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Resolution 1985-005 (CWS) 111 II r p RESOLUTION NO. CWS-85- 5 A RESOLUTION AUTHORIZING THE ISSUANCE BY THE COUNTY WATER - SEWER DISTRICT OF NOT EXCEEDING $ 82 , 500 , 000 IN THE AGGREGATE PRINCIPAL AMOUNT OF WATER AND SEWER REVENUE BONDS , SERIES 1985 TO FINANCE THE COST OF REFUNDING CERTAIN OUTSTANDING OBLIGATIONS OF THE DISTRICT AND CONSTRUCTING AND ACQUIRING CERTAIN ADDITIONS , EXTENSIONS AND IMPROVEMENTS TO THE DISTRICT ' S WATER AND SEWER SYSTEM ; PLEDGING THE NET REVENUES AND SYSTEM DEVELOPMENT CHARGES TO SECURE PAYMENT '. OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS ; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SAID BONDS; AND PROVIDING FOR AN EFFECTIVE DATE FOR THIS RESOLUTION. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, ACTING AS THE EX-OFFICIO GOVERNING BODY OF THE COUNTY WATER-SEWER DISTRICT: 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: 'Accreted Value' shall mean , as of any date of computation with respect to any Capital Appreciation Bond , an amount equal to the principal amount of such Capital Appreciation Bond ( the principal amount at its initial offering ) plus the interest accrued on such Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the Interest Date next preceding the date of computation or the date of computation if an Interest Date , such interest 01 to accrue at a rate not exceeding the legal rate , compounded semiannually , plus , with respect to matters related to the payment upon redemption or acceleration of the Capital Appreciation Bonds , if such date of computation shall not be an Interest Date , a portion of the difference between the Accreted Value as of the immediately preceding Interest Date and the Accreted Value as of the immediately succeeding li Interest Date , calculated based on the assumption that Accreted Value accrues during any semi-annual period in equal daily amounts on the basis of a 360-day year . 1 r11,11111.111111111111111111.1111111111.1111111111111111111111111111111111111111111.111111111111.1111.1111111111111111111111111.111"111"."11"1111111111111, e- • O r. "Act' shall mean Part II of Chapter 153 , Florida Statutes , Chapter 78-489 , Laws of Florida , Special Acts of 1978 , and other applicable provisions of law. 'Additional Bonds' shall mean the obligations issued at any time under the provisions of Section 6 . 02 hereof on a parity with the Series 1985 Bonds. 'Additional Project' shall mean any structure , property or facility for public use which the Issuer from time to time may determine to construct or acquire as part of the System, together with all equipment , structures and other facilities necessary or appropriate in connection therewith which are financed in whole or in part with the indebtedness secured by this Resolution . This term is to be broadly construed as including any lawful undertaking which will accrue to the benefit o.•`. the System, including joint ventures and acquisition of partial interests or contractual rights , and including modification , disposal or cancellation of an Additional Project previously authorized , should such modification , disposal or cancellation be permitted under this Resolution. "Annual Audit' shall mean the annual audit prepared pursuant to the requirements of Section 5.06 hereof. 'Annual Budget' shall mean the annual budget prepared pursuant to the requirements of Section 5.03 hereof. 'Annual Debt Service ' shall mean , at any time , the aggregate amount in the then current Bond Year of (1) interest required to be paid on the Outstanding Bonds during such Bond Year , except to the extent that such interest is to be paid from deposits in the Interest Account made from Bond proceeds , ( 2 ) principal of Outstanding Serial Bonds maturing in such Bond Year, and (3) the Sinking Fund Installments herein designated with respect to such Bond Year ; provided that in computing such Annual Debt Service for any future period , any Variable Rate Bonds shall be deemed to bear interest at all times to the maturity thereof at a constant rate of interest equal to either the rate borne by such Variable Rate Bonds on the date they were issued plus one-half of the difference between such rate and the Maximum Interest Rate or the actual rate of interest borne by such Variable Rate Bonds on such date of calculation , whichever is higher . For purposes of this definition , all amounts payable on a Capital Appreciation Bond shall be considered a principal payment due in the year it becomes due . i 4 ' it2 (g) I rQ, • • 'Authorized Investments' shall mean any of the following , if and to the extent that the same are at the time legal for investment of funds of the Issuer : (1) Direct obligations of , or obligations the principal of and interest on which are unconditionally guaranteed by , the United States of America , including obligations issued or held in book entry form by the Department of the Treasury of the United States. (2) Bonds , debentures , notes , participation certificates or other evidences of indebtedness issued , the principal of and interest on which are unconditionally guaranteed , by any agency or instrumentality of or corporation wholly owned by the United States of America , which evidence of indebtedness involves a pledge of the full faith and credit of the United States of America. (3) Bank time deposits evidenced by certificates of deposit , and bankers ' acceptances , issued by any bank , savings and loan association , trust company or national banking association , which are (a ) fully insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation , or (b) secured by obligations described in paragraphs (1) or (2) of this definition. (4) Repurchase agreements with any bank , trust company or national banking association insured by the Federal Deposit Insurance Corporation , or with any government bond dealer recognized as a primary dealer by the Federal Reserve Bank of New York , which agreement is fully and continuously secured by obligations described in paragraphs ( 1 ) and ( 2 ) of this definition ; provided such obligations shall be in the physical possession of the Issuer or a bank or trust company of its choosing which has no interest in such repurchase agreement. (5) Units of participation in the Local Government Surplus Funds Trust Fund established pursuant to Part IV , Chapter 218 , Florida Statutes , or any similar common trust fund which is established pursuant to law as a legal depository of public moneys and for which the State Board of Administration acts as custodian. (6) Such other obligations as shall be permitted to be legal investments of the Issuer by the laws of the State. 'Authorized Issuer Officer' shall mean the County ' s Manager or Utilities Administrator , and when used in reference to any act or document , also means any other person authorized 3 (Mif !9 • • • by resolution of the Issuer to perform such act or sign such document. 'Bond Year' shall mean the period commencing on May 1 of each year and continuing through the next succeeding April 30 , or such other period as may be provided by resolution of the Issuer . 'Bondholder' or "Holder' or 'holder' 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 Series 1985 Bonds , together with any Additional Bonds issued pursuant to this Resolution. 'Capital Appreciation Bonds' shall mean those Bonds so designated by Supplemental Resolution of the Issuer , which may be either Serial Bonds or Term Bonds and which shall bear interest payable at maturity or redemption . In the case of Capital Appreciation Bonds that are convertible to Bonds with interest payable prior to maturity or redemption of such Bonds , such Bonds shall be considered Capital Appreciation Bonds only during the period of time prior to such conversion. ' Chairman ' shall mean the Chairman of the Board of County Commissioners of Collier County , Florida , acting as the Ex-Officio Chairman of the Governing Body , and such other person as may be duly authorized to act on his or her behalf. 'Clerk ' shall mean the Clerk of the Board of County Commissioners of Collier County , Florida , acting as the Ex-Officio Clerk of the Governing Body , and such other person as may be duly authorized to act on his or her behalf . 'Code' shall mean the Internal Revenue Code of 1954 , as amended , and the regulations and rules thereunder in effect or proposed. 'Connection Fees' shall mean the charges imposed on customers for the cost of physically connecting into the System, including , but not limited to, the cost of excavating , plumbing, installation of meters and landscaping . Connection Fees shall not include System Development Fees . 'Construction Fund' shall mean the fund established pursuant to Section 4 .03 hereof. 'Consulting Engineers ' shall mean any engineering firm of reputation for skill and experience with respect 4 41 • to the construction and operation of facilities similar to the System , which is duly licensed under the laws of the State of Florida and designated by the Issuer to perform the duties of the Consulting Engineers under the provisions hereof. "Cost" , when used in connection with a Project , shall mean ( 1 ) the Issuer ' s cost of physical construction ; ( 2 ) costs of acquisition by or for the Issuer of such Project ; ( 3 ) costs of land and interests therein and the cost of the Issuer incidental to such acquisition ; ( 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 System during the period of construction of such Project ; ( 6 ) engineering , legal and other consultant fees and expenses ; (7 ) costs and expenses of the financing , including audits , fees and expenses of any Paying Agent, Registrar or depository; ( 8 ) amounts , if any , required by this Resolution to be paid into the Interest Account upon the issuance of any Series of Bonds ; ( 9 ) payments , when due (whether at the maturity of principal or the due date of interest or upon redemption) on any indebtedness of the Issuer (other than the Bonds ) incurred for a Project for the System ; ( 10 ) costs of machinery , equipment and supplies and reserves required by the Issuer for the commencement of operation of such Project ; and (11) any other costs properly attributable to such construction or acquisition, as determined by generally accepted accounting principles applicable to water and sewer systems , and shall include reimbursement to the Issuer for any such items of Cost heretofore paid by the Issuer . Any Supplemental Resolution may provide for additional items to be included in the aforesaid Costs . "County" shall mean Collier County, Florida. 'District' shall mean the area of operation and jurisdiction of the Issuer. 'Escrow Deposit Agreement' shall mean the Escrow Deposit Agreement dated as of the date of the Series 1985 Bonds , entered into by and between the Issuer and a banking institution or trust company , as escrow holder , in connection with the refunding of the Refunded Obligations. " Federal Securities " shall mean direct obligations of the United States of America and obligations the principal of and interest on which are fully guaranteed by the United States of America , none of which permit redemption prior to maturity at the option of the obligor . Federal Securities shall include any certificates or any other evidences of an ownership interest in the aforementioned obligations 5 ! ►► ) ; 1 1 k 11 or in specified portions thereof (which may consist of specified portions of the interest thereon) . ' 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. 'Governing Body' shall mean the Board of County Commissioners of Collier County, Florida , acting as the Ex-Officio Governing Body of the Issuer , or its successor in function. 'Government Grant ' , when used with respect to the System, shall mean any sum of money heretofore or hereafter received by the Issuer from the United States of America or any agency thereof or from the State of Florida or any agency or political subdivision thereof as or on account of a grant or contribution , not repayable by the Issuer , for or with respect to ( 1 ) the construction , acquisition or other development of an addition , extension or improvement to any part of the System or any costs of any such construction, acquisition or development , or ( 2 ) the financing of any such construction , acquisition, development or costs . 'Gross Revenues ' shall mean all income and moneys received by the Issuer from the rates , fees , rentals , charges and other income to be made and collected by the Issuer for the use of the products , services and facilities to be provided by the System , or otherwise received by the Issuer or accruing to the Issuer in the management and operation of the System , calculated in accordance with generally accepted accounting methods employed in the operation of public utility systems similar to the System, including , without limiting the generality of the foregoing , Connection Fees and all earnings and income derived from the investment of moneys under the provisions of this Resolution which are transferred to the Revenue Fund or Interest Account as herein provided . "Gross Revenues " shall not include ( 1 ) any Government Grants , ( 2 ) System Development Fees , and (3) Special Assessments. ' Initial Project' shall mean the following facilities to be constructed or acquired in or about the jurisdiction of the Issuer with all necessary and incidental connections , equipment , apparatus structures and appurtenances , including all real property and rights-of-way and other interests and all personal property necessary or desirable for efficient operation of such facilities: • 6 00112 • (1) Acquisition of Lely Sewer Utilities; (2) Construction of various improvements to Lely Sewer Utilities; (3) Construction of effluent disposal system for spray irrigation on Imperial Golf Course; (4) Construction of new sewage treatment plant - phase nt -phase I; (5) Expansion to existing sewage treatment plant in North Naples to 5 MGD; (6) Construction of a sewage collection and transmission system in East Naples; (7) Expansion to existing regional water plant; (8) Expansion of existing water wells; (9) Construction of North Naples water storage facilities of approximately 2 MG; (10) Construction of Capri area water system improvements; and (11) Such changes , deletions , additions or modifications to the enumerated improvements and facilities provided in clauses ( 1 ) through ( 10 ) above or such other improvements to the System as the Consulting Engineers shall recommend and as may be approved by the Governing Body. " Insurer " shall mean such Person as shall be in the business of insuring or guaranteeing the payment of principal of and interest on municipal securities and whose credit is such that , at the time of any action or consent required or permitted by the Insurer pursuant to the terms of this Resolution , all municipal securities insured or guaranteed by it are then rated , because of such insurance or guarantee, in one of the two most secure grades by one of the two most widely nationally recognized rating agencies which regularly rate the credit of municipal securities . ' Interest Account " shall mean the separate account in the Sinking Fund established pursuant to Section 4 . 