RESOLUTION NO. ____________

A RESOLUTION OF THE CITY OF LEESBURG, FLORIDA, AMENDING AND SUPPLEMENTING ITS RESOLUTION NO. 7141, AS PREVIOUSLY AMENDED AND SUPPLEMENTED BY RESOLUTION 7142; FOR THE PURPOSE OF AUTHORIZING THE ISSUANCE BY THE CITY OF NOT EXCEEDING $12,280,000 IN AGGREGATE PRINCIPAL AMOUNT OF ITS ELECTRIC SYSTEM REVENUE BONDS, SERIES 2007A, TO FINANCE THE ACQUISITION AND CONSTRUCTION OF IMPROVEMENTS TO THE CITY'S ELECTRIC SYSTEM AND AUTHORIZING THE ISSUANCE BY THE CITY OF ITS NOT EXCEEDING $12,000,000 TAXABLE ELECTRIC SYSTEM REVENUE BONDS, SERIES 2007B TO REPLENISH ELECTRIC REVENUES SPENT FOR CITY PURPOSES; AND PAY THE COSTS OF ISSUANCE OF SUCH SERIES 2007 BONDS; ACCEPTING THE BOND INSURER’S COMMITMENTS RELATING TO A 2007 BOND INSURANCE POLICY AND RESERVE PRODUCT WITH RESPECT TO THE SERIES 2007 BONDS; PLEDGING TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH SERIES 2007 BONDS, ON A PARITY WITH THE CITY’S OUTSTANDING ELECTRIC SYSTEM REVENUE BONDS, SERIES 2004, THE NET REVENUES DERIVED BY THE CITY FROM THE OPERATION OF THE CITY’S ELECTRIC SYSTEM AND CERTAIN MONEYS AND INVESTMENTS ON DEPOSIT IN CERTAIN FUNDS AND ACCOUNTS; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS OF THE SERIES 2007 BONDS; AND PROVIDING AN EFFECTIVE DATE.

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA AS FOLLOWS:

DEFINITIONS. When used in this Resolution, the terms defined in Resolution No. 7141 of the City of Leesburg, Florida (the “Original Instrument”) adopted by the City Commission of the Issuer on June 14, 2004 shall have the respective meanings assigned thereto by the Original Instrument and the following terms shall have the following meanings, unless the context clearly otherwise requires:

“Bond Insurer” shall mean as to the Series 2007 Bonds (as defined below) MBIA Insurance Corporation, a stock insurance company organized under the laws of the state of New York, and its permitted successors and assigns.

“Bond Resolution” shall mean the Original Instrument as amended and supplemented including this Resolution and any resolution supplementing or amending the then existing Bond Resolution.

“Interest Date” shall mean each April 1 and October 1 commencing October 1, 2007.

“Parity Obligations” shall mean the Issuer’s Outstanding Electric System Revenue Bonds, Series 2004.

“Person” shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity.

“This Resolution” shall mean this instrument, as the same may from time to time be amended, modified or supplemented.

“Series 2007 Bonds” shall mean collectively the Series 2007A Bonds and the Series 2007B Bonds authorized to be issued pursuant to Section 7 of this Resolution.

“Series 2007A Bonds” shall mean the City of Leesburg, Florida Electric System Revenue Bonds, Series 2007A.

“Series 2007B Bonds” shall mean the City of Leesburg, Florida Taxable Electric System Revenue Bonds, Series 2007B.

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 masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa.

AUTHORITY FOR THIS RESOLUTION.  This Resolution is adopted pursuant to the provisions of the Act, the Original Instrument as amended and supplemented, particularly Section 12.02 thereof, as to the Series 2007B Bonds, Chapter 159, Part VII, Florida Statutes, and other applicable provisions of law.

FINDINGS. It is hereby ascertained, determined and declared that:

The City Commissioners of the City of Leesburg, Florida (the “City”) duly adopted the Original Instrument on June 14, 2004 which authorized the issuance of the Parity Obligations and authorized the issuance of Additional Bonds having an equal lien on the Pledged Revenues as the Parity Obligations except as otherwise provided in the Original Instrument.

The Issuer deems it necessary, desirable and in the best financial interest of the Issuer and its citizens to issue the Series 2007A Bonds for the principal purpose of financing the acquisition and construction of improvements to the Issuer’s Electric System, which improvements constitute an Electric Project (the “2007A Project”) and to issue the Series 2007B Bonds for the principal purpose of providing funds to make a deposit to the City’s electric utility fund or any similar designated fund to replenish Electric Revenues used to pay for capital expenditures related to Florida Department of Transportation mandated projects and related projects (the “2007B Project”).  The 2007B Project is not an Electric Project.  The 2007A Project and the 2007B Project are collectively referred to as the “2007 Project”.

