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HomeMy WebLinkAboutR-03-47RESOLUTION NO. R-03-47 RESOLUTION OF CITY COUNCIL OF THE CITY OF SEBASTIAN, FLORIDA AMENDING AND SUPPI,EMENTING RESOLUTION NO. R-03-08 OF THE CITY; AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $2,125,000 IN AGGREGATE PRINCIPAL AMOUNT OF INFRASTRUCTURE SALES SURTAX REVENUE BONDS, SERIES 2003A IN ORDER TO FINANCE THE CONSTRUCTION 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. Q:\12308\Series Resog5.doc SECTION 2. FINDINGS. It is hereby found and determined that: (a) On March 26, 2003, the City Council (the "City Council") of the City of Sebastian, Florida (the "Issuer") duly adopted Resolution No. R-03-08 (the "Authorizing Resolution"), for the purposes described therein, authorizing, among other things, the issuance of certain Infrastructure Sales Surtax 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 2003A Bonds pursuant to the terms of the Resolution in order to acquire and construct certain capital improvements as described in EXHIBIT D attached hereto (the "Series 2003A Project"). (c) Due to the present volatility of the market for tax-exempt obligations such as the Series 2003 A Bonds and the complexity of the transactions relating to such Series 2003A Bonds, it is in the best interest of the Issuer to sell the Series 2003 A 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 2003A Bonds. (d) Kirkpatrick Pettis (the "Underwriter") has offered to purchase the entire principal amount of the Series 2003 A 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 Section6 hereof. (e) Inasmuch as the City Council desires to sell the Series 2003A 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 2003A 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 of the covenants contained in the Resolution shall apply to the Series 2003A Bonds. (g) The Series 2003A 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 2003A 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 2 Q:\12308\Series Resog5.doc mechanism to determine such terms and details, which terms and details shall be set forth in the hereinafter defined Purchase Contract. (0 The principal of and interest on the Series 2003A 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 the City's outstanding Series 2003 Bonds and any Additional Bonds that may be subsequently issued pursuant to the Resolution, all to the extent provided in the Resolution. The Series 2003A Bonds shall not constitute a general obligation, or a pledge of the 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 tke 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 2003A 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 9JPPLEMENTAL RESOLUTION. This Supplemental Resolution is adopted pursuant to the provisions of the Act, the Authorizing Resolution and other applicable provisions of law. Pursuant to the Resolution, the Series 2003A Bonds shall constitute Additional Bonds. SECTION 4. AUTHORIZATION OF THE SERIES 2003A PROJECT. The Issuer hereby authorizes the acquisition and construction of the Series 2003A Project and, upon the satisfaction in all respects of the conditions set forth in Section6 hereof, the financing thereof with proceeds of the Series 2003A Bonds. SECTION 5. AUTHORIZATION AND DESCRIPTION OF THE SERIES 2003A BONDS. The Issuer hereby authorizes the issuance of a Series of Bonds in the aggregate principal amount of not exceeding $2,125,000 to be known as the "City of Sebastian, Florida Infrastructure Sales Surtax Revenue Bonds, Series 2003A", which Series 2003A Bonds are issued for the principal purpose of financing the Costs of the acquisition and construction of the Series 2003A Project. Pursuant to the Resolution, the Series 2003A Bonds shall constitute Additional Bonds. The aggregate principal amount of the Series 2003A Bonds to be issued pursuant to the Resolution shall be determined by the City Manager provided such aggregate principal amount does not exceed $2,125,000. The Series 2003A 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 April 1 and October 1 of each year (the "Interest Paymert Date"), commencing on April 1, 2004 or such other date as may be determined by the City Manager. 3 Q:\12308\Series Reso#5.doc The principal of, or Redemption Price, as applicable, of the Series 2003A Bonds, shall be payable at the designated corporate trust office of Bank One Trust Company, National Association, Jacksonville, Florida, or its successors and assigns, as Paying Agent, upon presentation, when due, of the Series 2003A Bonds. Payment of interest on the Series 2003A Bonds shall be made to the owner thereof and shall be paid by check or draft of Bank One Trust Company, National Association, Jacksonville, Florida, or its successors and assigns, as Paying Agent to the Holder in whose name the Series 2003A 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 2003A 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 2003A 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 Section6 hereof. All of the terms of the Series 2003A 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 of the terms and details of the Series 2003A 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 2003A Bonds by the