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6030-96M c; ORDINANCE NO. 6030 -96 AN ORDINANCE PROVIDING FOR THE ADVANCE REFUNDING OF THE OUTSTANDING GAS SYSTEM REVENUE BONDS, SERIES 1991, OF THE CITY OF CLEARWATER, FLORIDA; PROVIDING FOR THE ISSU- ANCE OF NOT EXCEEDING $8,500,000 GAS SYSTEM REVENUE REFUNDING BONDS, SERIES [TO BE DETER- MINED], AS ADDITIONAL PARITY OBLIGATIONS OF THE CITY PURSUANT TO THE CITY'S ORIGINAL ORDI- NANCE, TO BE APPLIED TO ADVANCE REFUND SUCH OUTSTANDING OBLIGATIONS; PLEDGING THE NET REVENUES OF THE SYSTEM TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; PROVIDING FOR THE PAYMENT THEREOF; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT ENACTED BY THE CITY COMMISSION OF THE CITY OF CLEARWATER, FLORIDA, as follows. SECTION 1. AUTHORITY FOR THIS ORDINANCE, TO BE SUPPLEMENTAL. This Ordinance is enacted pursuant to the provisions of Chapter 166, Part II, Florida Statutes, and other applicable provisions of law (the "Act ") and the Original Ordinance, herein- after defined. This Ordinance is supplemental to the Original Ordinance and all provisions of the Original Ordinance not supplemented, modified, superseded or repealed by the provisions hereof shall (a) remain in full force and effect, (b) apply to the 1996 Bonds, hereinafter defined, to the same extent and in the same manner as such provisions apply to the Parity Bonds, hereinafter defined, and (c) are incorporated herein by reference as if fully set forth. SECTION 2. DEFINITIONS. Unless the context otherwise requires, the terms defined in this Ordinance shall have the meanings specified in this section, and any capitalized terms not defined herein shall have the meanings specified in Section 2 of the Original Ordinance. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations. "Additional Parity Obligations" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained in the original Ordinance and in this Ordinance and which (i) shall have a lien on the Pledged Revenues equal to that of the Parity Bonds and the 1996 Bonds, (ii) shall be 6mW1hrw&_ /Va 6� & ; -? ' payable from the Net Revenues on a parity with the Parity Bonds and the 1996 Bonds, and (iii) rank equally in all respects with the Parity Bonds and the 1996 Bonds. "Bond Registrar" or "Registrar" shall mean the officer of the Issuer or the bank or trust company which the Issuer may from time to time designate to perform the duties herein set forth for the Registrar of the 1996 Bonds. "Bonds" shall mean (i) the Bonds authorized under the Original Ordinance, including but not limited to the Parity Bonds and the 1996 Bonds and (ii) any Additional Parity Obligations issued hereafter in accordance with the provisions of the Original Ordinance and this Ordinance. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules thereunder in effect or proposed. "Cost of Operation and Maintenance" of the System shall mean all current expenses, paid or accrued, for the operation, main- tenance and repair of all facilities of the System, as calculated in accordance with sound accounting practice, and shall include, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the Issuer related solely to the 'System, labor, cost of materials and supplies used for current operation, and charges for the accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with sound accounting practice, but excluding any reserve for renewals or replacements, for extraordinary repairs or any allowance for depreciation. "Credit Facility" or "Credit Facilities" shall mean either individually or collectively, as appropriate, any bond insurance policy, surety bond, letter of credit, line of credit, guaranty or other instrument or instruments that would enhance the credit of the Bonds. The term Credit Facility shall not include any bond insurance, surety bond or other credit enhancement deposited into or allocated to a subaccount in the Reserve Account in the Sinking Fund. "Credit Facility issuer" shall mean the provider of a Credit Facility. "Escrow Deposit Agreement" shall mean that certain Escrow Deposit Agreement by and between the Issuer and a bank or trust company to be approved by subsequent resolution of the Issuer, for the purpose of providing for the payment of the Refunded Bonds, which agreement shall be in substantially the form attached hereto as Exhibit "AN and is hereby incorporated by reference. "Gross Revenues" or "Revenues" shall mean all moneys received from rates, fees, rentals or other charges or income derived from ,.0111N the investment of funds, unless otherwise provided herein, by the Issuer or accruing to it in the operation of the System, all calculated in accordance with sound accounting practice. "Holder of Bonds" or "Bondholders" or any similar term shall mean any person who shall be the registered owner ( "Registered Owner ") of any registered Bond, as shown on the books and records of the Bond Registrar. The Issuer may deem and treat the person in whose name any Bond is registered as the absolute owner thereof for the purpose of receiving payment of, or on account of, the princi- pal or redemption price thereof and interest due thereon, and for all other purposes. "Issuer" shall mean the City of Clearwater, Florida. IONet Revenues" shall mean. Gross Revenues less Cost of Opera- tion and Maintenance. 911996 Bonds" shall mean the obligations of the Issuer autho- rized to be issued pursuant to Section 5 of this Ordinance, which 1996 Bonds are to be issued in one or more series, with each series to be separately designated in accordance with subsequent resolutions to be adopted by the Issuer prior to the issuance of any series of 1996 Bonds. "Ordinance" shall mean this ordinance of the Issuer as here- after amended and supplemented from time to time in accordance with the provisions hereof. 11original ordinance" shall mean City of Clearwater Ordinance No. 5118 -91 as thereafter amended and supplemented from time to time in accordance with the provisions thereof. "Parity Bonds" shall mean the outstanding Gas System Revenue Bonds, Series 1991, Gas System Revenue Bonds, Series 1994A, and any bonds issued under the authority of the Original Ordinance or the City of Clearwater Ordinance No. 5665 -94. "Refunded Bonds" shall mean the portion of the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1991, dated September 1, 1991, for which the future payments of principal, premium, if any, and interest has been provided for in an irrevocable escrow in accordance with the Escrow Deposit Agreement with proceeds of the 1996 Bonds, which are so designated by the Issuer prior to the issuance of any series of 1996 Bonds. "Reserve Requirement" for each series of Bonds shall be as determined by subsequent resolution of the Issuer. The Reserve Requirement for the 1996 Bonds shall be the lesser of (i) the Maximum Bond Service Requirement of the 1996 Bonds, (ii) 125% of the average annual Bond Service Requirement of the 1996 Bonds, or lot of the net proceeds of the 1596 Bonds. 3 orkolaAu,A /110. d "System" shall mean the complete gas system now owned, operated and maintained by the Issuer, together with any and all assets, improvements, extensions and additions thereto hereafter constructed or acquired. SECTION 3. FINDINGS. It is hereby found, determined and declared that: (A) The Issuer has heretofore enacted the Original Ordinance authorizing the issuance of certain obligations to be secured by and payable from the Net Revenues, and providing for the issuance of Additional Parity obligations, upon the conditions set forth therein, to be payable on a parity from such Net Revenues. (B) The Issuer has previously issued the Refunded Bonds and deems it necessary and in its best interest to provide for the refunding of the Refunded Bonds. The refunding program herein described will be advantageous to the Issuer by providing a net present value reduction in the amount of debt service secured by the System, resulting in a lessening of pressures to increase System rates. (C) From the proceeds of the 1996 Bonds and other funds available therefor, there shall be deposited pursuant to the Escrow Deposit Agreement a sum which, together with the principal and income from the Federal Securities to be purchased pursuant to such agreement, will be sufficient to make timely payments of all presently outstanding principal, redemption premium, if any, and interest in respect to the Refunded Bonds, as the same come due and /or redeemable. Such funds and