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7191-03 ORDINANCE NO. 7191-03 AN ORDINANCE PROVIDING FOR THE ADVANCE REFUNDING OF THE OUTSTANDING GAS SYSTEM REVENUE BONDS, SERIES 1996A, OF THE CITY OF CLEARWATER, FLORIDA; PROVIDING FOR THE ISSUANCE OF NOT EXCEEDING $10,000,000 GAS SYSTEM REVENUE REFUNDING BONDS, SERIES 2003, AS ADDITIONAL PARITY OBLIGATIONS OF THE CITY PURSUANT TO THE CITY'S ORIGINAL ORDINANCE, TO BE APPLIED TO ADVANCE REFUND SUCH OUTSTANDING OBLIGATIONS; PLEDGING THE NET REVENUES OF THE SYSTEM TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; PROVIDING FOR THE PAYMENT THEREOF; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT ENACTED BY THE CITY COMMISSION OF THE CITY OF CLEARWATER, FLORIDA, as follows: SECTION 1. AUTHORITY FOR THIS ORDINANCE; ORDINANCE TO BE SUPPLEMENTAL. This Ordinance is enacted pursuant to the provisions of Chapter 166, Part II, Florida Statutes, and other applicable provisions of law (the "Act") and the Original Ordinance, hereinafter defined. This Ordinance is supplemental to the Original Ordinance and all provisions of the Original Ordinance not supplemented, modified, superseded or repealed by the provisions hereof shall (a) remain in full force and effect, (b) apply to the Refunding Bonds, hereinafter defined, to the same extent and in the same manner as such provisions apply to the Parity Bonds, hereinafter defined, and (c) are incorporated herein by reference as if fully set forth. SECTION 2. DEFINITIONS. Unless the context otherwise requires, the terms defined in this Ordinance shall have the meanings specified in this section, and any capitalized terms not defined herein shall have the meanings specified in Section 2 of the Original Ordinance. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations. Ordinance No. 7191-03 1 "Additional Parity Obligations" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained in the Original Ordinance and in this Ordinance and which (i) shall have a lien on the Pledged Revenues equal to that of the Parity Bonds and the Refunding Bonds, (ii) shall be payable from the Net Revenues on a parity with the Parity Bonds and the Refunding Bonds, and (iii) rank equally in all respects with the Parity Bonds and the Refunding Bonds. "Bond Registrar" or "Registrar" shall mean the officer of the Issuer or the bank or trust company which the Issuer may from time to time designate to perform the duties herein set forth for the Registrar of the Refunding Bonds. "Bonds" shall mean (i) the Bonds authorized under the Original Ordinance, including but not limited to the Parity Bonds and the Refunding Bonds and (ii) any Additional Parity Obligations issued hereafter in accordance with the provisions of the Original Ordinance and this Ordinance. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules thereunder in effect or proposed. "Cost of Operation and Maintenance" of the System shall mean all current expenses, paid or accrued, for the operation, maintenance and repair of all facilities of the System, as calculated in accordance with sound accounting practice, and shall include, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the Issuer related solely to the System, labor, cost of materials and supplies used for current operation, and charges for the accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with sound accounting practice, but excluding any reserve for renewals or replacements, for extraordinary repairs or any allowance for depreciation. "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. The term Credit Facility shall not include any bond insurance, surety bond or other credit enhancement deposited into or allocated to a subaccount in the Reserve Account in the Sinking Fund. "Credit Facility Issuer" shall mean the provider of a Credit Facility. "Escrow Deposit Agreement" shall mean that certain Escrow Deposit Agreement by and between the Issuer and a bank or trust company to be approved by subsequent resolution of the Issuer, for the purpose of providing for the payment of the Refunded Bonds, which agreement shall be in substantially the form attached hereto as Exhibit "B" and is hereby incorporated by reference. Ordinance No. 7191-03 2 "Gross Revenues" or "Revenues" shall mean all moneys received from rates, fees, rentals or other charges or income derived from the investment of funds, unless otherwise provided herein, by the Issuer or accruing to it in the operation of the System, all calculated in accordance with sound accounting practice. "Holder of Bonds" or "Bondholders" or any similar term shall mean any person who shall be the registered owner ("Registered Owner") of any registered Bond, as shown on the books and records of the Bond Registrar. The Issuer may deem and treat the person in whose name any Bond is registered as the absolute owner thereof for the purpose of receiving payment of, or on account of, the principal or redemption price thereof and interest due thereon, and for all other purposes. "Issuer" shall mean the City of Clearwater, Florida. "Net Revenues" shall mean Gross Revenues less Cost of Operation and Maintenance. "Ordinance" shall mean this ordinance of the Issuer as hereafter amended and supplemented from time to time in accordance with the provisions hereof. "Original Ordinance" shall mean City of Clearwater Ordinance No. 5118-91 as thereafter amended and supplemented from time to time in accordance with the provisions thereof. "Parity Bonds" shall mean outstanding Gas System Revenue Bonds, Series 1997 A, dated October 1, 1997, the outstanding Gas System Revenue Bonds, Series 1997B, dated October 1, 1997, the outstanding Gas System Revenue Refunding Bonds, Series 1998, dated January 15, 1998, and any bonds issued under the authority of the Original Ordinance or the City of Clearwater Ordinance No. 5665-94. "Refunded Bonds" shall mean all or any