RESOLUTION NO. _____

A RESOLUTION OF THE CITY OF LEESBURG, FLORIDA, PROVIDING FOR THE ISSUANCE OF NOT EXCEEDING $21,500,000 SUBORDINATE CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 2008, OF THE CITY TO FINANCE THE ACQUISITION AND CONSTRUCTION OF CERTAIN CAPITAL PROJECTS; PROVIDING FOR THE PAYMENT OF SUCH BONDS ON A SUBORDINATED BASIS FROM REVENUES DERIVED FROM THE PUBLIC SERVICE TAX, THE LOCAL GOVERNMENT HALF-CENT SALES TAX AND GUARANTEED ENTITLEMENT; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH, INCLUDING, BUT NOT LIMITED TO, AUTHORIZED INVESTMENTS AND COVENANTS REGARDING DEFAULTS AND REMEDIES; AND PROVIDING AN EFFECTIVE DATE.

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

ARTICLE I
AUTHORITY FOR THIS RESOLUTION

This Resolution is adopted pursuant to Section 159.11, Florida Statutes, Chapter 166, Florida Statutes, Parts II and VI of Chapter 218, Florida Statutes, Article VIII, Section 2, Constitution of the State of Florida and other applicable provisions of law.

ARTICLE II
DEFINITIONS

Section 2.01.       Definitions

.  As used herein, unless the context otherwise requires:

Act” means Section 159.11, Florida Statutes, Chapter 166, Florida Statutes, Part II and Part VI of Chapter 218, Florida Statutes, and Article VIII, Section 2, Constitution of the State of Florida and other applicable provisions of law.

“Additional Bonds” means additional obligations, including, without limitation, Commercial Paper Obligations and Designated Maturity Bonds, issued in compliance with the terms, conditions and limitations contained in Article XII hereof which will have an equal lien on the Pledged Revenues in the manner and to the extent herein provided, and rank equally in all other respects with the Series 2008 Bonds initially issued hereunder (except with respect to amounts held in any separate account created in the Construction Fund pursuant to Section 7.01 hereof and with respect to amounts held in any separate account or accounts in the Reserve Fund, which amounts shall be held only for the benefit of the Holders of the Bonds for which such accounts were created).

“Amortization Installment” means the funds set aside in the Revenue Fund in a given Bond Year that are required for the payment at maturity or redemption of a portion of a series of Term Bonds, as established hereby or by resolution or ordinance of the Issuer at or before the delivery of that series of Term Bonds.

“Annual Budget” means the budget, as amended and supplemented from time to time, prepared by the Issuer for each Fiscal Year in accordance with Section 11.04 and in accordance with the laws of the State of Florida.

“Audit Period” has the meaning provided in Section 12.02(a).

“Authorized Depository” means any bank, trust company, national banking association, savings and loan association, savings bank or other banking association selected by the Issuer as a depository, which is authorized under Florida law to be a depository of municipal funds and which has qualified with all applicable state and federal requirements concerning the receipt of Issuer funds.

“Bond Counsel” means Akerman Senterfitt and other counsel experienced in matters relating to the validity of, and the exclusion from gross income for federal income tax purposes of interest on, obligations of states and their political subdivisions.

“Bond Insurer” means, with respect to any Series of Bonds, the issuer of a municipal bond insurance policy or Reserve Product insuring all or a portion of the payment, when due, of the principal of and interest on such Series of Bonds or satisfying all or a portion of the Reserve Requirement for such Bonds.

“Bond Obligation” means, as of the date of computation, the sum of: (i) the principal amount of all Current Interest Bonds then Outstanding and (ii) the Compounded Amount on any Capital Appreciation Bonds then Outstanding.

“Bond Service Requirement” means, for a given Bond Year, the remainder after subtracting any accrued and capitalized interest for that year that has been set aside in the Revenue Fund or in a separate subaccount in the Construction Fund for that purpose, concurrently with the issuance of Bonds hereunder, and other funds that have been set aside in the Revenue Fund at the beginning of such Bond Year and specifically earmarked to pay debt service next coming due on Bonds of any one or more Series, from the sum of:

(a)                The amount required to pay the interest coming due on Bonds during that Bond Year, including the accreted interest component of the Compounded Amount of Capital Appreciation Bonds maturing during that Bond Year,

(b)               The amount required to pay the principal of Serial Bonds and the principal of Term Bonds maturing in that Bond Year that are not included in the Amortization Installments for such Term Bonds; and

(c)                The Amortization Installments for all series of Term Bonds for that Bond Year.

(1)               For purposes of determining the Reserve Requirement pursuant to Sections 9.02 and 9.04 of this Resolution, the interest rate on Variable Rate Bonds for the Bond Year in which such calculation is made, or for any following Bond Year, as the case may be, that are based on a variable rate index, shall be assumed to be one hundred ten percent (110%) of the average daily interest rate on such Variable Rate Bonds under such index during the twelve months ending with the month preceding the date of calculation, or such shorter period that such Bonds shall have been Outstanding. If such Bonds have not been Outstanding on the date of calculation, the assumed interest rate shall be the rate calculated by the Issuer based on the nationally published index that, in the Issuer’s reasonable judgment, will most closely track the expected interest rate on the Variable Rate Bonds.

(2)               For purposes of determining the Maximum Bond Service Requirement or the Bond Service Requirement for the issuance of Additional Bonds pursuant to Section 12.02 of this Resolution, the interest rate on Variable Rate Bonds outstanding on the date of calculation shall be the same as the interest rate used for determining the Reserve Requirement pursuant to paragraph (1) of this definition, the interest rate on Variable Rate Bonds proposed to be issued under the provisions of Section 12.02 shall be assumed to be the maximum permissible interest rate with respect to such Variable Rate Bonds as set forth in the supplemental resolution or ordinance authorizing the issuance of such Variable Rate Bonds.

(3)               If Bonds are subject to purchase by the Issuer at the option of the Bondholder and a Liquidity Facility is available with respect thereto to provide for the purchase of such Bonds at the time calculation of interest rates is to be made, the optional “put” date or dates shall be ignored and the stated maturity dates of such Bonds shall be used for the purposes of this calculation.

(4)               For purposes of calculating the Bond Service Requirement with respect to Designated Maturity Bonds, the unamortized principal coming due on the final maturity date thereof that the Issuer reasonably anticipates refinancing, as reflected in the Annual Budget and/or a certificate of the Chief Financial Officer, shall not be included, and in lieu thereof there shall be included in the Bond Service Requirement for the Bond Year in which such final maturity occurs, and subsequent Bond Years only the principal amount thereof the Issuer certifies that it reasonably anticipates to become due in each such Bond Year, taking into account any such anticipated refinancing of such Designated Maturity Bonds.

(5)               For purposes of calculating the Bond Service Requirement with respect to Commercial Paper Obligations, only the interest component of such Commercial Paper Obligations and the principal component of the Commercial Paper Obligations that the Issuer reasonably expects to retire and not to pay with the proceeds of roll-over Commercial Paper Obligations in such Bond Year (as reflected in the Annual Budget and/or a certificate of the Chief Financial Officer) shall be included in the calculation of the Bond Service Requirement. The interest rate on the Commercial Paper Obligations shall be computed in the same manner as the computation of interest on Variable Rate Bonds as described above.

(6)               If two Series of Variable Rate Bonds, or one or more maturities within a Series, are issued simultaneously with inverse variable interest rates providing a composite fixed interest rate for such Bonds taken as a whole, such composite fixed rate shall be used in determining the Bond Service Requirement with respect to such Bonds.

“Bond Year” means the annual period beginning on the first day of October of each year and ending on the last day of September of the following year; provided that when such term is used to describe the period during which deposits are to be made pursuant to Section 9.02 to amortize principal and interest on the Bonds maturing or becoming subject to redemption, or the Bond Service Requirement, the principal amount of, and interest on, Bonds maturing or becoming subject to redemption, due for payment, on October 1 of any year shall be deemed to mature, become subject to redemption, or be due for payment on the last day of the preceding Bond Year.

“Bondholders,” “Holders” or “holders” means the registered owners (or their authorized representatives) of Bonds.

“Bonds” means the Series 2008 Bonds originally issued hereunder and any Additional Bonds.

“Book Entry Bonds” means those Bonds to which the provision of Section 6.13 apply.

“Business Day” means a day on which banking business is transacted in the city or cities in which the Paying Agent (if an Authorized Depository) has its designated corporate trust offices, on which the New York Stock Exchange is open and on which the Issuer is open to transact business.

“Capital Appreciation Bonds” means Bonds that bear interest, compounded semiannually, that is payable only at maturity or upon redemption prior to maturity in amounts determined by reference to the Compounded Amounts.

“Chief Financial Officer” means the Finance Director or such other Chief Financial Officer of the Issuer as defined in Section 218.403, Florida Statutes.

“Clerk” means the Clerk or any Deputy Clerk of the Issuer.

“Code” means the Internal Revenue Code of 1986, as amended, or any corresponding provisions of any future laws of the United States of America relating to federal income taxation, and except as otherwise provided herein or required by the context thereof, includes interpretations thereof contained or set forth in the applicable regulations of the Department of the Treasury (including applicable final regulations, temporary regulations and proposed regulations), the applicable rulings of the Internal Revenue Service (including published Revenue Rulings and private letter rulings) and applicable court decisions.

“Commercial Paper Obligations” means all of the Bonds (which may be designated as notes or other obligations) of a Series or a proportionate maturity thereof with a maturity of less than 271 days so designated by the Issuer by a supplemental ordinance or resolution prior to the issuance thereof.

“Composite Reserve Account” means the account in the Reserve Fund established pursuant to Section 9.01 of this Resolution.

“Composite Reserve Requirement” means an amount equal to the lesser of (i) the Maximum Bond Service Requirement calculated with respect to all Series of Bonds Outstanding hereunder that are secured by the Composite Reserve Account, (ii) 125% of the average Bond Service Requirement calculated with respect to all Series of Bonds Outstanding hereunder that are secured by the Composite Reserve Account, or (iii) 10% of the aggregate stated original principal amount of all Series of Bonds Outstanding hereunder that are secured by the Composite Reserve Account, provided, however, that in determining the aggregate stated original principal amount of Bonds Outstanding for the purposes of this clause (iii), the issue price of Bonds (net of pre-issuance accrued interest) shall be substituted for the original stated principal amount of those Bonds if such Bonds were sold at either an original issue discount or premium exceeding two percent (2%) of the stated redemption price at maturity.

“Compounded Amounts” means the principal amount of the Capital Appreciation Bonds plus the amount of interest that has accreted on such Bonds, compounded semiannually, to the date of calculation, determined by reference to accretion tables contained in each such Bond or an offering document or official statement with respect thereto. The Compounded Amounts for such Bonds as of any date not stated in such tables shall be calculated by adding to the Compounded Amount for such Bonds as of the date stated in such tables immediately preceding the date of computation a portion of the difference between the Compounded Amount for such preceding date and the Compounded Amount for such Bonds as of the date shown on such tables immediately succeeding the date of calculation, apportioned on the assumption that interest accretes during any period in equal daily amounts on the basis of a year of twelve 30-day months.

“Construction Fund” means the Construction Fund established pursuant to Section 7.01 hereof.

“Cost” or “Cost of the Projects” with respect to the 2008 Project shall include all items of cost with respect to such 2008 Project permitted under the Act to be financed with proceeds of Bonds issued hereunder (including reimbursement to the Issuer in connection with items previously incurred in anticipation of the issuance of the Bonds). Without intending to limit the forgoing, Cost of the Projects shall include, without limitation: (i) all direct costs of the 2008 Project described in the plans and specifications for such 2008 Project; (ii) all costs of planning, designing, acquiring, constructing, financing and placing such 2008 Project in operation; (iii) all costs of issuance of Bonds, including the cost of any Reserve Product, any Credit Facility, any Liquidity Facility, Bond Counsel, underwriters and underwriters’ counsel, special tax counsel, financial advisors, printing costs and Rating Agency fees, initial acceptance fees of paying agents, registrars, trustees and depositaries, and any other costs of issuance of Bonds; (iv) the cost of any lands or interests therein and all of the properties deemed necessary or convenient for the maintenance and operation of the 2008 Project; (v) all other engineering, legal and financial costs and expenses; (vi) all expenses for estimates of costs and of revenues; (vii) costs of obtaining governmental and regulatory permits, licenses, covenants and approvals; (viii) all fees of special advisors and consultants associated with one or more aspects of the 2008 Project or the financing thereof; (ix) all costs relating to claims or judgments arising out of the construction of the 2008 Project; (x) all federal, state and local taxes and payments in lieu of taxes required to be paid in connection with the acquisition and construction of the 2008 Project; (xi) all amounts required to be paid by this Resolution or any supplemental ordinance or resolution authorizing the issuance of Bonds into the Reserve Fund or Revenue Fund upon the issuance of any Series of Bonds; (xii) the payment of all principal, premium, if any, and interest when due, of any Bonds of any Series or other evidences of indebtedness issued to finance a portion of the Cost of the 2008 Project, whether at the maturity thereof or at the due date of interest or upon redemption thereof; (xiii) interest on Bonds of any Series prior to and during construction of the 2008 Project, and for such additional periods as the Issuer may reasonably determine to be necessary for the placing of such 2008 Project in operation; (xiv) the reimbursement to the Issuer of all such Costs of the 2008 Project that have been advanced by the Issuer from its available funds before the delivery of the Series 2008 Bonds issued to finance such costs; (xv) the principal, premium, if any, interest and costs related thereto, payable with respect to any note or other obligation issued by the Issuer to pay any part of the Cost of the 2008 Project; (xvi) all amounts required to be rebated to the United States of America in order to preserve the exclusion from gross income for federal income tax purposes of interest on Bonds other than Taxable Bonds; and (xvii) such other costs and expenses which shall be necessary or incidental to the financing herein authorized and the construction and acquisition of the 2008 Project and the placing of same in operation.

