NEW SMYRNA BEACH UTILITIES

200 CANAL STREET

P.O. BOX 100

NEW SMYRNA BEACH, FL 32170-010

ITN 06-26

A NON-REVOLVING LINE OF CREDIT

New Smyrna Beach Utilities (NSBU) is issuing the Invitation to Negotiate, ITN to identify, evaluate and select the institution or institutions that can provide NSBU a tax exempt variable rate non-revolving line of credit liquidity facility in accordance with the terms, conditions, and specifications outlined in this ITN in a principal amount not to exceed $30 million (the “Facility”).

The proceeds will be used to pay costs associated with the Facility to be outstanding for a period of up to twelve (12) months to finance various capital improvements to NSBU’s Utility System. Southeastern Investment Securities, LLC (“SIS”) assisted in the preparation of the ITN as Municipal Advisor to NSBU. SIS does not serve as placement agent on this transaction. GrayRobinson represents the NSBU as Bond Counsel.

NSBU does not intend to prepare an Official Statement or any other type of disclosure document related to the Facility.

Interest on the Facility will be excludable under Section 103 of the Internal Revenue Code from the gross income of the owner thereof for federal income tax purposes.

The Utilities Commission of New Smyrna Beach, Florida

The Utilities Commission, City of New Smyrna Beach, Florida dba New Smyrna Beach Utilities was duly created and is validly existing under and by virtue of Chapters 67-1754 and 85-503, Laws of Florida. NSBU is governed by a 5-member body (the “Commission”) appointed by the City of New Smyrna Beach (the “City”) with authority over the management, operation and control of the City of New Smyrna Beach's combined Utilities System.

The Commission has the duty to fix rates and the authority, with City Commission approval, to issue revenue Bonds pursuant to Resolution 2020-02, adopted by the Utilities Commission on March 23, 2020, as may be amended and supplemented from time to time (the "Resolution").

The Utilities System

The "Utilities System" or "System" has been serving residents of the City since before 1920. As of September 30, 2025, the Utilities System served approximately 32,203 electric customers, 29,882 water customers, 24,742 sewer customers and 4,121 water reuse customers.

Pursuant to a territory agreement with Florida Power & Light Company ("FPL") and approved by the Florida Public Service Commission ("FPSC"), the electric system serves an area of approximately 71.9 square miles of urban and rural territory, including approximately 37.9 square miles within the corporate limits of the City, and approximately 34 square miles adjoining the City to the west and extending south along U.S. Highway A1A beyond the City limits to serve an unincorporated beach area (South Beachside).

The surrounding area is served by FPL.

The service area for both the water and wastewater systems are defined by an Interlocal Agreement among NSBU, the City, and Volusia County (the "Interlocal Agreement"). The defined service area is a total of approximately 60.5 square miles, including, without limitation, 37.1 square miles lying within the current corporate limits of the City of New Smyrna Beach, of which 41.3 square miles are currently being served. The Interlocal Agreement identifies the Utilities Commission as the principal provider of water and wastewater services within this service area and grants to the Utilities Commission the first option to provide new service in the part of the service area located in the unincorporated area of Volusia County.

The Utilities System's power and energy requirements are met through purchased power. Acting through the Florida Municipal Power Agency (“FMPA”), a joint action power agency which was formed to provide bulk electric power to its members through joint cooperation with other electric utilities in Florida, the Utilities Commission is a participant in a portion of FPL's St. Lucie Unit No.2 Nuclear Unit. In the Fiscal Year ended September 30, 2025, NSBU derived approximately 14.82% of its energy supply from FMPA nuclear resources, 71.59% from FPL Firm purchases, 13.25% from FPL and FMPA Solar purchases, and 0.34% from economy and other purchases.

The Utilities System's raw water supply is derived from 23 wells obtaining groundwater from the Floridan Aquifer. The water system utilizes a single treatment facility [Glencoe Water Treatment Plant (GWTP)] with a capacity of 10.368 million gallons per day (MGD). The finished water is then distributed through approximately 300 miles of pipes.

The Utilities System's Wastewater System Treatment Plant has a rated capacity of 7 MGD. The collection system includes approximately 140 miles of gravity sewer and force mains. There are 110 wastewater pumping stations in service, five of which are master pumping stations.

NSBU currently maintains underlying ratings of “Aa2”, and “AA/Stable” from Moody’s, and Fitch respectively on its publicly offered Utility System Revenue Bonds, Series 2020.

SECURITY FOR THE FACILITY:

The payment of the principal and interest on the Facility will be secured equally and ratably by a first lien on and pledge of the Net Revenues derived from the operation of the System (the "Pledged Revenues") on parity with all outstanding Bonds and Additional Parity Obligations issued under the Resolution, without preferences, priority or distinction of any Bonds over any other thereof. The Facility shall not constitute general obligations of the Utilities Commission or the City, but shall be payable solely from and secured by a lien upon the Net Revenues of the System.

The obligations of the Commission under the Facility shall be limited obligations payable solely in the manner provided in the Master Bond Resolution in Exhibit B attached hereto. The Commission’s obligations shall not constitute a general obligation of the Commission or the City, nor a debt or indebtedness of, or a pledge of the faith and credit of, the Commission or the City, within the meaning of any constitutional or statutory provision whatsoever. The full faith and credit of neither the Commission nor the City is pledged to the payment of any amounts owed by the Commission under the Facility.

OUTSTANDING BONDS

The Facility will initially be issued on a parity as a pledge of, lien on, and source of payment from the Pledged Funds with the Commission’s Utilities System Revenue Refunding Bonds, Series 2020, which are currently outstanding in the principal amount of $ 61,425,000 (the “Series 2020 Bonds”).

