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Res 104-90 RESOLUTION NO. 104-90 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY BEACH, FLORIDA, SUPPLEMENTING RESOLUTION NO. 39-88 BY AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $50,000,000 WATER AND SEWER REVENUE BONDS OF THE CITY OF DELRAY BEACH, FLORIDA, FOR THE PURPOSE OF FINANCING AND REFINANCING THE COSTS OF CERTAIN ADDITIONS, EXTENSIONS AND ~ TO THE CITY'S COMBINED PUBLIC UTILITY AND PROVIDING FOR THE TERMS AND PAYMENT OF SAID WATER AND SEWER REVENUE BOND~, AND THE RIGHTS, R~R~IESANDSE(~JRITYOFTHEHOLDERS OFT HE WATER AND SEWER REVENUE BOND~, MAKING~ COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FORCER'~AIN OTHER MATTERS IN CONNECTION~%~EWITH; AND PR0VIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Delray Beach, Florida, a Florida municipal corporation (the "City"), is authorized by law to issue revenue bonds to finance additions, extensions and improvements to its Combined Public Utility (as herein defined); and WHEREAS, the City Commission of the City of Delray Beach, Florida (refgrred to herein as the "City Commission"), did, on June 12, 1984, adopt Resolution No. 45-84, which was amended and sup- plemented on June 26, 1984, and October 17, 1984, authorizing the issuance of its Water and Sewer Revenue Bonds, Series 1984 (the "1984 Bonds"); and WHEREAS, the City Commission did, on June 28, 1988, adopt Resolution No. 36-88, which was amended, supplemented and restated by Resolution No. 39-88, adopted on July 12, 1988, as further amended I-1 Res. No. 104 -90 TABLE OF CONTENTS (Continued) Page OF SPECIAL ASSESSMENTS AND PLEDGED IMPACT CHARGES .......... 2 SECTION 5. APPLICATION OF BOND PROCEEDS ....... 3 SECTION 6. COVENANTS OF THE CITY .............. 5 A. TAX COVENANT ................. 6 B. RATES ........................ 7 C. MAINTENANCE OF FUNDS AND ACCOUNTS CREATED UNDER THE 1988 RESOLUTION .............. 7 D. DISPOSITION OF NET REVENUES AND PLEDGED IMPACT CHARGES, IF ANY ....................... 8 E. REMEDIES ..................... 21 F. DISCHARGE AND SATISFACTION OF BONDS ........................ 25 G. VALUATION .................... 29 ARTICLE IV MISCELLANEOUS PROVISIONS SECTION 1. MODIFICATION OR AMENDMENT .......... 1 SECTION 2. SEVERABILITY OF INVALID PROVISIONS. 2 SECTION 3. SALE OF BONDS ...................... 2 SECTION 4. BOND ANTICIPATION NOTES ............ 3 SECTION 5. kEPEALER ........................... 3 SECTION 6. BOND INSURER; DEFAULT .............. 3 SECTION 7. VALIDATION ......................... 3 -2- Res. No. 104-90 CITY OF DELRAY BEACH, FLORIDA $50,000,000 Water and Sewer Revenue Bo~d~ Water and Sewer Revenue Bond Resolution Adopted October 23, 1990 Res. No. 104-90 TABLE OF CONTENTS Page ARTICLE I STATUTORY AUTHORITY, FINDINGS AND DEFINITIONS SECTION 1. AUTHORITY OF THIS RESOLUTION ....... 3 SECTION 2. FINDINGS ........................... 3 SECTION 3. DEFINITIONS ........................ 6 SECTION 4. ORIGINAL RESOLUTION AND THIS RESOLUTION CONSTITUTES CONTRACT. 24 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS SECTION 1. AUTHORIZATION OF BONDS ............. 1 SECTION 2. DESCRIPTION OF BONDS ............... 1 SECTION 3. REDEMPTION PROVISIONS .............. 4 SECTION 4. EXECUTION OF BONDS ................. 4 SECTION 5. NEGOTIABILITY, REGISTRATION AND CANCELLATION .................... 5 SECTION 6. BONDS MUTILATED, DESTROYED, STOLEN OR LOST ......................... SECTION 7. Preparation of Definitive Bonds; Temporary Bonds ................. 9 SECTION 8. Form of Bonds ...................... 10 SECTION 9. BOOK-ENTRY SYSTEM .................. 32 ARTICLE III COVENANTS, FUNDS AND APPLICATION THEREOF SECTION 1. THE BONDS ON PARITY WITH THE PRIOR BONDS ........................... 1 SECTION 2. BONDS NOT TO BE INDEBTEDNESS OF THE CITY ............................ 1 SECTION 3. The Bonds Secured by the Original Resolution ...................... 1 SECTION 4. BONDS SECURED BY PLEDGE OF NET REVENUES AND ADDITIONAL SECURITY -1- Res. No. 104-90 and supplemented (collectively, the "1988 Resolution"), authorizing the issuance of the city's Water and Sewer Refunding Revenue Bonds, Series 1988 (the "1988 Bonds"), to refund the City's 1984 Bonds; and WHEREAS, the 1988 Resolution authorizes in Section 4.G of Article III thereof, of Part I, the issuance of bonds payable on a parity with the 1988 Bonds issued pursuant to the 1988 Resolution, on the terms and conditions therein contained: and WHEREAS, the City Commission did, on April 24, 1990, adopt Resolution No. 46-90 (the "1990 Resolution") which authorized the issuance of not exceeding $8,000,000 Water and Sewer Revenue Bonds (the "1990 A Bonds") of the City for the purpose of financing certain additions, extensions and improvements to the City's Combined Public Utility; and WHEREAS, the 1988 Bonds and the 1990 A Bonds, when issued, are collectively called the "Prior Bonds"; and WHEREAS, it is deemed necessary and advisable for the health and welfare of the inhabitants and citizens of the City to issue Water and Sewer Revenue Bonds, in one or more series, to pay the cost of all or a portion of a Project (as herein defined), on a parity with the Prior Bonds as to the lien on, and source and security for payment from, the Net Revenues (as herein defined) I-2 Res. No. 104-90 derived from the operation of the Combined Public Utility, and in all other respects. NOW, THRREFORE, BE IT RESOLVED BY THE CITY CO~IISSION OF THE CITY OF DELRAY BEACH, FLORIDA, AS FO~: ARTICLE I STATUTORY AUTHORITY, FINDINGS AND DEFINITIONS SECTION 1. AUTHORITY OF THIS RESO~ON. This Resolution is adopted pursuant to the provisions of the City, Charter of the City, as amended and supplemented; the Florida Constitution; Chapter I66, Florida Statutes, as amended and supplemented; and other applicable provisions of law. SECTION 2. FINDINGS. It is hereby ascertained, determined and declared: A. That all terms not otherwise defined in this Section 2 shall have the meaning ascribed to such terms in Section 3 of this Article 1. B. That the City now owns, operates and maintains a com- bined water system and sewer system for the supply and distribution of water to the inhabitants of the City and for the collection, treatment and disposal of sewage in said City (the "Combined Public Utility") and owns a one-half (1/2) undivided interest in a treatment and disposal system operated by the South Central Regional Wastewater I-3 Res. No. 104-90 Treatment and Disposal Board (herein the "Board"); and that the City derives revenues from the operation of said Combined Public Utility. C. That the revenues of the Combined Public Utility are not pledged or encumbered in any manner, except for the outstanding bonds of the City of a total authorized issue of $25,135,000 Water and Sewer Refunding Revenue Bonds, Series 1988, dated September 1, 1988 (hereinafter the "1988 Bonds"), heretofore issued pursuant to that certain resolution adopted on June 28, 1988, as amended, supDle- mented and restated by that certain resolutiQn adopted on July 12, 1988, as further amended and supplemented (collectively, the "1988 Resolution"), which 1988 Resolution as supplemented by Resolution No. 46-90, adopted on April 24, 1990 (the "1990 Resolution"), autho- rized the issuance of $8,000,000 Water and Sewer Revenue Bonds (the "1990 A Bonds") on a parity with the 1988 Bonds (hereinafter, the 1988 Resolution and the 1990 Resolution, as such resolutions may be amended and supplemented from time to time, shall be collectively referred to as the "Original Resolution"). D. That the 1988 Resolution in Section 4.G of Article III of Part I provides for the issuance of pari passu additional bonds, under the terms, conditions and limitations provided therein. E. That the 1988 Bonds and the 1990 A Bonds when issued will, for the purpose of this Resolution, be referred to as the Prior Bonds. F. That the City is authorized to issue the Bonds (as herein defined) as pari passu additional bonds within the terms, I-4 Res. No. 104-90 conditions and limitations provided in Section 4.G of Article III, Part I, of the 1988 Resolution. G. That the estimated Revenues to be derived in each year hereafter from the operation of the Combined Public Utility will be sufficient at all times to pay all the costs of operation and mainte- nance · of the Combined Public Utility and the principal of and inter- est on the Prior Bonds and the Bonds authorized pursuant to the Original Resolution and this Resolution, as the same become due and payable, and all sinking fund, reserve and other payments provided for in the Original Resolution and in this Resolution in accordance with the requirements of the Original Resolution and this Resolution. H. That the principal of and interest on the Bonds and all of the reserve, sinking fund and other payments provided for in the Original Resolution and this Resolution will be paid from the Net Revenues derived from the operation of the Combined Public Utility in the manner provided therein and herein, on a parity with the Prior Bonds; and the ad valorem taxing power of the City will never be nec- essary or authorized to pay the principal of and interest on the Bonds to be issued pursuant to this Resolution, or to make any of the reserve, sinking fund or other payments provided for in the Original Resolution and this Resolution, and the Bonds issued pursuant to this Resolution shall not constitute a lien upon the Combined Public Utility or upon any other property whatsoever of or in the City but shall be payable solely from the Net Revenues derived from the I-5 Res. No. 104-90 operation of the Combined Public Utility in the manner provided herein. I. That the proceeds derived from the sale of the Bonds shall be used to finance or refinance the cost of all or a portion of a Project (as herein defined). J. That, if the City Commission shall determine by subse- quent proceedings that it would be in the best financial and economic interest of the City, it may, but shall not be required to, issue the 1990 A Bonds simultaneously with or a portion of, the Bonds authorized under this Resolution. SECTION 3. DEFINITIONS. That, as used in this Resolution, the following terms shall have the following meanings unless the text otherwise expressly requires: A. "ACCRETED VALUE" shall mean, as of any date of compu- tation with respect to any Capital Appreciation Bond, the amount set forth as of such date in the supplemental resolution authorizing such capital Appreciation Bond plus, with respect to matters related to the payment upon redemption or other payment of such Capital Appreciation Bond, if such date of computation shall not be an Interest Payment Date, a portion of the difference between the Accreted Value as of the immediately preceding Interest Payment Date (or the date of original issuance if the date of computation is prior to the first Interest Payment Date succeeding the date of original issuance) and the Accreted Value as of the immediately succeeding Interest Payment Date, calculated based on the assumption that I-6 Res. No. 104-90 Accreted Value accrues during any semiannual period in equal daily amounts on the basis of a year of twelve 30-day months. B. "ACT" shall mean the Florida Constitution; the City Charter of the City, as amended and supplemented; Chapter 166, Florida Statutes, as amended and supplemented; and other applicable provisions of law. C. "ANNUAL DEBT SERVICE REQUIREMENT" shall mean, at any time, the amount required to be deposited in the then current Fiscal Year into the Interest Account, PrinciPa~ Account, and Bond Redemption Account, as provided in the Original Resolution and this Resolution; provided, however, that such amount shall be reduced by any earnings or investment income in the then current Fiscal Year on moneys and investments on deposit in the Debt Service Reserve Account and transferred to the Interest Account, as provided in the Original Resolution and this Resolution; and provided further, however, that in computing such Annual Debt Service Requirement for any future period (other than in connection with determining the Debt Service Reserve Requirement), any Variable Rate Bonds shall be deemed to bear interest at all times to the maturity thereof at a constant rate of interest equal to either the rate borne by such Variable Rate Bonds on the date they were issued plus one-half of the difference between such rate and the maximum interest rate for such Variable Rate Bonds as such maximum interest rate shall be determined by subsequent proceedings of the City Commission, or the actual rate of interest borne by such Variable Rate Bonds on such date of calculation, I-7 Res. No. 104-90 whichever is higher. For the purpose of this definition, the amount to be deposited to the aforementioned accounts with respect to Capital Appreciation Bonds and Capital Appreciation and Income Bonds shall be the amounts set forth in subsequent proceedings of the City Commission. D. "APPRECIATED VALUE" shall mean, (i) as of any date of computation with respect to any Capital Appreciation and Income Bonds up to the Interest Commencement Date set forth in subsequent proceedings of the City Commission providing for, the issuance of such Bonds, the amount set forth as of such date in the supplemental reso- lution authorizing such Capital Appreciation and Income Bonds plus, if such date of computation shall not be an Interest Payment Date, a portion of the difference between the Appreciated Value as of the immediately preceding Interest Payment Date (or the date of original issuance if the date of computation is prior to the first Interest Payment Date succeeding the date of original issuance) and the Appreciated Value as of the immediately succeeding Interest Payment Date calculated based upon an assumption that Appreciated Value accrues during any semiannual period in equal daily amounts on the basis of a year of twelve 30-day months, and (ii) as of any date of computation on and after the Interest Commencement Date, the Appreciated Value on the Interest Commencement Date. E. "BENEFICIAL OWNER shall mean, during any period the Bonds are registered under the Book-Entry System, any purchaser of a Bond and others who acquire a beneficial ownership interest in a Bond I-8 Res. No. 104-90 held by the Securities Depository. In determining the Beneficial Owner of the Bond, the City, the Paying Agent, the Registrar and the Bond Insurer, if any, may rely exclusively upon written representa- tions made, and information given to the City, the Paying Agent, the Registrar or the Bond Insurer, if any, by the Securities Depository or its Participants with respect to any Bond held by the Securities Depository in which a beneficial ownership interest is claimed. With respect to Replacement Bonds, the city, the Paying Agent, the Registrar and the Bond Insurer, if any, shall consider the owner of any such Replacement Bond as registered on the registration books of the City maintained by the Registrar to be the Beneficial Owner thereof. F. "BOARD" shall mean the South Central Regional Wastewater Treatment and Disposal Board. G. "BOND COUNSEL" shall mean a firm or firms of nation- ally recognized attorneys-at-law selected by the City and experienced in the financing of capital projects for governmental units through the issuance of tax-exempt revenue