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HomeMy WebLinkAbout1989-019t 0 s INDIAN RIVER COUNTY, FLORIDA RESOLUTION NO. 89- 19 A RESOLUTION OF INDIAN RIVER COUNTY, FLORIDA, PROVIDING FOR THE ISSUANCE OF NOT EXCEEDING $7,500,000 WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 1989, OF THE COUNTY TO REFUND CERTAIN OUTSTANDING BONDS OF THE COUNTY HERETOFORE ISSUED TO FINANCE THE COST OF CONSTRUCTION OR ACQUISITION OF THE COMBINED WATER AND SEWER SYSTEM OF THE COUNTY; PROVIDING FOR THE RIGHTS OF THE REGISTERED OWNERS OF SAID BONDS; PROVIDING FOR THE PAYMENT THEREOF; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD RIVER COUNTY, FLORIDA: OF COUNTY COMMISSIONERS OF INDIAN SECTION 1. AUTHORITY FOR THIS RESOLUTION. This resolution is adopted pursuant to Chapters 125 and 159, Florida Statutes (1987), as amended, and other applicable provisions of law. SECTION 2. DEFINITIONS. The following terms shall have the following meanings in this Resolution, unless the context otherwise clearly requires: A. "Act" shall mean Chapters 125 and 159, Florida Statutes (1987), as amended, and other applicable provisions of law. B. "Additional Parity Bonds" shall mean additional bonds issued in compliance with the terms, conditions and limitations contained herein which have an equal lien on the Pledged Funds, as herein defined, and rank equally in all respects with all other Bonds issued hereunder as to lien and security for payment. C. "Authorized Investments" shall mean those investments specified in Section 125.31, Florida Statutes (1987), as amended. D. "Board" shall mean the Board of County Commissioners of Indian River County, Florida. E. "Bonds" shall mean the Series 1989 Bonds together with any Additional Parity Bonds hereafter issued hereunder. F. "Bond Registrar" shall mean the Bond Registrar to be determined by subsequent resolution of the Board. C. "Consulting Engineers" shall mean such qualified and recognized consulting engineers, having a nationwide and favorable reputation for skill and experience in the construction and operation of systems such as the System at the time retained by the County to perform the acts and carry out the duties as herein provided for the Consulting Engineers. H. "Costs" shall mean all expenses necessary, appurtenant or incidental to the acquisition or construction of any property, real, personal or mixed, deemed necessary or desirable for carrying out the purposes of the System, including, without intending to limit the generality of the foregoing, the cost of any land or interest therein or of any fixtures, equipment or personal property necessary or convenient therefor; costs of acquiring any water or sewer system or other property in place, or any undivided interest therein, which can be operated as part of the System or which may be declared by resolution of the Board to be part. of the System; engineering, legal and financing expenses; expenses for estimates of costs and of revenues; expenses for surveys; the fees of fiscal agents, financial advisors and consultants; administrative expenses relating solely to such acquisition or construction; the capitalization of interest for a reasonable period after the issuance of Bonds to finance any portion of the Costs of such acquisition or construction; the creation and establishment of reasonable reserves for debt service and operation and maintenance; the discount on the sale of Bonds to finance any portion of the Costs of such acquisition or construction; and such other costs and expenses as may be necessary or incidental to such acquisition or construction. I. "County" shall mean Indian River County, Florida. J. "Federal Securities" shall mean direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, which are not redeemable prior to maturity at the option of the obligor. K. "Fees in lieu of Franchise Fees" shall mean the fees paid by the Utility Services Department of the County to the County in consideration for the use of public streets and rights-of-way in the County and to defray costs incident to the regulation by the County of the services and facilities of the Utility Services Department of the County. L. "Fiscal Year" shall mean the period beginning with and including October 1st of each year and ending with and including the next September 30th. M. "Franchise Fees" shall mean the fees paid by water and/or sewer utilities, other than the Utility Services Department of the County, to the County in consideration for the use of public streets and rights- of-way in the County and to defray costs incident to the regulation by the County of the services and facilities of such utilities. - 2 - N. "Government" shall mean the United States of America, acting by and through the Farmers Home Administration, United States Department of Agriculture. 0. "Gross Revenues" shall mean (1) all receipts and revenues of the County derived from the imposition, collection and enforcement of uniform water and sewer service rates, fees and charges for the use of and the services furnished or to be furnished by the facilities constituting the System, excluding Surcharges, Impact Fees, Special Assessments, Franchise Fees and Fees in lieu of Franchise Fees; (2) such Surcharges, Impact Fees and Special Assessments as the Board, by resolution, may pledge specifically in connection with the Bonds; and (3) such other revenues of the County as the Board, by resolution, may pledge specifically in connection with the Bonds. "Gross Revenues" shall not include, however, such receipts, revenues and funds as, from time to time, may be released from the pledge created hereunder as permitted by Section 15 hereof. P. "Impact Fees" shall mean the fees or charges imposed upon new customers of the System to provide funds for the payment of all or a Portion of the costs and expenses of additions, extensions and improvements to the System made necessary by the inclusion of such new customers. Expenses. Q. "Net Revenues" shall mean the Gross Revenues less Operating R. ean or accrued forthe"Operatingmaintenancem tpaid operation, and repair he current tallp facilities constituting a part of the System, as determined in accordance with generally accepted accounting methods, and shall include, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the County related solely to the System, costs of labor, materials and supplies used for such operation and charges for the accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with such accepted accounting methods, but shall exclude Payments into the Sinking Fund or the Reserve Account therein and any allowances for depreciation or for renewals or replacements of capital assets of the System. S. "Operation and Maintenance Fund" shall mean the account created pursuant to this Resolution for the purpose of receiving and maintaining funds transferred from the Revenue Fund for the payment of Operating Expenses. T. "Original Bonds" shall mean the bonds of the County known as the Water and Sewer Revenue Bonds, Series 1979, dated August 30, 1979, the Water and Sewer Revenue Bonds, Second Series 1979, dated May 21, 1981, the MW Water Revenue Bonds, Series 1980 (South County Water System), dated September 30, 1982, and the Water and Sewer Revenue Bonds, Series 1982, dates. April 30, 1985. U. "Paying Agent" shall mean the Paying Agent to be determined by subsequent resolution of the Board. V. "Pledged Funds" shall mean the Gross Revenues, together with any other revenues and funds pledged in connection with the Bonds. W. "Record Date" shall mean the 15th day of the month immediately preceding an interest or other applicable payment date for the Bonds. X. "Registered Owner" or any similar term shall mean any person who shall be the owner of any outstanding Bond or Bonds as shown on the books of the County maintained by the Bond Registrar. Y. "Renewal and Replacement Fund" shall mean the account created pursuant to this Resolution into which funds shall be deposited as herein provided for the purpose of providing funds for payment of the costs and expenses of renewals and replacements to the System. Z. "Revenue Fund" shall mean the account created pursuant to this Resolution into which all Gross Revenues of the System shall be deposited by the County. AA. "Series 1989 Bonds" shall mean the Water and Sewer Revenue Refunding