principal and income from investments shall also be sufficient to pay when due all expenses, if any, described in the Escrow Deposit Agreement. (D) The costs associated with such refunding program shall be deemed to include legal expenses, fiscal expenses, rating agency fees, expenses for estimates of costs and of revenues, accounting expenses, municipal bond insurance premiums, costs of printing, fees of financial advisors, fees for escrow structuring and verification, accrued and capitalized interest, provisions for reserves, and such other expenses as may be necessary or incidental. for the financing herein authorized. (E) The Revenues are not pledged or encumbered in any manner except for the prior payment from the Net Revenues of the principal of and interest on the Refunded Bonds, which pledge and encumbrance shall be defeased pursuant to the refunding herein authorized, and the Parity Bonds. (F) The principal of and interest on the 1996 Bonds and all required Sinking Fund, Reserve and other payments shall be payable solely from the Net Revenues derived from the operation of the system, as provided herein and in the original Ordinance. The 1996 4 Otet(iroet., Ala, Bonds shall not constitute an indebtedness, liability, general or moral obligation, or a pledge of the faith, credit or taxing power of the Issuer, the State, or any political subdivision thereof, within the meaning of any constitutional, statutory or charter provisions. Neither the State of Florida, nor any political :subdivision thereof, nor the Issuer shall be obligated (1) to levy ad valorem taxes on any property to pay the principal of the 1996 Bonds, the interest thereon, or other costs incidental thereto or (2) to pay the same from any other funds of the Issuer except from the Net Revenues, in the manner provided herein and in the Original Ordinance. The 1996 Bonds shall not constitute a lien upon the System, or any part thereof, or on any other property of the Issuer, but shall constitute a first and prior lien only on the Net Revenues in the manner provided herein and in the Original Ordinance. (G) The estimated Net Revenues to be derived from the opera- tion of the System will be sufficient to pay all principal of and interest on the Parity Bonds and the 1996 Bonds, as the same become due, and to make all required Sinking Fund, Reserve and other payments required by this Ordinance and the Original Ordinance. (H) The Original Ordinance, in Section 16(T) thereof, provides for the issuance of Additional Parity Obligations under the terms, limitations and conditions provided therein. (I) The Issuer has complied with the terms, conditions and restrictions contained in the Original Ordinance. The Issuer is, therefore, legally entitled to issue the 1996 Bonds as Additional Parity Obligations within the authorization contained in the Original Ordinance. (J) The 1996 Bonds herein authorized shall be on a parity and rank equally, as to lien on and source and security for payment from the Net Revenues and in all other respects, with the Parity Bonds. SECTION 4. THE ORDINANCE TO CONSTITUTE CONTRACT. In con- sideration of the acceptance of the 1996 Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this Ordinance and the Original Ordinance shall be deemed to be and shall constitute a contract between the Issuer and such Holders. The covenants and agreements herein set forth to be performed by the Issuer shall be for the equal benefit, protection and security of the legal Holders of any and all of the Bonds, all of which shall be of equal rank and without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided therein and herein. SECTION 5. AUTHORIZATION OF 1996 BONDS AND REFUNDING OF THE REFUNDED BONDS. Subject and pursuant to the provisions hereof, 5 obligations of the Issuer to be known as "Gas System Revenue Refunding Bonds, Series [to be determined]" herein defined as the 111996 Bonds" are authorized to be issued in the aggregate principal amount of not exceeding $8,500,000 to (i) finance the refunding of the Refunded Bonds, (ii) make a deposit to the Reserve Account in the Sinking Fund to satisfy the Reserve Requirement (or to purchase a debt service reserve fund policy or surety, as determined by resolution of the Issuer adopted prior to the issuance of any series of 1996 Bonds) and (iii) pay the costs of issuance of the 1996 Bonds. The refunding of the Refunded Bonds is hereby authorized in the manner provided herein. SECTION 6. DESCRIPTION OF 1996 BONDS. The 1996 Bonds shall be issued in fully registered form; may be Capital Appreciation Bonds and /or Current Interest Bonds; shall be dated; shall be numbered; shall 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 $5,000 multiples thereof, or in such other denominations as shall be approved by the Issuer in a subsequent resolution prior to the delivery of the 1996 Bonds; shall bear interest at a fixed or floating rate not exceeding the maximum rate allowed by law, such interest to be payable semiannually on such dates and in such years and amounts; and shall mature on such dates and in such years, and in such amounts all as shall be fixed by resolution or ordinance of the Issuer adopted prior to the delivery of the 1996 Bonds. The 1996 Bonds are to be issued in one or more series, from time to time, either as construction or completion bonds, and if issued in more than one series, each series is to be separately designated as determined by resolution of the Issuer adopted prior to the issu- ance of any such series of 1996 Bonds. The 1996 Bonds shall be payable with respect to principal (and Compounded Amount in the case of Capital Appreciation Bonds) upon presentation and surrender thereof on the date fixed for maturity or redemption thereof at the office of the Bond Registrar; shall be payable in any coin or currency of the United States which at the time of payment is legal tender for the payment of public or private debts; and shall bear interest from such date, but not earlier than the date of the 1996 Bonds, as is fixed by subsequent resolution or ordinance of the Issuer, payable in accordance with and pursuant to the terms of the 1996 Bonds. Interest on the 1996 Bonds which are Current Interest Bonds shall be paid by check or draft mailed to the Registered Owners, at their addresses as they appear on the books and records of the Bond Registrar, at the close of business on the 15th day of the month (whether or not a business day) next preceding the interest payment date for the 1996 Bonds (the "Record Date'$), irrespective of any transfer of the 1996 Bonds subsequent to such Record Date and prior 6 to such interest payment date, unless the Issuer shall be in default in the payment of interest due on such interest .payment date. In the event of any such default, such defaulted interest shall be payable to the Registered Owners at the close of business on a special record date for the payment of defaulted interest as established by notice mailed to the persons in whose names such 1996 Bonds are registered at the close of business on the fifth (5th) day preceding the date of mailing. Payment of interest on the 1996 Bonds may, at the option of any owner of 1996 Bonds in an aggregate principal amount of at least $1,000,000, be transmitted by wire transfer to such owner to the bank account number on file with the Paying Agent as of the Record Date upon written request therefor by the holder thereof for the appropriate interest payment date. If the date for payment of the principal of, premium, if any, or interest on the 1996 Bonds shall be a Saturday, Sunday, legal holiday or a day on which the banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday or legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of payment. The 1996 Bonds may be issued or exchanged for 1996 Bonds in coupon form, payable to bearer, in such form and with such attri- butes as the Issuer may provide by supplemental resolutions, upon receipt of an opinion from a nationally recognized bond counsel that such issuance or exchange will not cause interest on the 1996 Bonds to be includable in gross income of the Holder for federal income tax purposes. SECTION 7. __ EXECUTIONOF BONDS. The 1996 Bonds shall be executed in the name of the Issuer by its City Manager, counter- signed by its Mayor- Commissioner and attested to by its City Clerk, and its official seal or a facsimile thereof shall be affixed thereto or reproduced thereon. The 1996 Bonds shall