“Credit Facility” means a line of credit, letter of credit, bond insurance policy, guaranty or similar credit enhancement device or arrangement (including, without limitation, any reimbursement arrangement relating thereto) providing support for the payment of the principal of and interest on one or more Series of Bonds. A Credit Facility may also be a Liquidity Facility.

“Current Interest Bonds” means Bonds that bear interest which is payable periodically rather than solely at the maturity of the Bonds.

“Dated Date” means the date established by a resolution or ordinance authorizing the issuance of a Series of Bonds.

“Defeasance Obligations” means:

(1)               Cash held by an Authorized Depository pursuant to Article XIV whose deposits are insured by the Federal Deposit Insurance Corporation,

(2)               Obligations of, or obligations guaranteed as to principal and interest by, the U.S. or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the U.S.

(3)               Obligations of Government – Sponsored Agencies that are not backed by the fall faith and credit of the U.S. Government.

Any Defeasance Obligation must provide for the timely payment of principal and interest and cannot be callable or prepayable prior to maturity or earlier redemption of the related debt (excluding securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity or call date).

“Depository” means DTC and any successor securities depository.

“Designated Maturity Bonds” means all of the Bonds of a Series or a particular maturity thereof, with a, maturity longer than 270 days and less than or equal to 10 years, so designated by the Issuer by a supplemental ordinance or resolution prior to the issuance thereof, for which no mandatory debt service redemption requirements have been established.

“DTC” means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York.

“DTC Participant” means those broker dealers, banks and other financial institutions reflected on the books of DTC.

“Fiscal Year” means the period commencing on October 1 of each year and ending on the succeeding September 30, or such other consecutive 12-month period as may be hereafter designated as the Fiscal Year of the Issuer pursuant to general law.

“Governing Body” means the City Commission of the Issuer.

“Guaranteed Entitlement” means the guaranteed entitlement portion of the state revenue sharing funds available to the Issuer pursuant to Part II of Chapter 218, Florida Statutes.

“Issuer” means the City of Leesburg, Florida.

“Liquidity Facility” means a line of credit, letter of credit, standby bond purchase agreement or similar enhancement device or arrangement creating a source to be drawn upon by the Issuer to pay the purchase price of one or more Series of Bonds upon a mandatory or optional tender for payment. A Liquidity Facility may also be a Credit Facility.

“Maximum Bond Service Requirement” means, as of any particular date of calculation, the largest Bond Service Requirement for any remaining Bond Year, except that with respect to any Bonds for which Amortization Installments have been established, the amount of principal scheduled to come due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount or Compounded Amounts, as the case may be, of such Bonds that are to be redeemed or paid from Amortization Installments to be made in prior Bond Years.

“Mayor” means the Mayor or Mayor Pro Tem of the Issuer.

“No Adverse Effect Opinion” means an opinion of Bond Counsel that a particular event, plan of action or circumstance will not, in and of itself, cause interest on any Bonds issued hereunder to become includable in the gross income of the holders thereof for federal income tax purposes. A No Adverse Effect Opinion will not be required with respect to any series of Bonds that were initially issued as Taxable Bonds.

“Outstanding” or “Bonds Outstanding” or “Outstanding Bonds” means all Bonds that have been issued pursuant to this Resolution except:

(1)               Bonds cancelled after purchase in the open market or because of payment at or redemption prior to maturity;

(2)               Bonds for the payment or redemption of which, pursuant to, and subject to the provisions of, Article XIV hereof, cash funds or Defeasance Obligations or any combination thereof shall have been theretofore irrevocably set aside in a special account with the Paying Agent or an Authorized Depository acting as an escrow agent (whether upon or prior to the maturity or redemption date of any such Bonds) in an amount which, together with earnings on such Defeasance Obligations, will be sufficient to pay the principal of and interest on such Bonds at maturity or the principal of, interest on and premium, if any, upon their earlier redemption; provided that, if such Bonds are to be redeemed before the maturity thereof, irrevocable and unconditional notice of such redemption shall have been given according to the requirements of this Resolution or irrevocable instructions directing the timely publication of such notice and directing the payment of the principal of, premium, if any, and interest on all Bonds at such redemption dates shall have been given to the Paying Agent or such escrow agent; and

(3)               Bonds which are deemed paid pursuant to Section 6.06 and Section 6.08 hereof or in lieu of which other Bonds have been issued under Section 6.04 hereof.

“Parity Obligations” shall mean the Issuer’s Capital Improvement Bond Anticipation Note, Series 2006 (Taxable), the Issuer’s Subordinate Capital Improvement Revenue Note, Series 2007 to the extent of any advances thereunder and the Issuer’s commitment to fund deficiencies in the reserve account created under the loan agreement securing the Community Redevelopment Agency for the Carver Heights/Montclair Area Redevelopment Revenue Note, Series 2008.

“Paying Agent” means the Issuer or any Authorized Depository designated by the Issuer to serve as a Paying Agent or place of payment for any one or more Series of Bonds issued hereunder that shall have agreed to arrange for the timely payment of the principal of, interest on and premium, if any, with respect to the Bonds to the registered owners thereof, from funds made available therefor by the Issuer, and any successors designated pursuant to this Resolution. All Paying Agents appointed hereunder, if other than the Issuer, shall have a combined capital, surplus and undivided profits of at least $50,000,000.

“Payment Date” means, as the context may require, any date on which a payment of principal and/or interest on any Bonds Outstanding is due hereunder, including, without limitation, any date of redemption of Bonds.

“Permitted Investments” means any obligations in which surplus municipal funds may be invested under the laws of the State, that meet the Issuer’s internal investment policies.

“Pledged Funds” means, collectively, the Sales Tax, the Guaranteed Entitlement and the Public Service Tax.

“Pledged Revenues” means the Pledged Funds that will remain after all required deposits have been made pursuant to the Senior Improvement Resolution into the funds and accounts created thereunder having a priority in the flow of funds higher than the payment of the Bonds and after the payment of the unpaid fees, costs and expenses of any Reserve Product Provider or an issuer of a Liquidity Facility or Credit Facility, and all income received from the investment of moneys deposited in the funds and accounts created hereunder (except to the extent funds in any account in the Reserve Fund are pledged only to a Series of Bonds), excluding however amounts necessary to pay the Rebate Amount, if any, to the extent provided herein and any other revenues pledged by the Issuer to the payment of the Bonds by a supplement to this Resolution.

“Projects” means the construction or acquisition of, or addition, extension, improvements or repair to, or replacement of, the 2008 Project, or the refunding of obligations issued for such purpose.

“Project Costs” means the Cost of the Projects, other than costs of issuance of Bonds (e.g., bond insurance and Reserve Product premiums, original issue and underwriter’s discount, Reserve Requirements, printing costs, legal fees and other issuance costs), accrued interest on Bonds and capitalized interest on Bonds. Project Costs also do not include Cost of the Projects paid with proceeds of any federal, state or other grant.

“Public Service Tax” means any and all tax levied and collected by the Issuer in accordance with the Public Service Tax Ordinance pursuant to Section 166.231, Florida Statutes, as amended, and, to the extent provided by supplemental resolution or ordinance of the Issuer, any additional Public Service Tax revenues levied and collected by the Issuer.

“Public Service Tax Ordinance” means Ordinance 99-84 adopted by the Governing Body on December 13, 1999, as amended, modified or supplemented.

“Rating Agency” means any nationally recognized securities rating agency.

“Rating Category” means one of the generic rating categories of any nationally recognized securities rating agency without regard to any refinement or gradation of such rating by a numerical modifier or otherwise.

“Rebate Amount” means the excess of the future value, as of a computation date, of all receipts on nonpurpose investments (as defined in Section 1.148-1(b) of the Income Tax Regulations) over the future value, as of that date, of all payments on nonpurpose investments, all as provided by regulations under the Code implementing Section 148 thereof.

“Record Date” means the date specified as such in Section 6.02(d) hereof.

“Registrar” means the Issuer or any agent (including the Paying Agent) designated from time to time by the Issuer, by ordinance or resolution, to maintain the registration books for the Bonds issued hereunder or to perform other duties with respect to registering the transfer of Bonds.

“Representation Letter” means the Blanket Issuer Letter of Representations from the Issuer and the Registrar and Paying Agent to DTC.

“Reserve Fund” means the fund by that name established pursuant to Section 9.01 of this Resolution.

“Reserve Product” means bond insurance, a surety bond or a letter of credit or other credit facility used in lieu of a cash deposit in the Reserve Fund and meeting the terms and conditions of Section 9.02(a)(2) of this Resolution.

“Reserve Product Provider” means a reputable and nationally recognized bond insurance provider or a bank or other financial institution providing a Reserve Product, whose bond insurance policies insuring, or whose letters of credit, surety bonds or other credit facilities securing, the payment, when due, of the principal of and interest on bond issues by public entities results in such issues (as of the delivery date of the Reserve Product) being rated in one of the three highest Rating Categories by any Rating Agency.

“Reserve Requirement” means, with respect to the Composite Reserve Account, the Composite Reserve Requirement, and, with respect to each Series of Bonds issued hereunder that is not secured by the Composite Reserve Account, the amount of money, if any, or available amount of Reserve Product, if any, or any combination thereof, required by subsequent resolution or ordinance adopted or enacted prior to the issuance of such Series of Bonds to be deposited in the separate account in the Reserve Fund with respect to such Series of Bonds, if the reserve established with respect to such Series of Bonds is available for use only with respect to such Series of Bonds.

“Revenue Fund” means the fund established by that name pursuant to Section 9.01 of this Resolution.

“Sales Tax” means any and all proceeds of the local government half-cent sales tax distributed to the Issuer from the Local Government Half-Cent Sales Tax Clearing Trust Fund, as defined and described in Part VI, Chapter 218, Florida Statutes, as amended, and, to the extent provided by supplemental resolution or ordinance of the Issuer, any additional sales tax revenues distributed to the Issuer.

“Senior Improvement Bonds” means collectively the Issuer’s Capital Improvement Revenue Bonds, Series 1999 and Capital Improvement Revenue Bonds, Series 2004.

“Senior Improvement Resolution” means Resolution No. 5725 of the Issuer adopted on August 12, 1999, and Resolution No. 7162 of the Issuer adopted on July 12, 2004, as the same may be modified and amended from time to time.

“Serial Bonds” means all Bonds of a Series other than Term Bonds.

“Series” means any portion of the Bonds of an issue authenticated and delivered in a single transaction, payable from an identical source of revenue and identified pursuant to the supplemental ordinance or resolution authorizing such Bonds as a separate Series of Bonds, regardless of variations in maturity, interest rate, Amortization Installments or other provisions, and any Bonds thereafter authenticated and delivered in lieu of or in substitution of a series of Bonds issued pursuant to this Resolution.

“Series 2008 Bonds” means the Issuer’s Subordinate Capital Improvement Revenue Bonds, Series 2008 authorized to be issued hereunder.

“State” means the State of Florida.

“Subordinate Debt” means any bond, note or other indebtedness or obligation authorized by ordinance or resolution of the Issuer, which shall be payable from, and secured by a lien upon, Pledged Revenues subject and subordinate to Bonds issued, and payment obligations incurred hereunder.

“Taxable Bonds” means Bonds the interest on which is not intended at the time of the issuance thereof to be excluded from the gross income of the holders thereof for federal tax purposes.

“Term Bonds” means Bonds of a Series for which Amortization Installments are established, and such other Bonds of a Series so designated by supplemental ordinance or resolution of the Issuer adopted on or before the date of delivery of such Bonds.

“Trustee” has the meaning provided in Section 13.02.

“Variable Rate Bonds” means Bonds issued with a variable, adjustable, convertible or other similar interest rate, which rate cannot be ascertained and determined at the time of issuance for the entire term of such Bonds.

“2008 Project” means the acquisition and construction of the one or more Projects described on Exhibit “A” hereto, the costs of which are to be funded in whole or in part with proceeds from the Series 2008 Bonds.

“2008 Subordinate Project Construction Account” means the account by that name established within the Construction Fund pursuant to Section 7.01 of this Resolution.

Section 2.02.       Singular/Plural

.  Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms, corporations or other entities including governments or governmental bodies.

ARTICLE III
FINDINGS

Section 3.01.       Findings

.  It is hereby ascertained, determined and declared that:

(a)                The Issuer is authorized under the Act to issue Bonds and to use the proceeds thereof to pay, or to reimburse the Issuer for, the Cost of the Projects, including the 2008 Project.

