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1995.11.01_TC_Minutes_Regular TRANSCRIPT OF PROCEEDINGS $4 ,485, 000 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS SERIES 1995 DATED NOVEMBER 1, 1995 MOYLE, FLANIGAN, KATZ, FITZGERALD & SHEEHAN, P.A. BOND COUNSEL TIME AND PLACE OF CLOSING A preclosing was held at Town Hall , on November 28, 1995, beginning at 1 : 30 P.M. The closing was held on November 29, 1995 (the "Closing Date") . Although certain of the below-described closing documents were executed and/or filed in advance of the Closing Date, no closing document was deemed to have been delivered until all closing documents were delivered. LIST OF CLOSING DOCUMENTS 1 . Certified copy of Resolution No. 672 adopted by the Town Commission August 4 , 1995 . 2 . Certified copy of Resolution No . 677 adopted by the Town Commission on October 3, 1995 . 3 . Certified copy of Resolution No . 678 adopted by the Town Commission on November 7, 1995 fixing the details of the Bonds . 4 . Bond Purchase Agreement . 5 . Preliminary Official Statement . 6 . Official Statement . 7 . Registrar and Paying Agent Agreement . 8 . General Certificate of the Issuer (including specimen bond) . 9 . Notice of Sale to Division of Bond Finance. 10 . Order to Authenticate . 11 . Certificate of Registrar and Paying Agent 12 . Direction of Mayor and Finance Director Concerning Application of Proceeds . 13 . Receipt for the Bonds . 14 . Evidence of Ratings . 15 . Forms BF 2003 and BF 2004-B. 16 . Certificate of Original Purchaser . 17 . Municipal Bond Insurance Policy. 18. Certificates of Bond Insurer . -2- 7793M 19 . Certificate as to Arbitrage and Other Tax Matters . 20 . Form 8038-G and Transmittal Letter . 21 . Opinion of Counsel to the Issuer . 22 . Opinion of Counsel to the Bond Insurer . 23 . Opinion of Counsel to Original Purchaser . 24 . Opinion of Bond Counsel . 25 . Supplemental Opinion of Bond Counsel . 26 . Facsimile Signature Filings of Mayor and Clerk. 27 . Accountant ' s Consent Letter. 28 . Certificate of Engineer . 29 . Preliminary and Final Blue Sky Memorandum. Transcripts . Nine (9) complete transcripts are to be prepared for distribution as follows : 2 - Town of Highland Beach, Florida 1 - Stifel , Nicolaus & Company Incorporated 2 - Moyle, Flanigan, Katz, FitzGerald & Sheehan, P.A. 1 - Caldwell & Pacetti 1 - Greenberg Traurig Hoffman Lipoff Rosen & Quentel , P.A. 1 - NationsBank of Florida, N.A. 1 - Hodgson, Russ, Andrews, Woods & Goodyear -3- 7793M 1 . CERTIFICATE OF TRUE COPY I , the undersigned Town Clerk of Town of Highland Beach, Florida, DO HEREBY CERTIFY that attached hereto is a true and correct copy of Resolution No . 672 duly adopted by the Town Commission August 4 , 1995 and that such resolution remains in force and has not been amended. IN WITNESS WHEREOF, i have hereunto set my hand as of the 29th day of November , 1995 . By: c✓l vi .47te‘da— To n Clerk • 7794M/1 RESOLUTION NO. 672 A Resolution of the Town Commission of the Town of Highland Beach, Florida , expressing the Town ' s intent to reimburse certain original expenditures with the proceeds of bonds of the Town; and providing an effective date . WHEREAS, the Town of Highland Beach, Florida (the "Town" ) anticipates expenditures of funds ( the "Original Expenditures" ) of the Town for the purchase of a fire truck, for repairs/replacement of a raw water supply well and also for the purpose of satisfying a portion of the obligations of the Town pursuant to that certain Settlement Stipulation ( the "Settlement Stipulation" ) in the case Resolution Trust CorDQratiQn et . al . v . Town of Highland Beach , Case No . 87-8483 CIV-ZLOCH in the United States District Court for the Southern District of Florida ; and WHEREAS, the Town may wish to reimburse a portion of the Original Expenditures from proceeds of bonds which may be issued by the Town; and WHEREAS, under the Internal Revenue Code and Treasury Regulations thereunder , in order to preserve the ability of the Town to accomplish such reimbursement it is necessary that the Town declare its intent to reimburse the Original Expenditures with the proceeds of the bonds . NOW, THEREFORE, Be It Resolved by the Town Commission of the Town of Highland Beach, Florida : Section 1 . The projects for which the Original Expenditures are to be paid are the acquisition of a fire truck, the repair of a raw water supply well and the satisfaction of a portion of the Town ' s obligations pursuant to the Settlement Stipulation . The maximum principal amount of obligations which may be issued for the aforementioned projects is $420 , 000 . 