The Outstanding Bonds and any Additional Bonds of the Commission issued pursuant to the Resolution shall herein be referred to as the “Bonds".

COVENANTS, RESTRICTIONS:

NSBU anticipates that financial and other covenants, limitations, and requirements will be consistent with similar municipal facilities. The Resolution will control as to default provisions, non-acceleration, additional obligations, rate covenant and other covenants as stated therein.

A tentative calendar for the transaction is as follows:

January 19, 2026 ITN Circulated

January 28, 2026 Deadline for Questions by 2:30PM

February 3, 2026 Addendum Due By 5:00Pm

February 10, 2026 Proposal Due by 2:30 PM ET

February 11, 2026 Review of Proposals by Evaluation Committee Begins

March 23, 2026 NSBU Meeting for Approval of Recommended Award

March 31, 2026 Anticipated Closing Date

NSBU may, at its sole discretion, determine that none of the responses meet its goals and objectives and may elect to terminate or extend the evaluation process.

CREDIT PACKAGE:

To assist potential respondents in conducting a credit review and preparing a response to this ITN, materials are available on the Commission’s website http://www.nsbufl.com or on the MSRB’s Electronic Municipal Market Access site EMMA http ://www.emma.msrb.org http://www.nsbufl.com/

SUBMISSION REQUIREMENTS:

Notice is hereby given that sealed proposals will be ACCEPTED ELECTRONICALLY VIA VENDOR LINK, until February 10, 2026 AT 2:30PM.

https://www.myvendorlink.com/external/bids?a=358

BID OPENING 3:00 P.M.

WE ARE ALSO OFFERING A REMOTE CALL-IN FOR LISTENING TO THE

BID OPENING.

YOU CAN ATTEND BY DIALING (872) 216-5903

CONFERENCE ID: 763 836 233#

OR BY CLICKING ON THE LINK BELOW

https://teams.microsoft.com/l/meetup-join/19%3ameeting_ZjJlYWRmOTItNGY0ZS00YWNlLWJmMmEtYjZiOTE1NTZmOWJm%4 0thread.v2/0?context=%7b%22Tid%22%3a%2219e89539-5749-45c7-8e15-c666411ecab8%22%2c%22Oid%22%3a%22a50d38e8-dc21-4945-8930- 118cfc76150d%22%7d

All responses should include a completed version of the Proposal Form provided in Exhibit A.

QUESTIONS REGARDING PROPOSAL: NSBU has made every effort to provide prospective vendors with the information needed to appropriately respond to this ITN.

NSBU realizes that some clarification, interpretation, or additional information may be required.

Questions regarding any portion of this ITN shall be directed, in writing, to:

New Smyrna Beach Utilities Maureen Lynch, CPPB Procurement Manager mlynch@nsbufl.com https://teams.microsoft.com/l/meetup-join/19%3ameeting_ZjJlYWRmOTItNGY0ZS00YWNlLWJmMmEtYjZiOTE1NTZmOWJm%40thread.v2/0?context=%7b%22Tid%22%3a%2219e89539-5749-45c7-8e15-c666411ecab8%22%2c%22Oid%22%3a%22a50d38e8-dc21-4945-8930-118cfc76150d%22%7d https://teams.microsoft.com/l/meetup-join/19%3ameeting_ZjJlYWRmOTItNGY0ZS00YWNlLWJmMmEtYjZiOTE1NTZmOWJm%40thread.v2/0?context=%7b%22Tid%22%3a%2219e89539-5749-45c7-8e15-c666411ecab8%22%2c%22Oid%22%3a%22a50d38e8-dc21-4945-8930-118cfc76150d%22%7d https://teams.microsoft.com/l/meetup-join/19%3ameeting_ZjJlYWRmOTItNGY0ZS00YWNlLWJmMmEtYjZiOTE1NTZmOWJm%40thread.v2/0?context=%7b%22Tid%22%3a%2219e89539-5749-45c7-8e15-c666411ecab8%22%2c%22Oid%22%3a%22a50d38e8-dc21-4945-8930-118cfc76150d%22%7d https://teams.microsoft.com/l/meetup-join/19%3ameeting_ZjJlYWRmOTItNGY0ZS00YWNlLWJmMmEtYjZiOTE1NTZmOWJm%40thread.v2/0?context=%7b%22Tid%22%3a%2219e89539-5749-45c7-8e15-c666411ecab8%22%2c%22Oid%22%3a%22a50d38e8-dc21-4945-8930-118cfc76150d%22%7d https://teams.microsoft.com/l/meetup-join/19%3ameeting_ZjJlYWRmOTItNGY0ZS00YWNlLWJmMmEtYjZiOTE1NTZmOWJm%40thread.v2/0?context=%7b%22Tid%22%3a%2219e89539-5749-45c7-8e15-c666411ecab8%22%2c%22Oid%22%3a%22a50d38e8-dc21-4945-8930-118cfc76150d%22%7d mailto:mlynch@nsbufl.com

All such requests must be received no later than 2:30 PM, Eastern Standard Time, January 28, 2026. Responses to all requests for more information will be included in any addenda and will be made available to all Proposers via Vendor Link on February 3, 2026 by 5:00PM.

Requests for additional information received after the January 28, 2026 deadline will not receive a response. Responses will not be made orally.

Any additional information pertaining to this ITN or to the services being sought hereunder obtained in a manner other than as described in the preceding paragraph should be regarded as unofficial. NSBU will not be bound in any way by information so obtained, or by a Proposer’s reliance thereon.

1. Amount: Up to $30 million. NSBU anticipates an initial draw of approximately $1 million in order to establish the Facility at closing and pay costs of issuance. Additional draws on the Facility will occur as necessary to fund capital improvement costs.

