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R-02-1057
J-02-912 9/26/02 RESOLUTION NO. 02-1057 A RESOLUTION OF THE CITY OF MIAMI, FLORIDA AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $30,000,000 IN AN AGGREGATE PRINCIPAL AMOUNT OF SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS, SERIES 2002C, FOR THE PURPOSE OF PREPAYING ALL OF THE CITY'S OUTSTANDING LOAN PAYMENTS DUE UNDER THOSE CERTAIN LOAN AGREEMENTS DATED AS OF MAY 12, 1994 AND AS OF OCTOBER 25, 1995 BETWEEN THE CITY AND THE SUNSHINE STATE GOVERNMENTAL FINANCING COMMISSION; PROVIDING FOR THE PAYMENT OF SUCH REFUNDING BONDS FROM LEGALLY AVAILABLE NON -AD VALOREM REVENUES BUDGETED AND APPROPRIATED BY THE CITY FOR SUCH PURPOSE; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; DELEGATING TO THE CITY MANAGER THE DETERMINATION OF CERTAIN MATTERS AND DETAILS CONCERNING THE BONDS; AUTHORIZING THE NEGOTIATED SALE OF THE BONDS; APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT IN CONNECTION THEREWITH; APPOINTING A PAYING AGENT AND BOND REGISTRAR; APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT AND REGISTRAR AGREEMENT; APPROVING UNCERTIFICATED, BOOK -ENTRY ONLY REGISTRATION OF SAID BONDS WITH THE DEPOSITORY TRUST COMPANY; ACCEPTING THE COMMITMENTS OF FINANCIAL GUARANTY INSURANCE COMPANY FOR A MUNICIPAL BOND NEW ISSUE INSURANCE POLICY TO INSURE SAID BONDS AND A MUNICIPAL BOND DEBT SERVICE RESERVE FUND POLICY FOR SAID BONDS AND TO EXECUTE AND DELIVER ANY RELATED AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FOR A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT AND THE SELECTION OF A FINANCIAL PRINTER THEREFORE; COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 15C2-12 AND APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT WITH RESPECT THERETO; AUTHORIZING ALL REQUIRED ACTIONS; AND PROVIDING AN EFFECTIVE DATE. TABLE OF CONTENTS ARTICLE I AUTHORITY FOR THIS RESOLUTION................................................................1 SECTION1.01. Authority..................................................................................................1 ARTICLEII DEFINITIONS..........................................................................................................1 SECTION2.01. Definitions...............................................................................................I SECTION 2.02. Singular/Plural.........................................................................................7 ARTICLEIII FINDINGS...............................................................................................................8 SECTION 3.01. Findings and Determinations...................................................................8 ARTICLE IV THIS INSTRUMENT TO CONSTITUTE CONTRACT.......................................9 SECTION4.01. Contract....................................................................................................9 ARTICLE V AUTHORIZATION OF THE REFUNDING OF THE REFUNDED BONDS; DESCRIPTION, FORM AND TERMS OF BONDS ..............................9 SECTION 5.01. Authority for Refunding of Refunded Bonds and Issuanceof Bonds...................................................................................9 SECTION 5.02. Authorization of Bonds; Terms; Redemption and Form ofBonds..................................................................................................9 SECTION 5.03. Execution of Bonds................................................................................1 l SECTION 5.04. Bonds Mutilated, Destroyed, Stolen or Lost..........................................11 SECTION 5.05. Provisions for Redemption.................................................................... 11 SECTION 5.06. Effect of Notice of Redemption.............................................................12 SECTION 5.07. Redemption of Portion of Registered Bonds.........................................12 SECTION 5.08. Bonds Called for Redemption not Deemed Outstanding .......................13 SECTION 5.09. Date for Payment of Bonds....................................................................13 SECTION5.10. Form of Bonds.......................................................................................13 SECTION 5.11. Application of Bond Proceeds...............................................................21 SECTION 5.12. Temporary Bonds..................................................................................21 SECTION 5.13. Authorization and Approval of Bond Purchase Agreement.............................................................................................21 SECTION 5.14. Authorization and Approval of Negotiated Sale of Bonds ....................22 SECTION5.15. Reserved.................................................................................................22 SECTION 5.16. Approval of Form of Paying_Agent and Registrar Agreement; Appointment of Paying Agent and Bond Registrar................................................................................................22 SECTION 5.17. Preliminary Official Statement; Official Statement...............................22 SECTION 5.18. Election to Pay Optional Prepayment Price...........................................23 SECTION 5.19. Municipal Bond Insurance; Reserve Product........................................23 SECTION 5.20. Qualification for the Depository Trust Company..................................23 ARTICLE VI SOURCE OF PAYMENT OF BONDS; SPECIAL OBLIGATIONS OF THE CITY...........................................................................23 SECTION 6.01. Bonds Not to be General Obligation or Indebtedness of 1 02-1057 theCity..................................................................................................23 SECTION6.02 Pledge......................................................................................................23 SECTION 6.03 Covenant to Budget and Appropriate.....................................................24 ARTICLE VII CREATION AND USE OF FUNDS AND ACCOUNTS; DISPOSITION OF REVENUES...........................................................................24 SECTION 7.01. Creation of Funds and Accounts............................................................24 SECTION 7.02. Disposition of Covenant Revenues........................................................25 SECTION 7.03. Use of Moneys in the Sinking Fund......................................................29 SECTION 7.04. Application of Moneys in the Reserve Fund.........................................30 SECTION 7.05. Transfer to Paying Agent.......................................................................30 SECTION 7.06 First Union Escrow Agreement..............................................................30 ARTICLE VIII DEPOSITARIES OF FUNDS, SECURITY FOR DEPOSITS AND INVESTMENT OF MONEYS....................................................................31 SECTION 8.01. Deposits Constitute Trust Funds............................................................31 SECTION 8.02. Investment of Moneys...........................................................................31 ARTICLE IX GENERAL COVENANTS OF THE CITY..........................................................32 SECTION 9.01. Anti -Dilution Test..................................................................................32 SECTION 9.02. Notice of Deposit Shortfall....................................................................32 SECTION9.03. Annual Audit..........................................................................................32 ARTICLE X ISSUANCE OF ADDITIONAL INDEBTEDNESS..............................................33 SECTION 10.01. Issuance of Additional Indebtedness...................................................33 ARTICLE XI EVENTS OF DEFAULT; REMEDIES.................................................................33 SECTION 11.01. Events of Default.................................................................................33 SECTION 11.02. Enforcement of Remedies....................................................................34 SECTION 11.03. Effect of Discontinuing Proceedings...................................................35 SECTION 11.04. Directions to Default Trustee as to Remedial Proceedings...........................................................................................35 SECTION 11.05. Restrictions on Actions by Individual Bondholders ............................35 SECTION 11.06. Subrogation ..........................................................................................36 SECTION 11.07. Bond Insurer's Rightspon Events of Default...................................36 ARTICLE XII SECONDARY MARKET DISCLOSURE..........................................................36 SECTION 12.01. Continuing Disclosure Undertaking....................................................36 ARTICLE XIII MISCELLANEOUS PROVISIONS...................................................................37 SECTION 13.01. Modification or Amendment...............................................................37 SECTION 13.02. Defeasance...........................................................................................37 SECTION 13.03. Tax Covenants.....................................................................................38 SECTION 13.04. Bond Insurance Policy Provisions.......................................................39 SECTION 13.05. Severability..........................................................................................42 SECTION 13.06. No Third -Party Beneficiaries...............................................................42 SECTION 13.07. Controlling Law; Members of City Not Liable...................................42 11 02-1057 SECTION 13.08. Effect of Covenants.............................................................................43 SECTION 13.09. Further Authorizations.........................................................................43 SECTION 13.10. Repeal of Inconsistent Resolution.......................................................43 SECTION 13.11. Effective Date ...................................... Error! Bookmark not defined. Exhibit A - Bond Purchase Agreement Exhibit B - Paying Agent and Registrar Agreement Exhibit C - Preliminary Official Statement Exhibit D - Optional Prepayment Price Notice Exhibit E - Continuing Disclosure Agreement iii 02-1057 ARTICLE I AUTHORITY FOR THIS RESOLUTION SECTION 1.01. Authority. This Resolution is adopted pursuant to Chapter 166, Florida Statutes; Article VIII, Section 2 of the Constitution of the State of Florida; the City Charter of the City of Miami, Florida; and other applicable provisions of law (collectively, the "Act"). ARTICLE II DEFINITIONS SECTION 2.01. Definitions. As used herein, unless the context otherwise requires: "Act" shall have the meaning ascribed in Article I hereof. "Amortization Installment" means the funds to be deposited in the Sinking Fund in a given Bond Year for the payment at maturity or redemption of a portion of Term Bonds, as established by the City at or before the delivery of the Bonds. "Annual Budget" means the budget or budgets, as amended and supplemented from to time to time, prepared by the City for each Fiscal Year in accordance with the laws of the State of Florida. "Authorized Depository" means any bank, trust company, national banking association, savings and loan association, savings bank or other banking association selected by the City as a depository, which is authorized under Florida law to be a depository of municipal funds and which has complied with all applicable state and federal requirements concerning the receipt of City funds. `Bond Amortization Account' means the Bond Amortization Account within the Sinking Fund established pursuant to Section 7.01 of this Resolution. "Bond Counsel" means nationally recognized counsel experienced in matters relating to the validity of, and the exclusion from gross income for federal income tax purposes of interest on, obligations of states and their political subdivisions. "Bond Insurance Policy" means the municipal bond new issue insurance policy issued by the Bond Insurer that guarantees payment of principal of and interest on the Series 2002C Bonds. "Bond Insurer" means Financial Guaranty Insurance Company, a New York stock insurance company, or any successor thereto. "Bond Purchase Agreement" means the Bond Purchase Agreement between the Underwriters and the City with respect to the sale of the Bonds from the City to the Underwriters. "Bond Registrar" means, initially, as to the Series 2002C Bonds, Wachovia Bank, National Association and, thereafter, any other agent designated from time to time by the City, 1 02--1057 by resolution, to maintain the registration books for the Bonds or to perform other duties with respect to registering the transfer of the Bonds. "Bond Service Requirement" means for a given Bond Year the remainder, after subtracting any accrued interest for that year that has been deposited into the Interest Account for that purpose, from the sum of: (1) The amount required to pay the interest coming due on the Bonds during that Bond Year. (2) The amount required to pay the principal of Serial Bonds and the principal of Term Bonds, and (3) The Amortization Installment for all Term Bonds for that Bond Year. "Bond Year" means the annual period beginning on the first day of October of each year and ending on the last day of September of the following year; provided that when such term is used to described the period during which deposits are to be made pursuant to Article VII hereof to amortize the principal and interest on the Bonds maturing or becoming subject to redemption, the principal and interest maturing or becoming subject to redemption on the first day of the month immediately succeeding any Bond Year shall be deemed to mature or become subject to redemption on the last day of the preceding Bond Year. "Bondholder" or "registered owner" means the person in whose name any Bond is registered on the registration books maintained by the Bond Registrar. "Bonds" mean collectively the Series 2002C Bonds. "Business Day" means a day on which banking business is transacted in the city or cities in which the Paying Agent has its principal corporate trust offices and on which the New York Stock Exchange is open. "City" means the City of Miami, Florida. "City Attorney" means the City Attorney of the City or any designated assistant City Attorney. "City Commission" means the city commission of the City. "City Manager" means the City Manager of the City or any Assistant City Manager or other designee of the City Manager. "Clerk" means the City Clerk or any Deputy City Clerk of the City. "Closing Date" means the date of issuance and delivery of the Bonds to the Underwriters, being the original purchasers thereof. 2 02-1057 "Code" means the Internal Revenue Code of 1986, as amended, and all temporary, proposed or permanent implementing regulations promulgated or applicable hereunder. "Covenant Revenues" means the legally available non -ad valorem revenues budgeted and appropriated to pay the principal of, redemption premium, if any, and interest on the Series 2002C Bonds pursuant to Section 6.03 hereof. "Director of Finance" means the Director of Finance of the City or his designee. "First Union Escrow Agreement" means that certain Escrow Agreement dated as of March 17, 1997, by and among First Union National Bank of Florida (now known as Wachovia Bank, National Association), The Oversight Board, acting through its committee, the Fiscal Sufficiency Advisory Board, and the City, as the same may be supplemented or amended. "Fiscal Year" means the period commencing on October 1 of each year and ending on the succeeding September 30, or such other consecutive 12 -month period as may be hereafter designated as the fiscal year of the City pursuant to general law. "Governing Body" means the City Commission. "Government Obligations" means those obligations described in paragraph (1) of the definition of Permitted Investments, provided such obligations are non -callable and CATS, STRPS, Refcorp interest strips, TIGRS or defeased municipal bonds rated AAA by S&P or Aaa by Moody's (or any combination of the foregoing). "Interest Account" means the Interest Account within the Sinking Fund established pursuant to Section 7.01 of this Resolution. "Mayor" means the Mayor of the City or, in his absence or inability to perform, such member of the City Commission as may be appointed as acting Mayor of the City. "Maximum Bond Service Requirement" means, as of any particular date of calculation, the largest Bond Service Requirement for any remaining Bond Year, except that with respect to any Bonds for which Amortization Installments have been established, the amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount of such Bonds that are to be redeemed or paid from Amortization Installments to be made in prior Bond Years. "Moody's" means Moody's Investors Service and its successors. "Official Statement" means that certain Official Statement with respect to the issuance of the Bonds, as such Official Statement shall be approved by the City Manager in accordance with the provisions of this Resolution. "Outstanding" or "Bonds outstanding" means all Bonds which have been issued pursuant to this Resolution except: 3 02-1057 (a) Bonds cancelled after purchase in the open market or because of payment at or redemption prior to maturity; (b) Bonds for the payment or redemption of which pursuant to Section 13.02 of this Resolution cash funds or Government Obligations or any combination thereof shall have been theretofore irrevocably set aside in a special account with the Paying Agent or an Authorized Depositary acting as an escrow agent (whether upon or prior to the maturity or redemption date of any such Bonds) in an amount which, together with earnings on such Government Obligations, will be sufficient to pay the principal of and interest on such Bonds at maturity or upon their earlier redemption; provided that, if such Bonds are to be redeemed before the maturity thereof, notice of such redemption shall have been given according to the requirements of this Resolution or irrevocable instructions directing the timely publication of such notice and directing the payment of the principal of, redemption premium, if any and interest on all bonds at such redemption dates shall have been given to the Paying Agent; and (c) Bonds which are deemed paid pursuant to Section 5.08 hereof or in lieu of which other Bonds have been issued under Section 5.04 hereof. "Paying Agent" means, initially, as to the Series 2002C Bonds, Wachovia Bank, National Association and, thereafter, any other agent which is an Authorized Depository, designated by the City by resolution to serve as a Paying Agent for the Bonds that shall have agreed to arrange for the timely payment of the principal of, redemption premium, if any, and interest on the Bonds to the registered owners thereof, from funds made available therefore by the City, and any successors designated pursuant to this Resolution. "Paying Agent and Registrar Agreement" means the Paying Agent and Registrar Agreement with respect to the Series 2002C Bonds between the City and Wachovia Bank, National Association or any successor thereto in its capacity as Paying Agent and Bond Registrar. "Permitted Investments" means any investment permitted under applicable law, including units of participation in the Local Government Surplus Funds Trust Fund established pursuant to Part IV, Chapter 218, Florida Statutes and 1. Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, provided that the full faith and credit of the United States of America must be pledged to any such direct obligation or guarantee ("Direct Obligations"). 2. Direct obligations and fully guaranteed certificates of beneficial interest of the Export -Import Bank of the United States; consolidated debt obligations and letter of credit -backed issues of the Federal Home Loan Banks; participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation ("FHLMCs"); debentures of the Federal Housing Administration; mortgage- backed securities (except stripped mortgage securities which are valued greater 4 02-105'7 than par on the portion of unpaid principal) and senior debt obligations of the Federal National Mortgage Association ("FNMAs"); participation certificates of the General Services Administration; guaranteed mortgage-backed securities and guaranteed participation certificates of the Government National Mortgage Association ("GNMAs"); guaranteed participation certificates and guaranteed pool certificates of the Small Business Administration; debt obligations and letter of credit -backed issues of the Student Loan Marketing Association; local authority bonds of the U.S. Department of Housing & Urban Development; guaranteed Title XI financings of the U.S. Maritime Administration; guaranteed transit bonds of the Washington Metropolitan Area Transit Authority; Resolution Funding Corporation securities. 3. Direct obligations of any state of the United States of America or any subdivision or agency thereof whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service and "A" or better by Standard & Poor's Corporation, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service and "A" or better by Standard & Poor's Corporation. 4. Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase "P-1" by Moody's Investors Service ("Moody's") and "A-1" or better by Standard & Poor's Corporation ("S&P"). 5. Federal funds, unsecured certificates of deposit, time deposits or bankers acceptances (in each case having maturities of not more than 365 days) of any domestic bank including a branch office of a foreign bank which branch office is located in the United States, provided legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office or any branch of such bank, which, at the time of purchase, has a short-term `Bank Deposit" rating of "P1" by Moody's and a "Short -Term CD" rating of "A-1" or better by S&P. 6. Deposits of any bank or savings and loan association which has combined capital, surplus and undivided profits of not less than $3 million, provided such deposits are continuously and fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation. 7. Investments in money-market funds rated "AAAm" or "AAAm-G" by S&P. 8. Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated "P-1" or "A3" or better by Moody's, and "A-1" or "A-" or better by S&P, provided: 5 02-1057 (a) A master repurchase agreement or specific written repurchase agreement governs the transaction; (b) The securities are held free and clear of any lien by the Paying Agent or an independent third party acting solely as agent ("Agent") for the Paying Agent, and such third party is (i) a Federal Reserve Bank, (ii) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $50 million, or (iii) a bank approved in writing for such purpose by Financial Guaranty Insurance Company, and the Paying Agent shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Paying Agent; (c) A perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306 et seq. or 31 C.F.R. 350 et seq. in such securities as created for the benefit of the Paying Agent; (d) The repurchase agreement has a term of 180 days or less, and the Paying Agent or the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two (2) business days of such valuation; and (e) The fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 103%. 9. Investment agreements, the issuer, form and substance of which are specifically approved by the Bond Insurer. "Pledged Revenues" means the Covenant Revenues and income received from the investment of moneys deposited in the funds and accounts established hereunder. "Policy Costs" shall have the meaning ascribed to that term in Section 7.02 of this Resolution. "Principal Account" means the Principal Account within the Sinking Fund established pursuant to Section 7.01 of this Resolution. "Preliminary Official Statement" means the Preliminary Official Statement relating to the Bonds, to be dated as of the date of its distribution. "Rebate Amount" shall have the meaning ascribed to that term in Section 13.03 of this Resolution. "Redemption Account" means the Redemption Account within the Sinking Fund established pursuant to Section 7.01 of this Resolution. 6 02-105'7 "Refunded Bonds" means the loan payments due under those certain loan agreements dated as of May 12, 1994 and as of October 25, 1995 between the City and the Sunshine State Governmental Financing Commission (the "Outstanding Loan Agreements"). "Reserve Fund" means the Reserve Fund established pursuant to Section 7.01 of this Resolution. "Reserve Product" means the Municipal Bond Debt Service Reserve Fund Policy issued by the Bond Insurer in connection with the original issuance of the Bonds or other credit facility meting the terms and conditions of Section 7.02(4) of this Resolution. "Reserve Product Provider" means the Bond Insurer or any other provider of a Reserve Product for the Bonds. "Reserve Requirement" means as of the date of any calculation, an amount equal to the least of (i) the Maximum Bond Service Requirement with respect to the Series 2002C Bonds, (ii) 125% of the average Bond Service Requirement with respect to the Series 2002C Bonds, or (iii) ten percent (10%) of the proceeds of the Series 2002C Bonds (adjusted to reflect original issue discount or premium, if and to the extent required by the Code). "S&P" means Standard & Poor's Ratings Group and its successors. "Serial Bonds" means all Series 2002C Bonds other than Term Bonds. "Series 2002C Bonds" means the City of Miami, Florida Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2002C, authorized to be issued pursuant to this Resolution in the aggregate principal amount not to exceed $30,000,000. "Sinking Fund" means the Sinking Fund established pursuant to Section 7.01 of this Resolution. "Term Bonds" means Bonds for which Amortization Installments are established on or before the date of delivery of the Bonds in accordance with the provisions of this Resolution. "Underwriters" means collectively, Salomon Smith Barney Inc., Lehman Brothers, UBS PaineWebber Inc., Jackson Securities Inc., Morgan Stanley & Co., Incorporated and JP Morgan Securities, Inc. SECTION 2.02. Singular/Plural. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms, corporations or other entities including governments or governmental bodies. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neutral genders. 7 02-105'7 ARTICLE III FINDINGS SECTION 3.01. Findings and Determinations. It is hereby ascertained, determined and declared that: A. The principal of, redemption premium, if any, and interest on the Bonds and all required sinking fund, reserve and other payments with respect thereto shall be payable from the proceeds of the Bonds and from moneys deposited in the funds and accounts pledged by this Resolution which the City has full authority to irrevocably pledge. The City shall never be required to levy ad valorem taxes on any real or personal property to pay the principal of, redemption premium, if any, or interest on the Bonds or to make any of the required sinking fund, reserve and other payments required herein, and the Bonds shall not constitute a lien on any real or personal property owned by or situated within the limits of the City. B. It is in the best interest of the City, its citizens and taxpayers to take advantage of the existing favorable market conditions and the prevailing low interest rates by fixing the interest rates on certain debt of the City through the issuance of the Bonds in order to provide funds to refund the Refunded Bonds. C. The City is authorized under the Act to issue refunding bonds and to deposit the proceeds thereof in escrow or otherwise to provide for the payment when due of the principal of, redemption premium, if any, and interest on the Refunded Bonds. D. In accordance with Section 218.385(1), Florida Statutes, as amended, the City Commission hereby finds, determines and declares, based upon the advice of RBC Dain Rauscher Inc., financial advisor to the City (the "Financial Advisor"), that a negotiated sale of the Bonds is in the best interest of the City for the following reasons: (i) the complex structure and timing of the issuance of the Bonds and the refunding of the Refunded Bonds require extensive planning, and it is not practical for the City and the Financial Advisor to engage in such planning within the time constraints and uncertainties inherent in a competitive bidding process; and (ii) it is necessary to be able to sell the Bonds when market conditions are most favorable in order to attain the most favorable interest rates on the Bonds; the vagaries of the current and near future municipal bond market demand that the Underwriters have the maximum time and flexibility to price and market the Bonds, in order to obtain the most favorable interest rates available. E. It is in the best interest of the City based upon the advice of the Financial Advisor to accept the commitments of the Bond Insurer to provide the Bond Insurance Policy and Reserve Product for the Bonds. 8 02-1057 ARTICLE IV THIS INSTRUMENT TO CONSTITUTE CONTRACT SECTION 4.01. 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, this Resolution shall be deemed to be and shall constitute a contract between the City and the Bondholders. The covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection and security of the Bondholders and all Bonds shall be of equal rank and without preference, priority or distinction over any other thereof, except as expressly provided herein. ARTICLE V AUTHORIZATION OF THE REFUNDING OF THE REFUNDED BONDS,• DESCRIPTION, FORM AND TERMS OF BONDS SECTION 5.01. Authority for Refunding of Refunded Bonds and Issuance of Bonds. The refunding of the Refunded Bonds is hereby authorized. Subject and pursuant to the provisions hereof, Series 2002C Bonds to be known as "City of Miami, Florida, Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2002C" are hereby authorized to be issued at one time or as needed in one or more series in an aggregate principal amount of not exceeding Thirty Million Dollars ($30,000,000), for the purpose of refunding the Refunded Bonds, to fund the Reserve Requirement by the purchase of a Reserve Product for the Bonds and paying the costs of issuance of the Bonds. SECTION 5.02. Authorization of Bonds; Terms; Redemption and Form of Bonds. The City Manager is hereby authorized and directed to award the Bonds to the Underwriters at a purchase price of not less than ninety-nine percent (99%) (inclusive of underwriters' discount, but not inclusive of original issue discount; the original issue discount may be such as is necessary to market and sell the Bonds) of the original principal amount of the Bonds and at a true interest cost rate ("TIC") not to exceed four and one-quarter percent (4.25%) (the "Maximum TIC") per annum. The Bonds shall be dated such date, shall be issued in such principal amount, shall bear interest from the date thereof, payable on the first day of April and October of each year, commencing on such date, at the rates, shall mature on the first day of October of each year in accordance with the maturity schedule, but not later than thirty (30) years from their date of issuance, shall be issued as Serial Bonds and/or Term Bonds and if such Bonds are issued as Term Bonds, be subject to payment from Amortization Installments by operation of the Sinking Fund as set forth in the Bond Purchase Agreement, as such dates, principal amount, rates and maturity schedule may be approved by the City Manager, with the execution and delivery of the Bond Purchase Agreement as described in Section 5.13 hereof being conclusive evidence of the City's approval, provided that the TIC shall not exceed the Maximum TIC. The Bonds shall be issued as fully registered, book -entry only bonds in the denomination of $5,000 each or any integral multiple thereof through the book -entry only system maintained by The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Bonds, as further described in Section 5.20 hereof. The Bonds may have endorsed thereon such legends or text as may be necessary or appropriate to conform to any 9 02-1057 applicable rules and regulations of any governmental authority or any usage or requirement of law with respect thereto. Each of the Bonds shall be numbered consecutively from 1 upward preceded by the letters "CR" prefixed to the number of the Series 2002C Bonds. The principal of and redemption premium, if any, on the Bonds shall be payable upon presentation and surrender at the principal office of the Paying Agent. Interest on the Bonds shall be paid by check or draft drawn upon the Paying Agent and mailed to the registered owners of the Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at the close of business on the 15th day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Bonds subsequent to such Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date; provided, however, that (i) if ownership of Bonds is maintained in a book -entry only system by a securities depository, such payment may be made by automatic funds transfer (wire) to such securities depository or its nominee or (ii) if such Bonds are not maintained in a book -entry only system by a securities depository, upon written request of the holder of $1,000,000 or more in principal amount of Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such holder (such bank being a bank within the continental United States), if such holder has advanced to the Paying Agent the amount necessary to pay the cost of such wire transfer or authorized the Paying Agent to deduct the cost of such wire transfer from the payment due such holder. In the event of any default in the payment of interest, such defaulted interest shall be payable to the persons in whose names such Bonds are registered at the close of business on a special record date for the payment of such defaulted interest as established by notice deposited in the U.S. mails, postage prepaid, by the Paying Agent to the registered owners of the Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth (5th) day (whether or not a business day) preceding the date of mailing. The registration of any Bond may be transferred upon the registration books upon delivery thereof to the principal office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Bondholder or his attorney-in-fact or legal representative containing written instructions as to the details of the transfer of such Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Bond, the Bond Registrar shall at the earliest practical time in accordance with the terms hereof enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of funds. The City and the Bond Registrar may charge the Bondholder for the registration of every transfer or exchange of a Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the City) to be paid with respect to the registration of such transfer, and may require that such amounts be paid before any such new Bond shall be delivered. The City, the Bond Registrar, and the Paying Agent may treat the registered owner of any Bond as the absolute owner of such Bond for the purpose of receiving payment of the principal thereof and the interest and redemption premium, if any, thereon. Bonds may be exchanged at 10 02-1057 the office of the Bond Registrar for a like aggregate principal amount of Bonds, or other authorized denominations of the same Series and maturity. SECTION 5.03. Execution of Bonds. The Bonds shall be executed in the name of the City by the City Manager and the seal of the City shall be imprinted, reproduced or lithographed on the Bonds and attested to and countersigned by the Clerk. In addition, the City Attorney or any Assistant City Attorney shall sign the Bonds, showing approval of the form and correctness thereof. The signatures of the City Manager, the Clerk and the City Attorney or Assistant City Attorney on the Bonds may be by facsimile. If any officer whose signature appears on the Bonds ceases to hold office before the delivery of the Bonds, his signature shall nevertheless be valid and sufficient for all purposes. In addition, any Bond may bear the signature of, or may be signed by, such persons as at the actual time of execution of such Bond shall be the proper officers to sign such Bond, although at the date of such Bond or the date of delivery thereof such persons may not have been such officers. Only such of the Bonds as shall have been endorsed thereon by a certificate of authentication substantially in the form hereinafter set forth in Section 5.10 hereof, duly manually executed by the Bond Registrar, shall be entitled to any right or benefit under this Resolution. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly manually executed by the Bond Registrar, and such certificate of the Bond Registrar upon any such Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The Bond Registrar's certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the Bond Registrar, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time. The foregoing notwithstanding, if, at any time, the City serves as the Bond Registrar under this Resolution, any Bonds delivered during such time that the City serves as the Bond Registrar shall be authenticated by the manual signature of the Director of Finance, and the registered owner of any Bond so authenticated shall be entitled to the benefits of this Resolution. SECTION 5.04. Bonds Mutilated, Destroyed, Stolen or Lost. If any Bond is mutilated, destroyed, stolen or lost, the City or its agent may, in its discretion (i) deliver a duplicate replacement Bond of the same Series, or (ii) pay a Bond that has matured or is about to mature. A mutilated Bond shall be surrendered to and cancelled by the Bond Registrar. The Bondholder must furnish the City or its agent proof of ownership of any destroyed, stolen or lost Bond; post satisfactory indemnity; comply with any reasonable conditions the City or its agent may prescribe; and pay the reasonable expenses of the City or its agent. Any such duplicate Bond shall constitute an original contractual obligation on the part of the City whether or not the destroyed, stolen or lost Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal and proportionate benefits and rights as to lien on, and source of payment of and security for payment from, the funds pledged to the payment of the Bond so mutilated, destroyed, or stolen or lost. SECTION 5.05. Provisions for Redemption. The Bonds may be made subject to redemption prior to their maturity at such times and in such manner as set forth in the Bond Purchase Agreement and approved by the City Manager pursuant to the authority described 11 herein. Notice of redemption shall be given by deposit in the U.S. mails of a copy of a redemption notice, postage prepaid, at least thirty (30) days before the redemption date to all registered owners of the Bonds or portions of the Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Notice of the redemption of Bonds, other than mandatory sinking fund redemption and excepting any notice that refers to Bonds that are the subject of an advance refunding, shall be circulated only if sufficient funds have been deposited with the Paying Agent to pay the redemption price of the Bonds to be redeemed. Failure to mail any such notice to a registered owner of a Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Bond or portion thereof with respect to which no failure or defect occurred. Such notice shall set forth the date fixed for redemption, the rate of interest borne by each Bond being redeemed, the name and address of the Bond Registrar and Paying Agent, the redemption price to be paid and, if less than all of the Bonds then Outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall also state that on or after the redemption date, upon surrender of such Bond, a new Bond or Bonds of the same Series in a principal amount equal to the unredeemed portion of such Bond will be issued. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the owner of such Bond receives such notice. The Bond Registrar shall not be required to transfer or exchange any Bond after the mailing of a notice of redemption nor during the period of fifteen (15) days next preceding mailing of a notice of redemption. SECTION 5.06. Effect of Notice of Redemption. Notice having been given in the manner and under the conditions hereinabove provided, the Bonds or portions of Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such Bonds or portions of Bonds on such date. On the date so designated for redemption, moneys for payment of the redemption price being held in separate accounts by the Paying Agent in trust for the registered owners of the Bonds or portions thereof to be redeemed, all as provided in this Resolution, interest on the Bonds or portions of Bonds so called for redemption shall cease to accrue, such Bonds and portions of Bonds shall cease to be entitled to any lien, benefit or security under this Resolution and shall be deemed paid hereunder, and the registered owners of such Bonds or portions of Bonds shall have no right in respect thereof except to receive payment of the redemption price thereof and, to the extent provided in the Section 5.07 hereof, to receive Bonds for any unredeemed portions of the Bonds. SECTION 5.07. Redemption of Portion of Registered Bonds. In case part but not all of an Outstanding fully registered Bond shall be selected for redemption, the registered owner thereof shall present and surrender such Bond to the designated Paying Agent for payment of the principal amount thereof so called for redemption, and the City shall execute and deliver to or upon the order of such registered owner, without charge therefore, for the unredeemed balance of 12 02-105'7 the principal amount of the Bonds so surrendered, a Bond or Bonds of the same Series fully registered as to principal and interest. SECTION 5.08. Bonds Called for Redemption not Deemed Outstanding. Bonds or portions of Bonds that have been duly called for redemption under the provisions hereof, and with respect to which amounts sufficient to pay the principal of, redemption premium, if any, and interest to the date fixed for redemption shall be delivered to and held in separate trust accounts by an escrow agent, any Authorized Depository or any Paying Agent (other than the City) in trust for the registered owners thereof, as provided in this Resolution, shall not be deemed to be Outstanding under the provisions of this Resolution and shall cease to be entitled to any lien, benefit or security under this Resolution, except to receive the payment of the redemption price on or after the designated date of redemption from moneys deposited with or held by the escrow agent, Authorized Depository or Paying Agent (other than the City), as the case may be, for such redemption of the Bonds and, to the extent provided in the preceding subsection, to receive Bonds of the same Series for any unredeemed portion of the Bonds. SECTION 5.09. Date for Payment of Bonds. If the date for payment of the principal of, redemption premium, if any, or interest on the Bonds shall be a Saturday, Sunday, legal holiday or, if the Paying Agent is then an entity other than the City, a day on which banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and effect as if made on the nominal date of payment. SECTION 5.10. Form of Bonds. The text of the Bonds, the form of assignment for such Bonds and the authentication certificate to be endorsed thereon shall be substantially in the following form, with such omissions, insertions and variations as may be necessary or desirable and authorized by this Resolution or as may be approved and made by the officers of the City executing the same, such execution to be conclusive evidence of such approval, including, without limitation, such changes as may be required for the issuance of uncertificated public obligations: [Form of Bond] No. CR - UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF MIAMI SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BOND, SERIES 2002C Interest Rate Maturity Date Dated Date CUSIP % October 1, , 2002 REGISTERED OWNER: 13 02-1057 PRINCIPAL AMOUNT: DOLLARS The City of Miami, Florida (hereinafter called the "City"), for value received, hereby promises to pay to the Registered Owner identified above, or to registered assigns or legal representatives, to the extent and from the sources pledged therefore, as described herein, on the Maturity Date identified above (or earlier as hereinafter provided), the Principal Amount identified above, upon presentation and surrender hereof at the designated office of Wachovia Bank, National Association, as the Paying Agent for the Bonds, or any successor Paying Agent appointed by the City pursuant to the Resolution hereinafter referred to, and to pay, to the extent and from the sources herein described, interest on the principal sum from the date hereof, or from the most recent interest payment date to which interest has been paid, at the Interest Rate per annum identified above, until payment of the principal sum, or until provision for the payment thereof has been duly provided for, such interest being payable on the first day of March and the first day of September of each year, commencing on April 1, 2003. Interest will be paid by check or draft mailed to the registered owner hereof at his address as it appears on the registration books of the City maintained by Wachovia Bank, National Association, as Bond Registrar, at the close of business on the fifteenth (15th) day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Bond subsequent to each Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name such Bond is registered at the close of business on a special record date for the payment of such defaulted interest as established by notice by deposit in the U.S. mails, postage prepaid, by the Bond Registrar to the registered owners of Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth (5th) day (whether or not a business day) preceding the date of mailing. This Bond is one of an authorized issue of bonds in the aggregate principal amount of $ of like date, tenor and effect, except as to number, maturity (unless all bonds mature on the same date) and interest rate, issued to provide funds to prepay all of the City's outstanding loan payments due under those certain loan agreements dated as of May 12, 1994 and as of October 25, 1995 between the City and the Sunshine State Governmental Financing Commission (the "Refunded Bonds" ), pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly Article VII, Section 12 of the Constitution, the Charter of the City, Chapter 166, Florida Statutes, Resolution No. 02 - duly adopted by the City on September 26, 2002 (the "Resolution"), and other applicable provisions of law. This Bond is subject to all the terms and conditions of the Resolution, and capitalized terms not otherwise defined herein shall have the same meanings ascribed to them in the Resolution. This Bond and the interest hereon is payable solely from and secured by a prior lien upon and pledge of certain revenues of the City held in the funds and accounts created pursuant to the Resolution, including, investment earnings thereon, all in the manner and to the extent provided in the Resolution. All terms used herein in capitalized form and not otherwise defined shall have the meanings ascribed thereto in the Resolution. Pursuant to the Resolution, the City has covenanted and agreed, to the extent permitted by and in accordance with applicable law and 14 02-1057 budgetary processes, to prepare, approve and appropriate in its Annual Budget for each Fiscal Year, by amendment, if necessary and to deposit to the credit of the Sinking Fund established pursuant to the Resolution, Covenant Revenues of the City in an amount which together with other legally available revenues budgeted and appropriated for such purposes is equal to the Bond Service Requirement with respect to all Bonds outstanding under the Resolution for the applicable Fiscal Year, plus an amount sufficient to satisfy all other payment obligations of the City under the Resolution for the applicable Fiscal Year. "Covenant Revenues" is defined in the Resolution to mean the legally available non -ad valorem revenues budgeted and appropriated to pay the principal of, redemption premium, if any, and interest on the Bonds pursuant to Section 6.03 of the Resolution. Such covenant and agreement on the part of the City to budget and appropriate sufficient amounts of Covenant Revenues shall be cumulative, and shall continue until such Covenant Revenues in amounts, together with any other legally available revenues budgeted and appropriated for such purpose, sufficient to make all required payments under the Resolution as and when due, including any delinquent payments, shall have been budgeted, appropriated and actually paid into the appropriate funds and accounts under the Resolution; provided, however, that such covenant shall not constitute a lien, either legal or equitable, on any of the City's Covenant Revenue or other revenues, nor shall it preclude the City from pledging in the future any of its Covenant Revenues or other revenues to other obligations, nor shall it give the Bondholders a prior claim on the Covenant Revenues. Anything herein or in the Resolution to the contrary notwithstanding, all obligations of the City under the Resolution shall be secured only by the Covenant Revenues and other legally available revenues actually budgeted and appropriated and deposited into the funds and accounts created under the Resolution, as provided for therein, including investment income in certain funds and accounts, therein. Covenant Revenues and income received from the investment of moneys deposited in the funds and accounts established under the Resolution, are "Pledged Revenues" under the Resolution. The City may not expend moneys not appropriated or in excess of its current budgeted revenues. The obligation of the City to budget, appropriate and make payments hereunder from its Covenant Revenues is subject to the availability of Covenant Revenues of the City after satisfying funding requirements for obligations having an express lien on or pledge of such revenues and after satisfying funding requirements for essential government services of the City. Reference is hereby made to the Resolution for the provisions, among others, relating to the term, lien and security of the Bonds, the custody and application of the proceeds of the Bonds, continuing disclosure obligations of the City, the rights and remedies of the Bondholder, the extent of and limitations on the City's rights, duties and obligations and the provisions permitting the issuance of additional parity indebtedness, to all of which provisions the Bondholder hereof for himself and his successors in interest assents by acceptance of this Bond. The City has previously issued and currently has outstanding other indebtedness payable from and secured by, in whole or in part, its legally available non -ad valorem revenues. This Bond shall not be deemed to constitute a debt or a pledge of the faith and credit of the City, the State of Florida or any political subdivision thereof within the meaning of any constitutional, legislative or charter provision or limitation. Nothing herein or in the Resolution shall be deemed to create a pledge of or lien on the Covenant Revenues, the ad valorem tax revenues, or any other revenues of the City, or permit or constitute a mortgage or lien upon any assets owned by the City. It is expressly agreed by the holder of this Bond that such Bondholder 15 02-1057 shall never have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing power of the City or any other political subdivision of the State of Florida or taxation in any form on any real or personal property for any purpose, including, without limitation, for the payment of the principal of and interest or redemption premium on this Bond or for the payment of any other amounts provided for in the Resolution or to maintain or continue any of the activities of the City which generate user service charges, regulatory fees or any other Covenant Revenues, nor shall the Series 2002C Bonds constitute a charge, lien or encumbrance, either legal or equitable, on any property, assets or funds of the City, except the Pledged Revenues to the extent and as provided in the Resolution. Neither the members of the governing body of the City nor any person executing the Series 2002C Bonds shall be liable personally on the Series 2002C Bonds by reason of their issuance. [INSERT THE FOLLOWING REDEMPTION PROVISIONS ONLY IF BONDS ARE MADE SUBJECT TO REDEMPTION] [Bonds of this series are subject to mandatory redemption prior to their respective stated dates of maturity [insert mandatory redemption provisions, if any].] [Notice of call for redemption is to be given by mailing a copy of the redemption notice by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books maintained by the Bond Registrar, or any successor Bond Registrar appointed by the City pursuant to the Resolution. Failure to give such notice by mailing to any Bondholder, or any defect therein, shall not affect the validity of the proceedings for the redemption of any Bond or portion thereof with respect to which no such failure or defect has occurred. All such Bonds called for redemption and for the retirement of which funds are duly provided will cease to bear interest on such redemption date.] This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication endorsed hereon shall have been manually signed by the Bond Registrar. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF FULLY SET FORTH IN THIS PLACE. This Bond is and has all the qualities and incidents of an investment security under the Uniform Commercial Code -Investment Securities Law of the State of Florida. 16 02-1O57 IN WITNESS WHEREOF, the City of Miami, Florida, has issued this Bond and has caused the same to be signed by its City Manager and attested and countersigned by its City Clerk, either manually or with their facsimile signatures, and its seal to be affixed hereto or a facsimile of its seal to be reproduced hereon, all as of the day of , 2002. (SEAL) CITY OF MIAMI, FLORIDA wo ATTESTED AND COUNTERSIGNED: City Manager City Clerk APPROVED AS TO FORM AND CORRECTNESS 17 LI -13 City Attorney 02-1057 [CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds designated in and executed under the provisions of the within mentioned Resolution. as Bond Registrar Un Date of Authentication: Authorized Officer [To be printed on the reverse side of Registered Bonds] ADDITIONAL BOND PROVISIONS This Bond may be transferred upon the registration books of the City upon delivery thereof to the principal office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the registered owner of this Bond or by his attorney-in-fact or legal representative, containing written instructions as to the details of transfer of this Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Bond, the Bond Registrar shall at the earliest practical time in accordance with the provisions of the Resolution enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of funds. The City and the Bond Registrar may charge the owner of such Bond for the registration of every transfer or exchange of a Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the City) to be paid with respect to the registration of such transfer, and may require that such amounts be paid before any such new Bond shall be delivered. If the date for payment of the principal of, redemption premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or, if the Paying Agent is then an entity other than the City, a day on which banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and affect as if made on the nominal date of payment. The City has established a book -entry system of registration for the series of Bonds of which this is one. Except as specifically provided otherwise in the Resolution, an agent will hold this Bond on behalf of the beneficial owner hereof. By acceptance of a confirmation of 18 02-1057 purchase, delivery or transfer, the beneficial owner of this Bond shall be deemed to have agreed to such arrangement. It is hereby certified and recited that this Bond is authorized by and is issued in conformity with the requirements of the Constitution and statutes of the State of Florida; that all acts, conditions and things required to exist, to happen, and to be performed precedent to 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 hereto; that the issuance of the Bonds of this issue does not violate any constitutional or statutory limitation or provision; that the City has covenanted in the Resolution, to the extent permitted by and in accordance with applicable law and budgetary processes, to prepare, approve and appropriate in its Annual Budget, for each Fiscal Year, by amendment if necessary and to deposit to the credit of the Sinking Fund, Covenant Revenues, in an amount sufficient which, together with other amounts on deposit therein, are equal to the Bond Service Requirement for such applicable Fiscal Year. [Form of Abbreviations for Bonds] The following abbreviations, when used in inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT - (Crust) under Uniform Gifts to Minors Act (State) Custodian (Minor) Additional abbreviations may also be used though not in the above list. 19 02-1057 [Form of Assignment for Bonds] ASSIGNMENT FOR VALUE RECEIVED, the undersigned (the "Transferor") hereby sells, assigns and transfers unto (the "Transferee") PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to registrar the transfer of the within Bond on the books kept for registration and registration of the transfer thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a member firm of any other recognized national securities exchange or a commercial bank or a trust company. NOTICE: No transfer will be registered and no new Bond will be issued in the name of the Transferee, unless the signature(s) to this assignment correspond(s) with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. [End of Form of Bond] 20 12-1057 SECTION 5.11. Application of Bond Proceeds. The proceeds, including accrued interest, if any, received from the sale of the Bonds shall be applied by the City, simultaneously with delivery of the Bonds, as follows: (1) Accrued interest, if any, shall be deposited in the Interest Account within the Sinking Fund and shall be transferred one Business Day prior to the first interest payment date to the Paying Agent, who shall apply such moneys to pay interest on the Bonds as the same becomes due on the first interest payment date therefore. (2) An amount equal to the premium payable for the Reserve Product shall be paid to the Reserve Product Provider and such Reserve Product shall be held by the Paying Agent to the credit of the Reserve Fund for the benefit of the Bonds and the holders thereof. (3) An amount which is equal to the Optional Prepayment Price, as such is defined in the Outstanding Loan Agreements, shall be paid to the Sunshine State Governmental Financing Commission. (4) The remainder of the proceeds shall be deposited in a separate account designated "City of Miami 2002C Special Obligation Non -Ad Valorem Revenue Refunding Bonds Cost of Issuance Account" which is hereby established with the City and shall be disbursed for payment of expenses incurred in connection with the issuance of the Bonds (including payment of the expenses of the City); provided that the premiums for a Bond Insurance Policy and Reserve Product may be paid on behalf of the City by the Underwriters directly to the Bond Insurer. Any balance remaining after payment or provision for payment of such costs and expenses has been made shall be transferred to the Interest Account within the Sinking Fund and used solely to pay principal of and interest on the Bonds. SECTION 5.12, Temporary Bonds. Pending the preparation of definitive Bonds, the City may execute and deliver temporary Bonds. Temporary Bonds shall be issuable as registered Bonds without coupons, of any authorized denomination, and substantially in the form of the definitive Bonds but with such omissions, insertions, and variations as may be appropriate for temporary Bonds, all as may be determined by the City. Temporary Bonds may contain such reference to any provisions of this Resolution as may be appropriate. Every temporary Bond shall be executed and authenticated upon the same conditions and in substantially the same manner, and with like effect, as the definitive Bonds. As promptly as practicable the City shall execute and shall furnish definitive Bonds and thereupon temporary Bonds may be surrendered in exchange for definitive Bonds without charge at the principal office of the Bond Registrar, and the Bond Registrar shall authenticate and deliver in exchange, for such temporary Bonds a like aggregate principal amount of definitive Bonds of the same Series in authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds. SECTION 5.13. Authorization and Approval of Bond Purchase Agreement. The execution and delivery of the Bond Purchase Agreement is hereby authorized and approved. The City Commission hereby authorizes and directs the City Manager to determine the final provisions of the Bond Purchase Agreement, within the parameters for the Bonds set forth in Section 5.02 of this Resolution. Upon compliance by the Underwriters with the requirements of 21 02-1057 Section 218.385(2) and (3), Florida Statutes, and Section 218.385(6), Florida Statutes, by filing the "truth -in -bonding statement" and the "disclosure statement" required by said statutory provisions, the City Manager is hereby authorized to execute and the Clerk is hereby authorized to attest to, seal and deliver the Bond Purchase Agreement in substantially the form approved at this meeting and attached hereto as Exhibit "A", subject to such changes, insertions and omissions and such filling in of blanks therein as hereafter may be approved and made by the City Manager upon the advice of the City Attorney and Bond Counsel. The execution, attestation and delivery of the Bond Purchase Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. SECTION 5.14. Authorization and Approval of Negotiated Sale of Bonds. Based on the findings set forth in Article III hereof, the City Commission hereby approves the negotiated sale of the Bonds to the Underwriters, and the Bonds shall be sold and awarded to the Underwriters, upon the terms and conditions set forth herein and as set forth in the Bond Purchase Agreement. SECTION 5.15. Reserved. SECTION 5.16. Approval of Form of Paving Agent and Registrar Agreement', Appointment of Pa dung Agent and Bond Re isg tray. The execution and delivery of the Paying Agent and Registrar Agreement is hereby authorized and approved. The City Commission hereby authorizes and directs the City Manager to determine the final provisions of the Paying Agent and Registrar Agreement. The City Manager is hereby authorized to execute and the Clerk is hereby authorized to attest to, seal and deliver the Paying Agent and Registrar Agreement in substantially the form approved at this meeting and attached hereto as Exhibit `B", subject to such changes, insertions and omissions and such filling in of blanks therein as hereafter may be approved and made by the City Manager upon the advice of the City Attorney and Bond Counsel. The execution, attestation and delivery of the Paying Agent and Registrar Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. Wachovia Bank, National Association is hereby appointed as the initial Paying Agent and the initial Bond Registrar for the Series 2002C Bonds. SECTION 5.17. Preliminary Official Statement; Official Statement. The use of a Preliminary Official Statement in connection with the marketing of the Bonds is hereby authorized. The Preliminary Official Statement in substantially the form attached hereto as Exhibit "C" is hereby approved with such changes, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager. The City Manager is hereby authorized to approve and execute, on behalf of the City, an Official Statement relating to the Bonds with such changes from the Preliminary Official Statement, within the authorizations and limitations contained herein, as the City Manager in consultation with the City Attorney, Bond Counsel and the City's disclosure counsel in his sole discretion, may approve, such execution to be conclusive evidence of such approval. The City Manager is hereby authorized to deem the Preliminary Official Statement final for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). The City Manager or his designee is hereby authorized to provide for the printing of the Preliminary Official Statement and the Official Statement by the 02-105'7 22 lowest and most responsive bidder therefore and the payment of the cost of such printing is hereby authorized to be paid from the proceeds of the Bonds. SECTION 5.18. Election to Pay Optional Prepayment Price. The City Commission hereby elects to prepay the Optional Prepayment Price under the Outstanding Loan Agreements, as provided in the notice attached hereto as Exhibit "D". SECTION 5.19. Municipal Bond Insurance; Reserve Product. The City is hereby authorized to provide for the payment of the premiums on the Bond Insurance Policy and the Reserve Product from the proceeds of the issuance of the Bonds and to enter into such agreements as may be necessary to secure such Bond Insurance Policy and a Reserve Product, with the City Manager's execution of any such agreements, after consultation with the City Attorney and Bond Counsel, to be conclusive evidence of the City's approval thereof. The provisions of any such agreement shall supersede any inconsistent provision of this Resolution. SECTION 5.20. Qualification for the Depository Trust Company. Notwithstanding any other provision hereof, the City, the Bond Registrar and the Paying Agent are hereby authorized to take such actions as may be necessary to qualify the Bonds for deposit with DTC in accordance with the Blanket Issuer Letter of Representations dated October 4, 1995 from the City to DTC (the "DTC Agreement") and the taking of all actions required by such DTC Agreement, wire transfers of interest and principal payments with respect to the Bonds, utilization of electronic book entry data received from DTC in place of actual delivery of Bonds and provisions of notice with respect to Bonds registered by DTC (or any of its designees identified to the City, the Bond Registrar or the Paying Agent) by overnight delivery, courier service, telegram, telecopy or other similar means of communication. ARTICLE VI SOURCE OF PAYMENT OF BONDS,• SPECIAL OBLIGATIONS OF THE CITY SECTION 6.01. Bonds Not to be General Obligation or Indebtedness of the Cit. The Bonds shall not be deemed to constitute general obligations or a pledge of the faith and credit of the City, the State of Florida or any political subdivision thereof within the meaning