Loading...
HomeMy WebLinkAboutRefunding and Improvement Bonds Augusta Richmond GA DOCUMENT NAME M t- fO"6 I n~ ()\ n d T M f'eW. ""^+ l?o MIs DOCUMENTTYPE: hesoI0+{~Y\ YEAR: 1996 BOX NUMBER: :;l FILE NUMBER: /2 ~ Lf 5 NUMBER OF PAGES: 21 I ) · I , , ... .~ A RESOLUTION TO SPECIFY THE PRINCIPAL AMOUNTS OF AND RATES OP ~ INTEREST THE RICHMOND COUNTY WATER AND SEWERAGE REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 1996A, RICHMOND COUNTY TAXABLE WATER AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 1996B AND RICHMOND COUNTY WATER AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 1997, SHALL BEAR; TO SPECIFY THE SERIES 1996A BONDS, SERIES 1996B BONDS AND SERIES 1997 BONDS 1fBICH SHALL BE TERM BONDS SUBJECT TO MANDATORY REDEMPTION AND TO STATE THE PROVISIONS APPLICABLE THERETO; TO PROVIDE FOR BOND INSURANCE; TO DESIGNATE THE REPRESENTATrvE OF THE ORIGINAL PURCHASER OF THE SERIES 1996A BONDS, SERIES 1996B BONDS AND SERIES 1997 BONDS; TO AMEND THE DATED DATE OF THE SERIES 1996A BONDS AND THE SERIES 1996B BONDS; TO AMEND THE OPTIONAL REDEMPTION PROVISIONS APPLICABLE TO THE SERIES 1997 BONDS; TO PROVIDE FOR THE ISSUANCE AND DELrvERY OP THE SERIES 1996A BONDS, THE SERIES 1996B BONDS AND THE SERIES 1997 BONDS; TO RATIFY, REAFFIRM, AMEND AND SUPPLEMENT THE BOND RESOLUTION ADOPTED OCTOBER 21, 1996, AUTHORIZING THE ISSUANCE OF SAID SERIES 1996A BONDS, SERIES 1996B BONDS AND SERIES 1997 BONDS; AND FOR OTHER PURPOSES: 1fBEREAS, Richmond County (the "Consolidated Government"), pursuant to that certain resolution adopted October 21, 1996 (the "1996 Resolution"), has authorized the issuance of not to exceed $69,670,000 aggregate principal amount of its Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A, dated November 15, 1996 (the "Series 1996A Bonds") in the form of fully registered bonds without coupons, transferable to subsequent owners as hereinafter provided, in the denomination of $5,000 or any integral multiple thereof, numbered from R-1 upwards, bearing interest from date at such rate or rates not exceeding 6.55 percent in any year, all interest payable April 1, 1997 and semiannually thereafter on the 1st days of April and October in each year, and the principal maturing (or being subject to mandatory sinking fund redemption) on the 1st day of October, in each of the years 1997 to 2028, inclusive, and in such principal amounts such that the maturing annual debt service in any sinking fund year will not exceed $5,873,890; and WHEREAS, the Consolidated Government, pursuant to the 1996 ReSOlution, has authorized the issuance of not to exceed $3,760,000 aggregate principal amount of its Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B, dated November 15, 1996 (the "Series 1996B Bonds") in the form of fully registered bonds without coupons, transferable to subsequent owners as hereinafter provided, in the denomination of $5,000 or any integral multiple thereof, numbered from R-1 upwards, bearing interest from date at such rate or rates not exceeding 8.05 percent in any year, all interest payable April 1, 1997 and semiannually thereafter, on the 1st days of April and October in each year, and the principal maturing (or being subject to mandatory sinking fund red~mption) on the 1st day of October, in each of the years 1997 to 2007, inclusive, and in such principal amounts such that the maturing annual debt service in any sinking fund year will not exceed $863,565; and 196895.1 I , I , . WHEREAS, the Consolidated Government, pursuant to the 1996 Resolution, has authorized the issuance of not to exceed $6,210,000 aggregate principal amount of its Water and Sewerage Revenue Refunding Bonds, Series 1997, dated as of the first day of the month in which the Series 1997 Bonds are issued and delivered (the "Series 1997 Bonds" and, together with the Series 1996A Bonds and the Series 1996B Bonds, the "Series 1996/1997 Bonds") in the form of fully registered bonds without coupons, transferable to subsequent owners as hereinafter provided, in the denomination of $5,000 or any integral multiple thereof, numbered from R-1 upwards, bearing interest from date at such rate or rates not exceeding 6.50 percent in any year, all interest payable April 1, 1997 and semiannually thereafter on the 1st days of April and October in each year, and the principal maturing (or being subject to mandatory sinking fund redemption) on the 1st day of October, in each of the years 1997 to 2021, inClusive, and in such principal amounts such that the maturing annual debt service in any sinking fund year will not exceed $504,960; and WHEREAS, The Robinson-Humphrey Company, Inc., Atlanta, Georgia (the "Underwriter") has offered to purchase the Series 1996/1997 Bonds pursuant to a Bond Purchase Agreement, dated the date hereof, as follows: (a) the Series 1996A Bonds at a purchase price of $62,394,566.40 plus accrued interest to date of delivery less original issue discount of $1,658,185.85, (b) the Series 1996B Bonds at a purchase price of $3,730,972.80 plus accrued interest to date of delivery less original issue discount of $874.20, and (c) the Series 1997 Bonds at a purchase price of $5,864,374.80 plus accrued interest to date of delivery less original issue discount of $130,852.80, and the rates of interest set by the Underwriter do not exceed the maximum rates of interest for any year over the life of the Series 1996A Bonds, the Series 1996B Bonds and the Series 1997 Bonds as set forth in the 1996 Resolution and the Series 1996A Bonds, the Series 1996B Bonds and the Series 1997 Bonds shall bear interest from date at the rates per annum hereinafter set forth, and the sale of the Series 1996A, Series 1996B Bonds