bonds under the exclusion from gross income provided under Section 103(a) of the Code. H. "BOND INSURANCE POLICY" shall mean an insurance policy issued for the benefit of any Holders of Bonds, pursuant to which the Bond Insurer shall be obligated to pay when due the princi- pal of and interest on such Bonds to the extent of any deficiency in the amounts in the funds and accounts created under the Original Resolution and continued and maintained under this Resolution, in the I-9 Res. No. 104-90 manner and in accordance with the terms provided in such Bond Insurance Policy. I. "BOND INSURER" shall mean the issuer of a Bond Insurance Policy and its successors. J. "BONDHOLDER" OR "HOLDER OF BONDS" or any similar term, shall mean any person who shall be the registered owner of any Bond or Bonds Outstanding under the terms of this Resolution. K. "BONDS" shall mean the $50,000,000 Water and Sewer Revenue Bonds authorized to be issued pursuant to this Resolution, together with any Dari passu additional bonds hereafter issued in the manner provided in the Original Resolution. L. "BOOK-ENTRY SYSTEM" shall mean the system under which the City may issue its Bonds and maintain the registration for such Bonds in book-entry form only. M. "CAPITAL APPRECIATION BONDS" shall mean those Bonds issued under this Resolution as to which interest is compounded peri- odically on each of the applicable periodic dates designated for com- pounding and payable in an amount equal to the then current Accreted Value only at the maturity, earlier redemption or other payment date therefor, all as so designated by subsequent proceedings of the City Commission relating to the issuance thereof, and which may be either Serial Bonds or Term Bonds. N. "CAPITAL APPRECIATION AND INCOME BONDS" shall mean any Bonds issued under this Resolution as to which accruing interest is not paid prior to the Interest Commencement Date specified in the 1-10 Res. No. 104-90 resolution authorizing such Bonds and the Appreciated Value for such Bonds is compounded periodically on certain designated dates prior to the Interest Commencement Date for such capital Appreciation and Income Bonds, all as so designated by subsequent proceedings of the City Commission relating to the issuance thereof, and which may be either Serial Bonds or Term Bonds. O. "CITY" shall mean the City of Delray Beach, Florida. P. "CITY COMMISSION" shall mean the governing body of the City. Q. "CODE" shall mean the Internal Revenue Code of 1986, as amended, and all subsequent tax legislation duly enacted by the Congress of the United States. Each reference to a section of the Code herein shall be deemed to include, if applicable, final, tempo- rary or proposed regulations, revenue rulings and proclamations issued or amended with respect thereto, and any final, temporary or proposed regulations and revenue rulings and procedures promulgated under the Internal Revenue Code of 1954, as a_mended, by the Treasury Department or Internal Revenue Service of the United States. R. "COMBINED PUBLIC UTILITY" shall mean the combined Water System and Sewer System of the City. S. "CONSULTING ENGINEER" shall mean the engineering firm or qualified engineer retained by the City to perform the acts and carry out the duties provided for such Consulting Engineer in the Original Resolution and this Resolution. 1-11 Res. No. 104-90 T. "CREDIT FACILITY" shall mean, either individually or collectively, as appropriate, any Bond Insurance Policy, surety bond, a letter of credit, line of credit, or such other instrument or instruments that would enhance the credit of the Bonds. The term "Credit Facility" shall not mean a Reserve Account Credit Facility Substitute. U. "DEBT SERVICE RESERVE REQUIREMENT" shall me an an amount equal to (i) the maximum amount of principal of and interest on the Bonds becoming due in any succeeding Fiscal Year, (ii) one hundred twenty-five percent (125%) of the average annual amount of principal of and interest on the Bonds becoming due in any succeeding Fiscal Year or (iii) ten percent (10%) of the net proceeds (as such term is defined in the Code for such purposes) of the Bonds, which- ever is the lesser, required to be maintained in the Debt Service Reserve Account of the Sinking Fund created and established under the 1988 Resolution and continued and maintained under this Resolution. Such Debt Service Reserve Requirement may be satisfied, in whole or in part, by obtaining a Reserve Account Credit Facility Substitute (as herein defined) with the requisite coverage. V. "DEFEASANCE OBLIGATIONS" shall mean to the extent permitted by law and (other than with respect to the obligations described in clause (a) below) acceptable to the Bond Insurer if the principal of and interest on the defeased bonds is guaranteed under a Bond Insurance Policy, and such Bond Insurer is not in default under such policy, or acceptable to the Rating Agency or Agencies then 1-12 Res. No. 104-90 rating the defeased bonds if they are not guaranteed under a Bond Insurance Policy: (a) U. S. Obligations which are not callable prior to maturity except by the holder thereof; (b) any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (i) which are not callable prior to maturity or as to which irrevocable instructions, have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (ii) which are secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obligations of the character described in clause (a) hereof which fund may be applied only to the pay- ment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the redemption date or dates specified in the irrevocable instruc- tions referred to in subclause (i) of this clause (b), as appropriate, and (iii) as to which the principal of and interest on the bonds and obligations of the character described in clause (a) hereof which have 1-13 Res. No. 104-90 been deposited in such fund along with any cash on deposit in such fund are sufficient to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (b) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this clause (b), as appropriate; and (c) Evidences of ownership of proportionate interests in future interest and principal payments on obligations described in (a) held by a bank or trust company as custodian. U. "FACILITIES" shall mean all the facilities of the Combined Public Utility, and all parts thereof, and any facilities which may hereafter be a part of the Combined Public Utility, or any part thereof, by any additions, betterments, extensions, improvements thereto, or property of any kind or nature, real or personal, tangi- ble or intangible, hereafter constructed or acquired by the City. V. "FISCAL YEAR" shall mean that period commencing on October 1 and continuing to and including the next succeeding September 30, or such other annual period as may be prescribed by law. W. "INTEREST COMMENCEMENT DATE" s h a 1 1 m e a n , w i t h respect to any particular Capital Appreciation and Income Bond, the date specified in the resolution providing for the issuance of such 1-14 Res. No. 104-90 Bonds (which date must be prior to the maturity date for such Bonds) after which interest accruing on such Bonds shall be payable semi- annually, with the first such payment date being the applicable Interest Payment Date immediately succeeding such Interest Commencement Date. X. "INTEREST PAYMENT DATE" shall mean such dates of each Fiscal Year on which interest on the Bonds is payable on Bonds (other than Capital Appreciation Bonds and Capital Appreciation and Income Bonds prior to the applicable Interest Co~mmencement Date) that are then Outstanding and the date the principal of a Bond is to be paid. Y. "MAXIMUM ANNUAL DEBT SERVICE REQUIREMENT" shall mean, at any time, the maximum amount required to be deposited in the then current or any succeeding Fiscal Year into the Interest Account, Principal Account and Bond Redemption Account, as provided in the Original Resolution and this Resolution. The amount of Term Bonds which were subject to mandatory sinking fund redemption, in part, prior to their stated date of maturity by operation of the Bond Redemption Account shall not be included in determining the Maximum Annual Debt Service Requirement in their final Fiscal Year of maturity. Z. MOODY'S shall mean Moody's Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the 1-15 Res. No. 104-90 functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the City. AA. "NET REVENUES" shall mean the Gross Revenues remain- ing after deduction of Operating Expenses and shall also include Special Assessments which the City Commission may elect, by subse- quent proceedings, to pledge for the payment of principal of and interest on any series of Bonds. BB. "1988 BONDS" shall mean the Outstanding Water and Sewer Refunding Revenue Bonds, Series 1988, of the City, dated September 1, 1988, originally issued in the principal amount of $25,135,000. CC. "1988 RESOLUTION" shall mean Resolution No. 36-88, adopted by the City Commission on June 28, 1988, as amended, supple- mented and restated by Resolution No. 39-88, adopted by the City Commission on July 12, 1988, as further amended and supplemented, which 1988 Resolution authorized the issuance of the 1988 Bonds. DD. "1990 A BONDS" shall mean, from time to time, the Outstanding Water and Sewer Revenue Bonds, Series 1990 A of the City. It being recognized that the 1990 A Bonds have not been issued at the time this Resolution was adopted but are expected to be issued by the City either prior to or simultaneously with the issuance of any of the Bonds authorized under this Resolution. 1-16 Res. No. 104-90 EE. "1990 RESOLUTION" shall mean Resolution No. 46-90 adopted by the City Commission on April 24, 1990, as such resolution may be amended and supplemented from time to time. FF. "OPERATING EXPENSES" shall mean the expenses of operation, maintenance and ordinary repairs of the Combined Public Utility and its Facilities and shall include, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the City relating solely to the Combined Public Utility, and such other reasonable expenses as shall b9 in accordance with generally accepted accounting principles. "Operating Expenses" shall not include any allowance for depreciation or any extraordinary items arising from the early extinguishment of debt. GG. ORIGINAL RESOLUTION shall mean, collectively, the 1988 Resolution and the 1990 Resolution, as such resolutions may, from time to time, be amended and supplemented. HH. "OUTSTANDING" shall mean, when used with reference to the Bonds, as of any particular date, all Bonds theretofore, or thereupon being, authenticated and delivered by the Registrar under this Resolution, except (i) Bonds theretofore or thereupon cancelled by the Registrar or surrendered to the Registrar for cancellation; (ii) Bonds with respect to which all liability of the City shall have been discharged in accordance with Article III, Section 6.F of this Resolution; (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Registrar pursuant to any provision of this Resolution; (iv) Bonds cancelled 1-17 Res. No. 104-90 after purchase in the open market or because of payment at redemption prior to maturity; and (v) Bonds held or purchased by the City. II. "PARTICIPANTS" shall mean brokers, dealers, banks and other financial institutions and other persons for whom, from time to time, the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository. JJ. "PAYING AGENT" shall mean the bank or trust company and any successor bank or trust company appointed by the City to act as Paying Agent hereunder. ., KK. "PERMITTED INVESTMENTS" shall mean (i) to the extent permitted by law, U.S. Obligations and (ii) all other invest- ments permitted under the laws of Florida and acceptable to the Bond Insurer, if any. LL. "PLEDGED IMPACT CHARGES" shall mean the charges that may be imposed by the City on new users connecting to the Combined Public Utility which would represent a pro rata share of the costs of a Project which are attributable to the increased demand such additional connections create upon the Combined Public Utility, which Project has been financed with the proceeds of the Bonds, and which charges the City has pledged to payment of the principal of and interest on the Bonds. Pledged Impact Charges, however, shall not include the installation charges imposed by the City for the cost of physically connecting into the City's Combined Public Utility (including but not limited to the cost of excavation, plumbing, installation of meters and landscaping). 1-18 Res. No. 104-90 M~. "PRIOR BONDS" shall mean the 1988 Bonds and, when issued, the 1990 A Bonds. NN. "PROJECT" shall mean the cost of the construction and acquisition of additions, extensions and improvements to the Combined Public Utility of the city, consisting of, but not being limited to plant conversion to lime softening; additions and improve- ments to sanitary sewers and installation of manholes; construction of a master lift station; construction of transmission mains; reha- bilitation of various plant facilities of.