(b)               In order to promote and preserve the health, safety and general welfare of the Issuer and its citizens and residents, it is necessary and desirable to acquire and construct the 2008 Project in accordance with certain plans and specifications therefor to be filed with the Issuer.

(c)                Each component of the 2008 Project constitutes a “capital project” within the meaning of the Act and Section 218.64(4), Florida Statutes.

(d)               The Pledged Funds are not currently pledged to the payment of any outstanding debt other than on a senior claim, lien and interest in favor of the Senior Improvement Bonds all as provided in the Senior Improvement Resolution and on a parity basis with Bonds to the Parity Obligations. Any Bond or other debt authorized to be issued pursuant to this resolution is Subordinate Debt within the meaning of the Senior Improvement Resolution.

(e)                The estimated Pledged Revenues will be sufficient to pay all of the principal of and interest on the Bonds to be issued hereunder, as the same become due and to make all debt service, reserve and other payments in connection with the Bonds required by this Resolution.

(f)                The principal of, interest on and premium, if any, with respect to the Bonds and all required debt service, reserve and other payments with respect thereto shall be payable solely from moneys deposited in the Revenue Fund which the Issuer has full authority to irrevocably pledge. The Issuer shall never be required to levy ad valorem taxes on any property to pay the principal of, interest on or any premium with respect to the Bonds or to make any of the required debt service, reserve or other payments required herein, and the Bonds shall not constitute a lien on any property owned by or situated within the limits of the Issuer except the Pledged Revenues as expressly provided herein.

ARTICLE IV
AUTHORIZATION OF CONSTRUCTION AND
ACQUISITION OF PROJECTS; COST OF PROJECTS

Section 4.01.       Authorization of 2008 Project

.  The Issuer hereby authorizes the 2008 Project.

Section 4.02.       Cost of Projects

.  Proceeds received from the sale of the Series 2008 Bonds are hereby authorized to be used to fund the 2008 Project, or to reimburse the Issuer for costs previously incurred by the Issuer for the 2008 Project.

ARTICLE V
THIS INSTRUMENT TO CONSTITUTE CONTRACT

In consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the Issuer and the Bondholders. The covenants and agreements herein set forth to be performed by the Issuer shall be for the equal benefit, protection and security of the Bondholders and all Bonds shall be of equal rank and without preference, priority or distinction over any other thereof, except as expressly provided herein.

 

ARTICLE VI
AUTHORIZATION, DESCRIPTION, FORM
AND TERMS OF BONDS

Section 6.01.       Authority for Issuance of Bonds

.  Subject and pursuant to the provisions hereof, Bonds to be known as “City of Leesburg, Subordinate Capital Improvement Revenue Bonds” are hereby authorized to be issued for the purpose of financing or refinancing the Cost of the Projects, with other or different descriptive words intended to delineate the purpose for the issuance of the Bonds. Subject and pursuant to the provisions hereof, the Series 2008 Bonds to be known as “City of Leesburg, Florida Subordinate Capital Improvement Revenue Bonds, Series 2008” are hereby authorized to be issued in an aggregate principal amount of not exceeding Twenty-One Million Five Hundred Thousand Dollars ($21,500,000) for the purpose of financing the 2008 Project, funding the Reserve Requirement (either with cash, investments or Reserve Products) and paying the cost of issuance thereof. The Series 2008 Bonds may be issued in one or more series and the series designation of such Bonds may be changed to reflect the date and sequence of issuance and the particular terms thereof.

Section 6.02.       Description of Bonds

(a)                The Bonds authorized hereunder may be issued in one or more Series that may be delivered from time to time. The Bonds may be issued as obligations the interest on which is excluded from gross income for federal tax purposes, as Taxable Bonds, as fixed rate bonds, as Variable Rate Bonds, as Capital Appreciation Bonds, as Current Interest Bonds, as Designated Maturity Bonds and/or as Commercial Paper Obligations.

(b)               The Issuer shall by supplemental ordinance or resolution authorize such Series and shall specify, either hereby or by such supplemental resolution or ordinance, the following:

(1)               the authorized principal amount of such Series;

(2)               the Projects to be financed with the proceeds thereof;

(3)               the date and terms of maturity or maturities of the Bonds of such Series, whether such Bonds are Taxable Bonds, Variable Rate Bonds, fixed rate Bonds, Capital Appreciation Bonds, Current Interest Bonds, Designated Maturity Bonds and/or Commercial Paper Obligations, or the payment of the Bonds on the demand of the holder, provided that each maturity date shall be October 1 (or, in the event of semiannual maturities of principal, April 1 and October 1) unless otherwise expressly provided by subsequent ordinance or resolution;

(4)               the interest rate or rates of the Bonds of such series, which may include variable, dual, adjustable, convertible or other rates, original issue discounts, compound interest, Capital Appreciation Bonds and zero interest rate bonds, provided that the average net interest cost rate on each such Series shall never exceed for such Series the maximum interest rate permitted by law in effect at the time such Series are issued, and provided further that in the event original issue discount, zero interest rate, Capital Appreciation Bonds or similar Bonds are issued, only the original principal amount of such Bonds shall be deemed issued on the date of issuance for the purposes of the maximum amount of Bonds authorized hereunder or under a supplemental ordinance or resolution;

(5)               the denominations, numbering, lettering and series designation of such Series of Bonds, provided that the Bonds shall be in the denominations of $5,000 or any integral multiple thereof, or in the case of Capital Appreciation Bonds, $5,000 amount due at maturity, or any integral multiple thereof, or any other denomination designated by subsequent ordinance or resolution;

(6)               the Paying Agent and place or places of payment of such Bonds;

(7)               the redemption prices for such Series of Bonds and any terms of redemption or any formula for accretion upon redemption not inconsistent with the provisions of this Resolution which may include mandatory redemption at the election of the holder or registered owner thereof;

(8)               the amount and date of each Amortization Installment, if any, for such Series of Bonds, provided that each Amortization Installment shall fall due on April 1 or October 1, or both, of a Bond Year, unless otherwise expressly provided by subsequent ordinance or resolution;

(9)               the use of proceeds of such Series of Bonds, including deposits required to be made into the Construction Fund and the Reserve Fund; and

(10)           the Reserve Requirement, if any, and any other terms or provisions applicable to the Series of Bonds, not inconsistent with the provisions of this Resolution or the Act.

The supplemental ordinance or resolution shall designate whether or not such Series of Bonds shall be secured by the Composite Reserve Account. All of the foregoing may be added by supplemental resolution or resolutions (or supplemental ordinance or ordinances) adopted at any time and from time to time prior to the issuance of such Series of Bonds. Unless otherwise so provided, each Bond shall bear interest from the later of the Dated Date or the most recent interest Payment Date to which interest has been paid, until payment of the principal sum or until provision for the payment thereof on or after the maturity or redemption date has been duly provided for and, unless otherwise so provided, interest on the Bonds shall be calculated on the basis of a 360-day year consisting of twelve thirty-day months.

(c)                Unless coupon bonds, the interest on which is excluded from gross income for federal income tax purposes, may be issued under Section 103 of the Code, or any successor to such Code section, or unless such Bonds are intended to be Taxable Bonds, all Bonds hereunder shall be in registered form, in substantially the form set forth in Section 6.10 below; shall be numbered from one upward per Series, preceded by the letter “R” (unless issued as coupon bonds to the extent permitted herein), and may contain such other designations as the Issuer may specify by supplemental resolution; and shall be payable in lawful money of the United States of America. In the case of Current Interest Bonds, interest thereon shall be payable by mail to the Holder thereof, provided, however, that (i) so long as the ownership of such Bonds is maintained in a Book-Entry-Only System by a securities depository, such payment shall be made by automatic funds transfer (“wire”) to such securities depository or its nominee; and (ii) if such Bonds are not maintained in a Book-Entry-Only System by a securities depository, upon written request of the registered owner of $1,000,000 or more in principal amount of Bonds delivered 15 days prior to an interest Payment Date, interest may be paid when due by wire in immediately available funds to the bank account number of a bank within the continental United States designated in writing by such bondholder to the Paying Agent, on a form acceptable to it. Any such written election may state that it will apply to all subsequent payments due with respect to the Bonds held by such registered owner until a subsequent written notice is filed.

(d)               Unless otherwise provided by subsequent ordinance or resolution authorizing a Series of Bonds, interest will be paid to the Holders of Bonds as their addresses appear on the registration books of the Issuer 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 a Bond subsequent to such Record Date and prior to the next succeeding interest payment date, unless the Issuer shall be in default in payment of interest due on such interest Payment Date or unless otherwise provided by subsequent ordinance or resolution authorizing a Series of Bonds.  In the event of any such default, such defaulted interest shall be payable to the persons in whose names the Bonds are 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. mail, postage prepaid, by the Issuer to the Holders of the Bonds not less than fifteen (15) 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. Principal of Current Interest Bonds and principal of and any accreted interest on Capital Appreciation Bonds, shall be payable at maturity or earlier redemption thereof upon presentation and surrender of such Bonds at the designated office of the Registrar by check or draft unless otherwise provided by subsequent resolution or ordinance.

(e)                To the extent the Issuer under then applicable law may issue any Series of Bonds in coupon form, the interest on which, in the opinion of Bond Counsel, is excluded from gross income for federal tax purposes, or to the extent such Bonds are to be issued as Taxable Bonds, the Issuer may amend this Resolution, including the form of the Bonds, to authorize and provide for the issuance and payment of such coupon Bonds.

(f)                If any date for payment of the principal of, premium, if any, or interest on any Bond is not a Business Day, then, unless otherwise provided by subsequent ordinance or resolution with respect to a series of Bonds, 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.

(g)               The form of Bonds may provide that the Holder of any such Bond may demand that the Issuer purchase such Bond by payment of principal and interest within a stated period after delivering notice to a designated agent for the Issuer and providing a copy of the notice with the tender of the Bond to such agent. The designated agent for the Issuer, in accordance with the terms of a remarketing or replacement agreement, may provide for the resale or redelivery of the Bonds on behalf of the Issuer at a price provided for in the agreement. If the Bonds shall not be resold or redelivered within a stated period, the agent for the Issuer may be authorized to draw upon a previously executed Credit Facility or Liquidity Facility between the Issuer and one or more banks or other financial or lending institutions permitting the Issuer to borrow funds to pay for the purchase of Bonds to which such Credit Facility or Liquidity Facility shall pertain. The particular form or forms of such demand provisions, the period or periods for payment of principal and interest after delivery of notice, the appointment of the agent for the Issuer, the terms and provisions of the remarketing or replacement agreement, and the terms and provisions of the Credit Facility or Liquidity Facility shall be as designated by a supplemental ordinance or resolution of the Issuer pertaining to each Series of Bonds to which such terms and provisions are applicable, prior to the sale and delivery thereof.

Section 6.03.       Execution of Bonds

.  The Bonds shall be executed in the name of the Issuer by the Mayor, the seal of the Issuer shall be imprinted, reproduced or lithographed on the Bonds and attested to and countersigned by the Clerk and the signature of the City Attorney of the Issuer shall be affixed to approve as to form and correctness unless otherwise provided in the charter or ordinances of the Issuer. The signatures of the Mayor, the Clerk and the City Attorney on the Bonds may be by facsimile, but one such officer shall sign his manual signature on the Bonds unless the Issuer appoints an authenticating agent, registrar, transfer agent or trustee who shall be authorized and directed to cause one of its duly authorized officers to manually execute the Bonds. If any officer whose signature appears on the Bonds ceases to hold office before the delivery of the Bonds, his signature shall nevertheless be valid and sufficient for all purposes. In addition, any Bond may bear the signature of, or may be signed by, such persons as at the actual time of execution of such Bond shall be the proper officers to sign such Bond although at the date of such Bond or the date of delivery thereof such persons may not have been such officers.

Section 6.04.       Registration

(a)                The Issuer shall establish a system of registration with respect to any Series or all Series of Bonds issued hereunder and may issue thereunder certificated registered public obligations (represented by instruments) or uncertificated registered public obligations (not represented by instruments) commonly known as book-entry obligations (which shall be subject to the provisions of Section 6.13), combinations thereof, or such other obligations as may then be permitted by law. The Issuer shall appoint such Registrars, transfer agents, depositories or other agents as may be necessary to cause the registration, registration of transfer and reissuance of the Bonds within a commercially reasonable time according to the then-current industry standards and to cause the timely payment of interest, principal and premium, if any, payable with respect to the Bonds. Registration and registration of transfer of the Bonds shall be subject to the terms set forth below and those set forth in the forms of the Bonds referred to in Section 6.10 hereof. Any such system may be effective for any Series then Outstanding or to be subsequently issued, provided that if the Issuer adopts a system for the issuance of uncertificated registered public obligations, it may permit thereunder the conversion, at the option of a holder of any Bond then Outstanding, of a certificated registered public obligation to an uncertificated registered public obligation, and the reconversion of the same. A list of the names and addresses of the Holders of the Bonds shall be maintained at all times by the Registrar and shall be made available to any Bondholder requesting same during normal business hours.

