R-07-1542CITY OF CLERMONT
RESOLUTION
NO. 1542
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLERMONT,
FLORIDA SUPPLEMENTING RESOLUTION NUMBER 1162 ADOPTED BY THE
CITY COUNCIL OF THE CITY OF CLERMONT, FLORIDA, ON OCTOBER 24,
2000, FOR THE PURPOSE OF AUTHORIZING THE ISSUANCE BY THE CITY OF
NOT EXCEEDING $17,000,000 PRINCIPAL AMOUNT OF WATER AND SEWER
REVENUE REFUNDING BONDS, SERIES 2007, FOR THE PURPOSES OF (I)
REFUNDING A PORTION OF THE CITY'S OUTSTANDING WATER AND SEWER
REVENUE AND REFUNDING BONDS, SERIES 2000 (THE "REFUNDED
OBLIGATIONS"), (II) PURCHASING A RESERVE FUND INSURANCE POLICY
RELATING TO THE SERIES 2007 BONDS AND (III) PAYING THE COSTS OF
ISSUING THE SERIES 2007 BONDS; PLEDGING TO SECURE PAYMENT OF THE
PRINCIPAL OF AND INTEREST ON THE SERIES 2007 BONDS THE PLEDGED
FUNDS DESCRIBED IN RESOLUTION NO. 1162; ESTABLISHING OR
PROVIDING FOR THE ESTABLISHMENT OF THE DATE, INTEREST RATES,
INTEREST PAYMENT DATES, PROVISIONS FOR REDEMPTION AND
MATURITY SCHEDULES OF SAID SERIES 2007 BONDS; DELEGATING
CERTAIN AUTHORITY TO THE ADMINISTRATNE SERVICES DIRECTOR TO
AWARD SAID SERIES 2007 BONDS PURSUANT TO A PUBLIC BID, PROVIDED
THE BIDS SUBMITTED FALL WITHIN CERTAIN PARAMETERS SET FORTH
HEREIN; APPROVING THE FORM OF A PRELIMINARY OFFICIAL STATEMENT
AND AUTHORIZING THE EXECUTION OF A FINAL OFFICIAL STATEMENT
WITH RESPECT TO THE SERIES 2007 BONDS; APPROVING THE FORM OF AN
OFFICIAL NOTICE OF SALE, SUMMARY NOTICE OF SALE AND BID FORM
WITH RESPECT TO SAID SERIES 2007 BONDS; APPOINTING THE REGISTRAR
AND PAYING AGENT FOR THE SERIES 2007 BONDS AND APPROVING THE
FORM AND AUTHORIZING THE EXECUTION OF A REGISTRAR AND PAYING
AGENCY AGREEMENT; APPROVING THE FORM AND AUTHORIZING THE
EXECUTION OF A CONTINUING DISCLOSURE CERTIFICATE; RATIFYING THE
CITY'S ACCEPTANCE OF THE INSURER'S COMMITMENTS RELATING TO A
1VIUNICIPAL BOND INSURANCE POLICY AND A RESERVE FUND INSURANCE
POLICY WITH RESPECT TO THE SERIES 2007 BONDS; APPOINTING AN
ESCROW HOLDER AND APPROVING THE FORM AND AUTHORIZING THE
EXECUTION OF AN ESCROW DEPOSIT AGREEMENT PROVIDING FOR THE
PAYMENT OF THE REFUNDED OBLIGATIONS; MAKING CERTAIN
COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS OF
THE SERIES 2007 BONDS; AND PROVIDING AN EFFECTNE DATE.
TABLE OF CONTENTS
ARTICLE 1
GENERAL
Page No.
SECTION 1.1 Definitions .............................................................................................................. 1
SECTION 1.2 Authority for Resolution ........................................................................................ 7
SECTION 1.3 Resolution to Constitute Contract .......................................................................... 7
SECTION 1.4 Findings .................................................................................................................. 8
SECTION 1.5 Authorization of Refunding .................................................................................. 15
ARTICLE 2
AUTHORIZATION, TERMS, EXECUTION
AND REGISTRATION OF SERIES 2007 BONDS
SECTION 2.1 Authorization of Series 2007 Bonds .....................................................
SECTION 2.2 Description of Series 2007 Bonds .........................................................
SECTION 2.3 Application of Series 2007 Bond Proceeds ...........................................
SECTION 2.4 Execution of Series 2007 Bonds ...........................................................
SECTION 2.5 Book-Entry Only ...................................................................................
SECTION 2.6 Authentication .......................................................................................
SECTION 2.7 Temporary Bonds ..................................................................................
SECTION 2.8 Series 2007 Bonds Mutilated, Destroyed, Stolen or Lost .....................
SECTION 2.9 Interchangeability, Negotiability and Transfer .....................................
SECTION 2.10 Form of Bonds .....................................................................................
ARTICLE 3 SECURITY, SPECIAL FUNDS AND
APPLICATION THEREOF
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SECTION 3.1 Series 2007 Bonds not to be Indebtedness of Issuer ............................................ 26
SECTION 3.2 Security for Series 2007 Bonds ............................................................................ 26
SECTION 3.3 Additional Security ............................................................................................... 26
SECTION 3.4 Application of Provisions of Original Instrument ................................................ 26
ARTICLE 4
MISCELLANEOUS
SECTION 4.1 Ratification of Acceptance of Insurance Commitments ....................................... 26
SECTION 4.2 Provisions Relating to the Bond Insurance Policy for the Series 2007
Bonds ............................................................................................................... 26
SECTION 4.3 Provisions Relating to the Reserve Fund Insurance Policy .................................. 26
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SECTION 4.4 Sale of the Series 2007 Bonds .............................................................................. 26
SECTION 4.5 Approval of Draft Preliminary Official Statement and Authorization of
Preliminary Official Statement and Final Official Statement .......................... 26
SECTION 4.6 Conditions to Acceptance of Bid .......................................................................... 26
SECTION 4.7 Registrar and Paying Agent; Authorization of Execution and Delivery of
Registrar and Paying Agency Agreement ........................................................ 26
SECTION 4.8 Escrow Holder; Execution and Delivery of Escrow Deposit Agreement............ 26
SECTION 4.9 Authorization of Execution and Delivery of Continuing Disclosure
Certificate ......................................................................................................... 26
SECTION 4.10 General Authority ............................................................................................... 26
SECTION 4.11 Authorization of Execution of Certificates and Other Instruments .................... 26
SECTION 4.12 No Personal Liability .......................................................................................... 26
SECTION 4.13 No Third Party Beneficiaries .............................................................................. 26
SECTION 4.14 Severability of Invalid Provisions ...................................................................... 26
SECTION 4.15 Repeal of Inconsistent Resolutions .................................................................... 26
SECTION 4.16 Original Instrument in Full Force and Effect ..................................................... 26
SECTION 4.17 Table of Contents and Headings not Part Hereof ............................................... 26
SECTION 4.18 Effective Date ..................................................................................................... 26
Exhibit A Official Notice of Sale
Exhibit B Summary Notice of Sale
Exhibit C Draft of Preliminary Official Statement
Exhibit D Insurer's Commitments
Exhibit E Continuing Disclosure Certificate
Exhibit F Registrar and Paying Agency Agreement
Exhibit G Escrow Deposit Agreement
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BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CLERMONT,
FLORIDA.:
ARTICLE 1
GENERAL
SECTION 1.1 Definitions.
When used in this Resolution, the terms defined in the Original Instrument (as hereinafter
defined) shall have the respective meanings assigned thereto by the Original Instrument and the
following terms shall have the following meanings, unless the context clearly otherwise requires:
"Act" shall mean Chapter 166, Part II, Florida Statutes, as amended, and other applicable
provisions of law.
"Administrative Services Director" shall mean the Administrative Services Director of
the Issuer or such other person as maybe duly authorized by the Issuer to act on his or her behalf
"Bond Counsel" shall mean Foley & Lardner LLP, Jacksonville, Florida, bond counsel to
the Issuer with respect to the issuance of the Series 2007 Bonds.
"Bond Insurance Policy" means the municipal bond insurance policy issued by the
Insurer guaranteeing the scheduled payment of principal of and interest on the Series 2007 Bonds
when due.
"Book-Entry System" shall mean, with respect the Series 2007 Bonds, a form or system,
as applicable, under which (1) the ownership of beneficial interest in the Series 2007 Bonds and
debt service payments on the Series 2007 Bonds may be transferred only through a book entry
and (2) physical Series 2007 Bond certificates in fully registered form are registered only in the
name of a Depository or its nominee as holder, with the physical Series 2007 Bond certificates
"immobilized" in the custody of the Depository.
"Clerk" shall mean the City Clerk of the Issuer or such other person as may be duly
authorized by the Issuer to act on his or her behalf.
"Continuing Disclosure Certificate" shall mean the Continuing Disclosure Certificate of
the Issuer with respect to the Series 2007 Bonds, substantially in the form attached hereto as
Exhibit E.
"Depository" shall mean any Person which acts as a securities depository. The initial
Depository for the Series 2007 Bonds shall be The Depository Trust Company.
"Draft Preliminary Official Statement" shall mean the draft preliminary official statement
relating to the Series 2007 Bonds, substantially in the form attached hereto as Exhibit C.
"Escrow Account" shall mean the Escrow Account held for the benefit of the holders of
the Refunded Obligations by the Escrow Holder under the Escrow Deposit Agreement.
"Escrow Deposit Agreement" shall mean the Escrow Deposit Agreement to be executed
and delivered between the Issuer and the Escrow Holder, substantially in the form attached
hereto as Exhibit G.
"Escrow Holder" shall mean the Escrow Holder appointed pursuant to Section 4.8 of this
Resolution.
"Escrow Requirement" shall have the meaning assigned to such term in the Escrow
Deposit Agreement.
"Financial Advisor" shall mean Public Financial Management, Inc.
"Governing Body" shall mean the City Council of the Issuer or its successor in function.