2. Structure: NSBU desires to have the flexibility to draw on the Facility for a period not to exceed twelve (12) months (April 1, 2027). At the end of the draw period, the Facility is expected to be paid by long term financing issued in part to repay the Facility.

3. Interest Rate Options: NSBU requests a variable rate loan during the draw period. The variable rate during the draw period should be based on SIFMA or SOFR, or a similar publicly available index.

4. Repayment Provisions: Interest payments on the outstanding balance of the Facility will be calculated on a 30/360-day basis and will be paid monthly. Alternative payment frequencies (monthly, etc.) will be considered on a variable rate line of credit. Until the end of the draw period, NSBU expects to pay interest only on the Facility.

5. Prepayment Provisions: The Facility must be prepayable with no prepayment penalty, in whole or in part at any time.

6. CUSIP: No CUSIP numbers or ratings will be obtained with respect to the Facility.

7. Financial Information: NSBU’s most recent Annual Financial Report and Budget can be found at https://www.nsbufl.com

8. Tax-Exemption: NSBU will enter into such covenants as shall be necessary, in the opinion of Bond Counsel, to assure compliance by NSBU with the Internal Revenue Code of 1986, as amended (the "Code"), and to qualify interest on the Facility for exclusion from gross income https://www.nsbufl.com/ for federal income tax purposes, as set forth in the opinion of Bond Counsel. NSBU requests offers without capital adequacy or other interest rate adjustment language with respect to changes in tax law. The only interest rate adjustment provision NSBU will consider is one imposed as the result of a final, non- appealable ruling of the IRS or a court of competent jurisdiction declaring interest on the Facility to be includable in gross income of the holder thereof for federal income tax purposes, which results solely from the action or inaction of

NSBU.

9. Documents: NSBU’s Bond Counsel will prepare the necessary documents for the financing and provide the Lender and its Counsel with drafts thereof for review and comment prior to closing.

Please specifically note in your response any unique provisions that would be required in the financing documents for the Facility.

10. Financial Reporting: Upon request, NSBU shall remit to the Lender annual audited financial statements, when available, and any other Lender requested information that NSBU deems reasonable. Please include any specific reporting requirements that would be required of NSBU.

11. Costs and Fees: NSBU shall pay all costs relating to financing, preparing and printing the loan documents. NSBU shall also pay the Lender’s reasonable counsel fees on a successful closing.

12. Closing: Closing is anticipated to take place on or around March 31, 2026, at a time and place mutually acceptable to NSBU and the Lender. The award of the ITN by NSBU does not obligate NSBU to close on the Facility.

13. Rejection of Proposals: NSBU expressly reserves the right to reject any and all proposals received in connection with this ITN and thereafter to negotiate with any entity submitting a response to this ITN (the “Proposer”) or other Lender. The basis for acceptance of any proposal shall be that which is in the best interest of NSBU, as determined solely by NSBU.

14. Amendment: Any time before responses are due, NSBU reserves the right to amend or modify this ITN by email to prospective Lenders. A copy of any written amendment or modification hereto will be remitted to each prospective Proposer that, in connection with this ITN, at the time has its name and address on file with

NSBU.

INSTRUCTIONS TO PROPOSERS:

1. Proposers shall thoroughly examine and be familiar with the proposal specifications. Failure of any Proposer to receive or examine this document shall in no way relieve any Proposer of obligations pertaining to this ITN or the subsequent contract.

2. Any changes or modifications to the proposal specifications can result in the rejection of the proposal as not being responsive to this ITN.

3. The responsibility for emailing the proposal to the NSBU on or before the specified date and time will be solely and strictly the responsibility of the Proposer. The NSBU will in no way be responsible for delays caused by transmission of the proposal or a delay caused by any other occurrence.

4. The response deadline shall be strictly observed. Under no circumstances will a proposal delivered after the time specified be considered.

5. The NSBU reserves the right to reject the proposal of any Proposer who has previously failed in the proper performance of a contract or to deliver on time other contracts similar in nature, or who is not in a position to perform properly under this ITN.

6. Federal, state, and local laws, ordinances, rules and regulations that in any manner affect the items covered herein apply. Lack of knowledge by the Proposer will in no way be a cause for relief from responsibility.

7. No successful Proposer may assign any portion of the contractual agreement between the parties without prior written authorization by the NSBU.

8. Changes to the ITN may be made by and at the sole discretion of the NSBU.

9. The Proposer, in submission of its proposal, warrants to the NSBU that it will comply with all applicable federal, state and local laws, regulations and orders in providing the services under the proposed documents.

10. Collusion - The Proposer, by affixing its signature to its proposal, certifies that its proposal is made without previous understanding, agreement, or connection either with any previous firms or corporations offering a Proposal for the same subject matter of this ITN, or with the NSBU. The Proposer also certifies that its proposal is in all respects fair, without outside control, collusion, fraud or otherwise illegal action

11. Public Entity Crimes - Pursuant to Section 287.133, Florida Statutes, a person or affiliate who has been placed on the convicted vendor list following a conviction for a public entity crime may not submit a bid, proposal, or reply on a contract to provide any goods or services to a public entity; may not submit a bid, proposal, or reply on a contract with a public entity for the construction or repair of a public building or public work; may not submit bids, proposals, or replies on leases of real property to a public entity; may not be awarded or perform work as a contractor, supplier, subcontractor, or consultant under a contract with any public entity; and may not transact business with any public entity in excess of the threshold amount provided in

s. 287.017 for CATEGORY TWO for a period of 36 months following the date of being placed on the convicted vendor list. By responding to this ITN, the Proposer represents that it has not been placed on the convicted vendor list as provided in Section 287.133, Florida Statutes.