(b)               The registration of the Bonds may be transferred upon the registration books therefor upon delivery to 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 Holder of such Bonds or by his attorney-in-fact or legal representative, containing written instructions as to the details of transfer of such Bonds, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of the Bonds, the Registrar shall at the earliest practical time in accordance with the provisions of this Resolution enter the transfer of ownership in the registration books for the Bonds 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 sources of funds. Unless otherwise provided by supplemental resolution or ordinance with respect to any Series of Bonds issued hereunder, 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 next 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 Registrar or the Issuer may charge the registered owners of such Bonds for the registration of every such transfer of such Bonds an amount sufficient to reimburse it for any tax, fee or any other governmental charge required to be paid, except for any such governmental charge imposed by the Issuer, with respect to the registration of such transfer, and may require that such amounts be paid before any such new Bonds shall be delivered.

(c)                The registered owner of any Bond shall be deemed and regarded as the absolute owner of such Bond for all purposes of this Resolution. Payment of or on account of the debt service on any Bond shall be made only to or upon the order of that registered owner or such registered owner’s attorney-in-fact duly authorized in writing in the manner permitted by law, and neither the Issuer nor the Paying Agent shall be affected by notice to the contrary. All payments made as described in the Resolution shall be valid and effective to satisfy and discharge the liability upon that Bond, including without limitation, the interest on that Bond, to the extent of the amount or amounts so paid.

Section 6.05.       Bonds Mutilated, Destroyed, Stolen or Lost

.  If any Bond is mutilated, destroyed, stolen or lost, the Issuer or its agent may, in its discretion (i) deliver a duplicate replacement Bond, or (ii) pay a Bond that has matured or is about to mature. A mutilated Bond shall be surrendered to and cancelled by the Clerk of the Issuer or its duly authorized agent. The Bondholder must furnish the Issuer or its agent proof of ownership of any destroyed, stolen or lost Bond; post satisfactory indemnity; comply with any reasonable conditions the Issuer or its agent may prescribe; and pay the Issuer’s or its agent’s reasonable expenses.

Any such duplicate Bond shall constitute an original contractual obligation on the part of the Issuer whether or not the destroyed, stolen, or lost 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, and source of and security for payment from, the funds pledged to the payment of the Bond so mutilated, destroyed, stolen or lost.

Section 6.06.       Provisions for Redemption

.  Each Series of Bonds shall be subject to redemption prior to the maturity thereof at the option of the Issuer at such times and in such manner as shall be established by subsequent resolutions or ordinances of the Issuer adopted with respect to any Series of Bonds on or before the time of delivery of those Bonds. Except as otherwise provided by subsequent ordinance or resolution with respect to a Series of Bonds, notice of redemption shall be given by U.S. mail, postage prepaid, at least thirty and not more than sixty days before the redemption date to all Holders of the Bonds or portions of Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof; provided, however, that if all Bonds to be redeemed shall be in registered form, notice by mailing as prescribed above shall be sufficient and no newspaper publication of such redemption notice shall be required. Failure to give any such notice to a registered owner of a Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Bond or portion thereof with respect to which no failure or defect occurred.

Each notice shall set forth the date fixed for redemption for each Bond being redeemed, the redemption price to be paid, the date of publication, if any, of a notice of redemption, the name and address of the Registrar and, if less than all of the Bonds then outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall also state that on or after the redemption date, upon surrender of such Bond, new Bond or Bonds in a principal amount equal to the unredeemed portion of such Bond will be issued.

Any notice mailed as provided in this section shall be conclusively presumed to have been duly given, whether or not the owner of such Bond receives such notice.

Notwithstanding the foregoing or any other provision hereof, notice of optional redemption pursuant to this Section 6.06 may be conditioned upon the occurrence or non­occurrence of such event or events as shall be specified in such notice of optional redemption and may also be subject to rescission by the Issuer if expressly set forth in such notice.

 

Section 6.07.       Effect of Notice of Redemption

.  Except as set forth in the last paragraph of Section 6.06, notice having been given in the manner and under the conditions herein above provided, the Bonds or portions of Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such Bonds or portions of Bonds on such date. On the date so designated for redemption, moneys for payment of the redemption price being held in separate accounts by the Paying Agents in trust for the Holders of the Bonds or portions thereof to be redeemed, all as provided in this Resolution, interest on the Bonds or portions of Bonds so called for redemption shall cease to accrue, such Bonds and portions of Bonds shall cease to be entitled to any lien, benefit or security under this Resolution, and the Holders of such Bonds or portions of Bonds shall have no right in respect thereof except to receive payment of the redemption price thereof and, to the extent provided in Section 6.08 of this Article, to receive Bonds for any unredeemed portions of the Bonds.

Section 6.08.       Redemption of Portion of Registered Bonds

.  In case part but not all of an outstanding fully registered Bond shall be selected for redemption, the registered owners thereof shall present and surrender such Bond to the Issuer or its designated Paying Agent for payment of the principal amount thereof so called for redemption, and the Issuer shall execute and deliver to or upon the order of such registered owner, without charge therefor, for the unredeemed balance of the principal amount of the Bond so surrendered, a Bond or Bonds fully registered as to principal and interest.

Section 6.09.       Bonds Called for Redemption not Deemed Outstanding

.  Bonds or portions of Bonds that have been duly called for redemption under the provisions of this Article VI, and with respect to which amounts sufficient to pay the principal of, premium, if any, and interest to the date fixed for redemption shall be delivered to and held in separate accounts by an escrow agent, any Authorized Depository or any Paying Agent in trust for the registered owners thereof, as provided in this Resolution, and as to which any conditions to such redemption have been satisfied, shall not be deemed to be Outstanding under the provisions of this Resolution and shall cease to be entitled to any lien, benefit or security under this Resolution, except to receive the payment of the redemption price on or after the designated date of redemption from moneys deposited with or held by the escrow agent, Authorized Depository or Paying Agent, as the case may be, for such redemption of the Bonds and, to the extent provided in Section 6.08 of this Article, to receive Bonds for any unredeemed portions of the Bonds.

Section 6.10.       Form of Bonds

.  The text of the Current Interest Bonds, the form of assignment for such Bond and the form of certificate of authentication shall be in substantially the form set forth in Exhibit “B” attached hereto, with such omissions, insertions and variations as may be necessary or desirable and authorized or permitted by this Resolution or by any subsequent ordinance or resolution adopted prior to the issuance thereof, including, without limitation, such changes as may be required for the issuance of Taxable Bonds, uncertificated public obligations or coupon Bonds to the extent herein authorized and for the execution of the Bonds by an authenticating agent, The text of any Bonds other than Current Interest Bonds shall be in such form as may be set forth in the subsequent ordinance or resolution adopted by the Issuer authorizing such series of Bonds.

Section 6.11.       Application of Bond Proceeds

.  Except as otherwise provided hereby, the proceeds, including accrued interest and premium, if any, received from the sale of the Bonds of any Series shall be applied by the Issuer simultaneously with the delivery of such Bonds in accordance with the provisions of a supplemental ordinance or resolution of the Issuer in conformity with this Resolution to be adopted at or before the delivery of such Series of Bonds.

Section 6.12.       Temporary Bonds

.  Pending the preparation of definitive Bonds, the Issuer may execute and deliver temporary Bonds. Temporary Bonds shall be issuable as registered Bonds without coupons, of any authorized denomination, and substantially in the form of the definitive Bonds but with such omissions, insertions, and variations as may be appropriate for temporary Bonds, all as may be determined by the Issuer. Temporary Bonds may contain such reference to any provisions of this Resolution as may be appropriate. Every temporary Bond shall be executed and authenticated upon the same conditions and in substantially the same manner, and with like effect, as the definitive Bonds. As promptly as practicable, the Issuer shall execute and shall furnish definitive Bonds and thereupon temporary Bonds may be surrendered in exchange for definitive Bonds without charge at the designated office of the Registrar, and the Registrar shall authenticate and deliver in exchange for such temporary Bonds a like aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds.

Section 6.13.       Book-Entry Bonds

(a)                The Series 2008 Bonds may be initially issued in the form of a separate single authenticated fully registered certificate for each interest rate per maturity of such Bonds. Upon initial issuance, the ownership of such Bonds shall be registered in the registration books of the Issuer kept by the Registrar in the name of Cede & Co., as nominee of DTC. The Issuer, the Registrar and the Paying Agent may treat DTC (or its nominee) as the sole and exclusive Holder of such Bonds registered in its name for the purposes of payment of the principal, redemption price of or interest on such Bonds; any notice permitted or required to be given to Bondholders under this Resolution, registering the transfer of Bonds, obtaining any consent or other action to be taken by Holders of such Bonds and for all other purposes whatsoever; and neither the Issuer, the Registrar nor the Paying Agent shall be affected by any notice to the contrary. Neither the Registrar, the Paying Agent nor the Issuer shall have any responsibility or obligation to any DTC Participant, any Person claiming a beneficial ownership interest in such Bonds under or through DTC or any DTC Participant, or any other Person which is not shown on the registration books of the Registrar as being a Holder, with respect to the accuracy of any records maintained by DTC or any DTC Participant; the payment of DTC or any DTC Participant of any amount in respect of the principal, Amortization Installments or redemption price of or interest on such Bonds; any notice which is permitted or required to be given to Bondholders under this Resolution or any other documents; the selection by DTC or any DTC Participant of any Person to receive payment in the event of a partial redemption of such Bonds; or any consent given or other action taken by DTC as Bondholder. The Registrar shall pay all principal of; and premium, if any, and interest on such Bonds only to or “upon the order of” DTC (as that term is used in the Uniform Commercial Code as adopted in Florida), and all such payments shall be valid and effective to fully satisfy and discharge the Issuer’s obligations with respect to the principal of, and premium, if any, and interest on such Bonds to the extent of the sum or sums so paid.  Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions of this Resolution with respect to transfers of Bonds, the word “Cede & Co.” in this Resolution shall refer to such new nominee of DTC.

ARTICLE VII
CONSTRUCTION FUND

Section 7.01.       Construction Fund

.  The “Subordinate Capital Improvement Revenue Bonds Construction Fund” (the “Construction Fund”) is hereby created and established. There shall be paid into the Construction Fund funds which, together with investment earnings thereon, will be sufficient to pay the Cost of the Projects to be funded hereunder as designated by supplemental ordinance or resolution of the Issuer.

The Issuer shall establish a separate account in the Construction Fund for the Project or Projects to be financed by each Series of Bonds issued hereunder. Each such account in the Construction Fund shall be kept separate and apart from all other funds and accounts of the Issuer, and the funds on deposit therein shall be withdrawn, used and applied by the Issuer solely for the payment of the Cost of such Project or Projects and purposes incidental thereto as hereinabove described and set forth in Section 4.02. Capitalized interest, if any, deposited to an account in the Construction Fund and any income therefrom shall be transferred, to the extent necessary, to the Revenue Fund to pay interest on the related Series of Bonds. Any moneys on deposit in an account in the Construction Fund to pay capitalized interest not needed to pay interest pursuant to the preceding sentence or deposited to pay costs of issuance and not necessary for such purpose may be used in the same manner as other funds on deposit in that account in the Construction Fund. All such moneys shall be and constitute trust funds for such purposes, and shall be delivered to and held by the Chief Financial Officer (or his designated Authorized Depository) who shall act as trustee of such funds for the purposes of this Resolution. There is hereby created a lien upon such funds in favor of the Holders of the Series of Bonds to which such account is related until applied as herein provided.

The “2008 Subordinate Project Construction Account” is hereby created within the Construction Fund into which the Issuer shall deposit proceeds of the Series 2008 Bonds as provided by subsequent ordinance or resolution of the Issuer.

Any funds on deposit in the Construction Fund that, in the opinion of the Issuer, are not immediately necessary for expenditure, as hereinabove provided, shall be held and may be invested, in the manner provided by law, in Permitted Investments pursuant to Section 10.02 below. All income derived from investments of funds in an account or sub-account in the Construction Fund shall be deposited in such account or sub-account to which such investment income is attributable.

Any liquidated damages or settlement payments received by the Issuer as a result of the breach by any contractor, subcontractor or supplier working or supplying goods for a Project, of any representation, warranty or performance guaranty, and all insurance and condemnation proceeds received with respect to damages to or the taking of a Project during construction shall be deposited into the appropriate account or sub-account in the Construction Fund to insure completion of that Project or, at the direction of the Issuer by subsequent resolution, subject to the receipt of a No Adverse Effect Opinion, to the acquisition or construction of a different Project, or shall be deposited into the Revenue Fund for redemption of Bonds.

The Issuer covenants to commence or cause to be commenced the acquisition and construction of each Project authorized hereunder, promptly upon the delivery of the Series of Bonds issued to pay the Cost thereof, and to thereafter work with due diligence to complete each such Project. The Issuer may, however, upon receipt of a No Adverse Effect Opinion, abandon or defer any Project and use the remaining proceeds set aside to acquire or construct a different Project (or redeem Bonds according to the following paragraph). To the extent the Cost of a Project is to be paid in part from revenues of the Issuer, such funds shall be transferred to and deposited into the appropriate account in the Construction Fund and used in accordance with the provisions of this section. If funds for any Project are to come from other sources (for example, from city funding or state or federal grants and loans), the Issuer shall take all legally available actions to insure the receipt of such funds and shall cause such funds to be deposited into the Construction Fund or otherwise set aside in a separate fund or account and used for the purposes herein provided. For the purposes of this Section 7.01, “deferral” of a Project shall refer to situations where the Issuer shall not have formally taken action to abandon or cancel a Project, but shall have determined not to currently proceed with such Project and not to finance such Project with funds then held in the Construction Fund.