04 (C) hereof. "Interest Date' shall be such date or dates as shall be provided by Supplemental Resolution of the Issuer. 7 001. 1 3 s 11 ' Issuer' shall mean the County Water-Sewer District , and also includes any authority or other governmental entity to which may hereafter be transferred some or all of the powers and responsibilities of the Issuer with respect to the ownership, financing , operation , enlargement , improvement and maintenance of the System. "Maximum Annual Debt Service" shall mean the largest aggregate amount in any Bond Year , excluding all Bond Years which shall have ended prior to the Bond Year in which the Maximum Annual Debt Service shall at any time be computed , of the Annual Debt Service. "Maximum Interest Rate' shall mean , with respect to any particular Variable Rate Bonds , a numerical rate of interest , which shall be set forth in the Supplemental Resolution of the Issuer delineating the details of such Bonds , that shall be the maximum rate of interest such Bonds may at any particular time bear. "Net Revenues" shall mean Gross Revenues less Operating Expenses . "Operation and Maintenance Fund" shall mean the fund created pursuant to Section 4 .04 (B) hereof. "Operating Expenses" shall mean the Issuer ' s expenses for operation , maintenance , repairs and replacements with respect to the System and shall include , without limiting the generality of the foregoing , administration expenses , insurance and surety bond premiums , legal and engineering expenses , ordinary and current rentals of equipment or other property , refunds of moneys lawfully due to others , payments to others for disposal of sewage or other wastes , payments to pension , retirement , health and hospitalization funds , and any other expenses required to be paid for or with respect to proper operation or maintenance of the System , all to the extent properly attributable to the System in accordance with generally accepted accounting principles employed in the operation of public utility systems similar to the System , and disbursements for the expenses , liabilities and compensation of any Paying Agent or Registrar under this Resolution , but does not include any costs or expenses in respect of original construction or improvement other than expenditures necessary to prevent an interruption or continuance of an interruption of Gross Revenues or minor capital expenditures necessary for the proper and economical operation or maintenance of the System, or any provision for interest , depreciation , amortization or similar charges. 8 ; '; 1 7 1 • • • 'Outstanding' , when used with reference to Bonds and as of any particular date , shall describe all Bonds theretofore and thereupon being authenticated and delivered except , ( 1 ) any Bond in lieu of which other Bond or Bonds have been issued under agreement to replace lost , mutilated or destroyed Bonds , ( 2) any Bond surrendered by the Holder thereof in exchange for other Bond or Bonds under Sections 2 . 06 and 2 . 08 hereof , and ( 3 ) Bonds deemed to have been paid pursuant to Section 9 . 01 hereof . 'Paying Agent' shall mean any paying agent for Bonds appointed by or pursuant to this Resolution and its successor or assigns , and any other Person which may at any time be substituted in its place pursuant to this Resolution. ' Person ' shall mean an individual , a corporation , a partnership , an association , a joint stock company , a trust , any unincorporated organization or governmental entity. ' Pledged Funds ' shall mean , ( 1 ) the Net Revenues , (2) the System Development Fees , (3 ) the Special Assessment Proceeds , and ( 4 ) until applied in accordance with the provisions of this Resolution , all moneys , including investments thereof , in the funds and accounts established hereunder , except as for the Revenue Fund and the Operation and Maintenance Fund . ' Prerefunded Obligations ' shall mean any bonds or other obligations of any state of the United States of America or of any agency , instrumentality or local governmental unit of any such state (1 ) which are (A) not callable prior to maturity or (B ) as to which irrevocable instructions have been given to the fiduciary for such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions , ( 2 ) which are secured as to principal , redemption premium , if any , and interest by a fund consisting only of cash or Federal Securities , secured in the manner set forth in Section 9 . 01 hereof , which fund may be applied only to the payment of such principal of , redemption premium , if any , and interest on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions , as the case may be , and (3 ) as to which the principal of and interest on the Federal Securities , which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay principal of , redemption premium, if any , and interest on the bonds or other obligations on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in clause (1) above. 9 ( '; ':515 40 4 ' Principal Account' shall mean the separate account in the Sinking Fund established pursuant to Section 4 . 04 (C ) hereof . ' Projects ' shall mean the Initial Project and each Additional Project. '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 . 'Refunded Obligations' shall mean ( 1 ) the Issuer ' s $21 , 390 , 000 Water Revenue Refunding Bonds , Series 1983 , dated as of June 1 , 1983 , (2) the Issuer ' s $2 , 849 , 000 Sewer Revenue Bonds , dated April 26 , 1977 , (3) the Issuer ' s $1 , 005 , 000 Sewer Revenue and Special Assessment Bonds , Series 1980 , dated July 15 , 1981 , and ( 4 ) the Issuer ' s $375 , 000 Water Revenue and Special Assessment Bonds , Series 1980 , dated July 15, 1981 . 'Refunded Resolutions' shall mean Resolution Nos . CWS-83-2 , CWS-77-9 , CWS-80-5 and CWS-80-6 , all as amended and supplemented, of the Issuer which authorized the issuance of the Refunded Obligations. 'Refunding Securities' shall mean the Federal Securities and the Prerefunded Obligations . 'Registrar ' shall mean any registrar for the Bonds appointed by or pursuant to this Resolution and its successors and assigns , and any other Person which may at any time be substituted in its place pursuant to this Resolution. 'Renewal and Replacement Fund' shall mean the fund created pursuant to Section 4 .04 (F) hereof . 'Renewal and Replacement Fund Requirement' shall mean an amount of money equal to $300 , 000 , or such other amount as may be certified to the Issuer by the Consulting Engineers as an amount appropriate for the purposes of this Resolution . ' Reserve Account ' shall mean the separate account in the Sinking Fund established pursuant to Section 4 . 04 (C ) hereof. 'Reserve Account Requirement' shall mean , as of any date of calculation , an amount equal to the lesser of ( 1 ) Maximum Annual Debt Service for all Outstanding Bonds , or ( 2 ) 125 % of the average annual debt service for all 10 (')( Ii 11; 410 Outstanding Bonds , as provided in Revenue Procedure 84-26 of the Internal Revenue Service . 'Resolution" shall mean this Resolution , as the same may from time to time be amended , modified or supplemented by Supplemental Resolution . ' Revenue Fund' shall mean the fund created pursuant to Section 4 . 04 (A) hereof . "Serial Bonds ' shall mean all of the Bonds other than the Term Bonds. 'Series' shall mean all the Bonds delivered on original issuance in a simultaneous transaction and identified pursuant to Sections 2 . 01 and 2 . 02 hereof or a Supplemental Resolution authorizing the issuance by the Issuer of such Bonds as a separate Series , regardless of variations in maturity , interest rate , Sinking Fund Installments or other provisions . ' Series 1985 Bonds ' shall mean the Issuer ' s Water and Sewer Revenue Bonds , Series 1985 authorized pursuant to Section 2.02 hereof. "Sinking Fund" shall mean the fund established pursuant to Section 4 .04 (C) hereof. 'Sinking Fund Installment" shall mean an amount designated as such by Supplemental Resolution of the Issuer and established with respect to the Term Bonds. ' Special Assessments' means any and all assessments against property benefited by the System or any part thereof , but special assessments shall be subject to the provisions and lien and pledge of this Resolution only if and to the extent ( 1 ) such assessments have been levied in relation to a Project , or ( 2 ) provision for inclusion as part of the Pledged Revenues has been made by Supplemental Resolution to be adopted by the Issuer . 'Special Assessments Fund' shall mean the fund created pursuant to Section 4 .04 (E) hereof . ' Special Assessments Proceeds ' means the proceeds of Special Assessments pledged hereunder (principal and interest ) , whether paid at one time or in installments from time to time. "State' shall mean the State of Florida. ()() I1 '7 11 'Subordinated Indebtedness' shall mean that indebtedness of the Issuer , subordinate and junior to the Bonds , issued in accordance with the provisions of Section 6 . 01 hereof . ' Surplus Fund' shall mean the fund created pursuant to Section 4 .04 (G) hereof. ' Supplemental Resolution" shall mean any resolution of the Issuer amending or supplementing this Resolution enacted and becoming effective in accordance with the terms of Sections 8 . 01 , 8. 02 and 8 . 03 hereof . ' System' shall mean any and all water production , transmission , treatment and distribution facilities and sewage collection , transmission , treatment and disposal facilities now owned and operated or hereafter owned and operated by the Issuer , which System shall also include any and all improvements , extensions and additions thereto hereafter constructed or acquired either from the proceeds of Bonds or from any other sources , together with all property , real or personal , tangible or intangible , now or hereafter owned or used in connection therewith. 'System Development Fees' shall mean the charges imposed by the Issuer on Persons , including developers and large users , connecting to the System , or reserving capacity in the System , which represent a pro rata share of the costs of the System which are attributable to the increased demand such additional connections create upon the System ; provided , however , that such charges shall be net of any refunds to said Persons in accordance with applicable developer or use agreements . System Development Fees shall not include Connection Fees . " System Development Fees Fund' shall mean the fund created pursuant to section 4 .04 (D) hereof . 'Term Bonds " shall mean those Bonds which shall be designated as Term Bonds hereby or by Supplemental Resolution of the Issuer. 'Term Bonds Redemption Account' shall mean the separate account in the Sinking Fund established pursuant to Section 4 .04 (C) hereof. 'Variable Rate Bonds ' shall mean Bonds issued with a variable , adjustable , convertible or other similar rate which is not fixed in percentage for the entire term thereof at the date of issue . The terms " herein , " " hereunder , " " hereby , " " hereto , " "hereof, " and any similar terms , shall refer to this Resolution; 12 • • 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 every other 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 . The Issuer has ascertained and hereby determined that adoption of this Resolution is necessary to carry out the powers , purposes and duties expressly provided in the Act , that each and every matter and thing as to which provision is made herein is necessary in order to carry out and effectuate the purposes of the Issuer in accordance with the Act and to carry out and effectuate the plan and purpose of the Act , and that the powers of the Issuer herein exorcinod are in each case exercised in accordance with the provisions of the Act and in furtherance of the purposes of the Issuer . 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 shall be deemed to be and shall constitute a contract between the Issuer and the Holders from time to time of the Bonds . The pledge made in the 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 . 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: (A) That the Issuer now owns , operates and maintains water facilities for the supply and distribution of water for domestic, commercial and industrial use. (B) That the Issuer now owns , operates and maintains sewer facilities for the collection , treatment and disposal of sewage and waste water matter within the District . 13 00119 11, IP (C) That the Issuer deems it necessary , desirable and in the best financial and administrative interests of the Issuer that the water and sewer facilities be combined and consolidated into a single system. (D) That the water and sewer facilities be and are hereby combined and consolidated into one single system. (E) That there is hereby authorized the acquisition and construction of additions , extensions and improvements to the System, in the form of the Initial Project , substantially in accordance with the plans and specifications prepared by the Consulting Engineers and filed with and approved by the Governing Body . The Initial Project shall be financed by part of the proceeds of the Series 1985 Bonds issued pursuant to this Resolution and by other moneys available for such purposes , if any. (F) That the Issuer has heretofore issued and has now outstanding and unpaid certain of the Refunded Obligations . (G) That the Pledged Funds are not pledged or encumbered in any manner except for the payment of principal of and interest on the Refunded Obligations . (H) That there is hereby authorized the payment and refunding of the Refunded Obligations all in the manner as provided by this Resolution. (I) That for the payment and refunding of said Refunded Obligations , the Issuer shall , as provided herein , deposit part of the proceeds derived from the sale of the Series 1985 Bonds in a special escrow deposit trust fund , which shall be sufficient , together with investment earnings therefrom, to refund the Refunded Obligations as the same become due and payable or are redeemed prior to maturity , all as provided in this Resolution and the Escrow Deposit Agreement. (J) That the estimated Gross Revenues to be derived in each year hereafter from the operation of the System will be sufficient to pay all the Operating Expenses , the principal of and interest on the Bonds to be issued pursuant to this Resolution , as the same become due , and all other payments provided for in this Resolution . 