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HomeMy WebLinkAbout2003 - R-03-49 CIP�ctrso�u�ion hN�lbloc: �'ng �6,4W,tri►o in Cap:iw l RESOLUTION NO. R-0349 xv%flfiv 4pW%0 't'}"1 13�', ss RESOLUTION OF CITY COUNCIL OF THE CITY OF SEBASTIAN, FLORIDA AMENDING AND SUPPLEMENTING RESOLUTION NO. 80348 OF THE CITY; AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $6,400,000 IN AGGREGATE PRINCIPAL AMOUNT OF STORMWATER UTILITY REVENUE BONDS, SERIES 2003 IN ORDER TO FINANCE THE ACQUISMON, CONSTRUCTION AND RECONSTRUCTION OF CERTAIN CAPITAL IMPROVEMENTS IN AND FOR THE CITY, TOGETHER WITH CAPITALIZED INTEREST, IF ANY, AND CERTAIN COSTS ASSOCIATED THEREWITH; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; PROVIDING FOR PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON SUCH BONDS; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS; PROVIDING CERTAIN TERMS AND DETAILS OF SUCH BONDS, INCLUDING AUTHORIZING A NEGOTIATED SALE OF SAID BONDS AND THE EXECUTION AND DELIVERY OF A BOND PURCHASE CONTRACT WITH RESPECT THERETO; ESTABLISHING A BOOK -ENTRY SYSTEM OF REGISTRATION FOR THE BONDS; APPOINTING THE PAYING AGENT AND REGISTRAR WITH RESPECT TO SAID BONDS; AUTHORIZING THE USE OF A PRELIMINARY OFFICIAL STATEMENT AND THE EXECUTION AND DELIVERY OF A FINAL OFFICIAL STATEMENT WITH RESPECT THERETO; AUTHORIZING THE CITY MANAGER TO TAKE CERTAIN ACTIONS AND TO EXECUTE AND DELIVER CERTAIN DOCUMENTS; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY CITY COUNCIL OF THE CITY OF SEBASTIAN, FLORIDA, as follows: SECTION 1. DEFINITIONS. When used in this Supplemental Resolution, the terms defined in the Authorizing Resolution (herein defined) shall have the meanings therein stated, except as such definitions may be hereinafter amended or defined. SECTION 2. FINDINGS. It is hereby found and determined that: (A) On October 22, 2003, the City Council (the "City Council") of the City of Sebastian, Florida (the "Issuer") duly adopted ResolutionNo. R-03-48 (the "Authorizing Resolution"), forthepumposes described therein, authorizing, among other things, the issuance of certain Stormwater Utility Revenue Bonds of the Issuer. The Authorizing Resolution, as further amended and supplemented hereby, is referred to herein as the "Resolution." (B) The Issuer hereby determines it to be in the best interests of the Issuer and its residents to issue the Series 2003 Bonds pursuant to the terms of the Resolution in order to construct thelnitial Project. (C) Due to the present volatility of the market for tax-exempt obligations such as the Series 2003 Bonds and the complexity of the transactions relating to such Series 2003 Bonds, it is in the best interest of the Issuer to sell the Series 2003 Bonds by a negotiated sale, allowing the Issuer to enter the market at the most advantageous time, rather than at a specified advertised date, thereby permitting the Issuer to obtain the best possible price and interest rate for the Series 2003 Bonds. (D) Kirkpatrick Pettis (the "Underwriter") has offered to purchase the entire principal amount of the Series 2003 Bonds from the Issuer and has submitted a Bond Purchase Contract, the form of which is attached hereto as Exhibit A (the'Purchase Contract") expressing the terms and conditions of such offer, and the Issuer does hereby find and determine that it is in the best financial interest of the Issuer and its residents that the terms expressed in the Purchase Contract be accepted by the Issuer, subject, however, to the conditions for award set forth in Section 6 hereof. (E) Inasmuch as the City Council desires to sell the Series 2003 Bonds at the most advantageous time and not wait for a scheduled City Council meeting, so long as the herein described parameters are met, the Issuer hereby determines to delegate the award and sale of the Series 2003 Bonds to the City Manager within such parameters. (F) The Issuer hereby certifies that it is not in default in performing any of the covenants and obligations assumed under the Resolution and all ofthe covenants contained in the Resolution shall apply to the Series 2003 Bonds. (G) The Initial Project is of the nature and type that is beneficial to, or available to, all of the citizens of the Issuer. (H) The Resolution provides that the Series 2003 Bonds shall mature on such dates and in such amounts, shall bear interest at such rates, shall be payable in such places and shall be subject to such redemption provisions as shall be determined by Supplemental Resolution adopted by the Issuer, and it is now appropriate that the Issuer set forth the parameters and mechanism to determine such temps and details, which terms and details shall be set forth in the hereinafter defined Purchase Contract. (1) The principal of and interest on the Series 2003 Bonds and