Bonds, Series 1989, authorized and issued hereunder. BB. "Special Assessments" shall mean the fees. charges and costs lawfully assessed by the County against properties benefitted by construction or reconstruction of sewer or water facilities and representing an apportionment of the costs of such improvements to such properties. CC. "Surcharges" shall mean special rates, fees and charges for water or sewer service imposed for a limited time and purpose by ordinance adopted by the Board and in addition to the usual uniform water and sewer service rates, fees and charges of the County. DD. "System" shall mean the water and sewer systems now owned and operated by the County, wherever located in the County, together with any and all improvements, extensions and additions thereto hereafter constructed or acquired, and any water or sewer system hereafter made a part of the System by resolution of the Board together with any and all improvements, extensions and additions thereto thereafter constructed or acquired. Without intending to limit the generality of the foregoing sentence, "System" shall include all property, real, personal and mixed, rights, powers, licenses, easements, rights of way, privileges, franchises - 4 - and all other property or interests in property of whatsoever nature, including but not limited to vehicles, rolling stock, buildings, pipes, Pumps, machinery, tanks, mains, conduits, meters and other equipment, used or useful in connection with ownership, operation and maintenance of such water or sewer systems by the County. EE. "Term Bonds" shall mean the Bonds of a series all of which are stated to mature on one date but which shall be subject to earlier retirement by operation of the Bond Amortization Account. Words importing singular number shall include the plural number and vice versa and words importing persons shall include firms and corporations or other entities and vice versa. follows: SECTION 3. FINDINGS. It is hereby found and determined as A. The County presently owns and operates the System. B. The County has previously issued the Original Bonds to finance the costs of acquisition and/or construction of the System and, pursuant to Resolution 82-61, as amended, of the Board, declared all of such Original Bonds to be secured by a pledge of the gross revenues of the System. C. The Government is the owner of the outstanding Original Bonds and the Government, by letter dated January 10, 1989, has offered to the County the opportunity to purchase the outstanding Original Bonds at a substantial discount from the remaining outstanding principal amount thereof. D. It is in the best interests of the County to purchase the outstanding Original Bonds at a discount. E. It is necessary to issue the Series 1989 Bonds to provide funds to purchase the Original Bonds. F. The estimated annual Pledged Funds will be sufficient to pay the costs of maintenance, repair and operation of the System and the interest and principal of the Series 1989 Bonds as the same shall become due. G. The principal of and interest on the Bonds and all required sinking fund, reserve and other payments in connection therewith shall be payable solely from the Pledged Funds. The County shall never be required to levy ad valorem taxes on any property therein to pay the principal of and interest on the Bonds or to make any of the required sinking fund, reserve or other payments in connection therewith and such obligations shall not constitute a lien upon any property of or in the County. - 5 - SECTION 4. AUTHORIZATION OF PURCHASE OF ORIGINAL BONDS. There is hereby authorized the purchase of the Original Bonds pursuant to and as more fully described in the letter dated January 10, 1989, to the County from the Government. Proper officers of this County are hereby authorized and directed to notify the Government of this County's determination to purchase the outstanding Original Bonds in accordance with such letter and to make the good faith deposit with the Government required by the terms of such letter with such funds of this County as may be available for the purpose. SECTION 5. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Bonds by the Registered Owners who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the County and such Registered Owners. The covenants and agreements herein set forth to be performed by the County shall be for the equal benefit, protection and security of the Registered Owners of the Bonds, all of which Bonds shall be of equal rank and without preference, priority or distinction with respect to any other Bonds, except as expressly provided therein and herein. SECTION 6. AUTHORIZATION AND DESCRIPTION OF BONDS. Subject and pursuant to the provisions of this Resolution, obligations of the County to be known as "Water and Sewer Revenue Refunding Bonds, Series 1989," are hereby authorized to be issued in the aggregate principal amount of not exceeding $7,500,000. The Series 1989 Bonds shall be dated as of a date to be fixed by subsequent resolution of the County and may be numbered consecutively from one upward or in such other manner as agreed upon between the County and the Bond Registrar. The Bonds shall be issued in such denominations, shall bear interest at such rate or rates, not exceeding the maximum rate authorized by applicable law, payable at such times, shall mature on such dates and in such years and in such amounts and shall have such other terms and conditions as may be determined by subsequent resolution of the County adopted at or prior to the sale of the Series 1989 Bonds. The Series 1989 Bonds shall be issued in fully registered form without coupons; shall be payable with respect to principal at a principal corporate trust office of the Paying Agent; shall be payable in lawful money of the United States of America; and shall bear interest from their date, payable by check mailed to the Registered Owners at their addresses as they appear on the registration books kept by the Bond Registrar on behalf of the County. Notwithstanding any other provisions of this section, the Board may, at its option, prior to the date of issuance of the Bonds and subject to the approval of the purchasers of the Bonds, elect to use an immobilization system or pure book -entry system with respect to issuance of the Bonds, provided adequate records will be kept with respect to the ownership of Bonds issued in book -entry form or the beneficial ownership of the Bonds issued in the name of a nominee. As long as any Bonds are - 6 - outstanding in book -entry form, the provisions of Sections 7, 9, 10 and 11 of this Resolution shall not be applicable to such book -entry Bonds. The details of any alternative system of Bond issuance, as described in this paragraph, shall be set forth in a resolution of the Board duly adopted at or prior to the delivery of any of the Bonds. SECTION 7. EXECUTION AND AUTHENTICATION OF BONDS. The Bonds shall be executed in the name of the County by the Chairman or Vice Chairman of the Board attested by its Clerk or Ex -Officio Clerk and its official seal or a facsimile thereof shall be affixed thereto or reproduced thereon. The signatures of the Chairman or Vice Chariman and Clerk or Ex -Officio Clerk may be either manual or facsimile signatures. The certificate of authentication of the Bond Registrar shall appear on the Bonds, and no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless such certificate shall have been duly executed on such Bond. The authorized signature for the Bond Registrar shall be either manual or in facsimile; provided, however, that at least one of the signatures, including that of the authorized signatory for the Bond Registrar, appearing on the Bonds, shall at all times be a manual signature. In case any one or more of the officers of the Board who shall have signed or sealed any of the Bonds shall cease to be such officer or officers of the Board before the Bonds so signed and sealed shall have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as if the persons who signed or sealed such Bonds had not ceased to hold such offices. Any Bonds may be signed and sealed on behalf of the Board by such person who at the actual time of the execution of such Bonds shall hold the proper office, although at the date of such Bonds such person may not