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Ordinance No. 15-96-8vAUTHORIZING ORDINANCE No. 15-96-8 THE CITY OF ATLANTIC BEACH, FLORIDA i Dated as of March 11, 1996 relating to Utilities System Revenue Bonds Series 1996 • to TABLE OF CONTENTS Page ARTICLE I STATUTORY AUTHORITY, DEFINITIONS, AND FINDINGS SECTION 1.01. AUTHORITY FOR THIS ORDINANCE ..... ... . ..... .. .. 1 SECTION 1.02. DEFINITIONS .................... . .... ..... .. .. 1 SECTION 1.03. INTERPRETATION ................. ... . .. . . . . . . . 13 SECTION 1.04. FINDINGS ......... . . . . . . . .. .... . . . . . . . . . . . . . . 13 SECTION 1.05. ORDINANCE CONSTITUTES A CONTRACT . . .. . . . . . . . . . . 14 SECTION 1.06. ORDINANCE CAPTIONS AND HEADINGS ... . .. . . . . . . . . . 14 ARTICLE II DESCRIPTION, DETAILS AND FORM OF BONDS SECTION 2.01. 1996 PROJECT . ....... .. . . .... . . . . .. . .. . . . . . . . .. 15 SECTION 2.02. 1996 BONDS .......... ... .......... . .. .. . .. . . .. 15 SECTION 2.03. DESCRIPTION OF BONDS . .. .. ... .... .... .. . . .. . . . 15 SECTION 2.04. EXECUTION OF BOND .. . .. . . . .. .. .. . . . . . . . .. .. .. 15 SECTION 2.05. NEGOTIABILITY AND REGISTRATION .. .. . . .. . . . . . . . . . 16 SECTION 2.06. BONDS MUTILATED, DESTROYED, STOLEN OR LOST . . . . . . 17 SECTION 2.07. TEMPORARY BONDS ............. . . ... .. . . . . . . . . 17 SECTION 2.08. BOND ANTICIPATION NOTES ....... . . ... . . . . . . . . . . . 18 SECTION 2.09. PROVISIONS FOR REDEMPTION ... ...... . .. . . . . . . . .. 18 SECTION 2.10. FORM OF BONDS ................ . . ... . . . . . . . . . . 19 TABLE OF CONTENTS 40 (Continued) Paye ARTICLE III BONDS NOT GENERAL OBLIGATION OF CITY; PLEDGE OF REVENUES AND APPLICATION THEREOF SECTION 3.01. BONDS NOT GENERAL OBLIGATION OF CITY .. . . . . . . . . . 19 SECTION 3.02. BONDS SECURED BY PLEDGED REVENUES . .... ... .. . . . 19 SECTION 3.03. APPLICATION OF PLEDGED REVENUES ... . . .. .. . . .. .. 20 (A) CREATION OF FUNDS AND ACCOUNTS .... ... . ..... .. . .. 20 (B) MAINTENANCE OF FUNDS AND ACCOUNTS . .. . .. . . . .. .. . 20 (C) APPLICATION OF GROSS REVENUES ...... . .. . . . . . . . . . . . 21 (D) APPLICATION OF CAPITAL FACILITIES CHARGES . . . . . . . . . . 22 (E) APPLICATION OF SPECIAL ASSESSMENTS ... . .. . . . . . .. . . . 22 (F) USE OF MONEYS ON DEPOSIT IN FUNDS AND ACCOUNTS . .. . 22 (G) RESERVE ACCOUNT ............................... 24 (H) INVESTMENT OF MONEYS IN FUNDS AND ACCOUNTS . . . .. .. 25 (J) UNCLAIMED MONEYS ........... ......... ... ... 26 40 ARTICLE IV APPLICATION OF 1996 BOND PROCEEDS; 1996 PROJECT ACCOUNT SECTION 4.01. APPLICATION OF 1996 BOND PROCEEDS . ... . . . . . . . . . .. 26 SECTION 4.02. 1996 PROJECT ACCOUNT .......................... 26 ARTICLE V COVENANTS OF THE CITY; REMEDIES SECTION 5.01. COVENANTS OF THE CITY .... ..... . . ... . .. .. .. . . . 27 (A) RATE COVENANT .................. . ... . . .. . ... . .. 27 (B) OPERATION AND MAINTENANCE ...... . . ... . .. .. . . . . .. 28 (C) INSURANCE ..................................... 29 (D) ANNUAL BUDGET; BOOKS AND RECORDS; AUDIT . . .. .. . . . . 29 (E) SALE OF THE SYSTEM .............. . ... . . . . . . .. . . . 29 (F) ISSUANCE OF OTHER OBLIGATIONS PAYABLE OUT OF REVENUE ...................................... 30 (G) ISSUANCE OF ADDITIONAL PARITY BONDS . . . . . .. . . . . . . . 31 to i r� TABLE OF CONTENTS (Continued) Page (H) SERVICES RENDERED TO THE CITY; NO PREFERENTIAL RATES......................................... 34 (I) ENFORCEMENT OF COLLECTIONS ........ .... .... .. ... 35 (J) NO COMPETING FACILITIES; SEPARATE SYSTEMS . .. .... .. . 35 (K) TAX COMPLIANCE ........ ............... .. ... .. .. 35 (L) PAYMENT ...................................... 36 SECTION 5.02. EVENTS OF DEFAULT ............ . . .. . . .. .... . . .. 36 SECTION 5.03. REMEDIES ..................... ... ... ... .... .. 36 SECTION 5.04. CONTINUING DISCLOSURE ......... . .. ... .. .. . .. .. 38 (A) PROVISION OF ANNUAL INFORMATION; AUDITED FINANCIAL STATEMENTS; AND NOTICES OF EVENTS .... . .. ... .. .. .. 38 (B) ANNUAL INFORMATION ............ . . ... . . . . . . . . . .. 38 (C) SPECIFIED EVENTS ................................ 38 (D) AMENDMENTS ................... . . ... . . . .. . . . . .. 38 (E) REMEDY FOR BREACH ............................. 39 (F) NON -APPROPRIATION ................ .... ... .. .. .. . 39 (G) TERMINATION . ........................... .. .. . .. 39 (H) SEPARATE BOND REPORT NOT REQUIRED . .. ... . .. .. . . . . . 39 EXHIBIT A - BOND FORM EXHIBIT B - 1996 PROJECT to ORDINANCE NO. 15-96-8 AN ORDINANCE OF THE CITY OF ATLANTIC BEACH, FLORIDA, SUPPLEMENTING ORDINANCE NO. 15-95-7 OF THE CITY WHICH AUTHORIZED THE ISSUANCE OF NOT EXCEEDING $24,500,000 UTILITIES SYSTEM REVENUE BONDS, SERIES 1996; PROVIDING FOR CERTAIN DEFINITIONS; PROVIDING FOR CERTAIN FISCAL DETAILS OF SUCH BONDS AND FOR DELEGATION TO THE CITY MANAGER OF THE AUTHORITY TO FIX THE REMAINING DETAILS WITHIN CERTAIN PARAMETERS; PROVIDING FOR THE MANNER OF EXECUTION, REGISTRATION, AND EXCHANGE OF SUCH BONDS; PROVIDING FOR THE USE AND APPLICATION OF CERTAIN PLEDGED REVENUES; PROVIDING FOR THE RIGHTS AND REMEDIES OF, AND MAKING CERTAIN COVENANTS AND AGREEMENTS WITH, THE REGISTERED OWNERS OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COMMISSION AND ON BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH, FLORIDA: ARTICLE I STATUTORY AUTHORITY, DEFINITIONS, AND FINDINGS SECTION 1.01. AUTHORITY FOR THIS ORDINANCE. This Ordinance is enacted pursuant to the provisions of Chapter 166, Part II, Florida Statutes, the Bond Ordinance (as herein defined), and other applicable provisions of law (the "Act"), and is supplemental to the Bond Ordinance. SECTION 1.02. DEFINITIONS. Capitalized terms used in this Ordinance shall have the following meanings, unless the context clearly requires otherwise. Words importing singular number shall include the plural number in each case and vice versa, and words of one gender shall be deemed to include the other genders. In this Ordinance: "Act" shall mean Chapter 166, Florida Statutes; the Bond Ordinance; and other applicable provisions of law. "Accounting Principles" means generally accepted accounting principles and practices applicable to governmental entities, including those applicable to governmentally owned and operated utility systems such as the System. "Additional Parity Bonds" means any obligations hereafter issued pursuant to the terms and conditions of the Ordinance and payable from the Pledged Revenues on a parity with the 1996 Bonds, originally issued under this Ordinance. "Administrative Expenses" means the expenses of the various departments of the City properly allocable to the System or the Project, as the case may be, under Accounting Principles. "Amortization Installment" shall mean, with respect to each maturity of Term Bonds, the principal amounts (or Compounded Amounts) of such Term Bonds to be retired in consecutive years by mandatory redemption from the applicable Bond Amortization Account within the Sinking Fund or, in the year in which such Term Bonds are stated to mature, through payment at maturity, provided that (i) each such installment shall be deemed to be due on the Interest Payment Date or Principal Maturity Date of each applicable year as is fixed by resolution or ordinance of the Commission and (ii) the aggregate of such installments for each maturity shall equal the aggregate principal amount (or, if applicable, the Compounded Amounts at maturity) of Term Bonds of such maturity delivered on original issuance. "Annual Information" has the meaning specified in Section 5.04(B) hereof. "Authorized Investments" means any obligations, deposit certificates, or other evidences of indebtedness legal for the investment of funds of the City pursuant to the laws of the State, subject to such restrictions or limitations thereon as may be imposed by ordinance or resolution of the City (including any formal investment policy established by the City) or by the terms of any Credit Facility. "Banking Institution" means a bank or trust company incorporated and doing business under the laws of the United States (including laws relating to the District of Columbia) or of 60 any State, a substantial part of the business of which consists of receiving deposits and making loans and discounts, or of exercising fiduciary powers similar to those permitted to national banks under authority of the Comptroller of the Currency, and which is subject by law to supervision and examination by State or Federal authority having supervision over banking institutions. "Bond Counsel" shall mean a firm of attorneys which is nationally recognized as being experienced in matters relating to the validity of, and the state and federal income tax treatment of interest on, obligations of states and their political subdivisions and whose opinions are generally accepted by purchasers of such obligations, as selected by the City. "Bond Ordinance" shall mean Ordinance No. 15-95-7, enacted by the City Commission on November 13, 1995, as supplemented by this Ordinance and as further amended and supplemented from time to time. "Bond Registrar" shall mean the Banking Institution designated by the City to maintain the registration books required to be maintained hereunder and to serve as Paying Agent for purposes of making payments of principal of and interest on the Bonds to the Registered Owners; provided that such Banking Institution shall have trust powers. "Bond Year" means the period beginning on the day immediately following each Principal Maturity Date and ending on the next succeeding Principal Maturity Date or any other annual period designated by the City. 3248/ATL16.003/R-AUTH-RESOLUTION.6 2 March 12, 1996 2:28pm "Bonds" shall mean the Series 1996 Bonds and any Additional Parity Bonds issued 40 pursuant to the terms and conditions of the Bond Ordinance. "Budgeted Renewal and Replacement Amount" means the amount specified in the annual budget of the City to be necessary to be deposited into the Renewal and Replacement Fund so that there shall be on deposit in such fund at the beginning of the subsequent Fiscal Year an amount equal to the Renewal and Replacement Fund Requirement. "Business Day" means any day of the year on which banks in the city in which the Paying Agent is located, are not required or authorized by law to remain closed, and on which the Paying Agent and the New York Stock Exchange, Inc. are open for business. "Capital Facilities Charges" means any impact fees or charges which are related to acquiring, constructing, equipping or expanding capacity and Facilities of the System, including, but not limited to, excess capacity relating to the Facilities of the System not used by then current consumers, if any, existing at the time of the City's original acquisition of all or any portion of the System, and which are levied or collected by the City on or from any governmental body, utility company, real estate developer, or other Person, for the purpose of reserving capacity in the System, connecting to the System, or paying or reimbursing any capital cost relating to such acquisition, construction, expansion or equipping of excess and unused capacity of the System or any expansion thereof, but excluding: (1) amounts received from the sale of water or reuse water; (2) amounts received for the treatment, acceptance or disposal of wastewater; (3) meter installation fees and regular connection charges not described above; and (4) other revenues constituting operating revenues (as any of the foregoing items are more particularly described by the City with respect to the System); in each case to the extent the same are lawfully available for the acquisition and construction of Expansion Facilities and for the payment of Capital Facilities Charges Debt Service Components. "Capital Facilities Charges Debt Service Component" means, as of any particular date of calculation, for any Series of Bonds, the dollar amount of Capital Facilities Charges determined by (1) multiplying the aggregate Debt Service Requirements for such Series by the applicable Expansion Percentage, and (2) subtracting from the product so obtained all amounts previously transferred from the Capital Facilities Charges Fund to the applicable Sinking Fund, including the Bond Amortization Accounts therein, pursuant to the provisions of Section 3.03 hereof. "City" shall mean the City of Atlantic Beach, Florida, a municipal corporation of the State. "Code" shall mean the Internal Revenue Code of 1986, as amended, together with the valid and applicable regulations and proposed and temporary regulations thereunder, and, if applicable, under the Internal Revenue Code of 1954, as amended, as the same may be in effect or amended from time to time, and any successor provisions thereto. to"Commission" shall mean the City Commission, as the governing body of the City. 3248/ATL16.003/R-AUTH-RESOLUTION.6 3 March 12, 1996 2:28pm "Completion Bonds" shall mean Additional Parity Bonds issued without compliance with 40 the financial tests set forth in Section 5.01(G) hereof, as more particularly provided in such section. "Compounded Amounts" shall mean, with respect to any Compounding Interest Bonds, the amounts representing principal and interest on such Compounding Interest Bonds from time to time at and prior to the maturity thereof in accordance with a schedule of such amounts delivered at the original issuance of such Series of Bonds. "Compounding Interest Bonds" shall mean Bonds, the interest on which (1) shall be compounded periodically, (2) shall be payable only at maturity or redemption prior to maturity, and (3) shall be determined by reference to the Compounded Amounts. "Consulting Engineers" shall mean such independent, qualified, and recognized consulting engineers, having a favorable reputation for skill and experience in the planning, construction, operation and financial feasibility of facilities similar to that of the System, at the time retained by the City to perform the acts and carry out the duties as herein provided for such Consulting Engineers. "Credit Facility" shall mean each policy of municipal bond insurance, an irrevocable letter of credit, surety bond or other insurance or financial product which guarantees timely payment of all or any portion of the principal of, premium, if any, and interest on all or any portion of the Bonds. "Credit Facility Issuer" shall mean each insurance company, bank, or other organization which has provided a Credit Facility in connection with the issuance of any Series of Bonds or any particular Bonds within a Series. A Credit Facility Issuer of a Reserve Account Credit Facility must be an insurance company rated in the highest rating category by any Rating Agency (and, if applicable, by A.M. Best & Company) having a rating in effect as to such insurance company. "Current Interest Paying Bonds" shall mean Bonds, the interest on which shall be payable on a periodic basis. "Debt Service Requirement" shall mean, for any Bond Year, as applied to the Bonds of any Series, the sum of: (1) the amount required to pay the interest becoming due on the Current Interest Paying Bonds during such Bond Year; (2) the aggregate amount required to pay the principal becoming due on Current Interest Paying Bonds for such Bond Year; provided that, for purposes of this definition the stated maturity date of any Current Interest Paying Term Bonds shall be disregarded and the Amortization Installments applicable to such Current Interest Paying Term Bonds in such Bond Year shall be deemed to mature in such Bond Year; and 3248/ATL16.003/R-AUTH-RESOLUTION.6 4 March 12, 1996 2:28pm (3) the aggregate amount required to pay the Maturity Amounts due on any do Compounding Interest Bonds maturing in such Bond Year; provided that for purposes of this definition, the stated maturity date of any Compounding Interest Term Bonds shall be disregarded and the Amortization Installments applicable to such Compounding Interest Term Bonds in such Bond Year shall be deemed to mature in such Bond Year. In calculating the Debt Service Requirement for any period for any Series of Bonds, the City shall deduct from the amounts calculated in subparagraphs (1) through (3) above: (a) any capitalized interest deposited into the applicable accounts of the Sinking Fund for such period from the proceeds of the sale of such Bonds or otherwise and (b) any Investment Earnings (i) received on moneys on deposit in or transferred to the Sinking Fund and accounts established therein with respect to such Series and (ii) required by the terms of this Ordinance to be retained in such Sinking Fund. "Defeasance Obligations" means: (1) Federal Securities; (2) obligations described in Section 103(a) of the Code, provision for the payment of the principal of, premium, if any, and interest on which shall have been made by the irrevocable deposit with a Banking Institution (which is a member of the FDIC and which has a combined capital, surplus and undivided profits of not less than $25,000,000) acting as a trustee or escrow agent for holders of such obligations, of securities described in clause (1) above, the maturing principal of and interest on which, when due and payable, will provide sufficient moneys, without reinvestment, to pay when due the principal of, premium, if any, and interest on such obligations, and which securities described in clause (1) above are not available to satisfy any other claim, including any claim of the trustee or escrow agent or of any person claiming through the trustee or escrow agent or to whom the trustee or escrow agent may be obligated, including in the event of the insolvency of the trustee or escrow agent or proceedings arising out of such insolvency and which are rated "AAA" by Moody's and "Aaa" by S&P; and (3) Such other obligations as shall be permissible for defeasance of any Series or installment of bonds pursuant to the Credit Facility in effect with respect to such Series or installment. "Disclosure Counsel" means a firm of attorneys which is nationally recognized as being experienced in matters relating to the public offering and sale of obligations of states and their political subdivisions and the federal and state securities laws applicable thereto, as selected by the City. "Expansion Facilities" means additions, extensions and improvements to the System, together with all lands or interests therein, including plants, buildings, machinery, pipes, mains, fixtures, equipment, franchises, rights to water, wastewater or reuse water service and all property, real or personal, tangible or intangible, heretofore or hereafter constructed or acquired in order to meet the increased demand upon the System, whether actual or anticipated, created by new users connecting to the System. 