The Issuer deems it necessary, desirable and in the best interest of the Issuer and its citizens that the Pledged Revenues be pledged to the payment of the principal of and interest on the Series 2007 Bonds.  Following the issuance of the Series 2007 Bonds, no part of the Pledged Revenues will be pledged or encumbered in any manner except as security for the Series 2007 Bonds and the Parity Obligations.  The Issuer is authorized pursuant to Section 12.02 of the Original Instrument as amended to issue Additional Bonds payable from the Pledged Revenues on a parity with the Parity Obligations under the terms, limitations and conditions provided therein.  The Series 2007 Bonds shall be payable on a parity and rank equally as to lien on and source and security for payment from the Pledged Revenues, and in all other respects except as otherwise provided in the Bond Resolution, with the Parity Obligations and any Additional Bonds hereafter issued in accordance with the Bond Resolution.

The principal of and interest and redemption premium, if any, on the Series 2007 Bonds and all reserve and other payments shall be payable solely from the Pledged Revenues as provided in the Bond Resolution.  No ad valorem taxing power of the Issuer will ever be exercised nor will any Bondholder of any Series 2007 Bond or any Qualified Swap Provider or any issuer of a Credit Facility or Liquidity Facility have the right to compel the exercise of such ad valorem taxing power to pay the principal of or interest on the Series 2007 Bonds or to make any other payments provided for in the Bond Resolution, and the Series 2007 Bonds shall not constitute a lien upon any property of the Issuer or situated within its corporate territorial limits, except the Pledged Revenues.

The Issuer has received from the Bond Insurer commitments to provide its financial guaranty insurance policy (the “2007 Bond Insurance Policy”) and Reserve Product with respect to the Series 2007 Bonds, copies of such are attached hereto as Exhibit A; and it is in the best financial interest of the Issuer that the Issuer accept said commitments.

AUTHORIZATION OF 2007 PROJECT. The Issuer hereby authorizes the acquisition, construction, erection, renovation, reconstruction and funding of the 2007 Project.  Any amendments or additions to the 2007 Project must be approved by subsequent resolution of the Governing Body.

THIS RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of any or all of the Series 2007 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 Issuer and the Holders from time to time of the Series 2007 Bonds and the Bond 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 Series 2007 Bonds and for the benefit, protection and security of the Bond Insurer. All of the Series 2007 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 Series 2007 Bonds over any other thereof except as expressly provided in or pursuant to this Resolution.

ACCEPTANCE OF BOND INSURER’S COMMITMENTS. The Issuer hereby accepts the Bond Insurer’s commitment to provide the 2007 Bond Insurance Policy and the Reserve Product with respect to the Series 2007 Bonds; and hereby ratifies the execution and delivery by a City Authorized Representative on behalf of the Issuer of the acceptance of such commitments.

AUTHORIZATION OF SERIES 2007 BONDS. Subject and pursuant to the provisions of the Bond Resolution, the Series 2007A Bonds are authorized to be issued in the aggregate principal amount of not exceeding $12,280,000 and the Series 2007B Bonds are authorized to be issued in the aggregate principal amount of not exceeding $12,000,000.  The Series 2007B Bonds are being issued as Taxable Bonds.

DESCRIPTION OF SERIES 2007 BONDS. The Series 2007 Bonds shall be dated as of their date of delivery; shall be issued as fully registered Current Interest fixed rate Bonds; and shall be numbered consecutively from one upward within a series in order of maturity preceded by the letter “R;” shall be in such denominations 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 30‑day months), payable in such manner and on such dates; shall consist of such amounts of Serial Bonds and Term Bonds, maturing in such amounts and in such years; shall have such Paying Agent and Registrar; and shall contain such redemption provisions; all as the Issuer shall hereafter provide by supplemental resolution.

The 2007 Bonds shall be executed and shall be subject to registration and such other terms and provisions as provided in the Original Instrument, particularly Article VI thereof.

Ownership of the Series 2007 Bonds shall be initially pursuant to a Book Entry‑Only System registered in the name of a Depository or its nominee.

The Issuer will recognize the Depository or its nominee as the Holder for all purposes, including notices. Conveyance of notices and other communications by the Depository to participants, by participants to indirect participants, and by participants and indirect participants to beneficial Holders will be governed by arrangements among them, subject to any statutory and regulatory requirements as may be in effect from time to time.

In the event that (i) the Depository determines to discontinue providing its service with respect to the Series 2007 Bonds by giving written notice to the Issuer and discharging its responsibilities with respect thereto under applicable law, and the Issuer fails to appoint a successor Depository for the Series 2007 Bonds, or (ii) the Issuer determines as permitted by any agreement with the Depository to discontinue the Book Entry system through a Depository, then bond certificates are required to be delivered as described in the Series 2007 Bonds. The purchasers of beneficial ownership interests in the Series 2007 Bonds (the “Beneficial Holders”), upon registration of certificates held in the Beneficial Owner’s name, will become the registered owner of the Series 2007 Bonds.

