HomeMy WebLinkAboutResolution_07-97/98_01/08/1998 RESOLUTION
M0. 7-- 971/90
VILLAGE OF TEQUESTA, FLORIDA
WATER REVENUE BONDS
BOND R ESOLUTION
ADOPTED January 8, 1998
TABLE OF CONTENTS
(This Table of Contents is not part of the Resolution
and is for convenience of reference only.)
PAGE
ARTICLE GENERAL .............. ..............................1
SECTION 1.01. Definitions ... ............................... 1
SECTION 1.02. Authority for This Resolution ..................... 10
SECTION 1.03. Resolution to Constitute Contract ................... 10
SECTION 1.04. Findings .... ............................... 11
ARTICLE II AUTHORIZATION, TERMS, EXECUTION
AND REGISTRATION OF BONDS .......................... 12
SECTION 2.01. Authorization of Bonds ......................... 12
SECTION 2.02. Authorization and Description of Series 1998 Bonds ...... 12
SECTION 2.03. Application of Series 1998 Bond Proceeds ............. 13
SECTION 2.04. Execution of Bonds ............................ 13
SECTION 2.05. Authentication ............................... 14
SECTION 2.06. Temporary Bonds ............................. 14
SECTION 2.07. Bonds Mutilated, Destroyed, Stolen or Lost ............ 14
SECTION 2.08. Negotiability, Interchangeability and Transfer ........... 15
SECTION 2.09. Coupon Bonds ............................... 16
SECTION 2.10. Form of Bonds ............................. 16
ARTICLE III REDEMPTION OF BONDS ............................... 23
SECTION 3.01. Privilege of Redemption ......................... 23
SECTION 3.02. Selection of Bonds to be Redeemed ................. 23
SECTION 3.03. Notice of Redemption .......................... 23
SECTION 3.04. Redemption of Portions of Bonds ................... 24
SECTION 3.05. Payment of Redeemed Bonds ..................... 24
ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF ...... 26
SECTION 4.01. Bonds Not to be Indebtedness of Issuer ............... 26
SECTION 4.02. Security for Bonds ............................ 26
• -i-
SECTION 4.03. Funds and Accounts ........................... 26
40 SECTION 4.04. Construction Fund ............................ 27
SECTION 4.05. Flow of Funds.......... 28
SECTION 4.06. Impact Fee Fund ............:................. 34
SECTION 4.07. Rebate Fund . ............................... 34
SECTION 4.08. Investments .. ............................... 35
SECTION 4.09. Separate Accounts ............................. 35
ARTICLE V SUBORDINATED INDEBTEDNESS ADDITIONAL
BONDS, AND COVENANTS OF ISSUER ...................... 37
SECTION 5.01. Subordinated Indebtedness ....................... 37
SECTION 5.02. Issuance of Additional Bonds ..................... 37
SECTION 5.03. Bond Anticipation Notes ........................ 39
SECTION 5.04. Accession of Subordinated Indebtedness
to Parity Status with Bonds ....................... 39
SECTION 5.05. Operation and Maintenance ....................... 39
SECTION 5.06. Annual Budget ............................... 39
SECTION 5.07. Rates ...... ............................... 40
SECTION 5.08. Books and Records ............................ 41
SECTION 5.09. Annual Audit . ............................... 41
SECTION 5.10. Mortgage, Sale or Closing of Facilities ............... 41
• SECTION 5.11. Insurance ... ::::::::::::::::::::::::::::::: 42
SECTION 5.12. No Impairment 42
SECTION 5.13. Special Covenants Relating to Reserve Account Insurance
Policy or Reserve Account Letter of Credit ............ 42
SECTION 5.14. Covenants with Credit Banks and Insurers .............. 43
SECTION 5.15. Federal Income Tax Covenants; Taxable Bonds ......... 43
SECTION 5.16. Nonpresentment of Bonds; Disposition of Unclaimed Money . 44
SECTION 5.17. No Free Service; Enforcement of Charges ............. 44
SECTION 5.18. Continuing Disclosure Compliance .................. 45
ARTICLE VI DEFAULTS AND REMEDIES ............................. 47
SECTION 6.01. Events of Default ............................. 47
SECTION 6.02. Remedies ... ............................... 47
SECTION 6.03. Directions to Trustee as to Remedial Proceedings ........ 48
SECTION 6.04. Remedies Cumulative .......................... 48
SECTION 6.05. Waiver of Default ............................. 48
SECTION 6.06. Application of Moneys After Default ................ 48
SECTION 6.07. Control by Insurer or Credit Bank .................. 49
-ii-
ARTICLE VII SUPPLEMENTAL RESOLUTIONS ..................... 51
SECTION 7.01. Supplemental Resolution Without Bondholders' Consent .... 51
SECTION 7.02. Supplemental Resolution With Bondholders', Insurer's
and Credit Bank's Consent ....................... 52
SECTION 7.03. Amendment with Consent of Insurer and /or
Credit Bank Only ............................. 53
SECTION 7.04. Required Opinion of Bond Counsel ................. 54
ARTICLE VIII MISCELLANEOUS . ............................... 55
SECTION 8.01. Defeasance .. ............................... 55
SECTION 8.02. Capital Appreciation Bonds ....................... 56
SECTION 8.03. General Authority ............................. 56
SECTION 8.04. No Personal Liability ........................... 57
SECTION 8.05. No Third Party Beneficiaries ...................... 57
SECTION 8.06. Sale of Bonds . ............................... 57
SECTION 8.07. Severability of Invalid Provisions ................... 57
SECTION 8.08. Repeal of Inconsistent Resolutions .................. 57
SECTION 8.09. Table of Contents and Headings not Part Hereof ......... 57
SECTION 8.10. Issuer Reserved Rights .......................... 58
SECTION 8.11. Holidays; Time .............................. 58
• SECTION 8.12. Authorization to Deem Final and to Accept
Insurance Commitment ......................... 58
SECTION 8.13 Section 265 Designation ......................... 58
SECTION 8.14. Effective Date ............................... 58
• G:\20241\2 \Bond Res(2).wpd -111-
RESOLUTION NO. _Z 9719e
A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF
TEQUESTA, FLORIDA, AUTHORIZING THE ISSUANCE BY THE VILLAGE
OF NOT EXCEEDING $9,000,000 IN AGGREGATE PRINCIPAL AMOUNT
OF WATER REVENUE BONDS, SERIES 1998, TO PAY A PORTION OF THE
COSTS OF IMPROVEMENTS TO THE VILLAGE'S WATER SYSTEM, TO
FUND A DEBT SERVICE RESERVE AND TO PAY THE COSTS OF
ISSUANCE OF SUCH BONDS; PLEDGING TO SECURE PAYMENT OF THE
PRINCIPAL OF AND INTEREST ON SUCH BONDS CERTAIN PLEDGED
FUNDS, INCLUDING THE GROSS REVENUES OF THE VILLAGE'S WATER
SYSTEM AND MONEYS ON DEPOSIT IN AND INVESTMENTS HELD FOR
THE CREDIT OF CERTAIN FUNDS CREATED HEREUNDER; MAKING
CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE
OWNERS OF SUCH BONDS; PROVIDING FOR THE APPOINTMENT OF A
PAYING AGENT AND REGISTRAR; PROVIDING FOR THE CREATION OF
• FUNDS AND ACCOUNTS; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA,
FLORIDA:
ARTICLE I
GENERAL
SECTION 1.01. Definitions When used in this Resolution, the following terms shall
have the following meanings, unless the context clearly otherwise requires:
"Accreted Value" shall mean, as of any date of computation with respect to any Capital
Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond
(the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation
Bond from the date of delivery to the original purchasers thereof to the Interest Payment Date next
preceding the date of computation or the date of computation if an Interest Payment Date, plus,
if such date of computation shall not be an Interest Payment Date, a portion of the difference
between the Accreted Value as of the immediately preceding Interest Payment Date and the
Accreted Value as of the immediately succeeding Interest Payment Date, calculated based on the
• assumption that Accreted Value accrues during any semiannual period in equal daily amounts.
"Act" shall mean Part II, Chapter 166, Florida Statutes, Article VIII, Section 2(b),
• Constitution of the State of Florida, the Charter of the Issuer and other applicable provisions of
law.
"Additional Bonds" shall mean the obligations issued at any time under the provisions of
Section 5.02 hereof.
"Amortization Installment" shall mean a mandatory redemption amount (not including any
amount due at maturity as opposed to redemption prior to maturity) designated as such by
Supplemental Resolution and established with respect to any Term Bonds.
"Annual Audit" shall mean the annual audit prepared pursuant to the requirements of
Section 5.09 hereof.
"Annual Budget" shall mean the annual budget prepared pursuant to the requirements of
Section 5.06 hereof.
"Authorized Depository" shall mean a qualified public depository, as defined in Chapter
280, Florida Statutes, or any successor provision thereof.
"Authorized Investments" shall mean any of the following which shall be authorized from
time to time by applicable laws of the State for deposit or purchase by the Issuer for the investment
• of its funds:
(1) Federal Securities and obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America.
(2) Interest - bearing time deposits or savings accounts in banks organized under the
laws of the State, in national banks organized under the laws of the United States
and doing business and situated in the State, in savings and loan associations which
are under State supervision, or in federal savings and loan associations located in
the State and organized under federal law and federal supervision, provided that
any such deposits are secured by collateral as may be prescribed by law;
(3) Obligations of the federal farm credit banks; the Federal Home Loan Mortgage
Corporation, including Federal Home Loan Mortgage Corporation participation
certificates; or the Federal Home Loan Bank or its district banks or obligations
guaranteed by the Government National Mortgage Association;
(4) Obligations of the Federal National Mortgage Association, including Federal
National Mortgage Association participation certificates and mortgage pass - through
certificates guaranteed by the Federal National Mortgage Association;
• 2
(5) Securities of, or other interests in, any open -end or closed -end management type
investment company or investment trust registered under the investment Company
• Act of 1940, 15 U.S.C. ss. 80a -1 et seq., as amended from time to time, provided
the portfolio of such investment company or investment trust is limited to Federal
Securities and to repurchase agreements fully collateralized by such Federal
Securities and provided such investment company or investment trust takes delivery
of such collateral either directly or through an authorized custodian; or
(6) The Local Government Surplus Funds Trust Fund established pursuant to Part IV,
Chapter 218, Florida Statutes.
"Authorized Issuer Officer" for the performance on the behalf of the Issuer of any act of
the Issuer or the execution of any instrument on behalf of the Issuer shall mean the Village
Manager or any other person authorized by resolution of the Issuer or appointed by certificate of
the Mayor to perform such act or sign such document.
"Bond Amortization Account shall mean the separate account of that name in the Debt
Service Fund established pursuant to Section 4.03 hereof.
"Bond Counsel" shall mean any attorney at law or firm of attorneys, of nationally
recognized standing in matters pertaining to the federal tax exemption of interest on obligations
issued by states and political subdivisions, and duly admitted to practice law before the highest
• court of any state of the United States of America.
"Bond Insurance Policy" shall mean a municipal bond new issue insurance policy or
policies issued by an Insurer guaranteeing the payment of the principal of and interest on any
portion of the Bonds.
"Bondholder" or "Holder" or "holder" shall mean any Person who shall be the registered
owner of any Outstanding Bond or Bonds according to the registration books of the Issuer.
"Bonds" shall mean the Series 1998 Bonds, any Additional Bonds and any Subordinated
Indebtedness which accedes to the status of Bonds pursuant to Section 5.04 hereof.
"Business Day" shall mean, as to any Series of Bonds, any day on which any Paying Agent
for such Series is open for business.
"Capital Appreciation Bonds" shall mean those Bonds so designated by Supplemental
Resolution, which may be either Serial Bonds or Term Bonds and which shall bear interest payable
at maturity or redemption. In the case of Capital Appreciation Bonds that are convertible to Bonds
with interest payable prior to maturity or prior to redemption of such Bonds, such Bonds shall be
considered Capital Appreciation Bonds only during the period of time prior to such conversion.
• 3
"Clerk" shall mean the Village Clerk of the Issuer or such other person as may be duly
authorized by the Clerk to act on his or her behalf.
"Code" shall mean the United States Internal Revenue Code of 1986, as amended, and the
regulations thereunder, whether proposed, temporary or final, promulgated by the Department of
the Treasury, Internal Revenue Service.
"Construction Fund" shall mean the Construction Fund established pursuant to Section 4.03
hereof.
"Consultants" shall mean the firm of water utility system consulting engineers retained by
the Issuer to perform the duties of the Consultants under the provisions of this Resolution.
"Cost" when used in connection with a Project, shall mean all amounts permitted to be paid
by State law.
"Coupon Bonds" shall mean any Bonds the interest payable on which shall be represented
by bearer coupons attached thereto, and the interest on which Bonds shall be payable only upon
the presentation and surrender of such coupons to the Paying Agent as they severally fall due.
"Credit Bank" shall mean as to any particular Series of Bonds, the Person providing a
Credit Facility as designated in the Supplemental Resolution providing for the issuance of such
Bonds. Any Credit Bank must be rated in the highest short -term rating category assigned by
Moody's and S &P.
"Credit Facility" shall mean as to any particular Series of Bonds, a letter of credit, a line
of credit or another credit or liquidity enhancement facility (other than insurance policies issued
by an Insurer, Reserve Account Insurance Policies or Reserve Account Letters of Credit), as
approved in the Supplemental Resolution providing for the issuance of such Bonds.
"Debt Service Fund" shall mean the Debt Service Fund established pursuant to Section
4.03 hereof.
"Debt Service Requirement" for any Fiscal Year shall mean the sum of:
(1) The aggregate amount of interest becoming due on the Bonds, other than Capital
Appreciation Bonds, during such Fiscal Year. Except as otherwise specified in this Resolution,
for purposes of this definition, the interest due on any Variable Rate Bonds shall be assumed to
be the greater of (a) 110% of the daily average interest rate on such Variable Rate Bonds during
the 12 months ending with the month preceding the date of calculation, or such shorter period that
such Bonds shall have been outstanding, or (b) the actual rate of interest borne by such Variable
Rate Bonds on the date of calculation.
• 4
(2) The aggregate amount of principal becoming due on the Bonds, other than Capital
Appreciation Bonds, for such Fiscal Year, whether by reason of maturity or mandatory
redemption.
(3) The aggregate amount of Accreted Value due on any Capital Appreciation Bonds
maturing in such Fiscal Year.
"Event of Default" shall mean the occurrence of any event designated as such pursuant to
Section 6.01 hereof.
"Expansion Facilities" shall mean improvements, extensions and additions to the System,
together with all lands or interest therein, including plants, buildings, machinery, franchises,
pipes, mains, fixtures, equipment and all property, real or personal, tangible or intangible,
heretofore or hereafter constructed or acquired in order to meet the increased demand upon the
System, whether actual or anticipated, created by new users connecting to the System.
"Expansion Percentage" as applied to each Series of Bonds, shall mean a fraction having
a numerator equal to that portion of the total original principal amount of all Bonds of such Series
that are attributable to Expansion Facilities, if any, as shall be determined by the Consultants and
set forth in the Project Certificate relating to such Series, and a denominator equal to the total
original principal amount of all Bonds of such Series. The Expansion Percentage as to any Series
of Bonds issued to refund other Bonds shall be the same fraction as applicable to the refunded
• bonds.
"Federal Securities" shall mean negotiable direct obligations of the United States of
America.
"Fiscal Year" shall mean the period commencing on October 1 of each year and continuing
through the next succeeding September 30, or such other period as may be prescribed by law as
the fiscal year of the Issuer.
"Governing Body" shall mean the Village Council of the Issuer or its successor in function.
"Gross Revenues" shall mean all income and moneys received by the Issuer from the Rates
or otherwise received by the Issuer or accruing to the Issuer in the management and operation of
the System, but excluding Impact Fees. For purposes of Sections 5.02 and 5.07 hereof, Gross
Revenues shall include amounts transferred from the Rate Stabilization Fund to the Revenue Fund,
but if during any period of time amounts are transferred from the Rate Stabilization Fund to the
Revenue Fund, then during such period Gross Revenues shall not include amounts transferred
from the Revenue Fund to the Rate Stabilization Fund.
"Impact Fees" shall mean all charges separately imposed by the Issuer upon new customers
of the System as a non -user capacity charge for a proportionate share of the cost of the acquisition
• 5
or construction of Expansion Facilities, which are imposed by the Issuer for the purpose of
allocating to each such customer a proportionate share of the cost of the additional System capacity
made necessary by the inclusion or expected inclusion of such new customers of the System,
excluding those charges imposed by the Issuer on persons connecting to the System for the cost
of physically connecting thereto, but only to the extent that any such fee or charge has been
lawfully levied and collected by the Issuer and may under applicable law be used for the
acquisition or construction of the Expansion Facilities or for Impact Fee Debt Service
Components, and including any income from the investment of moneys on deposit in the Impact
Fee Fund or any other moneys transferred to the Impact Fee Fund pursuant to the provisions of
this Resolution.
