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6378-99.= :v n ORDINANCE NO. 6378-99 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, AUTHORIZING NOT TO EXCEED $30,000,000 OF AGGREGATE PRINCIPAL AMOUNT OF ITS STORMWATER SYSTEM REVENUE BONDS, SERIES [TO BE DETERMINED], TO FINANCE OR REFINANCE THE COST OF ACQUISITION OF EQUIPMENT AND LAND AND CONSTRUCTION AND IMPROVEMENTS TO THE CITY'S STORMWATER MANAGEMENT UTILITY SYSTEM; PLEDGING THE NET REVENUES OF THE STORMWATER SYSTEM OF THE CITY FOR THE PAYMENT OF THE DEBT SERVICE ON THE BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; MAKING OTHER COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF CLEARWATER, FLORIDA: SECTION 1. AUTHORITY FOR THIS ORDINANCE. This Ordinance is enacted pursuant to Chapter 166, Part II, Florida Statutes, the Charter of the City of Clearwater and other applicable provisions of law. SECTION 2. DEFINITIONS. Unless the context otherwise requires, 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. "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: (i) any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally 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 (including but not limited to obligations of the Resolution Funding Corporation) 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) held by a bank or trust I la379--`1'9 r? company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor on the obligations described in this clause (i), and which underlying obligations are not available to satisfy any claim of the custodian or any person claiming through the custodian or to whom the custodian may be obligated; and (ii) any bonds or other obligations of (a) the State of Florida or (b) any state or governmental unit thereof which are rated at such time in the then highest rating category of two or more nationally recognized municipal rating agencies; and (iii) 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 notice has been given by the obligor to call such bonds or obligations on the date specified in the notice, (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 obligations of the character described in clause (i) hereof which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (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 principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (iii) 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 (iii), as appropriate. "Additional Parity Obligations" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained herein and which (i) shall have a lien on the Pledged Revenues equal to that of the Bonds, (ii) shall be payable from the Pledged Revenues on a parity with the Bonds, and (iii) rank equally in all other respects with the Bonds. "Amortization Installment" shall mean an amount designated as such by supplemental resolution of the Issuer and established with respect to any Term Bonds. "Authorized Newspapers" shall mean a financial newspaper of general circulation in the Borough of Manhattan, City and State of New York (including, at such times as they are published, The New York Times, The Daily Bond Buver or De Wall Street Journal). "Average Annual Bond Service Requirement" shall mean, as of each date on which a series of Bonds is issued, the total amount of Bond Service Requirement which is to become due on all Bonds deemed to be Outstanding immediately after the issuance of such series of Bonds divided by the total number of years for which Bonds are deemed to be Outstanding, except that with respect to any Bonds for which Amortization Installments have been established, the 2 6.78-99 ,..-? amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount of such Bonds that are to be redeemed from Amortization Installments to be made in prior Bond Years. "Bond Insurance Policy" shall mean any municipal bond new issue insurance policy issued by a Bond Insurer that guarantees payment of principal of and interest on the Bonds. "Bond Insurer" shall mean the provider of a Bond Insurance Policy for a Series of Bonds so designated in a supplemental resolution of the Issuer. "Bond Service Requirement" shall mean, for any Fiscal Year, at any time, the amount required to be deposited in such Fiscal Year into the Bond Service Fund, as provided herein. In calculating such amount, the Issuer shall subtract therefrom any amounts to be transferred from the Construction Fund for the purpose of paying interest on the Bonds. With respect to Variable Rate Bonds, if any, the interest rate used to calculate the Bond Service Requirement shall be assumed to be the highest variable rate borne over the preceding twenty-four (24) months by Outstanding Variable Rate Bonds issued under this Ordinance or, if no such Variable Rate Bonds are at the time Outstanding under this Ordinance, by variable rate debt for which the interest rate is computed by reference to an index comparable to that to be utilized in determining the interest rate for the debt then proposed to be issued. If Bonds are Option Bonds, the date or dates of tender shall be disregarded, unless actually tendered and not remarketed, and the stated maturity dates thereof shall be used for purposes of this calculation, if such Option Bonds are required to be paid from Pledged Revenues hereunder on such date of maturity. "Bonds" shall mean (i) the Stormwater System Revenue Bonds, Series 1999 herein authorized to be issued and (ii) any Additional Parity Obligations permitted to be issued hereunder from time to time in accordance with the provisions hereof. "Bond Counsel" shall mean initially Bryant, Miller and Olive, P.A. or any attorney at law or firm of attorneys of nationally recognized standing in matters pertaining to the exclusion from gross income for federal income tax purposes of interest on obligations issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America. "Bond Service Fund" shall mean the Bond Service Fund created and established pursuant to Section 16 of this Ordinance. "Bond Year" shall mean the period commencing and ending on such dates as shall be approved by supplemental resolution of the Issuer. "Capital Appreciation Bonds" shall mean the aggregate principal amount of the Bonds that bear interest payable solely at maturity or upon redemption prior to maturity in the amounts determined by reference to the Compounded Amounts, all as shall be determined by supplemental resolution of the Issuer. In the case of Capital Appreciation Bonds that are 3 Jr7g-l? convertible to Bonds with interest payable prior to maturity or redemption of such Bonds, such Bonds shall be considered Capital Appreciation Bonds only during the period of time prior to such conversion. "Capital Appreciation Income Bonds" shall mean those Bonds initially issued as Capital Appreciation Bonds and which become Current Interest Bonds when the original issue amount and the Compounded Amount equals $5,000 principal amount or an integral multiple thereof as determined by subsequent resolution of the Issuer. "City Manager" shall mean the City Manager of the Issuer. "Clerk" shall mean the City Clerk of the Issuer. "Compounded Amounts" shall mean, as of any date of computation with respect to any Capital Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the interest date next preceding the date of computation or the date of computation if an interest date, such interest to accrue at the applicable rate which shall not exceed the legal rate, compounded semiannually, plus, with respect to matters related to the payment upon redemption or acceleration of the Capital Appreciation Bonds, if such date of computation shall not be an interest date, a portion of the difference between the Compounded Amount as of the immediately k.' preceding interest date and the Compounded Amount as of the immediately succeeding interest date, calculated based on the assumption that Compounded Amount accrues during any semi- annual period in equal daily amounts on the basis of a 360-day year of twelve 30-day months. "Construction Fund" shall mean the Construction Fund created and established pursuant to Section 16 of this Ordinance. "Consulting Engineers" shall mean one or more independent, qualified and recognized consulting engineers or firm of consulting engineers having favorable repute, skill and experience with respect to the planning and operation of the System who shall be retained from time to time by the Issuer. "Contributions in Aid of Construction" shall mean any amount or item of money, services, or property received by the Issuer, any portion of which is provided at no cost to the System, which represents an addition or transfer to the capital of the System, and which is utilized to offset the acquisition, improvement or construction costs of the System. "Cost of Operation and Maintenance" of the System shall mean the then 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 include expenses not annually recurring, such as any reserve for renewals and replacements, extraordinary repairs or .-1) 4 (03?9- 99 any allowance for depreciation or amortization of capital costs, any Bond Service Requirement, any payments in lieu of taxes or any indirect expenses incurred by departments of the Issuer other than those directly responsible for operating and maintaining the System. "Current Interest Bonds" shall mean Bonds, the interest on which is paid on each Interest Payment Date as such interest accrues. "Finance Director" shall mean the Financial Services Administrator of the Issuer or her designee. "Fiscal Year" shall mean the period commencing on October 1 of each year and ending on the next succeeding September 30 or such other annual period as may be prescribed by law from time to time for the Issuer. "Gross Revenues" or "Revenues" shall mean all income and earnings, including but not limited to the Stormwater Management Utility Fee, received by the Issuer or accrued to the Issuer from the ownership, use or operation of the. System and all parts thereof, including investment income, if any, earned on any fund or account created pursuant to this Ordinance and on any fund or account established by the Issuer for the System, except the Rebate Fund and except that interest earned on the Construction Fund shall remain in the Construction Fund, all as calculated in accordance with 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, condemnation awards or proceeds of insurance received with respect to the System. Notwithstanding the foregoing, "Gross Revenues" or "Revenues" shall not include Contributions in Aid of Construction. "Holder of Bonds" or "Bondholders" or any similar term shall mean any persons who shall be the registered owner of any outstanding Bonds. "Interest Account" shall mean the special account of the same name created within the Bond Service Fund. "Interest Payment Date" shall mean with respect to any Series of Bonds, the date or dates in each Fiscal Year on which interest on such Series of Bonds is to be paid, all as determined with respect to each Series of Bonds by a subsequent resolution of the issuer adopted prior to the issuance of such Series of Bonds. "Issuer" or "City" shall mean the City of Clearwater, Florida. "Maximum Bond Service Requirement" shall mean, as of any particular date of calculation, the greatest amount of Bond Service Requirement for the then current or any future Fiscal Year, except that with respect to any Bonds for which Amortization Installments have 5 6 307g-99 f..? been established, the amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount of such Bonds that are to be redeemed from Amortization Installments which were to be made in prior Bond Years. "Mayor-Commissioner" shall mean the Mayor-Commissioner or the Vice Mayor of the City Commission of the Issuer, or such other person as may be duly authorized by the Mayor- Commissioner to act on his or her behalf. "Net Revenues" of the System shall mean the Gross Revenues or Revenues, after deduction of the Cost of Operation and Maintenance. "1999 Project" shall mean the Project authorized to, be financed with the proceeds of the Series 1999 Bonds as identified by subsequent resolution of the Issuer adopted prior to the issuance of the Series 1999 Bonds, consisting of constructing and acquiring certain additions, extensions and improvements to the Issuer's System, including but not limited to piping, the purchase of real property for retention ponds and drainage improvements, and other similar improvements, additions, renovations, acquisitions and related capital projects of the System. "Option Bonds" shall mean Bonds subject to tender for payment prior to their maturity at the option of the Holder thereof. "Ordinance" shall mean this ordinance as from time to time may be amended or supplemented, in accordance with the terms hereof. 