have held such office or may not have been so authorized. The validation certificate on the Bonds, if any, shall be executed with the manual or facsimile signature of the Chairman or Vice Chairman of the Board. SECTION 8. NEGOTIABILITY. The Bonds issued hereunder shall be and shall have all of the qualities and incidents of negotiable instruments under the laws of the State of Florida, and each successive holder, in accepting any of the Bonds, shall be conclusively deemed to have agreed that such Bonds shall be and have all of the qualities and incidents of negotiable instruments under the laws of the State of Florida. SECTION 9. REGISTRATION, TRANSFER AND EXCHANGE. The Bond Registrar shall be responsible for maintaining books for the registration, transfer and exchange of the Bonds. All Bonds presented for transfer, exchange, redemption or payment (if so required by the Board or the Bond Registrar) shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature - 7 - satisfactory to the Board or the Bond Registrar, duly executed by the Registered Owner or by his duly authorized attorney. In the case of partial redemption of a Bond, and in lieu of issuing a new Bond or Bonds in the aggregate principal amount then outstanding on the Bond after such redemption, the County may, at its option, instruct the Bond Registrar to note on the Bond the principal amount of such redemption, the date of redemption and the outstanding principal amount of such Bond after such redemption, and return the Bond to the Registered Owner. Upon surrender to the Bond Registrar for transfer or exchange of any Bond accompanied by an assignment or written authorization for exchange, whichever is applicable, duly executed by the Registered Owner or his attorney duly authorized in writing, the Bond Registrar shall deliver in the name of the Registered Owner or the designated transferee or transferees, as the case may be, a new fully registered Bond or Bonds of authorized denominations and of the same maturity and interest rate, in an aggregate principal amount equal to the principal amount that remains outstanding with respect to such Bond so surrendered. The Bond Registrar or the Board may require payment from the Registered Owner or his transferee of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in connection with any transfer or exchange of the Bonds. Such charges and expenses shall be paid before any such new Bond shall be delivered. Interest on the Bonds shall be paid to the Registered Owner whose name appears on the books of the Bond Registrar as of 5:00 P.M. local time at the location of the Bond Registrar on the Record Date. New Bonds delivered upon any transfer or exchange shall be valid obligations of the County, evidencing the same debt as the Bonds surrendered, shall be secured by this Resolution, and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. The County and the Bond Registrar may treat the Registered Owner of any Bond as the absolute owner thereof for all purposes, whether or not such Bond shall be overdue, and shall not be bound by any notice to the contrary. SECTION 10. DISPOSITION OF BONDS PAID OR REPLACED. Whenever any Bond shall be delivered to the Bond Registrar for payment of the principal amount thereof upon maturity or redemption, or for replacement, transfer or exchange, such Bond shall be cancelled and destroyed by the Bond Registrar, and counterparts of a certificate of destruction evidencing such destruction shall be furnished to the County. SECTION 11. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the County may, in its discretion, issue and deliver a new Bond of like tenor - 8 - as the Bond so mutilated, destroyed, stolen or lost, in exchange for and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, upon the Registered Owner furnishing the County and the Bond Registrar proof of his ownership thereof and the loss thereof (if lost, stolen or destroyed) and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Board may prescribe and paying such expenses as the Board and the Bond Registrar may incur. All Bonds so surrendered shall be cancelled by the Bond Registrar. If any such Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the County may pay the same, upon being indemnified as aforesaid, and if such Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this section shall constitute original, additional, contractual obligations on the part of the County whether or not the lost, stolen or destroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Bonds issued hereunder. SECTION 12. PROVISIONS FOR REDEMPTION. The Bonds or any portions thereof shall be subject to redemption prior to their respective stated dates of maturity, at the option of the County or otherwise, at such times and in such manner as shall be determined by subsequent resolution adopted prior to the sale thereof. Notice of such redemption shall, not more than forty-five (45) days and not less than thirty (30) days prior to the redemption date, (i) be filed with the Bond Registrar and Paying Agent, and (ii) be mailed, postage prepaid, to all Registered Owners of Bonds to be redeemed at their addresses as they appear of record on the books of the Bond Registrar as of forty-five (45) days prior to the date fixed for redemption. Interest shall cease to accrue on any Bond duly called for prior redemption on the redemption date, if payment thereof has been duly provided. The Privilege of transfer or exchange of any of the Bonds so called for redemption shall be suspended commencing 45 days preceding the date fixed for redemption. SECTION 13. FORM OF BONDS. The text of the Bonds, the validation certificate thereon and the certificate of authentication thereon shall be in substantially the following form, with such Omissions, insertions and variations as may be necessary and/or desirable and authorized or permitted by this Resolution or any subsequent resolution adopted prior to the issuance thereof, or as may be necessary to comply with applicable laws, rules and regulations of the United States and the State of Florida in effect upon the issuance thereof: - 9 - No. R - UNITED STATES OF AMERICA STATE OF FLORIDA INDIAN RIVER COUNTY WATER AND SEWER REVENUE REFUNDING BOND, SERIES 1989 RATE OF INTEREST MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: KNOW ALL MEN BY THESE PRESENTS, that INDIAN RIVER COUNTY, FLORIDA (the "County"), for value received, hereby promises to pay to the Registered Owner named above, or registered assigns, solely from the Pledged Funds, hereinafter defined, on the Maturity Date specified above, the Principal Amount specified above and to pay, solely from such Pledged Funds, interest on this Water and Sewer Revenue Refunding Bond, Series 1989 (the "Bond"), from the Date of Original Issue specified above, or from the most recent interest payment date to which interest has been paid, as applicable, at the Rate of Interest specified above, per annum, such interest being payable initially on 198_ and semi- annually thereafter on each and until the Principal Amount hereof is paid in full. The Principal Amount hereof shall be payable, upon presentation and surrender hereof, on or after the Maturity Date or date of earlier redemption, at a principal corporate trust office of Florida, as Paying Agent and Bond Registrar. The interest hereon shall be paid, when due, by check mailed to the Registered Owner at his address as the same appear at 5:00 P.M. local time at the location of the Bond Registrar on the fifteenth (15th) day of the month immediately preceding the applicable interest payment date on the registration books kept by the Bond Registrar on behalf of the County. The principal of, premium, if any, and interest on this Bond are payable in lawful money of the United States of America. This Bond is one of the revenue bonds authorized by the County under the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly Chapters 125 and 159, Florida Statutes (1987) and Resolution No. of the County, all as amended and supplemented, and other applicable provisions of law. The above -referenced resolution as amended and supplemented from time to time is hereinafter referred to as the "Resolution". This Bond is subject to all the terms and conditions of the Resolution. This Bond is one of the revenue bonds designated