all required sinking fund, reserve and other payments shall be limited obligations of the Issuer, payable solely from the Pledged Funds (as defined in the Resolution) on parity in all respects with any Additional Bonds that may be subsequently issued pursuant to the Resolution, all to the extent provided in the Resolution. The Series 2003 Bonds shall not constitute a general obligation, or a pledge ofthe faith, credit or taxing power of the Issuer, the State of Florida, or any political subdivision thereof, within the meaning of any constitutional or statutory provisions. Neither the State of Florida, nor any political subdivision thereof, nor the Issuer shall be obligated (i) to exercise its ad valorem taxing power in any form on any real or personal property of or in the Issuer to pay the principal of the Series 2003 Bonds, the interest thereon, or other costs incidental thereto or (ii) to pay the same from any other funds of the Issuer except from the Pledged Funds, in the manner provided in the Resolution. SECTION 3. AUTHORITY FOR THIS SUPPLEMENTAL RESOLUTION. This Supplemental Resolution is adopted pursuant to the provisions of the Act, the Authorizing Resolution and other applicable provisions of law. SECTION 4. AUTHORIZATION OF THE INITIAL PROJECT. The Issuer hereby authorizes the acquisition and construction of the Initial Project and, upon the satisfaction in all respects of the conditions set forth in Section 6 hereof, the financing thereof with proceeds of the Series 2003 Bonds. SECTION 5. AUTHORIZATION AND DESCRIPTION OF THE SERIES 2003 BONDS. The Lssuerhereby authorizes the issuance of a Series of Bonds in the aggregate principal amount of not exceeding $6,400,000 to be known as the "City of Sebastian, Florida Stormwater UdlityRevenue Bonds, Series 2003", which Series 2003 Bonds are issued for the principal purpose of financing the Costs of the acquisition and construction ofthe Initial ProjecL The aggregate principal amount of the Series 2003 Bonds to be issued pursuant to the Resolution shall be determined by the City Manager provided such aggregate principal amount does not exceed $6,400,000. The Series 2003 Bonds shall be dated as of November 1, 2003 or such other date as the City Manager may determine, shall be issued in the form of fully registered Bonds in the denomination of $5,000 or any integral multiple thereof, shall be numbered consecutively from one upward in order of maturity preceded by the letter "R', shall bear interest from the dated date determined therefor, payable semi-annually, on October 1 and April 1 of each year (the "Interest Payment Date"), commencing on April 1, 2004 or such other date as may be determined by the City Manager. The principal of, or Redemption Price, as applicable, of the Series 2003 Bonds, shall be payable at the designated corporate trust office of Bank One Trust Company, National Association, Columbus, Ohio, or its successors or assigns, as Paying Agent, upon presentation, when due, of the Series 2003 Bonds. Payment of interest on the Series 2003 Bonds shall be made to the owner thereof and shall be paid by check or draft of Bank One Trust Company, National Association, Columbus, Ohio, or its successors or assigns, as Paying Agent to the Holder in whose name the Series 2003 Bond is registered at the close of business on the 15th day of the calendar month (whether or not a business day) next preceding the Interest Payment Date, or, at the option of the Paying Agent, and at the request and expense of such Holder, by bank wire transfer for the account of such Holder. All payments shall be made in accordance with and pursuant to the terms of the Resolution and the Series 2003 Bonds and shall be payable in any coin and currency of the United States of America which, at the time of payment, is legal tender for the payment of public or private debts. The Series 2003 Bonds shall bear interest at such rates and yields, shall mature on April 1 of each of the years and in the principal amounts corresponding to such years, and shall have such redemption provisions as determined by the City Manager subject to the conditions set forth in Section 6 hereof. Allof the terms of the Series 2003 Bonds will be included in a Purchase Contract which shall be in substantially the form attached hereto and made a part hereof as Exhibit A (the 'Purchase Contract"). The City Manager is hereby authorized to execute the Purchase Contract in substantially the form attached hereto as Exhibit A with such modifications as he deems appropriate upon satisfaction of the conditions described in Section 6 hereof. Execution of the Purchase Contract by the City Manager shall be conclusive evidence of approval ofthe terms and details of the Series 2003 Bonds and any modifications to the