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Resolution 2007-246 COLLIER COUNTY, FLORIDA LIMITED GENERAL OBLIGATION BOND RESOLUTION (FOREST LAKES ROADWAY AND DRAINAGE MUNICIPAL SERVICE TAXING UNIT) ADOPTED SEPTEMBER 11, 2007 TABLE OF CONTENTS ARTICLE I GENERAL SECTION 1.01. DEFINITIONS 2 SECTION 1.02. AUTHORITY FOR RESOLUTION 6 SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT 6 SECTION 1.04. FINDINGS 6 SECTION 1.05. AUTHORIZATION OF THE PROJECT 8 ARTICLE II AUTHORIZATION, TERMS, SALE, EXECUTION AND REGISTRATION OF BONDS SECTION 2.01. AUTHORIZATION AND DESCRIPTION OF THE BONDS; AWARD OF THE BONDS; REDEMPTION OF BONDS. 9 SECTION 2.02. APPLICATION OF BOND PROCEEDS 10 SECTION 2.03. EXECUTION OF BONDS 10 SECTION 2.04. AUTHENTICATION 11 SECTION 2.05. TEMPORARY BONDS 11 SECTION 2.06. BONDS MUTILATED, DESTROYED, STOLEN OR LOST 11 SECTION 2.07. INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER 12 SECTION 2.08. FULL BOOK ENTRY FOR BONDS 13 SECTION 2.09. REDEMPTION OF BONDS 15 SECTION 2.10. FORM OF BONDS 17 ARTICLE III SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 3.01. LIMITED GENERAL OBLIGATIONS OF THE ISSUER 24 SECTION 3.02. PROJECT FUND 24 SECTION 3.03. CREATION OF SINKING FUND; APPLICATION OF LIMITED AD VALOREM TAX 25 SECTION 3.04. REBATE FUND 26 SECTION 3.05. INVESTMENTS 26 SECTION 3.06. SEPARATE ACCOUNTS 27 SECTION 3.07. REFUNDING BONDS 27 SECTION 3.08 ADDITIONAL INDEBTEDNESS 27 ARTICLE IV COVENANTS OF ISSUER SECTION 4.01. BOOKS AND RECORDS 28 SECTION 4.02. NO IMPAIRMENT 28 SECTION 4.03. FEDERAL INCOME TAX COVENANTS 28 ARTICLE V DEFAULTS AND REMEDIES SECTION 5.0I. EVENTS OF DEFAULT 29 SECTION 5.02. REMEDIES 29 SECTION 5.03. DIRECTIONS TO RECEIVER AS TO REMEDIAL PROCEEDINGS 30 SECTION 5.04. REMEDIES CUMULATIVE 30 SECTION 5.05. WAIVER OF DEFAULT 30 SECTION 5.06. CONTROL BY INSURER 30 ARTICLE VI SUPPLEMENTAL RESOLUTIONS SECTION 6.01. SUPPLEMENTAL RESOLUTION WITHOUT BONDHOLDERS' CONSENT 32 SECTION 6.02. SUPPLEMENTAL RESOLUTION WITH BONDHOLDERS' AND INSURER'S CONSENT 32 SECTION 6.03. AMENDMENT WITH CONSENT OF INSURER 34 ARTICLE VII PROVISIONS RELATING TO THE BOND INSURANCE POLICY AND INSURER FOR THE BONDS SECTION 7.01. MUNICIPAL BOND INSURANCE 35 SECTION 7.02. PROVISIONS RELATING TO BOND INSURANCE POLICY 35 ARTICLE VIII DEFEASANCE SECTION 8.01. DEFEASANCE 39 ARTICLE IX PROVISIONS RELATING TO BONDS SECTION 9.01. OFFICIAL NOTICE OF SALE 41 SECTION 9.02. PRELIMINARY OFFICIAL STATEMENT; OFFICIAL STA"I'EMENT 41 SECTION 9.03. APPOINTMENT OF PAYING AGENT AND REGISTRAR 41 SECTION 9.04. SECONDARY MARKET DISCLOSURE 42 ii ARTICLE X MISCELLANEOUS SECTION 10.01. GENERAL AUTHORITY 43 SECTION 10.02. SEVERABILITY OF INVALID PROVISIONS 43 SECTION 10.03. REPEAL OF INCONSISTENT RESOLUTIONS 43 SECTION 10.04. EFFECTIVE DATE 43 EXHIBIT A - FORM OF OFFICIAL NOTICE OF SALE EXHIBIT B - FORM OF PRELIMINARY OFFICIAL STATEMENT EXHIBIT C - FORM OF CONTINUING DISCLOSURE CERTIFICATE EXHIBIT D - GENERAL DESCRIPTION OF THE PROJECT iii RESOLUTION NO. 2007-246 A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, ACTING AS THE GOVERNING BODY OF COLLIER COUNTY, FLORIDA AND THE FOREST LAKES ROADWAY AND DRAINAGE MUNICIPAL SERVICE TAXING UNIT, AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $6,250,000 IN AGGREGATE PRINCIPAL AMOUNT OF COLLIER COUNTY, FLORIDA LIMITED GENERAL OBLIGATION BONDS (FOREST LAKES ROADWAY AND DRAINAGE MUNICIPAL SERVICE TAXING UNIT), SERIES 2007, TO FINANCE THE ACQUISITION AND CONSTRUCTION OF VARIOUS CAPITAL IMPROVEMENTS WITHIN THE FOREST LAKES ROADWAY AND DRAINAGE MSTU; PROVIDING FOR THE PAYMENT OF SAID BONDS FROM AD VALOREM TAXATION LEVIED IN AN AMOUNT WHICH SHALL NOT EXCEED FOUR MILLS ON ALL TAXABLE PROPERTY WITHIN THE FOREST LAKES ROADWAY AND DRAINAGE MSTU; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; AUTHORIZING THE AWARDING OF SAID BONDS PURSUANT TO A PUBLIC BID; DELEGATING CERTAIN AUTHORITY TO THE CHAIRMAN FOR THE AWARD OF THE BONDS AND THE APPROVAL OF THE TERMS AND DETAILS OF SAID BONDS; AUTHORIZING THE PUBLICATION OF A NOTICE OF SALE FOR THE BONDS OR A SUMMARY THEREOF; APPOINTING THE PAYING AGENT AND REGISTRAR FOR SAID BONDS; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT WITH RESPECT TO THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE CERTIFICATE WITH RESPECT TO THE BONDS; AUTHORIZING MUNICIPAL BOND INSURANCE FOR THE BONDS; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, ACTING AS THE GOVERNING BODY OF COLLIER COUNTY, FLORIDA AND THE FOREST LAKES ROADWAY AND DRAINAGE MUNICIPAL SERVICE TAXING UNIT: ARTICLE I GENERAL SECTION 1.01. DEFINITIONS. When used in this Resolution, the following terms shall have the following meanings, unless the context clearly otherwise requires: "Act" shall mean Chapter 125, Florida Statutes, Article VII, Section 12 of the Florida Constitution,the Referendum Resolution, and other applicable provisions of law. "Amortization Installments," with respect to any Term Bonds, shall mean an amount designated for mandatory redemption of such Term Bonds. "Annual Debt Service" shall mean, at any time, the aggregate amount in the then current Fiscal Year of(1) interest required to be paid on the Outstanding Bonds during such Fiscal Year, except to the extent that such interest is to be paid from deposits in the Sinking Fund or Project Fund from Bond proceeds for such purpose, (2) principal of Outstanding Bonds maturing in such Fiscal Year, and (3) the Amortization Installment coming due in such Fiscal Year. "Authorized Investments" shall mean any investments or obligations in which the Issuer may invest its funds under applicable law and the internal investment policy of the Issuer, as such policy may be amended and supplemented from time to time. "Board" shall mean the Board of County Commissioners of Collier County, Florida. "Bond Counsel" shall mean Nabors, Giblin & Nickerson, P.A. or any other attorney at law or firm of attorneys, of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America. "Bond Insurance Policy" shall mean the financial guaranty insurance policy issued by MBIA Insurance Corporation insuring the payment of the principal of and interest on the Bonds as provided therein. "Bondholder" or "Holder" or "holder of Bonds" or any similar term, when used with reference to a Bond or Bonds, shall mean any Person who shall be the registered owner of any Outstanding Bond or Bonds as provided in the registration books of the Issuer. "Bonds" shall mean the Collier County, Florida Limited General Obligation Bonds (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit), Series 2007, authorized and issued pursuant to Section 2.01 of this Resolution. 2 "Chairman" shall mean the Chairman of the Board of County Commissioners of the Issuer and such other person as may be duly authorized to act on his or her behalf. "Continuing Disclosure Certificate" shall mean the Continuing Disclosure Certificate to be executed by the Issuer on or prior to the date of issuance of the Bonds, in substantially the form which is attached hereto as Exhibit C. "County Manager" shall mean the County Manager of the Issuer and such other person as may be duly authorized to act on his or her behalf. "Clerk" shall mean the Clerk of the Circuit Court of Collier County, Florida and Ex-Officio Clerk to the Board, and such other person as may be duly authorized to act on his or her behalf "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules promulgated thereunder. "Cost" when used in connection with the Project and permitted by the Act, shall mean (1) costs of acquisition or purchase, including the cost of property rights, easements and franchises of any nature; (2) the Issuer's cost of physical construction; (3) any costs of the Issuer incidental to the acquisition and purchase of land (including, without limitation, title insurance and related costs and costs associated with the examination, survey and any remediation required with respect to such land); (4) the cost of any indemnity and surety bonds and premiums for insurance during construction; (5) all interest due to be paid on the Bonds and other obligations relating to the Project during the period of construction of the Project and a reasonable period subsequent to completion of construction as the Issuer shall determine; (6) engineering, architectural, legal, financial advisory and other consultant fees and expenses; (7) costs and expenses of the financing incurred for the Project, including fees and expenses of any Paying Agent, Registrar, Insurer, or depository; (8)payments, when due (whether at the maturity of principal or the due date of interest) on any interim or temporary indebtedness of the Issuer incurred for the Project; and (9) any other costs properly attributable to such construction or acquisition or to the issuance of the Bonds which finance the Project, as determined by generally accepted accounting principles, and shall include reimbursement to the Issuer for any such items of Cost paid by the Issuer prior to the issuance of the Bonds or other obligations issued to finance the Project. "Federal Securities" shall mean direct obligations of (including obligations unconditionally guaranteed by) the United States of America, including obligations of any federal agency or corporation to the extent unconditionally guaranteed by the United States of America. Federal Securities shall also include any certificates or any other evidences of an ownership interest in the aforementioned obligations or in specified portions thereof(which may consist of specified portions of the interest thereon) if(1)a 3 bank or trust company acts as custodian and holds the underlying obligations; (2) the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor of the underlying obligations; and (3) the underlying obligations are held in a special account separate and apart from the custodian's general assets, and are not available to satisfy any claim of the custodian, any person claiming through the custodian, or any person to whom the custodian may be obligated. "Financial Advisor" shall mean Public Financial Management, Inc. or such other financial advisory firm of nationally recognized standing in matters pertaining to debt obligations issued by states and political subdivisions. "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing through the next succeeding September 30, or such other period as may be prescribed by law. "Forest Lakes MSTU" shall mean the Forest Lakes Roadway and Drainage Municipal Service Taxing Unit created pursuant to Ordinance No. 91-107 on December 10, 1991, as amended and supplemented from time to time. "Insurer" shall mean MBIA Insurance Corporation, any successor or assign, and any subsequent insurer of Bonds. "Interest Date" or "interest payment date" shall be such date or dates for the payment of interest on the Bonds as provided pursuant to Section 2.01. "Issuer" or "County" shall mean Collier County, Florida, a political subdivision of the State of Florida. "Limited Ad Valorem Tax" the ad valorem tax levied on all taxable property within the Forest Lakes MSTU in an amount not to exceed four (4) mills to pay the Annual Debt Service on the Bonds as approved by the qualified electors of the Issuer voting in the November 7, 2006, bond referendum election. "Official Notice of Sale" shall mean the Official Notice of Sale as described in Section 9.01 hereof, the form of which is attached hereto as Exhibit A. "Official Statement" shall mean the Official Statement to be used in connection with the issuance of the Bonds that shall be substantially in the form of the Preliminary Official Statement and which shall contain the financial terms and details of the Bonds. "Outstanding" when used with reference to the Bonds and as of any particular date, shall describe all of the Bonds theretofore and thereupon being authenticated and delivered except, (1) any Bond in lieu of which another Bond or Bonds have been issued to replace lost, mutilated or destroyed Bonds, (2) any Bond surrendered by the Holder 4 thereof in exchange for another Bond or Bonds under Sections 2.06 and 2.07 hereof, (3) Bonds deemed to have been paid pursuant to Section 8.01 hereof, and (4) Bonds cancelled after purchase in the open market or because of payment at maturity or upon redemption. "Paying Agent" shall mean U.S. Bank National Association, Miami, Florida, its successors and assigns. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. "Preliminary Official Statement" shall mean the Preliminary Official Statement to be used in connection with the marketing and sale of the Bonds, in substantially the form which is attached hereto as Exhibit B. "Project" shall mean the acquisition and construction of various capital improvements within the Forest Lakes MSTU as approved in the bond referendum held on November 7, 2006. The Project is generally described in Exhibit D attached hereto and more specifically described in the plans and specifications on file with the Issuer, as the same may be amended and supplemented by the Board from time to time. "Project Fund" shall mean Collier County, Florida Limited General Obligation Bonds (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit) Project Fund established pursuant to Section 3.02 hereof. "Rebate Fund" shall mean Collier County, Florida Limited General Obligation Bonds (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit) Rebate Fund established pursuant to Section 3.04 hereof. "Redemption Price" shall mean, with respect to any Bond or portion thereof, the principal amount or portion thereof, plus the applicable premium, if any, payable upon redemption thereof pursuant to such Bond or this Resolution. "Referendum Resolution" shall mean Resolution No. 2006-242, adopted by the Board on September 12, 2006. "Resolution" shall mean this Limited General Obligation Bond Resolution (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit), as the same may from time to time be amended, modified or supplemented by Supplemental Resolution. "Registrar" shall mean U.S. Bank National Association, Miami, Florida. 5 "Sinking Fund" shall mean Collier County, Florida Limited General Obligation Bonds (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit) Sinking Fund established pursuant to Section 3.03 hereof. "State" shall mean the State of Florida. "Supplemental Resolution" shall mean any resolution of the Issuer amending or supplementing this Resolution enacted and becoming effective in accordance with the terms of Article VII hereof. "Term Bonds" shall mean the Bonds which mature on one date and which shall be subject to mandatory redemption through the payment of Amortization Installments. "Vice-Chairman" shall mean the Vice-Chairman of the Board of County Commissioners of the Issuer and such other person as may be duly authorized to act on his or her behalf. The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar terms, shall refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. Words importing the masculine gender include the feminine gender. Words importing the singular number include the plural number, and vice versa. SECTION 1.02. AUTHORITY FOR RESOLUTION. This Resolution is adopted pursuant to the provisions of the Act. SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of any or all of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Issuer with the Holders of the Bonds and the Insurer and shall be deemed to be and shall constitute a contract between the Issuer and the Holders from time to time of the Bonds and the Insurer. The pledge made in this Resolution and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Holders of any and all of said Bonds and for the benefit, protection and security of the Insurer. All of the Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in or pursuant to this Resolution. SECTION 1.04. FINDINGS. It is hereby ascertained, determined and declared: 6 (A) Pursuant to the Referendum Resolution, the Issuer ordered the holding of a bond referendum election to determine if the qualified electors of the Issuer would approve the issuance of not exceeding $6,250,000 aggregate principal amount of limited general obligation bonds payable from ad valorem tax to be levied in an amount not to exceed four mills on all taxable property within the Forest Lakes MSTU for the principal purpose of financing improved roadway lighting, roadway-related drainage and roadway restoration within the Forest Lakes MSTU. (B) On November 7, 2006, a bond referendum election was held and the issuance of not exceeding $6,250,000 aggregate principal amount of limited general obligation bonds payable from the Limited Ad Valorem Tax was approved by a majority of the qualified electors within the Forest Lakes MSTU voting in said referendum election. (C) All of the findings set forth in the Referendum Resolution are incorporated herein by reference and for the reasons set forth in the Referendum Resolution it is in the best interests of the citizens to acquire the Project. (D) The most efficient and cost effective method of financing the Costs of the Project is through the issuance of not exceeding $6,250,000 aggregate principal amount of Collier County, Florida Limited General Obligation Bonds (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit), Series 2007. (E) In accordance with Section 218.385, Florida Statutes, and pursuant to this Resolution, the Bonds shall be advertised for competitive bids pursuant to the Official Notice of Sale, the form of which is attached hereto as Exhibit A, or a summary thereof. (F) Pursuant to the Official Notice of Sale, competitive bids for the purchase of the Bonds received in accordance with the Official Notice of Sale on or prior to 10:00 a.m., Eastern daylight savings time, on September 25, 2007, or such other date or time as is determined by the Chairman in accordance with the terms and provisions hereof and of the Official Notice of Sale, shall be publicly opened and announced. (G) Due to the present volatility and uncertainty of the market for tax-exempt obligations such as the Bonds, it is desirable for the Issuer to be able to advertise and award the Bonds at the most advantageous time and date instead of restricting the sale and award to the date of a particular meeting of the Board; and, accordingly, the Issuer hereby determines to delegate the advertising and awarding of the Bonds to the Chairman within the parameters described herein. (H) It is necessary and appropriate that the Issuer determine certain parameters for the terms and details of the Bonds and to delegate certain authority to the Chairman 7 for the award of the Bonds and the approval of the terms of the Bonds in accordance with the provisions hereof and of the Official Notice of Sale. (I) In the event Bond Counsel shall determine that the Bonds have not been awarded competitively in accordance with the provisions of Section 218.385, Florida Statutes, the Issuer shall adopt such resolutions and make such findings as shall be necessary to authorize and ratify a negotiated sale of the Bonds in accordance with said Section 218.385. (J) The Costs associated with the acquisition and construction of the Project shall be deemed to include legal expenses, underwriting discounts, the premium for the Bond Insurance Policy, financial advisory fees, and such other expenses as may be necessary or incidental for the issuance of the Bonds herein authorized. (K) It is necessary at this time that provision be made for the issuance of the Bonds and for the levy and pledging of the Limited Ad Valorem Tax to pay the same. SECTION 1.05. AUTHORIZATION OF THE PROJECT. The Issuer hereby authorizes the acquisition and construction of the Project. 8 ARTICLE H AUTHORIZATION, TERMS, SALE,EXECUTION AND REGISTRATION OF BONDS SECTION 2.01. AUTHORIZATION AND DESCRIPTION OF THE BONDS; AWARD OF THE BONDS; REDEMPTION OF BONDS. (A) In accordance with the Act and the terms of this Resolution, this Resolution hereby creates an issue of Bonds of the Issuer to be designated as "Collier County, Florida Limited General Obligation Bonds (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit), Series 2007" (or such other Series designation as the Chairman may determine) to be issued in the aggregate principal amount of not exceeding $6,250,000. The Bonds shall be issued for the principal purposes of financing Costs of the Project and paying certain costs and expenses incurred in connection with the issuance of the Bonds. The exact principal amount of the Bonds to be issued by the Issuer shall be determined by the Chairman in accordance with the Official Notice of Sale provided such principal amount does not exceed $6,250,000. In addition, to the extent any of the Bonds are sold at a premium, the sum of the principal amount of the Bonds and the net bond premium may not exceed $6,250,000. The Bonds shall be dated as of the date of their delivery (or such other date as determined by the Chairman), shall be issued in the form of fully registered bonds in the denominations of $5,000 and any integral multiple thereof, and shall be numbered consecutively from one upward in order of maturity preceded by the letter "R." The Bonds shall bear interest computed on the basis of a 360-day year consisting of twelve 30-day months, from their dated date, payable semiannually, on January 1 and July 1 of each year (each an "Interest Date"), commencing on January 1, 2008 (or such other date or dates as determined by the Chairman), at such rates and maturing in such amounts on January 1 of such years as shall be determined by the Chairman, subject to the conditions set forth in this Section 2.01(B) hereof The final maturity of the Bonds shall not be later than January 1, 2022. All of the terms of the Bonds will be included in a certificate to be executed by the Chairman or the County Manager following the award of the Bonds (the "Award Certificate") and shall be set forth in the final Official Statement, as described herein. The principal of the Bonds is payable upon presentation and surrender of the Bonds at the designated corporate trust office of the Paying Agent. Interest payable on the Bonds on any Interest Date will be paid by check or draft mailed