as Water and Sewer Revenue Refunding Bonds, Series 1989, all of like date and tenor, except as to numbers, denominations, dates of maturity, rates of interest and provisions for redemption, in the aggregate principal amount of Seven - 10 - Million Five Hundred Thousand Dollars ($7,500,000) (the "Bonds"). The proceeds of the Bonds will be used to refund the outstanding series of water and water and sewer revenue bonds of the County described in the Resolution and be used to pay certain costs and expenses relating to issuance of the Bonds. This Bond and the interest due hereon are payable solely from and are secured solely by a first lien upon and pledge of the Gross Revenues, as that term is defined in the Resolution, to be derived by the County from the operation of the water and sewer systems defined in the Resolution as the "System", and certain funds and accounts pledged for the payment of the principal of, interest and premium, if any, on the Bonds and certain earnings thereon, all as provided in the Resolution (the "Pledged Funds"). This Bond does not constitute a general indebtedness of the County within the meaning of any constitutional or statutory provision or limitation. It is expressly agreed by the Registered Owner of this Bond that such Registered Owner shall never have the right to require or compel the exercise of the ad valorem taxing power of the County for the payment of the principal of, interest or premium, if any, on this Bond or the making of any other payments specified by the Resolution. It is further agreed between the County and the Registered Owner of this Bond that this Bond and the indebtedness evidenced hereby shall constitute a lien upon only the Pledged Funds in the manner provided in the Resolution. (To be inserted where appropriate on face of bond: "Reference is hereby made to the further provisions of this Bond set forth on the reverse side hereof, and such further provisions shall for all purposes have the same effect as if set forth on this side.") This Bond may be transferred only upon the books kept by the Bond Registrar, on behalf of the County, upon surrender hereof at the principal corporate trust office of the Bond Registrar with an assignment duly executed by the Registered Owner or his duly authorized attorney, but only in the manner, subject to the limitations and upon payment of a sum sufficient to cover any tax, fee or governmental charge that may be imposed in connection with such transfer, all as provided Resolution. Upon such transfer, in the there shall be executed in the name of the transferee, and the Bond Registrar shall deliver, as early as practicable, a new fully registered bond or bonds of authorized denominations in the same aggregate principal amount, series, maturity and interest rate as this Bond. In like manner, subject to said conditions and upon payment of any such sum, this Bond may be surrendered at said office of the Bond Registrar in exchange for an equal aggregate principal amount of new fully registered bonds of authorized denominations in the same series, maturity and interest rate as this Bond. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the Constitution and laws of the State of Florida applicable thereto. This Bond is and has all the qualities and incidents of a negotiable instrument under the laws of the State of Florida. [Insert redemption provisions) Notice of such redemption shall be given in the manner provided in the Resolution. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the certificate of authentication hereon shall have been executed by the Bond Registrar. IN WITNESS WHEREOF, Indian River County, Florida, has issued this Bond and has caused the same to be executed by the Chairman of the Board of County Commissioners of the County and attested by the Ex -Officio Clerk of the Board, either manually or with their facsimile signatures, and its official seal, or a facsimile thereof, to be affixed, impressed, imprinted or otherwise reproduced hereon, all as of the 198_. day of (SEAL) INDIAN RIVER COUNTY, FLORIDA By ATTEST: Chairman Ex -Officio Clerk CERTIFICATE OF AUTHENTICATION OF BOND RECISTPv1R This Bond is one of the within -defined Bonds. Date of Authentication - 12 - As Bond Registrar By Authorized Signature VALIDATION CERTIFICATE This Bond is one of the bonds which were validated and confirmed by judgment of the Circuit Court of the Nineteenth Judicial Circuit of Florida in and for Indian River County, Florida, rendered on 198_. — Chairman, Board of County Commissioners of Indian River County, Florida The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in UNIF GIF MIN ACT - common ---- TEN ENT - as tenants by the Custodian for (Cust.) entireties JT TEN - as joint tenants with (Minor) under Uniform Gifts to Minors right of survivorship Act of (State) above. Additional abbreviations may also be used though not in list - 13 - ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers to (Name and address of Transferee) (Social Security or Taxpayer Identification Number of Transferee)this Bond and does hereby irrevocably constitute and appoint as his agent to transfer this Bond on the books kept for registration hereof, with full power of substitution in the premises. (Signature of Transferor) Date: Signature guaranteed: (Name of Bank, Trust Company or Firm) By: Title: NOTICE: No transfer will be registered and no new Bond will be issued in the name of the Transferee unless the signature(s) to this assignment correspond(s) to the name(s) appearing as registered owner upon the face of the within Bond in every particular, without enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. Signature(s) of the Transferor(s) must be guaranteed by a member firm of a major stock exchange or a commercial bank or trust company. PARTIAL REDEMPTION PAYMENTS Authorized Principal Balance of Officer of Payment Date Amount Paid Principal Unpaid Bond Reei�trar a - 14 - SECTION 14. BONDS NOT GENERAL OBLIGATIONS. The Bonds shall not be or constitute general or moral obligations or a pledge of the faith, credit or taxing power of the County, the State of Florida or any political subdivision thereof or an indebtedness of any of them as "bonds" within the meaning of the Constitution of the State of Florida, but shall be special obligations of the County payable solely from and secured solely by a lien upon and a pledge of the Pledged Funds. No Registered Owner shall ever have the right to compel the exercise of the ad valorem taxing power of the County, the State of Florida or any political subdivision thereof, or taxation in any form of any real property therein, to pay the Bonds or the interest thereon, or be entitled to payment of such principal and interest from any funds of the County other than the Pledged Funds. SECTION 15. SECURITY FOR BONDS; RELEASE OF CERTAIN PLEDGED REVENUES. The payment of the principal of, premium, if any, and interest on the Bonds shall be secured forthwith equally and ratably by a pledge of and a first lien upon the Pledged Funds. The County does hereby irrevocably pledge the Pledged Funds to the payment of the principal of, premium, if any, and interest on the Bonds. Nothing in this Resolution shall constitute or be construed to constitute a conveyance or mortgage of any water supply or sewage disposal system or of any water or sewer system improvements or any part of any of the foregoing. Notwithstanding any other provision of this Resolution to the contrary, the County may, by resolution of the Board filed with the Paying Agent for each series of Bonds outstanding hereunder, except and release from the pledge and lien created by this Resolution, and the phrase "Gross Revenues" as used in this Resolution shall no longer include, the receipts and revenues of the County derived from the imposition, collection and enforcement of uniform water and/or sewer service rates, fees and charges for the use of and services furnished or to be furnished by any water and/or sewer facilities constituting a physically independent system of the County, or any Impact Fees, Special Assessments, Surcharges or other receipts and revenues theretofore pledged in connection with the Bonds, as stated in such resolution, if there shall be filed with the County and such Paying Agent(s) the following: (1) A certificate