0 (K) That the principal of and interest on the Bonds to be issued pursuant to this Resolution , and all other payments provided for in this Resolution will be paid solely from the Pledged Funds in accordance with the terms hereof ; and the ad valorem taxing power or any other funds of the Issuer or the County will never be necessary or authorized 14 • • to pay the principal of and interest on the Bonds to be issued pursuant to this Resolution , or to make any other payments provided for in this Resolution , and the Bonds shall not constitute a lien upon the System or upon any other property whatsoever of or in the Issuer or the County. (L) That the estimated cost of the Initial Project is $50 ,000, 000; the estimated annual Gross Revenues , including System Development Fees and Special Assessment Proceeds , to be derived from the System , subsequent to acquisition and construction of the Initial Project are $17 , 095 , 000 ; the estimated annual Operating Expenses of the System , subsequent to acquisition and construction of the Initial Project are $8 , 392 , 000 ; that the estimated annual debt service on the Series 1985 Bonds is $8,240 , 000 . SECTION 1. 05. INITIAL PROJECT. The Issuer does hereby authorize the acquisition , construction and installation of the Initial Project. v OW 91 15 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS SECTION 2. 01 . AUTHORIZATION OF BONDS. This Resolution creates an issue of Bonds of the Issuer to be designated as " County Water-Sewer District Water and Sewer Revenue Bonds" which may be issued in one or more Series as hereinafter provided . The aggregate principal amount of the Bonds which may be executed and delivered under this Resolution is not limited except as is or may hereafter be provided in this Resolution or as limited by the Act or by law. The Bonds may , if and when authorized by the Issuer pursuant to this Resolution , be issued in one or more Series , with such further appropriate particular designations added to or incorporated in such title for the Bonds of any particular Series as the Issuer may determine and as may be necessary to distinguish such Bonds from the Bonds of any other Series . Each Bond shall bear upon its face the designation so determined for the Series to which it belongs. The Bonds shall be issued for such purpose or purposes ; shall bear interest at such rate or rates not exceeding the maximum rate permitted by law ; and shall be payable in lawful money of the United States of America on such dates ; all as determined by Supplemental Resolution of the Issuer . The Bonds shall be issued in such denominations and such form , whether coupon or registered ; shall be dated such date ; shall bear such numbers ; shall be payable at such place or places; shall contain such redemption provisions ; shall have such Paying Agents and Registrars ; shall mature in such years and amounts ; and the proceeds shall be used in such manner ; all as determined by Supplemental Resolution of the Issuer . SECTION 2.02. AUTHORIZATION AND DESCRIPTION OF SERIES 1985 BONDS. A Series of Bonds entitled to the benefit , protection and security of this ResoluLion is hereby authorized in the aggregate principal amount of not exceeding $82 , 500 ,000 for the purposes of refunding of the Refunded Obligations and financing the Cost of the Initial Project . Such Series of Bonds shall be designated as , and shall be distinguished from the Bonds of all other Series by the title , "County Water-Sewer District Water and Sewer Revenue Bonds , Series 1985 " ; provided the Issuer may change such designation in the event that the total amount of 16 ; )( ) ; ?�a 10 IP Series 1985 Bonds authorized herein are not issued in a simultaneous transaction or the Series 1985 Bonds are not issued in calendar year 1985. The Series 1985 Bonds shall be dated as of the first day of the month in which occurs the delivery of the Series 1985 Bonds to the purchaser or purchasers thereof or such other date as may be set forth by Supplemental Resolution of the Issuer ; shall be issued as fully registered Bonds ; shall be numbered consecutively from one upward in order of maturity preceded by the letter " R" ; shall be in such denominations and shall bear interest at a rate or rates not exceeding the maximum rate permitted by law , payable in such manner and on such dates ; shall consist of such amounts of Serial Bonds , Term Bonds , Variable Rate Bonds and Capital Appreciation Bonds maturing in such years and amounts not exceeding forty ( 40 ) years from their date ; shall be payable in such place or places ; shall have such Paying Agents and Registrars; and shall contain such redemption provisions ; all as the Issuer shall provide hereafter by Supplemental Resolution. The principal of or Redemption Price , if applicable , on the Series 1985 Bonds are payable upon presentation of the Series 1985 Bonds at the office of the Paying Agent . Interest payable on any Series 1985 Bond on any Interest Date will be paid by check of the Paying Agent 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 option of the Paying Agent , and at the request and expense of such Holder , by bank wire transfer for the account of such Holder . All payments of principal of or Redemption Price , if applicable , and interest on the Series 1985 Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 2.03. APPLICATION OF SERIES 1985 BOND PROCEEDS. Except as otherwise provided by Supplemental Resolution of the Issuer , the proceeds derived from the sale of the Series 1985 Bonds , including accrued interest and premium , if any , shall , simultaneously with the delivery of the Series 1985 Bonds to the purchaser or purchasers thereof , be applied by the Issuer as follows : (A) Accrued interest and proceeds of the Series 1985 Bonds representing capitalized interest , if any , shall be deposited in the Interest Account and shall be used only for the purpose of paying the interest which shall thereafter become due on the Series 1985 Bonds . 17 01) 11‹.!3 %rr (B) A sufficient amount of Series 1985 Bond proceeds shall be deposited in the Reserve Account which , together with any moneys and securities on deposit therein and insurance policies obtained in accordance with Section 4 . 05 ( B ) ( 4 ) hereof , shall equal the Reserve Account Requirement. (C) A sufficient amount of the Series 1985 Bond proceeds shall be applied to the payment of the premiums of any municipal bond insurance policies applicable to the Series 1985 Bonds or reserves established therefor and to the payment of costs and expenses relating to the issuance of the Series 1985 Bonds. (D) A sufficient amount of Series 1985 Bond proceeds shall be deposited irrevocably in trust in the escrow deposit trust fund under the terms and provisions of the Escrow Deposit Agreement and shall be invested in Federal Securities in the manner set forth in the Escrow Deposit Agreement , which investments shall mature at such times and in such amounts as shall be sufficient to pay the principal of or Redemption Price , if applicable , and interest on the Refunded Obligations as the same mature and become due and payable or are redeemed prior to maturity. (E) The balance of the Series 1985 Bond proceeds shall be deposited in the Construction Fund . SECTION 2.04. 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 , attested and countersigned 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 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. 18 ® e SECTION 2.05. AUTHENTICATION. No Bond of any Series 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 2.06. TEMPORARY BONDS . Until the definitive Bonds of any Series are prepared , the Issuer may execute , in the same manner as is provided in Section 2 . 04 , and deliver , upon authentication by the Registrar pursuant to Section 2 . 05 hereof , in lieu of definitive Bonds , but subject to the sane 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 of $ 5 , 000 or any multiple thereof authorized by the Issuer (except as to Capital Appreciation Bonds and Variable Rate Bonds which may be issued in such denominations as provided by Supplemental Resolution) , and with such omissions , insertions and variations as may be appropriate to temporary Bonds . The Issuer , at his 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 Series 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 . 07 . 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 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 19 O f),1 :�3 may incur . All Bonds so surrendered 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 . 07 shall constitute original , additional 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 as to lien on the Pledged Funds to the same extent as all other Bonds issued hereunder . SECTION 2.08. 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 Series and 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 long 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 . Each Bond shall be transferable 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 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 Series 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 20 i )i� itj; or Redemption Price , if applicable , 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 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 in respect to any Series of Bonds , forthwith (A) following the fifteenth day prior to an interest payment date for such Series ; (B) following the fifteenth day next preceding the date of first mailing of notice of redemption of any Bonds of such Series ; and ( C ) at any other time as reasonably requested by the Paying Agent of such Series , certify and furnish to such Paying Agent the names , addresses and holdings of 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 transferring Bonds is exercised , the Issuer shall execute and deliver Bonds and the Registrar shall authenticate such Bonds in accordance with the provisions of this Resolution . Execution of Bonds by the Chairman and Clerk for purposes of exchanging , replacing or transferring Bonds may occur at the time of the original delivery of the Series of which such Bonds are a part . All Bonds surrendered in any such exchanges or transfers shall be held by the Registrar in safekeeping until directed by the Issuer to be cancelled by the Registrar . For every such exchange or transfer of Bonds , 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 transfer . The Issuer and the Registrar • shall not be obligated to make any such exchange or transfer of Bonds of any Series during the fifteen ( 15 ) days next preceding an Interest Date on the Bonds of such Series (other than Capital Appreciation Bonds and Variable Rate Bonds) , or , in the case of any proposed redemption of Bonds of such Series , then during the fifteen ( 15 ) days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date . SECTION 2.09. COUPON BONDS. The Issuer , at its discretion, may by Supplemental Resolution authorize the issuance of coupon Bonds , registrable as to principal Qpl.yr as to 21 111, IP both principal and interest . Such Supplemental Resolution shall provide for the negotiability, transfer , interchangeability , denominations and form of such Bonds and coupons appertaining thereto. SECTION 2 . 10 . FORM OF BONDS . The text of the Bonds , except as otherwise provided pursuant to Section 2 . 09 hereof and except for Capital Appreciation Bonds and Variable Rate Bonds , the form of which shall be provided by Supplemental Resolution of the Issuer , 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) : 22 s, ;; ' 12S e S No. R- $ UNITED STATES OF AMERICA STATE OF FLORIDA COLLIER COUNTY COUNTY WATER-SEWER DISTRICT WATER AND SEWER REVENUE BOND, SERIES Interest Maturity Date of Rate Date Original Issue CUSIP $ / / -_ Registered Holder: Principal Amount: • KNOW ALL MEN BY THESE PRESENTS, the County Water-Sewer District , a body corporate and politic created and existing under and by virtue of the laws of the State of Florida (the " Issuer " ) , which is located in Collier County , Florida , for value received , hereby promises to pay , solely from wf, the Pledged Funds hereinafter described , 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 and of each year commencing until such Principal Amount shall have been paid, except as the provisions hereinafter set forth with respect to redemption prior to maturity 0 may be or become applicable hereto. Such Principal Amount and interest and the premium , if any , 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 23 Of) / 29 I 41 111 payment of public and private debts . Such Principal Amount and the premium, if any , on this Bond , are payable at the • principal 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 ► , as Registrar , at the close of business on the date which shall be the fifteenth day (whether or not a business day) next preceding each interest payment date and shall be paid by a check of such Paying Agent mailed to such Registered Holder at the address appearing on such registration books or , at the option of such Paying Agent , and at the request and expense of such Registered Holder , by bank wire transfer for the account of such Holder . 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 maturity date , interest rate , denomination and number , issued to finance , in and for the Issuer , under the authority of and in full compliance with the Constitution and laws of the State of Florida , particularly Part II of Chapter 153 , Florida Statutes , and other applicable provisions of law (the "Act") , and a resolution duly adopted by the Board of County Commissioners of Collier County , Florida , acting as the Governing Body of the Issuer , on , as amended and supplemented ( the " Resolution " ) , and is subject to all the terms and conditions of the Resolution. This Bond and the interest hereon are payable solely from and secured by a lien upon and a pledge of ( i ) the Net Revenues ( as defined in the Resolution) to be derived from the operation of the Issuer ' s water and sewer system ( the "System" ) , ( ii ) the System Development Fees (as defined in the Resolution) , ( iii ) the Special Assessment Proceeds ( as defined in the Resolution ) , and ( iv ) until applied in accordance with the provisions of the Resolution , all moneys , including investments thereof , in certain funds and accounts established by the Resolution ( collectively , the "Pledged Funds" ) , subject in each case to the application thereof for the purposes and on the conditions permitted by the Resolution . It is expressly agreed by the Registered Holder of this Bond that the full faith and credit of the Issuer and of Collier County , Florida ( the " County" ) are not pledged to the payment of the principal of , premium , if any , and interest on this Bond and that such Holder shall never have the right to require or compel the exercise of any taxing power of the Issuer or the County to the payment of such principal , premium , if any , and interest . This Bond and the obligation evidenced hereby shall. not • 24 constitute a lien upon the System or any other property of the Issuer or the County , but shall constitute a lien 11 only on , and shall be payable solely from , the Pledged Funds in accordance with the terms of the Resolution . Neither the members of the Governing Body of the Issuer nor any person executing this Bond shall be liable personally hereon or be subject to any personal liability or accountability by reason of the issuance hereof. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH ON THE FRONT SIDE HEREOF . ' This Bond is one of a series of Bonds which were validated by judgment of the Circuit Court for Collier County , Florida , rendered on . This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Registrar. IN WITNESS WHEREOF , the County Water-Sewer District has issued this Bond and has caused the same to be executed by the manual or facsimile signature of the Chairman of the Board of County Commissioners of Collier County , Florida , acting as the Ex-Officio Chairman of the Governing Body of the Issuer and by the manual or facsimile signature of the Clerk of the Board of County Commissioners of Collier County , Florida , acting as the Ex -Officio Clerk of the Governing Body of the Issuer and its corporate seal or a facsimile thereof to be affixed or reproduced hereon. COUNTY WATER-SEWER DISTRICT (SEAL) Chairman of the Board of County Commissioners of Collier County, Florida , acting as the Ex-Officio Chairman of the Governing Body of the County Water-Sewer District Clerk of the Board of County Commissioners of Collier County, Florida, acting as the Ex-Officio Clerk of the Governing Body of the County Water-Sewer District 25 OO13.1 • (Provisions on Reverse Side of Bond) This Bond is transferable in accordance with the terms of the Resolution only upon the books of the Issuer kept for that purpose at the principal corporate trust office of the Registrar by the Registered Holder hereof in person or by his attorney duly authorized in writing , upon the surrender of this Bond together with a written instrument of transfer satisfactory to the Registrar duly executed by the Registered Holder or his attorney duly authorized in writing , and thereupon a new Bond or Bonds in the same aggregate principal amount shall be issued to the transferee in exchange therefor , and upon the payment of the charges , if any , therein prescribed . The Bonds are issuable in the form of fully registered Bonds in the denomination of $5 , 000 and any integral multiple thereof , not exceeding the aggregate principal amount of the Bonds . The Issuer , the Registrar and any Paying Agent may treat the Registered Holder of this Bond as the absolute owner hereof for all purposes , whether or not this Bond shall be overdue , and shall not be affected by any notice to the contrary . The Issuer shall not be obligated to make any exchange or transfer of the Bonds during the fifteen ( 15 ) days next preceding an interest payment date or , in the case of any proposed redemption of the Bonds , then , during the fifteen ( 15 ) days next preceding the date of the first mailing of notice of such redemption. (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 thirty ( 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 this Bond . In the event that lcaa 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. Reference to the Resolution and any and all resolutions supplemental thereto and modifications and amendments thereof 26 t)() 1 ( and to the Act is made for a description of the pledge and covenants securing this Bond , the nature , manner and extent of enforcement of such pledge and covenants , the rights, duties , immunities and obligations of the Issuer. 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 does not violate any constitutional or statutory limitations or provisions. (fit) { ,?.1 27 S ASSIGNMENT FOR VALUE RECEIVED , the undersigned sells , assigns and transfers unto Insert Social Security or Other Identifying Number of Assignee (Name and Address of Assignee) the within Bond and does hereby irrevocably constitute and appoint as attorney to register the transfer of the said Bond on the books kept for registration thereof with full power of substitution in the premises. Dated: Signature guaranteed: NOTICE: Signature (s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust — company. fir NOTICE: The signature to this assignment 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. 28 00.1 ;3.1 • 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 GIF MIN ACT -- (Cust . ) Custodian for under Uniform Gifts to Minors Act of (State) Additional abbreviations may also be used though not in list above. CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the Issue described in the within-mentioned Resolution. DATE OF AUTHENTICATION: Registrar By: Authorized Officer � ().t X35 29 rr ARTICLE III REDEMPTION OF BONDS SECTION 3 . 01 . PRIVILEGE OF REDEMPTION . The terms of this Article III shall apply to redemption of Bonds other than Capital Appreciation Bonds or Variable Rate Bonds . The terms and provisions relating to redemption of Capital Appreciation Bonds and Variable Rate Bonds shall be provided by Supplemental Resolution. SECTION 3 . 02 . SELECTION OF BONDS TO BE REDEEMED . The Bonds shall be redeemed only in the principal amount of $5 , 000 each and integral multiples thereof . The Issuer shall , at least sixty ( 60 ) 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 forty-five ( 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 . 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. SECTION 3 . 03 . NOTICE OF REDEMPTION. 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 Agents of the Bonds and ( B) shall be mailed first class , postage prepaid , at least thirty ( 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. Such notice shall further state 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 30 On 1 :3G I) • that from and after such date interest thereon shall cease to accrue and be payable . Failure to mail notice to the Holders of the Bonds to be redeemed , or any defect therein , shall not affect the proceedings of redemption of such Bonds. SECTION 3 . 04 . REDEMPTION OF PORTIONS OF BONDS . 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 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 . SECTION 3 . 05 . PAYMENT OF REDEEMED BONDS . 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 and destroyed by the Registrar and shall not be reissued. 31 00 "?'" 1c� 1 40 411 ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 4 . 01 . BONDS NOT TO BE INDEBTEDNESS OF ISSUER. The Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds " within the meaning of any constitutional or statutory provision , but shall be special obligations of the Issuer , payable solely from and secured by a lien upon and pledge of the Pledged Funds , in the manner and to the extent provided in this Resolution . No Holder of any Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond , or be entitled to payment of such Bond from any moneys of the Issuer or the County except from the Pledged Funds in the manner and to the extent provided herein. The Pledged Funds shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act , and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort , contract or otherwise agninnt thQ IaQUQC . SECTION 4 . 02 . SECURITY FOR BONDS . The payment of the principal of or Redemption Price , if applicable , and interest on the Bonds shall be secured forthwith equally and ratably by a pledge of and lien upon the Pledged Funds . The Issuer does hereby irrevocably pledge the Pledged Funds to the payment of the principal of or Redemption Price , if applicable , and interest on the Bonds , subject to the application thereof for the purposes and on the conditions permitted by the Resolution. SECTION 4 .03 . CONSTRUCTION FUND. The Issuer covenants and agrees to establish a special fund in a bank , trust company or such other entity in the State , which is eligible under the laws of the State to be a depository for county funds , to be known as the "Water and Sewer System Construction Fund , " which shall be used only for payment of the Cost of the Project . Moneys in the Construction Fund , until applied in payment of any item of the Cost of a Project in the manner hereinafter provided , shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders . There shall be paid into the Construction Fund the amounts required to be so paid by the provisions of this Resolution , and there may be paid into the Construction Fund , at the option of the Issuer , any moneys received 32 41 41 for or in connection with a Project by the Issuer from any other source . The Issuer shall establish within the Construction Fund a separate account for each Project , the Cost of which is to be paid in whole or in part out of the Construction Fund . The I.:suer hereby agrees to establish in the Construction Fund a separate account for the Initial Project. The proceeds of insurance maintained pursuant to this Resolution against physical loss of or damage to a Project , or of contractors ' performance bonds with respect thereto pertaining to the period of construction thereof , shall be deposited into the appropriate account of the Construction Fund. Any moneys received by the Issuer from the State or from the United States of America or any agencies thereof for the purpose of financing part of the Cost of a Project shall be deposited into the appropriate account of the Construction Fund and used in the same manner as other Bond proceeds are used therein ; provided that separate accounts or subaccounts may be established in the Construction Fund for moneys received pursuant to the provisions of this paragraph whenever required by Federal or State law. The Issuer covenants that the acquisition , construction and installation of each Project will be completed without delay and in accordance with sound engineering practices . The Issuer shall make disbursements or payments from the Construction Fund to pay the Cost of a Project upon the filing with the Clerk of certificates signed by an Authorized Issuer Officer and by the Consulting Engineers , stating with respect to each disbursement or payment to be made : (A) the item number of the payment , (B) the name and address of the Person to whom payment is due , (C ) the amount to be paid , (D) the Construction Fund account from which payment is to be made , (E) the purpose , by general classification , for which payment is to be made , and ( F ) that ( i ) each obligation , item of cost or expense mentioned therein has been properly incurred , is in payment of a part of the Cost of a Project and is a proper charge against the account of the Construction Fund from which payment is to be made and has not been the basis of any previous disbursement or payment , or ( ii) each obligation , item of cost or expense mentioned therein has been paid by the Issuer , is a reimbursement of a part of the Cost of a Project , is a proper charge against the account of the Construction Fund from which payment is to be made , has not been theretofore reimbursed to the Issuer or otherwise been the basis of any previous disbursement or payment and the Issuer is entitled to reimbursement thereof . The Clerk shall retain all such certificates 33 t )t ) l $)) 10 11 of the Authorized Issuer Officers and the Consulting Engineers for seven ( 7 ) years from the dates of such certificates . The Clerk shall make available the certificates at all reasonable times for inspection by any Holder of any of the Bonds or the agent or representative of any Holder of any of the Bonds. Notwithstanding any of the other provisions of this Section 4 .03, to the extent that other moneys are not available therefor , amounts in the Construction Fund shall be applied to the payment of principal and interest on Bonds when due. The date of completion of a Project shall be determined by the Consulting Engineers which shall certify such fact in writing to the Governing Body. The Consulting Engineers may perform such tests relating to the Project as they deem necessary in order to make such certification. Promptly after the date of the completion of a Project , and after paying or making provision for the payment of all unpaid items of the Cost of such Project , the Issuer shall deposit in the following order of priority any balance of moneys remaining in the Construction Fund in ( 1 ) another account of the Construction Fund for which the Consulting Engineers have stated that there are insufficient moneys present to pay the Cost of the related Project , ( 2 ) the Reserve Account , to the extent of a deficiency therein , ( 3 ) the Renewal and Replacement Fund , to the extent of a deficiency therein, and (4) the Surplus Fund . SECTION 4 . 04 . CREATION OF FUNDS AND ACCOUNTS . The Issuer covenants and agrees to establish with a bank , trust company or such other entity in the State , which is eligible under the laws of the State to be a depository for county funds the following funds and accounts: (A) The "Water and Sewer System Revenue Fund." (B) The "Water and Sewer System Operation and Maintenance Fund" . (C) The "Water and Sewer System Sinking Fund . " The Issuer shall maintain four separate accounts in the Sinking Fund : the " Interest Account , " the " Principal Account , " the "Term Bonds Redemption Account" and the "Reserve Account . " (D) The " Water and Sewer System System Development Fees Fund . " (E) The "Water and Sewer System Special Assessments Fund." 34 ()t).N4 () 0 • (F) The "Water and Sewer System Renewal and Replacement Fund. " (G) The "Water and Sewer System Surplus Fund . " Moneys in the aforementioned funds and accounts , until applied in accordance with the provisions hereof , shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders . SECTION 4.05. DISPOSITION OF REVENUES. (A) Into the Revenue Fund , the Issuer shall deposit promptly, as received , all Gross Revenues . Into the Special Assessments Fund , the Issuer shall deposit promptly , as received, all Special Assessment Proceeds . Operation and Ma.1sitenance Fund . Moneys in Revenue Fund shall first be used each month to deposit in the Operation and Maintenance Fund such sums as are necessary to pay Operating Expenses for the ensuing month . Amounts in the Operation and Maintenance Fund shall be paid out from time to time by the Issuer for reasonable and necessary Operating Expenses ; provided , however , that no such payment shall be made unless the provisions of Section 5 . 