"Insurance Agreement" shall mean the Insurance and Reimbursement Agreement to be
entered into between the Issuer and the Insurer relating to the Series 2007 Bonds.
"Insurer" shall mean, with respect to the Series 2007 Bonds, MBIA Insurance
Corporation, or any successor thereto.
"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.
"Official Notice of Sale" shall mean the Official Notice of Sale relating to the Series
2007 Bonds substantially in the form attached hereto as Exhibit A.
"Original Instrument" shall mean Resolution No. 1162 adopted by the City Council of the
City of Clermont, Florida on October 24, 2000, amending and restating in its entirety Resolution
No. 901 adopted by the City Council of the City of Clermont, Florida on February 27, 1996.
"Parity Obligations" shall mean the Series 2000 Bonds which do not constitute Refunded
Obligations.
"Purchaser" shall mean bidder submitting the lowest bid proposal in the competitive sale
of the Series 2007 Bonds.
"Refunded Obligations" shall mean the portion of the Series 2000 Bonds to be refunded
by the Series 2007 Bonds, to be specified and irrevocably called for redemption in the Escrow
Deposit Agreement.
"Registered Owner" shall have the same meaning as the term "Bondholder."
"Registrar and Paying Agency Agreement" shall mean the Registrar and Paying Agency
Agreement between the Issuer and the Registrar and Paying Agent, substantially in the form
attached hereto as Exhibit F.
"Registrar and Paying Agent" shall mean the Person designated as such pursuant to
Section 4.7 hereof and its successors and assigns.
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"Reserve Fund Insurance Policy" shall mean with respect to the Series 2007 Bonds the
Reserve Fund Insurance Policy issued by the Insurer in connection with the issuance of the
Series 2007 Bonds guaranteeing certain payments into the Reserve Fund.
"Resolution" and "this Resolution" shall mean this instrument, as the same may from
time to time be amended, modified or supplemented.
"Series 2000 Bonds" shall mean the Issuer's outstanding Water and Sewer Revenue and
Refunding Bonds, Series 2000, issued pursuant to the Original Instrument.
"Series 2007 Bonds" shall mean the Water and Sewer Revenue Refunding Bonds, Series
2007, authorized to be issued by the Issuer pursuant to Section 2.1 hereof.
"Summary Notice of Sale" shall mean the Summary Notice of Sale relating to the Series
2007 Bonds substantially in the form attached hereto as Exhibit B.
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 1.2 Authority for Resolution.
This Resolution is adopted pursuant to the provisions of the Act and other applicable
provisions of law.
SECTION 1.3 Resolution to Constitute Contract.
In consideration of the purchase and acceptance of any or all of the Series 2007 Bonds by
those who shall hold the same from time to time, the provisions of this Resolution shall be
deemed to be and shall constitute a contract between the Issuer and the Holders from time to
time of the Series 2007 Bonds and shall be a part of the contract of the Issuer with any Credit
Bank and any Insurer that pertains to the Series 2007 Bonds. The pledge made in this Resolution
and the provisions, covenants and agreements herein set forth to be performed by or on behalf of
the Issuer shall be for the equal benefit, protection and security of the Holders of any and all of
the Series 2007 Bonds and for the benefit, protection and security of any Credit Bank and any
Insurer insuring the Series 2007 Bonds. All of the Series 2007 Bonds, regardless of the time or
times of their issuance or maturity, shall be of equal rank without preference, priority or
distinction of any of the Series 2007 Bonds over any other thereof except as expressly provided
in or pursuant to this Resolution.
SECTION 1.4 Findings.
It is hereby ascertained, determined and declared as follows:
(A) The Issuer presently owns and operates a water and sewer system for the health,
benefit and welfare of its citizen and inhabitants.
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(B) The Issuer has heretofore issued and has presently outstanding and unpaid the
Refunded Obligations.
(C) The Issuer deems it necessary, desirable and in the best financial interest of the
Issuer that the Refunded Obligations be refunded in order to effectuate interest cost savings and a
reduction in the debt service applicable to bonded indebtedness in the manner hereinafter
provided. Simultaneously with the issuance of the Series 2007 Bonds, subject to Sections 2.1
and 4.6 hereof, a sufficient portion of the proceeds of the Series 2007 Bonds and other funds
available will be paid by the Issuer to the Escrow Holder for deposit by the Escrow Holder into
the Escrow Account established pursuant to the Escrow Deposit Agreement, to effectuate the
refunding and defeasance of the Refunded Obligations by providing for the outstanding principal
of, premium, if any, and accrued interest on the Refunded Obligations as provided in the Escrow
Deposit Agreement.
(D) The Issuer deems it necessary, desirable and in the best interests of the Issuer that
the issuance of the Series 2007 Bonds be authorized as provided herein for the purpose of
refunding the Refunded Obligations.
(E) 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 Series 2007
Bonds in the manner and to the extent described herein. No part of the Pledged Funds shall be
pledged or encumbered in any manner, except that the Pledged Funds have been pledged as
security for the Parity Obligations and the Refunded Obligations.
(F) The Original Instrument, in Section 6.2 thereof, provides for the issuance of
Additional Bonds payable from the Pledged Funds on a parity with the Parity Obligations under
the terms, limitations and conditions provided therein. The Issuer will issue the Series 2007
Bonds as Additional Bonds within the authorization contained in Section 6.2 of the Original
Instrument. The Series 2007 Bonds shall be payable on a parity and rank equally as to lien on
and source and security for payment from the Pledged Funds and in all other respects, with the
Parity Obligations.
(G) No Bondholder shall ever be entitled to compel the payment of the principal of and
interest on the Series 2007 Bonds or any other payments provided for in this Resolution from any
funds or revenues of the Issuer other than the sources herein provided in accordance with the
terms hereof, nor will any Bondholder or any Credit Bank or any Insurer have the right to
compel the exercise of the ad valorem taxing power of the Issuer to pay the principal of or
interest on the Series 2007 Bonds or to make any other payments provided for in this Resolution,
and the Series 2007 Bonds shall not constitute a lien upon the System or any other property of
the Issuer or any other property situated within its territorial limits, except the Pledged Funds.
(H) The Issuer has received from the Insurer its commitments to provide a Bond
Insurance Policy and the Reserve Fund Insurance Policy with respect to the Series 2007 Bonds,
copies of which commitments are attached hereto as Exhibit D; on behalf of the Issuer, the
Administrative Services Director accepted the Insurer's commitments; and it is in the best
financial interest of the Issuer that the Issuer ratify such acceptance of said commitments.
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(I) It is necessary and in the best interests of the Issuer to provide for the sale by
competitive bid of the Series 2007 Bonds having a dated date, maturity, bearing interest and
subject to optional and mandatory redemption as set forth in the Official Notice of Sale, the
Summary Notice of Sale and in the bid proposal of the Purchaser and the Preliminary Official
Statement.
(J) It is appropriate that the Issuer approve and confirm the publication of the Official
Notice of Sale and the Summary Notice of Sale with respect to the Series 2007 Bonds, draft
forms of which are attached hereto as Exhibits A and B, respectively, and made a part hereof,
one or both which is to be published pursuant to the requirements of law and to be provided to all
parties expressing an interest in the offering of the Series 2007 Bonds.
(K) It is appropriate that the Issuer approve and confirm the distribution of a
preliminary official statement for the purpose of acquainting potential investors with pertinent
information with respect to the Issuer and the Series 2007 Bonds and that the Issuer authorize the
distribution of a preliminary official statement and a final official statement prior to or
contemporaneously with the issuance and delivery of the Series 2007 Bonds. For this purpose, it
is appropriate that the Draft Preliminary Official Statement be approved and confirmed and that
preparation and distribution of a preliminary official statement be authorized and that
preparation, distribution and execution of a final official statement be authorized, in substantially
the form of the Draft Preliminary Official Statement, the final form thereof to be approved by the
Mayor or the Administrative Services Director at any time at or prior to the issuance of the
Series 2007 Bonds.
(L) It is necessary and appropriate that the Issuer appoint a Registrar and Paying Agent
for the Series 2007 Bonds. In order to provide for the services of a Registrar and Paying Agent
for the Series 2007 Bonds, it is necessary and appropriate that the Issuer authorize the execution
and delivery of the Registrar and Paying Agency Agreement between the Issuer and the Registrar
and Paying Agent in the manner hereinafter provided.
(M) In order to provide for compliance with the requirements of Securities and
Exchange Commission Rule 15c2-12, it is necessary and appropriate that the Issuer authorize the
execution and delivery of the Continuing Disclosure Certificate in the manner hereinafter
provided.
(N) In order to carry out the refunding of the Refunded Obligations, it is necessary and
appropriate that the Issuer authorize the execution and delivery of the Escrow Deposit
Agreement between the Issuer and the Escrow Holder in the manner hereinafter provided.
(O) It is necessary and appropriate that the Issuer appoint an escrow holder to serve as
such under the Escrow Deposit Agreement, and the institution hereinafter named is acceptable to
the Issuer; and it appears to the Governing Body that the same is qualified to serve as Escrow
Holder under the Escrow Deposit Agreement in accordance with the terms of the Escrow Deposit
Agreement.
(P) Prior to the sale of the Series 2007 Bonds, the Purchaser will provide the Issuer
with atruth-in-bonding statement regarding the Series 2007 Bonds containing the information
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required by Section 218.358(2), Florida Statutes, the format of which is included in the Official
Confirmation of Bid Form included in the Official Notice of Sale.
SECTION 1.5 Authorization of Refunding.