~the Combined Public Utility; implementation of ozonization treatment process for water supply; reservoir rehabilitation; construction of monitoring wells; acquisition and development of western wellfield including but not limited to construction of transmission line; construction of line extensions; construction of repump station and tank; construction of a public utilities complex; land acquisitions, engineering and design costs related to the foregoing; equipment costs related to the fore- going; capitalization of all or part of the Debt Service Reserve Account or, in lieu thereof, payment of the premiums for a Reserve Account Credit Facility Substitute; interest on the Bonds prior to, during and for one (1) year after completion of the Project; legal and financing fees and expenses; the costs of issuance of the Bonds; expenses for estimates of costs and of revenues; expenses for plans, specifications and surveys, administrative expenses relating solely to such construction and acquisition; the premium for the Bond Insurance Policy, if any; and such other costs and expenses 1-19 Res. No. 104-90 necessary, or incidental to the financing authorized by this Resolution and for the payment of any temporary obligations issued for the purposes prov.ided in this Resolution and any other costs related to the additions, extensions and improvements to a Project. OO. "RATING AGENCY" OR "AGENCIES" shall mean Moody's and/or S&P, and/or any other securities rating agency which shall have a rating then in effect with respect to the Bonds. PP. "REGISTRAR" "shall mean the bank or trust company and any successor bank or trust company appointed by the City to act as Registrar hereunder. QQ. "REPLACEMENT BONDS" shall mean certificated Bonds, authenticated and delivered pursuant to the terms and provisions of this Resolution, when the City or the Securities Depository discon- tinues the Book-Entry System. RR. "RESERVE ACCOUNT CREDIT FACILITY SUBSTITUTE" shall mean any one of the facilities described in Section 6.D.4 of Article III of this Resolution. SS. "RESOLUTION" shall mean this Water and Sewer Revenue Bond Resolution, as from time to time may be amended and supplemented in accordance with the terms hereof. TT. "REVENUES" OR "GROSS REVENUES" s h a 1 1 m e a n a 1 1 rates, fees, charges, or other income, received by the City or any agency thereof in control of the management and operation of the Combined Public Utility, and all parts thereof, from the operation of the Combined Public Utility and shall also include the earnings and 1-20 Res. No. 104-90 investment income derived from the investment of moneys on deposit in the various funds and accounts created and established under the Original Resolution and continued and maintained under this Resolution, which by the terms and provisions of the Original Resolution and this Resolution are required to be deposited in the Revenue Fund and the Interest Account; provided, however, that Revenues shall not include (1) Pledged Impact Charges (2) Unpledged Impact Charges (3) Special Assessments and (4) capital contributions. , UU. "S&P" shall mean Standard & Poor's Corporation, a corporation organized and existing under the laws of the State of New York, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the func- tions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized securities rating agency desig- nated by the City. VV. "SECURITIES DEPOSITORY" shall mean, with respect to any Bonds to be issued in book entry form, The Depository Trust Company and its successors and assigns, or a successor clearing agency designated pursuant to Article II hereof and its successors and assigns. WW. "SERIAL BONDS" shall mean the Bonds of an issue other than Term Bonds which shall be stated to mature annually. XX. "SEWER SYSTEM" shall mean the complete sanitary sewer collection and transmission facility, any interests the City 1-21 Res. No. 104-90 may have in the Ocean Outfall System, and the City's one-half (1/2) undivided interest in the treatment and disposal system and property operated by the Board, as they now exist and as may hereafter be improved and extended, consisting of all real and personal property of every nature owned by the City and used or useful in the operation thereof, whether within or without the City, except that the Sewer System shall not include the Ocean Outfall System after the date on which the City shall have received payments from the Board for the use of the Ocean Outfall System totalling $1,.~55,646 in accordance with the terms of the Ocean Outfall Agreement dated July 12, 1979 among the City, the Board and the City of Boynton Beach, Florida. YY. "SPECIAL ASSESSMENTS" shall mean all proceeds derived by the City from the special assessments levied against the real property specially benefitted by the acquisition and construc- tion of a Project financed by a series of Bonds, including interest collected on such special assessments and any penalties or moneys received upon foreclosure of the liens of such special assessments. ZZ. "TAX CERTIFICATE" shall mean the Tax Certificate as to Arbitrage and Instructions as to Compliance with provisions of Section 103(a) of the Internal Revenue Code of 1986, executed by the City on the date of initial issuance and delivery of the Bonds, as such Tax Certificate may be amended from time to time, and which serves as a source of guidance for achieving compliance with the Code. 1-22 Res. No. 104-90 AAA. "TERM BONDS" shall mean the Bonds of an issue which shall be stated to mature on one date and for the amortization of which mandatory payments are required to be made into the Bond Redemption Account in the Sinking Fund. BBB. "UNPLEDGED IMPACT CHARGES" shall mean the charges that may be imposed by the City on new users connecting to the Combined Public Utility which would represent a pr~ rata share of the costs of any Project which are attributable to the increased demand such additional connections created upon the Co~bined Public Utility, which Project may or may not be financed with the proceeds of the Bonds, but in any event, such charges are not pledged to the payment of the Bonds. Unpledged Impact Charges, however, shall not include the installation charges imposed by the City for the cost of physi- cally connecting into the City's Combined Public Utility (including but not limited to the cost of excavation, plumbing, installation of meters and landscaping). CCC. "U. S. OBLIGATIONS" shall mean the direct obliga- tions of, or obligations on which the timely payment of principal and interest are unconditionally guaranteed by the United States of America, and, if determined by subsequent proceedings of the City Commission, certificates which evidence ownership of the right to the payment of the principal of, or interest on, such obligations. DDD. "VARIABLE RATE BONDS" shall mean Bonds issued with a variable, adjustable, convertible or other similar rate which is 1-23 Res. No. 104-90 not fixed in percentage for the entire term thereof at the date of issue. EEE. "WATER SYSTEM" shall mean the complete waterworks plant and system, within and without the City, now owned by the City, or hereafter constructed or acquired, including all improvements, extensions, and additions thereto hereafter constructed or acquired, together with all lands or interest therein, plants, buildings, machinery, franchises, pipes, fixtures, equipment and all property, real or personal, tangible or intangible, now or hereafter owned or used by the City in connection therewith. Words importing the singular number shall include the plural number in each case and vice versa, and words importing per- sons shall include firms and corporations. SECTION 4. ORIGINAL RESOLUTION AND THIS RESOLUTION CONSTITUTES CONTRACT. In consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall hold the same from time to time, the Original Resolution and this Resolution shall be deemed to be and shall constitute a contract between the City and such Bondholders, and the covenants and agreements therein and herein set forth to be performed by the City, shall be for the equal bene- fit, protection and security of the Holders of any and all of such Bonds, all of which shall be of equal rank and without preference, priority, or distinction of any of the Bonds over any other thereof except as expressly provided therein and herein. 1-24 Res. No. 104-90 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BOND~ SECTION 1. AUTHORIZATION OF BOND~. Subject and pursuant to the provisions of this Resolution, obligations of the City to be known as "Water and Sewer Revenue Bonds" are hereby authorized to be issued, in one or more series, in the initial aggregate principal amount of not exceeding FIFTY MILLION DOLLARS ($50,000,000) for the purpose provided in Article I, Section 2.I of ~his Resolution. The Bonds authorized by this Resolution may be issued all at one ti~e or in part, from time to time, as the City Commission may in its discre- ! tion hereafter determine by subsequent resolution; subject to the requirements of Part I, Article III, Section 4.G of the 1988 Resolution. SECTION 2. DESCRIPTION OF BO~D~. The Bonds shall be issued in registered form, shall be in the denomination of $5,000 each, or any integral multiple thereof; provided, however, (i) if such Bonds are Capital Appreciation Bonds, then in $5,000 maturity amounts or in $5,000 multiples thereof, and (ii) Capital Appreciation and Income Bonds, which may be issued in any denomination, as long as their Appreciated Value at maturity shall be $5,000 or any integral multi- ple thereof; and shall mature on such dates in such years and in such amounts, all as provided by subsequent proceedings of the City Commission. Principal shall be payable at the principal corporate trust office of the Paying Agent. The Bonds shall be numbered in II-1 Res. No. 104-90 such manner as may be prescribed by the Registrar. The Bonds shall bear interest at not exceeding the maximum rate or rates permitted by law, payable by check or draft made payable to the Holder of Bonds and mailed to the address of such Holder of Bonds, as such name and address shall appear on the registration books of the City maintained by the Registrar at the close of business on the fifteenth day of the calendar month preceding each Interest Payment Date or date of selec- tion of Bonds for redemption; provided, however, that if such 15th day is a Saturday, Sunday or holiday, then to ~the registered Holder and at the registered address shown on the registration books of the City maintained by the Registrar at the close of business on the day next preceding such 15th day which is not a Saturday, Sunday or holi- day (herein the "Record Date"); provided, however, that payment of interest on the Bonds may, at the option of any Holder of Bonds in an aggregate principal amount of at least $1,000,000 be transmitted by wire transfer to the Holder to the bank account number on file with the Paying Agent as of the Record Date, except for (i) Capital Appreciation Bonds which shall bear interest as described under the defined term Accreted Value, payable only upon redemption or maturity thereof and (ii) Capital Appreciation and Income Bonds which shall bear interest as described under the defined term Appreciated Value, such interest payable on the principal amount due at maturity but only from and after the Interest Commencement Date. The Bonds authenticated prior to the first Interest Payment Date shall be dated and bear interest from the date determined by subsequent proceedings II-2 Res. No. 104-90 of the city. Bonds authenticated subsequent to the first Interest Payment Date shall bear interest from the next preceding Interest Payment Date on which such interest has been paid, unless such Bond is registered on an Interest Payment Date or between a Record Date and the next succeeding Interest Payment Date, then from such Interest Payment Date if interest is then paid, as the case may be; provided, however, that if and to the extent there is a default in the payment of the interest due on such Interest Payment Date, such defaulted interest shall be paid to the pers0n~ in whose name Bonds are registered on the registration books of the City maintained by the Registrar at the close of business on the fifteenth day prior to a subsequent Interest Payment Date established by notice mailed by the Registrar to the registered owner not less than the tenth day preceding such subsequent Interest Payment Date, such interest shall be payable semiannually on April 1 and October 1 of each year, except that (i) interest on any Capital Appreciation Bonds shall be paid only at maturity or upon redemption prior to maturity in the amount determined by reference to the Accreted Value, and (ii) interest on a Capital Appreciation and Income Bond shall be payable semiannually on April 1 and October 1 of each year only after the Interest Commencement Date. The Bonds shall be payable, with respect to interest, prin- cipal and premium, if any, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts; II-3 Res. No. 104-90 The Bonds issued hereunder may be Serial Bonds or Term Bonds and such Term Bonds may be Variable Rate Bonds, and such Bonds issued hereunder may be Capital Appreciation Bonds and Capital Appreciation and Income Bonds as determined by subsequent proceedings of the City commission. The payment of principal of and interest on the Bonds may, in addition to the Net Revenues, be secured by Bond Insurance or other Credit Facility and/or Pledged Impact Charges, all as shall be determined by subsequent proceedings of the City Commission. SECTION 3. REDEMPTION PROVISIONS. The Bonds may be subject to redemption prior to maturity at such times, at such redemption prices and upon such terms as shall be determined by subsequent pro- ceedings of the City Commission. SECTION 4. EXECUTION OF BOND~. The Bonds shall be executed in the name of the City by the signature of the Mayor and its offi- cial seal shall be affixed thereto or imprinted or reproduced thereon and attested by the City Clerk. The signatures of said Mayor and Clerk on the Bonds may be manual or facsimile signatures. In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer of the City before the Bonds so signed and sealed shall have been actually sold and deliv- ered, such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the City by such person who at the actual time of II-4 Res. No. 104-90 the execution of such Bond shall hold the proper office, although at the date such Bonds shall be actually delivered such person may not have held such office or may not have been so authorized. The Bonds shall bear thereon a certificate of authentica- tion, in the form set forth in Section 8 of this Article, executed manually by the Registrar. Only such Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or benefit under this Resolution and no Bond shall be valid or obliga- tory for any purpose until such certificate of, authentication shall have been duly executed by the Registrar. Such certificate of the Registrar upon any Bond executed on behalf of the City shall be con- clusive evidence that the Bond so authenticated has been duly authen- ticated and delivered under this Resolution and that the Holder thereof is entitled to the benefits of this Resolution. If the Bonds are validated as directed by the City Commission, the validation certificate on the Bonds shall be sig~ed with the facsimile signatures of the present or any future Mayor and Clerk, as aforesaid, and the City may adopt and use for that purpose the facsimile signature of any person who shall have been such Mayor and Clerk at any time on or after the date of the Bonds, notwith- standing that he or she may have ceased to be such Mayor or Clerk at the time when said Bonds shall be actually delivered. SECTION 5. NEGOTIABILITY, REGISTRATION AND CANCELlATIOn. At the option of the registered Holder thereof and upon surrender thereof at the principal corporate trust office of the Registrar with II-5 Res. No. 104-90 a written instrument of transfer satisfactory to the Registrar duly executed by the registered Holder or his duly authorized attorney and upon payment by such Holder of any charges which the Registrar may make as provided in this Section, the Bonds may be exchanged for Bonds of the same series, interest rate and maturity of any other authorized denominations. The Registrar shall keep books for the registration of Bonds and for the registration of transfers of Bonds. The Bonds shall be transferable by the Holder thereof,,in person or by his attorney duly authorized in writing only upon the books of the City kept by the Registrar and only upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the Holder or his duly authorized attorney. Upon the transfer of any such Bond, the City shall issue in the name of the transferee a new Bond or Bonds. The City, the Paying Agent and the Registrar shall deem and treat the person in whose name any Bond shall be registered upon the books kept by the Registrar as the absolute Holder of such Bond, whether such Bond shall be overdue or not, for the purpose of receiv- ing payment of, or on account of, the principal of and interest on such Bond as the same become due and for all other purposes. All such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City, II-6 Res. No. 104-90 the Paying Agent nor the Registrar shall be affected by any notice to the contrary. In all cases, in which the privilege of exchanging Bonds or transferring Bonds is exercised, the City shall