Neither the Issuer, the Registrar nor the Paying Agent will have any responsibility or obligation to any Beneficial Owner or any other person with respect to (i) the accuracy of any records maintained by the Depository or any persons participating by or through the Depository; (ii) the payment by the Depository or any persons participating by or through the Depository of any amount with respect to the principal or Redemption Price, if applicable, or interest on the Series 2007 Bonds; (iii) any notice which is permitted or required to be given to Holders pursuant to this Resolution; (iv) the selection by the Depository or any persons participating by or through the Depository of any person to receive payment in the event of a partial redemption of the Series 2007 Bonds; or (v) any consent given or other action taken by the Depository as Holder.

CREATION OF 2007 PROJECT CONSTRUCTION ACCOUNT.  The Issuer hereby creates and establishes the “2007 Project Construction Account” within the Electric System Revenue Bonds Construction Fund.  Moneys deposited in the 2007 Project Construction Account shall be used to finance the Cost of the 2007A Project in the manner provided by the Bond Resolution.  Amounts on deposit in the 2007 Project Construction Account shall secure only the Series 2007 Bonds until expended as provided in the Bond Resolution.

CREATION OF 2007 ACCOUNT WITHIN THE RESERVE FUND.  The Issuer hereby creates and establishes the 2007 Reserve Account within the Electric System Reserve Fund.  Amounts on deposit in the 2007 Reserve Account, including any Reserve Product, shall be applied as provided in the Bond Resolution but shall secure only the Series 2007 Bonds.  The face amount of the Reserve Product issued by the Bond Insurer shall be equal to the Reserve Requirement for the Series 2007 Bonds.  The Reserve Requirement shall not exceed an amount equal to the lesser of (i) the Maximum Bond Service Requirement for the Series 2007 Bonds; (ii) 125% of the average Bond Service Requirement for the Series 2007 Bonds ; or (iii) 10% of the aggregate stated original principal amount of all Series 2007 Bonds.  The Series 2007 Bonds will not be secured by the Composite Reserve Account.

APPLICATION OF SERIES 2007 BOND PROCEEDS.  The proceeds derived from the sale of the Series 2007 Bonds, including premium, if any, shall, simultaneously with the delivery of the Series 2007 Bonds to the purchaser or purchasers thereof, be applied by the Issuer as follows:

an amount equal to the premiums with respect to the 2007 Bond Insurance Policy and the Reserve Product for the Series 2007 Bonds shall be transferred directly to the Bond Insurer

an amount of Series 2007B proceeds as set forth in a certificate of the Chief Financial Officer shall be deposited into the Electric Utility Fund in full satisfaction of costs of the 2007B Project; and

the balance of the proceeds of the Series 2007 Bonds shall be deposited in the 2007 Project Construction Account and applied to the Cost of the 2007A Project as provided in the Original Instrument, including, without limitation, the cost of issuance of the Series 2007 Bonds.  Amounts on deposit in the 2007 Project Construction Account are available to pay interest accruing on the Series 2007 Bonds through October 1, 2008.

Notwithstanding the provisions of this Section, a City Authorized Representative is hereby authorized by the Issuer to supplement and amend the application of proceeds of the Series 2007 Bonds provided herein, as evidenced by a Certificate signed by such official executed in connection with the issuance of the Series 2007 Bonds, in a manner otherwise consistent with the objectives of this Resolution and not inconsistent with the Bond Resolution.

FORM OF SERIES 2007 BONDS.  The Series 2007 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 Series 2007 Bonds to the purchaser or purchasers thereof):


(Form of Current Interest Bond)

REGISTERED                                                                                                          REGISTERED

No. R-                                                                                                                                $                

UNITED STATES OF AMERICA

STATE OF FLORIDA

CITY OF LEESBURG

[TAXABLE] ELECTRIC SYSTEM REVENUE BOND,

SERIES ____

Interest Rate:                     Maturity Date:                         Dated Date:                            CUSIP NO.

 

                        %

 

REGISTERED OWNER:

 

PRINCIPAL AMOUNT:                                                                                                   DOLLARS

 