"Impact Fee Debt Service Component" for any Fiscal Year, as applied to the Bonds of any
Series, shall mean the component of the Debt Service Requirement for such Series of Bonds,
initially set forth in the Project Certificate and thereafter, from time to time as necessary, as
determined by the Issuer, which shall be determined by multiplying the Debt Service Requirement
for such Series of Bonds by the Expansion Percentage.
"Impact Fee Fund" shall mean the Impact Fee Fund established pursuant to Section 4.03
hereof.
"Insurer" shall mean such Person as shall be in the business of insuring or guaranteeing
the payment of principal of and interest on municipal securities and with respect to any Series of
Bonds, which shall have insured or guaranteed payment of the principal of or interest on such
Bonds.
"Interest Account" shall mean the separate account of that name in the Debt Service Fund
established pursuant to Section 4.03 hereof.
"Interest Payment Date" shall be such date or dates for the payment of interest on a Series
of Bonds as shall be provided by Supplemental Resolution.
"Issuer" shall mean the Village of Tequesta, Florida.
"Maximum Debt Service Requirement" shall mean, as of any particular date of calculation,
the greatest annual Debt Service Requirement for the Bonds for the then current or any future
Fiscal Year.
"Maximum Interest Rate" shall mean, with respect to any particular Variable Rate Bonds,
a numerical rate of interest, which shall be set forth in the Supplemental Resolution delineating
the details of such Bonds, that shall be the maximum rate of interest such Bonds may at any time
bear in the future (including during such times as such Bonds shall be owned by a Credit Bank)
in accordance with the terms of such Supplemental Resolution.
6
"Mayor" shall mean the Mayor of the Issuer or such other person as may be duly
• authorized by the Issuer to act on his or her behalf.
" Moody's" shall mean Moody's Investors Service, Inc., a Delaware corporation,. the
nationally recognized securities rating firm, and any successor or successors thereto; and if such
corporation shall be dissolved or liquidated or shall no longer perform securities rating functions,
shall mean any other nationally recognized securities rating firm designated by the Issuer and
approved by the Insurer and /or the Credit Bank, as applicable.
"Net Revenues" shall mean Gross Revenues less Operating Expenses.
"Operation and Maintenance Fund" shall mean the Operation and Maintenance Fund
created pursuant to Section 4.03 hereof.
"Operating Expenses" shall mean the Issuer's expenses for operation of the System, all to
the extent properly attributable to the System in accordance with generally accepted accounting
principles employed in respect of activities such as those involved in the operation of municipal
water systems similar to the System, but not including any provision for interest, depreciation,
amortization or similar charges, provided, however, that for purposes of Sections 5.02 and 5.07
hereof, Operating Expenses shall not include administrative expenses allocable to the System or
extraordinary non - recurring expenses of the System.
"Outstanding" shall mean all Bonds which have been authenticated and delivered under this
Resolution except, (1) Bonds for which irrevocable (including revocable notice which shall have
become irrevocable) notice of redemption has been given and for which moneys have been
deposited with any Paying Agent(s) solely for the payment of such Bonds, (2) any Bond
surrendered by the Holder thereof in exchange for another Bond or other Bonds under Sections
2.06, 2.07 or 2.08 hereof, (3) Bonds deemed to have been paid pursuant to Section 8.01 hereof,
and (4) Bonds cancelled after purchase in the open market or because of payment at or redemption
prior to maturity.
"Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant to
resolution of the Governing Body, and its successors or assigns, and any other Person which may
at any time be substituted in its place pursuant to resolution of the Governing Body.
"Person" shall mean an individual, a corporation, a partnership, an association, a joint
stock company, a trust, any unincorporated organization or governmental entity.
"Pledged Accounts" shall mean, until applied in accordance with the provisions of this
Resolution, all moneys, including investments thereof, in the funds and accounts established
hereunder, except (i) moneys, including investments thereof, in the Rate Stabilization Fund, in any
Rebate Fund and the Impact Fee Fund, and (ii) to the extent moneys on deposit in a subaccount
of the Reserve Account and /or an account of the Construction Fund are pledged solely for the
7
payment of the Series of Bonds for which such account was established in accordance with the
• provisions hereof.
"Pledged Funds" shall mean the Net Revenues, the Pledged Accounts and, to the extent
allowed in Section 4.06 hereof, the Impact Fees.
"Principal Account" shall mean the separate account of that name in the Debt Service Fund
established pursuant to Section 4.03 hereof.
"Project" shall mean any undertaking of the Issuer the cost of which is to be paid, in whole
or in part, from amounts in the Construction Fund.
"Project Certificate" shall mean that certificate of the Consultants filed with the Issuer at
or prior to delivery of any Series of Bonds setting forth the estimated total cost of the Project to
be financed with such Bonds, the estimated cost of the Expansion Facilities portion of the Project,
the Expansion Percentage and the Impact Fee Debt Service Component.
"Rate Stabilization Fund" means the Rate Stabilization Fund created pursuant to Section
4.03 hereof.
"Rates" shall mean the charges imposed by the Issuer for the use of the services of the
System, other than any Impact Fees.
• "Rebate Fund" shall mean any Rebate Fund established pursuant to Section 4.07 hereof.
"Redemption Price" shall mean, with respect to any Bond or portion thereof, the principal
amount or portion thereof, plus the applicable premium, if any, payable upon redemption thereof.
"Registrar" shall mean any registrar for the Bonds appointed by or pursuant to resolution
of the Governing Body and its successors and assigns, and any other Person which may at any
time be substituted in its place pursuant to resolution of the Governing Body.
"Renewal and Replacement Fund" shall mean the Renewal and Replacement Fund
established pursuant to Section 4.03 hereof.
"Renewal and Replacement Fund Requirement" shall mean, as of any date of calculation,
an amount of money equal to 5 % of the Gross Revenues of the System for the preceding Fiscal
Year or such other greater or lesser sum as shall be recommended to the Issuer by the Consultants
and approved by the Governing Body as a sum appropriate for the Renewal and Replacement Fund
considering the purposes therefor as prescribed by this Resolution, the past performance and
existing condition of the System and the probable future requirements of the Issuer, in keeping
with sound water system management practices.
• 8
"Reserve Account" shall mean the separate account of that name in the Debt Service Fund
• established pursuant to Section 4.03 hereof.
"Reserve Account Insurance Policy" shall mean an insurance policy deposited in the
Reserve Account in lieu of or in partial substitution for cash on deposit therein pursuant to Section
4.05(B)(4).
"Reserve Account Letter of Credit" shall mean a Credit Facility (other than a Reserve
Account Insurance Policy) issued by any bank or national banking association, insurance company
or other financial institution and then on deposit in the Reserve Account in lieu of or in partial
substitution for cash on deposit therein pursuant to Section 4.05(B)(4) hereof.
"Reserve Account Requirement" shall mean, for a subaccount in the Reserve Account,
unless otherwise provided with respect to a Series of Bonds by Supplemental Resolution adopted
prior to issuance of such Series, as of any date of calculation, an amount of money equal to the
lesser of (1) the Maximum Debt Service Requirement for all Series of Bonds to which such
subaccount relates, (2) 125 % of the average annual Debt Service Requirement for all Series of
Bonds to which such subaccount relates calculated as of the date of issuance of the most recently
issued Series secured by such subaccount, or (3) the sum of 10% of the aggregate initial principal
amount of each Series of Bonds to which such subaccount relates. In computing the Reserve
Account Requirement, the interest rate on Variable Rate Bonds shall be assumed to be the lesser
of (a) the 30 -year Revenue Bond Index most recently published by The Bond Buyer but in no event
• published more than two weeks prior to the date of issuance of such Variable Rate Bonds or (b)
the Maximum Interest Rate.
"Resolution" and "this Resolution" shall mean this instrument, as the same may from time
to time be amended, modified or supplemented by any and all Supplemental Resolutions.
"Revenue Fund" shall mean the Revenue Fund established pursuant to Section 4.03 hereof.
"Serial Bonds" shall mean all of the Bonds other than the Term Bonds.
"Series" shall mean all the Bonds delivered on original issuance in a simultaneous
transaction and identified pursuant to Sections 2.01 or 2.02 hereof or in a Supplemental Resolution
authorizing the issuance by the Issuer of such Bonds as a separate Series, regardless of variations
in maturity, interest rate, Amortization Installments or other provisions.
"Series 1998 Bonds" shall mean the Issuer's Water Revenue Bonds, Series 1998,
authorized pursuant to Section 2.02 hereof.
"Series 1998 Project" means various capital improvements to the System, including
construction of reverse osmosis treatment facilities, all as described in plans and specifications on
file with the Issuer.
• 9
"S &P" shall mean Standard and Poor's Ratings Group, a division of The McGraw Hill
Companies, Inc., the nationally recognized securities rating firm, and any successor or successors
thereto; and if such corporation shall be dissolved or liquidated or shall no longer perform
securities rating functions, shall mean any other nationally recognized securities rating firm
designated by the Issuer and approved by the Insurer and /or the Credit Bank, as applicable.
"State" shall mean the State of Florida.
"Subordinated Indebtedness" shall mean any indebtedness of the Issuer, subordinate and
junior to the Bonds, issued in accordance with the provisions of Section 5.01 hereof, and any
Variable Rate Bonds which become Subordinated Indebtedness in accordance with Section 5.02(F)
hereof.
"Supplemental Resolution" shall mean any resolution of the Issuer amending or
supplementing this Resolution, adopted and becoming effective prior to the issuance of the Series
1998 Bonds or in accordance with the terms of Article VII hereof.
"System" shall mean the water supply, treatment and distribution system owned and
operated by the Issuer.
"Taxable Bond" shall mean any Bond which states, in the body thereof, that the interest
income thereon is includable in the gross income of the Holder thereof for federal income taxation
• purposes or that such interest is subject to federal income taxation.
"Term Bonds" shall mean those Bonds which shall be designated as Term Bonds hereby
or by Supplemental Resolution and which are subject to mandatory redemption by Amortization
Installments.
"Variable Rate Bonds" shall mean Bonds issued with a variable, adjustable, convertible or
other interest rate which at the date of issue is not fixed as one or more stated percentages for the
entire term of such Bonds.
The terms herein, "hereunder," "hereby," "hereto," "hereof," and any similar terms, shall
refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this
Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution.
Words importing the singular number include the plural number, and vice versa.
SECTION 1.02. Authority for This Resolution This Resolution is adopted pursuant
to the provisions of the Act.
SECTION 1.03. Resolution to Constitute Contra In consideration of the purchase
and acceptance of any or all of the Bonds by those who shall hold the same from time to time, the
provisions of this Resolution shall be deemed to be and shall constitute a contract between the
• 10
Issuer and the Holders from time to time of the Bonds and shall be a part of the contract of the
• Issuer with any Credit Bank and any Insurer. The pledge made in this Resolution and the
provisions, covenants and agreements herein set forth to be performed by or on behalf of the
Issuer shall be for the equal benefit, protection and security of the Holders of any and all of the
Bonds and for the benefit, protection and security of any Credit Bank and any Insurer. All of the
Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without
preference, priority or distinction of any of the Bonds over any other thereof except as expressly
provided in or pursuant to this Resolution.
SECTION 1.04. Findings It is hereby ascertained, determined and declared as
follows:
(A) The Issuer deems it necessary, desirable and in the best interest of the Issuer that
the Series 1998 Project be undertaken.
(B) The estimated Gross Revenues to be derived in each year hereafter will be sufficient
to pay Operating Expenses, the principal of and interest on the Bonds, as the same become due,
and all other payments provided for in this Resolution.
(C) No Bondholder, Credit Bank or Insurer shall ever be entitled to compel the payment
of the principal of and interest on the Bonds or any other payments provided for in this Resolution
from any funds or revenues of the Issuer other than the sources herein provided in accordance with
• the terms hereof.
[End of Article I]
• 11
ARTICLE II
• AUTHORIZATION, TERMS, EXECUTION
AND REGISTRATION OF BONDS
SECTION 2.01. Authorizatl Bonds. The Issuer hereby authorizes the issuance
of Bonds of the Issuer to be designated as "Village of Tequesta, Florida, Water Revenue Bonds,"
which may be issued in one or more Series as hereinafter provided. The aggregate principal
amount of the Bondg which may be executed and delivered under this Resolution is not limited
except as may hereafter be provided by Supplemental Resolution or as limited by the Act or by
other applicable law.
The Bonds may, if and when authorized by the Issuer pursuant to this Resolution or
Supplemental Resolution, be issued in one or more Series, with such further appropriate particular
designations added to or incorporated in such title for the Bonds of any particular Series as the
Issuer may determine and as may be necessary to distinguish such Bonds from the Bonds of any
other Series. Each Bond shall bear upon its face the designation so determined for the Series to
which it belongs.
The Bonds shall be issued for such purpose or purposes; shall bear interest at such rate or
rates not exceeding the maximum rate permitted by law; and shall be payable in lawful money of
the United States of America on such dates; all as determined by this Resolution and by
Supplemental Resolution. The Bonds shall be issued in such denomination or denominations and
. such form, whether coupon or registered; shall be dated such date or dates; shall bear such
numbers; shall be payable at such place or places; shall contain such redemption provisions; shall
have such Paying Agent(s) and Registrar(s); shall mature on such date or dates in such years and
amounts; and the proceeds shall be used in such manner all as determined by this Resolution and
by Supplemental Resolution. The Issuer may issue Bonds which may be secured by a Credit
Facility or by a Bond Insurance Policy all as shall be determined by this Resolution or by
Supplemental Resolution.
SECTION 2.02. Authorization and Description of Series 1998 Bonds A Series of
Bonds entitled to the benefit, protection and security of this Resolution is hereby authorized in an
aggregate principal amount not to exceed $9,000,000 for the principal purpose of paying the cost
of the Series 1998 Project. Such Series shall be designated as, and shall be distinguished from the
Bonds of all other Series by the title "Village of Tequesta, Florida, Water Revenue Bonds,
Series 1998. "
The Series 1998 Bonds shall be dated such date as may be set forth by Supplemental
Resolution of the Issuer; shall be issued as fully registered Bonds; and shall be numbered
consecutively from one upward in order of maturity preceded by the letter R; shall be in
denominations of $5,000 and integral multiples thereof and shall bear interest at a rate or rates not
exceeding the maximum rate permitted by law (calculated on the basis of a 360 -day year of twelve
• 12
30 -day months), payable in such manner and on such dates in such years; shall consist of such
• amounts of Serial Bonds, Term Bonds, Variable Rate Bonds and Capital Appreciation Bonds,
maturing in such amounts and on such dates in such years; shall be payable in such place or
places; shall have such Paying Agent(s) and Registrar(s); and shall contain such redemption
provisions; all as the Issuer shall hereafter provide by Supplemental Resolution.
The principal of or Redemption Price, if applicable, on the Series 1998 Bonds is payable
when due upon presentation and surrender of the Series 1998 Bonds at the office of the Paying
Agent. Interest payable on any Series 1998 Bond on any Interest Payment Date will be paid by
check or draft of the Paying Agent mailed on the Interest Payment Date to the Holder in whose
name such Bond shall be registered at the close of business on the fifteenth day (whether or not
a Business Day) of the calendar month next preceding such Interest Payment Date, or, unless
otherwise provided by Supplemental Resolution, at the written request and expense of any Holder
of at least $500,000 in principal amount of Series 1998 Bonds (or of all Series 1998 Bonds if less
than $500,000 shall be unpaid), by bank wire transfer for the account of such Holder. In the event
the interest payable on any Series 1998 Bond is not punctually paid or duly provided for by the
Issuer on such Interest Payment Date, such defaulted interest will be paid to the Holder in whose
name such Bond shall be registered at the close of business on a special record date for the
payment of such defaulted interest as established by notice sent by the Issuer to such Holder not
less than ten (10) days preceding such special record date.
All payments of principal of or Redemption Price, if applicable, and interest on the Series
1998 Bonds shall be payable in any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and private debts.
SECTION 2.03. Application of Series 1998 Bond Proceeds The proceeds derived
from the sale of the Series 1998 Bonds, including accrued interest and premium, if any, shall be
applied by the Issuer as directed by Supplemental Resolution adopted prior to the issuance of the
Series 1998 Bonds.