and Series 1997 Bonds at such prices will provide the Consolidated Government with sufficient funds to finance the cost of the overall undertaking now contemplated by the Consolidated Government as set forth in the 1996 Resolution; and WHEREAS, it was provided in the 1996 Resolution authorizing the issuance of the Series 1996/1997 Bonds that subsequent to the sale of the Series 1996/1997 Bonds the Consolidated Government would adopt a supplemental resolution specifying, among other things, the aggregate principal amount of each series of bonds, the interest rate or rates that the bonds would bear, the principal amount to mature in each year and the maturities of said bonds which will be designated as term bonds and subject to mandatory redemption, would designate the representative of the original purchaser of said bonds and would provide for the actual issuance and delivery of the bonds to the purchaser upon payment of the agreed purchase price therefor by said purchaser; and 196895.1 -2- ~ . I . \ WHBREAS, the Bonds should now be printed and thereafter executed, issued and delivered; and WHEREAS, in order to receive a more favorable rating and more favorable interest rates on the Series 1996/1997 Bonds, the Consolidated Government will obtain a municipal bond new issue insurance policy (the "Bond Insurance Policy") for the Series 1996/1997 Bonds from Financial Guaranty Insurance Company, a New York stock insurance company (the "Bond Insurer"); and WHEREAS, the Consolidated Government desires to change the dated date of the Series 1996A Bonds and the Series 1996B Bonds from November 15, 1996 to December 1, 1996; and WHEREAS, the Consolidated Government desires to indicate more specifically the optional redemption provisions applicable to the Series 1997 Bonds set forth in the 1996 Resolution; and HOW, THEREFORE, BB IT RESOLVED by the Augusta-Richmond County commission of Richmond County and it is hereby resolved by authority of same, that $62,880,000 aggregate principal amount of Richmond County Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A, shall be issued and mature on October 1 of the years set forth below and shall bear interest from date at the rate per annum set forth below opposite each principal maturity: Ye..a.I: Amount RaU Ye..a.I: Amount RaU 1997 $ 265,000 3.60% 2006 $ 1,260,000 6.00 % 1998 350,000 3.80 2007 1,335,000 6.00 1999 365,000 4.00 2008 1,415,000 4.90 2000 375,000 4.10 2009 1,485,000 5.00 2001 395,000 4.20 2010 1,560,000 5.10 2002 410,000 4.30 2012 3,355,000 5.00 2003 1,100,000 4.40 2017 10,000,000 5.125 2004 1,155,000 4.50 2022 13,305,000 5.25 2005 1,205,000 4.60 2028 23,545,000 5.25 and all interest shall be payable April 1, 1997 and semiannually thereafter on the 1st days of April and October in each year. BB IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that $3,760,000 aggregate principal amount of Richmond County Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B, shall be issued and mature on October 1 of the years set forth below and shall bear interest from date at the rate per annum set forth below opposite each, principal maturity: 196895.1 -3- . , xe.su: 1997 1998 1999 2000 2001 2002 Amount $655,000 585,000 605,000 610,000 640,000 665,000 Rate 5.60% 5.80 5.90 6.10 6.20 6.25 and all interest shall be payable April 1, 1997 and semiannually thereafter on the 1st days of April and October in each year. BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that $5,910,000 aggregate principal amount of Richmond County Water and Sewerage Revenue Refunding Bonds, Series 1997, shall be issued and mature on October 1 of the years set forth below and shall bear interest from date at the rate per annum set forth below opposite each principal maturity: xe.su: Amount Rate xe.su: Amount Ra.t..e. 1997 $100,000 3.60% 2006 $ 190,000 4.70 % 1998 140,000 3.80 2007 200,000 4.80 1999 145,000 4.00 2008 210,000 4.90 2000 150,000 4.10 2009 220,000 5.00 2001 155,000 4.20 2010 230,000 5.10 2002 160,000 4.30 2012 500,000 5.00 2003 170,000 4.40 2017 1,490,000 5.125 2004 175,000 4.50 2021 1,490,000 5.25 2005 185,000 4.60 and all interest shall be payable April 1, 1997 and semiannually thereafter on the 1st days of April and October in each year. BE IT FURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that the $3,355,000 aggregate principal amount of the Series 1996A Bonds maturing October 1, 2012 are hereby made subject to mandatory redemption prior to maturity on October 1, 2011 in the principal amount of $1,635,000 (leaving $1,720,000 to mature October 1, 2012), in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date. BB IT FURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that the $10,000,000 aggregate principal amount of the Series 1996A Bonds maturing October 1, 2017 are hereby made subject to mandatory redemption prior to maturity on October 1, 2013 and on each succeeding October 1 to and including October 1, 2016, in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date, in the following principal amounts on October 1, in the years as follows: 196895.1 -4- . . ~ 2013 2014 2015 2016 Amount $1,805,000 1,895,000 1,995,000 2,100,000 (Leaving $2,205,000 to mature October 1, 2017) BB IT FURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that the $13,305,000 aggregate principal amount of the Series 1996A Bonds maturing October 1, 2022 are hereby made subject to mandatory redemption prior to maturity on October 1, 2018 and on each succeeding October 1 to and including October 1, 2021, in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date, in the following principal amounts on October 1, in the years as follows: ~ 2018 2019 2020 2021 Amount $2,320,000 2,440,000 2,570,000 2,705,000 (Leaving $3,270,000 to mature October 1, 2022) BB IT FURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that the $23,545,000 aggregate principal amount of the Series 1996A Bonds maturing October 1, 2028 are hereby made subject to mandatory redemption prior to maturity on October 1, 2023 and on each succeeding October 1 to and including October 1, 2027, in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date, in the following principal amounts on October 1, in the years as follows: ~ 2023 2024 2025 2026 2027 Amount $3,440,000 3,620,000 3,810,000 4,010,000 4,220,000 (Leaving $4,445,000 to mature October 1, 2028) BB IT FURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that the $500,000 aggregate principal amount of the Series 1997 Bonds maturing October 1, 2012 are hereby made subject to mandatory redemption prior to maturity on October 1, 2011, in the principal amount of $245,000 (leaving $255,000 to mature October 1, 2012), in part, by lot in such manner 196895.1 -5- . . as may be dsignated by the Bond Registrar, at par plus accrued interest to the redemption date. BE IT FURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that the $1,490,000 aggregate principal amount of the Series 1997 Bonds maturing October 1, 2017, are hereby made subject to mandatory redemption prior to maturity on October 1 , 2013 , and on each succeeding October 1, to and including October 1, 2016, in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date, iri the following principal amounts on October 1, in the years as follows: ~ 2013 2014 2015 2016 Amount $270,000 285,000 295,000 310,000 (Leaving $330,000 to mature October 1, 2017) BE IT PURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that the $1,490,000 aggregate principal amount of the Series 1997 Bonds maturing October 1, 2021 are hereby made subject to mandatory redemption prior to maturity on October 1, 2018, and on each succeeding October 1, to and including October 1, 2020, in part, by lot in such manner as may be designated by the Bond Registrar, at par plus accrued interest to the redemption date, in the following principal amounts on October 1, in the years as follows: ~ 2018 2019 2020 Amount $345,000 365,000 380,000 (Leaving $400,000 to mature October 1, 2021) and the Series 1996/1997 Bonds subject to mandatory redemption as aforesaid shall be redeemed in the same manner and procedure as set forth in Article III, Section 2 of the 1996 Resolution pertaining to the optional redemption of said Series 1996/1997 Bonds. BE IT FURTHER RESOLVED by hereby resolved by authority of 1996/1997 Bonds as set forth amended so as to set forth the to mandatory redemption and the each year. the authority aforesaid, and it is same, that the forms of the Series in the 1996 Resolution shall be bonds which are term bonds subject principal amounts to be redeemed in 196895.1 -6- . . . . BB IT PURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of the same, that the Consolidated Government hereby accepts and approves the offer of the Underwriter to purchase the Series 1996/1997 Bonds pursuant to the terms and conditions set forth in the Bond Purchase Agreement, dated December 3, 1996, by and between the Consolidated Government and the Underwriter in the form presented at its meeting on December 3, 1996 and hereby authorizes and directs the Mayor of the Consolidated Government to execute and deliver such Bond Purchase Agreement for and on behalf of the Consolidated Government with such changes as the Mayor deems necessary and the Clerk of the Consolidated Government be and is hereby authorized and directed to attest the same. BB IT PURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that for the purpose of this resolution and the 1996 Resolution authorizing the issuance of the Series 1996/1997 Bonds, the terms "original purchaser, " "representative of the original purchaser" and "designated representative of the original purchaser" of the Series 1996/1997 Bonds shall be construed to mean the Underwriter, its successors or assigns. BB IT PURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that all of the Series 1996/1997 Bonds be delivered against payment to the original purchaser on the date and at the place as may be mutually agreed upon by the designated representative of the original purchaser and the Consolidated Government. BB IT PURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that Article I of the Bond Resolution is hereby amended to provide for the following definitions: "Bond Insurer" shall mean Financial Guaranty Insurance Company, a New York stock insurance company, or any successor thereto. "Bond Insurance Policy" shall mean the municipal bond new issue insurance policy issued by the Bond Insurer that guarantees payment of principal of and interest on the Series 1996/1997 Bonds. BB IT FURTHER RESOLVED, by the authority aforesaid, and it is. hereby resolved by authority of the same, that the following provisions shall apply with respect to the Bond Insurer (the capitalized terms herein having the same meanings as in the 1996 ,Resolution unless otherwise specified): 1. The Bond Insurer shall be provided with the following information: ( i) Within 120 days after the end of the Consolidated Government's Fiscal Year, budget for the new year, 196895.1 -7- 196895.1 (ii) (iii) (iv) (v) annual audited financial statements, a statement of the amount on deposit in the Debt Service Reserve Account as of the last valuation, and, if not presented in the audited financial statements, a statement of the revenues pledged to the payment of the Series 1996/1997 Bonds in each such Fiscal Year; Official