1 "Outstanding" or "Bonds Outstanding" shall mean all Bonds which have been issued pursuant to this Ordinance, except: (i) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity; (ii) Bonds for the payment or redemption of which cash funds or Acquired Obligations or any combination thereof shall have been theretofore irrevocably set aside in a special account with an escrow agent (whether upon or prior to the maturity or redemption date of any such Bonds) in an amount which, together with earnings on such Acquired Obligations, will be sufficient to pay the principal of and interest on such Bonds at maturity or upon their earlier redemption; provided that, if such Bonds are to be redeemed before the maturity thereof, notice of such redemption shall have been given according to the requirements of this Ordinance or irrevocable instructions directing the timely publication of such notice and directing the payment of the principal of and interest on all such Bonds at such redemption dates shall have been given; and (iii) Bonds which are deemed paid pursuant to this Ordinance or in lieu of which other Bonds have been issued under Sections I 1 and 13 hereof. 1-1-1 5 6319- q9 "Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant to a supplemental resolution and its successors or assigns, and any other Person which may at any time be substituted in its place pursuant to a supplemental resolution. "Permitted Investments" shall mean as follows, provided, however, that investment in Permitted Investments shall only be undertaken in accordance with the Issuer's investment policy in effect at such time or as specifically permitted in accordance with any Bond Insurance Policy as approved by subsequent resolution of the Issuer: (1) Cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in paragraph 2 below); (2) Direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America; (3) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: Export-Import Bank, Farm Credit System Financial Assistance Corporation; Farmers Home Administration; General Services Administration; U.S. Maritime Administration; Small Business Administration; Government National Mortgage Association (GNMA); U.S. Department of Housing & Urban Development (FHA's); and Federal Housing Administration; (4) Senior debt obligations rated "AAA" by Standard & Poor's and "Aaa" by Moody's Investors Service issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. Senior debt obligations of other Government Sponsored Agencies approved by the Bond Insurer; (S) U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A-1" or "A-1+" by Standard & Poor's and "P-1" by Moody's Investors Service and maturing no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (6) Commercial paper which is rated at the time of purchase in the single highest classification, "A-1+" by Standard & Poor's and "P-1" by Moody's Investors Service and which matures not more than 270 days after the date of purchase; (7) Investments in a money market fund rated "AAAm" or "AAAm-G" or better by Standard & Pooes; (8) Pre-refunded municipal obligations defined as follows: 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 which are not callable at the option of the obligor prior i 7 6,37eq-_ 99 ?..1 to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (a) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Standard & Poor's and Moody's Investors Service or any successor thereto; or (b)(i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (9) Investment agreements approved in writing by the Bond Insurer (and supported by appropriate opinions of counsel) with notice to Standard & Pooes; and (10) The pooled investment program of the State of Florida administered by the State ` D Board of Administration, known as the Local Government Surplus Funds Trust Fund, established y pursuant to Chapter 218, Part IV, Florida Statutes, as amended. (1I) Other forms of investments (including repurchase agreements) approved in writing by the Bond Insurer with notice to Standard & Poor's. As used in this definition, the term "Value", which shall be determined as of the end of each month, means that the value of any investments shall be calculated as follows: (a) as to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times): the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination; (b) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times: the average bid price at such time of determination for such investments by any two nationally recognized government securities dealers (selected by the Issuer at -the time making a market in such investments or the bid price published by a nationally recognized pricing service; ?378? 99 (c) as to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest; and (d) as to any investment not specified above: the value thereof established by prior agreement between the Issuer and the Bond Insurer. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. "Pledged Revenues" shall mean (i) the Net Revenues of the System, and (ii) the moneys on deposit in the various funds and accounts created pursuant to this Ordinance, with the exception of the Rebate Fund. "Principal Account" shall mean the special account of the same name created within the Bond Service Fund. "Project" or "Projects" shall mean any actual, proposed or potential addition, extension, supplement, or replacement of the System or joint ownership of similar properties or any interest therein or any right to use the capacity from any facilities or services thereof, or any other lawful purpose related to the System, all as determined by the Issuer and in accordance with plans and specifications on file or to be filed with the Issuer. "Project Costs" shall mean all costs of the System authorized to be paid from the Construction Fund pursuant to Section 18 hereof to the extent permitted under the laws of the State. It is intended that this definition be broadly construed to encompass all costs, expenses and liabilities of the Issuer related to the System which on the date of this Ordinance or in the future shall be permitted to be funded with the proceeds of any Series of Bonds pursuant to the laws of the State. "Prudent Utility Practice" shall mean, in respect of any particular utility industry, any of the practices, methods and acts which, in the exercise of reasonable judgment, in light of the facts, including but not limited to the practices, methods and acts engaged in or approved by a significant portion of such utility industry prior thereto, known at the time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety, and expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather is a spectrum of possible practices, methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. "Qualified Independent Consultant" shall mean one or more qualified and recognized independent consultants, having favorable repute, skill and experience with respect to the acts and duties of the Qualified Independent Consultant to be provided to the Issuer, as shall from 9 6319--11-N time to time be retained by the Issuer to perform the acts and carry out the duties herein provided for such consultants. "Rebate Fund" shall mean the Rebate Fund created pursuant to Section 29 of this Ordinance. "Redemption Account" shall mean the special account of the same name created within the Bond Service Fund. "Refunding Bonds" shall mean that amount of any Series of Bonds, the proceeds of which will be applied to the refunding of any previously issued Bonds, "Registrar" shall mean any registrar for the Bonds appointed by or pursuant to supplemental resolution and its successors and assigns, and any other Person which may at any time be substituted in its place pursuant to supplemental resolution. "Reserve Fund" shall mean the Reserve Fund created and established pursuant to Section 16 of this Ordinance. "Reserve Requirement" shall be the lesser of (i) the Maximum Bond Service Requirement, (ii) 125% of the Average Annual Bond Service Requirement or (iii) the largest amount as shall not adversely affect the exclusion of interest on the Bonds from gross income for Federal income tax purposes. ,. "Revenue Fund" shall mean the Revenue Fund created and established pursuant to Section 16 of this Ordinance. "Serial Bonds" shall mean all of the Bonds other than Term Bonds, as shall be determined by supplemental resolution of the Issuer. "Series" or "Series of Bonds" or "Bonds of a Series" shall mean all Bonds designated as being of the same Series issued and delivered on original issuance in a simultaneous transaction, and any Bonds thereafter delivered in lieu thereof or in substitution therefor pursuant to this Ordinance. "Stormwater System" or "System" shall mean the stormwater management utility system created and operated by the Issuer pursuant to Chapter 32, Article VI of the Issuer's Code of Ordinances,, which the Issuer is responsible for maintaining, together with any and all improvements, extensions and additions thereto hereafter constructed or acquired, together with all lands or interests therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment and all property, real or personal, tangible or intangible (including agreements for the providing of such services), now or hereafter owned or used in connection therewith. 10 6,3r7c:> -nA "Stormwater Management Utility Fee" shall mean the fees imposed by the Issuer upon and collected from users of the Stormwater System. "State" shall mean the State of Florida. "Subordinated Debt Service Fund" shall mean the Subordinated Debt Service Fund created and established pursuant to Section 16 hereof. "Subordinated Indebtedness" shall mean indebtedness of the Issuer, subordinate and junior to the Bonds, which is payable from the Subordinated Debt Service Fund created pursuant to Section 16 hereof "Term Bonds" shall mean the Bonds of a series, all of which shall be stated to mature on one date but which amortize a portion of the principal of such Bond prior to the maturity date through mandatory redemption, as shall be determined by supplemental resolution of the Issuer. "Variable Rate Bonds" shall mean obligations issued with a variable, adjustable, convertible or other similar rate which is not fixed in percentage at the date of issue for the entire term thereof as shall be determined by supplemental resolution of the Issuer. The terms "herein," "hereunder," "hereby," "hereto," "hereof' and any similar terms shall refer to this Ordinance; the term heretofore shall mean before the date of adoption of this Ordinance; and the term "hereafter" shall mean after the date of adoption of this Ordinance. Words importing the masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa. SECTION 3. FINDINGS. It is hereby ascertained, determined and declared that: (A) The Issuer now owns, operates and maintains the System and will continue to derive revenue from rates, fees, rentals and other charges made and collected for the services of such System, which revenues and the other revenues pledged pursuant to the provisions hereof are not now pledged or encumbered in any manner. (B) It is in the best interests of the Issuer and in the furtherance of the public health and safety of the residents thereof that the Issuer authorize the issuance of the Bonds for the purpose of designing, permitting, acquiring and constructing the improvements and additions to its Stormwater System. (C) Such Bonds shall be payable from the Pledged Revenues. J 11 6398- qq (D) Any Series of Bonds, after the issuance of the Bonds, shall be issued upon approval by supplemental resolution of the Issuer as provided by law. The proceeds of any Series of Bonds shall be applied as provided in a supplemental ordinance or resolution. (E) The principal of and interest and redemption premium on the Bonds and all reserve and other payments shall be payable solely from the Pledged Revenues. 