execute and the Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Resolution. All Bonds surrendered in any such exchanges or transfers shall forthwith be delivered to the Registrar and cancelled by the Registrar in the manner provided in this Section. There shall be no charge for any such, exchange or transfer of Bonds, but the City or the Registrar may require the payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Neither the City nor the Registrar shall be required (a) to transfer or exchange Bonds for a period of 15 days next preceding an Interest Payment Date on such Bonds or 15 days next preceding any selection of Bonds to be redeemed or thereafter until after the mailing of any notice of redemption; or (b) to transfer or exchange any Bonds called for redemption. However, if less than all of a Term Bond is redeemed or defeased, the City shall execute and the Registrar shall authenti- cate and deliver, upon the surrender of such Term Bond, without charge to the Bondholder, for the unpaid balance of the principal amount of such Term Bond so surrendered, a registered Term Bond in the appropriate denomination and interest rate. All Bonds paid or redeemed, either at or before maturity shall be delivered to the Registrar when such payment or redemption II-7 Res. No. 104-90 is made, and such Bonds, together with all Bonds purchased by the City, shall thereupon be promptly cancelled. Bonds so cancelled may at any time be destroyed by the Registrar, who shall execute a cer- tificate of destruction in duplicate by the signature of one of its authorized officers describing the Bonds so destroyed, and one exe- cuted certificate shall be filed with the City and the other executed certificate shall be retained by' the Registrar. The City Commission may, by subsequent proceedings, provide for the registration of the Bonds by adopting the Book-Entry System. Bonds held by the Securities Depository while the Bonds are re(/is- tered under the Book-Entry System shall be registered in the name of the Securities Depository or its nominee, and beneficial ownership of such Bonds shall be transferred in accordance with the procedures of the Securities Depository and its Participants. SECTION 6. BONDS MUTILATED, DESTROYED, STO~ OR [O~. In case any Bond shall become mutilated, destroyed, stolen or lost, the City may execute and the Registrar shall authenticate and deliver a new Bond of like date, maturity, denomination and interest rate as the Bond so mutilated, destroyed, stolen or lost; provided that, in the case of any mutilated Bond, such mutilated Bond shall first be surrendered to the City and, in the case of any lost, stolen or destroyed Bond, there shall first be furnished to the City and the Registrar evidence of such loss, theft, or destruction satisfactory to the City and the Registrar, together with indemnity satisfactory to them. In the event any such Bond shall be about to mature or have II-8 Res. No. 104-90 matured or have been called for redemption, instead of issuing a duplicate Bond, the City may pay the same without surrender thereof. The City and the Registrar may charge the Holder of such Bond their reasonable fees and expenses in connection with this transaction. Any Bond surrendered for replacement shall be cancelled in the same manner as provided in Section 5 of this Article. Any such duplicate Bonds issued pursuant to this Section shall constitute additional contractual obligations on the part of the City, 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 Net Revenues derived from the operation of the Combined Public Utility and the Pledged Impact Charges, if any are so pledged hereunder, with all other Bonds issued hereunder. SECTION 7. PREPARATION OF DEFINITIVE BONDS; TEMPORARY BONDS. The definitive Bonds shall be lithographed or printed on steel engraved borders. Until the definitive Bonds are prepared, the Mayor and the City Clerk may execute and the Registrar may authenticate, in the same manner as is provided in Section 4 of this Article II, and deliver, in lieu of definitive Bonds, but subject to the same provi- sions, limitations and conditions as the definitive Bonds, one or more printed, lithographed or typewritten temporary fully registered Bonds, substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in authorized II-9 Res. No. 104-90 denominations or any integral multiple thereof, and with such omissions, insertions and variations as may be appropriate to such temporary Bonds. The City, at its own expense, shall prepare and execute and, upon the surrender at the corporate trust office of the Registrar of such temporary Bonds for which no payment or only par- tial payment has been provided, for exchange and the cancellation of such surrender temporary Bonds, the Registrar shall authenticate and, without charge to the Holder thereof, deliver in exchange therefor, at the principal corporate trust office of the Registrar, definitive Bonds of the same aggregate principal amount, interest rate and matu- rity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the sa~e bene- fits and security as definitive Bonds issued pursuant to this Resolution. SECTION 8. FOI~ OF BONI~. The text of the Bonds shall be of substantially the following tenor, with such omissions, insertions and variations as may be necessary and desirable: II-10 Res. No. 104-90 (Form of Bond) * * The text of the Bonds shall be of substantially the tenor set forth below. Provisions of the Bonds may be set forth on the back of the Bonds and shall for all purposes have the same effect as if set forth on the front of the Bonds. (Face of Bond with certain provisions applicable to a Capital Appreciation Bond or a Capital Appreciation and Income Bond as indicated) No. R UNITED STATES OF AMERICA STATE OF FLORIDA PALM BEACH COUNTY CITY OF DELRAY BEACH WATER AND SEWER REVENUE BOND SERIES Interest Maturity Dated Rate Date Date CUSIP Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS, that the City of Delray Beach, Palm Beach County, Florida (the "City"), for value received, II-11 Res. No. 104-90 hereby promises to pay, from the Net Revenues and Pledged Impact Charges [if so pledged by the City], hereinafter mentioned, to the Registered Owner or registered assigns on the Maturity Date specified above, upon the presentation and surrender hereof at the principal corporate trust office of , as paying agent (said and any bank or trust company becoming successor paying agent being herein called the "Paying Agent"), the Principal Amount stated hereon with interest thereon at the Interest Rate stated above, payable on the first day of and of each year until the City's obligation with respect to the payment of such Principal Amount shall be discharged. Interest on this Bond is pay- able by check or draft of the Paying Agent made payable to the re~is- tered owner and mailed to the address of the registered owner as such name and address shall appear on the registration books of the City maintained by , as Registrar (said , and any successor Registrar being herein called the "Registrar") at the close of business on the fifteenth day preceding each interest payment date or the date on which the principal of a Bond is to be paid or the date of selection of Bonds to be redeemed; provided, how- ever, that if such fifteenth day is a Saturday, Sunday or holiday, then to the registered owner and at the registered address shown on the registration books of the City maintained by the Registrar at the close of business on the day next preceding such fifteenth day which is not a Saturday, Sunday or holiday (the "Record Date"); provided further, however, that payment of interest on the Bonds may, at the II-12 Res. No. 104-90 option of any Holder of Bonds in an aggregate principal amount of at least $1,0~0,000, be transmitted by wire transfer to the Holder to the bank account number on file with the Paying Agent as of the Record Date. Such interest shall be payable from the most recent interest payment date next preceding the date of authentication to which interest has been paid, unless the date hereof is an 1 or 1 to which interest has been paid, in which case from the date hereof, or unless the date hereof is prior to , 19__, in which case from , 19__, or unless the date hereof is between a Record Date and the next succeeding interest payment date, in which case from such interest payment date; provided, however, that if and to the extent there is a default in the payment of the interest due on such interest payment date, such defaulted interest shall be paid to the persons in whose name Bonds are registered on the registration books of the City maintained by the Registrar at the close of business on the fifteenth day prior to a subsequent interest payment date established by notice mailed by the Registrar to the registered owner not less than the tenth day preceding such subse- quent interest payment date. The Principal Amount and accrued inter- est thereon is payable in any coin or currency of the United States of America, which, on the date of payment thereof, shall be legal tender for the payment of public and private debts. II-13 Res. No. 104-90 [The following is applicable to Capital Appreciation Bonds only] No. UNITED STATES OF AMERICA STATE OF FLORIDA PALM BEACH COUNTY CITY OF DELRAY BEACH WATER AND SEWER REVENUE BOND SERIES Interest Maturity Dated Rate Date Date CUSIP Registered Owner: Principal Amount: $~ per $5,000 Amount Due at Maturity Amount Due at Maturity: KNOW ALL MEN BY THESE PRESENTS, that the City of Delray Beach, Palm Beach County, Florida, (the "City"), for value received, hereby promises to pay from the Net Revenues and Pledged Impact Charges [if so pledged by the City], hereinafter mentioned, to the Registered Owner or registered assigns on the Maturity Date specified above, upon presentation and surrender hereof at the principal corpo- rate trust office of , as paying agent (said and any bank or trust company to become successor paying agent being herein called the "Paying Agent"), the Amount Due II-14 Res. No. 104-90 at Maturity (stated above), constituting the Principal Amount per $5,000 Amount Due at Maturity (stated above) and interest thereon at the Interest Rate (stated above) from the Dated Date (stated above) compounded on and thereafter on and __, of each year until payment of said maturity amount or upon earlier redemption, as set forth on the reverse side hereof, payment to be made at the Accreted Value as of the date of redemption or other date of payment. The "Accreted Value" of this Bond shall mean, as of any date of computation, an amount equal to the principal amount hereof plus the compounded interest accrued hereon to the 1 or 1 next preceding the date of computation or the date of computation if a 1 or l, plus, if such date of computation shall not be a 1 or 1, a portion of the difference between the Accreted Value as of the immediately pre- ceding 1 or 1 (or the Dated Date if the date of computation is prior to , 19__~ and the Accreted Value as of the immediately succeeding 1 or 1, calculated based upon the assumption that Accreted Value accrues during any semiannual period in equal daily amounts on the basis of a year of twelve 30-day months. The Accreted Value per $5,000 maturity amount of this Bond on each 1 or 1 is set forth in a table on the reverse hereof. The table should not be construed as a representation as to the market value of this Bond at any time in the future but may bear a relationship to the amount of tax-exempt II-15 Res. No. 104-90 interest and taxable gain with respect to this Bond if sold prior to maturity. II-16 Res. No. 104-90 [The following is applicable to Capital Appreciation and Income Bonds only] No. $ UNITED STATES OF AMERICA STATE OF FLORIDA PALM BEACH COUNTY CITY OF DELRAY BEACH WATER AND SEWER REVENUE BOND SERIES INTEREST MATURITY DATED RATE DATE DATE CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: $__ PER $5,000 AMOUNT DUE AT MATURITY AMOUNT DUE AT MATURITY: KNOW ALL MEN BY THESE PRESENTS, that the City of Delray Beach, Palm Beach County, Florida (the "City"), for value received, hereby promises to pay from the Net Revenues and Pledged Impact Charges [if so pledged by the City], hereinafter mentioned, to the Registered Owner or registered assigns on the Maturity Date specified above, upon presentation and surrender hereof at the principal corpo- rate trust office of , as paying agent (said and any bank or trust company to become successor II-17 Res. No. 104-90 paying agent being herein called the "Paying Agent"), the Amount Due at Maturity (stated above), constituting the Principal Amount (stated above) per $5,000 Amount Due at Maturity and interest thereon at the Interest Rate (stated above) from the Dated Date (stated above), com- pounded on each 1 and 1 during the period from the Dated Date (stated above) to , (the "Interest Commencement Date"). The City further promises to pay to the Registered Owner hereof by check or draft of the Paying Agent made payable to the registered owner and, mailed to.such registered owner at the address shown on the registration books of the City kept for that purpose at the principal corporate trust office of , as Registrar (said and any successor Registrar being herein called the "Registrar") as of the Record Date, interest on the Amount Due at Maturity from the Interest Commencement Date, at the r~te per annum equal to the Interest Rate (stated above), payable on the first days of and in each year (commencing 1, ), until the city's obligation with respect to the payment of such Amount Due at Maturity shall be discharged. Upon earlier redemption or other payment prior to the Interest Commencement Date, as set forth on the reverse hereof, payment shall be made at the Appreciated Value as of the date of redemption or other payment of this Bond. The "Appreciated Value" of this Bond shall mean (i) as of any date of computation up to and including, the Interest Commencement Date, an amount equal to the Principal Amount hereof plus the interest accrued thereon to the 1 or II-18 Res. No. 104-90 1 next preceding the date of computation or the date of computation if a 1 or 1, plus, if such date of computation shall not be a 1 or 1, a portion of the difference between the Appreciated Value as of the immediately preceding 1 or 1 (or the Dated Date if the date of computation is prior to 1, 19 ) and the Appreciated Value as of the immediately succeeding 1 or 1, calculated based upon an assumption that Appreciated Value accrues during any semi-annual period in equal daily ameunts on the basis of a year of twelve 30-day months, and (ii) after the Interest Commencement Date, the Appreciated Value at the Interest Commencement Date. The Appreciated Value per $5,000 Amount Due at Maturity of this Bond on each 1 and 1 is set forth in a table on the reverse hereof. The table should not be construed as a representation as to the market value of this Bond at any time in the future but may bear a relationship to the amount of tax-exempt inter- est and taxable gain with respect to this Bond if sold prior to maturity. Upon redemption or other payment subsequent to the Interest Commencement Date and prior to the Maturity Date in accor- dance with the provisions set forth on the reverse hereof, payment of this Bond shall be made in an amount equal to the