The refunding of the Refunded Obligations in the manner herein provided is hereby
authorized. Simultaneously with the delivery of the Series 2007 Bonds to the Purchaser and
receipt of the purchase price thereof, subject to Sections 2.1 and 4.6 hereof, the Issuer will enter
into the Escrow Deposit Agreement with the Escrow Holder. At the time the Escrow Deposit
Agreement is executed, the Issuer will furnish to the Escrow Holder appropriate documentation
to demonstrate that the sum being deposited with the Escrow Holder pursuant to this Resolution,
together with other funds deposited into the Escrow Account pursuant to the provisions of the
Escrow Deposit Agreement, shall be equal to the Escrow Requirement and that such moneys and
the investments to be made pursuant to the Escrow Deposit Agreement will be sufficient to
produce the moneys required to make all payments described in the Escrow Deposit Agreement
for the full and complete refunding and defeasance of the Refunded Obligations.
ARTICLE 2
AUTHORIZATION, TERMS, EXECUTION
AND REGISTRATION OF SERIES 2007 BONDS
SECTION 2.1 Authorization of Series 2007 Bonds.
The Issuer hereby authorizes the issuance of Bonds of the Issuer to be designated as "City
of Clermont, Florida, Water and Sewer Revenue Refunding Bonds, Series 2007," in an aggregate
principal amount not to exceed $17,000,000 for the principal purpose of (i) refunding the
Refunded Obligations, (ii) purchasing the Reserve Fund Insurance Policy and (iii) paying the
costs of issuing the Series 2007 Bonds.
SECTION 2.2 Description of Series 2007 Bonds.
The Series 2007 Bonds shall be issued as fully registered Bonds, shall be numbered
consecutively from one upward in order of maturity preceded by the letter "R," and shall be in
denominations of $5,000 and integral multiples of $5,000. The Series 2007 Bonds shall be dated
their date of delivery or such other date as determined by the Administrative Services Director.
The Series 2007 Bonds shall bear interest from their date, payable semiannually on the
first day of June and the first day of December of each year, commencing December 1, 2007, or
such other date as determined by the Administrative Services Director, such determination to be
conclusively evidenced by the Official Notice of Sale, at the rates shown on, and shall mature on
June 1 in such years not exceeding forty (40) years from this date in accordance with, the
maturity schedule set forth in the Purchaser's bid proposal. Interest on the Series 2007 Bonds
will be computed on the basis of a 360-day year of twelve 30-day months.
The Series 2007 Bonds shall be subject to redemption prior to their maturity as set forth
in the Official Notice of Sale and/or as determined by the Administrative Services Director by
his acceptance of the Purchaser's bid for the Series 2007 Bonds in accordance with the terms
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hereof. Notice of redemption shall be given as provided in Article 3 of the Original Instrument.
Notwithstanding the foregoing or any other provision hereof, notice of optional redemption may
be conditioned upon the occurrence or non-occurrence of such event or events as shall be
specified in such notice of optional redemption and may also be subject to rescission by the
Issuer if expressly set forth in such notice.
The principal of or Redemption Price, if applicable, on the Series 2007 Bonds is payable
only upon presentation and surrender of the Series 2007 Bonds at the office of the Paying Agent.
Interest payable on any Series 2007 Bond on any Interest Date will be paid by check or draft of
the Paying Agent to the Holder in whose name such Bond shall be registered 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 such Interest Date, or, unless otherwise provided by
Supplemental Resolution, 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 2007 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 and Redemption Price, if applicable, and
interest on the Series 2007 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.
From and after any maturity date of any of the Series 2007 Bonds, whether at fixed
maturity, or otherwise (deposit of moneys and/or Securities for the payment of the principal and
interest on such Series 2007 Bonds having been made by the Issuer with the Paying Agent),
notwithstanding that any of such Series 2007 Bonds shall not have been surrendered 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 Series 2007 Bonds shall cease to be
entitled to any lien, benefit or security under this Resolution, and the Holders shall have no rights
in respect of such Series 2007 Bonds except to receive payment of such principal and unpaid
interest accrued to the maturity date.
Redemption of the Series 2007 Bonds shall be in accordance with and governed by the
provisions of Article 3 of the Original Instrument and the applicable provisions of this
Resolution.
SECTION 2.3 Application of Series 2007 Bond Proceeds.
The proceeds derived from the sale of the Series 2007 Bonds, including accrued interest
and premium, if any, shall, simultaneously with the delivery of the Series 2007 Bonds to the
Purchaser, be applied by the Issuer as follows:
(A) Accrued interest and capitalized interest, if any, shall be deposited in the Interest
Account.
(B) An amount shall be deposited in the Reserve Fund which, together with the
Reserve Fund Insurance Policy for the Series 2007 Bonds (collectively, the "2007 Reserve
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Deposit") obtained in accordance with Section 4.5(D) of the Original Instrument, shall equal the
Reserve Fund Requirement for the Series 2007 Bonds. The 2007 Reserve Deposit shall secure
only the Series 2007 Bonds and no other series of Bonds. Any Reserve Fund Insurance Policy
and/or Reserve Fund Letter of Credit on deposit in the Reserve Fund prior to the 2007 Reserve
Deposit shall not secure the Series 2007 Bonds.
(C) A sum which, together with other funds deposited in the Escrow Account pursuant
to the provisions of the Escrow Deposit Agreement, shall equal the Escrow Requirement, shall
be deposited with the Escrow Holder under the Escrow Deposit Agreement and applied only in
the manner provided in the Escrow Deposit Agreement.
(D) The Issuer covenants and agrees to establish a separate account with an Authorized
Depository to be known as the "City of Clermont Water and Sewer Revenue Refunding Bonds,
Series 2007, Costs of Issuance Account," which shall be used only for payment of the costs and
expenses described in this subsection. The balance of the Series 2007 Bonds proceeds shall be
deposited by the Issuer in the Costs of Issuance Account. Such moneys shall be in an amount
sufficient to pay all of the costs and expenses in connection with the preparation, issuance and
sale of the Series 2007 Bonds, including fees of financial advisors, engineering and other
consulting fees, legal fees, bond insurance premiums, printing fees, rating agency fees and all
other similar costs and all such costs and expenses shall be promptly paid by the Issuer from said
account to the Persons respectively entitled to receive the same. When all moneys on deposit to
the credit of said account shall have been disbursed by the Issuer for the payment of such costs
and expenses, said account shall be closed; provided, however, that if any balance shall remain in
said account six months after issuance of the Series 2007 Bonds, such moneys shall be
transferred by the Issuer to the Interest Account and the special account created pursuant to this
subsection shall be closed.
SECTION 2.4 Execution of Series 2007 Bonds.
The Series 2007 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 or a deputy clerk.
In case any one or more of the officers who shall have signed or sealed any of the Series 2007
Bonds or whose facsimile signature shall appear thereon shall cease to be such officer of the
Issuer before the Series 2007 Bonds so signed and sealed have been actually sold and delivered
such Series 2007 Bonds may nevertheless be sold and delivered as herein provided and may be
issued as if the person who signed or sealed such Series 2007 Bonds had not ceased to hold such
office. Any Series 2007 Bond may be signed and sealed on behalf of the Issuer by such person
who at the actual time of the execution of such Series 2007 Bond shall hold the proper office of
the Issuer, although at the date of such Series 2007 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 Series 2007 Bonds shall be actually sold and delivered.
SECTION 2.5 Book-Entry Only_
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A Depository may act as securities depository for the Series 2007 Bonds. The ownership
of one fully-registered, certificated Series 2007 Bond for each maturity, each in the aggregate
principal amount of such maturity, maybe registered in the name of a Depository or its nominee.
The Series 2007 Bonds in a Book-Entry System registered in the name of a Depository or
its nominee shall be payable in lawful money of the United States of America in immediately
available funds (i) in the case of principal of such Series 2007 Bonds, delivered or transmitted to
the Depository or its authorized representative when due, and (ii) in the case of interest on the
Series 2007 Bonds, delivered or transmitted on any date interest is due to the Depository or
nominee that was the Holder of that Series 2007 Bond (or one or more predecessor Series 2007
Bonds) at the close of business on the record date applicable to that interest payment date.
The Issuer will recognize the Depository or its nominee as the Holder for all purposes,
including notices. Conveyance of notices and other communications by the Depository to
participants, by participants to indirect participants, and by participants and indirect participants
to beneficial owners will be governed by arrangements among them, subject to any statutory and
regulatory requirements as maybe in effect from time to time.
In the event that (i) the Depository determines to discontinue providing its service with
respect to the Series 2007 Bonds by giving written notice to the Issuer and discharging its
responsibilities with respect thereto under applicable law, and the Issuer fails to appoint a
successor Depository for the Series 2007 Bonds, or (ii) the Issuer determines to discontinue the
Book-Entry System through a Depository, then bond certificates are required to be delivered as
described in the Series 2007 Bonds. The purchasers of beneficial ownership interests in the
Series 2007 Bonds (the "Beneficial Owners"), upon registration of certificates held in the
Beneficial Owner's name, will become the registered owner of the Series 2007 Bonds.
Neither the Issuer, the Registrar nor the Paying Agent will have any responsibility or
obligation to any Beneficial Owner or any other person with respect to (i) the accuracy of any
records maintained by the Depository or any persons participating by or through the Depository;
(ii) the payment by the Depository or any persons participating by or through the Depository of
any amount with respect to the principal or interest on the Bonds; (iii) any notice which is
permitted or required to be given to Holders pursuant to this Resolution; or (iv) any consent
given or other action taken by the Depository as Holder.
SECTION 2.6 Authentication.
No Series 2007 Bond 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 Series
2007 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 Series 2007 Bond shall be
conclusive evidence that such Series 2007 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 2.7 Temporary Bonds.
