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HomeMy WebLinkAbout1989-046INDIAN RIVER COUNTY, FLORIDA RESOLUTION NO. 89- 46 A RESOLUTION AMENDING AND RESTATING RESOLUTION NO. 89- 19 OF INDIAN RIVER COUNTY, FLORIDA, ENTITLED: "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." TO FURTHER PROVIDE FOR THE TERMS AND CONDITIONS UPON WHICH THIS COUNTY MAY ISSUE WATER AND SEWER REVENUE BONDS AND PROVIDE FOR THE PAYMENT AND SECURITY THEREOF. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA: SECTION 1. Authority for Resolution This resolution is adopted pursuant to Chapters 125 and 159, Florida Statutes (1988), as amended, and other applicable provisions of law. SECTION 2. Findings. It is hereby ascertained, determined and declared that: A. The Board of County Commissioners of Indian River County, Florida, on February 14, 1989, duly adopted a resolution entitled as follows: "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." (hereinafter called the "Bond Resolution"). B. It is necessary and desirable to amend and restate the Bond Resolution to further provide for the issuance of the Series 1989 Bonds and the terms and provisions upon which additional bonds may be issued under the Bond Resolution and may be paid and secured. SECTION 3. Amendment and Rea ae*+* of Bond Re o7u*��++ The Bond Resolution is hereby amended and restated in its entirety to read as follows: "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 OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA: "SECTION 1. AUTHORITY FOR THIS RESOLUTION. This resolution is adopted pursuant to Chapters 125 and 159, Florida Statutes (1988), as amended, and other applicable provisions of law. - 2 - � I 1 "SECTION 2. DEFINITIONS. The following terms shall have the following meanings in this Resolution, unless the context otherwise clearly requires: I "A. "Act" shall mean Chapters 125 and 159, Florida Statutes (1988), as amended, and other applicable provisions of law. "B. "Additional Parity Bonds" shall mean additional bonds issued 'M 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 Exhibit A attached hereto, provided that such investments are at the time lawful investments for the funds involved under Section 125.31, Florida Statutes (1988), 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 Insurance Policy" shall mean the municipal bond new issue insurance policy issued by the Bond Insurer guaranteeing the payment of principal of and interest on the Series 1989 Bonds. "G. "Bond Insurer" shall mean Financial Guaranty Insurance Company, a New York stock insurance company, or any successor thereto. "H. "Bond Registrar" shall mean the Bond Registrar to be determined by subsequent resolution of the Board. "l• "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. "J. "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 - 3 - 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. "K. "County" shall mean Indian River County, Florida. "L. "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. "M. "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. ON. "Fiscal Year" shall mean the period beginning with and including October first of each year and ending with and including the next September 30. "0. "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. by and through the Farmers , FarmerstHome Administration, United shall mean the United tStates Department actingofAgriculture. "Q. "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. OR. "Net Revenues" shall mean the Revenues less Operating Expenses. - 4 - "S. "Operating Expenses" shall mean the current expenses paid or accrued for the operation, maintenance and repair of all 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. "T. "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. "U. "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 Water Revenue Bonds, Series 1980 (South County Water System), dated September 30, 1982, and the Water and Sewer Revenue Bonds, Series 1982, dated April 30, 1985. "V. "Paying Agent" shall mean the Paying Agent to be determined by subsequent resolution of the Board. "Pledged Funds" any other receipts,re en esanshall ndspledged in onnec ion with tthe tBonds. "X. "Record Date" shall mean the fifteenth (15th) day of the month immediately preceding an interest or other applicable payment date for the Bonds. "Y. "Registered Owner", "Bondholder" 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. "Z. "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. "AA. "Required Renewal Fund Payments" shall mean the amounts required to be deposited in each month to the credit of the renewal and - 5 - 4 "S. "Operating Expenses" shall mean the current expenses paid or accrued for the operation, maintenance and repair of all 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. "T. "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. "U. "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 Water Revenue Bonds, Series 1980 (South County Water System), dated September 30, 1982, and the Water and Sewer Revenue Bonds, Series 1982, dated April 30, 1985. "V. "Paying Agent" shall mean the Paying Agent to be determined by subsequent resolution of the Board. "Pledged Funds" any other receipts,re en esanshall ndspledged in onnec ion with tthe tBonds. "X. "Record Date" shall mean the fifteenth (15th) day of the month immediately preceding an interest or other applicable payment date for the Bonds. "Y. "Registered Owner", "Bondholder" 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. "Z. "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. "AA. "Required Renewal Fund Payments" shall mean the amounts required to be deposited in each month to the credit of the renewal and - 5 - replacement fund under Section 3.04(E) of the Senior Lien Bond Resolution so long as the Senior Lien Bonds are outstanding. "BB. "Revenues" shall mean (1) the Uniform Charges, (2) subject to the consent of the Bond Insurer so long as any Series 1989 Bonds are outstanding such Surcharges, Impact Fees, Special Assessments, Franchise Fees and Fees in lieu of Franchise Fees as the Board, by resolution, may pledge specifically in connection with the Bonds; and (3) subject to the consent of the Bond Insurer so long as any Series 1989 Bonds are outstanding, such other receipts and revenues of the County as the Board, by resolution, may pledge specifically in connection with the Bonds. "Revenues" shall not include, however, such receipts and revenues as, from time to time, may be released from the pledge created hereunder as permitted by Section 15 hereof. "CC. "Revenue Fund" shall mean the account created pursuant to this Resolution into which all Revenues of the System shall be deposited by the County. "DD. "Senior Lien Bond Resolution" shall mean Resolution No. 82-61 of the County, together with all amendments and supplements thereto, providing for the issuance and security of the Senior Lien Bonds. "Senior Bonds" l shall that may be issuedt the Governmentaspermitted sbyeSection r and a16rrevenue Qhereof,bonds "FF. "Senior Lien Bonds Debt Service" shall mean the principal and Interest payable on bonds issued to the Government and having a right to payment from and a lien on the Pledged Funds senior to the lien granted for the benefit of the holders of Bonds issued under this Resolution, as permitted by Section 16 Q hereof. "GG. "Senior Lien Bonds Reserve Account Payments" shall mean the amounts required to be deposited in each month to the credit of the reserve account in the sinking fund for the Senior Lien Bonds under