be approved as to form and legal sufficiency by the City Attorney of the Issuer. The facsimile signatures of such officers may be imprinted or reproduced on the 1996 Bonds. The Certificate of Authentication of the Bond Registrar, hereinafter described, shall appear on the 1996 Bonds, and no 1996 Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this ordinance unless such certificate shall have been duly executed on such 1996 Bond. The authorized signature for the Bond Registrar shall at all times be a manual signature. In case any officer whose signature shall appear on any 1996 Bonds shall cease to be such officer before the delivery of such Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such 7 _ 96 delivery. Any 1996 Bonds may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bonds shall hold the proper office with the Issuer, although at the date of enactment of this Ordinance such person may not have held such office or may not have been so authorized. SECTION 8. NEGOTIABILITY AND REGISTRATION. (A) NEGOTIABILITY. The 1996 Bonds shall be and shall have all of the qualities and incidents of negotiable instruments under the Uniform Commercial Code - Investment Securities of the State of Florida, and each successive Holder, in accepting any of the 1996 Bonds shall be conclusively deemed to have agreed that such Bonds shall be and have all of the qualities and incidents of negotiable instruments under the Uniform Commercial Code - Investment Securities of the State of Florida. (B) REGISTRATION AND TRANSFER. There shall be a Bond Regis- trar for the 1996 Bonds which shall be a bank or trust company located within or without the State of Florida. The Bond Registrar shall maintain the registration books of the Issuer and be respon- sible for the transfer and exchange of the 1996 Bonds. The Issuer shall, prior to the proposed date of delivery of the 1996 Bonds, by resolution designate the bank to serve as a Bond Registrar and Paying Agent. The Bond Registrar shall maintain the books for the registration of the transfer and exchange of the Bonds in compli- ance with an agreement to be executed between the Issuer and such bank as Bond Registrar on or prior to the date of delivery of the 1996 Bonds. Such agreement shall set forth in detail the duties, rights and responsibilities of the parties thereto. The 1996 Bonds may be transferred upon the registration books, upon delivery to the Registrar, together with written instructions as to the details for the transfer of such 1996 Bonds, along with the social security or federal employer identification number of such transferee and, if such transferee is a trust, the name and social security or federal employer identification numbers of the settlor and beneficiaries of the trust, the date of the trust and the name of the trustee. No transfer of any 1996 Bond shall be effective until entered on the registration books maintained by the Registrar. In all cases of the transfer of the 1996 Bonds, the Registrar shall enter the transfer of ownership in the registration books and shall authenticate and deliver in the name of the transferee or transferees a new fully registered 1996 Bond or 1996 Bonds of authorized denominations of the same maturity and interest rate for the aggregate principal amount which the Registered Owner is entitled to receive at the earliest practicable time in accordance with the provisions of this Ordinance. Any 1996 Bond or Bonds shall be exchangeable for a 1996 Bond or Bonds of the same maturity and interest rate, in any authorized denomination, but in a prim B cipal amount equal to the unpaid principal amount of the 1996 Bond or Bonds presented for exchange. Bonds to be exchanged shall be surrendered at the principal office of the Registrar, and the Registrar shall deliver in exchange therefor the 1996 Bond or Bonds which the Bondholder making the exchange shall be entitled to receive. The Issuer or the Registrar may charge the Registered Owner of such 1996 Bond for every such transfer or exchange an amount sufficient to reimburse them for their reasonable fees and for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange, and may require that such charge be paid before any such new 1996 Bond shall be delivered. All 1996 Bonds delivered upon transfer or exchange shall bear interest from such date that neither gain nor loss in interest shall result from the transfer or exchange. All 1996 Bonds presented for transfer, exchange, redemption or payment (if so required by the Issuer), shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Issuer and the Registrar duly executed by the Registered owner or by his duly authorized attorney. SECTION 9. BONDS MUTILATED DESTROYED, STOLEN _ORLOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion issue and deliver a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond-or in lieu of and substi- tution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer proof of his ownership thereof and satisfac- tory indemnity and complying with such other reasonable regulations and conditions as the Issuer may prescribe and paying such expenses as the Issuer may incur. All Bonds so surrendered shall be canceled by the Registrar for the Bonds. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same, upon being indemnified as afore- said, and if such Bonds be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this section shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on the source and security for payment from the funds, as herein- after pledged, to the same extent as all other Bonds issued hereunder. SECTION ld. BOOK _ENTRY-SYSTEM. Notwithstanding the provi- sions of Sections 7j 8 and 9 hereof, the Issuer may, at its option, 9 prior to the date of issuance of the 1996 Bonds, elect to use an immobilization system or pure book-entry system with respect to issuance of such 1996 Bonds, provided adequate records will be kept with respect to the ownership of such Bonds issued in book-entry form or the beneficial ownership of bonds issued in the name of a nominee. As long as any Bonds are outstanding in book-entry form the provisions of Sections 7, 8 and 9 of this ordinance shall not be applicable to such 1996 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 1996 Bonds. SECTION 11. PROVISIONS FOR REDEMPTION. The 1996 Bonds shall be subject to redemption prior to their maturity, at the option of the Issuer, at such times and in such manner as shall be fixed by resolution of the Issuer duly adopted prior to or at the time of sale of the 1996 Bonds. Notice of such redemption will be given by the Registrar (who shall be the Paying Agent for the 1996 Bonds, or such other person, firm or corporation as may from time to time be designated by the Issuer as the Registrar for the 1996 Bonds) by mailing a copy of the redemption notice by first-class mail (postage prepaid) not more than thirty (30) days and not less than fifteen (15) days prior to the date fixed for redemption to the Registered Owner of each 1996 Bond to be redeemed in whole or in part at the address shown on the registration books. Failure to give such notice by mailing to any Registered Owner of Bonds, or any defect therein, shall not affect the validity of any proceeding for the redemption of other Bonds. All 1996 Bonds or portions thereof so called for redemption will cease to bear interest after the specified redemp- tion date provided funds for their redemption are on deposit at the place of payment at that time. Upon surrender of any 1996 Bond for redemption in part only, the Issuer shall issue and deliver to the Registered Owner thereof, the costs of which shall be paid by the Registered Owner, a new 1996 Bond or 1996 Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion surrendered. Whenever any 1996 Bonds shall be delivered to the Bond Registrar for cancellation, upon payment of the principal amount thereof, or for replacement, transfer or exchange, such 1996 Bonds shall be canceled and, upon request of the Issuer, destroyed by the Bond Registrar. Counterparts of the certificate of destruction evidencing any such destruction shall be furnished to the Issuer. SECTION 12. FORM.OF THE 1996 BONDS. The text of the 1996 Bonds shall be in substantially the following form with such omissions, insertions and variations as may be necessary and desirable and authorized and permitted by this ordinance or by any 10 C i subsequent ordinance or resolution adopted prior to the issuance