9
Until the definitive Series 2007 Bonds are prepared, the Issuer may execute, in the same
manner as is provided in Section 2.4 hereof, and deliver, upon authentication by the Registrar
pursuant to Section 2.6 hereof, in lieu of definitive Series 2007 Bonds, but subject to the same
provisions, limitations and conditions as the definitive Series 2007 Bonds, except as to the
denominations thereof, one or more temporary Series 2007 Bonds substantially of the tenor of
the definitive Series 2007 Bonds in lieu of which such temporary Series 2007 Bond or Bonds are
issued, in denominations approved by the officers of the Issuer who shall execute such temporary
Series 2007 Bond or Bonds, and with such omissions, insertions and variations as may be
appropriate to temporary Series 2007 Bonds. The Issuer, at its own expense, shall prepare and
execute definitive Series 2007 Bonds, which shall be authenticated by the Registrar. Upon the
surrender of such temporary Series 2007 Bonds for exchange, the Registrar, without charge to
the Holder thereof, shall deliver in exchange therefor definitive Series 2007 Bonds, of the same
aggregate principal amount and Series and maturity as the temporary Series 2007 Bonds
surrendered. Until so exchanged, the temporary Series 2007 Bonds shall in all respects be
entitled to the same benefits and security as definitive Series 2007 Bonds issued pursuant to this
Resolution. All temporary Series 2007 Bonds surrendered in exchange for another temporary
Series 2007 Bond or Bonds or for a definitive Series 2007 Bond or Bonds shall be forthwith
canceled by the Registrar.
SECTION 2.8 Series 2007 Bonds Mutilated, Destroyed, Stolen or Lost.
In case any Series 2007 Bond shall become mutilated, or be destroyed, stolen or lost, the
Issuer may, in its discretion, issue and deliver, and the Registrar shall authenticate, a new Series
2007 Bond of like tenor as the Series 2007 Bond so mutilated, destroyed, stolen or lost, in
exchange and substitution for such mutilated Series 2007 Bond upon surrender and cancellation
of such mutilated Series 2007 Bond or in lieu of and substitution for the Series 2007 Bond
destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of
such Holder's ownership thereof and satisfactory indemnity and complying with such other
reasonable regulations and conditions as the Issuer or the Registrar may prescribe and paying
such expenses as the Issuer and the Registrar may incur. All Series 2007 Bonds so surrendered
or otherwise substituted shall be canceled by the Registrar. If any of the Series 2007 Bonds shall
have matured or be about to mature, instead of issuing a substitute Series 2007 Bond, the Issuer
may pay the same or cause the Series 2007 Bond to be paid, upon being indemnified as
aforesaid, and if such Series 2007 Bonds be lost, stolen or destroyed, without surrender thereof.
Any such duplicate Series 2007 Bonds issued pursuant to this Section 2.8 shall constitute
original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen
or destroyed Series 2007 Bond be at any time found by anyone, and such duplicate Series 2007
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 Series 2007 Bonds issued hereunder and shall be entitled to
the same benefits and security as the Series 2007 Bond so lost, stolen or destroyed.
SECTION 2.9 Interchan eg ability, Negotiability and Transfer
Series 2007 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
10
exchanged for an equal aggregate principal amount of registered Series 2007 Bonds of the same
Series and maturity of any other authorized denominations.
The Series 2007 Bonds 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 Series 2007 Bonds. So long as any of the Series
2007 Bonds shall remain Outstanding, the Issuer shall maintain and keep, at the office of the
Registrar, books for the registration and transfer of the Series 2007 Bonds.
Each Series 2007 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 transfer satisfactory to the Registrar duly executed
and guaranteed by the Holder or such Holder's duly authorized attorney. Upon the transfer of
any such Series 2007 Bond, the Issuer shall issue, and cause to be authenticated, in the name of
the transferee a new Series 2007 Bond or Bonds of the same aggregate principal amount and
Series and maturity as the surrendered Series 2007 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 Series 2007 Bond shall be registered upon the books of the Issuer as the absolute
owner of such Series 2007 Bond, whether such Series 2007 Bond shall be overdue or not, for the
purpose of receiving payment of, or on account of, the principal, Redemption Price, if applicable,
and interest on such Series 2007 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 Series 2007 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 the event it is not also the Paying Agent for the Series 2007 Bonds, shall
forthwith (a) following the fifteenth day of the calendar month next preceding an interest
payment date for the Series 2007 Bonds, (b) following the fifteenth day next preceding the date
of first mailing of notice of redemption of any Series 1996 Bonds, or (c) at any other time as
reasonably requested by the Paying Agent of the Series 2007 Bonds, certify and furnish to such
Paying 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 Series 2007 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 Series 2007 Bonds or transferring Series
2007 Bonds is exercised, the Issuer shall execute and the Registrar shall authenticate and deliver
such Series 2007 Bonds in accordance with the provisions of this Resolution. Execution of
Series 2007 Bonds, by the officers of the Issuer described in Section 2.4 above, for purposes of
exchanging, replacing or transferring Series 2007 Bonds may occur at the time of the original
delivery of the Series 2007 Bonds. All Series 2007 Bonds surrendered in any such exchanges or
transfers shall be canceled by the Registrar. For every such exchange or transfer of Series 2007
Bonds, the Issuer or the Registrar may make a charge sufficient to reimburse it for any tax, fee,
expense or other governmental charge required to be paid with respect to such exchange or
11
transfer. The Issuer and the Registrar shall not be obligated to make any such exchange or
transfer of any Series 2007 Bonds which shall have been selected for redemption or of any Series
2007 Bonds during the fifteen (15) days next preceding an Interest Date on the Series 2007
Bonds, or in the case of any proposed redemption of Series 2007 Bonds, during the fifteen (15)
days next preceding the date of selection of Series 2007 Bonds to be redeemed.
SECTION 2.10 Form of Bonds.
Except for Capital Appreciation Bonds and Variable Rate Bonds, the form of which shall
be provided by Supplemental Resolution, the Series 2007 Bonds shall be in substantially the
following forms with such omissions, insertions and variations as may be necessary and/or
desirable and approved by the officers of the Issuer described in Section 2.4 above, prior to the
issuance thereof (which necessity and/or desirability and approval shall be evidenced
conclusively by the Issuer's delivery of the Series 2007 Bonds to the Purchaser):
[FORM OF SERIES 2007 BOND]
No. R- $
UNITED STATES OF AMERICA
STATE OF FLORIDA
COUNTY OF LAKE
CITY OF CLERMONT
WATER AND SEWER REVENUE REFUNDING BOND, SERIES 2007
Interest Maturity Date of
Rate Date Original Issue CUS1P No.
Registered Holder:
Principal Amount:
KNOW ALL MEN BY THESE PRESENTS, that the City of Clermont, a
municipality 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 identified 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 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 June 1 and December 1 of each year commencing December 1, 2007, until such
12
Principal Amount shall have been paid or provided for, except as the provisions 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
payment thereof, shall be legal tender for the payment of public and private debts. Such
Principal Amount and the premium, if any, on this bond, are payable, upon presentation and
surrender hereof, at the office of U.S. Bank National Association, Miami, 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 U.S. Bank National
Association, Miami, Florida, as registrar, or such other registrar as the Issuer shall hereafter duly
appoint (the "Registrar"), at the close of business on the date which shall be the fifteenth day
(whether or not a business day) of the calendar month next preceding each interest payment date
and shall be paid by a check 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 interest payment date, payment of each installment of such defaulted interest
shall be made to the person in whose name this bond shall be registered at the close of business
on a special record date for the payment of such defaulted interest as established by notice to
such Registered Holder, not less than ten (10) days preceding such special record date.
This bond is one of an authorized issue of bonds of the Issuer in the aggregate
principal amount of $ (the "Bonds") of like date, tenor and effect, except as to
maturity date, interest rate, denomination and number, issued for the purpose of refunding a
portion of the Issuer's outstanding Water and Sewer Revenue and Refunding Bonds, Series
2000, 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, and other applicable
provisions of law (the "Act"), and Resolution No. 1162 duly adopted by the City Council of the
Issuer on October 24, 2000, as amended and supplemented from time to time, particularly as
supplemented by the resolution duly adopted by the City Council of the Issuer on August 28,
2007 (collectively, the "Resolution"), and is subject to all the terms and conditions of the
Resolution.
The principal of, premium, if any, and interest on this bond are payable solely
from and secured by a lien upon and a pledge of the Pledged Revenues (as defined in the
Resolution), including the Net Revenues (as defined in the Resolution) to be derived from the
operation of the Issuer's water and sewer system (the "System"), and, until applied in accordance
with the provisions of the Resolution, the proceeds of the Bonds and all moneys, including
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"). 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 subdivision thereof, to the payment of such principal,
13
premium, if any, and interest. This bond and the obligation evidenced hereby shall not constitute
a lien upon the System or any other 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.
The Bonds are payable on a parity, equally and ratably, from the Pledged Funds
with the Issuer's outstanding Water and Sewer Revenue and Refunding Bonds, Series 2000
which are not being refunded with proceeds of the Bonds.
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.
The Bonds maturing on or before December 1, are not subject to
redemption prior to maturity. The Bonds maturing after December 1, are subject to
redemption prior to their respective maturities, at the option of the Issuer, in whole or in part, on
December 1, or any date thereafter, at a redemption price equal to the principal amount
thereof plus accrued interest to the redemption date. If less than all of the Bonds are called for
redemption, the Bonds to be redeemed shall be selected in such manner as the Issuer in its
discretion shall determine and if less than all of a maturity shall be called for redemption, the
Bonds to be redeemed shall be selected by lot within such maturity.
The Bonds maturing ,are subject to mandatory redemption
in part prior to maturity by lot at a redemption price equal to the principal amount thereof,
without premium, plus accrued interest to the redemption date, beginning on
,and on each thereafter in the years and in the principal
amounts corresponding to the Amortization Installments (as defined in the Resolution) as
follows:
Amortization
Year Installments
(maturity)
Notice of redemption shall be given in the manner required by the Resolution.
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 purpose 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 instrument of transfer
satisfactory to the Registrar duly executed by the Registered Holder or such Holder's attorney
duly authorized in writing, and thereupon a new Bond or Bonds in the same aggregate principal
amount shall be issued to the transferee in exchange therefor, and upon the payment of the
charges, if any, prescribed in the Resolution. Each of the Bonds is issuable in fully registered
form in the denomination of $5,000 or any integral multiple thereof not exceeding the aggregate
principal amount of the Bonds having the same maturity. The Issuer, the Registrar and any
14
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, during the fifteen (15) days next preceding
the redemption date established for such Bonds.