SECTION 2.04. Exec-ution of_B-onds. The Bonds shall be executed in the name of the
Issuer with the manual or facsimile signature of the Mayor and the official seal (or a facsimile
thereof) of the Issuer shall be impressed or imprinted thereon, attested and countersigned with the
manual or facsimile signature of the Clerk. In case any one or more of the officers who shall have
signed or sealed any of the Bonds or whose facsimile signature shall appear thereon shall cease
to be such officer of the Issuer before the Bonds so signed and sealed have been actually sold and
delivered, such Bonds may nevertheless be sold and delivered as herein provided and may be
issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Any
Bond may be signed and sealed on behalf of the Issuer by such person who at the actual time of
the execution of such Bond shall hold the proper office of the Issuer, although at the date of such
Bond such person may not have held such office or may not have been so authorized. The Issuer
may adopt and use for such purposes the facsimile signatures of any such persons who shall have
held such offices at any time after the date of the adoption of this Resolution, notwithstanding that
13
either or both shall have ceased to hold such office at the time the Bonds shall be actually sold and
• delivered.
SECTION 2.05. Authentication. No Bond of any Series shall be secured hereunder
or entitled to the benefit hereof or shall be valid or obligatory for any purpose unless there shall
be manually endorsed on such Bond a certificate of authentication by the Registrar or such other
entity as may be approved by the Issuer for such purpose. Such certificate on any Bond shall be
conclusive evidence that such Bond has been duly authenticated and delivered under this
Resolution. The form of such certificate shall be substantially in the form provided in Section
2.10 hereof.
SECTION 2.06. Temporar y—B9nds. Until the definitive Bonds of any Series are
prepared, the Issuer may execute, in the same manner as is provided in Section 2.04, and deliver,
upon authentication by the Registrar pursuant to Section 2.05 hereof, in lieu of definitive Bonds,
but subject to the same provisions, limitations and conditions as the definitive Bonds, except as
to the denominations thereof, one or more temporary Bonds substantially of the tenor of the
definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations
authorized by the Issuer by resolution of the Governing Body, and with such omissions, insertions
and variations as may be appropriate to temporary Bonds. The Issuer, at its own expense, shall
prepare and execute definitive Bonds, which shall be authenticated by the Registrar. Upon the
surrender of such temporary Bonds for exchange, the Registrar, without charge to the Holder
thereof, shall deliver in exchange therefor definitive Bonds, of the same aggregate principal
amount and Series and maturity as the temporary Bonds surrendered. Until so exchanged, the
temporary Bonds shall in all respects be entitled to the same benefits and security as definitive
Bonds issued pursuant to this Resolution. All temporary Bonds surrendered in exchange for
another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith cancelled
by the Registrar.
SECTION 2.07. Bonds Mutilated, Destroyed, Stolen or L o st.. In case any Bond shall
become mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and
deliver, and the Registrar shall authenticate, a new Bond of like tenor as the Bond so mutilated,
destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon surrender and
cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen
or lost, and upon the Holder furnishing the Issuer and the Registrar proof of such Holder's
ownership thereof and satisfactory indemnity and complying with such other reasonable
regulations and conditions as the Issuer or the Registrar may prescribe and paying such expenses
as the Issuer and the Registrar may incur. All Bonds so surrendered or otherwise substituted shall
be cancelled by the Registrar. If any of the Bonds shall have matured or been called for
redemption or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the
same or cause the Bond to be paid, upon being indemnified as aforesaid, and if such Bond be lost,
stolen or destroyed, without surrender thereof.
14
Any such duplicate Bonds issued pursuant to this Section 2.07 shall constitute original,
• additional contractual obligations on the part of the Issuer whether or not the lost, stolen or
destroyed Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal
and proportionate benefits and rights as to lien on the Pledged Funds to the same extent as all other
Bonds issued hereunder and shall be entitled to the same benefits and security as the Bond so lost,
stolen or destroyed.
SECTION 2.08. Ne=gotia Inter and T Sansfer. The Bonds issued
under this Resolution shall be and have all the qualities and incidents of negotiable instruments
under the laws of the State of Florida, subject to the provisions for registration and transfer
contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain
Outstanding, the Registrar shall keep on behalf of the Issuer books for the registration and transfer
of the Bonds.
Upon surrender thereof at the office of the Registrar with a written instrument of transfer
satisfactory to the Registrar, duly executed by the Holder thereof or such Holder's attorney -in -fact
duly authorized in writing, Bonds may, at the option of the Holder thereof, be exchanged for an
equal aggregate principal amount of registered Bonds of the same Series and maturity of any other
authorized denominations.
Each Bond shall be transferable only upon the books of the Issuer, at the office of the
Registrar, under such reasonable regulations as the Issuer may prescribe, by the Holder thereof
in person or by such Holder's attorney -in -fact duly authorized in writing upon surrender thereof
together with a written instrument of transfer satisfactory to the Registrar duly executed and
guaranteed by the Holder or such Holder's duly authorized attorney -in -fact. Upon the transfer of
any such Bond, the Issuer shall issue, and cause to be authenticated, in the name of the transferee
a new Bond or Bonds of the same aggregate principal amount and Series and maturity as the
surrendered Bond.
The Issuer, the Registrar and any Paying Agent or fiduciary of the Issuer shall deem and
treat the Person in whose name any Outstanding Bond shall be registered upon the books of the
Issuer as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the
purpose of receiving payment of, or on account of, the principal or Redemption Price, if
applicable, and interest on such Bond and for all other purposes, and all such payments so made
to any such Holder or upon such Holder's order shall be valid and effectual to satisfy and
discharge the liability upon such Bond to the extent of the sum or sums so paid and neither the
Issuer nor the Registrar nor any Paying Agent or other fiduciary of the Issuer shall be affected by
any notice to the contrary-
The Registrar, in any case where it is not also the Paying Agent in respect to any Series
of Bonds, shall forthwith (a) following the fifteenth day of the calendar month next preceding an
Interest Payment Date for such Series, (b) following the fifteenth day next preceding the date of
first mailing of notice of redemption of any Bonds of such Series, and (c) at any other time as
15
reasonably requested by the Paying Agent of such Series, certify and furnish to such Paying
• Agent the names, addresses and holdings of Bondholders and any other relevant information
reflected in the registration books.
In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised,
the Issuer shall execute and the Registrar shall authenticate and deliver such Bonds in accordance
with the provisions of this Resolution. Execution of Bonds by the Mayor and the Clerk for
purposes of exchanging, replacing or transferring Bonds may occur at the time of the original
delivery of the Series of which such Bonds are a part. All Bonds surrendered in any such
exchanges or transfers shall be cancelled by the Registrar. For every such exchange or transfer
of Bonds, the Issuer or the Registrar may make a charge sufficient to reimburse it for any tax, fee,
expense or other governmental charge required to be paid with respect to such exchange or
transfer. The Issuer and the Registrar shall not be obligated to make any such exchange or
transfer of any Bonds which shall have been selected for redemption or, in the case of any
proposed redemption of Bonds, during the fifteen (15) days next preceding the date of selection
of Bonds to be redeemed.
SECTION 2.09. u pon Bond The Issuer, at its discretion, may by Supplemental
Resolution authorize the issuance of Coupon Bonds, registrable as to principal only or as to both
principal and interest. Such Supplemental Resolution shall provide for the negotiability, transfer,
interchangeability, denominations and form of such Bonds and coupons appertaining thereto.
Coupon Bonds (other than Taxable Bonds) shall only be issued if an opinion of Bond Counsel is
received to the effect that issuance of such Coupon Bonds will not adversely affect the exclusion
of the interest payable on such Bonds from gross income for federal income tax purposes.
SECTION 2.10. Form of Bonds Except as otherwise provided pursuant to Section
2.09 hereof and except for Capital Appreciation Bonds and Variable Rate Bonds, the form of
which shall be provided by Supplemental Resolution, the Bonds shall be in substantially the
following form with such omissions, insertions and variations as may be necessary and /or
desirable and approved by the Mayor or the Clerk prior to the issuance thereof (which necessity
and /or desirability and approval shall be evidenced conclusively by the Issuer's delivery of the
Bonds to the purchaser or purchasers thereof):
[This space intentionally blank.]
is 16
• No. R
UNITED STATES OF AMERICA
STATE OF FLORIDA
VILLAGE OF TEQUESTA, FLORIDA
WATER REVENUE BOND, SERIES
Interest Maturity Date of
Rate Date Original Issue CUSIP
Registered Holder:
Principal Amount:
KNOW ALL MEN BY THESE PRESENTS, that the Village of Tequesta (the
"Issuer "), a municipal corporation and political subdivision created and existing under and by
• virtue of the laws of the State of Florida, for value received, hereby promises to pay, solely from
the sources of payment hereinafter described, to the Registered Holder identified above, or
registered assigns as hereinafter provided, the Principal Amount identified above on the Maturity
Date identified above, subject to prior redemption as hereinafter provided, together with interest
on such Principal Amount from the Date of Original Issue identified above or from the most recent
interest payment date to which interest has been paid, at the Interest Rate per annum (calculated
on the basis of a 360 -day year of twelve 30 -day months) identified above on _ 1 and ------ -
1 of each year commencing until such Principal Amount shall have been paid or
provided for.
Such Principal Amount and interest and the premium, if any, on this bond are
payable in any coin or currency of the United States of America which, on the respective dates of
payment thereof, shall be legal tender for the payment of public and private debts. Such Principal
Amount and the premium, if any, on this bond, are payable when due upon presentation and
surrender hereof at the principal office of , as paying agent, or
such other paying agent as the Issuer shall hereafter duly appoint (the "Paying Agent "). Payment
of each installment of interest shall be made to the person in whose name this bond shall be
registered on the registration books of the Issuer maintained by , _—
_, as registrar, or such other registrar as the Issuer shall hereafter duly appoint (the "Registrar "),
at the close of business on the date which shall be the fifteenth day (whether or not a Business
Day) of the calendar month next preceding each interest payment date and shall be paid by a check
17
or draft of the Paying Agent mailed to such Registered Holder at the address appearing on such
• registration books or, in the case of a Holder of at least $500,000 principal amount of Bonds (or
of all Bonds if less than $500,000 shall be unpaid), and at the written request and expense of such
Registered Holder, by bank wire transfer for the account of such Holder. In the event interest
payable on this bond is not punctually paid or duly provided for by the Issuer on such interest
payment date, payment of each installment of such defaulted interest shall be made to the person
in whose name this bond shall be registered at the close of business on a special record date for
the payment of such defaulted interest as established by notice sent by the Issuer to such Registered
Holder not less than °ten (10) days preceding such special record date.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH ON THE REVERSE SIDE HEREOF AND SUCH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN THIS
PLACE.
This bond shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been manually signed by the Registrar.
IN WITNESS WHEREOF, the Village of Tequesta, Florida, has issued this bond and has
caused the same to be executed by the manual or facsimile signature of its Mayor and - attested and
countersigned by the manual or facsimile signature of its Clerk and its official seal or a facsimile
thereof to be affixed or reproduced hereon, all as of the day of , 19_
• VILLAGE OF TEQUESTA, FLORIDA
(SEAL)
By--------
Mayor
ATTESTED AND COUNTERSIGNED:
Clerk
go 18
• CERTIFICATE OF AUTHENTICATION
This bond is one of the Bonds of the issue described in the within - mentioned Resolution.
DATE OF AUTHENTICATION:
Registrar
By: --
Authorized Officer
(Provisions on Reverse Side of Bond)
This bond is one of an authorized issue of bonds of the Issuer in the aggregate principal
amount of $ (the "Bonds ") of like date, tenor and effect, except as to maturity date, interest
rate, denomination and number, issued under the authority of and in full compliance with the
Constitution and laws of the State of Florida, particularly Chapter 166, Part II, Florida Statutes,
Article VIII, Section 2 of the Constitution of the State of Florida, the Charter of the Issuer, and
• other applicable provisions of law (the "Act "), and a resolution duly adopted by the Village
Council of the Issuer on , 19_, as amended and supplemented (the "Resolution "), and is
subject to all the terms and conditions of the Resolution.
The principal of or Redemption Price, if applicable, of and interest on this bond are
payable solely from and secured by a pledge of the Pledged Funds, as defined in and in the manner
and to the extent described in the Resolution. It is expressly agreed by the registered Holder of
this bond that the full faith and credit of the Issuer is not pledged to the payment of the principal
of or Redemption Price, if applicable, of and interest on this bond and that the registered Holder
shall never have the right to require or compel the exercise of the ad valorem taxing power of the
Issuer to the payment of such principal, Redemption Price, if applicable, and interest. This bond
and the obligation evidenced hereby shall not constitute a lien upon any property of the Issuer,
except the Pledged Funds, and shall be payable solely from the Pledged Funds in accordance with
the terms of the Resolution.
is 19
(INSERT REDEMPTION PROVISIONS)
• Notice of redemption, unless waived, is to be given by the Registrar by mailing an official
redemption notice by first class mail, postage prepaid, at least 30 days and not more than 60 days
prior to the date fixed for redemption to the registered holders of the Bonds to be redeemed at such
holders' addresses shown on the registration books maintained by the Registrar or at such other
addresses as shall be furnished in writing by such registered holders to the Registrar; provided,
however, that no defect in any such notice to any registered holder of Bonds to be redeemed nor
failure to give such notice to any such registered holder shall in any manner defeat the
effectiveness of a call for redemption as to all other registered holders of Bonds to be redeemed.
Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be
redeemed shall, on the redemption date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Issuer shall default in the payment of the
Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Any notice of
redemption prepared and mailed as provided in the Resolution shall be conclusively presumed to
have been duly given, whether or not the registered Holder receives the notice.
This bond is transferable in accordance with the terms of the Resolution only upon the
books of the Issuer kept for that purpose at the office of the Registrar upon the surrender of this
bond together with a written instrument of transfer satisfactory to the Registrar duly executed by
the Registered Holder or such Holder's attorney duly authorized in writing, and thereupon a new
bond or bonds in the same aggregate principal amount shall be issued to the transferee in exchange
• therefor, and upon the payment of the charges, if any, prescribed in the Resolution. The Issuer,
the Registrar and any Paying Agent shall treat the Registered Holder of this bond as the absolute
owner hereof for all purposes, whether or not this bond shall be overdue, and shall not be affected
by any notice to the contrary. The Issuer and the Registrar shall not be obligated to make any
exchange or transfer of Bonds during the fifteen (15) days next preceding the date of selection of
Bonds to be redeemed, or to make any exchange or transfer of Bonds selected for redemption.
It is hereby certified and recited that all acts, conditions and prerequisites required to exist,
to happen and to be performed precedent to and in connection with the issuance of this bond, exist,
have happened and have been performed, in regular and due form and time as required by the
Constitution and laws of the State of Florida applicable thereto, and that the issuance of the Bonds
does not violate any constitutional or statutory limitations or provisions.
20
LEGAL OPINION
[Insert appropriate approving opinion of bond counsel.
The following abbreviations, when used in the inscription on the face of the within
bond, shall be construed as though they were written out in full according to applicable laws or
regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants
in common
UNIF TRANS MIN ACT --
(Cust.)
Custodian for
under Uniform Transfers to Minors Act of
(State)
Additional abbreviations may also be used though not in list above.
21
ASSIGNMENT
• FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
Insert Social Security or Other Identifying Number of Assignee
(Name and Address of Assignee)
_ the within bond and does hereby irrevocably constitute
and appoint , as attorneys to register the transfer of the said bond
on the books kept for registration thereof with full power of substitution in the premises.
Dated: .
Signature Guaranteed:
NOTICE: Signature(s) must be
guaranteed by a member firm
of the New York Stock Exchange
or a commercial bank or trust
company.
• NOTICE: The signature to this assignment
must correspond with the name of the
Registered Holder as it appears upon the face
of the within bond in every particular,
without alteration or enlargement or any
change whatever and the Social Security or
other identifying number of such assignee
must be supplied.
[End of Article II]
• 22
ARTICLE III
• REDEMPTION OF BONDS
SECTION 3.01. Privile of Redemptio Any Series of Bonds may be subject to
redemption prior to maturity in the manner and on such date or dates as specified by a
Supplemental Resolution adopted prior to the issuance of such Series of Bonds. The terms of this
Article III shall apply to redemption of Bonds other than Capital Appreciation Bonds or Variable
Rate Bonds. The terms and provisions relating to redemption of Capital Appreciation Bonds and
Variable Rate Bonds shall be provided by Supplemental Resolution.