to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or, at the request of such Holder, by bank wire transfer for the account of such Holder. All payments of principal of and interest on the Bonds shall be payable in 9 any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. (B) The Chairman, on behalf of the Issuer and only in accordance with the terms hereof and of the Official Notice of Sale, shall award the Bonds to the underwriter or underwriters that submit a bid proposal which complies in all respects with this Resolution and the Official Notice of Sale and offers to purchase the Bonds at the lowest true interest cost to the Issuer, as calculated by the Issuer's Financial Advisor in accordance with the terms and provisions of the Official Notice of Sale; provided, however, the Bonds shall not be awarded to any bidder unless the true interest cost set forth in the winning bid (as calculated by the Financial Advisor) is equal to or less than 5.00%. In accordance with the provisions of the Official Notice of Sale, the Chairman may, in his or her sole discretion, reject any and all bids. (C) The Bonds may be redeemed prior to their respective maturities from any moneys legally available therefor, upon notice as provided in this Resolution, and upon the terms and provisions as shall be determined by the Chairman. Notwithstanding the foregoing, with respect to any optional redemption terms for the Bonds, the first call date may be no later than January 1, 2017, and the call premium, if any, for the Bonds may not exceed 2.00% of the par amount of the Bonds to be redeemed. The Chairman, upon the advice of the Issuer's Financial Advisor, may determine that the Bonds shall not be subject to optional redemption. Term Bonds may be established in accordance with the terms of the Official Notice of Sale. SECTION 2.02. APPLICATION OF BOND PROCEEDS. The proceeds received from the sale of the Bonds shall be applied by the Issuer, as follows: (A) A sufficient amount of the Bond proceeds shall be applied to the payment for the premium for the Bond Insurance Policy; (B) a sufficient amount of the Bond proceeds shall be held by the Issuer to pay costs and expenses associated with the issuance of the Bonds; and (C) any remaining amounts of the Bond proceeds shall be deposited in the Project Fund and shall be used to pay the Costs of the Project. SECTION 2.03. EXECUTION OF BONDS. The Bonds shall be executed in the name of the Issuer with the manual or facsimile signature of the Chairman and the official seal of the Issuer shall be imprinted thereon, and attested with the manual or facsimile signature of the Clerk. In case any one or more of the officers who shall have signed or sealed any of the Bonds or whose facsimile signature shall appear thereon shall cease to be such officer of the Issuer before the Bonds so signed and sealed have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as herein 10 provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bond shall hold the proper office of the Issuer, although at the date of such Bond such person may not have held such office or may not have been so authorized. The Issuer may adopt and use for such purposes the facsimile signatures of any such persons who shall have held such offices at any time after the date of the adoption of this Resolution, notwithstanding that either or both shall have ceased to hold such office at the time the Bonds shall be actually sold and delivered. SECTION 2.04. AUTHENTICATION. No Bond shall be secured hereunder or entitled to the benefit hereof or shall be valid or obligatory for any purpose unless there shall be manually endorsed on such Bond a certificate of authentication by the Registrar or such other entity as may be approved by the Issuer for such purpose. Such certificate on any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The form of such certificate shall be substantially in the form provided in Section 2.10 hereof. SECTION 2.05. TEMPORARY BONDS. Until the definitive Bonds are prepared, the Issuer may execute, in the same manner as is provided in Section 2.03 hereof, and deliver, upon authentication by the Registrar pursuant to Section 2.04 hereof, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof, one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations authorized by the Issuer, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Issuer, at its own expense, shall prepare and execute definitive Bonds, which shall be authenticated by the Registrar. Upon the surrender of such temporary Bonds for exchange, the Registrar, without charge to the Holder thereof, shall deliver in exchange therefor definitive Bonds, of the same aggregate principal amount and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pursuant to this Resolution. All temporary Bonds surrendered in exchange for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith cancelled by the Registrar. SECTION 2.06. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and deliver, and the Registrar shall authenticate, a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of his ownership thereof and 11 satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer or the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Bonds so surrendered or otherwise substituted shall be cancelled by the Registrar. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same or cause the Bond to be paid, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this Section 2.06 shall constitute original contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal and proportionate benefits and rights provided hereunder to the same extent as all other Bonds issued hereunder. SECTION 2.07. INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER. Bonds, upon surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory to the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same maturity of any other authorized denominations. The Bonds issued under this Resolution shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State of Florida, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds. So Iong as any of the Bonds shall remain Outstanding, the Issuer shall maintain and keep, at the office of the Registrar, books for the registration and transfer of the Bonds. The transfer of any Bond shall be registered only upon the books of the Issuer, at the office of the Registrar, under such reasonable regulations as the Issuer may prescribe, by the Holder thereof in person or by his attorney duly authorized in writing upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed and guaranteed by the Holder or his duly authorized attorney. Upon the registration or transfer of any such Bond, the Issuer shall issue, and cause to be authenticated, in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and maturity as the surrendered Bond. The Issuer, the Registrar and any Paying Agent or fiduciary of the Issuer may deem and treat the Person in whose name any Outstanding Bond shall be registered upon the books of the Issuer as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal and interest on such Bond and for all other purposes, and all such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the 12 extent of the sum or sums so paid and neither the Issuer nor the Registrar nor any Paying Agent or other fiduciary of the Issuer shall be affected by any notice to the contrary. The Registrar, in any case where it is not also the Paying Agent with respect to the Bonds, forthwith (A) following the fifteenth day prior to an Interest Date for the Bonds, and (B) at any other time as reasonably requested by the Paying Agent, certify and furnish to the Paying Agent the names, addresses and holdings of the Bondholders and any other relevant information reflected in the registration books. Any Paying Agent of any fully registered Bond shall effect payment of interest on such Bonds by mailing a check to the Holder entitled thereto or may, in lieu thereof, upon the request and at the expense of such Holder, transmit such payment by bank wire transfer for the account of such Holder. In all cases in which the privilege of exchanging Bonds or the transfer of Bonds shall be registered, the Issuer shall execute and the Registrar shall authenticate and deliver such Bonds in accordance with the provisions of this Resolution. Execution of Bonds by the Chairman and Clerk for purposes of exchanging, replacing or registering the transfer of Bonds may occur at the time of the original delivery of the Bonds. All Bonds surrendered in any such exchanges or registration of transfer shall be held by the Registrar for safekeeping until directed by the Issuer to be cancelled by the Registrar. For every such exchange or registration of transfer, the Issuer or the Registrar may make a charge sufficient to reimburse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or registration of transfer. The Issuer and the Registrar shall not be obligated to make any such exchange or transfer of the Bonds during the period commencing on the fifteenth day of the month immediately preceding an Interest Date on the Bonds and ending on such Interest Date, or, in the case of any proposed redemption of Bonds, then, for the Bonds subject to redemption, during the 15 days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date. SECTION 2.08. FULL BOOK ENTRY FOR BONDS. Notwithstanding the provisions set forth in Section 2.07 hereof, the Bonds shall be initially issued in the form of a separate single certificated fully registered Bond for each of the maturities of the 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"). All of the Outstanding Bonds shall be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. As long as the Bonds shall be registered in the name of Cede & Co., all payments of principal on the Bonds shall be made by the Paying Agent by check or draft or by bank wire transfer to Cede & Co., as Holder of the Bonds, upon presentation of the Bonds to be paid, to the Paying Agent. 13 With respect to the 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 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 Bonds, 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 or interest on the Bonds. The Issuer, the Registrar and the Paying Agent shall treat and consider the Person in whose name each 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 and interest with respect to such Bond, for the purpose of giving notices 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 and interest on the 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 and interest on the 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 of the Issuer to make payments of principal and interest pursuant to the provisions of this 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 Section 2.07 with respect to transfers during the 15 days next preceding an Interest Date, the words "Cede & Co." 