thereof: (Form of 1996 Bond) No. UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF CLEARWATER GAS SYSTEM REVENUE REFUNDING BOND, SERIES (to be determined] Dated Rate of Interest Maturity Date Date Cusiy Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS, that the City of Clearwater, Florida (hereinafter called "City ") , for value received, hereby promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date specified above, the Principal Amount shown above solely from the revenues hereinafter mentioned, and to pay solely from such revenues, interest on said sum from the 'Dated Date of this Bond or from the most recent interest payment date to which interest has been paid, at the rate of interest per annum set forth above until payment of such sum, such interest being payable , and semi- annually thereafter on the first day of and the first day of of each year. The principal 1 of and premium, if any, on thi� s are payable upon presentation and surrender here- of on the date fixed for maturity or redemption at the principal office of (the "Paying Agent ") in Florida, or at the office designated for such payment of any successor thereof. The interest on this Bond, when due and payable, shall be paid by check or draft mailed to the ` rson in whose name this Bond is registered, at his address as it appears on the books and records of the Bond Registrar, at the close of business on the 15th day of the month (whether or not a business day) next preceding the interest payment date (the "Record Date"), irrespective of any transfer of this Bond subsequent to such Record Date and prior to such interest payment date, unless the city shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name such Bond is registered at the close of business on a special record date for the payment of defaulted interest as established by 11 e� notice mailed by the Registrar to the Registered Holder of the Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the person in whose name such Bond is registered at the close of business on the fifth (5th) day preceding the date of mailing. Payment of interest on the Bonds may, at the option of any owner of Bonds in an aggregate principal amount of at least $1,000,000, be transmitted by wire transfer to such owner to the bank account number on file with the Paying Agent as of the Record Date upon written request therefor by the holder thereof for the appropriate interest payment date. All amounts due hereunder shall be payable in any coin or currency of the United States, which is, at the time of payment, legal tender for the payment of public or private debts. This Bond is one of a duly authorized issue of Bonds in the aggregate principal amount of $ of like date,-tenor and effect, except as to number, installments, maturity and inter- est rate, issued to finance the cost of advance refunding the Gas System Revenue Bonds, Series 1991, pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, and other applicable provisions of law (the "Act "), and Ordinance No. 5118 -91, duly enacted by the Issuer on August 15, 1991, as supplemented by Ordinance No. -96, duly enacted by the Issuer on , 1996, as amended and supplemented (herein - after collectively called the "Ordinance "), and is subject to all the terms and conditions of such Ordinance. It is provided in the Ordinance that the Bonds of this issue will rank on a parity with the outstanding Bonds of an issue of Gas System Revenue Bonds, Series 1991, dated September 1, 1991 which are not refunded by the Bonds, the Gas System Revenue Bonds, Series 1994A, dated September 1, 1994, and the Gas System Revenue Bonds, Series 1996A, dated (July 1], 1996, of the Issuer (the "Parity Bonds "). This Bond and the Parity Bonds are payable solely from and secured by a first and prior lien upon and pledge of the Net Revenues, as defined in the Ordinance, which consists of the net revenues derived by the City from the operation of the System (the "Net Revenues ") in the manner provided in the Ordinance. This Bond does not constitute an indebtedness, liability, general or moral obligation, or a pledge of the faith, credit or taxing power of the City, the State of Florida or any political subdivision thereof, within the meaning of any constitutional, statutory or charter provisions. Neither the State of Florida nor any political sub- division thereof, nor the City shall be obligated (1) to levy ad valorem taxes on any property to pay the principal of the Bonds, the interest thereon or other costs incident thereto oT (2) to pay the same from any other funds of the City, except from the Net Revenues, in the manner provided herein. It is further agreed between the City and the Registered Holder of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien upon the System, or any part thereof, or on any other property 12 J63o-el of the City, but shall constitute a first and prior lien only on the Net Revenues, in the manner provided in the ordinance. (INSERT REDEMPTION PROVISIONS) Bonds in denominations greater than $5,000 shall be deemed to be an equivale- number of Bonds of the denomination of $5,000. In the event a Boca is of a denomination larger than $5,000, a portion of such may be redeemed, but Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof. In the event any of the Bonds or portions thereof are called for redemption as aforesaid, notice thereof identifying the Bonds or portions thereof to be redeemed will be given by the Registrar (who shall be the paying agent for the Bonds, or such other person, firm or corporation as may from time to time be designated by the City as the Registrar for the Bonds) by mailing a copy of the redemption notice by first -class mail (postage prepaid) not more than thirty (30) days and not less than fifteen (15) days prior to the date fixed for redemption to the Registered Holder of each Bond to be redeemed in whole or in part at the address shown on the regis- tration books. Failure to give such notice by mailing to any Registered Holder of Bonds, or any defect therein, shall not affect . the validity of any proceeding for the redemption of other Bonds. All Bonds so called for redemption will cease to bear interest after the specified redemption date provided funds for their redemption are on deposit at the place of payment at that time. Upon surrender of any Bond for redemption in part only, the City shall issue and deliver to the Registered Holder thereof, the costs of which shall be paid by the Registered Holder, a new Bond or Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion surrendered. If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the city where the corporate trust office of the paying agent is located are autho- rized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the nominal date of payment. (To be inserted where appropriate on face of bond: "Reference is hereby made to the further provisions of this Bond set forth on the reverse side hereof, and such further provisions shall for all purposes have the same effect as if set forth on this side.'$) in and by the Ordinance, the City has covenanted and agreed with the Registered Folders of the Bonds of this issue that it will fix, establish, revise from time to tine whenever necessary, main- tain and collect always, such fees, rates, rentals and other charges for the use of the product, services and facilities of the 13 e System which will always provide revenues in each year sufficient to pay, and out of such funds pay, 100% of all costs of operation and maintenance of the System in such year and all reserve and other payments provided for in the Ordinance and 125% of the bond service . requirement due in such year on the Bonds of this issue, and on all other obligations payable on a parity therewith, and that such fees, rates, rentals and other charges shall not be reduced so as to be insufficient to provide adequate revenues for such purposes. The City has entered into certain further covenants with the Holders of the Bonds of this issue for the terms of which reference is made to the Ordinance. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed prece- dent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and Constitution of the State of Florida applicable thereto, and that the issuance of the Bonds of this issue does not violate any constitutional or statutory limitations or provisions. This Bond is and has all the qualities and incidents of a negotiable instrument under the Uniform Commercial Code - Investment Securities of the State of Florida. The Bonds are issued in the form of fully registered bonds without coupons in denominations of $5,000 or any integral multiple of $5,000. Subject to the limitations and upon payment of the charges provided in the Ordinance, Bonds may be exchanged for a like aggregate principal amount of Bonds of the same maturity of other authorizers denominations. This Bond is transferable by the ]Registered Holder hereof in person or by his attorney duly autho- rized in writing, at the above - mentioned office of the Registrar, but only in the manner, subject to the limitations and upon payment of the charges provided in the Ordinance, and upon surrender and cancellation of this Bond. Upon such transfer a new Bond or Bonds of the same maturity and of authorized denomination or denomina- tions, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. Bonds may be transferred upon the registration books upon delivery to the Registrar of the Bonds, accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Registrar, duly executed by the Registered Molder of the Bonds to be trans- ferred or his attorney -in -fact or legal representative, containing written instructions as to the details of the transfer of such Bonds, along with the social security number or federal employer identification number of such transferee and, if such transferee is a trust, the name and social security or federal employer iden- tification numbers of the settlor and beneficiaries of the trust, the federal employer identification number and date of the trust and the name of the trustee. in all cases of the transfer of a 'Bond, the Registrar shall, enter the transfer of ownership in the registration books and shall authenticate and deliver in the nave 14 of the transferee or transferees a new fully registered Bond or Bonds of authorized denominations of the same Maturity Date and Rate of Interest for the aggregate principal amount which the Registered Holder is entitled to receive at the earliest practi- cable time in accordance with the provisions of the Ordinance. The City or the Registrar may charge the Registered Holder of such Bond for every such transfer or exchange of a Bond an amount sufficient to reimburse them for their reasonable fees and any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange, and may require that such charge be paid before any such new Bond shall be delivered. The City may deem and treat the Registered Holder hereof as the absolute owner hereof (whether or not this Bond shall be over - due) for the purpose of receiving payment of or on account of prin- cipal hereof and interest due hereon and for all other purposes, and the City shall not be affected by any notice to the contrary. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordi- nance until the certificate of authentication hereon shall have been executed by the Bond Registrar. IN WITNESS WHEREOF, the City of Clearwater, Florida, has issued this Bond and has caused the same to be executed by the manual or facsimile signature of its City Manager and countersigned by the manual or facsimile signature of its Mayor - Commissioner, and its corporate seal or a facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, and attested by the manual or facsimile signature of its City Clerk, as of the Dated Date. CITY OF CLEARWATER, FLORIDA (SEAL) ATTEST: City Clerk is City Manager Mayor - Commissioner APPROVED AS TO FORM AND LEGAL SUFFICIENCY: ad City Attorney CERTIFICATE OF AUTHENTICATION OF BOND REGISTRAR This Bond is one of the Bonds of the issue described in the within - mentioned Ordinance. �r BY Authorized Signature Date of Authentication The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN CON - as tenants in common UNIF TRANSFERS TO MIN ACT - TEN ENT as tenants by the entireties (Cust.) JT TEN - as joint tenants Custodian for with right of sur- (Minor) vivorship and not as under Uniform Transfers to tenants in common Minors Act of (State) Additional abbreviations may also be used though not in list above. 16 ASSIGNMENT FOR VALUE RECEIVED, the undersigned (the "Transferor "), hereby sells, assigns and transfers unto (Please insert name and Social security or Federal Employer Identification number of assignee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ('the "Transferee ") as attorney to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature guaranteed: NOTICE: Signature(s) must be guaranteed by a member of the New York Stock Exchange or a commercial bank or a trust company. NOTICE: No transfer will be registered and no new Bond will be issued in the name of the Transferee, unless the signa- ture(s) to this assignment corresponds with the name as it appears upon the face of the within Bond in every particu- lar, without alteration or enlargement or any change what- ever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. [End of Form of Bond] 17 030 - iE/ SECTION 13. APPLICATION OF PROVISIONS OF ORIGINAL ORDINANCE. The 1996 Bonds, herein authorized, shall for all purposes (except as herein expressly provided) be considered to be Additional Parity Obligations issued under the authority of the Original Ordinance, and shall be entitled to all the protection and security provided therein for the Parity Bonds, and shall be in all respects entitled to the same security, rights and privileges enjoyed by the Parity Bonds. The covenants and pledges contained in the original Ordinance shall be applicable to the 1996 Bonds herein authorized in like manner as applicable to the Parity Bonds. The principal of and interest on the 1996 Bonds shall be payable from the Sinking Fund established in the original Ordinance on a parity with the Parity Bonds, and payments shall be made into such Sinking Fund by the Issuer in amounts fully sufficient to pay the principal of and interest on the Parity Bonds and the 1996 Bonds as such principal and interest become due. SECTION 14. APPLICATION OF 1996 BOND PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of any or all of the 1996 Bonds shall be applied by the Issuer as follows: (A) The accrued interest shall be deposited in the Interest Account in the Sinking Fund created in the Original Ordinance and shall be used only for the purpose of paying interest becoming due on the 1996 Bonds. (B) Unless provided from other funds of the Issuer on the date of issuance of any series of 1996 Bonds as set forth in Section 16(B) of the Original Ordinance, a sum equal to the Reserve Requirement for the 1996 Bonds shall be deposited in the subaccount in the Reserve Account in the Sinking Fund, herein created and established for the benefit of the 1996 Bonds, and shall be used only for the purposes provided therefor, or, if determined by subsequent resolution of the Issuer, a sum equal to the premium of a debt service reserve fund policy or surety provided in satisfac- tion of the Reserve Requirement for such series of 1996 Bonds. (C) Unless paid or reimbursed by the original purchasers of the 1996 Bonds, the Issuer shall pay all costs and expenses in connection with the preparation, issuance and sale of the 1996 Bonds. (D) A sum which, together with the other funds to be deposited pursuant to the Escrow Deposit Agreement, and the investment income to be derived therefrom, will be sufficient to pay, as of any date of calculation, the principal of, redemption premium, if any, and interest on the Refunded Bonds as the same shall become due and or redeemable, shall be deposited pursuant to the Escrow Deposit Agreement. 