12. Scrutinized Companies List: By responding to this ITN , the Proposer certifies that it is not: (1) listed on the Scrutinized Companies that Boycott Israel List, created pursuant to Section 215.4725, Florida Statutes, (2) engaged in a boycott of Israel, (3) listed on the Scrutinized Companies with Activities in Sudan List or the Scrutinized Companies with Activities in the Iran Terrorism Sectors List, created pursuant to Section 215.473, Florida Statutes, or (4) engaged in business operations in Cuba or Syria.

13. If selected, the Lender must submit an affidavit of compliance with anti-human trafficking pursuant to Section 787.06(13), Florida Statutes.

14. Evaluation Criteria:

Respondents confirming their ability to meet the timeline previously identified, in particular closing on a Facility by March 31, 2026 will be evaluated based on the following criteria:

No

Evaluation Criteria

Points

1 Proposed fees/Spread/Covenants 80

2 Bank’s long-term and short-term ratings 20

Total 100

OTHER INFORMATION:

1. The NSBU reserves the right to (i) cancel the ITN, (ii) accept or reject, in whole or in part, any or all proposals, (iii) waive minor irregularities or technicalities in the proposals or in the ITN process, (iv) adjust the tentative schedule as needed or desired, and (v) enter into negotiations with Proposers as determined to be in the best interests of the NSBU. A minor irregularity is defined as a variation from the ITN terms and conditions which does not affect the price of the ITN, give a Proposer an unfair advantage over other Proposers, or adversely impact the interests of the NSBU. There is no obligation on the part of the NSBU to award the ITN to the Proposer offering the lowest price to the NSBU. The NSBU reserves the right to award the ITN to the Lender whose proposal is judged to be the most advantageous to the NSBU and to be in the best interests of the NSBU. The NSBU shall be the sole judge of which proposal is in the best interests of the NSBU. The NSBU reserves the right to obtain and review any information deemed necessary to determine the ability of the Proposer to carry out its obligations required under this ITN or any subsequent contract, including but not limited to its relevant experience and qualifications, the quality of its past performance, the Proposer’s current and prior compliance with all laws and regulations, its financial strength and capability to perform the requirements of this ITN.

2. In the event that the Lender selected by the NSBU does not execute a contract within a timeframe acceptable to the NSBU, the NSBU may give notice of intent to award the Facility to the next most qualified Lender or to call for new proposals and may proceed to act accordingly.

3. The NSBU will not be responsible and will have no liability whatsoever for any costs incurred by a Proposer in preparing or submitting its response to this ITN.

4. All proposals received in response to this ITN become the property of the NSBU.

5. At the closing, the Lender will be required to execute and deliver to the NSBU an accredited investor letter in form and substance reasonably satisfactory to the NSBU and Bond Counsel.

EXHIBIT A – PROPOSAL FORM

UTILITES COMMISSION CITY OF NEW

SMYRNA BEACH FLORIDA

2026 CREDIT FACILITY

The Lender hereby agrees to extend a Facility of credit in amount up to $ 30 million (the “Facility”), to the Utilities Commission City of New Smyrna Beach, Florida (“NSBU”), subject to the terms and conditions set forth in the ITN dated, January 19, 2026. By submitting this proposal, the Lender agrees to be legally bound to such terms from the date of this ITN to the closing date of the Facility, not to exceed 90 days from submittal date.

Interest Rate & Index NSBU shall only consider proposals which clearly express the rate of interest and the method of setting such rate of interest and the maximum rate of interest to be charged during the full term of the Facility.

Rate Quote

• A variable, non-bank qualified, tax-exempt rate of interest during the Facility Term equal to ________________________ per annum for the utilized draw period of the Facility. Please specify index and formula below:

Facility Term Index Utilized Spread (in bps)

Unutilized Spread (in bps)

1 Year

Current calculated utilized rate as of close of business January 30, 2026 was ____%

Cost & Expenses

The Lender shall request the reimbursement of its legal fees and expenses in an amount not to exceed $_______ upon successfully closing of the Facility.

Lender’s Counsel The Lender will use the following attorney as Bank counsel.

Bank’s counsel:

Name:

Address:

Phone:

E-mail:

Bank Ratings

The Lender acknowledges that NSBU reserves the right to reject any and all proposals received in connection with the ITN. The Lender also acknowledges that NSBU has no responsibility and has no liability whatsoever for any costs incurred by the Lender in preparing or submitting this response.

Moody’s Long Term S&P Fitch Moody’s Short Term

S&P

Fitch

Respectfully submitted, [Name of Lender]

By: Authorized Officer

[Typed or printed name of officer]

Date:

Email:

Accepted this day of , NSBU

By:

Authorized Officer

EXHIBIT B

MASTER BOND RESOLUTION

51263301;5

MASTER BOND RESOLUTION

UTILITIES COMMISSION, CITY OF NEW SMYRNA BEACH, FLORIDA

Utility System Revenue Bonds

Resolution No. 2020-02

Adopted March 23, 2020

DocuSign Envelope ID: DFFF9845-B89A-4C22-AB97-FA5DAF6E05DB i

TABLE OF CONTENTS

ARTICLE I STATUTORY AUTHORITY, DEFINITIONS AND FINDINGS

SECTION 1.01 AUTHORITY FOR THIS RESOLUTION

SECTION 1.02 DEFINITIONS

ARTICLE II DESCRIPTION, DETAILS, AND FORM OF BONDS

SECTION 2.01 AUTHORIZATION OF BONDS

SECTION 2.02 DESCRIPTION OF BONDS

SECTION 2.03 EXECUTION OF BONDS

SECTION 2.04 NEGOTIABILITY AND REGISTRATION

SECTION 2.05 BONDS, MUTILATED DESTROYED, STOLEN OR LOST

SECTION 2.06 FORM OF BONDS

SECTION 2.07 BOOK-ENTRY SYSTEM

ARTICLE III REDEMPTION OF BONDS

SECTION 3.01 PROVISIONS FOR REDEMPTION

SECTION 3.02 SELECTION OF BONDS TO BE REDEEMED

SECTION 3.03 NOTICE OF REDEMPTION

SECTION 3.04 CONDITIONAL REDEMPTION

ARTICLE IV BONDS NOT DEBT OF COMMISSION, PLEDGE OF REVENUES;