of any constitutional, legislative or charter provision or limitation, but shall be payable solely from and secured by a lien upon and a pledge of the Pledged Revenues, in the manner and to the extent herein provided. No Bondholder shall ever have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing power of the City or any other political subdivision of the State of Florida or taxation in any form on any real or personal property to pay the Bonds or the interest thereon, nor shall any Bondholder be entitled to payment of such principal and interest from any other funds of the City other than the Pledged Revenues, all in the manner and to the extent herein provided. The Bonds and the indebtedness evidenced thereby shall not constitute a lien upon any real or personal property of the City, or any part thereof, or any other tangible personal property of or in the City, but shall constitute a lien only on the Pledged Revenues, all in the manner and the extent provided herein. SECTION 6.02 Pledge. The payment of the principal of, redemption premium, if any, and interest on the Bonds shall be secured forthwith equally and ratably by an irrevocable lien on 23 02-1057 the Pledged Revenues, all in the manner and to the extent provided herein. The City does hereby irrevocably pledge such Pledged Revenues to the payment of the principal of, redemption premium, if any, and interest on the Bonds, the funding and maintaining of the Reserve Fund as required herein, and for all other payments as provided herein, in the order of priorities set forth herein. SECTION 6.03 Covenant to Budget and Appropriate. The City hereby covenants and agrees to the extent permitted by and in accordance with applicable law and budgetary processes, to prepare, approve and appropriate in its Annual Budget for each Fiscal Year, by amendment if necessary, and to deposit to the credit of the Sinking Fund, legally available non -ad valorem revenues of the City in an amount which is equal to the Bond Service Requirement with respect to all Bonds outstanding hereunder for the applicable Fiscal Year, plus an amount sufficient to satisfy the other payment obligations of the City hereunder for the applicable Fiscal Year, including, without limitation, the obligations of the City to fund and cure deficiencies in the Reserve Fund. Such covenant and agreement on the part of the City to budget and appropriate sufficient amounts of legally available non -ad valorem revenues shall be cumulative, and shall continue until such legally available non -ad valorem revenues in amounts sufficient to make all required payments hereunder as and when due, including any delinquent payments, shall have been budgeted, appropriated and actually paid into the appropriate funds and accounts, hereunder; provided, however, that such covenant shall not constitute a lien, either legal or equitable, on any of the City's legally available non -ad valorem revenues or other revenues, nor shall it preclude the City from pledging in the future any of its legally available non -ad valorem revenues or other revenues to other obligations, nor shall it give the Bondholders a prior claim on the legally available non -ad valorem revenues. Anything herein to the contrary notwithstanding, all obligations of the City hereunder shall be secured only by the legally available non -ad valorem revenues actually budgeted and appropriated and deposited into the funds and accounts created hereunder, as provided for herein. The City may not expend moneys not appropriated or in excess of its current budgeted revenues. The obligation of the City to budget, appropriate and make payments hereunder from its legally available non -ad valorem revenues is subject to the availability of legally available non -ad valorem revenues after satisfying funding requirements for obligations having an express lien on or pledge of such revenues and after satisfying funding requirements for essential governmental services of the City. ARTICLE VII CREATION AND USE OF FUNDS AND ACCOUNTS; DISPOSITION OF REVENUES SECTION 7.01. Creation of Funds and Accounts. There are hereby established the "Sinking Fund" and the "Reserve Fund," and there is established within the Sinking Fund three separate accounts therein designated as the "Interest Account," the "Principal Account" and the "Bond Amortization Account". The Sinking Fund and the Reserve Fund established hereunder and all accounts therein shall constitute trust funds for the purpose herein provided, shall be delivered to and held by the Director of Finance (or an Authorized Depositary designated by the Director of Finance), in each case who shall act as trustee of such funds for the purposes hereof, and shall at all times be kept separate and distinct from all other funds of the City and used only as herein provided. Money 24 02-1057 held in the Sinking Fund and the Reserve Fund and the accounts therein shall be subject to a lien and charge in favor of the holders and registered owners of the Bonds as herein provided. SECTION 7.02. Disposition of Covenant Revenues. (1) Commencing immediately following the issuance of the Bonds, and continuing thereafter so long as any Bonds shall be Outstanding hereunder, the City shall deposit to the credit of the Funds and Accounts listed below on or before the twenty-fifth day of each month, from Covenant Revenues, amounts which, together with funds on deposit therein, will be sufficient to satisfy the cumulative deposit requirements described in clauses (a) and (b) below. Covenant Revenues shall be deposited in the following order and priority: (a) First, by deposit into the Interest Account within the Sinking Fund an amount which, together with any other amounts required to be deposited therein pursuant to this Resolution, will equal one-sixth (1/6) of the interest payable on the Bonds on the next semiannual interest payment date; by deposit into the Principal Account within the Sinking Fund one -twelfth (1/12) of all principal maturing or becoming due during the current Bond Year on the various Serial Bonds that mature annually; and by deposit into the Bond Amortization Account within the Sinking Fund one -twelfth' (1/12) of the Amortization Installments and unamortized principal balances of Term Bonds coming due during the current Bond Year with respect to the Bonds, until there are sufficient funds then on deposit equal to the sum of the interest, principal and Amortization Installments due on the Bonds on the next interest, principal and redemption dates in such Bond Year. (b) Second, by deposit into the Reserve Fund, the amounts, if any, which, together with funds on deposit therein, will be sufficient to make the funds and/or Reserve Product on deposit therein equal to the Reserve Requirement for the Bonds. (c) Thereafter any remaining Covenant Revenues shall be available to the City to be used for any lawful purpose. (2) The deposits to the Sinking Fund described above shall be increased or decreased, as the case may be, to the extent required to pay principal (including Amortization Installments) and interest coming due, after taking into account deficiencies in prior months' deposits. (3) Deposits required pursuant to this Section 7.02 shall be cumulative and the amount of any deficiency in any month shall be added to the amount otherwise required to be deposited in each month thereafter until such time as all such deficiencies have been cured. (4) In lieu of or in substitution for any cash or securities on deposit in the Reserve Fund, the City may fund the Reserve Requirement with a Reserve Product issued by a Reserve Product Provider in an amount equal to the difference between the Reserve Requirement and the sums then on deposit in the Reserve Fund. Any such Reserve Product other than the Reserve Product delivered in connection with the original issuance of the Bonds must either be (1) a surety bond or insurance policy issued to the entity serving as trustee or paying agent (the "Fiduciary"), as agent of the Bondholders, by a company licensed to issue an insurance policy guaranteeing the timely payment of debt service on the Bonds (a "municipal bond insurer") with 25 02-1057 the claims paying ability of the issuer thereof rated "AAA" or "Aaa" by S&P or Moody's, respectively, or (2) a surety bond or insurance policy issued to the Fiduciary, as agent of the bondholders, by an entity other than a municipal bond insurer if the form and substance of such instrument and the issuer thereof is approved by the Bond Insurer, or (3) an unconditional irrevocable letter of credit issued to the Fiduciary, as agent of the bondholders, by a bank if the issuer thereof is rated at least "AA" by S&P. Any such letter of credit shall be payable in one or more draws upon presentation by the beneficiary of a sight draft accompanied by its certificate that it then holds insufficient funds to make a required payment of principal or interest on the Bonds. The draws on such letter of credit shall be payable within two days of presentation of the sight draft. The letter of credit shall be for a term of not less than three years. The issuer of the letter of credit shall be required to notify the City and the Fiduciary, not later than 30 months prior to the stated expiration date of the letter of credit, as to whether such expiration date shall be extended, and if so, shall indicate the new expiration date. If such notice indicates that the expiration date shall not be extended, the City shall deposit in the Reserve Fund an amount sufficient to cause the cash or Permitted Investments on deposit in the Reserve Fund together with any other Reserve Product, to equal the Reserve Requirement on all outstanding Bonds. Such deposit must be paid in equal installments on at least a semi-annual basis over the remaining term of the letter of credit, unless the Reserve Product is replaced by a Reserve Product meeting the requirements in any of (1-3) above. The letter of credit shall permit a draw in full not less than two weeks prior to the expiration or termination of such letter of credit if the letter of credit has not been replaced or renewed. The Fiduciary shall draw upon any such letter of credit prior to its expiration or termination unless an acceptable replacement is in place or the Reserve Fund is fully funded in its required amount. The use of any Reserve Product shall be subject to receipt of an opinion of counsel acceptable to the Bond Insurer and in form and substance satisfactory to the Bond Insurer as to the due authorization, execution, delivery and enforceability of such instrument in accordance with its terms, subject to applicable laws affecting creditors' rights generally, and, in the event the Reserve Product Provider is not a domestic entity, an opinion of foreign counsel in form and substance satisfactory to the Bond Insurer. In addition, the use of an irrevocable letter of credit shall be subject to receipt of an opinion of counsel acceptable to the Bond Insurer and in form and substance satisfactory to the Bond Insurer to the effect that payments under such letter of credit would not constitute avoidable preferences under Section 547 of the U.S. Bankruptcy Code or similar state laws with avoidable preference provisions in the event of the filing of a petition for relief under the U.S. Bankruptcy Code or similar state laws by or against the City (or any other account party under the letter of credit). The obligation to reimburse a Reserve Product Provider for any expenses, accrued interest or draws upon such Reserve Product (the "Policy Costs") shall be subordinate to the payment of debt service on the Bonds. The right of a Reserve Product Provider to payment or reimbursement of its fees and expenses shall be subordinated to cash replenishment of the Reserve Fund, and, subject to the second succeeding sentence, its right to reimbursement for claims or draws shall be on a parity with the cash replenishment of the Reserve Fund. A Reserve Product shall provide for a revolving feature under which the amount available thereunder will be reinstated to the extent of any reimbursement of draws or claims paid. If the revolving feature is suspended or terminated for any reason, the right of the Reserve Product Provider to reimbursement will be further subordinated to cash replenishment of the Reserve Fund to an 26 02-1057 amount equal to the difference between the full original amount available under the Reserve Product and the amount then available for further draws or claims. If (a) the Reserve Product Provider becomes insolvent or (b) the Reserve Product Provider defaults in its payment obligations thereunder or (c) the claims -paying ability of a Reserve Product Provider of an insurance policy or surety bond falls below a S&P "AAA" or a Moody's "Aaa" or (d) the rating of a Reserve Product Provider of a letter of credit falls below a S&P "AA", the obligation to reimburse the Reserve Product Provider shall be subordinate to the cash replenishment of the Reserve Fund. If (a) the revolving reinstatement feature described in the preceding paragraph is suspended or terminated or (b) the rating of the claims paying ability of a Reserve Product Provider of a surety bond or insurance policy falls below a S&P "AAA" or a Moody's "Aaa" or (c) the rating of a Reserve Product Provider of a letter of credit falls below a S&P "AA", the City shall either (i) deposit into the Reserve Fund an amount sufficient to cause the cash or Permitted Investments on deposit in the Reserve Fund to equal the Reserve Requirement on all outstanding Bonds, such amount to be paid over the ensuing five years in equal installments deposited at least semi-annually or (ii) replace such instrument with a surety bond, insurance policy or letter of credit meeting the requirements in any of (1-3) above within six months of such occurrence. In the event (a) the rating of the claims -paying ability of a Reserve Product Provider of a surety bond or insurance policy falls below "A" or (b) the rating of a Reserve Product Provider of a letter of credit falls below "A" or (c) the Reserve Product provider defaults in its payment obligations or (d) the Reserve Product provider becomes insolvent, the City shall either (i) deposit into the Reserve Fund an amount sufficient to cause the cash or Permitted Investments on deposit in the Reserve Fund to equal to Reserve Requirement on all outstanding Bonds, such amount to be paid over the ensuing year in equal installments on at least a monthly basis or (ii) replace such instrument with a surety bond, insurance policy or letter of credit meeting the requirements in any of (1-3) above within six months of such occurrence. The amount available for draws or claims under a Reserve Product may be reduced by the amount of cash or Permitted Investments deposited in the Reserve Fund. The Fiduciary will ascertain the necessity for a claim or draw upon the Reserve Product and provide notice to the Reserve Product Provider not later than three days (or such longer period as may be necessary depending on the permitted time period for honoring a draw under the Reserve Product) prior to each interest payment date. Cash on deposit in the Reserve Fund shall be used (or investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing on any Reserve Product. If and to the extent that more than one Reserve Product is deposited in the Reserve Fund, drawings thereunder and repayments of costs associated therewith shall be made on a pro rata basis, calculated by reference to the maximum amounts available thereunder. Notwithstanding any of the provisions of this Resolution, as long as the Reserve Product of the Bond Insurer is in effect, the following provisions shall apply: (a) The City's repayment of any draws under such Reserve Product and related reasonable expenses incurred by the Bond Insurer (together with interest thereon at a rate 27 02-105'7 equal to the lower of (i) the prime rate of Morgan Guaranty Trust Company of New York in effect from time to time plus 2% per annum, and (ii) the highest rate permitted by law) shall enjoy the same priority as the obligation to maintain and refill the Reserve Fund. Repayment of Policy Costs shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12th of the aggregate of Policy Costs related to such draw. If and to the extent that cash has also been deposited in the Reserve Fund, all such cash shall be used (or investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing under the Reserve Product, and repayment of any Policy Costs shall be made prior to replenishment of any such cash amounts. If, and in addition to the Reserve Product, any other Reserve Product ("Additional Debt Service Reserve Fund Policy") is provided, drawings under the Reserve Product and any such Additional Debt Service Reserve Fund Policy, and repayment of Policy Costs and reimbursement of amounts due under the Additional Debt Service Reserve Fund Policy, shall be made on a pro rata basis (calculated by reference to the Maximum Amounts available thereunder) after applying all available cash in the Reserve Fund and prior to replenishment of any such cash draws, respectively. (b) If the City shall fail to repay any Policy Costs in accordance with the preceding paragraph (a), the Bond Insurer shall be entitled to exercise any and all remedies available at law or under the Resolution other than (i) acceleration of the maturity of the Bonds, or (ii) remedies which would adversely affect the Bondholders. (c) The Resolution shall not be discharged until all Policy Costs owing to the Bond Insurer shall have been paid in full. (d) As security for the City's repayment obligations with respect to the Bond Insurer's Reserve Product, the Bond Insurer shall be and is hereby granted a security interest (subordinate only to that of the Bondholders) in all revenues and collateral pledged as security for the Bonds. (e) No additional bonds or obligations may be issued without the Bond Insurer's prior written consent if any Policy Costs are past due and owing to the Bond Insurer. (f) The City shall require the Paying Agent to ascertain the necessity for a claim upon the Reserve Product and to provide notice to the Bond Insurer in accordance with the terms of the Reserve Product at least two business days prior to each interest payment date. (g) This Resolution shall not be modified or amended without the prior written consent of the Bond Insurer. (h) The Bond Insurer shall be provided with written notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto at 125 Park Avenue, New York, New York 10017, Attention: Risk Management. (5) The City shall not be required to make any further payments into the Sinking Fund, including the accounts therein, and the Reserve Fund when the aggregate amount of funds in the Sinking Fund and the Reserve Fund, including the accounts therein, are at least equal to the aggregate principal amount of the Bonds issued pursuant to this Resolution and then Outstanding, plus the amount of interest then due or thereafter to become due on the Bonds then 28 02-1057 Outstanding, or if all of the Bonds then Outstanding have otherwise been defeased pursuant to Section 13.02 hereof. SECTION 7.03. Use of Moneys in the Sinking. (1) Moneys on deposit in the Sinking Fund shall be used solely for the payment of the principal of, interest on and any redemption premiums required with respect to the Bonds; provided, however, that if such principal and interest payments, or a portion thereof, have been made on behalf of the City by a Bond Insurer, credit facility issuer, Reserve Product Provider or other entity insuring, guaranteeing or providing a Reserve Product for the payment of the Bonds, moneys on deposit in the Sinking Fund shall be paid to such Bond Insurer, credit facility issuer, Reserve Product Provider or entity having theretofore made a corresponding payment on the Bonds. (2) One Business Day prior to the maturity date of each Bond (or the due date of such Amortization Installments for Term Bonds) and installment of interest on such Bonds, the City shall transfer from the Sinking Fund to the Paying Agent for the Bonds sufficient moneys to pay all principal of, redemption premium, if any, and interest then due and payable with respect to such Bonds. Interest accruing with respect to any fully registered Bond shall be paid by check or draft of the Paying Agent to the registered owner thereof. (3) Moneys on deposit in the Sinking Fund for the redemption of the Series 2002C Bonds shall be applied to the retirement of the Series 2002C Bonds issued under the provisions of this Resolution and then outstanding in the following order: (a) The City shall first endeavor to purchase Outstanding Term Bonds redeemable from Amortization Installments during such Bond Year, or if no such Term Bonds are then Outstanding, the City shall endeavor to purchase Serial Bonds whether or not such Serial Bonds shall then be subject to redemption, but only to the extent moneys are available therefore, at the most advantageous price obtainable, such price not to exceed the principal of such Serial Bonds plus accrued interest but no such purchase shall be made by the City within a period of thirty (30) days next preceding any interest payment date on which such Serial Bonds are subject to call for redemption under the provisions of this Resolution. (b) Then, to the extent moneys remain on deposit in the Sinking Fund that are held for the redemption of the Bonds, the City shall call for redemption on each interest payment date on which Bonds are subject to redemption, with or without premium from such moneys, such amount of Term Bonds subject to the Amortization Installments for such Bond Year that have not been purchased pursuant to clause (a) above. (c) Then, to the extent moneys remain on deposit in the Sinking Fund that were deposited therein pursuant to this Resolution for the purpose of redeeming the Bonds, the City shall first call any remaining Bonds then subject to redemption, in such order and by such selection method as the City, in its discretion, may determine, from such funds as will exhaust the money then held for the redemption of such Bonds as nearly as may be possible. 29 02-107 (d) Then, to the extent moneys remain on deposit in the Sinking Fund that were deposited therein pursuant to this Resolution for the purpose of redeeming the Bonds, the City may, in its discretion from time to time (i) use such moneys to defease the Bonds, pay the principal of or interest on the Bonds, or any other lawful purpose, or (ii) keep such moneys on deposit in the Sinking Fund for future use pursuant to this Section 7.03; provided, however, that such moneys shall be used for any purpose or purposes allowed pursuant to clause (i) above only if the City shall obtain an opinion of Bond Counsel to the effect that such use will not cause the interest on any Bond to become included in the gross income of the Bondholder thereof. If Term Bonds are purchased or redeemed pursuant to this section in excess of the Amortization Installments for such Bond Year, such excess principal amount of such Term Bonds so purchased or redeemed shall be credited against subsequent Amortization Installments for such Term Bonds in such Bond Year or Bond Years as the City may determine and as may be reflected in the City's permanent accounting records. Notwithstanding the foregoing, to the extent that moneys are deposited into the Sinking Fund in a given Bond Year in an amount equal to the Amortization Installment for such Bond Year and are applied to purchase or redeem Term Bonds to which such Amortization Installment applies, then all moneys thereafter deposited to the Bond Amortization Account in such Bond Year may be applied as provided in clause (c) above. SECTION 7.04. Application of Moneys in the Reserve Fund. The Bonds shall be secured by the Reserve Fund. Funds on deposit in the Reserve Fund shall be used solely to cure deficiencies in the Sinking Fund with respect to the Bonds. If any funds on deposit in the Reserve Fund exceed the Reserve Requirement with respect to the Bonds, such excess shall be transferred to the Sinking Fund, provided that if such excess is due to the substitution of a Reserve Product, such excess shall be first applied to cure any deficiencies in the Sinking Fund, and then shall be released to the City to use for any lawful purposes that, in the opinion of Bond Counsel, will not cause the interest on the Bonds to become includable in gross income for federal income tax purposes. The Reserve Fund created in Section 7.01 above shall be held in trust only for the benefit of the holders of the Bonds. The Reserve Fund shall be funded at all times at the Reserve Requirement. Upon issuance of the Bonds, there shall be deposited to the credit of the Reserve Fund, either cash equal to the Reserve Requirement or a Reserve Product in an amount equal to the Reserve Requirement, or a combination thereof. SECTION 7.05. Transfer to Paying Agent. The City shall transfer from the Sinking Fund and, to the extent necessary, the Reserve Fund, to the Paying Agent on the Business Day preceding each interest, principal or redemption date, by wire transfer or delivery in other immediately available funds, an amount sufficient to pay when due the principal of, interest on and redemption premium, if any, with respect to the Bonds. SECTION 7.06 First Union Escrow Agreement. Notwithstanding anything to the contrary contained in this Article VII, the City shall comply with the deposit requirements of the 30 02-1057 First Union Escrow Agreement, as such deposit requirements apply to the Bonds, for so long as such First Union Escrow Agreement is in full force and effect. ARTICLE VIII DEPOSITARIES OF FUNDS, SECURITY FOR DEPOSITS AND INVESTMENT OF MONEYS SECTION 8.01. Deposits Constitute Trust Funds. All funds or other property which at any time may be owned or held in the possession of or deposited with the City for application in accordance with the terms and provisions of this Resolution shall be held in trust and applied only in accordance with the provisions of this Resolution, and shall not be subject to lien or attachment by any creditor of the City. All funds or other property which at any time may be owned or held in the possession of or deposited with the City pursuant to this Resolution, and any investment income thereon, shall be continuously secured, for the benefit of the City and the Bondholders in the order and manner and for the purposes provided in this Resolution either (a) by depositing with an Authorized Depositary, as custodian, collateral security consisting of obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America having a market value (exclusive of accrued interest) not less than the amount of such deposit, or (b) in such other manner as permitted hereunder as may then be required or permitted by applicable state and federal law as and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds, including without limitation, the provisions of Chapter 280, Florida Statutes, as from time to time amended. All moneys deposited with each Authorized Depositary shall be credited to the particular fund or account to which such moneys belong. SECTION 8.02. Investment of Moneys. Moneys held for the credit of the Sinking Fund and the Reserve Fund may be invested by the City in Permitted Investments. Such investments or reinvestments shall mature or become available not later than the respective dates, as estimated by the City, that the moneys held for the credit of said funds and accounts will be needed for the purposes of such funds or accounts; provided, however, that funds in the Reserve Fund shall be invested only in Permitted Investment with a remaining maturity of five years or less from date of purchase or subject to redemption upon demand of the holder, or such longer period with the consent of the Bond Insurer. Obligations so purchased as an investment of moneys in any such fund or account shall be deemed at all times to be a part of such fund or account, and shall at all times, for the purposes of this Resolution, be valued as frequently as deemed necessary by the Bond Insurer, but not less often than annually, at the market value thereof, exclusive of accrued interest. Deficiencies in the amount on deposit in any fund or account resulting from a decline in market value shall be restored no later than the succeeding valuation date. Except as otherwise expressly provided herein, including specifically the obligations of the City with respect to paying the Rebate Amount as set forth in Section 13.03 hereof, all income and profits derived from the investment of moneys in the Sinking Fund shall be retained 31 02-105-7 in such funds and used for the purposes specified for such respective fund; all income and profits derived from the investment of moneys in the Reserve Fund, if any, shall be retained in the Reserve Fund therein until amounts on deposit in such Reserve Fund equal the Reserve Requirement; thereafter, all such income and profits shall be deposited into the Sinking Fund. Notwithstanding the foregoing, income and profits derived from the investment of moneys in the funds and accounts created hereunder may, at the option of the City, be transferred to the City in order to pay the Rebate Amount. hereof. All investments of moneys hereunder shall be made in compliance with Section 13.03 ARTICLE IX GENERAL COVENANTS OF THE CITY SECTION 9.01. Anti -Dilution Test. The City may incur additional debt that is payable from all or a portion of the legally available non -ad valorem revenues only if the total amount of legally available non -ad valorem revenues for the prior Fiscal Year were (a) at least 2.00 times the aggregate maximum annual debt service of all debt (including all long-term financial obligations appearing on the City's most recent audited financial statements, any debt issued during the current Fiscal Year, and the debt proposed to be incurred) to be paid from legally available non -ad valorem revenues (collectively, "Debt"), including any Debt payable from one or several specific revenue sources and (b) so long as the Bonds are outstanding and if a Reserve Product is in effect, at least 1.00 times the obligation of the City to repay any Policy Costs then due and owing to the Reserve Product Provider. SECTION 9.02. Notice of Deposit Shortfall. The City covenants that it will notify the Paying Agent, the Bond Insurer, any Reserve Product Provider and any insurance trustee for the Bond Insurer of any shortfall or deficiency in the Sinking Fund at least five (5) days before each principal or payment date on which such shortfall is expected to occur. SECTION 9.03. Annual Audit. (1) Annual Audit. The City shall require that an annual audit of its accounts and records with respect to its general fund and the Pledged Revenues and the funds and accounts created herein be completed as soon as practicable after the end of each Fiscal Year by an independent certified public accountant of recognized standing. Such audit shall be conducted in accordance with generally accepted auditing standards as applied to governmental units. (2) Availability of Reports. A copy of the comprehensive annual financial report as certified according to the requirements stated herein shall be available for inspection at the offices of the City and shall be promptly furnished to the Underwriters of the Series 2002C Bonds and mailed to the Bond Insurer, if any, Reserve Product Provider, if any, or Bondholder requesting the same, upon payment by such Bond Insurer, Reserve Product Provider or Bondholder, as the case may be, of the cost of reproduction and mailing. 32 02-1057 ARTICLE X ISSUANCE OF ADDITIONAL INDEBTEDNESS SECTION 10.01. Issuance of Additional Indebtedness. The City will not issue any obligations (other than the Bonds authorized by Section 5.01 hereof) secured by or payable from the Pledged Revenues, or any portion thereof, or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge, in each case, having priority to or being on a parity with the lien securing the Bonds issued pursuant to this Resolution upon the Pledged Revenues or any portion thereof. The City hereby agrees that it will not issue or incur any other debt obligation secured by or payable from a covenant to budget and appropriate all or a portion of the City legally available non -ad valorem revenues or secured by or payable from specific non -ad valorem revenues, unless the issuance of such debt obligations complies with Section 9.01 hereof, as evidenced by a certificate of the Director of Finance filed with the City Commission on or prior to the issuance or incurrence of such debt and no "event of default" has occurred and is continuing. ARTICLE XI EVENTS OF DEFAULT; REMEDIES SECTION 11.01. Events of Default. Each of the following events is hereby declared an "event of default," that is to say if: (a) payment of principal of any Bond shall not be made when the same shall become due and payable, either at maturity (whether by acceleration or otherwise) or on required payment dates by proceedings for redemption or otherwise; or (b) Payments of any installment of interest shall not be made when the same shall become due and payable; or (c) the City shall fail to make any deposits required to be made hereunder or shall otherwise fail to comply with any of the covenants and obligations of the City hereunder and such failure shall continue unremedied for a period of thirty (30) days after such failure to deposit or other such occurrence; or (d) an order or decree shall be entered, with the consent or acquiescence of the City, appointing a receiver or receivers of the City, or the filing of a petition by the City for relief under federal bankruptcy laws or any other similar law or statute of the Untied States of America or the State of Florida, which shall not be dismissed, vacated or discharged within thirty (30) days after the filing thereof, or (e) any proceedings shall be instituted, with the consent or acquiescence of the City, for the purpose of effecting a composition between the City and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statutes now or hereafter enacted, if the claims of such creditors are under any circumstances payable from the Pledged Revenues. 