statement or other disclosure, if any, prepared in connection with the issuance of additional debt, whether or not it is on parity with the Series 1996/1997 Bonds within 30 days after the sale thereof; Notice of any draw upon or deficiency due to market fluctuation in the amount, if any, on deposit in the Debt Service Reserve Account: Notice of the redemption, other than mandatory sinking fund redemption, of any of the Series 1996/1997 Bonds, or of. any advance refunding of the Series 1996/1997 Bonds, including the principal amount, maturities and CUSIP numbers thereof; Simultaneously with the delivery of the annual audited financial statements: (A) The number of System users as of the end of the Fiscal Year; (B) Notification of the withdrawal of any System user comprising 5 percent of more of System sales measured in terms of revenue dollars since the last reporting date; (C) Any significant plant retirements or expansions planned or undertaken since the last reporting date; (D) Maximum and average daily usage for the Fiscal Year; (E) Updated capital plans for expansion and improvement projects; (F) Results of annual engineering inspections, if any, occurring at the end of the Fiscal Year; and Such additional information as the Bond Insurer may reasonably request from time to time. So long as the Bond Insurer is not in default in its payment obligations under the Bond Insurance POlicy, any credit instrument provided in lieu of a cash deposit into the Debt Service Reserve Account shall conform to the \ (vi) 2. -8- 196895.1 '0' 8. 9. requirements set forth in Exhibit A hereto in addition to those requirements set forth in the 1996 Resolution. If the requirements of Exhibit A and the 1996 Resolution conflict, the requirements set forth in Exhibit A shall control. 3. Article III, section 2 of the 1996 Resolution is hereby amended by adding the following sentence as the last paragraph thereof: Notice of any redemption of Series 1996/1997 Bonds shall either (i) explicitly state that the proposed redemption is conditioned on there being on deposit in the applicable fund account on the redemption date sufficient money to pay the full redemption price of the Series 1996/1997 Bonds to be redeemed or (ii) be sent only if sufficient money to pay the full redemption price of the Series 1996/1997 Bonds to be redeemed is on deposit in the applicable fund or account. 4. To the extent there are no other available funds held under the 1996 Resolution, the Bond Registrar and Paying Agent shall use the remaining funds in the Construction Fund to pay principal of and interest on the Series 1996/1997 Bonds in the event of a payment default. Any acceleration of the Series 1996/1997 Bonds or any annulment thereof shall be subject to the prior written consent of the Bond Insurer (if the Bond Insurer has not failed to comply with its payment obligations under the Bond Insurance Policy). 5. 6. The Bond Insurer shall receive immediate notice of any payment default and notice of any other default known to the Bond Registrar or paying Agent within 30 days of their knowledge thereof. 7. For all purposes of the 1996 Resolution provisions governing events of default and remedies, except the gi ving of notice of default to bondholders, the Bond Insurer shall be deemed to be the sole holder of the Series 1996/1997 Bonds for so long as the Bond Insurer has not failed to comply with its payment obligations under the Bond Insurance Policy. No resignation or removal of the Paying Agent shall become effective until a successor has been appointed and has accepted the duties of Paying Agent. The Bond Insurer shall be furnished with written notice of the resignation or removal of the Paying Agent and Bond Registrar and the appointment of any successor thereto. The Bond Insurer shall be included as a party in interest and as a party entitled to (i) notify the Consolidated Government or any applicable receiver of the occurrence -9- 196895.1 of an event of default and (ii) request the receiver to intervene in judicial proceedings that affect the Series 1996/1997 Bonds or the security therefor. The receiver shall be required to accept notice of default from the Bond Insurer. 10. So long as the Bond Insurer is not in default in its payment obligations under the Bond Insurance POlicy, any amendment or supplement to the 1996 Resolution and all other principal financing documents shall be subject to the prior written consent of the Bond Insurer. Any rating agency rating the Series 1996/1997 Bonds must receive notice of each amendment and a copy thereof at last 15 days in advance of its execution or adoption. The Bond Insurer shall be provided with a full transcript of all proceedings relating to the execution of any such amendment or supplement. 11. So long as the Bond Insurer is not in default in its payment obligations under the Bond Insurance POlicy, only cash, direct non-callable obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, to which direct obligation or guarantee the full faith and credit of the United States of America has been pledged, Refcorp interest strips, CATS, TIGRS, STRPS, or defeased municipal bonds rated AAA by S&P or Aaa by Moody's (or any combination thereof) shall be used to effect defeasance of the Series 1996/1997 Bonds unless the Bond Insurer otherwise approves. In the event of an advance refunding, the Consolidated Government shall cause to be delivered a verification report of an independent nationally recognized certified public accountant. If a forward supply contract is employed in connection with the refunding, (i) such verification report shall expressly state that the adequacy of the escrow to accomplish the refunding project relies solely on the initial escrowed investments and the maturing principal thereof and interest income thereon and does not assume performance under or compliance with the forward supply contract, and (ii) the applicable escrow agreement shall provide that in the event of any discrepancy or difference between the terms of the forward supply contract and the escrow agreement and the 1996 Resolution, the terms of the escrow agreement and the 1996 Resolution shall be controlling. 