Underwriter substantially in the form of the Purchase Contract attached hereto as EXHIBIT A, said offer to provide for or demomtrate, among other things, (i) not exceeding $2,125,000 initial aggregate principal amount of Series 2003A Bonds, (ii)an underwriting discount (including management fee and expenses) not in excess of one-percent (1%) of the par amount of Series 2003A Bonds, (iii) a tree interest cost for the Series 2003A Bonds of not more than five point six percent (5.6%) per annum, and (iv) the maturities of the Series 2003A Bonds, with the final maturity being not later than April 1, 2018. (b) Receipt by the City Manager of a disclosure statement and a troth-in-bonding statement of the Underwriter dated the date of the Purchase Contract and complying with Section 218.385, Florida Statutes. 4 Q:\12308\Series Resog5.doc (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 2003A Bonds in accordance with the Purchase Contract. Upon satisfaction of all the requirements set forth in this Section6, the City Manager is authorized to execute and deliver the Purchase Contract containing terms complying with the provisions of this Section 6. SECTION 7. REDEMPTION PROVISIONS FOR SERIES 2003A BONDS. The Series 2003A 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. Notwithstanding any provision herein to the contrary, in lieu of an optional redemption and cancellation of Bonds subject to optional redemption, if the Issuer provides the Holders of such Bonds with a notice to redeem such Bonds on an optional redemption date, the Issuer may contract with a third party to remarket Bonds called for optional redemption as non-callable Bonds for the principal purpose of providing funds to effect such optional redemption. Under such circumstances, such Bonds will not be cancelled upon surrender but will be remarketed to mature in accordance with their existing maturity schedule (any term bonds may be converted to serial bonds) and bearing interest at the same rates but without the option of prior optional redemption by the Issuer. Action undertaken by the Issuer pursuant to this provision shall be deemed to be a purchase in lieu of redemption notwithstanding the mailing of a notice of optional redemption. For purposes of tl'e Resolution, Bonds which are purchased and remarketed pursuant to the terms of this provision shall be deemed to be and remain Outstanding at all times. SECTION 8. FULL BOOK-ENTRY. The Series 2003A Bonds shall be initially issued in the form of a separate single certificated fully registered Series 2003A Bond for each of the maturities of the Series 2003A 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 2003A Bonds are registered in the name of Cede & Co., all of the Outstanding Series 2003A 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 2003A 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 2003A Bonds, upon presentation of the Series 2003A Bonds to be paid, to the Paying Agent. With respect to Series 2003A 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 5 Q:\12308\Series Resog5.doc 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 2003A 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 2003A 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 2003A Bonds. The Issuer, the Registrar and the Paying Agent may treat and consider the Person in whose name each Series 2003A 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 of giving 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 2003A 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 satisfy and discharge the Issuer's obligations with respect to payment of principal of, Redemption Price, if any, and interest on the Series 2003A Bonds to the extent of the sum or sums so paid. No Person other than a Holder, as shown in the registration books l~pt by the Registrar, shall receive a certificated Bond evidencing the obligation of the Issuer to make payments of principal, 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 of the requirement that all of the outstanding Series 2003A Bonds be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, is not in the best interest of the beneficial owners of the Series 2003A 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 {~)determination by the Issuer that such book-entry only system is burdensome or undesirable to the Issuer, the Series 2003A 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 accordance with the provisions of the Resolution. In such event, tie Issuer shall issue and the Registrar shall authenticate, transfer and exchange the Series 2003A 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 of Representations previously executed by the Issuer and delivered to DTC 6 Q:\12308\Series Resog5.doc shall apply to the payment of principal of, lxemium, if any, and interest on the Series 2003A Bonds. SECTION 9. APPLICATION OF SERIES 2003A BOND PROCEEDS. The proceeds derived from the sale of the Series 2003A Bonds shall be applied by the Issuer as follows: (a) An amount equal to the accrued interest, if any, and capitalized interest, if any, on the Series 2003A Bonds shall be deposited to the Payment Account of the Debt Service Fund and shall be used to pay a portion of the interest on the Series 2003A Bonds. (b) A sufficient amount of the Series 2003A Bond proceeds shall be applied to the payment of the premium for any municipal bond insurance policy applicable to the Series 2003A Bonds and to the payment of costs and expenses relating to the issuance of the Series 2003A Bonds. (c) An amount of the Series 2003A 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 2003A Bonds shall be deposited to the Series 2003A Project Account of the Construction Fund created pursuant to Section 16 hereof, and applied to pay the Costs of the Series 2003A Project. SECTION 10. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution and use of the Preliminary Official Statement in substantially the form attached hereto as EXHIBIT B in connection with the offering of the Series 2003A Bonds for sale. If between the date hereof and the mailing of the Preliminary Official Statement, it is necessary to make insertiom, 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 ora 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. 7 Q :\ 12308\Series Reso#5.doc SECTION 11. OFFICIAL STATEMENT. Subject in all respects to the satisfaction of the conditions set forth in Section6 hereof, the form, terms and provisions of the final Official Statement relating to the Series 2003A Bonds shall be substantially as set forth in the Preliminary Official Statement and shall include all of the specific financial terms of the Series 2003A Bonds; provided, however, the Official Statement shall not be prepared or distributed unless the conditions set forth in Section6 hereof have been satisfied in all respects. Subject in all respects to the satisfaction of the conditions set forth in Section6 hereof, 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 2003A 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 12. APPOINTMENT OF REGISTRAR AND PAYING AGENT. Subject in all respects to the satisfaction of the conditions set forth in Section6 hereof, Bank One Trust Company, National Association, and its successors and assigns, is hereby appointed Registrar and Paying Agent for the Series 2003A 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 Section6 hereof, the Issuer hereby autlx)rizes the payment of the principal of and interest on the Series 2003A 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 2003A Bonds as provided therein issued by AMBAC Assurance Corporation ("Ambac Assurance"), a Wisconsin domiciled stock insurance corporation. The City Manager and the Clerk are hereby authorized to execute such documents and instruments necessary to cause Ambac Assurance to insure the Series 2003A Bonds. With respect to the Series 2003A Bonds, Ambac Assurance 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. So long as the Bond Insurance Policy issued by Ambac Assurance is in full force and effect and any Ambac Assurance has not defaulted in its 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) Notices to be given to Ambac Assurance. The Issuer or the Paying Agent shall furnish to Ambac Assurance (to the attention of the Surveillance Department, unless otherwise indicated): 8 Q:\12308\Series Resog5.doc (0 as soon as practicable after the filing thereof, a copy of any financial statement of the Issuer and a copy of any audit and annual report of the Issuer; (ii) a copy of any notice to be given to the registered owners of the Series 2003A Bonds, including, without limitation, notice of any redemption of or defeasance of Series 2003A Bonds, and any certificate rendered pursuant to the Resolution relating to the security for the Series 2003A Bonds; (iii) To the extent that the Issuer has entered into a continuing disclosure agreement with respect to the Series 2003A Bonds, Ambac Assurance shall be included as party to be notified; and (iv) such additional information it may reasonably request. The Paying Agent or Issuer (as appropriate) shall notify Ambac Assurance of any failure of the Issuer to provide any relevant notices, certificates, etc. The Issuer will permit Ambac Assurance to discuss the affairs, finances and accounts of the Issuer or any information Ambac Assurance may reasonably request regarding the security for the Series 2003A Bonds with appropriate officers of the Issuer. The Paying Agent or Issuer (as appropriate) will permit Ambac Assurance to have access to and to make copies of all books and records relating to the Series 2003A Bonds at any reasonable time. Ambac Assurance shall have the right to direct an accounting at the Issuer's expense, and the Issuer's failure to comply with such direction within thirty (30) days after receipt of written notice of the direction from Ambac Assurance shall be deemed a default hereunder; provided, however, that if compliance cannot occur within such period, then such period will be extended so long as compliance is begun within such period and diligently pursued, but only f such extension would not materially adversely affect the interests of any registered owner of the Series 2003A Bonds. Notwithstanding any other provision of the Resolution, the Issuer shall immediately notify Ambac Assurance if at any time there are insufficient moneys to make any payments of principal and/or interest as required and immediately