SECTION 3.02. Selection of Bonds to be Redeemed The Bonds shall be redeemed
only in the principal amount of $5,000 each and integral multiples thereof. For purposes of any
optional redemption of less than all of the Outstanding Bonds of a Series, the amounts of the
particular maturity or maturities to be redeemed shall be selected by the Issuer. For purposes of
any redemption of less than all of the Outstanding Bonds of a single maturity, the particular Bonds
or portions of Bonds to be redeemed shall be selected by the Registrar by such method as the
Registrar shall deem fair and appropriate and which may provide for the selection for redemption
of Bonds or portions of Bonds in principal amounts of $5,000 and integral multiples thereof.
If less than all of the Outstanding Bonds of a single maturity are to be redeemed, the
Registrar shall promptly notify the Issuer and Paying Agent (if the Registrar is not the Paying
• Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for redemption and,
in the case of any Bond selected for partial redemption, the principal amount thereof to be
redeemed.
SECTION 3.03. Notic of Redemption Unless waived by any Holder of .Bonds to
be redeemed, notice of any redemption of Bonds shall be given by the Registrar on behalf of the
Issuer by mailing a copy of an official redemption notice by first class mail, postage prepaid, at
least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to
each Holder of Bonds to be redeemed at the address of such Holder shown on the registration
books maintained by the Registrar.
Every official notice of redemption shall be filed by the Registrar with the Paying Agent
and shall be dated and shall state:
(1) the redemption date,
(2) the Redemption Price,
(3) if less than all outstanding Bonds for a maturity are to be redeemed, the number
(and, in the case of a partial redemption of any Bond, the principal amount) of each Bond of such
maturity to be redeemed,
• 23
(4) that on the redemption date the Redemption Price will become due and payable
upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease
to accrue from and after said date, and
(5) that such Bonds to be redeemed, whether as a whole or in part, are to be
surrendered for payment of the Redemption Price plus accrued interest at the office of the Paying
Agent.
A notice of redemption may be conditioned upon the availability of funds to pay the
Redemption Price of the Bonds to be redeemed on the redemption date, and in such event, the
notice of redemption shall expressly state that it is subject to such condition. In the event that a
conditional notice of redemption is given and in the event that funds are not available to pay the
Redemption Price of the Bonds so called for redemption, such Bonds shall continue to be
Outstanding as if such notice had not been given. Provided, however, that in such event the
Registrar shall on behalf of the Issuer mail a notice to the Holders of the Bonds subject to such
conditional notice stating that the condition to the call was not satisfied and that the Bonds shall
remain outstanding.
Prior to any redemption date, the Issuer shall deposit with the Paying Agent an amount of
money sufficient to pay the Redemption Price of and accrued interest on all the Bonds or portions
of Bonds which are to be redeemed on that date.
• The failure to give any notice of redemption, or any defect therein, shall not affect the
validity of any proceedings for the redemption of any Bond with respect to which no such failure
or defect has occurred. Any notice prepared and mailed as provided in this Section shall be
conclusively presumed to have been duly given, whether or not the Holder receives the notice.
SECTION 3.04. Red Any Bond which is to be
redeemed only in part shall be surrendered at any place of payment specified in the notice of
redemption (with due endorsement by, or written instrument of transfer in form satisfactory to the
Registrar duly executed by, the Holder thereof or such Holder's attorney -in -fact duly authorized
in writing) and the Issuer shall execute and the Registrar shall authenticate and deliver to the
Holder of such Bond, without service charge, a new Bond or Bonds, of the same interest rate and
maturity, and of any authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the unredeemed portion of the principal of the
Bonds so surrendered.
SECTION 3.05. Payment of Redeemed -Bonds. Official notice of redemption having
been given substantially as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on the
redemption date, become due and payable at the Redemption Price therein specified, and from and
after such date (unless the Issuer shall default in the payment of the Redemption Price) such Bonds
or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption
in accordance with said notice, such Bonds shall be paid by the Registrar and /or Paying Agent at
• 24
the appropriate Redemption Price, plus accrued interest. Each check or other transfer of funds
• issued by the Registrar and /or Paying Agent for the purpose of the payment of the Redemption
Price of Bonds being redeemed shall bear the CUSIP number identifying, by issue and maturity,
the Bonds being redeemed with the proceeds of such check or other transfer. Installments of
interest due on or prior to the Redemption Date shall be payable as herein provided for payment
of interest. All Bonds which have been redeemed shall be cancelled by the Registrar and shall not
be reissued.
[End of Article III]
•
• 25
ARTICLE IV
• SECURITY, SPECIAL FUNDS AND
APPLICATION THEREOF
SECTION 4.01. Bonds-Not to be_In debtedness _— ofI uer. The Bonds shall not be or
constitute general obligations or indebtedness of the Issuer within the meaning of any constitutional
or statutory provision, but shall be special obligations of the Issuer, payable solely from and
secured by a pledge of the Pledged Funds in accordance with the terms of this Resolution. The
Issuer may cause any Series of Bonds to be payable from and secured by a Credit Facility or a
Bond Insurance Policy not applicable to any one or more other Series of Bonds. No Holder of any
Bond or any Credit Bank or any Insurer shall ever have the right to compel the exercise of the ad
valorem taxing power of the Issuer to pay such Bond or be entitled to payment of such Bond from
any moneys of the Issuer except the Pledged Funds, in the manner provided herein.
SECTION 4.02. Seu urity for Bo nds. The payment of the principal of or Redemption
Price, if applicable, and interest on the Bonds shall be secured forthwith equally and ratably by
a pledge of the Pledged Funds; provided, however, a Series of Bonds may be further secured by
a Credit Facility or any Bond Insurance Policy not applicable to any one or more other Series of
Bonds, as shall be provided by Supplemental Resolution, in addition to the security provided
herein. The Issuer does hereby irrevocably pledge the Pledged Funds in the manner provided in
this Resolution to the payment of the principal of or Redemption Price, if applicable, and interest
• on the Bonds.
SECTION 4.03. Fund�and..Accounts. The Issuer covenants and agrees to establish
with one or more Authorized Depositories the following separate funds:
(1) "Construction Fund" (the "Construction Fund "),
(2) "Revenue Fund" (the "Revenue Fund "),
(3) "Operation and Maintenance Fund" (the "Operation and Maintenance Fund
(4) "Debt Service Fund" (the "Debt Service Fund "),
(5) "Renewal and Replacement Fund" (the "Renewal and Replacement Fund "),
(6) "Impact Fee Fund" (the "Impact Fee Fund "), and
(7) "Rate Stabilization Fund" (the "Rate Stabilization Fund)."
The Issuer shall maintain in the Debt Service Fund four accounts:
• 26
(1) the "Interest Account,"
•
( 2 ) the "Principal al Account, "
(3) the "Bond Amortization Account," and
(4) the "Reserve Account," and therein, a "1998 Subaccount" which shall jointly secure
all Series of Bonds, unless under the provisions of the Supplemental Resolution(s) authorizing one
or more Series of Bonds, such Series of Bonds is or are to be separately secured by a separate
subaccount in the Reserve Account, in which case a separate subaccount in the Reserve Account
may secure only such Series of Bonds.
The Issuer shall at any time and from time to time appoint one or more Authorized
Depositaries to hold, for the benefit of the Issuer and /or the Bondholders, any one or more of the
funds and accounts established hereby. Such depositary or depositaries shall perform at the
direction of the Issuer the duties of the Issuer in depositing, transferring and disbursing moneys
to and from each of such funds and accounts as herein set forth, and all records of such depositary
in performing such duties shall be open at all reasonable times to inspection by the Issuer and its
agents and employees.
SECTION 4.04. Constructi Fund The Issuer shall establish within the
Construction Fund a separate account for each Series of Bonds the proceeds of which are to be
deposited in whole or in part in the Construction Fund. Moneys in each account of the
Construction Fund, until applied in payment of any item of the Cost of a Project, shall be held in
trust by the Issuer and shall be subject to a lien and charge in favor of the Holders of the Series
of Bonds the proceeds of which were deposited in such account and held for the further security
of such Holders.
There shall be paid into the Construction Fund the amounts required to be so paid by the
provisions of this Resolution or Supplemental Resolution, and there may be paid into the
Construction Fund, at the option of the Issuer, any moneys received for or in connection with a
Project by the Issuer from any other source.
The Issuer may make disbursements or payments from the Construction Fund to pay the
Cost of a Project. Promptly after the date of the completion of a Project, and after paying or
making provisions for the payment of all unpaid items of the Cost of such Project, the Issuer shall
deposit in the following order of priority any balance of moneys remaining in the applicable
account of the Construction Fund in (1) another account of the Construction Fund established in
connection with another Series of Bonds for which the Authorized Issuer Officer has stated that
there are insufficient moneys present to pay the Cost of the related Project, (2) the Reserve
Account, to the extent of a deficiency therein, and (3) (i) the Debt Service Fund or (ii) such other
fund or account of the Issuer, including those established hereunder, as shall be determined by the
Governing Body, provided the Issuer has received an opinion of Bond Counsel to the effect that
• 27
such transfer to such other fund or account shall not adversely affect the exclusion, if any, of
interest on the Bonds from gross income for federal income tax purposes.
SECTION 4.05. Fl _ofFunds.
(A) Revenue Fund. The Issuer shall deposit all Gross Revenues into the Revenue Fund
promptly upon the receipt thereof. On or before the last Business Day of each month, the moneys
in the Revenue Fund shall be deposited or credited in the following manner and in the following
order of priority:
(1) Op eration and -Mai ntenanc e-Eund. The Issuer shall deposit into or credit to the
Operation and Maintenance Fund such sum as shall be necessary to cause the moneys in the
Operation and Maintenance Fund to be sufficient to pay Operating Expenses for the next
succeeding month; provided, however, that subject always to the provisions of Section 5.06
hereof, the Issuer shall transfer moneys from the Revenue Fund to the Operation and Maintenance
Fund at any time to pay Operating Expenses to the extent there shall be a deficiency in the moneys
in the Operation and Maintenance Fund for such purpose. Moneys in the Operation and
Maintenance Fund shall be paid out from time to time by the Issuer to pay reasonable and
necessary Operating Expenses as and when the same shall be incurred.
(2) Debt -S-ex-viceEund. Next, the Issuer shall deposit into or credit to the Debt Service
Fund such sums as shall be required for all of the deposits, transfers and payments described in
• Section 4.05(B) hereof.
(3) Rebate-Fund. Next, the Issuer may, at its option, deposit into or credit to any
Rebate Fund the amount described - in Section 4.07(1) hereof.
(4) Subord Indeb tedness. Next, the Issuer shall apply available moneys in the
Revenue Fund to the payment of the debt service for any Subordinated Indebtedness.
(5) Rene and Replacement Fu nd. Next, whenever the balance on deposit in the
Renewal and Replacement Fund shall be less than the Renewal and Replacement Fund
Requirement, the Issuer shall deposit into or credit to the Renewal and Replacement Fund the
lesser of the balance of all moneys remaining in the Revenue Fund or 2% of the deposits to the
Revenue Fund during the current month, to the extent necessary to cause the moneys in the
Renewal and Replacement Fund to equal 100% of the Renewal and Replacement Fund
Requirement. If at any time the balance on deposit in the Renewal and Replacement Fund shall
exceed the Renewal and Replacement Fund Requirement, such excess may be withdrawn by the
Issuer from the Renewal and Replacement Fund and deposited into the Revenue Fund. The
moneys in the Renewal and Replacement Fund shall be applied by the Issuer to the payment of the
cost of extensions, improvements and additions to, or renewals and replacements of the capital
assets of, or extraordinary repairs of the System; provided, however, that whenever moneys in the
Debt Service Fund and Impact Fee Fund shall be insufficient to pay all or any part of the principal
• 28
• of, Redemption Price or interest on any of the Bonds, moneys in the Renewal and Replacement
Fund shall first be used to supplement the Debt Service Fund to the extent necessary to prevent
a default on the Bonds.
(6) Rate Stabiliza tion_Eund. Next, the Issuer may, at its option, deposit into the Rate
Stabilization Fund any amount desired by the Issuer. Moneys in the Rate Stabilization Fund may
be used by the Issuer for any lawful purpose of the Issuer, including to make deposits to the
Revenue Fund at any time and from time to time.
(7) Excess Revenues The Issuer may withdraw the balance of all moneys remaining
on deposit to the credit of the Revenue Fund and apply the same in any manner permitted by the
laws of the State.
(B) Debt Service. The moneys on deposit in the Debt Service Fund shall be applied
by the Issuer in the manner provided herein solely for the payment of the principal of or
Redemption Price, if applicable, of and interest on the Bonds and for the reimbursement to any
Credit Bank of any payments made by it for such purpose, or for the purchase of, and
reinstatement of the maximum limits of, any Reserve Account Insurance Policy and /or Reserve
Account Letter of Credit, and shall not be available for any other purpose. The moneys
transferred from the Revenue Fund to the Debt Service Fund shall upon such transfer or credit be
deposited or credited in the following manner and in the following order of priority (except that
payments pursuant to (2) and (3) below shall be on a parity):
• (1) Interest Account The Issuer shall deposit into or credit to the Interest Account
one -sixth (1/6) of the amount of interest becoming due on all Outstanding Bonds through the next
succeeding Interest Payment Date, provided that no payment or only a partial payment need be
made at any time to the extent that the amount on deposit in the Interest Account is, or together
with such partial payment shall be, an amount sufficient to pay all interest becoming due on all
Outstanding Bonds on the next succeeding Interest Payment Date, and, provided, that such
monthly payments may be decreased proportionately by a Supplemental Resolution to take into
account any deposit made to the Interest Account as capitalized interest upon the issuance of a
Series of Bonds, and provided further in each month intervening between the date of delivery of
a Series of Bonds (beginning with the month following the month in which such delivery takes
place) and the next succeeding Interest Payment Date, the amount specified in this subsection shall
be that amount which when multiplied by the number of deposits to the Interest Account required
to be made during such period will equal the amount required for such next succeeding interest
payment. Moneys in the Interest Account shall be applied by the Issuer to pay interest on the
Bonds as and when the same become due, whether by redemption or otherwise, or to reimburse
a Credit Bank for amounts drawn for such purpose, and for no other purpose. The Issuer shall
adjust the amount of the deposit into the Interest Account not later than the month immediately
preceding any Interest Payment Date so as to provide sufficient moneys in the Interest Account
to pay the interest on the Bonds coming due on such Interest Payment Date.
• 29
(2) Prin Next, beginning in the month which is twelve (12) months prior
• to the month in which the first principal payment date occurs, one - twelfth (1/12) of the principal
of the Bonds other than Term Bonds scheduled to become due on the next succeeding principal
payment date, provided, however, that no payment or only a partial payment need be made in any
month to the extent the amount on deposit in the Principal Account is, or together with such partial
payment shall be, sufficient to pay the principal of the Bonds (other than Amortization Installments
of Term Bonds) scheduled to become due on the next succeeding principal payment date and
provided further than in each month intervening between the date of delivery of the Series of
Bonds (beginning wiih the month following the month in which such delivery takes place) and the
next succeeding principal payment date (if less than 12 months) the amount specified in this
subsection shall be that amount that when multiplied by the number of deposits to the principal
account required to be made during such period will equal the amount required for the next
succeeding principal payment. Moneys in the Principal Account shall be applied by the Issuer to
pay the principal of the Bonds (other than Amortization Installments of Term Bonds) as and when
the same shall mature, or to reimburse a Credit Bank for amounts drawn for such purpose, and
for no other purpose. The Issuer shall adjust the amount of the deposit into the Principal Account
no later than the month immediately preceding any principal payment date so as to provide
sufficient moneys in the Principal Account to pay the principal on the Bonds becoming due on such
principal payment date.
(3) Bond Amorti zatioII__A_ccount. Commencing in the month which is twelve months
prior to the month in which occurs the due date of each Amortization Installment, the Issuer shall
• deposit into or credit to the Bond Amortization Account, one - twelfth (1/12) of such Amortization
Installment, provided, however, that no payment or only a partial payment need be made to the
Bond Amortization Account in any month to the extent that the amount on deposit in the Bond
Amortization Account is, or together with such partial payment shall be, sufficient to pay such
Amortization Installment. Moneys in the Bond Amortization Account shall be applied by the
Issuer to purchase or redeem Term Bonds in the manner herein provided, or to reimburse a Credit
Bank for amounts drawn for such purpose, and for no other purpose. The Issuer shall adjust the
amount of the deposit into the Bond Amortization Account not later than the month immediately
preceding any due date of an Amortization Installment so as to provide sufficient moneys in the
Bond Amortization Account to pay the Amortization Installment due on such date.