Amount Due at Maturity plus any applicable premium plus accrued and unpaid interest on such Amount Due at Maturity. II-19 Res. No. 104-90 The following is applicable to all Bonds: This Bond is one of an authorized issue of Bonds of the City designated as its Water and Sewer Revenue Bonds, Series (herein called the "Bonds"), in the aggregate principal amount of $ of like date, tenor, and effect, except as to number, date of maturity and interest rate, issued for the purpose of paying the cost of the Project (as defined in the Resolution hereinafter referred to) under the authority of and in full compliance with the Constitution, the City Charter, as amended a~d supplemented, and Statutes of the State of Florida, including particularly Chapter 166, Florida Statutes, as amended and supplemented and other applicable provisions of law, and a resolution duly adopted by the City Commission on , 1990, as amended and supplemented (herein referred to as the "Resolution"), and is subject to all the terms and conditions of the Resolution. This Bond is payable from and secured by a lien upon and pledge of the Net Revenues, as defined in the Resolution, derived from the operation of the City's Combined Public Utility, as defined in the Resolution, and the Pledged Impact Charges, as defined in the Resolution [if so pledged by the City], all in the manner provided in the Resolution. The full faith and credit of the City is not pledged for the payment of this Bond and this Bond does not constitute an indebtedness of the City within the meaning of any Constitutional, statutory or other provision or limitation; and it is expressly agreed by the Holder of this Bond that such Holder shall never have II-20 Res. No. 104-90 the right to require or compel the exercise of the ad valorem taxing power of the City for the payment of the principal of and interest on this Bond or the making of any sinking fund or reserve payments pro- vided for in the Resolution. It is further agreed between the City and the Holder of this Bond that this Bond and the obligation evidenced thereby shall not constitute a lien upon the City's Combined Public Utility, or any part thereof, or on any other property of or in the City, but shall constitute a lien only on the Net Revenues derived from the operation of the City's Combined Public Utility and the Pledged Impact Charges [if so pledged by the City], all in the manner provided in the Resolution. The lien of the Holders of the Bonds of the issue of which this Bond is one on the Net Revenues derived from the operation of the City's Combined Public Utility and the Pledged Impact Charges [if so pledged by the City] shall rank equally with the lien on such Net Revenues of the Holders of the Prior Bonds (as such term is defined in the Resolution), issued pursuant to the Original Resolution, as defined in the Resolution, and any pari passu additional obligations hereinafter issued by the City within the terms, restrictions and limitations contained in the Original Resolution. The Holders of the Bonds of the issue of which this Bond is one and the holders of the Prior Bonds, and of the Holders of any pari Dassu additional obligations hereinafter issued by the City within the terms, restrictions, and limitations contained in the Original Resolution, II-21 Res. No. 104-90 shall jointly have a lien on the Net Revenues derived from the operation of the Combined Public Utility and the Pledged Impact Charges [if so pledged by the City], which lien shall be prior and superior to all other liens or encumbrances on such Net Revenues and Pledged Impact Charges [if so pledged by the City]. The City has covenanted in the Resolution that in each Fiscal Year it will fix, establish and maintain such rates and col- lect such fees, rentals or other charges for the services and facili- ties of its Combined Public Utility and revise %he same from time to time whenever necessary, as will always provide in each Fiscal Year, Net Revenues which shall be adequate to pay at least one hundred ten percent (110%) of the Annual Debt Service Requirement (as defined in the Resolution) for the Prior Bonds, the Bonds and any pari passu additional Bonds hereafter issued; and that such Net Revenues shall be sufficient to make all of the payments required by the terms of the Resolution and that such rates, fees, rentals or other charges shall not be so reduced so as to be insufficient for such purposes. The original registered owner, and each successive regis- tered owner of this Bond shall be conclusively deemed to have agreed and consented to the following terms and conditions: II-22 Res. No. 104-90 (1) The Registrar shall maintain the books of the City for the registration of Bonds and for the registration of transfers of Bonds as provided in the Resolution. The Bonds shall be transferable by the registered owner thereof in person or by his attorney duly authorized in writing only upon the books of the City maintained by the Registrar and only upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney. Upon the transfer of any such Bond, the city shall issue in the name of the transferee a new Bond or Bonds. (2) The City, the Paying Agent and the Registrar shall deem and treat the person in whose name any Bond shall be registered upon the books kept by the Registrar as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond as the same becomes due, and for all other purposes. All such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City, the Paying Agent, nor the Registrar shall be affected by any notice to the contrary. II-23 Res. No. 104-90 (3) At the option of the registered owner thereof and upon surrender hereof at the principal corporate trust office of the Registrar with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly autho- rized attorney and upon payment by such registered owner of any charges which the Registrar or the City may make as provided in the Resolution, the Bonds may be exchanged for Bonds of the same interest rate and maturity of any other authorized denominations. (4) In all cases in which the priv, ilege of exchanging Bonds or transferring Bonds is exercised, the City shall execute and the Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Resolution. There shall be no charge for any such exchange or transfer of Bonds, but the City or the Registrar may require payment of a sum sufficient to pay any tax, fee or other gov- ernmental charge required to be paid with respect to such exchange or transfer. Neither the City nor the Registrar shall be required (a) to transfer or exchange Bonds for a period of 15 days next preceding an interest payment date on such Bonds or 15 days next preceding any selection of Bonds to be redeemed or thereafter until after the mail- ing of any notice of redemption; or (b) to transfer or exchange any Bonds called for redemption. However, if less than all of a Bond is redeemed or defeased, the City shall execute and the Registrar shall authenticate and deliver, upon the surrender of such Bond, without charge to the Bondholder, for the unpaid balance of the principal II-24 Res. No. 104-90 amount of such Bond so surrendered, a registered Bond in the appropriate denomination and interest rate. This Bond shall not be valid or obligatory for any purpose until the certificate of authentication set forth hereon shall have been duly executed by the Registrar. It is hereby certified and recited that all acts, condi- tions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the Laws and Constitution of the State of Florida applicable thereto, and that the issuance of this Bond, and of the issue of Bonds of which this Bond is one, is in full compliance with all con- stitutional or statutory limitations or provisions. [The following paragraph is applicable to Capital Appreciation Bonds only] The Capital Appreciation Bonds, of which this Bond is one, pay principal and compound accrued interest only at maturity or upon prior redemption. For the purposes of (i) receiving payment of the redemption price if a Capital Appreciation Bond is redeemed prior to maturity, or (ii) computing the amount of Bonds held by the regis- tered owner of a Capital Appreciation Bond in giving to the City any notice, consent, request, or demand pursuant to the Resolution for any purpose whatsoever, or (iii) computing the amount of Bonds to be redeemed and the selection of Bonds to be redeemed, the principal II-25 Res. No. 104-90 amount of a Capital Appreciation Bond shall be deemed to be its Accreted Value. [The following paragraph is applicable only to Capital Appreciation and Income Bonds] For the purposes of (i) receiving payment of the redemption price if a Capital Appreciation and Income Bond is redeemed prior to maturity, or (ii) computing the amount of Bomds held by the regis- tered owner of a Capital Appreciation and Income Bond in giving to the City any notice, consent, request or demand pursuant to the Resolution for any purpose whatsoever, the principal amount of a Capital Appreciation and Income Bond shall be deemed to be its Appreciated Value. II-26 Res. No. 104-90 IN WITNESS WHEREOF, the City of Delray Beach, Florida, has issued this Bond and has caused the same to be executed by the manual or facsimile signature of its Mayor and the corporate seal of the city to be affixed hereto or lithographed or imprinted or reproduced hereon, and attested by the manual or facsimile signature of the City Clerk of the City, all as of the Dated Date. CITY OF DELRAY BEACH, FLORIDA By Mayor (SEAL) Attest: City Clerk (FORM OF CERTIFICATE OF AUTHENTICATION) Date of Authentication: This Bond is one of the Bonds delivered pursuant to the within mentioned Resolution. as Registrar By Authorized Officer II-27 Res. No. 104-90 (FORM OF VALIDATION CERTIFICATE) [INSERT IF BONDS ARE VALIDATED] This Bond iR one of a series of Bonds which were validated by judgment of the Circuit Court of Palm Beach County, Florida, rendered on the day of , 199__. Mayor City Clerk II-28 Res. No. 104-90 [For Capital Appreciation Bonds only] ACCRETED VALUE PER $5,000 MATURITY AMOUNT Accreted Accreted Date Value Date Value II-29 Res. No. 104-90 [For Capital Appreciation and Income Bonds only] APPRECIATED VALUE PER $5,000 MATURITY AMOUNT Appreciated Appreciated Date Value Date Value II-30 Res. No. 104-90 ASSIGNMENT AND TRANSFER FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto (please print or typewrite name and address of transferee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney to transfer the within bond on the books kept for registra- tion thereof, with full power of substitution in the premises. Dated: In the presence of: [STATEMENT OF INSURANCE, if any] II-31 Res. No. 104-90 SECTION 9. BOOK-ENTRY SYSTEM. 1. As long as the Bonds are registered under the Book- Entry System, the City and the Registrar shall comply with the terms of the agreement entered into with the Securities Depository (the "Book-Entry Agreement"). However, the Book-Entry System through the Securities Depository may be terminated upon the happening of any of the following: (a) The Securities Depository or the City, based upon advice from the Securities Depository, advise the Registrar that the Securities Depository is no longer willing or able to properly discharge its responsibilities under the Book-Entry Agreement and the Registrar and the City are unable to locate a qualified successor clearing agency satisfactory to the Registrar and the City; or (b) The City, in its sole discretion but with the prior written consent of the Registrar, elects to terminate the Book-Entry System by notice to the Securities Depository, the Registrar and the Bond Insurer, if any. 2. Upon the occurrence of any event described above, (i) the City and the Registrar shall, if necessary, enter into a res- olution supplemental to this Resolution to add to the provisions of this Resolution any provisions deemed reasonably necessary or required by the Registrar, and approved in writing by the Bond II-32 Res. No. 104-90 Insurer, if any, with respect to Replacement Bonds (including, but not limited to, the provision for the cost and expenses for the printing thereof) and to account for the fact that, thereafter, the Bonds will no longer be registered under the Book-Entry System, and (ii) the Registrar shall notify the Securities Depository and the Bond Insurer, if any, of the occurrence of such event and of the availability of definitive or temporary Replacement Bonds to Beneficial Owners requesting the same, in an aggregate Outstanding amount representing the interest of each such Beneficial Owner, making such adjustments and allowances as it may find necessary or appropriate as to accrued interest and previous payments of principal. Definitive Replacement Bonds shall be issued only upon surrender to the Registrar of the Bond of each maturity by the Securities Depository, accompanied by registration instructions for the definitive Replacement Bonds for such maturity from the Securities Depository. Neither the City nor the Registrar shall be liable for any delay in delivery of such instructions and conclu- sively may rely on, and shall be protected in relying on, such instructions. 