3248/ATL16.003/R-AUTH-RESOLUTION.6 5 March 12, 1996 2:28pm "Expansion Percentage" means, with respect to any Series of Bonds, the fraction equal to that portion of the total aggregate Debt Service Requirements for such Series that is attributable to Expansion Facilities, if any, as shall be determined by the Independent Consultant and as set forth in the Project Certificate relating to such Series. "Event of Default" has the meaning set forth in Section 5.02 hereof. "Facilities" shall mean all of the physical assets of the System, and all parts thereof, existing at the time of the adoption of this Ordinance, and also any physical assets which may thereafter be added to the System, or any part thereof, by any additions, replacements, betterments, extensions, improvements thereto, and property of any kind or nature, real or personal, tangible or intangible, hereafter constructed or acquired in connection with the System. "Federal Securities" shall mean direct noncallable obligations of the United States of America or obligations the timely payment when due of the principal of and interest on which is fully and unconditionally guaranteed by the United States of America. "Financial Advisor" means an investment banking or financial advisory firm which is nationally recognized as being experienced in financial matters related to states and their political subdivisions, as selected by the City. "Fiscal Year" shall mean the period commencing on October 1 of each year and ending on the succeeding September 30, or such other period as may be prescribed from time to time 4W as the fiscal year for the City. "Funds and Accounts" means the Revenue Fund, the Sinking Fund, (and accounts therein), the Renewal and Replacement Fund, the Rate Stabilization Fund, and the Project Fund all created pursuant to Section 3.03(A) hereof. "Gross Revenues" means all fees, rentals or other charges or other income received by the City in connection with the System, or accruing to the City or to any other board or agency of the City in control of the management and operation of the System, all as calculated in accordance with Accounting Principles. Gross Revenues include, without limitation, Investment Earnings on moneys in all funds and accounts herein created or authorized, except the Project Fund and the Rebate Fund, to the extent that Investment Earnings are required to be deposited into the Revenue Fund herein created. Gross Revenues do not include Capital Facilities Charges, Special Assessments, or Investment Earnings on either thereof. "Independent Certified Public Accountants" shall mean such firm of certified public accountants, not in the regular employ of the City, as shall be retained by the City for the purpose of auditing the books and records relating to the Pledged Revenues and performing such other functions as are specified in this Ordinance. "Independent Consultant" shall mean such firm or firms, consisting of or employing, registered professional engineers, architects, rate consultants, or other professionals having a favorable reputation for the design, maintenance and operation of facilities such as the System, not in the regular employ of the City, engaged by the City to perform the tasks set forth to be 3248/ATL16.003/R-AUTH-RESOLUTION.6 6 March 12, 19% 2:28pm performed by such Independent Consultant by the provisions of this Ordinance or by other 40 official action of the City, and shall include, where applicable, the Consulting Engineers. "Interest Payment Date" shall mean, with respect to any Series of Bonds, the semiannual or other periodic dates on which interest is payable on the Current Interest Paying Bonds, as determined by subsequent resolution of the Commission adopted at or prior to the time of issuance of such Bonds. "Investment Earnings" shall mean the interest, dividends, and the net of the capital gains and losses received from the investment, purchase, and sale of Authorized Investments held in the various funds and accounts established pursuant to this Ordinance. "Issuance Expenses" means the fees and costs paid in connection with the authorization, sale, and issuance of any Series of Bonds. Issuance Expenses include, but are not necessarily limited to: (1) the fees and expenses of the Financial Advisor, Bond Counsel, Disclosure Counsel, and the Consulting Engineer related to (a) the preparation of the preliminary and final Official Statements; (b) preparation of the Bond Ordinance, this Ordinance, and other ordinances and resolutions supplemental hereto or in connection herewith; (c) preparation of financing plans; (d) hiring investment bankers; (e) validation of Bonds; and (f) preparation of the Engineer's Report, if any; (2) the cost of obtaining a rating on such Bonds from a Rating Agency; (3) the cost of printing and distributing the Official Statement for such Bonds; (4) the cost of printing and delivery of such Bonds; and (5) the cost of obtaining consents and legal opinions necessary in connection with the delivery of such Bonds. Issuance Expenses do not 40 include (1) amounts deposited into the Reserve Account; (2) the premium for any Credit Facility; (3) discount upon the sale of Bonds; or (4) capitalized interest on Bonds. "Maximum Debt Service Requirement" shall mean, as of any particular date of calculation, the Debt Service Requirement for the then current or any future Bond Year which is greatest in dollar amount with respect to the particular Series of Bonds, or all Bonds, as the case may be. "MSRB" means the Municipal Securities Rulemaking Board. "Net Revenues" means the Gross Revenues remaining after deducting only Operating Expenses. Moneys deposited into the Rate Stabilization Fund (as set forth in Section 3.03(C)(8) hereof) shall be excluded from Gross Revenues for the purposes of calculating Net Revenues hereunder for the Fiscal Year in which such transfer into the Rate Stabilization Fund occurs. Moneys on deposit in the Rate Stabilization Fund may be withdrawn at any time and redeposited into the Revenue Fund, and such moneys shall be included in Gross Revenues for the purpose of calculating Net Revenues for the Fiscal Year in which such redeposit into the Revenue Fund occurs. "NRMSIR" means a nationally -recognized municipal securities information repository designated by the SEC for purposes of the Rule. "Operating Expenses" means the current expenses, paid or accrued, of operation, maintenance and repair of the System and its Facilities determined in accordance with 3248/ATL16.003/R-AUTH-RESOLUTION.6 7 March 12, 1996 2:28pin Accounting Principles. Operating Expenses include, without limiting the generality of the 40 foregoing, (i) Administrative Expenses, (ii) insurance premiums, (iii) charges for the accumulation of appropriate reserves not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with Accounting Principles, and (iv) the cost of product and services purchased by the City for resale to customers of the System in lieu of the production of such product and services by the City directly. "Operating Expenses" shall not include any allowance for depreciation, amortization or other similar non-cash expenses, except to the extent expressly provided herein. In determining Operating Expenses, there shall not be taken into account: (a) any gain or loss resulting from either the extinguishment or refinancing of any Series of Bonds or other long-term indebtedness; (b) loss from the sale, exchange or other disposition of capital assets not made in the ordinary course of business; and (c) any capital expenditures for renewal, replacement, expansion or acquisition of capital assets (including any deposits or reserves therefor). "Ordinance" means collectively, the Bond Ordinance, this supplemental ordinance, and any ordinance amendatory hereof or supplemental hereto. "Outstanding" shall mean as applied to Bonds, as of any applicable time, all Bonds which have been authenticated and delivered, or which are being delivered, under this Ordinance, except: (1) Bonds cancelled upon surrender, exchange or transfer, or cancelled after purchase in the open market or because of payment at or redemption prior to maturity; (2) Bonds, or portions thereof, which are considered no longer Outstanding pursuant to Section 6.04; (3) Bonds, or portions thereof, which are deemed paid upon the redemption or maturity thereof for which moneys sufficient to pay the maturity amount or redemption price thereof have been deposited into the appropriate accounts of the Sinking Fund by the City or in lieu of which other Bonds have been issued under Section 2.06 or 2.07 hereof. For purposes of voting, giving directions and granting consents, Bonds held by the City or by an agent of the City shall not be deemed Outstanding. "Person" or words importing persons shall mean firms, associations, partnerships (including without limitation, general and limited partnerships), joint ventures, societies, estates, trusts, corporations (including limited liability corporations), public or governmental bodies, other legal entities and natural persons. "Pledged Revenues" means (a) the Net Revenues, (b) the Capital Facilities Charges, (c) the moneys on deposit in the Funds and Accounts, (d) the Investment Earnings, and (e) the Special Assessments. "Principal Maturity Date" shall mean, with respect to any series of Bonds, the annual or other periodic date on which (i) principal matures on the Current Interest Paying Bonds and (ii) 3248/ATL16.003/R-AUTH-RESOLUTION.6 8 March 12, 19% 228pm Compounded Amounts are payable on Compounding Interest Bonds, as determined by 40 subsequent resolution of the Commission adopted at or prior to the issuance of Bonds, and in each case including applicable dates on which Amortization Installments are required to be applied to retire Term Bonds. "Prohibited Payment" shall mean a payment, or an agreement to pay, to a Person other than the United States of America, an amount that is otherwise required to be paid to the United States of America through a transaction or series of transactions that reduces the amount earned on an investment or deposit or that results in a smaller profit or a larger loss on such investment or deposit than would have resulted in an arm's length transaction in which yield on Bonds was not relevant to either party to such investment or deposit. "Project" shall mean the acquisition and construction of improvements and additions to the System and the Stormwater System owned by the City. "Project Certificate" means that certificate of the Independent Consultant filed with the City at or prior to the date of delivery of any Series of Bonds and setting forth the estimated total cost of the Project to be constructed with the proceeds of such Bonds and, if said Series of Bonds is additionally secured by Capital Facilities Charges, the estimated cost of the Expansion Facilities portion of the Project, the Expansion Percentage, and the Capital Facilities Charges Debt Service Component, as appropriate. "Project Costs" shall mean the amount required to be expended to construct a Project, and shall include, but not necessarily be limited to: the acquisition of any lands or interests therein or any other properties deemed necessary or convenient therefor; engineering, accounting, and legal fees and expenses; expenses for plans, specifications and surveys; expenses for estimates of costs and of revenues; Administrative Expenses; the capitalization of interest on the Bonds authorized hereby for a reasonable period of time after the date of issuance and delivery thereof; the establishment of reasonable reserves for the payment of debt service on the Bonds; discount upon the sale of the Bonds; Issuance Expenses; the cost of purchasing any Credit Facility or Reserve Account Credit Facility with respect to the Bonds; such other expenses as may be necessary or incidental to the financing of the Project and to the placing of the same in operation; and reimbursement to the City for any sums expended for the foregoing purposes. In connection with any particular Series of Bonds, Project Costs shall mean those of the foregoing costs which are to be paid or financed by proceeds of such Series. "Project Fund" means the fund authorized, created and established by the City, pursuant to this Ordinance for the payment of Project Costs together with any accounts therein. "Rating Agency" shall mean Fitch Investors Service, L.P. ("Fitch"), Moody's Investors Service, Inc. ("Moody's"), or Standard and Poor's Ratings Services ("S&P") or any thereof and their successors, if any is then maintaining a rating on any Series of Bonds. "Record Date" shall mean, for any Series, the fifteenth day of the month prior to an Interest Payment Date for such Bonds, or such other date as may be specified by subsequent resolution of the Commission. 3248/ATL16.003/R-AUTI -RESOLUTION.6 9 March 12. 1996 2:28pm "Redemption Date" shall mean, for any Series, the date specified in a resolution of the 40 Commission on which any Bonds are to be redeemed prior to the maturity thereof, whether at the option of the City or by operation of the applicable Bond Amortization Account in the Sinking Fund. "Registered Owner" or "Owner" shall mean any Person who shall be the owner of any Outstanding Bond or Bonds as shown on the registration books maintained by the Bond Registrar. "Renewal and Replacement Fund Requirement" means an amount, determined as of the beginning of each Fiscal Year, equal to (a) the lesser of (1) five percent (5%) of the Gross Revenues received by the City in the immediately preceding Fiscal Year; or (2) $500,000, or (b) such other amount as shall be certified in writing by the Consulting Engineers as necessary and desirable to provide immediately available funds to pay capital costs of the System. "Reserve Account Credit Facility" shall mean a policy of insurance, an irrevocable letter of credit, surety bond or other insurance or financial product which provides for payment of amounts equal to all or a portion of the Reserve Account Requirement in the event of an insufficiency of moneys in the Sinking Fund to pay principal of and interest on any Series or installment of the Bonds, and which meets the criteria set forth in Section 3.03(G) hereof and shall include any agreement between the City and the Credit Facility Issuer with respect to the repayment of amounts advanced under any Reserve Account Credit Facility. "Reserve Account Credit Facility Costs" shall mean the amounts the City is required to pay to the Credit Facility Issuer as a result of a draw under a Reserve Account Credit Facility or otherwise pursuant to such Reserve Account Credit Facility or any related agreement. "Reserve Account Credit Facility Coverage" shall mean the amount then available to be paid to the Paying Agent under the terms of the Reserve Account Credit Facility at any particular time. "Reserve Account Requirement" means the lesser of (1) the Maximum Debt Service Requirement for the Bonds then Outstanding, or (2) the maximum amount allowed as a reasonably required reserve or replacement fund under Section 148 of the Code. "Reserve Account Value" shall mean the aggregate of the Reserve Account Credit Facility Coverage and the value of moneys and Authorized Investments credited to the Reserve Account. The values of such Authorized Investments are to be calculated as provided in Section 3.03(G) hereof. "Rule" means Rule 15c2-12, as amended from time to time, promulgated by the SEC. "SEC" means the Securities and Exchange Commission. "Serial Bonds" shall mean any Current Interest Paying or Compounding Interest Bonds 40 for the payment of the principal of which, at the maturity thereof, no fixed mandatory sinking 3248/ATL16.003/R-AUT11-RESOLUTION.6 10 March 12, 1996 2:28pm fund or bond redemption deposits are required to be made prior to the 12 -month period immediately preceding the stated date of maturity of such Serial Bonds. "Series" shall mean series of Bonds. "Series 1996 Bonds" shall mean the Utilities System Revenue Bonds, Series 1996, originally issued pursuant to this Ordinance. "SID" means an information depository designated from time to time by the State. "Sinking Fund" means the fund authorized, created, and established pursuant to the provisions of Section 3.03(A) hereof. "Special Assessments" means all the proceeds derived from special assessments to be levied against the lands and real estate within the City to be specially benefitted by any Project, including interest and penalties on such assessments and any moneys received upon the sale of tax certificates with respect to such lands and real estate and upon the foreclosure of the liens of such assessments, to the extent that the City has covenanted to deposit the proceeds received from the levy and collection of such special assessments into the Special Assessment Fund for the payment of any Series; provided, however, that for purposes of the rate covenant set forth in Section 5.01(A) and the test for the issuance of Additional Parity Bonds set forth in Section 5.01(G), Special Assessments shall only include those Special Assessments which are (1) levied on developed property, (2) collected pursuant to the uniform method pursuant to Section 197.3632, Florida Statutes, and (3) in the aggregate, according to the final assessment roll, are not greater than one-tenth (1/10) of the total assessed value of all property against which such Special Assessments are levied. "Specified Events" has the meaning set forth in Section 5.04(C) hereof. "State" means the State of Florida. "Stormwater System" means the facilities for the collection and drainage of stormwater now owned, operated and maintained by the City, 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, now or hereafter owned or used in connection therewith. "Subordinated Bonds" shall mean any obligations issued by the City and payable from the Pledged Revenues subject and subordinate to the rights of the Registered Owners of any Bonds issued pursuant to this Ordinance as to security for payment from such Pledged Revenues and in all other respects, in accordance with the provisions of this Ordinance. "System" shall mean the combined and consolidated water and sewer system now owned, operated and maintained by the City, together with any and all improvements, extensions and 40 additions thereto, hereafter constructed or acquired, together with all lands or interests therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment, and all 3248/ATL16.003/R-AUTH-RESOLUTION.6 11 March 12, 1996 228pm property, real or personal, tangible or intangible, now or hereafter owned or used in connection 40 therewith. "Tax Compliance Certificate" means, with respect to any Series, the certificate executed by an officer of the City responsible for the issuance of the Series, delivered in connection with the issuance of such Series, relating to compliance by the City with the requirements of the Code applicable to such Series, including any investment instructions attached to such certificate. "Term Bonds" shall mean the Current Interest Paying or Compounding Interest Bonds all of which shall be stated to mature on one date and which shall be subject to retirement by operation of the applicable Bond Amortization Account in the Sinking Fund herein established. "Variable Rate Bonds" shall mean Bonds, the interest rate on which is subject to adjustment at such times and in such manner as shall be determined by the Commission prior to the sale thereof. "1996 Bonds" means the Series 1996 Bonds. 