portion of the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1996A, dated July '1, 1996, for which the future payments of principal, premium, if any, and interest has been provided for in an irrevocable escrow in accordance with the Escrow Deposit Agreement with proceeds of the Refunding Bonds, which are so designated by the Issuer prior to the issuance of any series of Refunding Bonds. "Refunding Bonds" shall mean the obligations of the Issuer authorized to be issued pursuant to Section 5 of this Ordinance, which Refunding Bonds are to be issued in one or more series, with each series to be separately designated in accordance with subsequent resolutions to be adopted by the Issuer prior to the issuance of any series of Refunding Bonds. "Reserve Requirement" for each series of Bonds shall be as determined by subsequent resolution of the Issuer. The Reserve Requirement for the Refunding Bonds Ordinance No. 7191-03 3 shall be the lesser of (i) the Maximum Bond Service Requirement of the Refunding Bonds, (ii) 125% of the average annual Bond Service Requirement of the Refunding Bonds, or (iii) 10% of the net proceeds of the Refunding Bonds. "System" shall mean the complete gas system now owned, operated and maintained by the Issuer, together with any and all assets, improvements, extensions and additions thereto hereafter constructed or acquired. SECTION 3. FINDINGS. It is hereby found, determined and declared that: (A) The Issuer has heretofore enacted the Original Ordinance authorizing the issuance of certain obligations to be secured by and payable from the Net Revenues, and providing for the issuance of Additional Parity Obligations, upon the conditions set forth therein, to be payable on a parity from such Net Revenues. (B) The Issuer has previously issued the Refunded Bonds and deems it necessary and in its best interest to provide for the refunding of the Refunded Bonds. The refunding program herein described will be advantageous to the Issuer by providing a net present value reduction in the amount of debt service secured by the System, resulting in a lessening of pressures to increase System rates. (C) From the proceeds of the Refunding Bonds and other funds available therefor, there shall be deposited pursuant to the Escrow Deposit Agreement a sum which, together with the principal and income from the Federal Securities to be purchased pursuant to such agreement, will be sufficient to make timely payments of all presently outstanding principal, redemption premium, if any, and interest in respect to the Refunded Bonds, as the same come due and/or redeemable. Such funds and principal and income from investments shall also be sufficient to pay when due all expenses, if any, described in the Escrow Deposit Agreement. (D) The costs associated with such refunding program shall be deemed to include legal expenses, fiscal expenses, rating agency fees, expenses for estimates of costs and of revenues, accounting expenses, municipal bond insurance premiums, costs of printing, fees of financial advisors, fees for escrow structuring and verification, accrued and capitalized interest, provisions for reserves, and such other expenses as may be necessary or incidental for the financing herein authorized. (E) The Revenues are not pledged or encumbered in any manner except for the prior payment from the Net Revenues of the principal of and interest on the Refunded Bonds, which pledge and encumbrance shall be defeased pursuant to the refunding herein authorized, and the Parity Bonds. (F) The principal of and interest on the Refunding Bonds and all required Sinking Fund, Reserve and other payments shall be payable solely from the Net Revenues derived from the operation of the System, as provided herein and in the Original Ordinance. The Ordinance No. 7191-03 4 Refunding Bonds shall not constitute an indebtedness, liability, general or moral obligation, or a pledge of the faith, credit or taxing power of the Issuer, the State, or any political subdivision thereof, within the meaning of any constitutional, statutory or charter provisions. Neither the State of Florida, nor any political subdivision thereof, nor the Issuer shall be obligated (1) to levy ad valorem taxes on any property to pay the principal of the Refunding Bonds, the interest thereon, or other costs incidental thereto or (2) to pay the same from any other funds of the Issuer except from the Net Revenues, in the manner provided herein and in the Original Ordinance. The Refunding Bonds shall not constitute a lien upon the System, or any part thereof, or on any other property of the Issuer, but shall constitute a first and prior lien only on the Net Revenues in the manner provided herein and in the Original Ordinance. (G) The estimated Net Revenues to be derived from the operation of the System will be sufficient to pay all principal of and interest on the Parity Bonds and the Refunding Bonds, as the same become due, and to make all required Sinking Fund, Reserve and other payments required by this Ordinance and the Original Ordinance. (H) The Original Ordinance, in Section 16(T) thereof, provides for the issuance of Additional Parity Obligations under the terms, limitations and conditions provided therein. (I) The Issuer has complied with the terms, conditions and restrictions contained in the Original Ordinance. The Issuer is, therefore, legally entitled to issue the Refunding Bonds as Additional Parity Obligations within the authorization contained in the Original Ordinance. (J) The Refunding Bonds herein authorized shall be on a parity and rank equally, as to lien on and source and security for payment from the Net Revenues and in all other respects, with the Parity Bonds. Ordinance No. 7191-03 5 SECTION 4. THE ORDINANCE TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Refunding Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this Ordinance and the Original Ordinance shall be deemed to be and shall constitute a contract between the Issuer and such Holders. 