33 02-1057 Notwithstanding the foregoing, with respect to the events described in clause (c), the City shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the City in good faith institutes appropriate curative action and diligently pursues such action until the default has been corrected. Any waiver of an "event of default" shall be subject to the prior written consent of the Bond Insurer. SECTION 11.02. Enforcement of Remedies. Upon the happening and continuance of any event of default specified in Section 11.01 of this Article, then and in every such case the owners of not less than twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding may, but only after receiving the prior written consent of the Bond Insurer, appoint any state bank, national bank, trust company or national banking association qualified to transact business in Florida to serve as trustee for the benefit of the holders of all Bonds then outstanding (the "Default Trustee"). Notice of such appointment, together with evidence of the requisite signatures of the holders of twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding and the trust instrument under which the Default Trustee shall have agreed to serve shall be filed with the City and the Default Trustee and notice of such appointment shall be mailed to the registered holders of the Bonds. No more than one Default Trustee may be appointed and serving hereunder at any one time; however, the holders of a majority of the aggregate principal amount of the Bonds Outstanding may remove the Default Trustee initially appointed and appoint a successor and subsequent successors at any time. If the default for which the Default Trustee was appointed is cured or waived pursuant to this Article, the appointment of the Default Trustee shall terminate with respect to such default. After a Default Trustee has been appointed pursuant to the foregoing, the Default Trustee may proceed, and upon the written request of owners of twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding shall proceed, to protect and enforce the rights of the Bondholders under the laws of the State of Florida, including the Act, and under this Resolution, by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board, body or officer having jurisdiction, either for the specific performance of any covenant or agreement contained herein or in aid of execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, all as the Default Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights. In the enforcement of any remedy against the City under this Resolution the Default Trustee shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any City default becoming, and at any time remaining, due from the City for principal, interest or otherwise under any provisions of this Resolution or of such Bonds and unpaid, with interest on overdue payments of principal and, to the extent permitted by law, on interest, at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice to any other right or remedy of the Default Trustee or of the Bondholders, and to recover and enforce any judgment or decree against the City, but solely as provided herein and in such Bonds, for any portion of such amounts remaining unpaid and interest, costs and expenses as above provided, and to collect (but solely from moneys in the Sinking Fund, the Reserve Fund and any other 34 02-1057 moneys available for such purpose) in any manner provided by law, the moneys adjudged or decreed to be payable. SECTION 11.03. Effect of Discontinuing Proceedings. In case any proceeding taken by the Default Trustee or any Bondholder on account of any default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Default Trustee or such Bondholder, then and in every such case the City, the Default Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies and powers of the Default Trustee shall continue as though no such proceeding had been taken. SECTION 11.04. Directions to Default Trustee as to Remedial Proceedings. Anything in this Resolution to the contrary notwithstanding, the holders of a majority of the aggregate principal amount of the Bonds Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Default Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Default Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions of this Resolution, and that the Default Trustee shall have the right to decline to follow any such direction which in the opinion of the Default Trustee would be unjustly prejudicial to Bondholders not parties to such direction. SECTION 11.05. Restrictions on Actions by Individual Bondholders. No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust hereunder or for any other remedy hereunder unless such Bondholder previously shall have given to the Default Trustee written notice of the event of default on account of which such suit, action or proceeding is to be taken, and unless the holders of not less than twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding shall have made written request of the Default Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Default Trustee a reasonable opportunity either to proceed to exercise the powers hereinabove granted or to institute such action, suit or proceeding in its or their name, and unless, also, there shall have been offered to the Default Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, including the reasonable fees of its attorneys (including fees on appeal), and the Default Trustee shall have refused or neglected to comply with such request within a reasonable period of time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Default Trustee, to be conditions precedent to the execution of the powers and trusts of this Resolution or for any other remedy hereunder. It is understood and intended that no one or more owners of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Resolution, or to enforce any right hereunder, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Bondholders, and that any individual rights of action or any other right given to one or more of such owners by law are restricted by this Resolution to the rights and remedies herein provided. Nothing contained herein, however, shall affect or impair the right of any Bondholder, individually, to enforce the payment of the principal of and interest on his Bond or Bonds at and 35 02-1057 after the maturity thereof, at the time, place, from the source and in the manner provided in this Resolution. SECTION 11.06. Subrogation. Notwithstanding anything in this Resolution to the contrary, if the principal, interest and redemption premium, if any, with respect to any Bonds are paid by a Bond Insurer or Reserve Product Provider with respect to such Bonds, the pledge of the amounts on deposit from time to time in the funds and accounts created hereby and all covenants, agreements and other obligations of the City to the Bondholders of such Bonds shall continue to exist and the Bond Insurer and/or the Reserve Product Provider, as applicable, to the extent of any payment by such entity with respect to such Bonds, shall be subrogated to the rights of such Bondholders. SECTION 11.07. Bond Insurer's Rights Upon Events of Default. Anything in this Resolution to the contrary notwithstanding, if any event of default has occurred and is continuing while a Bond Insurance Policy securing all or a portion of the Bonds is in effect and not in default, the Bond Insurer shall, except as set forth below, have the right, in lieu of the holders of the Bonds secured by said Bond Insurance Policy, by an instrument in writing, executed and delivered to the Default Trustee, if any (provided that if there is no Default Trustee then in place, such instrument shall be delivered to the City) to direct the time, method and place of conducting all remedial proceedings available to the Default Trustee under this Resolution, or exercising any trust or power conferred on the Default Trustee by this Resolution. Said direction shall be controlling to the extent the direction of holders of the Bonds would have been controlling under this Article XI. If the Bond Insurer shall be in default in the performance of its obligations under the Bond Insurance Policy, said Bond Insurer shall have no rights under this Section. ARTICLE XII SECONDARY MARKET DISCLOSURE SECTION 12.01. Continuing Disclosure Undertaking. For the benefit of the holders and beneficial owners from time to time of the Bonds, the City agrees, in accordance with and as the only obligated person with respect to the Bonds under Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), to provide or cause to be provided such financial information and operating data, financial statements and notices, in such manner, as may be required for purposes of paragraph (b)(5) of the Rule. In order to describe and specify certain terms of the City's continuing disclosure agreement, including provisions for enforcement, amendment and termination, the City Manager is hereby authorized and directed to sign and deliver, in the name and on behalf of the City, a Continuing Disclosure Agreement (the "Continuing Disclosure Commitment"), in substantially the form attached hereto as Exhibit "E", with such changes, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager, after consultation with the City Attorney, Bond Counsel or the City's disclosure counsel. The execution of the Continuing Disclosure Commitment, for and on behalf of the City by the City Manager, shall be deemed conclusive evidence of the City's approval of the Continuing Disclosure Commitment. The agreement formed, collectively, by this paragraph and the Continuing Disclosure Commitment, shall be the City's continuing disclosure agreement for purposes of the Rule, and its performance shall be subject to the availability of funds to meet costs the City would be required to incur to perform it. Notwithstanding any other provisions of this Resolution, any failure by the City to comply with 36 02-1057 any provisions of the Continuing Disclosure Commitment or this Section 12.01 shall not constitute a default under this Resolution and the remedies therefore shall be solely as provided in the Continuing Disclosure Commitment. The City Manager is further authorized and directed to establish, or cause to be established, procedures in order to ensure compliance by the City with the Continuing Disclosure Commitment, including the timely provision of information and notices. Prior to making any filing in accordance with such agreement, the City Manager shall consult with, as appropriate, the City Attorney, Bond Counsel or the City's disclosure counsel. The City Manager, acting in the name and on behalf of the City, shall be entitled to rely upon any legal advice provided by the City Attorney, Bond Counsel or the City's disclosure counsel in determining whether a filing should be made. ARTICLE XIII MISCELLANEOUS PROVISIONS SECTION 13.01. Modification or Amendment. This Resolution may be modified or amended by ordinance or resolution and may be supplemented for the addition of terms, covenants and provisions in the manner herein provided and as may further be necessary for issuance of the Bonds hereunder from time to time by supplemental resolution adopted concurrently with or prior to the issuance of the Bonds. Thereafter, no modification or amendment of this Resolution or of any resolution or ordinance amendatory hereof or supplemental hereto not provided for herein, materially adverse to the holders of the Bonds, the Bond Insurer or the Reserve Product Provider, if any, may be made without the consent in writing of the owners of not less than a majority of the aggregate principal amount of Bonds Outstanding, but no modification, amendment or supplemental ordinance or resolution shall permit a change (a) in the maturity of the Bonds or a reduction in the rate of interest thereon, (b) in the amount of the principal obligation of any Bond, (c) that would affect the covenant of the City to budget and appropriate legally available non -ad valorem revenues of the City for the payment of the amounts provided herein pursuant to Section 6.03 hereof, or (d) that would reduce such percentage of holders of the Bonds, required above for such modifications or amendments, without the consent all of the Bondholders. For the purpose of Bondholders' voting rights or consents, the Bonds owned by or held for the account of the City, directly or indirectly, shall not be counted. The City may amend this Resolution to make other amendments not prohibited by the foregoing without the consent of the Bondholders. Notwithstanding anything to the contrary contained in this Resolution, for so long as any Bond Insurance Policy securing the Bonds is in effect and the Bond Insurer is not in default of its obligations thereunder, such Bond Insurer shall be treated as the holder of the Bonds secured by the Bond Insurance Policy for purposes of this Section 13.01 and the written consent of such Bond Insurer to a proposed amendment or supplement to this Resolution shall be deemed to be the consent of the holders of the Bonds secured by the Bond Insurance Policy issued by such Bond Insurer. SECTION 13.02. Defeasance. If, at any time after the date of issuance of the Bonds (a) all Bonds secured hereby or any maturity thereof shall have become due and payable in accordance with their terms or otherwise as provided in this Resolution, or shall have been duly 37 02^1057 called for redemption (if applicable), or the City gives the Paying Agent irrevocable instructions directing the payment of the principal of, redemption premium, if any, and interest on such Bonds at maturity or at any earlier redemption date scheduled by the City, or any combination thereof, (b) the full amount of the principal, redemption premium, if any, and the interest so due and payable upon all of such Bonds then outstanding or any portion of such Bonds, at maturity or upon redemption (if applicable), shall be paid, or sufficient moneys shall be held by an escrow agent who shall be an Authorized Depository or any Paying Agent (other than the City) in irrevocable trust for the benefit of such Bondholders (whether or not in any accounts created hereby) which, when invested in Government Obligations maturing not later than the maturity or redemption (if applicable) dates of such principal, redemption premium, if any, and interest, will, together with the income realized on such investments, be sufficient to pay all such principal, redemption premium, if any, and interest on said Bonds at the maturity thereof or the date upon which such Bonds are to be called for redemption (if applicable) prior to maturity, and (c) provision shall also be made for paying all other sums payable hereunder by the City allocable to such Bonds, including, but not limited to the payment of Policy Costs owed to a Reserve Product Provider, then and in that case the right, title and interest of such Bondholders hereunder shall thereupon cease, determine and become void; otherwise, this Resolution shall be, continue and remain in full force and effect. Notwithstanding any other provision of this Resolution, including in particular this Section 13.02, the obligation to pay over the Rebate Amount to the United States and to comply with all other requirements of Section 13.03 hereof shall survive the defeasance or payment in full of the Bonds. SECTION 13.03. Tax Covenants. The City hereby covenants and agrees, for the benefit of the owners from time to time of the Bonds, to comply with the requirements applicable to it contained in the Code to the extent necessary to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. Specifically, without intending to limit in any way the generality of the foregoing, the City covenants and agrees: (a) to pay to the United States of America from the funds and sources of revenues pledged to the payment of the Bonds, and from any other legally available funds, at the times required pursuant to Section 148(f) of the Code, the excess of the amount earned on all non -purpose investments (as defined in Section 148(f)(6) of the Code) over the amount which would have been earned if such non -purpose investments were invested at a rate equal to the yield on the Bonds, plus any income attributable to such excess, computed in accordance with the applicable provisions of the Code (the "Rebate Amount'); (b) to maintain and retain all records pertaining to and to be responsible for making or causing to be made all determinations and calculations of the Rebate Amount and required payments of the Rebate Amount as shall be necessary to comply with the Code; (c) to refrain from using proceeds from the Bonds in a manner that would cause the Bonds to be classified as private activity bonds under Section 141(a) of the Code; 38 02-1057 (d) to refrain from taking any action that would cause the Bonds, or any of them, to become arbitrage bonds under Section 148 of the Code or hedge bonds under Section 149(g) of the Code; and (e) so long as the Bonds are outstanding, to determine within 90 days after the beginning of each Fiscal Year the amount that is available to the City as of the beginning of that Fiscal Year to pay working capital expenditures of the type financed or refinanced by the Bonds ("Available Amounts"), and to restrict the investment of a portion of the Available Amount equal to the outstanding principal amount of the Bonds as of the beginning of that Fiscal Year to the yield on the until the Available Amount for the immediately succeeding Fiscal Year has been determined. For purposes of this paragraph (e), "Available Amount' excludes the proceeds of the Bonds but includes cash, investments, and other amounts held in accounts or otherwise by the City or a related party if these amounts may be used by the City for working capital expenditures of the type being financed or refinanced by the Bonds without legislative (but excluding appropriation) or judicial action and without a legislative, judicial, or contractual requirement that those amounts be reimbursed to the fund in which such amounts have been deposited. Available Amount shall not include a working capital reserve that does not exceed 5% of the actual expenditures of the City during the prior Fiscal Year, whether for capital or working capital expenditures, that are paid out of current revenues. The City understands that the foregoing covenants impose continuing obligations on the City to comply with the requirements of the Code so long as such requirements are applicable. SECTION 13.04. Bond Insurance Policy Provisions. So long as the Bonds are Outstanding and insured by the Bond Insurance Policy, the City hereby makes the following covenants and agreements for the benefit of the Bond Insurer: (A) Information: The Bond Insurer shall be provided with the following information: (i) the budget for the current fiscal year (within 120 days of the beginning of such fiscal year), annual audited financial statements (on each April 30`h), a statement of the amount on deposit in the Reserve Fund as of the last valuation (on each April 301h); (ii) official statement or other disclosure document, if any, prepared in connection with the issuance of additional debt secured by the Covenant Revenues within 30 days of the sale thereof, (iii) notice of any draw upon or deficiency due to market fluctuation in the amount, if any, on deposit in the Reserve Fund; (iv) notice of the redemption, other than mandatory sinking fund redemption, of any Bonds, including the principal amount, maturities and CUSIP numbers thereof; (v) such additional information as the Bond Insurer may reasonably request from time to time; and (vi) a full transcript of all proceedings relating to the adoption of any supplement to this Resolution or any other principal financing document. (B) Payments from the Bond Insurance Policy. (i) If on the Business Day immediately preceding an interest payment date, there is not on deposit with the Paying Agent sufficient moneys available to pay all principal of and interest on the Bonds due on such date, the Paying Agent 39 02-1057 shall immediately notify the Bond Insurer and State Street Bank and Trust Company, N.A., New York, New York, or its successor, as its Fiscal Agent (the "Fiscal Agent") of the amount of such deficiency. If, by said interest payment date, the City has not provided the amount of such deficiency, the Paying Agent shall simultaneously make available to the Bond Insurer and to the Fiscal Agent the registration books for the Bonds. In addition: (a) the Paying Agent shall provide the Bond Insurer with a list of Bondholders entitled to receive principal or interest payments from the Bond Insurer under the terms of the Bond Insurance Policy and shall make arrangements for the Bond Insurer and its Fiscal Agent (1) to mail checks or drafts to Bondholders entitled to receive full or partial interest payments from the Bond Insurer and (2) to pay principal of the Bonds surrendered to the Fiscal Agent by the Bondholders entitled to receive full or partial payments from the Bond Insurer; and (b) The Paying Agent shall, at the time it makes the registration books available to the Bond Insurer pursuant to (a) above, notify Bondholders entitled to receive the payment of principal of or interest on the Bonds from the Bond Insurer (1) as to the fact of such entitlement, (2) that the Bond Insurer will remit to them all or part of the interest payments coming due, subject to the terms of the Bond Insurance Policy, (3) that, except as provided in paragraph (ii) below, in the event that any Bondholder is entitled to receive full payment of principal from the Bond Insurer, such Bondholder must tender his Bond with the instrument of transfer in the form provided on the Bond executed in the name of the Bond Insurer and (4) that, except as provided in paragraph (ii) below, in the event that such Bondholder is entitled to receive partial payment of principal from the Bond Insurer, such Bondholder must tender his Bond for payment first to the Paying Agent, which shall note on such Bond the portion of principal paid by the Paying Agent, and then, with an acceptable form of assignment executed in the name of the Bond Insurer, to the Fiscal Agent, which will then pay the unpaid portion of principal to such Bondholder subject to the terms of the Insurance Policy. (ii) In the event that the Paying Agent has notice that any payment of principal of or interest on a Bond has been recovered from a Bondholder pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying Agent shall, at the time it provides notice to the Bond Insurer, notify all Bondholders that in the event that any Bondholder's payment is so recovered, such Bondholder will be entitled to payment from the Bond Insurer to the extent of such recovery, and the Paying Agent shall furnish to the Bond Insurer its records evidencing the payments of principal of and interest on the Bonds which have been made by the Paying Agent and subsequently recovered from Bondholders, and the dates on which such payments were made. 40 02-1057 (iii) The Bond Insurer shall, to the extent it makes payment of principal of or interest on the Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Bond Insurance Policy and, to evidence such subrogation, (1) in case of subrogation as to claims for past due interest, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books maintained by the Registrar upon receipt from the Bond Insurer of proof of the payment of interest thereon to the holders of such Bonds and (2) in the case of subrogation as to claims for past due principal, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books for the Bonds maintained by the Registrar upon receipt of proof of the payment of principal thereof to the holders of such Bonds. Notwithstanding anything in this Resolution or the Bonds to the contrary, the Paying Agent shall make payment of such past due interest and past due principal directly to the Bond Insurer to the extent that the Bond Insurer is a subrogee with respect thereto. (C) Notices. The notice address for the Bond Insurer and the Fiscal Agent are: Financial Guaranty Insurance Company 125 Park Avenue New York, New York 10017 Attention: Risk Management State Street Bank and Trust Company, N.A. 61 Broadway New York, New York 10006 Attention: Corporate Trust Department (D) Amendments to Resolution. Notwithstanding anything in the Resolution to the contrary, any amendment or supplement to the Resolution shall be subject to the prior written consent of the Bond Insurer. Any rating agency rating the Bonds must receive notice of such amendment and a copy thereof at least 15 days in advance of its adoption. (E) Default -Related Provisions. (i) In determining whether an event of default has occurred under the Resolution or whether a payment on the Bonds has been made under the Resolution, no effect shall be given to payments made under the Bond Insurance Policy. (ii) The Bond Insurer shall receive immediate notice of any payment default and notice of any other default known to the Paying Agent or the City within 30 days of the Paying Agent's or the City's knowledge thereof. (iii) Except regarding the giving of notice of default to the Bondholders, the Bond Insurer shall be deemed to be the sole holder of the Bonds it has insured for so long as it has not failed to comply with its payment obligations under the Bond Insurance Policy. 41 02-1057 (iv) The Bond Insurer shall be included as a party in interest and as a party entitled to (i) notify the City, the Paying Agent, if any, or any applicable receiver of the occurrence of an event of default and (ii) request the Paying Agent or receiver to intervene in judicial proceedings that affect the Bonds or the security therefor. The Paying Agent or Default Trustee shall be required to accept notice of default from the Bond Insurer. (v) Any acceleration of the Bonds or annulment thereof shall be subject to the prior written consent of the Bond Insurer (if it has not failed to comply with its payment obligations under the Bond Insurance Policy). (vi) Remedies under this Resolution shall be cumulative with respect to the Default Trustee, if any, Bondholders and the Bond Insurer. If any remedial action is discontinued or abandoned, any Default Trustee, if any, Bondholders and Bond Insurer shall be restored to their former positions. (F) Successor Paying_Agent or Registrar. Any successor Paying Agent and Registrar must have combined capital, surplus and undivided profits of at least $50 million, unless this requirement is waived in writing by the Bond Insurer. No resignation or removal of the Paying Agent or Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent or Registrar, as applicable. The Bond Insurer shall be furnished with written notice of the resignation or removal of the Paying Agent or Registrar and the appointment of any successor thereto. SECTION 13.05. Severability. If any one or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to 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 severed from the remaining covenants, agreements or provisions of this Resolution or of the Series 2002C Bonds issued hereunder. SECTION 13.06. No Third -Party Beneficiaries. Except as herein otherwise expressly provided, nothing in this Resolution expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the parties hereto and the owners and holders of the Series 2002C Bonds issued under and secured by this Resolution, any rights, remedy or claim, legal or equitable, under or by reason of this Resolution or any provision hereof, this Resolution and all its provisions being intended to be and being for the sole and exclusive benefit of the parties hereto and the owners and holders from time to time of the Series 2002C Bonds issued hereunder. SECTION 13.07. Controlling Law; Members of City Not Liable. All covenants, stipulations, obligations and agreements of the City contained in this Resolution shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized by the Act and provided by the Constitution and laws of the State of Florida. No covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent or employee of the 42 02-1057 City in his individual capacity, and neither the members of the City nor any official executing the Series 2002C Bonds shall be liable personally on the Series 2002C Bonds or this Resolution or shall be subject to any personal liability or accountability by reason of the issuance or the execution by the City or such members thereof. SECTION 13.08. Effect of Covenants. All covenants, stipulations, obligations and agreements of the City contained in this Resolution shall be deemed to be covenants, stipulations, obligations and agreements of the City and of the Governing Body and of each department and agency of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall bind or inure to the benefit of the successor or successors thereof from time to time and any officer, board, body or commission to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law. Except as otherwise provided herein, all rights, powers and privileges conferred and duties and liabilities imposed upon the City or upon the Governing Body by the provisions of this Resolution shall be exercised or performed by the Governing Body, or by such other officers, board, body or commission as may be required by law to exercise such powers or to perform such duties. SECTION 13.09, Further Authorizations. The Mayor and the City Manager or either of them and the Clerk, the Director of Finance and the City Attorney and such other officers and employees of the City as may be designated by the Mayor and the City Manager or either of them are each designated as agents of the City in connection with the sale, issuance and delivery of the Bonds and are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, documents and contracts on behalf of the City, including, but not limited to, the filing of any required subscriptions for United States Treasury Securities — State and Local Government Series and the execution of documentation required in connection with the negotiated sale of the Bonds to the Underwriters, that are necessary or desirable in connection with the sale, execution and delivery of the Bonds, and which are specifically authorized or are not inconsistent with the terms and provisions of this Resolution, the Bond Purchase Agreement, the Escrow Deposit Agreement, the Paying Agent and Registrar Agreement, the Continuing Disclosure Commitment or any action relating to the Bonds heretofore taken by the City. Such officers and those so designated are hereby charged with the responsibility for the issuance of the Bonds. Any and all costs incurred in connection with the issuance of the Bonds and/or the refunding of the Refunded Bonds are hereby authorized to be paid from the proceeds of the Bonds. SECTION 13.10. Real of Inconsistent Resolution. All resolutions or parts thereof in conflict herewith are to the extent of such conflict superseded and repealed. 43 02-1057 SECTION 13.11. Effective Date. This Resolution shall become effective immediately upon its adoption and signature of the Mayor. l/ PASSED AND ADOPTED this ATTEST: VR'1�4A�ILLA. THO PS N CITY CLERK ANDRO VILARELLO ATTORNEY W6645:tr:AS 26th CORRECTNESS: day of September , 2002. ANUEL A. DIAZ, MAYO 1' If the Mayor does not sign this Resolution, it shall become effective at the end of ten calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission. 