3. Whenever the Bonds are registered under the Book-Entry System and notice or other communication to the Bondholders is required under this Resolution, unless and until definitive Replacement Bonds shall have been issued with respect to the Bonds, the City or the Registrar, as the case may be, shall give to the Securities Depository one copy of each such notice and communication II-33 Res. No. 104-90 specified herein or required by this Resolution to be given to the Beneficial Owners of the Bonds. II-34 Res. No. 104-90 ARTICLE III COVENANTS, FUNDS AND APPLICATION THEREOF SECTION 1. THE BONDS ON PARITY WITH THE PRIOR BONDS. The Bonds shall be on a parity and rank equally as to the lien on, and source and security for payment from, the Net Revenues derived from operation of the Combined Public Utility and, in all other respects, with the Prior Bonds and any pari passu additional obligations here- inafter issued pursuant to and within the terms, limitations and con- ditions contained in Section 4.G of Article'III, Part I, of the 1988 Resolution. SECTION 2. BONDS NOT TO BE INDEBTEDNESS OF THE CITY. The Bonds shall not be and shall not constitute an indebtedness of the City within the meaning of any constitutional, statutory, charter or other limitation of indebtedness, but shall be payable solely from the Net Revenues derived from the operation of the Combined Public Utility, as provided in the Original Resolution and this Resolution. No Holder or Holders of any Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or taxation in any form of any real property therein to pay the Bonds or the interest thereon. SECTION 3. THE BONDS SECURED BY THE ORIGINAL RESOLUTION. The Bonds shall be deemed to have been issued pursuant to the Original Resolution, as fully and to the same extent as the Prior Bonds, and, except as otherwise provided herein, all of the covenants and agreements contained in the Original Resolution shall be deemed III-1 Res. No. 104-90 to have been made for the benefit of the holders of the Bonds, and of any pari passu additional obligations hereafter issued within the terms, limitations and conditions contained in Section 4.G of Article III, Part I, of the 1988 Resolution, as fully and to the same extent as the holders of the Prior Bonds. Ail of the covenants, agreements, and provisions of the Original Resolution shall be deemed to be part of this Resolution to the same extent as if incorporated verbatim in this Resolution, and shall be fully enforceable in the manner prow%ded in the Original Resolution by any of the holders of the Bonds, except as otherwise provided herein. SECTION 4. BONDS SECURED BY PLEDGE OF NET REVENUES AND ADDITIONAL SECURITY OF SPECIAL ASSESSMENTS AND PLEDGED IMPACT CHARGES. The payment of the principal of and interest on all of the Prior Bonds issued under the Original Resolution and Bonds issued hereunder shall be secured forthwith equally and ratably by a first lien on and pledge of the Net Revenues derived from the operation of the Combined Public Utility. The Net Revenues derived from the oper- ation of the Combined Public Utility in an amount sufficient to pay the principal of and interest on the Prior Bonds and the Bonds herein authorized and to make the payments into the reserve and sinking fund and all other payments provided for in the original Resolution and this Resolution, are hereby irrevocably pledged to the payment of the principal of and interest on the Bonds authorized herein, and other payments provided for in the Original Resolution and in this III-2 Res. No. 104-9 Resolution, as the same become due and payable. In addition, the city may by subsequent resolution of the city Commission elect to pledge Special Assessments for the payment of principal of and inter- est on the Bonds authorized under this Resolution. If the City ~akes such election, the Special Assessments so pledged shall be treated for all purposes under this Resolution as Net Revenues, except as otherwise provided in the Original Resolution. The City may also, by subsequent proceedings of the City Commission, elect to pledge Pledged Impact Charges for the payment of principal of and interest on the Bonds. SECTION 5. APPLICATION OF BOND PROCEEDS. All moneys received by the City from the sale of the Bonds originally authorized and issued pursuant to this Resolution shall be disbursed as follows: A. The accrued interest derived from the sale of the Bonds shall be deposited in the Interest Account, created and estab- lished under the 1988 Resolution and continued and maintained under this Resolution, and used for the purpose of paying interest on the Bonds as the same becomes due and payable. B. From the proceeds of the Bonds there may be deposited in the Debt Service Reserve Account, created and established under the 1988 Resolution and continued and maintained under this Resolution, such amount as shall be determined by subsequent proceedings of the City Commission, but which amount shall not exceed the Debt Service Reserve Requirement for the Bonds. III-3 Res. No. 104-90 C. The balance of the proceeds of the Bonds which together with any other moneys lawfully available therefor (such amounts to be determined by subsequent proceedings of the City Commission) shall be deposited into a ,'Construction Fund" created and established under the 1990 Resolution and continued and maintained under this Resolution. No withdrawals shall be made from the Construction Fund (except from the Funded Interest Account created and established in the Construction Fund for the payment of interest on the Bonds prior to, during and for one (1) year after the comple- tion of the Project in such amounts as the City Commission shall hereafter determine by subsequent proceedings, legal, financial and engineering expenses and fees, and expenses and fees in connection with the issuance of the Bonds) without the receipt of a written req- uisition executed by the City Manager or his or her designee, speci- fying the purpose for which such withdrawal is to be ~ade and certi- fying that such purpose is one of the purposes provided for in this Resolution. Amounts on deposit in the Funded Interest Account shall be transferred to the Interest Account at such times and in such' amounts as shall be determined by the Finance Director of the City. If, for any reason, the moneys in said Construction Fund, or any part thereof, are not necessary for, or are not applied to the purposes provided in this Resolution, then such unapplied proceeds, upon cer- tification of the City Manager or his or her designee that such surplus proceeds are not needed for the purposes of the Construction III-4 Res. No. 104-90 Fund, shall be deposited in the following manner and order of priority: First, to the Debt Service Reserve Account in the Sinking Fund, to the full extent necessary to make the amount then on deposit therein equal to the Debt Service Reserve Requirement; Second, to the Interest Account, Principal Account or Bond · Redemption Account in the amounts determined by subsequent proceed- ings of the City Commission; and Third, the balance, if any, to the Renewal, Replacement and Improvement Fund. The moneys deposited in the Construction Fund may, pending their use for the purposes provided in this Resolution, be temporar- ily invested in Permitted Investments maturing not later than the dates on which such moneys will be needed for the purposes of the Construction Fund. All the earnings from such investments shall remain in and become a part of said Construction Fund and be used for the purposes of the Construction Fund. The proceeds of the sale of the Bonds shall be and consti- tute trust funds for the purposes hereinabove provided and there is hereby created a lien upon such moneys, until so applied, in favor of the Holders of said Bonds. SECTION 6. COVENANTS OF THE CITY. As long as any of the principal of or interest on any of the Bonds shall be Outstanding and unpaid, or until there shall have been set apart in the Sinking Fund, consisting of the Interest Account, Principal Account, Bond III-5 Res. No. 104-90 Redemption Account and the Debt Service Reserve Account, created and established under the 1988 Resolution and continued and maintained under this Resolution, a sum sufficient to pay, when due, the entire principal of the Bonds remaining unpaid, together with interest accrued and to accrue thereon, or until the provisions of Article III, Section 6.F of this Resolution have been complied with, the City covenants with the Holders of any and all of the Bonds issued pursuant to the Resolution as follows: A. TAX COVENANT. 1. The City covenants to comply with each requirement of the Code, and any successor provisions thereto, necessary to maintain the exclusion of the interest on the Bonds from gross income for Federal income tax purposes pursuant to Section 103(a) of the Code. In furtherance of the covenant contained in the preceding sentence, the City agrees to comply with the provi- sions of the Tax Certificate. 2. The City shall make any and all payments required to be made to the United States Department of the Treasury in connection with the Bonds pursuant to Section 148(f) of the Code from amounts on deposit in the funds and accounts established under the 1988 Resolution and continued and maintained under this Resolution and available therefor. 3. Notwithstanding any other provision of this Resolution to the contrary, as long as necessary in order to maintain the exclusion of interest on the Bonds from gross income for Federal income tax purposes, the covenants contained in this Section shall III-6 Res. No. 104-90 survive the payment of the Bonds, including any payment or defeasance thereof pursuant to Article III, Section 6.F, of the Resolution. B. RATES. The City, in each Fiscal Year, will fix, establish and maintain such rates and collect such_fees, rentals or other charges for the services and Facilities of its Combined Public Utility, and revise the same from time to time whenever necessary, as will always provide in each Fiscal Year Net Revenues, which shall be adequate to pay at least one hundred ten percent (110%) of the Annual Debt Service Requirement for the Prior Bonds, the Bonds and any pari passu additional Bonds hereafter issued; and that such Net Revenues shall be sufficient to make all of the payments required by the terms of the Original Resolution and this Resolution, and that such rates, fees, rentals or other charges shall not be so reduced so as to be insufficient for such purposes. C. MAINTENANCE OF FUNDS AND ACCOUNTS CREATED UNDER THE 1988 RESOLUTION. The Combined Public Utility Revenue Fund, the Water and Sewer Sinking Fund, consisting of four (4) separate accounts, namely the Interest Account, the Principal Account, the Bond Redemption Account and the Debt Service Reserve Account, the Water and Sewer System Renewal, Replacement and Improvement Fund and the Pledged Impact Charge Fund, all created and established pursuant to the 1988 Resolution, shall be continued and maintained as provided in this Resolution as long as any of the Bonds, or interest thereon, remain unpaid. III-7 Res. No. 104-90 D. DISPOSITION OF NET REVENUES AND PLEDGED IMPACT CHARGES, IF ANY. The Revenues at any time on deposit in the Revenue Fund shall be disposed of only in the following manner: 1. Revenues shall be used, to the full extent necessary, to pay operating Expenses that are due and payable during the current calendar month. 2. Subject to the terms and provisions of the Original Resolution, Net Revenues shall next be used, to the full extent nec- essary, for deposit into the Interest Account in, the Sinking Fund, as provided in the Original Resolution, and the amount of such deposits shall be increased, on the fifteenth (15th) day of each month, begi~l- ning with the fifteenth (15th) day of the first full calendar month following the date on which any or all of the Bonds are delivered to the purchaser thereof, such sums as shall be sufficient to pay one-sixth (1/6th) of the interest becoming due on the Bonds on the next semiannual Interest Payment Date; provided, however, that such monthly deposits for interest shall not be required to be made into the Interest Account to the extent that money is on deposit therein for such purpose; and provided further, that in the event the City has issued pari passu additional Variable Rate Bonds pursuant to the provisions of this Resolution and the Original Resolution, Net Revenues shall be deposited at such other or additional times and amounts as necessary to pay the interest becoming due on the Bonds on the next Interest Payment Date, all in the manner provided in the III-8 Res. No. 104-90 supplemental resolution authorizing such pari passu additional Variable Rate Bonds. The earnings and investment income derived from the moneys and investments on deposit in the Principal Account, the Bond Redemption Account and the Debt Service Reserve Account, which are to be deposited in the Interest Account as required by the terms of the Original Resolution and this Resolution, shall be credited against the amount of Net Revenues required to be deposited in the Interest Account. In the event that the period to elapse between the date of the delivery of the Bonds and the next semiannual Interest Payment Date will be less or more than six (6) months, then such monthly deposits shall be increased or decreased accordingly in sufficient amounts to provide the required semiannual interest amount maturing on the next Interest Payment Date. 3. Net Revenues shall next be used, to the full extent necessary, (a) for the monthly required deposits in the Principal Account in the Sinking Fund, as provided in the Original Resolution, and the amount of such depos- its shall be increased on the fifteenth (15th) day of each month in each year, such sums as shall be suffi- cient to pay one-twelfth (1/12th) of the principal amount or Accreted Value of the Serial Bonds which will mature and become due on the next annual maturity III-9 Res. No. 104-90 date, as shall be determined by subsequent proceedings of the City Commission. In the event the period to elapse between the date of delivery of the Bonds and the next principal payment date will be less or more than twelve (12) months, then such monthly payments shall be increased or decreased accordingly in suffi- cient amounts to provide the required principal amount maturing on the next principal payment date. (b) for the monthly required deposits into the Bond Redemption Account (or such special account cre- ated therein for the Bonds by subsequent proceedings of the City Commission) in the Sinking Fund, as pro- vided in the Original Resolution, and the amount of such deposits shall be increased on the fifteenth (15th) day of each month in each year, such sums as shall be sufficient to pay one-twelfth (1/12th) of the amount required for the payment of the Term Bonds, as shall hereafter be determined by subsequent proceed- ings of the City Commission, until the amount on deposit therein is equal to the amount required to be paid on the next installment payment date. The moneys in the Bond Redemption Account (or such special account created therein for the Bonds by subsequent proceedings of the City Commission) shall be used solely for the purchase or redemption of the III-10 Res. No. 104-90 Term Bonds payable therefrom. The City may purchase any of the Term Bonds at prices not greater than par and accrued interest and may purchase Capital Appreciation Bonds and/or Capital Appreciation and Income Bonds (if such Capital Appreciation Bond or Capital Appreciation and Income Bond is a Term Bond) at prices not greater than the Accreted Value or Appreciated Value, as the case may be, as of the date of purchase. If, by the application.of moneys in the Bond Redemption Account (or such special account cre- ated therein for the Bonds by subsequent proceedings of the City Commission), the City shall purchase or call for redemption in any year Term Bonds in excess of the installment requirement for such year, such excess of Term Bonds so purchased or redeemed shall at the option of the City either be credited on a pro rata basis over the remaining installment payment dates or credited against the following year's installment requirement. The City shall, to the extent of any moneys in the Bond Redemption Account (or such special account created therein for the Bonds by subsequent proceed- ings of the City Commission), be mandatorily obligated to use such moneys for the redemption prior to maturity of Term Bonds in such manner and at such III-11 Res. No. 104-90 times as shall hereafter be determined by subsequent proceedings of the City Commission. No distinction or preference shall exist in the use of moneys on deposit in the Revenue Fund for pay- ment into the Interest Account, the Principal Account and the Bond Redemption Account in the Sinking Fund, such accounts being on a parity with each other. 