12. (i) If, on the third day preceding any Interest Payment Date for the Series 1996/1997 Bonds, there is not on deposit with the Sinking Fund Custodian sufficient moneys available to pay all principal of and interest on the Series 1996/1997 Bonds due on -10- such date, the Sinking Fund CUstodian shall immediately notify the Bond Insurer and state street Bank and Trust Company, N.A., New York, New York or its successor as its Fiscal Agent (the MFiscal Agent") of the amount of such deficiency. If, by said Interest Payment Date, the Consolidated Government has not provided the amount of such deficiency, the Bond Registrar shall simultaneously make available to the Bond Insurer and to the Fiscal Agent the registration books for the series 1996/1997 Bonds maintained by the Bond Registrar. In addition: (A) (B) 196895.1 The Bond Registrar and Paying Agent shall provide the Bond Insurer with a list of the Bondholders entitled to receive principal or interest payments from the Bond Insurer under the terms of the Bond Insurance Policy and shall make arrangements for the Bond Insurer and its Fiscal Agent (1) to mail checks or drafts to Bondholders entitled to receive full or partial interest payments from the Bond Insurer and (2) to pay principal of the Series 1996/1997 Bonds surrendered to the Fiscal Agent by the Bondholders entitled to receive full or partial principal payments from the Bond Insurer; and The Bond Registrar and Paying Agent shall, at the time they make the registration books available to the Bond Insurer pursuant to (A) above, notify Bondholders entitled to receive the payment of principal of or interest on the Series 1996/1997 Bonds from the Bond Insurer (1) as to the fact of such entitlement, (2) that the Bond Insurer will remit to them all or part of the interest payments coming due subject to the terms of the Bond Insurance POlicy, (3) that, except as provided in paragraph (ii) below, in the event that any Bondholder is entitled to receive full payment of principal from the Bond Insurer, such Bondholder must tender his Series 1996/1997 Bond with the instrument of transfer in the form provided on the Series 1996/1997 Bond executed in the name of the Bond Insurer, and (4) that, except as provided in paragraph (ii) below~ in the event that such Bondholder is entitled to receive partial payment of principal from the Bond Insurer, such Bondholder must tender his Series 1996/1997 Bond for payment first to the Paying Agent, which shall note on such Series 1996/1997 Bond -11- 196895.1 the portion of principal paid by the Paying Agent, and then, with an acceptable form of assignment executed in the name of the Bond Insurer, to the Fiscal Agent, which will then pay the unpaid portion of principal to the Bondholder subject to the terms of the Bond Insurance Policy. (ii) In the event that the Bond Registrar or Paying Agent has notice that any payment of principal of or interest on a series 1996/1997 Bond has been recovered from a Bondholder pursuant to the United states Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Bond Registrar and Paying Agent shall furnish to the Bond Insurer their records evidencing the payments of principal of and interest on the Series 1996/1997 Bonds which have been made by the Bond Registrar or Paying Agent and subsequently recovered from Bondholders, and the dates on which such payments were made. 13. The notice addresses for the Bond Insurer and the Fiscal Agent are: Financial Guaranty Insurance Company 115 Broadway New York, New York 10006 Attention: General Counsel state street Bank and Trust Company, N.A. 61 Broadway New York, New York 10006 Attention: Corporate Trust Department 14. So long as the Bond Insurer is not in default in its payment obligations under the Bond Insurance Policy, for all purposes, variable rate indebtedness shall be assumed to bear interest at the highest of: (i) the actual rate on the date of calculation, or if the indebtedness is not yet outstanding, the initial rate (if established and binding), (ii) if the indebtedness has been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation, and (iii) (1) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Internal Revenue Code, the most recently published Bond Buyer 25 Bond Revenue Index (or comparable index if no longer published) plus 50 basis points, or (2) if interest is not so excludable, the interest rate on direct u.s. Treasury Obligations with comparable maturities plus 50 basis points; provided, -12- however, that for purposes of any rate covenant measuring actual debt service coverage during a test period, variable rate indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the test period. 