Section 3.04(C)(4) of the Senior Lien Bond Resolution so long as any Senior Lien Bonds are outstanding. "HH. "Series 1989 Bonds" shall mean the Water and Sewer Revenue Refunding Bonds, Series 1989, authorized and issued hereunder. "II. "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. - 6 - ` r replacement fund under Section 3.04(E) of the Senior Lien Bond Resolution so long as the Senior Lien Bonds are outstanding. "BB. "Revenues" shall mean (1) the Uniform Charges, (2) subject to the consent of the Bond Insurer so long as any Series 1989 Bonds are outstanding such Surcharges, Impact Fees, Special Assessments, Franchise Fees and Fees in lieu of Franchise Fees as the Board, by resolution, may pledge specifically in connection with the Bonds; and (3) subject to the consent of the Bond Insurer so long as any Series 1989 Bonds are outstanding, such other receipts and revenues of the County as the Board, by resolution, may pledge specifically in connection with the Bonds. "Revenues" shall not include, however, such receipts and revenues as, from time to time, may be released from the pledge created hereunder as permitted by Section 15 hereof. "CC. "Revenue Fund" shall mean the account created pursuant to this Resolution into which all Revenues of the System shall be deposited by the County. "DD. "Senior Lien Bond Resolution" shall mean Resolution No. 82-61 of the County, together with all amendments and supplements thereto, providing for the issuance and security of the Senior Lien Bonds. "Senior Bonds" l shall that may be issuedt the Governmentaspermitted sbyeSection r and a16rrevenue Qhereof,bonds "FF. "Senior Lien Bonds Debt Service" shall mean the principal and Interest payable on bonds issued to the Government and having a right to payment from and a lien on the Pledged Funds senior to the lien granted for the benefit of the holders of Bonds issued under this Resolution, as permitted by Section 16 Q hereof. "GG. "Senior Lien Bonds Reserve Account Payments" shall mean the amounts required to be deposited in each month to the credit of the reserve account in the sinking fund for the Senior Lien Bonds under Section 3.04(C)(4) of the Senior Lien Bond Resolution so long as any Senior Lien Bonds are outstanding. "HH. "Series 1989 Bonds" shall mean the Water and Sewer Revenue Refunding Bonds, Series 1989, authorized and issued hereunder. "II. "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. - 6 - "JJ. "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. "KK. "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 physically independent 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 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. "LL. "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. rm Charges" shall mean all receipts and venues of the County derived fromUthe oimposition, collection and enforcement ofeuniform 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, including the earnings and interest income derived from the investment of money on deposit in the various funds and accounts created in connection with the System, but excluding,Surcharges, Impact Fees; Special Assessments, Franchise Fees and Fees in lieu of Franchise Fees. "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. - 7 - "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, and thereby redeem and retire, 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, and thereby redeem and retire, 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. "SECTION 4. AUTHORIZATION OF PURCHASE, REDEMPTION AND RETIREMENT OF ORIGINAL BONDS. There is hereby authorized the purchase, redemption and retirement 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, and thereby redeem and retire, 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 of the acceptanceof he Bonds Lby10T theRegiOster dCONSTITUTE who shall hold ithe asame 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. -8- "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 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 and its official seal or a facsimile thereof shall be affixed thereto or reproduced thereon. The signatures of the Chairman or Vice Chairman and 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 manual. 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 - 9 - 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. 9. Registrar shall be responsible formaintainingbooks for EXCHANGE. registration, ation, transfer and exchange of the Bonds. nds for transfer, ption or pa (if so requiredlbBy the Board or d he Bond Registrar) exchange, hall bemaccompanied byna written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature 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 istrar or te fom nd Registered Owner oro his t ransferee of a sumosufficient mayetoire coverayment any tax, feetor - 10 - 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 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. 11 - x "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 County and the Bond Registrar shall not be required to issue or to register the transfer of or exchange any Bonds then considered for redemption during a period beginning at the close of business on the fifteenth (15th) day next preceding any date of selection of Bonds to be redeemed and ending at the close of business on the day of mailing the applicable notice of redemption, as hereinafter provided, or to register the transfer of or exchange any portion of any of the Bonds selected for redemption until after the redemption date. "All notices of redemption with respect to the Bonds shall specify the series, maturities and numbers of the Bonds to be redeemed (including the CUSIP numbers); the date fixed for redemption; the redemption price or prices to be applicable to the Bonds to be redeemed; and that on the date fixed for redemption such Bonds shall be payable at the principal corporate trust office of the Paying Agent (specifying the address of same). If holders or registered owners of all such Bonds to be redeemed file written waivers of notice with the Paying Agent, such Bonds may be redeemed on the redemption date without necessity of notice by mailing. Failure to mail any notice of redemption or any defect therein or in the mailing thereof shall not affect the validity of any proceeding for redemption of other Bonds so called for redemption. "SECTION FORM OF BONDS. certificate thereon and the certificate U h rifica a ofauthentic ion thereon shall bee text of the Bonds, the insubstantially 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: M No. R - UNITED STATES OF AMERICA STATE OF FLORIDA INDIAN RIVER COUNTY WATER AND SEWER REVENUE (REFUNDING) BOND, SERIES RATE OF INTERrrcT MATURITY DATF. DATED DATE OF SF.RT_R.R - - 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, unless this Water and Sewer Revenue Refunding Bond, Series 1989 (the "Bond") shall be redeemable and duly shall have been called for earlier redemption and payment of the redemption price shall have been made or provided for, and to pay, solely from such Pledged Funds, semiannually on and of each year, beginning interest on the Principal Amount specified above, at the Rate of Interest specified above, per annum, until such Principal Amount is paid in full. Interest on this Bond shall be payable from the interest payment date next preceding the date of registration and authentication of this Bond, unless: (a) this Bond is registered and authenticated as of an interest payment date, in which event this Bond shall bear interest from