03 hereof in regard to the current Annual Budget are complied with . (B) All moneys at any time on deposit in the Special Assessments Fund and any deposits remaining in the Revenue Fund after the aforementioned transferrals to the Operation and Maintenance Fund shall be disposed of by the Issuer on or before the twenty-fifth ( 25th ) day of each month , commencing in the month immediately following the delivery of any of the Bonds to the purchasers thereof , or such later date as hereinafter provided , first from the Special Assessments Fund and then from the Revenue Fund in the following manner and in the following order of priority: (1) Interest Account . There shall be deposited to the Interest Account the sum which , together with the balance in said Account , shall equal the interest on all Bonds Outstanding (except as to Capital Appreciation Bonds) accrued and unpaid and to accrue to the end of the then current calendar month . Moneys in the Interest Account shall be applied by the Issuer for deposit with the Paying Agents the interest on the Bonds on or prior to the date the same shall become due. (2) principal Account . There shall be deposited to the Principal Account the sum which , together with the balance in said Account , shall equal the principal amounts on all Bonds Outstanding due and unpaid and that portion 35 of the principal next due which would have accrued on such Bonds during the then current calendar month if such principal 7 amounts were deemed to accrue during such period of time (assuming that a year consists of twelve ( 12 ) equivalent calendar months having thirty ( 30 ) days each) in equal amounts from the next preceding principal payment due date , or , if there be no such preceding payment due date from a date one year preceding the due date of such principal amount . Moneys in the Principal Account shall be applied by the Issuer for deposit with the Paying Agents the principal of the Bonds on or prior to the date the same shall mature . Serial Capital Appreciation Bonds shall be payable from the Principal Account in the Bond Years in which such Bonds mature and monthly payments into the Principal Account on account of such Bonds shall commence in the first month of the respective Bond Years in which such Bonds mature. (3) Term Bonds Redemption Account . Commencing in the month which is one year prior to the first Sinking Fund Installment , there shall be deposited to the Term Bonds Redemption Account the sum which , together with the balance in such Account, shall equal the Sinking Fund Installments on all Bonds Outstanding due and unpaid and that portion of the Sinking Fund Installments of all Bonds Outstanding next due which would have accrued on such Bonds during the then current calendar month if such Sinking Fund Installments were deemed to accrue during such period of time ( assuming that a year consists of twelve ( 12 ) equivalent calendar months having thirty (30) days each) in equal amounts from the next preceding Sinking Fund Installment due date , or , if there be no such preceding Sinking Fund Installment due date , from a date one year preceding the due date of such Sinking Fund Installment . Moneys in the Term Bonds Redemption Account shall be applied by the Issuer for deposit with the Paying Agents the amount required to purchase or redeem the Sinking Fund Installments on or prior to the date the same shall be purchased or redeemed . Amounts accumulated in the Term Bonds Redemption Account with respect to any Sinking Fund Installment ( together with amounts accumulated in the Interest Account with respect to interest, if any, on the Term Bonds for which such Sinking Fund Installment was established ) may be applied by the Issuer , on or prior to the sixtieth ( 60th ) day preceding the due date of such Sinking Fund Installment , (a) to the purchase of Term Bonds of the Series and maturity for which such Sinking Fund Installment was established , or (b) to the redemption at the applicable Redemption Prices of such Term Bonds , if then redeemable by their terms . The epplionbla Redemption Price (or principal amount of maturing Term Bonds ) of any Term Bonds so purchased or redeemed shall be deemed to constitute part of the Term Bonds Redemption 36 0011? imnmaaIIIIIIIIIIIIIIIIEIIIMIIIIIIIIIIIIIIIIIIIIMMIMIIIIEIIIINIII 41 • Account until such Sinking Fund Installment date , for the purposes of calculating the amount of such Account . As soon as practicable after the 60th day preceding the due date of any such Sinking Fund Installment , the Issuer shall proceed to call for redemption on such due date , by causing notice to be given as provided in Section 3 . 03 hereof , Term Bonds of the Series and maturity for which such Sinking Fund Installment was established ( except in the case of Term Bonds maturing on a Sinking Fund Installment date ) in such amount as shall be necessary to complete the retirement of the unsatisfied balance of such Sinking Fund Installment . The Issuer shall pay out of the Term Bonds Redemption Account and the Interest Account to the appropriate Paying Agents , on or before the day preceding such redemption date ( or maturity date ) , the amount required for the redemption (or for the payment of such Term Bonds then maturing ) , and such amount shall be applied by such Paying Agents to such redemption (or payment) . All expenses in connection with the purchase or redemption of Term Bonds shall be paid by the Issuer from the Operation and Maintenance Fund. (4) Reserve Account . There shall be deposited to the Reserve Account such sum, if any , as will be necessary to restore the funds on deposit therein to an amount equal 11 to the Reserve Account Requirement . On or prior to each principal and interest payment date for the Bonds ( in no event earlier than the twenty-fifth (25th) day of the month next preceding such payment date ) , moneys in the Reserve Account shall be applied by the Issuer to the payment into the Interest Account , the Principal Account and the Term Bonds Redemption Account , when the moneys therein shall be insufficient to pay the principal of and interest on the Bonds coming due , but only to the extent the moneys transferred from the Surplus Fund and from the System Development Fees Fund for such purposes pursuant to Sections 4 . 05 ( B ) ( 8 ) and 4 . 06 , respectively, hereof shall be inadequate to fully provide for such insufficiency . Whenever there shall be surplus moneys in the Reserve Account by reason of a decrease in the Reserve Account Requirement , such surplus moneys shall be applied by the Issuer , at ito diacrotion , oithor to the purchase or redemption of Outstanding Bonds or for deposit into the Renewal and Replacement Fund. Upon the issuance of any Additional Bonds under the terms , limitations and conditions as herein provided , the Issuer shall increase the sum required to be accumulated and maintained on deposit in the Reserve Account to be at least equal to the Reserve Account Requirement on all Outstanding Bonds and on the Additional Bonds becoming due in any ensuing Bond Year . Such required sum may be paid in full or in part from the proceeds of such Additional Bonds or may be accumulated in equal monthly payments in 37 vow the Reserve Account over a period of years , not to exceed five (5) years , from the date of delivery of the issuance of the Additional Bonds , as determined by Supplemental Resolution. Notwithstanding the foregoing provisions , in lieu of the required deposits into the Reserve Account , the Issuer may cause to be deposited into the Reserve Account a surety bond or an insurance policy issued by a reputable and recognized insurer for the benefit of the Bondholders in an amount equal to the difference between the Reserve Account Requirement and the sums then on deposit in the Reserve Account , if any , which surety bond or insurance policy shall be payable to the Paying Agent (upon the giving of notice as required thereunder ) on any interest payment date on which a deficiency exists which cannot be cured by funds in any other fund or account held pursuant to this Resolution and available for such purpose . The insurer providing such surety bond or insurance policy shall be an insurer whose municipal bond insurance policies insuring the payment , when due , of the principal of and interest on municipal bond issues results in such issues being rated in the highest rating category by either Standard & Poor ' s Corporation or Moody ' s Investors Service or their successors , or any insurer who holds the highest policyholder rating accorded insurers by A. M. Best & Company, or any comparable service . If a disbursement is made from a surety bond or an insurance policy provided pursuant to this paragraph , the Issuer shall either reinstate the maximum limits of such surety bond or insurance policy immediately following such disbursement or deposit into the Reserve Account from the Pledged Revenues , as herein provided , funds in the amount of the disbursement made under such policy , or a combination of such alternatives. Whenever the amount in the Reserve Account , together with the amount in the other accounts of the Sinking Fund , is sufficient to fully pay all Outstanding Bonds in accordance with their terms ( including principal or applicable sinking fund Redemption Price and interest thereon) , the funds on deposit in the Reserve Account shall be transferred to the other accounts of the Sinking Fund . (5) Renewal and Replacement Fund . There shall be deposited to the Renewal and Replacement Fund such sums as shall be sufficient to pay one-twelfth ( 1/12 ) of five percent ( 5%) of the Gross Revenues derived from the System during the preceding Fiscal Year until the amount accumulated in such Fund is equal to the Renewal and Replacement Fund Requirement ; provided , however , that ( a) such Renewal and Replacement Fund Requirement may be increased or decreased as the Consulting Engineers shall certify to the Issuer 38 ()()1 .1.1 • • is necessary for the purposes of the Renewal and Replacement FunC , and (b) in the event that the Consulting Engineers shall certify that the Renewal and Replacement Fund Requirement is excessive for the purposes of the Renewal and Replacement Fund such excess amount as may be on deposit therein may be transferred by the Issuer from the Renewal and Replacement Fund for deposit into the Surplus Fund . The moneys in the Renewal and Replacement Fund shall be applied by the Issuer for the purpose of paying the cost of major extensions , improvements or additions to , or the replacement or renewal of capital assets of , the System, or extraordinary repairs of the System; provided , however , that on or prior to each principal and interest payment date for the Bonds ( in no event earlier than the twenty-fifth (25th) day of the month next preceding such payment date ) , moneys in the Renewal and Replacement Fund shall be applied for the payment into the Interest Account , the Principal Account , and the Term Bonds Redemption Account when the moneys therein are insufficient to pay the principal of and interest on the Bonds coming due , but only to the extent moneys transferred from the Surplus Fund , the System Development Fees Fund and the Reserve Account for such purpose pursuant to Sections 4 .05 (B) (4) , 4 . 05 (B) (8) and 4 . 06 , respectively, hereof shall be inadequate to fully provide for such insufficiency. In the event the Issuer receives a Government Grant , the terms of which require that the Issuer establish a revenue generation system as provided in Section 403 . 1838 , Florida Statutes , and by applicable regulations promulgated thereunder , the Issuer shall establish a separate account within the Renewal and Replacement Fund , System Development Fees Fund or Surplus Fund into which sufficient moneys from such respective Fund shall be deposited annually by the Issuer to satisfy the conditions of said Government Grant . The use and withdrawal of moneys from such account shall be governed by the terms of the Government Grant and applicable law. (6) Subordinated Indebtedness . Gross Revenues shall next be applied by the Issuer for the payment of any accrued debt service on Subordinated Indebtedness incurred by the Issuer in connection with the System and in accordance with the proceedings authorizing such Subordinated Indebtedness . (7) Binking Fund . There shall be deposited to the Interest Account , the Principal Account and the Term Bonds Redemption Account , in that order , sufficient moneys such that the amounts on deposit therein shall equal , respectively, the interest , principal and Sinking Fund Installment next coming due on the Bonds outstanding ; provided , however , no deposit need be made to the Principal Account or Term 39 ()x) 1 .1 • IP • Bonds Redemption Account until a date one year preceding the due date of such principal amount or Sinking Fund Installment . (8) Surplus mind . The balance of any Gross Revenues remaining in said Revenue Fund shall be deposited in the Surplus Fund and applied to the payment , on or prior to each principal and interest payment date for the Bonds ( in no event earlier than the twenty-fifth ( 25th ) day of the month next preceding such payment date) , into the Interest Account , the Principal Account and the Term Bonds Redemption Account when the moneys therein shall be insufficient to pay the principal of and interest on the Bonds coming due . Moneys not required to meet such a deficiency may be applied for any lawful purpose in connection with the System, including , but not limited to , purchase or redemption of Bonds , payment of Subordinated Indebtedness and improvements , renewals and replacements to the System ; provided , however , that none of such revenues shall ever be used for the purposes provided in this paragraph (8) unless all payments required in paragraphs (1 ) through (6) above of this Section 4 . 05 (B) , including any deficiencies for prior payments , have been made in full to the date of such use . (C) Whenever the amount in the Reserve Account, together with the other amounts in the Sinking Fund , is sufficient to fully pay all Outstanding Bonds in accordance with their terms ( including principal or applicable Redemption Price and interest thereon) , no further deposits to the Sinking Fund need be made . If on any payment date the Gross Revenues are insufficient to deposit the required amount in any of the funds or accounts or for any of the purposes provided above , the deficiency shall be made up on the subsequent payment dates . SECTION 4 . 06 . SYSTEM DEVELOPMENT FEES FUND . The Issuer shall deposit into the System Development Fees Fund all System Development Fees as received and such System Development Fees shall be accumulated in the System Development Fees Fund and applied by the Issuer in the following manner and order of priority: (A) For the payment on or prior to each principal and interest payment date ( in no event earlier than the twenty-fifth ( 25th) day of the month next preceding such payment date ) into the Interest Account , the Principal Account and the Term Bonds Redemption Account , when the moneys therein are insufficient to pay the principal of and interest on the Bonds coming due , but only to the extent moneys transferred from the Surplus Fund for such purpose pursuant to Section 4 . 05 (B) ( 8 ) hereof shall be inadequate to fully provide for such insufficiency. 