Purchase Contract provided therein. SECTION 6. CONDITIONS TO EXECUTION OF PURCHASE CONTRACT. The Purchase Contract shall not be executed by the City Manager until such time as all of the following conditions have been satisfied: (A) Receipt by the City Manager of a written offer to purchase the Series 2003 Bonds by the Underwriter substantially in the form of the Purchase Contract attached hereto as Exhibit A, said offer to provide for or demonstrate, among other things, (i) not exceeding $6,400,000 initial aggregate principal amount of Series 2003 Bonds, (ii) an underwriting discount (including management fee and expenses) not in excess of one point two percent (1.2%) ofthe par amount of Series 2003 Bonds, (iii) a true interest cost for the Series 2003 Bonds of not more than six percent (6.01/6) per annum, and (iv) the maturities ofthe Series 2003 Bonds, with the final maturity being not later than April 1, 2028. (B) Receipt by the City Manager of a disclosure statement and atmttrin-bonding statement of the Underwriter dated the date of the Purchase Contract and complying with Section 218.385, Florida Statutes. (C) Receipt by the City Manager of a good faith deposit from the Underwriter in an amount not less than 1% of the par amount of the Series 2003 Bonds in accordance with the Purchase Contract. Upon satisfaction of all the requirements set forth in this Section 6, the City Manager is authorized to execute and deliver the Purchase Contract containing terms complying with the provisions ofthis Section 6. SECTION 7. REDEMPTION PROVISIONS FOR SERIES 2003 BONDS. The Series 2003 Bonds may be redeemed prior to their respective maturities from any moneys legally available therefor, upon notice as provided in the Resolution, upon the terms and provisions as determined by the City Manager and set forth in the Purchase Contract subject to the conditions contained in Section 6 hereof. SECTION 8. FULL BOOK -ENTRY. The Series 2003 Bonds shall be initially issued in the form of a separate single certificated fully registered Series 2003 Bond for each of the maturities of the Series 2003 Bonds. Upon initial issuance, the ownership of each such Bond shall be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of The Depository Trust Company ('DTC"). As long as the Series 2003 Bonds are registered in the name of Cede & Co., all of the Outstanding Series 2003 Bonds shall be registered in the registration books kept by the Registrar in the name of Cede & Co., all payments of principal on the Series 2003 Bonds shall be made by the Paying Agent by check or draft or by bank wire transfer to Cede & Co., as Holder of the Series 2003 Bonds, upon presentation of the Series 2003 Bonds to be paid, to the Paying Agent. With respect to Series 2003 Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation to any direct or indirect participant in the DTC book -entry program (the "Participants'). Without limiting the immediately preceding sentence, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation with respect to (A) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest on the Series 2003 Bonds, (B) the delivery to any Participant or any other Person other than a Bondholder, as shown in the registration books kept by the Registrar, of any notice with respect to the Series 2003 Bonds, including any notice of redemption, or (C) the payment to any Participant or any other Person, other than a Bondholder, as shown in the registration books kept by the Registrar, of any amount with respect to principal of, Redemption Price, if any, or interest on the Series 2003 Bonds. The Issuer, the Registrar and the Paying Agent may treat and consider the Person in whose name each Series 2003 Bond is registered in the registration books kept by the Registrar as the Holder and absolute owner of such Bond for the purpose of payment of principal, Redemption Price, if any, and interest with respect to such Bond, for the purpose ofgiving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent shall pay all principal of, Redemption Price, if any, and interest on the Series 2003 Bonds only to or upon the order of the respective Holders, as shown in the registration books kept by the Registrar, or their respective attorneys duly authorized in writing, as provided herein and all such payments shall be valid and effective to fully satisfyand discharge the Issuer's obligations with respect to payment of principal of, Redemption Price, if any, and interest on the Series 2003 Bonds to the extent of the sum or sums so paid. No Person other than a Holder, as shown in the registration books kept by the Registrar, shall receive a certificated Bond evidencing the obligation ofthe Issuer to make payments ofprincipal, Redemption Price, if any, and interest pursuant