The Bonds when issued will be registered initially in the name of Cede & Co., as
nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as
the initial securities depository for the Bonds. Individual purchases of the Bonds may be made
in book entry form only, and such purchasers will not receive certificates representing their
interests in the Bonds. While the Bonds are registered in the name of a securities depository (a
"Depository") or its nominee the Issuer will recognize the Depository or its nominee as the
Holder of the Bonds for all purposes, including notices. Conveyance of notices and other
communications by the Depository to participants, by participants to indirect participants, and by
participants and indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory and regulatory requirements as may be in effect from time
to time.
The Bonds are issuable only as fully-registered bonds and, except as hereinafter
provided, in printed or typewritten form, registered in the name of Cede & Co., as nominee of
DTC, which shall be considered to be the Registered Holder for all purposes of the Resolution,
including without limitation, payment by the Issuer of principal of, premium, if any, and interest
on the Bonds, and receipt of notices and exercise of rights of holders of the Bonds. There shall
be a single Bond which shall be immobilized in the custody of DTC with the beneficial owners
having no right to receive the Bonds in the form of physical securities or certificates. Ownership
of beneficial interest in the Bonds shall be shown by book entry on the system maintained and
operated by DTC and its participants, and transfers of ownership or beneficial interests shall be
made only by DTC and its participants, by book entry, the Issuer having no responsibility
therefor. DTC is expected to maintain records of the positions of participants in the Bonds, and
the participants and persons acting through participants are expected to maintain records of the
purchasers of beneficial interests in the Bonds. The Bonds as such shall not be transferable or
exchangeable, except for transfer to another Depository or to another nominee of a Depository,
without further action by the Issuer.
If any Depository determines not to continue to act as a Depository for the Bonds
for use in a book entry system, the Issuer may attempt to have established a securities
depository/book entry system relationship with another qualified Depository under the
Resolution. If the Issuer does not or is unable to do so, the Issuer and the Registrar and Paying
Agent, after the Registrar and Paying Agent has made provision for notification of the beneficial
owners by the then Depository, shall permit withdrawal of the Bonds from the Depository, and
authenticate and deliver Bond certificates in fully registered form (in denominations of $5,000 or
multiples thereof) to the assigns of the Depository or its nominee.
It is hereby certified and recited that all acts, conditions and things required to
exist, to happen and to be performed precedent to and in connection with the issuance of this
bond, exist, have happened and have been performed, in regular and due form and time as
15
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.
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.
16
IN WITNESS WHEREOF, the City of Clermont, Florida, has issued this bond
and has caused the same to be executed by the manual or facsimile signature of its Mayor and
attested and countersigned by the manual or facsimile signature of its City Clerk and its official
seal or a facsimile thereof to be affixed or reproduced hereon, all as of the ~ day of
~t.[.a/i s ~- , 2007.
CITY OF CLERMONT, FLORIDA
(SEAL)
ATTE/STED AND COUNTERSIGNED:
~'
~/~
Tracy Ac y ,City Cl
sy
arold S. Turville, Jr., Mayor
CERTIFICATE OF AUTHENTICATION
Resolution.
This bond is one of the Bonds of the issue described in the within-mentioned
Date of Authentication:
U.S. BANK NATIONAL ASSOCIATION,
Registrar
By:
Authorized Signatory
17
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a policy containing the following
provisions, such policy being on file at the Miami, Florida offices of U.S. Bank National
Association, paying agent.
The Insurer, in consideration of the payment of the premium and subject to the terms of
this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter
defined, of the following described obligations, the full and complete payment required to be
made by or on behalf of the Issuer to U.S. Bank National Association, or its successor (the
"Paying Agent"), of an amount equal to (i) the principal of (either at the stated maturity or by
any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on the
Obligations (as that term is defined below) as such payments shall become due but shall not be
so paid (except that in the event of any acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from default or otherwise, other than
any advancement of maturity pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times as such payments of
principal would have been due had there not been any such acceleration); and (ii) the
reimbursement of any such payment which is subsequently recovered from any owner pursuant
to a final judgment by a court of competent jurisdiction that such payment constitutes an
avoidable preference to such owner within the meaning of any applicable bankruptcy law. The
amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein
collectively as the "Insured Amounts." "Obligations" shall mean:
CITY OF CLERMONT, FLORIDA
WATER AND SEWER REVENUE REFUNDING BONDS,
SERIES 2007
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
writing by registered certified mail, or upon receipt of written notice by registered or certified
mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an
Insured Amount for which is then due, that such required payment has not been made, the
Insurer on the due date of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with U.S. Bank
Trust National Association, in New York, New York, or its successor, sufficient for the payment
of any such Insured Amounts which are then due. Upon presentment and surrender of such
Obligations or presentment of such other proof of ownership of the Obligations, together with
any appropriate instruments of assignment to evidence the assignment of the Insured Amounts
due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the
appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding
related to payment of Insured Amounts on the Obligations, such instruments being in a form
satisfactory to U.S. Bank Trust National Association, U.S. Bank Trust National Association shall
disburse to such owners or the Paying Agent payment of the Insured Amounts due on such
Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts
18
and legally available therefor. This policy does not insure against loss of any prepayment
premium which may at any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any Obligation as
indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer
for such purpose. The term owner shall not include the Issuer or any party whose agreement
with the Issuer constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices located at
113 King Street, Armonk, New York 10504 and such service of process shall be valid and
binding.
This policy is non-cancelable for any reason. The premium on this policy is not
refundable for any reason including the payment prior to maturity of the Obligations.
The insurance provided by this Policy is not covered by the Florida Insurance Guaranty
Association created under Chapter 631, Florida Statutes.
MBIA Insurance Corporation
19
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of the within bond, shall be
construed as though they were written out in full according to 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 --
(Gust.)
Custodian for
under Uniform Transfer to Minors Act of
(State)
Additional abbreviations may also be used though not in list above.
20
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
Insert Social Security or Other
Identifying Number of Assignee
(Name and Address of Assignee)
the within bond and does hereby irrevocably constitute and appoint
as attorneys to register the transfer of the said bond on the books kept for registration thereof
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by an institution which is a participant in the
Securities Transfer Agent Medallion Program
(STAMP) or similar program.
NOTICE: The signature to this assignment
must correspond with the name of the
Registered Holder as it appears upon the
face of the within bond in every particular,
without alteration or enlargement or any
change whatever and the Social Security or
other identifying number of such assignee
must be supplied.
21
ARTICLE 3
SECURITY, SPECIAL FUNDS AND
APPLICATION THEREOF
SECTION 3.1 Series 2007 Bonds not to be Indebtedness of Issuer.
The Series 2007 Bonds shall not be or constitute general obligations or indebtedness of
the Issuer as "bonds" within the meaning of any constitutional or statutory provision, but shall be
special obligations 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 and the Original Instrument.
No Holder of any Series 2007 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 Series 2007
Bond or be entitled to payment of such Series 2007 Bond from any moneys or property of the
Issuer except the Pledged Funds in the manner provided herein and in the Original Instrument.
SECTION 3.2 Security for Series 2007 Bonds.
The payment of the principal of or Redemption Price, if applicable, and interest on the
Series 2007 Bonds shall be secured forthwith equally and ratably by a pledge of and prior lien
upon the Pledged Funds in the manner and to the extent described herein. The Pledged Funds
shall be subject to the lien of this pledge immediately upon the issuance and delivery of the
Series 2007 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. The Issuer does hereby irrevocably
pledge the Pledged Funds to the payment of the principal of or Redemption Price, if any, and
interest on the Series 2007 Bonds in the manner and to the extent provided in this Resolution and
the Original Instrument. The Series 2007 Bonds are payable from the Pledged Funds on a parity,
equally and ratably, with the Parity Obligations.
SECTION 3.3 Additional Security.
Anything herein to the contrary notwithstanding, however, the Series 2007 Bonds will be
payable from and secured by a Bond Insurance Policy of the Insurer, and the Issuer may cause
the Series 2007 Bonds to be payable from and secured by a Credit Facility or any other insurance
policy of an Insurer not applicable to any one or more other Series of Bonds, as shall be provided
by Supplemental Resolution of the Governing Body, in addition to the security of the Pledged
Funds provided herein.
SECTION 3.4 Application of Provisions of Original Instrument.
The Series 2007 Bonds shall for all purposes be considered to be Additional Bonds issued
under the authority of Section 6.2 of the Original Instrument and shall be entitled to all the
protection and security provided in and by the Original Instrument for the Parity Obligations, and
the Series 2007 Bonds shall be in all respects entitled to the same security, rights and privileges
22
enjoyed by the Parity Obligations. The covenants and pledges contained in the Original
Instrument shall be applicable to the Series 2007 Bonds in like manner as applicable to the Parity
Obligations.
ARTICLE 4
MISCELLANEOUS
SECTION 4.1 Ratification of Acceptance of Insurance Commitments.
The Issuer hereby ratifies the acceptance of the Insurer's commitments to provide a Bond
Insurance Policy with respect to the Series 2007 Bonds and the Reserve Fund Insurance Policy,
copies of which commitments are attached hereto as Exhibit D. The Insurer is hereby designated
as the Insurer for the Series 2007 Bonds. The Reserve Fund Insurance Policy shall be in the
amount specified therein. Such amount, together with the other amounts on deposit in or
credited to the Reserve Fund, shall equal not less than the Reserve Fund Requirement. Such
amount may equal an amount which, together with the other amounts on deposit in or credited to
the Reserve Fund, is greater than the Reserve Fund Requirement in order to comply with the
terms of the Insurer's commitments.