of an independent firm of certified public accountants of suitable experience and responsibility: (i) stating that the books and records of the County relating to the collection and receipt of the Gross Revenues and other receipts, funds and revenues pledged hereunder, if any, and the Operating Expenses have been audited by them for the Fiscal Year immediately preceding the date of the - 15 - proposed release of such receipts and revenues from the pledge hereunder or for any twelve (12) consecutive month period out of the eighteen (18) consecutive months immediately preceding such date; (ii) setting forth the Gross Revenues, the Operating Expenses and the Net Revenues for the audited period referred to in (i) above, with respect to which such certificate is made; and (iii) stating that the Net Revenues, adjusted to give effect to the proposed release of such receipts and revenues as if the same had occurred at the beginning of such audited period, were equal to at least 1.00 times the largest amount of principal and interest which will mature and become due in any Fiscal Year thereafter on all Bonds then outstanding. For purposes of (iii) above Gross Revenues and other receipts, funds and revenues pledged hereunder may be further adjusted so as to fairly represent the operation of the System, provided that the amount and a detailed reason for each such adjustment is set forth in such certificate; and (2) A certificate of the Consulting Engineers stating that the Net Revenues, as estimated by the Consulting Engineers, for the first twelve (12) months following release of such receipts and revenues shall equal at least 1.00 times the largest amount of principal and interest which will become due in any succeeding Fiscal Year on the Bonds; and (3) A certificate of the chief financial officer of the County stating that the County has established and will maintain a separate accounting of all revenues and expenses in connection with any such independent system or with respect to such Impact Fees, Surcharges, Special Assessments or other receipts and revenues to be released, apart from the Pledged Funds. SECTION 16. COVENANTS OF THE COUNTY. For so long as any of the principal of and interest on any of the Bonds shall be outstanding and unpaid, or until there shall have been set apart in the Sinking Fund hereinafter created, a sum sufficient to pay, when due, the entire principal amount of the Bonds remaining unpaid, together with interest accrued and interest to accrue thereon through such payment date or until the provisions of Section 20 hereof have been satisfied, the County covenants with the holders of the Bonds issued pursuant to this Resolution that: - 16 - A. REVENUE FUND. All Gross Revenues shall upon receipt thereof be deposited in the "Water and Sewer Revenue Fund" (herein the "Revenu3 Fund"), which is hereby created and established. B. DISPOSITION OF REVENUES. All Gross Revenues on deposit in the Revenue Fund shall be disposed of by the County as needed or as required herein only in the following manner and in the following order of priority: (1) First, the County shall transfer in each month to the Operation and Maintenance Fund the amount required to be deposited therein to pay the Operating Expenses due or to become due for such month. (2) Second, the County shall deposit in each month to a fund to be known as the "1989 Water and Sewer Revenue Refunding Bonds Sinking Fund" (herein the "Sinking Fund"), which is hereby created and established, one-sixth (1/6th) of such sum as will be sufficient to pay interest on the Bonds as the same shall become due on the next semiannual interest Payment date, together with the amount of any deficiency in prior deposits for interest on Bonds, and one -twelfth (1/12th) of the principal of Bonds maturing or subject to mandatory call for redemption on the next principal payment date with respect to the Bonds. Such deposit shall take into account the sums, if any, in the Bond Amortization Account, hereinafter defined, attributable to such payments and the sums, if any, deposited in the Sinking Fund out of proceeds from the sale of Bonds to pay interest thereon. In addition, there shall be deposited in the Sinking Fund amounts sufficient to pay the fees and charges of the Paying Agent. (3) Third, the County shall deposit into an account in the Sinking Fund to be known as the "Bond Amortization Account" hereby created and established, such sums as are required by resolution of the County to be deposited therein at such times as are required thereby for each series of Term Bonds for purposes of the mandatory redemption thereof. (4) Fourth, the County shall deposit into an account in the Sinking Fund to be known as the "Reserve Account", which is hereby created and established, a sum at least equal to and sufficient to pay the maximum amount of principal and interest on all outstanding Bonds becoming due in any ensuing Fiscal Year. A sum to be specified by subsequent - 17 - resolution of the County may be deposited -jai rdicc! Reserve Account out of the proceeds of the sz :t aiJ' Bonds. Provided, however, in no Fiscal Year sha!IL Revenues in excess of twenty per cent (20%) ad uiha maximum amount of principal and interest uni rYLl' outstanding Bonds becoming due in any ensuing Bi:.:xraill Year be required to be deposited in the gaaacTvs: Account. No further deposits shall be require -0 ttu. ltik� made into the Reserve Account as long as thert oliali remain on deposit therein (including any Resaava Account insurance policy or letter of credUiu a� described below) a sum equal to the maximum am)uitr ad - principal and interest on all outstanding, D;cntds becoming due in any ensuing Fiscal Year. The xaducs a,d the Reserve Account, including investments on ltMae it± in the Reserve Account, shall be determined a-inuallLyy on the first day of the Fiscal Year by an indejumdanti. firm of certified public accountants, who may Ini tdiu• accountants for the County, in accordano:, .vdaii. generally accepted accounting principles. Notwithstanding the foregoing provisions, in ]iautoff,. in whole or in part, the required deposits uitsn, alhf- Reserve Account, the County may cause to be dcpoe;luaai into the Reserve Account either an inst:rance gc)$iia, issued by a reputable and recognized municip0. 3und, insurer or a letter of credit from a bank aor nsuss. company whose municipal bond insurance poOLay/ oz letter of credit will result in the highest ri.u:9mi, eLY municipal obligations of either Moody's Irges;eors, Service or Standard & Poor's Corporation. Aay suuh, insurance policy or letter of credit shall be payablia. or available to be drawn upon, as the case may, 1W• (upon the giving of notice as required thereundhr)), on, any interest payment date on which a deficiency ex3,sts; which cannot be cured by money in any other 9undl apt• account held pursuant hereto and available fhu suail, purpose. If a disbursement is made under mjir such insurance policy or letter of credit, the Coinay mWF reinstate the maximum limits of such insurance ger�iab or letter of credit immediately followigk, sHajh disbursement, otherwise the amount of credit uow�ru,O the Reserve Account requirement for such itauranau: Policy or letter of credit shall be approp,;;L�;pti�, reduced. Furthermore, the County may at any time and flam• ttiame, to time cause to be deposited in the Reserve A.uaounu: - 18 - such an insurance policy or letter of credit and cause an appropriate amount to be withdrawn from the Reserve Account and released to the County. Moneys in the Reserve Account shall be used only for the purpose of the payment of maturing principal of or interest on Bonds when the other moneys in the Sinking Fund are insufficient therefor, and for no other purpose. However, upon the valuation of the Reserve Account in each year, if the moneys applied and allocated to the Reserve Account (except the investment income thereon) exceed the amount required, such excess may be withdrawn and released to the County. (5) Fifth, apply moneys in the Revenue Fund to the payment of current debt service and reserve requirements of any obligations of the County issued to finance the cost of additions, acquisition, extensions and improvements to the System which are junior and subordinate to the lien of the Bonds on the Pledged