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 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. SECTION 5. AUTHORIZATION OF REFUNDING BONDS AND REFUNDING OF THE REFUNDED BONDS. Subject and pursuant to the provisions hereof, obligations of the Issuer to be known as "Gas System Revenue Refunding Bonds, Series 2003" herein defined as the "Refunding Bonds" are authorized to be issued in the aggregate principal amount of not exceeding $10,000,000 to (i) finance the refunding of the Refunded Bonds, (ii) make a deposit to the Reserve Account in the Sinking Fund to satisfy the Reserve Requirement (or to purchase a debt service reserve fund policy or surety, as determined by resolution of the Issuer adopted prior to the issuance of any series of Refunding Bonds) and (iii) pay the costs of issuance of the Refunding Bonds. The refunding of the Refunded Bonds is hereby authorized in the manner provided herein. SECTION 6. DESCRIPTION OF REFUNDING BONDS. The Refunding Bonds shall be issued in fully registered form; may be Capital Appreciation Bonds and/or Current Interest Bonds; shall be dated; shall be numbered; shall bein the denomination of $5,000 each or integral multiples thereof for the Current Interest Bonds and in $5,000 maturity amounts for the Capital Appreciation Bonds or in $5,000 multiples thereof, or in such other denominations as shall be approved by the Issuer in a subsequent resolution prior to the delivery of the Refunding Bonds; shall bear interest at a fixed or floating rate not exceeding the maximum rate allowed by law, such interest to be payable semiannually on such dates and in such years and amounts; and shall mature on such dates and in such years, and in such amounts all as shall be fixed by resolution or ordinance of the Issuer adopted prior to the delivery of the Refunding Bonds. The Refunding Bonds are to be issued in one or more series, from time to time, either as construction or completion bonds, and if issued in more than one series, each series is to be separately designated as determined by resolution of the Issuer adopted prior to the issuance of any such series of Refunding Bonds. The Refunding Bonds shall be payable with respect to principal (and Compounded Amount in the case of Capital Appreciation Bonds) upon presentation and surrender thereof on the date fixed for maturity or redemption thereof at the office of the Bond Registrar; shall be payable in any coin or currency of the United States which at the time of payment is legal tender for the payment of public or private debts; and shall bear interest from such date, but not earlier than the date of the Refunding Bonds, as is fixed by Ordinance No. 7191-03 6 subsequent resolution or ordinance of the Issuer, payable in accordance with and pursuant to the terms of the Refunding Bonds. Interest on the Refunding Bonds which are Current Interest Bonds shall be paid by check or draft mailed to the Registered Owners, at their addresses as they appear on the books and records of the Bond Registrar, at the close of business on the 15th day of the month (whether or not a business day) next preceding the interest payment date for the Refunding Bonds (the "Record Date"), irrespective of any transfer of the Refunding Bonds subsequent to such Record Date and prior to such interest payment date, unless the Issuer shall be in default in the payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the Registered Owners at the close of business on a special record date for the payment of defaulted interest as established by notice mailed to the persons in whose names such Refunding Bonds are registered at the close of business on the fifth (5th) day preceding the date of mailing. Payment of interest on the Refunding Bonds may, at the option of any owner of Refunding Bonds in an aggregate principal amount of at least $1,000,000, be transmitted by wire transfer to such owner to the bank account number on file with the Paying Agent as of the Record Date upon written request therefor by the holder thereof for the appropriate interest payment date. If the date for payment of the principal of, premium, if any, or interest on the Refunding Bonds shall be a Saturday, Sunday, legal holiday or a day on which the banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday or legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. The Refunding Bonds may be issued or exchanged for Refunding Bonds in coupon form, payable to bearer, in such form and with such attributes as the Issuer may provide by supplemental resolutions, upon receipt of an opinion from a nationally recognized bond counsel that such issuance or exchange will not cause interest on the Refunding Bonds to be includable in gross income of the Holder for federal income tax purposes. SECTION 7. EXECUTION OF BONDS. The Refunding Bonds shall be executed in the name of the Issuer by its City Manager, countersigned by its Mayor-Commissioner and attested to by its City Clerk, and its official seal or a facsimile thereof shall be affixed thereto or reproduced thereon. The Refunding Bonds shall be approved as to form and legal sufficiency by the City Attorney of the Issuer. The facsimile signatures of such officers may be imprinted or reproduced on the Refunding Bonds. The Certificate of Authentication of the Bond Registrar, hereinafter described, shall appear on the Refunding Bonds, and no Refunding Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Ordinance unless such certificate shall have been duly executed on such Refunding Bond. The authorized signature for the Bond Registrar shall at all times be a manual signature. In case any officer whose signature shall appear on Ordinance No. 7191-03 7 any Refunding Bonds