40 ( )! ) 146 411, (B) To pay the cost of acquiring and/or constructing extensions , improvements or additions to the System in accordance with the plans and specifications provided by the Consulting Engineers and the requisitions for disbursement of moneys provided by the Issuer . (C) To be used for any other lawful purpose relating to the System. SECTION 4 .07 . INVESTMENTS. The moneys in the Construction Fund , the Revenue Fund , Operation and Maintenance Fund , the Special Assessments Fund , the Principal Account , the Interest Account , the Term Bonds Redemption Account , the Renewal and Replacement Fund , the System Development Fees Fund and the Surplus Fund shall be invested and reinvested by the Issuer in Authorized Investments , maturing not later than the dates on which such moneys will be needed for the purposes of such fund or account ; provided , however , Authorized Investments in the Renewal and Replacement Fund and the System Development Fees Fund shall mature no later than three (3 ) years from the date of investment . Moneys in the Reserve Account shall be invested in such obligations as provided in clauses ( 1 ) , ( 2 ) , ( 3 ) , ( 4 ) and ( 5 ) of the definition of Authorized Investments , maturing no later than ten (10) years from the date of investment. All investments shall be carried at cost. Any and all income received from the investment of moneys in the Surplus Fund , the Renewal and Replacement Fund (only to the extent such income and the other amounts in such Fund exceed the Renewal and Replacement Fund Requirement) and the Reserve Account ( only to the extent such income and the other amounts in such Account exceed the Reserve Account Requirement) , shall be deposited upon receipt thereof in the Revenue Fund . Any and all income received from the investment of moneys in the Special Assessments Fund shall be deposited upon receipt thereof into the Interest Account; provided , however, the Issuer may accumulate investment earnings in the special account established pursuant to section 4 . 06 hereof . Any and all income received from the investment of moneys in the Revenue Fund , the Principal Account , the Interest Account , the Term Bonds Redemption Account , the Reserve Account (to the extent such income and the other amounts in such Account do not exceed the Reserve Account Requirement ) , the Renewal and Replacement Fund ( to the extent such income and the other amounts in such Fund do not exceed the Renewal and Replacement Fund Requirement ) , the System Development Fees Fund and in each separate account of the Construction Fund shall be retained in such respective Fund or Account. 41 ()i)14 • Nothing 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. SECTION 4 . 08 . 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 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 and accounts 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. 00148 42 VW 110 ARTICLE V COVENANTS SECTION 5 . 01 . GENERAL . The Issuer hereby makes the following covenants , in addition to all other covenants in this Resolution , with each and every successive Holder of any of the Bonds so long as any of said Bonds remain Outstanding. SECTION 5 . 02 . OPERATION AND MAINTENANCE. The Issuer will maintain or cause to be maintained the System and all portions thereof in good condition and will operate or cause to be operated the same in an efficient and economical manner , making or causing to be made such expenditures for equipment and for renewals , repairs and replacements as may be proper for the economical operation and maintenance thereof. SECTION 5. 03 . ANNUAL BUDGET. The Issuer shall annually prepare and adopt , prior to the beginning of each Fiscal Year , an Annual Budget in accordance with applicable law. No expenditure for the operation and maintenance of the System shall be made in any Fiscal Year in excess of the amount provided therefor in the Annual Budget , (A) without a written finding and recommendation by an Authorized Issuer Officer , which finding and recommendation shall state in detail the purpose of and necessity for such increased expenditures , and (B) until the Governing Body shall have approved such finding and recommendation by resolution . No such increased expenditures in excess of twenty percent ( 20 % ) of the amounts provided therefor in the Annual Budget shall in any event be made except upon the further certification of the Consulting Engineers that such increased expenditures are reasonable and necessary to the continued operation of the System. If for any reason the Issuer shall not have adopted the Annual Budget before the first day of any Fiscal Year , other than the first Fiscal Year , the preliminary budget for such year , if it be approved by the Consulting Engineers , or otherwise the Annual Budget for the preceding Fiscal Year , shall be deemed to be in effect for such Fiscal Year until the Annual Budget for such Fiscal Year is adopted. The Issuer may at any time adopt an amended Annual Budget for the then current Fiscal Year , but no such amended Annual Budget shall supersede any prior budget until it shall be approved by the Consulting Engineers as reasonable and necessary. 43 001,19 • e The Issuer shall mail copies of such Annual Budgets and amended Annual Budgets and all resolutions authorizing increased expenditures for operation and maintenance to any Holder or Holders of Bonds who shall file his address with the Clerk and request in writing that copies of all such Annual Budgets and resolutions be furnished to him and shall make available all such Annual Budgets and resolutions authorizing increased expenditures for operation and maintenance of the System at all reasonable times to any Holder or Holders of Bonds or to anyone acting for and on behalf of such Holder or Holders . SECTION 5 . 04 RATES . Commencing with the Fiscal Year beginning on October 1 , 1986 , the Issuer shall fix , establish and maintain such rates and collect such fees , rates or • other charges for the product , services and facilities of its System, and revise the same from time to time , whenever necessary , as will always provide in each Fiscal Year , (A) Net Revenues , System Development Fees and Special Assessment Proceeds adequate at all times to pay in each Fiscal Year at least one hundred twenty-five percent ( 125 %) of the Annual Debt Service on all Outstanding Bonds becoming due in such Fiscal Year and ( B) Net Revenues in each Fiscal Year adequate to pay at least one hundred percent ( 100 % ) of the Annual Debt Service on all Outstanding Bonds becoming due in such Fiscal Year . Such rates , fees or other charges shall not be so reduced so as to be insufficient to provide adequate Net Revenues , System Development Fees and Special Assessment Proceeds for the purposes provided therefor by this Resolution. SECTION 5 . 05 . BOOKS AND RECORDS . The Issuer shall keep books , records and accounts of the revenues and operations of the System , which shall be kept separate and apart from all other books , records and accounts of the Issuer , and the Holders of not less thin five percent (5%) in aggregate principal amount of the Bonds Outstanding or the duly authorized representatives thereof shall have the right at all reasonable times to inspect all books , records and accounts of the Issuer relating thereto. SECTION 5 . 06. ANNUAL AUDIT. The Issuer shall , immediately after the close of each Fiscal Year , cause the books , records and accounts relating to the System to be properly audited by a recognized independent firm of certified public accountants , and shall require such accountants to complete their report of such Annual Audit in accordance with applicable law . Such Annual Audits shall contain , but not be limited to , a balance sheet , an income statement , a statement of changes in financial position , statement of changes in retained earnings , a statement of the number and classification of users and services of the System and rates associated 44 ( ) ) l5() ID • with such services , a statement of insurance coverage , and any other statements as required by law or accounting convention , and a certificate by such accountants disclosing any material default on the part of the Issuer of any covenant or agreement herein . Each Annual Audit shall be in conformity with generally accepted accounting principles . A copy of each Annual Audit shall regularly be furnished to any Insurer and to any Holder of a Bond who shall have furnished his address to the Cler . and requested in writing that the same be furnished to him. SECTION 5 . 07 . NO MORTGAGE OR SALE OF THE SYSTEM . The Issuer irrevocably covenants , binds and obligates itself not to sell , lease , encumber or in any manner dispose of the System as a whole or any substantial part thereof (except as provided below) until all of the Bonds and all interest thereon shall have been paid in full or provision for payment has been made in accordance with Section 9 .01 hereof. The foregoing provison notwithstanding , the Issuer shall have and hereby reserves the right to sell , lease or otherwise dispose of any of the property comprising a part of the System in the following manner , if any one of the following conditions exist : (A) such property is not necessary for the operation of the System , ( B ) such property is not useful in the operation of the System , (C ) such property is not profitable in the operation of the System , or (D) in the case of a lease of such property , will be advantageous to the System and will not adversely affect the security for the Bondholders. Prior to any such sale , lease or other disposition of said property: (1) if the amount to be received therefor is not in excess of one-fourth ( 1/4 ) of one percent ( 1 %) of the value of the gross plant of the System at original cost , the Utilities Administrator or other Authorized Issuer Officer shall make a finding in writing determining that one or more of the conditions for sale , lease or disposition of property provided for in the second paragraph of this Section 5 . 07 have been met ; or ( 2 ) if the amount to be received from such sale , lease or other disposition of said property shall be in excess of one-fourth ( 1/4 ) of one percent ( 1 % ) of the value of the gross plant of the System at original cost , the Utilities Administrator or other Authorized Issuer Officer and the Consulting Engineers shall each first make a finding in writing determining that one or more of the conditions for sale , lease or other disposition of property provided for in the second paragraph of this Section 5 . 07 have been met , and the Issuer shall , by resolution, duly adopt , approve and concur in the finding of the Utilities Administrator or other Authorized Issuer Officer and the Consulting Engineers . 45 00151 • 40 The proceeds from such sale , lease or other disposition shall be deposited , first , into the Renewal and Replacement Fund to the extent necessary to make the amount therein equal to the Renewal and Replacement Fund Requirement , and , second, into the Surplus Fund. The transfer of the System as a whole from the control of the Governing Body to some other board or authority which may hereafter be created for such purpose and which constitutes a governmental entity , obligations issued by which are exempt from Federal income taxation under Section 103 (a) of the Code , shall not be deemed prohibited by this Section 5 . 07 and such successor board or authority shall fall within the definit :on of " Issuer " in Section 1 . 01 hereof. Notwithstanding the foregoing provisions of this Section 5 . 07 , the Issuer shall have the authority to sell for fair and reasonable consideration any land comprising a part of the System which is no longer necessary or useful in the operation of the System and the proceeds derived from the sale of such land shall be disposed of in accordance with the provisions of the fourth paragraph of this Section 5.07 . The Issuer may make contracts or grant licenses for the operation of , or grant easements or other rights with respect to , any part of the System if such contract, license, easement or right does not , in the opinion of the Consulting Engineers , as evidenced by a certificate to that effect filed with the Issuer , impede or restrict the operation by the Issuer of the System, but any payments to the Issuer under or in connection with any such contract , license , easement or right in respect of the System or any part thereof shall constitute Gross Revenues . SECTION 5 . 08 . INSURANCE . The Issuer will carry such insurance as is ordinarily carried by private or public corporations owning and operating utilities similar to the System with a reputable insurance carrier or carriers , including public and product liability insurance in such amounts as the Issuer shall determine to be sufficient and such other insurance against loss or damage by fire , explosion ( including underground explosion ) , hurricane , tornado or other hazards and risks , and said property loss or damage insurance shall at all times be in an amount or amounts equal to the fair appraisal value of the buildings, properties , furniture , fixtures and equipment of the System , or such other amount or amounts as the Consulting Engineers shall approve as sufficient. 46 001 52 • • The Issuer may establish certain minimum levels of insurance for which the Issuer may self-insure . Such minimum levels of insurance shall be in amounts as recommended in writing by an insurance consultant who has a favorable reputation and experience and is qualified to survey risks and to recommend insurance coverage for Persons engaged in operations similar to the System. The proceeds of any such insurance (except for proceeds of any use and occupancy insurance ) shall be held in the Construction Fund and applied in accordance with the requisition procedure provided in *Section 4 . 03 hereof to the necessary costs involved in such repair and replacement and , to the extent not so applied , shall ( together with proceeds of any such use and occupancy insurance ) be deposited . into the Revenue Fund as Gross Revenues . SECTION 5 . 09 . NO FREE SERVICE . The Issuer will not render , or cause to be rendered , any free services of any nature by its System or any part thereof , nor will any preferential rates be established for users of the same , class , and in the event the Issuer or the County , or any department , agency , instrumentality , officer or employee thereof , shall avail itself of the System or services provided by said System or any part thereof , the same rates , fees or charges applicable to other customers receiving like services under similar circumstances shall be charged the Issuer , the County and any such department, agency, instrumentality, officer or employee . The revenues so received shall be deemed to be Gross Revenues derived from the operation of the System , and shall be deposited and accounted for in the same manner as other Gross Revenues. SECTION 5 . 10 . NO IMPAIRMENT OF RIGHTS . The Issuer will not enter into any contract or contracts , nor take any action , the results of which might impair the rights of the Holders of the Bonds and will not permit the operation of any competing water or sewer service facilities in the Districts provided , however , the Issuer reserves the right to permit the ownership and operation of water or sewer service facilities or both by itself or by others in any territory which is not in any service area now or hereafter served by the System. SECTION 5 . 