SECTION 4.2 Provisions Relating to the Bond Insurance Policy for the Series 2007
Rnnr~c
Notwithstanding any provision to the contrary contained herein, the following provisions
shall apply so long as the Bond Insurance Policy with respect to the Series 2007 Bonds issued by
the Insurer shall be in full force and effect:
(A) "Authorized Investments" shall mean any of the following which shall be
authorized from time to time by applicable laws of the State of Florida for deposit or purchase by
the Issuer for the investments of its funds:
(1) Direct obligations of the United States of America (including
obligations issued or held in book-entry form on the books of the Department of
the Treasury, and CATS and TIGRS) or obligations the principal of and interest
on which are unconditionally guaranteed by the United States of America.
(2) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such
obligations are backed by the full faith and credit of the United States of America
(stripped securities are only permitted if they have been stripped by the agency
itself):
(a) U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial
ownership
(b) Farmers Home Administration (FmHA)
23
Certificates of beneficial ownership
(c) Federal Financing Bank
(d) Federal Housing Administration Debentures (FHA)
(e) General Services Administration
Participation certificates
(f) Government National Mort~a~e Association (GNMA or "Ginnie
Mae"
GNMA -guaranteed mortgage-backed bonds
GNMA -guaranteed pass-through obligations
(not acceptable for certain cash-flow sensitive issues)
(g) U.S. Maritime Administration
Guaranteed Title XI financing
(h) U.S. Department of Housing and Urban Development HUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.S. government
guaranteed debentures
U.S. Public Housing Notes and Bonds - U.S. government
guaranteed public housing notes and bonds
(3) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit U.S. government
agencies (stripped securities are only permitted if they have been stripped by the
agency itself):
(a) Federal Home Loan Bank System
Senior debt obligations
(b) Federal Home Loan Mort~a~e Corporation (FHLMC or "Freddie
Mac")
Participation Certificates
24
Senior debt obligations
(c) Federal National Mortgage Association (FNMA or "Fannie Mae")
Mortgage-backed securities and senior debt obligations
(d) Student Loan Marketing Association (SLMA or "Sallie Mae")
Senior debt obligations
(e) Resolution Funding Corp. (REFCORP) obligations
(f) Farm Credit System
Consolidated systemwide bonds and notes
(4) 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 S&P of AAAm-G; A.AA.tn; or AAm; and if
rated by Moody's rated Aaa; Aal; or Aa2.
(5) Certificates of deposit secured at all times by collateral described in
(A) and/or (B) above. Such certificates must be issued by commercial banks,
savings and loan associations or mutual savings banks. The collateral must be
held by a third party and the bondholders must have a perfected first security
interest in the collateral.
(6) Certificates of deposit, savings accounts, deposit accounts or money
market deposits which are fully insured by FDIC, including BIF and SAIF.
(7) Investment agreements, including guaranteed investment contracts,
forward purchase agreements and reserve fund put agreements acceptable to the
Insurer.
(8) Commercial paper rated, at the time of purchase, "Prime-1" by
Moody's and "A-1" or better by S&P.
(9) Bonds or notes issued by any state or municipality which are rated by
Moody's and S&P in one of the two highest rating categories assigned by such
agencies.
(10) Federal funds or bankers "acceptances with a maximum term of one
year of any bank which has an unsecured, uninsured and unguaranteed obligation
rating of "Prime-1" or "A3" or better by Moody's and "A-1" or "A" or better by
S&P.
(11) Repurchase agreements provide for the transfer of securities from a
dealer bank or securities firm (seller/borrower) to a municipal entity
25
(buyer/lender), and the transfer of cash from a municipal entity to the dealer bank
or securities firm with an agreement that the dealer bank or securities firm will
repay the cash plus a yield to the municipal entity in exchange for the securities at
a specified date.
Repurchase agreements ("Repos") must satisfy the following criteria or be
approved by the Insurer insuring the related series of Bonds.
(a) Repos must be between the municipal entity and a dealer bank or
securities firm described below:
(i) Primary dealers on the Federal Reserve reporting dealer list
which are rated "A" or better by S&P and Moody's, or
(ii) Banks rated "A" or above by S&P and Moody's.
(b) The written repo contract must include the following_
(i) Securities which are acceptable for transfer are:
Direct U.S. governments, or
Federal agencies backed by the full faith and credit of the
U.S. government (and FNMA & FHLMC).
(ii) The term of the repo maybe up to 30 days
(iii) The collateral must be delivered to the municipal entity,
trustee (if trustee is not supplying the collateral) or third party
acting as agent for the trustee (if the trustee is supplying the
collateral) before or simultaneous with payment (perfection by
possession of certificated securities).
(iv) Valuation of Collateral:
The securities must be valued weekly, marked-to-market at
current market price plus accrued interest.
The value of collateral must be equal to 104% of the
amount of cash transferred by the municipal entity to the dealer
bank or security firm under the repo plus accrued interest. If the
value of securities held as collateral slips below 104% of the value
of the cash transferred by municipality, then additional cash and/or
acceptable securities must be transferred. If, however, the
securities used as collateral are FNMA or FHLMC, then the value
of collateral must equal 105%.
26
(c) Legal opinion which must be delivered to the municipal entity
that states to the effect that the Repo meets guidelines under state
law for legal investment of public funds.
(12) Units of participation in the Local Government Surplus 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 depository of public money.
(13) With the prior written consent of the Insurer or credit bank for a
particular series of Bonds, such other obligations as shall be permitted to be legal
investments of the Issuer by the laws of the State.
(B) Copies of any material modifications or amendments to the Resolution which shall
have been consented to by the Insurer shall be furnished to Moody's Investors Service and
Standard &Poor's.
(C) No amendment to any substantive provisions of the Resolution or supplements to
the Resolution may be made without the prior written consent of the Insurer, such consent not to
be unreasonably withheld.
(D) The Issuer shall furnish to the Insurer a copy of any notice to be given to the
Bondholders or to any Registrar and Paying Agent and any certificate rendered pursuant to the
Resolution at the following address: 113 King Street, Armonk, New York 10504, Attention:
Insured Portfolio Management.
(E) If any Series 2007 Bonds insured by the Insurer is refunded and the refunding
utilizing a forward supply contract, the Insurer's consent to use such forward supply contract as
required.
(F) The following procedures shall apply for payments pursuant to the Bond
Insurance Policy and the Issuer and the Registrar and Paying Agent shall comply with the
following procedures:
(1) In the event that, on the second business day, and again on the business
day, prior to the payment date on Series 2007 Bonds, the Registrar and Paying Agent has
not received sufficient moneys to pay all principal of and interest on the Series 2007
Bonds due on the second following or following, as the case may be, business day, the
Paying Agent shall immediately notify the Insurer or its designee on the same business
day by telephone or telegraph, confirmed in writing by registered or certified mail, of the
amount of the deficiency.
(2) If the deficiency is made up in whole or in part prior to or on the payment
date, the Registrar and Paying Agent shall so notify the Insurer or its designee.
(3) In addition, if the Registrar and Paying Agent has notice that any
Bondholder has been required to disgorge payments of principal or interest on any Series
2007 Bond to a trustee in bankruptcy or creditors or others pursuant to a final judgment
27
by a court of competent jurisdiction that such payment constitutes a voidable preference
to such Bondholder within the meaning of any applicable bankruptcy laws, then the
Registrar and Paying Agent shall notify the Insurer or its designee of such fact by
telephone or telegraphic notice, confirmed in writing by registered or certified mail.
(4) The Registrar and Paying Agent is hereby irrevocably designated,
appointed, directed and authorized to act as attorney-in-fact for Registered Owners of the
Series 2007 Bonds, as applicable as follows:
(a) If and to the extent there is a deficiency in amounts required to
pay interest on the Series 2007 Bonds, the Registrar and Paying Agent shall (i) execute
and deliver to U.S. Bank Trust National Association, or its successors under the Bond
Insurance Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance
Paying Agent, an instrument appointing the Insurer as agent for such Registered Owners
in any legal proceeding related to the payment of such interest and an assignment to the
Insurer of the claims for interest to which such deficiency relates and which are paid by
the Insurer, (ii) receive as designee of the Registered Owners (and not as Registrar and
Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment from
the Insurance Paying Agent with respect to the claims for interest so assigned, and (iii)
disburse the same to such respective Registered Owners; and
(b) If and to the extent of a deficiency in amounts required to pay
principal of the Series 2007 Bonds, the Registrar and Paying Agent shall (i) execute and
deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent
an instrument appointing the Insurer as agent for such Registered Owner in any legal
proceeding relating to the payment of such principal and an assignment to the Insurer of
any of the Series 2007 Bonds surrendered to the Insurance Paying Agent of so much of
the principal amount thereof as has not previously been paid or for which moneys are not
held by the Registrar and Paying Agent and available for such payment (but such
assignment shall be delivered only if payment from the Insurance Paying Agent is
received), (ii) receive as designee of the Registered Owners (and not as Registrar and
Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment
therefor from the Insurance Paying Agent, and (iii) disburse the same to such Registered
Owners.
(5) Payments with respect to claims for interest on and principal of the Series
2007 Bonds disbursed by the related Registrar and Paying Agent from proceeds of the
Bond Insurance Policy shall not be considered to discharge the obligation of the Issuer
with respect to the Series 2007 Bonds and the Insurer shall become the owner of such
unpaid Series 2007 Bond and claims for the interest in accordance with the tenor of the
assignment made to it under the provisions of this subsection or otherwise.