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 or upon any property other than the Pledged Revenues. (F) The Pledged Revenues should be sufficient to pay all principal of and interest and redemption premium on the Bonds to be issued hereunder, as the same become due, and to make all required deposits or payments required by this Ordinance. (G) All costs of the 1999 Project incurred after the date of this Ordinance shall be reimbursed from proceeds of the Bonds. SECTION 4. AUTHORIZATION OF DESIGN, PERMITTING, ACQUISITION AND CONSTRUCTION OF THE 1999 PROJECT. There is hereby authorized the design, permitting, acquisition and construction of the 1999 Project. SECTION 5. THIS ORDINANCE TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this 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 6. AUTHORIZATION OF BONDS. Subject and pursuant to the provisions hereof and as shall be described in subsequent resolutions of the Issuer to be adopted prior to the issuance of any series of Bonds, obligations of the Issuer to be known as "Stormwater System Revenue Bonds, Series [to be determined]" are authorized to be issued in one or more series (including Additional Parity Obligations) from time to time in the aggregate principal amount of not exceeding $30,000,000, which may mature at higher Compounded Amounts to include the maturity amount of Capital Appreciation Bonds and Capital Appreciation Income Bonds. There is expressly authorized to be issued an initial Series of Bonds to be called the "Stormwater System Revenue Bonds, Series 1999", the proceeds of which will fund the costs of the 1999 Project, all as shall be described in a subsequent resolution to be adopted prior to the issuance of such Series 1999 Bonds. -- ' 12 6 378- 91 SECTION 7. DESCRIPTION OF BONDS. The Bonds shall be issued in fully ' registered form; may be Capital Appreciation Bonds, Capital Appreciation Income Bonds, Option bonds, Variable Rate Bonds, Serial Bonds or Term Bonds; shall be dated; shall be numbered consecutively from one upward in order of maturity preceded by the letter "R"; shall be in 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 such other denominations as shall be approved by the Issuer in a supplemental resolution prior to the delivery of the Bonds; shall have such Paying Agent and Registrar as designated in a subsequent Resolution of the Issuer adopted prior to the issuance of such Series of Bonds; shall bear interest at such rate or rates not exceeding the maximum rate allowed by State law, the actual rate or rates to be approved by the governing body of the Issuer prior to or upon the sale of the Bonds; such interest to be payable semiannually at such times as are fixed by supplemental resolution of the Issuer if Current Interest Bonds and shall mature annually on such date in such years (not exceeding 30 years from the date of issuance) and such amounts as will be fixed by supplemental resolution of the Issuer prior to or upon the sale of the Bonds; and may be issued with variable, adjustable, convertible or other rates with original issue discounts and as Capital Appreciation Bonds; all as the Issuer shall provide herein or hereafter by supplemental resolution. Each Serial 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 y j interest payment date, in which case it shall bear interest from its date; provided, however, that if at the time of authentication payment of any interest which is due and payable has not been made, such Serial Bond shall bear interest from the date to which interest shall have been paid. The Capital Appreciation Bonds shall bear interest only at maturity or upon redemption prior to maturity in the amount determined by reference to the Compounded Amount. The principal of and the interest redemption premium, if any, on the Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The interest on the Serial Bonds shall be payable by the Paying Agent on each interest payment date to the person appearing on the registration books of the Issuer hereinafter provided for as the registered Holder thereof, by check or draft mailed to such registered Holder at his address as it appears on such registration books or by wire transfer to Holders of $1,000,000 or more in principal amount of the Bonds. Payment of the principal of all Serial Bonds and the Compounded Amount with respect to the Capital Appreciation Bonds shall be made upon the presentation and surrender of such Bonds as the same shall become due and payable. Notwithstanding any other provisions of this section, the Issuer may, at its option, prior to the date of issuance of any Series of Bonds, elect to use an immobilization system or pure book- entry system with respect to issuance of such Series of Bonds, provided adequate records will be X378"- 99 kept with respect to the ownership of such Series of 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 this Ordinance inconsistent with such system of book-entry registration shall not be applicable to such 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 of Bonds. SECTION 8. EXECUTION OF BONDS. The Bonds shall be signed by, or bear the facsimile signatures of the Mayor-Commissioner and City Manager of the Issuer and shall be attested by, or bear the facsimile signature of, the Clerk, and shall be approved as to form and legal sufficiency by the City Attorney and a facsimile of the official seal of the Issuer shall be imprinted on the Bonds. In case any officer whose signature or a facsimile of whose signature shall appear on any Bonds shall cease to be such officer before the delivery of such Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he has remained in office until such delivery. Any Bond may bear the facsimile signature of or may be signed by such persons who, at the actual time of the execution of such Bond, shall be the proper officers to sign such Bonds although, at the date of such Bond, such persons may not have been such officers. The validation certificate endorsed on the Bonds shall be executed by the Mayor- Commissioner by his manual or facsimile signature. SECTION 9. AUTHENTICATION OF BONDS. Only such of the Bonds as shall 4 have endorsed thereon a certificate of authentication substantially in the form hereinbelow set forth, duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Ordinance. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Registrar, and such certificate of the Registrar upon any such Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Ordinance. The Registrar's certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Bonds that may be issued hereunder at any one time. SECTION 10. EXCHANGE OF BONDS. Any Bonds, upon surrender thereof at the principal corporate trust office of the Registrar, together with an assignment duly executed by the Bondholder or his attorney or legal representative in such form as shall be satisfactory to the Registrar, may, at the option of the Bondholder, be exchanged for an aggregate principal amount of Bonds equal to the principal amount of the Bond or Bonds so surrendered. The Registrar shall make provision for the exchange of Bonds at the principal corporate trust office of the Registrar. 3.4 6 378'-99 SECTION 11. NEGOTIABILITY, REGISTRATION AND TRANSFER OF BONDS. The Registrar shall keep books for the registration of and for the registration of transfers of Bonds as provided in this Ordinance. The transfer of any Bonds may be registered only upon such books and only upon surrender thereof to the Registrar together with an assignment duly executed by the Bondholder or his attorney or legal representative in such form as shall be satisfactory to the Registrar. Upon any such registration of transfer, the Issuer shall execute and the Registrar shall authenticate and deliver in exchange for such Bond, a new Bond or Bonds registered in the name of the transferee, and in an aggregate principal amount equal to the principal amount of such Bond or Bonds so surrendered. In all cases in which Bonds shall be exchanged, the Issuer shall execute and the Registrar shall authenticate and deliver, at the earliest practicable time, a new Bond or Bonds of the same type (e.g., Serial Bonds will be exchanged for Serial Bonds and Capital Appreciation Bonds will be exchanged for Capital Appreciation Bonds) in accordance with the provisions of this Ordinance. All Bonds surrendered in any such exchange or registration of transfer shall forthwith be canceled by the Registrar. The Issuer or the Registrar may make a charge for every such exchange or registration of transfer of Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to any Bondholder for the privilege of exchanging or registering the transfer of Bonds under the provisions of this Ordinance. SECTION 12. OWNERSHIP OF BONDS. The person in whose name any Bond shall A?} be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal or redemption price of any such Bond, and the interest on any such Bonds shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to sati.,fy and discharge the liability upon such Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. SECTION 13. 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 cause to be executed, and the Registrar shall authenticate and deliver, a new Bond of like date and tenor as the Bond so mutilated, destroyed, stolen or lost (e.g., Serial Bonds shall be issued in exchange for Serial Bonds and Capital Appreciation Bonds shall be issued in exchange for Capital Appreciation Bonds) in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer and the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Bonds so surrendered shall be canceled by the Issuer. 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 Bond be lost, stolen or destroyed, without surrender thereof. is lv3?g-99 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 de- stroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Bonds issued hereunder. SECTION 14. PROVISIONS FOR REDEMPTION. The 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 supplemental resolution of the Issuer prior to or at the time of sale of the Bonds. Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Holders of Bonds to be redeemed at their addresses as they appear on the registration books hereinbefore provided for, but failure to mail such notice to one or more Holders of Bonds shall not affect the validity of the proceedings for such redemption with respect to Holders of Bonds to which notice was duly mailed hereunder. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, if less than all of the Bonds of one maturity are to be called, the distinctive numbers of such Bonds to be redeemed and in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. Any notice of optional redemption, other than with respect to an anticipated refunding, shall be circulated only if sufficient funds have been deposited in the Bond Service Fund to pay the redemption price of the Series of Bonds to be redeemed. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar at the redemption price. Each check or other transfer of funds issued by the Registrar for the purpose of the payment of the redemption price of Bonds being redeemed shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Holder a new Bond or Bonds of the same maturity in the amount of the unpaid principal of such partially redeemed Bond. All Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued. In addition to the foregoing notice, further notice may, but need not be, given by the Issuer as set out below, but no defect in said further notice nor any failure to give all or any 16 -37"9 --1 portion of such further notice shall in any manner defeat the effectiveness of a call for ' redemption if notice thereof is given as above prescribed. (1) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Bonds being redeemed; (ii) the date of issue of the Bonds as originally issued; (iii) the rate of interest borne by each Bond being redeemed; (iv) the maturity date of each Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Bonds being redeemed. (2) Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types similar to the type of which the Bonds consist (such depositories now being Depository Trust Company of New York, New York, Midwest Securities Trust Company of Chicago, Illinois, Pacific Securities Depository Trust Company of San Francisco, California, and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania) and to one or more national information services that disseminates notices of redemption of obligations such as the Bonds. SECTION 115. FORM OF BONDS. The text of the Bonds, together with the certificate of authentication to be endorsed therein, shall be in substantially the following form, with such omissions, insertions and variations as may be necessary, desirable, authorized or permitted by this Ordinance or by any supplemental resolution adopted prior to the issuance thereof, or as may be necessary if the Bonds or a portion thereof are issued as Capital Appreciation Bonds, Capital Appreciation Income Bonds, Option Bonds, Variable Rate Bonds, or as may be necessary to comply with applicable laws, rules and regulations of the United States and of the State in effect upon the issuance thereof. The text of any Series of Bonds, other than the Bonds shall be as determined by supplemental ordinance or resolution of the Issuer. 