Funds. (6) The balance of any moneys remaining in the Revenue Fund after the above required payments have been made may be deposited into a special fund to be known as the "Sewer and Water Renewal and Replacement Fund", which is hereby created and which shall be used only for the purpose of paying the costs of extensions, enlargements, or additions to or the replacement of capital assets of the System, and for emergency repairs thereto or may used by the County for any lawful purpose. No further deposits to the Sinking Fund, the Bond Amortization Account or the Reserve Account shall be required when the aggregate sums deposited therein are and remain at least equal to the sum of all of the principal and interest then due and thereafter becoming due in all ensuing years for the Bonds then outstanding. C. PLEDGED FUNDS AND INVESTMENT OF FUNDS. The Revenue Fund, the Sinking Fund, the Bond Amortization Account and the Reserve Account shall be Pledged Funds, shall constitute trust funds for the purposes provided herein for such funds and shall be used only for the purposes and in the manner provided herein. All moneys in all funds and accounts created or established hereunder shall be continuously secured in the manner by which deposits of public funds are required to be secured by the laws of the State of Florida. Moneys on deposit in the Revenue Fund and the Sinking Fund (except the Reserve Account therein) may be invested 19 - and reinvested only in Authorized Investments maturing not later than the date on which the moneys therein will be needed for the purposes of such funds. Moneys in the Reserve Account may be invested and reinvested in Authorized Investments maturing not later than five (5) years from the date of purchase. Any and all income received by the County from such investments shall be deposited into the Rebate Account hereunder to the extent required and the excess, if any, into the Revenue Account. D. OPERATION AND MAINTENANCE. The County will maintain the System and all parts thereof in good condition and will operate the same in an efficient and economical manner making such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. E. RATE COVENANT. In conjunction with the adoption of its annual budget and as otherwise required, the County shall fix, establish and maintain such uniform rates, fees and charges for the use of the System and the services furnished or to be furnished by the System and shall collect the same and revise the same from time to time, whenever necessary, so as to always provide Net Revenues in each Fiscal Year sufficient to pay (1) one hundred percent (1008) of all required deposits into the Reserve Account, and (2) one hundred percent (1008) of the amount of principal and interest becoming due in such Fiscal Year on the Bonds. F. BOOKS AND RECORDS. The County shall keep proper books, records and accounts, showing correct and complete entries of all transactions of the County relating to the System. Registered Owners of the Bonds shall have the right at all reasonable times to inspect all books, records and accounts of the County relating to the System. G. ANNUAL AUDIT. The County shall also, at least once a year, within 180 days after the close of its Fiscal Year, cause the books, records and accounts relating to the System to be audited by a independent firm of certified public accountants. A copy of such annual audits shall be furnished to any Registered Owner of the Bonds who shall have requested in writing that a copy of such audits be furnished him. H. NO MORTGAGE OR SALE OF THE SYSTEM. The County will not sell, mortgage, pledge or otherwise encumber the System or any part thereof, or any Gross Revenues to be derived therefrom, except as herein provided, and will not sell, lease or otherwise dispose of any substantial portion of the System, except as provided herein. The County may sell, lease or otherwise dispose of any of the property comprising a substantial portion of the System in the event that (a) such property is determined by resolution of the Board, upon the recommendation of the County Administrator and the Consulting Engineers, to be no longer necessary or useful or profitable for the System; and (b) the sale, lease or other disposition of such property is determined by resolution of the Board, upon recommendation of the County Administrator - 20 - and the Consulting Engineers, not to impair the ability of the County to comply during the current or any future Fiscal Year with the rate covenant set forth herein. The proceeds derived from any sale, lease or other disposition of a substantial portion of the System shall be used for the retirement of outstanding Bonds. Any other proceeds derived from the sale, lease or other disposition of a portion of the System shall be placed in an appropriate fund of the County relating to the renewal or replacement of the System, provided, however, all or a portion of any such proceeds may be used for the retirement of outstanding Bonds if authorized by resolution of the Board upon the recommendation of the County Administrator and the Consulting Engineers. I. INSURANCE. For so long as any of the Bonds are outstanding, and to the extent practicable, the County will carry adequate fire and windstorm insurance on all buildings, structures and other appropriate properties of the System which are subject to loss through fire or windstorm, will carry adequate public liability insurance, and will otherwise carry insurance of all kinds and in the amounts normally carried in the operation of similar facilities and properties in Florida. Any such insurance shall be carried for the benefit of the Registered Owners of the Bonds. All moneys received from losses under any of such insurance, except public liability, are hereby pledged by the County as security for the Bonds, until and unless such proceeds are used to remedy the loss or damage for which such proceeds are received, in which event the repairing of the property damaged or the replacement of the property destroyed shall be commenced within a reasonable time after the receipt of such proceeds and shall proceed on a reasonable and continuous basis. J. NO FREE SERVICE. The County will not render or cause to be rendered any free use of any nature of the System, nor will any preferential rates be established for users of the same class. K. ENFORCEMENT OF COLLECTIONS. The County will diligently enforce and collect the Gross Revenues and any other receipts and revenues pledged hereunder, will take all steps, actions and proceedings for the enforcement and collection thereof as the same shall become delinquent to the full extent permitted or authorized by law; and will maintain accurate records with respect thereto. All such Gross Revenues and other charges shall, as collected, be held in trust to be applied as herein provided and not otherwise. L. REMEDIES. Any Registered Owner may by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights, including the right to the appointment of a receiver, existing under the laws of the State of Florida, and may enforce and compel the performance of all duties required hereunder or by any applicable statutes to be performed by the County or by any officer thereof. - 21 - Nothing herein, however, shall be construed to grant to any Registered Owner any lien on any property of or in the County. M. OPERATING BUDGET. On or before the last day of each Fiscal Year, the County shall adopt an annual budget for the System for the ensuing Fiscal Year, which shall include a budget for Operating Expenses. The Operating Expenses incurred in any Fiscal Year will not exceed the reasonable and necessary amounts required therefor and the County will not expend any amount or incur any obligation for the operation, maintenance and repair of the System in excess of the amount provided for the purpose in the annual budget for the then current Fiscal Year except upon resolution of the Board declaring that such expenses are necessary for the operation and maintenance of the System. If the budget discloses that the estimated Gross Revenues and other revenues, funds and receipts pledged hereunder, if any, will be insufficient during such Fiscal Year, after payment of the Operating Expenses, to meet the rate covenant set forth herein, the County shall forthwith revise the rates, fees and charges imposed with respect to the System in order to cure such estimated deficiency and to comply with the rate covenant. There shall be included in the budget amounts necessary to provide for the orderly replacement of the depreciable capital assets of the System. N. CONSULTING ENGINEERS. The County will annually retain the Consulting Engineers for the purpose of providing the County with competent engineering counsel with respect to the economical and efficient operation of the entire water and sewer system of the County and in connection with the making of capital improvements thereto and renewals and replacements thereof. The County may, however, employ additional engineers at any time with relation to specific engineering and operation problems arising in connection therewith. 