1993 Project" means the additions, extensions and improvements to the System previously authorized to be acquired and constructed with the proceeds of the 1996 Refunded Obligation. " 1996 Project" means the acquisition and construction of additions, extensions and improvements to the System and the Stormwater System, as more particularly described in the 40 list on Exhibit B hereto and including the components of the 1993 Project which were not funded with proceeds of the 1996 Refunded Obligation; provided that the Commission may (a) add items to or delete items from such list and (b) reallocate sums of money between items on such list. "1996 Project Account" means the account authorized, created and established by the City, pursuant to Section 3.03(A) of this Ordinance for the payment of 1996 Project Costs. "1996 Project Costs" mean the amount required to be expended to acquire and construct the 1996 Project. Without limiting the generality of the foregoing, 1996 Project Costs include: the acquisition of any lands or interests therein or any other properties deemed necessary or convenient therefor; engineering, accounting, and legal fees and expenses; expenses for plans, specifications and surveys; expenses for estimates of costs and of revenues; the fees of fiscal agents, financial advisors and consultants; Administrative Expenses; Issuance Expenses; the cost of establishment of reasonable reserves for the payment of debt service on the 1996 Bonds; discount upon the sale of the 1996 Bonds; the cost of purchasing any Credit Facility or Reserve Account Credit Facility with respect to the 1996 Bonds; rebate payments required to be made to the Department of the Treasury of the United States in connection with the investment of moneys in the Project Fund; such other expenses as may be necessary or incidental to the financing authorized by this Ordinance, to the 1996 Project, and to the placing of the same in operation; and reimbursement to the City for any sums expended for the foregoing purposes. • "1996 Refunded Obligation" means the Water and Sewer Revenue Note, dated July 29, 1993, payable to Barnett Bank of Jacksonville, N.A. and to be outstanding at the time of issuance of the 1996 Bonds to the principal amount of approximately $8,100,000. 3248/ATL16.003/R-AUTH-RESOLUTION.6 12 March 12. 1996 2:28pm 1996 Refunding" means the program for refinancing the 1996 Refunded Obligation 40 through the issuance of the Series 1996 Bonds and the payment of a portion of the proceeds thereof to Barnett Bank of Jacksonville, N.A. "1996 Refunding Costs" means but shall not necessarily be limited to: the cost of payment of the principal of, premium, if specified, and interest on the Refunded Obligation; expenses for estimates of costs and of revenues; the fees of fiscal agents, financial advisors and consultants; administrative expenses; interest on the Series 1996 Bonds for a reasonable period of time after the date of delivery thereof; reasonable reserves for the payment of Debt Service; discount upon the sale of the Series 1996 Bonds; the cost of purchasing any Credit Facility or Reserve Account Credit Facility; Issuance Expenses as estimated on Exhibit C attached hereto; and such other expenses as may be necessary or incidental to the financing authorized by this Ordinance, to the Refunding, and to the accomplishing thereof; and reimbursement to the City for any sums expended for the foregoing purposes in anticipation of the issuance of the Series 1996 Bonds. SECTION 1.03. INTERPRETATION. Any reference herein to the City, to the Commission or to any member or officer of either, includes entities or officials succeeding to their respective functions, duties or responsibilities pursuant to or by operation of law or lawfully performing their functions. Unless context clearly indicates otherwise, any reference to a section or provision of the Constitution of the State or the Act, or to a section, provision or chapter of the Laws of Florida or the United States of America, includes that section, provision or chapter as amended, modified, revised, supplemented or superseded from time to time; provided, that no amendment, modification, revision, supplement or superseding section, provision or chapter shall be applicable solely by reason of this provision, if it constitutes in any way an impairment of (1) the rights or obligations of the City, its officers and employees, the members of the Commission of the City, the Registrar, the Paying Agent, the Registered Owners, or any Credit Facility Issuer; (2) the Bonds; or (3) any other instrument or document entered into in connection with any of the foregoing. Unless the context indicates otherwise, words importing the singular number include the plural number, and vice versa; the terms "hereof," "hereby," "herein," "hereto," "hereunder" and similar terms refer to this Ordinance; and the term "hereafter" means after and the term "heretofore" means before the date of this Ordinance. SECTION 1.04. FINDINGS. It is hereby ascertained, determined, and declared as follows: (A) The City now owns, operates and maintains the System and derives and will continue to derive revenues from rates, fees, and charges imposed and collected for the services of the System. (B) The City has previously enacted the Bond Ordinance which authorized improvements to the System and the Stormwater System (collectively, the "1996 Project"). 3248/ATL16.003/R-AUTH-RESOLUTION.6 13 March 12, 1996 228pm (C) The City is without adequate, currently available funds to finance the 1996 Project 40 Costs, and it is necessary and desirable and in the best interests of the City that it borrow the money necessary to fund the Project. The City is authorized pursuant to the provisions of the Act, to borrow moneys necessary to pay the Project Costs. • (D) The City currently has outstanding the 1996 Refunded Obligation in the principal amount of approximately $8,100,000. (E) It is necessary and desirable and in the best interests of the City that the City provide for the payment of the 1996 Refunded Obligation by the issuance of the 1996 Bonds and the payment of a portion of the proceeds thereof with to Barnett Bank of Jacksonville, N.A. for the sole purpose of the payment of all of the outstanding principal of and interest on such Refunded Obligation. (F) It is in the best interest of the health, safety, and welfare of the City and the inhabitants thereof that the City pledge the Pledged Revenues to the repayment of the Bonds, and the Pledged Revenues are not currently pledged and encumbered in any manner other than to the 1996 Refunded Obligation, the lien of which on the Pledged Revenues will be defeased and released upon the issuance of the Series 1996 Bonds. (G) The Pledged Revenues are estimated to be sufficient to pay all principal of and interest on the Series 1996 Bonds, as the same become due, and to make all required sinking fund, reserve or other payments required by this Ordinance. SECTION 1.05. ORDINANCE CONSTITUTES A CONTRACT. In consideration of the issuance of any Credit Facility or Reserve Account Credit Facility and in consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall be the Registered Owners of the same from time to time, this Ordinance shall be deemed to be and shall constitute a contract between the City and the Credit Facility Issuer and such Registered Owners, and the covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection, and security of the Credit Facility Issuer and the Registered Owners of any and all such 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 or herein. SECTION 1.06. ORDINANCE CAPTIONS AND HEADINGS. The captions and headings in this Ordinance are solely for convenience of reference and in no way define, limit or describe the scope or intent of any Articles, Sections, subsections, paragraphs, subparagraphs or clauses hereof. 3248/ATL 16.003/R -A UTII-RESOLUTION.6 14 March 12. 1996 2:28pm 40 ARTICLE II DESCRIPTION, DETAILS AND FORM OF BONDS SECTION 2.01. 1996 PROJECT. The City will promptly commence work on the 1996 Project and will prosecute the 1996 Project to completion with due diligence. SECTION 2.02. 1996 BONDS. The 1996 Bonds shall be and are hereby designated "Utility System Revenue Bonds, Series 1996". SECTION 2.03. DESCRIPTION OF BONDS. The Bonds of each Series shall be numbered; shall be in such denominations or maturity amounts; shall be dated as of the date of their delivery or such other date prior to the date of their delivery; shall bear interest at not exceeding the maximum rate allowed by law; payable on such dates; shall mature on the first day of such month, in such years, not to exceed forty (40) years from the date thereof, and in such amounts; and shall be issued as Current Interest Paying Bonds, Compounding Interest Bonds, Variable Rate Bonds, Serial Bonds, Term Bonds, or any combination thereof; all the foregoing as shall be determined by subsequent resolution of the Commission adopted at or prior to the time of sale of any such Series of the Bonds, subject of the provisions of Section 5.01(G) and 6.01 hereof. The Bonds of each Series may be issued all at one time or in installments from time to 40 time. Different installments and Series of the Bonds may have such characteristics as shall be provided herein and by subsequent resolution of the Commission and shall bear a designation to distinguish such Series or installment from other Series or installments of the Bonds. The Bonds of each Series shall be issued in fully registered form; shall be payable with respect to principal at the office of the Bond Registrar, as Paying Agent, or such other Paying Agent as shall be subsequently determined by the Commission; shall be payable in lawful money of the United States of America; and shall bear interest from their date, or from the most recent date to which interest has been paid, payable, in the case of Current Interest Paying Bonds, by check or draft mailed on each Interest Payment Date to the Registered Owner at his address as it appears upon the books of the Bond Registrar as of 5:00 P.M. Eastern Time on the Record Date, and in the case of Compounding Interest Bonds, at maturity upon presentation at the office of the Bond Registrar; provided that, for any Registered Owner of one million dollars ($1,000,000) or more in principal amount of Bonds, such payment shall, at the written request and expense of such Registered Owner, be made by wire transfer to a Banking Institution or by such other medium acceptable to the City and to such Registered Owner. SECTION 2.04. EXECUTION OF BONDS. The Bonds of each Series shall be executed in the name of the City by the Mayor or Vice -Mayor, and countersigned and attested by the City Clerk or Deputy Clerk and the corporate seal of the City or Commission or facsimile thereof shall be affixed thereto or reproduced thereon. The signatures of the Mayor or Vice -Mayor and the City Clerk or Deputy Clerk may be manual or facsimile signatures imprinted or reproduced 40 thereon. 3248/ATL16.003/R-AUTH-RESOLUTION.6 15 March 12. 1996 2:28pm There shall be a Certificate of Authentication of the Bond Registrar on the Bonds, and no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under the provisions of this Ordinance unless such certificate shall have been duly executed on such Bond. The authorized signature for the Bond Registrar shall be either manual or in facsimile, provided, however, that at least one of the above signatures, including that of the authorized signature for the Bond Registrar, appearing on the Bonds shall be a manual signature. In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer of the City before the Bonds so signed and sealed shall have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the City by such person as at the actual time of the execution of such Bond shall hold the proper office in the City, although at the date of such Bonds such person may not have held such office or may not have been so authorized. SECTION 2.05. NEGOTIABILITY AND REGISTRATION. The Bonds shall be and have all the qualities and incidents of negotiable instruments under the Uniform Commercial Code - Investment Securities Laws of the State of Florida, and each successive Registered Owner, in accepting any of said Bonds shall be conclusively deemed to have agreed that the Bonds shall be and have all of the qualities and incidents of such negotiable instruments. There shall be a Bond Registrar, who may also be the paying agent for the Bonds, which shall be a Banking Institution. The Bond Registrar shall be responsible for maintaining the books for the registration of the transfer and exchange of the Bonds. The City and the Bond Registrar may treat the Registered Owner of any Bond as the absolute owner thereof for all purposes, whether or not such Bond shall be overdue, and shall not be bound by any notice to the contrary. All Bonds presented for transfer, exchange, redemption or payment (if so required by the City or the Bond Registrar) 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 City or the Bond Registrar, duly executed by the Registered Owner or by his duly authorized attorney. The Bond Registrar may charge the Registered Owner a sum sufficient to reimburse it for any expenses incurred in making any exchange or transfer after the first such exchange or transfer following the initial delivery of the Bonds. The Bond Registrar or the City may also require payment from the Registered Owner or his transferee, as the case may be, of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Such charges and expenses shall be paid before any such new Bonds shall be delivered. The City and the Bond Registrar shall not be required (a) to issue, transfer or exchange any Bonds during a period beginning at the opening of business on the 15th day next preceding either any Interest Payment Date or any date of selection of Bonds or parts thereof to be redeemed and ending at the close of business on the Interest Payment Date or day on which the 3248/ATLI6.003/R-AUTH-RESOLUTION.6 16 March 12. 1996 2:28pm applicable notice of redemption is given, or (b) to transfer or exchange any Bonds selected, called or being called for redemption in whole or in part. New Bonds delivered upon any transfer or exchange shall be valid obligations of the City, evidencing the same debt as the Bonds surrendered, shall be secured by this Ordinance, and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. The City may elect to use a book -entry or immobilization system for issuance and registration of the Bonds of any Series, and the details of any such system shall be as fixed by subsequent ordinance or resolution of the Commission adopted prior to the time of issuance of such Bonds. Whenever any Bond shall be delivered to the Bond Registrar for cancellation, upon payment of the principal amount thereof, or for replacement, transfer or exchange, such Bond shall be cancelled and destroyed by the Bond Registrar, and counterparts of a certificate of destruction evidencing such destruction shall be furnished to the City. SECTION 2.06. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bond Registrar may in its discretion issue and deliver a new Bond, of like tenor as the Bond, so mutilated, destroyed, stolen or lost, either 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, upon the Registered Owner's furnishing the Bond Registrar proof of his ownership thereof, furnishing satisfactory indemnity in favor of both the City and the Bond Registrar, complying with such other reasonable regulations and conditions as the Bond Registrar and City may prescribe, and paying such expenses as the City may incur. All Bonds so surrendered shall be cancelled. If any such Bonds shall have matured or are about to mature, instead of issuing a substitute Bond, the Bond Registrar may pay the same, upon compliance with the foregoing conditions and requirements. Any such duplicate Bonds issued pursuant to this Section shall constitute original contractual obligations on the part of the City, whether or not any lost, stolen or destroyed Bonds are found and shall be entitled to equal and proportionate benefits and rights with all other Bonds of such Series issued hereunder as to lien on and source and security for payment from the Pledged Revenues. SECTION 2.07. TEMPORARY BONDS. Until Bonds in definitive form of any Series are ready for delivery, the City may execute, and upon its request in writing, the Bond Registrar shall authenticate and deliver in lieu of any thereof, and subject to the same provisions, limitations and conditions, one or more printed, lithographed or typewritten Bonds in temporary form, substantially of the tenor of the Bonds hereinbefore described and with appropriate omissions, variations and insertions. Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the lien and benefit of this Ordinance. The City shall, without unreasonable delay, prepare, execute and deliver to the Bond Registrar and thereupon, upon the presentation and 3248/ATL16.003/R-AUTH-RESOLUTION.6 17 March 12, 1996 2:28pm surrender of the Bonds in temporary form to the Bond Registrar the Bond Registrar shall authenticate and deliver, in exchange therefor, Bonds of the same Series and maturity, in definitive form in the authorized denominations, and for the same aggregate principal amount, as the Bonds in temporary form surrendered. The expense of such exchange shall be paid by the City and there shall be made no charge therefor to any Registered Owner. SECTION 2.08. BOND ANTICIPATION NOTES. In anticipation of the delivery of the Bonds of any Series and receipt of the proceeds thereof, the City may issue Bond Anticipation Notes. Provisions regarding the form of such Bond Anticipation Notes and the security for any Bond Anticipation Notes shall be set forth in a separate ordinance or resolution of the Commission adopted at or prior to the time of sale of such Bond Anticipation Notes. SECTION 2.09. PROVISIONS FOR REDEMPTION. The Bonds may be redeemable, by operation of the applicable Bond Amortization Account or, at the option of the City, as provided by subsequent resolution of the Commission adopted prior to the delivery of the Bonds; provided that no optional redemption of Bonds may be effected at any time when there are outstanding, unpaid obligations due and owing to a Credit Facility Issuer pursuant to any Credit Facility or Reserve Account Credit Facility without the prior written consent of the Credit Facility Issuer. Not more than sixty (60) days or less than thirty (30) days prior to the Redemption Date, notice of such redemption (i) shall be filed with the Bond Registrar, and (ii) shall be mailed by first class mail, postage prepaid, to all Registered Owners of Bonds to be redeemed at their addresses as they appear on the registration books hereinabove provided for. Notice of Redemption of Bonds, other than by operation of the Bond Amortization Account and other than pursuant to the application of advanced refunding bond proceeds, shall be provided as set forth herein only from and to the extent that funds sufficient to pay the redemption price and accrued interest thereon are on deposit in the funds and accounts held by the Paying Agent and available for such purpose on the date the notice of redemption is mailed. Interest shall cease to accrue on any Bonds duly called for prior redemption on the Redemption Date, if payment thereof has been duly provided. Failure of any Registered Owner to receive notice properly provided shall not affect the validity of any such proceedings for redemption or the cessation of the accrual of interest on any Bonds called for redemption from and after the Redemption Date. In addition to the foregoing notice, further notice shall be given as set out below, but no defect in any such notice nor any failure to give all or any portion of any notice shall in any manner defeat the effectiveness of a call for redemption with respect to an Owner as to which notice is given as prescribed above. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus: (i) the date of original execution and delivery of the Bonds of such Series; (ii) the rate of interest borne by each Bond being redeemed; (iii) the maturity date and CUSIP number of each Bond being redeemed; and (iv) any other descriptive information needed to identify accurately the Bonds being redeemed. 0 Each further notice of redemption shall be sent at least thirty (30) days before the redemption date by registered or certified mail or overnight delivery service (at the expense of 3248/ATLI6.003/R-AUT"-RESOLUTION.6 18 March 12, 1996 2:28pm the addressee) to the Credit Facility Issuer and to all registered securities depositories then in the business of holding substantial amounts of obligations of types such as the Bonds (such depositories now being The Depository Trust Company of New York, New York, New York; Midwest Securities Trust Company of Chicago, Illinois; and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania) and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds (such as Financial Information, Inc.'s Financial Daily Called Bond Service, Interactive Data Corporation's Bond Service, Kenny Information Service's Called Bond Service and Standard & Poor's Called Bond Record). SECTION 2.10. FORM OF BONDS. The text of the Bonds shall be of substantially the form of Exhibit A hereto, with such omissions, insertions, and variations as may be necessary and desirable, and as may be authorized or permitted by this Ordinance or by subsequent ordinance or resolution adopted prior to the issuance thereof. ARTICLE III BONDS NOT GENERAL OBLIGATION OF CITY; PLEDGE OF REVENUES AND APPLICATION THEREOF SECTION 3.01. BONDS NOT GENERAL OBLIGATION OF CITY. Neither the Bonds nor the interest or premium, if any, thereon shall be or constitute general obligations or indebtedness of the City as "bonds" within the meaning of the Constitution of the State of Florida, but shall be payable from and secured solely by a lien upon and a pledge of the Pledged Revenues as herein provided. No Registered Owner or Owners of any Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the City or taxation in any form of any property therein to pay such Bonds or the interest or premium, if any, thereon or be entitled to payment of such principal, premium, if any, and interest from any other funds of the City except from the Pledged Revenues in the manner provided herein. Neither the Bonds nor the interest or premium, if any, thereon shall have or be a lien upon the System or the Stormwater System, or upon any property of or in the City, other than the Pledged Revenues in the manner provided herein. SECTION 3.02. BONDS SECURED BY PLEDGED REVENUES. The payment of Debt Service on all the Bonds issued hereunder shall be secured forthwith equally and ratably with the other Bonds solely by a lien upon and pledge of the Pledged Revenues. The Pledged Revenues, in an amount sufficient both to pay the principal of, premium, if any, and interest on the Bonds herein authorized and to make the payments into the Reserve Account and Sinking Fund and all other payments provided for in this Ordinance are hereby irrevocably pledged in the manner stated herein to such payment; provided that said pledge and lien may be released and extinguished by defeasance as provided in Section 6.04 hereof. Notwithstanding the foregoing, no provision hereof is intended to prohibit the payment of Debt Service Requirements on any Series of Bonds from, or the pledging to such payment of, any lawfully available 40 additional revenues, reserves, security, documents, obligations or sources of funds. 3248/ATL 16.003/R-AUTI I-RESOLUTION.6 19 Ma, h 13, 1996 2:28pm SECTION 3.03. APPLICATION OF PLEDGED REVENUES. For as long as any of the principal of, premium, if any, and interest on any of the Bonds shall be outstanding and unpaid or until (a) there shall have been set apart in the Sinking Fund, herein established, including subaccounts therein for each Series of Bonds and the Reserve Account and Bond Amortization Account and subaccounts therein, a sum sufficient to pay when due the entire principal amount of the Bonds remaining unpaid, together with the premium, if any, with respect thereto, and the interest accrued or to accrue thereon, or (b) provision for payment of the Bonds shall have been made in accordance with the terms of Section 6.04 of this Ordinance and the Bonds shall have been defeased, the City covenants with the Registered Owners of any and all Bonds as follows: (A) CREATION OF FUNDS AND ACCOUNTS. There are hereby created and established the following funds and accounts: the Utilities System Revenue Fund, hereinafter referred to as the "Revenue Fund"; the Utilities System Capital Facilities Charges Fund, hereinafter called the "Capital Facilities Charges Fund", together with the "Water System Capital Facilities Charges Account" and the "Wastewater System Capital Facilities Charges Account" therein; the Utilities System Special Assessments Fund, hereinafter called the "Special Assessment Fund"; the Utilities System Revenue Bonds Sinking Fund, hereinafter called the "Sinking Fund", together with the accounts therein to be known as the "Current Debt Service Account," the "Bond Amortization Account" (together with any subaccounts therein) and the "Reserve Account"; the Utilities System Renewal and Replacement Fund, hereinafter called the "Renewal and Replacement Fund"; the Utilities System Rate Stabilization Fund, hereinafter called the "Rate Stabilization Fund"; the Utilities System Project Fund, hereinafter called the "Project Fund" together with an account therein to be known as the "1996 Project Account"; and the Utilities System Revenue Bonds Rebate Fund, herein referred to as the "Rebate Fund"; provided that separate Sinking Funds, and separate accounts and subaccounts in any of the foregoing may be established and maintained for different Series or installments of Bonds. (B) MAINTENANCE OF FUNDS AND ACCOUNTS. The designation and establishment of the various funds and accounts in and by this Ordinance shall not be construed to require the establishment of any completely independent, self -balancing funds or accounts, as such terms are commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of Pledged Revenues for certain purposes and to establish certain priorities for application of such Pledged Revenues as provided herein. Cash and Authorized Investments required to be accounted for in each of the funds and accounts established by this Ordinance may be deposited in a single account, provided that accounting records, prepared in accordance with Accounting Principles are maintained to reflect control or restricted allocation of the moneys therein for the various purposes of such funds and accounts. Deposits into the accounts for any Series or installment of Bonds shall be on a parity with the deposits, if any, into the corresponding accounts for each other Series or installment of Bonds (or, in the case of a deficiency, shall be on a pro rata basis computed with regard to the aggregate principal amount of Bonds of each Series or installment then Outstanding) unless specified otherwise; further provided that moneys on deposit in the accounts established for a particular Series or installment of Bonds may be specified not to be available to be used for 40 payments required to be made from the corresponding accounts for any other Series or installment of Bonds. 3248/ATL16.003/R-AUTH-RESOLUTION.6 20 March 12, 1996 228pm (C) APPLICATION OF GROSS REVENUES. All Gross Revenues shall, immediately upon receipt thereof, be deposited by the City into the Revenue Fund. Moneys on deposit in the Revenue Fund shall be applied to each month, subject to credits for deposits as provided hereinbelow, only in the following manner and order of priority; provided, that with respect to any payment period for any Series of Bonds that is other than annual or semiannual, the required deposits shall be such as to provide for equal monthly deposits of all amounts required to meet the annual Debt Service Requirement of such Series: (1) moneys shall first be used to pay Operating Expenses; (2) moneys shall next be used for deposit into the Sinking Fund in the following priority: (a) into the Current Debt Service Account in such amounts as are necessary to pay one-sixth (1/6) of the interest becoming due on the Current Interest Paying Bonds on the next Interest Payment Date; (b) into the Current Debt Service Account in such amounts as are necessary to pay one -twelfth (1/12) of the principal maturing on Current Interest Paying Serial Bonds on the next Principal Maturity Date; (c) into the Current Debt Service Account on a parity with the payments provided in subparagraph (b) above, in such amounts as are necessary to pay one -twelfth (1/12) of the Maturity Amount of any Capital Appreciation Bonds maturing on the next Principal Maturity Date; and (d) into the Bond Amortization Account, on a parity with the payments provided in subparagraphs (b) and (c) above, in such amounts as are necessary to pay one -twelfth (1/12) of the Amortization Installment for Term Bonds which shall become due and payable on the next Principal Maturity Date; (3) moneys shall next be used to cure any deficiency for prior deposits into the Sinking Fund; (4) moneys shall next be used to maintain in the Reserve Account a Reserve Account Value in an amount equal to the Reserve Account Requirement; (5) moneys shall next be deposited into the Renewal and Replacement Fund in an amount equal to one twelfth (1/12) of the Budgeted Renewal and Replacement Fund Amount; (6) moneys shall next be used to pay Reserve Account Credit Facility Costs; (7) moneys may next be used to pay debt service on any Subordinated Bonds; 40 (8) moneys may next, in the discretion of the Commission, be deposited into the Rate Stabilization Fund in such sums as shall be determined by the Commission; and 3248/ATL16.003/R-AUTH-RESOLUTION.6 21 March 12, 1996 2:28pin • (9) remaining moneys may be used by the City for any lawful purpose, including deposits to the Rebate Fund; provided that no moneys may be withdrawn and used by the City other than for deposits into the Rebate Fund at any time when there are outstanding, unpaid obligations due and owing to a Credit Facility Issuer pursuant to any Credit Facility or Reserve Account Credit Facility. The foregoing provisions notwithstanding, no further deposits shall be required to be made into the foregoing funds and accounts whenever (1) there shall be on deposit in the Sinking Fund, including the Reserve Account and the Bond Amortization Accounts therein, an amount of money and Authorized Investments equal to all principal and interest due on the Bonds to the final maturity thereof, and (2) all amounts due and owing to any Credit Facility Issuer shall have been paid. Credit shall be allowed against the required deposit amounts due as prescribed above for the payment of principal of and interest and Amortization Installment on Bonds to the extent of any other funds on deposit and available for such purpose in the applicable accounts of the Sinking Fund, including, but not limited to, moneys derived from (i) Capital Facilities Charges, (ii) Special Assessments; (iii) capitalized interest, and (iv) any Investment Earnings transferred into such fund or account and available for such purposes. (D) APPLICATION OF CAPITAL FACILITIES CHARGES. All Water System Capital Facilities Charges shall be deposited upon receipt into the Water System Capital Facilities Charges Account, and all Wastewater System Capital Facilities Charges shall be deposited upon receipt into the Wastewater System Capital Facilities Charges Account. (E) APPLICATION OF SPECIAL ASSESSMENTS. All Special Assessments shall, immediately upon receipt thereof, be deposited by the City into the Special Assessment Fund. (F) USE OF MONEYS ON DEPOSIT IN FUNDS AND ACCOUNTS. The moneys on deposit in the funds and accounts herein established shall be only used in the following manner and for the following purposes: (1) REVENUE FUND. Moneys on deposit in the Revenue Fund shall be used only to make the required payments and deposits as provided in Section 3.03(C)(1) through (8), inclusive, hereof and, thereafter, may be applied as provided in Section 3.03(C)(9) hereof, or may be retained in the Revenue Fund. (2) SINKINGFUND. (a) Current Debt Service Account. Moneysondeposit in the Current Debt Service Account in the Sinking Fund shall be used only to pay the principal of (including Maturity Amounts) and interest on the Bonds as the same matures and becomes due. 32481ATL16.003/R-AUTH-RESOLUTION.6 22 March 12. 1996 2:28pm (b) Bond Amortization Account. Moneys held for the credit of the Bond Amortization Account shall be applied to the retirement of Term Bonds of each Series or installment of Bonds, to the extent of the Amortization Installment, if any, for such Bond Year for the Term Bonds of each such Series or installment then Outstanding, and if the amount available in such Bond Year shall not be sufficient therefor, then in proportion to the Amortization Installment, if any, for such Bond Year for the Term Bonds of each such Series or installment then Outstanding. Notwithstanding the provisions of the preceding paragraph, the City may purchase Term Bonds then Outstanding at the most advantageous price obtainable with reasonable diligence, such price not to exceed the principal amount of such Term Bonds. No such purchase shall be made by the City within the period of forty-five (45) days immediately preceding any Interest Payment Date on which Term Bonds are subject to call for redemption, except from moneys in excess of the amounts set aside or deposited for the redemption of Term Bonds on such date. (c) Reserve Account. Moneys in the Reserve Account shall be used only for the purpose of the payment of interest on or principal (including Maturity Amounts and Amortization Installments) of the Bonds when the other moneys allocated to the Sinking Fund are insufficient therefor, and for no other purpose. (3) RENEWAL AND REPLACEMENT FUND. The moneys in the Renewal and Replacement Fund shall be used only for the purpose of paying (a) the cost of 40 extensions, enlargements or additions to, or the renewal or replacement of Facilities of, the System, including extraordinary repairs and any Project Costs; (b) making emergency repairs to the Facilities of the System; or (c) the principal of and interest on the Bonds, when due, if the moneys on deposit in the Sinking Fund and accounts therein are ever insufficient therefor, provided that any amounts so withdrawn must be restored from moneys available for use as provided in Section 3.03(C)(9). (4) RATE STABILIZATION FUND. Moneys on deposit in the Rate Stabilization Fund may be used only for redeposit into the Revenue Fund. Moneys redeposited into the Revenue Fund shall be included in Gross Revenues for the purposes of calculating Net Revenues hereunder for the Fiscal Year in which the redeposit occurs, except as provided in Section 5.01(G) hereof. (5) CAPITAL FACILITIES CHARGES FUND. Moneys on deposit in the Capital Facilities Charges Fund shall be used first for the purpose of supplementing the Gross Revenues and Investment Earnings to the extent necessary to make the required deposits into the Sinking Fund and accounts therein when the Gross Revenues and Investment Earnings are insufficient therefor. Thereafter, Capital Facilities Charges may be used to pay the cost of Expansion Facilities or for other lawful purposes of the System. (6) SPECIAL ASSESSMENT FUND. Moneys on deposit in the Special Assessment Fund shall be used first for the purpose of supplementing the Pledged Revenues to the extent necessary to make the required deposits into the Sinking Fund and 3248/ATL16.003/R-AUTII-RESOLUTION.6 23 March 12, 1996 2:28pm accounts therein when the Pledged Revenues are insufficient therefor. Thereafter, Special Assessments may be used to pay the cost of Expansion Facilities or for other lawful purposes of the System. (7) REBATE FUND. Moneys on deposit in the Rebate Fund may be used only for the