APPLICATION OF REVENUES

SECTION 4.01 BONDS NOT DEBT OF COMMISSION

SECTION 4.02 PLEDGE OF PLEDGED REVENUES

SECTION 4.03 APPLICATION OF REVENUES

SECTION 4.04 DEVELOPMENT FEES

SECTION 4.05 SEPARATE ACCOUNTS

ARTICLE V COVENANTS OF THE COMMISSION; TAX COVENANTS

SECTION 5.01 COVENANTS OF THE COMMISSION

SECTION 5.02 TAX COVENANTS

ARTICLE VI EVENTS OF DEFAULT; REMEDIES

SECTION 6.01 EVENTS OF DEFAULT

SECTION 6.02 REMEDIES

ARTICLE VII MISCELLANEOUS PROVISIONS

SECTION 7.01 MODIFICATION OR AMENDMENT

SECTION 7.02 DEFEASANCE

SECTION 7.03 SEVERABILITY OF INVALID PROVISIONS

SECTION 7.04 REPEAL OF INCONSISTENT INSTRUMENTS

SECTION 7.05 NO RECOURSE ON THE BONDS

SECTION 7.06 EFFECTIVE DATE

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MASTER BOND RESOLUTION

A RESOLUTION AUTHORIZING THE ISSUANCE OF UTILITIES SYSTEM

REVENUE BONDS OF THE UTILITIES COMMISSION, CITY OF NEW

SMYRNA BEACH, FLORIDA, FOR THE PURPOSE OF PAYING THE COST

OF CONSTRUCTION OR ACQUISITION OF ADDITIONS, EXTENSIONS

AND IMPROVEMENTS TO ITS COMBINED UTILITIES SYSTEM, AND TO

PROVIDE FOR THE REFUNDING OF OUTSTANDING OBLIGATIONS OF

SAID COMMISSION; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF

SAID BONDS; PROVIDING FOR THE PAYMENT OF SAID BONDS;

PROVIDING THE TERMS, CONDITIONS AND LIMITATIONS UPON

WHICH SAID COMMISSION MAY ISSUE ADDITIONAL BONDS PAYABLE

ON A PARITY WITH SAID BONDS; AND MAKING CERTAIN OTHER

COVENANTS AND AGREEMENTS IN CONNECTION WITH THE

ISSUANCE OF SAID BONDS.

BE IT RESOLVED BY THE UTILITIES COMMISSION, CITY OF NEW

SMYRNA BEACH, FLORIDA:

ARTICLE I

STATUTORY AUTHORITY, DEFINITIONS AND FINDINGS

SECTION 1.01 AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to Chapter 85-503, Laws of Florida, Special Acts of 1985, as amended and supplemented from time to time, Chapter 15 of the Charter of the City of New Smyrna Beach, Florida, and other applicable provisions of law.

SECTION 1.02 DEFINITIONS. The following terms shall have the following meanings in this Resolution unless the context otherwise expressly requires. Words importing singular number shall include the plural number in each case and vice versa, words of one gender shall be deemed to include the other genders, and words importing persons shall include firms and corporations.

“Accountant” shall mean the Certified Public Accountant or firm of Certified Public Accountants at the time employed by the Commission to perform and carry out the duties imposed on the Accountant by this Resolution.

“Act” shall mean Chapter 85-503, Laws of Florida, Special Acts of 1985, as amended and supplemented from time to time, Chapter 15 of the Charter of the City of New Smyrna Beach, Florida and other applicable provisions of law.

“Additional Parity Obligations” shall mean additional bonds, notes, or other evidences of indebtedness of the Commission issued in compliance with the terms, conditions, and limitations contained in Paragraph J of Section 5.01 of this Resolution.

“Amortization Installment” with respect to any Current Interest Paying Term Bonds, shall mean an amount so designated which is established for the Current Interest Paying Term Bonds, provided that (i) each such installment shall be deemed to be due on such interest or principal

-2-maturity date of each applicable year as is fixed by subsequent resolution of the Commission, and

(ii) the aggregate of such installments shall equal the aggregate principal amount of Current Interest Paying Term Bonds authenticated and delivered on original issuance; and with respect to any Term Bonds issued as Capital Appreciation Bonds, shall mean the Compounded Amounts so designated by subsequent resolution of the Commission, provided that each such installment shall be deemed to be due on such date of each applicable year as is fixed by subsequent resolution of the Commission.

“Authorized Investments” shall mean any investments authorized pursuant to the laws of the State and the written investment policy adopted by the governing body the Commission in accordance with Section 218.415, Florida Statutes.

“Average Annual Debt Service Requirement” shall mean, as of each date on which a Series of Bonds is issued, the total amount of Debt Service Requirement which is to become due on all Bonds deemed to be Outstanding immediately after the issuance of such Series of Bonds divided by the total number of years for which Bonds are deemed to be Outstanding.

“Bond Registrar” shall mean the person or corporation designated by the Commission 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.

“Bond Year” shall mean the annual period ending on and including October 1. The Bond Year related to a Fiscal Year is the Bond Year ending on the succeeding October 1.

“Bonds” shall mean the Series 2020 Bonds and any Additional Parity Obligations hereafter issued under the terms and conditions set forth in this Resolution.