(6) Irrespective of whether any such assignment is executed and delivered, the
Issuer and the Registrar and Paying Agent hereby agree for the benefit of the Insurer that:
(a) They recognize that to the extent the Insurer makes payments,
directly or indirectly (as by paying through the Registrar and Paying Agent), on account
28
of principal of or interest on the Series 2007 Bonds, the Insurer will be subrogated to the
rights of such Registered Owners to receive the amount of such principal and interest
from the Issuer, with interest thereon as provided and solely from the sources stated in the
Resolution and the Series 2007 Bonds; and
(b) They will accordingly pay to the Insurer the amount of such
principal and interest (including principal and interest recovered under subparagraph (ii)
of the first paragraph of the Bond Insurance Policy, which principal and interest shall be
deemed past due and not to have been paid), with interest thereon as provided in the
Resolution and the Series 2007 Bonds, but only from the sources and in the manner
provided herein for the payment of principal of and interest on the Series 2007 Bonds to
Registered Owners, and will otherwise treat the Insurer as the owner of such rights to the
amount of such principal and interest.
(7) In connection with the issuance of Additional Bonds, the Issuer shall
deliver to the Insurer a copy of the disclosure document, if any is circulated with respect
to such Additional Bonds.
(8) Copies of any amendments made to the documents executed in connection
with the issuance of the Series 2007 Bonds which are consented to by the Insurer shall be
sent to Moody's Investors Service and Standard &Poor's.
(9) The Insurer shall receive notice of the resignation or removal of any
Registrar and Paying Agent and the appointment of a successor thereto.
(10) The Insurer shall receive copies of all notices required to be delivered to
Bondholders and, on an annual basis, copies of the Issuer's audited financial statements
and annual budget.
Notices: Any notice that is required to be given to a Registered Owner of any Series 2007
Bond or to the Registrar and Paying Agent pursuant to the Resolution shall also be provided to
the Insurer. All notices required to be given to the Insurer shall be in writing and shall be sent by
registered or certified mail addressed to the Insurer Insurance Corporation, 113 King Street,
Armonk, New York 10504 Attention: Insured Portfolio Management.
(G) Anything provided herein to the contrary notwithstanding, the Insurer shall not be
entitled to any benefits of this Resolution or any rights specifically granted to it hereunder,
including the right to consent to, approve or participate in any actions proposed to be taken by
the Issuer, a Series 2007 Bondholder, or any of them pursuant to this Resolution i£
(1) the Insurer shall be in default in the due and punctual performance of its
payment obligations under the Bond Insurance Policy or the Reserve Fund Insurance
Policy or if either of such policies for whatever reason is not then enforceable and in full
force and effect; or
(2) the Insurer shall apply for or consent to the appointment of a receiver,
custodian, trustee or liquidator of the Insurer or of all or a substantial part of its assets, or
29
shall admit in writing its inability, or be generally unable, to pay its debts as such debts
become due, or shall make a general assignment for the benefit of its creditors, or
commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter in
effect) or shall file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding up or composition or adjustment of
debts, or shall fail to contest in a timely and appropriate manner, or acquiesce in writing
to, any other petition flied against the Insurer in any involuntary case under said Federal
Bankruptcy Code, or shall take any other action for the purpose of effecting the
foregoing; or
(3) a proceeding or case shall be commenced without the application or
consent of the Insurer, in any court of competent jurisdiction seeking the liquidation,
reorganization, dissolution, winding up or composition or readjustment of debts of the
Insurer or the appointment of a trustee, receiver, custodian, liquidator, sequestrator (or
other similar official) or the like, of the Insurer or of all or a substantial part of its assets,
or similar relief with respect to the Insurer under any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or adjustment of debts, or for
relief, rehabilitation, reorganization, conservation, liquidation or dissolution under the
law of any state and such proceeding or case shall continue undismissed and an order,
judgment or decree approving or ordering any of the foregoing shall be entered and
continue unstayed in effect for a period of one hundred twenty (120) days from
commencement of such proceedings or case, or any order for relief against the Insurer
shall be entered in an involuntary case under said Federal Bankruptcy Code.
(H) No Additional Bonds may be issued pursuant to the Resolution without the prior
consent of the Insurer, unless such Additional Bonds are issued solely to refund outstanding
Bonds to obtain debt service savings.
(I) Notwithstanding any provision of the Resolution to the contrary, the Insurer shall
at all times be deemed the registered owner of each Series 2007 Bond for all purposes except for
the purpose of payment of the principal of and premium, if any, and interest on such Bonds prior
to payment by the Insurer of the principal of an interest on any of such Bonds. So long as the
Bond Insurance Policy is in effect and the Insurer is not in default thereunder, the Insurer shall
have the exclusive right to direct any action or remedy to be undertaken by the Bondholders or
by any other party pursuant to the Resolution, and no acceleration shall be permitted, and no
event of default shall be waived, without the Insurer's prior written consent.
(J) Any Registrar and Paying Agent appointed with respect to the Series 2007 Bonds
must be a commercial bank with trust powers.
(K) The Issuer hereby grants to the Insurer a security interest in all amounts pledged
to the payment of the principal of, premium, if any, and interest on the Series 2007 Bonds,
subject only to the security interest held the Bondholders.
(L) In the event of any advance refunding of the Series 2007 Bonds, the Issuer shall
notify the Insurer at least fifteen (15) business days prior to such advance refunding.
30
(M) Investments made with moneys in the Reserve Fund must mature later than five
(5) years from the date of the investment, unless otherwise approved by the Insurer.
SECTION 4.3 Provisions Relating to the Reserve Fund Insurance Policy.
Notwithstanding any provision to the contrary contained herein, the following provisions
shall apply so long the Reserve Fund Insurance Policy shall be in full force and effect with
respect to the Series 2007 Bonds, any of such policy is in full force and effect, and the Series
2007 Bonds remain outstanding under the Resolution:
(A) A Reserve Fund Insurance Policy may not be deposited in the Reserve Fund to
meet the Reserve Fund Requirement unless the issuer thereof is an insurance company rated in
the highest rating category by Standard & Poor's and Moody's Investors Service and, if rated by
A. M. Best & Company, is rated in the highest rating category by A. M. Best & Company.
(B) Each Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit shall
be subject to the approval of the Insurer.
(C) A default under either the Financial Guaranty Agreement (the "Financial
Guaranty Agreement") executed between the Issuer and the Insurer in connection with the Series
2007 Bonds or the Insurance Agreement, shall constitute an Event of Default under the terms of
the Resolution.
(D) The Registrar and Paying Agent shall deliver to the Insurer a Demand for
Payment as described in the Reserve Fund Insurance Policy at least three days prior to the date
on which funds are required. It will be the responsibility of the Registrar and Paying Agent to
maintain adequate records, verified by the Insurer, as to the amount available to be drawn at any
time under the Reserve Fund Insurance Policy and as to the amounts paid and owing to the
Insurer under the terms of the Financial Guaranty Agreement.
(E) The Issuer agrees to pay or cause to be paid all amounts owed to the Insurer under
the terms of each Financial Guaranty Agreement and the Insurance Agreement. All such amounts
shall be paid before this Resolution may be defeased pursuant to Section 9.1 of the Original
Instrument. There may be no optional redemption of Series 2007 Bonds, refunding or
distribution of funds to the Issuer unless all amounts owed to the Insurer under the terms of the
Financial Guaranty Agreement and the Insurance Agreement shall have been paid in full.
SECTION 4.4 Sale of the Series 2007 Bonds.
The Series 2007 Bonds shall be offered for sale to the public pursuant to the Official
Notice of Sale substantially in the form attached hereto as Exhibit A with such changes,
amendments, modifications, omissions and additions thereto as may be approved by the
Administrative Services Director. The form of such Official Notice of Sale is hereby approved.
Foley & Lardner LLP, the Issuer's Bond Counsel, is authorized and directed to place a summary
of such Official Notice of Sale in The Bond Buyer and/or in any other publications it deems
appropriate for the purpose of offering the Series 2007 Bonds for sale at least ten (IO) days prior
to the date fixed for receipt of bids. The Official Confirmation of Bid Form shall be in
31
substantially the form included within the Official Notice of Sale attached hereto as Exhibit A
with such changes, amendments, modifications, omissions and additions thereto as may be
approved by the Administrative Services Director of the Issuer (the "Official Bid Form"). The
form of such Official Bid Form is hereby approved. The Financial Advisor is hereby authorized
to utilize such method of electronic bidding, if any, as it deems appropriate for the offering of the
Series 2007 Bonds.
The Series 2007 Bonds shall be sold to the bidder selected pursuant to Section 4.6 below
at the purchase price indicated in the Official Bid Form submitted by the bidder in accordance
with the terms and conditions of the Official Notice of Sale, as such purchase price may be
adjusted in accordance with the Official Notice of Sale.
SECTION 4.5 Approval of Draft Preliminary Official Statement and Authorization of
Preliminary Official Statement and Final Official Statement.
The form of the Draft Preliminary Official Statement is hereby approved, and a
preliminary official statement and a final official statement substantially in the form of the Draft
Preliminary Official Statement attached hereto as Exhibit C, with such omissions, insertions and
variations as may be necessary and/or desirable and approved by the Mayor or the
Administrative Services Director prior to the release thereof, are hereby approved; and the
Administrative Services Director is hereby authorized to deem the preliminary official statement
final as of its date on behalf of the Issuer for purposes of Rule 15c2-12 of the Securities and
Exchange Commission (except for such omissions permitted by such Rule 15c2-12), and to
execute a certificate to that effect. A final official statement in substantially the form of the
"deemed final" preliminary official statement, with such omissions, insertions and variations as
may be necessary and/or desirable and approved by the Mayor or the Administrative Services
Director prior to the release thereof, is hereby authorized to be delivered by the Issuer to the
Purchaser for distribution at or prior to the issuance and delivery of the Series 2007 Bonds. The
Mayor is hereby authorized to evidence the Issuer's approval of the final official statement by his
or her endorsement thereof upon one or more copies, and approval of all such omissions,
insertions and variations may be presumed from such endorsement upon any copy of such final
official statement. Bond Counsel is hereby directed to furnish to the Division of Bond Finance
of the Department of the State Board of Administration of the State of Florida a copy of the final
official statement, a notice of the impending sale of the Series 2007 Bonds and the other
information required by Section 218.38, Florida Statutes, as amended, within the appropriate
time periods specified by such section.