shall cease to be such officer before the delivery of such Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. Any Refunding Bonds may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bonds shall hold the proper office with the Issuer, although at the date of enactment of this Ordinance such person may not have held such office or may not have been so authorized. SECTION 8. NEGOTIABILITY AND REGISTRATION. (A) NEGOTIABILITY. The Refunding Bonds shall be and shall have all of the qualities and incidents of negotiable instruments under the Uniform Commercial Code - Investment Securities of the State of Florida, and each successive Holder, in accepting any of the Refunding Bonds shall be conclusively deemed to have agreed that such Bonds shall be and have all of the qualities and incidents of negotiable instruments under the Uniform Commercial Code - Investment Securities of the State of Florida. (B) REGISTRATION AND TRANSFER. There shall be a Bond Registrar for the Refunding Bonds which shall be a bank or trust company located within or without the State of Florida. The Bond Registrar shall maintain the registration books of the Issuer and be responsible for the transfer and exchange of the Refunding Bonds. The Issuer shall, prior to the proposed date of delivery of the Refunding Bonds, by resolution designate the bank to serve as a Bond Registrar and Paying Agent. The Bond Registrar shall maintain the books for the registration of the transfer and exchange of the Bonds in compliance with an agreement to be executed between the Issuer and such bank as Bond Registrar on or prior to the date of delivery of the Refunding Bonds. Such agreement shall set forth in detail the duties, rights and responsibilities of the parties thereto. The Refunding Bonds may be transferred upon the registration books, upon delivery to the Registrar, together with written instructions as to the details for the transfer of such Refunding Bonds, along with the social security or federal employer identification number of such transferee and, if such transferee is a trust, the name and social security or federal employer identification numbers of the settlor and beneficiaries of the trust, the date of the trust and the name of the trustee. No transfer of any Refunding Bond shall be effective until entered on the registration books maintained by the Registrar. In all cases of the transfer of the Refunding Bonds, the Registrar shall enter the transfer of ownership in the registration books and shall authenticate and deliver in the name of the transferee or transferees a new fully registered Refunding Bond or Refunding Bonds of authorized denominations of the same maturity and interest rate for the aggregate principal amount which the Registered Owner is entitled to receive at the earliest practicable time in accordance with the provisions of this Ordinance. Any Refunding Bond or Bonds shall be exchangeable for a Refunding Bond orBonds of the same maturity and interest rate, in any authorized denomination, but in a principal amount equal to the unpaid principal amount of the Refunding Bond or Bonds presented for exchange. Bonds to be Ordinance No. 7191-03 8 exchanged shall be surrendered at the principal office of the Registrar, and the Registrar shall deliver in exchange therefor the Refunding Bond or Bonds which the Bondholder making the exchange shall be entitled to receive. The Issuer or the Registrar may charge the Registered Owner of such Refunding Bond for every such transfer or exchange an amount sufficient to reimburse them for their reasonable fees and for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange, and may require that such charge be paid before any such new Refunding Bond shall be delivered. All Refunding Bonds delivered upon transfer or exchange shall bear interest from such date that neither gain nor loss in interest shall result from the transfer or exchange. All Refunding Bonds presented for transfer, exchange, redemption or payment (if so required by the Issuer), shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Issuer and the Registrar duly executed by the Registered Owner or by his duly authorized attorney. SECTION 9. BONDS MUTILATED. DESTROYED. STOLEN OR LOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion issue and deliver a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, 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 Issuer proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer may prescribe and paying such expenses as the Issuer may incur. All Bonds so surrendered shall be canceled by the Registrar for the Bonds. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this section shall constitute original, additional contractual obligations on the part of the Issuer 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 the source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Bonds issued hereunder. SECTION 10. BOOK ENTRY SYSTEM. Notwithstanding the provisions of Sections 7, 8 and 9 hereof, the Issuer may, at its option, prior to the date of issuance of the Refunding Bonds, elect to use an immobilization system or pure book-entry system with respect to issuance of such Refunding Bonds, provided adequate records will be kept with respect to the ownership of such Bonds issued in book-entry form or the beneficial ownership of bonds issued in the name of a nominee. As long as any Bonds are outstanding in book-entry form the provisions of Sections 7,8 and 9 of this Ordinance shall Ordinance No. 7191-03 9 not be applicable to such Refunding Bonds. The details of any alternative system of issuance, as described in this paragraph, shall be set forth in a resolution of the Issuer duly adopted at or prior to the sale of such Series Refunding Bonds. SECTION 11. PROVISIONS FOR REDEMPTION. The Refunding Bonds shall be subject to redemption prior to their