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 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 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 and compliance by the Issuer with all then applicable rules and procedures of DTC, the Bonds shall no longer be restricted to being registered in the 14 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 this Resolution. In such event, the Issuer shall issue, and the Registrar shall authenticate, transfer and exchange the 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 Letter of Representations previously executed by the Issuer and delivered to DTC shall apply to the payment of principal of and interest on the Bonds. SECTION 2.09. REDEMPTION OF BONDS. The Bonds shall be redeemed only in the principal amount of $5,000 each and integral multiples thereof. The Issuer shall, at least 45 days prior to the redemption date (unless a shorter time period shall be satisfactory to the Registrar), notify the Registrar of such redemption date and of the principal amount of Bonds to be redeemed. For purposes of any redemption of less than all of the Outstanding Bonds of a single maturity, the particular Bonds or portions of Bonds to be redeemed shall be selected not more than 45 days prior to the redemption date by the Registrar from the Outstanding Bonds of the maturity or maturities designated by the Issuer by such method as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Bonds or portions of Bonds in principal amounts of$5,000 and integral multiples thereof If less than all of the Outstanding Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the Issuer and Paying Agent (if the Registrar is not the Paying Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. Notice of such redemption, which shall specify the Bond or Bonds (or portions thereof) to be redeemed and the date and place for redemption, shall be given by the Registrar on behalf of the Issuer, and (A) shall be filed with the Paying Agent of such Bonds, (B) shall be mailed first class, postage prepaid, at least 30 days prior to the redemption date to all Holders of Bonds to be redeemed at their addresses as they appear on the registration books kept by the Registrar as of the date of mailing of such notice, and (C) shall be mailed, certified mail, postage prepaid, at least 35 days prior to the redemption date to the registered securities depositories and two or more nationally recognized municipal bond information services. Failure to mail such notice to such depositories or services or the Holders of the Bonds to be redeemed, or any defect therein, shall not affect the proceedings for redemption of Bonds as to which no such failure or defect has occurred. Notice of optional redemption of Bonds shall only be sent if the Issuer determines it shall have sufficient funds available to pay the Redemption Price of and interest on the Bonds called for redemption on the redemption date or the 15 notice contains an express provision stating that the redemption is conditioned upon the Issuer receiving sufficient funds on or prior to the redemption date. Each notice of redemption shall state: (1) the CUSIP numbers of all Bonds being redeemed, (2) the original issue date of such Bonds, (3) the maturity date and rate of interest borne by each Bond being redeemed, (4)the redemption date, (5)the Redemption Price, (6) the date on which such notice is mailed, (7) if less than all Outstanding Bonds are to be redeemed, the certificate number (and, in the case of a partial redemption of any Bond, the principal amount) of each Bond to be redeemed, (8) that on such redemption date there shall become due and payable upon each Bond to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of the principal thereof in the case of Bonds to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such date interest thereon shall cease to accrue and be payable, (9) that the Bonds to be redeemed, whether as a whole or in part, are to surrendered for payment of the Redemption Price at the designated office of the Registrar at an address specified, and (10) the name and telephone number of a person designated by the Registrar to be responsible for such redemption. In addition to the mailing of the notice described above, each notice of redemption and payment of the Redemption Price shall meet the following requirements; provided, however, the failure to provide such further notice of redemption or to comply with the terms of this paragraph shall not in any manner defeat the effectiveness of a call for redemption if notice thereof is given as prescribed above: (A) Each further notice of redemption shall be sent by certified mail or overnight delivery service or telecopy to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and to two or more national information services which disseminate notices of prepayment or redemption of obligations such as the Bonds. (B) Each further notice of redemption shall be sent to such other Person, if any, as shall be required by applicable law or regulation. The notice of redemption described in this paragraph need not be given as described above if the Bonds called for redemption are registered pursuant to a book-entry-only system. The Issuer may provide that a notice of redemption may be contingent upon the occurrence of certain condition(s) and that if such condition(s) do not occur, the notice will be rescinded; provided notice of rescission shall be mailed in the manner described above to all affected Bondholders as soon as practicable after the Issuer has determined to rescind the redemption. 16 Any Bond which is to be redeemed only in part shall be surrendered at any place of payment specified in the notice of redemption (with due endorsement by, or written instrument of transfer in form satisfactory to the Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Issuer shall execute and the Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds, of the same interest rate and maturity, and of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bonds so surrendered. Notice of redemption having been given substantially as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar and/or Paying Agent at the appropriate Redemption Price, plus accrued interest. All Bonds which have been redeemed shall be cancelled by the Registrar and shall not be reissued. SECTION 2.10. FORM OF BONDS. The text of the Bonds shall be in substantially the following form with such omissions, insertions and variations as may be necessary and/or desirable and approved by the Chairman or the Clerk prior to the issuance thereof(which necessity and/or desirability and approval shall be presumed by such officer's execution of the Bonds and the Issuer's delivery of the Bonds to the purchaser or purchasers thereof): 17 No. R- $ UNITED STATES OF AMERICA COLLIER COUNTY,FLORIDA LIMITED GENERAL OBLIGATION BOND (FOREST LAKES ROADWAY AND DRAINAGE MUNICIPAL SERVICE TAXING UNIT), SERIES Date of Interest Rate Maturity Date Original Issue CUSIP Registered Holder: CEDE & CO. Principal Amount: Collier County, Florida, a political subdivision of the State of Florida (the "Issuer"), for value received, hereby promises to pay to the Registered Holder identified above, or registered assigns as hereinafter provided, on the Maturity Date identified above, the Principal Amount identified above and to pay interest on such Principal Amount from the Date of Original Issue identified above or from the most recent interest payment date to which interest has been paid at the Interest Rate per annum identified above on 1 and 1 of each year, commencing 1, , until such Principal Amount shall have been paid. Such Principal Amount and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Such Principal Amount is payable at the designated corporate trust office of , as Paying Agent. Payment of each installment of interest shall be made to the person in whose name this Bond shall be registered on the registration books of the Issuer maintained by (the "Registrar"), at the close of business on the fifteenth day (whether or not a business day) of the calendar month next preceding each interest payment date and shall be paid by a check or draft of such Paying Agent mailed to such Registered Holder at the address appearing on such registration books or, at the request of such Registered Holder, by bank wire transfer to an account of such Holder designated in such written request. 18 This Bond is one of an authorized issue of Bonds in the aggregate principal amount of$ (the "Bonds") of like date, tenor and effect, except as to number, principal amount, maturity and interest rate, issued to , and in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 125, Florida Statutes,Article VII, Section 12 of the Florida Constitution, Resolution No. 2006-242, adopted by the Board of County Commissioners of the Issuer (the "Board") on September 12, 2006, and Resolution No. of the Issuer, adopted by the Board on September 11, 2007, as it may be amended or supplemented from time to time (the "Resolution"), and is subject to all the terms and conditions of such Resolution. In accordance with the terms of the Resolution, the Issuer has made a limited pledge of its faith, credit and taxing power for the full and prompt payment of the principal of and interest on the Bonds. A direct annual tax shall be levied, not in excess of four (4) mills, upon all taxable property within the Forest Lakes Roadway and Drainage Municipal Service Taxing Unit to make such payments. Provision shall be included and made in the annual budget and tax levy for the levy of such taxes, which tax shall be levied and collected at the same time, and in the same manner, as other ad valorem taxes of the Issuer are assessed, levied and collected. Reference to the Resolution is hereby made for a description of the funds charged with and pledged to the payment of the principal of and interest on the Bonds, the nature and extent of the security for the payment of the Bonds, a statement of the rights, duties and obligations of the Issuer, the rights of the Holders of the Bonds, to all the provisions of which Resolution the holder hereof by the acceptance of this Bond assents. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and Constitution of the State of Florida applicable thereto, and that the issuance of the Bonds of this issue does not violate any constitutional, statutory, or charter limitation or provision, and that provision has been made for the collection of a direct annual tax, without limitation, on all property in the Issuer taxable for such purpose sufficient to pay and discharge the principal hereof at maturity. The Issuer has established a book-entry system of registration for the Bonds. 