to the provisions of the Resolution. Upon delivery by DTC to the Issuer of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in the Resolution with respect to transfers during the 15 days next preceding an Interest Date or first mailing of a notice of redemption, the words "Cede & Co." in this Supplemental Resolution shall refer to such new nominee of DTC; and upon receipt of such notice, the Issuer shall promptly deliver a copy of the same to the Registrar and the Paying Agent. Upon (A) receipt by the Issuer of written notice from DTC (i) to the effect that a continuation ofthe requirement that all ofthe outstanding Series 2003 Bonds be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee ofDTC, is not in the best interest ofthe beneficial owners ofthe Series 2003 Bonds or (ii) to the effect that DTC is unable or unwilling to discharge its responsibilities and no substitute depository willing to undertake the functions of DTC hereunder can be found which is willing and able to undertake such functions upon reasonable and customary terms, or (B) determination by the Issuer that such book -entry only system is burdensome or undesirable to the Issuer, the Series 2003 Bonds shall no longer be restricted to being registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names Holders shall designate, in accordancewith the provisions ofthe Resolution. In such event, the Issuer shall issue and the Registrar shall authenticate, transfer and exchange the Series 2003 Bonds of like principal amount and maturity, in denominations of $5,000 or any integral multiple thereof to the Holders thereof. The foregoing notwithstanding, until such time as participation in the book -entry only system is discontinued, the provisions set forth in the Blanket Issuer Letter ofRepresentations previously executed by the Issuer and delivered to DTC shall apply to the payment of principal of, premium, if any, and interest on the Series 2003 Bonds. SECTION 9. APPLICATION OF SERIES 2003 BOND PROCEEDS. The proceeds derived from the sale of the Series 2003 Bonds shall be applied by the Issuer as follows: (A) An amount equal to the accrued interest, ifany, and capitalized interest, if any, on the Series 2003 Bonds shall be deposited to the Interest Account ofthe Debt Service Fund and shall be used to pay a portion of the interest on the Series 2003 Bonds. (B) A sufficient amount of the Series 2003 Bond proceeds shall be applied to the payment of the premium for any municipal bond insurance policy applicable to the Series 2003 Bonds and to the payment of costs and expenses relating to the issuance of the Series 2003 Bonds. (C) An amount of the Series 2003 Bond proceeds shall be used to pay the premium of the Reserve Account Insurance Policy approved pursuant to Section 17 hereof. (D) The remainder of the proceeds of the Series 2003 Bonds shall be deposited to the Series 2003 Account of the Construction Fund and applied to pay the Costs of the Initial Project. SECTION 10. PRELUvHNARY OFFICIAL STATEMENT. The Issuerhereby authorizes the distribution and use ofthe Preliminary Official Statement in substantially the form attached hereto as Exhibit B in connection with the offering of the Series 2003 Bonds for sale. If between the date hereof and the mailing of the Preliminary Official Statement, it is necessary to make insertions, modifications or changes in the Preliminary Official Statement, the City Manager, upon the advice of the City Attorney and the Issuer -s Disclosure Counsel, is hereby authorized to approve such insertions, changes and modifications. The City Manager, upon the advice of the City Attorney and the Issuer -s Disclosure Counsel, is hereby authorized to deem the Preliminary Official Statement "final' within the meaning of Rule 15c2 -12(b)(1) under the Securities Exchange Act of 1934 in the form as mailed. Execution of a certificate by the City Manager deeming the Preliminary Official Statement "final' as described above shall be conclusive evidence of the approval of any insertions, changes or modifications. SECTION IL OFFICIAL STATEMENT. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, the form, terns and provisions ofthe final Official Statement relating to the Series 2003 Bonds shall be substantially as set forth in the Preliminary Official Statement and shall include all of the specific financial terms of the Series 2003 Bonds; provided, however, the Official Statement shall not be prepared or distributed unless the conditions set forth in Section 6 hereofhave been satisfied in all respects. Subject in all respects to the satisfaction of the conditions set forth in Section 6 heteot the City Manager is hereby authorized and directed to execute and deliver said Official Statement in the name and on behalf of the Issuer, and thereupon to cause such Official Statement to be delivered to the Underwriter with such changes, amendments, modifications, omissions and additions as may be approved by the City Manager, upon the advice of the City Attorney and the Issuer -s Disclosure Counsel. Said Official Statement, including any such changes, amendments, modifications, omissions and additions as approved by the City Manager and the information contained therein are hereby authorized to be used in connection with the sale of the Series 2003 Bonds to the public. Execution by the City Manager of the Official Statement shall be deemed to be conclusive evidence of approval of such changes. SECTION I2.APPOINTMENTOFREGISTRAR AND PAYING AGENT. Subjectinall respects to the satisfaction of the conditions set forth in Section 6 hereof, Bank One Trust Company, National Association, and its successors and assigns, is hereby appointed Registrar and Paying Agent for the Series 2003 Bonds. The City Manager is hereby authorized to enter into any agreement which may be necessary to effect the transactions contemplated by this Section 12 and by the Authorizing Resolution. SECTION 13. MUNICIPAL BOND INSURANCE. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, the Issuer hereby authorizes the payment of the principal of and interest on the Series 2003 Bonds to be insured pursuant to the financial guaranty insurance policy (the "Bond Insurance Policy") that insures the payment when due of the principal of and interest on the Series 2003 Bonds as provided therein issued by MBIA Insurance Corporation ("MBIA"), a stock insurance company incorporated under the laws of the State of New York The City Manager and the Clerk are hereby authorized to execute such documents and instruments necessary to cause MBIA to insure the Series 2003 Bonds. With respect to the Series 2003 Bonds, MBIA shall be deemed to be the 'Insurer" as such term is used and defined in the Resolution. SECTION 14. PROVISIONS RELATING TO BOND INSURANCE POLICY. Solong as the Bond Insurance Policy issued by MBIA is in full force and effect and MBIA has not defaulted in its 7 payment obligations under the Bond Insurance Policy, the Issuer agrees to comply with the following provisions, notwithstanding any provision in the Resolution to the contrary: (A) In the event that, on the second Business Day, and again on the Business Day, prior to the payment date on the Series 2003 Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Series 2003 Bonds due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify the Insurer or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, ofthe amount of the deficiency. (B) If the deficiency is trade up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the Insurer or its designee. (C) In addition, if the Paying Agent has notice that any Bondholder has been required to disgorge payments of principal or interest on the Series 2003 Bonds to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such Bondholder within the meaning of any applicable banlauptcy laws, then the Paying Agent shall notify the Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. (D) The paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as an attomey-m-fact for Bondholders of the Series 2003 Bonds as follows: 1. If and to the extent there is a deficiency in amounts required to pay interest on the Series 2003 Bonds, the Paying Agent shall (a) execute and deliver to U.S. Bank Trust National Association, or its successors under the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as agent for such Bondholders in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (b) receive as designee of the respective Bondholders (and not as Paying Agent) in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Bondholders; and 2. If and to the extent of a deficiency in amounts required to pay principal of the Series 2003 Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as agent for such Bondholder in any legal proceeding relating to the payment of such principal and an assignment to the Insurer of any of the Series 2003 Bonds surrendered to the Insurance Paying agent of so touch ofthe principal amount thereof as has not previously been paid or forwhich moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective Bondholders (and not as Paying Agent) in accordance with the tenor of the Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Bondholders. E. Payments with respect to claims for interest on and principal of Series 2003 Bonds disbursed by the Paying Agent from proceeds of the Bond Insurance Policy shall not be considered to discharge the obligation of the Issuer with respect to such Series 2003 Bonds, and the Insurer shall become the owner of such unpaid Series 2003 Bonds