17 6378-?19 No. R- [FORM OF BOND] UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF PINELLAS CITY OF CLEARWATER STORMWATER SYSTEM REVENUE BONDS, SERIES [to be determined] MATURITY DATE: INTEREST RATE: DATED DATE: CUSIP: Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS that the City of Clearwater, Florida (hereinafter called the "Issuer") for value received, hereby promises to pay to the order of the Registered Owner identified above or registered assigns, as herein provided, on the Maturity Date identified above, upon the presentation and surrender hereof at the principal corporate trust office of . in the City of . from the revenues hereinafter mentioned, the Principal Amount identified above in any coin or currency of the United States of America which on the date of payment thereof is legal tender for the payment of public and private debts, and to pay, solely from said sources, to the Registered Owner hereof by wire transfer or check transmitted to the Registered Owner at his address as it appears on the Bond registration books of the Issuer as it appears on the 15th day of the calendar month preceding the applicable interest payment date, interest on said Principal Amount at the Interest Rate per annum identified above on each 1 and 1 commencing, _ from the interest payment date next preceding the date of registration and authentication of this Bond, unless this Bond is registered and authenticated as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless this Bond is registered and authenticated prior to . _, in which event this Bond shall bear interest from _ The Bonds of this issue [shall not be] [shall be] subject to redemption prior to their maturity at the option of the Issuer. (Insert Optional or Mandatory Redemption Provisions) .J 18 637$-99 Notice of such redemption shall be given in the manner required by the Resolution described below. This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $_ of like date, tenor and effect, except as to number, principal amount, maturity redemption provisions and interest rate, issued to acquire, construct and erect certain capital improvements, all in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, and Ordinance No. 6378-99 duly enacted by the Issuer on , 1999, as supplemented (hereinafter collectively called the "Ordinance") and is subject to all the terms and conditions of such Ordinance. All capitalized undefined terms used herein shall have the meaning set forth in the Ordinance, This Bond is payable solely from and secured by a pledge of the Net Revenues of the System levied and collected by the Issuer and the moneys in certain funds and accounts created pursuant to the Ordinance, with the exception of the Rebate Fund (collectively, the "Pledged Revenues") in the manner provided in the Ordinance. Reference is made to the Ordinance for more complete definition and description of the System and the Pledged Revenues. This Bond does not constitute a general indebtedness of the Issuer within the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the Holder of this Bond that such Bondholder shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer or taxation of any real or personal property therein for the payment of the principal of and interest on this Bond or the making of any debt service fund, reserve or other payments provided for in the Ordinance. It is further agreed between the Issuer and the Holder of this Bond that this Bond and the indebtedness evidenced thereby shall not constitute a lien upon the System, or any part thereof, or on any other property of or in the Issuer, but shall constitute a lien only on the Pledged Revenues all in the manner provided in the Ordinance. The Issuer has covenanted, in the Ordinance, to fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the products, services and facilities of the System which will always provide Net Revenues in each year sufficient to pay the aggregate of one hundred fifteen percent (115%) of the Bond Service Requirement becoming due in such year on the Outstanding Bonds. Such rates, fees, rentals or other charges shall not be reduced so as to render them insufficient to provide revenues for the purposes provided therefor by the Ordinance. The Issuer 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. It is certified that this Bond is authorized by and is issued in conformity with the requirements of the Constitution and Statutes of the State of Florida. This Bond is and has all the qualities and incidents of a negotiable instrument under Article 8 of the Uniform Commercial Code, the State of Florida, Chapter 678, Florida Statutes, The transfer of this Bond is registrable by the Bondholder hereof in person or by his attorney or legal representative at the principal corporate trust office of the Registrar but only in 1.9 In 31?1 -?9 the manner and subject to the conditions provided in the Ordinance 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 Ordinance until it shall have been authenticated by the execution by the Registrar of the certificate of authentication endorsed hereon. IN WITNESS WHEREOF, the City of Clearwater, Florida, has issued this Bond and has caused the same to be signed by its Mayor-Commissioner and City Manager and countersigned and attested to by its Clerk and approved as to form, sufficiency and correctness by the City Attorney (the signatures of the Mayor-Commissioner, the City Manager, the City Attorney and the Clerk being authorized to be facsimiles of such officers' signatures), and its seal or facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the day of .199-. CITY OF CLEARWATER, FLORIDA (SEAL) manual or facsimile Mayor-Commissioner ATTESTED AND COUNTERSIGNED: {manual or facsimile) City Manager (manual or facsimile) Clerk Approved as to form and legal sufficiency: (manual or facsimile) City Attorney M' 20 r r i i® ®.. -E. CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds issued under the provisions of the within mentioned Ordinance. Registrar, as Authenticating Agent Date of Authentication: By? (manual signature Authorized Officer ASSIGNMENT AND TRANSFER f. 7• - For value received the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or other identifying number of transferee) the attached bond of the City of Clearwater, Florida, and does hereby constitute and appoint. attorney, to transfer the said Bond on the books kept for Registration thereof, with full power of substitution in the premises. Date Signature Guaranteed by [member firm of the New York Stock Exchange or a commercial bank or a trust company.] By: (manual signature Title: NOTICE: No transfer will be registered and no new Bonds will be issued in the name of the Transferee, unless the signature to this assignment corresponds with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. [END OF FORM OF BOND] i 21 /398-99 1Y G...w. 1 SECTION lb. CREATION OF FUNDS. There are hereby created and established the following funds and accounts, which funds and accounts shall be trust funds for the purposes herein provided and used only in the manner herein provided: (A) The "City of Clearwater Stormwater System Revenue Fund" (hereinafter sometimes called the "Revenue Fund") to be held by the Issuer and to the credit of which deposits shall be made as required by Section 20(A) hereof. (B) The "City of Clearwater Stormwater System Bond Service Fund" (hereinafter sometimes called the "Bond Service Fund") to be held by the Issuer and to the credit of which deposits shall be made as required by Section 20(B)(1) hereof. In such fund there shall be maintained the following accounts: the Principal Account, the Interest Account and the Redemption Account. (C) The "City of Clearwater Stormwater System Reserve Fund" (hereinafter sometimes called the "Reserve Fund") to be held by the Issuer and to the credit of which deposits shall be made as required by Section 20(B)(2) hereof. (D) The "City of Clearwater Stormwater System Subordinated Debt Service Fund" (hereinafter sometimes called the "Subordinated Debt Service Fund") to be created by the Issuer if and when needed and to be held by the Issuer and to the credit of which deposits shall be made as required by Section 20(B)(3) hereof. t (E) The "City of Clearwater Stormwater System Construction Fund" (hereinafter sometimes called the "Construction Fund") to be held by the Issuer and to the credit of which deposits shall be made as required by Section 17 hereof. Within such fund there shall be maintained separate accounts for each Series of Bonds and furthermore be maintained separate accounts for capitalized interest funded from the proceeds of any Series of Bonds. I SECTION 17. APPLICATION OF BOND PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of the Bonds shall be applied by the Issuer simultaneously with the delivery of such Bonds to the purchaser thereof, as follows: (A) The accrued interest shall be deposited in the Interest Account in the Bond Service Fund and shall be used only for the purpose of paying interest becoming due on the Bonds. (B) Unless otherwise provided in a supplemental ordinance or resolution of the Issuer or unless the Issuer has provided for a surety bond, a letter of credit, or other form of credit enhancement as provided in Section 20(B)(2) hereof, a sum equal to the Reserve Requirement shall be deposited in the Reserve Fund and shall be used only for the purposes provided therefor. 22 6 379-9R (C) A sufficient amount of the Bond proceeds shall be applied to the payment of the premiums of any municipal bond insurance policies applicable to the Bonds and to the payment of costs and expenses relating to the issuance of the Bonds which must be paid upon delivery of the Bonds. (D) A sum as shall be determined by supplemental resolution of the Issuer shall be deposited into the Construction Fund and used for the purpose of paying Project Costs. (E) Any remaining moneys from the Bonds shall be deposited as provided in supplemental resolutions of the Issuer, but shall only be used for the purposes permitted by law. The proceeds of any series of Bonds, other than the Bonds, shall be applied as provided by supplemental resolution of the Issuer, adopted at or prior to sale of such series of the Bonds. SECTION 18. DISBURSEMENTS FROM CONSTRUCTION FUND. Moneys on deposit from time to time in the Construction Fund shall be used to pay or reimburse the following Project Costs: (A) Costs incurred directly or indirectly for or in connection with a Project or a proposed or future Project including, but not limited to, those for preliminary planning and studies, architectural, legal, financial, engineering and supervisory services, labor, services, materials, equipment, acquisitions, land, rights-of-way, improvements and installation; (B) Premiums attributable to all insurance required to be taken out and maintained during the period of construction with respect to a Project to be acquired or constructed, the premium on each surety bond, if any, required u:th respect to work on such facilities, and taxes, assessments and other charges hereof that may become payable during the period of construction with respect to such a Project; (C) Costs incurred directly or indirectly in seeking to enforce any remedy against a contractor or subcontractor in respect of any default under a contract relating to a Project or costs incurred directly or indirectly in defending any claim by a contractor or subcontractor with respect to a Project; (D) Financial, legal, accounting, appraisals, title evidence and printing and engraving fees, charges and expenses, and all other such fees, charges and expenses incurred in connection with the authorization, sale, issuance and delivery of such Series of Bonds; (E) Interest funded from Bond proceeds, if any, for a reasonable period of time, which shall be deposited in the Construction Fund and shall be used as provided in a supplemental resolution of the Issuer; (F) Any other incidental and necessary costs including without limitation any expenses, fees and charges relating to the acquisition, construction or installation of a Project, 23 6 ads'-q9 and the making of extraordinary repairs, renewals and replacements, decommissioning or retirement of any portion of the System, including the cost of temporary employees of the Issuer retained to carry out duties in connection with the acquisition, construction or erection of a Project; (G) Costs incurred directly or indirectly in placing any Project in operation in order that completion of such Project may occur; (H) Any other costs authorized pursuant to a supplemental resolution of the Issuer and permitted under the laws of the State; and (I) Reimbursements to the Issuer for any of the above items theretofore paid by or on behalf of the Issuer. SECTION 19. 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 Florida, but shall be payable solely from and secured by a first lien upon and a pledge of the Pledged Revenues as herein provided. No Holder or Holders of any Bonds issued hereunder 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, or to compel the Issuer to pay such principal and interest from any other funds of the Issuer. The payment of principal of and interest on the Bonds shall be secured forthwith equally and ratably by, and the Issuer hereby grants to the Bondholders an irrevocable lien on the Pledged Revenues, prior and superior to all other liens or encumbrances on such Pledged Revenues and the Issuer does hereby irrevocably pledge such Pledged Revenues to the payment of the principal of, redemption premium, if any, and interest on the Bonds, for the reserves therefor and for all other payments required hereunder. Such amounts hereby pledged and assigned shalt immediately be subject to the lien of this pledge without any further physical delivery thereof or any further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer, irrespective of whether such parties have notice thereof. SECTION 20, COVENANTS OF THE ISSUER. For so long as any of the principal of and interest on any of the Bonds shall be outstanding and unpaid or until the Issuer has made provision for payment of principal, interest and redemption premiums, if any, with respect to the Bonds, as provided herein, the Issuer covenants with the Holders of any and all Bonds as follows: (A) REVENUE FUND. All Gross Revenues of the System shall upon receipt thereof be deposited in the Revenue Fund. All deposits into such Revenue Fund shall be deemed to be held in trust for the purposes herein provided and used only for the purposes and in the manner herein provided. 