for the reserves therefor and for all other required payments. SECTION 18. COVENANTS OF THE ISSUER. For as long as any of the principal of and interest on any of the Bonds shall be Out- standing and unpaid or until there shall have been set apart in the Debt Service Fund, herein established, and in the Reserve Account, herein established, a sum sufficient to pay when due the entire principal or the Bonds remaining unpaid, together wi th interest accrued and to accrue thereon, the Issuer covenants wi th the Owners of any and all Bonds as follows: A. REVENUE FUND. The entire Gross Revenues derived from the operation of the System shall upon receipt thereof be deposited in the "City of winter Springs water and Sewer Revenue Fund" (herein- after called the "Revenue Fund"), hereby created and established. Such Revenue Fund shall constitute a trust fund for the purposes herein provided and shall be used only for the purposes and in the manner herein provided. B. DISPOSITION OF REVENUES. All revenues at any time re- maining on deposit in the Revenue Fund after payment of Cost of Operation and Maintenance shall be disposed of on or before the fifteenth day of each month commencing in the month immediately following delivery of the Bonds only in the following manner and in the following order of priority: ( 1 ) From the moneys remaining in the Revenue Fund, the Issuer shall next deposit into a separate fund which is hereby created and designated "City of winter Springs Water and Sewer Debt Service Fund" (herein called the "Debt Service Fund"), and credit to the following accounts, each on a parity with each other, the following identified sums: (a) Interest Account: One-sixth (1/6) of all interest becoming due on the Bonds on the next semi-annual interest payment date, together with any fees or charges of the Paying Agent there- for. The moneys in the Interest Account shall be withdrawn and 17 e -- deposi ted with the paying Agent for the Bond s on or before each interest payment date in an amount sufficient to pay the interest due on such date and the fees and charges of the paying Agent. Such monthly payments shall be increased or decreased proportion- ately prior to the first interest payment date or dates, after making allowance for any deposits made into the Interest Account upon the issuance of the Bonds. (b) Principal Account: Beg inning on the first day of the month which is twelve (12) months prior to the first principal maturi ty date and monthly thereafter, a sum equal to one twelfth ( 1/12) of the amount wh ich will be suff ic ient, together wi th the funds then on deposit therein, to pay the principal (except the principal of which is required to be paid on the Term Bonds from the Redemption Account hereinafter created and established) on the Serial Bonds on the next principal maturity date. Such payments shall be increased proportionately prior to the first principal payment date of the Bonds to make up any deficiency in the Princi- pal Account. The moneys on deposit in the Principal Account shall be withdrawn and deposited with the Paying Agent for such Bonds on or before each principal maturity date in an amount sufficient to pay the principal maturing on such date and the fees and charges of the paying Agent. (c) Redemption Account: An amount sufficient to pay any Amortization Installment established by any subsequent resolu- tion of the Issuer. (2) From the moneys on deposit in the Revenue Fund the Issuer shall next deposit into a special account in the Debt Service Fund hereby created and designated the IlReserve Accountll, a monthly sum of not less than one-sixtieth (1/60) of the Reserve Requirement. No further deposits shall be required to be made into the Reserve Account whenever the full Reserve Requirement shall be on deposit therein. Any withdrawals from the Reserve Account shall be sub- sequently restored from the first moneys available in the Revenue Fund after all required payments from the Revenue Fund (including all deficiencies in prior required payments therefrom) have been made in full. Moneys in the Reserve Account shall be used only for the purpose of paying Bond Service Requirement on the Bonds when the other moneys in the Debt Service Fund are insufficient therefor, and for no other purpose. Whenever the amount on deposi t in the Reserve Account exceeds the then current Reserve Requirement, the excess shall be wi thdrawn from the Reserve Account and deposited in any account in the Debt Service Fund. (3) Upon the issuance of any Additional parity Obliga- tions under the terms, limitations and conditions as are herein 18 e e " provided, the payments into the several accounts in the Debt Ser- v ice Fund, incl ud ing, if Term Bond s are issued, the Redemption Account, shall be increased in such amounts as shall be necessary to make the payment for the principal of, interest on and reserves for such Additional Parity Obligations on the same basis as here- inabove prov ided wi th respect to the Bond s initially issued under this Resolution. (4) The Issuer shall next apply and deposit monthly from the moneys remaining on deposit in the Revenue Fund into a special account to be known as the "City of winter Springs Water and Sewer Renewal and Replacement Fund" (hereinafter called the "Renewal and Replacement