purpose of making any payments required to be made to the Department of the Treasury of the United States pursuant to the provisions of Sections 103 and 141-148 of the Code. Any excess amount in the Rebate Fund not needed or required to be paid to the Department of the Treasury of the United States may be withdrawn and applied for any lawful purpose. (G) RESERVE ACCOUNT. Upon the issuance of Bonds, cash or Authorized Investments shall be deposited into the Reserve Account or a Reserve Account Credit Facility shall be purchased from the proceeds of such Bonds, or from other moneys of the City available therefor, in order to make the Reserve Account Value at the time of issuance thereof equal to the Reserve Account Requirement; provided, that the City may establish separate reserve accounts for different series of Bonds. Notwithstanding the foregoing, the City at any time may substitute a Reserve Account Credit Facility for all or any portion of the cash and Authorized Investments on deposit in the Reserve Account, subject only to such conditions and approvals as may be imposed by the Credit Facility Issuer providing such Reserve Account Credit Facility or by any Credit Facility Issuer having a Credit Facility or Reserve Account Credit Facility in effect as to any Bonds. Cash on deposit in the Reserve Account shall be used (or Authorized Investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing on any Reserve Account Credit Facility. If and to the extent that more than one Reserve Account Credit Facility is deposited in the Reserve Account, drawings thereunder and repayments of costs associated therewith shall be made on a pro -rata basis, calculated by reference to the maximum amounts available thereunder. The Authorized Investments on deposit in the Reserve Account shall be valued as of the last day of the Fiscal Year at the lesser of (1) their cost or (2) their fair market value, exclusive of accrued interest. Any Reserve Account Credit Facilities shall be valued at the amount of the Reserve Account Credit Facility Coverage. If and whenever the Reserve Account Value (excluding Investment Earnings to be deposited into the Sinking Fund or Revenue Fund as hereinafter provided in Section 3.03(H)) exceeds the Reserve Account Requirement on all then Outstanding Bonds, such excess may be withdrawn and applied, first, to pay any Reserve Account Credit Facility Costs and thereafter applied and allocated into the Renewal and Replacement Fund, or, if an amount equal to the Renewal and Replacement Fund Requirement is then on deposit in the Renewal and Replacement Fund, then into the Revenue Fund. Deficiencies in the Reserve Account Value resulting from a draw upon the Reserve Account or a decline in market value of the Authorized Investments therein shall be restored in equal installments over a period of not more than twelve (12) months from the date of valuation, draw, or withdrawal; provided that no restoration shall be required due to a decline of less than fifteen 40 percent (15%) in the market value of such Authorized Investments. 3248/ATL16.003/R-AUTH-RESOLUTION.6 24 March 12, 1996 2:28pm (H) INVESTMENT OF MONEYS IN FUNDS AND ACCOUNTS. All moneys on deposit in the funds and accounts created hereunder may be invested and reinvested only in Authorized Investments; provided, however, that such investments shall mature not later than the respective dates when such moneys will be required for the purposes of such funds and accounts; and provided that at no time shall any moneys constituting gross proceeds of Bonds be used in any manner to cause or result in a Prohibited Payment under applicable regulations pertaining to, or in any other fashion as would constitute failure of compliance with, Section 148 of the Code. Investment Earnings related to any Capital Facilities Charges shall be held and applied for the same purposes to which such Capital Facilities Charges are restricted by the terms of this Ordinance or any ordinance or resolution adopted in connection with the issuance of any applicable Series or installment of Bonds. Moneys in the Sinking Fund, other than the Reserve Account therein, may be invested in Authorized Investments maturing not later than the respective dates that such moneys will be needed for the payment of interest and principal (including Amortization Installments) on Bonds, and Investment Earnings thereon shall be deposited into the Revenue Fund. In the case of the Reserve Account, investments shall mature not later than ten (10) years from the date of investment, and Investment Earnings thereon shall be retained in such account to the extent necessary to maintain the Reserve Account Requirement therein, and, otherwise, 40 shall be deposited into the Revenue Fund. Moneys on deposit in the Renewal and Replacement Fund may be invested in Authorized Investments maturing not later than the time that such moneys will be needed for the purposes of such fund, and Investment Earnings thereon shall be retained in such fund to the extent necessary to maintain the Renewal and Replacement Fund Requirement therein and, otherwise, shall be deposited into the Revenue Fund. Moneys on deposit in the Rate Stabilization Fund may be invested in Authorized Investments maturing not later than the date that such moneys will be needed, and Investment Earnings thereon shall be deposited into the Revenue Fund upon receipt. Moneys on deposit in the Rebate Fund may be held uninvested or may be invested in Authorized Investments. Any Investment Earnings thereon shall be retained in the Rebate Fund to the extent needed to make required rebate payments and, otherwise, shall be deposited into the Revenue Fund. (I) PAYMENT ACCOUNTS. On or prior to each Interest Payment Date when Debt Service is due on any Bonds, funds for the payment of the Debt Service then due shall be transferred from the accounts in the Sinking Fund and deposited with the Paying Agent who shall deposit the same in a payment account upon which Debt Service payment checks shall be drawn and other payments of Debt Service shall be made. Such payment account shall be established in the name of the City and moneys in any such payment account may be invested 40 at the direction of the City in Authorized Investments. Such payment account shall be held in trust solely for the benefit of the persons entitled to receive payment of the Debt Service with 3248/ATL16.003/R-AUTU-RESOLUTION.6 25 March 12. 1996 228pm respect to which such moneys were deposited, subject however to the provisions of the next paragraph. (J) UNCLAIMED MONEYS. Any moneys deposited into the Sinking Fund, including the Bond Amortization Account(s) therein, for the payment of principal of, premium, if any, and interest on the Bonds and remaining unclaimed for a period of one (1) year from the date on which such moneys were due to pay maturing principal of, premium, if any, or interest on such Bonds may be withdrawn by the City and used for any lawful purpose; provided that (1) such withdrawal shall not give rise to any claim for additional interest due on such Bonds on account of payment thereof not having been duly provided for under the terms of this Ordinance; and (2) such withdrawal shall not affect the right, to the extent existing under the provisions of this Ordinance or of the laws of the State, of the Registered Owner of such Bonds to payment of the principal and interest thereon to the Interest Payment Date with respect to which such moneys were originally deposited. ARTICLE IV APPLICATION OF 1996 BOND PROCEEDS; 1996 PROJECT ACCOUNT SECTION 4.01. APPLICATION OF 1996 BOND PROCEEDS. All moneys received from the sale of any or all of the 1996 Bonds shall be disbursed as follows: (A) Accrued and capitalized interest shall be deposited into the Sinking Fund and applied to the interest coming due on the 1996 Bonds on the applicable Interest Payment Dates. (B) An amount required to pay all outstanding principal of and interest on the Refunded Obligation will be paid to Barnett Bank of Jacksonville, N.A., to retire the Refunded Obligation. (C) An amount equal to the Reserve Account Requirement shall be deposited into the Reserve Account; provided that this requirement may be satisfied in whole or in part by the establishment of a Reserve Account Credit Facility for the purpose of such Reserve Account. (D) An amount necessary to pay the Issuance Expenses with respect to the 1996 Bonds will be deposited into a cost of issuance account in the 1996 Project Account or will be paid at closing from the proceeds of the 1996 Bonds. (E) The balance of such proceeds of the sale of the 1996 Bonds shall be deposited into the 1996 Project Account to be used to pay Project Costs. SECTION 4.02. 1996 PROJECT ACCOUNT. The moneys on deposit in the 1996 Project Account shall be withdrawn, used and applied by the City solely for the payment of 1996 40 Project Costs and purposes incidental thereto. All expenditures or disbursements from the 1996 3248/ATL16.003/R-RUTH-RESOLUTION.6 26 March 12, 1996 2:28pm toProject Account shall be made only after such expenditures or disbursements shall have been approved by the City. All funds on deposit in the 1996 Project Account, which in the opinion of the City, are not immediately necessary for expenditure, as hereinabove provided, may be invested in Authorized Investments, maturing at such time or times as such moneys will be needed for the purposes of the 1996 Project Account. All income derived from such investments shall be retained in the 1996 Project Account and used to pay 1996 Project Costs, unless otherwise required by the terms of the tax compliance certificate delivered in connection with the 1996 Bonds. If, for any reason, the moneys on deposit in the 1996 Project Account, or any part thereof, are not necessary for or are not applied to the payment of applicable 1996 Project Costs, then, upon receipt of an opinion of Bond Counsel to the effect that such deposit and application shall not adversely affect the exclusion from gross income for federal income tax purposes of interest on the 1996 Bonds, the unapplied proceeds shall be applied and deposited by the City (1) first, into the Sinking Fund to the extent of any deficiency therein, (2) second, into the Reserve Account to the extent of any deficiency therein, (3) third into the Renewal and Replacement Fund, (4) fourth, to pay the cost of any additional Facilities which the City shall have determined to be useful in connection with the System, and (5) fifth to redeem or purchase Bonds. ARTICLE V COVENANTS OF THE CITY; REMEDIES SECTION 5.01. COVENANTS OF THE CITY. So long as any of the principal of, premium, if any, or interest on any of the Bonds shall be outstanding and unpaid, or until there shall have been set apart in the Sinking Fund and the accounts therein, a sum sufficient to pay, when due, or to redeem prior to maturity, the entire principal amount of the Bonds remaining unpaid, together with the premium, if any, and the interest accrued and to accrue thereon, and all amounts due and owing to any Credit Facility Issuer, or until all Bonds have been defeased in accordance with Section 6.04 hereof, the City covenants with the Registered Owners of any and all of the Bonds issued pursuant to this Ordinance and with any Credit Facility Issuer as follows: (A) RATE COVENANT. The City will fix, establish and maintain such rates and collect such fees, rentals, or other charges for the services and Facilities of the System, and will revise the same from time to time whenever necessary, so as to provide Net Revenues in each Fiscal Year commencing with the Fiscal Year beginning October 1, 1996, equal to the amounts set forth in either (1) or (2) below. 0 (1) Net Revenues equal to (a) one hundred ten percent (110 %) of the Debt Service Requirement on the Bonds for such Fiscal Year, and (b) one hundred percent 3248/ATLI6.003/R-AUTH-RESOLUTION.6 27 March 12, 1996 2:28pm (100%) of the required deposits into (i) the Reserve Account (less any portion thereof to be deposited from proceeds of Bonds) together with any amounts of Reserve Account Credit Facility Costs payable in such Fiscal Year, and (ii) the Renewal and Replacement Fund in such Fiscal Year. K' (2) (a) Net Revenues equal to (i) one hundred five percent (105%) of the Debt Service Requirement on the Bonds for such Fiscal Year, and (ii) one hundred percent (100%) of the required deposits into (A) the Reserve Account (less any portion thereof to be deposited from proceeds of Bonds) together with any amounts of Reserve Account Credit Facility Costs payable in such Fiscal Year, and (B) the Renewal and Replacement Fund in such Fiscal Year; AND (b) Net Revenues, Special Assessments and Capital Facilities Charges available in such Fiscal Year, equal to (i) one hundred ten percent (I 10 %) of the Debt Service Requirement on the Bonds for such Fiscal Year, and (ii) one hundred percent (100%) of the required deposits into (A) the Reserve Account (less any portion thereof to be deposited from proceeds of Bonds) together with any amounts of Reserve Account Credit Facility Costs payable in such Fiscal Year, and (B) the Renewal and Replacement 40 Fund in such Fiscal Year. The City further covenants that, from time to time and as often as shall be necessary, it will revise rates, fees and charges of the System or the Operating Expenses and methods of operations of the System as may be necessary so that Net Revenues in each Fiscal Year will, subject to applicable requirements and restrictions imposed by law, not be less than the amount required for such Fiscal Year (1) under this Section 5.01(A) and (2) to make all deposits and payments required by the provisions of Section 3.03(C) hereof. The City further covenants and agrees that it will annually, within thirty (30) days after adoption of the annual budget, revise its rates, fees and charges to the extent necessary to cause the estimated Net Revenues during the Fiscal Year to which such budget pertains to be not less than the amount of Net Revenues (1) required by this Section 5.01(A) and (2) needed to make the deposits and payments required by Section 3.03(C) hereof. (B) OPERATION AND MAINTENANCE. The City will maintain the System and all parts thereof in good condition, and will operate the same in an efficient and economical manner, making such expenditures for equipment and for renewal, repair and replacement as may be proper for the economical operation and maintenance thereof and, subject to the provisions of this Ordinance, will continuously operate the System as a revenue producing enterprise of the City until all of the Bonds and the interest thereon, are finally paid and retired, or until the Bonds have been defeased in accordance with the provisions of Section 6.04 hereof and all amounts due and owing to any Credit Facility Issuer shall have been paid. Nothing in 40 this paragraph shall prevent the City from entering into one or more management contracts for all or a portion of the operation of the System. 3248/ATLI6.0I13/R-AUTN-RESOLUTION.6 28 March 12, 1996 2:28pm (C) INSURANCE. The City will carry such insurance as is customarily carried by City governments owning and operating facilities similar to the Facilities of the System with a reputable insurance carrier or carriers, including liability insurance, for which the City may upon appropriate authorization by the Commission be a self -insurer on a sound actuarial basis, and insurance against loss or damage by fire, explosion, hurricane, earthquake, cyclone, occupancy or other hazards and risks, and said property loss or damage insurance shall at all times be in an amount or amounts equal to the full insurable value of the buildings, properties, furniture, fixtures and equipment of the System. Any such insurance shall be carried for the benefit of the City and, to the extent herein provided, the Registered Owners and/or Credit Facility Issuer. (D) ANNUAL BUDGET; BOOKS AND RECORDS; AUDIT. The City shall prepare and adopt an initial budget in connection with the System and thereafter on or prior to the beginning of each Fiscal Year, shall prepare and adopt a detailed budget of the estimated revenues and expenditures for the System during its current or such next succeeding Fiscal Year, as applicable, and shall provide any Rating Agency and Credit Facility Issuer with a copy thereof at the earliest practicable date. No expenditure for the System shall be made in any Fiscal Year in excess of the amount provided therefor in such budget, as revised pursuant to law. The City will keep books and records of the System, which shall be separate and apart from all other books, records and accounts of the City, and in which complete and correct entries shall be made, in accordance with Accounting Principles, of all transactions relating to the System. Any Rating Agency, Credit Facility Issuer, and any Registered Owner of Bonds issued pursuant to this Ordinance shall have the right at all reasonable times to inspect the System and all parts thereof, and all records, accounts and data of the City relating thereto. The City shall, within one hundred eighty (180) days after the close of each Fiscal Year (or such other date as shall be specified by law), cause the books, records and accounts of the City for such preceding Fiscal Year to be properly audited by the Independent Certified Public Accountants and a report thereon prepared and delivered to the City, and the City shall make available at City Hall, and shall mail to each Rating Agency and Credit Facility Issuer and, upon written request, to any Registered Owner of Bonds issued pursuant to this Ordinance, said report, or a reasonable summary thereof. (E) SALE OF THE SYSTEM. The following provisions shall govern the disposition of any Facilities or the System as a whole: (1) The System may be sold, mortgaged, leased or otherwise disposed of as a whole or substantially as a whole, only if the net proceeds to be realized from such transaction shall be sufficient fully to retire all of the Bonds and all other obligations Outstanding pursuant to the provisions of this Ordinance which have a lien on the Pledged Revenues. The proceeds from such sale, mortgage, lease or other disposition of the System pursuant to this paragraph (1) shall be used only for the purpose of providing for the payment of the principal of and interest on the Bonds and other obligations Outstanding pursuant to the provisions of this Ordinance as the same shall become due, or for the redemption of callable Bonds; provided, however, that any excess of such 3248/ATL16.003/R-AUTH-RESOLUTION.6 29 March 12. 