4. To the extent not funded from Bond proceeds, Net Revenues shall next be used, to the full Extent necessary, to increase monthly deposits into the Debt Service Reserve Account in the Sinking Fund, on the fifteenth (15th) day of each month in each year, beginning with the fifteenth (15th) day of the first full cal- endar month following the date on which any or all of the Bonds issued hereunder are delivered to the purchaser thereof, such sums as shall be sufficient to pay an amount equal to one-twelfth of twenty percent (1/12th of 20%) of the Debt Service Reserve Requirement for the Bonds; provided, however, that if Bond proceeds are deposited in the Debt Service Reserve Account in an amount less than the Debt Service Reserve Requirement, the City shall (except as hereafter pro- vided in the following paragraph) cause Net Revenues to be deposited in an amount equal to one-sixtieth (1/60th) of the difference between the amount on deposit in the Debt Service Reserve Account and the Debt Service Reserve Requirement, and provided further, that no payments shall be required to be made into the Debt Service Reserve III-12 Res. No. 104-90 Account whenever and as long as the amount deposited therein shall be equal to the Debt Service Reserve Requirement. Notwithstanding the foregoing provisions, in lieu of the deposits of Net Revenues into the Debt Service Reserve Account or a deposit from Bond proceeds, the City may cause to be deposited into the Debt Service Reserve Account a surety bond, an unconditional direct pay letter of credit issued by a bank, a reserve account line of credit or a municipal bond insurance policy issued by a reputable and recognized municipal bond insurer for ~the benefit of the Bondholders (sometimes referred to herein as a "Reserve Account Credit Facility Substitute") in an amount equal to the difference between the Debt Service Reserve Requirement and the sums then on deposit in the Debt Service Reserve Account, if any, which Reserve Account Credit Facility Substitute shall be payable (upon the giving of notice as required thereunder) on any Interest Payment Date on which a deficiency exists which cannot be cured by funds in any other account held pursuant to this Resolution and available for such pur- pose under the terms and order of priority as established under the Original Resolution and continued in this Resolution. In addition, the City, at any time by subsequent proceedings of the City Commission, may substitute a Reserve Account Credit Facility Substitute for all moneys on deposit in the Debt Revenue Reserve Account. Under such circumstances, the Reserve Account Credit Facility Substitute shall be in an amount equal to the Debt Service Reserve Requirement. Such municipal bond insurer or bank in the case III-13 Res. No. 104-90 of a letter of credit or line of credit shall be one whose municipal bond insurance policies or unconditional direct pay letters of credit or other type of credit enhancement insuring or guaranteeing the pay- ment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in the highest rating cate- gory by the Rating Agency or Agencies then rating the Bonds. If a disbursement is made from a Reserve Account Credit Facility Substitute, provided pursuant to this paragraph, the City shall be obligated to reinstate the maximum limits of such Reserve Account Credit Facility Substitute immediately following such disbursement or with the consent of the issuer of the Reserve Account Credit Facility Substitute, to replace such Reserve Account Credit Facility Substitute by depositing into the Debt Service Reserve Account from the Net Revenues and the Pledged Impact Charges, if any are so pledged, as herein provided, funds in the maximum amount originally payable under such Reserve Account Credit Facility Substitute, or any combination of such alternatives. In the event the Debt Service Reserve Account is funded, both with cash (including Permitted Investments of such cash) and a Reserve Account Credit Facility Substitute in the aforementioned manner, and it is necessary to make payments into the Interest Account, Principal Account or Bond Redemption Account in the Sinking Fund when moneys in the Revenue Fund and the Pledged Impact Charge Fund, to the extent Pledged Impact Charges have been pledged, are insufficient therefor, the City covenants to deposit the cash (including Permitted Investments of III-14 Res. No. 104-90 such cash) on deposit in the Debt Service Reserve Account into such accounts in the Sinking Fund prior to any disbursements made from the Reserve ~Account Credit Facility Substitute. Whenever there is on deposit in the Debt Service Reserve Account an amount in excess of the Debt Service Reserve Requirement, the amount of such excess shall be reduced at the option of the City in the following manner: (a) if there is on deposit in the Debt Service Reserve Account, a Reserve Account Credit Facility Substitute, as provided herein, the principal amount thereof shall be reduced by the amount of such excess and (b) if the Debt Service Reserve Account is funded with cash and/or Permitted Investments by reducing the amount of moneys and/or securities in the Debt Service Reserve Account in an amount equal to such excess. The cash and/or Permitted Investments so withdrawn under subsection (b) above shall be deposited in the Renewal, Replacement and Improvement Fund and used for the purposes provided therein; provided, however, that all of the income incurred from the investment and reinvestment of moneys on deposit in the Debt Service Reserve Account in excess of the Debt Service Reserve Requirement shall be deposited in the Interest Account as herein provided in this Resolution. Moneys in the Debt Service Reserve Account shall be used only for the purpose of making payments into the Interest Account, the Principal Account and the Bond Redemption Account when the moneys in the Revenue Fund are insufficient therefor; and provided further, however, that moneys on deposit in the Debt Service Reserve Account III-15 Res. No. 104-90 may, upon final maturity of the Bonds, be used to pay principal of and interest on the Bonds. In the event that any moneys shall be withdrawn from the Debt Service Reserve Account for payments into the Interest Account, the Principal Account and the Bond Redemption Account such withdraw- als shall be subsequently restored from the first Net Revenues avail- able after all required payments have been made into the Interest Account, the Principal Account and the Bond Redemption Account including any deficiencies for prior payments to the extent such deficiencies are not paid from Pledged Impact Charges, if any are so pledged by the City, on deposit in the Pledged Impact Charge F%l~d as hereinafter provided. Notwithstanding any provision in this Resolution to the contrary, if a disbursement is made from a Reserve Account Credit Facility Substitute, the City shall be obligated to reinstate the maximum limits of such Reserve Account Credit Facility Substitute prior to making any deposits into the Debt Service Reserve Account from the Net Revenues and Pledged Impact Charges, if any are so pledged. If more than one Reserve Account Credit Facility Substitute shall be in effect, the City shall reinstate each on a pro rata basis. No distinction or preference shall exist in the use of the moneys on deposit in the Debt Service Reserve Account for payment into the Interest Account, the Principal Account and the Bond Redemption Account, such accounts being on a parity with each other. III-16 Res. No. 104-90 5. Net Revenues shall next be used, to the full extent necessary, for the monthly required deposits into the Renewal, Replacement and Improvement Fund, as provided in the Original Resolution, and the amount of such deposits shall be increased on the fifteenth (15th) day of each month, beginning with the fifteenth (15th) day of the first full calendar month following the date on which any or all of the Bonds issued hereunder are delivered to the purchaser thereof, in such sums as shall be sufficient to pay one-twelfth (1/12th) of five per centum (5%) of the Gross Revenues derived from the operation of the Combined Public Utility during the preceding Fiscal Year, provided that the payments set forth herein shall not be required to be made to the extent the payments required under the Original Resolution with respect to the Renewal, Replacement and Improvement Fund have been made. No further deposits need be made if the Consulting Engineer shall certify that no addi- tional deposits are necessary for the purposes of the Renewal, Replacement and Improvement Fund. The moneys in the Renewal, Replacement and Improvement Fund shall be used for the purpose of paying the costs of extensions, improvements or additions to, or the replacement or renewal of capi- tal assets of the Combined Public Utility, or extraordinary repairs of the Combined Public Utility; provided, however, that moneys in the Renewal, Replacement and Improvement Fund shall be used for payment into the Interest Account, the Principal Account and the Bond Redemption Account when the moneys in the Revenue Fund, the Debt III-17 Res. No. 104-90 Service Reserve Account and the Pledged Impact Charge Fund, if any, are insufficient therefor. 6. Net Revenues shall next be used, first, for the repay- ment of any obligations owed to the provider(s) of a Reserve Account Credit Facility Substitute, and second, for the payment of any subor- dinated indebtedness hereafter issued by the City in connection with the Combined Public Utility in accordance with the proceedings autho- rizing such subordinated indebtedness. 7. Thereafter, the balance of any Net Revenues remaining in the Revenue Fund shall be used by the City to make improvements to the Combined Public Utility, to purchase or redeem Bonds prior to maturity or for any other lawful purpose; provided, however, that none of such Net Revenues shall ever be used for the purposes pro- vided in this paragraph (7) unless all payments required in para- graphs (1) to (6) above, including any deficiencies for prior pay- ments, have been made in full to the date of such use. Pledged Impact Charges: There shall be deposited in the Pledged Impact Charge Fund created under the 1988 Resolution all Pledged Impact Charges, if so pledged by the City as received by the City, and such Pledged Impact Charges shall be used by the City to the extent permitted by law in the following manner and order of priority: (a) For the payment into the Interest Account, the Principal Account and the Bond Redemption Account III-18 Res. No. 104-90 when the moneys in the Revenue Fund and the Debt Service Reserve Account are insufficient therefor. (b) To restore any withdrawals or to make up any deficiencies that may exist from time to time in the Debt Service Reserve Account whenever the moneys in the Revenue Fund are insufficient for such purpose. (c) To pay the cost of capital improvements to the Combined Public Utility. (d) The balance of any Pledged Impact Charges remaining in the Pledged Impact Charge Fund shall be deposited, as needed, in the Interest Account and used to pay interest becoming due on the Bonds; provided, however, that none of such Pledged Impact Charges shall ever be used for the purposes provided in this subparagraph 7(d) unless all payments required under subparagraphs 7(a) through 7(c), including any defi- ciencies for prior payments are made in full to date of such use. (e) Thereafter, the balance of any Pledged Impact Charges remaining in the Pledged Impact Charge Fund may be used for any other lawful purpose for the Combined Public Utility. 8. The Sinking Fund, including the Interest Account, Principal Account, Bond Redemption Account and Debt Service Reserve III-19 Res. No. 104-90 Account therein, the Renewal, Replacement and Improvement Fund, the Pledged Impact Charge Fund created and established under the 1988 Resolution and continued and maintained under this Resolution shall constitute trust funds. The amounts required to be accounted for in each of the funds and accounts designated herein, except for the Sinking Fund, may be deposited in a single bank account maintained by the City provided that adequate accounting procedures are maintained to reflect and control the restricted allocations of the amounts on deposit therein for the various purposes of such funds and accounts as herein provided. The designation and establishment of funds and accounts in and by the Original Resolution and this Resolution shall not be construed to require the establishment of any completely inde- pendent funds and accounts but rather is intended solely to consti- tute an allocation of certain revenues of the Combined Public Utility for certain purposes and to establish such certain priorities for application of certain revenues as herein provided. Moneys on deposit in the Revenue Fund, the Renewal, Replacement and Improvement Fund, the Sinking Fund and the Pledged Impact Charge Fund may be invested in U.S. Obligations or any other Permitted Investments maturing not later than such date or dates as the City shall determine. Subject to the requirements under the Code and the Tax Certificate, all income and earnings received from the investment and reinvestment of moneys on deposit in the Renewal, Replacement and III-20 Res. No. 104-90 Improvement Fund shall be transferred to the Revenue Fund and used in the same manner as other moneys on deposit therein. Subject to the requirements under the Code and the Tax Certificate, all the income and earnings received from the investment and reinvestment of moneys on deposit in the Principal Account, Bond Redemption Account and Debt Service Reserve Account (provided the Debt Service Reserve Requirement is maintained) shall be transferred to the Interest Account and be credited against any moneys required to be deposited into the Interest Account as provided in the Original Resolution and in this Resolution. Subject to the requirements under the Code and the Tax Certificate, all the income and earnings received from the investment and reinvestment of moneys on deposit in the Interest Account in the Sinking Fund shall be retained therein and be credited against any moneys required to be deposited into the Interest Account, as pro- vided in the Original Resolution and in this Resolution. Subject to the requirements under the Code and the Tax Certificate, all the income and earnings received from the investment and reinvestment of moneys on deposit in the Pledged Impact Charge Fund shall be retained therein and used in the manner provided for in the Original Resolution and in this Resolution. E. REMEDIES. Any Holder of Bonds issued under the provi- sions of this Resolution or any trustee acting for such Bondholders in the manner hereinafter provided, may either at law or in equity, by suit, action, mandamus or other proceedings in any court of III-21 Res. No. 104-90 competent jurisdiction, protect and enforce any and all rights under the laws of the State of Florida, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution or by any applicable statutes to be per- formed by the City or by any officer thereof, including the fixing, charging and collecting of rates, fees or other charges for the ser- vices and Facilities of the Combined Public Utility. In the event that default shall be made in the payment of the interest on or the principal of any of the ~Bonds issued pursuant to this Resolution as the same shall become due, or in the making of the payments into any reserve or sinking fund or any other payments required to be made by the Original Resolution and this Resolution, or in the event that the City or any officer, agent or employee thereof shall fail or refuse to comply with the provisions of the Original Resolution and this Resolution or shall