The City of Leesburg, Florida (hereinafter called the “Issuer”), for value received, hereby promises to pay to the Registered Owner identified above, or to registered assigns or legal representatives, but solely from the revenues hereinafter mentioned, on the Maturity Date identified above (or earlier as hereinafter provided), the Principal Amount identified above, upon presentation and surrender hereof at the designated office of U.S. Bank National Association, ______________, Florida, or its successors, as Registrar and Paying Agent (the “Registrar” and “Paying Agent”), and to pay, solely from such special revenues, interest on the Principal Amount from the Dated Date, or from the most recent interest payment date to which interest has been paid, at the Interest Rate per annum identified above, until payment of the Principal Amount, or until provision for the payment thereof has been duly provided for, such interest being payable semiannually on the first day of April and the first day of October of each year, commencing on October 1, 2007.  Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months and will be paid by check or draft mailed to the Registered Owner hereof at his address as it appears on the registration books of the Issuer maintained by the Registrar at the close of business on the fifteenth day (whether or not a business day) of the month next preceding the interest payment date (the “Record Date”), irrespective of any transfer or exchange of this Bond subsequent to the Record Date and prior to such interest payment date, unless the Issuer shall be in default in payment of interest due on such interest payment date.  In the event of any such default, such defaulted interest shall be payable to the person in whose name such Bond is registered at the close of business on a special record date (which date shall also be the date for the payment of such defaulted interest) as established by notice by deposit in the U.S. mails, postage prepaid, by the Issuer to the Registered Owners of Bonds not less than fifteen days preceding such special record date.  Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth day (whether or not a business day) preceding the date of mailing.

This Bond and the interest hereon is payable solely from and secured by a lien upon and pledge of certain revenues derived by the Issuer from the operation of the Electric System, after payment of the Cost of Operation pursuant to the terms and subject to the conditions described in Resolution No. 7141, adopted by the Issuer on June 14, 2004, as supplemented and amended (the “Resolution”), and certain other funds and investment earnings thereon (collectively, the “Pledged Revenues”), all in the manner and to the extent provided in the Resolution and as more particularly described below.  The lien of the Bonds on the Pledged Revenues is on a parity with the lien of the Issuer’s Outstanding Electric System Revenue Bonds, Series 2004 and the Issuer’s _________ issued on the date hereof, except as otherwise provided in the Resolution.  Reference is hereby made to the Resolution for the provisions, among others, relating to the terms, lien and security of the Bonds, the custody and application of the proceeds of the Bonds, the rights and remedies of the Registered Owners of the Bonds, the extent of and limitations on the Issuer's rights, duties and obligations, and the provisions permitting the issuance or incurrence of additional parity indebtedness (including Additional Bonds and Hedge Obligations arising under Qualified Swaps), to all of which provisions the Registered Owner hereof for himself and his successors in interest assents by acceptance of this Bond.  All terms used herein in capitalized form, unless otherwise defined herein, shall have the meanings ascribed thereto in the Resolution.

This Bond shall not be deemed to constitute a general debt or a pledge of the faith and credit of the Issuer, or a debt or a pledge of the faith and credit of the State of Florida or any political subdivision thereof within the meaning of any constitutional, legislative or charter provision or limitation, and it is expressly agreed by the Registered Owner of this Bond that such Registered Owner shall never have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing power of the Issuer or any other political subdivision of the State of Florida or taxation in any form on any real or personal property for the payment of the principal of, premium, if any, and interest on this Bond or for the payment of any other amounts provided for in the Resolution.

It is further agreed between the Issuer and the Registered Owner of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien upon the System, or any part thereof, or any other tangible personal property of or in the Issuer, but shall constitute a lien only on the Pledged Revenues, all in the manner and to the extent provided in the Bond Resolution.  Neither the members of the governing body of the Issuer nor any person executing the Bonds shall be liable personally on the Bonds by reason of their issuance.

This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $____________, of like tenor and effect, except as to number, maturity (unless all Bonds mature on the same date) and interest rate, issued to finance the cost [____________ (the “Electric System”)], pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly the Resolution, Article VIII, Section 2, Constitution of the State of Florida and Chapter 166, Florida Statutes, Section 159.11, Florida Statutes and _____________.  This Bond is also subject to the terms and conditions of the Resolution.

The Bonds of this issue are subject to redemption prior to their maturity [Insert Term Bond amortization provisions].  The Bonds of this issue shall be further subject to redemption prior to their maturity at the option of the Issuer [Insert optional redemption provisions].

Notice of such redemption shall be given in the manner required by the Resolution.

The registration of this Bond may be transferred upon the registration books upon delivery to the designated office of the Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Registrar, duly executed by the owner of this Bond or by his attorney-in-fact or legal representative, containing written instructions as to the details of transfer of this Bond, along with the social security number or federal employer identification number of such transferee.  In all cases of a transfer of a Bond, the Registrar shall at the earliest practical time in accordance with the provisions of the Bond Resolution enter the transfer of ownership in the registration books and (unless uncertificated registration shall be requested and the Issuer has a registration system that will accommodate uncertificated registration) shall deliver in the name of the new transferee or transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of funds.  Neither the Issuer nor the Registrar shall be required to register the transfer of any Bond during the period commencing on the fifteenth day of the month immediately preceding an interest payment date on the Bonds and ending on such interest payment date, or, in the case of any proposed redemption of Bonds, after such Bonds or any portion thereof have been selected for redemption.  The Issuer and the Registrar may charge the owner of such Bond for the registration of every such transfer of a Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the Issuer) to be paid with respect to the registration of such transfer, and may require that such amounts be paid before any such new Bond shall be delivered.