1996 2:28pm proceeds not needed for such purpose may be used by the City for any purpose permitted to by law. (2) The foregoing provision notwithstanding, the City shall have and hereby reserves the right to sell, lease or otherwise dispose of any of the property comprising a part of the System which may hereafter be determined in the manner provided herein to be no longer necessary, useful, or profitable in the operation thereof. Prior to any such sale, lease, or other disposition of said property pursuant to this paragraph (2) the duly authorized officer in charge of the System shall make a finding in writing determining that such property comprising a part of the System is no longer necessary, useful, or profitable in the operation thereof. If (a) the amount to be received as a result of such sale or other disposition is in excess of $25,000, such finding shall be approved by resolution of the Commission; and, if (b) the amount to be received as a result of such sale or other disposition is in excess of $250,000, such finding shall be approved by the Independent Consultant and by resolution of the Commission, and written notice thereof shall be provided to the Credit Facility Issuer; and if (c) the amount to be received in the aggregate as a result of all such sales or other dispositions over an 18 -month period is in excess of $1,000,000, such finding shall additionally be subject to the approval of the Credit Facility Issuer. Any proceeds of such sale or other disposition shall (1) be deposited in the Renewal and Replacement Fund created by this Ordinance and used only as provided herein for moneys on deposit in such fund or (2) shall be used to purchase or redeem Bonds. Payment of such proceeds into the Renewal and Replacement Fund shall not reduce the amounts required to be paid into such fund by other provisions of this Ordinance. (3) Additionally, notwithstanding the foregoing, the City may sell or otherwise dispose of a portion of the System or any of the System's operating components if (a) the City determines that the operating integrity of the System will not be materially adversely affected and the City will be able to comply with the rate covenant set forth in Section 5.01(A) hereof, (b) such findings are approved by the Independent Consultant, and (c) such sale or disposal would not, in the opinion of Bond Counsel, affect the exclusion from gross income of interest on the Bonds. (4) The foregoing provision notwithstanding, the City shall have and hereby reserves the right to sell, lease, or transfer operating control of, or otherwise dispose of, the property comprising the System as a whole to any public board or body, whether created by the City or created pursuant to the laws of the State, for the purpose of owning and operating the System, whether independent of or together with any other utility systems of the City. Any such transfer shall be expressly made subject to the rights of the Registered Owners of any Bonds issued hereunder and then Outstanding, and in particular subject to the lien upon the Pledged Revenues of the Bonds. (F) ISSUANCE OF OTHER OBLIGATIONS PAYABLE OUT OF REVENUES. The City will not issue any other obligations, and will not voluntarily create or cause to be created, any debt, lien, pledge, assignment, encumbrance or any other charge, having priority over the Bonds as to lien upon and security for payment from the Pledged Revenues. The City may issue Additional Parity Bonds, in the manner and subject to the conditions hereinafter provided, 3248/ATL16.003/R-AUTH-RESOLUTION.6 30 March 12, 1996 2:28pm payable from and secured by the Pledged Revenues on a parity with the Bonds. Any other to obligations issued by the City, in addition to the Bonds authorized by this Ordinance or Additional Parity Bonds provided for in Section 5.01(G) below, shall contain an express statement that such obligations are junior, inferior, and subordinate in all respects to the Bonds issued pursuant to this Ordinance and any such Additional Parity Bonds as to lien on and source and security for payment from the Pledged Revenues, and in all other respects. (G) ISSUANCE OF ADDITIONAL PARITY BONDS. No Additional Parity Bonds shall be issued after the issuance of the 1996 Bonds, except upon the following terms and conditions: For purposes of this Section 5.01(G): (1) the term "Adjusted Net Revenues" shall mean the Net Revenues, certified by the Independent Certified Public Accountant, giving effect to the following adjustments, (provided each such adjustment shall be certified by an Independent Consultant or Independent Certified Public Accountant in a certificate or report which shall set forth the assumptions upon which it is based and shall state that such assumptions, in the opinion of the Independent Consultant or Independent Certified Public Accountant, as the case may be, form a reasonable basis for the conclusions expressed therein). (a) If the City, prior to the issuance of the proposed Series of Bonds, 40 as applicable (the "Applicable Bonds"), shall have adopted or put into effect an increase in the rates, fees, rentals or other charges for the services of the System, then Net Revenues shall be adjusted to include the additional Net Revenues which would have been received during the Computation Period if such increased rates, fees, rentals or other charges had been in effect during all of such period. (b) If the number of connections as of the first day of the month preceding the month in which the proposed Applicable Bonds are to be issued exceeds the average number of such connections during the most recent full Fiscal Year, then the Net Revenues shall be adjusted to include the Net Revenues which would have been received during the Computation Period if those additional connections had also been connected to the System during all of such period. (c) If the City shall acquire by the issuance of the Applicable Bonds any privately or publicly owned existing water system, wastewater system or water and wastewater system, the cost of which shall be paid from all or part of the proceeds of the issuance of the proposed Applicable Bonds, then the Net Revenues during the Computation Period shall be increased by adding to the Net Revenues during the Computation Period the additional Net Revenues (to the extent such amounts were not reflected in such Net Revenues) which, on the basis of operating data pertaining to the acquired system during the Computation Periods, would have been derived from such existing water system, wastewater system, or other utility system as if such existing 40 water system, wastewater system or other utility system had been operated by the City as a part of the System during the Computation Period. 3248/ATL 16.003/R-AUTH-RESOLUTION.6 31 March 12, 1996 2:28pm (d) If the City shall have entered into a contract, which contract shall 40 be for a duration of not less than five years, with any public body whereby the City shall have agreed to furnish services for the collection, treatment or disposal of sewage or agreed to furnish services in connection with any water system or other utility system, then the Net Revenues during the Computation Period shall be increased (to the extent such amounts were not reflected in such Net Revenues) by the minimum amount which such public body shall guarantee, under a legally enforceable agreement with the City, to pay in any Fiscal Year for the furnishing of such services by the City, after deducting from such payment the estimated additional Operating Expenses attributable in such Fiscal Year to such services. to y (e) The Net Revenues shall be increased (to the extent the following amounts are not otherwise reflected in Net Revenues) by seventy-five percent (75%) of the amount of additional Net Revenues which would have been received during the Computation Period from any existing occupied structures which are to be connected to the System within the following eighteen (18) months of the issuance of the Applicable Bonds. (2) "Computation Period" means either (i) any twelve (12) consecutive calendar months of the eighteen (18) complete calendar months or (ii) the most recent complete Fiscal Year for which the audit is completed, in either case, immediately preceding the month of issuance of Additional Parity Bonds. Additional Parity Bonds may be issued by the City for the purposes of financing the construction and acquisition of additions, extensions and improvements to the System, including Project Costs, only if the requirements of either (1) or (2) below have been met (as evidenced by the certificate of an Independent Consultant or Independent Certified Public Accountant). (1) The Adjusted Net Revenues for the Computation Period, hereinafter defined, shall have at least equalled: (a) one hundred ten percent (110%) of the Maximum Debt Service Requirement on all Bonds to be Outstanding as of the date of such issuance, and (b) one hundred five percent (100%) of the amounts, if any, required to be deposited in the Reserve Account during such Computation Period (less any portion thereof which is to be deposited from proceeds of Bonds) together with any amounts of Reserve Account Credit Facility Costs payable in such Computation Period, and (c) one hundred percent (100%) of the amounts required to be deposited in the Renewal and Replacement Fund during such Computation Period; 3248/ATL 16.003/R -A UT FI-RESOLUTION.6 32 March 12, 1996 2:28pm (2) (a) The Adjusted Net Revenues for the Computation Period shall have to at least equalled: AND (i) one hundred five percent (105%) of the Maximum Debt Service Requirement on all Bonds to be Outstanding as of the date of such issuance, and (ii) one hundred percent (100%) of the amounts, if any, required to be deposited in the Reserve Account during such Computation Period (less any portion thereof which is to be deposited from proceeds of Bonds) together with any amount of Reserve Account Credit Facility Costs payable in such Computation Period, and (iii) one hundred percent (100%) of the amounts required to be deposited in the Renewal and Replacement Fund during such Computation Period; (b) The sum of the Adjusted Net Revenues, the Special Assessments, and Capital Facilities Charges for the Computation Period shall have at least equalled: (i) one hundred ten percent (110%) of the Maximum Debt Service Requirement on all Bonds to be Outstanding as of the date of such issuance, and (ii) one hundred percent (100%) of the amounts, if any, required to be deposited in the Reserve Account during such Computation Period (less any portion thereof which is to be deposited from proceeds of Bonds) together with any amount of Reserve Account Credit Facility Costs payable in such Computation Period, and (iii) one hundred percent (100%) of the amounts required to be deposited in the Renewal and Replacement Fund during such Computation Period. In addition to meeting either (1) or (2) above, the Additional Parity Bonds may not be issued unless Adjusted Net Revenues for the Computation Period, excluding any transfers from the Rate Stabilization Fund, shall have equalled at least one hundred percent (100%) of Adjusted Maximum Debt Service Requirement (as hereinafter defined) on all Bonds to be Outstanding on the date of issuance. For purposes of the foregoing, "Adjusted Maximum Debt Service Requirement" shall be calculated in the same manner as Maximum Debt Service Requirement, however, the annual amount of Special Assessments to be collected and applied in each Bond Year to the payment of the principal of and interest on Bonds to be Outstanding on the date of issuance of the proposed Additional Parity Bonds shall be subtracted from the Debt Service Requirement for such Bond Year. 3248/ATL16.003/R-AUT"-RESOLUTION.6 33 March 12, 1996 2:28pm Additional Parity Bonds ("Completion Bonds") may be issued without satisfying the Go foregoing Additional Parity Bonds financial tests in (1) or (2) above for completion of any Project, provided that such Completion Bonds may be issued only in a principal amount not greater than fifteen percent (15%) of the principal amount of Bonds initially issued to fund the applicable Project, or may be issued without regard to the fifteen percent (15 %) limitation upon the approval of the Credit Facility Issuer and delivery to the City of a certificate of an Independent Consultant stating that the proceeds of such Completion Bonds will be sufficient to complete the acquisition, construction and installation of such Project substantially in accordance with the plans and specifications therefor in effect at the time of issuance of the Bonds originally issued for such Project. Additional Parity Bonds payable from the Pledged Revenues may be issued by the City for Refunding purposes without satisfying the foregoing financial tests in (1) or (2) above, provided that, as a result of such Refunding, the Maximum Debt Service Requirement is not increased. Additional Parity Bonds may be issued in the form of Variable Rate Bonds only upon the prior written consent of the Credit Facility Issuer. No Additional Parity Bonds for the purpose of constructing additions, extensions or improvements to the System, including Project Costs, shall be issued at any time, however, unless (a) all of the payments into the respective funds and accounts provided for in this Ordinance, shall have been made in full to the date of issuance of such Additional Parity Bonds, (b) no Event of Default as described in Section 5.02 hereof shall have occurred and be continuing, and (c) the City shall be in substantial compliance with the covenants, agreements 40 and terms of this Ordinance. Each ordinance or resolution authorizing the issuance of Additional Parity Bonds shall recite that all of the covenants herein contained will be applicable to such Additional Parity Bonds. (H) SERVICES RENDERED TO THE CITY; NO PREFERENTIAL RATES. The City will neither render nor cause to be rendered any free services of any nature by the System, or any part thereof, nor will any preferential rates be established for users of the same class; in the event the City, or any department, agency, or instrumentality, or any officer or employee thereof, shall avail itself of the Facilities or services provided by the System, or any part thereof, the same rates, fees, or charges applicable to other customers receiving like services under similar circumstances shall be charged to the City and to any such department, agency, instrumentality, officer, or employee provided, that the City may provide water service for irrigation purposes to publicly -owned landscaping and beautification projects in a quantity which, if billed to private users for such purposes, costs not more than two percent (2%) of the Net Revenues in each year such water service is provided. Such charges shall be paid as they accrue, and the City shall transfer from its general funds sufficient sums to pay such charges. The moneys so received shall be deemed to be Gross Revenues derived from the operation of the System, and shall be deposited and accounted for in the same manner as other Gross Revenues derived from the operation of the System. The foregoing paragraph shall not require the City to have the same rates for (a) different classes of users or (b) for users of the services and Facilities of the System residing or located 3248/ATL16.003/R-AUTH-RESOLUTION.6 34 March 12, 1996 2:28pm within different geographical areas, and the City may have different rates for (i) different classes Go of users or (ii) for users of the services and Facilities of the System located within and without the boundaries of the City, as long as such rates comply with the foregoing paragraph, insofar as they relate to the users within (A) any class or (B) any particular area or areas located within and without the City. The foregoing provisions notwithstanding, the City shall set rates for customers of the System residing within the corporate limits of the City in accordance with any applicable provisions of law. Additionally, notwithstanding anything in this section to the contrary, the City may contract separately for services of the System to be provided to the federal government and the federal government may be considered to be a separate class of user for purposes of this Section. (I) ENFORCEMENT OF COLLECTIONS. The City will diligently enforce and collect all fees, rentals, or other charges for the services and facilities of the System and all parts thereof. The Commission will establish written policies regarding the enforcement of collections of such fees, rentals, and other charges and will take all steps, actions and proceedings for the enforcement or collection of such fees, rentals or other charges to the full extent permitted or authorized by law, consistent with such reasonable policy. The City will, to the full extent permitted by law, establish written policies consistent with sound business judgment for the disconnection from the System of any customer who fails to pay for services rendered by the System, and shall enforce such policies diligently and fairly. (n NO COMPETING FACILITIES; SEPARATE SYSTEMS. The City, to the extent permitted by law, will not grant any franchise, license, or permit, or cause or voluntarily agree to the granting of any franchise, license, or permit, for the construction or operation of any facilities which will be competitive with the services and facilities of the System; provided, however, that this subsection shall not affect the vested rights of any persons, firms, or corporations now owning or operating such facilities; further provided that this provision shall not be deemed to require the City to provide service from the System where to do so would be uneconomical. (K) TAX COMPLIANCE. The City covenants that it will restrict the use of the proceeds of the Bonds in such manner and to such extent, if any, as may be necessary so that the Bonds will not constitute arbitrage bonds under Section 148 of the Code. The Mayor or the Vice -Mayor, or any other officer having responsibility for the issuance of the Bonds of each Series shall give an appropriate certificate of the City for inclusion in the transcript of proceedings for each Series, setting forth the reasonable expectations of the City regarding the amount and use of all the proceeds of the Bonds of such Series, the facts, circumstances and estimates on which they are based, and other facts and circumstances relevant to the tax treatment of interest on such Series. Each such officer is further authorized to make or effect any election, selection, choice, consent, approval, or