44 02-1057 Exhibit "A" Bond Purchase Agreement 02-105'7 Exhibit `B" Paying Agent and Registrar Agreement 02-1057 Exhibit "C" Preliminary Official Statement 02-1057 Exhibit "D" Optional Prepayment Price Notice 02-1©57 Exhibit "E" Continuing Disclosure Agreement 02-1057 ImTER-OFFICE MEMORANDUM Honorable Mayor and Members of - = September 19, 2002 The City Commission - - Issuance of Bonds to Refund Outstanding Sunshine State Notes ACity enez =-_--- er Attached please find a Supplemental Resolution for Item #15 on the September 26, 2002 Agenda. The changes to the original resolution authorizing the issuance of Special Obligation Non -Ad Valorem Revenue Refunding Bonds Series 2002C are as follows: • This resolution deletes the appointing an Escrow Agent since the loan will be paid off with bond proceeds on the day of the closing. • The appointment of Verification Agent is deleted since there will be no Escrow Agent Agreement. • Surety Bond language is added to the resolution. The surety bond will cost the City approximately $126,000 for a period of 15 years. This bond substitutes the reserve requirement of approximately $2,700,000. • Also included in the package is a copy of the Black Line Resolution indicating all the changes. CAG/RJN/PSC 021-057 15 RESOLUTION NO. 02- A RESOLUTION OF THE CITY OF MIAMI, FLORIDA AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $30,000,000 IN AN AGGREGATE PRINCIPAL AMOUNT OF SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS, SERIES 2002C, FOR THE PURPOSE OF PREPAYING ALL OF THE CITY'S OUTSTANDING LOAN PAYMENTS DUE UNDER THOSE CERTAIN LOAN AGREEMENTS DATED AS OF MAY 12, 1994 AND AS OF OCTOBER 25, 1995 BETWEEN THE CITY AND THE SUNSHINE STATE GOVERNMENTAL FINANCING COMMISSION; PROVIDING FOR THE PAYMENT OF SUCH REFUNDING BONDS FROM LEGALLY AVAILABLE NON -AD VALOREM REVENUES BUDGETED AND APPROPRIATED BY THE CITY FOR SUCH PURPOSE; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; DELEGATING TO THE CITY MANAGER THE DETERMINATION OF CERTAIN MATTERS AND DETAILS CONCERNING THE BONDS; AUTHORIZING THE NEGOTIATED SALE OF THE BONDS; APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT IN CONNECTION THEREWITH; APPOINTING A PAYING AGENT AND BOND REGISTRAR; APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT AND REGISTRAR AGREEMENT; APPROVING UNCERTIFICATED, BOOK - ENTRY ONLY REGISTRATION OF SAID BONDS WITH THE DEPOSITORY TRUST COMPANY; ACCEPTING THE COMMITMENTS OF FINANCIAL GUARANTY INSURANCE COMPANY FOR A MUNICIPAL BOND NEW ISSUE INSURANCE POLICY TO INSURE SAID BONDS AND A MUNICIPAL BOND DEBT SERVICE RESERVE FUND POLICY FOR SAID BONDS AND TO EXECUTE AND DELIVER ANY RELATED AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FOR A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT AND THE SELECTION OF A FINANCIAL PRINTER THEREFOR; COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 15C2-12 AND APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A {OR548757;1} 02-1057 CONTINUING DISCLOSURE AGREEMENT WITH RESPECT THERETO; AUTHORIZING ALL REQUIRED ACTIONS; AND PROVIDING AN EFFECTIVE DATE. At {OR548757;1 } 02-105'7 TABLE OF CONTENTS Page ARTICLE I AUTHORITY FOR THIS RESOLUTION................................................................ I SECTION1.01. Authority................................................................................................. I ARTICLEII DEFINITIONS....................................................................................................... 1 SECTION 2.01. Definitions............................................................................................... 1 SECTION 2.02. Singular/Plural......................................................................................... 7 ARTICLEIII FINDINGS.............................................................................................................. 8 SECTION 3.01. Findings and Determinations.................................................................. 8 ARTICLE IV THIS INSTRUMENT TO CONSTITUTE CONTRACT ...................................... 9 SECTION4.01. Contract................................................................................................... 9 ARTICLE V AUTHORIZATION OF THE REFUNDING OF THE REFUNDED BONDS; DESCRIPTION, FORM AND TERMS OF BONDS ............................. 9 SECTION 5.01. Authority for Refunding of Refunded Bonds and Issuanceof Bonds................................................................................... 9 SECTION 5.02. Authorization of Bonds; Terms; Redemption and Form ofBonds.................................................................................................. 9 SECTION 5.03. Execution of Bonds............................................................................... 11 SECTION 5.04. Bonds Mutilated, Destroyed, Stolen or Lost ......................................... 11 SECTION 5.05. Provisions for Redemption.................................................................... 11 SECTION 5.06. Effect of Notice of Redemption............................................................ 12 SECTION 5.07. Redemption of Portion of Registered Bonds ........................................ 12 SECTION 5.08. Bonds Called for Redemption not Deemed Outstanding ...................... 13 SECTION 5.09. Date for Payment of Bonds................................................................... 13 SECTION 5.10. Form of Bonds....................................................................................... 13 SECTION 5.11. Application of Bond Proceeds.............................................................. 21 SECTION 5.12. Temporary Bonds.................................................................................. 21 SECTION 5.13. Authorization and Approval of Bond Purchase Agreement............................................................................................. 21 SECTION 5.14. Authorization and Approval of Negotiated Sale of Bonds ................... 22 SECTION5.15. Reserved................................................................................................ 22 SECTION 5.16. Approval of Form of Paying Agent and Registrar Agreement; Appointment of Paying Agent and Bond Registrar................................................................................................ 22 SECTION 5.17. Preliminary Official Statement; Official Statement .............................. 22 SECTION 5.18. Election to Pay Optional Prepayment Price .......................................... 23 SECTION 5.19. Municipal Bond Insurance; Reserve Product ........................................ 23 SECTION 5.20. Qualification for the Depository Trust Company ................................. 23 ARTICLE VI SOURCE OF PAYMENT OF BONDS; SPECIAL OBLIGATIONS OF THE CITY........................................................................... 23 SECTION 6.01. Bonds Not to be General Obligation or Indebtedness of (OR548757;1 ) OR540859;3 111 02-1057 theCity.................................................................................................. 23 SECTION6.02 Pledge.....................................................................................................23 SECTION 6.03 Covenant to Budget and Appropriate..................................................... 24 ARTICLE VII CREATION AND USE OF FUNDS AND ACCOUNTS; DISPOSITIONOF REVENUES.......................................................................... 24 SECTION7.01. Creation of Funds and Accounts............................o,.:........................... 24 SECTION 7.02. Disposition of Covenant Revcnues....................................................... 25 SECTION 7.03. Use of Moneys in the Sinking Fund..................................................2829 SECTION 7.04. Application of Moneys in the Reserve Fund ...................................... SECTION 7.05. Transfer to Paying Agent.................................................................. 2-92=0 SECTION 7.06 First Union Escrow Agreement.......................................................... 2939 ARTICLE VIII DEPOSITARIES OF FUNDS, SECURITY FOR DEPOSITS AND INVESTMENT OF MONEYS................................................................ 3831 SECTION 8.01. Deposits Constitute Trust Funds .......................................................303 SECTION 8.02. Investment of Moneys.......................................................................303 ARTICLE IX GENERAL COVENANTS OF THE CITY ......................................................3 32 SECTION 9.01. Anti -Dilution Test.............................................................................332 SECTION 9.02. Notice of Deposit Shortfall............................................................... 4R2 SECTION 9.03. Annual Audit.....................................................................................31-32 ARTICLE X ISSUANCE OF ADDITIONAL INDEBTEDNESS .......................................... 3-f SECTION 10.01. Issuance of Additional Indebtedness .... .......................................... .P_U ARTICLE XI EVENTS OF DEFAULT; REMEDIES............................................................ 3233 SECTION 11.01. Events of Default............................................................................. 3231 SECTION 11.02. Enforcement of Remedies...............................................................3334 SECTION 11.03. Effect of Discontinuing Proceedings .............................................. 3334 SECTION 11.04. Directions to Default Trustee as to Remedial Proceedings....................................................................................... 3435 SECTION 11.05. Restrictions on Actions by Individual Bondholders ....................... 3435 SECTION 11.06. Subrogation.....................................................................................3435 SECTION 11.07. Bond Insurer's Rights Upon Events of Default .............................. 3536 ARTICLE XII SECONDARY MARKET DISCLOSURE..................................................... 36L6 SECTION 12.01. Continuing Disclosure Undertaking ................................................ 333¢ ATICLE XIII MISCELLANEOUS PROVISIONS.............................................................. 363 SECTION 13.01. Modification or Amendment........................................................... 3637 SECTION 13.02. Defeasance...................................................................................... 363 SECTION 13.03. Tax Covenants.................................................................................333$ SECTION 13.04. Bond Insurance Policy Provisions .................................................. 3$L9 SECTION 13.05. Severability..................................................................................... 4442 SECTION 13.06. No Third -Party Beneficiaries.......................................................... 4442 SECTION 13.07. Controlling Law; Members of City Not Liable ............................... 411; {OR548757; I } OR540859;3 iv 02-1057 SECTION 13.08. Effect of Covenants......................................................................... 41-4, SECTION 13.09. Further Authorizations.................................................................... 444a SECTION 13.10. Repeal of Inconsistent Resolution ................................................... 42-43 SECTION 13.11. Effective Date.................................................................................. 4243 Exhibit A - Bond Purchase Agreement Exhibit B - Paying Agent and Registrar Agreement Exhibit C - Preliminary Official Statement Exhibit D - Optional Prepayment Price Notice Exhibit E - Continuing Disclosure Agreement Of. (ORS48757;1) OR540859;3 V 02-1057 ARTICLE I AUTHORITY FOR THIS RESOLUTION SECTION 1.01. Authority. This Resolution is adopted pursuant to Chapter 166, Florida Statutes; Article VIII, Section 2 of the Constitution of the State of Florida; the City Charter of the City of Miami, Florida; and other applicable provisions of law (collectively, the "Act"). ARTICLE II DEFINITIONS SECTION 2.01. Definitions. As used herein, unless the context otherwise requires: "Act" shall have the meaning ascribed in Article I hereof. "Amortization Installment" means the funds to be deposited in the Sinking Fund in a given Bond Year for the payment at maturity or redemption of a portion of Term Bonds, as established by the City at or before the delivery of the Bonds. "Annual Budget" means the budget or budgets, as amended and supplemented from to time to time, prepared by the City for each Fiscal Year in accordance with the laws of the State of Florida. "Authorized Depository" means any bank, trust company, national banking association, savings and loan association, savings bank or other banking association selected by the City as a depository, which is authorized under Florida law to be a depository of municipal funds and which has complied with all applicable state and federal requirements concerning the receipt of City funds. "Bond Amortization Account" means the Bond Amortization Account within the Sinking Fund established pursuant to Section 7.01 of this Resolution. "Bond Counsel" means nationally recognized counsel experienced in matters relating to the validity of, and the exclusion from gross income for federal income tax purposes of interest on, obligations of states and their political subdivisions. "Bond Insurance Policy" means the municipal bond new issue insurance policy issued by the Bond Insurer that guarantees payment of principal of and interest on the Series 2002C Bonds. "Bond Insurer" means Financial Guaranty Insurance Company, a New York stock it*urance company, or any successor thereto. "Bond Purchase Agreement" means the Bond Purchase Agreement between the Underwriters and the City with respect to the sale of the Bonds from the City to the Underwriters. "Bond Registrar" means, initially, as to the Series 2002C Bonds, Wachovia Bank, National Association and, thereafter, any other agent designated from time to time by the City, {OR548757;1} OR540859:3 02-1057 by resolution, to maintain the registration books for the Bonds or to perform other duties with respect to registering the transfer of the Bonds. "Bond Service Requirement" means for a given Bond Year the remainder, after subtracting any accrued interest for that year that has been deposited into the Interest Account for that purpose, from the sum of: (1) The amou:it required to pay the interest c,ming due on the Bonds during that Bond Year. (2) The amount required to pay the principal of Serial Bonds and the principal of Term Bonds, and (3) The Amortization Installment for all Term Bonds for that Bond Year. "Bond Year" means the annual period beginning on the first day of October of each year and ending on the last day of September of the following year; provided that when such term is used to described the period during which deposits are to be made pursuant to Article VII hereof to amortize the principal and interest on the Bonds maturing or becoming subject to redemption, the principal and interest maturing or becoming subject to redemption on the first day of the month immediately succeeding any Bond Year shall be deemed to mature or become subject to redemption on the last day of the preceding Bond Year. "Bondholder" or "registered owner" means the person in whose name any Bond is registered on the registration books maintained by the Bond Registrar. "Bonds" mean collectively the Series 2002C Bonds. "Business Day" means a day on which banking business is transacted in the city or cities in which the Paying Agent has its principal corporate trust offices and on which the New York Stock Exchange is open. "City" means the City of Miami, Florida. "City Attorney" means the City Attorney of the City or any designated assistant City Attorney. "City Commission" means the city commission of the City. ,t. "City Manager" means the City Manager of the City or any Assistant City Manager or other designee of the City Manager. "Clerk" means the City Clerk or any Deputy City Clerk of the City. "Closing Date" means the date of issuance and delivery of the Bonds to the Underwriters, being the original purchasers thereof. (OR548757;1) OR540859;3 2 02-1057 "Code" means the Internal Revenue Code of 1986, as amended, and all temporary, proposed or permanent implementing regulations promulgated or applicable thereunder. "Covenant Revenues" means the legally available non -ad valorem revenues budgeted and appropriated to pay the principal of, redemption premium, if any, and interest on the Series 2002C Bonds pursuant to Section 6.03 hereof. "Director of Finance" means the Director of Finance of the City or his designee. "First Union Escrow Agreement" means that certain Escrow Agreement dated as of March .17, 1997, by and among First Union National Bank of Florida (now known as Wachovia Bank, National Association), The Oversight Board, acting through its committee, the Fiscal Sufficiency Advisory Board, and the City, as the same may be supplemented or amended. "Fiscal Year" means the period commencing on October 1 of each year and ending on the succeeding September 30, or such other consecutive 12 -month period as may be hereafter designated as the fiscal year of the City pursuant to general law. "Governing Body" means the City Commission. "Government Obligations" means those obligations described in paragraph (1) of the definition of Permitted Investments, provided such obligations are non -callable and CATS, STRPS, Refcorp interest strips, TIGRS or defeased municipal bonds rated AAA by S&P or Aaa by Moody's (or any combination of the foregoing). "Interest Account" means the Interest Account within the Sinking Fund established pursuant to Section 7.01 of this Resolution. "Mayor" means the Mayor of the City or, in his absence or inability to perform, such member of the City Commission as may be appointed as acting Mayor of the City. "Maximum Bond Service Requirement" means, as of any particular date of calculation, the largest Bond Service Requirement for any remaining Bond Year, except that with respect to any Bonds for which Amortization Installments have been established, the amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount of such Bonds that are to be redeemed or paid from Amortization Installments to be made in prior Bond Years. "Moody's" means Moody's Investors Service and its successors. R. "Official Statement" means that certain Official Statement with respect to the issuance of the Bonds, as such Officidl Statement shall be approved by the City Manager in accordance with the provisions of this Resolution. "Outstanding" or "Bonds outstanding" means all Bonds which have been issued pursuant to this Resolution except: ;OR548757;1) OR540859;3 02-1057 (a) Bonds cancelled after purchase in the open market or because of payment at or redemption prior to maturity; (b) Bonds for the payment or redemption of which pursuant to Section 13.02 of this Resolution cash funds or Government Obligations or any combination thereof shall have been theretofore irrevocably set aside in a special account with the Paying Agent or an Authorized Depositary acting as an escrow agent (whether upon or prior to the maturity or redemption date of any such Bonds) in an amount which, together with earnings on such Government Obligations, will be sufficient to pay the principal of and interest on such Bonds at maturity or upon their earlier redemption; provided that, if such Bonds are to be redeemed before the maturity thereof, notice of such redemption shall have been given according to the requirements of this Resolution or irrevocable instructions directing the timely publication of such notice and directing the payment of the principal of, redemption premium, if any and interest on all bonds at such redemption dates shall have been given to the Paying Agent; and (c) Bonds which are deemed paid pursuant to Section 5.08 hereof or in lieu of which other Bonds have been issued under Section 5.04 hereof. "Paying Agent" means, initially, as to the Series 2002C Bonds, Wachovia Bank, National Association and, thereafter, any other agent which is an Authorized Depository, designated by the City by resolution to serve as a Paying Agent for the Bonds that shall have agreed to arrange for the timely payment of the principal of, redemption premium, if any, and interest on the Bonds to the registered owners thereof, from funds made available therefor by the City, and any successors designated pursuant to this Resolution. "Paying Agent and Registrar Agreement" means the Paying Agent and Registrar Agreement with respect to the Series 2002C Bonds between the City and Wachovia Bank, National Association or any successor thereto in its capacity as Paying Agent and Bond Registrar. "Permitted Investments" means any investment permitted under applicable law, including units of participation in the Local Government Surplus Funds Trust Fund established pursuant to Part IV, Chapter 218, Florida Statutes and 1. Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, provided that the full faith and credit of the United States of America must be pledged to any such direct obligation or guarantee ("Direct Obligations"). (OR548757;1) OR540859;3 Direct obligations and fully guaranteed certificates of beneficial interest of the Export -Import Bank of the United States; consolidated debt obligations and letter of credit -backed issues of the Federal Home Loan Banks; participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation ("FHLMCs"); debentures of the Federal Housing Administration; mortgage- backed securities (except stripped mortgage securities which are valued greater 4 02--1057 than par on the portion of unpaid principal) and senior debt obligations of the Federal National Mortgage Association ("FNMAs"); participation certificates of the General Services Administration; guaranteed mortgage-backed securities and guaranteed participation certificates of the Government National Mortgage Association ("GNMAs"); guaranteed participation certificates and guaranteed pool certificates of the Small Business Administration; debt obligations and letter of credit -backed issues of the Student Loan Nfarketing Association; local authority bonds of the U.S. Department of Housing & Urban Development; guaranteed Title XI financings of the U.S. Maritime Administration; guaranteed transit bonds of the Washington Metropolitan Area Transit Authority; Resolution Funding Corporation securities. Direct obligations of any state of the United States of America or any subdivision or agency thereof whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service and "A" or better by Standard & Poor's Corporation, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service and "A" or better by Standard & Poor's Corporation. 4. Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase "P-1" by Moody's Investors Service ("Moody's") and "A-1" or better by Standard & Poor's Corporation ("S&P"). Federal funds, unsecured certificates of deposit, time deposits or bankers acceptances (in each case having maturities of not more than 365 days) of any domestic bank including a branch office of a foreign bank which branch office is located in the United States, provided legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office or any branch of such bank, which, at the time of purchase, has a short-term "Bank Deposit" rating of "Pl" by Moody's and a "Short -Term CD" rating of "A-1" or better by S&P. Deposits of any bank or savings and loan association which has combined capital, surplus and undivided profits of not less than $3 million, provided such deposits are continuously and fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation. "t- 7. Investments in money-market funds rated "AAAm" or "AAAm-G" by S&P. (ox548757;t ) OR540859;3 Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated "P-1" or "A3" or better by Moody's, and "A-1" or "A-" or better by S&P, provided: 02-1057 (a) A master repurchase agreement or specific written repurchase agreement governs the transaction; (b) The securities are held free and clear of any lien by the Paying Agent or an independent third party acting solely as agent ("Agent") for the Paying Agent, and such third party is (i) a Federal Reserve Bank, (ii) a bank which is a member of the Federal Deposes -Insurance Corporation and which has cor bined capital, surplus and undivided profits of not less than $50 million, or (iii) a bank approved in writing for such purpose by Financial Guaranty Insurance Company, and the Paying Agent shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Paying Agent; (c) A perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306 et seg. or 31 C.F.R. 350 et seq. in such securities as created for the benefit of the Paying Agent; (d) The repurchase agreement has a term of 180 days or less, and the Paying Agent or the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two (2) business days of such valuation; and (e) The fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 103%. 9. Investment agreements, the issuer, form and substance of which are specifically approved by the Bond Insurer. "Pledged Revenues" means the Covenant Revenues and income received from the investment of moneys deposited in the funds and accounts established hereunder. "Policy Costs" shall have the meaning ascribed to that term in Section 7.02 of this Resolution. "Principal Account" means the Principal Account within the Sinking Fund established pursuant to Section 7.01 of this Resolution. At "Preliminary Official Statement" means the Preliminary Official Statement relating to the Bonds, to be dated as of the date of its distribution. "Rebate Amount" shall have the meaning ascribed to that term in Section 13.03 of this Resolution. "Redemption Account" means the Redemption Account within the Sinking Fund established pursuant to Section 7.01 of this Resolution. {OR548757;1 } OR540859;3 0 02-1057 "Refunded Bonds" means the loan payments due under those certain loan agreements dated as of May 12, 1994 and as of October 25, 1995 between the City and the Sunshine State Governmental Financing Commission (the "Outstanding Loan Agreements"). "Reserve Fund" means the Reserve Fund established pursuant to Section 7.01 of this Resolution. "Rescue Product" means the Municiral Bond Debt Service Reserve Fund Policy issued by the Bond Insurer in connection with the original issuance of the Bonds or other credit facility meting the terms and conditions of Section 7.02(4) of this Resolution. "Reserve Product Provider" means the Bond Insurer or any other provider of a Reserve Product for the Bonds. "Reserve Requirement" means as of the date of any calculation, an amount equal to the least of (i) the Maximum Bond Service Requirement with respect to the Series 2002C Bonds, (ii) 125% of the average Bond Service Requirement with respect to the Series 2002C Bonds, or (iii) ten percent (10%) of the proceeds of the Series 2002C Bonds (adjusted to reflect original issue discount or premium, if and to the extent required by the Code). "S&P" means Standard & Poor's Ratings Group and its successors. "Serial Bonds" means all Series 2002C Bonds other than Term Bonds. "Series 2002C Bonds" means the City of Miami, Florida Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2002C, authorized to be issued pursuant to this Resolution in the aggregate principal amount not to exceed $30,000,000. "Sinking Fund" means the Sinking Fund established pursuant to Section 7.01 of this Resolution. "Term Bonds" means Bonds for which Amortization Installments are established on or before the date of delivery of the Bonds in accordance with the provisions of this Resolution. "Underwriters" means collectively, Salomon Smith Barney Inc., Lehman Brothers, UBS PaineWebber Inc., Jackson Securities Inc., Morgan Stanley & Co., Incorporated and JP Morgan Securities, Inc. SECTION 2.02. Singular/Plural. Words importing singular number shall include the Acral number in each case and vice versa, and words importing persons shall include firms, corporations or other entities including governments or governmental bodies. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neutral genders. {OR548757;1} OR540859;3 02-105'7 ARTICLE III FINDINGS SECTION 3.01. Findings and Determinations. It is hereby ascertained, determined and declared that: A. The principal of, redemption premium, if any, and interest on the Bonds and all , required sinking fund, reserve and other payments with respect thereto shall be payable from the proceeds of the Bonds and from moneys deposited in the funds and accounts pledged by this Resolution which the City has full authority to irrevocably pledge. The City shall never be required to levy ad valorem taxes on any real or personal property to pay the principal of, redemption premium, if any, or interest on the Bonds or to make any of the required sinking fund, reserve and other payments required herein, and the Bonds shall not constitute a lien on any real or personal property owned by or situated within the limits of the City. B. It is in the best interest of the City, its citizens and taxpayers to take advantage of the existing favorable market conditions and the prevailing low interest rates by fixing the interest rates on certain debt of the City through the issuance of the Bonds in order to provide funds to refund the Refunded Bonds. C. The City is authorized under the Act to issue refunding bonds and to deposit the proceeds thereof in escrow or otherwise to provide for the payment when due of the principal of, redemption premium, if any, and interest on the Refunded Bonds. D. In accordance with Section 218.385(1), Florida Statutes, as amended, the City Commission hereby finds, determines and declares, based upon the advice of RBC Dain Rauscher Inc., financial advisor to the City (the "Financial Advisor"), that a negotiated sale of the Bonds is in the best interest of the City for the following reasons: (i) the complex structure and timing of the issuance of the Bonds and the refunding of the Refunded Bonds require extensive planning, and it is not practical for the City and the Financial Advisor to engage in such planning within the time constraints and uncertainties inherent in a competitive bidding process; and (ii) it is necessary to be able to sell the Bonds when market conditions are most favorable in order to attain the most favorable interest rates on the Bonds; the vagaries of the current and near future municipal bond market demand that the Underwriters have the maximum time and flexibility to price and market the Bonds, in ' order to obtain the most favorable interest rates available. E. It is in the best interest of the City based upon the advice of the Financial Advisor to accept the commitments of the Bond Insurer to provide the Bond Insurance Policy and Reserve Product for the Bonds. (OR548757;] ) OR540859;3 8 02-1057 ARTICLE IV THIS INSTRUMENT TO CONSTITUTE CONTRACT SECTION 4.01. 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, this Resolution shall be deemed to be and shall constitute a contract between the City and the Bondholders. The covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection and security of the Bondholders and all Bonds shall be of equal rank and without preference, priority or distinction over any other thereof, except as expressly provided herein. - ARTICLE V AUTHORIZATION OF THE REFUNDING OF THE REFUNDED BONDS; DESCRIPTION, FORM AND TERMS OF BONDS SECTION 5.01. Authority for Refunding of Refunded Bonds and Issuance of Bonds. The refunding of the Refunded Bonds is hereby authorized. Subject and pursuant to the provisions hereof, Series 2002C Bonds to be known as "City of Miami, Florida, Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2002C" are hereby authorized to be issued at one time or as needed in one or more series in an aggregate principal amount of not exceeding Thirty Million Dollars ($30,000,000), for the purpose of refunding the Refunded Bonds, to fund the Reserve Requirement by the purchase of a Reserve Product for the Bonds and paying the costs of issuance of the Bonds. SECTION 5.02. Authorization of Bonds; Terms; Redemption and Form of Bonds. The City Manager is hereby authorized and directed to award the Bonds to the Underwriters at a purchase price of not less than ninety-nine percent (99%) (inclusive of underwriters' discount, but not inclusive of original issue discount; the original issue discount may be such as is necessary to market and sell the Bonds) of the original principal amount of the Bonds and at a true interest cost rate ("TIC") not to exceed four and one-quarter percent (4.25%) (the "Maximum TIC") per annum. The Bonds shall be dated such date, shall be issued in such principal amount, shall bear interest from the date thereof, payable on the first day of April and October of each year, commencing on such date, at the rates, shall mature on the first day of October of each year in accordance with the maturity schedule, but not later than thirty (30) years from their date of issuance, shall be issued as Serial Bonds and/or Term Bonds and if such Bonds are issued as Term Bonds, be subject to payment from Amortization Installments by operation of the Sinking Fund as set forth in the Bond Purchase Agreement, as such dates, principal amount, rates and maturity schedule may be approved by the City Manager, with the e ecution and delivery of the Bond Purchase Agreement as described in Section 5.13 hereof bing conclusive evidence of the City's approval, provided that the TIC shall not exceed the Maximum TIC. The Bonds shall be issued as fully registered, book -entry only bonds in the denomination of $5,000 each or any integral multiple thereof through the book -entry only system maintained by The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Bonds, as further described in Section 5.20 hereof. The Bonds may have endorsed thereon such legends or text as may be necessary or appropriate to conform to any (OR548757;1) OR540859;3 9 02-105'7 applicable rules and regulations of any governmental authority or any usage or requirement of law with respect thereto. Each of the Bonds shall be numbered consecutively from 1 upward preceded by the letters "CR" prefixed to the number of the Series 2002C Bonds. The principal of and redemption premium, if any, on the Bonds shall be payable upon presentation and surrender at the principal office of the Paying Argent. Interest on the Bonds shall be paid by check or draft drawn upon the Paying Agent and mailed to the registered owners of the Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at the close of business on the 15th day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Bonds subsequent to such Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date; provided, however, that (i) if ownership of Bonds is maintained in a book -entry only system by a securities depository, such payment may be made by automatic funds transfer (wire) to such securities depository or its nominee or (ii) if such Bonds are not maintained in a book -entry only system by a securities depository, upon written request of the holder of $1,000,000 or more in principal amount of Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such holder (such bank being a bank within the continental United States), if such holder has advanced to the Paying Agent the amount necessary to pay the cost of such wire transfer or authorized the Paying Agent to deduct the cost of such wire transfer from the payment due such holder. In the event of any default in the payment of interest, such defaulted interest shall be payable to the persons in whose names such Bonds are registered at the close of business on a special record date for the payment of such defaulted interest as established by notice deposited in the U.S. mails, postage prepaid, by the Paying Agent to the registered owners of the Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth (5th) day (whether or not a business day) preceding the date of mailing. The registration of any Bond may be transferred upon the registration books upon delivery thereof to the principal office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Bondholder or his attorney-in-fact or legal representative containing written instructions as to the details of the transfer of such Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Bond, the Bond Registrar shall at the earliest practical time in accordance with the terms hereof enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of fupds. The City and the Bond Registrar may charge the Bondholder for the registration of every transfer or exchange of a Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the City) to be paid with respect to the registration of such transfer, and may require that such amounts be paid before any such new Bond shall be delivered. The City, the Bond Registrar, and the Paying Agent may treat the registered owner of any Bond as the absolute owner of such Bond for the purpose of receiving payment of the principal thereof and the interest and redemption premium, if any, thereon. Bonds may be exchanged at { OR548757; I I OR540859;3 10 02-105'7 the office of the Bond Registrar for a like aggregate principal amount of Bonds, or other authorized denominations of the same Series and maturity. SECTION 5.03. Execution of Bonds. The Bonds shall be executed in the name of the City by the City Manager and the seal of the City shall be imprinted, reproduced or lithographed on the Bonds and attested to and countersigned by the Clerk. In addition, the City Attorney or any Assistant City Attorney shall sign the Bonds, showing -approval of the form and correctness thereof. The signatures of the City Manager, the Clerk and the City Attorney or Assistant City Attorney on the Bonds may be by facsimile. If any officer whose signature appears on the Bonds ceases to hold office before the delivery of the Bonds, his signature shall nevertheless be valid and sufficient for all purposes. In addition, any Bond may bear the signature of, or may be signed by, such persons as at the actual time of execution of such Bond shall be the proper officers to sign such Bond, although at the date of such Bond or the date of delivery thereof such persons may not have been such officers. Only such of the Bonds as shall have been endorsed thereon by a certificate of authentication substantially in the form hereinafter set forth in Section 5.10 hereof, duly manually executed by the Bond Registrar, shall be entitled to any right or benefit under this Resolution. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly manually executed by the Bond Registrar, and such certificate of the Bond Registrar upon any such Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The Bond Registrar's certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the Bond Registrar, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time. The foregoing notwithstanding, if, at any time, the City serves as the Bond Registrar under this Resolution, any Bonds delivered during such time that the City serves as the Bond Registrar shall be authenticated by the manual signature of the Director of Finance, and the registered owner of any Bond so authenticated shall be entitled to the benefits of this Resolution. SECTION 5.04. Bonds Mutilated, Destroyed, Stolen or Lost. If any Bond is mutilated, destroyed, stolen or lost, the City or its agent may, in its discretion (i) deliver a duplicate replacement Bond of the same Series, or (ii) pay a Bond that has matured or is about to mature. A mutilated Bond shall be surrendered to and cancelled by the Bond Registrar. The Bondholder must furnish the City or its agent proof of ownership of any destroyed, stolen or lost Bond; post satisfactory indemnity; comply with any reasonable conditions the City or its agent may prescribe; and pay the reasonable expenses of the City or its agent. Any such duplicate Bond shall constitute an original contractual obligation on the part of the City whether or not the destroyed, stolen or lost Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal and proportionate benefits and rights as to lien on, and source of payment of and security for payment from, the funds pledged to the payment of the Bond so mutilated, destroyed, or stolen or lost. SECTION 5.05. Provisions for Redemption. The Bonds may be made subject to redemption prior to their maturity at such times and in such manner as set forth in the Bond Purchase Agreement and approved by the City Manager pursuant to the authority described {OR548757; I } OR540859;3 11 02-1057 herein. Notice of redemption shall be given by deposit in the U.S. mails of a copy of a redemption notice, postage prepaid, at least thirty (30) days before the redemption date to all registered owners of the Bonds or portions of the Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Notice of the redemption of Bonds, other than mandatory sinking fund redemption and excepting any notice that refers to Bonds that are the subject of an advance refunding, shall be circulated only if sufficient funds have been deposited with the -Paying Agent to pay the redemption price u C the Bonds to be redeemed. Fai"lire to mail any such notice to a :,cgistered owner of a Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Bond or portion -thereof with respect to which no failure or defect occurred. Such notice shall set forth the date fixed for redemption, the rate of interest bome by each Bond being redeemed, the name and address of the Bond Registrar and Paying Agent, the redemption price to be paid and, if less than all of the Bonds then Outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall also state that on or after the redemption date, upon surrender of such Bond, a new Bond or Bonds of the same Series in a principal amount equal to the unredeemed portion of such Bond will be issued. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the owner of such Bond receives such notice. The Bond Registrar shall not be required to transfer or exchange any Bond after the mailing of a notice of redemption nor during the period of fifteen (15) days next preceding mailing of a notice of redemption. SECTION 5.06. Effect of Notice of Redemption. Notice having been given in the manner and under the conditions hereinabove provided, the Bonds or portions of Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such Bonds or portions of Bonds on such date. On the date so designated for redemption, moneys for payment of the redemption price being held in separate accounts by the Paying Agent in trust for the registered owners of the Bonds or portions thereof to be redeemed, all as provided in this Resolution, interest on the Bonds or portions of Bonds so called for redemption shall cease to accrue, such Bonds and portions of Bonds shall cease to be entitled to any lien, benefit or security under this Resolution and shall be deemed paid hereunder, and the registered owners of such Bonds or portions of Wnds shall have no right in respect thereof except to receive payment of the redemption price thereof and, to the extent provided in the Section 5.07 hereof, to receive Bonds for any unredeemed portions of the Bonds. SECTION 5.07. Redemption of Portion of Registered Bonds. In case part but not all of an Outstanding fully registered Bond shall be selected for redemption, the registered owner thereof shall present and surrender such Bond to the designated Paying Agent for payment of the principal amount thereof so called for redemption, and the City shall execute and deliver to or upon the order of such registered owner, without charge therefor, for the unredeemed balance of {OR548757;1 } OR540859;3 12 02-1057 the principal amount of the Bonds so surrendered, a Bond or Bonds of the same Series fully registered as to principal and interest. SECTION 5.08. Bonds Called for Redemption not Deemed Outstanding. Bonds or portions of Bonds that have been duly called for redemption under the provisions hereof, and with respect to which amounts sufficient to pay the principal of, redemption premium, if any, and interest to the date fixed for redemption shall be delivered to and held in separate trust accounts by an escrow agent, any Authorized Depository or any Paying Agent (other than th,- City) in trust for the registered owners thereof, as provided in this Resolution, shall not be deemed to be Outstanding under the provisions of this Resolution and shall cease to be entitled to any lien, benefit or security under this Resolution, except to receive the payment of the redemption price on or after the designated date of redemption from moneys deposited with or held by the escrow agent, Authorized Depository or Paying Agent (other than the City), as the case may be, for such redemption of the Bonds and, to the extent provided in the preceding subsection, to receive Bonds of the same Series for any unredeemed portion of the Bonds. SECTION 5.09. Date for Payment of Bonds. If the date for payment of the principal of, redemption premium, if any, or interest on the Bonds shall be a Saturday, Sunday, legal holiday or, if the Paying Agent is then an entity other than the City, a day on which banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and effect as if made on the nominal date of payment. SECTION 5.10. Form of Bonds. The text of the Bonds, the form of assignment for such Bonds and the authentication certificate to be endorsed thereon shall be substantially in the following form, with such omissions, insertions and variations as may be necessary or desirable and authorized by this Resolution or as may be approved and made by the officers of the City executing the same, such execution to be conclusive evidence of such approval, including, without limitation, such changes as may be required for the issuance of uncertificated public obligations: No. CR - [Form of Bond) UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF MIAMI SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BOND, SERIES 2002C Interest Rate Maturity Date Dated Date CUSIP % October 1, , 2002 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS (OR548757;1) OR540859;3 13 The City of Miami, Florida (hereinafter called the "City"), for value received, hereby promises to pay to the Registered Owner identified above, or to registered assigns or legal representatives, to the extent and from the sources pledged therefor, as described herein, on the Maturity Date identified above (or earlier as hereinafter provided), the Principal Amount identified above, upon presentation and surrender hereof at the designated office of Wachovia Bank, National Association, as the Paying Agent for the Bonds, or any successor Paying Agent appointed by the City pursuant to the Resolution hereinafter referred to, and to pay, to the -extent and from the aources herein described, interea, on the principal sum from the d.,te hereof, or from the most recent interest payment date to which interest has been paid, at the Interest Rate per annum identified above, until payment of the principal sum, or until provision for the payment thereof has been duly provided for, such interest being payable on the first day of March and the first day of September of each year, commencing on April 1, 2003. Interest will be paid by check or draft mailed to the registered owner hereof at his address as it appears on the registration books of the City maintained by Wachovia Bank, National Association, as Bond Registrar, at the close of business on the fifteenth (15th) day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Bond subsequent to each Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name such Bond is registered at the close of business on a special record date for the payment of such defaulted interest as established by notice by deposit in the U.S. mails, postage prepaid, by the Bond Registrar to the registered owners of Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth (5th) day (whether or not a business day) preceding the date of mailing. This Bond is one of an authorized issue of bonds in the aggregate principal amount of $ of like date, tenor and effect, except as to number, maturity (unless all bonds mature on the same date) and interest rate, issued to provide funds to prepay all of the City's outstanding loan payments due under those certain loan agreements dated as of May 12, 1994 and as of October 25, 1995 between the City and the Sunshine State Governmental Financing Commission (the "Refunded Bonds" ), pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly Article VII, Section 12 of the Constitution, the Charter of the City, Chapter 166, Florida Statutes, Resolution No. 02 - duly adopted by the City on September 26, 2002 (the "Resolution"), and other applicable provisions of law. This Bond is subject to all the terms and conditions of the Resolution, and capitalized terms not otherwise defined herein shall have the same meanings ascribed to them in the Resolution. a�. This Bond and the interest hereon is payable solely from and secured by a prior lien upon and pledge of certain revenues of the City held in the funds and accounts created pursuant to the Resolution, including, investment earnings thereon, all in the manner and to the extent provided in the Resolution. All terms used herein in capitalized form and not otherwise defined shall have the meanings ascribed thereto in the Resolution. Pursuant to the Resolution, the City has covenanted and agreed, to the extent permitted by and in accordance with applicable law and budgetary processes, to prepare, approve and appropriate in its Annual Budget for each Fiscal Year, by amendment, if necessary and to deposit to the credit of the Sinking Fund established {OR548757;1 } OR540859;3 14 02.1057 pursuant to the Resolution, Covenant Revenues of the City in an amount which together with other legally available revenues budgeted and appropriated for such purposes is equal to the Bond Service Requirement with respect to all Bonds outstanding under the Resolution for the applicable Fiscal Year, plus an amount sufficient to satisfy all other payment obligations of the City under the Resolution for the applicable Fiscal Year. "Covenant Revenues" is defined in the Resolution to mean the legally available non -ad valorem revenues budgeted and appropriated to pay the principal of, redemption premium, if any, and interest on the Bonds pursuant to Section 6.03 of the Resolution. Such covenant and agreement on the part of the City to budb,:t and appropriate sufficient amounts of Covenant Revenues shall be cumulative, and shall continue until such Covenant Revenues in amounts, together with any other legally available revenues budgeted and appropriated for such purpose, sufficient to make all required payments under the Resolution as and when due, including any delinquent payments, shall have been budgeted, appropriated and actually paid into the appropriate funds and accounts under the Resolution; provided, however, that such covenant shall not constitute a lien, either legal or equitable, on any of the City's Covenant Revenue or other revenues, nor shall it preclude the City from pledging in the future any of its Covenant Revenues or other revenues to other obligations, nor shall it give the Bondholders a prior claim on the Covenant Revenues. Anything herein or in the Resolution to the contrary notwithstanding, all obligations of the City under the Resolution shall be secured only by the Covenant Revenues and other legally available revenues actually budgeted and appropriated and deposited into the funds and accounts created under the Resolution, as provided for therein, including investment income in certain funds and accounts, therein. Covenant Revenues and income received from the investment of moneys deposited in the funds and accounts established under the Resolution, are "Pledged Revenues" under the Resolution. The City may not expend moneys not appropriated or in excess of its current budgeted revenues. The obligation of the City to budget, appropriate and make payments hereunder from its Covenant Revenues is subject to the availability of Covenant Revenues of the City after satisfying funding requirements for obligations having an express lien on or pledge of such revenues and after satisfying funding requirements for essential government services of the City. Reference is hereby made to the Resolution for the provisions, among others, relating to the term, lien and security of the Bonds, the custody and application of the proceeds of the Bonds, continuing disclosure obligations of the City, the rights and remedies of the Bondholder, the extent of and limitations on the City's rights, duties and obligations and the provisions permitting the issuance of additional parity indebtedness, to all of which provisions the Bondholder hereof for himself and his successors in interest assents by acceptance of this Bond. The City has previously issued and currently has outstanding other indebtedness payable from and secured by, in whole or in part, its legally available non -ad valorem revenues. Of. This Bond shall not be deemed to constitute a debt or a pledge of the faith and credit of the City, the State of Florida or any political subdivision thereof within the meaning of any constitutional, legislative or charter provision or limitation. Nothing herein or in the Resolution shall be deemed to create a pledge of or lien on the Covenant Revenues, the ad valorem tax revenues, or any other revenues of the City, or permit or constitute a mortgage or lien upon any assets owned by the City. It is expressly agreed by the holder of this Bond that such Bondholder shall never have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing power of the City or any other political subdivision of the State of Florida or (OR548757;1) OR540859;3 15 02-1057 taxation in any form on any real or personal property for any purpose, including, without limitation, for the payment of the principal of and interest or redemption premium on this Bond or for the payment of any oth :r amounts provided for in the Resolution or to maintain or continue any of the activities of the City which generate user service charges, regulatory fees or any other Covenant Revenues, nor shall the Series 2002C Bonds constitute a charge, lien or encumbrance, either legal or equitable, on any property, assets or funds of the City, except the Pledged Revenues to the extent and as provided in the Resolution. Neither the members of the governing body of the City nor any person executing the Series 2002C Bonds shall be liable personally on the Series 2002C Bonds by reason of their issuance. [INSERT THE FOLLOWING REDEMPTION PROVISIONS ONLY IF BONDS ARE MADE SUBJECT TO REDEMPTION] [Bonds of this series are subject to mandatory redemption prior to their respective stated dates of maturity [insert mandatory redemption provisions, if any].] [Notice of call for redemption is to be given by mailing a copy of the redemption notice by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books maintained by the Bond Registrar, or any successor Bond Registrar appointed by the City pursuant to the Resolution. Failure to give such notice by mailing to any Bondholder, or any defect therein, shall not affect the validity of the proceedings for the redemption of any Bond or portion thereof with respect to which no such failure or defect has occurred. All such Bonds called for redemption and for the retirement of which funds are duly provided will cease to bear interest on such redemption date.] This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication endorsed hereon shall have been manually signed by the Bond Registrar. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF FULLY SET FORTH IN THIS PLACE. This Bond is and has all the qualities and incidents of an investment security under the Vniform Commercial Code -Investment Securities Law of the State of Florida. $I- (OR548757;1) OR540859;3 16 0`;2-107: IN WITNESS WHEREOF, the City of Miami, Florida, has issued this Bond and has caused the same to be signed by its City Manager and attested and countersigned by its City Clerk, either manually or with their facsimile signatures, and its seal to be affixed hereto or a facsimile of its seal to be reproduced hereon, all as of the day of , 2002. CITY OF MIAMI, FLORIDA (SEAL -)- By: ATTESTED AND COUNTERSIGNED: City Manager By: APPROVED AS TO FORM City Clerk AND CORRECTNESS (OR548757;1) OR540859;3 17 City Attorney 02-1057 [CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds designated in and executed under the provisions of the within mentioned Resolution. as Bond Registrar 0 Date of Authentication: Authorized Officer [To be printed on the reverse side of Registered Bonds] ADDITIONAL BOND PROVISIONS This Bond may be transferred upon the registration books of the City upon delivery thereof to the principal office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the registered owner of this Bond or by his attorney-in-fact or legal representative, containing written instructions as to the details of transfer of this Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Bond, the Bond Registrar shall at the earliest practical time in accordance with the provisions of the Resolution enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of funds. The City and the Bond Registrar may charge the owner of such Bond for the registration of every transfer or exchange of a Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the City) to be paid with respect to the registration of such transfer, and may require that such amounts be paid before any such new Bond shall be delivered. If the date for payment of the principal of, redemption premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or, if the Paying Agent is then an entity other titin the City, a day on which banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and affect as if made on the nominal date of payment. The City has established a book -entry system of registration for the series of Bonds of which this is one. Except as specifically provided otherwise in the Resolution, an agent will hold this Bond on behalf of the beneficial owner hereof. By acceptance of a confirmation of {OR548757;1} OM40859;3 18 02-1057 purchase, delivery or transfer, the beneficial owner of this Bond shall be deemed to have agreed to such arrangement. It is hereby certified and recited that this Bond is authorized by and is issued in conformity with the requirements of the Constitution and statutes of the State of Florida; that all acts, conditions and things required to exist, to happen, and to be performed precedent to the issuance of this Bond exist, have happened -,Ed have been performed in regular and due form and time as required by the laws and :'onstitution of the State of Florida applicable hereto; that the issuance of the Bonds of this issue does not violate any constitutional or statutory limitation or provision; that the City has covenanted in the Resolution, to the extent permitted by and in accordance with applicable law and budgetary processes, to prepare, approve and appropriate in its Annual Budget, for each Fiscal Year, by amendment if necessary and to deposit to the credit of the Sinking Fund, Covenant Revenues, in an amount sufficient which, together with other amounts on deposit therein, are equal to the Bond Service Requirement for such applicable Fiscal Year. [Form of Abbreviations for Bonds] The following abbreviations, when used in inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - TEN ENT - JT TEN !R. {OR548757;1 } OR540859;3 as tenants to common as tenants by the entireties as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT - Custodian (Cust) under Uniform Gifts to Minors Act (State) Additional abbreviations may also be used though not in the above list. 19 (Minor) 02-105'7 [Form of Assignment for Bonds] ASSIGNMENT FOR VALUE RECEIVED, the undersigned (the "Transferor") hereby sells, assigns and transfers unto (the "Transferee") PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to registrar the transfer of the within Bond on the books kept for registration and registration of the transfer thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a member firm of any other recognized national securities exchange or a commercial bank or a trust company. 1. NOTICE: No transfer will be registered and no new Bond will be issued in the name of the Transferee, unless the signature(s) to this assignment correspond(s) with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. [End of Form of Bond] {OR548757;1 } OR540859;3 20 02-1057 SECTION 5.11. Application of Bond Proceeds. The proceeds, including accrued interest, if any, received from the sale of the Bonds shall be applied by the City, simultaneously with delivery of the Bonds, as fa'_lows: (1) Accrued interest, if any, shall be deposited in the Interest Account within the Sinking Fund and shall be transferred one Business Day prior to the first interest payment date to the Paying Agent, who shall apply such moneys to pay interest on the Bonds -as the same beconlcs due on the first interest payirnknt date therefor. -(2) An amount equal to the premium payable for the Reserve Product shall be paid to the Reserve Product Provider and such Reserve Product shall be held by the Paying Agent to the credit of the Reserve Fund for the benefit of the Bonds and the holders thereof. (3) An amount which is equal to the Optional Prepayment Price, as such is defined in the Outstanding Loan Agreements, shall be paid to the Sunshine State Governmental Financing Commission. (4) The remainder of the proceeds shall be deposited in a separate account designated "City of Miami 2002C Special Obligation Non -Ad Valorem Revenue Refunding Bonds Cost of Issuance Account" which is hereby established with the City and shall be disbursed for payment of expenses incurred in connection with the issuance of the Bonds (including payment of the expenses of the City); provided that the premiums for a Bond Insurance Policy and Reserve Product may be paid on behalf of the City by the Underwriters directly to the Bond Insurer. Any balance remaining after payment or provision for payment of such costs and expenses has been made shall be transferred to the Interest Account within the Sinking Fund and used solely to pay principal of and interest on the Bonds. SECTION 5.12. Temporary Bonds. Pending the preparation of definitive Bonds, the City may execute and deliver temporary Bonds. Temporary Bonds shall be issuable as registered Bonds without coupons, of any authorized denomination, and substantially in the form of the definitive Bonds but with such omissions, insertions, and variations as may be appropriate for temporary Bonds, all as may be determined by the City. Temporary Bonds may contain such reference to any provisions of this Resolution as may be appropriate. Every temporary Bond shall be executed and authenticated upon the same conditions and in substantially the same manner, and with like effect, as the definitive Bonds. As promptly as practicable the City shall execute and shall furnish definitive Bonds and thereupon temporary Bonds may be surrendered in exchange for definitive Bonds without charge at the principal office of the Bond Registrar, and the Bond Registrar shall authenticate and deliver in exchange, for such temporary Bonds a like qfgregate principal amount of definitive Bonds of the same Series in authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds. SECTION 5.13. Authorization and Approval of Bond Purchase Agreement. The execution and delivery of the Bond Purchase Agreement is hereby authorized and approved. The City Commission hereby authorizes and directs the City Manager to determine the final provisions of the Bond Purchase Agreement, within the parameters for the Bonds set forth in Section 5.02 of this Resolution. Upon compliance by the Underwriters with the requirements of {OR548757; l } OR540859;3 21 02-105'7 Section 218.385(2) and (3), Florida Statutes, and Section 218.385(6), Florida Statutes, by filing the "truth -in -bonding statement" and the "disclosure statement" required by said statutory provisions, the City Manager is hereby authorized to execute and the Clerk is hereby authorized to attest to, seal and deliver the Bond Purchase Agreement in substantially the form approved at this meeting and attached hereto as Exhibit "A", subject to such changes, insertions and omissions and such filling in of blanks therein as hereafter may be approved and made by the "City Manager upon the advice of the City Attorney and Bond Counsel. The execution, attestation and delivery of Lhe Bond Purchase Agreemeiit, as described herein, shall b� conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. SECTION 5.14. Authorization and Approval of Negotiated Sale of Bonds. Based on the findings set forth in Article III hereof, the City Commission hereby approves the negotiated sale of the Bonds to the Underwriters, and the Bonds shall be sold and awarded to the Underwriters, upon the terms and conditions set forth herein and as set forth in the Bond Purchase Agreement. SECTION 5.15. Reserved. SECTION 5.16. Approval of Form of Pa 'nim Q Agent and Registrar Agreement; Appointment of Paving Agent and Bond Registrar. The execution and delivery of the Paying Agent and Registrar Agreement is hereby authorized and approved. The City Commission hereby authorizes and directs the City Manager to determine the final provisions of the Paying Agent and Registrar Agreement. The City Manager is hereby authorized to execute and the Clerk is hereby authorized to attest to, seal and deliver the Paying Agent and Registrar Agreement in substantially the form approved at this meeting and attached hereto as Exhibit `B", subject to such changes, insertions and omissions and such filling in of blanks therein as hereafter may be approved and made by the City Manager upon the advice of the City Attorney and Bond Counsel. The execution, attestation and delivery of the Paying Agent and Registrar Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. Wachovia Bank, National Association is hereby appointed as the initial Paying Agent and the initial Bond Registrar for the Series 2002C Bonds. SECTION 5.17. Preliminary Official Statement, Official Statement. The use of a Preliminary Official Statement in connection with the marketing of the Bonds is hereby authorized. The Preliminary Official Statement in substantially the form attached hereto as Exhibit "C" is hereby approved with such changes, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager. The City Manager is hereby authorized to approve and execute, on behalf of the City, an Official Statement relating to the Bonds with such changes from the Preliminary Official Statement, within the authorizations and limitations contained herein, as the City Manager in consultation with the City Attorney, Bond Counsel and the City's disclosure counsel in his sole discretion, may approve, such execution to be conclusive evidence of such approval. The City Manager is hereby authorized to deem the Preliminary Official Statement final for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). The City Manager or his designee is hereby authorized to provide for the printing of the Preliminary Official Statement and the Official Statement by the {OR548757; I } OR540859;3 22 02-1057 lowest and most responsive bidder therefor and the payment of the cost of such printing is hereby authorized to be paid from the proceeds of the Bonds. SECTION 5.18. Election to Pay Optional Prepayment Price. The City Commission hereby elects to prepay the Optional Prepayment Price under the Outstanding Loan Agreements, as provided in the notice attached hereto as Exhibit "D". SECTION 5.19. Municipal Bond Insurance; Reserve Product. The City is hereby authorized to provide for the payment of the premiums on the Bond Insurance Policy and the Reserve Product from the proceeds of the issuance of the Bonds and to enter into such agreements as may be necessary to secure such Bond Insurance Policy and a Reserve Product, with the City Manager's execution of any such agreements, after consultation with the City Attorney and Bond Counsel, to be conclusive evidence of the City's approval thereof. The provisions of any such agreement shall supersede any inconsistent provision of this Resolution. SECTION 5.20. Qualification for the Depository Trust Company. Notwithstanding any other provision hereof, the City, the Bond Registrar and the Paying Agent are hereby authorized to take such actions as may be necessary to qualify the Bonds for deposit with DTC in accordance with the Blanket Issuer Letter of Representations dated October 4, 1995 from the City