such interest payment date; or (b) this Bond is registered and authenticated after a Record Date (hereinafter defined) and before the next succeeding interest payment date, in which event this Bond shall bear interest from such interest payment date; or (c) this Bond is registered and authenticated on or prior to the Record Date first preceding in which event this Bond shall bear interest from ' own by the records of the Paying Agent (hereinafter defined), interest on)thissBond is in default, in which event this Bond shall bear interest from the date on which interest was last paid on this Bond. The Principal Amount hereof, together with any applicable redemption premium with respect thereto, shall be payable, when due upon maturity or earlier redemption, upon presentation and surrender of this Bond at the principal corporate trust office of Agent. Interest hereon hshall be paid,, when due, by check mailed t Paying Registered Owner whose name and address shall appear, at 5:00 P.M. prevailing - 13 - local time at the location of the Bond Registrar (hereinafter defined) on the fifteenth (15th) day of the month next preceding each interest payment date (the "Record Date"), on the registration books maintained by (the "Bond Registrar"), , Florida, as Bond Registrar, irrespective Of any transfer or exchange of this Bond subsequent to such Record Date and prior to such interest payment date, unless the County shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name this Bond is registered on such registration books at 5:00 P.M. prevailing local time at the location of the Bond Registrar on a special record date for the payment of such defaulted interest established by notice mailed by the Paying Agent to the Registered Owner of this Bond not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business of the Bond Registrar on the fifth (5th) day preceding the date of mailing. 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 (1988), and Resolution No. 89-19 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 _, 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 Dollars ($ ) (the "Bonds"). The proceeds of the Bonds, together with certain other available funds of the County, will be used to retire the outstanding series of water revenue and water and sewerrevenue bonds of the County described in the Resolution (the "Original Bonds"), to establish a debt service reserve account and to pay certain costs and expenses relating to issuance of the Bonds and retirement of the Original Bonds, all as more fully set forth in the Resolution. The Bonds and the interest due thereon are payable solely from, and are secured solely by a lien upon and pledge of, the Net 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"). Reference is made to the Resolution - 14 - for terms and conditions upon which certain receipts and revenues pledged under the Resolution may be released from such pledge, and for terms and conditions upon which additional bonds having a senior or parity lien upon and right to payment from such Pledged Funds may be issued from time to time. 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.") The Bonds are issuable only in the form of registered bonds, without coupons, in the denominations of $5,000 principal amount or any integral multiple thereof. 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 in the Resolution. Upon such transfer, 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 and of the same 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 of the same series, maturity and interest rate as this Bond. The County and the Bond Registrar shall not be required to issue or to register the transfer of or exchange any Bonds then considered for redemption during a period beginning at the close of business on the fifteenth (15th) day - 15 - next preceding any date of selection of Bonds to be redeemed and ending at the Close of business on the day of mailing the applicable notice of redemption, as hereinafter provided, or to register the transfer of or exchange any portion of any of the Bonds selected for redemption until after the redemption date. It tified and recited that l acts, conditions and things required it exist, torhappen and to be performed 1precedent 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) If less than all Bonds of any one maturity are to be redeemed, the Bonds of such maturity to be redeemed shall be drawn by lot by the Paying Agent. For the purposes of redemption, a Bond of a denomination larger than $5,000 shall be treated as representing that number of Bonds which equals the number obtained by dividing the principal amount thereof by $5,000, each $5,000 portion of such Bond being subject to redemption. In case of partial redemption of any Bond, payment of the redemption price shall be made only upon surrender of such Bond in exchange for Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the principal amount thereof. Notice of any redemption shall be given in the manner provided in the Resolution. On the date designated for redemption, notice having been Provided as aforesaid, and money for payment of the principal, premium, if any, and accrued interest being held by the Paying Agent, interest on the Bonds or portions thereof so called for redemption shall cease to accrue and such Bonds or portions thereof so called for redemption shall cease to be entitled to any benefit or security under the Resolution, and the registered owners of such Bonds or portions thereof so called for redemption shall have no rights with respect thereto, except to receive payment of the principal to be redeemed and accrued interest thereon to the date fixed for redemption, together with the redemption premium, if any. not be all lid or be entitleds t onanyhsecurity or orforecome under the obligatoryunder until purposethecertificate of authentication hereon shall have been executed by the manual signature of an authorized representative of the Bond Registrar. - 16 - 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 Clerk of the Board OF County Commissioners, 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 day of (SEAL) INDIAN RIVER COUNTY, FLORIDA By: ATTEST: Chairman Clerk CERTIFICATE OF AUTHENTICATION AND CERTIFICATE AS TO OPINION It is certified that: (1) This Bond is one of the Bonds described in the within -mentioned Resolution; and (2) The text of the Opinion printed upon this Bond is a true and correct copy of the text of an original Opinion issued by , dated and delivered on the date of original delivery of, and payment for, such Bonds, which Opinion is on file at our corporate trust office referred to in this Bond, where the same may be inspected. As Bond Registrar By: Date of Registration and Authentication: Authorized Representative 17 - 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 19 . 