waiver on behalf of the City with respect to the Bonds as the City is permitted or required to make or give under the federal income tax laws, for the purposes of assuring, enhancing or protecting favorable tax treatment or characterization of the Bonds or interest thereon or assisting compliance with requirements for that purpose, reducing the burden or expense of such compliance, reducing the rebate amount • or payments of penalties thereon, or making payments in lieu thereof, or obviating such amounts 3248/ATLI6.IAl3/R-AUT"-RESOLUTION.6 35 March 12, 1996 2:28pm or payments, as determined by such officer. Any such action of such officer shall be in writing Go and signed by the officer. The City covenants that it (a) will take or cause to be taken such actions which may be required of it for the interest on the Bonds to be and remain excluded from gross income for federal income tax purposes, and (b) will not take or permit to be taken any actions which would adversely affect that exclusion, and that it, or persons acting for it, will, among other acts of compliance, (i) apply the proceeds of the Bonds to the governmental purpose of the borrowing, (ii) restrict the yield on investment property acquired with those proceeds, (iii) make timely rebate or penalty payments, if any, to the federal government, (iv) maintain proper books and records and make necessary calculations and reports, and (v) refrain from certain uses of proceeds, all in such manner and to the extent necessary to assure such exclusion of that interest under the Code. The Mayor, the Vice -Mayor and other appropriate officers are hereby authorized and directed to take any and all actions, make rebate or penalty payments, and make or give reports and certifications, as may be appropriate to assure such exclusion of that interest. (L) PAYMENT. The City will duly and punctually pay or cause to be paid from the Pledged Revenues the principal of, premium, if any, and interest on the Bonds. SECTION 5.02. EVENTS OF DEFAULT. It shall be an Event of Default under this Ordinance if the City shall: (1) fail to deposit with the Paying Agent on or before each Interest Payment Date sufficient funds to pay the portion of the Debt Service Requirement becoming due and payable on such Interest Payment Date; (2) fail to comply in any material respect with any other covenant made in this Ordinance, if (a) such failure shall continue for more than thirty (30) days following written notice of such failure to the City or (b) the City shall not (within thirty (30) days of receipt of such notice) have initiated steps to cure such default and thereafter have proceeded diligently to cure such default; provided, however, that the Credit Facility Issuer may waive any such defect if compliance shall be determined to be impossible of performance; or (3) the City files a voluntary petition under the federal bankruptcy laws or any other applicable federal or state bankruptcy or insolvency law. In determining whether any Event of Default described in paragraph (1) above has occurred, no effect shall be given to any payments made pursuant to a Credit Facility. The City will provide or cause to be provided immediate notice to the Credit Facility Issuer of any Event of Default described in paragraph (1) above and notice within thirty (30) days of any other Event of Default. • SECTION 5.03, REMEDIES. The Registered Owners of not less than twenty-five percentum (25%) in principal amount of Bonds issued under the provisions of this Ordinance, or any Credit Facility Issuer while the Bonds secured by it are Outstanding, or any trustee acting 3248/ATLI6.003/R-A UTN-R ESOLUTION.6 36 March 12, 1996 228pm for such Registered Owners in the manner hereinafter provided, may, either at law or in equity, 40 by suit, action, mandamus, or other proceedings, in any court of competent jurisdiction, protect and enforce any and all rights, available under the laws of the State of Florida; provided, however, that there will be no right to force any acceleration of payment with respect to the Bonds without the consent of the Credit Facility Issuer. Any such Registered Owner or trustee may enforce and compel the performance of all duties required by this Ordinance or by any applicable statutes to be performed either by the City or by any officer thereof, including the fixing, charging, and collecting of rates, fees or other charges for the services and Facilities of the System. The Registered Owners of not less than twenty-five percentum (25%) in aggregate principal amount of Bonds issued under this Ordinance then Outstanding or any Credit Facility Issuer while the Bonds secured by it are Outstanding may, by a duly executed certificate in writing, appoint a trustee for Registered Owners of Bonds issued pursuant to this Ordinance with authority to represent such Registered Owners in any legal proceedings for the enforcement and protection of the rights of such Registered Owners. Such certificate shall be executed by such Registered Owners or their duly authorized attorneys or representatives or any Credit Facility Issuer, and shall be filed in the office of the City Clerk and with the Mayor. Upon the occurrence and continuance of an Event of Default under this Ordinance, the authorized trustee or the Registered Owners of twenty-five percentum (25%) or more in aggregate principal amount of the Bonds then Outstanding may pursue any available right, remedy or power to enforce the payment of the Debt Service Requirement and the observance and performance of any other covenant, agreement or obligation under this Ordinance or any other instrument providing security, directly or indirectly, for the Bonds. No right, remedy or power conferred upon or reserved to the trustee or the Registered Owners under this Ordinance is intended to be exclusive of any other available right, remedy or power, but each right, remedy or power shall be cumulative and concurrent and shall be in addition to every other right, remedy or power available hereunder or existing at law, in equity or by statute or otherwise. No exercise, beginning of the exercise, or partial exercise by the trustee or the Registered Owners or the Credit Facility Issuer of any one or more rights, remedies or powers shall preclude the simultaneous or later exercise by the trustee or the Registered Owners or the Credit Facility Issuer of any other right, remedy or power. No delay or omission in the exercise of any right, remedy or power accruing upon any event of default under this Ordinance shall impair that or any other right, remedy or power or shall be construed to constitute a waiver of such event of default under this Ordinance, but every right, remedy or power may be exercised from time to time and as often as may be deemed to be necessary or desirable. For purposes of this Section 5.03, the foregoing provisions notwithstanding, with regard to defaults as to any Bonds as to which a Credit Facility is in effect, the Credit Facility Issuer shall, as long as it has not failed to comply with its payment obligations under the Credit 40 Facility, be deemed to be the sole Registered Owner of such Bonds. 3248/ATLI6.003/R-AUTH-RESOLUTION.6 37 March 12, 1996 2:28pm SECTION 5.04. CONTINUING DISCLOSURE. (A) PROVISION OF ANNUAL so INFORMATION; AUDITED FINANCIAL STATEMENTS; AND NOTICES OF EVENTS. The City hereby covenants, in accordance with the provisions of the Rule, to provide or cause to be provided: (1) to each NRMSIR and to any SID, (i) annual financial information and operating data of the type described under the caption "Annual Information" below for each Fiscal Year ending on or after September 30, 1996, not later than the following May 1, and (ii) when and if available, audited financial statements for the City for each such Fiscal Year; and (2) to each NRMSIR or to the MSRB and to the SID, in a timely manner, notice of (i) any Specified Event if that Specified Event is material, (ii) the City's failure to provide the Annual Information on or prior to the date specified above, (iii) any change in the Fiscal Year, (iv) the City's failure to appropriate funds to meet costs to be incurred to provide the foregoing information, and (v) the termination of the City's obligations to provide the foregoing information. The City expects that (a) annual financial statements of the City shall be prepared and audited, (b) any such audited statements shall be available together with the Annual Information, and (c) the accounting principles to be applied in the preparation of those financial statements shall be generally accepted accounting principles as recommended from time to time by the Governmental Accounting Standards Board. In the event that the audited annual general purpose 40 financial statements of the City are not available by the date on which the Annual Information shall be provided, the City will provide unaudited financial statements of the City by the date specified and audited financial statements when available. (B) ANNUAL INFORMATION. Annual Information to be provided by the City shall consist of: (a) the annual general purpose financial statements of the City; and (b) summary of revenue expenses and quantities of the System consistent with the presentation of such information in the Official Statement for the 1996 Bonds. (C) SPECIFIED EVENTS. Specified Events shall include the occurrence of the following events, within the meaning of the Rule, with respect to the Bonds: principal and interest payment delinquencies; non-payment related defaults; unscheduled draws on debt service reserves reflecting financial difficulties; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions or events affecting the tax-exempt status of the Bonds; modifications to rights of holders of Bonds; Bond calls; defeasances; release, substitution, or sale of property securing repayment of the Bonds; and rating changes. In furtherance of the foregoing, however, holders should understand that the sale or other transfer of real property subject to the Special Assessments is not included in the listed events. The City shall not be required to undertake to track the sale or other transfer of any such real property or make any notification in the event any such sale or other transfer may occur. • (D) AMENDMENTS. The City reserves the right to amend this Section as may be necessary or appropriate to achieve its compliance with any applicable federal securities law or 3248/ATL 16.003/R-AUTII-RESOLUTION.6 38 March 12. 1996 2:28pm rule, to cure any ambiguity, inconsistency or formal defect or omission, and to address any as change in circumstances arising from a change in legal requirements, change in law, or change in the identity, nature, or status of the City, or type of business conducted by the City. Any such amendment shall be made only in a manner consistent with the Rule and interpretations thereof by the SEC. Annual Information containing any amended operating data or financial information shall explain, in narrative form, the reasons for any such amendment and the impact of the change on the type of operating data or financial information being provided. The provisions of Section 6.05 of this Ordinance shall not apply to amendments made to this Section. (E) REMEDY FOR BREACH. The covenants contained in this Section 5.04, as amended, relating to the City's continuing disclosure requirements shall be solely for the benefit of the holders and beneficial owners from time to time of the Bonds. Holders and beneficial owners, to the extent permitted by law and equity, shall have the right, and shall be limited to the right, upon any breach of such covenant by the City and to the exclusion of any other remedy for that breach that otherwise would be available, to institute and maintain, or to cause to be instituted and maintained, proceedings at law or in equity to obtain the specific performance by the City of its obligations under such covenant. An individual holder or beneficial owner shall not be entitled to institute or maintain proceedings to challenge the sufficiency of any pertinent filing that is made. (F) NON -APPROPRIATION. The performance by the City of its obligations under this Section 5.04, relating to the City's continuing disclosure requirements shall be subject to the availability of funds and their annual appropriation to meet costs the City would be required 40 to incur to perform such obligations. • (G) TERMINATION. The obligations of the City under this Section 5.04, relating to the City's continuing disclosure requirements shall remain in effect only for such period that (1) such covenant is required by the Rule, (2) the Bonds are outstanding in accordance with their terms, and (3) the City remains an obligated person with respect to the Bonds within the meaning of the Rule. The obligation of the City to provide the Annual Information and notices of the events described above shall terminate, if and when the City no longer remains such an obligated person. (H) SEPARATE BOND REPORT NOT REQUIRED. Additionally, the requirements of this Section 5.04 do not necessitate the preparation of any separate annual report addressing only the Bonds. These requirements may be met by the filing of a combined bond report or the City's Comprehensive Annual Financial Report; provided, such report includes all of the required information and is available by May 1. Additionally, the City may incorporate any information provided in any prior filing with each NRMSIR or included in any final official statement of the City; provided, such final official statement. is filed with the MSRB. 3248/ATLI6.003/R-AUTH-RESOLUTION.6 39 March 12, 1996 2:23pm so ARTICLE VI MISCELLANEOUS PROVISIONS SECTION 6.01. SALE OF BONDS; DELEGATION OF AUTHORITY. The Bonds shall be issued and sold at public sale, private placement, or negotiated sale at one time or in installments from time to time and at such price or prices consistent with the provisions of the Act and the laws of the State of Florida and the requirements of this Ordinance. The City Manager may, subject to the conditions hereinafter set forth, be authorized and empowered by resolution to approve the purchase price, interest rates, maturities, and redemption provisions for any Series of Bonds and to execute a purchase contract for such Series of Bonds on behalf of the City. Any delegation of authority may only be made if the following parameters are addressed in the delegation. The conditions to any delegation of authority hereunder are: (A) The maximum principal amount of such Series to be sold shall be specified. (B) The maximum underwriter's discount for such Series must be specified. (C) The maximum interest (true interest cost or net interest cost) rate for such Series must be specified. 49 (D) The maximum Issuance Expenses for such Series must be specified. SECTION 6.02. NOTICES TO CREDIT FACILITY ISSUER; CREDIT FACILITY ISSUER DEEMED SOLE BONDOWNER AND A PARTY IN INTEREST. Whenever a Credit Facility Issuer shall be providing a Credit Facility with respect to any Bonds issued hereunder, such Credit Facility Issuer shall be entitled to receive and shall be provided by certified mail all notices and reports which are required herein to be prepared and to be sent or made available to Registered Owners of such Bonds and a full transcript of any proceedings relating to the execution of any supplemental ordinance or resolution hereto. Notwithstanding any other provisions of this Ordinance to the contrary, the Credit Facility Issuer shall be deemed to be the sole Registered Owner of all Bonds insured by it for purposes of exercising rights, consents or remedies granted under this Ordinance. For any amendment or modification of the Ordinance for which a Credit Facility Issuer shall consent in replacement of the Registered Owners, notice of such amendment or modification along with a copy of such supplemental resolution shall be sent to Standard & Poor's Ratings Services at least twenty (20) days prior to the adoption of such amendment or modification. Any provision of this Ordinance to the contrary notwithstanding, if under any provision hereof any action is to be taken only with the consent or approval of a Credit Facility Issuer, and if at the time such consent or approval would otherwise be called for such Credit Facility Issuer is not in compliance with its payment obligations of or is contesting its obligations under its Credit Facility, then the rights of such Credit Facility Issuer to any consent or approval is hereunder shall be suspended while any such noncompliance or contest is ongoing. 