Amounts accumulated in the Bond Amortization Account with respect to any Amortization
Installment shall be applied by the Issuer, (i) on or prior to the sixtieth (60th) day preceding the
due date of such Amortization Installment to the purchase of Term Bonds of the Series and
maturity for which such Amortization Installment was established, at a price not greater than the
Redemption Price at which such Term Bonds may be redeemed on the first date thereafter on
which such Term Bonds shall be subject to redemption, or (ii) to the redemption at the applicable
Redemption Price of such Term Bonds. The amount of the applicable Redemption Price of any
Term Bonds so purchased or redeemed shall be deemed to be on deposit in the Bond Amortization
Account until such Amortization Installment date for the purposes of calculating the amount on
deposit in such Account. As soon as practicable after the sixtieth (60th) day preceding the due
• 30
• date of any such Amortization Installment, the Issuer shall proceed to call for redemption on such
due date, by causing notice to be given as provided in Section 3.03 hereof, Term Bonds of the
Series and maturity for which such Amortization Installment was established in such amount as
shall be necessary to complete the retirement of the unsatisfied balance of such Amortization
Installment. The Issuer shall pay out of the Bond Amortization Account and the Interest Account
to the respective Paying Agents, on or before the day preceding such redemption date, the amount
required for the redemption, and such amount shall be applied by such Paying Agents to such
redemption.
(4) Reserve Account Next, the Issuer shall deposit into or credit to each subaccount
of the Reserve Account such sum, if any, as will be sufficient to restore in not more than 12 equal
monthly payments the funds on deposit therein to an amount equal to the Reserve Account
Requirement therefor including the reinstatement of any Reserve Account Insurance Policy or
Reserve Account Letter of Credit on deposit therein or the cash replacement thereof. In the event
the amounts available for such purpose shall be insufficient to make all payments required by the
preceding sentence, the available amount shall be prorated among the various subaccounts in the
Reserve Account in the same proportion that the Reserve Account Requirement for each
subaccount bears to the total Reserve Account Requirement for all such subaccounts. On or prior
to each principal payment date and Interest Payment Date for the Bonds, moneys in each
subaccount of the Reserve Account shall be applied by the Issuer to the payment of the principal
of or Redemption Price, if applicable, and interest on the Series of Bonds to which such
subaccount relates to the extent moneys in the Interest Account, the Principal Account and the
Bond Amortization Account shall be insufficient for such purpose. Whenever upon valuation of
any subaccount of the Reserve Account there shall be moneys in any subaccount of the Reserve
Account in excess of the Reserve Account Requirement, therefor such excess moneys shall be
deposited by the Issuer into the Revenue Fund.
Upon the issuance of any Series of Bonds, under the terms, limitations and conditions as
herein provided, the Issuer shall provide for the funding of a subaccount in the Reserve Account
in an amount equal to the Reserve Account Requirement, if any, for such Series.
Whenever moneys on deposit in a subaccount of the Reserve Account, together with the
other available amounts in the Debt Service Fund, are sufficient to fully pay all Outstanding
Bonds (including principal and interest thereon) of the Series secured by such subaccount in
accordance with their terms, the funds on deposit in such subaccount may be applied to the
payment of such Series of Bonds.
Notwithstanding the foregoing provisions, with the written consent of each Insurer, in lieu
of the required deposits into the Reserve Account, and /or in substitution for money on deposit in
the Reserve Account, the Issuer may, at its sole option and discretion, cause to be deposited a
Reserve Account Insurance Policy and /or Reserve Account Letter of Credit in an amount equal
to the difference between the Reserve Account Requirement applicable thereto and the sums then
on deposit in the Reserve Account, if any, and, in the case of a substitution of a Reserve Account
• 31
• Insurance Policy and /or Reserve Account Letter of Credit for money on deposit in the Reserve
Account, the Issuer may withdraw money from the Reserve Account in excess of the Reserve
Account Requirement and may use such money for any lawful purpose provided the Issuer first
obtains an opinion of Bond Counsel that such use is permitted and will not, in and of itself,
adversely affect the exclusion from gross income of interest on any Bonds other than any Taxable
Bonds. Such Reserve Account Insurance Policy and /or Reserve Account Letter of Credit shall be
payable to the Paying Agent for such Series (upon the giving of notice as required thereunder) on
any interest payment or redemption date on which a deficiency exists which cannot be cured by
funds in any other fund or account held pursuant to this Resolution and available for such purpose.
If fifteen (15) days prior to an interest payment or mandatory redemption date, the Issuer
shall determine that a deficiency exists in the amount of moneys available to pay in accordance
with the terms hereof interest and /or principal due on Bonds on such date, the Issuer shall
immediately notify (a) the issuer of the applicable Reserve Account Insurance Policy and /or the
issuer of the Reserve Account Letter of Credit, and (b) the Insurer, if any, of the amount of such
deficiency and the date on which such payment is due, and shall take all action to cause such issuer
or Insurer to provide moneys sufficient to pay all amounts due on such interest payment or
redemption date.
If a disbursement is made from a Reserve Account Insurance Policy and /or Reserve
Account Letter of Credit provided pursuant to this Section 4.05(B)(4), the Issuer shall reinstate
the maximum limits of such Reserve Account Insurance Policy and /or Reserve Account Letter of
• Credit following such disbursement from moneys becoming available in the applicable subaccount
of the Reserve Account in accordance with the provisions of the first paragraph of this Section
4.05(B)(4), by depositing funds in the amount of the disbursement made under such instrument,
with the issuer thereof. In addition, after the amount on deposit in the applicable subaccount of
the Reserve Account equals the Reserve Account Requirement therefor, the Issuer shall reimburse
the issuer of the Reserve Account Insurance Policy and /or the issuer of the Reserve Account Letter
of Credit for interest and all reasonable expenses incurred by such issuer in connection with the
draw on such Reserve Account Insurance Policy or the Reserve Account Letter of Credit, as the
case may be, if the Issuer is so obligated under the terms of the Reserve Account Insurance Policy,
or Reserve Account Letter of Credit.
The Issuer may evidence its obligation to reimburse the issuer of any Reserve Account
Letter of Credit or Reserve Account Insurance Policy by executing and delivering to such issuer
a promissory note therefor, provided, however, any such note (a) shall not be a general obligation
of the Issuer the payment of which is secured by the full faith and credit or taxing power of the
Issuer, and (b) shall be payable solely from moneys available in the applicable subaccount of the
Reserve Account in accordance with the provisions of the first paragraph of this Section
4.05(B)(4).
To the extent the Issuer causes to be deposited into the Reserve Account a Reserve Account
Insurance Policy and /or a Reserve Account Letter of Credit for a term of years shorter than the
• 32
• life of the Series of Bonds so insured or secured, then the Reserve Account Insurance Policy
and /or the Reserve Account Letter of Credit shall provide, among other things, that the issuer
thereof shall provide the Issuer with notice as of each anniversary of the date of the issuance of
the Reserve Account Insurance Policy and /or the Reserve Account Letter of Credit of the intention
of the issuer thereof to either (a) extend the term of the Reserve Account Insurance Policy and /or
the Reserve Account Letter of Credit beyond the expiration dates thereof, or (b) terminate the
Reserve Account Insurance Policy and /or the Reserve Account Letter of Credit on the initial
expiration dates thereof or such other future date as the issuer thereof shall have established. If
the issuer of the Reserve Account Insurance Policy and /or the Reserve Account Letter of Credit
notifies the Issuer pursuant to clause (b) of the immediately preceding sentence, then the Issuer
shall deposit into the applicable subaccount of the Reserve Account pursuant to the first sentence
of this Section 4.05(B)(4), during the first full calendar month following the date on which such
notice of intent to terminate is received by the Issuer and in each succeeding month, such sums
as shall be sufficient to pay each month an amount equal to a fraction, the numerator of which is
one (1) and the denominator of which is equal to the number of months remaining in the term of
the Reserve Account Insurance Policy and /or the Reserve Account Letter of Credit, of the portion
of the Reserve Account Requirement covered by the Reserve Account Letter of Credit and /or the
Reserve Account Insurance Policy on the date such notice was received, until the sum on deposit
in the applicable subaccount of the Reserve Account, and no later than the expiration of such
Reserve Account Insurance Policy and /or such Reserve Account Letter of Credit, shall be equal
to the Reserve Account Requirement.
• If any Reserve Account Letter of Credit or Reserve Account Insurance Policy shall
terminate prior to the stated expiration date thereof, the Issuer agrees that it shall fund the
applicable subaccount of the Reserve Account pursuant to the first sentence of this Section
4.05(B)(4), over a period of not to exceed twelve (12) months during which it shall make
consecutive equal monthly payments in order that the amount on deposit in such account at the end
of such period shall be equal to the Reserve Account Requirement; provided, the Issuer may at its
sole option and discretion, with the prior written consent of the Insurer, if any, obtain a new
Reserve Account Letter of Credit or a new Reserve Account Insurance Policy in lieu of making
the payments required by this paragraph.
(C) The Issuer, in its discretion, may use moneys in the Principal Account and the
Interest Account to purchase or redeem Bonds coming due on the next principal payment date,
provided such purchase or redemption does not adversely affect the Issuer's ability to pay the
principal or interest coming due on the Bonds not so purchased or redeemed.
(D) At least one (1) Business Day prior to the date established for payment of any
principal of or Redemption Price, if applicable, or interest on the Bonds, the Issuer shall withdraw
from the Debt Service Fund sufficient moneys to pay such principal or Redemption Price, if
applicable, or interest and deposit such moneys with the Paying Agent for the Bonds to be paid.
• 33
(E) In the case of Bonds secured by a Credit Facility, amounts on deposit in the Debt
• Service Fund or any accounts therein established for such Bonds may be applied as provided in
the applicable Supplemental Resolution to reimburse the Credit Bank for amounts drawn under
such Credit Facility to pay the principal of or Redemption Price, if applicable, and interest on such
Bonds or to pay the purchase price of any such Bonds which are tendered by the Holders thereof
for payment.
SECTION 4.06. Impact Fee F und. The Issuer shall deposit all Impact Fees received
in each Fiscal Year into the Impact Fee Fund.
All or any portion of the moneys in the Impact Fee Fund may, at the option of the Issuer,
be deposited or credited to the subaccounts in the Debt Service Fund in the manner described in
Section 4.05(B) hereof; provided, however, that such moneys shall be deposited or credited to the
subaccounts in the Debt Service Fund in the manner described in Section 4.05(B) hereof in the
event that moneys in the Revenue Fund are insufficient or unavailable to make all of the deposits
into the subaccounts in the Debt Service Fund required by Section 4.05(B) hereof. Amounts in
the Impact Fee Fund not required to be deposited to the Debt Service Fund may be expended for
any lawful purpose of the Issuer.
Notwithstanding anything to the contrary contained herein, the aggregate amount of Impact
Fees applied and allocated to the aggregate Debt Service Requirements for the Bonds shall never
exceed the aggregate Impact Fee Debt Service Components for the Bonds, unless the Issuer shall
receive an opinion of legal counsel to the effect that a greater amount of Impact Fees could
lawfully be applied to the Debt Service Requirements for the Bonds.
SECTION 4.07. Rebate Fun d. If so provided by Supplemental Resolution with
respect to any Series of Bonds, the Issuer may establish with a Authorized Depository a fund to
be known as the "Rebate Fund" (the "Rebate Fund "). Amounts on deposit in the Rebate Fund
shall be held in trust by the Issuer and used solely to make required payments to the United States
Treasury (except to the extent the same may be transferred to the Revenue Fund) and the
Bondholders shall have no right to have the same applied for debt service on the Bonds. The
Issuer agrees to undertake all actions required of it pursuant to Section 5.15 hereof, including, but
not limited to:
(1) making a determination in accordance with the Code of the amount necessary to be
deposited in the Rebate Fund;
(2) depositing into the Rebate Fund from moneys in the Revenue Fund or from other
moneys of the Issuer legally available for such purpose the amount determined in clause (1) above;
(3) paying on the dates and in the manner required by the Code to the United States
Treasury from the Rebate Fund and any other legally available moneys of the Issuer such amounts
as shall be required by the Code to be rebated to the United States Treasury; and
• 34
• (4) keeping such records of the determinations made pursuant to this Section 4.07 as
shall be required by the Code, as well as evidence of the fair market value of any investments
purchased with proceeds of the Bonds of the Series of which such .accounts were created.
If at any time the Issuer shall determine that the amount on deposit in the Rebate Fund
exceeds the amount necessary to be on deposit therein to satisfy the foregoing covenants of the
Issuer, the Issuer may transfer all or a portion of the amount on deposit in the Rebate Fund to the
Revenue Fund to be applied in the same manner as other funds on deposit in the Revenue Fund.
SECTION 4.08. Investments All funds and accounts hereunder shall be continuously
secured in the manner by which the deposit of public funds are authorized and required to be
secured by the laws of the State. Moneys on deposit in the Construction Fund, the Revenue Fund,
the Operation and Maintenance Fund, the Rebate Fund, the Rate Stabilization Fund, the Renewal
and Replacement Fund, the Impact Fee Fund and the Debt Service Fund, other than the Reserve
Account, may be invested and reinvested in Authorized Investments maturing not later than the
date on which the moneys therein will be needed. Moneys on deposit in the Reserve Account may
be invested or reinvested in Authorized Investments which shall mature no later than five (5) years
from the date of acquisition thereof.
Any and all income received by the Issuer from the investment of moneys in the funds and
accounts established pursuant to this Resolution shall be retained in such respective fund or
account unless otherwise required by applicable law, provided that income received by the Issuer
• from the investment of moneys in any subaccount of the Reserve Account to the extent the amount
therein is greater than the Reserve Account Requirement shall be deposited in the Revenue Fund.
Nothing contained in this Resolution shall prevent any Authorized Investments acquired
as investments of or security for funds held under this Resolution from being issued or held in
book -entry form on the books of the Department of the Treasury of the United States.
All investments shall be valued at their fair market values. Amounts in the Reserve
Account shall be valued on each Interest Payment Date after the payments due on the Bonds on
such date shall have been made.
SECTION 4.09. Separate Acc ents. The moneys required to be accounted for in each
of the foregoing funds and accounts established herein may be deposited in a single bank account,
and funds allocated to the various funds and accounts established herein may be invested in a
common investment pool, provided that adequate accounting records are maintained to reflect and
control the restricted allocation of the moneys on deposit therein and such investments for the
various purposes of such funds and accounts as herein provided.
The designation and establishment of the various funds and accounts in and by this
Resolution shall not be construed to require the establishment of any completely independent, self -
balancing funds as such term is commonly defined and used in governmental accounting, but
• 35
rather is intended solely to constitute an earmarking of certain revenues for certain purposes and
• to establish certain priorities for application of such revenues as herein provided.
[End of Article IV]
•
• 36
• ARTICLE V
SUBORDINATED INDEBTEDNESS
ADDITIONAL BONDS, AND COVENANTS OF ISSUER
SECTION 5.01. Subordinated Inde btedness. The Issuer will not issue any other
obligations, except under the conditions and in the manner provided herein, payable from the
Pledged Funds or voluntarily create or cause to be created any debt, lien, pledge, assignment,
encumbrance or other charge having priority to or being on a parity with the lien thereon in favor
of the Bonds and the interest thereon. The Issuer may at any time or from time to time issue
evidences of indebtedness that are not Additional Bonds and that are payable in whole or in part
out of the Pledged Funds and which may be secured by a pledge of the Pledged Funds; provided,
however, that such pledge shall be, and shall be expressed to be, subordinated in all respects to
the pledge of the Pledged Funds created by this Resolution. The Issuer shall have the right to
covenant with the holders from time to time of any Subordinated Indebtedness to add to the
conditions, limitations and restrictions under which any Additional Bonds may be issued pursuant
to Section 5.02 hereof.
SECTION 5.02. Issuance of Additional B onds. No Additional Bonds, payable from
the Pledged Funds on a parity with the Bonds then Outstanding pursuant to this Resolution, shall
be issued except upon the conditions and in the manner herein provided. The Issuer may issue one
• or more Series of Additional Bonds for any one or more of the following purposes: financing the
Cost of any Project, or the completion thereof, or refunding any or all Outstanding Bonds or any
Subordinated Indebtedness of the Issuer, or for any other purpose permitted by law.
No Additional Bonds shall be issued or incurred unless the following conditions are
complied with:
(A) The Issuer shall certify that it is current in all deposits into the various funds and
accounts established hereby and all payments theretofore required to have been deposited or made
by it under the provisions of this Resolution and has complied with the covenants and agreements
of this Resolution.