maturity, at the option of the Issuer, at such times and in such manner as shall be fixed by resolution of the Issuer duly adopted prior to or at the time of sale of the Refunding Bonds. Notice of such redemption will be given by the Registrar (who shall be the Paying Agent for the Refunding Bonds, or such other person, firm or corporation as may from time to time be designated by the Issuer as the Registrar for the Refunding Bonds) by mailing a copy of the redemption notice by first-class mail (postage prepaid) not more than thirty (30) days and not less than fifteen (15) days prior to the date fixed for redemption to the Registered Owner of each Refunding Bond to be redeemed in whole or in part at the address shown on the registration books. Failure to give such notice by mailing to any Registered Owner of Bonds, or any defect therein, shall not affect the validity of any proceeding for the redemption of other Bonds. All Refunding Bonds or portions thereof so called for redemption will cease to bear interest after the specified redemption date provided funds for their redemption are on deposit at the place of payment at that time. Upon surrender of any Refunding Bond for redemption in part only, the Issuer shall issue and deliver to the Registered Owner thereof, the costs of which shall be paid by the Registered Owner, a new Refunding Bond or Refunding Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion surrendered. Whenever any Refunding Bonds shall be delivered to the Bond Registrar for cancellation, upon payment of the principal amount thereof, or for replacement, transfer or exchange, such Refunding Bonds shall be canceled and, upon request of the Issuer, destroyed by the Bond Registrar. Counterparts of the certificate of destruction evidencing any such destruction shall be furnished to the Issuer. SECTION 12. FORM OF THE REFUNDING BONDS. The text of the Refunding Bonds shall be in substantially the form set forth in Exhibit A attached hereto and incorporated herein, with such omissions, insertions and variations as may be necessary and desirable and authorized and permitted by this Ordinance or by any subsequent ordinance or resolution adopted prior to the issuance thereof: SECTION 13. APPLICATION OF PROVISIONS OF ORIGINAL ORDINANCE. The Refunding Bonds, herein authorized, shall for all purposes (except as herein expressly provided) be considered to be Additional Parity Obligations issued under the authority of the Original Ordinance, and shall be entitled to all the protection and security provided therein for the Parity Bonds, and shall be in all respects entitled to the same security, rights and privileges enjoyed by the Parity Bonds. Ordinance No. 7191-03 10 The covenants and pledges contained in the Original Ordinance shall be applicable to the Refunding Bonds herein authorized in like manner as applicable to the Parity Bonds. The principal of and interest on the Refunding Bonds shall be payable from the Sinking Fund established in the Original Ordinance on a parity with the Parity Bonds, and payments shall be made into such Sinking Fund by the Issuer in amounts fully sufficient to pay the principal of and interest on the Parity Bonds and the Refunding Bonds as such principal and interest become due. SECTION 14. APPLICATION OF REFUNDING BOND PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of any or all of the Refunding Bonds shall be applied by the Issuer as follows: (A) The accrued interest shall be deposited in the Interest Account in the Sinking Fund created in the Original Ordinance and shall be used only for the purpose of paying interest becoming due on the Refunding Bonds. (B) Unless provided from other funds of the Issuer on the date of issuance of any series of Refunding Bonds as set forth in Section 16(B) of the Original Ordinance, a sum equal to the Reserve Requirement for the Refunding Bonds shall be deposited in the sub- account in the Reserve Account in the Sinking Fund, herein created and established forthe benefit of the Refunding Bonds, and shall be used only for the purposes provided therefor, or, if determined by subsequent resolution of the Issuer, a sum equal to the premium of a debt service reserve fund policy or surety provided in satisfaction of the Reserve Requirement for such series of Refunding Bonds. (C) Unless paid or reimbursed by the original purchasers of the Refunding Bonds, the Issuer shall pay all costs and expenses in connection with the preparation, issuance and sale of the Refunding Bonds. (D) A sum which, together with the other funds to be deposited pursuant to the Escrow Deposit Agreement, and the investment income to be derived therefrom, will be sufficient to pay, as of any date of calculation, the principal of, redemption premium, if any, and interest on the Refunded Bonds as the same shall become due and or redeemable, shall be deposited pursuant to the Escrow Deposit Agreement. SECTION 15. SPECIAL OBLIGATIONS OF ISSUER. The Refunding Bonds shall be special obligations of the Issuer, payable solely from the Net Revenues as herein provided. The Refunding Bonds do not constitute an indebtedness, liability, general or moral obligation, or a pledge of the faith, credit or taxing power of the Issuer, the State of Florida or any political subdivision thereof, within the meaning of any constitutional, statutory or charter provisions. Neither the State of Florida nor any political subdivision thereof nor the Issuer shall be obligated (1) to levy ad valorem taxes on any property to pay the principal of the Refunding Bonds, the interest thereon or other costs incident thereto, or Ordinance No. 7191-03 11 (2) to pay the same from any other funds of the Issuer except from the Net Revenues, in . the manner provided herein. The acceptance of the Refunding Bonds by the Holders from time to time thereof shall be deemed an