and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby agree for the benefit of the Insurer that: 1. They recognize that to the extent the Insurer makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Series 2003 Bonds, the Insurer will be subrogated to the rights of such Bondholders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in this Resolution and the Series 2003 Bonds; and 2. They will accordingly pay to the Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) ofthe first paragraph ofthe Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Resolution and the Series 2003 Bonds, but only from the sources and in the mannerprovided herein for the payment ofprincipal of and interest on the Series 2003 Bonds to Bondholders, and will otherwise treat the Insurer as the owner of such rights to the amount of such principal and interest. G. In connection with the issuance ofAdditional Bonds, the Issuer shall deliver to the Insurer a copy of the disclosure document, if any, circulated with respect to such Additional Bonds. a Copies of any amendments made to the documents executed in connection with the issuance of the Series 2003 Bonds which are consented to by the Insurer shall be sent to Standard & Poor's Corporation. I. The Insurer shall receive notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto. J. The Insurer shall receive copies of all notices required to be delivered to Bondholders and, on an annual basis, copies of the Issuers audited financial statements and Annual Budget. Notices: Any notice that is required to be given to a Bondholder or to the Paying Agent pursuant to the Resolution shall also be provided to the Insurer. All notices required to be given to the Insurer under the Resolution shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance. K. The Issuer agrees to reimburse the Insurer immediately and unconditionally upon demand, to the extentpermitted by law, for all reasonable expenses, including attorneys' fees and expenses, incurred by the Insurer in connection with (i) the enforcement by the Insurer of the Issuer's obligations, or the preservation or defense of any rights of the Insurer, under this Resolution and any other document executed in connection with the issuance ofthe Series 2003 Bonds, and (ii) any consent, amendment, waiver or other action with respect to the Resolution or any related document, whether or not granted or approved, together with interest on all such expenses from and including the date incurred to the date of payment at Citibanks Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is less. In addition, the Insurer reserves the right to charge a fee in connection with its review of any such consent, amendment or waiver, whether or not granted or approved. L. The Issuer agrees not to use MBIA's name in any public document including, without limitation, a press release or presentation, announcement or forum without MBIA's prior consent. In the event that the Issuer is advised by counsel that it has a legal obligation to disclose MBIA's name in any press release, public announcement or other public document, the Issuer shall provide MBIA with at least three (3) business days' prior written notice of its intent to use MBIA's name together with a copy of the proposed use ofMBIA's name and of any description of a transaction with MBIA and shall obtain MBIA's prior consent as to the form and substance of the proposed use of MBIA's name and any such description. M. The Issuer shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to which Series 2003 Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of such Series 2003 Bonds without the prior written consent of MBIA. SECTION 15. SECURITY FOR THE SERIES 2003 BONDS. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, neither the Series 2003 Bonds nor the interest thereon shall be or constitute a general indebtedness ofthe Issuer withinthe meaning of any constitutional or statutory provision or limitation, but shall be payable solely from and secured by a lien upon and pledge of the Pledged Funds in the manner provided in the Resolution. The Holders of any Series 2003 Bond shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form of any property therein for payment thereof, or be entitled to payment of such principal and interest from any other funds of the Issuer, except from the Pledged Funds in the manner provided in the Resolution. Until payment has been provided for as herein permitted, the payment of the principal of and interest on the Series 2003 Bonds shall be secured forthwith equally and ratably with any Outstanding Bonds issued under the Authorizing Resolution by an irrevocable lien on the Pledged Funds, and the Issuer does hereby irrevocably pledge and grant a lien upon the Pledged Funds to the payment of the principal of and interest on the Series 2003 Bonds in accordance with the terms hereof. 