(B) There shall have been obtained and filed with the Issuer a certificate of an
independent certified public accountant: (1) stating that such accountant has examined the books
and records of the Issuer relating to the collection and receipt of Pledged Funds; (2) stating the
amount of Net Revenues adjusted as provided in Section 5.02(E) hereof for the immediately
preceding Fiscal Year or any twelve (12) consecutive months selected by the Issuer of the eighteen
(18) months immediately preceding the issuance of such Additional Bonds as the case may be;
(3) stating that the amount of such Net Revenues equals at least 1.20 times the Maximum Debt
Service Requirement for all Outstanding Bonds and such Additional Bonds then proposed to be
• 37
• issued; and (4) stating that no Event of Default was disclosed in the report of the most recent
Annual Audit, or if an Event of Default was so disclosed, that it shall have been cured.
(C) In computing the Maximum Debt Service Requirement for purposes of this Section
5.02, the interest rate on outstanding Variable Rate Bonds, and on any additional parity Variable
Rate Bonds then proposed to be issued, shall be deemed to be the Maximum Interest Rate
applicable thereto. In addition, in connection with the issuance of any Variable Rate Bonds, at the
time of issuance of such Variable Rate Bonds, the Maximum Interest Rate applicable thereto shall
be established.
(D) For the purposes of this Section 5.02, the phrase "immediately preceding Fiscal
Year or any twelve (12) consecutive months selected by the Issuer of the eighteen (18) months
immediately preceding the issuance of such Additional Bonds" shall be sometimes referred to as
"twelve consecutive months."
(E) The Net Revenues may be adjusted by the independent certified public accountant,
at the option of the Issuer, as follows:
(1) If the Issuer, prior to the issuance of the proposed Additional Bonds but not prior
to the beginning of such twelve consecutive months, shall have increased the Rates, and /or shall
have begun to derive revenues from newly acquired facilities of the System, the Net Revenues for
the twelve consecutive months shall be adjusted to show the Net Revenues which would have been
• derived in such twelve consecutive months if such increased Rates had been in effect, and /or such
new facilities had produced revenues, during all of such twelve consecutive months.
(2) - In the event the Issuer shall have completed additions, extensions or improvements
to the System prior to the issuance of the proposed Additional Bonds but not prior to the beginning
of such twelve consecutive months and /or shall be constructing or acquiring additions, extensions
or improvements to the System to be financed wholly or in part from the proceeds of such
Additional Bonds or from any other source, from which Project or Projects the Issuer expects to
derive revenues within three (3) years after issuance of such Additional Bonds, such Net Revenues
may be adjusted by adding thereto the additional net revenues estimated by the Consultants to be
derived (based upon the then current Rates or such Rates as shall have been adopted by the Issuer
to become effective during the period in which completion of such improvements is anticipated
to occur) during the first twelve (12) months of operation of such Project after completion of the
construction or acquisition thereof.
(F) Except as otherwise provided herein, Additional Bonds shall be deemed to have
been issued pursuant to this Resolution the same as the Outstanding Bonds, and all of the other
covenants and other provisions of this Resolution (except as to details of such Additional Bonds
inconsistent therewith) shall be for the equal benefit, protection and security of the Holders of all
Bonds issued pursuant to this Resolution; provided, however, any Supplemental Resolution
authorizing the issuance of Additional Bonds may provide that any of the covenants herein
• 38
• contained will not be applicable to such Additional Bonds, provided that such provision shall not,
in the opinion of Bond Counsel, adversely affect the rights of any Bonds which shall then be
Outstanding. Except as expressly provided herein or in a Supplemental Resolution, all Bonds,
regardless of the time or times of their issuance, shall rank equally with respect to their lien on
the Pledged Funds and their sources and security for payment therefrom without preference of any
Bonds over any other; provided, however, that the Issuer shall include a provision in any
Supplemental Resolution authorizing the issuance of Variable Rate Bonds pursuant to this Section
5.02 that in the event the principal thereof is accelerated due to such Bonds being held by the
issuer of a Credit Facility, the lien of such Bonds on the Pledged Funds shall be subordinate in all
respects to the pledge of the Pledged Funds created by this Resolution.
(G) In the event any Additional Bonds are issued for the purpose of refunding any
Bonds then Outstanding, the conditions of Section 5.02(B) shall not apply, provided that the
issuance of such Additional Bonds shall not result in an increase in the aggregate amount of
principal of and interest on the Outstanding Bonds becoming due in the current Fiscal Year and /or
all or any subsequent Fiscal Years. The conditions of Section 5.02(B) hereof shall apply to
Additional Bonds issued to refund Subordinated Indebtedness and to Additional Bonds issued for
refunding purposes which cannot meet the conditions of this paragraph.
SECTION 5.03. Bond Anticipation Notes The Issuer may issue notes in anticipation
of the issuance of Bonds which shall have such terms and details and be secured in such manner,
not inconsistent with this Resolution, as shall be provided by resolution of the Issuer.
• SECTION 5.04. Ac cession of Subordinated Inde to Pare smvithB__onsfs.
The Issuer may provide for the accession of Subordinated Indebtedness to the status of complete
parity with the Bonds, if the Issuer shall meet all the requirements imposed upon the issuance of
Additional Bonds by Section 5.02 hereof, assuming, for purposes of said requirements, that such
Subordinated Indebtedness shall be Additional Bonds. If the aforementioned conditions are
satisfied, the Subordinated Indebtedness shall be deemed to have been issued pursuant to this
Resolution the same as the Outstanding Bonds, and such Subordinated Indebtedness shall be
considered Bonds for all purposes provided in this Resolution.
SECTION 5.05. ope ration and Mainten The Issuer will maintain or cause to
be maintained the System and all portions thereof in good condition and will operate or cause to
be operated the same in an efficient and economical manner, making or causing to be made such
expenditures for equipment and for renewals, repairs and replacements as may be proper for the
economical operation and maintenance thereof. The Issuer will obtain and renew to the full extent
required by applicable law all permits for acquisition, construction, operation of the System.
SECTION 5.06. Annual Budget The Issuer shall annually prepare and adopt an
Annual Budget with respect to at least the System in accordance with applicable law. No
expenditure shall be made in any Fiscal Year in excess of the amount provided therefor in the
Annual Budget, (A) without a written finding and recommendation by an Authorized Issuer
• 39
Officer, which finding and recommendation shall state in detail the purpose of and necessity for
• such increased expenditures, and (B) until the Governing Body shall have approved such finding
and recommendation by resolution.
If for any reason the Issuer shall not have adopted the Annual Budget before the first day
of any Fiscal Year, other than the first Fiscal Year, the preliminary budget for such Fiscal Year
shall be deemed to be in effect for such Fiscal Year until the Annual Budget for such Fiscal Year
shall be adopted; and if the preliminary budget shall not have been prepared, the Annual Budget
for the preceding Fiscal Year shall be deemed to continue in effect.
The Issuer shall mail copies of such Annual Budgets and amended Annual Budgets and all
resolutions authorizing increased expenditures to any Holder who shall file an address with the
Clerk and request in writing that copies of all such Annual Budgets and resolutions be furnished
to such Holder and shall make available all such Annual Budgets and resolutions authorizing
increased expenditures at all reasonable times to any Holder or to anyone acting for or on behalf
of any Holder. The Issuer shall be permitted to make a reasonable charge for furnishing to any
Holder such Annual Budgets and resolutions.
SECTION 5.07. Rates The Issuer shall fix, establish, maintain and collect such Rates,
and revise the same to the extent necessary, so that the Rates will always provide in each Fiscal
Year Net Revenues which are at least equal one hundred twenty percent (120 %) of the Debt
Service Requirement for such Fiscal Year. Such Rates shall not be so reduced so as to be
• insufficient to provide Net Revenues in each Fiscal Year fully adequate for the purposes provided
therefor by this Resolution.
The Issuer covenants and agrees that prior to the beginning of each Fiscal Year, whenever
the Net Revenues which shall be projected by the Annual Budget proposed for such Fiscal Year
shall be insufficient for the coverages required by the first paragraph of this section, the Issuer
shall revise the Rates by adopting a schedule thereof by resolution or ordinance in the manner
provided by applicable law of the State.
For purposes of calculating the Debt Service Requirement for purposes of this Section
5.07, the interest rate on outstanding Variable Rate Bonds shall be deemed to be the lesser of the
Maximum Interest Rate applicable thereto or the maximum interest rate borne by such Variable
Rate Bonds at any time during the preceding twelve (12) months.
Notwithstanding any other provision hereof to the contrary, for purposes of this Section
5.07, to the extent that in any Fiscal Year the Issuer budgets for deposit to the Revenue Fund and
actually deposits to the Revenue Fund lawfully available funds of the Issuer not otherwise
constituting Gross Revenues, such revenues shall be deemed to be Rates for purposes . of
determining compliance with this Section 5.07.
40
• SECTION 5.08. Boo ks - and - Records . The Issuer will keep books, records and
accounts of the receipt of the Pledged Funds in accordance with generally accepted accounting
principles, and any Credit Bank, Insurer, or Holder of any Bonds Outstanding or the duly
authorized representatives thereof shall have the right at all reasonable times to inspect all books,
records and accounts of the Issuer relating thereto.
The Issuer covenants that within one hundred eighty (180) days of the close of each Fiscal
Year it will cause to be prepared and filed with the Clerk and mailed to all Credit Banks, Insurers
and Holders who shall have filed their names and addresses with the Clerk for such purpose a
statement setting forth in respect of the preceding Fiscal Year: (A) the amount of the Pledged
Funds received in the preceding Fiscal Year; (B) the total amounts deposited to the credit of each
fund and account created under the provisions of this Resolution; (C) the principal amount of all
Bonds issued, paid, purchased or redeemed; and (D) the amounts on deposit at the end of such
Fiscal Year to the credit of each such fund or account.
SECTION 5.09. Annual Au dit. The Issuer shall, immediately after the close of each
Fiscal Year, cause the financial statements of the Issuer to be properly audited by a recognized
independent firm of certified public accountants, and shall require such accountants to complete
their report of such Annual Audit in accordance with applicable law. Such Annual Audits shall
contain, but not be limited to, a balance sheet, an income statement, a statement of changes in
financial position, a statement of change in retained earnings, a statement of insurance coverage,
and any other statements as required by law or accounting convention, and a certificate by such
accountants disclosing any material default on the part of the Issuer of any covenant or agreement
herein. Each Annual Audit shall be in conformity with generally accepted accounting principles.
A copy of each Annual Audit shall regularly be furnished to any Credit Bank, to any Insurer and
to any Holder who shall have furnished an address to the Clerk and requested in writing that the
same be furnished to such Holder. The Issuer shall be permitted to make a reasonable charge for
furnishing to any Holder such Annual Audit.
SECTION 5.10. Mortg age,-Sa l e or Closing of Facili ties. The Issuer irrevocably
covenants, binds and obligates itself not to sell, lease, encumber or in any manner dispose of any
portion of the System except as provided in this section, until all of the Bonds and all interest
thereon shall have been paid in full or provision for payment has been made in accordance with
Section 8.01 hereof.
The Issuer shall have and hereby reserves the right to sell, lease or otherwise dispose of
any site, facilities or property comprising a part of the System in the manner provided in this
Section 5. 10, if in the judgment of the Issuer such disposition will not adversely affect the security
for the Bondholders and any one of the following conditions exist: (A) such site, facilities or
property is not necessary for the operation of the System, (B) such site, facilities or property is
not useful in the operation of the System, (C) such site, facilities or property is not profitable in
the operation of the System, or (D) in the case of a lease of such site, facilities or property, such
lease will be advantageous to the System. The proceeds from any such sale, lease or other
41
disposition shall be deposited into the Revenue Fund. The Issuer may make contracts or grant
• licenses for the operation of, or grant easements or other rights with respect to, any part of the
System if such contract, license, easement or right does not, in the opinion of the Consultants, as
evidenced by a certificate to that effect filed with the Issuer, impede or restrict the operation by
the Issuer of the System, but any payments to the Issuer under or in connection with any such
contract, license, easement or right in respect of the System or any part thereof shall constitute
Gross Revenues.
SECTION 5.11. Insurance. So long as the Net Revenues are pledged hereunder, the
Issuer will carry, with a reputable insurance carrier or carriers, such insurance as is ordinarily
carried by private or public corporations owning and operating water systems similar to the
System, including public liability insurance, in such amounts as the Issuer shall determine to be
sufficient. The property loss or damage insurance shall at all times be in an amount or amounts
equal to the replacement value of the buildings, furniture, fixtures and equipment of the System.
The Issuer may establish certain minimum levels of insurance for which the Issuer may
self - insure. Such minimum levels of insurance shall be in amounts as recommended in writing by
an insurance consultant who has a favorable reputation and experience and is qualified to survey
risks and to recommend insurance coverage for Persons engaged in operations similar to the
System.
SECTION 5.12. No- Impairment. The pledging of the Pledged Funds in the manner
• provided herein shall not be subject to repeal, modification or impairment by any subsequent
ordinance, resolution or other proceedings of the Governing Body. This provision shall not,
however, be deemed to prohibit the reduction or elimination of the Rates if such reduction or
elimination will not result in a violation of Section 5.07 hereof.
SECTION 5.13. Sp -cial Covenants Relating to Res e Insurance P Qlicy_or
Reserve A ccount Letter of Credit—
(A) (A) The Issuer shall annually submit to the issuer of the Reserve Account Insurance Policy
and /or the Reserve Account Letter of Credit, records of withdrawals on such Reserve Account
Insurance Policy or such Reserve Account Letter of Credit, as the case may be, received by the
Paying Agent and remaining unpaid, the respective dates of such withdrawals, the interest accrued
on such withdrawals and the aggregate amount of interest due by the Issuer to the issuer of such
Reserve Account Insurance policy or such Reserve Account Letter of Credit, as the case may be.
(B) The Issuer hereby acknowledges that the issuer of the Reserve Account Insurance
Policy and /or the Reserve Account Letter of Credit shall be deemed a third -party beneficiary of
this Resolution, but not on a parity with the Bondholders, for the purpose of enforcing the terms,
conditions and obligations of the Resolution which benefit the issuer of such Reserve Account
Insurance Policy or such Reserve Account Letter of Credit, as the case may be.
• 42
SECTION 5.14. Covenants with Credit Banks and Insurers The Issuer may make
• such covenants as it may in its sole discretion, determine to be appropriate with any Insurer,
Credit Bank or other financial institution that shall agree to insure or to provide for Bonds of any
one or more Series credit or liquidity support that shall enhance the security or the value of such
Bonds. Such covenants may be set forth in the applicable Supplemental Resolution and shall be
binding on the Issuer, the Registrar, the Paying Agent and all the Holders of Bonds the same as
if such covenants were set forth in full in this Resolution.
SECTION 5.15. Federal Income Tax Covenants; Taxable -Bond -s.
(A) The Issuer covenants with the Holders of each Series of Bonds (other than Taxable
Bonds), that it shall not use the proceeds of such Series of Bonds in any manner which would
cause the interest on such Series of Bonds to be or become includable in the gross income of the
Holder thereof for federal income tax purposes.
(B) The Issuer covenants with the Holders of each Series of Bonds (other than Taxable
Bonds) that neither the Issuer nor any Person under its control or direction will knowingly make
any use of the proceeds of such Series of Bonds (or amounts deemed to be proceeds under the
Code) in any manner which would cause such Series of Bonds to be arbitrage bonds within the
meaning of Section 148 of the Code, and neither the Issuer nor any such other Person shall
knowingly do any act or fail to do any act which would cause the interest on such Series of Bonds
to become includable in the gross income of the Holder thereof for federal income tax purposes.
• Specifically, without intending to limit in any way the generality of the foregoing, the Issuer
covenants and agrees:
(1) to pay to the United States of America from amounts in the Rebate Fund and
from any other legally available funds, at the times required pursuant to Section 148(f) of
the Code, the excess of the amount earned on all non - purpose investments (as defined in
Section 148(f)(6) of the Code) (other than investments attributed to an excess described in
this sentence) over the amount which would have been earned if such non - purpose
investments were invested at a rate equal to the yield on the Bonds, plus any income
attributable to such excess (the "Rebate Amount ");
(2) to maintain and retain all records pertaining to and to be responsible for
making or causing to be made all determinations and calculations of the Rebate Amount
and required payments of the Rebate Amount as shall be necessary to comply with the
Code;
(3) to refrain from using proceeds from the Bonds in a manner that would cause
the Bonds or any of them, to be classified as private activity bonds under Section 141(a)
of the Code; and
• 43
(4) to take or refrain from taking any action that would cause the Bonds, or any
of them, to become arbitrage bonds under Section 103(b) and Section 148 of the Code.