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 common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship UNIF GIF MIN ACT - Custodian for (Cust.) (Minor) under Uniform Gifts to Minors Act of (State) Additional abbreviations may also be used though not in list above. - 18 - ASSIGNMENT transfers to FOR VALUE RECEIVED, the undersigned sells, assigns and (Name and address of Transferee) kaociai 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 guaranteed: (Name of Bank, Trust Company or Firm) By: Title: (Signature of Transferor) Date: 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. [insert if appropriate:] PARTIAL REDEMPTION PAYMENTS Authorized Principal Officer of ym Paent Date p Balance of Bond Amount Paid Principal Unpaid Registrar - 19 - "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 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 Clerk of the Board, except and release from the pledge and lien created by this Resolution, and the phrase "Revenues" as used in this Resolution shall no longer include, the receipts and revenues of the County derived from the Uniform 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, Franchise Fees, Fees in lieu of Franchise Fees or other receipts and revenues (other than Uniform Charges) theretofore pledged in connection with the Bonds, as stated in such resolution, if there shall be filed with the Clerk of the Board 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 Revenues and the Operating Expenses have been audited by them for the Fiscal Year immediately preceding the date of the proposed release of such receipts and revenues from the pledge hereunder or for any twelve (12) consecutive month period out of the 20 - eighteen (18) consecutive months immediately preceding such date; (ii) setting forth the Revenues, the Uniform Charges, 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 1.20 times the largest amount of principal and interest that will mature and become due in any Fiscal Year thereafter on all Bonds then outstanding. For purposes of (iii) above, (A) Revenues, Uniform Charges and Operating Expenses 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; (B) Net Revenues may also be adjusted for (I) the pro forma effect of rates implemented prior to the proposed release of such receipts and revenues and (II) new customers added to the System during the test period; and (C) any amounts owed to the issuer of a Reserve Account Credit Instrument (hereinafter defined) as a result of a draw thereon, as appropriate, shall be added to the principal and interest payable on Bonds to determine compliance with the foregoing test; (2) 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, Franchise Fees, Fees in lieu of Franchise Fees, or other receipts and revenues to be released, apart from the Pledged Funds; and (3) Written consent of the Bond Insurer, if the Bond Insurance Policy is then in effect. For purposes of this Section 15, Senior Lien Bonds Debt Service, Senior Lien Bonds Reserve Account Payments and, to the extent made from Revenues, Required Renewal Fund Payments shall be treated as Operating Expenses. All or any part of the certificate required under subparagraph (1) of this paragraph may be rendered by consulting engineers, consultants or other persons with requisite knowledge and experience who not reasonably objected to by the Bond Insurer. 21 - "SECTION 16. COVENANTS OF THE COUNTY. Subject to any stricter covenants imposed upon the County in the Senior Lien Bond Resolution, which shall be observed while any Senior Lien Bonds are outstanding, 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: "A. REVENUE FUND. All Revenues shall upon receipt thereof be deposited in the "Water and Sewer Revenue Fund" (herein the "Revenue Fund"), which is hereby created and established. "B. DISPOSITION OF REVENUES. Subject to prior disposition in accordance with the provisions of the Senior Lien Bond Resolution while any Senior Lien Bonds are outstanding, all 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 (to the extent that the same have not been provided for pursuant to the Senior Lien Bond Resolution). (2) Second, the County shall deposit in each month to a fund to be known as the "Water and Sewer Revenue 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 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 - 22 - 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 resolution of the County may be deposited in the Reserve Account out of the proceeds of the sale of Bonds. Provided, however, in no Fiscal Year shall Net Revenues in excess of twenty per cent (208) of the maximum amount of principal and interest on all outstanding Bonds becoming due in any ensuing Fiscal Year be required to be deposited in the Reserve Account, except as may be required by subsection P or subsection 2 below. No further deposits shall be required to be made into the Reserve Account as long as there shall remain on deposit therein (including any Reserve Account Credit Instrument as described below) a sum equal to the maximum amount of principal and interest on all outstanding Bonds becoming due in any ensuing Fiscal Year. The value of the Reserve Account, including investments on deposit in the Reserve Account, shall be determined annually on the first day of the Fiscal Year by an independent firm of certified public accountants, who may be the accountants for the County, in accordance with generally accepted accounting principles. Notwithstanding the foregoing provisions, in lieu of, in whole or in part, the required deposits into the Reserve Account, the County may cause to be deposited into the Reserve Account any of the following (each a "Reserve Account Credit Instrument"): - 23 - (a) A surety bond or insurance policy issued to the Paying Agent, as agent of the Bondholders, by a company licensed to issue an insurance policy guaranteeing the timely payment of debt service on the Bonds (a "municipal bond insurer"), if the claims paying ability of the issuer thereof shall be rated "AAA" or "Aaa" by Standard & Poor's Corporation ("S&P") or Moody's Investors Service ("Moody's"), respectively; (b) A surety bond or insurance Policy issued to the Paying Agent, as agent of the Bondholders, by an entity other than a municipal bond insurer, if the form and substance of such instrument and the issuer thereof shall be approved by the Bond Insurer; or (c) An unconditional irrevocable letter of credit issued to the Paying Agent, as agent of the Bondholders, by a bank, if such bank is rated at least "AA" by S&P. Any such Reserve Account Credit Instrument shall meet the further terms and conditions described in subsection Z below and shall be payable or available to be drawn upon, as the case may be (upon the giving of notice as required thereunder), by the Paying Agent on any interest payment date on which a deficiency exists which cannot be cured by money in any other fund or account held pursuant hereto and available for such purpose. It shall be the duty of the Paying Agent to, and the Paying Agent shall, without further authorization or direction from the County, ascertain the necessity for a claim or draw upon any Reserve Account Credit Instrument and provide notice to the issuer of the Reserve Account Credit Instrument in accordance with its terms not later than three days (or such appropriate time period as will, when combined with the timing of required payment under the Reserve Account Credit Instrument, ensure payment under the Reserve Account Credit Instrument on or before the interest payment - 24 - date) prior to each interest payment date, If a disbursement is made under any such Reserve Account Credit Instrument, the County may reinstate the maximum limits of such Reserve Account Credit Instrument immediately following such disbursement, otherwise the amount of credit toward the Reserve Account requirement for such Reserve Account Credit Instrument shall be appropriately reduced. Furthermore, the County may at any time and from time to time cause to be deposited in the Reserve Account such a Reserve Account Credit Instrument 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. If the Reserve Account requirement shall at any time be satisfied in whole or in part with a