upon the occurrence of any event of default thereunder. (B) Payment Procedure Pursuant to Bond Insurance Policy. As long as the Series 2003A Bond insurance shall be in full force and effect, the Issuer and the Paying Agent agree to comply with the following provisions: at least one (1) day prior to all Interest Payment Dates the Paying Agent will determine whether there will be sufficient funds in the funds and accounts established under this Indenture to pay the principal of or interest on the Series 2003A 9 Q:\12308\Series Reso#5.doc Bonds on such Interest Payment Date. If the Paying Agent determines that them will be insufficient funds in such funds or accounts, the Paying Agent shall so notify Ambac Assurance. Such notice shall specify the amount of the anticipated deficiency, the Series 2003A Bonds to which such deficiency is applicable and whether such Series 2003A Bonds will be deficient as to principal or interest, or both. If the Paying Agent has not so notified Ambac Assurance at least one (1) day prior to an Interest Payment Date, Ambac Assurance will make payments of principal or interest due on the Series 2003A Bonds on or before the first (lst) day next following the date on which Ambac Assurance shall have received notice of nonpayment from the Paying Agent. (ii) the Paying Agent shall, after giving notice to Ambac Assurance as provided in (B)(i) above, make available to Ambac Assurance and, at Ambac Assumnce's direction, to The Bank of New York, in New York, New York, as insurance trustee for Ambac Assurance or any successor insurance trustee (the "Insurance Trustee"), the registration books of the Issuer maintained by the Paying Agent and all records relating to the funds and accounts maintained under the Resolution. (iii) the Paying Agent shall provide Ambac Assurance and the Insurance Trustee with a list of registered owners of Series 2003A Bonds entitled to receive principal or interest payments from Ambac Assurance under the terms of the Bond Insurance Policy, and shall make arrangements with the Insurance Trustee (A) to mail checks or drafts to the registered owners of the Series 2003A Bonds entitled to receive full or partial interest payments from Ambac Assurance and (B) to pay principal upon the Series 2003A Bonds surrendered to the Insurance Trustee by the registered owners of the Series 2003A Bonds entitled to receive full or partial principal payments from Ambac Assurance. (iv) the Paying Agent shall, at the time it provides notice to Ambac Assurance pursuant to (B)(i) above, notify registered owners of Series 2003A Bonds entitled to receive the payment of principal or interest thereon from Ambac Assurance (A) as to the fact of such entitlement, (B) that Ambac Assurance will remit to them all or a part of the interest payments next coming due upon proof of Bondholder entitlement to interest payments and delivery to the Insurance Trustee, in form satisfactory to the Insurance Trustee, of an appropriate assignment of the registered owner's right to payment, (C) that should they be entitled to receive full payment of principal from Ambac Assurance, they must surrender their Series 2003A Bonds (along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee to permit ownership of such Series 2003A Bonds to be registered in the name of Ambac Assurance) for payment to the Insurance Trustee, and not the Paying Agent, and (D) that should they be entitled to receive partial payment of principal from Ambac Assurance they must surrender their Series 2003A Bonds for payment thereon first to the Paying Agent who shall note on such Series 2003A Bonds the portion of the principal paid by the Paying Agent, and then, along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal. 1 0 Q:\ 12308\Series Resog5.doc (v) in the event that the Paying Agent has notice that any payment of principal of or interest on a Series 2003A Bond which has become due for payment and which is made to a Bondholder by or on behalf of the Issuer has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a lrustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying Agent shall, at the time Ambac Assurance is notified pursuant to (i) above, notify all registered owners that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from Ambac Assurance to the extent of such recovery if sufficient funds are not otherwise available, and the Paying Agent shall furnish to Ambac Assurance its records evidencing the payments of principal of and interest on the Series 2003A Bonds which have been made by the Paying Agent and subsequently recovered from registered owners and the dates on which such payments were made. (vi) in addition to those rights granted Ambac Assurance under tie Resolution, Ambac Assurance shall, to the extent it makes payment of principal of or interest on Series 2003A 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 (A) in the case of subrogation as to claims for past due interest, the Paying Agent shall note Ambac Assurance's rights as subrogee on the registration books of the Issuer maintained by the Paying Agert upon receipt from Ambac Assurance of proof of the payment of interest thereon to the registered owners of the Series 2003A Bonds, and (B) in