Loading...
R-89-644 . RESOLUTION NO. 644 . F&L DRAFT OF 10/23/89 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLERMONT, FLORIDA, PROVIDING FOR THE ACQUI- SITION, CONSTRUCTION AND EQUIPPING OF CERTAIN CAPITAL PROJECTS FOR THE CITY; AUTHORIZING THE ISSUANCE BY THE CITY OF NOT EXCEEDING $2,070,000 IN AGGREGATE PRINCIPAL AMOUNT OF SALES TAX REVENUE BONDS, SERIES 1989, TO FINANCE THE COST OF SUCH PROJECTS AND PAY THE COSTS OF ISSUANCE OF SUCH BONDS; PLEDGING TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTER- EST ON SUCH BONDS THE MONEYS RECEIVED BY THE CITY FROM THE ONE-CENT DISCRETIONARY INFRA- STRUCTURE SALES SURTAX AND FROM THE LOCAL GOVERNMENT HALF-CENT SALES TAX, ALL MONEYS ON DEPOSIT IN AND INVESTMENTS HELD FOR THE CREDIT OF CERTAIN FUNDS CREATED HEREUNDER AND THE EARNINGS ON ,SUCH INVESTMENTS; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE. section 1.01 section 1. 02 Section 1. 03 section 1.04 section 1. 05 section 2.01 section 2.02 section 2.03 section 2.04 section 2.05 section 2.06 section 2.07 Section 2.08 section 2.09 section 2.10 section 3.01 section 3.02 section 3.03 section 3.04 section 3.05 e e TABLE OF CONTENTS PAGE ARTICLE I GENERAL Definitions ................................. 1 Authority for Resolution .................... 12 Resolution to Constitute Contract ........... 12 Findings ..................................... 12 Initial Project Authorized .................. 13 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS Authorization of Bonds ...................... 13 Authorization and Description of Series 1989 Bonds ................... 14 Application of Series 1989 Bond Proceeds .......................... 15 Execution of Bonds .......................... 15 Authentication .............................. 16 Temporary Bonds ............................. 16 Bonds Mutilated, Destroyed Stolen or Lost ......................... 16 Interchangeability, Negotiability and Transfer ........................... 17 Coupon Bonds ................................ 19 Form of Bonds ............................... 19 ARTICLE III REDEMPTION OF BONDS Privilege of Redemption ..................... 26 Selection of Bonds to be Redeemed ........... 26 Notice of Redemption ........................ 26 Redemption of Portions of Bonds ............. 28 Payment of Redeemed Bonds ................... 28 ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF section 4.01 Section 4.02 section 4.03 section 4.04 section 4.05 Bonds not to be Indebtedness of Issuer ...... 29 Security for Bonds .......................... 29 Construction Fund ........................... 29 Funds and Accounts .......................... 31 Flow of Funds ............................... 31 -i- section 4.06 Section 4.07 Section 4.08 section 5.01 section 5.02 section 5.03 section 5.04 section 5.05 Section 5.06 section 5.07 section 5.08 section 5.09 section 5.10 section 5.11 section 5.12 section 5.13 section 6.01 section 6.02 section 6.03 section 6.04 section 6.05 section 6.06 section 6.07 section 7.01 section 7.02 Section 7.03 e e Reba te Fund ................................. 38 Investments ................................. 39 Separate Accounts ........................... 40 ARTICLE V SUBORDINATED INDEBTEDNESS, ADDITIONAL BONDS AND COVENANTS OF ISSUER Subordinated Indebtedness ................... 40 Issuance of Additional Bonds ................ 40 Bond Anticipation Notes ..................... 42 Accession of Subordinated Indebtedness to Parity Status with Bonds ............ 42 Books and Records ........................... 43 Annual Audit................................ 43 No Impairment ............................... 44 Collection of Half-Cent Sales Tax and Infrastructure Sales Surtax............. 44 Release of Half-Cent Sales Tax..........:.... 44 Special Covenants Relating to Reserve Account Insurance Policy or Reserve Account Letter of Credit................ 45 Covenants with Credit Banks and Insurers .... 45 Federal Income Tax Covenants; Taxable Bonds .......................... 46 MBIA as Insurer.............................. 46 ARTICLE VI DEFAULTS AND REMEDIES Events of Default ........................... 47 Remed i e s .................................... 48 Directions to Trustee as to Remedial Proceedings ................... 49 Remedies Cumulative ......................... 49 Waiver of Default ........................... 49 Application of Moneys After Default ......... 49 Control by Insurer or Credit Bank ........... 50 ARTICLE VII SUPPLEMENTAL RESOLUTIONS Supplemental Resolution without Bondholders' Consent ................... 51 Supplemental Resolution with Bondholders', Insurer's and Credit Bank's Consent..... 52 Amendment with Consent of Insurer and/or Credit Bank Only......... 54 -ii- section 8.01 section 8.02 section 8.03 section 8.04 section 8.05 section 8.06 section 8.07 section 8.08 section 8.09 section 8.10 section 8.11 e e ARTICLE VIII MISCELLANEOUS Defeasance .................................. 54 capital Appreciation Bonds .................. 56 General Authority........................... 56 No Personal Liability....................... 57 No Third Party Beneficiaries ................ 57 Sale of Bonds ............................... 57 Severability of Invalid provisions .......... 57 Validation Authorized ....................... 57 Repeal of Inconsistent Resolutions .......... 58 Table of Contents and Headings not Part Hereof ........................ 58 Effective Date .............................. 58 -iii- e e BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CLERMONT, FLORIDA: ARTICLE I GENERAL SECTION 1.01. Definitions. When used in this Resolu- tion, the following terms shall have the following meanings, un- less the context clearly otherwise requires: "Accreted Value" shall mean, as of any date of computa- tion with respect to any capital Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond from the date of deliv- ery to the original purchasers thereof to the Interest Date next preceding the date of computation or the date of computation if an Interest Date, such interest to accrue at a rate not exceeding the legal rate, compounded semiannually, plus, with respect to matters related to the payment upon redemption or acceleration of the capital Appreciation Bonds, if such date of computation shall not be an Interest Date, a portion of the difference between the Accreted Value as of the immediately preceding Interest Date and the Accreted Value as of the immediately succeeding Interest Date, calculated based on the assumption that Accreted Value accrues during any semiannual period in equal daily amounts on the basis of a 360-day year. "Act" shall mean Chapter 166, Part II, Florida Statutes, as amended, Chapter 218, Part VI, Florida Statutes, as amended, Chapter 212, Part I, Florida Statutes, as amended, and other applicable provisions of law. "Additional Bonds" shall mean the obligations issued at any time under the provisions of Section 5.02 hereof on a parity with the Series 1989 Bonds. "Additional Project" shall mean the acquisition, con- struction, erection, renovation or reconstruction of capital im- provements and shall include all property rights, appurtenances, easements, rights of way, franchises and equipment relating thereto and deemed necessary or convenient for the acquisition, construction, erection, renovation, reconstruction, or the opera- tion thereof which shall be authorized by the Act and financed in whole or in part with the proceeds of Additional Bonds. "Amortization Installment" shall mean a mandatory redemp- tion amount designated as such by Supplemental Resolution and established with respect to any Term Bonds. -1- e e "Annual Audit" shall mean the annual audit prepared pursuant to the requirements of section 5.06 hereof. "Authorized Depository" shall mean the State Board of Administration of Florida or a bank or trust company in the State which is eligible under the laws of the State to receive funds of the Issuer. "Authorized Investments" shall mean any of the following which shall be authorized from time to time by applicable laws of the State for deposit or purchase by the Issuer for the invest- ment of its funds: (1) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the united states of America and stripped and zero coupon obligations), or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America. (2) Bonds, debentures or notes or other evidences of indebtedness payable in cash issued by anyone or a combination of any of the following federal agencies whose obligations represent full faith and credit of the united States of America: Export Import Bank of the united States, Federal Financing Bank, Farmers Home Administration, Federal Housing Administration, Maritime Administration, Public Housing Authority and Government National Mortgage Association. (3) certificates of deposit properly secured at all times by collateral security described in either or both of para- graphs (1) and (2) of this definition and issued by commercial banks, savings and loan associations or mutual savings banks chartered by the State or the united States of America. The col- lateral must be held by a third party and the Bondholders must have a perfected first security interest in the collateral. (4) The following investments fully insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation: (A) certificates of deposit, (B) savings accounts, (C) deposit accounts, or (D) money market deposits of a bank, savings and loan association or mutual sav- ings bank. (5) Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's Investors Service or "A-1" or better by standard & Poor's corporation. (6) Subject to the prior written approval of the Insur- er, written repurchase agreements with any bank, savings institu- tion or trust company which is insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance ~ -2- e e corporation, or with any broker-dealer with retail customers which falls under Securities Investors Protection corporation protection, provided that such repurchase agreements are fully secured by collateral described in (1) above or obligations of any agency or instrumentality of the united States of America, and provided further that (A) such collateral is held by a bank or trust company chosen by the Issuer which has no interest in the repurchase agreement during the term of such repurchase agreement, (B) such collateral is not subject to liens or claims of third parties, (C) such collateral has a market value (deter- mined at least once every 30 days) at least equal to the amount invested in the repurchase agreement, (D) the entity holding the collateral has a perfected first security interest in the collat- eral for the benefit of the Bondholders, (E) the agreement shall be for a term not longer than 270 days and (F) the failure to maintain such collateral at the level required in (C) above will require the entity holding the collateral to liquidate the col- lateral. (7) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by Stand- ard & Poor's corporation of AAAm-G, AAAm, or AAm. (8) units of participation in the Local Government Sur- plus Funds Trust Fund established pursuant to Part IV, Chapter 218, Florida Statutes, as amended, or any similar common trust fund which is established pursuant to State law as a legal deposi- tory of public moneys. . (9) Obligations of state or local government municipal bond issuers that are rated in one of the two highest rating cate- gories by Moody's Investors Service and Standard & Poor's Corpora- tion. (10) Subject to the prior written approval of the Insurer, such other obligations as shall be permitted to be legal invest- ments of the Issuer by the laws of the State. Rating categories when referred to herein shall be with- out regard to gradations within such categories, such as "plus" or "minus." "Authorized Issuer Officer" for the performance on the behalf of the Issuer of any act of the Issuer or the execution of any instrument on behalf of the Issuer shall mean any person authorized by resolution or certificate of the Issuer to perform such act or sign such document. -3- e e "Bond Amortization Account" shall mean the separate account of that name in the Debt Service Fund established pursuant to Section 4.04 hereof. "Bond Counsel" shall mean any attorney at law or firm of attorneys, of nationally recognized standing in matters per- taining to the federal tax exemption of interest on obligations issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the united States of America. "Bond Insurance Policy" shall mean the municipal bond new issue insurance policy or policies issued by an Insurer guar- anteeing the payment of the principal of and interest on any por- tion of the Bonds. "Bond Year" pertaining to any Series shall mean the an- nual period commencing each year on the day after the day of the year on which the Bonds of such Series mature, whether or not Bonds of such Series mature in every year or in the Bond Year under consideration (except that the first Bond Year for every Series shall commence on the date of issuance of the Bonds of such Series), and ending on the next succeeding day of the year which shall be such day of the year on which the Bonds of such Series mature. Each Bond Year shall be designated with the number of the calendar year in which such Bond Year ends. "Bondholder" or "Holder" or "holder" shall mean any Person who shall be the registered owner of any outstanding Bond or Bonds according to the registration books of the Issuer. "Bonds" shall mean the Series 1989 Bonds, together with any Additional Bonds and any Subordinated Indebtedness which acceeds to the status of Bonds pursuant to section 5.04 hereof. "Capital Appreciation Bonds" shall mean those Bonds so designated by Supplemental Resolution, which may be either serial Bonds or Term Bonds and which shall bear interest payable at maturity or redemption. In the case of Capital Appreciation Bonds that are convertible to Bonds with interest payable prior to maturity or prior to redemption of such Bonds, such Bonds shall be considered capital Appreciation Bonds only during the period of time prior to such conversion. "Clerk" shall mean the City Clerk of of the Issuer or such other person as may be duly authorized by the Issuer to act on his or her behalf. "Code" shall mean the united states Internal Revenue Code of 1986, as the same may be amended from time to time, and the regulations thereunder, whether proposed, temporary or -4- ~ . e e final, promulgated by the Department of the Treasury, Internal Revenue Service, and all other promulgations of said service pertaining thereto. "Construction Fund" shall mean the Construction Fund established pursuant to section 4.03 hereof. "Cost" when used in connection with a Project, shall mean (1) the Issuer's cost of physical construction; (2) costs of acquisition by or for the Issuer of such Project: (3) costs of land and interests therein and the cost of the Issuer incidental to such acquisition: (4) the cost of any indemnity and surety bonds and premiums for insurance during construction; (5) all interest due to be paid on the Bonds and other obligations relat- ing to the Project during the construction period of such Project and for a reasonable period thereafter; (6) engineering, legal and other consultant fees and expenses; (7) costs and expenses incidental to the issuance of the Bonds including bond insurance premium, rating agency fees and the fees and expenses of any audi- tors, Paying Agent, Registrar, Credit Bank or depository; (8) payments, when due (whether at the maturity of principal or the due date of interest or upon redemption) on any indebtedness of the Issuer (other than the Bonds) incurred for such Project; (9) costs of machinery or equipment required by the Issuer for the commencement of operation of such Project; and (10) any other costs properly attributable to the issuance of the Bonds, and such construction or acquisition, as determined by generally accepted accounting principles and shall include reimbursement to the Issuer for any such items of Cost heretofore paid by the Issuer. Any Supplemental Resolution may provide for additional items to be included in the aforesaid Costs. "Coupon Bonds" shall mean any Bonds the interest payable on which shall be represented by bearer coupons attached thereto, and the interest on which Bonds shall be payable only upon the presentation and surrender of such coupons to the Paying Agent as they severally fall due. "Credit Bank" shall mean as to any particular Series of Bonds, the Person (other than an Insurer) providing a letter of credit, a line of credit or another credit or liquidity enhance- ment facility, as designated in the Supplemental Resolution pro- viding for the issuance of such Bonds. "Credit Facility" shall mean as to any particular Ser- ies of Bonds, a letter of credit, a line of credit or another credit or liquidity enhancement facility (other than an insurance policy issued by an Insurer), as approved in the Supplemental Resolution providing for the issuance of such Bonds. -5- e e "Debt Service Fund" shall mean the Debt Service Fund established pursuant to section 4.04 hereof. "Debt Service Requirement" for any Bond Year shall mean the sum of: (1) The aggregate amount required to pay the interest becoming due on the Bonds, other than capital Appreciation Bonds, during such Bond Year, except to the extent that such interest shall have been provided by payments into the Interest Account out of Bond proceeds or other sources for a specified period of time. For purposes of this definition, the interest due on any such Bonds which shall have a variable rate of interest shall be assumed to be the greater of (a) 110% of the daily average inter- est rate on such Variable Rate Bonds during the 12 months ending with the month preceding the date of calculation, or such shorter