18 SECTION 15. SPECIAL OBLIGATIONS OF ISSUER. The 1996 Bonds shall be special obligations of the Issuer, payable solely from the Net Revenues as herein provided. The 1996 Bonds do not constitute an indebtedness, liability, general or moral obligation, or a pledge of the faith, credit or taxing power of the Issuer, the State of Florida or any political subdivision thereof, within the meaning of any constitutional, statutory or charter provisions. Neither the State of- Florida nor any political subdivision thereof nor the Issuer shall be obligated (1) to levy ad valorem taxes on any property to pay the principal of the 1996 Bonds, the interest thereon or other costs incident thereto, or (2) to pay the same from any other funds of the Issuer except from the Net Revenues, in the manner provided herein. The acceptance of the 1996 Bonds by the Holders from time to time thereof shall be deemed an agreement between the Issuer and such Holders that the Bonds and the indebt- edness evidenced thereby shall not constitute a lien upon the System, or any part thereof, or any other property of the Issuer, but shall constitute a first and prior lien only on the Net Reve- nues, in the manner hereinafter provided. The Net Revenues shall be immediately subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer. The payment of the principal of and the interest on the 1996 Bonds shall be secured forthwith equally and ratably by an irrevocable lien on the Net Revenues of the System, as defined herein, on a parity with the Parity Bonds and the Issuer does hereby irrevocably pledge such Net Revenues of the System to the payment of the principal of and the interest on the 1996 Bonds, for the reserves therefor and for all other required payments. SECTION 16. COVENANTS OF THE ISSUER. The provisions of Section 16 of the Original Ordinance shall be deemed applicable to this Ordinance and shall apply to the 1996 Bonds issued pursuant to this Ordinance as though fully restated herein. SECTION 17. AMENDING AND SUPPLEMENTING OF ORDINANCE WITHOUT CONSENT OF HOLDERS OF BONDS. Ta`Ae provisions of Section 17 of the Original Ordinance shall be deemed applicable to this Ordinance and shall apply to the 1996 Bonds issued pursuant to this Ordinance as though fully restated herein. SECTION 18. AMENDMENT OF ORDINANCE WITH CONSENT OF HOLDERS OF BONDS. The provisions of Section 18 of the Original Ordinance shall be deemed applicable to this Ordinance and shall apply to the 1996 Bonds issued pursuant to this Ordinance as though fully restated herein. 19 0M - �6 i `r= 1-IN SECTION 19. DEFEASANCE. The provisions of Section 19 of the Original Ordinance shall be deemed applicable to this Ordinance and shall apply to the 1996 Bonds issued pursuant to this Ordinance as though fully restated herein. SECTION 20. TAX COVENANTS. (A) The Issuer covenants with the Registered Owners of each series of Bonds that it shall not use the proceeds of such series of Bonds in any manner which would cause the interest on such series of Bonds to be or become includable in the gross income of the Registered Owner thereof for federal income tax purposes. (B) The Issuer covenants with the Registered Owners of each series of Bonds that neither the Issuer nor any person under its control or direction will make any use of the proceeds of such series of Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such series of Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and neither the Issuer nor any other person shall do any act or fail to do any act which would cause the interest on such series of Bonds to become includable in the gross income of the Registered Owner thereof for federal income tax purposes. (C) The Issuer hereby covenants with the Registered Owners of each series of Bonds that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Bonds from the gross income of the Registered Owner thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code. SECTION 21. GOVERNMENTAL REORGANIZATION. The provisions of Section 21 of the 67 iginal Ordinance shall be deemed applicable to this Ordinance and shall apply to the 1996 Bonds issued pursuant to this Ordinance as though fully restated herein. SECTION 22. COVENANTS WITH CREDIT FACILITY ISSUER. The Issuer may make such covenants as it may, in its sole discretion, determine to be appropriate with any credit Facility Issuer that shall agree to provide a Credit Facility that shall enhance the security or the value of the 1996 Bonds. Such covenants may be set forth in a resolution adopted prior to or simultaneously with the sale of the 1996 Bonds and shall have the same effect as if such covenants were set forth in full in this Ordinance. SECTION 23. PRELIMINARY OFFICIAL STATEMENT. The distribution of a Preliminary Official Statement relating to the 1996 Bonds is hereby approved in such form and substance as shall be approved by the Mayor and City Manager of the Issuer. The Mayor and the City Manager are hereby authorized to deem such Preliminary Official Statement as "final" within the meaning of Rule 15c-2-12 of the 20 V Securities and Exchange Commission, except for certain "permitted omissions" as defined in such rule. SECTION 24. SEVERABILITY. If any one or more of the cove- nants, agreements, or provisions of this Ordinance should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Ordinance or of the Bonds. SECTION 25. REPEAL OF INCONSISTENT INSTRUMENTS. All ordi- nances or resolutions, or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. SECTION 26. EFFECTIVE DATE. This Ordinance shall take effect immediately upon its enactment. PASSED ON FIRST READING May 16, 1996 PASSED ON SECOND AND FINAL READING June 6, 1996 AND ENACTED i Rita Garvey Mayor- Commissioner Attest: Cy hia E. Goudeau Cig Clerk Approved as to form and legal sufficiency: - a � Pamela . Akin City Attorney 21 1� � E f"� ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT, dated as of , 1996, by and between the CITY OF CLEARWATER, FLORIDA (the "Issuer "), and , a banking associa- tion organized under the laws of the [State of ) [United States of America], as Escrow Holder and its successors and assigns (the "Escrow Holder "); W I T N E S S E T H: WHEREAS, the Issuer has previously authorized and issued obli- gations, hereinafter defined as "Refunded Bonds ", as to which the Total Debt Service (as hereinafter defined) is set forth on Schedule A; and WHEREAS, the Issuer has determined to provide for payment of the Total Debt Service of the Refunded Bonds by depositing with the Escrow Holder an amount which together with investment earnings thereon is at least equal to such Total Debt Service; and WHEREAS, in order to obtain the funds needed for such purpose, the Issuer has authorized and is, concurrently with the delivery of this Agreement, issuing its Gas System Revenue Refunding Bonds, Series [To be determined], as defined herein; and WHEREAS, the execution of this Escrow Deposit Agreement and full performance of the provisions hereof shall defease and dis- charge the Issuer from the aforestated obligations; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Issuer and the Escrow Holder agree as follows: SECTION 1. Definitions. As used herein, the following terms mean: (a) "Agreement" means this Escrow Deposit Agreement. (b) "Annual Debt Service" means the interest and principal on the Refunded Bonds coming due in such year as shown on Schedule A attached hereto and made a part hereof. (c) "Bonds" means the $ city of Clearwater, Florida, Gas System Revenue Refunding Bonds, Series [to be determined], issued under the ordinance. (d) "Escrow Account" means the account hereby created and entitled Escrow Account established and held by the Escrow Holder pursuant to this Agreement, in which cash and investments will be held for payment of the principal of, premium, if any, and accrued interest on the Refunded Bonds as they become due and payable, (e) "Escrow Holder" means , having its primary corporate trust office in , , and its successors and assigns. (f) "Escrow Requirement" means, as of any date of calcula- tion, the sum of an amount in cash and principal amount of Federal Securities in the Escrow Account which together with the interest to become due on the Federal Securities will be sufficient to pay the Total Debt Service on the Refunded Bonds in accordance with Schedule A. (g) "Federal Securities" means any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed as to full and timely payment by, the United States of America, none of which permit redemption or prepayment prior to the dates on which such Federal Securities shall be applied pursuant to this Agreement. The term "Federal Securities" shall not include money market funds or mutual funds invested in obligations described in this definition. (h) "Issuer" means the City of Clearwater, Florida, and its successors and assigns. (i) "Ordinance" means Ordinance No. -96, enacted by the governing body of the Issuer on , 1996, as amended and supplemented, authorizing issuance.of the Bonds. (j) "Refunded Bonds" means the bonds outstanding of the Issuer's Gas System Revenue Bonds, Series 1991, dated September 1, 1991, which amy be redeemed prior to the maturity date thereof or which mature within 90 days of the date of issuance of the Bonds. (k) "Total Debt Service" means the sum of the principal, premium and interest remaining unpaid with respect to the