Fund"), which fund is hereby created and established, an amount equal to one-twelfth (1/12th) of five percent (5%) of the Gross Revenues received during the immediately preceding Fiscal Year, such deposit to be continued to be made for the purpose of this account; prov ided that no deposit shall be required to be made so long as there is an amount on deposit in the Renewal and Replacement Fund in the amount of 5% of the Gross Revenues received during the immediately preceeding Fiscal Year. The moneys in the Renewal and Replacement Fund shall be used only for the purpose of paying the cost of extensions, enlargements or add i tions to, or the replacement of capi tal assets of the System and emergency repairs thereto. Such moneys on deposit in such account shall also be used to supplement the Reserve Account in the Debt Service Fund, if necessary, in order to prevent a default in the payment of the principal of and interest on the Bonds. (5) The balance of any moneys remaining in the Revenue Fund after the above requi red payments have been made may be used for any lawful purpose; provided, however, that none of said money shall be used for any purposes other than those hereinabove speci- fied unless all current payments, including any deficiencies for prior payments, have been made in full and unless the Issuer shall have compl ied fully wi th all the covenants and prov isions of this Resolution. (6) The Debt Service Fund (including the Reserve Account and all accounts therein), the Renewal and Replacement Fund, the Revenue Fund, the Acquis i tion and Improvement Fund and any other special funds herein established and created shall con- stitute trust funds for the purposes provided herein for such funds. The money in all such funds shall be continuously secured in the same manner as municipal deposits are authorized to be secured by the laws of the State of Florida. Moneys on deposit in the Revenue Fund and the Debt Service Fund may be invested and reinvested in Investment Securities (or as otherwise prov ided) which mature not later than the dates on which the moneys on deposit therein will be needed for the purpose of such fund. The moneys in the Renewal and Replacement Fund may 19 e e be invested up to five (5) years. Moneys in the Reserve Account may be invested and reinvested in Investment Securities maturing not later than the last maturity of the Series 1985 Bonds or Additional Parity Obligations, if issued. All income on such investments 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 is on deposit therein, and thereafter shall be deposited in the Revenue Fund. (7) In determining the amount of any of the payments required to be made pursuant to this Section 18, credit shall be given for all investment income accruing to the respective funds and accounts described herein, except as otherwise provided. (8) The cash required to be accounted for in each of the funds and accounts described in this section may be deposited in a single bank account, provided that adequate accounting records are maintained to reflect and control the restricted allo- cation of the cash on deposit therein for the various purposes of such funds and accounts as herein 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 or to hinder or prevent the Issuer from maintaining its records and accounts in the manner set forth by the National Council on Governmental Accounting in the publication titled "Governmental Accounting Auditing and Financial Reporting", but rather is intended solely to constitute an ear- marking of certain revenues and assets of the System for certain purposes and to establish certain priori ties for application of such revenues and assets as herein provided. The Issuer may main- tain separate accounts for the System within the funds and accounts described herein. C. OPERATION AND MAINTENANCE. The Issuer will maintain the System and all parts thereof in good condition and will operate the same in an efficient and economical manner, making such expen- ditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. D. RATE COVENANT. The Issuer will fix, establish, revise from time to time whenever necessary, maintain and collect all such fees, rates, rentals and other charges for the use of the products, services and facilities of the System which will always provide revenues in each year sufficient to pay all the Cost of Operation and Maintenance of the System as the same shall become due plus one hundred twenty-five per centum (125%) of the Bond Service Requirement becoming due in such Bond Year upon the Bonds and any other obligations intended to be paid from such Net 20 , , , , e e " Revenues after excluding from such Bond Service Requirement pay- ments to be derived for that purpose from other sources. Such rates, fees, rental s or other charges shall not be red uced so as to be insufficient to provide revenues for such purposes. In the event the audit referred to in 18E hereof shows that the Issuer is not in compliance with the rate covenant set forth in 180, within thirty (30) days after such audit, the Consul ting Eng ineer will recommend suggested fees, rates, rentals and other charges for the use of the products, services and facilities of the System suffi- cient to meet the requirements of this Section 180. The Issuer