qualifying letter of credit and such letter of credit is about to expire or terminate, the County hereby authorizes and directs the Paying Agent to draw upon such letter of credit prior to its expiration or termination to the extent required to fully fund the Reserve Account requirement unless a replacement Reserve Account Credit Instrument is in place or the Reserve Account is otherwise fully funded in its required amount. (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 - 25 - 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 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 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. "Except as may be provided in a resolution adopted in connection with the issuance of Additional Parity Bonds, 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. The County shall fix, establish and maintain such Uniform Charges and, as applicable, such Surcharges, Impact Fees, Special Assessments, Franchise Fees and Fees in lieu of Franchise Fees in connection with the System and other receipts and revenues pledged hereunder, shall collect the same and shall revise the same from time to time, whenever necessary, so as to always provide either of the following: - 26 - (1) Uniform Charges less Operating Expenses sufficient to pay (a) one hundred percent (1008) of all required deposits into the Reserve Account, and (b) one hundred twenty percent (1208) of the amount of principal and interest becoming due in such Fiscal Year on the Bonds outstanding; or (2) when the Revenues include receipts and revenues in addition to Uniform Charges, Net Revenues in each Fiscal Year sufficient to pay (a) one hundred percent (1008) of all required deposits into the Reserve Account, and (b) one hundred twenty percent (1208) of the amount of principal and interest becoming due in such Fiscal Year on the Bonds outstanding; provided, however, that Uniform Charges less Operating Expenses are sufficient to pay (a) one hundred percent (1008) of all required deposits into the Reserve Account, and (b) one hundred percent (1008) of the amount of principal and interest becoming due in such Fiscal Year on the Bonds outstanding. For purposes of this subsection, Senior Lien Bonds Debt Service, Senior Lien Bonds Reserve Account Payments and, to the extent made from Revenues, Required Renewal Fund Payments shall be treated as Operating Expenses. In addition, any amounts owed by the County to the issuer of a Reserve Account Credit Instrument (hereinafter defined) as a result of a draw thereon, as appropriate, shall be added to the principal and interest payable on the Bonds to determine compliance with this rate covenant. "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 - 27 - 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 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 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. - 28 - "K. ENFORCEMENT OF COLLECTIONS. The County will diligently enforce and collect the 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 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. "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 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. - 29 - r 110. 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 System. "P. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. Additional Parity 1 Bonds, payable on a parity from the Pledged Funds with the Bonds, may be issued i 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. "Before issuing any such Additional Parity Bonds, 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 Revenues, the Uniform Charges 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 Revenues, the Uniform Charges, 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: (a) during such audited period the County was in compliance with the rate covenant set forth in Subsection E above; and (b) the Net Revenues, adjusted as hereinafter provided, were equal to at least 1.20 times the largest amount of principal and interest that will mature and become due in any Fiscal Year thereafter on all Bonds outstanding, including the proposed Additional Parity Bonds; and when the Revenues include receipts and revenues in addition to Uniform Charges, the Uniform Charges less Operating Expenses, adjusted as hereinafter provided, were equal to at least 1.00 times the largest amount of principal and interest that will mature and become due in any Fiscal Year thereafter on all Bonds outstanding, including the proposed Additional Parity Bonds. For purposes of (iii) above, (A) Revenues, Uniform Charges and Operating Expenses may be adjusted so as to fairly represent the operation of the System, - 30 - provided that the amount and a detailed reason for each such adjustment is set forth in such certificate; (B) Net Revenues may also be adjusted for: (i) the pro forma effect of rates implemented prior to issuance of the Additional Parity Bonds, (ii) new customers added to the System during the test period, (iii) already existing occupied residences or operating business establishments which will be connected to the System upon completion of projects under construction or to be funded with bond proceeds, and (iv) Net Revenues attributable to customers for whom Impact Fees have been paid, and which will be connected to the System upon completion of projects under construction or to be funded with bond proceeds (provided that while the Series 1989 Bonds are otstanding and the Bond Insurance Policy is in effect, not more than 408 of the Net Revenues described in this subclause (iv) shall be used as an adjustment under this clause (B) without the consent of the Bond Insurer); and (C) any amounts owed by the County to the issuer of a Reserve Account Credit Instrument as a result of a draw thereon, as appropriate, shall be added to the principal and interest payable on the Bonds to determine compliance with the foregoing test. "For purposes of this subsection, Senior Lien Bonds Debt Service, Senior Lien Bonds Reserve Account Payments and, to the extent made from Revenues, Required Renewal Fund Payments shall be treated as an Operating Expenses. All or any part of the certificate required under the second paragraph of this subsection may be rendered by consulting engineers, consultants or other persons with requisite knowledge and experience who are not reasonably objected to by the Bond Insurer. "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 while 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. "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. "The County covenants for the benefit of the Registered Owners of the Series 1989 Bonds and any other Bonds issued and outstanding hereunder that the County shall, at the time of issuance of any Additional Parity Bonds, make a deposit to the Reserve Account in the Sinking Fund created hereunder so that the Reserve Account shall have a value of cash and investments at such time - 31 - equal to the maximum amount of principal and interest on all outstanding Bonds (including the Additional Parity Bonds and giving effect to the retirement of any Bonds being refunded with proceeds of the Additional Parity Bonds) becoming due in any ensuing Fiscal Year, unless the Bond Insurer shall agree otherwise. "Q. ISSUANCE OF SENIOR LIEN BONDS. Additional bonds having a right to payment from and a lien on the Pledged Funds senior to the lien granted hereunder for the benefit of the Bonds may be issued only to the Government, in an aggregate principal amount not greater that $9,650,000, under and pursuant