3248/ATL16.003/R-AUT"-RESOLUTION.6 40 March 12, 1996 2:28pm Except as expressly provided herein to the contrary, neither the City nor the Paying Be Agent shall take the Credit Facility into effect in determining whether the rights of Registered Owners are adversely affected by actions taken pursuant to the terms and provisions of the Ordinance. The Credit Facility issuer shall be included as a party in interest and as a party entitled to notify the Paying Agent or any trustee or the City to intervene in judicial proceedings that affect the Bonds or the security therefor. The trustee, the Paying Agent and the City shall be required to accept notice of default from the Credit Facility Issuer. SECTION 6.03. NO RECOURSE. No recourse shall be had for the payment of the principal of, premium, if any, and interest on the Bonds, or for any claim based thereon or on this Ordinance, against any present or former member or officer of the Commission or any person executing the Bonds. SECTION 6.04. DEFEASANCE. Notwithstanding the foregoing provisions of this Ordinance, if, at any time, the City shall have paid all amounts due and owing to any Credit Facility Issuer and shall have paid, or shall have made provision for payment of, the principal, interest and redemption premiums, if any, with respect to any Bonds, then, and in that event, the pledge of and lien on the Pledged Revenues in favor of the Registered Owners of such Bonds shall be no longer in effect. For purposes of the preceding sentence, deposit of noncallable Defeasance Obligations in irrevocable trust with a Banking Institution for the sole benefit of the Registered Owners of such Bonds, in respect to which such Defeasance Obligations the principal 40 and interest received will be sufficient, without reinvestment, based on the report of an Independent Certified Public Accountant, to make timely payment of the principal of, interest, and redemption premiums, if any, on such outstanding Bonds designated to be defeased, and receipt of an opinion of Bond Counsel to the effect that such deposit has no adverse effect on the exclusion from gross income for federal income tax purposes of interest on the Bonds, shall be considered "provision for payment". Nothing herein shall be deemed to require the City to call any of the Outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the City in determining whether to exercise any such option for early redemption. Notwithstanding the foregoing, amounts paid by a Credit Facility Issuer shall not be deemed paid for the purposes of this Section and shall remain due and owing hereunder until paid in accordance with the Ordinance. SECTION 6.05. MODIFICATION OR AMENDMENT. (A) The City, from time to time and at any time and without the consent or concurrence of any Registered Owners, may adopt an ordinance or resolution amendatory hereof or supplemental hereto, if the provisions of such supplemental or amendatory ordinance or resolution shall not adversely affect the rights of the Registered Owners of the Bonds then Outstanding, for any one or more of the following purposes: (1) to make any changes or corrections in this Ordinance which the City shall have been advised by legal counsel are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or omission or mistake or manifest error contained herein, or to insert in this Ordinance such provisions clarifying matters or questions arising hereunder as are necessary or desirable; 3248/ATL 16.003/R-AUTH-RESOLUTION.6 41 March 12, 1996 2:28pm (2) to add additional covenants and agreements of the City for the purpose of further securing the payment of the Bonds; (3) to surrender any right, power or privilege reserved to or conferred upon the City by the terms hereof; (4) to confirm by further assurance any lien, pledge or charge created or to be created by the provisions hereof; (5) to grant to or confer upon the Registered Owners any additional right, remedies, powers, authority or security that lawfully may be granted to or conferred upon them; (6) to assure compliance with the Code; (7) to provide such changes which, in the opinion of the City, based upon such certificates and opinions of the Independent Consultant, Independent Certified Public Accountant, Bond Counsel, financial advisors or other appropriate advisors as the City may deem necessary or appropriate, will not materially adversely affect the security of the Registered Owners. (8) to modify any of the provisions of this Ordinance in any other respects, provided that such modification shall not be effective (a) with respect to the Bonds Outstanding at the time such amendatory or supplemental resolution is adopted or (b) shall not be effective (i) until the Bonds Outstanding at the time such amendatory or supplemental resolution is adopted shall cease to be Outstanding, or (ii) until the Registered Owners thereof consent thereto. (B) The foregoing provisions notwithstanding, (1) no consent of any Registered Owners shall be required with respect to modification or amendment with respect to Bonds as to which a Credit Facility (other than a Reserve Account Credit Facility) is in place and to which modification or amendment the Credit Facility Issuer has provided its prior written consent and (2) no modification or amendment (other than as described in paragraphs (1) and (2) of clause (A) above) shall be effective with respect to any Bonds as to which a Credit Facility is effective without the prior written consent to such modification or amendment of the Credit Facility Issuer. (C) The foregoing provisions of Sections 6.05(A) and (B) notwithstanding, no modification or amendment shall permit a change in the maturity of such Bonds, a reduction in the rate of interest thereon, a reduction in the amount of the principal obligation represented thereby or a reduction in the redemption premium required to be paid in connection with any optional redemption thereof; nor shall any modification or amendment either affect the unconditional promise of the City to pay the principal of and interest on the Bonds, as the same shall become due, or reduce the percentage of Registered Owners of Bonds above required to consent to such material modifications or amendments, without the consent of the Registered Owners of all such Bonds. 3248/ATLI6.003/R-AIITII-RESOLUTION.6 42 March 12. 1996 2:28pm �J (D) Other than as provided above, no modification or amendment of this Ordinance or of any ordinance or resolution amendatory hereof or supplemental hereto may be made without the consent in writing of the Registered Owners of fifty-one percent (51 %) or more in principal amount of the Bonds then Outstanding and affected by such modification or amendment. (E) The foregoing provisions shall not apply to amendments to Section 5.04 hereof. SECTION 6.06. PAYMENTS DUE AND ACTS REQUIRED TO BE DONE ON DAYS WHICH ARE NOT BUSINESS DAYS; TIME. (A) In any case where any payment of Debt Service is required to be paid on a date which is not a Business Day, then such payment need not be made on such date, but shall be made on the next succeeding Business Day, with the same force and effect as if made on the date fixed for such payment, and no interest shall accrue on such payment for the period after such date if such payment is made on such next succeeding Business Day. (B) In any case where any act is required or any notice is required to be given hereunder on any day other than a Business Day, then such act shall be done or such notice shall be given on the next succeeding Business Day, with the same force and effect as if such act had been performed or such notice had been given on the date required. (C) All times for the making of any payment or the performance of any act, as provided in this Ordinance means the local time prevailing in the City unless some other time is expressly provided for. SECTION 6.07. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions of this Ordinance should be held to be contrary to any express provision of law or to be contrary to the policy of express law, though not expressly prohibited, or to be against public policy, or should 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, and in no way affect the validity of, all the other provisions of this Ordinance or of the Bonds. SECTION 6.08. REPEALING CLAUSE. All resolutions of the City, or parts thereof, in conflict with the provisions of this Ordinance are to the extent of such conflict, hereby superseded and repealed. 3248/ATLI6.003/R-AUTH-RESOLUTION.6 43 March 12. 1996 2:28pm SECTION 6.09. EFFECTIVE DATE. This Ordinance shall take effect immediately upon its adoption. PASSED AND ADOPTED by the City Commission of the City of Atlantic Beach, Florida at a special/regular meeting duly called and held this 11th day of March, 1996. Approved as to form, sufficiency and correctness: City Attor ATTEST: City Clerk 3248/ATL 16.(X)3/R-AI1T1 I-RESOLUTION.6 CITY OF ATLANTIC BEACH, FLORIDA yor March 12. 1996 2:28pm EXHIBIT A No. $ UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF ATLANTIC BEACH UTILITIES SYSTEM REVENUE BOND, SERIES [FORM OF FIRST PARAGRAPH OF CURRENT INTEREST PAYING BOND] DATE OF RATE OF INTEREST MATURITY DATE ORIGINAL ISSUE CUSIP IwxffWI a : 1 • iil.la"I PRINCIPAL AMOUNT: KNOW ALL MEN BY THESE PRESENTS, that the City of Atlantic Beach, Florida (the "City"), for value received, hereby promises to pay to the Registered Owner designated above, or registered assigns, solely from the special funds hereinafter mentioned, on the Maturity Date specified above, the principal sum shown above, upon presentation and surrender hereof at the corporate trust office of , as Bond Registrar and Paying Agent, and to pay solely from such funds, interest thereon from the date of this Bond or from the most recent Interest Payment Date to which interest has been paid, whichever is applicable, at the rate per annum set forth above such interest to the maturity or prior redemption hereof being payable on , 19_, and thereafter on 1 and 1 of each year by check or draft mailed to the Registered Owner at his address as it appears, at 5:00 P.M. Eastern Time on the fifteenth day of the month preceding the applicable interest payment date, on the registration books of the City kept by the Bond Registrar; provided, that for any Registered Owner of One Million Dollars ($1,000,000) or more in principal amount of Bonds, such payment shall, at the written request and at the expense of such Registered Owner, be by wire transfer or other medium acceptable to the City and to such Registered Owner. The principal of, premium, if any, and interest on this Bond are payable in lawful money of the United States 40 of America. A-1 go [FORM OF FIRST PARAGRAPH OF COMPOUNDING INTEREST BOND] PRINCIPAL AMOUNT AT DATE OF ISSUANCE PER $5,000 RATE OF INTEREST ORIGINAL DATE MATURITY AMOUNT CUSIP REGISTERED OWNER: MATURITY AMOUNT: KNOW ALL MEN BY THESE PRESENTS, that the City of Atlantic Beach, Florida (the "City"), for value received, hereby promises to pay to the Registered Owner designated above, or registered assigns, solely from the special funds hereinafter mentioned, on the Maturity Date specified above, the Maturity Amount shown above, upon presentation and surrender hereof at the corporate trust office of , as Bond Registrar and Paying Agent; provided, that for any Registered Owner of One Million Dollars ($1,000,000) or more in principal amount of Bonds, such payment shall, at the written request and at the expense of such Registered Owner, be by wire transfer or other medium acceptable to the City and to such Registered Owner. The Maturity Amount and premium, if any, of this Bond are payable in lawful money of the United States of America. [FORM OF REMAINING PARAGRAPHS FOR ALL BONDS] This Bond is payable from and secured solely by a lien upon and pledge of (i) the Net Revenues to be derived from the operation of the System, (ii) Capital Facilities Charges, (iii) (iii) the moneys on deposit in the Funds and Accounts, (iv) certain Investment Earnings, and (v) the Special Assessments (collectively, the "Pledged Revenues"), all as defined and provided in Ordinance No. of the City as supplemented by Ordinance No. (the "Ordinance") hereinafter referred to. This Bond does not constitute a general obligation or indebtedness of the City, and it is expressly agreed by the Registered Owner of this Bond that such Registered Owner shall never have the right to require or compel the exercise of the ad valorem taxing power of the City, or the taxation of any property of or in the City, for the payment of the principal of and interest on this Bond or for the making of any sinking fund, reserve or other payments provided for in said Ordinance. It is further agreed between the City and the Registered Owner of this Bond, that this Bond and the obligation evidenced hereby shall not constitute a lien upon the System or any part thereof, or on any other property of or in the City, but shall constitute a lien only on the Pledged Revenues, in the manner provided in the Ordinance. A-2 REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND APPEARING ON THE REVERSE SIDE HEREOF AND SUCH FURTHER PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH ON THE FACE HEREOF. It is hereby certified and recited that all acts, conditions and things required to be performed to exist and to happen precedent to and in connection with the issuance of this Bond, have been performed exist and have happened 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 this Bond, and the issue of Bonds of which this Bond is one, does not violate any constitutional or statutory limitation. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordinance until the Certificate of Authentication hereon shall have been executed by the Bond Registrar. IN WITNESS WHEREOF, the City of Atlantic Beach, Florida has issued this Bond and has caused the same to be executed by the Mayor or the Vice -Mayor of the City, either manually or with his facsimile signature, and the corporate seal of said City or City Commission, or a facsimile thereof to be affixed hereto or imprinted or reproduced hereon, and the foregoing attested by the manual or facsimile signature of the City Clerk of the City, all as of the day of , 19—. (SEAL) CITY OF ATLANTIC BEACH, FLORIDA ATTEST: City Clerk C� J Mayor A-3 C7 �J BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the issue described in the within -mentioned Ordinance. Date of Authentication: [NAME] As Bond Registrar Authorized Signature VALIDATION CERTIFICATE This Bond is one of a series of Bonds validated by judgment of the Circuit Court for Duval County, Florida rendered on A-4 Mayor 0 (MATERIAL APPEARING ON REVERSE OF BONDS) This Bond is one of an authorized issue of Bonds, originally issued in the aggregate principal amount of $ , of like date, tenor and effect, except as to number, interest rate, and date of maturity, issued to pay the cost of acquiring and constructing additions, extensions, and improvements to the City's combined water and sewer utility system (the "System") and the City's stormwater utility system, and to refund certain outstanding debt of the City previously issued to finance improvements to the System, under the authority of and in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, and other applicable provisions of law, and Ordinance No. 15-95-7 duly enacted by the City Commission of the City on November 13, 1995 (the "Bond Ordinance"), as supplemented by Ordinance No. 15-96-8, duly enacted by the City Commission on March 11, 1996, as further supplemented (hereinafter collectively called "Ordinance"), and is subject to all the terms and conditions of said Ordinance. Capitalized terms used herein shall have the meaning specified in the Ordinance. The Bonds are issuable only as fully registered Bonds in the denominations or Maturity Amounts of $5,000 or integral multiples thereof. This Bond is transferable and exchangeable for Bonds of other authorized denominations at the office of the Bond Registrar, by the Registered Owner or by a person legally empowered to do so, upon presentation and surrender hereof to the Bond Registrar together with a request for exchange or an assignment signed by the Registered Owner or by a person legally empowered to do so in a form satisfactory to the Bond Registrar, all subject to the terms, limitations and conditions provided in the Ordinance. No charge will be made for transfer or exchange, but the City or the Bond Registrar may require payment of an amount sufficient to cover any tax or other governmental charge payable in connection therewith. The City and the Bond Registrar may deem and treat the Registered Owner as the absolute owner of this Bond for the purpose of receiving payment of or on account of principal or interest and for all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. The City has entered into certain covenants with the Registered Owners of the Bonds of this issue for the terms of which reference is made to said Ordinance. In particular, the City has reserved the right to issue additional obligations payable from and secured by a lien upon and pledge of the Pledged Revenues on a parity with the Bonds of this issue and series, upon compliance with certain conditions set forth in the Ordinance. The City has also reserved the right to defease the lien of the Bonds of this issue upon the Pledged Revenues upon making provision for payment of the Bonds as provided in the Ordinance. The Bonds maturing in the years to are not subject to redemption prior to their stated dates of maturity. The Bonds maturing on and thereafter are redeemable prior to maturity, at the option of the City, in inverse order of maturity, and by lot within maturity if less than a full maturity, from any moneys legally available therefor, at a redemption price, expressed as a percentage of the principal amount of the Bonds so redeemed, if redeemed 0 during the following periods: • r� me Redemption Period (Both dates inclusive) Redemption Price (%) (INSERT TABLE) The Bonds maturing in the year are subject to mandatory redemption prior to maturity by lot at a redemption price of par plus accrued interest to the date of such redemption on of each year in the years and amounts as follows: Year Amount Year Amount (INSERT TABLE) Notice of such redemption shall be given in the manner provided in the Ordinance. This Bond is and has all the qualities and incidents of a negotiable instrument under the Uniform Commercial Code -Investment Securities Laws of the State of Florida, and the Registered Owner and each successive Registered Owner of this Bond, shall be conclusively deemed by his acceptance hereof to have agreed that this Bond shall be and have all the qualities and incidents of negotiable instruments under the laws of the State of Florida. STATEMENT OF INSURANCE [INSERT STATEMENT OF INSURANCE, IF ANY] 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 COM - as tenants in common UNIF GIF MIN ACT - TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right Custodian for of survivorship and not of tenants in common Additional abbreviations may also be used although not listed above. (Cust. ) (Minor) 0 ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto (PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE] (Name and Address of Transferee) the within Bond and does hereby irrevocably constitute and appoints to transfer the within note on the books kept for registration thereof, with full power of substitution in the premises. Dated Signature Guaranteed Signature guarantee shall be made by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Registrar. • A-7 Note: The signature(s) on this assignment must correspond with the name of the Registered Owner as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever. EXHIBIT B 1996 PROJECT Capital Improvement Program for Four Fiscal Years Endin¢ September 30. 2000 ($ in thousands) 0 Estimated Cost 100,000 15,000 5,000 253,000 1,400,000 8,500 1,200,000 895,000 894,000 3,200,000 3,982,000 131.500 IVAIT.r., II1; Description 1. New Well/Water Treatment Plant #2 2. City Water Meters 3. Corrosion Reduction 4. New Master Lift Station/ Buccaneer WWTP 5. Facility Improvements/ Buccaneer WWTP 6. Influent Flow Meter and Controls, Buccaner WWTP 7. Water and Sewer Improvements Oak Harbor 8. Water and Sewer Improvements Beach Avenue 9. Water Main Ungrades Various Location 10. Sewer Rehabilitation 11. Stormwater Master Plan Implementation 12. Capital Improvements Program Contingency TOTAL 0 Estimated Cost 100,000 15,000 5,000 253,000 1,400,000 8,500 1,200,000 895,000 894,000 3,200,000 3,982,000 131.500 IVAIT.r., II1;