Refunded Bonds in accordance with Schedule A attached hereto. SECTION 2. Deposit of Funds. The Issuer hereby deposits $ with the Escrow Holder for deposit into the Escrow Account, in immediately available funds, which funds the Escrow Holder acknowledges receipt of, to be held in irrevocable escrow by the Escrow Holder separate and apart from other funds of the Escrow Holder and applied solely as provided in this Agreement. $ of such funds are being derived from proceeds of the Bonds. $ of such funds are being derived from legally available funds of the issuer. The Issuer represents that such securities and funds are at least equal to the Escrow Requirement as of the date of such deposit. SECTION 3. Use and investment of Funds. The Escrow Holder acknowledges receipt of the sum described in Section 2 and agrees: (a) to hold the funds and investments purchased pursuant to this Agreement in irrevocable escrow during the term of this Agree- ment for the sole benefit of the holders of the Refunded Bonds; (b) to immediately invest $ of such funds derived from the proceeds of the Bonds in the Federal Securities set forth on Schedule C attached hereto and to hold such securities and $ of such funds in cash in accordance with the terms of this Agreement; (c) in the event the securities described on Schedule C cannot be purchased, substitute securities may be purchased with the consent of the Issuer but only upon receipt of verification from an independent certified public accountant that the cash and securities deposited will not be less than the Escrow Requirement and only upon receipt of an opinion of Bryant, Miller and Olive, P.A., that such securities constitute Federal Securities for purposes of this Agreement; (d) there will be no investment of funds except as set forth in this Section 3 and except as set forth in Section 5. SECTION 4. Payment of Bonds and Expenses. (a) Refunded Bonds. On the dates and in the amounts set forth on Schedule A, the Escrow Holder shall transfer to First Union National Bank of Florida, Jacksonville, Florida, the Paying Agent for the Refunded Bonds (the "Paying Agent "), in immediately available funds solely from amounts available in the Escrow Account, a sum sufficient to pay that portion of the Annual Debt Service for the Refunded Bonds coming due on such dates, as shown on Schedule A. (b) Expenses. On each of the due dates as shown on Schedule B, the Escrow Holder shall pay the portion of the expenses coming due on such date to the appropriate payee or payees designated on Schedule B or designated by separate certificate of the Issuer. (c) Surplus. After making the payments from the Escrow Account described in Subsection 4 (a) and (b) above, the Escrow Holder shall retain in the Escrow Account any remaining cash in the Escrow Account in excess of the Escrow Requirement until the termi- nation of this Agreement, and shall then pay any remaining funds to the Issuer. (d) Priority of Payments. The holders of the Refunded Bonds shall have an express first priority security interest in the funds and Federal Securities in the Escrow Account until such funds and 3 7P Federal Securities are used and applied as provided in this Agree- ment. SECTION 5. Reinvestment. (a) Except as provided in Section 3 and in this Section, the Escrow Holder shall have no power or duty to invest any funds held under this Agreement or to sell, transfer or otherwise dispose of or make substitutions of the Federal Securities held hereunder. (b) At the written request of the Issuer and upon compliance with the conditions hereinafter stated, the Escrow Holder shall sell, transfer or otherwise dispose of any of the Federal Securi- ties acquired hereunder and shall substitute other Federal Securi- ties and reinvest any excess receipts in Federal Securities. The Issuer will not request the Escrow Holder to exercise any of the powers described in the preceding sentence in any manner which, will cause interest on the Bonds to be included in the gross income of the holders thereof for purposes of Federal income taxation. The transactions may be effected only if (i) an independent certi- fied public accountant selected by the Issuer shall certify or opine in writing to the Issuer and the Escrow Holder that the cash and principal amount of Federal Securities remaining on hand after the transactions are completed will, assuming no reinvestment earn- ings, be not less than the Escrow Requirement, and (ii) the Escrow Holder shall receive an opinion from a nationally recognized bond counsel acceptable to the Issuer to the effect that the transac- tions, in and by themselves will not cause interest on such Bonds to be included in the gross income of the holders thereof for pur- poses of Federal income taxation and such substitution is in com- pliance with this Agreement. Subsection 4(c) above notwithstand- ing, cash in excess of the Escrow Requirement caused by substitu- tion of Federal Securities shall, as soon as practical be paid to the Issuer. Notwithstanding any provision of this Agreement to the contrary, no forward purchase agreement shall relating to the securities held hereunder shall be executed unless Moody's Investors Service, Inc. shall have confirmed that such agreement shall not adversely affect the rating, then outstanding, if any, on the Refunded Bonds. SECTION 6. Redemption or Acceleration of Maturity. The Issuer will not accelerate the maturity of, or exercise any option to redeem before maturity, any Refunded Bonds, except as set .forth on Schedule A attached hereto. SECTION 7. Indemnity. To the extent permitted by law, the Issuer hereby assumes liability for, and hereby agrees to indem- nify, protect, save and keep harmless the Escrow Holder and its respective successors, assigns, agents and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disburse- ments (including reasonable legal fees and disbursements) of what- soever kind and nature which may be imposed on, incurred by, or 4 asserted against at any time, the Escrow Holder (whether or not also indemnified against the same by the Issuer or any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Agreement, the establishment of the Escrow Account established hereunder, the acceptance of the funds and securities deposited therein, the pur- chase of the Federal Securities, the retention of the Federal Securities or the proceeds thereof and any payment, transfer or other application of funds or securities by the Escrow Holder in accordance with the provisions of this Agreement; provided, how- ever, that the Issuer shall not be required to indemnify the Escrow Holder against its own negligence or willful misconduct. In no event shall the Issuer be liable to any person by reason of the transactions contemplated hereby other than to the Escrow Holder as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Agreement. The Escrow Holder shall not be liable for any deficiencies in the amounts necessary to pay the Escrow Requirement. Furthermore, the Escrow Holder shall not be liable for the accuracy of the calcula- tion as to the sufficiency of moneys and the principal amount of Federal Securities and the earnings thereon to pay the Escrow Requirement. SECTIONS. Responsibilities of Escrow Holder. The Escrow Holder and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and deliv- ery of this Agreement, the establishment of the Escrow Account, the acceptance of the funds deposited therein, the purchase of the Federal Securities, the retention of the Federal Securities or the proceeds thereof or for any payment, transferor other application of moneys or securities by the Escrow Holder in accordance with the provisions of this Agreement or by reason of any non- negligent or non - willful act, omission or error of the Escrow Holder made in good faith in the conduct of its duties. The Escrow Holder shall, however, be responsible for its negligent or willful failure to comply with its duties required hereunder, and its negligent or willful acts, omissions or errors hereunder. The duties and obli- gations of the Escrow Holder may be determined by the express pro- _ visions of this Agreement. The Escrow Holder may consult with counsel, who may or may not be counsel to the Issuer, at the Issuer's expense and in reliance upon the opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Holder shall deem it necessary or desirable that a matter be proved or estab- lished prior to taking, suffering or omitting any action