agreement between the Issuer and such Holders that the Bonds and the indebtedness evidenced thereby shall not constitute a lien upon the System, or any part thereof, or any other property of the Issuer, but shall constitute a first and prior lien only on the Net Revenues, in the manner hereinafter provided. The Net Revenues shall be immediately subject to the lien of this pledge without any physical delivery thereof or 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 Issuer. The payment of the principal of and the interest on the Refunding Bonds shall be secured forthwith equally and ratably by an irrevocable lien on the Net Revenues of the System, as defined herein, on a parity with the Parity Bonds and the Issuer does hereby irrevocably pledge such Net Revenues of the System to the payment of the principal of and the interest on the Refunding Bonds, for the reserves therefor and for all other required payments. SECTION 16. COVENANTS OF THE ISSUER. The provisions of Section 16 of the Original Ordinance shall be deemed applicable to this Ordinance and shall apply to the Refunding Bonds issued pursuant to this Ordinance as though fully restated herein. SECTION 17. AMENDING AND SUPPLEMENTING OF ORDINANCE WITHOUT CONSENT OF HOLDERS OF BONDS. The provisions of Section 17 of the Original Ordinance shall be deemed applicable to this Ordinance and shall apply to the Refunding Bonds issued pursuant to this Ordinance as though fully restated herein. SECTION 18. AMENDMENT OF ORDINANCE WITH CONSENT OF HOLDERS OF BONDS. The provisions of Section 18 of the Original Ordinance shall be deemed applicable to this Ordinance and shall apply to the Refunding Bonds issued pursuant to this Ordinance as though fully restated herein. SECTION 19. DEFEASANCE. The provisions of Section 19 of the Original Ordinance shall be deemed applicable to this Ordinance and shall apply to the Refunding Bonds issued pursuant to this Ordinance as though fully restated herein. SECTION 20. TAX COVENANTS. (A) The Issuer covenants with the Registered Owners of each series of 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 Registered Owner thereof for federal income tax purposes. (B) The Issuer covenants with the Registered Owners of each series of Bonds that neither the Issuer 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 Ordinance No. 7191-03 12 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 Issuer 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 Registered Owner thereof forfederal income tax purposes. (C) The Issuer hereby covenants with the Registered Owners of each series of 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 Registered Owner thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code. SECTION 21. GOVERNMENTAL REORGANIZATION. The provisions of Section 21 of the Original Ordinance shall be deemed applicable to this Ordinance and shall apply to the Refunding Bonds issued pursuant to this Ordinance as though fully restated herein. SECTION 22. COVENANTS WITH CREDIT FACILITY ISSUER. The Issuer may make such covenants as it may, in its sole discretion, determine to be appropriate with any Credit Facility Issuer that shall agree to provide a Credit Facility that shall enhance the security or the value of the Refunding Bonds. Such covenants may be set forth in a resolution adopted prior to or simultaneously with the sale of the Refunding Bonds and shall have the same effect as if such covenants were set forth in full in this Ordinance. SECTION 23. PRELIMINARY OFFICIAL STATEMENT. The distribution of a Preliminary Official Statement relating to the Refunding Bonds is hereby approved in such form and substance as shall be approved by subsequent ~esolution of the Issuer. SECTION 24. SEVERABILITY. If anyone or more of the covenants, agreements, or provisions of this Ordinance 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, agreements or provisions of this Ordinance or of the Bonds. SECTION 25. REPEAL OF INCONSISTENT INSTRUMENTS. All ordinances or resolutions, or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. Ordinance No. 7191-03 13 SECTION 26. EFFECTIVE DATE. This Ordinance shall take effect immediately upon its enactment. PASSED ON FIRST READING ~pp~pmhpr lR, ?nn3 PASSED ON SECOND AND FINAL READING AND ADOPTED October 2, 2003 Attest: -2,:: &. .0... ia E. GoudeaLf lerk ~~stoform: Pamela K. Akin City Attorney Ordinance No. 7191-03 14 EXHIBIT A (Form of Refunding Bond) No. $ UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF CLEARWATER GAS SYSTEM REVENUE REFUNDING BOND, SERIES 2003 Rate of Interest Maturitv Date Dated Date Cusip Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS, that the City of Clearwater, Florida (hereinafter called "City"), for value received, hereby promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date specified above, the Principal Amount shown above solely from the revenues hereinafter mentioned, and to pay solely from such revenues, interest on said sum from the Dated Date of this Bond or from the most recent interest payment date to which interest has been paid, at the rate of interest per annum set forth above until payment of such sum, such interest being payable , _ and semiannually thereafter on the first day of and the first day of of each year. The principal of and premium, if any, on this Bond are payable upon presentation and surrender hereof on the date fixed for maturity or redemption at the principal office of (the "Paying Agent") in , Florida, or at the office designated for such payment of any successor thereof. The interest on this Bond, when due and payable, shall be paid by check or draft mailed to the person in whose name this Bond is registered, at his address as it appears on the books and records of the Bond Registrar, at the close of business on the 15th day of the month (whether or not a business day) next