The Issuer understands that the foregoing covenants impose continuing obligations on the
Issuer to comply with the requirements of Section 103 and Part IV of Subchapter B of Chapter 1
of the Code so long as such requirements are applicable.
Unless otherwise specified in a Supplemental Resolution, the Issuer shall designate a
certified public accountant, Bond Counsel, or other professional consultant having the skill and
expertise necessary (the "Rebate Analyst ") to make any and all calculations required pursuant to
this Section regarding the Rebate Amount. Such calculation shall be made in the manner and at
such times as specified in the Code. The Issuer shall engage and shall be responsible for paying
the fees and expenses of the Rebate Analyst.
(C) The Issuer may, if it so elects, issue one or more Series of Taxable Bonds the
interest on which is includible in the gross income of the Holder thereof for federal income
taxation purposes, so long as each Bond of such Series states in the body thereof that interest
payable thereon is subject to federal income taxation and provided that the issuance thereof will
not cause the interest on any other Bonds theretofore issued hereunder to be or become includable
in the gross income of the Holder thereof for federal income tax purposes. The covenants set forth
in subsections (A) and (B) of this Section 5.15 shall not apply to any Taxable Bonds.
• SECTION 5.16. NoTesentment of Bonds; Dispositio n_of_Unclaimed-Money. In the
event any Bond shall not be presented for payment when the principal thereof becomes due, either
at maturity, or otherwise, if funds sufficient to pay any such Bond shall have been made available
to any Paying Agent for the benefit of the Holder thereof, all liability of the Issuer to the Holder
thereof for the payment of such Bond shall forthwith cease, determine and be completely
discharged, and thereupon it shall be the duty of such Paying Agent to hold such funds, without
liability for interest thereon, for the benefit of the Holder of such Bond, who shall thereafter be
restricted exclusively to such funds for any claim of whatever nature on the part of such Holder
under this Resolution or on, or with respect to, such Bond. Any moneys so deposited with and
held by such Paying Agent for the payment of Bonds not so claimed within seven years after the
date the payment of such Bonds shall have become due, whether at maturity or otherwise, shall
be presumed abandoned and shall be returned to the Issuer, and the Issuer shall comply with the
provisions of Chapter 717, Florida Statutes, or any successor thereof, in respect of such moneys.
SECTION 5.17. No Free Service; Enforcement of Cha rges. The Issuer will not render,
or cause to be rendered, any free services of any nature by the System or any part thereof, nor will
any preferential rates be established for any particular user as opposed to other users of the System
of the same class, nor, to the extent permitted by law, shall the Issuer permit the operation of any
water utility competitive with the System. The Issuer shall compel the prompt payment of Rates,
fees and other charges imposed for the service rendered by the System and will vigorously enforce
all of the provisions of any ordinance or resolution of the Issuer relating to service provided by
• 44
• the System. The Issuer shall take all steps required to lawfully impose the Impact Fees and shall
diligently proceed to collect all Impact Fees and shall exercise all legally available remedies to
enforce the same.
SECTION 5.18. Continuing Disclosure Com pliance. The Issuer hereby covenants and
agrees that, so long as any of the Series 1998 Bonds remain outstanding, it will provide, in a
manner consistent with Rule 15c2 -12 of the Securities and Exchange Commission (the "Rule ") (a)
to each nationally recognized municipal securities information repository ( "NRMSIR ") and to the
appropriate depository designated by the State of Florida ( "SID ") if any, (i) on or before one
hundred eighty (180) days after each fiscal year financial information and operating data of the
Issuer for the preceding fiscal year of the type included in the Official Statement, including, but
not necessarily limited to the operating data contained under the caption "The System" and (ii) if
not submitted as part of the annual financial information pursuant to (i), then, when and if
available, audited financial statements of the Issuer prepared in accordance with generally accepted
accounting principles; (b) in a timely manner, to each NRMSIR or the Municipal Securities
Rulemaking Board ( "MSRB "), and to the appropriate SID, if any, written notice of the occurrence
of any of the following events with respect to the Series 1998 Bonds, if material: (i) principal and
interest payment delinquencies; (ii) non - payment related defaults; (iii) unscheduled draws on debt
service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements
reflecting financial difficulties; (v) adverse tax opinions, or events affecting the tax - exempt status
of the security; (vi) modifications to rights of security holders; (vii) any call of the Series 1998
Bonds for redemption other than mandatory sinking fund redemptions of Term Bonds;
(viii) defeasances; (ix) release, substitution, or sale of property securing the repayment of the
securities; (x) substitution of credit or liquidity providers, or their failure to perform; (xi) rating
changes; (xii) any change in the fiscal year of the Issuer; (c) in a timely manner, to each NRMSIR
or the MSRB, and to the appropriate SID, if any, written notice of a failure of the Issuer to
provide the financial information described in (a)(i) above, on or before the date specified above,
and (d) any other information required to be disclosed to any person to whom it is required to be
disclosed by the Rule.
The Issuer also covenants to promptly provide a copy of the above information to the
Paying Agent, each Insurer and the underwriter of the Series 1998 Bonds. The Paying Agent shall
provide such information to any requesting Bondholder of the Series 1998 Bonds and any
requesting beneficial owner of the Series 1998 Bonds held in street -name or in a nominee capacity,
(the "Beneficial Owners "), provided that the Paying Agent shall be entitled to charge such
requesting Bondholder or Beneficial Owner an amount sufficient to reimburse the itself for costs
incurred for copying and shipping such information.
The foregoing covenants shall run to the benefit of the Series 1998 Bondholders and the
Beneficial Owners. However, failure to meet the covenants set forth in this Section 5.18 shall not
be deemed to constitute an event of default or a breach of any other covenant under the resolutions
authorizing the Series 1998 Bonds, and the sole remedy for such a default or breach shall be as
described in the next paragraph.
• 45
• The Bondholder of any Series 1998 Bond or any Beneficial Owner may either at law or in
equity, by suit, action, mandamus or other proceeding in any court or competent jurisdiction,
protect and enforce any and all rights granted or contained in this Section 5.18 and may enforce
any compel the performance of all duties required hereby to be performed by the Issuer or by any
officers thereof. Notwithstanding the foregoing, the enforcement of the covenants contemplated
hereby shall not affect the validity or enforceability of the Series 1998 bonds.
Notwithstanding any other provision of this Resolution, this Section 5.18 may be amended
only as follows: (a) the amendment may only be made in connection with a change in
circumstances that arises from a change in legal requirements, change in law, or change in the
identity, nature or status of the Issuer or the type of business conducted by the Issuer; (b) the
provisions of this Section 5.18, as amended, would have complied with the requirements of Rule
15c2 -12 of the Securities and Exchange Commission as in effect as of the date of issuance of the
Series 1998 Bonds, after taking into account any amendments or interpretations of the Rule, as
well as any change in circumstances; and (c) the amendment does not materially impair the interest
of the Series 1998 Bondholders and /or Beneficial Owners as determined by an opinion of
nationally recognized bond counsel delivered to the Issuer, or by approving vote of the Beneficial
Owners of the Series 1998 Bonds at the time of the amendment. In the event of any amendment
hereto, the annual financial information provided subsequent to such amendment shall explain, in
narrative form, the reasons for the amendment and the impact of the change in the type of
operating data or financial information being provided by the Issuer. If the amendment affects the
accounting principles to be followed in preparing financial statements of the Issuer, the annual
• financial information for the year in which the change is made must present a comparison between
the financial statements or information prepared on the basis of the new accounting principles and
those prepared on the basis of the former accounting principles. The comparison must include a
qualitative discussion of the differences in the accounting principles and the impact of the change
in the accounting principles on the presentation of the financial information, in order to provide
information to investors to enable them to evaluate the ability of the Issuer to meet its obligations.
To the extent reasonably feasible, the comparison should also be quantitative. A notice of the
change in the accounting principles must be sent to each NRMSIR or the MSRB and the
appropriate SID, if any.
[End of Article V]
• 46
•
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default The following events shall each constitute an
Event of Default hereunder:
(A) Default shall be made in the payment of the principal of, Amortization Installment,
Redemption Price or interest on any Bond when due.
(B) There shall occur the dissolution or liquidation of the Issuer, or the filing by the
Issuer of a voluntary petition in bankruptcy, or the commission by the Issuer of any act of
bankruptcy, or adjudication of the Issuer as a bankrupt, or assignment by the Issuer for the benefit
of its creditors, or appointment of a receiver for the Issuer, or the entry by the Issuer into an
agreement of composition with its creditors, or the approval by a court of competent jurisdiction
of a petition applicable to the Issuer in any proceeding for its reorganization instituted under the
provisions of the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction
which may now be in effect or hereafter enacted.
(C) The Issuer shall default in the due and punctual performance of any other of the
• covenants, conditions, agreements and provisions contained in the Bonds or in this Resolution on
the part of the Issuer to be performed, other than Section 5.18 hereof, and such default shall
continue for a period of thirty (30) days after written notice of such default shall have been
received from any Insurer or the Holders of not less than twenty -five percent (25 %) of the
aggregate principal amount of Bonds Outstanding or any Credit Bank. Notwithstanding the
foregoing, the Issuer shall not be deemed in default hereunder if such default cannot be cured
within such thirty (30) days, but can be cured within a reasonable period of time, if the Issuer in
good faith institutes curative action and diligently pursues such action until the default has been
corrected.
SECTION 6.02. Remedies Any Holder of Bonds issued under the provisions of this
Resolution or any trustee or receiver acting for such Bondholders may either at law or in equity,
by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and
enforce any and all rights under the laws of the State, or granted and contained in this Resolution,
and may enforce and compel the performance of all duties required by this Resolution or by any
applicable statutes to be performed by the Issuer or by any officer thereof. This paragraph shall
not be deemed to be a waiver by the Issuer of its venue rights.
Upon the occurrence of an Event of Default, the Holders of not less than a majority in
aggregate principal amount of the Bonds then Outstanding may by written notice to the Issuer
declare the principal of the Bonds to be immediately due and payable, whereupon that portion of
• 47
I
• the principal of the Bonds thereby coming due and the interest thereon accrued to the date of
payment shall, without further action, become and be immediately due and payable.
The Holder or Holders of not less than a majority in aggregate principal amount of the
Bonds then Outstanding may by a duly executed certificate in writing appoint a trustee for Holders
of Bonds issued pursuant to this Resolution with authority to represent such Bondholders in any
legal proceedings for the enforcement and protection of the rights of such Bondholders and such
certificate shall be. executed by such Bondholders or their duly authorized attorneys or
representatives, and shall be filed in the office of the Clerk. Notice of such appointment, together
with evidence of the requisite signatures of the Holders of not less than a majority in aggregate
principal amount of Bonds Outstanding and the trust instrument under which the trustee shall have
agreed to serve shall be filed with the Issuer and the trustee and notice of appointment shall be
given to all Holders of Bonds in the same manner as notices of redemption are given hereunder.
The Holders of not less than a majority in aggregate principal amount of all the Bonds then
Outstanding may remove the trustee initially appointed and appoint a successor and subsequent
successors at any time.
SECTION 6.03. Directions to Trustee as to Remedial_Pr-occedings. The Holders of
a majority in principal amount of the Bonds then Outstanding (or any Insurer insuring, or any
Credit Bank providing a Credit Facility for, any then Outstanding Bonds) have the right, by an
instrument or concurrent instruments in writing executed and delivered to any trustee appointed
pursuant to Section 6.02 hereof, to direct the method and place of conducting all remedial
• proceedings to be taken by any trustee hereunder, provided that such direction shall not be
otherwise than in accordance with law or the provisions hereof, and that such trustee shall have
the right to decline to follow any such direction which in the opinion of such trustee would be
unjustly prejudicial to Holders of Bonds not parties to such direction.
SECTION 6.04. Remedies Cumulative No remedy herein conferred upon or
reserved to the Bondholders is intended to be exclusive of any other remedy or remedies, and each
and every such remedy shall be cumulative, and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute.
SECTION 6.05. Waiver of Defau No delay or omission of any Bondholder to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver of any such default, or an acquiescence therein; and every power
and remedy given by Section 6.02 of this Resolution to the Bondholders may be exercised from
time to time, and as often as may be deemed expedient.
SECTION 6.06. Ap plication of Moneys After Default If an Event of Default
described in Section 6.01(A) or (B) shall happen and shall not have been remedied, the Issuer or
a court - appointed trustee or receiver shall apply all Pledged Funds as follows and in the following
order:
• 48
• (A) To the payment of the reasonable and proper charges, expenses and liabilities of
the trustee or receiver, Registrar and Paying Agent hereunder; and
(B) To the payment of the amounts required for reasonable and necessary Operating
Expenses, and for the reasonable renewals, repairs and replacements of the System necessary to
prevent loss of Gross Revenues, as certified by the Consultants; and
(C) To the payment of the interest and principal or Redemption Price, if applicable,
then due on the Bonds, as follows:
(1) Unless the principal of all the Bonds shall have become due and payable, all such
moneys shall be applied:
FIRST: to the payment to the Persons entitled thereto of all installments of interest
then due, in the order of the maturity of such installments, and, if the amount available
shall not be sufficient to pay in full any particular installment, then to the payment ratably,
according to the amounts due on such installment, to the Persons entitled thereto, without
any discrimination or preference;
SECOND: to the payment to the Persons entitled thereto of the unpaid principal
of any of the Bonds which shall have become due at maturity or upon mandatory
• redemption prior to maturity (other than Bonds called for redemption for the payment of
which moneys are held pursuant to the provisions of Section 8.01 of this Resolution), in
the order of their due dates, with interest upon such Bonds from the respective dates upon
which they became due, and, if the amount available shall not be sufficient to pay in full
Bonds due on any particular date, together with such interest, then to the payment first of
such interest, ratably according to the amount of such interest due on such date, and then
to the payment of such principal, ratably according to the amount of such principal due
on such date, to the Persons entitled thereto without any discrimination or preference; and
THIRD: to the payment of the Redemption Price of any Bonds called for optional
redemption pursuant to the provisions of this Resolution.
(2) If the principal of all the Bonds shall have become due and payable, all such moneys
shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds,
with interest thereon as aforesaid, without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any other installment of interest, or
of any Bond over any other Bond, ratably, according to the amounts due respectively for principal
and interest, to the Persons entitled thereto without any discrimination or preference.
SECTION 6.07. Control by Insurer or Credit Bank Upon the occurrence and
continuance of an Event of Default, each Insurer or Credit Bank, if such Insurer or Credit Bank
• shall have honored all of its commitments under its Bond Insurance Policy or its Credit Facility,
49
• as the case may be, shall be entitled to direct and control the enforcement of all rights and
remedies with respect to the Bonds it shall insure or for which such Credit Facility is provided.
[End of Article VI]
•
• 50
• ARTICLE VII
SUPPLEMENTAL RESOLUTIONS
SECTION 7.01. Su pplemental Resolution Without Bondholder Consent Except as
provided herein or in Sections 5.18 or 7.02, subsequent to the issuance of Bonds, no amendment,
revision or revocation of this Resolution shall be enacted by the Issuer. The Issuer, from time to
time and at any time, may adopt such Supplemental Resolutions without the consent of the
Bondholders (which Supplemental Resolution shall thereafter form a part hereof) for any of the
following purposes:
(A) To cure any ambiguity or formal defect or omission or to correct any inconsistent
provisions in this Resolution or to clarify any matters or questions arising hereunder.
(B) To grant to or confer upon the Bondholders any additional rights, remedies,
powers, authority or security that may -lawfully be granted to or conferred upon the Bondholders.
(C) To add to the conditions, limitations and restrictions on the issuance of Bonds under
the provisions of this Resolution other conditions, limitations and restrictions thereafter to be
observed.
• (D) To add to the covenants and agreements of the Issuer in this Resolution other
covenants and agreements thereafter to be observed by the Issuer or to surrender any right or
power herein reserved to or conferred upon the Issuer.
(E) To specify and determine at any time prior to the first delivery of any Series of
Bonds the matters and things referred to in Sections 2.01, 2.02 or 2.09 hereof, and also any other
matters and things relative to such Bonds which are not contrary to or inconsistent with this
Resolution as theretofore in effect, or to amend, modify or rescind any such authorization,
specification or determination.
(F) To authorize Projects or to change or modify the description of any Project.
(G) To specify and determine matters necessary or desirable for the issuance of Capital
Appreciation Bonds or Variable Rate Bonds.
(H) To authorize Additional Bonds or Subordinated Indebtedness.
(I) To maintain or obtain a rating on any Bonds, to implement or discontinue, if
necessary, a book -entry system of registration of Bonds or to preserve the tax - exempt status of
Bonds.