15. So long as the Bond Insurer is not in default in its payment obligations under the Bond Insurance pOlicy, utilization of the synthetic fixed rate under a Hedge Agreement with respect to a swap for purposes of performing any required calculations under the 1996 Resolution shall be permitted only if the 1996 Resolution and the applicable swap satisfy the requirements of Exhibit B hereto. BB IT PURTHER RESOLVED, by the authority aforesaid, and it is hereby resolved by authority of same, that Article III, Section 1 Paragraph (b) of the 1996 Resolution be deleted in its entirety and in lieu thereof a new Paragraph (b) be substituted as follows: (b) The Series 1997 Bonds may be redeemed at the option of the Consolidated Government in whole at any time or in part on any Interest Payment Date, in any year not earlier than October 1, 2006, from any moneys which may be available for such purpose and deposited with the Paying Agent on or before the date fixed for redemption. The optional redemption of Series 1997 Bonds shall be made by the payment of the principal amount of the Series 1997 Bonds to be redeemed and accrued interest thereon to date of redemption, together with a premium of 2 percent of such principal amount if redeemed on or prior to September 30, 2007; 1 percent of such principal amount if redeemed thereafter and on or prior to september 30, 2008; and at par without a premium if redeemed thereafter and before maturity. BE IT PURTHER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that the following sentence be added as the first sentence of the last paragraph of Article V, Section 2, paragraph 6 of the 1996 Resolution: "It is expressly provided that indebtedness of the Consolidated Government to the Georgia Environmental Facilities Authority, which ranks as to lien on the Pledged Revenues junior and subordinate to the lien securing the Series 1996/1997 Bonds authorized to be issued hereunder, shall be paid from moneys remaining in the Revenue Fund after the required payments have been made to Sinking Fund No. 2 and 196895.1 -13- prior to the payments made pursuant to this Paragraph 6 to the utility General Fund". BB IT PURTBER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that the following paragraph be added as the last subparagraph of the definition of Permitted Investments set forth in Article I of the 1996 Resolution: (ix) any other investments if and to the extent the same are at the time legal for investment of Consolidated Government funds and are consented to by the Bond Insurer. BB IT PURTRBR RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that all of the terms, conditions, provisions and covenants of the 1996 Resolution authorizing the issuance of the Series 1996/1997 Bonds are hereby ratified and reaffirmed and the 1996 Resolution is hereby amended and supplemented as herein provided. BB IT PURTBER RESOLVED by the authority aforesaid, and it is hereby resolved by authority of same, that any and all resolutions or parts of resolutions in conflict with this resolution this day adopted be and the same are hereby repealed. 196895.1 -14- . , EXHIBIT A RESERVE ACCOUNT SURETY GUIDELINES The Consolidated Government may satisfy the requirement (the "Reserve Account Requirement") to deposit a specified amount in the Debt Service Reserve Account (the "Reserve Account") by the deposit of a surety bond, insurance policy or letter of credit as set forth below. The following requirements are hereby incorporated in the 1996 Resolution in the event the Reserve Account Requirement with respect to the Series 1996/1997 Bonds is fulfilled by a deposit of a credit instrument (other than a credit instrument issued by the Bond Insurer) in lieu of cash: A. A surety bond or insurance policy issued to the entity serving as trustee or paying agent (the "Fiduciary"), as agent of the bondholders, by a company licensed to issue an insurance policy guaranteeing the timely payment of debt service on the Series 1996/1997 Bonds (a "municipal bond insurer") may be deposited in the Reserve Account to meet the Reserve Account Requirement if the claims paying ability of the issuer thereof shall be rated "AAA" or "Aaa" by S&P or Moody's, respectively. B. A surety bond or insurance policy issued to the Fiduciary, as agent of the bondholders, by an entity other than a municipal bond insurer may be deposited in the Reserve fund to meet the Reserve Account Requirement if the form and substance of such instrument and the issuer thereof shall be approved by the Bond Insurer. C. An unconditional irrevocable letter of credit issued to the Fiduciary, as agent of the Bondholders, by a bank may be deposited in the Reserve Account to meet the Reserve Account Requirement if the issuer thereof is rated at least "AA" by S&P. The letter of credit shall be payable in one or more draws upon presentation by the beneficiary of a sight draft accompanied by its certificate that it then holds insufficient funds to make a required payment of principal or interest on the Series 1996/1997 Bonds. The draws shall be payable within two days of presentation of the sight draft. The letter of credit shall be for a term of not less than three years. The issuer of the letter of credit shall be required to notify the Consolidated Government and the Fiduciary, not later than 12 months prior to the stated expiration date of the letter of credit, as to whether such expiration date shall be extended, and if so, shall indicate the new expiration date. If such notice indicates that the expiration date shall not be extended, the Consolidated Government shall deposit in the Reserve Account an amount sufficient to cause the cash or permitted investments on deposit in the Reserve Account together with any other qualifying credit instruments, to 196895.1 196895.1 .. equal the Reserve Account Requirement on all outstanding series 1996/1997 Bonds, such deposit to be paid in equal installments on at least a semi-annual basis over the remaining term of the letter of credit, unless the Reserve Account credit instrument is replaced by a Reserve Account credit instrument meeting the requirements in any of 