to the terms and conditions of a Letter of Conditions dated July 2, 1985, as amended by a letter dated November 4, 1985, and a letter dated September 1, 1988, all from the Government to the County, and upon the terms and conditions set forth in the Senior Lien Bond Resolution heretofore adopted by the County. No Bonds other than the aforesaid $9,650,000 aggregate principal amount may be issued with a lien upon the Pledged Funds senior to the Series 1989 Bonds and other Bonds issued hereunder. The County covenants with the Registered Owners of the Bonds issued hereunder that it will not issue the Senior Lien Bonds unless the Senior Lien Bonds would meet the conditions for the issuance of Additional Parity Bonds under subsection P of this Section if the Senior Lien Bonds were Additional Parity Bonds. "The Senior Lien Bonds shall not in any manner whatsoever be considered Additional Parity Bonds or be subject to the terms and conditions of this Resolution. "The County covenants for the benefit of the Registered Owners of the Series 1989 Bonds and any other Bonds issued hereunder that the County shall fund fully the reserve account in the sinking fund created under the Senior Lien Bond Resolution for the benefit of the Senior Lien Bonds at the time of issuance of the Senior Lien Bonds with available money of the County, other than Revenues or ad valorem taxes, unless the Bond Insurer shall agree otherwise. "The County further covenants for the benefit of the Registered Owners of the Series 1989 Bonds and any other Bonds issued hereunder that it will make all Required Renewal Fund Payments from available money of the County, other than Revenues or ad valorem taxes, to the extent that such money is available or can be made available by the County for such purpose. "R. 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, except as specifically provided herein. The County may issue obligations other than the Bonds and the Senior Lien Bonds payable from the Pledged Funds provided such obligations are junior and - 32 - 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. "S. MANAGEMENT OF SYSTEM. The County in operating the System will employ persons of demonstrated ability and experience and will 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. "T. 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. "U. ARBITRAGE. The County covenants to and with purchasers of the issue which is comprised of the Series 1989 Bonds that it will make no 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 Ragister 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. "V. 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. "W. 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 - 33 - 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. "X. 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. action or fail to take any action wcovenantse County that it l any with respect to heproceeds oftheoBondsethat 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 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 take -or -pay contract or certain management contracts ("private business use"), if such use is related to the County's use of the System, will not exceed more than ten percent (108) of the use of the System, or if such private business use in unrelated or disproportionate to the County's use of the System, will not exceed more than five percent (58) of the use of the System. "The County covenants that no more than ten percent (108) of the 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. "Z. The further terms and conditions upon which the Reserve Account requirement set forth in subsection B(4) above may be met in whole or in part with a Reserve Account Credit Instrument are, unless the Bond Insurer agrees otherwise, as follows: (1) With respect to any letter of credit: - 34 - (a) such letter of credit shall be payable in one or more draws upon presentation by the Paying Agent of a sight draft accompanied by its certificate that it then holds insufficient funds to make a required payment of principal or interest on the Bonds; (b) the draws shall be payable within two days of presentation of the sight draft; (c) the letter of credit shall be for a term of not less than three years and shall be subject to an "evergreening" feature so as to provide the County with at least 30 months' notice of termination; the issuer of the letter of credit shall be required to notify the County and the Paying Agent not later than 30 months prior to the stated expiration date of the letter of credit as to whether such expiration date shall be extended, and if so, shall indicate the new expiration date. If such notice indicates that the expiration date shall not be extended, the County shall deposit in the Reserve Account an amount sufficient to cause the cash or permitted investments on deposit in the Reserve Account, together with any other qualifying Reserve Account Credit Instruments, to equal the Reserve Account requirement on all Outstanding Bonds, such deposit to be paid in equal installments on a least a semi-annual basis over the remaining term of the letter of credit, unless the Reserve Account Credit Instrument is replaced by another Reserve Account Credit Instrument permitted hereunder; and (d) The letter of credit shall permit a draw in full prior to the expiration or termination of such letter of 35 - credit if the letter of credit has not been replaced or renewed. (2) The use of any Reserve Account Credit Instrument shall be subject to receipt of an opinion of counsel acceptable to the Bond Insurer in form and substance satisfactory to the Bond Insurer as to the due authorization, execution, delivery and enforceability of such instrument in accordance with its terms, subject to applicable laws affecting creditors' rights generally, and, in the event the issuer of such credit instrument is not a domestic entity, an opinion of foreign counsel in form and substance satisfactory to the Bond Insurer. In addition, the use of an irrevocable letter of credit shall be subject to receipt of an opinion of counsel acceptable to the Bond Insurer in form and substance satisfactory to the Bond Insurer to the effect that payments under such letter of credit would not constitute avoidable preferences under Section 547 of the United States Bankruptcy Code or similar Florida laws with avoidable preference provisions in the event of the filing of a petition for relief under the United States Bankruptcy Code or similar Florida laws by or against the County (or any other account party under the letter of credit). (3) The obligation to reimburse the issuer of a Reserve Account Credit Instrument for any fees or expenses or claims or draws upon such Reserve Account Credit Instrument shall be subordinate to the payment of debt service on the Bonds. The right of the issuer of a Reserve Account Credit Instrument to payment or reimbursement of its fees and expenses shall be subordinated to cash replenishment of the Reserve Account, and, subject to the second succeeding sentence, its right to reimbursement for claims or draws shall be on a parity with the cash replenishment of the Reserve Account. The Reserve Account Credit Instrument shall provide for a revolving feature under which the amount available thereunder will be reinstated to the extent of any reimbursement of draws or claims paid. If the revolving feature is suspended or terminated for any reason, the right of the issuer of the Reserve Account Credit Instrument to reimbursement will be further subordinated to cash