Except as otherwise provided with respect to any account or sub-account in the Construction Fund in the supplemental resolution or ordinance approving the issuance of a Series of Bonds, upon completion of each Project, or upon the abandonment or deferral thereof pursuant to the foregoing, any amounts then remaining in the corresponding account or sub-account in the Construction Fund and not reserved by the Issuer for the payment of any remaining part of the Cost of construction and acquisition thereof or for the payment of the Cost of another Project, shall be used to redeem Bonds in the manner described in Section 9.03(c) below, or, upon receipt of a No Adverse Effect Opinion, (i) shall be deposited into the Revenue Fund and used to pay principal and interest next coming due on the Bonds, or (ii) if needed, shall be deposited in the Reserve Fund, or (iii) shall be paid to the Issuer to be used for any lawful purpose.

Upon the occurrence of an event of default hereunder, the moneys in an account or sub-account in the Construction Fund related to a Series of Bonds may be applied to the payment of such Bonds.

 

ARTICLE VIII
SOURCE OF PAYMENT OF BONDS;
SPECIAL OBLIGATIONS OF THE ISSUER

Section 8.01.       Bonds Not to be General Indebtedness of the Issuer

.  The Bonds 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. No Bondholder 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 Bonds, nor shall any Bondholder be entitled to payment of such principal, premium and interest from any other funds of the Issuer other than the Pledged Revenues, all in the manner and to the extent herein provided. The Bondholders shall not have a lien upon the Projects.

Section 8.02.       Pledge of Revenues

.  The payment of the principal of, premium, if any, and interest on the Bonds shall be secured forthwith equally and ratably by an irrevocable, valid and binding lien on and security interest in the Pledged Revenues to the extent provided herein and shall be prior and superior to all other liens or encumbrances on the Pledged Revenues. As provided herein, the Issuer does hereby irrevocably pledge, in the manner and to the extent provided herein, the Pledged Revenues, all to the payment of the principal of, premium, if any, and interest on the Bonds, the funding and maintaining of the reserves as required herein and for all other payments as provided herein.

ARTICLE IX
CREATION AND USE OF FUNDS AND ACCOUNTS;
DISPOSITION OF REVENUES

Section 9.01.       Creation of Funds and Accounts

.  There are hereby created and established the following funds and accounts to be known as: the “Subordinate Capital Improvement Revenue Fund” (the “Revenue Fund”) and the “Subordinate Capital Improvement Reserve Fund (the “Reserve Fund”), with the Composite Reserve Account therein and a separate account therein for each Series of Bonds issued hereunder that is not secured by the Composite Reserve Account to the extent provided by subsequent ordinance or resolution enacted or adopted prior to the issuance of such Series of Bonds. Such funds and accounts shall constitute trust funds for the purposes herein provided, shall be delivered to and held by the Chief Financial Officer (or an Authorized Depository designated by the Chief Financial Officer), in each case who shall act as trustee of such funds for the purposes hereof, shall be subject to a lien and charge in favor of the Holders of the Bonds in the manner and to the extent provided herein, and shall, except as expressly permitted hereby, at all times be kept separate and distinct from all other funds of the Issuer and used only as herein provided.

Section 9.02.       Disposition of Revenues

.  Commencing on the day following the delivery of the first Bonds issued hereunder, except as otherwise provided herein, Pledged Revenues shall be deposited by the Issuer into the Revenue Fund promptly upon receipt.  Pledged Revenues shall be applied as provided herein and to make due payments on the Parity Obligations on a pro rata basis.

(a)                Disposition of Funds in the Revenue Fund.  Funds in the Revenue Fund shall be accumulated, paid out, withdrawn and disposed of, only in the following order and priority:

(1)               First, on or before the next succeeding Payment Date, by transfer to the Paying Agents in the manner contemplated in Section 9.03 below, an amount sufficient to pay the debt service next coming due on the Bonds.

Notwithstanding anything in this Section 9.02(a)(1) to the contrary, if principal, interest or premium payments have been made on behalf of the Issuer by a Bond Insurer or the issuer of a Liquidity Facility or Credit Facility or other entity insuring, guarantying or providing for the payment of Bonds or any Series thereof, moneys on deposit in the Revenue Fund and allocable to such Bonds shall be paid to such Bond Insurer or issuer of the Liquidity Facility or Credit Facility having theretofore made a corresponding payment on the Bonds.

(2)               Then, by deposit pro rata into the Composite Reserve Account and the other special reserve accounts in the Reserve Fund created for separate Series of Bonds, such amounts that, after taking into account other concurrent deposits made in such accounts pursuant to the provisions of this Resolution, and other funds or Reserve Products then on deposit therein or credited to such accounts, if any, will be sufficient to make the funds on deposit therein and Reserve Products credited thereto equal to the Reserve Requirement for each such account.

Notwithstanding anything herein to the contrary, the Issuer may satisfy the Reserve Requirement for any account in the Reserve Fund, in whole or in part with a Reserve Product in lieu of a cash funded deposit. Such Reserve Product must provide for payment of deficiencies (up to the policy limits of such Reserve Product) on any interest or principal Payment Date (provided adequate notice is given) on which a deficiency exists (or is expected to exist) in moneys held hereunder for a payment with respect to Bonds secured by the applicable account in the Reserve Fund, which cannot be cured by funds in any other account held pursuant to this Resolution and available for such purpose. Each such Reserve Product shall name as the beneficiary thereof, the Paying Agent or an Authorized Depository who has agreed to serve as trustee for the benefit of such Bondholders.

If a disbursement is made from a Reserve Product as provided pursuant hereto, the Issuer shall be obligated to reinstate the maximum limits of such Reserve Product promptly following such disbursement or to replace such Reserve Product by depositing into the applicable account in the Reserve Fund from the first available Pledged Revenues for deposit pursuant to this Section 9.02(a)(2), funds in the maximum amount originally payable under such Reserve Product, plus amounts necessary to reimburse the Reserve Product Provider for previous disbursements made pursuant to such Reserve Product, or a combination of such alternatives, and for purposes of this clause (a)(2), amounts necessary to satisfy such reimbursement obligation and other obligations of the Issuer to such a Reserve Product Provider shall be deemed required deposits into the applicable Reserve Fund account, but shall be used by the Issuer to satisfy its obligations to the Reserve Product Provider.

Notwithstanding the foregoing, if one or more accounts in the Reserve Fund have been funded with cash or Permitted Investments and no event of default shall have occurred and be continuing hereunder, the Issuer may, at any time in its discretion, substitute a Reserve Product meeting the requirements of this Resolution for the cash and Permitted Investments in any such account, and the Issuer may then withdraw such cash and Permitted Investments from such account and apply them to any lawful purpose that, in the opinion of Bond Counsel, will not result in the interest on the Bonds for which such account in the Reserve Fund was held which are not Taxable Bonds to be includable in the gross income of the Holders thereof for federal income tax purposes.

(3)               Then by payment of all amounts related to any Subordinate Debt required to be paid by the terms of the ordinance, resolution or other instrument authorizing such Subordinate Debt and the unpaid fees, costs and expenses of any Reserve Product Provider or issuer of a Liquidity Facility or Credit Facility.

(4)               Then by payment of all Rebate Amounts determined to be due and owing pursuant to the Code as provided in Section 10.03 below.

(5)               Then, for any lawful purposes of the Issuer that the Issuer deems appropriate.

(b)               Additional Payments. The Issuer shall not be required to make any further payments into the Revenue Fund or the Reserve Fund when (1) the moneys in the Revenue Fund set aside specifically to pay debt service on the Bonds, and (2) the moneys in the Reserve Fund set aside specifically to pay debt service on the Bonds are, in the aggregate, at least equal to the aggregate principal amount of Bonds issued and Outstanding pursuant to this Resolution and not theretofore defeased pursuant to Article XIV below, plus the amount of interest then due or thereafter to become due on said Bonds.

Section 9.03.       Use of Moneys Set Aside to Pay Debt Service

(a)                Moneys on deposit in the Revenue Fund and specifically set aside to pay debt service on Bonds Outstanding shall be used solely and on a pro rata basis for the payment of principal of, interest on and any premium required with respect to the Bonds.

(b)               On or before the next succeeding Payment Date, the Issuer shall transfer from the Revenue Fund to the Paying Agents sufficient moneys to pay all principal of, premium, if any, and interest due and payable with respect to such Bonds. Interest accruing with respect to any fully registered Bond shall be paid by check or draft of the Paying Agent to the registered owner thereof unless the registered owner has elected to receive payments by wire transfer as permitted in this Resolution and the Series resolution or ordinances.

(c)                Moneys deposited in the Revenue Fund set aside for the redemption of Bonds shall be applied with reasonable diligence to the retirement of Bonds issued under the provisions of this Resolution and then Outstanding in the following order:

(1)               The Issuer may first endeavor to purchase outstanding Term Bonds of each Series redeemable from Amortization Installments, and pro rata (based on the principal amount of the Amortization Installments due in such Bond Year for each such Series of Term Bonds) among all such Bonds if more than one Series of such Term Bonds are Outstanding, or if no such Term Bonds are Outstanding, Serial Bonds, whether or not such Bonds shall then be subject to redemption, but only to the extent moneys are available therefor, at the most advantageous price obtainable, such price not to exceed the principal of such Bonds plus accrued interest, or the Compounded Amount, as the case may be, but no such purchase shall be made by the Issuer within a period of thirty days next preceding any interest Payment Date on which such Bonds are subject to call for redemption under the provisions of this Resolution;

(2)               Then, to the extent moneys remain on deposit in the Revenue Fund that are specifically set aside for the redemption of Bonds, the Issuer shall call for redemption on each interest Payment Date on which Bonds are subject to redemption, with or without premium, from such moneys, such amount of Term Bonds subject to the Amortization Installments for such Bond Year that have not been purchased pursuant to clause (a) above; and

(3)               Then, to the extent moneys remain on deposit in the Revenue Fund that are specifically set aside therein pursuant to this Resolution for the purpose of redeeming Bonds, the Issuer shall first call any remaining Term Bonds then subject to redemption and then Serial Bonds then subject to redemption, in such order and by such selection method as the Issuer, in its discretion, may determine, from such funds as will exhaust the money then held for the redemption of such Bonds as nearly as may be possible,

If Term Bonds are purchased or redeemed pursuant to this section in excess of the Amortization Installments for such Bond Year, such excess principal amount of such Term Bonds so purchased or redeemed shall be credited against subsequent Amortization Installments for Bonds in such Series in such Bond Year or Years as the Issuer may determine and as may be reflected in the Issuer’s permanent accounting records. Such election shall be included in the annual audited reports of Issuer referred to in Section 11.06 below.

 

Section 9.04.       Use of Moneys in the Reserve Fund; Funding of Accounts in Reserve Fund

(a)                Except as otherwise expressly provided in this Section 9.04, funds on deposit in an account in the Reserve Fund (including, without limitation, the Composite Reserve Account) may be used only for the purpose of curing deficiencies in amounts available for such purposes in the Revenue Fund related to the Series of Bonds with respect to which such account in the Reserve Fund was created and for no other purpose. If funds on deposit in an account in the Reserve Fund exceed, in the aggregate, the applicable Reserve Requirement for such account, such excess shall be paid into the Revenue Fund. Any proceeds received from a Reserve Product shall be applied immediately to cure deficiencies in the moneys set aside and available in the Revenue Fund to pay debt service with respect to all Series of Bonds secured by the Composite Reserve Account, or the special account in the Reserve Fund to which such Reserve Product was credited, as the case may be, and for no other purpose.

(b)               At the time of issuance of the Series 2008 Bonds, if the Series 2008 Bonds are to be secured by the Composite Reserve Account, the Composite Reserve Account shall be funded in an amount (in cash or through a Reserve Product, or a combination thereof) equal to the Composite Reserve Requirement for the Series 2008 Bonds. At the time of issuance of the Series 2008 Bonds, if the Series 2008 Bonds are not to be secured by the Composite Reserve Account, a separate account within the Reserve Fund shall be funded in an amount (in cash or through a Reserve Product) equal to the Reserve Requirement, if any, specified in the supplemental resolution authorizing the issuance of the Series 2008 Bonds.

(c)                At the time of issuance of any Series of Additional Bonds, the Issuer shall, by ordinance or resolution, indicate whether such Series is to be secured by the Composite Reserve Account or by a special account in the Reserve Fund. If such Series of Additional Bonds is to be secured by the Composite Reserve Account, such ordinance or resolution shall provide that the amounts on deposit in the Composite Reserve Account shall be increased to the Composite Reserve Requirement. If such Additional Bonds are to be secured by a special account in the Reserve Fund, such resolution or ordinance shall set forth the Reserve Requirement with respect thereto.