under -ais Agreement, such matter may be deemed to be conclusively establishes by a certificate signed by an authorized officer of the Issuer. SECTION 9, Resignation of Escrow Holder, The Escrow Holder may resign and thereby become discharged from the duties and obli- 5 -96 r gations hereby created, by notice in writing given to the Issuer, any rating agency then providing a rating on either the Refunded Bonds or the Bonds, and the Paying Agent for the Refunded Bonds not less than sixty (60) days before such resignation shall take effect. Such resignation shall not take effect until the appoint- ment of a new Escrow Holder hereunder. SECTION 10. Removal of Escrow Holder. (a) The Escrow Holder may be removed at any time by an instrument or concurrent instruments in writing, executed by the holders of not less than fifty -one percentum (51 %) in aggregate principal amount of the Refunded Bonds then outstanding, such instruments to be filed with the Issuer, and notice in writing given by such holders to the original purchaser or purchasers of the Bonds and published by the Issuer once in a newspaper of general circulation in the territorial limits of the Issuer, and in a daily newspaper or financial journal of general circulation in the City of New York, New York, not less than sixty (60) days before such removal is to take effect as stated in said instrument or instruments. A photographic copy of any instrument filed with the Issuer under the provisions of this paragraph shall be delivered by the Issuer to the Escrow Holder. (b) The Escrow Holder may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provisions of this Agreement with respect to the duties and obligations of the Escrow Holder by any court of competent jurisdiction upon the application of the Issuer or the holders of not less than five percentum (5 %) in aggregate principal amount of the Bonds then out - standing, or the holders of not less than five percentum (5 %) in aggregate principal amount of the Refunded Bonds then outstanding. (c) The Escrow Holder may not be removed until a successor Escrow Holder has been appointed in the manner set forth herein. SECTION 11. Successor Escrow Holder. (a) If at any time hereafter the Escrow Holder shall resign, be removed, be dissolved or otherwise become incapable of acting, or shall be taken over by any governmental official, agency, department or board, the position of Escrow Holder shall thereupon become vacant. If the position of Escrow Holder shall become vacant for any of the foregoing reasons or for any other reason, the Issuer shall immediately appoint an Escrow Holder to fill such vacancy and upon such appointment, all assets held hereunder shall be transferred to such successor. The issuer shall either (i) pub- lish notice of any such appointment made by it once in each week for four (4) successive weeks in a newspaper of general circulation published in the territorial limits of the Issuer and in a daily newspaper or financial journal of general circulation in the City 6 1.: of New York, New York, or (ii) mail a notice of any such appoint- ment made by it to the Holders of the Refunded Bonds within thirty (30) days after such appointment. (b) At any time within one year after such vacancy shall have occurred, the holders of a majority in principal amount of the Bonds then outstanding or a majority in principal amount of the Refunded Bonds then outstanding, by an instrument or concurrent instruments in writing, executed by either group of such bond- holders and filed with the governing body of the Issuer, may appoint a successor Escrow Holder, which shall supersede any Escrow Holder theretofore appointed by the Issuer. Photographic copies of each such instrument shall be delivered promptly by the Issuer, to the predecessor Escrow Holder and to the Escrow Holder so appointed by the bondholders. In the case of conflicting appointments made by the bondholders under this paragraph, the first effective appointment made during the one year period shall govern. (c) If no appointment of a successor Escrow Holder shall be made pursuant to the foregoing provisions of this Section, the holder of any Refunded Bonds then outstanding, or any retiring Escrow Holder may apply to any court of competent jurisdiction to appoint a successor Escrow Holder. Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Escrow Holder. (d) Any corporation or association into which the Escrow Holder may be converted or merged, or with which it may be consoli- dated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, ipso facto, shall be and become successor Escrow Holder hereunder and vested with all the trust, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any parties hereto, anything herein to the contrary notwithstanding, provided such successor shall have reported total capital and surplus in excess of $15,000,000, pro- vided that such successor Escrow Holder assume in writing all the trust, duties and responsibilities of the Escrow Holder hereunder. SECTION 12. Payment to Escrow Holder. The Escrow Holder hereby acknowledges that it has agreed to accept compensation under the Agreement in the sum of $ , payable ,, for services to be performed by the Escrow Holder pursuant to th s Agreement, plus out -of- pocket expenses to be reimbursed at cost from legally available funds of the Issuer. The Escrow Holder shall have no lien or claim against funds in the Escrow Account for payment of obligations due it under this Section. 7 0640 �4�0 r U SECTION 13. Term. This Agreement shall commence upon its execution and delivery and shall terminate when the Refunded Bonds have been paid and discharged in accordance with the proceedings authorizing the Refunded Bonds, except as provided in Section 7. SECTION 14. Severability. If any one or more of the cove - nants or agreements provided in this Agreement on the part of the Issuer or the Escrow Holder to be performed should be determined by a court of competent'jurisdiction to be contrary to law, notice of such event shall be sent to Moody's Investors Service at the address set forth in Section 15, but such covenant or agreements herein contained shall be null and void and shall in no way affect the validity of the remaining provisions of this Agreement. SECTION 15. Amendments to this Agreement. This Agreement is made for the benefit of the Issuer and the holders from time to time of the Refunded Bonds and the Bonds and it shall not be repealed, revoked, altered or amended in whole or in part without the written consent of all affected holders, the Escrow Holder and the Issuer; provided, however, that the Issuer and the Escrow Holder may, without the consent of, or notice to, such holders, enter into such agreements supplemental to this Agreement as shall not adversely affect the rights of such holders and as shall not be inconsistent with the terms and provisions of this Agreement, for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; (b) to grant to, or confer upon, the Escrow Holder, for the benefit of the holders of the Bonds and the Refunded Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Holder; and (c) to subject to this Agreement additional funds, securities or properties. The Escrow Holder shall, at its option, be entitled to request at the Issuer's expense and rely exclusively upon an opinion of nationally recognized attorneys on the subject of municipal bonds acceptable to the Issuer with respect to compliance with this Section, including the extent, if any, to which any change, modifi- cation, addition or elimination affects the rights of the holders of the Refunded Bonds or that any instrument executed hereunder complies with the conditions and provisions of this Section. Prior written notice of such amendments, together with proposed copies of such amendments shall be provided to Moody's Investors Service, Inc., Public Finance Rating Desk /Refunded Bonds, 99 Church Street, New York, New York 10007. g 7 (0 SECTION 16. Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. SECTION 17. Governing Law. This Agreement shall be construed under the laws of the State of Florida. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers and their corporate seals to be hereunto affixed and attested as of the date first above written. (SEAL) ATTEST: City Clerk Approved as to form and legal sufficiency: City Attorney CITY OF CLEARWATER, FLORIDA. Mayor- Commissioner [ESCROW HOLDER] (SEAL) By Title: ATTEST: Title: 9 ■