If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a day on which banking business in the city or cities where the Paying Agent has its designated corporate trust offices is not being transacted, the New York Stock Exchange is not open or the Issuer is not open to transact business, then the date for such payment shall be the next succeeding Business Day, and payment on such day shall have the same force and effect as if made on the nominal date of payment.

It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and Constitution of the State of Florida applicable hereto, and that the issuance of the Bonds of this Series does not violate any constitutional or statutory limitation or provision.

This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication endorsed hereon shall have been signed by the Registrar.

IN WITNESS WHEREOF, the City of Leesburg, Florida, has issued this Bond and has caused the same to be signed by the Mayor and attested to and countersigned by its Clerk, either manually or with their facsimile signatures, and its corporate seal or a facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the first day of _____________, ____.

CITY OF LEESBURG, FLORIDA

(SEAL)

By                                                                   

Mayor

 

ATTESTED AND COUNTERSIGNED:

By                                                                   

            Clerk

APPROVED AS TO FORM AND CORRECTNESS:

By:                                                                  

            City Attorney

 

CERTIFICATE OF AUTHENTICATION

This Bond is one of the Bonds designated in and executed under the provisions of the within mentioned Resolution.

U.S. BANK, NATIONAL ASSOCIATION

By                                                                  

Authorized Officer

Date of Authentication:

[Form of Abbreviations]

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 the applicable laws or regulations.

TEN COM      -           as tenants in common

TEN ENT       -           as tenants by the entireties

JT TEN           -           as joint tenants with the right of survivorship and not as tenants in common

UNIFORM GIFT MIN ACT - ________________________ Custodian ________________

(Cust)                                                  (Minor)

 

under Uniform Gifts to Minors Act __________________

(State)

Additional abbreviations may also be used

though not in the above list.

 


ASSIGNMENT

FOR VALUE RECEIVED the undersigned _____________________________ (the “Transferor”) hereby sells, assigns and transfers unto __________________________ (the “Transferee”)

(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF TRANSFEREE)

(Please print or typewrite name and address of Transferee)

the within bond and all rights thereunder, and does hereby irrevocably constitute and appoint ______________ as attorney to register the transfer of the within bond on the books kept for registration and registration of transfer thereof, with full power of substitution in the premises.

Dated:                                                        

 

Signature Guaranteed:

 

 

                                                                   

 

NOTICE:  Signature(s) must be guaranteed by an eligible guarantor institution which is a member of a recognized signature guaranty program, i.e., Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) or New York Stock Exchange Medallion Signature Program (MSP), a member firm of the New York Stock Exchange or a commercial bank or a trust company.

 

 

                                                                   
Registered Owner

 

 

 

NOTICE:  No transfer will be registered and no new Bond will be issued in the name or names of the Transferee(s), unless the signature(s) to this assignment correspond(s) with the name or names as it/they appear(s) upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Numbers of the Transferee(s)is/are supplied.

 

 

 

 

 

 

[STATEMENT OF INSURANCE]


BONDS AND QUALIFIED SWAPS NOT TO BE GENERAL INDEBTEDNESS OF THE ISSUER.  Neither the Series 2007 Bonds nor any Hedge Obligations or other amounts payable under any Qualified Swaps in regard to the Series 2007 Bonds or any amounts due the Bond Insurer or any other provider of a Credit Facility, Liquidity Facility or Reserve Product shall be or constitute general obligations or indebtedness of the Issuer within the meaning of the Constitution of the State of Florida, but shall be payable solely from and secured by a lien upon and a pledge of the Pledged Revenues in the manner and to the extent herein provided in the Bond Resolution.  No Bondholder or Qualified Swap Provider or the Bond Insurer or any other provider of a Credit Facility, Liquidity Facility or Reserve Product shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form on any real or personal property to pay the principal of, premium, if any, and interest on the Series 2007 Bonds or any amounts due under a Qualified Swap or any amounts due the Bond Insurer or any other provider of a Credit Facility, Liquidity Facility or Reserve Product, nor shall any Bondholder or Qualified Swap Provider or the Bond Insurer or any other provider of a Credit Facility, Liquidity Facility or Reserve Product be entitled to payment of such principal, premium and interest or Hedge Obligations or Hedge Charges from any other funds of the Issuer other than the Pledged Revenues, all in the manner and to the extent herein provided in the Bond Resolution.  Neither the Bondholders nor the Qualified Swap Providers shall have a lien upon the System or the Electric Projects.

SECURITY FOR BONDS.  The Issuer does hereby irrevocably pledge the Pledged Revenues to the payment of the principal of or redemption price, if applicable, and interest on the Series 2007 Bonds.  The Series 2007 Bonds are payable from the Pledged Revenues on a parity, equally and ratably with the Parity Obligations except as otherwise provided herein.