“Book-Entry Form” or “Book-Entry System” shall mean a form or system, as applicable, under which (i) Bonds are issued to a Depository or to its nominee, as Registered Owner, (ii) Bonds are held by and “immobilized” in the custody of such Depository, and (iii) records are maintained by the Depository and/or other persons to identify and record the transfer of beneficial interests in the Bonds.

“Build America Bond” shall mean any taxable bond issued by the Commission pursuant to Section 54AA of the Code for which either (1) the Commission receives direct subsidy payments in an amount equal to a percentage of the interest paid on such bond, or (2) the holder of such bond receives a tax credit in an amount equal to a percentage of the interest paid on such bond.

“Cede & Co.” shall mean Cede & Co., as nominee for DTC.

“Chairman” shall mean the Chairman or Vice Chairman of the Commission.

“Chief Financial Officer” shall mean the Chief Financial Officer or other most senior financial executive officer the Commission.

“City” shall mean the City of New Smyrna Beach, Florida, a municipal corporation of the State of Florida.

-3-

“Commission” shall mean the Utilities Commission, City of New Smyrna Beach, Florida, a public body corporate and politic, organized and existing under and pursuant to the laws of the State.

“Compounded Amounts” shall mean the accreted value of Compounding Interest Bonds, determined in accordance with a table of accreted values, as of any particular date of calculation.

For purposes of calculating the Debt Service Requirement and the required payments into the Sinking Fund under the provisions of Article III of this Resolution, the Compounded Amount of any Compounding Interest Bonds shall be treated as principal maturing on the maturity date of Serial Bonds or as Amortization Installments due on Term Bonds, as the case may be. For the purposes of computing the amount of Registered Owners required for any notice, consent, request or demand hereunder for any purpose whatsoever, the principal amount of a Compounding Interest Bond shall be deemed to be its Compounded Amount as of the date of such determination.

“Compounding Interest Bonds” shall mean the Bonds of a series, the interest on which shall be compounded on a periodic basis and be payable at maturity.

“Conditional Output Contract” shall mean any contract or other arrangement with a Supplier, as defined herein, pursuant to which the Commission is obligated to purchase either electric capacity and energy or transmission services, or both, and to make payment for such electric capacity and energy or transmission services or both with respect to any computation period (for purposes of such computation not to exceed one calendar month or thirty-one (31) days) during any portion of which such electric capacity and energy or transmission services or both, were made available to the Commission, regardless of whether such services were actually taken or used by the Commission and shall include, but not by way of limitation of the generality of the foregoing, the St. Lucie Project Power Supply Contract between the Florida Municipal Power Agency and the Commission.

“Conditional Redemption” shall have the meaning set forth in Section 3.04 hereof.

“Consulting Engineer” shall mean such qualified and recognized consulting engineers or utility consultants, having a favorable reputation for skill and experience as consulting engineers or utility consultants to facilities similar to the System, from time to time retained to perform the acts and carry out the duties as herein provided for such consultant. The functions of the consulting engineer or utility consultants hereunder may be divided between or among more than one firm.

“Costs of Issuance” shall mean but shall not necessarily be limited to: expenses for estimates of costs; the fees of fiscal agents, accountants, verification agents, financial advisors, consulting engineers and other consultants with regard to the issuance of the Bonds; legal fees and expenses; administrative expenses; the cost of establishment of reasonable interest reserves for the payment of debt service on the Bonds; discount upon the sale of the Bonds; the expenses and costs of issuance of the Bonds; the cost of purchasing any Credit Facility with respect to the Bonds; such other expenses as may be necessary or incidental to the financing authorized by this Resolution, to the Refunding, and to the accomplishing thereof, and reimbursement to the Commission for any sums expended for the foregoing purposes.

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“Credit Facility” a policy of municipal bond insurance, debt service reserve surety, letter of credit, or other credit or liquidity support in connection with the issuance of any Bonds.

“Credit Facility Provider” shall mean an insurance company or bank or other organization from whom the Commission has obtained a Credit Facility.

“Current Interest Paying Bonds” shall mean the Bonds of a series, the interest on which shall be payable on a semiannual or other periodic basis.

“Debt Service Requirement” as of any date of calculation and with respect to any period, as applied to the then outstanding Bonds shall mean the sum of:

(1) the amount required to pay the interest becoming due on the Bonds during such period, except to the extent that such interest shall have been provided from proceeds of the Bonds;

(2) the amount required to pay the principal of Serial Bonds maturing in such period; and

(3) the amount of the Amortization Installments for the Term Bonds for such period. In computing the Debt Service Requirement for any Fiscal Year for Bonds, the Commission shall assume that an amount of the Term Bonds equal to the Amortization Installments for the Term Bonds for such Fiscal Year will be retired by purchase or redemption in such period or that payment of such amount of Term Bonds at maturity will be fully provided for in such Fiscal Year. When determining the amount of principal of and interest on the Bonds which mature in any year, for purposes of this Resolution or the issuance of any Additional Parity Obligations, the stated maturity date of Term Bonds shall be disregarded, and the Amortization Installments, if any, applicable to Term Bonds in such year shall be deemed to mature in such year.

(4) For purposes of determining the Debt Service Requirement with respect to Designated Maturity Obligations, the unamortized principal coming due on the final maturity date thereof shall not be included and in lieu thereof there shall be added to the Debt Service Requirement for the Fiscal Year in which such final maturity occurs and to each Fiscal Year thereafter through the 25th anniversary of the final maturity of such Designated Maturity Obligation (the “Reamortization Period”) the amount of substantially level principal and interest payments (using the same interest rate actually applicable to such unamortized Bonds before maturity) that if paid in each year during the Reamortization Period would be sufficient to pay in full the unamortized portion of such Designated Maturity Obligations by such anniversary (the “Amortization Payment”); provided, however, for the current Fiscal Year interest coming due on such Designated Maturity Obligations shall be deducted from the Amortization Payment.