preceding the interest payment date (the "Record Date"), irrespective of any transfer of this Bond subsequent to such Record Date and prior to such interest payment date, unless the City snail be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name such Bond is registered at the close of business on a special record date for the payment of defaulted interest as B-1 Ordinance No. 7191-03 established by notice mailed by the Registrar to the Registered Holder of the Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the person in whose name such Bond is registered at the close of business on the fifth (5th) day preceding the date of mailing. Payment of interest on the Bonds may, at the option of any owner of Bonds in an aggregate principal amount of at least $1 ,000,000, be transmitted by wire transfer to such owner to the bank account number on file with the Paying Agent as of the Record Date upon written request therefor by the holder thereof for the appropriate interest payment date. All amounts due hereunder shall be payable in any coin or currency of the United States, which is, at the time of payment, legal tender for the payment of public or private debts. This Bond is one of a duly authorized issue of Bonds in the aggregate principal amount of $ of like date, tenor and effect, except as to number, installments, maturity and interest rate, issued to finance the cost of advance refunding the Gas System Revenue Bonds, Series 1996A, pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, and other applicable provisions of law (the "Act"), and Ordinance No. 5118-91, duly enacted by the Issuer on August 15, 1991, as supplemented by Ordinance No. 03-_ duly enacted by the Issuer on , 2003, as amended and supplemented (hereinafter collectively called the "Ordinance"), and is subject to all the terms and conditions of such Ordinance. It is provided in the Ordinance that the Bonds of this issue will rank on a parity with the outstanding Bonds of an issue of Gas System Revenue Bonds, Series 1997 A, dated October 1, 1997, the Gas System Revenue Bonds, Series 1997B, dated October 1, 1997, the outstanding Gas System Revenue Refunding Bonds, Series 1998, dated January 15, 1998 and any bonds issued under the authority of the Original Ordinance or the City of Clearwater Ordinance No. 5665-94 (the "Parity Bonds"). This Bond and the Parity Bonds are payable solely from and secured by a first and prior lien upon and pledge of the Net Revenues, as defined in the Ordinance, which consists of the net revenues derived by the City from the operation of the System (the "Net Revenues") in the manner provided in the Ordinance. This Bond does not constitute an indebtedness, liability, general or moral obligation, or a pledge of the faith, credit or taxing power of the City, the State of Florida or any political subdivision thereof, within the meaning of any constitutional, statutory or charter provisions. Neither the State of Florida nor any political subdivision thereof, nor the City shall be obligated (1) to levy ad valorem taxes on any property to pay the principal of the Bonds, the interest thereon or other costs incident thereto or (2) to pay the same from any other funds of the City, except from the Net Revenues, in the manner provided herein. It is further agreed between the City and the Registered Holder of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien upon the System, or any part thereof, or on any other property of the City, but shall constitute a first and prior lien only on the Net Revenues, in the manner provided in the Ordinance. (INSERT REDEMPTION PROVISIONS) B-2 Ordinance No. 7191-03 Bonds in denominations greater than $5,000 shall be deemed to be an equivalent number of Bonds of the denomination of $5,000. In the event a Bond is of a denomination larger than $5,000, a portion of such may be redeemed, but Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof. In the event any of the Bonds or portions thereof are called for redemption as aforesaid, notice thereof identifying the Bonds or portions thereof to be redeemed will be given by the Registrar (who shall be the paying agent for the Bonds, or such other person, firm or corporation as may from time to time be designated by the City as the Registrar for the Bonds) by mailing a copy of the redemption notice by first-class mail (postage prepaid) not more than thirty (30) days and not less than fifteen (15) days prior to the date fixed for redemption to the Registered Holder of each Bond to be redeemed in whole or in part at the address shown on the regis- tration books. Failure to give such notice by mailing to any Registered Holder of Bonds, or any defect therein, shall not affect the validity of any proceeding for the redemption of other Bonds. All Bonds so called for redemption will cease to bear interest after the specified redemption date provided funds for their redemption are on deposit at the place of payment at that time. Upon surrender of any Bond for redemption in part only, the City shall issue and deliver to the Registered Holder thereof, the costs of which shall be paid by the Registered Holder, a new Bond or Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion surrendered. If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the city where the corporate trust office of the paying agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. (To be inserted where appropriate on face of bond: "Reference is hereby made to the further provisions of this Bond set forth on the reverse side hereof, and such further provisions shall for all purposes have the same effect as if set forth on this side.") In and by the Ordinance, the City has covenanted and agreed with the Registered Holders of the Bonds of this issue that it will fix, establish, revise from time to time whenever necessary, maintain and collect always, such fees, rates, rentals and other charges for the use of the product, services and facilities of the System which will always provide revenues in each year sufficient to pay, and out of such funds pay, 100% of all costs of operation and maintenance of the System in such year and all reserve and other payments provided for in the Ordinance and 125% of the bond service requirement due in such year on the Bonds of this issue, and on all other obligations payable on a parity therewith, and that such fees, rates, rentals and other charges shall not be reduced so as to be insufficient to provide adequate revenues for such purposes. 