• (J) To make amendments permitted by Section 5.18 hereof.
51
(K) To make any other change that, in the opinion of Bond Counsel, would not
materially adversely affect the security for the Bonds. In making such determination, Bond
Counsel shall not take into consideration any Bond Insurance Policy.
Except Supplemental Resolutions described in subsections (E), (F), (H) and (J) of this
Section 7.01 and Supplemental Resolutions adopted for the purpose of authorizing Additional
Bonds in compliance with all applicable provisions hereof, no Supplemental Resolution adopted
pursuant to this Article VII shall become effective unless approved by every Insurer; and the Issuer
covenants and agrees to furnish to each Insurer an executed original transcript of the Issuer's
proceedings with respect to the adoption of each Supplemental Resolution.
SECTION 7.02. Suppleme Resolution With B ondholders' . Insure s -and- Credit
Bank's Consent Except as otherwise provided in Section 7.03 hereof, subject only to the terms
and provisions contained in Section 5.18 hereof and in this Section 7.02, the Holder or Holders
of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have
the right, from time to time, to consent to and approve the adoption of such Supplemental
Resolution or Resolutions hereto as shall be deemed necessary or desirable by the Issuer for the
purpose of supplementing , modifying, altering, amending, adding to or rescinding, in any
particular, any of the terms or provisions contained in this Resolution; provided, however, that
if such modification or amendment will, by its terms, not take effect so long as any Bonds of any
specified Series or maturity remain Outstanding, the consent of the Holders of such Bonds shall
not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any
• calculation of Outstanding Bonds under this Section 7.02. Any Supplemental Resolution which
is adopted in accordance with the provisions of this Section 7.02 shall also require the written
consent of the Insurer of, or any Credit Bank providing a Credit Facility for, any Bonds which are
Outstanding at the time such Supplemental Resolution shall take effect. No Supplemental
Resolution may be approved or adopted which shall permit or require (A) an extension of the
maturity of the principal of or the payment of the interest on any Bond issued hereunder, (B)
reduction in the principal amount of any Bond or the Redemption Price or the rate of interest
thereon, (C) the creation of a lien upon or a pledge of the Pledged Funds which adversely affects
the rights granted by the Bonds or this Resolution in favor of any Bondholders, (D) a preference
or priority of any Bond or Bonds over any other Bond or Bonds, or (E) a reduction in the
aggregate principal amount of the Bonds required for consent to such Supplemental Resolution.
If at any time the Issuer shall determine that it is necessary or desirable to adopt any
Supplemental Resolution pursuant to this Section 7.02, the Clerk shall cause the Registrar to give
notice of the proposed adoption of such Supplemental Resolution and the form of consent to such
adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they appear on the
registration books and to all Insurers of, and Credit Banks providing a Credit Facility for, Bonds
Outstanding. Such notice shall briefly set forth the nature of the proposed Supplemental
Resolution and shall state that copies thereof are on file at the offices of the Clerk and the
Registrar for inspection by all Bondholders. The Issuer shall not, however, be subject to any
liability to any Bondholder by reason of its failure to cause the notice required by this Section 7.02
• 52
to be mailed and any such failure shall not affect the validity of such Supplemental Resolution
when consented to and approved as provided in this Section 7.02.
Whenever the Issuer shall deliver to the Clerk an instrument or instruments in writing
purporting to be executed by the Holders of not less than a majority in aggregate principal amount
of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed
Supplemental Resolution described in such notice and shall specifically consent to and approve the
adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon,
but not otherwise, the Issuer may adopt such Supplemental Resolution in substantially such form,
without liability or responsibility to any Holder of any Bond, whether or not such Holder shall
have consented thereto.
If the Holders of not less than a majority in aggregate principal amount of the Bonds
Outstanding at the time of the adoption of such Supplemental Resolution shall have consented to
and approved the adoption thereof as herein provided, no Holder of any Bond shall have any right
to object to the adoption of such Supplemental Resolution, or to object to any of the terms and
provisions contained therein or the operation thereof, or in any manner to question the propriety
of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from taking
any action pursuant to the provisions thereof.
Upon the adoption of any Supplemental Resolution pursuant to the provisions of this
• Section 7.02, this Resolution shall be deemed to be modified and amended in accordance
therewith, and the respective rights, duties and obligations under this Resolution of the Issuer and
all Holders of Bonds then Outstanding shall thereafter be determined, exercised and enforced in
all respects under the provisions of this Resolution as so modified and amended.
SECTION 7.03. Am endment with Consent of Insurer and/or Credit Bank Onl If
all of a Series of Bonds Outstanding hereunder are insured or secured as to payment of principal
and interest by an Insurer or Insurers and /or by a Credit Facility provided by a Credit Bank or
Credit Banks, and the Insurer or Insurers and /or the Credit Bank or Credit Banks, as applicable,
are not in default, and such Bonds, at the time of the hereinafter described amendment, shall be
rated by the rating agencies which shall have rated the Bonds at the time such Bonds were insured
or such Credit Facility was provided no lower than the ratings assigned thereto by such rating
agencies on the date such Bonds were insured or such Credit Facility was provided, the Issuer may
enact one or more Supplemental Resolutions amending all or any part of Articles I, IV, V, VI and
VIII hereof with the written consent of said Insurer or Insurers and /or said Credit Bank or Credit
Banks, as applicable, and the acknowledgment by said Insurer or Insurers and /or said Credit Bank
or Credit Banks that its Bond Insurance Policy or its Credit Facility, as the case may be, will
remain in full force and effect. The consent of the Holders of any Bonds shall not be necessary.
The foregoing right of amendment, however, does not apply to any amendment to Section 5.15
hereof with respect to the exclusion, if applicable, of interest on said Bonds from the gross income
of the Holders thereof for federal income tax purposes nor may any such amendment deprive the
Holders of any Bond of right to payment of the Bonds from, and their lien on, the Pledged Funds
53
• and any additional security pledged hereunder. Upon filing with the Clerk of evidence of such
consent of the Insurer or Insurers and /or the Credit Bank or Credit Banks as aforesaid, the Issuer
may adopt such Supplemental Resolution. After the adoption by the Issuer of such Supplemental
Resolution, notice thereof shall be mailed in the same manner as notice of an amendment under
Section 7.02 hereof.
SECTION 7.04. Required Opinion of Bon d-Counsel. The Issuer shall not adopt a
Supplemental Resolution unless the Issuer shall have received an opinion of Bond Counsel to the
effect that such action is permitted hereunder and will not impair the exclusion of the interest on
any Bonds (other than Taxable Bonds) from gross income for federal income tax purposes.
[End of Article VII]
I
•
54
• ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Defeasance If the Issuer shall pay or cause to be paid or there shall
otherwise be paid to the Holders of all Bonds the principal or Redemption Price, if applicable, and
interest due or to become due thereon, at the times and in the manner stipulated therein and in this
Resolution, then the pledge of the Pledged Funds and any additional security pledged hereunder,
and all covenants, agreements and other obligations of the Issuer to the Bondholders, shall
thereupon cease, terminate and become void and be discharged and satisfied. In such event, the
Paying Agents shall pay over or deliver to the Issuer all money or securities held by them pursuant
to the Resolution which are not required for the payment or redemption of Bonds not theretofore
surrendered for such payment or redemption.
Any Bonds or interest installments appertaining thereto, whether at or prior to the maturity
or redemption date of such Bonds, shall be deemed to have been paid within the meaning of this
Section 8.01 if (A) in case any such Bonds are to be redeemed prior to the maturity thereof, there
shall have been taken all action necessary to irrevocably call such Bonds for redemption and notice
of such redemption shall have been duly given or irrevocable provision shall have been made for
the giving of such notice, and (B) there shall have been deposited in irrevocable trust with a
banking institution or trust company by or on behalf of the Issuer either moneys in an amount
• which shall be sufficient, or noncallable Federal Securities the principal of and the interest on
which when due will provide moneys which, together with the moneys, if any, deposited with such
bank or trust company at the same time shall be sufficient, to pay the principal of or Redemption
Price, if applicable, and interest due and to become due on said Bonds on and prior to the
redemption date or maturity date thereof, as the case may be. Neither the Federal Securities nor
any moneys so deposited with such bank or trust company nor any moneys received by such bank
or trust company on account of principal of or Redemption Price, if applicable, or interest on said
Federal Securities shall be withdrawn or used for any purpose other than, and all such moneys
shall be held in trust for and be applied to, the payment, when due, of the principal of or
Redemption Price, if applicable, of the Bonds for the payment or redemption of which they were
deposited and the interest accruing thereon to the date of maturity or redemption thereof; provided,
however, the Issuer may substitute new Federal Securities and moneys for the deposited Federal
Securities and moneys if the new Federal Securities and moneys are sufficient to pay the principal
of or Redemption Price, if applicable, and interest on such Bonds, and any trust agreement
governing the deposit of such Federal Securities and moneys may provide for the investment of
moneys unclaimed by Bondholders and for the payment to the Issuer of such unclaimed moneys
and the investment earnings thereon. For purposes of determining whether Variable Rate Bonds
shall be deemed to have been paid prior to the maturity or the redemption date thereof, as the case
may be, by the deposit of moneys, or specified Federal Securities and moneys, if any, in
accordance with this Section 8.01, the interest to come due on such Variable Rate Bonds on or
prior to the maturity or redemption date thereof, as the case may be, shall be calculated at the
Maximum Interest Rate; provided, however, that if on any date, as a result of such Variable Rate
• 55
• Bonds having borne interest at less than the Maximum Interest Rate for any period, the total
amount of moneys and specified Federal Securities on deposit for the payment of interest on such
Variable Rate Bonds is in excess of the total amount which would have been required to be
deposited on such date in respect of such Variable Rate Bonds in order to satisfy this Section 8.01,
such excess shall be paid to the Issuer free and clear of any trust, lien, pledge or assignment
securing the Bonds or otherwise existing under this Resolution.
In the event the Bonds for which moneys are to be deposited for the payment thereof in
accordance with this Section 8.01 are not by their terms subject to redemption within the next
succeeding sixty (60) days, the Issuer shall cause the Registrar to mail a notice to the Holders of
such Bonds that the deposit required by this Section 8.01 of moneys or Federal Securities has been
made and said Bonds are deemed to be paid in accordance with the provisions of this Section 8.01
and stating such maturity or redemption date upon which moneys are to be available for the
payment of the principal of or Redemption Price, if applicable, and interest on said Bonds.
Nothing herein shall be deemed to require the Issuer to call any of the Outstanding Bonds
for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to
impair the discretion of the Issuer in determining whether to exercise any such option for early
redemption, but the Issuer may waive these rights by Supplemental Resolution.
In the event that the principal of or Redemption Price, if applicable, and interest due on
the Bonds or any portion thereof shall be paid by an Insurer or Insurers, a Credit Bank or Credit
• Banks and /or the issuer of a Reserve Account Letter of Credit or Reserve Account Insurance
Policy and such Insurer, Credit Bank and /or issuer shall not have been reimbursed by the Issuer,
such Bonds or any portion thereof shall remain Outstanding, shall not be defeased and shall not
be considered paid by the Issuer, and the pledge of the Pledged Funds and any additional security
pledged hereunder, and all covenants, agreements and other obligations of the Issuer to the
Bondholders shall continue to exist and such Insurer or Insurers, such Credit Bank or Credit Banks
and such issuer shall be subrogated to the rights of such Bondholders.
SECTION 8.02. Capital Appreciatio _Bonds. For the purposes of (A) receiving
payment of the Redemption Price if a Capital Appreciation Bond is redeemed prior to maturity,
or (B) receiving payment of a Capital Appreciation Bond if the principal of all Bonds becomes due
and payable under the provisions of this Resolution, or (C) computing the amount of Bonds held
by the Holder of a Capital Appreciation Bond in giving to the Issuer or any trustee or receiver
appointed to represent the Bondholders any notice, consent, request or demand pursuant to this
Resolution for any purpose whatsoever, the principal amount of a Capital Appreciation Bond shall
be deemed to be its Accreted Value.
SECTION 8.03. General Authority The members of the Governing Body and the
Issuer's officers, attorneys and other agents and employees are hereby authorized to do all acts and
things required of them by this Resolution or desirable or consistent with the requirements hereof
for the full, punctual and complete performance of all of the terms, covenants and agreements
• 56
• contained in the Bonds and this Resolution, and they are hereby authorized to execute and deliver
all documents which shall be required by Bond Counsel or the initial purchasers of the Bonds to
effectuate the sale of the Bonds to said initial purchasers.
SECTION 8.04. No Personal L iability. No representation, statement, covenant,
warranty, stipulation, obligation or agreement herein contained, or contained in the Bonds, or in
any certificate or other instrument to be executed on behalf of the Issuer in connection with the
issuance of the Bonds, shall be deemed to be a representation, statement, covenant, warranty,
stipulation, obligation or agreement of any member of the Governing Body, officer, employee or
agent of the Issuer in his or her individual capacity, and none of the foregoing persons nor any
officer of the Issuer executing the Bonds or any certificate or other instrument to be executed in
connection with the issuance of the Bonds, shall be liable personally thereon or be subject to any
personal liability or accountability by reason of the execution or delivery thereof.
SECTION 8.05. No Third Party Beneficiaries Except such other Persons as may be
expressly described herein or in the Bonds, nothing in this Resolution, or in the Bonds, expressed
or implied, is intended or shall be construed to confer upon any Person other than the Issuer, any
Insurer, any Credit Bank and the Holders any right, remedy or claim, legal or equitable, under
and by reason of this Resolution or any provision hereof, or of the Bonds, all provision hereof and
thereof being intended to be and being for the sole and exclusive benefit of the Issuer, any Insurer,
any Credit Bank and the Persons who shall from time to time be the Holders.
• SECTION 8.06. Sale of Bonds The Bonds shall be issued and sold at public and /or
private sale at one time or in installments from time to time and at such price or prices as shall be
consistent with the provisions of the Act, the requirements of this Resolution and other applicable
provisions of law.
SECTION 8.07. Severability of Invalid Provisi If any one or more of the
covenants, agreements or provisions of this Resolution shall be held contrary to any express
provision of law or contrary to the policy of express law, though not expressly prohibited, or
against public policy, or shall for any reason whatsoever be held invalid, then such covenants,
agreements or provisions shall be null and void and shall be deemed separable from the remaining
covenants, agreements and provisions of this Resolution and shall in no way affect the validity of
any of the other covenants, agreements or provisions hereof or of the Bonds issued hereunder.
SECTION 8.08. Repeal of Inconsistent Resoluti All resolutions or parts thereof
in conflict herewith are hereby superseded and repealed to the extent of such conflict.
SECTION 8.09. Table of Contents and Headings rt Hereof The Table of
Contents preceding the body of this Resolution and the headings preceding the several articles and
sections hereof shall be solely for convenience of reference and shall not constitute a part of this
Resolution or affect its meaning, construction or effect.
• 57
• SECTION 8. 10. Issuer R Rights, The Issuer reserves the right not to issue
any Bonds for any reason. No Bonds shall be issued except pursuant to a Supplemental
Resolution.
SECTION 8.11. Holidays; Time In any case where the date of maturity of interest
on or principal of the Bonds or the date fixed for redemption of any Bonds is not a Business Day,
then payment of principal, premium, if any, or interest need not be made on such date but may
be made on the next succeeding Business Day, with the same force and effect as if made on the
date of maturity or the date fixed for redemption. All references to specified times of day shall
be deemed to refer to the then prevailing time within the jurisdiction of the Issuer.
SECTION 8.12. Authorization to- Deem Final and to Accept Insuur n_e C9mmitment.
The Mayor or Village Manager are severally authorized to "deem final" the Preliminary Official
Statement for the Series 1998 Bonds for purposes of Securities and Exchange Commission Rule
15c2 -12.
SECTION 8.13 Section The reasonably anticipated amount of
tax - exempt obligations which will be issued by the Issuer during 1998 does not exceed
$10,000,000. The Issuer designates the Series 1998 Bonds as "qualified tax - exempt obligations"
for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986.
SECTION 8.14. Effective Date This Resolution shall become effective immediately
upon its passage.
THE FOREGOING RESOLUTION was offered by Councilmember
who moved its adoption. The motion was seconded by Councilmember ,
and upon being put to a vote, the vote was as follows:
F OR ADOPTION AG AINST ADOPTIO
58
The Mayor thereupon declared the Resolution duly passed and adopted this ?,t/ ( , day of
1998.
Mayor of Tequesta
t rSFAL]
ATTEST:
Village Clerk
G:\20241\2 \Bond Res(2).wpd 59