0. NO COMPETING SYSTEMS. To the full extent permitted by law, the County will not grant, renew, extend or allow to expand any franchise or permit for any system similar to the System within the service area of the Systema P. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. Additional Parity Bonds, payable on a parity from the Pledged Funds with the Bonds, may be issued from time to time to finance any portion of the Costs of the construction and/or acquisition of additions, extensions and improvements to the System, or of any physically separate water or sewer system declared by resolution of the Board to be part of the System, or for refunding purposes, in the manner herein provided and upon compliance with both of the following conditions: - 22 - (1) There shall have been obtained and filed with the County a certificate of an independent firm of certified public accountants of suitable experience and responsibility: (i) stating that the books and records of the County relating to the collection and receipt of the Gross Revenues and other receipts, funds and revenues pledged hereunder, if any, and the Operating Expenses have been audited by them for the Fiscal Year immediately preceding the date of sale of the proposed obligations or for any twelve (12) consecutive month period out of the eighteen (18) consecutive months immediately preceding the date of sale of the proposed obligations; (ii) setting forth the Gross Revenues, the Operating Expenses and the Net Revenues for the audited period referred to in (i) above, with respect to which such certificate is made; and (iii) stating that the Net Revenues, as adjusted as hereinafter provided, were equal to at least 1.00 times the largest amount of principal and interest which will mature and become due in any Fiscal Year thereafter on all Bonds then outstanding, excluding the proposed Additional Parity Bonds. For purposes of (iii) above Gross Revenues and other receipts, funds and revenues pledged hereunder may be adjusted so as to fairly represent the operation of the System, provided that the amount and a detailed reason for each such adjustment is set forth in such certificate; and (2) There shall have been obtained and filed with the County a certificate of the Consulting Engineers stating that the Net Revenues, as estimated by the Consulting Engineers, for the first twelve (12) months following completion of the project for which the Additional Parity Bonds are being issued shall equal at least 1.00 times the largest amount of principal and interest which will become due in any succeeding Fiscal Year on the Bonds, including the proposed Additional Parity Bonds. Each resolution authorizing the issuance of Additional Parity Bonds shall recite that all of the covenants herein contained will be applicable to such Additional Parity Bonds. Additional Parity Bonds may not be issued hereunder at any time at which the County is in default in performing any of the covenants and obligations assumed hereunder, or all payments herein required to have been made into the accounts and funds, as provided hereunder, have not been made to the full extent required. - 23 - The foregoing conditions shall not apply with respect to Additional Parity Bonds the proceeds of which will be used to complete a project a substantial portion of the cost of which has been or will be paid out of the proceeds of Bonds issued hereunder. Q. ISSUANCE OF OTHER OBLIGATIONS. The County will not issue any other obligations, except under the conditions and in the manner provided herein, payable from the Pledged Funds, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien of the Bonds and the interest thereon, upon the Pledged Funds. The County may issue obligations other than the Bonds payable from the Pledged Funds provided such obligations are junior and subordinate in all respect to the Bonds as to lien on and source and security for payment from the Pledged Funds and such obligations contain an express statement to that effect. R. will employ persons OF SYSTEM. TCounty operating nsof T dem nstrated abilityy and n experience t and System require all employees who may have possession of moneys derived from operation of the System to be covered by a fidelity bond written by a responsibility indemnity company in an amount sufficient to protect the County from loss. S. CONNECTION WITH SYSTEM. The County will, to the full extent permitted by law, require all lands, buildings, residences and other structures within its territorial boundaries which can use the System to connect therewith and use the System and cease to use any other potable water system and any other method of sewage disposal. T. GE. The County the issue which Ais I comprised ise of the eri se nants 1989 Bondsnthattitpsers willamake nof o use of the proceeds of such issue which will cause the Series 1989 Bonds to be or become "arbitrage bonds" within the meaning of Section 103(b)(2) and Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations implementing said Sections that duly have been published in the Federal Register or with any other applicable regulations implementing said Sections, and the County further covenants to comply with all other requirements of the Code if and to the extent applicable to maintain continuously the Federal income tax exemption of interest on the Series 1989 Bonds. U. FUNDS AND ACCOUNTS. The designation and establishment of the various funds and accounts created herein does not require the establishment of any completely independent, self -balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues and assets as provided herein. - 24 - V. POWER TO ISSUE BONDS AND PLEDGE PLEDGED FUNDS. The County is duly authorized under all applicable laws to create and issue the Bonds and to adopt this Resolution and to pledge the Pledged Funds in the manner and to the extent provided herein. Except to the extent otherwise provided in this Resolution, the Pledged Funds are not pledged or hypothecated (except with respect to the Original Bonds to be retired with proceeds of the Series 1989 Bonds) and, upon issuance of the Series 1989 Bonds, will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the security interest, pledge and assignment created by this Resolution, including any pledge thereof for the benefit of the Original Bonds, and all action on the part of the County to that end has been and will be duly and validly taken. The Bonds and the provisions of this Resolution are and will be valid and legally enforceable obligations of the County in accordance with their terms and the terms of this Resolution. The County shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Pledged Funds and all the rights of the Registered Owners under this Resolution against all claims and demands of all persons whomsoever. W. BONDS SECURED BY PLEDGE OF PLEDGED FUNDS. The Bonds issued hereunder shall be direct and special obligations of the County payable in accordance with their terms and the provisions of this Resolution from the Pledged Funds hereby pledged for the benefit of the Registered Owners, subject to the provisions of this Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in this Resolution. The Pledged Funds shall immediately be subject to the lien and charge of this Resolution without any physical delivery thereof or further act, and the lien and charge of this Resolution shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise, against the County, irrespective of whether such parties