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 purchase, delivery or transfer, the beneficial owner of this Bond shall be deemed to have agreed to such arrangement. The transfer of this Bond is registrable by the Bondholder hereof in person or by his attorney or legal representative at the designated corporate trust office of the Registrar 19 but only in the manner and subject to the conditions provided in the Resolution and upon surrender and cancellation of this Bond. (INSERT REDEMPTION PROVISIONS) Redemption of this Bond under the preceding paragraphs shall be made as provided in the Resolution upon notice given by first class mail sent at least 30 days prior to the redemption date to the Registered Holder hereof at the address shown on the registration books maintained by the Registrar; provided, however, that failure to mail notice to the Registered Holder hereof, or any defect therein, shall not affect the validity of the proceedings for redemption of other Bonds as to which no such failure or defect has occurred. In the event that less than the full principal amount hereof shall have been called for redemption, the Registered Holder hereof shall surrender this Bond in exchange for one or more Bonds in an aggregate principal amount equal to the unredeemed portion of principal, as provided in the Resolution. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Resolution until it shall have been authenticated by the execution by the Registrar of the certificate of authentication endorsed hereon. IN WITNESS WHEREOF, Collier County, Florida has issued this Bond and has caused the same to be signed by the Chairman of its Board of County Commissioners and attested to by the Clerk of the Circuit Court for Collier County, Florida and Ex-Officio Clerk of the Board of County Commissioners and its official seal or a facsimile of thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the day of . COLLIER COUNTY, FLORIDA (SEAL) By: Chairman, Board of County Commissioners ATTESTED: Clerk, Circuit Court for Collier County, Florida and Ex-Officio Clerk of the Board of County Commissioners 20 CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds issued under the provisions of the within- mentioned Resolution. , as Registrar Date of Authentication: By: Authorized Signatory 21 Unless this certificate is presented by an authorized representative of The Depository Trust Company to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by the authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. ASSIGNMENT AND TRANSFER FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or other identifying number of assignee) the attached Bond of Collier County, Florida, and does hereby constitute and appoint attorney, to transfer the said Bond on the books kept for registration thereof, with full power of substitution in the premises. Date: Signature Guaranteed by: NOTICE: Signature must be guaranteed by an institution which is a participant in the Securities Transfer Agent Medallion NOTICE: The signature to this assignment Program (STAMP) or similar program. must correspond with the name of the Registered Holder 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 other identifying number of such assignee must be supplied. 22 The following abbreviations, when used in the 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 TRANS MIN ACT -- (Cust.) Custodian for under Uniform Transfers to Minors Act of (State) Additional abbreviations may also be used though not in list above. 23 ARTICLE HI SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 3.01. LIMITED GENERAL OBLIGATIONS OF THE ISSUER. The faith, credit and taxing power of the Issuer shall be and are hereby pledged for the full and prompt payment of the principal of and interest on the Bonds; provided, that such pledge is a limited obligation of the Issuer which shall not exceed four (4)mills of ad valorem taxes levied and collected within the Forest Lakes MSTU. A direct annual tax not in excess of four (4) mills shall be levied upon all taxable property within the Forest Lakes MSTU to make such payments. No Holder or Holders of the Bonds shall ever have the right to compel the full faith, credit and taxing power of the Issuer in an amount greater than the Limited Ad Valorem Tax or within any area other than the Forest Lakes MSTU. Provision shall be included and made in the annual budget and tax levy for the levy of the Limited Ad Valorem Tax in an amount sufficient to pay the principal of and interest on the Bonds, as the same shall become due. Whenever the Issuer shall, in any Fiscal Year, have irrevocably deposited in the Sinking Fund any moneys derived from sources other than the aforementioned Limited Ad Valorem Tax, said Limited Ad Valorem Tax may be correspondingly diminished; but any such diminution must leave available an amount of such Limited Ad Valorem Tax, after allowance for anticipated delinquencies in collection, fully sufficient, with such moneys so deposited from other sources, to assure the prompt payment of principal, interest and other related charges falling due prior to the time that the proceeds of the next annual Limited Ad Valorem Tax levy will be available. Such Limited Ad Valorem Tax shall be levied and collected at the same time, and in the same manner, as other ad valorem taxes of the Issuer are assessed, levied and collected. The Limited Ad Valorem Tax shall be levied and collected in accordance with all applicable law, including, but not limited to, the Referendum Resolution. The Issuer hereby irrevocably pledges such Limited Ad Valorem Tax to the payment of the Bonds. SECTION 3.02. PROJECT FUND. There is hereby created a special fund to be known as the "Collier County, Florida Limited General Obligation Bonds (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit)Project Fund," which shall be used only for payment of the Costs of Project. Moneys in the Project Fund, until applied to payment of any item of the Costs of the Project in the manner hereinafter provided, shall be held in trust by the Issuer and shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders. The Issuer covenants that the acquisition and construction of the Project will be completed without delay. The Issuer shall keep records of disbursements and payments from the Project Fund and shall retain all such records for such periods of time as is required by applicable law. 24 Notwithstanding any of the other provisions of this Section 3.02, to the extent that other moneys are not available therefor, amounts in an account of the Project Fund shall be applied to the payment of principal and interest on the Bonds or to reimburse the Insurer for the payment of such principal and interest. The date of completion of acquisition and construction of the Project shall be filed by the County Manager with the Issuer. Promptly after the date of the completion of the Project, and after paying or making provisions for the payment of all unpaid items of the Costs of the Project, the Issuer shall apply any balance of moneys remaining in the Project Fund for any lawful purpose; provided the Issuer has received an opinion of Bond Counsel to the effect that such application shall not adversely affect the exclusion, if any, of interest on the Bonds from gross income for purposes of federal income taxation and such use is consistent with the provisions of the Referendum Resolution. SECTION 3.03. CREATION OF SINKING FUND; APPLICATION OF LIMITED AD VALOREM TAX. (A) There is hereby created a special fund to be known as the "Collier County, Florida Limited General Obligation Bonds (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit) Sinking Fund" which shall be held in trust for the benefit of the Bondholders. There is hereby ordered levied upon all the property taxable for such purpose within the Forest Lakes MSTU the Limited Ad Valorem Tax in an amount sufficient, together with other available moneys, to pay the principal and interest on the Bonds, the charges of the Paying Agents and Registrars, and any other amounts that are properly due and owing with respect to the repayment of the Bonds; provided, however, that in no event shall the levy of the Limited Ad Valorem Tax be in excess of four (4) mills on all taxable property within Forest Lakes MSTU. The Limited Ad Valorem Tax levied pursuant to this Resolution as collected shall be paid over for deposit into the Sinking Fund. (B) Money in the Sinking Fund shall be used solely for the purpose of paying the Annual Debt Service on the Bonds coming due (whether by maturity or otherwise). Moneys in the Sinking Fund shall be disbursed for (i) the payment of the interest on the Bonds secured hereby as such interest falls due, (ii)the payment of the principal of the Bonds secured hereby at their respective maturities or earlier redemption, (iii) the payment of Amortization Installments coming due, (iv)the purchase of Bonds in the open market, provided, however, the price paid shall not exceed the principal amount plus accrued interest, and (v) the payment of the necessary charges for paying Bonds and interest thereon. (C) At least one business day prior to the date established for payment of any principal of or interest on the Bonds, the Issuer shall withdraw from the Sinking Fund sufficient moneys to pay such principal or interest and deposit such moneys with the 25 Paying Agent. Such deposits with the Paying Agent shall be made in moneys available to make payments of the principal of and interest on the Bonds as the same becomes due. SECTION 3.04. REBATE FUND. There is hereby created a special fund to be known as the "Collier County, Florida Limited General Obligation Bonds (Forest Lakes Roadway and Drainage Municipal Service Taxing Unit) Rebate Fund." Amounts on deposit in the Rebate Fund shall be held in trust by the Issuer and used solely to make required rebates to the United States (except to the extent the same may be transferred to the Issuer) and the Bondholders shall have no right to have the same applied for debt service on the Bonds. If the rebate requirements of Section 148(f) of the Code are applicable, the Issuer agrees to undertake all actions required of it in its arbitrage certificate related to the Bonds, including, but not limited to: (A) making a determination in accordance with the Code of the amount required to be deposited in the Rebate Fund; (B) depositing the amount determined in clause (A) above into the Rebate Fund; (C) paying on the dates and in the manner required by the Code to the United States Treasury from the Rebate Fund and any other legally available moneys of the Issuer such amounts as shall be required by the Code to be rebated to the United States Treasury; and (D) keeping such records of the determinations made pursuant to this Section 3.04 as shall be required by the Code, as well as evidence of the fair market value of any investments purchased with proceeds of the Bonds. The provisions of the above-described arbitrage certificate may be amended without the consent of any Holder or the Insurer from time to time as shall be necessary, in the opinion of Bond Counsel, to comply with the provisions of the Code. SECTION 3.05. INVESTMENTS. Moneys on deposit in the Project Fund and the Sinking Fund shall be continuously secured in the manner by which the deposit of public funds are authorized to be secured by the laws of the State. Moneys on deposit in the Project Fund and the Sinking Fund may be invested and reinvested in Authorized Investments maturing not later than the date on which the moneys therein will be needed for the purposes of such Funds. All investments shall be valued at amortized cost. Any and all income received by the Issuer from the investment of moneys in the Project Fund and the Sinking Fund shall be retained in such respective Fund. Nothing contained in this Resolution shall prevent any Authorized Investments acquired as investments of or security for funds held under this Resolution from being issued or held in book-entry form on the books of the Department of the Treasury of the United States. 