1 through 3 above. The letter of credit shall permit a draw in full not less than two weeks prior to the expiration or termination of such letter of credit if the letter of credit has not been replaced or renewed. The Authorizing Document shall, in turn, direct the Fiduciary to draw upon the letter of credit prior to its expiration or termination unless an acceptable replacement is in place or the Reserve Account is fully funded in its required amount. D. The use of any Reserve Account credit instrument pursuant to this Paragraph shall be subject to receipt of an opinion of counsel acceptable to the Bond Insurer and in form and substance satisfactory to the Bond Insurer as to the due authorization, execution, delivery and enforceability of such instrument in accordance with its terms, subject to applicable laws affecting creditors' rights generally, and, in the event the issuer of such credit instrument is not a domestic entity, an opinion of foreign counsel in form and substance satisfactory to the Bond Insurer. In addition, the use of an irrevocable letter of credit shall be subject to receipt of an opinion of counsel acceptable to the Bond Insurer and in form and substance satisfactory to the Bond Insurer to the effect that payments under such letter of credit would not constitute avoidable preferences under Section 547 of the u.S. Bankruptcy Code or similar state laws with avoidable preference provisions in the event of the filing of a petition for relief under the u.S. Bankruptcy Code or similar state laws by or against the issuer of the bonds (or any other account party under the letter of credit). E. The obligation to reimburse the issuer of a Reserve Account credit instrument for any fees, expenses, claims or draws upon such Reserve Account credit instrument shall be subordinate to the payment of debt service on the Series 1996/1997 Bonds. The right of the issuer of a Reserve Account credit instrument to payment or reimbursement of its fees and expenses shall be subordinated to cash replenishment of the Reserve Account, and, subject to the second succeeding sentence, its right to reimbursement for claims or draws shall be on a parity with the cash replenishment of the Reserve Account. The Reserve Account credit instrument shall provide for a revolving feature under which the amount available thereunder will be reinstated to the extent of any reimbursement of draws or claims paid. If the revolving feature is suspended or terminated for any reason, the right of the issuer of the Reserve Account credit instrument to reimbursement will be further subordinated to cash replenishment of the Reserve A-2 196895.1 Account to an amount equal to the difference between the full original amount available under the Reserve Account credit instrument and the amount then available for further draws or claims. If (a) the issuer of a Reserve Account cadit instrument becomes insolvent or (b) the issuer of a Reserve Account credit instrument defaults in its payment obligations thereunder or (c) the claims-paying ability of the issuer of the insurance policy or surety bond falls below a S&P "AAA" or a Moody's "Aaa" or (d) the rating of the issuer of the letter of credit falls below a S&P "AA," the obligation to reimburse the issuer of the Reserve Account credit instrument shall be subordinate to the cash replenishment of the Reserve Account. F. If (a) the revolving reinstatement feature described in the preceding paragraph is suspended or terminated or (b) the rating of the claims paying ability of the issuer of the surety bond or insurance policy falls below a S&P "AAA" or a Moody's "Aaa" or (c) the rating of the issuer of the letter of credit falls below a S&P "AA," the Consolidated Government shall either (i) deposit into the Reserve Account an amount sufficient to cause the cash or permitted investments on deposit in the Reserve Account to equal the Reserve Account Requirement on all outstanding Series 1996/1997 Bonds, such amount to be paid over the ensuing five years in equal installments deposited at least semi-annually or (ii) replace such instrument with a surety bond, insurance policy or letter of credit meeting the requirements in any of 1 through 3 above within six months of such occurrence. In the event (a) the rating of the claims-paying ability of the issuer of the surety bond or insurance policy falls below "A" or (b) the rating of the issuer of the letter of credit falls below "A" or (c) the issuer of the Reserve Account credit instrument defaults in its payment obligations or (d) the issuer of the Reserve Account credit instrument becomes insolvent, the Consolidated Government shall either (i) deposit into the Reserve Account an amount sufficient to cause the cash or permitted investments on deposit in the Reserve Account to equal the Reserve Account Requirement on all Outstanding Series 1996/1997 Bonds, such amount to be paid over the ensuing year in equal installments on at last a monthly basis or (ii) replace such instrument with a surety bond, insurance policy or letter of credit meeting the requirements of 1 through 3 above within six months of such occurrence. G. Where applicable, the amount available for draws or claims under the Reserve Account credit instrument may be reduced by the amount of cash or permitted investments deposited in the Reserve Account pursuant to clause ( i) of the preceding subparagraph F. H. If the Consolidated Government chooses the above described alternatives to a cash-funded Reserve Account, any amounts owed by the Consolidated Government to the issuer of such A-3 ~ J. 196895.1 credit instrument as a result of a draw thereon or a claim thereunder, as