have notice thereof. X. TAX COVENANTS. The County covenants that it will not take any action or fail to take any action with respect to the proceeds of the Bonds that would result in loss of the exclusion from gross income for federal income tax purposes pursuant to section 103(a) of the Code of interest paid on Outstanding Bonds which, when initially issued and sold, were the subject of an opinion of counsel to the effect that interest thereon was so excludable. With respect to any,4 series of Bonds, the County covenants that any use of the System in the trade or business of any person or entity other than the County, including use under a tick -or-pay contract or certain management contracts ("private business ijc."), if such use is related to the County's use of the System, will not ••xceed more than ten percent (10%) of the use of the System, or if such private business use in - 25 - unrelated or disproportionate to the County's use of the System, will not excsed more than five percent (5%) of the use of the System. The County covenants that no more than ten percent (10%) of the Gross Revenues will be derived directly or indirectly from payments from any nongovernmental user, other than payments by a nongovernmental user as a member of the general public. SECTION 17. APPLICATION OF SERIES 1989 BOND PROCEEDS. All moneys received from the sale of the Series 1989 Bonds shall be deposited and applied by the County as follows: A. All accrued interest on the Series 1989 Bonds shall be deposited into the Sinking Fund and applied exclusively for the payment of interest first becoming due on the Series 1989 Bonds. B. A sum, if any, specified by subsequent resolution of the County shall be deposited into the Reserve Account in the Sinking Fund. C. The amount necessary to purchase and thereby retire all of the outstanding Original Bonds shall be paid to the Government. D. Next, the amount necessary to pay all engineering fees, costs and expenses of financial reports, studies and projections, legal fees, fees of financial advisors, costs of the issuance of the Series 1989 Bonds, and all other similar costs incurred in connection with the retirement of the Original Bonds and the issuance of the Series 1989 Bonds shall be paid or provided for. If for any reason any proceeds of the Series 1989 Bonds are not necessary for or are not applied to the payment of such costs, then such moneys shall be deposited by the County into the Sinking Fund and used only to pay the principal of and interest on the Bonds. SECTION 18. REBATE. Anything to the contrary contained herein notwithstanding, the County shall at least annually transfer appropriate amounts from the funds and accounts hereunder to which income on investments has been deposited into an account to be known as the "Series 1989 Rebate Account" (herein referred to as the "Rebate Account") sufficient to pay to the United States of America all amounts due with respect to the Series 1989 Bonds under the provisions of Section 148 (f) of the Internal Revenue Code of 1986, as amended and supplemented, or under similar provisions of subsequent federal revenue laws. The earnings on the Rebate Account shall be added to and become a part of the Rebate Account. Moneys in the Rebate Account shall only be used to pay the amounts due to the United States of America under said Section of the Code as the same shall become due and payable. It is the intent of this paragraph to provide for payment of all amounts due under said Section of the Code with respect to the Series 1989 Bonds, in such installments and - 26 - at such times as may be required by said Section of the Code. In the event of any amendment to the Code or the promulgation of regulations under the Code which provide or require otherwise than as provided or required in this paragraph, this paragraph shall be deemed to be amended to incorporate such amendments or regulations, to the extent applicable, and any provisions hereof which conflict with the provisions thereof shall be deemed to be null and void. The County shall establish appropriate rebate accounts for any and all Additional Parity Bonds and junior and subordinate obligations issued hereunder and provide for the adequate funding thereof. SECTION 19. SALE OF BONDS. The Bonds may be sold at public or private sale pursuant to the Act, all at one time or from time to time, as shall be provided by subsequent resolution of the Board. SECTION 20. DEFEASANCE. If at any time the County shall have paid, or shall have made provision for payment of, the principal, interest and premiums, if any, with respect to any of the Bonds or any series thereof, then, and in that event, the pledge of and lien on the Pledged Funds in favor of the Registered Owners of such Bonds or of such series, as the case may be, shall be no longer in effect. For purposes of the preceding sentence, the deposit of Federal Securities or bank certificates of deposit fully secured as to principal and interest by Federal Securities (or the deposit of any other securities or investments which may be authorized by law from time to time and sufficient under such law to effect such a defeasance) in irrevocable trust with a banking institution or trust company, for the sole benefit of the Registered Owners of such Bonds or such series, as the case may be, the principal of and interest on which will be sufficient to pay, when due, the principal, interest and premiums, if any, on such Bonds or such series, as applicable, shall be considered "provision for payment". Nothing in this section shall be deemed to require the County to call any of the outstanding Bonds or any series thereof for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the County in determining whether to exercise any such option for early redemption. SECTION 21. MODIFICATION OF RESOLUTION. No adverse material modification or amendment of this Resolution, or of any resolution amendatory hereof or supplemental hereto, may be made without the consent in writing of the Registered Owners of 518 or more in aggregate principal amount of the Bonds then outstanding affected by such adverse material modification or amendment; provided, however, that no modification or amendment shall permit a change in the maturity of any Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof, or affect the unconditional promise of the County to levy, impose and/or collect the Gross Revenues or other receipts, revenues and funds pledged hereunder, if any, as herein provided, or to pay the principal of and interest on the Bonds as the same shall become due from the Pledged Funds or reduce the percentage required - 27 - above for an adverse material modification or amendment, without the consent of the Registered Owners of all of the Bonds affected thereby. The foregoing shall not apply with respect to supplemental resolutions adopted for the sole purpose of issuing Additional Parity Bonds or junior and subordinate obligations issued hereunder in accordance herewith. SECTION 22. SEVERABILITY. If any one or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements and provisions hereof, and shall in no way affect the validity thereof or of the Bonds issued hereunder. SECTION 23. VALIDATION. The attorney for the County is hereby authorized and directed to institute appropriate proceedings in the Circuit Court of the Nineteenth Judicial Circuit of Florida in and for Indian River County, Florida, for the validation of the Bonds. SECTION 24. REPEALER. All resolutions or parts of resolutions in conflict herewith are hereby repealed. SECTION 25. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. - 28 - The foregoing resolution was offered by Commissioner Eggert who moved for its adoption. The motion was seconded by Commissioner _ --q'iirinrk and, upon being put to a vote, the vote was as follows: Chairman Gary C. Wheeler Aye Vice Chairman Carolyn K. Eggert --Ty--e Commissioner Don C. Scurlock Commissioner Richard N. Bird _ Aye Commissioner Margaret C. Bowman Aye The Chairman thereupon declared the Resolution duly passed and adopted this 14th day of February , 1989. BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA By r Chairma Attest- (/Je��Ye KQ Bart4n„ C e c a., APPROVED�AS TO ORM AND LEGAL SUFFICIENCY Charles P. Vitunac Attorney for the County .. � j ziralr7