Notwithstanding anything in the foregoing to the contrary, to the extent that such Series of Additional Bonds are being issued to refund Outstanding Bonds secured by the Composite Reserve Account and the Composite Reserve Account has been funded or partially funded with respect to the Outstanding Bonds to be refunded, the amount theretofore funded allocable to the Bonds being refunded by such Series of Additional Bonds may be credited against the amount required by this Section 9.04(c) to be deposited to the Composite Reserve Account.

 

(d)               If cash has been deposited in an account in the Reserve Fund, all such cash shall be used (or Permitted Investments purchased with such cash and held in such account shall be liquidated and the proceeds applied as required) prior to any disbursement made under any Reserve Product relating to Bonds secured by such account. If more than one Reserve Product relates to Bonds secured by an account in the Reserve Fund, then disbursements under such Reserve Products shall be made on a pro rata basis (calculated by reference to the maximum amounts available thereunder) after applying all available cash in such account in the Reserve Fund.

Section 9.05.       Paying Agents

.  The Issuer shall transfer, from the various funds and accounts established in this Article IX, to one or more Paying Agents as shall be designated by resolution or ordinance hereafter and from time to time adopted or enacted by the Issuer, on the date preceding each interest, principal and redemption date, an amount sufficient to pay when due the principal of, interest on and premium, if any, with respect to the Bonds.

No resignation or removal of a Paying Agent appointed hereunder shall be effective until such time as a successor has been appointed by the Issuer and has accepted the duties as Paying Agent hereunder.

 

ARTICLE X
DEPOSITARIES OF MONEYS, SECURITY FOR
DEPOSITS AND INVESTMENT OF FUNDS

Section 10.01.   Deposits Constitute Trust Funds

.  All funds or other property which at any time may be owned or held in the possession of or deposited with the Issuer in the Revenue Fund and the Reserve Fund under the provisions of this Resolution shall be held in trust and applied only in accordance with the provisions of this Resolution and shall not be subject to lien or attachment by any general creditor of the Issuer.

All funds or other property which at any time may be owned or held in the possession of or deposited with the Issuer pursuant to this Resolution shall be continuously secured, for the benefit of the Issuer and the Bondholders, either (a) by lodging with an Authorized Depositary, as custodian, with collateral security consisting of obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America having a market value (exclusive of accrued interest) not less than the amount of such deposit, or (b) in such other manner as permitted hereunder and as may then be required or permitted by applicable state or federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds, including, without limitation, the provisions of Chapter 280, Florida Statutes, as from time to time amended.

All moneys deposited with each Authorized Depository shall be credited to the particular Fund or Account to which such moneys belong. Notwithstanding anything herein to the contrary, for purposes of investment and to the extent permitted by applicable law, amounts on deposit in any Fund or Account may be commingled, as provided in Section 10.04 below, provided adequate care is taken to account for such amounts as provided in the preceding sentence.

Section 10.02.   Investment of Moneys

.  Moneys held for the credit of each of the Funds and Accounts created hereby shall be invested and reinvested by the Issuer in Permitted Investments, either directly or through broker-dealer deposit agreements or a combination thereof. Such investments or reinvestments shall mature not later than the respective dates, as estimated by the Issuer, that the moneys held for the credit of said funds or accounts will be needed for the purposes of such funds or accounts, but in no event shall any of the investments of funds in an account in the Reserve Fund have a term to maturity exceeding the final maturity date of the Series of Bonds secured by such account.

Obligations so purchased as an investment of moneys in any such Fund or Account shall be deemed at all times to be a part of such Fund or Account, and shall at all times, for the purposes of this Resolution, be valued annually as of September 30 of each year at the market value thereof on the date of valuation, as determined by the Issuer, exclusive of accrued interest.

Except as otherwise provided herein, all income and profits derived from the investment of money in the Construction Fund, shall be retained in such fund and used for the purposes specified for such fund. All income and profits derived from the investment of moneys in an account in the Reserve Fund shall be retained therein until the amount in such account equals the applicable Reserve Requirement, and thereafter, all remaining income and profits shall be transferred upon receipt into the Revenue Fund. Except as otherwise provided above, all income and profits derived from the investment of moneys in all other accounts or funds created hereby shall be deposited upon receipt in the Revenue Fund.

Section 10.03.   Tax Covenants

.  It is the intention of the Issuer and all parties under its control that the interest on the Bonds issued hereunder that are not Taxable Bonds be and remain excluded from gross income for federal income tax purposes and to this end the Issuer hereby represents to and covenants with each of the Holders of the Bonds issued hereunder that are not Taxable Bonds that it will comply with the requirements applicable to it contained in Section 103 and Part IV of Subchapter B of Chapter 1 of Subtitle A of the Code to the extent necessary to preserve the exclusion of interest on the Bonds issued hereunder that are not Taxable Bonds from gross income for federal income tax purposes. Specifically, without intending to limit in any way the generality of the foregoing, the Issuer covenants and agrees:

(a)                to make or cause to be made all necessary determinations and calculations of the Rebate Amount required to be paid to the United States of America pursuant to Section 148(f) of the Code;

(b)               to set aside sufficient moneys from the Pledged Revenues or other legally available funds of the Issuer, to timely pay the Rebate Amount to the United States of America;

(c)                to pay the Rebate Amount to the United States of America at the times and to the extent required pursuant to Section 148(f) of the Code;

(d)               to maintain and retain all records pertaining to the Rebate Amount with respect to the Bonds that are not Taxable Bonds issued hereunder and required payments of the Rebate Amount with respect to the Bonds that are not Taxable Bonds for at least six years after the final maturity of the Bonds that are not Taxable Bonds or such other period as shall be necessary to comply with the Code;

(e)                to refrain from taking any action that would cause any Bonds or any Series or portion thereof issued hereunder, other than Taxable Bonds and Bonds issued with the intent that they shall constitute “private activity bonds” under Section 141(a) of the Code, to be classified as “private activity bonds” under Section 141(a) of the Code; and

(f)                to refrain from taking any action that would cause the Bonds that are not Taxable Bonds issued hereunder to become arbitrage bonds under Section 148 of the Code.

The Issuer understands that the foregoing covenants impose continuing obligations of the Issuer that will exist as long as the requirements of Section 103 and Part IV of Subchapter B of Chapter 1 of Subtitle A of the Code are applicable to the Bonds.

Notwithstanding any other provision of this Resolution, including, in particular Article XIV hereof, the obligation of the Issuer to pay the Rebate Amount to the United States of America and to comply with the other requirements of this Section 10.03 shall survive the defeasance or payment in full of the Bonds that are not Taxable Bonds.

 

Section 10.04.   Separate Accounts

.  The moneys required to be accounted for in each of the funds and accounts established under this Resolution 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 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.

 

ARTICLE XI
GENERAL COVENANTS OF THE ISSUER

Section 11.01.   Representations of the Issuer

.  The Issuer makes the following representations on which the Bondholders are hereby entitled to rely:

(a)                Adoption of this Resolution and the compliance by the Issuer with the requirements hereof will not conflict with or result in a breach of or a default under any ordinance, resolution, agreement or instrument to which the Issuer is now a party.

(b)               As of the date of issuance of the Series 2008 Bonds, there will exist no event of default, as defined in Section 13.01 hereof, or any condition or event which would constitute, or with the passage of time or the giving of notice, or both, would constitute an event of default hereunder.

(c)                There are no pending, or to the knowledge of the Issuer, threatened actions or proceedings against the Issuer before any court of the State or any federal court in the State or any administrative agency which are likely in any case or in the aggregate to materially adversely affect the financial condition or operations of the Issuer or its obligations under this Resolution, nor is the Issuer aware of any facts or circumstances that would give rise to any such actions or proceedings.

Section 11.02.   Punctual Payment

.  The Issuer covenants and agrees with the Bondholders that it will punctually pay or cause to be paid the principal of premium, if any, and interest on the Bonds and that it will be unconditionally and irrevocably obligated, so long as any of the Bonds are Outstanding and unpaid, to take all lawful action necessary or required during each Fiscal Year so long as any of the Bonds are Outstanding and unpaid, to pay from the available funds pledged hereunder, in accordance with the provisions hereof (i) all Reserve Fund deposits provided herein for such year, (ii) the Bond Service Requirement that shall become due on the Bonds in such Bond Year, and (iii) all other payments required by this Resolution, and that the funds pledged hereunder shall not, in the aggregate, be reduced by action of the Issuer so as to be insufficient to provide adequate revenues for such purposes. Such covenant and agreement of the Issuer shall be cumulative and shall continue until such funds in amounts sufficient to make all payments required hereunder have been actually paid as herein provided.

Section 11.03.   Enforcement of Collections

.  The Issuer will diligently enforce its right to receive the Pledged Revenues. The Issuer will not take any action that will impair or adversely affect its rights to levy, collect and receive the Pledged Revenues, as herein pledged, or impair or adversely affect in any manner the pledge of the Pledged Revenues, made herein or the rights of the Bondholders. The Issuer shall be unconditionally and irrevocably obligated, so long as any of the Bonds are outstanding and unpaid, to take all lawful action necessary or required to continue to entitle the Issuer to receive the Pledged Revenues in at least the amounts required by this Resolution.

Section 11.04.   Operating Budget

.  Before the first day of each Fiscal Year the Governing Body shall prepare, approve and adopt in the manner prescribed by law, a detailed budget including the estimated amounts of the Pledged Revenues. Copies of its Annual Budgets shall be available for inspection at the offices of the City Clerk of the Issuer and shall be mailed to any Bondholder requesting the same upon payment by such Bondholder of the cost of reproduction and mailing.

Section 11.05.   Books and Records

.  The Issuer shall keep financial books, records, accounts and data concerning the receipt and disbursement of Pledged Revenues as is common practice for governmental entities like the Issuer.

Section 11.06.   Reports and Annual Audits

(a)                The Issuer shall require that an annual audit of its accounts and records be completed within nine (9) months after the end of each Fiscal Year by an independent certified public accountant of recognized standing. Such audit shall be conducted in accordance with generally accepted auditing standards as applied to governments.

(b)               A copy of the comprehensive annual financial report as certified according to the requirements stated herein, shall be available for inspection at the offices of the City Clerk of the Issuer and shall be mailed to any Bondholder requesting the same upon payment by such Bondholder of the cost of reproduction and mailing.

Section 11.07.   No Impairment

.  The pledging of the Pledged Revenues 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 of the Issuer.

ARTICLE XII
CONDITIONS TO THE ISSUANCE OF EACH
SERIES OF BONDS AND ADDITIONAL BONDS

Section 12.01.   Issuance of Obligations

.  The Issuer will not issue or incur any obligations payable from the any of 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 of any Bonds issued pursuant to this Resolution, upon the Pledged Revenues, except under the conditions and in the manner provided herein. Notwithstanding the immediately preceding sentence, the Issuer may issue bond anticipation notes having a lien upon Pledged Revenues as provided in this Resolution for Bonds provided that any bond anticipation notes may not be Outstanding when Bonds are also Outstanding.  Any such bond anticipation notes shall for purposes of this Section 12.01 be considered Bonds.  Any obligations issued or incurred by the Issuer other than in accordance with this Article XII and payable from the Pledged Revenues shall contain an express statement that such obligations are junior and subordinate in all respects to the Bonds as to lien on, and source of and security for payment from, the Pledged Revenues.

Section 12.02.   Issuance of Additional Bonds

.  The Issuer may issue at any time and from time to time Additional Bonds for the purpose of refunding any Series of Bonds or bond anticipation notes as provided in Section 12.01 hereof, or any Bonds within a Series, or for the purpose of refunding any Subordinate Debt provided that prior to the issuance of such Bonds:

(a)                There shall have been obtained and filed with the Governing Body a certificate signed by the Chief Financial Officer, pursuant to which he or she shall state and certify the following:

(1)               The amount of Pledged Revenues as determined under standard auditing procedures for, at the option of the Issuer, any twelve (12) consecutive months out of the thirty (30) consecutive months immediately preceding the date of issue of the Proposed Additional Bonds or the most recently audited Fiscal Year (the “Audit Period”).

(2)               Based upon the foregoing, the Chief Financial Officer is of the opinion that the Pledged Revenues for the Audit Period shall equal or exceed the sum of (i) one hundred thirty percent (130%) of the Maximum Bond Service Requirement, and (ii) one hundred percent (100%) of average annual debt service on borrowings that constitute Subordinate Debt, applying the assumptions and conventions provided in the definition of Bond. Service Requirement with respect to such Subordinate Debt.  For such purposes Maximum Bond Service Requirement shall included payments or any estimated payments due in regard to the Parity Obligations.

In addition, prior to the issuance of such Bonds pursuant to this section, there shall be filed with the Governing Body of the Issuer an opinion of Bond Counsel, given in reliance on factual and financial certificates, to the effect that (i) upon the deposit of proceeds from the sale of such Additional Bonds in irrevocable escrow for the payment of the Bonds to be refunded, such Bonds shall not be deemed outstanding for purposes of this Resolution, and (ii) the issuance of such Additional Bonds and the use of the proceeds thereof as described above will not, in and of itself have the effect of causing the interest on any Bond that is not a Taxable Bond then outstanding under this Resolution (including the Bonds to be refunded) to become included in gross income for federal income tax purposes.