24 63w-qq (B) DISPOSITION OF REVENUES. All revenues in the Revenue Fund after payment of Cost of Operation and Maintenance of the System, shall be disposed of monthly, but not later than the twenty-fifth (25th) day of each month commencing in the month immediately following the delivery of the initial series of Bonds, for so long as any Bonds remain Outstanding, only in the following manner and the following order of priority: (1) The Issuer shall first deposit into the Bond Service Fund and credit to the following accounts, in the following order (except that payments in the Principal Account and the Redemption Account shall be on a parity with each other), the following identified sums: (a) Interest Account: Such sum as will be sufficient to pay one-sixth (116th) (or such higher monthly amount on a pro rated basis)of all interest coming due on all Outstanding Bonds on the next interest payment date, together with any fees and charges of the Paying Agent and Registrar therefor; provided, however, that monthly deposits of interest, or portions thereof, shall not be required to be made to the extent that money on deposit within such Interest Account is sufficient for such purpose. In the event the Issuer has issued Variable Rate Bonds pursuant to the provisions hereof, Net Revenues shall be deposited at such other or additional times and amounts as necessary to pay any interest coming due on such Variable Rate Bonds on the next interest payment date, all in the manner provided in a supplemental resolution of the Issuer. Any monthly payment out of Net Revenues to be deposited as set forth above, for the purpose of meeting interest payments for any Series of Bonds, shall be adjusted, as appropriate, to reflect the frequency of interest payment dates applicable to such Series. Moneys in the Interest Account may be used only for the purposes set forth in this paragraph (a). (b) Principal Account: Such sum as will be sufficient to pay one- twelfth (1112th) (or such higher monthly amount on a pro rated basis) of the principal amount of the Outstanding Bonds which will mature and become due on such annual maturity dates beginning the month which is twelve (12) months prior to the first principal maturity date; provided, however, that monthly deposits for principal, or portions thereof, shall not be required to be made to the extent that money on deposit within such Principal Account is sufficient for such purpose. Any monthly payment out of Net Revenues to be deposited as set forth above, for the purpose of meeting principal payments for any Series of Bonds, shall be adjusted, as appropriate, to reflect the frequency of principal payment dates applicable to such Series. Moneys in the Principal Account may be used only for the purposes set forth in this paragraph (b). (c) Redemption Account: Such sum as will be sufficient to pay one- twelfth (1112th) of any Amortization Installment established for the mandatory redemption of Outstanding Bonds on such annual maturity date beginning the month which is twelve (12) months prior to the first Amortization Installment date; provided, however, that monthly deposits into the Redemption Account, or portions thereof, shall ?? 25 6_qr7O -99 10- not be required to be made to the extent that money on deposit in the Redemption Account is sufficient for such purpose. Any monthly payment out of Net Revenues to be deposited as set forth above, for the purpose of meeting Amortization Installments for any Series of Bonds, shall be adjusted, as appropriate, to reflect the frequency of dates established for Amortization Installments applicable to such Series. The moneys in the Redemption Account shall be used solely for the purchase or redemption of the Term Bonds payable therefrom. The Issuer may at any time purchase any of said Term Bonds at prices not greater than the then redemption price of said Term Bonds. If the Term Bonds are not then redeemable prior to maturity, the Issuer may purchase said Term Bonds at prices not greater than the redemption price of such Term Bonds on the next ensuing redemption date. If Term Bonds are so purchased by the Issuer, the Issuer shall credit the account of such purchased Term Bonds against any current Amortization Installment to be paid by the Issuer. If the Issuer shall purchase or call for redemption in any year Term Bonds in excess of the Amortization Installment requirement for such year, such excess of Term Bonds so purchased or redeemed shall be credited in such manner and at such times as the Issuer shall determine. Moneys in the Redemption Account in the Debt Service Fund may be used only for the purposes set forth in this paragraph (c). (2) The Issuer shall next deposit from moneys remaining in the Revenue Fund an amount required to make the amount on deposit in the Reserve Fund equal the Reserve Requirement, subject to the funding limitations set forth in this paragraph (2). Any withdrawals from the Reserve Fund shall be subsequently restored from the first moneys available in the Revenue Fund, after all required current payments for Cost of Operation and Maintenance as set forth above and all current applications and allocations to the Bond Service Fund, including all deficiencies for prior payments have been made in full. Notwithstanding the foregoing, in case of withdrawal from the Reserve Fund, in no event shall the Issuer be required to deposit into the Reserve Fund an amount greater than that amount necessary to ensure that the difference between the Reserve Requirement and the amounts on deposit in the Reserve Fund on the date of calculation shall be restored not later than sixty (60) months after the date of such deficiency (assuming equal monthly payments into the Reserve Fund for such sixty (60) month period). The Issuer may provide that the difference between the amounts on deposit in the Reserve Fund and the Reserve Requirement shall be an amount covered by obtaining bond insurance issued by a reputable and recognized municipal bond insurer, by a letter of credit rated in one of the two highest categories by one of two nationally recognized rating agencies, by a surety bond acceptable to any company issuing a policy of municipal bond insurance guaranteeing the payment of principal and interest on such Series of Bonds, or any combination thereof. Moneys in the Reserve Fund shall be used only for the purpose of the payment of Amortization Installments, principal of, or interest on the Outstanding Bonds when the other moneys allocated to the Bond Service Fund are insufficient therefor, and for no other purpose. Securities in the Reserve Fund shall be valued annually at market rate. Defi- ciencies in the amounts on deposit in the Reserve Fund resulting from a decline in market value 26 63e79--19 r shall be restored no later than the succeeding interest payment date. In the event of the refunding of any Series of Bonds, the Issuer may withdraw from the Reserve Fund, all or any portion of the amounts accumulated therein with respect to the Bonds being refunded and deposit such amounts as required by the resolution authorizing the refunding of such Series of Bonds; provided that such withdrawal shall not be made unless (a) immediately thereafter the Bonds being refunded shall be deemed to have been paid pursuant to the provisions hereof and (b) the amount remaining in the Reserve Fund after giving effect to the issuance of such refunding obligations and the disposition of the proceeds thereof shall not be less than the Reserve Requirement for any Bonds then Outstanding. (3) From the moneys remaining in the Revenue Fund, the Issuer shall next deposit into the Subordinated Debt Service Fund, if any, an amount required to be paid as provided in the resolution of the Issuer authorizing such Subordinated Indebtedness for principal, interest, mandatory redemption payments, if any, and debt service reserve payments, if any, on Subordinated Indebtedness, but for no other purposes. (4) The balance of any moneys remaining in the Revenue Fund after the above required 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 specified unless all current payments, including any deficiencies for prior payments, have been made in full and unless the Issuer shall have complied fully with all the covenants and provisions of this Ordinance. i (5) The Bond Service Fund (including the accounts therein), the Reserve Fund, the Revenue Fund, and any other special funds herein established and created shall be deemed to be held in trust for the purposes provided herein for such funds. The money in all such funds shall be continuously secured in the same manner as state and municipal deposits are authorized to be secured by the laws of the State of Florida in Permitted Investments. Moneys in any fund or account created hereunder (with the exception of the Reserve Fund) may be invested and reinvested in Permitted Investments which mature not later than the dates on which the moneys on deposit therein will be needed for the purpose of such fund. Moneys in the Reserve Fund may be invested and reinvested in Permitted Investments maturing not later than five (5) years after deposit into such Reserve Fund by the Issuer. All income on such investments, except as otherwise provided, shall be deposited in the respective funds and accounts from which such investments were made and be used for the purposes thereof unless and until the maximum required amount (or, with respect to the Construction Fund, the amount required to acquire, construct and erect the Project) is on deposit therein, and thereafter shall be deposited in the Revenue Fund. (6) In determining the amount of any of the payments required to be made pursuant to this Section, credit may be given for all investment income accruing to the respective funds and accounts described herein, except as otherwise provided. 27 6317s-99 (7) 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 allocation 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 Ordinance shall not be construed to require the establishment of any completely independent, self-balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues and assets of the System for certain purposes and to establish certain priorities for application of such revenues and assets as herein provided. (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 expenditures 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 always such fees, rates, rentals and other charges for the use of the products, services and facilities of the System which will always provide Net Revenues in each Fiscal Year sufficient to pay one hundred fifteen percent (115°/n) of the Bond _ Service Requirement becoming due in such Fiscal Year on the Outstanding Bonds. Such rates, fees, rentals or other charges shall not be reduced so as to render them insufficient to provide revenues for the purposes provided therefor by this Ordinance. (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, and the Holders of any of the Bonds or any duly authorized agent or agents of such Holders shall have the right at any and all reasonable times to inspect such books, records and accounts. The Issuer shall, within one hundred eighty (180) days following the close of each Fiscal Year of the Issuer cause an audit of such books, records and accounts to be made by an independent firm of certified public accountants. Copies of each such audit report shall be placed on file with the Issuer and be made available at reasonable times for inspection by Holders of the Bonds. (F) DISPOSITION 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 shall no longer be Outstanding. Notwithstanding the foregoing, the Issuer may sell or dispose of, for fair market value, any properties 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 ti L? 28 6389-119 might fail to comply with the covenants of this Ordinance. To the extent the amount to be received therefor is not in excess of one-half (S) of one per centum (1%) of the value of the gross plant investment in the System, as such value is determined by the Consulting Engineer, the finding set forth above and required to be made by the Consulting Engineer may be made by an authorized representative of the Issuer. The proceeds derived from any sale or disposal of any properties or parts of the System as provided for in the above paragraph shall be 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 unusual or extraordinary repairs, or for the construction or acquisition of additions, extensions and improvements to the System. However, if the Consulting Engineer certifies that it is neither necessary nor desirable to use all or any portion of the proceeds for such purposes, the Issuer shall use such certified portion of the proceeds for the purchase or retirement of the Bonds. (G) INSURANCE. The Issuer shall provide protection for the System both in accordance with the requirements of all agreements, if any, to which the Issuer may at the time be a party with respect to joint ownership of properties by the Issuer with others which is part of the System, and in accordance