hereby covenants and agrees to immediately adjust (to the extent permi tted by law), such rates, fees and other charges to comply with the requirements of this Section 180. E. BOOKS AND ACCOUNTS: AUDIT. The Issuer 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. The Owners of any of the Bonds or any duly authorized agent or agents of such Owners shall have the right at any and all reasonable times to inspect such books, records and accounts. The Issuer shall within one hundred twenty (120) days following the close of each Fiscal Year cause an audit of such books, records and accounts to be made by an independent firm of certified public accountants. Each such audit, in addi- tion to whatever matters may be deemed proper by said firm of certified publ ic accountants to be included therein, shall, wi th- out limiting the generality of the foregoing, include the following: (1) A statement in reasonable detail of the income and expenditures of the System for such Fiscal Year; (2) Comments regard ing any non-compl iance by the City in carrying out the accounting requirements of this Resolution. Copies of each such audit report shall be placed on file with the Issuer and be made available at reasonable times for inspec- tion by Owners of Bonds, and shall be sent to the nationally recognized bond rating agencies and to the initial purchasers of the Bond s . F. MORTGAGE OR SALE OF SYSTEM. The Issuer shall not sell, lease, encumber or in any manner dispose of the System as a whole until all of the Bonds or any subsequently issued pari ty bonds shall have been paid in full as to both principal and interest, provided, however, that this provision and nothing in this Resolu- tion, particularly Paragraph G immed iately below, shall prohibit the sale, lease or transfer of the System or any part of the System to another unit of local government established by law for the purpose of owning and operating water and sewer facilities. 21 .. , . e e G. SALE OR DISPOSITION OF CERTAIN PARTS OF SYSTEM. The Issuer may sell or dispose of, for fair market value, any proper- ties or parts of the System which the Consulting Engineer shall certify in writing are not necessary for the continuing operation of the System, and that the sale or disposal of which will not adversely affect the Revenues derived from the System to such an extent that the Issuer will fail to comply with the covenants of this Resolution. The proceeds derived from any sale or disposal of any proper- ties or parts of the System as provided for in the above para- graph, in the discretion of the Issuer, be (1) deposited in the Renewal and Replacement Fund and used exclusively for the purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and for any unu- sual or extraordinary repairs, or for the construction or acquisi- tion of additions, extensions and improvements to the System, or (2) for the purchase or retirement of the Bonds, provided, howev- er, that if the Consul ting Eng ineer certified that the proceeds are necessary for the purpose stated in part (1) above, such proceeds shall remain in the Renewal and Replacement Fund until such certified requirements are satisfied and the proceeds shall not be used for any other purpose allowed by this Resolution. H. INSURANCE. The Issuer will maintain fire and windstorm insurance on all buildings and structures of the works and proper- ties of the System which are subject to loss through fire or wind- storm, public liability insurance, and such other insurance as is generally carried on similar property at least in such amounts as are normally carried in the operation of a similar public utility system wi thin the State of Florida. Any such insurance shall be placed with a nationally recognized reputable insurer and shall be carried for the benefit of the Owners of the Bonds. In lieu of carrying such insurance the Issuer may self-insure to the extent customary wi th ut il i ties operating 1 ike properties. All moneys received for losses under any such insurance, except public liabi- 1 i ty, are hereby pledged by the Ci ty as securi ty for the Bonds, until and unless such proceeds are used to remedy the loss or damage for which such proceeds are received, either by repairing the property damage or replacing the property would be possible from the date of the receipt of the proceeds of the insurance. I. NO FREE SERVICE. So long as any Bond s are Outstand ing , the Issuer shall not furnish or supply the facilities, services and commodities of the System free of charge to any person, firm or corporation, public or private. The Issuer shall promptly enforce the payment of any and all accounts owing to the Issuer and delinquent, by discontinuing service or by filing suits, actions or proceed ings, or by both discontinuance of service and f i 1 i ng sui t . 