period that such Bonds shall have been outstanding, or (b) the actual rate of interest borne by such Variable Rate Bonds on the date of calculation. (2) The aggregate amount required to pay the principal becoming due on the Bonds, other than Capital Appreciation Bonds, for such Bond Year. For purposes of this definition: (a) the stated maturity date of any Term Bonds shall be disregarded and the principal of such Term Bonds shall be deemed to be due in the Bond Years and in the amounts of the Amortization Installments applicable to such Term Bonds; and (b) the principal amount of any single maturity of Term Bonds for which the Issuer shall have established no Amortization Installments shall be deemed to be due in the Bond Years and in such amounts as shall provide for the amortization of such principal amount over a term equal to the number of years such Term Bonds shall be outstanding to such maturity and in equal annual installments of combined prin- cipal and interest: provided, however, that if the Issuer has employed a Credit Facility in connection with any such Term Bonds having no Amortization Installments the amortization of such Term Bonds shall be deemed to correspond to the applicable terms of such Credit Facility. (3) The aggregate amount required to pay the Accreted Value due on any Capital Appreciation Bonds maturing in such Bond Year. "Federal Securities" shall mean direct obligations of the united States of America and obligations the principal of and interest on which are unconditionally guaranteed by the united states of America, none of which permit redemption prior to matur- ity at the option of the obligor. Federal Securities shall include any certificates or any other evidences of an ownership -6- e e interest in the aforementioned obligations or in specified por- tions thereof (which may consist of specified portions of the interest thereon) . "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing through the next succeeding September 30, or such other period as may be prescribed by law. "Governing Body" shall mean the City Council of the Issuer or its successor in function. "Half-Cent Sales Tax" shall mean the 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 Chapter 218, Part VI, Florida Statutes, as amended. "Half-Cent Sales Tax Fund" shall mean the Half-Cent Sales Tax Fund established pursuant to section 4.04 hereof. "Infrastructure Sales Surtax" shall mean the proceeds derived by the Issuer from the levy and collection of the one- cent discretionary infrastructure sales surtax pursuant to Chapter 212, Part I, Florida Statutes, as amended. "Initial Project" shall mean the acquisition, construc- tion, and equipping of certain capital projects for the Issuer, including the development of a recreational park, the construc- tion of a public works complex, the expansion or relocation of City Hall and the expansion of the Police station, including, without limitation, site preparation and equipment deemed neces- sary or convenient for the operation thereof, as more particu- larly described in and in accordance with certain plans on file or to be on file with the Issuer, with such changes, deletions, additions or modifications to the enumerated improvements, equip- ment and facilities, or such other improvements as shall be designated and approved by Supplemental Resolution in accordance with the Act. "Insurer" shall mean such Person as shall be in the business of insuring or guaranteeing the payment of principal of and interest on municipal securities and whose credit is such that, at the time of any action or consent required or permitted by the Insurer pursuant to the terms of this Resolution, all muni- cipal securities insured or guaranteed by it are then rated, because of such insurance or guarantee, in one of the two most secure grades by either Moody's Investors Service or Standard and Poor's corporation, and with respect to any Series of Bonds, the Insurer which shall have insured or guaranteed payment of the principal of or interest on such Bonds. -7- e e "Interest Account" shall mean the separate account of that name in the Debt Service Fund established pursuant to section 4.04 hereof. "Interest Date" shall mean such date or dates for the paYment of interest on a Series of Bonds as shall be provided by Supplemental Resolution. "Issuer" shall mean the City of Clermont, Florida. "Maximum Debt Service Requirement" shall mean, as of any particular date of calculation, the greatest annual Debt Service Requirement for the Bonds for the then current or any future Bond Year. "Maximum Interest Rate" shall mean, with respect to any particular Variable Rate Bonds, a numerical rate of interest, which shall be set forth in the Supplemental Resolution delinea- ting the details of such Bonds, that shall be the maximum rate of interest such Bonds may at any time bear in the future in accord- ance with the terms of such Supplemental Resolution. "Mayor" shall mean the Mayor of the Issuer or such other person as may be duly authorized by the Issuer to act on his or her behalf. "Moody's Investors Service" shall mean Moody's Investors Service, the nationally recognized securities rating firm, and any successor or successors thereto; and if such corporation shall be dissolved or liquidated or shall no longer perform securities rating functions, shall mean any other nationally recognized securities rating firm designated by the Issuer and approved by the Insurer and/or the Credit Bank, as applicable. "Outstanding" shall mean all Bonds theretofore and thereupon being authenticated and delivered, except (1) any Bond in lieu of which another Bond or other Bonds have been issued under an agreement to replace lost, mutilated or destroyed Bonds, (2) any Bond surrendered by the Holder thereof in exchange for another Bond or other Bonds under Sections 2.06 and 2.08 hereof, (3) Bonds deemed to have been paid pursuant to section 8.01 hereof, and (4) Bonds cancelled after purchase in the open market or be- cause of payment at or redemption prior to maturity. "Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant to Supplemental Resolution and its suc- cessors or assigns, and any other Person which may at any time be substituted in its place pursuant to Supplemental Resolution. -8- e e "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. "Pledged Funds" shall mean the Infrastructure Sales Surtax, the Half-Cent Sales Tax and, until applied in accordance with the provisions of this Resolution, the proceeds of the Bonds and all moneys, including investments thereof, in the funds and accounts established hereunder, other than the Unrestricted Reve- nue Account and the Rebate Fund. "Prerefunded obligations" shall mean any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (1) which are (a) not callable prior to maturity or (b) as to which irrevocable instructions have been given to the fiduciary for such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemp- tion on the date or dates specified in such instructions, (2) which are fully secured as to principal, redemption premium, if any, and interest by a fund consisting only of cash or Federal Securities, secured in the manner set forth in Section 8.01 here- of, which fund may be applied only to the payment of such princi- pal of, redemption premium, if any, and interest on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as the case may be, (3) as to which the principal of and interest on the Federal Securities deposited in such fund with any cash on deposit in such fund, are sufficient, as verified by an independent certified public accountant, to pay principal of, redemption premium, if any, and interest on the bonds or other obligations on the maturity date or dates thereof or on the redemp- tion date or dates specified in such irrevocable instructions, and (4) which are rated in the highest rating category of Standard & Poor's corporation and of Moody's Investors Service. "Principal Account" shall mean the separate account of that name in the Debt Service Fund established pursuant to Section 4.04 hereof. "Project" shall mean the Initial Project and any Addi- tional Project. "Rebate Fund" shall mean the Rebate Fund established pursuant to section 4.04 hereof. "Redemption Price" shall mean, with respect to any Bond or portion thereof, the principal amount or portion thereof, plus the applicable premium, if any, payable upon redemption thereof pursuant to such Bond or Supplemental Resolution. -9- e e "Registrar" shall mean any registrar for the Bonds ap- pointed by or pursuant to Supplemental Resolution and its succes- sors and assigns, and any other Person which may at any time be substituted in its place pursuant to Supplemental Resolution. "Reserve Account" shall mean the separate account of that name in the Debt Service Fund established pursuant to Section 4.04 hereof. "Reserve Account Insurance Policy" shall mean a insur- ance policy deposited in the Reserve Account in lieu of or in partial substitution for cash on deposit therein pursuant to Sec- tion 4.05(A)(4). "Reserve Account Letter of Credit" shall mean a Credit Facility (other than a Reserve Account Insurance Policy) issued by any bank or national banking association, insurance company or other financial institution and then on deposit in the Reserve Account in lieu of or in partial substitution for cash on deposit therein pursuant to Section 4.05(A) (4) hereof. "Reserve Account Requirement" shall mean, as of any date of calculation, an amount equal to the lesser of (1) the Maximum Debt Service Requirement, (2) 125% of the average annual Debt Service Requirement, or (3) 10% of the proceeds of all Outstand- ing Bonds. In computing the Reserve Account Requirement, the interest rate on Variable Rate Bonds shall be assumed to be the lesser of (a) the 30-year Revenue Bond Index published by The Bond Buyer no more than two weeks prior to the date of sale of such Variable Rate Bonds, (b) the Maximum Interest Rate on such Bonds, or (c) the maximum rate of interest allowed by applicable law. "Resolution" and "this Resolution" shall mean this in- strument, as the same may from time to time be amended, modified or supplemented by any and all Supplemental Resolutions. "Restricted Revenue Account" shall mean the separate account of that name in the Revenue Fund established pursuant to section 4.04 hereof. "Revenue Fund" shall mean the Revenue Fund established pursuant to section 4.04 hereof. "Securities" shall mean Federal Securities and Prere- funded obligations. "Serial Bonds" shall mean all of the Bonds other than the Term Bonds. -10- e e "Series" shall mean all the Bonds delivered on original issuance in a simultaneous transaction and identified pursuant to sections 2.01 and 2.02 hereof or in a Supplemental Resolution authorizing the issuance by the Issuer of such Bonds as a separate Series, regardless of variations in maturity, interest rate, Amor- tization Installments or other provisions. "Series 1989 Bonds" shall mean the Issuer's Sales Tax Revenue Bonds, Series 1989, authorized pursuant to section 2.02 hereof. "Standard and Poor's Corporation" shall mean Standard and Poor's corporation, the nationally recognized securities rating firm, and any successor and successors thereto; and if such corporation shall be dissolved or liquidated or shall no longer perform securities rating functions, shall mean any other nationally recognized securities rating firm designated by the Issuer and approved by the Insurer and/or the Credit Bank, as applicable. "State" shall mean the State of Florida. "Subordinated Indebtedness" shall mean that indebted- ness of the Issuer, subordinate and junior to the Bonds, issued in accordance with the provisions of Section 5.01 hereof and any Variable Rate Bonds which become Subordinated Indebtedness in ac- cordance with section 5.02 hereof. "Supplemental Resolution" shall mean any resolution of the Issuer amending or supplementing this Resolution, adopted and becoming effective prior to the issuance of the Series 1989 Bonds or in accordance with the terms of Sections 7.01, 7.02 or 7.03 hereof. "Taxable Bond" shall mean any Bond which states, in the body thereof, that the interest income thereon is includable in the gross income of the Holder thereof for federal income taxation purposes. "Term Bonds" shall mean those Bonds which shall be desig- nated as Term Bonds hereby or by Supplemental Resolution and which are subject to mandatory redemption by Amortization Installments. "Unrestricted Revenue Account" shall mean the separate account of that name in the Revenue Fund established pursuant to Section 4.04 hereof. "Variable Rate Bonds" shall mean Bonds issued with a variable, adjustable, convertible or other interest rate which at the date of issue is not fixed as one or more stated percentages for the entire term of such Bonds. -11- e e The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar terms, shall refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. Words importing the singular number include the plural number, and vice versa. SECTION 1.02. Authority for Resolution. This Resolu- tion is adopted pursuant to the provisions of the Act. SECTION 1.03. Resolution to Constitute Contract. In consideration of the purchase and acceptance of any or all of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be deemed to be and shall constitute a contract between the Issuer and the Holders from time to time of the Bonds and shall be a part of the contract of the Issuer with any Credit Bank and any Insurer. The pledge made in this Resolution and the provisions, covenants and agree- ments herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Holders of any and all of the Bonds and for the benefit, protection and security of any Credit Bank and any Insurer. All of the Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in or pursuant to this Resolution. SECTION 1.04. Findinqs. It is hereby ascertained, determined and declared as follows: (A) The Issuer deems it necessary, desirable and in the best interests of the Issuer that the Initial Project be ac- quired and constructed. (B) The Cost of the Initial Project shall be financed with the proceeds of the Series 1989 Bonds. (C) The Issuer deems it necessary, desirable and in the best interest of the Issuer that the Pledged Funds be pledged to the payment of the principal of and interest on the Bonds. (D) The estimated Pledged Funds will be sufficient to pay the principal of and interest on the Series 1989 Bonds, as the same become due, and all other payments provided for in this Resolution. (E) The principal of and interest on the Bonds and all other payments provided for in this Resolution will be paid solely from the sources herein provided in accordance with the terms -12- e e hereof; and no ad valorem taxing power of the Issuer will ever be exercised nor will any Holder of any Bond or any Credit Bank or any Insurer have the right to compel the exercise of such ad valorem taxing power to pay the principal of or interest on the Bonds or to make any other payments provided for in this Resolu- tion, and the Bonds shall not constitute a lien upon any property of the Issuer or situated within its territorial limits, except the Pledged Funds. SECTION 1.05. Initial Project Authorized. The acquisi- tion and construction of the Initial Project in the manner herein provided is hereby authorized. ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS SECTION 2.01. Authorization of Bonds. The Issuer here- by authorizes the issuance of Bonds of the Issuer to be desig- nated as "City of Clermont, Florida, Sales Tax Revenue Bonds," which may be issued in one or more Series as hereinafter pro- vided. The aggregate principal amount of the Bonds which may be executed and delivered under this Resolution is not limited except as may hereafter be provided by Supplemental Resolution or as limited by the Act or by other applicable law. The Bonds may, if and when authorized by the Issuer pursuant to this Resolution or Supplemental Resolution, be issued in one or more Series, with such further appropriate particular designations added to or incorporated in such title for the Bonds of any particular Series as the Issuer may determine and as may be necessary to distinguish such Bonds from the Bonds of any other Series. Each Bond shall bear upon its face the designation so determined for the Series to which it belongs. The Bonds shall be issued for such purpose or purposes; shall bear interest at such rate or rates not exceeding the maxi- mum rate permitted by law; and shall be payable in lawful money of the united States of America on such dates; all as determined by this Resolution or by Supplemental Resolution. From and after any maturity date of any of the Bonds (deposit of moneys and/or Securities for the payment of the principal and interest on such Bonds having been made by the Issuer with the Paying Agents), notwithstanding that any of such Bonds shall not have been sur- rendered for cancellation, no further interest shall accrue upon the principal or upon the interest which shall have accrued and shall then be due on such date, and such Bonds shall cease to be entitled to any lien, benefit or security under this Resolution, -13- e e and the Holders shall have no rights in respect of such Bonds except to receive payment of such principal and unpaid interest accrued to the maturity date. The Bonds shall be issued in such denomination or denom- inations and such form, whether coupon or registered; shall be dated such date or dates; shall bear such numbers; shall be pay- able at such place or places; shall contain such redemption pro- visions; shall have such Paying Agents and Registrars; shall ma- ture in such years and amounts; and the proceeds shall be used in such manner all as determined by this Resolution or by Supple- mental Resolution. The Issuer may issue Bonds which may be se- cured by a Credit Facility or by a Bond Insurance Policy of an Insurer all as shall be determined by this Resolution or by Sup- plemental Resolution. SECTION 2.02. Authorization and Description of Series 1989 Bonds. A Series of Bonds entitled to the benefit, protec- tion and security of this Resolution is hereby authorized to be issued in an aggregate principal amount not to exceed $2,070,000 for the principal purpose of financing the cost of acquiring and constructing the Initial Project and paying certain costs of issuance incurred with respect to such Series. Such Series shall be designated as, and shall be distinguished from the Bonds of all other Series by the title "City of Clermont, Florida, Sales Tax Revenue Bonds, Series 1989," provided that the Issuer may change such designation in the event the Series 1989 Bonds are not issued in calendar year 1989. The Series 1989 Bonds shall be dated as of the first day of the month in which occurs the delivery of the Series 1989 Bonds to the purchaser or purchasers thereof or such other date as may be set forth by Supplemental Resolution; shall be issued as fully registered Bonds; and shall be numbered consecutively from one upward in order of maturity preceded by the letter "R;" shall be in such denominations and shall bear interest at a rate or rates not exceeding the maximum rate permitted by law (calcu- lated on the basis of a 360-day year of twelve 30-day months), payable in such manner and on such dates; shall consist of such amounts of Serial Bonds, Term Bonds, Variable Rate Bonds and Capital Appreciation Bonds, maturing in such amounts and in such years not exceeding fifteen (15) years from their date; shall be payable in such place or places; shall have such Paying Agents and Registrars; and shall contain such redemption provisions; all as the Issuer shall hereafter provide by Supplemental Resolution. The principal of or Redemption Price, if applicable, on the Series 1989 Bonds are payable upon presentation and surrender of the Series 1989 Bonds at the office of the Paying Agent. Interest payable on any Series 1989 Bond on any Interest Date will be paid by check or draft of the Paying Agent to the Holder -14- e e in whose name such Bond shall be registered at the close of busi- ness on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Inter- est Date, or, unless otherwise provided by Supplemental Resolu- tion, at the option of the Paying Agent, and at the request and expense of such Holder, by bank wire transfer for the account of such Holder. In the event the interest payable on any Series 1989 Bond is not punctually paid or duly provided for by the Issuer on such Interest Date, such defaulted interest will be paid to the Holder in whose name such Bond shall be registered at the close of business on a special record date for the payment of such defaulted interest as established by notice to such Holder, not less than ten (10) days preceding such special record date. All payments of principal of or Redemption Price, if applicable, and interest on the Series 1989 Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 2.03. Application of Series 1989 Bond Proceeds. Except as otherwise provided by Supplemental Resolution, the pro- ceeds derived from the sale of the Series 1989 Bonds, including accrued interest and premium, if any, shall, simultaneously with the delivery of the Series 1989 Bonds to the purchaser or pur- chasers thereof, be applied by the Issuer as follows: (A) Accrued interest shall be deposited in the Interest Account. (B) All costs and expenses in connection with the prep- aration, issuance and sale of the Series 1989 Bonds, including fees of financial advisors, consulting fees, legal fees, bond insurance premiums, reserve account surety bond premiums, print- ing fees, rating agency fees and all other similar costs shall be paid by the Issuer to the persons respectively entitled to receive the same. (C) The balance of the Series 1989 Bond proceeds shall be deposited in the Construction Fund. SECTION 2.04. Execution of Bonds. The Bonds shall be executed in the name , of the Issuer with the manual or facsimile signature of the Mayor and the official seal of the Issuer shall be imprinted thereon, attested and countersigned with the manual or facsimile signature of the Clerk. In case anyone or more of the officers who shall have signed or sealed any of the Bonds or whose facsimile signature shall appear thereon shall cease to be such officer of the Issuer before the Bonds so signed and sealed have been actually sold and delivered such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the -15- e e Issuer by such person who at the actual time of the execution of such Bond shall hold the proper office of the Issuer, although at the date of such Bond such person may not have held such office or may not have been so authorized. The Issuer may adopt and use for such purposes the facsimile signatures of any such persons who shall have held such offices at any time after the date of the adoption of this Resolution, notwithstanding that either or both shall have ceased to hold such office at the time the Bonds shall be actually sold and delivered. SECTION 2.05. Authentication. No Bond of any Series shall be secured hereunder or entitled to the benefit hereof or shall be valid or obligatory for any purpose unless there shall be manually endorsed on such Bond a certificate of authentication by the Registrar or such other entity as may be approved by the Issuer for such purpose. Such certificate on any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The form of such certificate shall be substantially in the form provided in section 2.10 hereof. SECTION 2.06. Temporary Bonds. until the definitive Bonds of any Series are prepared, the Issuer may execute, in the same manner as is provided in Section 2.04, and deliver, upon authentication by the Registrar pursuant to section 2.05 hereof, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof, one or more temporary Bonds substanti- ally of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations authorized by the Issuer by Supplemental Resolution, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Issuer, at its own expense, shall prepare and execute defini- tive Bonds, which shall be authenticated by the Registrar. Upon the surrender of such temporary Bonds for exchange, the Registrar, without charge to the Holder thereof, shall deliver in exchange therefor definitive Bonds, of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pur- suant to this Resolution. All temporary Bonds surrendered in exchange for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith cancelled by the Registrar. SECTION 2.07. Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and de- liver, and the Registrar shall authenticate, a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and substi- tution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of such Holder's -16- e e ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer or the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Bonds so surrendered or other- wise substituted shall be cancelled by the Registrar. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same or cause the Bond to be paid, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this Sec- tion 2.07 shall constitute original, additional contractual obli- gations on the part of the Issuer whether or not the lost, stolen or destroyed Bond be at any time found by anyone, and such dupli- cate Bond shall be entitled to equal and proportionate benefits and rights as to lien on the Pledged Funds to the same extent as all other Bonds issued hereunder and shall be entitled to the same benefits and security as the Bond so lost, stolen or destroyed. SECTION 2.08. Interchangeability, Negotiability and Transfer. Bonds, upon surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory to the Registrar, duly executed by the Holder thereof or such Holder's attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same Series and maturity of any other authorized denominations. The Bonds issued under this Resolution shall be and have all the qualities and incidents of negotiable instruments under the laws of the State of Florida, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain outstanding, the Issuer shall maintain and keep, at the office of the Registrar, books for the registration and transfer of the Bonds. Each Bond shall be transferable only upon the books of the Issuer, at the office of the Registrar, under such reasonable regulations as the Issuer may prescribe, by the Holder thereof in person or by such Holder's attorney duly authorized in writing upon surrender thereof together with a written instrument of trans- fer satisfactory to the Registrar duly executed and guaranteed by the Holder or such Holder's duly authorized attorney. Upon the transfer of any such Bond, the Issuer shall issue, and cause to be authenticated, in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and Series and matur- ity as the surrendered Bond. The Issuer, the Registrar and any Paying Agent or fiduciary of the Issuer may deem and treat the Person in whose name any outstanding Bond shall be registered upon the books of the Issuer as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of -17- e e receiving payment of, or on account of, the principal or Redemp- tion Price, if applicable, and interest on such Bond and for all other purposes, and all such payments so made to any such Holder or upon such Holder's order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid and neither the Issuer nor the Registrar nor any Paying Agent or other fiduciary of the Issuer shall be affected by any notice to the contrary. The Registrar, in any case where it is not also the Paying Agent in respect to any Series of Bonds, shall forthwith (a) following the fifteenth day prior to an interest payment date for such Series, (b) following the fifteenth day next preceding the date of first mailing of notice of redemption of any Bonds of such Series, and (c) at any other time as reasonably requested by the Paying Agent of such series, certify and furnish to such Pay- ing Agent the names, addresses and holdings of Bondholders and any other relevant information reflected in the registration books. Any Paying Agent of any fully registered Bond shall effect payment of interest on such Bonds by mailing a check or draft to the Holder entitled thereto or may, in lieu thereof, upon the request and at the expense of such Holder, transmit such payment by bank wire transfer for the account of such Holder. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Issuer shall execute and the Registrar shall authenticate and deliver such Bonds in accor- dance with the provisions of this Resolution. Execution of Bonds by the Mayor and the Clerk for purposes of exchanging, replacing or transferring Bonds may occur at the time of the original delivery of the Series of which such Bonds are a part. All Bonds surrendered in any such exchanges or transfers shall be cancelled by the Registrar. For every such exchange or transfer of Bonds, the Issuer or the Registrar may make a charge sufficient to reim- burse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or transfer. The Issuer and the Registrar shall not be obligated to make any such exchange or transfer of Bonds of any Series during the fif- teen (15) days next preceding an Interest Date on the Bonds of such Series (other than Capital Appreciation Bonds and Variable Rate Bonds), or, in the case of any proposed redemption of Bonds, during the fifteen (15) days next preceding the redemption date established for such Bonds. The Issuer may elect to issue any Bonds as uncertifi- cated registered public obligations (not represented by instru- ments), commonly known as book-entry obligations, provided it shall establish a system of registration therefor by Supplemental Resolution. -18- e e SECTION 2.09. Coupon Bonds. The Issuer, at its dis- cretion, may by Supplemental Resolution authorize the issuance of Coupon Bonds, registrable as to principal only or as to both prin- cipal and interest. Such Supplemental Resolution shall provide for the negotiability, transfer, interchangeability, denominations and form of such Bonds and coupons appertaining thereto. Coupon Bonds (other than Taxable Bonds) shall only be issued if an opin- ion of Bond Counsel is received to the effect that issuance of such Coupon Bonds will not adversely affect the exclusion of the interest payable on such Bonds from gross income for federal income tax purposes. SECTION 2.10. Form of Bonds. Except as otherwise pro- vided pursuant to section 2.09 hereof and except for Capital Ap- preciation Bonds and Variable Rate Bonds, the form of which shall be provided by Supplemental Resolution, the Bonds shall be in substantially the following form with such omissions, insertions and variations as may be necessary and/or desirable and approved by the Mayor or the Clerk prior to the issuance thereof (which necessity and/or desirability and approval shall be evidenced conclusively by the Issuer's delivery of the Bonds to the purchaser or purchasers thereof): No. R- $ UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF CLERMONT SALES TAX REVENUE BONDS SERIES Interest Rate Maturity Date Date of Original Issue CUSIP ~ o Registered Holder: Principal Amount: KNOW ALL MEN BY THESE PRESENTS, that the City of Clermont, a municipal corporation created and existing under and by virtue of the laws of the state of Florida (the "Issuer"), for value received, hereby promises to pay, solely from the sources of payment hereinafter described, to the Registered Holder iden- tified above, or registered assigns as hereinafter provided, the Principal Amount identified above on the Maturity Date identified above and interest (calculated on the basis of a 360-day year of -19- e e twelve 30-day months) on such Principal Amount from the Date of Original Issue identified above or from the most recent interest payment date to which interest has been paid, at the Interest Rate per annum identified above on and of each year commencing , until such Principal Amount shall have been paid or provided for, except as the provi- sions hereinafter set forth with respect to redemption prior to maturity may be or become applicable hereto. Such Principal Amount and interest and the premium, if any, on this bond are payable in any coin or currency of the united States of America which, on the respective dates of pay- ment thereof, shall be legal tender for the payment of public and private debts. Such Principal Amount and the premium, if any, on this bond, are payable, upon presentation and surrender hereof, at the corporate trust office of , Florida, as paying agent, or such other paying agent as the Issuer shall hereafter duly appoint (the "Paying Agent"). Payment of each installment of interest shall be made to the person in whose name this bond shall be registered on the registration books of the Issuer maintained by , , Florida, as registrar, or such other registrar as the Issuer shall hereafter duly appoint (the "Regis- trar"), at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding each interest payment date and shall be paid by a check or draft of the Paying Agent mailed to such Registered Holder at the address appearing on such registration books or, at the option of the Paying Agent, and at the request and expense of such Registered Holder, by bank wire transfer for the account of such Holder. In the event interest payable on this bond is not punctually paid or duly provided for by the Issuer on such inter- est payment date, payment of each installment of such defaulted interest shall be made to the person in whose name this bond shall be registered at the close of business on a special record date for the payment of such defaulted interest as established by notice to such Registered Holder, not less than ten (10) days preceding such special record date. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN THIS PLACE. This bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Registrar. IN WITNESS WHEREOF, the City of Clermont, Florida, has issued this bond and has caused the same to be executed by the -20- e e manual or facsimile signature of its Mayor and attested and countersigned by the manual or facsimile signature of its Clerk and its official seal or a facsimile thereof to be affixed or reproduced hereon, all as of the day of 19 CITY OF CLERMONT, FLORIDA (SEAL) By Mayor ATTESTED AND COUNTERSIGNED: Clerk CERTIFICATE OF AUTHENTICATION This bond is one of the Bonds of the issue described in the within-mentioned Resolution. DATE OF AUTHENTICATION: Registrar By: Authorized Officer (provisions on Reverse Side of Bond) This bond is one of an author.ized issue of bonds of the Issuer in the aggregate principal amount of $ (the "Bonds") of like date, tenor and effect, except as to maturity date, interest rate, denomination and number, issued to finance , in and for the Issuer, under the authority of and in full compliance with the Constitution and laws of the State of Florida, particularly Chapter 166, Part II, Florida Statutes, as amended, Chapter 218, Part VI, Florida Statutes, as amended, and Chapter 212, Part I, Florida Statutes, as amended, and other applicable provisions of -21- e e law (the "Act"), and a resolution duly adopted by the City Coun- cil of the Issuer on , 1989, as supplemented (the "Reso- lution"), and is subject to all the terms and conditions of the Resolution. The principal and interest on this bond is payable solely from and secured by a lien upon and a pledge of (1) the proceeds derived by the Issuer from the levy and collection of the one-cent discretionary infrastructure sales surtax pursuant to Chapter 212, Part I, Florida statutes, as amended, (2) the 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 Chapter 218, Part VI, Florida Statutes, as amended (the "Half-Cent Sales Tax"), and (3) until applied in accordance with the provisions of the Resolution, the proceeds of the Bonds and all moneys, includ- ing investments thereof, in certain of the funds and accounts established pursuant to the Resolution, all in the manner and to the extent described in the Resolution (collectively, the "Pledged Funds"). The Issuer has the right, under certain cir- cumstances described in the Resolution, to obtain the release of the pledge of and lien upon the Half-Cent Sales Tax, in which event Pledged Funds shall no longer include the Half-Cent Sales Tax. It is expressly agreed by the Registered Holder of this bond that the full faith and credit of neither the Issuer, the State of Florida, nor any political subdivision thereof, is pledged to the payment of the principal of or premium, if any, or interest on this bond and that the Registered Holder shall never have the right to require or compel the exercise of any taxing power of the Issuer, the State of Florida, or any political sub- division thereof, to the payment of such principal, premium, if any, and interest. This bond and the obligation evidenced hereby shall not constitute a lien upon any property of the Issuer, except the Pledged Funds, and shall be payable solely from the Pledged Funds in accordance with the terms of the Resolution. Neither the members of the City Council of the Issuer nor any person executing this bond shall be liable personally hereon or be subject to any personal liability or accountability by reason of the issuance hereof. (INSERT REDEMPTION PROVISIONS) Notice of redemption, unless waived, is to be given by the Registrar by mailing an official redemption notice by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to the registered holders of the Bonds to be redeemed at such holders' addresses shown on the registration books maintained by the Registrar or at such other addresses as shall be furnished in writing by such registered holders to the Registrar; provided, however, that no defect in any such notice to any registered holder of Bonds to be -22- ~ e e redeemed nor failure to give such notice to any such registered holder nor failure of any such registered holder to receive such notice shall in any manner defeat the effectiveness of a call for redemption as to all other registered holders of Bonds to be re- deemed. Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on the redemp- tion date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Bonds or portion~ of Bonds shall cease to bear interest. This bond is and has all the qualities and incidents of a negotiable instrument under the laws of the state of Florida, but may be transferred only in accordance with the terms of the Resolution only upon the books of the Issuer kept for that pur- pose at the office of the Registrar by the Registered Holder in person or by such Holder's attorney duly authorized in writing, upon the surrender of this bond together with a written instru- ment of transfer satisfactory to the Registrar duly executed by the Registered Holder or such Holder's attorney duly authorized in writing, and thereupon a new bond or bonds in the same aggre- gate principal amount shall be issued to the transferee in ex- change therefor, and upon the payment of the charges, if any, prescribed in the Resolution. Each of the Bonds is issuable in fully registered form in the denomination of $5,000 or any inte- gral multiple thereof not exceeding the aggregate principal amount of the Bonds having the same maturity. The Issuer, the Registrar and any Paying Agent may treat the Registered Holder of this bond as the absolute owner hereof for all purposes, whether or not this bond shall be overdue, and shall not be affected by any notice to the contrary. The Issuer and the Registrar shall not be obligated to make any exchange or transfer of any Bonds during the fifteen (15) days next preceding an interest payment date, or in the case of any proposed redemption of any Bonds, then, during the fifteen (15) days next preceding the redemption date established for such Bonds. It is hereby certified and recited that all acts, condi- tions and things required to exist, to happen and to be performed precedent to and in the issuance of this bond, exist, have hap- pened and have been performed, in regular and due form and time as required by the Constitution and laws of the state of Florida applicable thereto, and that the issuance of the Bonds does not violate any constitutional or statutory limitations or provisions. -23- e e LEGAL OPINION [Insert appropriate approving opinion of bond counsel.] The above is a true copy of the opinion rendered by Foley & Lardner, Jacksonville, Florida, in connection with the issuance of, and dated as of the original delivery of, the Bonds of the issue of which this bond is one. An executed copy of that opinion is on file in my office. City Clerk, City of Clermont, Florida The following abbreviations, when used in the inscrip- tion on the face of the within bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM as tenants in common TEN ENT as tenants by the entireties JT TEN as joint tenants with right of survivorship and not as tenants in common UNIF TRANS MIN ACT -- (Cust.) Custodian for under Uniform Transfer to Minors Act of (State) Additional abbreviations may also be used though not in list above. -24- e e ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto Insert Social security or Other Identifying Number of Assignee (Name and Address of Assignee) the within bond and does hereby irrevocably constitute and appoint , as attorneys to register the transfer of the said bond on the books kept for regis- tration thereof with full power of substitution in the premises. Dated: signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. NOTICE: The signature to this assignment must correspond with the name of the Registered Holder as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever and the Social Security or other iden- tifying number of such assignee must be supplied. -25- e - ARTICLE III REDEMPTION OF BONDS SECTION 3.01. Privilege of Redemption. The terms of this Article III shall apply to redemption of Bonds other than capital Appreciation Bonds or Variable Rate Bonds. The terms and provisions relating to redemption of Capital Appreciation Bonds and Variable Rate Bonds shall be provided by Supplemental Resolu- tion. SECTION 3.02. Selection of Bonds to be Redeemed. The Bonds shall be redeemed only in the principal amount of $5,000 each and integral multiples thereof. The Issuer shall, at least sixty (60) days prior to the redemption date (unless a shorter time period shall be satisfactory to the Registrar) notify the Registrar of such redemption date and of the principal amount of Bonds to be redeemed. For purposes of any redemption of less than all of the outstanding Bonds of a single maturity, the par- ticular Bonds or portions of Bonds to be redeemed shall be selected not more than forty-five (45) days prior to the redemption date by the Registrar from the outstanding Bonds of the maturity or maturities designated by the Issuer by such method as the Regis- trar shall deem fair and appropriate and which may provide for the selection for redemption of Bonds or portions of Bonds in principal amounts of $5,000 and integral multiples thereof. If less than all of the outstanding Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the Issuer and Paying Agent (if the Registrar is not the Paying Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. SECTION 3.03. Notice of Redemption. Unless waived by any Holder of Bonds to be redeemed, notice of any redemption made pursuant to this section shall be given by the Registrar on be- half of the Issuer by mailing a copy of an official redemption notice by first class mail, postage prepaid, at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to each Holder of Bonds to be redeemed at the ad- dress of such Holder shown on the registration books maintained by the Registrar or at such other address as shall be furnished in writing by such Holder to the Registrar; provided, however, that no defect in any notice given pursuant to this section to any Holder of Bonds to be redeemed nor failure to give such no- tice shall in any manner defeat the effectiveness of a call for redemption as to all other Holders of Bonds to be redeemed. -26- e e Every official notice of redemption shall be dated and shall state: (1) the redemption date, (2) the Redemption Price, (3) if less than all outstanding Bonds are to be re- deemed, the number (and, in the case of a partial redemption of any Bond, the principal amount) of each Bond to be redeemed, (4) that on the redemption date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (5) that such Bonds to be redeemed, whether as a whole or in part, are to be surrendered for paYment of the Redemption Price plus accrued interest at the office of the Paying Agent. Prior to any redemption date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of and accrued interest on all the Bonds or por- tions of Bonds which are to be redeemed on that date; provided, however, that redemption of Bonds, other than mandatory sinking fund redemptions and other than pursuant to the application of refunding bond proceeds, shall be made only from and to the extent of funds on deposit with the Paying Agent, or other paying agent with respect to such Bonds, and available for such purpose on the date the official notice of redemption is mailed. In addition to the foregoing notice, further notice shall be given by the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above pre- scribed. (1) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (a) the CUSIP numbers of all Bonds being re- deemed; (b) the date of issue of the Bonds as originally issued; (c) the rate of interest borne by each Bond being redeemed; (d) the maturity date of each Bond being redeemed; and (e) any other descriptive information needed to identify accurately the Bonds being redeemed. (2) Each further notice of redemption shall be sent at least thirty-five (35) days before the redemption date by regis- tered or certified mail or overnight delivery service to any Insurer which shall have insured, or any Credit Bank which shall have provided a Credit Facility for, any of the Bonds being -27- e e redeemed and to all registered securities depositories then in the business of holding substantial amounts of obligations of types similar to the type of which the Bonds consist (such deposi- tories now being Depository Trust Company of New York, New York, Midwest Securities Trust Company of Chicago, Illinois, Pacific Securities Depository Trust Company of San Francisco, California, and Philadelphia Depository Trust Company of Philadelphia, Penn- sylvania) and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds. (3) Each such further notice shall be published one time in the Bond Buyer of New York, New York or, if such pUblica- tion is impractical or unlikely to reach a substantial number of the Holders of the Bonds, in some other financial newspaper or journal which regularly carries notices of redemption of obliga- tions similar to the Bonds, such publication to be made at least 30 days prior to the date fixed for redemption. SECTION 3.04. Redemption of Portions of Bonds. Any Bond which is to be redeemed only in part shall be surrendered at any place of payment specified in the notice of redemption (with due endorsement by, or written instrument of transfer in form satisfactory to the Registrar duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Issuer shall execute and the Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds, of the same interest rate and maturity, and of any authorized denomination as requested by such Holder, in an aggre- gate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bonds so surrendered. SECTION 3.05. Payment of Redeemed Bonds. Official notice of redemption having been given substantially as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar and/or Paying Agent at the appropriate Redemption Price, plus accrued interest. Each check or other transfer of funds issued by the Registrar and/or Paying Agent for the purpose of the payment of the Redemption Price of Bonds being redeemed shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. All Bonds which have been redeemed shall be cancelled by the Registrar and shall not be reissued. -28- e e ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 4.01. Bonds not to be Indebtedness of Issuer. The Bonds shall not be or constitute general obligations or in- debtedness of the Issuer as "bonds" within the meaning of any constitutional or statutory provision, but shall be special obli- gations of the Issuer, payable solely from and secured by a lien upon and pledge of the Pledged Funds in accordance with the terms of this Resolution. The Issuer may cause any Series of Bonds to be payable from and secured by a Credit Facility or a Bond Insur- ance Policy of an Insurer not applicable to anyone or more other Series of Bonds. No Holder of any Bond or any Credit Bank or any Insurer shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer to pay such Bond or shall be entitled to payment of such Bond from any moneys of the Issuer except the Pledged Funds, in the manner provided herein. The Pledged Funds shall be subject to the lien of this pledge immediately upon the issuance and delivery of the Series 1989 Bonds, without any physical delivery by the Issuer of the Pledged Funds or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind against the Issuer, in tort, contract or otherwise. SECTION 4.02. Security for Bonds. The payment of the principal of or Redemption Price, if applicable, and interest on the Bonds shall be secured forthwith equally and ratably by a pledge of and lien upon the Pledged Funds; provided, however, a Series of Bonds may be further secured by a Credit Facility or any Bond Insurance Policy of an Insurer not applicable to anyone or more other Series of Bonds, as shall be provided by Supplemental Resolution, in addition to the security provided herein. The Issuer does hereby irrevocably pledge the Pledged Funds to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds. SECTION 4.03. Construction Fund. The Issuer covenants and agrees to establish a separate fund with an Authorized Depos- itory to be known as the "City of Clermont Sales Tax Revenue Bonds Construction Fund," which shall be used only for payment of the Cost of the Projects. Moneys in the Construction Fund, until applied in payment of any item of the Cost of a Project in the manner hereinafter provided, shall be held in trust by the Issuer and shall be subject to a lien and charge in favor of the Bond- holders and for the further security of such Holders. There shall be paid into the Construction Fund the amounts required to be so paid by the provisions of this Resolution or any -29- e e Supplemental Resolution, and there may be paid into the Construc- tion Fund, at the option of the Issuer, any moneys received for or in connection with a Project by the Issuer from any other source. The Issuer shall establish within the Construction Fund a separate account for the Initial Project and each Additional Project, the Cost of which is to be paid in whole or in part out of the Construction Fund. The proceeds of insurance maintained pursuant to this Resolution against physical loss of or damage to a Project, or of contractors' performance bonds with respect thereto pertaining to the period of construction thereof, shall be deposited into the appropriate account of the Construction Fund. The Issuer covenants that the acquisition and construc- tion of each Project will be completed without delay and in accordance with sound engineering practices. The Issuer shall make disbursements or payments from the Construction Fund to pay the Cost of a Project upon the filing with the Clerk of documents and/or certificates signed by an Authorized Issuer Officer stat- ing with respect to each disbursement or payment to be made: (1) the item number of the payment, (2) the name and address of the Person to whom payment is due, (3) the amount to be paid, (4) the Construction Fund account from which payment is to be made, (5) the purpose, by general classification, for which payment is to be made, and (6) that (A) each obligation, item of cost or ex- pense mentioned therein has been properly incurred, is in payment of a part of the Cost of a Project and is a proper charge against the account of the Construction Fund from which payment is to be made and has not been the basis of any previous disbursement or payment, or (B) each obligation, item of cost or expense men- tioned therein has been paid by the Issuer, is a reimbursement of a part of the Cost of a Project, is a proper charge against the account of the Construction Fund from which payment is to be made, has not been theretofore reimbursed to the Issuer or other- wise been the basis of any previous disbursement or payment and the Issuer is entitled to reimbursement thereof. The Clerk shall retain all such documents and/or certificates of the Authorized Issuer Officers for seven (7) years from the dates of such docu- ments and/or certificates. The Clerk shall make available the documents and/or certificates at all reasonable times for inspec- tion by any Bondholder or the agent or representative of any Bond- holder. Notwithstanding any of the other provisions of this Sec- tion 4.03, to the extent that other moneys are not available therefor, amounts in the Construction Fund shall be applied to the payment of principal of or Redemption Price, if applicable, and interest on Bonds when due. -30- e e The date of completion of a Project