with Prudent Utility Practice. Said protection may consist of insurance, self insurance and indemnities. The Issuer vt?ill keep, or cause to be kept, the works, plants and facilities comprising the properties of the System insured, and will carry such other insurance against fire and other risks, accidents or casualties at least to the extent and of the kinds r_ that insurance is usually carried by utilities operating like properties. Any insurance shall be in the form of policies or contracts for insurance with insurers of good standing, shall be payable to the Issuer and may provide for such deductibles, exclusions, limitations, restrictions, and restrictive endorsements customary in policies for similar coverage issued to entities operating properties similar to the properties of the System. Any self insurance shall be in the amounts, manner and of the type provided by entities operating properties similar to the properties of the System. In the event of any loss or damage to the System covered by insurance, the Issuer will, with respect to each such loss, promptly repair, reconstruct or replace the parts of the System affected by such loss or damage to the extent necessary to the proper conduct of the operation of the business of the System in accordance with Prudent Utility Practice, shall cause the proceeds of such insurance to be applied for that purpose to the extent required therefor, and pending such application shall hold the proceeds of any insurance policy covering such damage or loss in trust to be applied for that purpose to the extent required therefor. Any excess insurance proceeds received by the Issuer may be used by the Issuer for any lawful purpose. Notwithstanding the foregoing or any provisions of this Ordinance to the contrary, the Issuer shall not be required to maintain insurance with respect to facilities for which insurance shall not be available or for facilities which in accordance with Prudent Utility Practice are not customarily insured. (H) NO FREE SERVICE. So long as any Bonds are outstanding, the Issuer shall not furnish or supply the facilities, services and commodities of the System either free of charge or for a nominal charge to any person, firm or corporation, public or private. The Issuer shall 29 637g-5? -? promptly enforce the payment of any and all accounts owing to the Issuer and delinquent, by discontinuing services of all related utility services or by filing suits, actions or proceedings, or by both discontinuance of services and filing suit. (I) [RESERVED.] (J) ENFORCEMENT OF COLLECTIONS. The Issuer will diligently enforce and collect the rates, fees and other charges for the services and facilities of the System and will take all steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become delinquent to the full extent permitted or authorized by law by discontinuing service of all related utilities or by filing suits, actions, or proceedings, or by bath discontinuance of services and filing suit; and will maintain accurate records with respect thereof. All such fees, rates, charges and revenues shall, as collected, be held in trust to be applied as herein provided. (K) OPERATING BUDGET. The Issuer shall annually, prior to commencement of each of its Fiscal Years, prepare and adopt a budget of the estimated expenditures for the operation and maintenance of the System during such next succeeding Fiscal Year. The Issuer shall mail copies of such annual budgets (including any amendments thereto) to any Holder or Holders of Bonds who shall file his address with the Issuer and request in writing that copies of -all such budgets be furnished him and shall make available such budgets of the System at all reasonable times to any Holder or Holders of Bonds or to anyone acting for and on behalf of such Holder or Holders. Bondholders shall pay reasonable actual cost of printing and mailing of such copies. w. (L) NO COMPETING SYSTEM. To the extent permitted by law, the Issuer will not grant a franchise for the operation of any competing stormwater utility system or systems within the area served by the System as of the date of issuance of the Bonds until all Bonds issued hereunder together with the interest thereon, and premium, if any, have been paid in full. Notwithstanding the foregoing, the Issuer shall not be required to duplicate services being provided by private or public utilities in the area being served by such private or public utilities on the date of issuance of the Bonds. In addition, the Issuer shall not be prohibited from allowing other private or public utilities to provide services within the area being served by the System as of the date of issuance of the Bonds, if the Issuer shall not be providing such service in such area on that date. Nothing herein shall be deemed to constitute the approval of the Issuer for any private or public utility (other than the System) to provide any services within the boundaries of the Issuer or within the area being served by the System as of the date of issuance of the Bonds or within any other area of the Issuer. (M) SUPERVISORY PERSONNEL. The Issuer in operating the System will employ or designate as manager one or more of its qualified employees who have demonstrated ability and experience in operating municipal utility facilities, and will require all employees who may have possession of money derived from the operation of the System to be covered by a fidelity •.J 30 ? 3r7s-eilj bond, written by a responsible indemnity company in amounts fully adequate to protect the Issuer from loss. (N) PAYMENT OF TAXES, ASSESSMENTS AND OTHER CLAIMS. The Issuer shall from time to time duly pay and discharge, or cause to be paid and discharged, all taxes, assessments and other governmental charges, or payments in lieu thereof, lawfully imposed upon the properties constituting the System or the Gross Revenues when the same shall become due, as well as all lawful claims for labor and materials and supplies which, if not paid, might become a lien or charge upon such properties or any part thereof, or upon the Gross Revenues or which might in any way impair the security of the Bonds, except assessments, charges or claims which the Issuer shall in good faith contest by proper legal proceedings. (O) [RESERVED] (P) ISSUANCE OF OTHER OBLIGATIONS. The Issuer shall issue no bonds or obligations of any kind or nature payable from or enjoying a lien on the Pledged Revenues if such obligations have priority over the Bonds with respect to payment or lien, nor shall the Issuer create or cause or permit to be created any debt, lien, pledge, assignment, encumbrance or other charge on a parity with the lien of the Bonds upon said Pledged Revenues except in accordance with this subsection (P). Notwithstanding any other provision in this Section, the Issuer may issue Additional Parity Obligations under the conditions and in the manner provided herein. Any obligations of the Issuer, other than the Bonds, which are payable from the Pledged Revenues shall contain an express statement that such obligations are junior and subordinate in all respects to the Bonds as to lien on and source and security for payment from such Pledged Revenues. (Q) ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. No Additional Parity Obligations shall be issued after the issuance of the Bonds herein authorized, except upon the conditions and in the manner hereinafter provided: (1) There shall have been obtained and filed with the Clerk a certificate of an independent certified public accountant stating: (a) that the books and records of the Issuer relative to the System and the Pledged Revenues have been reviewed; and (b) the amount of the Pledged Revenues derived for any consecutive twelve (12) months out of the preceding twenty- four (24) months preceding the date of issuance of the proposed Additional Parity Obligations as adjusted pursuant to paragraphs 2, 3, 4 and/or 5 below, is equal to not less than 120% of the Maximum Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Bonds issued under this Ordinance, if any, then Outstanding, and (ii) on the Additional Parity Obligations with respect to which such certificate is made. (2) Upon recommendation of the Consulting Engineers, the Net Revenues certified pursuant to paragraph 1(b) in this Section may be adjusted for purposes of this Subsection by including: (a) 100% of the additional Net Revenues which in the opinion of the Consulting Engineer would have been derived by the Issuer from rate increases adopted before 31 /Z 3r7 g-R9 the Additional Parity Obligations are issued, if such rate increases had been implemented during the test period described in paragraph 1(b) in this Section, and (b) 100% of the additional Net Revenues estimated by the Consulting Engineer to be derived during the first full twelve month period after the facilities of the System are extended, enlarged, improved or added to with the proceeds of the Additional Parity Obligations with respect to which such certificate is made. (3) Upon recommendation of the Consulting Engineers if the Additional Parity Obligations are to be issued for the purpose of acquiring an existing stormwater system and/or any other utility system in accordance with Section 27 hereof, the Net Revenues certified pursuant to paragraph 1(b) in this Section may be adjusted by including: 80% of the additional estimated Net Revenues which in the written opinion of the Consulting Engineers will be derived from the acquired facility during the first full 12-month period after the issuance of such Additional Parity Obligations (the Consulting Engineers' report shall be based on the actual operating revenues of the acquired utility for a recent 12-month period adjusted to reflect the Issuer's ownership and the Issuer's rate structure in effect with respect to the System at the time of the issuance of the Additional Parity Obligations). (4) Upon recommendation of the Consulting Engineer, if the Issuer shall have entered into a contract, which contract shall be for a duration of not less than the final maturity of the proposed Additional Parity Obligations, with any public body, whereby the Issuer shall have agreed to furnish any services creating Gross Revenues, then the Net Revenues certified pursuant to paragraph I(b) of this Section may be increased (to the extent such amounts were not ? otherwise reflected in such Net Revenues) by the minimum amount which the public body shall guarantee to pay in any one year for the furnishing of services by the Issuer, after deducting from such payment the estimated Cost of Operation and Maintenance attributable in such year to such services. (5) Upon recommendations of the Consulting Engineers, if there is an estimated increase in Net Revenues to be received by the Issuer as a result of additions, extensions or improvements to the System during the period of three (3) years following the completion of such additions, extensions or improvements financed with the proceeds of Bonds or Additional Parity Obligations, then the Net Revenues certified pursuant to paragraph I (b) of this Section shall be increased by fifty percent (50%) of the average annual additional Net Revenues calculated for such three year period. (5) The Issuer need not comply with the provisions of paragraph 1 of this Section if and to the extent the Bonds to be issued are refunding bonds, and if the Issuer shall cause to be delivered a certificate of the Finance Director setting forth the Bond Service Requirements (i) for the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that the Bond Service Requirements in any particular year pursuant to (ii) above is not greater than the Bond Service Requirements in the corresponding year set forth pursuant to (i) above. 