(b)               The Chief Financial Officer of the Issuer shall certify that the Issuer is not in default in the performance of any of the covenants and obligations assumed by it under this Resolution, as the same may have been theretofore amended, and that all payments herein required to have been made into the funds and accounts provided herein shall have been made in full.

(c)                The City Attorney of the Issuer shall submit an opinion to the Governing Body of the Issuer to the effect that the issuance of such Bonds has been duly authorized and that all conditions precedent to the delivery of such Bonds have been fulfilled.

(d)               Each ordinance, resolution or enabling instrument authorizing the issuance of such Bonds will recite that all of the covenants herein contained will be fully applicable to such Bonds as if originally issued hereunder.

Bonds issued pursuant to the terms and conditions of this Article shall be deemed on a parity with all Bonds then Outstanding, and all of the covenants and other provisions of this Resolution (except as otherwise expressly provided hereby) shall be for the equal benefit, protection and security of the holders of any Bonds originally authorized and issued pursuant to this Resolution and the holders of any Bonds evidencing additional obligations subsequently created within the limitations of and in compliance with this Article. Bonds shall be issued only for the purpose of financing one or more Projects, or for the purpose of refunding any obligations theretofore issued for such purposes.

ARTICLE XIII
EVENTS OF DEFAULT; REMEDIES

Section 13.01.   Events of Default

.  Each of the following events is hereby declared an “event of default,” that is to say if:

(a)                payment of principal of any Bond shall not be made by the Issuer when the same shall become due and payable, either at maturity (whether by acceleration or otherwise) or on required Payment Dates by proceedings for redemption or otherwise; or

(b)               the Issuer shall for any reason be rendered incapable of fulfilling its obligations hereunder to the extent that the payment of or security for the Bonds would be materially adversely affected, and such conditions shall continue unremedied for a period of thirty (30) days after the Issuer becomes aware of such conditions; or

(c)                an order or decree shall be entered, with the consent or acquiescence of the Issuer, appointing a receiver or receivers of the Issuer, the Pledged Revenues or any part thereof, or the filing of a petition by the Issuer for relief under federal bankruptcy laws or any other applicable law or statute of the United States of America or the State of Florida, which shall not be dismissed, vacated or discharged within thirty (30) days after the filing thereof; or

(d)               any proceedings shall be instituted, with the consent or acquiescence of the Issuer, for the purpose of effecting a composition between the Issuer and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statutes now or hereafter enacted, if the claims of such creditors are under any circumstances payable from the Pledged Revenues; or

(e)                the entry of a final judgment or judgments for the payment of money against the Issuer which subjects any of the funds pledged hereunder to a lien for the payment thereof in contravention of the provisions of this Resolution for which there does not exist adequate insurance, reserves or appropriate bonds for the timely payment thereof, and any such judgment shall not be discharged within ninety (90) days from the entry thereof or an appeal shall not be taken therefrom or from the order, decree or process upon which or pursuant to which such judgment shall have been granted or entered, in such manner as to stay the execution of or levy under such judgment, order, decree or process or the enforcement thereof; or

(f)                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, and such default shall continue for thirty (30) days after written notice specifying such default and requiring the same to be remedied shall have been given to the Issuer by the registered owners of not less than ten percent (10%) of the Bond Obligation.

Notwithstanding the foregoing, with respect to the events described in clauses (a) or (b), when determining whether a payment default has occurred with respect to any Series of Bonds, no effect shall be given to payments made under a Credit Facility in place with respect to such Series of Bonds. Notwithstanding the foregoing, with respect to the events described in clause (f), the Issuer shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the Issuer in good faith institutes appropriate curative action and diligently pursues such action until the default has been corrected.

 

Section 13.02.   Enforcement of Remedies

.  Upon the happening and continuance of any event of default specified in Section 13.01 of this Article, then and in every such case the owners of not less than twenty-five percent (25%) of the Bond Obligation may appoint any state bank, national bank, trust company or national banking association qualified to transact business in Florida and having a combined capital, surplus and undivided profits of at least $50,000,000, to serve as trustee for the benefit of the holders of all Bonds then outstanding (the “Trustee”). Notice of such appointment, together with evidence of the requisite signatures of the holders of twenty-five percent (25%) of the Bond Obligation 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 such appointment shall be published in a financial journal of general circulation in the City of New York, New York. After the appointment of the first Trustee hereunder, no additional Trustees may be appointed; however, the holders of a majority of the Bond Obligation may remove the Trustee initially appointed and appoint a successor and subsequent successors at any time, but no such removal, and no resignation, of such Trustee shall be effective until a successor has been appointed and has accepted the duties of Trustee hereunder. If the default for which the Trustee was appointed is cured or waived pursuant to this Article, the appointment of the Trustee shall terminate as to such default.

After a Trustee has been appointed pursuant to the foregoing, the Trustee may proceed, and upon the written request of holders of twenty-five percent (25%) of the Bond Obligation shall proceed, subject to the provisions of Section 13.03 of this Resolution, to protect and enforce the rights of the Bondholders under the laws of the State, including the Act, and under this Resolution, by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board, body or officer having jurisdiction, either for the specific performance of any covenant or agreement contained herein or in aid of execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, all as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights.

In the enforcement of any remedy against the Issuer under this Resolution the Trustee shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any default becoming, and at any time remaining, due from the Issuer for principal, interest or otherwise under any provisions of this Resolution or of such Bonds and unpaid, with interest on overdue payments of principal and, to the extent permitted by law, on interest at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice to any other right or remedy of the Trustee or of the Bondholders, and to recover and enforce any judgment or decree against the Issuer, but solely as provided herein and in such Bonds, for any portion of such amounts remaining unpaid and interest, costs and expenses as above provided, and to collect (but solely from moneys in the Revenue Fund specifically set aside for that purpose, the Reserve Fund and any other moneys available for such purpose) in any manner provided by law, the moneys adjudged or decreed to be payable. Notwithstanding the foregoing, however, nothing herein shall permit an acceleration of the Bonds.

 

Section 13.03.   Effect of Discontinuing Proceedings

.  In case any proceeding taken by the Trustee or any Bondholder on account of any default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or such Bondholder, then and in every such case the Issuer, the Trustee and Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies and powers of the Trustee shall continue as though no such proceeding had been taken.

Section 13.04.   Directions to Trustee as to Remedial Proceedings

.  Anything in this Resolution to the contrary notwithstanding, the holders of a majority of the Bond Obligation shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions of this Resolution, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction.

Section 13.05.   Restrictions on Actions by Individual Bondholders

.  No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust hereunder or for any other remedy hereunder unless such Bondholder previously shall have given to the Trustee written notice of the event of default on account of which such suit, action or proceeding is to be taken, and unless the holders of not less than twenty-five percent (25%) of the Bond Obligation shall have made written request of the Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers hereinabove granted or to institute such action, suit or proceeding in its or their name, and unless also, there shall have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, including the reasonable fees of its attorneys (including fees on appeal), and the Trustee shall have refused or neglected to comply with such request within a reasonable time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of this Resolution or for any other remedy hereunder. It is understood and intended that no one or more owners of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Resolution, or to enforce any right hereunder, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Bondholders, and that any individual rights of action or any other right given to one or more of such owners by law are restricted by this Resolution to the rights and remedies herein provided.

Nothing contained herein, however, shall affect or impair the right of any Bondholder, individually, to enforce the payment of the principal of and interest on his Bond or Bonds at and after the maturity thereof, at the time, place, from the source and in the manner provided in this Resolution.

 

Section 13.06.   Rights of Bond Insurer

(a)                Each Bond Insurer, if any, shall receive from Issuer and the Trustee (i) copies of all notices required to be delivered to the Bondholders and (ii) notice of any Event of Default.

(b)               The Bond Insurers shall, in accordance with the provisions of Section 15.03, be entitled to control and direct the enforcement of all remedies and rights to the extent granted to the holders of the Bonds insured by them hereunder, and shall also have the right to waive Events of Default on behalf of such holders; provided that no such Bond Insurer that is in insolvent or in default with respect to its obligations under the Credit Facility shall be entitled to exercise any such right.

ARTICLE XIV
DEFEASANCE AND RELEASE OF RESOLUTION

If, at any time after the date of issuance of any Series of the Bonds, (a) all Bonds secured hereby or any Bonds within a Series shall have become due and payable in accordance with their terms or otherwise as provided in this Resolution, or shall have been duly called for redemption, or the Issuer gives the Paying Agent irrevocable instructions directing the payment of the principal of, premium, if any, and interest on such Bonds at maturity or at any earlier redemption date scheduled by the Issuer, or any combination thereof, and (b) the whole amount of the principal, premium, if any, and the interest so due and payable upon all of such Bonds then outstanding, at maturity or upon redemption, shall be paid, or sufficient moneys shall be held by the Paying Agent or other Authorized Depository acting as an escrow agent in irrevocable trust for the benefit of such Bondholders (whether or not in any accounts created hereby) which, as verified by a report of an independent certified public accountant or firm of certified public accountants, when invested in Defeasance Obligations maturing not later than the maturity or redemption dates of such principal, premium, if any, and interest will, together with the income realized on such investments, be sufficient to pay all such principal, premium, if any, and interest on said Bonds at the maturity thereof or the date upon which such Bonds are to be called for redemption prior to maturity, then and in that case the right, title and interest of such Bondholders hereunder and the pledge of and lien on the Pledged Revenues and all other pledges and liens created hereby or pursuant hereto, with respect to such Bondholders, shall thereupon cease, determine and become void, and such Bonds shall no longer be deemed outstanding for purposes of this Resolution, and if such conditions have been satisfied with respect to all Bonds issued hereunder and then Outstanding, all balances remaining in any other funds or accounts created by this Resolution other than moneys held for redemption or payment of Bonds and to pay all other sums payable by the Issuer hereunder, shall be distributed to the Issuer far any lawful purpose; otherwise this Resolution shall be, continue and remain in full force and effect.

For purposes of this Article XIV, the amount of interest to accrue on Variable Rate Bonds to maturity or redemption shall be determined by assuming interest thereon will accrue at the maximum rate of interest such Variable Rate Bonds may bear pursuant to the ordinance or resolution authorizing the issuance thereof, or the maximum rate permitted by law if such authorizing ordinance or resolution provides no maximum rate of interest.

Notwithstanding anything herein to the contrary, in the event that the principal and/or interest on a Series of Bonds shall have been paid to the Holders of such Series of Bonds by a Bond Insurer, such Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, and the assignment and pledge of the security hereunder and all covenants, agreements and other obligations of the Issuer to the Holders shall continue to exist and shall run to the benefit of the Bond Insurer and the Bond Insurer shall be subrogated to the rights of such Holders.

Notwithstanding any other provision of this Resolution, including in particular this Article XIV, the obligation to pay over the Rebate Amount to the United States and to comply with all other requirements of Section 10.03 shall survive the defeasance or payment in full of the Bonds.

 

ARTICLE XV
MODIFICATION OR AMENDMENT

Section 15.01.   Modification or Amendment

.  This Resolution may be modified and amended by the Issuer from time to time prior to the issuance of the first Series of Bonds hereunder. Thereafter, no modification or amendment of this Resolution, or of any resolution or ordinance amendatory hereof or supplemental hereto, materially adverse to the Bondholders may be made without the consent in writing of the Holders of not less than a majority of the Bond Obligation, but no modification or amendment shall permit a change (a) in the maturity of any of the Bonds or a reduction in the rate of interest thereon, (b) in the amount of the principal obligation of any Bond, or (c) that would reduce such percentage of holders of the Bond Obligation, required above, for such modifications or amendments, without the consent of all of the Bondholders. For the purpose of Bondholders’ voting rights or consents, the Bonds owned by or held for the account of the Issuer, directly or indirectly, shall not be counted. Notwithstanding the foregoing, the Issuer may, from time to time and at any time without the consent of the Bondholders, enter into such supplemental ordinances or resolutions (which supplemental ordinances or resolutions shall thereafter form a part hereof):

(a)                To cure any ambiguity, inconsistency or formal defect or omission in this Resolution or in any supplemental ordinance or resolution, or

(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, or

(c)                To provide for the sale, authentication and delivery of Additional Bonds and the disposition of the proceeds from the sale thereof, in the manner and to the extent authorized by Article XII above, or

(d)               To modify, amend or supplement this Resolution or any ordinance or resolution supplemental hereto in such manner as to permit the qualification hereof and thereof under the Trust Indenture Act of 1939 or any similar federal statute hereafter in effect or to permit the qualification of the Bonds for sale under the securities laws of any of the states of the United States of America, and, if the Issuer so determines, to add to this Resolution or any ordinance or resolution supplemental hereto such other terms, conditions and provisions as .may be permitted by said Trust Indenture Act of 1939 or similar federal statute, or

(e)                To provide for the issuance of coupon Bonds or certificated or uncertificated registered public obligations as contemplated in Section 6.02 hereof, or

(f)                To provide for changes suggested by a Rating Agency as necessary to secure the highest rating on the Bonds, or

(g)               To subject to the terms of this Resolution any additional funds, securities or properties, or

(h)               To make any other change or modification of the terms hereof which, in the reasonable judgment of the Issuer is not materially prejudicial to the rights or interests of the holders of the Bonds hereunder.