shall be determined by the Authorized Issuer Officer who shall certify such fact in writing to the Governing Body. Promptly after the date of the completion of a Project, and after paying or making provisions for the paYment of all unpaid items of the Cost of such project, the Issuer shall deposit in the following order of priority any balance of moneys remaining in the Construction Fund in (1) another account of the Construction Fund for which the Authorized Issuer Officer has stated that there are insufficient moneys present to pay the Cost of the related Project, (2) the Reserve Account, to the extent of a deficiency therein, and (3) such other fund or account of the Issuer; including those established hereunder, as shall be determined by the Governing Body, provided the Issuer has received an opinion of Bond Counsel to the effect that such transfer shall not adversely affect the exclusion, if any, of interest on the Bonds from gross income for federal in- come tax purposes. SECTION 4.04. Funds and Accounts. The Issuer covenants and agrees to establish with one or more Authorized Depositories separate funds to be known as the "City of Clermont Sales Tax Revenue Bonds Revenue Fund," the "City of Clermont Half-Cent Sales Tax Fund," the "City of Clermont Sales Tax Revenue Bonds Debt Service Fund" and the "City of Clermont Sales Tax Revenue Bonds Rebate Fund." The Issuer shall maintain in the Revenue Fund two accounts: the "Restricted Revenue Account" and the "Unrestricted Revenue Account." The Issuer shall maintain in the Debt Service Fund four accounts: the "Interest Account," the "Principal Account," the "Bond Amortization Account," and the "Reserve Account." Moneys in the Restricted Revenue Account, the Half-Cent Sales Tax Fund and the Debt Service Fund, until applied in accordance with the provisions hereof, shall be subject to a lien and charge in favor of the Holders and for the further security of the Holders. The Issuer shall at any time and from time to time ap- point one or more Authorized Depositories to hold, for the bene- fit of the Issuer and/or the Bondholders, anyone or more of the funds and accounts established hereby. Such depository or depos- itaries shall perform at the direction of the Issuer the duties of the Issuer in depositing, transferring and disbursing moneys to and from each of such funds and accounts as herein set forth, and all records of such depositary in performing such duties shall be open at all reasonable times to inspection by the Issuer and its agent and employees. SECTION 4.05. Flow of Funds. (A) The Issuer shall deposit the Infrastructure Sales Surtax into the Restricted Revenue Account, promptly upon receipt thereof. On or before the last day of each month, commencing with the month in which delivery of the Series 1989 Bonds shall -31- e e be made to the purchasers thereof, the moneys in the Restricted Revenue Account shall be deposited or credited in the following manner and in the following order of priority: (1) Interest Account. The Issuer shall deposit into or credit to the Interest Account the sum which, together with the balance in said account, shall equal the interest on all Outstand- ing Bonds accrued and unpaid and to accrue to the end of the then current calendar month (assuming that a year consists of twelve (12) equal calendar months of thirty (30) days each). Moneys in the Interest Account shall be applied by the Issuer to pay inter- est on the Bonds as and when the same become due, whether by redemption or otherwise, and for no other purpose. The Issuer shall adjust the amount of the 'deposit into the Interest Account not later than the month immediately preceding any Interest Date so as to provide sufficient moneys in the Interest Account to pay the interest coming due on the Bonds on such Interest Date. (2) Principal Account. Next, the Issuer shall deposit into or credit to thé Principal Account the sum which, together with the balance in said account, shall equal (a) the principal amount of all outstanding Bonds other than Term Bonds due and unpaid, (b) that portion of the principal amount of the Bonds other than Term Bonds next due which would have accrued on such Bonds next due during the then current calendar month if such principal amount thereof were deemed to accrue monthly (assuming that a year consists of twelve (12) equal calendar months of thirty (30) days each) in equal installments from a date one year preceding the due date of such Bonds next due and (c) the portion of the principal amount of the Bonds next due which shall have accrued on such basis in prior months. Serial Capital Apprecia- tion Bonds (including their respective interest components) shall be payable entirely from moneys in the Principal Account on their respective maturity dates, and monthly deposits or credits to the Principal Account to provide funds for such purpose shall com- mence in the month which is one year prior to each such maturity date. Not later than the month immediately preceding any princi- pal payment date, the Issuer shall adjust the amount of the de- posit into the Principal Account so as to provide sufficient moneys in the Principal Account to pay the principal on Bonds becoming due on such principal payment date. Moneys in the Prin- cipal Account shall be applied by the Issuer to pay the principal of the Bonds as and when the same shall mature, and for no other purpose. (3) Bond Amortization Account. Payments to the Bond Amortization Account shall be on a parity with payments to the Principal Account. Commencing in the month which is one year prior to the due date of each Amortization Installment, the Issuer shall deposit into or credit to the Bond Amortization Account the sum which, together with the balance in said account held for the credit of such Amortization Installment and all Outstanding Term -32- · e Bonds due and unpaid, shall equal (a) the principal amount of all such outstanding Term Bonds due and unpaid, (b) that portion of such Amortization Installment which would have accrued during the then current calendar month if such Amortization Installment were deemed to accrue monthly (assuming that a year consists of twelve (12) equal calendar months having thirty (30) days each) in equal amounts from a date one year preceding such due date and (c) the portion of such Amortization Installment which shall have accrued on such basis in prior months. Term Capital Appreciation Bonds (including their respective interest components) shall be payable entirely from moneys in the Bond Amortization Account on the respective due dates of the Amortization Installments applicable thereto, and monthly deposits or credits to the Bond Amortization Account to provide funds for such purpose shall commence in the month which is one year prior to each such Amortization Install- ment due date. The Issuer shall adjust the amount of the deposit into the Bond Amortization Account not later than the month imme- diately preceding any date for payment of an Amortization Install- ment so as to provide sufficient moneys in the Bond Amortization Account to pay such Amortization Installment on such date. Moneys in the Bond Amortization Account shall be applied by the Issuer to purchase or redeem Term Bonds in the manner herein provided, and for no other purpose. Amounts accumulated in the Bond Amortization Account with respect to any Amortization Installment may be applied by the Issuer, on or prior to the sixtieth (60th) day preceding the due date of such Amortization Installment (i) to the purchase of Term Bonds of the Series and maturity for which such Amortization Installment was established, at a price not greater than the Redemption Price at which such Term Bonds may be redeemed on the first date thereafter on which such Term Bonds shall be subject to redemption, or (ii) to the redemption at the applicable Redemp- tion Price of such Term Bonds. The applicable Redemption Price (or principal amount of maturing Term Bonds) of any Term Bonds so purchased or redeemed shall be deemed to constitute part of the Bond Amortization Account until such Amortization Installment date, for the purposes of calculating the amount of such Account. As soon as practicable after the sixtieth (60th) day preceding the due date of any such Amortization Installment, the Issuer shall proceed to call for redemption on such due date, by causing notice to be given as provided in section 3.03 hereof, Term Bonds of the Series and maturity for which such Amortization Installment was established (except in the case of Term Bonds maturing on an Amortization Installment date) in such amount as shall be neces- sary to complete the retirement of the unsatisfied balance of such Amortization Installment. The Issuer shall payout of the Bond Amortization Account and the Interest Account to the respec- tive Paying Agents, on or before the day preceding such redemption date (or maturity date), the amount required for the redemption (or for the payment of such Term Bonds then maturing), and such amount shall be applied by such Paying Agents to such redemption -33- · e (or payment). All expenses in connection with the purchase or redemption of Term Bonds shall be paid by the Issuer from the Restricted Revenue Account. (4) Reserve Account. Next, the Issuer shall deposit into or credit to the Reserve Account such sum, if any, as will be necessary to immediately restore the funds on deposit therein to an amount equal to the Reserve Account Requirement including the reinstatement of any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit therein or the cash replacement thereof. On or prior to each principal and interest payment date for the Bonds, moneys in the Reserve Account shall be applied by the Issuer to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds to the extent moneys in the Interest Account, the Principal Account and the Bond Amortization Account shall be insufficient for such pur- pose. Whenever there shall be surplus moneys in the Reserve Account by reason of a decrease in the Reserve Account Require- ment, such surplus moneys shall be deposited by the Issuer into the Interest Account. Upon the issuance of any Series of Bonds, under the terms, limitations and conditions as herein provided, the Issuer shall fund the Reserve Account in an amount equal to the Reserve Account Requirement. Whenever moneys on deposit in the Reserve Account, to- gether with the other available amounts in the Debt Service Fund, are sufficient to fully pay all Outstanding Bonds (including principal and interest thereon) in accordance with their terms, the funds on deposit in the Reserve Account shall be applied to the payment of Bonds. Notwithstanding the foregoing provisions, in lieu of the required deposits into the Reserve Account, the Issuer may, at its sole option and discretion, cause to be deposited a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit in an amount equal to the difference between the Reserve Account Requirement applicable thereto and the sums then on deposit in the Reserve Account, if any. Such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit shall be payable to the Paying Agent for such Series (upon the giving of notice as required thereunder) on any interest payment or redemption date on which a deficiency exists which cannot be cured by funds in any other fund or account held pursuant to this Resolution and available for such purpose. The issuer providing such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit shall be either (a) an insurer (i) whose municipal bond insurance policies insuring the payment, when due, of the principal of and interest on municipal bond issues results in such issues being -34- e e rated in the highest rating category (without regard to grada- tions, such as "plus" or "minus" of such categories) by either standard & Poor's corporation or Moody's Investors service, or (ii) who holds the highest policyholder rating accorded insurers by A. M. Best & Company, or any comparable service, or (b) a com- mercial bank, insurance company or other financial institution the bonds payable or guaranteed by which have, or whose obliga- tion to pay is guaranteed by a commercial bank, insurance company or other financial institution which has, been assigned a rating by either Moody's Investors Service or Standard & Poor's Corpora- tion in the highest rating category (without regard to gradations, such as "plus" or "minus" of such categories). If fifteen (15) days prior to an interest payment or mandatory redemption date, the Issuer shall determine that a deficiency exists in the amount of moneys available to pay in accordance with the terms hereof interest and/or principal due on Bonds on such date, the Issuer shall immediately notify (a) the issuer of the applicable Reserve Account Insurance Policy and/or the issuer of the Reserve Account Letter of Credit, and (b) the Insurer, if any, of the amount of such deficiency and the date on which such payment is due, and shall take all action to cause such issuer or Insurer to provide moneys sufficient to pay all amounts due on such interest payment or redemption date. All moneys on deposit in the Reserve Account shall be applied to cure any deficiency which exists in the Interest Account, the Princi- pal Account or the Bond Amortization Account before the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit is drawn upon. If a disbursement is made from a Reserve Account Insur- ance Policy and/or Reserve Account Letter of Credit provided pur- suant to this section 4.05(A) (4), the Issuer shall reinstate the maximum limits of such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit immediately following such dis- bursement from moneys available in the Reserve Account in accor- dance with the provisions of the first paragraph of this section 4.05(A) (4), by depositing funds in the amount of the disbursement made under such instrument, with the issuer thereof, together with interest thereon to the date of reimbursement at the rate set forth in such Reserve Account Insurance Policy or such Re- serve Account Letter of Credit, but in no case greater than the maximum rate of interest permitted by law. In addition, and in the same manner, the Issuer shall reimburse the issuer of the Reserve Account Insurance Policy and/or the issuer of the Reserve Account Letter of Credit for all reasonable expenses incurred by such issuer in connection with the draw on such Reserve Account Insurance Policy or the Reserve Account Letter of Credit, as the case may be. with regard to replenishment of the Reserve Account, any available moneys shall be used first, to reimburse the Issuer of the Reserve Account Insurance Policy or the Reserve Account Letter of Credit, as the case may be, thereby reinstating the -35- e e Reserve Account Insurance Policy or the Reserve Account Letter of Credit, as the case may be, and second, to replenish the cash in the Reserve Account. The Issuer may evidence its obligation to reimburse the issuer of any Reserve Account Letter of Credit or Reserve Account Insurance Policy by executing and delivering to such issuer a promissory note therefor, provided, however, any such note (a) shall not be a general obligation of the Issuer the payment of which is secured by the full faith and credit or taxing power of the Issuer, and (b) shall be payable solely from the Pledged Funds in the manner provided herein. To the extent the Issuer causes to be deposited into the Reserve Account, a Reserve Account Insurance policy and/or a Reserve Account Letter of Credit for a term of years shorter than the life of the Series of Bonds so insured or secured, then the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit shall provide, among other things, that the issuer thereof shall provide the Issuer with notice as of each anniver- sary of the date of the issuance of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit of the inten- tion of the issuer thereof to either (a) extend the term of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit beyond the expiration dates thereof, or (b) terminate the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit on the initial expiration dates thereof or such other future date as the issuer thereof shall have established. If the issuer of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit notifies the Issuer pursuant to clause (b) of the immediately preceding sentence or if the Issuer terminates the Reserve Account Letter of Credit and/or Reserve Account Insurance Policy, then the Issuer shall deposit into the Reserve Account, on or prior to the fifteenth (15th) day of the first full calendar month following the date on which such notice is received by the Issuer, such sums as shall be sufficient to pay an amount equal to a fraction, the numerator of which is one (1) and the denominator of which is equal to the number of months remaining in the term of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit of the Reserve Account Requirement on the date such notice was received (the maximum amount available, assuming full reimbursement by the Issuer, under the Reserve Account Letter of Credit and/or the Reserve Account Insurance Policy to be reduced annually by an amount equal to the deposit to the Reserve Account during the previous twelve (12) month period) until amounts on deposit in the Reserve Account, as a result of the aforementioned deposits, and no later than upon the expiration of such Reserve Account Insurance Policy and/or such Reserve A~count Letter of Credit, shall be equal to the Reserve Account Requirement applicable thereto. -36- e e If any Reserve Account Letter of Credit or Reserve Account Insurance Policy shall terminate prior to the stated ex- piration date thereof, the Issuer agrees that it shall fund the Reserve Account over a period not to exceed sixty (60) months during which it