SECTION 4.6 Conditions to Acceptance of Bid.
The Administrative Services Director shall not accept a bid for the purchase of the
Series 2007 Bonds until such time as all of the following conditions have been satisfied:
A. Receipt by the Administrative Services Director of an Official Bid Form,
as described herein, from an underwriter or underwriters complying with the terms of the
Official Notice of Sale and proposing to purchase the Series 2007 Bonds at the lowest true
interest cost to the Issuer on the Series 2007 Bonds, all as calculated in accordance with the
terms of the Official Notice of Sale, said Official Bid Form to provide for, among other things,
32
(i) an aggregate principal amount of Series 2007 Bonds of not in excess of $17,000,000, (ii) a
true interest cost of 5.00% or less, (iii) the maturities of the Series 2007 Bonds, with the final
maturity being not later than December 1, 2030, (iv) an initial optional call date no later than
December 1, 2017, with a redemption premium no greater than 1.0% of the principal amount of
Series 2007 Bonds called and (v) the net present value of the savings, after payment of all
issuance expenses and costs, which shall result from the issuance of the Series 2007 Bonds shall
not be less than 4.5% of the principal amount of the Refunded Obligations;. The Administrative
Services Director may approve the adjustment of principal maturities and the purchase price of
the Series 2007 Bonds as, and to the extent, contemplated by the Official Notice of Sale,
execution by the Administrative Services Director of a certificate accepting a bid to constitute
conclusive evidence of such approval.
B. Receipt by the Administrative Services Director of a Truth in Bonding
statement of the Purchaser complying with Section 218.385, Florida Statutes.
C. Receipt on behalf of the Issuer by the Administrative Services Director of
a good faith deposit in an amount not less than 1.0% of the par amount of the Series 2007 Bonds.
The Administrative Services Director shall rely upon the Issuer's Financial
Advisor for compliance with the conditions provided in this Section 4.6.
Upon satisfaction of all the requirements set forth in this Section 4.6, the
Administrative Services Director is authorized to accept the bid of the lowest bidder for the
purchase of the Series 2007 Bonds determined in accordance with the terms hereof and of the
Official Notice of Sale.
SECTION 4.7 Registrar and Paving Agent; Authorization of Execution and Delivery of
Registrar and Paying Agency Agreement.
U.S. Bank National Association, Miami, Florida, is hereby appointed Registrar
and Paying Agent for the Series 2007 Bonds. The Registrar and Paying Agency Agreement, with
such omissions, insertions and variations as may be approved on behalf of the Issuer by the
Mayor or the Administrative Services Director, such approval to be evidenced conclusively by
the Mayor's execution thereof, is hereby approved and authorized. The Issuer hereby authorizes
and directs the Mayor to execute the Registrar and Paying Agency Agreement and to deliver the
same to the Registrar and Paying Agent for the Series 2007 Bonds. All of the provisions of the
Registrar and Paying Agency Agreement, when executed, dated and delivered by or on behalf of
the Issuer as authorized herein and by or on behalf of the Registrar and Paying Agent for the
Series 2007 Bonds, shall be deemed to be a part of this Resolution as fully and to the same extent
as if incorporated verbatim herein.
SECTION 4.8 Escrow Holder; Execution and Delivery of Escrow Deposit Agreement.
U.S. Bank National Association, Miami, Florida, is hereby appointed Escrow
Holder for the Series 2007 Bonds. The Escrow Deposit Agreement, with such omissions,
insertions and variations as may be approved on behalf of the Issuer by the Mayor or the
Administrative Services Director, such approval to be evidenced conclusively by the Mayor's
33
execution thereof, is hereby approved and authorized. The Issuer hereby authorizes and directs
the Mayor to execute the Escrow Deposit Agreement and to deliver the same to the Escrow
Holder for the Series 2007 Bonds. All of the provisions of the Escrow Deposit Agreement, when
executed, dated and delivered by or on behalf of the Issuer as authorized herein and by or on
behalf of the Escrow Holder for the Series 2007 Bonds, shall be deemed to be a part of this
Resolution as fully and to the same extent as if incorporated verbatim herein.
SECTION 4.9 Authorization of Execution and Delivery of Continuing Disclosure
Certificate.
The Continuing Disclosure Certificate, with such omissions, insertions and variations as
may be approved on behalf of the Issuer by the Mayor or the Administrative Services Director,
such approval to be evidenced conclusively by the Mayor's execution thereof, is hereby
approved and authorized. The Issuer hereby authorizes and directs the Mayor to execute and
deliver the Continuing Disclosure Certificate. A11 of the provisions of the Continuing Disclosure
Certificate, when executed, dated and delivered by or on behalf of the Issuer as authorized
herein, shall be deemed to be a part of this Resolution as fully and to the same extent as if
incorporated verbatim herein.
The Issuer agrees that it will comply with and carry out all of the provisions of the
Continuing Disclosure Certificate executed by the Issuer and dated the date of issuance of the
Series 2007 Bonds, as originally executed and as it may be amended from time to time in
accordance with the terms thereof. Notwithstanding any other provision of this Resolution,
failure of the Issuer to comply with the Continuing Disclosure Certificate shall not be considered
an Event of Default; however, any Bondholder or Beneficial Owner (as hereinafter defined) may
take such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the Issuer to comply with its obligations under this Section
4.9. For purposes of this Section 4.9, "Beneficial Owner" means any person which (a) has the
power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of,
any Series 2007 Bonds (including persons holding Series 2007 Bonds through nominees,
depositories or other intermediaries), or (b) is treated as the owner of any Series 2007 Bonds for
federal income tax purposes.
SECTION 4.10 General Authority.
The members of the Governing Body and the Issuer's officers, attorneys and other agents
and employees are hereby authorized to do all acts and things required of them by this
Resolution or desirable or consistent with the requirements hereof for the full, punctual and
complete performance of all of the terms, covenants and agreements contained in the Series 2007
Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents
which shall be reasonably required by Bond Counsel or the Purchaser to effectuate the sale and
delivery of the Series 2007 Bonds.
SECTION 4.11 Authorization of Execution of Certificates and Other Instruments.
The Mayor, the Clerk and the Administrative Services Director are hereby authorized and
directed, under the official seal of the Issuer, to execute and deliver certificates of the Issuer
34
certifying such facts as the Issuer's attorney or Bond Counsel shall require in connection with the
issuance, sale and delivery of the Series 2007 Bonds, and to execute and deliver such other
instruments as shall be necessary or desirable to perform the Issuer's obligations under the
Original Instrument, this Resolution and the Official Notice of Sale and to consummate the
transactions contemplated hereby and thereby. The Mayor, the Clerk and/or the Administrative
Services Director are authorized to execute such other agreements as may be required by the
Insurer, Moody's Investors Service, Standard & Poor's or Fitch, Inc. which are necessary to
obtain any financial guaranty insurance policy, any reserve fund insurance policy, letter of credit
or rating.
SECTION 4.12 No Personal Liability.
No representation, statement, covenant, warranty, stipulation, obligation or agreement
herein contained, or contained in the Series 2007 Bonds, or in any certificate or other instrument
to be executed on behalf of the Issuer in connection with the issuance of the Series 2007 Bonds,
shall be deemed to be a representation, statement, covenant, warranty, stipulation, obligation or
agreement of any member of the Governing Body, officer, employee or agent of the Issuer in his
or her individual. capacity, and none of the foregoing persons nor any officer of the Issuer
executing the Series 2007 Bonds, or any certificate or other instrument to be executed in
connection with the issuance of the Series 2007 Bonds, shall be liable personally thereon or be
subject to any personal liability or accountability by reason of the execution or delivery thereof.
SECTION 4.13 No Third Party Beneficiaries.
Except such other Persons as may be expressly described herein or in the Series 2007
Bonds, nothing in this Resolution, or in the Series 2007 Bonds, expressed or implied, is intended
or shall be construed to confer upon any Person other than the Issuer, the Insurer 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 Series 2007 Bonds, all provisions hereof and thereof being intended to
be and being for the sole and exclusive benefit of the Issuer, the Insurer and the Persons who
shall from time to time be the Holders.
SECTION 4.14 Severability of Invalid Provisions.
If any one or more of the covenants, agreements or provisions of this Resolution shall be
held contrary to any express provision of law or contrary to the policy of express law, though not
expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid,
then such covenants, agreements or provisions shall be null and void and shall be deemed
separable from the remaining covenants, agreements and provisions of this Resolution and shall
in no way affect the validity of any of the other covenants, agreements or provisions hereof or of
the Series 2007 Bonds.
SECTION 4.15 Repeal of Inconsistent Resolutions.
All other resolutions or parts thereof in conflict herewith are hereby superseded and
repealed to the extent of such conflict.
35
SECTION 4.16 Original Instrument in Full Force and Effect.
Except as hereby supplemented, the Original Instrument shall remain in full force and
effect.
SECTION 4.17 Table of Contents and Headings not Part Hereof.
The Table of Contents preceding the body of this Resolution and the headings preceding
the several articles and sections hereof shall be solely for convenience of reference and shall not
constitute a part of this Resolution or affect its meaning, construction or effect.
SECTION 4.18 Effective Date.
This Resolution shall become effective immediately upon its passage.
PASSED, APPROVED AND ADOPTED this 28th day of August, 2007.
CITY COUNCIL OF THE CITY OF CLERMONT,
FLORIDA
By:
arold S. Turville, Jr., Mayor
(OFFICIAL SEAL)
ATTE
Tracy ckroyd, City rk
I, Tracy Ackroyd, Clerk of the City of Clermont, Florida, hereby certify that the
foregoing is a true and correct copy of Resolution No. 1542 of said City passed and adopted on
August 28, 2007.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of
said City this 14th day of August, 2007.
Tracy Ackroyd, City Clerk