26 SECTION 3.06. SEPARATE ACCOUNTS. The moneys required to be accounted for in each of the foregoing funds and accounts established herein may be deposited in a single, non-exclusive bank account, and funds allocated to the various funds and accounts established herein may be invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein and such investments for the various purposes of such funds, accounts and subaccounts as herein provided. The designation and establishment of the various funds and accounts in and by this Resolution shall not be construed to require the establishment of any completely independent, self-balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to establish certain priorities for application of such revenues as herein provided. SECTION 3.07. REFUNDING BONDS. The Issuer may, from time to time, issue bonds to refund the Bonds issued hereunder. Such refunding bonds shall be issued on parity with any unrefunded Bonds; provided, issuance of such refunding bonds shall result in aggregate debt service savings. For purposes of all of the provisions of this Resolution, except Sections 2.01 and 2.02 and Articles VII and IX and except where the context clearly provides otherwise, the term "Bonds" shall include any refunding bonds. SECTION 3.08 ADDITIONAL INDEBTEDNESS. The Issuer agrees that it will issue no obligations payable from the Limited Ad Valorem Tax other than the Bonds. No additional Bonds shall be issued under this Resolution other than for refunding purposes as described in Section 3.07 hereof. 27 ARTICLE IV COVENANTS OF ISSUER SECTION 4.01. BOOKS AND RECORDS. The Issuer will keep books and records of the receipt of the Limited Ad Valorem Tax in accordance with generally accepted accounting principles, and the Insurer and any Holder of Bonds shall have the right at all reasonable times to inspect the records, accounts and data of the Issuer relating thereto. SECTION 4.02. NO IMPAIRMENT. The pledging of the Limited Ad Valorem Tax in the manner provided herein shall not be subject to repeal, modification or impairment by any subsequent ordinance, resolution, agreement or other proceedings of the Issuer. The Issuer agrees not to take any action with respect to the Forest Lakes MSTU, including but not limited to reducing its geographic boundaries, which would have a materially adverse effect on the Bonds. SECTION 4.03. FEDERAL INCOME TAX COVENANTS. (A) The Issuer covenants with the Holders of the Bonds that it shall not use the proceeds of the Bonds in any manner which would cause the interest on the Bonds to be or become includable in gross income for purposes of federal income taxation. (B) The Issuer covenants with the Holders of the Bonds that neither the Issuer nor any Person under its control or direction will make any use of the proceeds of the Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause the Bonds to be "arbitrage bonds" within the meaning of the Code and neither the Issuer nor any other Person shall do any act or fail to do any act which would cause the interest on the Bonds to become includable in gross income for purposes of federal income taxation. (C) The Issuer hereby covenants with the Holders of the Bonds that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Bonds from gross income for purposes of federal income taxation, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code. 28 ARTICLE V DEFAULTS AND REMEDIES SECTION 5.01. EVENTS OF DEFAULT. The following events shall each constitute an "Event of Default": (A) Default shall be made in the payment of the principal of or interest on any Bond when due. In determining whether a payment default has occurred, no effect shall be given to payment made under a Bond Insurance Policy. (B) There shall occur the dissolution or liquidation of the Issuer, or the filing by the Issuer of a voluntary petition in bankruptcy, or the commission by the Issuer of any act of bankruptcy, or adjudication of the Issuer as bankrupt, or assignment by the Issuer for the benefit of its creditors, or appointment of a receiver for the Issuer, or the entry by the Issuer into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Issuer in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy Code, as amended, or under any similar act in any jurisdiction which may now be in effect or hereafter enacted. (C) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Resolution on the part of the Issuer to be performed, and such default shall continue for a period of 30 days after written notice of such default shall have been received from the Holders of not less than 25% of the aggregate principal amount of the Outstanding Bonds or any Insurer. Notwithstanding the foregoing, the Issuer shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the Issuer in good faith institutes curative action and diligently pursues such action until the default has been corrected. SECTION 5.02. REMEDIES. Any Holder of the Bonds or any trustee or receiver acting for such Bondholders may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights under the laws of the State of Florida, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution or by any applicable statutes to be performed by the Issuer or by any officer thereof; provided, however, that no Holder, Insurer, trustee, receiver or other person shall have the right to declare the Bonds immediately due and payable. The Holder or Holders of Bonds in an aggregate principal amount of not less than 25% of the Bonds then Outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to this Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and protection 29 of the rights of such Bondholders and such certificate shall be executed by such Bondholders or their duly authorized attorneys or representatives, and shall be filed in the office of the Clerk. Notice of such appointment, together with evidence of the requisite signatures of the Holders of not less than 25% in aggregate principal amount of Bonds Outstanding and the trust instrument under which the trustee shall have agreed to serve shall be filed with the Issuer and the trustee and notice of appointment shall promptly be given to all Holders of Bonds by first class mail, postage prepaid. After the appointment of the first trustee hereunder, no further trustees may be appointed; however, the holders of a majority in aggregate principal amount of all the Bonds then Outstanding may remove the trustee initially appointed and appoint a successor and subsequent successors at any time. SECTION 5.03. DIRECTIONS TO RECEIVER AS TO REMEDIAL PROCEEDINGS. The Holders of a majority in principal amount of the Bonds then Outstanding (or the Insurer) have the right, by an instrument or concurrent instruments in writing executed and delivered to any receiver, to direct the method and place of conducting all remedial proceedings to be taken by any receiver hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions hereof, and that the trustee shall have the right to decline to follow any such direction which in the opinion of such receiver would be unjustly prejudicial to Holders of Bonds not parties to such direction. SECTION 5.04. REMEDIES CUMULATIVE. No remedy herein conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. SECTION 5.05. WAIVER OF DEFAULT. No delay or omission of any Bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by this Section 5.05 to the Bondholders may be exercised from time to time, and as often as may be deemed expedient. No Event of Default may be waived without the consent of the Insurer, which has honored all its obligations under the Bond Insurance Policy. SECTION 5.06. CONTROL BY INSURER. To the extent the Insurer makes any payment of principal of or interest on Bonds in accordance with the Bond Insurance Policy, the Insurer shall become subrogated to the rights of the recipients of such payments in accordance with the terms of its Bond Insurance Policy. Upon the occurrence and continuance of an Event of Default, the Insurer, if it shall not be in payment default under the Bond Insurance Policy, shall be deemed to be the sole owner of such Bonds for purposes of(A) directing and controlling the enforcement of all rights 30 and remedies with respect to such Bonds, including any waiver of an Event of Default and removal of any trustee, and (B) exercising any voting right or privilege or giving any consent or direction or taking any other action that the Holders of such Bonds are entitled to take pursuant to this Article V hereof. No provision expressly recognizing or granting rights in or to the Insurer shall be modified without the consent of the Insurer. The Insurer's rights under this Section 5.06 shall be suspended during any period in which it is in default in its payment obligations under the Bond Insurance Policy (except to the extent of amounts previously paid by the Insurer and due and owing to it) and shall be of no force or effect if its Bond Insurance Policy is no longer in effect or if it asserts that its Bond Insurance Policy is not in effect or if the Insurer waives such rights in writing. The rights granted to the Insurer under this Section 5.06 are granted in consideration of the Insurer issuing its Bond Insurance Policy. The Issuer shall provide the Insurer immediate notice of any Event of Default described in Section 5.01(A) hereof and notice of any other Event of Default occurring hereunder within five days of the occurrence thereof. The insurer shall be considered a third-party beneficiary to this Resolution with respect to the Bonds. 