Section 15.02.   Supplemental Resolutions With Bondholders’ Consent

.  Subject to the terms and provisions contained in this section, and not otherwise, the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption of such supplemental resolution or resolutions as shall be deemed necessary or desirable by the Issuer for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution or in any supplemental resolution; provided, however, that nothing in this section shall permit, or be construed as permitting, without the consent of the Holders of all Bonds Outstanding, (a) an extension of the maturity of the principal of or the interest on any Bonds, or (b) a reduction in the principal amount of, or the premium or the rate of interest on, any Bonds, or (c) the creation of a lien upon or a pledge of any of the funds or accounts established under or pursuant to this Resolution other than a lien and pledge created by this Resolution, or that is made expressly subordinate to the Issuer’s obligations hereunder, or (d) a preference or priority of any Bond or Bonds over any other Bond other Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such supplemental resolution. Nothing in this section, however, shall be construed as making necessary the approval by Bondholders of the adoption of any supplemental resolution as authorized in Section 15.01.

Except as provided in the immediately preceding paragraph, if the Registered Owners 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 its adoption, no Registered Owner of any Bond, any Insurer, or any Reserve Provider of a Reserve Product shall have any right to object to the adoption of such supplemental resolution, or to object to any of its terms and provisions, or in any manner to question the propriety of its adoption, or enjoin or restrain the Issuer from adopting the same or from taking any action pursuant to its provisions. Bondholder approval need not be given at one time, and approvals may be prospective in nature and aggregated over a period of time. Once a Bondholder has given approval to an amendment (either current or prospective), such approval shall be irrevocable and binding on all subsequent holders of such Bonds.

Upon the adoption of any supplemental resolution pursuant to the provisions of this section, this Resolution shall be modified and amended in accordance with such supplemental resolution, and the respective rights, duties and obligations under this Resolution of the Issuer and all Registered Owners 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 15.03.   Rights of Bond Insurer

.  In the event that a Credit Facility is in full force and effect as to a Series of Bonds and the Bond Insurer is not insolvent and no default under the Credit Facility exists on the part of the Bond Insurer, the Bond Insurer, in place of the Registered Owners of such Bonds, shall have the power and authority to give any consents and exercise any and all other rights that the Registered Owners of such Bonds insured by it would otherwise have the power and authority to make, give or exercise, including, but not limited to, the exercise of remedies provided in Article XIII, and the giving of consents to supplemental resolutions when required by Section 15.02 (exclusive of those matters referred to in the proviso thereof), and such consent shall be deemed to constitute the consent of the Registered Owners of all of those Bonds which are secured by such Credit Facility.

Section 15.04.   Supplemental Resolutions Part of Resolution

.  Any supplemental resolution adopted in accordance with the provisions of this Article and approved in accordance with applicable law shall thereafter form a part of this Resolution, and all of the terms and conditions contained in any such supplemental resolution shall be part of the terms and conditions of this Resolution for any and all purposes. Express reference to any supplemental resolution may be made in the text of any Bonds issued after its adoption, if deemed necessary or desirable by the Issuer.

Section 15.05.   Notice of Supplemental Resolutions

.  The Issuer shall give to the Rating Agencies advance notice of the proposed adoption of any supplemental resolution, which notice shall include the substantial form of such supplemental resolution.

ARTICLE XVI
REGISTRAR AND PAYING AGENT

Section 16.01.   Notice by Registrar and Paying Agent if Default Occurs

.  The Registrar and Paying Agent shall not be required to take notice or be deemed to have notice of any default under this Resolution except failure by the Issuer to cause to be made any of the payments to the Registrar and Paying Agent required to be made by this Resolution unless the Registrar and Paying Agent shall be specifically notified in writing of such default by the Issuer or by the Holders of at least twenty-five percent (25%) in aggregate principal amount of all Bonds then Outstanding, and all notices or other instruments required by this Resolution to be delivered to the Registrar and Paying Agent must, in order to be effective, be delivered at a corporate trust office of the Registrar and Paying Agent, and in the absence of such notice so delivered, the Registrar and Paying Agent may conclusively assume there is no default except as aforesaid.

If a default occurs of which the Registrar and Paying Agent is by this Section 16.01 required to take notice or if notice of default be given as provided in the preceding paragraph, then the Registrar and Paying Agent shall give written notice thereof by mail to the Issuer, each provider of a Credit Facility any Reserve Product and the registered owners of all Bonds then Outstanding.

 

Section 16.02.   Registrar and Paying Agent: Appointment and Acceptance of Duties; Removal

.  The Issuer may appoint one or more additional Paying Agents for each Series of Bonds which may include the Registrar. Any such Paying Agent shall be a commercial bank or trust company organized under the laws of the United States of America or one of the States thereof. Each Paying Agent other than the Registrar and Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing and delivering to the Issuer and the Registrar and Paying Agent a written acceptance of this Resolution.

The Issuer may remove any Paying Agent or the Registrar and Paying Agent and any successors thereto, and may appoint a successor or successors thereto; provided that the Registrar and Paying Agent or any other such Paying Agent designated by the Issuer shall continue to function as such until the designation of a successor. The Registrar and Paying Agent and each other Paying Agent is hereby authorized to pay or redeem Bonds from money on deposit in the respective funds and accounts hereunder when duly presented to it for payment or redemption.

 

ARTICLE XVII
MISCELLANEOUS PROVISIONS

Section 17.01.   Limitation of Rights

.  With the exception of rights in this Resolution expressly conferred, nothing expressed or mentioned in or to be implied from this Resolution or the Bonds is intended or shall be construed to give to any person or company other than the parties hereto, the Registrar and Paying Agent, each provider of a Credit Facility, each provider of a Reserve Product and the Holders of the Bonds, any legal or equitable right, remedy or claim under or in respect to this Resolution or any covenants, conditions and provisions in this Resolution contained; this Resolution and all of the covenants, conditions and provisions of this Resolution being intended to be and being for the sole and exclusive benefit of the parties hereto, the Registrar and Paying Agent, each provider of a Credit Facility, each provider of a Reserve Product and the Holders of the Bonds as in this Resolution provided.

Each provider of a Credit Facility is an express third party beneficiary of this Resolution and is entitled to enforce this Resolution as if it were a party hereto to the extent provided in this Resolution.

 

Section 17.02.   Unclaimed Moneys

.  Any moneys deposited the Registrar and Paying Agent by the Issuer in accordance with the terms and covenants of this Resolution, in order to redeem or pay any Bond in accordance with the provisions of this Resolution, and remaining unclaimed by the registered owner of the Bond for four (4) years after the date fixed for redemption or of maturity, as the case may be, shall, if the Issuer is not at the time to the actual knowledge of the Registrar and Paying Agent in default with respect to any of the terms and conditions of this Resolution, be repaid by the Registrar and Paying Agent to the Issuer upon its written request therefor; and thereafter the registered owner of the Bond shall be entitled to look only to the Issuer for payment of such amount, provided, however, that the Registrar and Paying Agent, before being required to make any such repayment, shall, at the expense of the Issuer, mail to the registered owner of such Bond at its address, as the same shall last appear on the Bond Register, a notice to the effect that said moneys have not been so applied and that after the date named in said notice any unclaimed balance of said moneys then remaining shall be returned to the Issuer. If the Issuer makes arrangements satisfactory to the Registrar and Paying Agent to indemnify the Registrar and Paying Agent for any costs which it may incur due to the unavailability of moneys due to such investment, such moneys may be invested in accordance with Section 10.02. Investment income on any such unclaimed moneys received by the Registrar and Paying Agent shall be deposited as provided in Section 10.02 until the final maturity or redemption date of the Bonds. Any such income generated after such date shall be deemed to be unclaimed moneys of the type referred to in the first sentence of this section and shall be disposed of in accordance with such sentence. The Issuer must covenant and agree, as a condition to it receiving such funds, to indemnify and save the Registrar and Paying Agent harmless from any and all loss, costs, liability and expense suffered or incurred by the Registrar and Paying Agent by reason of having returned any such moneys to the Issuer as in this Resolution provided.

Section 17.03.   Action Required on Non-Business Day

.  Notwithstanding anything to the contrary in this Resolution, in the event that any payment, action or notice required by this Resolution is required or scheduled for a day which is not a Business Day, except as otherwise provided in this Resolution, or in a supplemental resolution or ordinance with respect to a Series of Bonds, such payment, action or notice shall take place on the next succeeding Business Day with the same effect as if made on the required or scheduled date, and no Event of Default shall exist solely because of the failure to make such payment, take such action or give such notice on such required or scheduled date.

Section 17.04.   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, 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 Bonds issued hereunder, which remaining covenants, agreements and provisions shall remain in full force and effect.

Section 17.05.   No Third-Party Beneficiaries

.  Except as herein otherwise expressly provided, nothing in this Resolution expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the parties hereto and the owners and holders of the Bonds issued under and secured by this Resolution, any right, remedy or claim, legal or equitable, under or by reason of this Resolution or any provision hereof this Resolution and all its provisions being intended to be and being for the sole and exclusive benefit of the parties hereto and the owners and holders from time to time of the Bonds issued hereunder.

Section 17.06.   Controlling Law: Members of Issuer Not Liable

.  All covenants, stipulations, obligations and agreements of the Issuer contained in this Resolution shall be deemed to be covenants, stipulations, obligations and agreements of the Issuer to the full extent authorized by the Act and provided by the Constitution and laws of the State of Florida. No covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent, officer or employee of the Issuer or the Governing Body of the Issuer in his or her individual capacity, and neither the members or officers of the Governing Body of the Issuer nor any official executing the Bonds shall be liable personally on the Bonds or this Resolution or shall be subject to any personal liability or accountability by reason of the issuance or the execution by the Issuer or such members thereof.

Section 17.07.   Repeal of Inconsistent Resolutions

.  All resolutions in conflict with the express terms hereof are hereby repealed.

Section 17.08.   Effective Date

.  This Resolution shall take effect immediately upon its passage in the manner provided by law.

PASSED AND CERTIFIED AS TO PASSAGE this 8th day of December, 2008.

CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA

 

By                                                                   
      Mayor

(SEAL)

Attested:

 

By:                                                      
            City Clerk

Approved as to Form and Correctness:


By:                                                      
            City Attorney

 


EXHIBIT “A”

2008 Project

The 2008 Project shall consist of one or more city-wide capital projects including those described below and as otherwise may be designated and/or amended from time to time by supplemental resolution of the Issuer (any material change in the projects listed below being subject to a No Adverse Effect Opinion):

Improvements to the Issuer’s Electric Transmission System and Related Costs.

 


EXHIBIT “B”

(Form of Current Interest Bond)

REGISTERED

 

REGISTERED

No. R-_____

 

$___________

 

 

 

UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF LEESBURG
SUBORDINATE CAPITAL IMPROVEMENT 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 ____________________________________, ____________, 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 ____________ 1, ____.  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 Public Service Tax, the Sales Tax and Guaranteed Entitlement (the “Pledged Funds”) pursuant to the terms and subject to the conditions described in Resolution No. ________, adopted by the Issuer on December 8, 2008, as amended (the “Resolution”), and certain other funds and investment earnings thereon, all in the manner and to the extent provided in the Resolution and as more particularly described below. The lien of this Bond and the interest thereon on the Pledged Funds is subordinate to the lien thereon of the Issuer's Outstanding Capital Improvement Revenue Bonds, Series 2004 (the "2004 Bonds").  The lien of the 2004 Bonds on the revenues derived from the Sales Tax and the Guaranteed Entitlement is subordinate to the lien thereon of the Issuer's Capital Improvement Revenue Bonds, Series 1999.  The lien of this Bond on the Pledged Funds is on parity with the lien thereon of the Parity Obligations.  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, 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 tangible personal property of or in the Issuer, but shall constitute a lien only on the Pledged Revenues and certain other funds and investment earnings thereon, all in the manner and to the extent provided in the 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 of the repair of and acquisition and construction of additions, extensions and improvements to certain citywide capital projects of the Issuer, 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, Chapter 166, Florida Statutes, and Parts II and VI of Chapter 218, Florida Statutes. 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 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.

[PROVISION FOR VARIABLE RATE BONDS]

The form of the Current Interest Bonds may be modified as appropriate by supplemental ordinance or resolution to provide for a variable interest rate calculated as provided by supplemental ordinance or resolution pertaining to each Series of Bonds, provided that in no event shall the interest rate calculated in accordance with such formula or any accreted interest exceed the maximum rate permitted by law.

[PROVISION FOR DEMAND BONDS]

The form of the Current Interest Bonds may be modified as appropriate by supplemental resolution or ordinance of the Issuer for each series of Bonds prior to the sale thereof, to provide that the holder of any such Bond may demand from the Issuer payment of principal and interest on his Bond within a specified number of calendar days after delivering notice to a remarketing or other agent for the Issuer and providing a copy of the notice and tendering the Bonds to a named tender or other agent for the Issuer.

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 ____________, ____.

(SEAL)

CITY OF LEESBURG, FLORIDA

 

 

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.

[Name of Registrar]

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:

 

                                                           

 

                                                                
Registered Owner

 

 

 

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 Exchange 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.

 

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.