replenishment of the Reserve Account to an amount equal to the difference between - 36 - the full original amount available under the Reserve Account Credit Instrument and the amount then available for further draws or claims. In the event (a) the issuer of a Reserve Account Credit Instrument becomes insolvent, or (b) the issuer of a Reserve Account Credit Instrument defaults in its payment obligations thereunder, or (c) the rating of the claims paying ability of the issuer of the insurance policy or surety bond falls below "AAA" or "Aaa", by S&P or Moody's, respectively, or (d) the rating of the issuer of the letter of credit falls below "AA" by S&P, the obligation to reimburse the issuer of the Reserve Account Credit Instrument shall be subordinate to the cash replenishment of the Reserve Account. (4) In the event (a) the revolving reinstatement feature described in the preceding subparagraph (3) is suspended or terminated, or (b) the rating of the claims paying ability of the issuer of the surety bond or insurance policy falls below "AAA" or "Aaa", by S&P or Moody's, respectively, or (c) the rating of the issuer of the letter of credit falls below "AA" by S&P, the Issuer shall either (i) deposit into the Reserve Account an amount sufficient to cause the cash or permitted investments on deposit in the Reserve Account to equal the Reserve Account requirement on all outstanding Bonds, such amount to be paid over the ensuing five years in equal installments deposited at least semi- annually or (ii) replace such instrument with another Reserve Account Credit Instrument within six months of such occurrence. In the event (a) the rating of the claims -paying ability of the issuer of the surety bond or insurance policy falls below "A or (b) the rating of the issuer of the letter of credit falls below "A", or (C) the issuer of the Reserve Account Credit Instrument defaults in its payment obligations hereunder, or (d) the issuer of the Reserve Account Credit Instrument becomes insolvent, the County shall either (i) deposit into the Reserve Account an amount sufficient to cause the cash or permitted investments on deposit in the Reserve Account to equal the Reserve Account requirement on all outstanding Bonds, such amount to be paid over the ensuing year in equal installments on at least a monthly basis, or (ii) replace such instrument with another Reserve Account Credit Instrument within six months of such occurrence. - 37 - (5) Where applicable, the amount available for draws or claims under a Reserve Account Credit Instrument may be reduced by the amount of cash or permitted investments deposited in the Reserve Account pursuant to either clause (i) of the preceding subparagraph (4). (6) Cash on deposit in the Reserve Account shall be used (or investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing on any Reserve Account Credit Instrument. If and to the extent that more than one Reserve Account Credit Instrument is deposited in the Reserve Account, drawings thereunder and repayments of costs associated therewith shall be made on a pro rata basis, calculated by reference to the maximum amounts available thereunder. "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, premiums and expenses related to insuring or rating 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. - 38 - "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 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, any and all Senior Lien Bonds and any and all 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 - 39 - 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 Revenues or other receipts and revenues 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 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 or any resolution authorizing the issuance of the Senior Lien Bonds. "SECTION 22. SPECIAL COVENANTS. So long as the Series 1989 Bonds are outstanding and the Bond Insurance Policy is in effect, the County covenants to comply with the following provisions and the Registered Owners of the Bonds, by their acceptance of such Bonds, shall be deemed to consent to the following provisions: "A. The County shall provide the Bond Insurer with such additional information as is reasonably requested by the Bond Insurer from time to time, "B. Any notice or information required to be furnished to the Bond Insurer under the Resolution shall be addressed as follows, unless a notice of change of address shall have been given by the Bond Insurer to the County: Financial Guaranty Insurance Company, 175 Water Street, New York, New York 10038, Attention: President. "C. The Bond Insurer shall be deemed a party in interest under this Resolution. "D. Upon the occurrence of a default which would require the Bond Insurer to make payments under the Bond Insurance Policy, the Bond Insurer and - 40 - its designated agent shall be provided with access to the registration books of the County maintained by the Bond Registrar. "E. No resignation or removal of the Paying Agent and/or the Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent and/or the Bond Registrar. The Bond Insurer shall be furnished with written notice of the resignation or removal of the Paying Agent and/or the Bond Registrar and the appointment of any successor thereto. "F. This Resolution shall not be amended without the prior written consent of the Bond Insurer. "G. The Bond Insurer shall be notified promptly of any draw on the Reserve Account. "H. In determining whether an event of default has occurred no effect shall be given to payments made by the Bond Insurer. No remedial action shall be taken without the consent of the Bond Insurer and the Bond Insurer, acting alone, shall have the right to direct remedies upon default. "I. Remedies shall be cumulative with respect to the Paying Agent, the Bondholders remedies Resolution are discontinued in ed or abandoned, the Paying Agent, the Bondholders and the Bond Insurer shall be restored to their former positions. "J. The prior written consent of the Bond Insurer shall be required for any waiver of a default. Insurer: "K. The County shall provide the following information to the Bond (i) A copy of each of the annually audited financial reports of the County; (ii) A copy of the County's upcoming year's budget; (iii) Upon the issuance of additional debt, whether or not it is on a parity with the Series 1989 Bonds, a copy of the official statement or other disclosure document, if any, circulated in connection with such issuance; and (iv) On an annual basis, the following information: - 41 - (a) Number of system users as of the end of each Fiscal Year; (b) Withdrawal of any System users comprising 4% or more of the System's sales (measured in terms of revenue dollars) since the last reporting date; and (c) Any significant plant expansion or retirements planned or in progress. "SECTION 23. 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 24. 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 25. REPEALER. All resolutions or parts of resolutions in conflict herewith are hereby repealed. "SECTION 26. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption." SECTION 4. Severability of Invalid Provisions, If any one or more of the provisions contained herein shall be held contrary to the express provisions 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 provisions shall be null and void and shall be deemed severable from the remaining provisions and shall in no way affect the validity of any of the other provisions hereof. SECTION 5. Repealing Clause Any and all prior resolutions and other actions of the Board, or parts thereof, in conflict with the provisions herein contained are, to the extent of such conflict, hereby superseded and repealed. - 42 - I t N (a) Number of system users as of the end of each Fiscal Year; (b) Withdrawal of any System users comprising 4% or more of the System's sales (measured in terms of revenue dollars) since the last reporting date; and (c) Any significant plant expansion or retirements planned or in progress. "SECTION 23. 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 24. 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 25. REPEALER. All resolutions or parts of resolutions in conflict herewith are hereby repealed. "SECTION 26. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption." SECTION 4. Severability of Invalid Provisions, If any one or more of the provisions contained herein shall be held contrary to the express provisions 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 provisions shall be null and void and shall be deemed severable from the remaining provisions and shall in no way affect the validity of any of the other provisions hereof. SECTION 5. Repealing Clause Any and all prior resolutions and other actions of the Board, or parts thereof, in conflict with the provisions herein contained are, to the extent of such conflict, hereby superseded and repealed. - 42 - SECTION 6. Effective Date. This Resolution shall take effect Immediately upon its adoption. - 43 - The foregoing resolution was offered by Commissioner Scurlock who moved for its adoption. The motion was seconded by Commissioner Eggert and, upon being put to a vote, the vote was as follows: Chairman Gary C. Wheeler Aye Vice Chairman Carolyn K. Eggert Aye Commissioner Don C. Scurlock Aye_ Commissioner Richard N. Bird AvP Commissioner Margaret C. Bowman ALL- - The Chairman thereupon declared the Resolution duly passed and adopted this 2nd day of May, 1989. BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA 7 s By: ,� Chairman Attest:. y k. tolIn** C c APPROVED AS TO F AND e LEGAL SUFFICIENCY Charles P. Vitunac Attorney for the County EXHIBIT A k,. PERMITTED INVESTMENT GUILDLINES (1) direct obligations of the United states of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America ("Direct obligations"), (2) direct obligations and fully guaranteed certificates of beneficial interest of the Export-import Hank of the United states; senior debt obligations of the Federal Home Loan Banks; debentures of the Federal Housing Administration; guaranteed mortgage-backed bonds and guaranteed pass-through obligations of the Government National Mortgage Corporations; guaranteed Title XI financing of the U.S. Maritime Administration; mortgage-backed securities and senior debt obligations of the Federal National Mortgage Association; and participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation (collectively, "Agency obligations"); (3) direct obligations of any state of the United States Of America or any subdivision or agency thereof whose unsecured general obligation debt is rated "A3" or better by Moody4s Investors Service and "A-" or better by standard & Poor's Corporation, or any oblanyistate,! Subdivision nunconditionally visionOragencywhouby whose unsecured general obligation debt is rated "A3" or better by Moody's Investors Service and "A-" or better by Standard & Poor's Corporat O ; (4) commercial paper rated "Prime -1" by Moody's Investors Service and "A-1" or better by Standard & Poor's Corporat on; (5) obligations rated 41A3" or better by Moody's Investors Service and "A-" or better by Standard & Poor's Corporat o ; (6) deposits, Federal funds or bankers acceptances of any domestic bank, including a branch office of a foreign bank which branch office is located in the United States, provided legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office or any branch of such bank, which: a• has an unsecured, uninsured and unguaranteed obligation rated "Prime -1't or 11A3" or better by Moody's Investors Service and "A-1" or "A-" or better by Standard & Poor's Corporation, or ExMbit A PaAc I of 3 z . .. e„ b. is the lead bank of a parent bank holding Companywith an uninsured, unsecured and unguaranteed obligation meeting the rating requirements in (a.) above; (7) deposits of any bank or savings and loan association which has combined capital, surplus and undivided Profits of not less than $3 million, provided such deposits are fully insured by the Federal Deposit Insurance corporation or Federal savings and Loan Insurance Corporation; (8) investments in a money-market fund rated "Am" or "Am -G" or better by Standard & Poor's Corporation; (9) repurchase agreements with a term of one year or less with any institution with debt rated "AA" or commercial paper rated "A-1" (in each case by Standard & Poor's Corporation); (10) repurchase agreements collateralized by Direct Obligations or Agency Obligations with any registered broker/dealer subject to the Securities Investorts# Protection Corporation jurisdiction or any commercial bank, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated "Prime -1" or 41A3" or better by Moody's Investors Service, and "A-1" or "A-" or better by Standard & Poor's Corporation, provided: (A) a master repurchase agreement or specific written,repurchass agreement governs the transaction; and (B) the securities are held free and clear of any lien by the Trustee or an independent third party acting solely as agent for the Trustee, and such third party is (a) a Federal Reserve Bank, (b) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $25 Million, or (c) a bank approved in writing for such purpose by Financial Guaranty Insurance Company, and the Trustee shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Trustee; and (C) a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. in such securities is created for the benefit of the Trustee; and Exhibit A Page 2 of 3 A (D) the repurchase agreement has a term of thirty days or less, or the Trustee will value the collateral securities no less frequently than monthly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two business days of such valuation; and (E) the repurchase agreement matures at least ten days (or other appropriate liquidation period) prior to a debt service payment date, and (F) the fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 100$; and (11) investment agreements with a bank or insurance company which has an unsecured, uninsured and unguaranteed obligation (or claims -paying ability) rated 11A3" or better by Moody's investors Service and "A-10 or better by Standard & Poor's Corporation, or is the lead bank of a parent bank holding company with an uninsured, unsecured and unguaranteed obligation meeting such rating requirements, provided: (A) interest is paid at least semi-annually at a fixed rate during the entire term of the agreement, consistent with bond payment dates, and (B) moneys invested thereunder may be withdrawn without any penalty, premium, or charge upon not more than one day's notice (provided such notice may be amended or canceled at any time prior to the withdrawal date), and (C) the agreement is not subordinated to any other obligations of such insurance company or bank, and (D) the same guaranteed interest rate will be paid on any future deposits made to restore the reserve to its required amount, and (E) the 'Trustee receives an opinion of counsel that such agreement is an enforceable obligation of such insurance company or bank. Exhibit A 0028G Page 3 of 3