to DTC (the "DTC Agreement") and the taking of all actions required by such DTC Agreement, wire transfers of interest and principal payments with respect to the Bonds, utilization of electronic book entry data received from DTC in place of actual delivery of Bonds and provisions of notice with respect to Bonds registered by DTC (or any of its designees identified to the City, the Bond Registrar or the Paying Agent) by overnight delivery, courier service, telegram, telecopy or other similar means of communication. ARTICLE VI SOURCE OF PAYMENT OF BONDS; SPECIAL OBLIGATIONS OF THE CITY SECTION 6.01. Bonds Not to be General Obligation or Indebtedness of the City. The Bonds shall not be deemed to constitute general obligations or a pledge of the faith and credit of the City, the State of Florida or any political subdivision thereof within the meaning of any constitutional, legislative or charter provision or limitation, but shall be payable solely from and secured by a lien upon and a pledge of the Pledged Revenues, in the manner and to the extent herein provided. No Bondholder shall ever have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing power of the City or any other political subdivision of the State of Florida or taxation in any form on any real or personal property to pay the Bonds o, the interest thereon, nor shall any Bondholder be entitled to payment of such principal and Interest from any other funds of the City other than the Pledged Revenues, all in the manner and to the extent herein provided. The Bonds and the indebtedness evidenced thereby shall not constitute a lien upon any real or personal property of the City, or any part thereof, or any other tangible personal property of or in the City, but shall constitute a lien only on the Pledged Revenues, all in the manner and the extent provided herein. SECTION 6.02 Pledee. The payment of the principal of, redemption premium, if any, and interest on the Bonds shall be secured forthwith equally and ratably by an irrevocable lien on {OR548757;1 } OR540859;3 23 02--1057 the Pledged Revenues, all in the manner and to the extent provided herein. The City does hereby irrevocably pledge such Pledged Revenues to the payment of the principal of, redemption premium, if any, and interest on the Bonds, the funding and maintaining of the Reserve Fund as required herein, and for all other payments as provided herein, in the order of priorities set forth herein. SECTION 6.03 Covenant t& -Budget and Appropriate. The City hereby covenants and agr 2s to the extent permitted by and :n accordance with applicable la,x and budgetary processes, to prepare, approve and appropriate in its Annual Budget for each Fiscal Year, by amendment if necessary, and to deposit to the credit of the Sinking Fund, legally available non -ad valorem revenues of the City in an amount which is equal to the Bond Service Requirement with respect to all Bonds outstanding hereunder for the applicable Fiscal Year, plus an amount sufficient to satisfy the other payment obligations of the City hereunder for the applicable Fiscal Year, including, without limitation, the obligations of the City to fund and cure deficiencies in the Reserve Fund. Such covenant and agreement on the part of the City to budget and appropriate sufficient amounts of legally available non -ad valorem revenues shall be cumulative, and shall continue until such legally available non -ad valorem revenues in amounts sufficient to make all required payments hereunder as and when due, including any delinquent payments, shall have been budgeted, appropriated and actually paid into the appropriate funds and accounts, hereunder; provided, however, that such covenant shall not constitute a lien, either legal or equitable, on any of the City's legally available non -ad valorem revenues or other revenues, nor shall it preclude the City from pledging in the future any of its legally available non -ad valorem revenues or other revenues to other obligations, nor shall it give the Bondholders a prior claim on the legally available non -ad valorem revenues. Anything herein to the contrary notwithstanding, all obligations of the City hereunder shall be secured only by the legally available non -ad valorem revenues actually budgeted and appropriated and deposited into the funds and accounts created hereunder, as provided for herein. The City may not expend moneys not appropriated or in excess of its current budgeted revenues. The obligation of the City to budget, appropriate and make payments hereunder from its legally available non -ad valorem revenues is subject to the availability of legally available non -ad valorem revenues after satisfying funding requirements for obligations having an express lien on or pledge of such revenues and after satisfying funding requirements for essential governmental services of the City. ARTICLE VII CREATION AND USE OF FUNDS AND ACCOUNTS; DISPOSITION OF REVENUES SECTION 7.01. Creation of Funds and Accounts. There are hereby established the "*king Fund" and the "Reserve Fund," and there is established within the Sinking Fund three separate accounts therein designated as the "Interest Account," the "Principal Account" and the "Bond Amortization Account". The Sinking Fund and the Reserve Fund established hereunder and all accounts therein shall constitute trust funds for the purpose herein provided, shall be delivered to and held by the Director of Finance (or an Authorized Depositary designated by the Director of Finance), in each case who shall act as trustee of such funds for the purposes hereof, and shall at all times be kept separate and distinct from all other funds of the City and used only as herein provided. Money (OR548757J ) OR540859;3 24 02-1057 held in the Sinking Fund and the Reserve Fund and the accounts therein shall be subject to a lien and charge in favor of the holders and registered owners of the Bonds as herein provided. SECTION 7.02. Disposition of Covenant Revenues. (1) Commencing immediately following the issuance of the Bonds, and continuing thereafter so long as any Bonds shall be Outstanding hereunder, the City shall deposit to the credit of the Funds and Accounts listed below on or before the twenty-fifth day of each month, from Covenant Revenues, amounts which, together with funds on deposit therein, will be sufficient to satisfy the cumulative deposit requirements described in clauses (a) and (b) below. Covenant Revenues shall be deposited in the following order and priority: (a) First, by deposit into the Interest Account within the Sinking Fund an amount which, together with any other amounts required to be deposited therein pursuant to this Resolution, will equal one-sixth (1/6) of the interest payable on the Bonds on the next semiannual interest payment date; by deposit into the Principal Account within the Sinking Fund one -twelfth (1/12) of all principal maturing or becoming due during the current Bond Year on the various Serial Bonds that mature annually; and by deposit into the Bond Amortization Account within the Sinking Fund one -twelfth (1/12) of the Amortization Installments and unamortized principal balances of Term Bonds coming due during the current Bond Year with respect to the Bonds, until there are sufficient funds then on deposit equal to the sum of the interest, principal and Amortization Installments due on the Bonds on the next interest, principal and redemption dates in such Bond Year. (b) Second, by deposit into the Reserve Fund, the amounts, if any, which, together with funds on deposit therein, will be sufficient to make the funds and/or Reserve Product on deposit therein equal to the Reserve Requirement for the Bonds. (c) Thereafter any remaining Covenant Revenues shall be available to the City to be used for any lawful purpose. (2) The deposits to the Sinking Fund described above shall be increased or decreased, as the case may be, to the extent required to pay principal (including Amortization Installments) and interest coming due, after taking into account deficiencies in prior months' deposits. (3) Deposits required pursuant to this Section 7.02 shall be cumulative and the amount of any deficiency in any month shall be added to the amount otherwise required to be deposited in each month thereafter until such time as all such deficiencies have been cured. 1'C (4) In lieu of or in substitution for any cash or securities on deposit in the Reserve Fund, the City may fund the Reserve Requirement with a Reserve Product issued by a Reserve Product Provider in an amount equal to the difference between the Reserve Requirement and the sums then on deposit in the Reserve Fund. Any such Reserve Product other than the Reserve Product delivered in connection with the original issuance of the Bonds must either be (1) a surety bond or insurance policy issued to the entity serving as trustee or paying agent (the "Fiduciary"), as agent of the Bondholders, by a company licensed to issue an insurance policy guaranteeing the timely payment of debt service on the Bonds (a "municipal bond insurer") with {OR548757;1 } OR540859;3 25 Q2-1057 the claims paying ability of the issuer thereof rated "AAA" or "Aaa" by S&P or Moody's, respectively, or (2) a surety bond or insurance policy issued to the Fiduciary, as agent of the bondholders, by an entity other than a municipal bond insurer if the form and substance of such instrument and the issuer thereof is approved by the Bond Insurer, or (3) an unconditional irrevocable letter of credit issued to the Fiduciary, as agent of the bondholders, by a bank if the issuer thereof is rated at least "AA" by S&P. Any such letter of credit shall be payable in one or more draws upon presentation by the beneficiary of a sight draft accompanied by its certificate that it turn holds insufficient funds to make a required payment of prim—'pal or interest on the Bonds. The draws on such letter of credit shall be payable within two days of presentation of the sight draft. The letter of credit shall be for a term of not less than three years. The issuer of the letter of credit shall be required to notify the City and the Fiduciary, not later than 30 months prior to the stated expiration date of the letter of credit, as to whether such expiration date shall be extended, and if so, shall indicate the new expiration date. If such notice indicates that the expiration date shall not be extended, the City shall deposit in the Reserve Fund an amount sufficient to cause the cash or Permitted Investments on deposit in the Reserve Fund together with any other Reserve Product, to equal the Reserve Requirement on all outstanding Bonds. Such deposit must be paid in equal installments on at least a semi-annual basis over the remaining term of the letter of credit, unless the Reserve Product is replaced by a Reserve Product meeting the requirements in any of (1-3) above. The letter of credit shall permit a draw in full not less than two weeks prior to the expiration or termination of such letter of credit if the letter of credit has not been replaced or renewed. The Fiduciary shall draw upon any such letter of credit prior to its expiration or termination unless an acceptable replacement is in place or the Reserve Fund is fully funded in its required amount. The use of any Reserve Product shall be subject to receipt of an opinion of counsel acceptable to the Bond Issuer and in form and substance satisfactory to the Bond Issuer as to the due authorization, execution, delivery and enforceability of such instrument in accordance with its terms, subject to applicable laws affecting creditors' rights generally, and, in the event the Reserve Product provider is not a domestic entity, an opinion of foreign counsel in form and substance satisfactory to the Bond Insurer. In addition, the use of an irrevocable letter of credit shall be subject to receipt of an opinion of counsel acceptable to the Bond Insurer and in form and substance satisfactory to the Bond Insurer to the effect that payments under such letter of credit would not constitute avoidable preferences under Section 547 of the U.S. Bankruptcy Code or similar state laws with avoidable preference provisions in the event of the filing of a petition for relief under the U.S. Bankruptcy Code or similar state laws by or against the City (or any other account party under the letter of credit). The obligation to reimburse a Reserve Product Provider for any fees, expenses, eltimsaccrued interest or draws upon such Reserve Product (the "Policy Costs") shall be subordinate to the payment of debt service on the Bonds. The right of a Reserve Product Provider to payment or reimbursement of its fees and expenses shall be subordinated to cash replenishment of the Reserve Fund, and, subject to the second succeeding sentence, its right to reimbursement for claims or draws shall be on a parity with the cash replenishment of the Reserve Fund. A Reserve Product shall provide for a revolving feature under which the amount available thereunder will be reinstated to the extent of any reimbursement of draws or claims paid. If the revolving feature is suspended or terminated for any reason, the right of the Reserve Product Provider to reimbursement will be further subordinated to cash replenishment of the {OR548757;1 } OR540859;3 26 02-1057 Reserve Fund to an amount equal to the difference between the full original amount available under the Reserve Product and the amount then available for further draws or claims. If (a) the Reserve Product Provider becomes insolvent or (b) the Reserve Product Provider defaults in its payment obligations thereunder or (c) the claims -paying ability of a Reserve Product Provider of an insurance policy or surety bond falls below a S&P "AAA" or a Moody's "Aaa" or (d) the rating of a Reserve Product Provider of a letter of credit falls below a S&P "AA", the obligation to reimburse the Reserve Product Provider shall be subordinate to -the cash replenishment of the Reserve Fund. If (a) the revolving reinstatement feature described in the preceding paragraph is suspended or terminated or (b) the rating of the claims paying ability of a Reserve Product Provider of a surety bond or insurance policy falls below a S&P "AAA" or a Moody's "Aaa" or (c) the rating of a Reserve Product Provider of a letter of credit falls below a S&P "AA", the City shall either (i) deposit into the Reserve Fund an amount sufficient to cause the cash or Permitted Investments on deposit in the Reserve Fund to equal the Reserve Requirement on all outstanding Bonds, such amount to be paid over the ensuing five years in equal installments deposited at least semi-annually or (ii) replace such instrument with a surety bond, insurance policy or letter of credit meeting the requirements in any of (1-3) above within six months of such occurrence. In the event (a) the rating of the claims -paying ability of a Reserve Product Provider of a surety bond or insurance policy falls below "A" or (b) the rating of a Reserve Product Provider of a letter of credit falls below "A" or (c) the Reserve Product provider defaults in its payment obligations or (d) the Reserve Product provider becomes insolvent, the City shall either (i) deposit into the Reserve Fund an amount sufficient to cause the cash or Permitted Investments on deposit in the Reserve Fund to equal to Reserve Requirement on all outstanding Bonds, such amount to be paid over the ensuing year in equal installments on at least a monthly basis or (ii) replace such instrument with a surety bond, insurance policy or letter of credit meeting the requirements in any of (1-3) above within six months of such occurrence. The amount available for draws or claims under a Reserve Product may be reduced by the amount of cash or Permitted Investments deposited in the Reserve Fund. The Fiduciary will ascertain the necessity for a claim or draw upon the Reserve Product and provide notice to the Reserve Product Provider not later than three days (or such longer period as may be necessary depending on the permitted time period for honoring a draw under the Reserve Product) prior to each interest payment date. Cash on deposit in the Reserve Fund shall be used (or investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing on any ReAerve Product. If and to the extent that more than one Reserve Product is deposited in the Reserve Fund, drawings thereunder and repayments of costs associated therewith shall be made on a pro rata basis, calculated by reference to the maximum amounts available thereunder. Notwithstanding any of the provisions of this Resolution, as lone as the Reserve Product of the Bond Insurer is in effect. the following nr visi _ns shall apply: a The City's repayment of any draws under such Reserve Product and related reasonable expenses incurred by the Bond Insurer (together with interest thereon at a rate JOR548757;1) OR540859;3 27 02-1057 equal to the lower of (i) the prime rate of M rgan Guaranty Trust Company of New York in effect from time to time plus 2% per annum. and (u) the highest rate 12cmaitted by law) snati enioy the same priority as the obligation to maintain and refill the Reserve Fund RPpavment of Policy Costs shall commence . the first month following each draw, and each such monthly p3y-ntsn_ll c m an a unt at easua to 1/1 21h Qf the _vgrev_te of policy Costs related to u w. If and to the extent that cash h s also been deposited m the Reserve Fund. all such cash shall be used for investments purchased with such cash shall be liquidated and the proceeds -- applied as reguirod) prior to any diwing under the Reserve Prou1.ct, and repayment of any paLlo Cots shall be matjP nrigr to opIgnish_ment of any such -cash amounts. If. and in addifig to the Reserve Product any other Reserve Product ("Additional Debt Service Reserve Fun Policy") is provided drawings under the Reserve Product and any such Additional Debt Service Reserve Fund Policy and zPaYMCU ^f ULU rusts aped reimbursement of amounts due under The Additional Debt Service Reserve Fund Eglicy. shall be made on a pro rata basis (calculated by reference to th� Maximum Amounts available thereunder) after applying all available cash in the Reserve Fund and prior to replenishment of any such cash draws. respectively. (b) If th . City shall fail to repay any Policy Costs in accordance with the preceding para aph (a). the Bond Insurer shall be entitled to exercise any and all remedi available at law or under the Resolution other than (i)_acceleration of the maturity of the Bonds. r(ii) remedies which would adversely affect the Bondholders. (c) The Resolution shall not be discharged until all Policy Costs owing to the Bond Insurer shall have been paid in full. (d) As security for the City's repayment obligations with respect to the Bond Insurer's Reserve Product, the Bond insurer shall be and is hereby granted a security interest (subordinate only to that of the Bondholders) in all revenues and collateral pledged as security forthe Bonds. (e) No additional bonds or obligations may be issued _without the - o d Insurer's prior written consent if any Policy Costs are past due and owing to the Bond Insurer. (f) The City shall require the Paving Agent to ascertain the necessity for a claim upon the _Reserve Product and to provide notice to the Bond Insurer in accordance_ with the terms of the Reserve Product at least two business days prior to each interest payment date This Resolution shall not be modified or amended without the prior written consent of the Bond Insurer. A- (h) The Bond Insurer shall be provided with written notice_of the resignation or removal of the Pavine Agent and the appointment of a successor thereto at 125 Park Avenue. New York, New York 10017, Attention: Risk Management. (5) The City shall not be required to make any further payments into the Sinking Fund, including the accounts therein, and the Reserve Fund when the aggregate amount of funds in the Sinking Fund and the Reserve Fund, including the accounts therein, are at least equal to the aggregate principal amount of the Bonds issued pursuant to this Resolution and then Outstanding, plus the amount of interest then due or thereafter to become due on the Bonds then 1OR548757;1) OR540859;3 28 02-1057 Outstanding, or if all of the Bonds then Outstanding have otherwise been defeased pursuant to Section 13.02 hereof. SECTION 7.03. Use of Moneys in the Sinking Fund. (1) Moneys on deposit in the Sinking Fund shall be used solely for the payment of the principal of, interest on and any redemption premiums required with respect to the Bonds; provided, however, that if such principal and interest payments, or a portion thereof, have been made on behalf of the City by a Bond Insurer, credit facility issuer, Reserve Product Provider or other entity insuring, guaranteeing or providing a Reserve Product for the payment of the Bonds, moneys on deposit in the Sinking Fund shall be paid to such Bond Insurer, credit facility issuer, Reserve Product Provider or entity having theretofore made a corresponding payment on the Bonds. (2) One Business Day prior to the maturity date of each Bond (or the due date of such Amortization Installments for Term Bonds) and installment of interest on such Bonds, the City shall transfer from the Sinking Fund to the Paying Agent for the Bonds sufficient moneys to pay all principal of, redemption premium, if any, and interest then due and payable with respect to such Bonds. Interest accruing with respect to any fully registered Bond shall be paid by check or draft of the Paying Agent to the registered owner thereof. (3) Moneys on deposit in the Sinking Fund for the redemption of the Series 2002C Bonds shall be applied to the retirement of the Series 2002C Bonds issued under the provisions of this Resolution and then outstanding in the following order: (a) The City shall first endeavor to purchase Outstanding Term Bonds redeemable from Amortization Installments during such Bond Year, or if no such Term Bonds are then Outstanding, the City shall endeavor to purchase Serial Bonds whether or not such Serial Bonds shall then be subject to redemption, but only to the extent moneys are available therefor, at the most advantageous price obtainable, such price not to exceed the principal of such Serial Bonds plus accrued interest but no such purchase shall be made by the City within a period of thirty (30) days next preceding any interest payment date on which such Serial Bonds are subject to call for redemption under the provisions of this Resolution. (b) Then, to the extent moneys remain on deposit in the Sinking Fund that are held for the redemption of the Bonds, the City shall call for redemption on each interest payment date on which Bonds are subject to redemption, with or without premium from such moneys, such amount of Term Bonds subject to the Amortization Installments for such Bond Year that have not been purchased pursuant to clause (a) above. (c) Then, to the extent moneys remain on deposit in the Sinking Fund that were deposited therein pursuant to this Resolution for the purpose of redeeming the Bonds, the City shall first call any remaining Bonds then subject to redemption, in such order and by such selection method as the City, in its discretion, may determine, from such funds as will exhaust the money then held for the redemption of such Bonds as nearly as may be possible. (OR548757;1) OR540859;3 FZ b2-1057 (d) Then, to the extent moneys remain on deposit in the Sinking Fund that were deposited therein pursuant to this Resolution for the purpose of redeeming the Bonds, the City may, in its discretion from time to time (i) use such moneys to defease the Bonds, pay the principal of or interest on the Bonds, or any other lawful purpose, or (ii) keep such moneys on deposit in the Sinking Fund for future use pursuant to this Section 7.03; provided, however, that such moneys shall be used for any purpose or purposes allowed pursuant to clause (i) above only if the City shall obtain an opinion of Bond Counsel to the effect that such use will not cause the interest on any Bond to become included in the gross income of the Bondholder thereof. If Term Bonds are purchased or redeemed pursuant to this section in excess of the Amortization Installments for such Bond Year, such excess principal amount of such Term Bonds so purchased or redeemed shall be credited against subsequent Amortization Installments for such Term Bonds in such Bond Year or Bond Years as the City may determine and as may be reflected in the City's permanent accounting records. Notwithstanding the foregoing, to the extent that moneys are deposited into the Sinking Fund in a given Bond Year in an amount equal to the Amortization installment for such Bond Year and are applied to purchase or redeem Term Bonds to which such Amortization Installment applies, then all moneys thereafter deposited to the Bond Amortization Account in such Bond Year may be applied as provided in clause (c) above. SECTION 7.04. _Application of Moneys in the Reserve Fund. The Bonds shall be secured by the Reserve Fund. Funds on deposit in the Reserve Fund shall be used solely to cure deficiencies in the Sinking Fund with respect to the Bonds. If any funds on deposit in the Reserve Fund exceed the Reserve Requirement with respect to the Bonds, such excess shall be transferred to the Sinking Fund, provided that if such excess is due to the substitution of a Reserve Product, such excess shall be first applied to cure any deficiencies in the Sinking Fund, and then shall be released to the City to use for any lawful purposes that, in the opinion of Bond Counsel, will not cause the interest on the Bonds to become includable in gross income for federal income tax purposes. The Reserve Fund created in Section 7.01 above shall be held in trust only for the benefit of the holders of the Bonds. The Reserve Fund shall be funded at all times at the Reserve Requirement. Upon issuance of the Bonds, there shall be deposited to the credit of the Reserve Fund, either cash equal to the Reserve Requirement or a Reserve Product in an amount equal to the Reserve Requirement, or a combination thereof. "t SECTION 7.05. Transfer to Paving Aizent. The City shall transfer from the Sinking Fund and, to the extent necessary, the Reserve Fund, to the Paying Agent on the Business Day preceding each interest, principal or redemption date, by wire transfer or delivery in other immediately available funds, an amount sufficient to pay when due the principal of, interest on and redemption premium, if any, with respect to the Bonds. SECTION 7.06 First Union Escrow Agreement. Notwithstanding anything to the contrary contained in this Article VII, the City shall comply with the deposit requirements of the (OR548757;1) OR540859;3 30 .� 057 First Union Escrow Agreement, as such deposit requirements apply to the Bonds, for so long as such First Union Escrow Agreement is in full force and effect. ARTICLE VIII DEPOSITARIES OF FUNDS, SECURITY FOR DEPOSITS AND INVESTMENT OF MONEYS SECTION 8.01. Deposits Constitute Trust Funds. All funds or other property which at any time may be owned or held in the possession of or deposited with the City for application in accordance with the terms and provisions of this Resolution shall be held in trust and applied only in accordance with the provisions of this Resolution, and shall not be subject to lien or attachment by any creditor of the City. All funds or other property which at any time may be owned or held in the possession of or deposited with the City pursuant to this Resolution, and any investment income thereon, shall be continuously secured, for the benefit of the City and the Bondholders in the order and manner and for the purposes provided in this Resolution either (a) by depositing with an Authorized Depositary, as custodian, collateral security consisting of obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America having a market value (exclusive of accrued interest) not less than the amount of such deposit, or (b) in such other manner as permitted hereunder as may then be required or permitted by applicable state and federal law as and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds, including without limitation, the provisions of Chapter 280, Florida Statutes, as from time to time amended. All moneys deposited with each Authorized Depositary shall be credited to the particular fund or account to which such moneys belong. SECTION 8.02. Investment of Moneys. Moneys held for the credit of the Sinking Fund and the Reserve Fund may be invested by the City in Permitted Investments. Such investments or reinvestments shall mature or become available not later than the respective dates, as estimated by the City, that the moneys held for the credit of said funds and accounts will be needed for the purposes of such funds or accounts; provided, however, that funds in the Reserve Fund shall be invested only in Permitted Investment with a remaining maturity of five .years or less from date of purchase or subject to redemption upon demand of the holder, or such longer period with the consent of the Bond Insurer. Obligations so purchased as an investment of moneys in any such fund or account shall be deemed at all times to be a part of such fund or account, and shall at all times, for the PsToses of this Resolution, be valued as frequently as deemed necessary by the Bond Insurer, but not less often than annually, at the market value thereof, exclusive of accrued interest. Deficiencies in the amount on deposit in any fund or account resulting from a decline in market value shall be restored no later than the succeeding valuation date. Except as otherwise expressly provided herein, including specifically the obligations of the City with respect to paying the Rebate Amount as set forth in Section 13.03 hereof, all income and profits derived from the investment of moneys in the Sinking Fund shall be retained {ox549757;1) 0R540859;3 31 02 -105'7 in such funds and used for the purposes specified for such respective fund; all income and profits derived from the investment of moneys in the Reserve Fund, if any, shall be retained in the Reserve Fund therein until amounts on deposit in sig .h Reserve Fund equal the Reserve Requirement; thereafter, all such income and profits shall be deposited into the Sinking Fund. Notwithstanding the foregoing, income and profits derived from the investment of moneys in the funds and accounts created hereunder may, at the option of the City, be transferred to the City in order to pay the Rebate Amount. All investments of moneys hereunder shall be made in compliance with Section 13.03 hereof ARTICLE IX GENERAL COVENANTS OF THE CITY SECTION 9.01. Anti -Dilution Test. The City may incur additional debt that is payable from all or a portion of the legally available non -ad valorem revenues only if the total amount of legally available non -ad valorem revenues for the prior Fiscal Year were (a) at least 2.00 times the aggregate maximum annual debt service of all debt (including all long-term financial obligations appearing on the City's most recent audited financial statements, any debt issued during the current Fiscal Year, and the debt proposed to be incurred) to be paid from legally available non -ad valorem revenues (collectively, "Debt"), including any Debt payable from one or several specific revenue sources and (b) so long as the Bonds are outstanding and if a Reserve Product is in effect, at least 1.00 times the obligation of the City to repay any Policy Costs then due and owing to the Reserve Product Provider. SECTION 9.02. Notice of Deposit Shortfall. The City covenants that it will notify the Paying Agent, the Bond Insurer, any Reserve Product Provider and any insurance trustee for the Bond Insurer of any shortfall or deficiency in the Sinking Fund at least five (5) days before each principal or payment date on which such shortfall is expected to occur. SECTION 9.03. Annual Audit. (1) Annual Audit. The City shall require that an annual audit of its accounts and records with respect to its general fund and the Pledged Revenues and the funds and accounts created herein be completed as soon as practicable after the end of each Fiscal Year by an independent certified public accountant of recognized standing. Such audit shall be conducted in accordance with generally accepted auditing standards as applied to governmental units. (2) Availabili of Reports. A copy of the comprehensive annual financial report as certified according to the requirements stated herein shall be available for inspection at the offices of the City and shall be promptly fumished to the Underwriters of the Series 2002C Bonds and mailed to the Bond Insurer, if any, Reserve Product Provider, if any, or Bondholder requesting the same, upon payment by such Bond Insurer, Reserve Product Provider or Bondholder, as the case may be, of the cost of reproduction and mailing. {OR548757; I } OR540859;3 ARTICLE X ISSUANCE OF ADDITIONAL INDEBTEDNESS 32 02--1057 SECTION 10.01. Issuance of Additional Indebtedness. The City will not issue any obligations (other than the Bonds authorized by Section 5.01 hereof) secured by or payable from the Pledged Revenues, or any portion thereof, or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge, in each case, having priority to or being on a parity with the lien securing the Bonds issued pursuant to this Resolution upon the Pledged Revenues or any portion thereof. J The City hereby agrees that it will not issue or incur any other debt obligation sec,,,., cd by or payable from a covenant to budget and appropriate all or a portion of the City legally available non -ad valorem