32 o 3179"-99 ---1 (7) The Issuer need not comply with the provisions of paragraph 1 of this Section if and to the extent the Bonds to be issued are for the purpose of providing any necessary additional funds required for completion of any improvements to the System ("Completion Bonds") if originally financed with the proceeds of Bonds; provided that such Completion Bonds for which the Issuer need not comply with the provision of such paragraph (1) of this Section may not exceed 10% of the total principal amount of Bonds estimated to be required for such improvements to the System at the time of issuance of the initial Series of Bonds to finance such improvements. (8) The Issuer shall not be in default in the carrying out of any of the obligations assumed under this Ordinance and no event of default shall have occurred under this Ordinance and shall be continuing, and all payments required by this Ordinance to be made into the funds and accounts established hereunder shall have been made to the full extent required. (9) The ordinance or resolution authorizing the issuance of the Additional Parity Obligations shall recite that all of the covenants contained herein will be applicable to such Additional Parity Obligations. (R) LEVY AND COLLECTION OF STORMWATER MANAGEMENT UTILITY SERVICE FEE. The Issuer covenants that it will not impair or adversely affect the power and right of the Issuer to receive the Stormwater Management Utility Service Fees. The Issuer will proceed diligently to perform legally and effectively all steps required on its part in the levy and collection of the Stormwater Management Utility Service Fees and shall exercise all legally available remedies to enforce such collections now or hereafter available under State law. Furthermore, the pledging of the Net Revenues in the manner provided herein shall not be subject to repeal, modification or impairment by any subsequent ordinance or other proceeding of the Issuer while the Bonds are Outstanding. SECTION 21. DEFAULTS; EVENTS OF DEFAULT AND REMEDIES. Except as provided below, if any of the following events occur it is hereby defined as and declared to be and to constitute an "Event of Default": (A) Default in the due and punctual payment of any interest on the Bonds; (B) Default in the due and punctual payment of the principal of and premium, if any, on any Bond, at the stated maturity thereof, or upon proceedings for redemption thereof; (C) Default in the performance or observance of any other of the covenants, agreements or conditions on the part of the Issuer contained in this Ordinance or in the Bonds and the continuance thereof for a period of thirty (30) days after written notice to the Issuer given by the Holders of not less than twenty-five percent (25%) of aggregate principal amount of Bonds then Outstanding (provided, however, that with respect to any obligation, covenant, agreement or condition which requires performance by a date certain, if the Issuer performs such 1J 33 1-10 1 42 obligation, covenant, agreement or condition within thirty (30) days of written notice as provided above, the default shall be deemed to be cured); (D) Failure by the Issuer promptly to remove any execution, garnishment or attachment of such consequence as will materially impair its ability to carry out its obligations hereunder; (E) Any act of bankruptcy or the rearrangement, adjustment or readjustment of the obligations of the Issuer under the provisions of any bankruptcy or moratorium laws or similar laws relating to or affecting creditors' rights. The term "default" shall mean default by the Issuer in the performance or observance of any of the covenants, agreements or conditions on its part contained in this Ordinance, any supplemental resolution or in the Bonds, exclusive of any period of grace required to constitute a default or an "Event of Default" as hereinabove provided. For purposes of Section 21(A) and (B) hereof, no effect shall be given to any payments made under any Bond Insurance Policy. Any Holder of Bonds issued under the provisions hereof or any trustee acting for the Holders of such Bonds, may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent ,jurisdiction, protect and enforce any and all rights, Y, including the right to the appointment of a receiver, existing under State or federal law, or granted and contained herein, and may enforce and compel the performance of all duties required herein or by any applicable law to be performed by the Issuer or by any officer thereof. Nothing herein, however, shall be construed to grant to any Holder of the Bonds any lien on any property of the Issuer, except the Pledged Revenues. The foregoing notwithstanding: (i) No remedy conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy, but each remedy shall be cumulative and shall be in addition to any other remedy given to the Bondholders hereunder. (ii) No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised as often as may be deemed expedient. (iii) No waiver of any default or Event of Default hereunder by the Bondholders shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. 34 (? 378 99 1i (iv) Acceleration of the payment of principal of and interest on the Bonds shall not be a remedy hereunder in the case of an Event of Default. Upon the occurrence of an Event of Default, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Bondholders under this Ordinance, the Bondholders shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the System and the funds pending such proceedings, with such powers as the court making such appointment shall confer. Notwithstanding any provision of this Ordinance to the contrary, for all purposes of this Section 21, except the giving of notice of any Event of Default to the Holder of the Bonds, the Bond Insurer shall be deemed to be the Holder of the Bonds it has insured. On the occurrence of an Event of Default, to the extent such rights may then lawfully be waived, neither the Issuer nor anyone claiming through or under it, shall set up, claim or seek to take advantage of any stay, extension or redemption laws now or hereafter in force, in order to prevent or hinder the enforcement of this Ordinance, and the Issuer, for itself and all who may claim through or under it, hereby waives, to the extent it may lawfully do so, the benefit of all such laws and all right of redemption to which it may be entitled. Within 30 days of knowledge thereof, both the Issuer and the Paying Agent shall provide notice to the Bond Insurer of the occurrence of any Event of Default. The Bond Insurer shall be included as a party in interest and as a party entitled to (i) notify the Issuer or any Paying Agent of the occurrence of an Event of Default and (ii) request the Issuer or any Paying Agent to intervene in judicial proceedings that affect the Bonds or the security therefor. The Issuer and any Paying Agent are required to accept notice of default from the Bond Insurer. Anything in this Ordinance to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default, the Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders under this Ordinance and the Bond Insurer shall also be entitled to approve all waivers of events of default. SECTION 22. AMENDING AND SUPPLEMENTING OF ORDINANCE WITHOUT CONSENT OF HOLDERS OF BONDS. The Issuer, from time to time and at any time and without the consent or concurrence of any Holder of any Bonds, may enact an ordinance amendatory hereof or supplemental hereto, if the provisions of such supplemental ordinance shall not adversely affect the rights of the Holders of the Bonds then Outstanding, for any one or more of the following purposes: (A) To make any changes or corrections in this Ordinance as to which the Issuer shall have been advised by counsel that are required for the purpose of curing or correcting any 35 ? ?7g 99 ambiguity or defective or inconsistent provisions or omission or mistake or manifest error contained in this Ordinance, or to insert in this Ordinance such provisions clarifying matters or questions arising under this Ordinance as are necessary or desirable; (B) To add additional covenants and agreements of the Issuer for the purpose of further securing the payments of the Bonds; (C) To surrender any right, power or privilege reserved to or conferred upon the Issuer by the terms of this Ordinance; (D) To confirm as further assurance any lien, pledge or charge or the subjection to any lien, pledge or charge, created or to be created by the provisions of this Ordinance; (E) To grant to or confer upon the Holders any additional right, remedies, powers, authority or security that lawfully may be granted to or conferred upon them; (F) To assure compliance with federal "arbitrage" provisions in effect from time to time; (G) To provide such changes as may be necessary in order to adjust the terms hereof (but not including the provisions of Section 20(D) and Section 20(Q) hereof) so as to facilitate the issuance of Variable Rate Bonds or Option Bonds; (H) To provide for the combination of the System with any other utility provided the conditions set forth in Section 27 hereof are satisfied; 0) To provide for the transfer of the ownership and/or operation of the System pursuant to a governmental reorganization as set forth in Section 25 hereof; and (J) To modify any of the provisions of this Ordinance in any other aspects provided that such modifications shall not be effective until after the Bonds Outstanding at the time such supplemental ordinance is adopted shall cease to be Outstanding, or until the holders thereof consent thereto pursuant to Section 23 hereof, and any Bonds issued subsequent to any such modification shall contain a specific reference to the modifications contained in such supplemental ordinance. Except for supplemental ordinances providing for the issuance of Bonds pursuant hereto, the Issuer shall not enact any supplemental ordinance authorized by the foregoing provisions of this Section unless in the opinion of Bond Counsel the enactment of such supplemental ordinance is permitted by the foregoing provisions of this section. SECTION 23. AMENDMENT OF ORDINANCE WITH CONSENT OF HOLDERS OF BONDS. Except as provided in Section 22 hereof, no material modification or 36 63rffl-9? f*k amendment of this Ordinance or of any resolution supplemental hereto shall be made without the consent in writing of the Holders of fifty-one percent or more in the principal amount of the Bonds of each Series so affected and then Outstanding. For purposes of this Section, to the extent any Bonds are insured by a policy of municipal bond insurance or are secured by a letter of credit and such Bonds are then rated in as high a rating category as the rating category in which such Bonds were rated at the time of initial issuance and delivery thereof by either Standard & Pooes Corporation or Moody's Investors Service, or successors and assigns, then the consent of the issuer of such municipal bond insurance policy or the issuer of such letter of credit shall be deemed to constitute the consent of the Holder of such Bonds. No modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof or affecting the promise of the Issuer to pay the principal of and interest on the Bonds as the same shall become due from the Pledged Revenues or reduce the percentage of the Holders of the Bonds required to consent to any material modification or amendment hereof without the consent of the Holder or Holders of all such obligations. For purposes of the immediately preceding sentence, the issuer of a municipal bond insurance policy or a letter of credit shall not consent on behalf of the Holders of the Bonds. No amendment or supplement pursuant to this Section 23 (but not including Section 22 hereof) shall be made without the consent of the Bond Insurer. SECTION 24. DEFEASANCE. The covenants and obligations of the Issuer shall be defeased and discharged under terms of this Ordinance as follows: (A) If the Issuer shall pay or cause to be paid, or there shall otherwise be paid, to the Holders of all Bonds the principal, redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein, then the pledge of the Pledged Revenues and all covenants, agreements and other obligations of the Issuer to the Bondholders, shall thereupon cease, terminate and become void and be discharged and satisfied. If the Issuer shall pay or cause to be paid, or there shall otherwise be paid, to the Holders of any Outstanding Bonds the principal or redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein, such Bonds shall cease to be entitled to any lien, benefit or security under this Ordinance, and all covenants, agreements and obligations of the Issuer to the Holders of such Bonds shall thereupon cease, terminate and become void and be discharged and satisfied. (B) The Bonds, redemption premium if any, and interest due or to become due for the payment or redemption of which moneys shall have been set aside and shall be held in trust (through deposit by the Issuer of funds for such payment or redemption or otherwise) at the maturity or redemption date thereof shall be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section 24. Subject to the provisions of paragraph (C) and (D) of this Section 24, any Outstanding Bonds shall prior to the maturity or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section if (i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Issuer shall have given to the escrow agent instructions 1.) 