the case of subrogation as to claims for past due principal, the Paying Agent shall note Ambac Assurance's rights as subrogee on the registration books of the Issuer maintained by the Paying Agent upon surrender of the Series 2003A Bonds by the registered owners thereof together with proof of the payment of principal thereof. (C) Consent of Ambac Assurance. Any provision of tie Resolution expressly recognizing or granting rights in or to Ambac Assurance may not be amended in any manner which affects the rights of Ambac Assurance hereunder without the prior written consent of Ambac Assurance. (D) Consent of Ambac Assurance in Addition to Bondholder's Consent. Unless otherwise provided in tie Resolution, Ambac Assurance's consent shall be required in addition to Bondholder consent, when required, for the following purposes: (i) execution and delivery of any supplemental resolution or any amendment, supplement or change to or modification of the Resolution; (ii) removal of the Paying Agent and selection and appointment of any successor trustee or paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires consent of the Bondholders. (E) Consent of Ambac Assurance Upon Default. Anything in th: Resolution to the contrary notwithstanding, upon the occurrence and continuance of an event of default as defined herein, Ambac Assurance shall be entitled to control and direct the enforcement of all rights and 11 Q:\12308\Series Resog5.doc remedies granted to the Bondholders or the Paying Agent for the benefit of the Bondholders under the Resolution (F) Provisions Concerning the Paying Agent. (i) The Paying Agent may be removed at any time, at the request of Ambac Assurance, for any breach of the trust set forth herein. (ii) resignation. Ambac Assurance shall receive prior written notice of any Paying Agent (iii) Every successor Paying Agent appointed pursuant to the Resolution shall be a trust company or bank in good standing located in or incorporated under the laws of the State, duly authorized to exercise trust powers and subject to examination by federal or state authority, having a reported capital and surplus of not less than $75,000,000 and acceptable to Ambac Assurance. Any successor Paying Agent shall not be appointed unless Ambac Assurance approves such successor in writing. (iv) Notwithstanding any other provision of the Resolution, in determining whether the rights of the Bondholders will be adversely affected by any action taken pursuant to the terms and provisions of the Resolution, the Paying Agent shall consider the effect on the Bondholders as if there were no Bond Insurance Policy. (v) Notwithstanding any other provision of the Resolution, no removal, resignation or termination of the Paying Agent shall take effect until a successor, acceptable to Ambac Assurance, shall be appointed. (G) Interested Parties. To the extent that the Resolution confers upon or gives or grants to Ambac Assurance any right, remedy or claim under or by reason of the Resolution, Ambac Assurance is thereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted thereunder. Nothing in the Resolution, expressed or implied, is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Issuer, the Paying Agent, Ambac Assurance and the registered owners of the Series 2003A Bonds, any right, remedy or claim under or by reason of the Resolution or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in the Resolution contained by and on behalf of the Issuer shall be for the sole and exclusive benefit of the Issuer, the Paying Agent, Ambac Assurance and the registered owners of the Series 2003A Bonds. (H) Defeasance. Notwithstanding anything herein to the contrary, in the event that the principal and/or interest due on the Series 2003A Bonds shall be paid by Ambac Assurance pursuant to the Bond Insurance Policy, the Series 2003A Bonds shall remain outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, and the assignment and pledge of the Pledged Revenues and all covenants, agreements and other 12 Q:\12308\Series Resog5.doc obligations of the Issuer to the registered owners shall continue to exist and shall nm to the benefit of Ambac Assurance, and Ambac Assurance shall be subrogated to the rights of such registered owners. SECTION 15. SECURITY FOR THE SERIES 2003A BONDS. Subject in all respects to the satisfaction of the conditions set forth in Section6 hereof, neither the Series 2003A Bonds nor the interest thereon shall be or constitute a general indebtedness of the Issuer within the 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 2003A 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 2003A 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 2003A Bonds in accordance with the terms hereof. SECTION 16. ESTABLISHMENT OF A CERTAIN ACCOUNT AND SUBACCOUNT. Subject in all respects to the satisfaction of the conditions set forth in Section6 hereof, pursuant to the authority of the Resolution, the Issuer hereby establishes a separate account within the Construction Fund to be known as the "Series 2003A Project Account" and a separate subaccount within the Reserve Account of the Debt Service Fund to be known as the "Series 2003A Subaccount". Such Account and Subaccount shall be