appropriate, shall be included in any calculation of Debt Service Requirements required to be made pursuant to the 1996 Resolution for any purpose, e.g., rate covenant or additional bonds test. I. The Fiduciary shall ascertain the necessity for a claim or draw upon the Reserve Account credit instrument and to provide notice to the issuer of the Reserve Account credit instrument in accordance with its terms not later than three days (or such longer period as may be necessary depending on the permitted time period for honoring a draw under the Reserve Account credit instrument) prior to each Interest Payment Date. Cash on deposit in the Reserve Account shall be used (or investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing on any Reserve Account credit instrument. If and to the extent that more than one Reserve Account credit instrument 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. A-4 .. .. . ~ ;, ~ EXHIBIT B SWAP PROVIDER GUIDELINES Any Swap entered into in connection with the issuance or incurrence by the Consolidated Government of variable rate indebtedness secured with the Series 1996/1997 Bonds by a parity lien on the Pledged Revenues shall meet the following guidelines and, for purposes of calculating UDebt Service" and establishing compliance with financial covenants under the 1996 Resolution shall be treated as follows: A. Long--Dated Swaps--Term or Weighted Averaqe Maturity of Ten Years or More. 1. The Swap provider must be rated at least A-/A3 or better by Standard & Poor's and Moody's (the UInitial Rating Requirement") . 2. Assuming satisfaction of the Initial Rating Requirement, and thereafter as long as the long term indebtedness of the Swap provider or the claims paying ability of the Swap provider does not fall below Baa2 or BBB by either Standard & Poor's or Moody's (the uMinimum Rating Requirement"), all interest rate assumptions for purposes of establishing or demonstrating compliance with a financial covenant (~.g. rate covenant, reserve requirement, additional bonds test, asset transfer test, etc.) may be based upon the synthetic fixed interest rate under the Swap. Failure to maintain a Swap provider holding the Minimum Rating Requirement or, if the Consolidated Government elects, failure to replace any such Swap provider by another Swap provider which holds the Initial Rating Requirement within ten business days, will have the following effects: (1) compliance with any required rate covenant for the preceding Fiscal Year will be based on the actual interest paid on the Variable Rate Indebtedness during such Fiscal Year without regard to the Swap; (2) in the case of any required Debt Service Reserve Account, the amount required to be on deposit therein will be re-calculated based on the formula described in paragraph 14 of the provisions relating to the Bond Insurer in this Resolution, calculated as of the date of original issuance of the variable rate indebtedness and any resulting deficiency will be restored wi thin the same one year restoration period established in the bond documentation for curing Debt Service Reserve Account deficiencies; and (3) any uforward-looking" financial covenant based upon uOebt 196895.1 .. :.. " ~ .. . Service," "Annual Debt Service" or "Maximum Annual Debt Service" will be based upon the formula described in paragraph 14 of the provisions relating to the Bond Insurer in this Resolution, calculated as of the date the required calculation is made. B. Short Dated Swaps Having Terms or Weighted Average Maturities of Ten Years or Less, Whereupon Related Bonds Automatically Convert to a Pre-Set Fixed Rate. 196895.1 The embedded Swap provider must meet the Initial Rating Requirement. with respect to financial covenants, the synthetic fixed rate based on the Swap may be utilized for purposes of demonstrating or establishing compliance with the applicable covenant. Failure to maintain a Swap provider holding the Minimum Rating Requirement during the embedded Swap period will require replacement of the Swap provider within ten business days. Failure to replace will require re- calculation of the applicable financial covenants in the manner outlined in A.2 above. B-2 .. . " . . ~ .a.. "" .... ~ CLERK'S CERTIPICATE GEORGIA, RICBKOND COUNTY I, Lena Bonner, Clerk of the Augusta-Richmond County commission (the "commission"), DO HEREBY CERTIPY that the foregoing pages constitute a true and correct copy of the resolution adopted by said Commission at an open public meeting duly called and lawfully assembled at 2:00 p.m., on the 3rd day of December, 1996, supplementing the resolution authorizing the issuance of $62,880,000 Richmond County Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A, $3,760,000 Richmond County Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B and $5,910,000 Richmond County Water and Sewerage Revenue Refunding Bonds, Series 1997, the original of said resolution being duly recorded in the Minute Book of said commission, which Minute Book is in my custody and control. I do hereby further certify that the following members of said Commission were present at said meeting: Lee Beard Wi 1 1 i::lrn KlInl kp r Tr Ulmer Bridges William H. Mays. III Henry Brigham James B. Powell Jerry Brigham Mo!';e.!'; Todd Freddie Lee Handv Rohe.rt 7,e.tte.rhe.rr and that the following members were absent: and that said resolution was duly adopted by a vote of Aye ]0 Nay Abstain ,;" .../ ' ~SS my hand and the official seal of Richmond County this day of December, 1996. ~ay#~ the ,>~,".....- .- -' '- - ~(S~~,~; :;. . ...".: .;~ Y: ;:: . :..:.:.~. - t: ;< . I ..,...... --' ?~ ~"- ~..;..-"~ 196895:-1' ~"- -- '- ". ~ -.;: ><, V'I r , .