AMENDMENT TO THE BOND RESOLUTION.  The Issuer has on the date hereof adopted a resolution consented to by the Bond Insurer for the Parity Obligations in accordance with Section 15.03 of the Original Instrument which resolution amended the Original Instrument by providing that the Bonds may be issued pursuant to the Bond Resolution for any lawful purpose of the Issuer (the “Consented To Change”).  As a result of the Consent To Change, Section 6.02(b)(2) of the Original Instrument contains an ambiguity or inconsistency and the Issuer hereby determines it to be in its best interest to amend Section 6.02(b)(2) of the Original Instrument to read as follows:

“(2)      the purposes to be financed with the proceeds thereof.”

APPLICATION OF PROVISIONS OF ORIGINAL INSTRUMENT. The Series 2007 Bonds shall for all purposes be considered to be Additional Bonds issued under the authority of Section 12.02 of the Bond Resolution and shall be entitled to all the protection and security provided in and by the Bond Resolution for Additional Bonds, and the Series 2007 Bonds shall be in all respects entitled to the same security, rights and privileges enjoyed by the Parity Obligations except as otherwise provided herein. The debt service on the Series 2007 Bonds shall be payable from the Revenue and Operating Fund established by the Original Instrument on a parity with the Parity Obligations, and to the extent of available Pledged Revenue deposits shall be made into such fund by the Issuer in amounts fully sufficient to pay the debt service on the Series 2007 Bonds and on the Parity Obligations as such debt service becomes due.  The terms and provisions of the Bond Resolution as supplemented hereby shall remain in full force and effect and be applicable with respect to the Series 2007 Bonds.

BOND INSURANCE POLICY AND RESERVE ACCOUNT INSURANCE POLICY. Notwithstanding any provision to the contrary contained in the Bond Resolution, the following provisions shall apply so long as the 2007 Bond Insurance Policy and/or Reserve Product with respect to the Series 2007 Bonds shall be in full force and effect.

1.          Permitted Investments.  With respect to the Series 2007 Bonds, Permitted Investments shall mean:

A.        Direct obligations of the United States of America (including obligations issued or held in book‑entry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America.

(B)       Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself):

(i)         U.S. Export-Import Bank (Eximbank)

Direct obligations or fully guaranteed certificates of beneficial ownership

(ii)        Farmers Home Administration (FmHA)

Certificates of beneficial ownership

(iii)       Federal Financing Bank

(iv)       Federal Housing Administration Debentures (FHA)

(v)        General Services Administration

Participation certificates

(vi)       Government National Mortgage Association (GNMA or "Ginnie Mae")

GNMA - guaranteed mortgage-backed bonds

GNMA - guaranteed pass-through obligations

(not acceptable for certain cash-flow sensitive issues.)

(vii)      U.S. Maritime Administration

Guaranteed Title XI financing

(viii)     U.S. Department of Housing and Urban Development (HUD)

Project Notes

Local Authority Bonds

New Communities Debentures - U.S. government guaranteed debentures

U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds

(C)       Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped securities are only permitted if they have been stripped by the agency itself):

(i)         Federal Home Loan Bank System

Senior debt obligations

(ii)        Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac")

Participation Certificates

Senior debt obligations

(iii)       Federal National Mortgage Association (FNMA or "Fannie Mae")

Mortgage-backed securities and senior debt obligations

(iv)       Student Loan Marketing Association (SLMA or "Sallie Mae")

Senior debt obligations

(v)        Resolution Funding Corp. (REFCORP) obligations

(vi)       Farm Credit System

Consolidated systemwide bonds and notes

(D)       Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by Standard & Poor’s Corporation (“S&P”) of AAAm-G; AAA-m; or AA-m and if rated by Investor Services (“Moody's”) rated Aaa, Aa1 or Aa2.

(E)       Certificates of deposit secured at all times by collateral described in (A) and/or (B) above.  Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks.  The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral.

(F)       Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC, including BIF and SAIF.

(G)       Investment Agreements, including GIC's, Forward Purchase Agreements and Reserve Fund Put Agreements acceptable to the Bond Insurer (Investment Agreement criteria is available upon request).

(H)       Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's and "A-1" or better by S&P.

(I)        Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two highest rating categories assigned by such agencies.

(J)        Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or "A3" or better by Moody's and "A-1" or "A" or better by S&P.

(K)       Any state administered pool investment fund in which the Issuer is statutorily permitted or required to invest.

(L)       Repurchase Agreements for 30 days or less must follow the following criteria.  Repurchase Agreements which exceed 30 days must be acceptable to the Bond Insurer (criteria available upon request)

Repurchase Agreements ("Repos") provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date.