initially funded in accordance with Section9 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 Section6 hereof, the Issuer hereby authorizes the payment of the premium for the debt service reserve surety bond (the "Surety Bond") from Ambac Assurance in the amount of the Reserve Account Requirement for the Series 2003A Bonds. The City Manager and the Clerk are hereby authorized to execute such documents and instruments necessary to cause Ambac Assurance to issue the Surety Bond. SECTION 18. AMENDMENT TO AUTHORIZING RESOLUTION. Upon the issuance of the Series 2003A Bonds, Section 6.02(A) of the Authorizing Resolution shall be amended in its entirety as follows: "(A) Except as otherwise provided in Section 6.02(D) hereof, there shall have been obtained and adopted by the Issuer a statement of the Finance Director: (1) stating that the books 13 Q:\12308\Series Resog5.doc and records of the Issuer relating to the Infrastructure Sales Surtax Revenues have been examined by him; (2) setting forth the amount of the Infrastructure Sales Surtax Revenues which have been received by the Issuer during any twelve (12) consecutive months designated by the Issuer within the twenty-four (24) months immediately preceding the date of delivery of such Additional Bonds with respect to which such statement is made; and (3) stating that the amount of the Infrastructure Sales Surtax Revenues received during the aforementioned 12-month period equals at least 1.50 times (a) the Maximum Annual Debt Service of all Bonds then Outstanding and such Additional Bonds with respect to which such statement is made and (b) any amounts then owing to the issuer of any Reserve Account Credit Instrument as a result of a drawdown on such Reserve Account Credit Instrument, plus 1.0 times the maximum annual debt service on any Subordinated Indebtedness outstanding. In the event the Act is amended to provide for additional infrastructure sales surtax revenues to be distributed to the Issuer, and the Issuer, by Supplemental Resolution, extends the pledge of the Infrastructure Sales Surtax Revenues created hereby to include such additional infrastructure sales surtax revenues, then for the purpose of determining whether there are sufficient Infrastructure Sales Surtax Revenues to meet tie afore- referenced tests, the Finance Director shall assume that such additional infrastructure sales surtax revenues were in effect during the applicable twelve (12) consecutive month period." SECTION 19. SECONDARY MARKET DISCLOSURE. Subject in all ~espects 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 of the Securities md Exchange Commission (the "Rule"), it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be executed by the Issuer and dated the date of delivery of the Series 2003A 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 of the 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 of any Series 2003A Bondholder for the enforcement of the provisions of the Continuing Disclosure Certificate that relates to its Series 2003A 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 19 and the Continuing Disclosure Certificate. For purposes of this Section 19, "Series 2003A 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 2003A Bonds (including persons holding Series 2003A Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2003A Bonds for federal income tax purposes. 14 Q:\12308\Series Resog5.doc SECTION 20 GENERAL AUTHORITY. The members of the 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 or the 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 terms, covenants and agreements contained herein or in the Series 2003A Bonds, the Authorizing Resolution, the Official Statement, the Continuing Disclosure Certificate and the Purchase Contract and each member, employee, attorney and officer of the Issuer or the City Council and the City Manager and the Clerk 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 or proper for carrying out the transactions contemplated hereunder. SECTION 21 SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed 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 2003A Bonds. SECTION 22 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. SECTION 23 EFFECTIVE DATE. This Supplemental Resolution shall become effective immediately upon its adoption. 15 Q:\12308\Series Resog5.doc DULY ADOPTED, this 12th day of November, 2003. CITY OF~I~I~ASTIAN, FLORIDA By: /~ ~-"'q City Attorney 1 6 Q:\12308\Series Resog5.doc EXHIBIT A FORM OF PURCHASE CONTRACT Q:\12308\Series Resog5.doc EXHIBIT B FORM OF PRELIMINARY OFFICIAL STATEMENT Q:\12308\Series Resog5.doc EXHIBIT C FORM OF CONTINUING DISCLOSURE CERTIFICATE Q:\ 12308\Series Reso~5.doc EXHIBIT D DESCRIPTION OF SERIES 2003A PROJECT The Series 2003A Project, financed along with the proceeds of the Series 2003 Bonds and other funds, consists of the construction and equipping of a new city hall complex, renovation and expansion of the police station, renovation of an existing historic school building (old city hall), construction of a city hall park, renovation of certain other existing city facilities, and any other capital improvement approved by the City Council in accordance with the Act. Q:\ 12308\Series Resog5.doc