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 Ordinance. B-3 Ordinance No. 7191-03 It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the iss~ance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and Constitution of the State of Florida applicable 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 qualities and incidents of a negotiable instrument under the Uniform Commercial Code - Investment Securities of the State of Florida. The Bonds are issued in the form of fully registered bonds without coupons in denominations of $5,000 or any integral multiple of $5,000. Subject to the limitations and upon payment of the charges provided in the Ordinance, Bonds may be exchanged for a like aggregate principal amount of Bonds of the same maturity of other authorized denominations. This Bond is transferable by the Registered Holder hereof in person or by his attorney duly authorized in writing, at the above-mentioned office of the Registrar, but only in the manner, subject to the limitations and upon payment of the charges provided in the Ordinance, and upon surrender and cancellation of this Bond. Upon such transfer a new Bond or Bonds of the same maturity and of authorized denomination or denomina- tions, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. Bonds may be transferred upon the registration books upon delivery to the Registrar of the Bonds, accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Registrar, duly executed by the Registered Holder of the Bonds to be transferred or his attorney-in-fact or legal representative, containing written instructions as to the details of the transfer of such Bonds, along with the social security number or federal employer identification number of such transferee and, if such transferee is a trust, the name and social security or federal employer identification numbers of the settlor and beneficiaries of the trust, the federal employer identification number and date of the trust and the name of the trustee. In all cases of the transfer of a Bond, the Registrar shall enter the transfer of ownership in the registration books and shall authenticate and deliver in the name of the transferee or transferees a new fully registered Bond or Bonds of authorized denominations of the same Maturity Date and Rate of Interest for the aggregate principal amount which the Registered Holder is entitled to receive at the earliest practicable time in accordance with the provisions of the Ordinance. The City or the Registrar may charge the Registered Holder of such Bond for every such transfer or exchange of a Bond an amount sufficient to reimburse them for their reasonable fees and any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange, and may require that such charge be paid before any such new Bond shall be delivered. The City may deem and treat the Registered Holder hereof as the absolute owner hereof (whether or not this Bond shall be overdue) for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and the City shall not be affected by any notice to the contrary. B-4 Ordinance No. 7191-03 This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordinance until the certificate of authentication hereon shall have been executed by the Bond Registrar. B-5 Ordinance No. 7191-03 IN WITNESS WHEREOF, the City of Clearwater, Florida, has issued this Bond and has caused the same to be executed by the manual or facsimile signature of its City Manager and countersigned by the manual or facsimile signature of its Mayor- Commissioner, and its corporate seal or a facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, and attested by the manual or facsimile signature of its City Clerk, as of the Dated Date. (SEAL) Countersigned: CITY OF CLEARWATER, FLORIDA By: Brian J. Aungst Mayor-Commissioner William B. Horne II City Manager Approved as to form: Attest: Pamela K. Akin City Attorney Cynthia E. Goudeau City Clerk CERTIFICATE OF AUTHENTICATION OF BOND REGISTRAR This Bond is one of the Bonds of the issue described in the within-mentioned Ordinance. By: Authorized Signature Date of Authentication The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: B-6 Ordinance No. 7191-03 TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UNIF TRANSFERS TO MIN ACT- (Cust.) Custodian for (Minor) under Uniform Transfers to Minors Act of (State) Additional abbreviations may also be used though not in list above. B-7 Ordinance No. 7191-03 ASSIGNMENT FOR VALUE RECEIVED, the undersigned the "Transferor"), hereby sells, assigns and transfers unto (Please insert name and Social Security or Federal Employer Identification number of assignee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints (the "Transferee") as attorney to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature guaranteed: NOTICE: Signature(s) must be guaranteed by a member of the New York Stock Exchange or a commercial bank or a trust company. NOTICE: No transfer will be registered and no new Bond will be issued in the name of the Transferee, unless the signa- ture(s) 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. B-8 Ordinance No. 7191-03 [End of Form of Bond] B-9 Ordinance No. 7191-03 EXHIBIT B FORM OF ESCROW DEPOSIT AGREEMENT B-1 Ordinance No. 7191-03