shall make consecutive equal monthly payments in order that the amount on deposit in such account at the end of such period shall equal to Reserve Account Requirement; provided, the Issuer may, with the prior written consent of the Insurer, if any, obtain a new Reserve Account Letter of Credit or a new Reserve Account Insurance Policy in lieu of making the payments required by this paragraph. Prior to deposit in the Reserve Account, any Reserve Account Letter of Credit or Reserve Account Insurance Policy shall be approved in writing by any Insurer or Credit Bank and shall conform to such additional or different restrictions as such Insurer or Credit Bank shall reasonably require. (5) Unrestricted Revenue Account. The balance of any moneys remaining in the Restricted Revenue Account after the deposits required by parts (1) through (4) of this subsection (A) may be transferred, at the discretion of the Issuer, to the Unrestricted Revenue Account or any other appropriate fund or account of the Issuer and used by the Issuer for any lawful purpose. (B) The Issuer shall deposit the Half-Cent Sales Tax into the Half-Cent Sales Tax Fund, promptly upon receipt thereof. Whenever by reason of the insufficiency of moneys on deposit in the Restricted Revenue Account the Issuer is not able to make promptly the current monthly payments required to be made pursu- ant to the provisions of parts (1) through (4) of subsection (A), there shall be deposited into the Restricted Revenue Account from the moneys on deposit in the Half-Cent Sales Tax Fund whatever sums are necessary to cure such existing deficit. The balance of any moneys remaining in the Half-Cent Sales Tax Fund after the deposits required by this subsection (B) may be transferred, at the discretion of the Issuer, to the Unrestricted Revenue Account or any other appropriate fund or account of the Issuer and used by the Issuer for any lawful purpose. (C) The Issuer, in its discretion, may use moneys in the Principal Account and the Interest Account to purchase or redeem Bonds coming due on the next principal payment date, pro- vided such purchase or redemption does not adversely affect the Issuer's ability to pay the principal or interest coming due on such principal payment date on the Bonds not so purchased or re- deemed. (D) At least one (1) business day prior to the date established for payment of any principal of or Redemption Price, if applicable, or interest on the Bonds, the Issuer shall withdraw -37- e e from the Debt Service Fund sufficient moneys to pay such principal or Redemption Price, if applicable, or interest and deposit such moneys with the Paying Agent for the Bonds to be paid. (E) In the case of Bonds secured by a Credit Facility, amounts on deposit in any funds or accounts established for such Bonds may be applied as provided in the applicable Supplemental Resolution to reimburse the Credit Bank for amounts drawn under such Credit Facility to pay the principal of or Redemption Price, if applicable, and interest on such Bonds or to pay the purchase price of any such Bonds which are tendered by the Holders thereof for payment. SECTION 4.06. Rebate Fund. Amounts on deposit in the Rebate Fund shall be held in trust by the Issuer and used solely to make required rebates to the United States Treasury (except to the extent the same may be transferred to the Revenue Fund) and the Bondholders shall have no right to have the same applied for debt service on the Bonds. The Issuer agrees to undertake all actions required of it in its arbitrage certificate relating to each Series of the Bonds (other than Taxable Bonds) and other instructions from Bond Counsel delivered in connection with or subsequent to the issuance of such Bonds, including, but not limited to: (A) making a determination in accordance with the Code of the amount required to be deposited in the Rebate Fund; (B) depositing from moneys in the Revenue Fund or from other moneys of the Issuer derived from sources other than ad valorem taxation and legally available for such purpose the amount determined in clause (A) above into the Rebate Fund; (C) paying on the dates and in the manner required by the Code to the United States Treasury from the Rebate Fund and any other legally available moneys of the Issuer such amounts as shall be required by the Code to be rebated to the united States Treasury; and (D) keeping such records of the determinations made pursuant to this section 4.06 as shall be required by the Code, as well as evidence of the fair market value of any investments purchased with proceeds of the Bonds. The provisions of the above-described instructions of Bond Counsel may be amended from time to time as shall be neces- sary, in the opinion of Bond Counsel, to comply with the provisions of the Code. Arbitrage Rebate Company, Milwaukee, Wisconsin, is hereby appointed to serve as rebate administrator hereunder with respect to every Series of the Bonds (other than Taxable Bonds) -38- e e until the Issuer shall by resolution appoint as successor rebate administrator any Bond Counselor any certified public accountant, bank or trust company, or other agent of the Issuer who shall be qualified to assure compliance by the Issuer with the requirements of this section. The rebate administrator is hereby authorized to hire counsel, accountants, and other experts which the rebate administrator may, in its sole discretion, determine advisable for the purpose of obtaining the required calculations of the rebate amounts and determinations as to the due dates for the rebate thereof and other matters necessary for compliance with section 148(f) of the Code as the same relates to the Bonds. The rebate administrator will not be liable for any loss occasioned by its reliance upon the instructions of such experts or upon the Issuer's certification of the amounts earned on nonpurpose invest- ments, as such term is defined in section 148(b) (2) of the Code, in which gross proceeds of the Bonds shall be invested. The duties and responsibilities of the rebate administrator may be performed by more than one Person. SECTION 4.07. Investments. The Construction Fund, the Restricted Revenue Account, the Half-Cent Sales Tax Fund and the Debt Service Fund shall be continuously secured in the manner by which the deposit of public funds are authorized to be secured by the laws of the State. Moneys on deposit in the Construction Fund, the Restricted Revenue Account, the Half-Cent Sales Tax Fund and the Debt Service Fund, other than the Reserve Account, may be invested and reinvested in Authorized Investments maturing not later than the date on which the moneys therein will be needed. Moneys on deposit in the Reserve Account may be invested or reinvested in securities provided in clauses (1) through (9) of the definition of Authorized Investments which shall mature no later than five (5) years from the date of acquisition thereof. Any and all income received by the Issuer from the investment of moneys in the Construction Fund, the Half-Cent Sales Tax Fund and the Rebate Fund, in the Interest Account, the Principal Account and the Bond Amortization Account in the Debt Service Fund, in the Restricted Revenue Account in the Revenue Fund and in the Reserve Account in the Debt Service Fund (to the extent the amount therein is less than the Reserve Account Requirement), shall be retained in such respective fund or account unless otherwise required by applicable law. Any and all income received by the Issuer from the investment of moneys in the Reserve Account in the Debt Service Fund (to the extent the amount therein is greater than the Reserve Account Requirement) shall be deposited in the Interest Account. All investments shall be valued at cost, except for investments in the Reserve Account which shall be valued annually at their fair market value. Nothing contained in this Resolution shall prevent any Authorized Investments acquired as investments -39- e . of or security for funds held under this Resolution from being issued or held in book-entry form on the books of the Department of the Treasury of the United states. SECTION 4.08. Separate Accounts. The moneys required to be accounted for in each of the foregoing funds and accounts established herein may be deposited in a single bank account, and funds allocated to the various funds and accounts established herein may be invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein and such investments for the various purposes of such funds and ac- counts 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 govern- mental accounting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to estab- lish certain priorities for application of such revenues as herein provided. ARTICLE V SUBORDINATED INDEBTEDNESS ADDITIONAL BONDS AND COVENANTS OF ISSUER SECTION 5.01. Subordinated Indebtedness. The Issuer will not issue any other obligations, except under the conditions and in the manner provided herein, payable from the Pledged Funds or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien thereon in favor of the Bonds and the interest thereon. The Issuer may at any time or from time to time issue evidences of indebtedness that are not Additional Bonds and that are payable in whole or in part out of the Pledged Funds and which may be secured by a pledge of the Pledged Funds; provided, however, that such pledge shall be, and shall be expressed to be, subordinated in all respects to the pledge of the Pledged Funds created by this Resolution. The Issuer shall have the right to covenant with the holders from time to time of any Subordinated Indebtedness to add to the con- ditions, limitations and restrictions under which any Additional Bonds may be issued pursuant to Section 5.02 hereof. The Issuer agrees to pay promptly any Subordinated Indebtedness as the same shall become due. SECTION 5.02. Issuance of Additional Bonds. The Issuer may issue one or more Series of Additional Bonds for anyone or -40- e e more of the following purposes: financing the Cost of an Addi- tional Project, or the completion thereof or of the Initial Proj- ect, or refunding any or all outstanding Bonds or of any Subor- dinated Indebtedness of the Issuer. Additional Bonds shall be deemed to have been issued pursuant to this Resolution the same as the outstanding Bonds, and all of the other covenants and other provisions of this Resolution (except as to details of such Additional Bonds inconsistent therewith) shall be for the equal benefit, protection and security of the Holders of all Bonds issued pursuant to this Resolution; provided, however, any Supple- mental Resolution authorizing the issuance of Additional Bonds may provide that any of the covenants herein contained will not be applicable to such Additional Bonds, provided that such provi- sion shall not, in the opinion of Bond Counsel, adversely affect the rights of the Holders of any Bonds which shall then be Out- standing. Except as provided in sections 4.02 and 4.05 hereof, all Bonds, regardless of the time or times of their issuance, shall rank equally with respect to their lien on the Pledged Funds and their sources and security for payment therefrom with- out preference of any Bonds over any other; provided, however, that the Issuer shall include a provision in any Supplemental Resolution authorizing the issuance of Variable Rate Bonds pur- suant to this section 5.02 that in the event the principal there- of is accelerated due to such Bonds being held by the issuer of a Credit Facility, the lien of such Bonds on the Pledged Funds shall be subordinate in all respects to the pledge of the Pledged Funds created by this Resolution. No such Additional Bonds shall be issued by the Issuer unless the following conditions are complied with: (A) The Issuer shall certify that it is current in all deposits into the various funds and accounts established hereby and all payments theretofore required to have been deposited or made by it under the provisions of this Resolution and has complied with the covenants and agreements of this Resolution. (B) There shall have been obtained and filed with the Issuer a certificate of an independent certified public accoun- tant: (1) stating that such accountant has examined the books and records of the Issuer relating to collection and receipt of the Infrastructure Sales Surtax and the Half-Cent Sales Tax, unless the Half-Cent Sales Tax shall have been theretofore released from the provisions of this Resolution; (2) setting forth the amount of Infrastructure Sales Surtax and Half-Cent Sales Tax, if appli- cable, for the immediately preceding Fiscal Year or any twelve (12) consecutive months selected by the Issuer from the eighteen (18) months immediately preceding the issuance of such Additional Bonds; (3) (a) prior to the release of the Half-Cent Sales Tax pursuant to Section 5.09 hereof, stating that such Infrastructure Sales Surtax and Half-Cent Sales Tax equal at least (i) 1.50 times the Maximum Debt Service Requirement of all Outstanding Bonds and such Additional Bonds then proposed to be issued and -41- e e (ii) 1.00 times the maximum annual subordinated debt service for all Subordinated Indebtedness then outstanding, and (b) after the release of the Half-Cent Sales Tax pursuant to section 5.09 here- of, stating that such Infrastructure Sales Surtax equals at least (i) 1.50 times the Maximum Debt Service Requirement of all Out- standing Bonds and such Additional Bonds then proposed to be issued and (ii) 1.00 times the maximum annual subordinated debt service for all Subordinated Indebtedness then outstanding; and (4) stating that no Event of Default was disclosed in the report of the most recent Annual Audit, or if such Event of Default was so disclosed, that it shall have been cured. (C) In computing Maximum Debt Service Requirement for purposes of this section 5.02, the interest rate on outstanding Variable Rate Bonds, and on additional parity Variable Rate Bonds then proposed to be issued, shall be deemed to be the Maximum Interest Rate applicable thereto. (D) In the event any Additional Bonds are issued for the purpose of refunding any Bonds then Outstanding, the condi- tions of this section 5.02 shall not apply, provided that the issuance of such Additional Bonds shall not result in an increase in the aggregate amount of principal of and interest on the Out- standing Bonds becoming due in the current Fiscal Year and all subsequent Fiscal Years. The conditions of section 5.02(B) hereof shall apply to Additional Bonds issued to refund Subordinated Indebtedness and to Additional Bonds issued for refunding purposes which cannot meet the conditions of this paragraph. (E) In the event that the total amount of any Series of Bonds authorized to be issued shall not be issued simultaneously, such Bonds which shall be issued subsequently shall be subject to the conditions of section 5.02(B) hereof. (F) In addition to all of the other requirements speci- fied in this section 5.02, the Issuer must comply with any appli- cable provisions of any financing documents relating to outstand- ing Subordinated Indebtedness to the extent such provisions impact on the ability of the Issuer to issue Additional Bonds. SECTION 5.03. Bond Anticipation Notes. The Issuer may issue notes in anticipation of the issuance of Bonds which shall have such terms and details and be secured in such manner, not inconsistent with this Resolution, as shall be provided by resolu- tion of the Issuer. SECTION 5.04. Accession of Subordinated Indebtedness to Parity Status with Bonds. The Issuer may provide for the ac- cession of Subordinated Indebtedness to the status of complete -42- e e parity with the Bonds, if (A) the Issuer shall meet all the re- quirements imposed upon the issuance of Additional Bonds by Sec- tion 5.02 hereof, assuming, for purposes of said requirements, that such Subordinated Indebtedness shall be Additional Bonds, and (B) the Issuer shall provide for the funding of the Reserve Account, upon such accession, in an amount equal to the increase in the amount of the Reserve Account Requirement occasioned by such accession in accordance with section 4.05(A) (4) hereof. If the aforementioned conditions are satisfied, the Subordinated Indebtedness shall be deemed to have been issued pursuant to this Resolution the same as the outstanding Bonds, and such Subordin- ated Indebtedness shall be considered Bonds for all purposes pro- vided in this Resolution. SECTION 5.05. Books and Records. The Issuer will keep books, records and accounts of the receipt of the Pledged Funds in accordance with generally accepted accounting principles, and any Credit Bank, Insurer, or Holder of any Bonds outstanding or the duly authorized representatives thereof shall have the right at all reasonable times to inspect all books, records and accounts of the Issuer relating thereto. The Issuer covenants that within one hundred eighty (180) days of the close of each Fiscal Year it will cause to be prepared and filed with the Clerk and mailed to all Credit Banks, Insurers and Holders who shall have filed their names and addres- ses with the Clerk for such purpose a statement setting forth in respect of the preceding Fiscal Year: (A) the amount of the Half- Cent Sales Tax and Infrastructure Sales Surtax, if applicable, received in the preceding Fiscal Year; (B) the total amounts deposited to the credit of each fund and account created under the provisions of this Resolution; (C) the principal amount of all Bonds issued, paid, purchased or redeemed; and (D) the amounts on deposit at the end of such Fiscal Year to the credit of each such fund or account. SECTION 5.06. Annual Audit. The Issuer shall, immedi- ately after the close of each Fiscal Year, cause the financial statements of the Issuer to be properly audited by a recognized independent firm of certified public accountants, and shall