revenues or secured by or payable from specific non -ad valorem revenues, unless the issuance of such debt obligations complies with Section 9.01 hereof, as evidenced by a certificate of the Director of Finance filed with the City Commission on or prior to the issuance or incurrence of such debt and no "event of default" has occurred and is continuing. ARTICLE XI EVENTS OF DEFAULT; REMEDIES SECTION 11.01. Events of Default. Each of the following events is hereby declared an "event of default," that is to say if: (a) payment of principal of any Bond shall not be made when the same shall become due and payable, either at maturity (whether by acceleration or otherwise) or on required payment dates by proceedings for redemption or otherwise; or (b) Payments of any installment of interest shall not be made when the same shall become due and payable; or (c) the City shall fail to make any deposits required to be made hereunder or shall otherwise fail to comply with any of the covenants and obligations of the City hereunder and such failure shall continue unremedied for a period of thirty (30) days after such failure to deposit or other such occurrence; or (d) an order or decree shall be entered, with the consent or acquiescence of the City, appointing a receiver or receivers of the City, or the filing of a petition by the City for relief under federal bankruptcy laws or any other similar law or statute of the Untied States of America or the State of Florida, which shall not be dismissed, vacated or discharged within thirty (30) days after the filing thereof; or (e) any proceedings shall be instituted, with the consent or acquiescence of the City, for the purpose of effecting a composition between the City and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statutes now or hereafter enacted, if the claims of such creditors are under any circumstances payable from the Pledged Revenues. Notwithstanding the foregoing, with respect to the events described in clause (c), the City shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the City in good faith institutes appropriate curative action and diligently pursues such action until the default has been corrected. (ox548757;1) oR540859;3 33 02-1057 Any waiver of an "event of default" shall be subject to the prior written consent of the Bond Insurer. SECTION 11.02. Enforcement of Remedies. Upon the happening and continuance of any event of default specified in Section 11.01 of this Article, then and in every such case the owners of not less than twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding may, but only after receiving the prior written consent of the Bond Insurer, -- appoint any state bank, national bank, trust company or national banking association qualified to transact business in Florida to serve as trustee for the benefit of the holders of all Bonds then outstanding (the "Default Trustee"). Notice of such appointment, together with evidence of the requisite signatures of the holders of twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding and the trust instrument under which the Default Trustee shall have agreed to serve shall be filed with the City and the Default Trustee and notice of such appointment shall be mailed to the registered holders of the Bonds. No more than one Default Trustee may be appointed and serving hereunder at any one time; however, the holders of a majority of the aggregate principal amount of the Bonds Outstanding may remove the Default Trustee initially appointed and appoint a successor and subsequent successors at any time. If the default for which the Default Trustee was appointed is cured or waived pursuant to this Article, the appointment of the Default Trustee shall terminate with respect to such default. After a Default Trustee has been appointed pursuant to the foregoing, the Default Trustee may proceed, and upon the written request of owners of twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding shall proceed, to protect and enforce the rights of the Bondholders under the laws of the State of Florida, including the Act, and under this Resolution, by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board, body, or officer having jurisdiction, either for the specific performance of any covenant or agreement contained herein or in aid of execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, all as the Default Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights. In the enforcement of any remedy against the City under this Resolution the Default Trustee shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any City default becoming, and at any time remaining, due from the City for principal, interest or otherwise under any provisions of this Resolution or of such Bonds and unpaid, with interest on overdue payments of principal and, to the extent permitted by law, on interest, at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice to any other right or remedy of the Default Trustee or of the Bondholders, and to recover and enforce any jy¢gment or decree against the City, but solely as provided herein and in such Bonds, for any portion of such amounts remaining unpaid and interest, costs and expenses as above provided, and to collect (but solely from moneys in the Sinking Fund, the Reserve Fund and any other moneys available for such purpose) in any manner provided by law, the moneys adjudged or decreed to be payable. SECTION 11.03. Effect of Discontinuing Proceedings. In case any proceeding taken by the Default Trustee or any Bondholder on account of any default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Default Trustee or such (ORs48757;1) OR540859;3 34 02-1057 Bondholder, then and in every such case the City, the Default Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies and piwers of the Default Trustee shall continue as though no such proceeding had been taken. SECTION 11.04. Directions to Default Trustee as to Remedial Proceedings. Anything in this Resolution to the contrary notwithstanding, the holders of a majority of the aggregate principal amount of the Bonds Outstanding shall have the right, by an instrument or concurrent , instruments in writing exca.:'cd and delivered to the Default Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Default Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions of this Resolution, and that the Default Trustee shall have the right to decline to follow any such direction which in the opinion of the Default Trustee would be unjustly prejudicial to Bondholders not parties to such direction. SECTION 11.05. Restrictions on Actions by Individual Bondholders. No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust hereunder or for any other remedy hereunder unless such Bondholder previously shall have given to the Default Trustee written notice of the event of default on account of which such suit, action or proceeding is to be taken, and unless the holders of not less than twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding shall have made written request of the Default Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Default Trustee a reasonable opportunity either to proceed to exercise the powers hereinabove granted or to institute such action, suit or proceeding in its or their name, and unless, also, there shall have been offered to the Default Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, including the reasonable fees of its attorneys (including fees on appeal), and the Default Trustee shall have refused or neglected to comply with such request within a reasonable period of time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Default Trustee, to be conditions precedent to the execution of the powers and trusts of this Resolution or for any other remedy hereunder. It is understood and intended that no one or more owners of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Resolution, or to enforce any right hereunder, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Bondholders, and that any individual rights of action or any other right given to one or more of such owners by law are restricted by this Resolution to the rights and remedies herein provided. At Nothing contained herein, however, shall affect or impair the right of any Bondholder, individually, to enforce the payment of the principal of and interest on his Bond or Bonds at and after the maturity thereof, at the time, place, from the source and in the manner provided in this Resolution. SECTION 11.06. Subrogation. Notwithstanding anything in this Resolution to the contrary, if the principal, interest and redemption premium, if any, with respect to any Bonds are paid by a Bond Insurer or Reserve Product Provider with respect to such Bonds, the pledge of the amounts on deposit from time to time in the funds and accounts created hereby and all {OR548757;1 } OR540859;3 35 02-1057 covenants, agreements and other obligations of the City to the Bondholders of such Bonds shall continue to exist and the Bond Insurer and/or the Reserve Product Provider, as applicable, to the extent of any payment by such entity with respect to such Bonds, shall be subrogated to the rights of such Bondholders. SECTION 11.07. Bond Insurer's Rights Upon Events of Default. Anything in this Resolution to the ceptrary notwithstanding, if any event of default has occurred and is continuing while a Bond Insuranc; Policy securing all or a portion of the Bonds is in effect and not in default, the Bond Insurer shall, except as set forth below, have the right, in lieu of the holders of the Bonds secured by said Bond Insurance Policy, by an instrument in writing, executed and delivered to the Default Trustee, if any (provided that if there is no Default Trustee then in place, such instrument shall be delivered to the City) to direct the time, method and place of conducting all remedial proceedings available to the Default Trustee under this Resolution, or exercising any trust or power conferred on the Default Trustee by this Resolution. Said direction shall be controlling to the extent the direction of holders of the Bonds would have been controlling under this Article XI. If the Bond Insurer shall be in default in the performance of its obligations under the Bond Insurance Policy, said Bond Insurer shall have no rights under this Section. ARTICLE XII SECONDARY MARKET DISCLOSURE SECTION 12.01. Continuing Disclosure Undertaking. For the benefit of the holders and beneficial owners from time to time of the Bonds, the City agrees, in accordance with and as the only obligated person with respect to the Bonds under Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), to provide or cause to be provided such financial information and operating data, financial statements and notices, in such manner, as may be required for purposes of paragraph (b)(5) of the Rule. In order to describe and specify certain terms of the City's continuing disclosure agreement, including provisions for enforcement, amendment and termination, the City Manager is hereby authorized and directed to sign and deliver, in the name and on behalf of the City, a Continuing Disclosure Agreement (the "Continuing Disclosure Commitment"), in substantially the form attached hereto as Exhibit "E", with such changes, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager, after consultation with the City Attorney, Bond Counsel or the City's disclosure counsel. The execution of the Continuing Disclosure Commitment, for and on behalf of the City by the City Manager, shall be deemed conclusive evidence of the City's approval of the Continuing Disclosure Commitment. The agreement formed, collectively, by this paragraph and the Continuing Disclosure Commitment, shall be the City's continuing disclosure agreement for purposes of the Rule, and its performance shall be subject to the availability of funds to meet costs the City would be required to incur to perform it. Notwithstanding any other provisions of this Resolution, any failure by the City to comply with any provisions of the Continuing Disclosure Commitment or this Section 12.01 shall not constitute a default under this Resolution and the remedies therefor shall be solely as provided in the Continuing Disclosure Commitment. The City Manager is further authorized and directed to establish, or cause to be established, procedures in order to ensure compliance by the City with the Continuing Disclosure Commitment, including the timely provision of information and notices. Prior to making any (ox548757;1) oR540859;3 36 02-1057 filing in accordance with such agreement, the City Manager shall consult with, as appropriate, the City Attorney, Bond Counsel or the City's disclosure counsel. The City Manager, acting in the name and on behalf of the City, shall be entitled to rely upon any legal advice provided by the City Attorney, Bond Counsel or the City's disclosure counsel in determining whether a filing should be made. ARTICLE XIII MISCELLANEOUS PROVISIONS -SECTION 13.01. Modification or Amendment. This Resolution may be modified or amended by ordinance or resolution and may be supplemented for the addition of terms, covenants and provisions in the manner herein provided and as may further be necessary for issuance of the Bonds hereunder from time to time by supplemental resolution adopted concurrently with or prior to the issuance of the Bonds. Thereafter, no modification or amendment of this Resolution or of any resolution or ordinance amendatory hereof or supplemental hereto not provided for herein, materially adverse to the holders of the Bonds, the Bond Insurer or the Reserve Product Provider, if any, may be made without the consent in writing of the owners of not less than a majority of the aggregate principal amount of Bonds Outstanding, but no modification, amendment or supplemental ordinance or resolution shall permit a change (a) in the maturity of the Bonds or a reduction in the rate of interest thereon, (b) in the amount of the principal obligation of any Bond, (c) that would affect the covenant of the City to budget and appropriate legally available non -ad valorem revenues of the City for the payment of the amounts provided herein pursuant to Section 6.03 hereof, or (d) that would reduce such percentage of holders of the Bonds, required above for such modifications or amendments, without the consent all of the Bondholders. For the purpose of Bondholders' voting rights or consents, the Bonds owned by or held for the account of the City, directly or indirectly, shall not be counted. The City may amend this Resolution to make other amendments not prohibited by the foregoing without the consent of the Bondholders. Notwithstanding anything to the contrary contained in this Resolution, for so long as any Bond Insurance Policy securing the Bonds is in effect and the Bond Insurer is not in default of its obligations thereunder, such Bond Insurer shall be treated as the holder of the Bonds secured by the Bond Insurance Policy for purposes of this Section 13.01 and the written consent of such Bond Insurer to a proposed amendment or supplement to this Resolution shall be deemed to be the consent of the holders of the Bonds secured by the Bond Insurance Policy issued by such Bond Insurer. SECTION 13.02. Defeasance. If, at any time after the date of issuance of the Bonds (a) a41 Bonds secured hereby or any maturity thereof shall have become due and payable in accordance with their terms or otherwise as provided in this Resolution, or shall have been duly called for redemption (if applicable), or the City gives the Paying Agent irrevocable instructions directing the payment of the principal of, redemption premium, if any, and interest on such Bonds at maturity or at any earlier redemption date scheduled by the City, or any combination thereof, (b) the full amount of the principal, redemption premium, if any, and the interest so due and payable upon all of such Bonds then outstanding or any portion of such Bonds, at maturity or upon redemption (if applicable), shall be paid, or sufficient moneys shall be held by an escrow agent who shall be an Authorized Depository or any Paying Agent (other than the City) in (oR548757;1) OM40859;3 37 02-1057 irrevocable trust for the benefit of such Bondholders (whether or not in any accounts created hereby) which, when invested in Government Obligations maturing not later than the maturity or redemption (if applicable) dates of such principal, redemption premium, if any, and interest, will, together with the income realized on such investments, be sufficient to pay all such principal, redemption premium, if any, and interest on said Bonds at the maturity thereof or the date upon which such Bonds are to be called for redemption (if applicable) prior to maturity, and (c) provision shall also be made for paying all other sums payable hereunder by the City allocable to such Bonds, including, but not limited to the payment of Policy Costs owed to a Reserve i : oduct Provider, then and in that case the right, title and interest of such Bondholders hereunder shall thereupon cease, determine and become void; otherwise, this Resolution shall be, continue and remain in full force and effect. Notwithstanding any other provision of this Resolution, including in particular this Section 13.02, the obligation to pay over the Rebate Amount to the United States and to comply with all other requirements of Section 13.03 hereof shall survive the defeasance or payment in full of the Bonds. SECTION 13.03. Tax Covenants. The City hereby covenants and agrees, for the benefit of the owners from time to time of the Bonds, to comply with the requirements applicable to it contained in the Code to the extent necessary to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. Specifically, without intending to limit in any way the generality of the foregoing, the City covenants and agrees: (a) to pay to the United States of America from the funds and sources of revenues pledged to the payment of the Bonds, and from any other legally available funds, at the times required pursuant to Section 148(f) of the Code, the excess of the amount earned on all non -purpose investments (as defined in Section 148(f)(6) of the Code) over the amount which would have been earned if such non -purpose investments were invested at a rate equal to the yield on the Bonds, plus any income attributable to such excess, computed in accordance with the applicable provisions of the Code (the "Rebate Amount"); (b) to maintain and retain all records pertaining to and to be responsible for making or causing to be made all determinations and calculations of the Rebate Amount and required payments of the Rebate Amount as shall be necessary to comply with the Code; (c) to refrain from using proceeds from the Bonds in a manner that would cause the Bonds to be classified as private activity bonds under Section 141(a) of the Code; (d) to refrain from taking any action that would cause the Bonds, or any of them, to become arbitrage bonds under Section 148 of the Code or hedge bonds under Section 149(g) of the Code; and (e) so long as the Bonds are outstanding, to determine within 90 days after the beginning of each Fiscal Year the amount that is available to the City as of the beginning {OR548757;1} OR540859;3 38 02-1057 of that Fiscal Year to pay working capital expenditures of the type financed or refinanced by the Bonds ("Available Amounts"), and to restrict the investment of a portion of the Available Amount equal to the outstanding principal amount of the Bonds as of the beginning of that Fiscal Year to the yield on the until the Available Amount for the immediately succeeding Fiscal Year has been determined. For purposes of this paragraph (e), "Available Amount" excludes the proceeds of the Bonds but includes cash, investments, and other amounts held in accountmr otherwise by the City or a related party if these amounts may be used by the City for working capital expenditures of the type being financed or refinanced by the Bonds without legislative (but excluding appropriation) or judicial action and without a legislative, judicial, or contractual requirement that those amounts be reimbursed to the fund in which such amounts have been deposited. Available Amount shall not include a working capital reserve that does not exceed 5% of the actual expenditures of the City during the prior Fiscal Year, whether for capital or working capital expenditures, that are paid out of current revenues. The City understands that the foregoing covenants impose continuing obligations on the City to comply with the requirements of the Code so long as such requirements are applicable. SECTION 13.04. Bond Insurance Policy Provisions. So long as the Bonds are Outstanding and insured by the Bond Insurance Policy, the City hereby makes the following covenants and agreements for the benefit of the Bond Insurer: (A) Information: The Bond Insurer shall be provided with the following information: (i) the budget for the current fiscal year (within 120 days of the beginning of such fiscal year), annual audited financial statements (on each April 30`h), a statement of the amount on deposit in the Reserve Fund as of the last valuation (on each April 30`s); (ii) official statement or other disclosure document, if any, prepared in connection with the issuance of additional debt secured by the Covenant Revenues within 30 days of the sale thereof; (iii) notice of any draw upon or deficiency due to market fluctuation in the amount, if any, on deposit in the Reserve Fund; (iv) notice of the redemption, other than mandatory sinking fund redemption, of any Bonds, including the principal amount, maturities and CUSIP numbers thereof; (v) such additional information as the Bond Insurer may reasonably request from time to time; and (vi) a full transcript of all proceedings relating to the adoption of any supplement to this Resolution or any other principal financing document. (B) Payments from the Bond Insurance Policy. At (i) If on the Business Day immediately preceding an interest payment date, there is not on deposit with the Paying Agent sufficient moneys available to pay all principal of and interest on the Bonds due on such date, the Paying Agent shall immediately notify the Bond Insurer and State Street Bank and Trust Company, N.A., New York, New York, or its successor, as its Fiscal Agent (the "Fiscal Agent") of the amount of such deficiency. If, by said interest payment date, the City has not provided the amount of such deficiency, the Paying Agent shall simultaneously make available to the Bond Insurer and to the Fiscal Agent the registration books for the Bonds. In addition: (Ox548757;1) OR540859;3 WE 02-1057 (a) the Paying Agent shall provide the Bond Insurer with a list of Bondholders entitled to receive principal or interest payments from the Bond Insurer under the terms of the Bond Insurance Policy and shall make arrangements for the Bond Insurer and its Fiscal Agent (1) to mail checks or drafts to Bondholders entitled to receive full or partial interest payments from the Bond Insurer and (2) to pay principal of the Bonds surrendered to the Fiscal Agent by the Bondholders entitled to receive full or partia}-- payments from the Bond Insurer; acid (b) The Paying Agent shall, at the time it makes the registration books available to the Bond Insurer pursuant to (a) above, notify Bondholders entitled to receive the payment of principal of or interest on the Bonds from the Bond Insurer (1) as to the fact of such entitlement, (2) that the Bond Insurer will remit to them all or part of the interest payments coming due, subject to the terms of the Bond Insurance Policy, (3) that, except as provided in paragraph (ii) below, in the event that any Bondholder is entitled to receive full payment of principal from the Bond Insurer, such Bondholder must tender his Bond with the instrument of transfer in the form provided on the Bond executed in the name of the Bond Insurer and (4) that, except as provided in paragraph (ii) below, in the event that such Bondholder is entitled to receive partial payment of principal from the Bond Insurer, such Bondholder must tender his Bond for payment first to the Paying Agent, which shall note on such Bond the portion of principal paid by the Paying Agent, and then, with an acceptable form of assignment executed in the name of the Bond Insurer, to the Fiscal Agent, which will then pay the unpaid portion of principal to such Bondholder subject to the terms of the Insurance Policy. (ii) In the event that the Paying Agent has notice that any payment of principal of or interest on a Bond has been recovered from a Bondholder pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying Agent shall, at the time it provides notice to the Bond Insurer, notify all Bondholders that in the event that any Bondholder's payment is so recovered, such Bondholder will be entitled to payment from the Bond Insurer to the extent of such recovery, and the Paying Agent shall fumish to the Bond Insurer its records evidencing the payments of principal of and interest on the Bonds which have been made by the Paying Agent and subsequently recovered from �R. Bondholders, and the dates on which such payments were made. (ox548757;1) OR540859;3 (iii) The Bond Insurer shall, to the extent it makes payment of principal of or interest on the Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Bond Insurance Policy and, to evidence such subrogation, (1) in case of subrogation as to claims for past due interest, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books maintained by the Registrar upon receipt from the Bond Insurer of proof of the payment of interest thereon to the holders of such Bonds and (2) in 40 02-1057 the case of subrogation as to claims for past due principal, the Paying Agent shall note the Bond Insurer's rights as subrogee on the registration books for the Bonds maintained by she Registrar upon receipt of proof of the payment of principal thereof to the holders of such Bonds. Notwithstanding anything in this Resolution or the Bonds to the contrary, the Paying Agent shall make payment of such past due interest and past due principal directly to the Bond Insurer to the extent that the Bond Insurer is a subrogee with respect thereto. (C) Notices. The notice address for the Bond Insurer and the Fiscal Agent are: Financial Guaranty Insurance Company 125 Park Avenue New York, New York 10017 Attention: Risk Management State Street Bank and Trust Company, N.A. 61 Broadway New York, New York 10006 Attention: Corporate Trust Department (D) Amendments to Resolution. Notwithstanding anything in the Resolution to the contrary, any amendment or supplement to the Resolution shall be subject to the prior written consent of the Bond Insurer. Any rating agency rating the Bonds must receive notice of such amendment and a copy thereof at least 15 days in advance of its adoption. (Ox548757;1) OM40859;3 (E) Default -Related Provisions. (i) In determining whether an event of default has occurred under the Resolution or whether a payment on the Bonds has been made under the Resolution, no effect shall be given to payments made under the Bond Insurance Policy. (ii) The Bond Insurer shall receive immediate notice of any payment default and notice of any other default known to the Paying Agent or the City within 30 days of the Paying Agent's or the City's knowledge thereof. (iii) Except regarding the giving of notice of default to the Bondholders, the Bond Insurer shall be deemed to be the sole holder of the Bonds it has insured for so long as it has not failed to comply with its payment obligations under the Bond Insurance Policy. (iv) The Bond Insurer shall be included as a party in interest and as a party entitled to (i) notify the City, the Paying Agent, if any, or any applicable receiver of the occurrence of an event of default and (ii) request the Paying Agent or receiver to intervene in judicial proceedings that affect the Bonds or the security therefor. The Paying Agent or Default Trustee shall be required to accept notice of default from the Bond Insurer. 41 02-1057 (v) Any acceleration of the Bonds or annulment thereof shall be subject to the prior written consent of the Bond Insurer (if it has not failed to comply with its payment obligations under the Bond Insurance Policy). (vi) Remedies under this Resolution shall be cumulative with respect to the Default Trustee, if any, Bondholders and the Bond Insurer. If any remedial action is discontinued or abandoned, any Default Trustee, if any, Bondholders and Bond Insurer shall be restored to their former positions. (F) Successor Paving Agent or Registrar. Any successor Paying Agent and Registrar must have combined capital, surplus and undivided profits of at least $50 million, unless this requirement is waived in writing by the Bond Insurer. No resignation or removal of the Paying Agent or Registrar shall become effective until a successor has been appointed and has accepted the duties of Paying Agent or Registrar, as applicable. The Bond Insurer shall be furnished with written notice of the resignation or removal of the Paying Agent or Registrar and the appointment of any successor thereto. SECTION 13.05. Severability. If any one or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to 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 severed from the remaining covenants, agreements or provisions of this Resolution or of the Series 2002C Bonds issued hereunder. SECTION 13.06. No Third -Party Beneficiaries. Except as herein otherwise expressly provided, nothing in this Resolution expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the parties hereto and the owners and holders of the Series 2002C Bonds issued under and secured by this Resolution, any rights, remedy or claim, legal or equitable, under or by reason of this Resolution or any provision hereof, this Resolution and all its provisions being intended to be and being for the sole and exclusive benefit of the parties hereto and the owners and holders from time to time of the Series 2002C Bonds issued hereunder. SECTION 13.07. Controlling Law; Members of City Not Liable. All covenants, stipulations, obligations and agreements of the City contained in this Resolution shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized by the Act and provided by the Constitution and laws of the State of Florida. No covenant, s4pulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent or employee of the City in his individual capacity, and neither the members of the City nor any official executing the Series 2002C Bonds shall be liable personally on the Series 2002C Bonds or this Resolution or shall be subject to any personal liability or accountability by reason of the issuance or the execution by the City or such members thereof. SECTION 13.08. Effect of Covenants. All covenants, stipulations, obligations and agreements of the City contained in this Resolution shall be deemed to be covenants, {OR548757;1) OR540859;3 42 p2-1057 stipulations, obligations and agreements of the City and of the Governing Body and of each department and agency of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall bind or inure to the benefit of the successor or successors thereof from time to time and any officer, board, body or commission to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law. Except as otherwise provided herein, all rig'.,ts, powers and privileges conferred and duties and liabilities imposed upon the City or upon the Governing Body by the provisions of this Resolution shall be exercised or performed by the Governing Body, or by such other officers, board, body or commission as may be required by law to exercise such powers or to perform such duties. SECTION 13.09. Further Authorizations. The Mayor and the City Manager or either of them and the Clerk, the Director of Finance and the City Attorney and such other officers and employees of the City as may be designated by the Mayor and the City Manager or either of them are each designated as agents of the City in connection with the sale, issuance and delivery of the Bonds and are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, documents and contracts on behalf of the City, including, but not limited to, the filing of any required subscriptions for United States Treasury Securities — State and Local Government Series and the execution of documentation required in connection with the negotiated sale of the Bonds to the Underwriters, that are necessary or desirable in connection with the sale, execution and delivery of the Bonds, and which are specifically authorized or are not inconsistent with the tenons and provisions of this Resolution, the Bond Purchase Agreement, the Escrow Deposit Agreement, the Paying Agent and Registrar Agreement, the Continuing Disclosure Commitment or any action relating to the Bonds heretofore taken by the City. Such officers and those so designated are hereby charged with the responsibility for the issuance of the Bonds. Any and all costs incurred in connection with the issuance of the Bonds and/or the refunding of the Refunded Bonds are hereby authorized to be paid from the proceeds of the Bonds. SECTION 13.10. Repeal of Inconsistent Resolution. All resolutions or parts thereof in conflict herewith are to the extent of such conflict superseded and repealed. SECTION 13.11. Effective Date. This Resolution shall be effective immediately upon its adoption. ot- {OR54875r, t } OR540859;3 43 02-1057 PASSED AND ADOPTED this 26th day of September, 2002. Mayes UaM36 City Clerk APPROVED AS TO FORM AND CORRECTNESS: City Attomey A. {OR548757;1 } ORS40859;3 02-105'7