22 . ' .' e e Notwithstanding the foregoing, the Issuer shall not be required to impose any fees or charges for the collection, trans- mission, treatment or disposal of storm water runoff or the supply of water to fire service. J. ENFORCEMENT OF COLLECTIONS. The Issuer will diligently enforce and collect the rates, fees and other charges for the ser- vices and facilities of the System herein pledged; 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 herein pledged shall, as collected, be held in trust to be applied as herein provided. K. REMEDIES. Any Owner of Bonds issued under the provision hereof or any trustee act ing for the Owners 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 the laws of the State of Florida, or granted and contained herein, and may enforce and compel the per- formance of all duties required herein or by any applicable stat- utes to be performed by the Issuer or by any officer thereof. Nothing herein, however, shall be construed to grant to any Owner of the Bonds any lien on any property of the Issuer. L. CONSULTING ENGINEERS. The Issuer shall employ qualified Consulting Engineers in an advisory capacity to inspect the facil- ities of the System and to make reports and recommendations with respect thereto and concerning the operat ion, maintenance, re- placements, property additions and improvements thereto as re- quested by the Issuer. A copy of each report shall be available and shall remain on file with the City Clerk for public inspec- tion. M. MANDATORY CONNECTIONS. The Issuer will, to the full extent permitted by law, require all lands, buildings and struc- tures within the Issuer's service area, fronting or abutting on the lines of the System, or any part thereof, or which can use the facilities of the System to connect with and use such facilities within ninety (90) days after notification that service is avail- able. The Issuer will not grant a franchise for the operation of any competing utility system until all Bonds issued hereunder to- gether with the interest thereon have been paid in full; provided however, nothing in this Resolution shall effect the validity of any franchises existing on the effective date of this Resolution for the operation of any utility system within the City. N. NO COMPETING SYSTEM. To the full extent permitted by law, the Issuer will not grant, or cause, consent to or allow the 23 . , . .- e e < . granting of, any franchise or permit to any person, firm, corpora- tion or body, or agency or instrumentality whatsoever, for the the furnishing of water or sewer services which the Issuer determines will adversely affect the revenues of the System; provided how- ever, nothing in this Resolution shall effect the validity of any franchise existing on the effective date of this resolution for the operation of any utility system within the City. O. ISSUANCE OF OTHER OBLIGATIONS. The Issuer will not issue any other obligations payable from the Revenues of the System nor voluntarily create or cause to be created any debt, lien pledge, assignment, encumbrance or other charge having priority to or be ing on a parity wi th the 1 ien of the Bond s issued pursuant to this Resolution and the interest thereon, upon said Revenues ex- cept under the conditions and in the manner provided herein. Any obligations issued by the Issuer other than the Bonds herein au- thorized and Additional Parity Obligations provided for in Subsection P below, payable from such Revenues, shall contain an express statement that such obligations are junior, inferior and subordinate in all respects to the Bonds herein authorized, as to lien on and source and security for payment from such Revenues. P. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. No Additional parity Obligations, payable on a pari ty from the Net Revenues of the System with the Bonds herein authorized, shall be issued after the issuance of any Bonds herein authorized, except upon the con- ditions and in the manner hereinafter provided: (1) Any such obligations shall be issued solely for the purpose of extending, enlarging, improving or adding to the facil- i ties of the System and/or to refund any bonds issued for such purposes. (2) There shall have been obtained and filed wi th the Issuer a certificate of an independent certified public accountant of sui table experience and responsibil i ty stating: (a) that the books and records of the City relative to the System have been audited by him; (b) the amount of the Net Revenues of the System, derived for the Fiscal Year preceding the date of issuance of the proposed Additional Parity Obligations with respect to which such certificate is made, adjusted as herein below provided; (c) that the aggregate amount of such Net Revenues, as adj usted, from the System, for such preced ing Fiscal Year is equal to not less than one hundred twenty-five (125%) percent of the Maximum Bond Service Requirement on (i) all obligations issued under this Resolution, if any, then Outstanding, and (ii) on the Additional parity Obli- gations with respect to which such certificate is made. (3) Upon recommendation of the Consul ting Eng ineers, historical Net Revenues of the System may be adjusted for purposes of this Section by including 100% of the additional Net Revenues, 24 . .. e e . which in the opinion of the Consulting Engineer would have been derived by the Issuer from rate increases adopted and in effect before the Additional Parity Obligations are issued. (4) The Issuer shall not be in default in the carrying out of any of the obligations assumed under this Resolution, 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. (5) The Bond Service Requirement on the Bonds shall be substantially level. (6) The resolution authorizing the issuance of the Additional Parity