default in any cove- nant made herein, and in the further event that any such default shall continue for a period of sixty (60) days, any Holder of such Bonds, or any trustee appointed to represent Bondholders as hereinaf- ter provided, shall be entitled as of right to the appointment of a receiver of the Combined Public Utility in an appropriate judicial proceeding in a court of competent jurisdiction, whether or not such Holder or trustee is also seeking or shall have sought to enforce any other right or exercise any other remedy in connection with Bonds issued pursuant to this Resolution. III-22 Res. No. 104-90 The receiver so appointed shall forthwith, directly or by his agents and attorneys, enter into and upon and take possession of the Combined Public Utility, and each and every part thereof, and shall hold, operate and maintain, manage and control the Combined Public Utility, and each and every part thereof, and in the name of the City shall exercise all the rights and powers of the City with respect to the Combined Public Utility as the City itself might do. Such receiver shall collect and receive all Revenues and Pledged Impact Charges, if any are so pledged, and maintain and operate the Combined Public Utility in the manner provided in the Original Resolution and this Resolution and comply under the jurisdiction of the court appointing such receiver, with all of the provisions of the Original Resolution and this Resolution. Whenever all that is due upon Bonds issued pursuant to this Resolution, and interest thereon, and under any covenants of the Original Resolution and this Resolution for reserve, sinking fund or other funds, and upon any other obligations and interest thereon having a charge, lien or encumbrance upon the Revenues of the Combined Public Utility and the Pledged Impact Charges, if any are so pledged, shall have been paid and made good, and all defaults under the provisions of the Original Resolution and this Resolution shall have been cured and made good, possession of the Combined Public Utility shall be surrendered to the City upon the entry of an order of the court to that effect. Upon any subsequent default, any Holder of Bonds issued pursuant to this Resolution, or any trustee appointed III-23 Res. No. 104-90 for Bondholders as hereinafter provided, shall have the right to secure the further appointment of a receiver upon any such subsequent default. Such receiver shall in the performance of the powers here- inabove conferred upon him be under the direction and supervision of the court making such appointment, shall at all times be subject to the orders and decrees of such court and may be removed thereby and a successor receiver appointed in the discretion of such court. Nothing herein contained shall limit or restrict the jurisdiction of such court to enter such other and further orders and decrees as such court may deem necessary or appropriate for the exercise by the receiver of any function not specifically set forth herein. Any receiver appointed as provided herein shall hold and operate the Combined Public Utility in the name of the City and for the joint protection and benefit of the City and Holders of Bonds issued pursuant to this Resolution and the holders of the Prior Bonds issued pursuant to the Original Resolution. Such receiver shall have no power to sell, assign, mortgage or otherwise dispose of any assets of any kind or character belonging or pertaining to the Combined Public Utility, except as provided herein, but the authority of such receiver shall be limited to the possession, operation and mainte- nance of the Combined Public Utility for the sole purpose of the pro- tection of both the City and the Bondholders. The Holder or Holders of Bonds in an aggregate principal amount of not less than fifty-one per centum (51%) of Bonds issued III-24 Res. No. 104-90 under the Original Resolution and this Resolution then Outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to the Original Resolution and this Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and protection of the rights of such Bondholders. Such certificate shall be executed by such Bondholders or their duly authorized attorneys or representatives, and shall be filed in the office of the City Clerk. The term "Bonds," as used in this paragraph, shall mean both the Bonds authorized to be issued under this Resolution and the Prior Bonds issued under the Original Resolution. Any exercise of a remedy set forth in this Section 4.E shall be subject to the consent of the Bond Insurer, if any, and the Bond Insurer shall have the right, acting alone, to exercise said remedies as long as it has not defaulted in its obligations under the Bond Insurance Policy. F. DISCHARGE AND SATISFACTION OF BONDS. The covenants, liens and pledges entered into, created or imposed pursuant to the Original Resolution and this Resolution may be fully discharged and satisfied with respect to the Bonds in any one or more of the follow- ing ways: (a) by paying the principal of and interest on Bonds when the same shall become due and payable; or (b) by depositing in the Interest Account, Principal Account, Debt Service Reserve Account and III-25 Res. No. 104-90 the Bond Redemption Account, or in such other accounts which are irrevocably pledged to the payment of the Bonds, as the City may hereafter create and establish by resolution, certain moneys, which together with other moneys lawfully available therefor and deposited therein shall be sufficient at the time of such deposit to pay the Bonds, the interest thereon and the redemption premium, if any, as the same become due on said Bonds on or prior to the redemption date or matu- rity date thereof; or (c) by depositing in the Interest Account, Principal Account, Debt Service Reserve Account and the Bond Redemption Account, or such other accounts which are irrevocably pledged to the payment of the Bonds as the City may hereafter create and establish by resolution, certain moneys which, together with other moneys lawfully available therefor and deposited therein, when invested in Defeasance Obligations will provide moneys which shall be sufficient to pay the Bonds, the interest thereon and the redemption premi- um, if any, as the same shall become due on said Bonds on or prior to the redemption date or maturity date thereof. (d) Notwithstanding the foregoing all references to the discharge and satisfaction of Bonds III-26 Res. No. 104-90 shall include the discharge and satisfaction of any issue of Bonds, any portion of an issue of Bonds, any maturity or maturities of an issue of Bonds, any por- tion of a maturity of an issue of Bonds or any combi- nation thereof. Notwithstanding the foregoing, in the event that the pay- ment or deposit in the amount and manner provided in this Resolution has been made by the Bond Insurer under the terms of the Bond Insurance Policy, the Bond Insurer shall be subrogated to the rights of the Holders of the Bonds and the liability of the City, with respect thereto, shall not be discharged or extinguished. For the purposes of determining the amount of interest on Variable Rate Bonds whether discharged and satisfied under the provi- sions of subsections (a), (b) and (c) above, the amount required for the interest thereon shall be calculated at the maximum rate permit- ted by the terms of the provisions which authorized the issuance of such Variable Rate Bonds. Upon such payment or deposit in the amount and manner pro- vided in this Section 6.F, the Bonds shall no longer be deemed to be Outstanding for the purposes of the Original Resolution and this Resolution and all liability of the City with respect to the Bonds shall cease, terminate and be completely discharged and extinguished, and the Holders thereof shall be entitled for payment solely out of the moneys or securities so deposited. III-27 Res. No. 104-90 In the case of Bonds which by their terms may be redeemed prior to their stated maturity, the City shall give the Registrar, in form satisfactory to the Registrar, irrevocable instructions: (i) stating the date when the principal of each such Bond is to be paid, whether at maturity or on a redemption date; (ii) requiring the Registrar to call for redemption pursuant to the terms of such Bonds any Bonds to be redeemed prior to maturity pursuant to (i) hereof; and (iii) requiring the Registrar to publish and mail, as soon as practicable, a notice to the owners of such Bonds that the deposit required by this Section 6.F has been made and that such Bonds are deemed to have been paid in accordance with this Section 6.F and stating the matu- rity or redemption date upon which money is to be available for the payment of the principal or redemption price, if applicable, on such Bonds as specified in (i) hereof. Notwithstanding the foregoing, the discharge and satisfac- tion of the Bonds shall not be conditioned on the giving of such notices. Notwithstanding anything contained in this Section 6.F to the contrary, the covenants, liens and pledges contained in this Resolution shall not be fully discharged and satisfied until all obligations owed to the provider(s) of the Reserve Account Credit Facility Substitute have been satisfied. III-28 Res. No. 104-90 G. VALUATION. The value of Permitted Investments on deposit in the funds and accounts created and established under the 1988 Resolution and'continued and maintained under this Resolution other than investments of moneys on deposit in the Debt Service Reserve Account shall be the lower of par, or if purchased at other than par, amortized value. Amortized value, when used with respect to securities purchased at a premium above or a discount below par, shall mean the value at any given date obtained by dividing the total premium or discount at which such securities were purchased by the number of interest payment dates remaining to maturity on such secu- rities after such purchase and by multiplying the amount so calcu- lated by the number of interest payment dates having passed since the date of purchase; and (i) in the case of securities purchased at a premium, by deducting the product thus obtained from the purchase price, and (ii) in the case of securities purchased at a discount, by adding the product thus obtained to the purchase price. The value of Permitted Investments on deposit in the Debt Service Reserve Account shall be determined by the terms and provisions of the Tax Certificate. III-29 Res. No. 104-90 ARTICLE IV MISCELLANEOUS PROVISIONS SECTION 1. MODIFICATION OR AMENDMENT. Except as otherwise provided in the second paragraph hereof, no material modification or amendment of this Resolution, or of any resolution amendatory thereof or supplemental thereto, may be made without the consent in writing of the Holders of two-thirds or more in principal amount of the Bonds then Outstanding~ provided, however, that no modification or amend- ment shall permit a change in the maturity of ~uch Bonds or a r~duc- tion in the rate of interest thereon, or affecting the unconditional promise of the City to fix, maintain and collect fees, rentals and other charges for the Combined Public Utility or to pay the interest of and principal on the Bonds, as the same mature or become due, from the Net Revenues of the Combined Public Utility and the Pledged Impact Charges, if any are so pledged, or reduce the percentage of Holders of Bonds required above for such modification or amendments, without the consent of the Holders of all the Bonds. This Resolution may be amended, changed, modified and altered without the consent of the Owners of Bonds, (i) to cure any ambiguity, correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions contained herein, (ii) to provide other changes which will not adversely affect the interest of such Owners, (iii) to implement a Credit Facility, (iv) to implement or discontinue a book-entry system of registration for the Bonds (v) to maintain the exclusion of interest on the Bonds IV-1 Res. No. 104-90 from gross income for federal income tax purposes, or (vi) to secure or maintain a rating on the Bonds. For purposes of this Section 1 of Article IV, to the e~tent the Bonds are insured by a Bond Insurance Policy and such Bonds are then rated in as high a rating category in which such Bonds was rated at the time of initial issuance and delivery thereof, by the Rating Agency or Agencies, then the consent of the Bond Insurer shall con- stitute the consent of the Holders of the Bonds under the terms and conditions; and provided further, that such BOnd Insurer is not in default under the Bond Insurance Policy. SECTION 2. SEVERABILITY OF INVAT.TD PROVISIONS. If any one or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions, and shall in no way affect the validity of any of the other provisions of the Resolution or of the Bonds. SECTION 3. S~Tm OF BONDS. The Bonds shall be issued and sold at one time or from time to time, in such manner and at such price or prices consistent with the provisions of the Act and the requirements of the Original Resolution and this Resolution as the City Commission shall hereafter determine by subsequent proceedings. IV-2 Res. No. 104-90 SECTION 4. BOND ANTICIPATION NOTES. The City may, if it determines it to be in its best financial interest, issue its bond anticipation notes in order to temporarily finance the costs of a Project as provided in this Resolution. The City shall by proper proceedings authorize the issuance and establish the details of such bond anticipation notes pursuant to the provisions of Section 215.431, Florida Statutes, as amended. In connection with such bond anticipation notes, the City is hereby authorized to enter into line of credit agreements, loan agreements or similar arrangements (collectively referred to as "Financing Agreements") with banks or similar financial institutions for the purpose of financing the costs of the Project. The City is authorized to issue one or more bond anticipation notes to such banks or financial institutions to evi- dence its obligation to repay loans made under such Financing Agreements. SECTION 5. REPEALER. That all resolutions or riders or parts thereof in conflict herewith are to the extent of such conflict hereby repealed. SECTION 6. BOND INSURER; DEFAULT. Notwithstanding any of the provisions of this Resolution to the contrary, all of the rights of the Bond Insurer, if any, granted herein shall be null and void if the Bond Insurer is in default under the Bond Insurance Policy. SECTION 7. V~LTDATION. That the City Attorney shall, if directed by the City Commission, take appropriate proceedings in the Circuit Court of the Fifteenth Judicial Circuit of Florida in and for IV-3 Res. No. 104-90 Palm Beach County for the validation of the Bonds, and the Mayor and City Clerk are hereby authorized to sign any pleadings in such pro- ceedings for and on behalf of the City Commission. IV-4 Res. No. 104-90 EFFECTIVE DATE. This Resolution shall take effect immediately upon its passage. PASSED AND' ADOPTED in regular session on this the 23rd day of October, 1990. CITY BEACH, FLORIDA By Attest: ' City cler~ ~ / The foregoing resolution and the forms of Bonds therein contained are hereby approved by me as to form, language and execu- tion this the '~day of ~o~, 1990. :y// /Cit~ Attorney -/ IV-5 Res. No. 104-90