11 . COMPULSORY WATER AND SEWER CONNECTIONS. In order better to secure the prompt payment of principal and interest on the Bonds , as well as for the purpose of protecting the health and welfare of the inhabitants of the District , and acting under authority of the general laws of Florida , the Issuer will require (A) every owner of each lot in the Issuer which abuts upon any street or public way containing a sewer line forming a part of the 47 ( )() l 53 , • sewer facilities of the System and upon which lot a building shall subsequently be constructed for residential , commercial or industrial use , to connect such building to such sewer facilities and to cease to use any other method for the disposal of sewage waste or other polluting matter , and (B) every owner of each lot in the Issuer which abuts upon any street or public way containing a water line forming a part of the water facilities of the System and upon which lot a building shall subsequently be constructed for residential , commercial or industrial use , to connect such building to such water facilities. SECTION 5 . 12 . ENFORCEMENT OF CHARGES . The Issuer shall compel the prompt payment of rates , fees and charges imposed for service rendered on every lot or parcel connected with the System , and to that end will vigorously enforce • all of the provisions of any ordinance or resolution of the Issuer having to do with sewer and water connections and charges , and all of the rights and remedies permitted the Issuer under law , including the requirement for the making of a reasonable deposit by each user , the requirement for disconnection of all premises delinquent in the payment , and the securing of injunction against the disposition of sewage or industrial waste into the sewer facilities • of the System by any premises delinquent in the payment of such charges . SECTION 5 . 13 . UNIT WATER AND SEWER BILLS . In every instance in which a building or structure on a lot is connected to the sewer facilities of the System , which building or structure is also connected to the water facilities of the System and receives water therefrom , the Issuer shall submit to the owner or occupant of such lot a single bill for both water and sewer service and shall refuse to accept payment for either the water charge alone or sewer charge alone without payment of the other. SECTION 5 . 14 . COLLECTION OF SPECIAL ASSESSMENTS . The Issuer shall proceed diligently to perform legally and effectively all steps required in the imposition and collection of the Special Assessments . The Issuer shall diligently proceed to collect such Special Assessments and shall exercise all legally available remedies now or hereafter available under State law, including foreclosure , to enforce such collections. SECTION 5.15. RE—ASSESSMENTS. If any Special Assessment shall be either in whole cr in part annulled , vacated or set aside by the judgment of any court , or if the Governing Body shall be satisfied that any such Special Assessment is so irregular or defective that the same cannot be enforced or collected , or if the Governing Body shall have omitted 48 001 5.1 • • to make such Special Assessment when it might have done so , the Governing Body shall take all necessary steps to cause a new Special Assessment to be made for the whole or any part of said improvement or against any property benefited by said improvement , and in case such second Special Assessment shall be annulled , said Governing Body shall obtain and make other Special Assessments until a valid Special Assessment shall be made. SECTION 5 . 16 . COLLECTION OF SYSTEM DEVELOPMENT FEES. The Issuer shall proceed diligently to perform legally and effectively all steps required in the imposition and collection of the System Development Fees . Upon the due date of any such System Development Fees , the Issuer shall diligently proceed to collect the same and shall exercise all legally available remedies to enforce such collections • now or hereafter available under State law. SECTION 5 . 17 . CONSULTING ENGINEERS. The Issuer shall at all times employ ConsuLting Engineers , whose duties shall be to make any certificates and perform any other acts required or permitted of the Consulting Engineers under this Resolution , and also to review the construction and operation of the System , to make an inspection of the System at least once a year , and , not more than sixty (60) or less than forty-five ( 45 ) days before the end of each Fiscal Year, to submit to the Issuer a report with recommendations as to the proper maintenance , repair and operation of the System during the ensuing Fiecal Year , including recommendations for expansion and additions to the System to meet anticipated service demands , and an estimate of the amount of money necessary for such purposes. Co;?ies of such reports , recommendations and estimates made as hereinabove provided shall be filed with the Issuer for inspection by Bondholders , if such inspection is requested. SECTION 5 . 18 . ARBITRAGE . The Issuer at all times will comply with the requ ;. rements of Section 103 ( c ) of the Code and any applicable rules and regulations promulgated thereunder . The Issuer agrees to take no action which may render the interest on any of the Bonds subject to Federal income taxation. 49 11111. ARTICLE VI SUBORDINATED INDEBTEDNESS AND ADDITIONAL BONDS SECTION 6 . 01 . SUBORDINATED INDEBTEDNESS. The Issuer will not issue any other obligations , except under the conditions and in the :manner provided herein , payable from the Pledged Funds or the Gross Revenues or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien thereon in favor of the Bonds and the interest thereon . The Issuer may at any time or from time to time issue evidences of indebtedness payable in whole or in part out of Pledged Funds and which may be secured by a pledge of Pledged Funds ; provided , however , that such pledge shall be , and shall be expressed to be , subordinated in all respects to the pledge of the Pledged Funds created by this Resolution . The Issuer agrees to pay promptly any Subordinated Indebtedness as the same shall become due. SECTION 6. 02. ISSUANCE OF ADDITIONAL BONDS. No Additional Bonds , payable pari passu with the Bonds then Outstanding pursuant to this Resolution , shall be issued except upon the conditions and in the manner herein provided . The Issuer may issue one or more Series of Additional Bonds for any one or more of twee following purposes : (A) financing the Cost of completion of the Initial Project , (B) financing the Cost of an Additional Project , or the completion thereof , or (C ) refunding any or all Outstanding Bonds or of any Subordinated Indebtedness of the Issuer . No such Additional Bonds shall be issued unless the following conditions are complied with: (1) Except in the case of Additional Bonds issued for the purpose of refunding Outstanding Bonds , the Issuer shall certify that it is current in all deposits into the various funds and accounts established hereby and all payments theretofore required to have been deposited or made by it under the provisions of this Resolution and have complied with the covenants and agreements of this Resolution. (2) The Consulting Engineers shall certify to the Issuer that the amount of the Net Revenues during the immediate preceding Fiscal Year or any twelve (12) consecutive months selected by the Issuer of the twenty-four (24) months immediately preceding the issuance of said Additional Bonds , adjusted as hereinafter provided , will ( a ) be equal to at least one hundred percent (100 %) of the Maximum Annual Debt Service 50 0015E; of the Outstanding Bonds and the Additional Bonds then proposed to be issued , and (b) when added to the Special Assessment Proceeds and the System Development Fees , adjusted as hereinafter provided , received by the Issuer during such 12-month period , te equal to at least one hundred twenty-five percent (125%) of the Maximum Annual Debt Service of the Outstanding Bonds and the Additional Bonds then proposed to be issued. For the purpose of determining the Maximum Annual Debt Service under this rection 6 . 02 , the interest rate on pari passu additional Variable Rate Bonds then proposed to be issued shall be deemed to be the Maximum Interest Rate applicable thereto. For the purpose of this Section 6.02, the phrase "immediately preceding Fiscal Year or the twelve (12) consecutive months of the twenty-four ( 24 ) months immediately preceding the issuance of said Additional Bonds" shall be sometimes referred to as "twelve (12) consecutive months ." The Net Revenues , the System Development Fees and the Special Assessment Proceeds calculated pursuant to the foregoing paragraph ( 2 ) of this Section 6 . 02 may be adjusted , at the option of the Issuer, as follows: (A) If the Issuer , prior to the issuance of the proposed Additional Bonds , shall have increased the rates , fees or other charges for the product , services or facilities of the System, the Net Revenues and the System Development Fees for the twelve ( 12 ) consecutive months immediately preceding the issuance of said Additional Bonds shall be adjusted to show the Net Revenues and the System Development Fees which would have been derived from the System in such twelve ( 12 ) consecutive months as if such increased rates , fees or other charges for the product , services or facilities of the System had been in effect during all of such twelve (12) consecutive months . (B) If the Issuer shall have acquired or has contracted to acquire any privately or publicly owned existing water and/or sewer system , the cost of which shall be paid from all or part of the proceeds of the issuance of the proposed Additional Bonds , then the Net Revenues derived from the System during the twelve (12) consecutive months immediately preceding the issuance of said Additional Bonds shall be increased by adding to the Net Revenues for said twelve ( 12 ) consecutive months the Net Revenues which would have been derived from said exifting water and/or sewer system as if such existing water and/or sewer system had been a part of the System during such twelve ( 12 ) consecutive months . For the purposes of this paragraph , the Net Revenues 51 ( )(). 5 derived from said existing water and/or sewer system during such twelve ( 12 ) consecutive months shall be adjusted to determine such Net Revenues by deducting the cost of operation and maintenance of said existing water and/or sewer system from the gross revenues of said system. (C) If the Issuer , in connection with the issuance of Additional Bonds , shall enter into a contract ( with a duration not less than the final maturity of such Additional Bonds) with any public or private entity whereby the Issuer agrees to furnish services in connection with any water and/or sewer system , then the Net Revenues of the System during the twelve (12) consecutive months immediately preceding the issuance of said Additional Bonds shall be increased by the least amount which said public or private entity shall guarantee to pay in any one year for the furnishing of said services by the Issuer , after deducting therefrom the proportion of operating expenses and repair , renewal and replacement cost attributable in such year to such services . (D) If the Issuer covenants to levy Special Assessments against property to be benefited by the improvements , the cost of which shall be paid from the proceeds of the proposed Additional Bonds , then the Special Assessment Proceeds derived from the System during the twelve (12) consecutive months shall be increased by an amount equal to eighty percent ( 80 % ) of the least amount which the Consulting Engineers estimate will be received in any one year from the levy of said Special Assessments , said amount to be the total received from the installment payments on the Special Assessments plus the interest paid on the unpaid portion of the Special Assessments . The estimate of the Consulting Engineers shall be based upon the preliminary assessment roll filed with the Issuer prior to the construction of such improvements . (E) In the event the Issuer shall be constructing or acquiring additions , extensions or improvements to the System from the proceeds of such Additional Bonds and shall have established fees , rates or charges to be charged and collected from users of :3uch facilities when service is rendered , such Net Revenues and System Development Fees may be adjusted by adding thereto the Net Revenues and System Development Fees estimated by the Consulting Engineers to be derived during the first twelve (12) months of operation after completion of the construction or acquisition of said additions , extensions .and improvements from the proposed users of the facilities to be financed by Additional Bonds together with other funds on hand or lawfully obtained for such purpose. 52 ()( ) 15S 41 • Additional Bonds shall be deemed to have been issued pursuant to this Resolution the same as the Outstanding Bonds , and all of the other covenants and other provisions of this Resolution (except as to details of such Additional Bonds inconsistent therewith) shall be for the equal benefit , protection and security of the Holders of all Bonds issued pursuant to this Resolution . All Bonds , regardless of the time or times of their issuance , shall rank equally with respect to their lien on the Pledged Funds and their sources and security for payment therefrom without preference of any Bonds over any other. In the event any Additional Bonds are issued for the purpose of refunding any Bond.3 then Outstanding , the conditions of paragraph ( 2 ) of thin Section 6 . 02 shall not apply , provided that the issuance of such Additional Bonds shall not result in an increase in the aggregate amount of principal of and interest on the Outstanding Bonds becoming due in the current Bond Year and all subsequent Bond Years . The conditions of paragraph ( 2 ) of this Section 6 . 02 shall apply to Additional Bonds issued to refund Subordinated Indebtedness. In the event that the total amount of Series 1985 Bonds herein authorized to be issued are not issued simultaneously, such Series 1985 Bonds which are subsequently issued shall be subject to the conditions of paragraph (2) of this Section 6 .02 . If at any time the Issuer shall enter into an agreement or contract for an ownership interest in any public or privately owned water and/or sewer system or for the reservation of capacity therein whereby the Issuer has agreed as part of the cost thereof to pay part of the debt service on the obligations of such public or privately owned water and/or sewer system issued in connection therewith , such payments to be made by the Issuer shall be junior , inferior and subordinate in all respects to the Bonds issued hereunder , unless such obligations (when treated as Additional Bonds ) shall meet the conditions of paragraph (2) of this Section 6 . 02 , in which case such obligations shall rank on parity as to lien on the Pledged Funds with the Bonds . SECTION 6 . 03 . BOND ANTICIPATION NOTES . The Issuer may issue notes in anticipation of the issuance of Bonds which shall have such terms and details and be secured in such manner , not inconsistent with this Resolution , as shall be provided by Supplemental Resolution of the Issuer . 53 (g) 159 41/ ARTICLE VII DEFAULTS AMID REMEDIES SECTION 7 .