31 ARTICLE VI SUPPLEMENTAL RESOLUTIONS SECTION 6.01. SUPPLEMENTAL RESOLUTION WITHOUT BONDHOLDERS' CONSENT. The Issuer, from time to time and at any time, may adopt such Supplemental Resolutions without the consent of the Bondholders (which Supplemental Resolution shall thereafter form a part hereof) for any of the following purposes: (A) To cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution or to clarify any matters or questions arising hereunder. (B) To grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders. (C) To add to the conditions, limitations and restrictions on the issuance of Bonds under the provisions of this Resolution other conditions, limitations and restrictions thereafter to be observed. (D) To add to the covenants and agreements of the Issuer in this Resolution other covenants and agreements thereafter to be observed by the Issuer or to surrender any right or power herein reserved to or conferred upon the Issuer. (E) To specify and determine any matters and things relative to such Bonds which are not contrary to or inconsistent with this Resolution as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination at any time prior to the first delivery of such Bonds. (F) To issue obligations to refund any Bonds as described in Section 3.07 hereof. (G) To make any other change that, in the opinion of the Issuer, would not materially adversely affect the security for the Bonds. SECTION 6.02. SUPPLEMENTAL RESOLUTION WITH BONDHOLDERS' AND INSURER'S CONSENT. Subject to the terms and provisions contained in this Section 6.02 and Sections 6.01 and 6.03 hereof, the Holder or Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption of such Supplemental Resolution or Resolutions hereto as shall be deemed necessary or desirable by the Issuer 32 for the purpose of supplementing, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution; provided, however, that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any maturity remain Outstanding, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds under this Section 6.02. Any Supplemental Resolution which is adopted in accordance with the provisions of this Section 6.02 shall also require the written consent of the Insurer. No Supplemental Resolution may be approved or adopted which shall permit or require (A) an extension of the maturity of the principal of or the payment of the interest on any Bond issued hereunder, (B) reduction in the principal amount of any Bond or the rate of interest thereon, (C) the creation of a lien upon or a pledge of the Limited Ad Valorem Tax other than the lien and pledge created by this Resolution or as otherwise permitted hereby, (D) a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (E) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Resolution. Nothing herein contained, however, shall be construed as making necessary the approval by Bondholders or the Insurer of the adoption of any Supplemental Resolution as authorized in Section 6.01 hereof. If at any time the Issuer shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursuant to this Section 6.02, the Clerk shall cause the Registrar to give notice of the proposed adoption of such Supplemental Resolution and the form of consent to such adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they appear on the registration books and to all Insurers of Bonds Outstanding. Such notice shall briefly set forth the nature of the proposed Supplemental Resolution and shall state that copies thereof are on file at the offices of the Clerk and the Registrar for inspection by all Bondholders. The Issuer shall not, however, be subject to any liability to any Bondholder by reason of its failure to cause the notice required by this Section 6.02 to be mailed and any such failure shall not affect the validity of such Supplemental Resolution when consented to and approved as provided in this Section 6.02. Whenever the Issuer shall deliver to the Clerk an instrument or instruments in writing purporting to be executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed Supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the Issuer may adopt such Supplemental Resolution in substantially such form, without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. 33 If the Holders of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of the adoption of such Supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no Holder of any Bond shall have any right to object to the adoption of such Supplemental Resolution, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from taking any action pursuant to the provisions thereof Upon the adoption of any Supplemental Resolution pursuant to the provisions of this Section 6.02, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolution of the Issuer and all Holders of Bonds then Outstanding shall thereafter be determined, exercised and enforced in all respects under the provisions of this Resolution as so modified and amended. SECTION 6.03. AMENDMENT WITH CONSENT OF INSURER. For purposes of amending this Resolution pursuant to Section 6.02 hereof, the Insurer shall be considered the Holder of the Bonds, provided the Bonds, at the time of the adoption of the amendment, shall be rated by the rating agencies which shall have rated the Bonds no lower than the initial ratings (insured ratings) assigned thereto by such rating agencies. The consent of the Holders of Bonds shall not be required if the Insurer shall consent to the amendment as provided by this Section 6.03. The foregoing right of amendment, however, does not apply to any amendment to Section 4.03 hereof with respect to the exclusion of interest on the Bonds from gross income for purposes of federal income taxation or the amendments described in the penultimate sentence of the first paragraph of Section 6.02 hereof. Prior to adoption of any amendment made pursuant to this Section 6.03, notice of such amendment shall be delivered to the rating agencies rating the Bonds. Upon filing with the Clerk of evidence of such consent of the Insurer as aforesaid, the Issuer may adopt such Supplemental Resolution. After the adoption by the Issuer of such Supplemental Resolution, notice thereof shall be mailed in the same manner as notice of an amendment under Section 6.02 hereof. 34 ARTICLE VII PROVISIONS RELATING TO THE BOND INSURANCE POLICY AND INSURER FOR THE BONDS SECTION 7.01. MUNICIPAL BOND INSURANCE. Subject in all respects to the satisfaction of the conditions of Section 2.01 hereof, the Issuer hereby authorizes the payment of the principal of and interest on the Bonds to be insured pursuant to the Bond Insurance Policy issued by MBIA Insurance Corporation ("MBIA" or the "Insurer"). The Chairman is hereby authorized to execute such documents and instruments necessary to cause to MBIA insure the Bonds. SECTION 7.02. PROVISIONS RELATING TO BOND INSURANCE POLICY. (1) The commitment from MBIA to issue its Bond Insurance Policy with respect to the Bonds is hereby approved and authorized and payment for the premium for such insurance is hereby authorized from proceeds of the Bonds. A statement of insurance is hereby authorized to be printed on or attached to the Bonds for the benefit and information of the Bondholders of the Bonds. (2) Subject in all respects to the satisfaction of the conditions of Section 2.01 hereof, so long as the Bond Insurance Policy issued by MBIA is in full force and effect and MBIA has not defaulted in its payment obligations under the Bond Insurance Policy, the Issuer agrees to comply with the following provisions: (A) In the event that, on the second business day, and again on the business day, prior to an Interest Date on the Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Bonds due on the second following or following, as the case may be, business day, the Paying Agent shall immediately notify MBIA or its designee on the same business day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. (B) If the deficiency is made up in whole or in part prior to or on the Interest Date, the Paying Agent shall so notify MBIA 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 a Bond to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify MBIA or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. 35 (D) The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Bondholders as follows: (i) If and to the extent there is a deficiency in amounts required to pay interest on the Bonds, the Paying Agent shall (a) execute and deliver to U.S. Bank Trust National Association, or its successors under the Bond Insurance Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing MBIA as agent for such Bondholders in any legal proceeding related to the payment of such interest and an assignment to MBIA of the claims for interest to which such deficiency relates and which are paid by MBIA, (b) receive as designee of the respective Bondholders (and not as Paying Agent) in accordance with the tenor of the Bond Insurance 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 (ii) If and to the extent of a deficiency in amounts required to pay principal of the 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 MBIA as agent for such Bondholder in any legal proceeding relating to the payment of such principal and an assignment to MBIA of any of the Bonds surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which 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 Bond Insurance 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 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 Bonds, and MBIA shall become the owner of such unpaid Bond 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 agree for the benefit of MBIA that: (i) They recognize that to the extent MBIA makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Bonds, MBIA will be subrogated to the 36 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 the Resolution and the Bonds; and (ii) They will accordingly pay to MBIA the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in the Resolution and the Bonds, but only from the sources and in the manner provided in the Resolution for the payment of principal of and interest on the Bonds to Bondholders, and will otherwise treat MBIA as the owner of such rights to the amount of such principal and interest. (G) In connection with the issuance of additional parity obligations, the Issuer shall deliver to MBIA a copy of the disclosure document, if any, circulated with respect to such additional parity obligations. (H) Copies of any amendments made to the documents executed in connection with the issuance of the Bonds which are required to be consented to by MBIA shall be sent to Standard & Poor's Corporation. Copies of any other amendments not requiring MBIA's consent shall be delivered to MBIA. (I) The Issuer shall provide MBIA with notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto. (J) The Issuer shall provide MBIA with copies of all notices required to be delivered to Bondholders under the Resolution and, on an annual basis, copies of the Issuer's audited financial statements and annual budget. (K) Any notice required to be given to or by any party, including, but not limited to, a Bondholder or the Paying Agent, pursuant to the Resolution shall also be provided to MBIA. All notices required to be given to MBIA 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. (L) The Issuer agrees to reimburse MBIA immediately and unconditionally upon demand, to the extent permitted by law, for all reasonable expenses, including attorneys' fees and expenses, incurred by MBIA in connection with (i) enforcement by MBIA of the Issuer's obligations, or the preservation or defense of any rights of MBIA, under the Resolution and any other document executed in connection with the issuance of the Bonds, and (ii) any consent, amendment, waiver or other action with respect to the Resolution or any related 37 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 of Citibank's prime rate plus 3% or the maximum interest rate permitted by law, whichever is less. In addition, MBIA 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. (M) 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. Notwithstanding the immediately