(5) For purposes of determining the Debt Service Requirement pursuant to this Section 1.02, the interest rate on outstanding Variable Rate Bonds shall be assumed to be one hundred ten percent (110%) of the greater of (i) the daily

-5-average interest rate on such Variable Rate Bonds during the twelve months ending with the month preceding the date of calculation, or such shorter period that such Variable Rate Bonds shall have been Outstanding, or (ii) the rate of interest on such Variable Rate Bonds on the date of calculation. For purposes of determining the Maximum Debt Service Requirement for the issuance of Bonds or Additional Parity Obligations pursuant to Paragraph J of Section 5.01 of this Resolution, the interest rate on Variable Rate Bonds outstanding on the date of calculation shall be the same as the rate used in calculating the Debt Service Requirement as described above, and the interest on Variable Rate Bonds proposed to be issued as Bonds or Additional Parity Obligations under the provisions of Paragraph J of Section 5.01 shall be deemed to be the interest rate quoted as the 25 Revenue Bonds Bond Buyer Index for the last week of the month preceding the date of calculation as published in CREDIT MARKETS, or if that index is no longer published, the interest rate for the last week of such month as published in an index that a qualified independent consultant deems substantially equivalent. If Variable Rate Bonds are subject to purchase by or on behalf of the Commission at the option of the Registered Owner and if funds for the purchase thereof are being made available through an arrangement with a Credit Facility Provider, the “put” date or dates shall be ignored and the stated maturity dates thereof shall be used for purposes of this calculation;

otherwise, the earliest “put” date shall be used for purposes of this calculation.

“Designated Maturity Obligations” shall mean all of the Bonds of a Series or a particular maturity thereof, so designated by the Commission by resolution prior to the issuance thereof, for which no Amortization Installments have been established.

“Development Fees” shall mean the fees and charges levied upon and collected from new users of the System as a contribution toward their equitable share of the cost of capital improvements required to serve new users of the System, together with the income from investment of such amounts, or other similar fees and charges, which by law or Commission policy established in connection with the imposition of such fees and charges, are required to be segregated and applied only to offset capital costs attributable to System improvement or expansion.

“Director of Engineering” shall mean the Director of Engineering of the Commission.

“DTC” shall mean The Depository Trust Company, New York, New York, a securities depository.

“Effective Date” shall have the meaning set forth in Section 6.04 hereof.

“Federal Securities” means direct obligations of the United States of America or obligations, the principal of and interest on, which are unconditionally guaranteed by the United States of America, none of which permit redemption prior to maturity at the option of the obligor.

“Fiscal Year” shall mean the 12-month period used by the Commission for its general accounting purposes as the same may be changed from time to time, said fiscal year currently extending from October 1 through September 30th.

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“General Manager and CEO” shall mean the General Manager and Chief Executive Officer of the Commission.

“Gross Revenues” or “Revenues” shall mean all rates, fees, rentals or other charges or other income, any income from investment of moneys in the funds and accounts created pursuant to this Resolution received by the Commission or accrued to the Commission from the ownership or operation of the System, all as calculated in accordance with generally accepted accounting principles. Gross Revenues do not include (i) proceeds from the sale of Bonds or other evidences of indebtedness, (ii) proceeds from sale of property, (iii) grants from governmental agencies, (iv) contributions in aid of construction (other than connection fees), (v) customer deposits, (vi) Development Fees, or (vii) investment earnings on proceeds of a Series of Bonds held by the Commission in a project construction fund. Gross Revenues include amounts received by the Commission as direct subsidy, rebate or tax credit payments with respect to Build America Bonds.

“Letter of Representations” shall mean the Blanket Issue Letter of Representations, between the Commission and DTC regarding Bonds issued in book-entry only form, as updated from time to time.

“Maximum Debt Service Requirement” shall mean, as of any particular date of calculation, the Debt Service Requirement for the then current or any future Fiscal Year which is largest in dollar amount.

“Net Revenues” shall mean the Gross Revenues during such period plus the amounts, if any, paid from the Rate Stabilization Fund into the Revenue Fund during such period (excluding, for the purpose of avoiding double counting, amounts already included in the Revenues for such period representing interest earnings transferred from the Rate Stabilization Fund to the Reserve Fund) and minus the sum of (a) Operating Expenses, (b) the amounts, if any, paid from the Revenue Fund into the Rate Stabilization Fund during such period, and (c) any direct subsidy payments received from the United States Treasury relating to Build America Bonds issued pursuant to Section 54AA of the Code or any other interest subsidy or similar payments made by the Federal government to the extent interest corresponding to such subsidy or similar payments is excluded from the calculation of Debt Service Requirements.

“Operating Expenses” shall mean the then current expenses paid or accrued, of operation, maintenance and repair of said System, as calculated in accordance with generally accepted accounting principles applicable to the Commission, and shall include, without limiting the generality of the foregoing, payments under any Conditional Output Contracts, insurance premiums, accounting, legal, engineering and administrative expenses of the Commission relating solely to the System, labor, the cost of materials and supplies used for current operations, and any other current expenses required or permitted to be paid by the Commission for the operation, maintenance and repair of said System under this Resolution. “Operating Expenses” shall not include (i) any cost or expense of the construction, acquisition or capital repair of the System, or any part thereof, (ii) any amortization of the costs of issuance of debt obligations, (iii) any allowance for depreciation and amortization or renewals or replacements of capital assets of said System, (iv) payments under Unconditional Output Contracts, (v) any reserves for renewals or replacements, (vi) payments for any extraordinary repairs, (vii) any Unfunded OPEB Expense, -7-

(viii) any Unfunded Pension Expense, or (ix) any unfunded expense which may be required to be accrued under future GASB implementations.