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 Sinking Fund Installment , redemption premium or interest on any Bond or Subordinated :indebtedness when due . (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 a bankrupt , or assignment by the Issuer for the benefit of its creditors , or appcintment 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 fcr its reorganization instituted under the provisions of the Federal Bankruptcy Act , 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 thirty (30) days after written notice of such default shall have been received from the Holders of not less than twenty-five percent ( 25 %) of the aggregate principal amount of Bonds Outstanding or the Insurer of such amount of Bonds . SECTION 7 . 02 . REMEDI)3S. Any Holder of Bonds issued under the provisions of this Resolution 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. The Holder or Holders of Bonds in an aggregate principal amount of not less than twenty-five per centum ( 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 54 • • such Bondholders in any legal proceedings for the enforcement and protection of the rights of such Bondholders in any legal proceedings for the enforcement and protection 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 Secretary. SECTION 7 . 03 . 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 7 . 04 . WAIVER OF DEFAULT. No delay or omission of any Bondholder to exercise any right or power accruing upon any default shall iirpair 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 Section 7 . 02 to the Bondholders may be exercised from time to time , and as often as may be deemed expedient. SECTION 7 . 05 . APPLICATION OF MONEYS AFTER DEFAULT . If an Event of Default shall happen and shall not have been remedied , the Issuer or a trustee or receiver appointed for the purpose shall apply all Pledged Funds as follows and in the following order : A. To the payment of the reasonable and proper charges , expenses and liabilities of the trustee or receiver and Registrar hereunder; B. To the payment of the amounts required for reasonable and necessary Operating Expenses , and for the reasonable renewals , repairs and replacements of the System necessary to prevent loss of Gross Revenues , as certified by the Consulting Engineer; C. To the payment of the interest and principal or Redemption Price , if applicable , then due on the Bonds , as follows: (1) Unless the principal of all the Bonds shall have become due and payable , all such moneys shall be applied: FIRST : to the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of such installments , and , if the amount available shall not be sufficient to pay in full any particular installment , then to the payment ratably , according to the amounts 55 1110 due on such installment , to the Persons entitled thereto, without any discrimination or preference; SECOND : to the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due at maturity or upon mandatory redemption prior to maturity • ( other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of Section 9 . 01 of this Resolution) , in the order of their due dates , with interest upon such Bonds from the respective dates upon which they became due , and , if the amount available shall not be sufficient to pay in full Bonds due on any particular date , together with such interest , then to the payment first of such interest , ratably according to the amount of such interest due on such date , and then to the payment of such principal , ratably according to the amount of such principal due on such date , to the Persons entitled thereto without any discrimination or preference; and THIRD : to the payment of the Redemption Price of any Bonds called for optional redemption pursuant to the provisions of this; Resolution. (2) If the principal of all the Bonds shall have become due and payable , all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds , with interest thereon as aforesaid , without preference or priority of principal over interest or of interest over principal , or of any installment of interest over any other installment of interest , or of any Bond over any other Bond , ratably , according to the amounts due respectively for principal and interest , to the Persons entitled thereto without any discrimination or preference . OW 62 i y 56 • ARTICLE VIII SUPPLEMENTAL RESOLUTIONS SECTION 8 .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 the matters and things referred to in Sections 2 . 01 , 2 . 02 or 2 . 09 hereof , and also any other 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 authorize Additional Projects or to change or modify the description of any Project. (G) To specify and determine matters necessary or desirable for the issuance df Variable Rate Bonds or Capital Appreciation Bonds. SECTION 8.02 . SUPPLEMENTAL RESOLUTION WITH BONDHOLDERS' AND INSURER' S CONSENT. Subject to the terms and provisions contained in this Section 8 . 02 and Section 8 . 01 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 57 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 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 i.E such modification or amendment will , by its terms , not take effect so long as any Bonds of any specified Series or 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 8 . 02 . Any Supplemental Resolution which is adopted in accordance with the provisions of this Section 8 . 02 shall also require the written consent of the Insurer of any Bonds which are Outstanding at the time such Supplemental Resolution shall take effect . 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 Redemption Price or the rate of interest thereon , (C ) the creation of a lien upon or a pledge of other than the lien and pledge created by this Resolution which adversely affects any Bondholders , (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 8 .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 8: . 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 . 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 8 . 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 8 .02 . 58 l( ) I G1 ® • 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 . 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 o:E 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 8 . 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 8 . 03 . AMENDMENT WITH CONSENT OF INSURER ONLY. If all of the Bonds Outstanding hereunder are insured as to payment of principal and interest by an Insurer or Insurers , the Issuer may enact one or more Supplemental Resolutions amending all or any part of Articles IV , V , VI and VII hereof with the written consent of said Insurer or Insurers and the acknowledgment by said Insurer or Insurers that its insurance or guaranty policy will remain in full force and effect . The consent of the Holders of any Bonds shall not be necessary . The foregoing right of amendment , however , does not apply to any amendment to Section 5 . 18 hereof with respect to the exemption of interest on said Bonds from Federal income taxation nor may any such amendment deprive the Holders of any Bond of right to payment of the Bonds from , and their lien on , the Pledged Funds . Upon filing with the Clerk of evidence of such consent • 59 OO165 • • • s of the Insurer or Insurei:s 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 8.02 hereof. • 11.4_ / • • t � • ()O1c; ; 60 41 4111 AR ICLB IX MISCELLANEOUS SECTION 9 . 01 . DEFEASANCE . If the Issuer shall pay or cause to be paid or there shall otherwise be paid to the Holders of all Bonds the principal or Redemption Price , if applicable , and interest due or to become due thereon , at the times and in the manner stipulated therein and in this Resolution , then the pledge of the Pledged Funds , and all covenants , agreements and other obligations of the Issuer to the Bondholders , shall thereupon cease , terminate and become void and be discharged and satisfied . In such event , the Paying Agents shall pay over or deliver to the Issuer all money or securities held by them pursuant to the Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. Any Bonds or interest installments appertaining thereto, whether at or prior to the maturity or redemption date of such Bonds , shall be deemed to have been paid within the meaning of this Section 9 . 01 if (A) in case any such Bonds are to be redeemed prior to the maturity thereof , there shall have been taken all action necessary to call such Bonds for redemption and notice of such redemption shall have been duly given or provision shall have been made for the giving of such notice , and (B ) 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 Refunding Securities the principal of and the interest on which when due will provide moneys which , together with the moneys , if any, deposited with such bank or trust company at the same time shall be sufficient , to pay the principal of or Redemption Price , if applicable , and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof , as the case may be . Except as hereafter provided , neither the Refunding Securities nor any moneys so deposited with such bank or trust company nor any moneys received by such bank or trust company on • account of principal of or Redemption Price , if applicable , or interest on said Refunding 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 or Redemption Price, if applicable , of the Bonds for the payment or redemption of which they 61 00111)1 1j' 1 IP • were deposited and the interest accruing thereon to the date of maturity or redemption. For purposes of determining whether Variable Rate 9onds shall be deemed to have been paid prior to the maturity the redemption date thereof , as the case may be , by ;le deposit of moneys , or specified Refunding Securities and moneys , if any , in accordance with this Section 9 . 01 , the interest to come due on such Variable Rate Bonds on or prior to the maturity or redemption date thereof , as the case may be , shall be calculated at the Maximum Interest Rate ; provided , however , that if on any date , as a result of such Variable Rate Bonds having borne interest at less than the Maximum Interest. Rate for any period , the total amount of moneys and specified Refunding Securities on deposit for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited on such date in respect of such Variable Rate Bonds is in order to satisfy this Section 9 . 01 , such excess shall be paid to the Issuer free and clear of any trust , lien , pledge or assignment securing the Bonds or otherwise existing under this Resolution. In the event the Bonds for which moneys are to be deposited for the payment thereof in accordance with this Section 9 . 01 are not by their terms subject to redemption within the next succeeding sixty ( 60 ) days , the Issuer shall cause the Registrar to mail a notice to the Holders of such Bonds that the deposit required by this Section 9 . 01 of moneys or Refunding Securities has been made and said Bonds are deemed to be paid in accordance with the provisions of this Section 9 . 01 and stating such maturity or redemption date upon which moneys are to be available for the payment of the p:: incipal of or Redemption Price , if applicable , and interest on said Bonds . Nothing herein shall be deemed to require the Issuer to call any of the Outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions , or to impair the discretion of the Issuer in determining whether to exercise any such option for early redemption. In the event that the principal of or Redemption Price , if applicable , and interest due on the Bonds shall be paid by an Insurer or Insurers , the pledge of the Pledged Funds and all covenants , agreements and other obligations of the Issuer to the Bondholders shall continue to exist and such Insurer or Insurers shall be subrogated to the rights of such Bondholders . C;1'r 62 OUl Wi 4100 SECTION 9 . 02 . CAPITAL APPRECIATION BONDS . For the purposes of (A) receiving payment of the Redemption Price if a Capital Appreciation Bond is redeemed prior to maturity, or ( B) receiving payment of a Capital Appreciation Bond if the principal of all Bonds becomes due and payable under the provisions of this Resolution , or (C ) computing the amount of Bonds held by the Holder of a Capital Appreciation Bond in giving to the Is:;uer or any trustee or receiver appointed to represent the Bondholders any notice , consent , request or demand pursuant to this Resolution for any purpose whatsoever , the principal amount of a Capital Appreciation Bond shall be deemed to be its Accreted Value . SECTION 9 . 03 . SALE OF BONDS . The Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the Act , the requirements of this Resolution and other applicable provisions of law. SECTION 9 .04 . VALIDATION AUTHORIZED. Burt L . Saunders , Esquire , Counsel for the Issuer , is hereby authorized and directed to institute appropriate proceedings for the validation of the Series 1985 Bonds :in the Circuit Court for Collier County , and the proper officers of the Issuer are hereby authorized to verify on behalf of the Issuer any pleadings in such proceedings. SECTION 9 . 05 . 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 9 . 06 . 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 9 . 07 . EFFECTIVE DATE . This Resolution shall take effect immediately upon its adoption. 63 n1) 16 • This Resolution adopted after motion , second and roll call vote as follows: Chairman Voss Aye Commissioner Goodnight Aye Commissioner Hasse Seconded and Aye Commissioner Holland Aye Commissioner Pistor Motioned and Aye DATED: July 30 , 1985. COUNTY WATER—SEWER DISTRICT, BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLOIRDA, ACTING • - AS THE EX—OFFICIO GOVERNING BODY OF THE COUNTY WATER—SEWER DISTRICT • • Chairman \ \ .• 1 r • • 40, Approved as to Form and Legal Sufficiency County Attorney 001.7( 64 S •4 STATE OF FLORIDA: °4,7"';A: COLLIER COUNTY : • I , William J . Reagan , Clerk of the Board of County Commissioners , Collier County , Florida, acting as the Ex-Officio Clerk of the Governing Body of the County Water-Sewer District, do hereby certify that the above and foregoing is a true copy of: RESOLUTION NO. CWS-85-5 • ,;•- A RESOLUTION AUTHORIZING THE ISSUANCE BY THE COUNTY WATER- SEWER DISTRICT OF NOT EXCEEDING $ 82, 500 , 000 IN THE AGGREGATE PRINCIPAL AMOUNT OF WATER AND SEWER REVENUE BONDS , SERIES 1985 TO FINANCE THE COST OF REFUNDING CERTAIN OUTSTANDING OBLIGATIONS OF THE DISTRICT AND CONSTRUCTING AND ACQUIRING CERTAIN ADDITIONS , EXTENSIONS AND IMPROVEMENTS TO THE DISTRICT ' S WATER AND SEWER SYSTEM ; .PLEDGING - THE NET REVENUES AND SYSTEM DEVELOPMENT CHARGES TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS ; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SAID BONDS; AND PROVIDING FOR AN EFFECTIVE DATE FOR THIS RESOLUTION. • adopted by said Board in session on the 30th day of July , 1985. WITNESS my hand and official seal this 1st day of August , 1985, in Naples , Collier County, Florida. Cl k of th. : •ar• o Commission • - , C•.11 Florida, acting a- the' EX-Offic;io • Clerk of the Governin :Bbdy..of ,the . County Water-Sewer Dist r ick• ;;:`, ti