preceding sentence, the Issuer may use, refer to and disclose MBIA's name in its ordinary course of business and government activity. Such use, reference or disclosure includes, but is not limited to, publishing MBIA's name in the Issuer's Comprehensive Annual Financial Report, any preliminary or final Official Statement, any continuing disclosure document, or any other document or instrument that is prepared by the Issuer in the ordinary course of its business and government activity. In addition, the Issuer may disclose MBIA's name in accordance with any applicable public records or other laws. (N) The Issuer shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to which Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of such Bonds without the prior written consent of MBIA. 38 ARTICLE VIII DEFEASANCE SECTION 8.01. DEFEASANCE. If the Issuer shall pay or cause to be paid or there shall otherwise be paid to the Holders of the Bonds the principal and interest due or to become due thereon, at the times and in the manner stipulated therein and in this Resolution, and the Issuer shall pay all amounts owing to the Insurer, then all covenants, agreements and other obligations of the Issuer to the holders of the Bonds shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Paying Agent shall pay over or deliver to the Issuer all money or securities held by it pursuant to this Resolution which are not required for payment of the Bonds not theretofore surrendered for such payment. Any Bonds or interest installments appertaining thereto shall be deemed to have been paid within the meaning of this Section 8.01 if there shall have been deposited in irrevocable trust with a banking institution or trust company by or on behalf of the Issuer either moneys in an amount which shall be sufficient, or Federal Securities verified by an independent certified public accountant to be in such amount that the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with such banking institution or trust company at the same time shall be sufficient, to pay the principal of and interest due and to become due on said Bonds on and prior to the maturity date thereof Except as hereafter provided, neither the Federal Securities nor any moneys so deposited with such banking institution or trust company nor any moneys received by such bank or trust company on account of principal of or interest on said Federal Securities shall be withdrawn or used for any purpose other than, and all such moneys shall be held in trust for and be applied to, the payment, when due, of the principal of the Bonds for the payment of which they were deposited and the interest accruing thereon to the date of maturity; provided, however, the Issuer may substitute new Federal Securities and moneys for the deposited Federal Securities and moneys if the new Federal Securities and moneys are sufficient to pay the principal of and interest on the refunded Bonds. If Bonds are not to be redeemed or paid within 60 days after any such defeasance described in this Section 8.01, the Issuer shall cause the Registrar to mail a notice to the Holders of such Bonds that the deposit required by this Section 8.01 of moneys or Federal Securities has been made and said Bonds are deemed to be paid in accordance with the provisions of this Section 8.01 and stating such maturity date upon which moneys are to be available for the payment of the principal of and interest on said Bonds. Failure to provide said notice shall not affect the Bonds being deemed to have been paid in accordance with the provisions of this Section 8.01. Notwithstanding anything herein to the contrary, in the event that the principal of or interest due on the Bonds shall be paid by the Insurer, such Bonds shall remain 39 Outstanding, shall not be defeased or otherwise satisfied and shall not be considered paid by the Issuer, and the pledge of the Limited Ad Valorem Tax and all covenants, agreements and other obligations of the Issuer to the Bondholders shall continue to exist and the Insurer shall be subrogated to the rights of such Bondholders. 40 ARTICLE IX PROVISIONS RELATING TO BONDS SECTION 9.01. OFFICIAL NOTICE OF SALE. The form of the Official Notice of Sale attached hereto as Exhibit A and the terms and provisions thereof are hereby authorized and approved. The Chairman is hereby authorized to make such changes, insertions and modifications as he or she shall deem necessary prior to the advertisement of such Official Notice of Sale or a summary thereof. The Chairman is hereby authorized to advertise and publish the Official Notice of Sale or a summary thereof at such time as he or she shall deem necessary and appropriate, upon the advice of the Financial Advisor, to accomplish the competitive sale of the Bonds in accordance with applicable law. SECTION 9.02. PRELIMINARY OFFICIAL STATEMENT; OFFICIAL STATEMENT. (A) 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 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 Chairman is hereby authorized to approve such insertions, changes and modifications. The Chairman 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 Chairman deeming the Preliminary Official Statement "final" as described above shall be conclusive evidence of the approval of any insertions, changes or modifications. (B) The form, terms and provisions of the Official Statement relating to the Bonds shall be substantially as set forth in the Preliminary Official Statement and shall include all of the specific financial terms of the Bonds. Subject in all respects to the satisfaction of the conditions in Section 2.01 hereof, the Chairman 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 Underwriters with such changes, amendments, modifications, omissions and additions as may be approved by the Chairman. Said Official Statement, including any such changes, amendments, modifications, omissions and additions as approved by the Chairman and the information contained therein are hereby authorized to be used in connection with the sale of the Bonds to the public. Execution by the Chairman of the Official Statement shall be deemed to be conclusive evidence of approval of such changes. SECTION 9.03. APPOINTMENT OF PAYING AGENT AND REGISTRAR. Subject in all respects to the satisfaction of the conditions in Section 2.01 hereof, U.S. Bank National Association, Miami, Florida, is hereby designated Registrar and Paying Agent for the Bonds. The Chairman and/or the Clerk are hereby authorized to 41 • enter into any agreement which may be necessary to effect the transactions contemplated by this Section 9.03 and by this Resolution. SECTION 9.04. SECONDARY MARKET DISCLOSURE. Subject in all respects to the satisfaction of the conditions in Section 2.01 hereof, the Issuer hereby covenants and agrees that, in order to provide for compliance by the Issuer with the secondary market disclosure requirements of 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 dated date of the 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 of Exhibit C hereto with such changes, amendments, modifications, omissions and additions as shall be approved by the Chairman who is hereby authorized to execute and deliver such Certificate. Notwithstanding any other provision of this Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an Event of Default under this Resolution; provided, however, to the extent permitted by law, the sole and exclusive remedy of any Bondholder for the enforcement of the provisions of the Continuing Disclosure Certificate 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 9.04 and the Continuing Disclosure Certificate. For purposes of this Section 9.04, "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 Bonds (including persons holding such Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any such Bond for federal income tax purposes. 42 ARTICLE X MISCELLANEOUS SECTION 10.01. GENERAL AUTHORITY. The members of the Board, 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 Resolution or the Bond Insurance Policy or which are desirable or consistent with the requirements of this Resolution or the Bond Insurance Policy for the full punctual and complete performance of all the terms, covenants and agreements contained herein or in the Bonds and this Resolution, including the execution of any documents or instruments relating to insuring payment of the Bonds, and each member, employee, attorney and officer of the Issuer or the Issuer are hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. If the Chairman is unavailable or unable at any time to perform any duties or functions hereunder, the Vice- Chairman is hereby authorized and directed to act on his or her behalf. SECTION 10.02. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions of this Resolution 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 and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Bonds issued hereunder. SECTION 10.03. REPEAL OF INCONSISTENT RESOLUTIONS. All ordinances, resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict. SECTION 10.04. EFFECTIVE DATE. This Resolution shall take effect immediately upon its enactment in accordance with law. 43 DULY ADOPTED, in Regular Session this 11t day of September, 2007. COLLIER COUNTY, FLORIDA (SEAL). C` , By A�i.■ri/i;.;46 ;p Chaim ¶ Board of County Commissioners ATTESTET: Is Clerk,l;oard of County Commissioners Approved as to Form and Legal Sufficiency: County Attorney 44 EXHIBIT A FORM OF OFFICIAL NOTICE OF SALE EXHIBIT B FORM OF PRELIMINARY OFFICIAL STATEMENT EXHIBIT C FORM OF CONTINUING DISCLOSURE CERTIFICATE EXHIBIT D GENERAL DESCRIPTION OF THE PROJECT The Project generally includes the acquisition and construction of the following capital improvements, as the same may be amended and supplemented from time to time: • Gravity storm sewer from PS to Gordon River • Forest Lakes Boulevard Relief Sewer to Lake 10 • Quail Forest Boulevard North Entrance Swale Rebuilding and Paving (no pipes) • Rebuild Swale #6 (behind homes on north side of East-West segment of F-L Blvd.) • Rebuild Swale #1 (behind condominiums on Quail Forest Boulevard) • Rebuild Swale #3 (connects lakes behind condominiums on Quail Forest Boulevard) • Rebuild Swale #4 (connects lakes behind condominiums on Quail Forest Boulevard) • Rebuild Swale #12 (behind Forest Lakes Golf& Tennis Club) • Rebuild Swale #13 (behind Turtle Lakes Golf Colony) • Rebuild Swale #14a& #14b (behind Emerald Greens Villas) • Rebuild Swale #11 (behind single family homes on Forest Lakes Boulevard) • Rebuild Swale #9 (behind single family homes on Forest Lakes Boulevard) • Rebuild Swale #8 (behind single family homes on Forest Lakes Boulevard) • Single Family Area - Side Yard Swale Rebuild/Road Cross Drains • New storm sewer outfall at Fairways at Emerald Greens • Overlay Forest Lakes Boulevard and cul-de-sacs throughout Single Family Area • Rebuild Woodshire Lane from Pine Ridge Road to Single Family Area • Overlay Quail Forest Boulevard from GC Clubhouse to southern end • Overlay Forest Lakes Drive and side streets from Forest Lakes Boulevard to south end