“Original Resolution” shall mean Resolution No. 28-78, duly adopted by the Commission on June 30, 1978, as heretofore amended and supplemented from time to time.

“Outstanding” refers to all obligations of the class concerned which shall have been issued and delivered with the exception of (a) obligations in lieu of which other obligations have been issued in exchange therefor or under agreement to replace lost, mutilated or destroyed obligations, and (b) obligations paid or for the payment of which provision has been made.

“Pledged Revenues” shall mean the Net Revenues.

“Rebate Liability” shall mean the sum of amounts payable under Section 148 of the Code as ‘arbitrage rebate’ necessary to maintain the exclusion from gross income under the Code of interest on any Series of the Bonds, determined under the regulations implementing such Section 148.

“Record Date” shall mean the fifteenth day prior to an interest payment date for the Bonds, or such other date as may be specified by Supplemental Resolution for Variable Rate Bonds.

“Registered Owner” shall mean any person who shall be the owner of any outstanding Bond or Bonds as shown on the books maintained by the Bond Registrar.

“Renewal and Replacement Fund Deposit” shall mean (i) an amount equal to one-twelfth (1/12th) of six percent (6%) of (x) the Gross Revenues received by the Commission in the second preceding Fiscal Year, less (y) fuel expense and purchased power expense for such Fiscal Years, or (ii) such amount as shall be determined by the Commission and set forth in the then current Annual Budget, provided that if the amount determined by the Commission is less than the amount determined under clause (i), the Consulting Engineer shall have advised the Commission that such lesser amount is adequate to provide for the purposes of such fund for the then-current Fiscal Year.

“Reserve Fund Insurance Policy” shall mean an insurance policy or surety bond deposited in the Reserve Fund in lieu of or in substitution for cash on deposit therein pursuant to Section 3.03(B)(3) hereof, if the claims paying ability of the company issuing such policy is rated, at the time of deposit, in one of the three highest rating categories of either Moody’s, S&P or Fitch, without regard to gradation.

“Reserve Fund Letter of Credit” shall mean an unconditional irrevocable letter of credit or line of credit (other than a Reserve Fund Insurance Policy) deposited in the Reserve Fund in lieu of or in substitution for cash on deposit therein pursuant to Section 3.03(B)(3) hereof, if the claims paying ability of the company issuing such letter of credit is rated at the time of deposit in one of the three highest rating categories of either Moody’s, S&P or Fitch, without regard to gradation.

“Reserve Account Requirement” shall be the lesser of (i) the Maximum Debt Service Requirement with respect to Bonds secured by the Reserve Fund and/or any account created therein, (ii) one hundred twenty-five percent (125%) of the Average Annual Debt Service Requirement with respect to Bonds secured by the Reserve Fund and/or any account created

-8-therein, or (iii) the largest amount as shall not adversely affect the exclusion of interest on the Bonds from gross income for Federal income tax purposes with respect to Bonds secured by the Reserve Fund and/or any account created therein; provided. The Commission may establish by Supplemental Resolution a different Reserve Account Requirement or no Reserve Account Requirement for a Series of Bonds.

“Resolution” shall mean this Resolution together with all Supplemental Resolutions hereafter adopted by the Commission amendatory hereof or supplemental hereto.

“Secretary” shall mean the Secretary of the Commission.

“Serial Bonds” shall mean the Bonds which shall be stated to mature in annual installments and are not Term Bonds.

“Series” or “Series of Bonds” or “Bonds of a Series” shall mean all Bonds designated as being of the same Series issued and delivered on original issuance in a simultaneous transaction, and any Bonds thereafter delivered in lieu thereof or in substitution therefor pursuant to this Resolution.

“Series 2020 Bonds” shall mean the Commission’s Utility System Revenue Refunding Bonds, Series 2020, as approved by Supplemental Resolution adopted subsequent to this Resolution.

“State” shall mean the State of Florida.

“Supplemental Resolution” shall mean any resolution of the Commission amending or supplementing this Resolution enacted and becoming effective in accordance with the terms of Section 4.02 hereof.

“Supplier” shall mean any entity with which the Commission has entered into a Conditional Output Contract or an Unconditional Output Contract, payments under which are pledged, assigned, or hypothecated by the Supplier to secure payment of debt service on any of such Supplier’s debt obligations, whether outstanding or to be outstanding and shall include, without limiting the generality of the foregoing, the Florida Municipal Power Agency.

“System” shall mean the combined water, sanitary sewer, and electric system of the City, under the management, operation and control of the Commission, and as hereafter construction or acquired, including all improvements, extensions, additions and betterments thereto, together will 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 by the City or the Commission in connection therewith. This definition shall be broadly interpreted to facilitate the purposes hereof.

“Taxable Bond” shall mean any Bond (other than Build America Bonds) which states, in the body thereof, that the interest income thereon is includable in the gross income of the Registered Owner thereof for federal income tax purposes (provided that a Bond which states that interest thereon is not so excluded while the Bond is held by a “substantial user,” as such term is used in the Code, shall not solely thereby be deemed to be a Taxable Bond).

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“Term Bonds” shall mean the Bonds of a series all of which shall be stated to mature on one date and which shall be subject to retirement through mandatory redemption in installments by operation of the Bond Amortization Account created pursuant to Section 3.03 of this Resolution.

“Unfunded OPEB Expense” shall mean the noncash portion of the OPEB expense calculated pursuant to GASB Statement No. 45.

“Unfunded Pension Expense” shall mean the noncash portion of the pension expense calculated pursuant to GASB Statement No. 68.

“Uncond…