Obligations shall recite that all of the cove- nants contained herein will be applicable to such Additional Parity Obligations, shall bear interest payable semi-annually on April 1 and October 1 of each year and shall mature annually or semiannually on October 1 and/or April 1 of the year of maturity thereof. (7) For the purposes of this Subsection only, the term Net Revenues shall not include investment income derived from any acquisition or construction fund created for any Additional Parity Obligations. (8) Upon the issuance of the Additional Parity Obliga- tions, the Reserve Account shall contain therein the Reserve Requirement. Q. ARBITRAGE. No use will be made of the proceeds of the Bonds which, if reasonably expected on the date of issuance of the Bonds, would cause the same to be "arbitrage bonds" wi thin the meaning of the Internal Revenue Code of 1954. The Ci ty at all times while the Bonds and interest thereon are outstanding will comply with the requirements of Section 103(c) of the Internal Revenue Code of 1954 and any valid and applicable rules and regu- lations promulgated thereunder. SECTION 19. ACQUISITION AND IMPROVEMENT FUND AND TRANSFER OF FUNDS FOR REFUNDED BONDS. Except as provided in this Section 19, all moneys on deposit in the various funds and accounts created pursuant to the resolution and the Indenture of Trust securing the Refunded Bonds shall be transferred upon the issuance of the Series 1985 Bonds to the corresponding fund or account created pursuant to this Resolution. Moneys in excess of the Reserve Requirement for the Series 1985 Bonds in the Reserve Requirement for the Series 1985 Bonds in the reserve account for the Refunded Bonds, if any, shall, at the direction of the Mayor and City Manager be transferred to the Escrow Holder for deposit pursuant to the Escrow Deposit Agreement or shall be used to pay Bond Service Requirement on the Series 1985 Bonds at the earliest possible date. 25 .. . e . I . .- Moneys on deposit in the Acquisition and Improvement Fund created pursuant to the resolution authorizing the Refunded Bonds shall be transferred on the date of the issuance of the Series 1985 Bonds to the City of Winter Springs Acquisition and Improve- ment Fund hereby created and established. Section 17 of the reso- lution authorizing the Refunded Bonds shall apply to such trans- ferred funds as though fully set forth herein until all of such funds have been utilized as provided therein. All defined terms used in said Section 19 shall have the same meaning as set forth in this Resolution. SECTION 20. MODIFICATION OR AMENDMENT. No material modifi- cation or amendment of this Resolution or of any resolution amend- atory hereof or supplemental thereto, may be made without the con- sent in writing of the Owners of two-thirds (2/3) or more in prin- cipal amount of the Bonds then Outstanding; provided, however, that 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 or affecting the unconditional promise of the Issuer to pay the principal of and interest on the Bonds as the same shall come due from the Net Revenues of the System or reduce the percentage of the owners of the Bonds required to consent to any material modification or amendment hereof without the consent in writing of the Owner or Owners of all such Bonds. SECTION 21. DEFEASANCE. If, at any time, the Issuer shall have paid, or shall have made provision for payment of, the prin- cipal, interest and redemption premiums, if any, with respect to the Bonds, then, and in that event, the pledge of and lien on the funds pledged in favor of the Owners of the Bonds shall be no longer in effect. For purposes of the preceding sentence, deposit of sufficient cash and/or Federal Securities or bank certificates of deposit fully secured as to principal and interest by Federal Securities (or deposit of any other securities or investments which may be authorized by law from time to time and sufficient under such law to effect such a defeasance including Acquired Obligations) in irrevocable trust with a banking institution or trust company, for the sole benefit of the Owners of the Bonds in respect to which such Federal Securities or certificates of deposit, principal and interest, received will be sufficient to make timely payment of the principal, interest and redemption premiums, if any, on the Outstanding Bonds, shall be considered "provision for payment." Nothing herein shall be deemed to require the Issuer to call any of the Outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the Issuer in determin- ing whether to exercise any such option for early redemption. Nothing herein shall be deemed to require the defeasance of all Outstanding Bonds at any time (i.e., the Issuer may elect to defease one series of Bonds without defeasing all Outstanding series of Bonds. 26 . ~ t' .. - t' r ~ e . SECTION 22. SEVERABILITY. If anyone or more of the cove- nants, 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, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agree- ments or provisions of this Resolution or of the Bonds issued hereunder. SECTION 23. EFFECTIVE DATE. This Resolution shall become effective immediately upon its adoption. ADOPTED this ~ day of (SEAL) ATTEST: ~T ~L\ City Clerk Approved as to Form and Legal Sufficiency: City Attorney 27