10 SECTION 16. ESTABLISHMENT OFA CERTAIN ACCOUNT AND SUBACCOUNT. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, pursuant to the authority ofthe Resolution, the Issuer hereby establishes a separate account within the Reserve Account of the Debt Service Fund to be known as the "Series 2003 Subaccount". Such Subaccount shall be initially funded in accordance with Section 9 hereof and shall be maintained and administered in accordance with the applicable provisions of the Resolution. SECTION 17. RESERVE ACCOUNT INSURANCE POLICY. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, the Issuer hereby authorizes the payment of the premium for the debt service reserve surety bond (the "Surety Bond") from MBIA in the amount of the Reserve Account Requirement for the Series 2003 Bonds. The City Manager and the Clerk are hereby authorized to execute such documents and instruments necessary to cause MBIA to issue the Surety Bond. SECTION I&SECONDARY MARKT DISCLOSURE. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, the Issuer hereby covenants and agrees that, in order to provide for compliance by the Issuer with the secondary market disclosure requirements of Rule 15c2-12 ofthe Securities and Exchange Commission (the "Rule"), it will comply with and carry out all ofthe provisions of the Continuing Disclosure Certificate to be executed by the Issuer and dated the date of delivery of the Series 2003 Bonds, as it may be amended from time to time in accordance with the terms thereof. The Continuing Disclosure Certificate shall be substantially in the form attached hereto as Exhibit C with such changes, amendments, modifications, omissions and additions as shall be approved by the City Manager who is hereby authorized to execute and deliver such Certificate. Notwithstanding any other provision ofthe Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an event of default under the Resolution; provided, however, to the extent provided by law, the sole and exclusive remedy ofany Series 2003 Bondholder for the enforcement ofthe provisions of the Continuing Disclosure Certificate that relates to its Series 2003 Bonds shall be an action for mandamus or specific performance, as applicable, by court order, to cause the Issuer to comply with its obligations under this Section 18 and the Continuing Disclosure Certificate. For purposes of this Section 18, "Series 2003 Bondholder" shall mean any person who (A) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2003 Bonds (including persons holding Series 2003 Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any Series 2003 Bonds for federal income tax purposes. SECTION 19. GENERAL AUTHORITY. The members ofthe City Council, the City Manager, the Clerk and the officers, attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by this Supplemental Resolution, the Authorizing Resolution, the Official Statement, the Continuing Disclosure Certificate orthe Purchase Contract or desirable or consistent with the requirements hereof or the Authorizing Resolution, the Official Statement, the Continuing Disclosure Certificate or the Purchase Contract for the full punctual and complete performance of all the terns, covenants and agreements contained herein or in the Series 2003 Bonds, the Authorizing Resolution, the Official Statement, the Continuing Disclosure Certificate and the Purchase Contract and each member, 11 employee, attorney and officer of the Issuer or the City Council and the City Manager and the Cleric is hereby authorized and directed to execute and deliver any and all papers and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. The Clerk is hereby authorized and directed to attest to the signature of the Mayor and/or City Manager on any and all papers and instruments necessary orproper for carrying out the transactions contemplated hereunder. SECTION 20. SEVERABILITY AND INVALID PROVISIONS. Ifany one ormore ofthe covenants, agreements or provisions herein contained shall be held contrary to any express provision oflaw or contrary to the policy of express law, though not expressly prohibited or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Series 2003 Bonds. SECTION 21.RESOLUTION TO CONTINUE IN FORCE. Except as herein expressly provided, the Resolution and all the terms and provisions thereof are and shall remain in full force and effect. 12 SECTION 22. EFFECTIVE DATE. This Supplemental Resolution shall become effective immediately upon its adoption. DULY ADOPTED, this 22nd day of October, 2003. CITY OF SEBASTIAN, FLORIDA By: WaJ rM W f�acrr� Mayor ATTEST --- B ll'r�k2 �c�(CE�►�2 C Irk �Fr)/�fC( e�{Y ciei-k- APPROVED k ASTO FORM AND CONTENT: By. City Attorney 13