(i)         Repos must be between the municipal entity and a dealer bank or securities firm

(a)        Primary dealers on the Federal Reserve reporting dealer list which are rated A or better by Standard & Poor's Corporation and Moody's Investor Services, or

(b)        Banks rated "A" or above by Standard & Poor's Corporation and Moody's Investor Services.

(ii)        The written Repo contract must include the following:

(a)        Securities which are acceptable for transfer are:

(1)        Direct U.S. governments, or

(2)        Federal agencies backed by the full faith and credit of the U.S. government (and FNMA & FHLMC)

(b)        The term of the Repo may be up to 30 days

(c)        The collateral must be delivered to the municipal entity, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities).

(d)        Valuation of Collateral

(1)        The securities must be valued weekly, marked-to-market at current market price plus accrued interest

(2)        The value of collateral must be equal to 104% of the amount of cash transferred by the municipal entity to the dealer bank or security firm under the repo plus accrued interest.  If the value of securities held as collateral slips below l04% of the value of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred.  If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 105%.

(iii)       Legal opinion which must be delivered to the municipal entity:

(a)        Repo meets guidelines under state law for legal investment of public funds.

(2)       Defeasance Obligations.  With respect to the Series 2007 Bonds, Defeasance Obligations shall only include the following:

(A)       Cash

(B)       U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series – "SLGs")

(C)       Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities

(D)       Resolution Funding Corp. (REFCORP) Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable.

(E)       Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P.  If however, the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre-refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipals to satisfy this condition.

(F)       Obligations issued by the following agencies which are backed by the full faith and credit of the U.S.:

(i)         U.S. Export-Import Bank (Eximbank)

(ii)        Direct obligations or fully guaranteed certificates of beneficial ownership

(iii)       Farmers Home Administration (FmHA)

(iv)       Certificates of beneficial ownership

(v)        Federal Financing Bank

(vi)       General Services Administration Participation certificates

(vii)      U.S. Maritime Administration

(viii)     Guaranteed Title XI financing

(ix)       U.S. Department of Housing and Urban Development (HUD)

(a)        Project Notes

(b)        Local Authority Bonds

(c)        New Communities Debentures - U.S. government guaranteed debentures

(d)        U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds

The Bond Insurer shall be provided with an opinion of counsel acceptable to the Bond Insurer that the Series 2007 Bonds have been legally defeased and that the escrow agreement establishing such defeasance operates to legally defease the Series 2007 Bonds within the meaning of the Bond Resolution as it relates to the Series 2007 Bonds.  In addition, the Bond Insurer will be entitled to receive (i) 15 business days notice of any advance refunding of the Series 2007 Bonds and (ii) an accountant's report with respect to the sufficiency of the amounts deposited in escrow to defease the Series 2007 Bonds.

(3)        Agents.

(A)       Paying Agent must be a commercial bank with trust powers.

(B)       Any remarketing agent must have trust powers if they are responsible for holding moneys or receiving bonds.  If the remarketing agent is removed, resigns or is unable to perform its duties, the Paying Agent must assume the responsibilities of remarketing agent until a substitute acceptable to the Bond Insurer is appointed.

(4)        Payments to Insurer; Other Provisions.

(A)       In the event that, on the second Business Day, and again on the Business Day, prior to the payment date on the Series 2007 Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Series 2007 Bonds due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify the Bond Insurer or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency.

(B)       If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the Bond Insurer or its designee.

(C)       In addition, if the Paying Agent has notice that any Bondholder has been required to disgorge payments of principal or interest on the Series 2007 Bonds to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify the Bond Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail.

(D)       The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the Series 2007 Bonds as follows:

(i)         If and to the extent there is a deficiency in amounts required to pay interest on the Series 2007 Bonds, the Paying Agent shall (a) execute and deliver to U.S. Bank Trust National Association, or its successors under the 2007 Bond Insurance Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Bond Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to the Bond Insurer of the claims for interest to which such deficiency relates and which are paid by the Bond Insurer, (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and

(ii)        If and to the extent of a deficiency in amounts required to pay principal of the Series 2007 Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Bond Insurer as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to the Bond Insurer of any of the Series 2007 Bonds surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders.

(E)       Payments with respect to claims for interest on and principal of Series 2007 Bonds disbursed by the Paying Agent from proceeds of the Bond Insurance Policy shall not be considered to discharge the obligation of the Issuer with respect to such Series 2007 Bonds, and the Bond Insurer shall become the owner of such unpaid Series 2007 Bonds and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise.

(F)       Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby agree for the benefit of the Bond Insurer that:

(i)         They recognize that to the extent the Bond Insurer makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Series 2007 Bonds, the Bond Insurer will be subrogated to the rights of such Holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in the Bond Resolution and the Series 2007 Bonds; and

(ii)        They will accordingly pay to the Bond Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in the Bond Resolution and the Series 2007 Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Series 2007 Bonds to Holders, and will otherwise treat the Bond Insurer as the owner of such rights to the amount of such principal and interest.