require such accountants to complete their report of such Annual Audit in accordance with applicable law. Such Annual Audits shall contain, but not be limited to, a balance sheet, an income statement, a statement of changes in financial position, a state- ment of change in retained earnings, a statement of insurance coverage, and any other statements as required by law or accounting convention, and a certificate by such accountants disclosing any material default on the part of the Issuer of any covenant or agreement herein. Each Annual Audit shall be in conformity with generally accepted accounting principles. A copy of each Annual Audit shall regularly be furnished to any Credit Bank, to any Insurer and to any Holder who shall have furnished an address to -43- e e the Clerk and requested in writing that the same be furnished to such Holder. The Issuer shall be permitted to make a reasonable charge for furnishing to any Holder such Annual Audit. SECTION 5.07. No Impairment. The pledging of the Pledged Funds in the manner provided herein shall not be subject to repeal, modification or impairment by any subsequent ordi- nance, resolution or other proceedings of the Governing Body. SECTION 5.08. Collection of Half-Cent Sales Tax and Infrastructure Sales Surtax. (A) The Issuer covenants to do all things necessary on its part to maintain its eligibility to par- ticipate in the distribution of funds from the Local Government Half-Cent Sales Tax Clearing Trust Fund required by the Act including, without limitation, meeting the eligibility require- ments for revenue sharing as specified in section 218.23, Florida Statutes, or any successor provision of law. The Issuer will proceed diligently to perform legally and effectively all steps required on its part in the levy and collection of the Half-Cent Sales Tax and shall exercise all legally available remedies to enforce such collections now or hereafter available under State law. (B) The Issuer covenants to do all things necessary on its part to continue the levy and collection of the Infrastruc- ture Sales Surtax at the maximum rate permitted by and in compli- ance with Chapter 212, Part I, Florida Statutes, as amended, and any successor provision of law. The Issuer will proceed dili- gently to perform legally and effectively all steps required on its part in the levy and collection of the Infrastructure Sales Surtax and shall exercise all legally available remedies to enforce such collections now or hereafter available under State law. The Issuer will not take any action or enter into any agreement that shall result in reducing the level of the Infra- structure Sales Surtax distributed to the Issuer from that pre- vailing at the time the Issuer takes such action or enters into such agreement. The Issuer will not amend any interlocal agree- ment with respect to the distribution of the Infrastructure Sales Surtax unless the Infrastructure Sales Surtax received by the Issuer shall remain at a fixed level which is not less than the then current level and the term of such interlocal agreement extends through the final maturity of the Bonds. The Issuer will take every action which shall be necessary in order that the Issuer shall remain qualified to receive the maximum distribution of Infrastructure Sales Surtax to which the Issuer may be entitled under applicable law. SECTION 5.09. Release of Half-Cent Sales Tax. At such time as the Issuer may be able to obtain and file in the minutes of its Governing Body a certificate of an independent certified public accountant stating that for the immediately preceding Fiscal Year the Infrastructure Sales Surtax equaled at least one -44- e e hundred thirty-five per centum (135%) of the Maximum Debt Service Requirement for all outstanding Bonds and the maximum combined principal and interest maturing in anyone ensuing Fiscal Year on all other outstanding obligations payable from the Infrastructure Sales Surtax, then upon a declaration by resolution of the Gov- erning Body the lien hereby impressed upon the Half-Cent Sales Tax as security for the paYment of the Bonds and the interest thereon shall permanently be released, and thereafter the Bonds and the interest thereon shall be payable from and secured by a lien upon and pledge of only the remaining Pledged Funds; pro- vided, however, the Half-Cent Sales Surtax shall not be so released unless all paYments required by this Resolution to have been made to the several accounts and funds herein specified shall have been made in full and the Reserve Account shall have on deposit therein the Reserve Account Requirement. SECTION 5.10. Special Covenùnts Relatinq to Reserve Account Insurance Policy or Reserve Account Letter of Credit. (A) The Issuer shall annually submit to the issuer of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit, records of withdrawals on such Reserve Account Insurance Policy or such Reserve Account Letter of Credit, as the case may be, received by the Paying Agent and remaining unpaid, the respective dates of such withdrawals, the interest accrued on such withdrawals and the aggregate amount of interest due by the Issuer to the issuer of such Reserve Account Insurance Policy or such Reserve Account Letter of Credit, as the case may be. (B) The Issuer hereby acknowledges that the issuer of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit shall be deemed a third-party beneficiary of this Resolution for the purpose of enforcing the terms, conditions and obligations of the Resolution which benefit the issuer of such Reserve Account Insurance policy or such Reserve Account Letter of Credit, as the case may be. SECTION 5.11. Covenants with Credit Banks and Insurers. The Issuer may make such covenants as it may in its sole discre- tion determine to be appropriate with any Insurer, Credit Bank or other financial institution that shall agree to insure or to provide for Bonds, of anyone or more Series credit or liquidity support that shall enhance the security or the value of such Bonds. Such covenants may be set forth in the applicable Supplemental Resolution and shall be binding on the Issuer, the Registrar, the Paying Agent and all the Holders of Bonds the same as if such covenants were set forth in full in this Resolution. -45- ·e e SECTION 5.12. Federal Income Tax Covenants; Taxable Bonds. (A) The Issuer covenants with the Holders of each Ser- ies of Bonds (other than Taxable Bonds), that it shall not use the proceeds of such Series of Bonds in any manner which would cause the interest on such Series of Bonds to be or become includable in the gross income of the Holder thereof for federal income tax purposes. (B) The Issuer covenants with the Holders of each Ser- ies of Bonds (other than Taxable Bonds) that neither the Issuer nor any Person under its control or direction will make any use of the proceeds of such Series of Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such Series of Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code, and neither the Issuer nor any such other Person shall do any act or fail to do any act which would cause the interest on such Series of Bonds to become includable in the gross income of the Holder thereof for federal income tax pur- poses. (C) The Issuer hereby covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that it will com- ply with all provisions of the Code necessary to maintain the exclusion of interest on the Bonds from the gross income of the Holder thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the United States Treasury pursuant to the Code. (D) The Issuer may, if it so elects, issue one or more Series of Taxable Bonds the interest on which is (or may be) in- cludible in the gross income of the Holder thereof for federal income taxation purposes, so long as each Bond of such Series states in the body thereof that interest payable thereon is (or may be) subject to federal income taxation and provided that the issuance thereof will not cause the interest on any other Bonds theretofore issued hereunder to be or become includable in the gross income of the Holder thereof for federal income tax pur- poses. The covenants set forth in subsections (A), (B) and (C) of this section 5.12 shall not apply to any Taxable Bonds. SECTION 5.13. MBIA as Insurer. Notwithstanding any provision to the contrary contained herein, the following provi- sions will apply so long as Municipal Bond Investors Assurance Corporation ("MBIA") shall be the Insurer with respect to the Bonds and/or shall be the issuer of a Reserve Account Insurance Policy and/or a Reserve Account Letter of Credit: (A) Variable Rate Bonds shall be issued hereunder by the Issuer only with the prior written consent of MBIA. -46- e e (B) Copies of any material modifications or amendments to this Resolution which shall have been consented to by MBIA shall be furnished to Standard & Poor's corporation. (C) Each Reserve Account Insurance Policy and/or Reserve Account Letter of Credit shall be subject to the approval of MBIA. (D) A default under the Financial Guaranty Agreement (the "Financial Guaranty Agreement") executed between the Issuer and MBIA in connection with the Reserve Account Insurance Policy provided by MBIA in connection with the issuance of the Series 1989 Bonds, shall constitute an Event of Default under the terms of this Resolution. (E) The Paying Agent shall deliver to MBIA a Demand for Payment as described in the Reserve Account Insurance Policy pro- vided by MBIA at least three days prior to the date on which funds are required. It will be the responsibility of the Paying Agent to maintain adequate records, verified by MBIA, as to the amount available to be drawn at any time under such Reserve Account Insurance Policy and as to the amounts paid and owing to MBIA under the terms of the Financial Guaranty Agreement. (F) The Issuer agrees to payor cause to be paid all amounts owed to MBIA under the terms of the Financial Guaranty Agreement. All such amounts shall be paid before this Resolution may be defeased pursuant to section 8.01 hereof. There may be no optional redemption of Bonds, refunding or distribution of funds to the Issuer unless all amounts owed to MBIA under the terms of the Financial Guaranty Agreement shall have been paid in full. (G) No amendment to any substantive provisions of this Resolution may be made without the prior written consent of MBIA, such consent not to be unreasonably withheld. (H) The Issuer shall furnish to MBIA a copy of any notice to be given to the Bondholders and any certificate render- ed pursuant to this Resolution at the following address: 113 King street, Armonk, New York 10504, Attention: Surveillance Depart- ment. (I) All Bonds shall mature at least six (6) months prior to the expiration date of the Infrastructure Sales Surtax. ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01. Events of Default. The following events shall each constitute an "Event of Default" hereunder: -47- e e (A) Default shall be made in the paYment of the princi- pal of, Amortization Installment, redemption premium or interest on any Bond when due by the Issuer. (B) There shall occur the dissolution or liquidation of the Issuer, or the filing by the Issuer of a voluntary petition in bankruptcy, or the commission by the Issuer of any act of bank- ruptcy, or adjudication of the Issuer as a bankrupt, or assignment by the Issuer for the benefit of its creditors, or appointment of a receiver for the Issuer, or the entry by the Issuer into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Issuer in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction which may now be in effect or hereafter enacted. (C) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Resolution on the part of the Issuer to be performed, and such default shall continue for a period of thirty (30) days after written notice of such default shall have been received from any Insurer or the Holders of not less than twenty-five percent (25%) of the aggre- gate principal amount of Bonds Outstanding or any Credit Bank. Notwithstanding the foregoing, 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 cura- tive action and diligently pursues such action until the default has been corrected. SECTION 6.02. Remedies. Any Holder of Bonds issued under the provisions of this Resolution or any trustee or receiver acting for such Bondholders may either at law or in equity, by suit, action, mandamus or other proceedings in any court of com- petent jurisdiction, protect and enforce any and all rights under the laws of the State, or granted and contained in this Resolu- tion, and may enforce and compel the performance of all duties required by this Resolution or by any applicable statutes to be performed by the Issuer or by any officer thereof. The Holder or Holders of Bonds in an aggregate princi- pal amount of not less than twenty-five percent (25%) of the Bonds then outstanding may by a duly executed certificate in writ- ing appoint a trustee for Holders of Bonds issued pursuant to this Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and protection of the rights of such Bondholders and such certificate shall be executed by such Bondholders or their duly authorized attorneys or repre- sentatives, and shall be filed in the office of the Clerk. No- tice of such appointment, together with evidence of the requisite signatures of the Holders of not less than twenty-five percent -48- e e (25%) in aggregate principal amount of Bonds outstanding and the trust instrument under which the trustee shall have agreed to serve shall be filed with the Issuer and the trustee and notice of appointment shall be given to all Holders of Bonds in the same manner as notices of redemption are given hereunder. After the appointment of the first trustee hereunder, no further trustees may be appointed; however, the Holders of a majority in aggregate principal amount of all the Bonds then outstanding may remove the trustee initially appointed and appoint a successor and subse- quent successors at any time. SECTION 6.03. Directions to Trustee as to Remedial Pro- ceedings. The Holders of a majority in principal amount of the Bonds then Outstanding (or any Insurer insuring, or any Credit Bank providing a Credit Facility for, any then Outstanding Bonds) have the right, by an instrument or concurrent instruments in writing executed and delivered to 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 hereof, 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 Holders of Bonds not parties to such direction. SECTION 6.04. Remedies Cumulative. No remedy herein conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. SECTION 6.05. waiver of Default. No delay or omission of any Bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be con- strued to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by section 6.02 of this Resolution to the Bondholders may be exercised from time to time, and as often as may be deemed expedient. SECTION 6.06. Application of Moneys After Default. If an Event of Default shall happen and shall not have been remedied, the Issuer or a trustee or receiver appointed for the purpose shall apply all Pledged Funds as follows and in the following order: (A) To the payment of the reasonable and proper charges, expenses and liabilities of the trustee or receiver, Registrar and Paying Agent hereunder; and -49- e e (B) To the payment of the interest and principal or Redemption Price, if applicable, then due on the Bonds, as fol- lows: (1) Unless the principal of all the Bonds shall have become due and payable, all such moneys shall be applied: FIRST: to the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of such installments, and, if the amount avail- able shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or preference; SECOND: to the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due at maturity or upon mandatory redemption prior to maturity (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of section 8.01 of this Resolution), in the order of their due dates, with interest upon such Bonds from the respective dates upon which they became due, and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment first of such interest, ratably according to the amount of such interest due on such date, and then to the payment of such principal, ratably according to the amount of such principal due on such date, to the Persons entitled thereto without any discrimination or preference; and THIRD: to the payment of the Redemption Price of any Bonds called for optional redemption pursuant to the provi- sions of this Resolution. (2) If the principal of all the Bonds shall have become due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, with interest thereon as aforesaid, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the Per- sons entitled thereto without any discrimination or preference. (C) To the payment of any amounts due and owing to the issuer of any Reserve Account Insurance Policy or Reserve Account Letter of Credit. SECTION 6.07. Control by Insurer or Credit Bank. Upon the occurrence and continuance of an Event of Default, each Insurer or Credit Bank, if such Insurer or Credit Bank shall have -50- - - honored all of its commitments under its Bond Insurance Policy or its Credit Facility, as the case may be, shall be entitled to direct and control the enforcement of all rights and remedies with respect to the Bonds it shall insure or for which such Credit Facility is provided. ARTICLE VII SUPPLEMENTAL RESOLUTIONS SECTION 7.01. Supplemental Resolution without Bond- holders' Consent. The Issuer, from time to time and at any time, may adopt such Supplemental Resolutions without the consent of the Bondholders (which Supplemental Resolution shall thereafter form a part hereof) for any of the following purposes: (A) To cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution or to clarify any matters or questions arising hereunder. (B) To grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders. (C) To add to the conditions, limitations and restric- tions on the issuance of Bonds under the provisions of this Reso- lution other conditions, limitations and restrictions thereafter to be observed. (D) To add to the covenants and agreements of the Is- suer in this Resolution other covenants and agreements thereafter to be observed by the Issuer or to surrender any right or power herein reserved to or conferred upon the Issuer. (E) To specify and determine at any time prior to the first delivery of any Series of Bonds the matters and things re- ferred to in sections 2.01, 2.02 or 2.09 hereof, and also any other matters and things relative to such Bonds which are not contrary to or inconsistent with this Resolution as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination. (F) To authorize Additional Projects or to change or modify the description of the Initial Project or any Additional Project. (G) To specify and determine matters necessary or de- sirable for the issuance of Capital Appreciation Bonds or Variable Rate Bonds. -51- - e (H) To authorize Additional Bonds or Subordinated Indebtedness. (I) To make any other change that, in the opinion of Bond Counsel, would not materially adversely affect the security for the Bonds. In making such determination, Bond Counsel shall not take into consideration any Bond Insurance Policy. Except Supplemental Resolutions described in subsections (E), (F) and (H) of this section 7.01 and Supplemental Resolu- tions adopted for the purpose of authorizing Additional Bonds in compliance with all applicable provisions hereof, no Supplemental Resolution adopted pursuant to this Article VII shall become effective unless approved by every Insurer; and the Issuer cove- nants and agrees to furnish to each Insurer an executed original transcript of the Issuer's proceedings with respect to the adop- tion of each Supplemental Resolution. SECTION 7.02. Supplemental Resolution with Bondholders', Insurer's and Credit Bank's Consent. Subject to the terms and provisions contained in this section 7.02 and Section 7.01 hereof, the Holder or Holders of not less than a majority in aggregate principal amount of the Bonds then outstanding shall have the right, from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption of such Supplemental Resolution or Resolutions hereto as shall be deemed necessary or desirable by the Issuer for the pur- pose of supplementing, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution; provided, however, that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any specified Series or maturity remain out- standing, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be outstanding for the purpose of any calculation of outstanding Bonds under this Section 7.02. Any Supplemental Resolution which is adopted in accordance with the provisions of this section 7.02 shall also require the written consent of the Insurer of, or any Credit Bank providing a Credit Facility for, any Bonds which are Outstanding at the time such Supplemental Resolution shall take effect. No Supplemental Resolution may be approved or adopted which shall permit or require (A) an extension of the maturity of the princi- pal of or the payment of the interest on any Bond issued hereunder, (B) reduction in the principal amount of any Bond or the Redemp- tion Price or the rate of interest thereon, (C) the creation of a lien upon or a pledge of other than the lien and pledge created by this Resolution which adversely affects any Bondholders, (D) a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (E) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Resolution. Nothing herein contained, however, shall be construed as making -52- e e necessary the approval by Bondholders, the Insurer or the Credit Bank of the adoption of any Supplemental Resolution as authorized in section 7.01 hereof. If at any time the Issuer shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursu- ant to this Section 7.02, the Clerk shall cause the Registrar to give notice of the proposed adoption of such Supplemental Resolu- tion and the form of consent to such adoption to be mailed, post- age prepaid, to all Bondholders at their addresses as they appear on the registration books and to all Insurers of, and Credit Banks providing a Credit Facility for, Bonds Outstanding. Such notice shall briefly set forth the nature of the proposed Supplemental Resolution and shall state that copies thereof are on file at the offices of the Clerk and the Registrar for inspection by all Bond- holders. The Issuer shall not, however, be subject to any liabil- ity to any Bondholder by reason of its failure to cause the notice required by this Section 7.02 to be mailed and any such failure shall not affect the validity of such Supplemental Resolution when consented to and approved as provided in this section 7.02. Whenever the Issuer shall deliver to the Clerk an instru- ment or instruments in writing purporting to be executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed Supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the Issuer may adopt such Supplemental Resolution in substantially such form, without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. If the Holders of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of the adop- tion of such Supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no Holder of any Bond shall have any right to object to the adoption of such Supplemental Resolution, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from tak- ing any action pursuant to the provisions thereof. Upon the adoption of any Supplemental Resolution pursu- ant to the provisions of this Section 7.02, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolu- tion of the Issuer and all Holders of Bonds then Outstanding shall thereafter be determined, exercised and enforced in all respects under the provisions of this Resolution as so modified and amended. -53- - e SECTION 7.03. Amendment with Consent of Insurer and/or Credit Bank Only. If all of the Bonds Outstanding hereunder are insured or secured as to payment of principal and interest by an Insurer or Insurers and/or by a Credit Facility provided by a Credit Bank or Credit Banks, and the Insurer or Insurers and/or the Credit Bank or Credit Banks, as applicable, are not in default, and the Bonds, at the time of the hereinafter described amendment, shall be rated by the rating agencies which shall have rated the Bonds at the time such Bonds were insured or such Credit Facility was provided no lower than the ratings assigned thereto by such rating agencies on the date such Bonds were insured or such Credit Facility was provided, the Issuer may enact one or more Supple- mental Resolutions amending all or any part of Articles I, IV, V and VI hereof with the written consent of said Insurer or Insurers and/or said Credit Bank or Credit Banks, as applicable, and the acknowledgment by said Insurer or Insurers and/or said Credit Bank or Credit Banks that its Bond Insurance Policy or its Credit Facility, as the case may be, will remain in full force and effect. The consent of the Holders of any Bonds shall not be necessary. The foregoing right of amendment, however, does not apply to any amendment to Section 5.12 hereof with respect to the exclusion, if applicable, of interest on said Bonds from the gross income of the Holders thereof for federal income tax purposes nor may any such amendment deprive the Holders of any Bond of right to payment of the Bonds from, and their lien on, the Pledged Funds and any additional security pledged hereunder. Upon filing with the Clerk of evidence of such consent of the Insurer or Insurers and/or the Credit Bank or Credit Banks as aforesaid, the Issuer may adopt such Supplemental Resolution. After the adoption by the Issuer of such Supplemental Resolution, notice thereof shall be mailed in the same manner as notice of an amendment under section 7.02 hereof. ARTICLE VIII MISCELLANEOUS SECTION 8.01. Defeasance. If the Issuer shall payor cause to be paid or there shall otherwise be paid to the Holders of all Bonds the principal or Redemption Price, if applicable, and interest due or to become due thereon, at the times and in the manner stipulated therein and in this Resolution, then the pledge of the Pledged Funds and any additional security pledged hereunder, and all covenants, agreements and other obligations of the Issuer to the Bondholders, shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Paying Agents shall pay over or deliver to the Issuer all money or securities held by them pursuant to the Resolution which are not required for the payment or redemption of Bonds not there- tofore surrendered for such payment or redemption. -54- e e Any Bonds or interest installments appertaining there- to, whether at or prior to the maturity or redemption date of such Bonds, shall be deemed to have been paid within the meaning of this Section 8.01 if (A) in case any such Bonds are to be re- deemed prior to the maturity thereof, there shall have been taken all action necessary to call such Bonds for redemption and notice of such redemption shall have been duly given or provision shall have been made for the giving of such notice, and (B) there shall have been deposited in irrevocable trust with a banking institu- tion or trust company by or on behalf of the Issuer either moneys in an amount which shall be sufficient, or Securities the princi- pal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with such bank or trust company at the same time shall be sufficient, to pay the principal of or Redemption Price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as the case may be. Neither the Securities nor any moneys so deposited with such bank or trust company nor any moneys received by such bank or trust company on account of principal of or Redemption Price, if applicable, or interest on said Securities shall be withdrawn or used for any purpose other than, and all such moneys shall be held in trust for and be applied to, the payment, when due, of the principal of or Redemption Price, if applicable, of the Bonds for the payment or redemption of which they were deposited and the interest ac- cruing thereon to the date of maturity or redemption thereof; provided, however, the Issuer may substitute new Securities and moneys for the deposited Securities and moneys if the new Secur- ities and moneys are sufficient to pay the principal of or Redemp- tion Price, if applicable, and interest on such Bonds. For purposes of determining whether Variable Rate Bonds shall be deemed to have been paid prior to the maturity or the redemption date thereof, as the case may be, by the deposit of moneys, or specified Securities and moneys, if any, in accordance with this section 8.01, the interest to come due on such Variable Rate Bonds on or prior to the maturity or redemption date thereof, as the case may be, shall be calculated at the Maximum Interest Rate; provided, however, that if on any date, as a result of such Variable Rate Bonds having borne interest at less than the Maximum Interest Rate for any period, the total amount of moneys and speci- fied Securities on deposit for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited on such date in respect of such Variable Rate Bonds in order to satisfy this section 8.01, such excess shall be paid to the Issuer free and clear of any trust, lien, pledge or assignment securing the Bonds or otherwise existing under this Resolution. In the event the Bonds for which moneys are to be de- posited fQr the payment thereof in accordance with this section 8.01 are not by their terms subject to redemption within the next -55- e e succeeding sixty (60) days, the Issuer shall cause the Registrar to mail a notice to the Holders of such Bonds that the deposit required by this section 8.01 of moneys or Securities has been made and said Bonds are deemed to be paid in accordance with the provisions of this Section 8.01 and stating such maturity or re- demption date upon which moneys are to be available for the pay- ment of the principal of or Redemption Price, if applicable, and interest on said Bonds. Nothing herein shall be deemed to require the Issuer to call any of the outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the Issuer in determining whether to exercise any such option for early redemption. In the event that the principal of or Redemption Price, if applicable, and interest due on the Bonds or any portion thereof shall be paid by an Insurer or Insurers or a Credit Bank or Credit Banks, such Bonds or any portion thereof shall remain outstanding, shall not be defeased and shall not be considered paid by the Issuer, and the pledge of the Pledged Funds and any additional security pledged hereunder, and all covenants, agreements and other obligations of the Issuer to the Bondholders shall continue to exist and such Insurer or Insurers or such Credit Bank or Credit Banks shall be subrogated to the rights of such Bondholders. SECTION 8.02. Capital Appreciation Bonds. For the purposes of (A) receiving payment of the Redemption Price if a Capital Appreciation Bond is redeemed prior to maturity, or (B) receiving payment of a Capital Appreciation Bond if the principal of all Bonds becomes due and payable under the provisions of this Resolution, or (C) computing the amount of Bonds held by the Holder of a capital Appreciation Bond in giving to the Issuer or any trustee or receiver appointed to represent the Bondholders any notice, consent, request or demand pursuant to this Resolution for any purpose whatsoever, the principal amount of a Capital Appreciation Bond shall be deemed to be its Accreted Value. SECTION 8.03 General Authoritv. The members of the Governing Body and the Issuer's officers, attorneys and other agents and employees are hereby authorized to do all acts and things required of them by this Resolution or desirable or consis- tent with the requirements hereof for the full, punctual and com- plete performance of all of the terms, covenants and agreements contained in the Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents which shall be required by Bond Counselor the initial purchasers of the Bonds to effectuate the sale of the Bonds to said initial purchasers. -56- . . SECTION 8.04 No Personal Liability. No representation, statement, covenant, warranty, stipulation, obligation or agree- ment herein contained, or contained in the Bonds, or in any certi- ficate or other instrument to be executed on behalf of the Issuer in connection with the issuance of the Bonds, shall be deemed to be a representation, statement, covenant, warranty, stipulation, obligation or agreement of any member of the Governing Body, offi- cer, employee or agent of the Issuer in his or her individual capacity, and none of the foregoing persons nor any officer of the Issuer executing the Bonds, or any certificate or other instrument to be executed in connection with the issuance of the Bonds, shall be liable personally thereon or be subject to any personal liability or accountability by reason of the execution or delivery thereof. SECTION 8.05 No Third Party Beneficiaries. Except such other Persons as may be expressly described herein or in the Bonds, nothing in this Resolution, or in the Bonds, expressed or implied, is intended or shall be construed to confer upon any Person other than the Issuer and the Holders any right, remedy or claim, legal or equitable, under and by reason of this Resolution or any provision hereof, or of the Bonds, all provision hereof and thereof being intended to be and being for the sole and ex- clusive benefit of the Issuer and the Persons who shall from time to time be the Holders. SECTION 8.06. Sale of Bonds. The Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consis- tent with the provisions of the Act, the requirements of this Resolution and other applicable provisions of law. SECTION 8.'07. Severability of Invalid Provisions. If anyone or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not ex- pressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Bonds issued hereunder. SECTION 8.08. Validation Authorized. The attorney for the Issuer is hereby authorized and directed to institute appro- priate proceedings on behalf of the Issuer in the Circuit Court for Lake County, Florida, for the validation of the Bonds and the proper officers of the Issuer are hereby authorized to verify on -57- . . behalf of the Issuer any pleadings, in the event that such attor- ney shall determine that such proceedings shall be necessary or desirable. SECTION 8.09. Repeal of Inconsistent Resolutions. All resolutions or parts thereof in conflict herewith are hereby super- seded and repealed to the extent of such conflict. SECTION 8.10. Table of Contents and Headings not Part Hereof. The Table of Contents preceding the body of this Resolu- tion and the headings preceding the several articles and sections hereof shall be solely for convenience of reference and shall not constitute a part of this Resolution or affect its meaning, con- struction or effect. SECTION 8.11. Effective Date. This Resolution shall take effect immediately upon its adoption. PASSED, APPROVED AND ADOPTED this 24th day of October, 1989. CITY COUNCIL OF THE CITY OF CLERMONT, FLORIDA ~ () ¿~ (OFFICIAL SEAL) ATTEST: 9J £~y/J 7Y Clerk / ( -58- . . I, Joseph E. Van zile, City Clerk of the City of Cler- mont, Florida, hereby certify that the foregoing is a true and correct copy of Resolution No. 644 of the city Council of the City of Clermont, Florida, passed and adopted on October 24, 1989. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of said City this 24th day of October, 1989. (OFFICIAL SEAL) Cit~k~~lermont, Fl~~é! GF02B34 -59-