37 --? accepted in writing by the escrow agent to notify Holders of Outstanding Bonds in the manner required herein of the redemption of such Bonds on said date and (ii) there shall have been deposited with the escrow agent either moneys in an amount which shall be sufficient, or Acquired Obligations (including any Acquired Obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States) the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with the escrow agent at the same time, shall be sufficient, to pay when due the principal of or premium, if any, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof, as the case may be. (C) For purposes of determining whether Variable Rate Bonds shall be deemed to have been paid prior to the maturity or redemption date thereof, as the case may be, by the deposit of moneys, or Acquired Obligations and moneys, if any, in accordance with paragraph B of this Section 24, the interest to come due on such Variable Rate Bonds on or prior to the maturity date or redemption date thereof, as the case may be, shall be calculated at the maximum rate permitted by the terms thereof; provided, however, that if on any date, as a result of such Variable Rate Bonds having borne interest at less than such maximum rate for 4.ny period, the total amount of moneys and Acquired Obligations on deposit with the escrow agent for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited with the escrow agent on such date in respect of such Variable Rate Bonds in order to satisfy the second sentence of paragraph (B) of this Section 24, the escrow agent shall, if requested by the Issuer, pay the amount of such excess to the Issuer free and clear of any trust, lien, pledge or assignment securing the Bonds or otherwise existing under this Ordinance. (D) Option Bonds shall be deemed to have been paid in accordance with the second sentence of paragraph (B) of this Section 24 only if, in addition to satisfying the requirements of clauses (i) and (ii) of such sentence, there shall have been deposited with the escrow agent moneys in an amount which shall be sufficient to pay when due the maximum amount of principal of and redemption premium, if any, and interest on such Bonds which could become payable to the Holders of such Bonds upon the exercise of any options provided to the Holders of such Bonds; provided, however, that if, at the time a deposit is made with the escrow agent pursuant to paragraph (B) of this Section, the options originally exercisable by the Holder of an Option Bond are no longer exercisable, such Bond shall not be considered an Option Bond for purposes of this paragraph (D). If any portion of the moneys deposited with the escrow agent for the payment of the principal of and redemption premium, if any, and interest on Option Bonds is not required for such purpose, the escrow agent shall, if requested by the Issuer, pay the amount of such excess to the Issuer free and clear of any trust, lien, security interest, pledge or assignment securing said Bonds or otherwise existing under the Resolution. SECTION 25. GOVERNMENTAL REORGANIZATION. Notwithstanding any other provisions of this Ordinance, this Ordinance shall not prevent any lawful reorganization of the governmental structure of the Issuer, including a merger or consolidation of the Issuer with another public body or the transfer of a public function of the Issuer to another public body, provided that any reorganization which affects the System shall provide that the System shall be ?-- 38 6 3rlg-ell continued as a single enterprise and that any public body which succeeds to the ownership and operation of the System shall also assume all rights, powers, obligations, duties and liabilities of the Issuer under this Ordinance and pertaining to all Bonds, SECTION 26. MATTERS RELATING TO THE BOND INSURER. The Issuer hereby covenants, represents, and expressly agrees to the following terms and provisions as such are necessary and desirable in order to obtain a Municipal Bond Insurance Policy: A. Consent of the Bond Insurer. Any provision of this Ordinance expressly recognizing or granting rights in or to the Bond Insurer or to an Insurer may not be amended in any manner which affects the rights of the Bond Insurer hereunder without the prior written consent of the Bond Insurer. B. Consent of the Bond Insurer in Addition to Bondholder Consent. Unless otherwise provided in this Section, the Bond Insurer's consent shall be required in addition to Bondholder consent, when required, for the following purposes: (i) execution and delivery of any supplemental ordinance or resolution or any amendment, supplement or change to or modification thereto, (ii) removal of the Paying Agent and selection and appointment of any successor paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires Bondholder consent. C. Consent of the Bond Insurer in the Event of Insolvency. Any reorganization or liquidation plan with respect to the Issuer must be acceptable to the Bond Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall have the right to vote on behalf of all Bondholders who hold the Bond Insurer-insured Bonds absent a default by the Bond Insurer under the applicable Municipal Bond Insurance Policy insuring such Bonds. D. Consent of the Bond Insurer upon Default. Anything in this Ordinance to the contrary notwithstanding, upon the occurrence and continuance of an event of default as defined in this Ordinance, the Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders for the benefit of the Bondholders under this Ordinance, E. Notification and Documents to be Furnished. While the Municipal Bond Insurance Policy is in effect, the Issuer shall furnish to the Bond Insurer (to the attention of the Surveillance Department, unless otherwise indicated): (i) as soon as practicable after the filing thereof, a copy of any financial statement of the Issuer and a copy of any audit and annual report of the Issuer; (ii) a copy of any notice to be given to the registered owners of the Bonds, including, without limitation, notice of any redemption of or defeasance of the Bonds, and any certificate rendered pursuant to this Ordinance or relating to the security for the Bonds; 39 ? 3 19- '77 r (iii) such additional information it may reasonably request; (iv) notice of any failure of the Issuer to provide relevant notices, certificates, etc.; and (v) immediate notification if at any time there are insufficient moneys to make any payments of principal and or interest as required and immediate notification upon the occurrence of any event of default. F. Access to Issuer Information. The Issuer will permit the Bond Insurer to discuss the affairs, financings and accounts of the Issuer or any information the Bond Insurer may reasonably request regarding the security for the Bonds with appropriate officers of the Issuer. The Issuer will permit the Bond Insurer to have access to the Project and to have access to and make copies of all books and records relating to the Bonds at any reasonable time. G. Continuing Disclosure. To the extent that the Issuer has entered into a continuing disclosure obligation with respect to any Series of Bonds, the Bond Insurer for such Series shall be included as a party to be notified. SECTION 27. ADDITIONAL UTILITY FUNCTIONS. The Issuer may expand the utility functions of the System as they exist on the date hereof as permitted in the definition of "System" contained herein, provided that the Issuer has adopted resolutions or ordinances of the Issuer to the effect that, based upon such certificates and opinions of its Consulting Engineers, independent certified public accountants, Bond Counsel, financial advisors or other appropriate advisors as the Issuer shall deem necessary, desirable or appropriate, the addition of such utility functions (a) will not impair the ability of the Issuer to comply with the provisions of this Ordinance, and (b) will not materially adversely affect the rights of the Holders of the Bonds. SECTION 28. CAPITAL APPRECIATION BONDS. For the purposes of (i) receiving payment of the redemption price of a Capital Appreciation Bond if redeemed prior to maturity, (ii) receiving payment if the principal of all Bonds is declared immediately due and payable, (iii) computing Bond Service Requirement, and (iv) computing the amount of Holders required for any notice, consent, request or demand hereunder for any purpose whatsoever, the principal amount of a Capital Appreciation Bond shall be deemed to be its Compounded Amount. SECTION 29. TAX COVENANTS. With respect to any Bonds for which the Issuer intends on the date of issuance thereof for the interest thereon to be excluded from gross income for purposes of Federal income taxation: (A) The Issuer shall not use or permit the use of any proceeds of any such series of Bonds or any other funds of the Issuer, directly or indirectly, to acquire any securities or obligations, and shall not use or permit the use of any amounts received by the Issuer with '-1) 40 13?g 99 respect to such series of Bonds in any manner, and shall not take or permit to be taken any other action or actions, which would cause any such series of Bonds to be a "private activity bond" within the meaning of Section 141 or an "arbitrage bond" within the meaning of Section 148, or "federally guaranteed" within the meaning of Section 149(b), of the Internal Revenue Code of 1986, as amended (the "Code"), or otherwise cause interest on such series of Bonds to become subject to federal income taxation. (B) The Issuer shall at all times do and perform all acts and things permitted by law and this Ordinance which are necessary or desirable in order to assure that interest paid on such series of Bonds will be excluded from gross income for purposes of federal income taxes and shall take no action that would result in such interest not being so excluded. (C) 'The Issuer shall pay or cause to be paid to the United States Government any amounts required by Section 148(f) of the Code and the regulations thereunder (the "Regulations"). In order to insure compliance with the rebate provisions of Section 148(f) of the Code with respect to any such series of Bonds for which the Issuer intends on the date of issuance thereof to be excluded from gross income for purposes of Federal income taxation, the Issuer hereby creates the "City of Clearwater Stormwater System Rebate Fund" (hereinafter sometimes called the "Rebate Fund") to be held by the Issuer. The Rebate Fund need not be maintained so long as the Issuer timely satisfies its obligation to pay any rebatable earnings to the United States Treasury; however, the Issuer may, as an administrative convenience, maintain and deposit funds in the Rebate Fund from time to time. Any moneys held in the Rebate Fund u, shall not be considered Pledged Revenues and shall not be pledged in any manner for the benefit of the holders of the Bonds. Moneys in the Rebate Fund (including earnings and deposits therein) shall be held for future payment to the United States Government as required by the Regulations and as set forth in instructions of Bond Counsel delivered to the Issuer upon issuance of such Bonds. SECTION 30. ADDITIONAL RIGHTS TO BOND INSURER. Pursuant to one or more supplemental resolutions, the Issuer may provide additional rights, covenants, agreements and restrictions relating to any Bond Insurer and any Bond Insurance Policy. SECTION 31. SEVERA.BILITY. If any one 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 or shall in any manner be held to adversely affect the validity of the Bonds, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Ordinance or of the Bonds issued hereunder. SECTION 32. SALE OF BONDS. The Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the requirements of this Ordinance and other applicable 11) 141 ?03'l9-`q provisions of law as set forth in a supplemental resolution of the Issuer adopted before the issuance of any Series of Bonds. SECTION 33. GENERAL AUTHORITY. The members of the City Commission of the Issuer and the Issuer's officers, attorneys and other agents and employees are hereby authorized to perform all acts and things required of them by this Ordinance or desirable or consistent with the requirements hereof for the full, punctual and complete'performance of all of the terms, covenants and agreements contained in the Bonds and this Ordinance, and they are hereby authorized to execute and deliver all documents which shall be required by Bond Counsel or the initial purchasers of the Bonds to effectuate the sale of the Bonds to said initial purchasers. SECTION 34. NO THIRD PARTY BENEFICIARIES. Except such other Persons as may be expressly described herein or in the Bonds including the Bond Insurer, nothing in this Ordinance, or in the Bonds, expressed or implied, is intended or shall be construed to confer upon any Person other than the Issuer and the Holders any right, remedy or claim, legal or equitable, under and by reason of this Ordinance or any provision hereof, or of the Bonds, all provisions hereof and thereof being intended to be and being for the sale and exclusive benefit of the Issuer, the Bond Insurer and the Persons who shall from time to time be the Holders. SECTION 35. NO PERSONAL LIABILITY. Neither the members of the City Commission of the Issuer nor any person executing the Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. SECTION 36. REPEAL OF INCONSISTENT INSTRUMENTS. Any other ordinance or resolutions, or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. SECTION 37. EFFECTIVE DATE. The provisions of this Ordinance shall take effect upon its enactment, as required by law. [Remainder of page left intentionally blank] 42 F , r '. z SECTION 38. PUBLIC NOTICE, Notice of the proposed enactment of this Ordinance -. L has been properly advertised in a newspaper of general circulation In accordance with Chapter 166.041, Florida Statutes. PASSED ON FIRST READING April 1 1999 f PASSED ON SECOND READING ? AND FINAL READING AND ADOPTED peril 15 1999 l JAW Mayor-Commissioner Attest: Brian J. Aungst Ci Clerk Cynthia E. Goudeau.• t Approved as to Form and Legal ' Sufficiency; t City Attorney Pamela K. Akin 1 43 i