(G)       In connection with the issuance of Additional Bonds, the Issuer shall deliver to the Bond Insurer a copy of the disclosure document, if any, circulated with respect to such Additional Bonds.

(H)       Copies of any amendments made to the documents executed in connection with the issuance of the Series 2007 Bonds which are consented to by the Bond Insurer shall be sent to S&P.

(I)        The Bond Insurer shall receive notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto.

(J)        The Bond Insurer shall receive copies of all notices required to be delivered to Bondholders and, on an annual basis, copies of the Issuer’s audited financial statements and Annual Budget.

Notices:  Any notice that is required to be given to a Holder of the Series 2007 Bonds or to the Paying Agent pursuant to the Bond Resolution shall also be provided to the Bond Insurer.  All notices required to be given to the Bond Insurer under the Bond Resolution shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York  10504  Attention:  Surveillance.

(K)       The Issuer agrees to reimburse the Bond Insurer immediately and unconditionally upon demand, to the extent permitted by law, for all reasonable expenses, including attorneys' fees and expenses, incurred by the Bond Insurer in connection with (i) the enforcement by the Bond Insurer of the Issuer’s Series 2007 Bonds, or the preservation or defense of any rights of the Bond Insurer, under the Bonds Resolution and any other document executed in connection with the issuance of the Series 2007 Bonds, and (ii) any consent, amendment, waiver or other action with respect to the Bond Resolution or any related document, whether or not granted or approved, together with interest on all such expenses from and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is less.  In addition, the Bond Insurer reserves the right to charge a fee in connection with its review of any such consent, amendment or waiver, whether or not granted or approved.

(L)       The Issuer shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to which the Series 2007 Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of such Series 2007 Bonds without the prior written consent of the Bond Insurer.

(M)      Any Supplemental Resolution authorizing the issuance of Variable Rate Bonds pursuant to the Bond Resolution shall provide a stated maximum rate of interest.

(5)        Payment to Bond Insurer Prior to Defeasance of Series 2007 Bonds.  The Bond Insurer must be paid all amounts owed to it under the terms of the agreement pursuant to which the Issuer agrees, among other matters, to reimburse the Bond Insurer for amounts drawn under the Reserve Product (the “Insurance Agreement”) or any other documents prior to the Series 2007 Bonds being deemed paid for purposes of Article XIV of the Bond Resolution.

(6)        Available Amounts.  It will be the responsibility of the Paying Agent to maintain adequate records, verified with the Bond Insurer, as to the amount available to be drawn any given time under the Reserve Product and as to amounts paid and owing to the Bond Insurer under the terms of the Reserve Product.

(7)        No Optional Redemption or Distribution of Funds.  There may be no optional redemption of Series 2007 Bonds or distribution of funds to the Issuer pursuant to the Bond Resolution unless all amounts owed to the Bond Insurer under the terms of the Insurance Agreement or any other documents have been paid.

SEVERABILITY. If any one or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid or shall in any manner be held to adversely affect the validity of the Series 2007 Bonds, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Resolution or of the Series 2007 Bonds issued hereunder.

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 contained in the Series 2007 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 Series 2007 Bonds to effectuate the sale of the Bonds to said initial purchasers.

NO PERSONAL LIABILITY.  No representation, statement, covenant, warranty, stipulation, obligation or agreement herein contained, or contained in the Series 2007 Bonds, or in any certificate or other instrument to be executed on behalf of the Issuer in connection with the issuance of the Series 2007 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 Series 2007 Bonds, or any certificate or other instrument to be executed in connection with the issuance of the Series 2007 Bonds, shall be liable personally thereon or be subject to any personal liability or accountability by reason of the execution or delivery thereof.

NO THIRD PARTY BENEFICIARIES.  Nothing in this Resolution, or in the Series 2007 Bonds, expressed or implied, is intended or shall be construed to confer upon any person for a corporation other than the Bond Insurer and the Holders any right, remedy or claim, legal or equitable, under and by reason of the Bond Resolution or any provision hereof, or of the Series 2007 Bonds, all provisions hereof and thereof being intended to be and being for the sole and exclusive benefit of the Issuer and the Persons who shall from time to time be the Holders.

REPEAL OF INCONSISTENT RESOLUTIONS.  All resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict.

 

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EFFECTIVE DATE.  This Resolution shall take effect immediately upon its adoption.

PASSED, APPROVED AND ADOPTED this 23rd day of July, 2007.




(OFFICIAL SEAL)

CITY OF LEESBURG, FLORIDA


                                                                           
Mayor

 

 

ATTEST:


                                                                          
City Clerk

 

 

 

Approved as to Form and Correctness:


                                                                          
Office of the City Attorney