00 with respect to the fire truck, $100 , 000 . 00 with respect to the raw water supply well and $110 , 000 . 00 with respect to the Settlement Stipulation, plus , in each case, a reasonably required debt service reserve fund and costs of issuance . Section 2 . The issuer has a reasonable expectation that it will reimburse the Original Expenditures in the amounts described in Section 1 hereof with proceeds of bonds issued for such purpose . Section 3 . The Resolution shall be effective immediately upon its adoption. PASSED AND ADOPTED this 4th day of August , 1995 . (SEAL) ATTE T: TOWN OF HIGHLAND BEACH, FLORIDA lam• if TO N CLERK / ARLIN G. VORESS, MAYOR 2 . CERTIFICATE OF TRUE COPY I , the undersigned Town Clerk of Town of Highland Beach, Florida, DO HEREBY CERTIFY that attached hereto is a true and correct copy of Resolution No. 677 duly adopted by the Town Commission October 3 , 1995 and that such resolution remains in force and has not been amended. IN WITNESS WHEREOF, I have hereunto set my hand as of the 29th day of November , 1995 . By: 4a4L)11 ° Clerk 7794M/2 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS BOND RESOLUTION ADOPTED OCTOBER 3 , 1995 7624M/71 TABLE OF CONTENTS (This Table of Contents is not part of the Resolution and is for convenience of reference only. ) RAGE ARTICLE I GENERAL Section 1 . 01 Definitions 1 Section 1 . 02 Authority for this Resolution 12 Section 1 . 03 Resolution to Constitute Contract 12 Section 1 . 04 Findings 13 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS Section 2 . 01 Authorization of Bonds 14 Section 2 . 02 Authorization and Description of Series 1995 Bonds 14 Section 2 . 03 Application of Series 1995 Bond Proceeds 15 Section 2 . 04 Execution of Bonds 15 Section 2 . 05 Authentication 16 Section 2 . 06 Temporary Bonds 16 Section 2 . 07 Bonds Mutilated, Destroyed Stolen or Lost 16 Section 2 . 08 Negotiability, Interchangeability and Transfer 17 Section 2 . 09 Coupon Bonds 18 Section 2 . 10 Form of Bonds 19 ARTICLE III REDEMPTION OF BONDS Section 3 . 01 Privilege of Redemption 26 Section 3 . 02 Selection of Bonds to be Redeemed 26 Section 3 . 03 Notice of Redemption 26 Section 3 . 04 Redemption of Portions of Bonds 27 Section 3 . 05 Payment of Redeemed Bonds 27 ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF Section 4 . 01 Bonds Not to be Indebtedness of Issuer 29 Section 4 . 02 Security for Bonds 29 -i- 7624M/72 Section 4 . 03 Funds and Accounts 29 Section 4 . 04 .Construction Fund 30 Section 4 . 05 Flow of Funds 31 Section 4 . 06 Impact Fee Fund 38 Section 4 .07 Rebate Fund 38 Section 4 .08 Investments 39 Section 4 . 09 Separate Accounts 40 Section 4 . 10 Non-Ad Valorem Revenues 40 ARTICLE V SUBORDINATED INDEBTEDNESS, ADDITIONAL BONDS, AND COVENANTS OF ISSUER Section 5. 01 Subordinated Indebtedness 42 Section 5 . 02 Issuance of Additional Bonds and Non-Ad Valorem Debt 42 Section 5 . 03 Bond Anticipation Notes 44 Section 5 . 04 Accession of Subordinated Indebtedness to Parity Status with Bonds 44 Section 5 . 05 Operation and Maintenance 45 Section 5 . 06 Annual Budget 45 Section 5 . 07 Rates 46 Section 5 . 08 Books and Records 46 Section 5 . 09 Annual Audit 47 Section 5. 10 Mortgage, Sale or Closing of Facilities 47 Section 5 . 11 Insurance 48 Section 5 . 12 No Impairment 98 Section 5 . 13 Special Covenants Relating to Reserve Account Insurance Policy or Reserve Account Letter of Credit 48 Section 5 . 14 Covenants with Credit Banks and Insurers 49 Section 5 . 15 Federal Income Tax Covenants ; Taxable Bonds . 49 Section 5 . 16 Nonpresentment of Bonds; Disposition of Unclaimed Money 50 Section 5 . 17 No Free Service; Enforcement of Charges 51 Section 5 . 18 Continuing Disclosure Compliance 51 Section 5 . 19 Insurance Provisions 53 ARTICLE VI DEFAULTS AND REMEDIES Section 6 . 01 Events of Default 57 Section 6 . 02 Remedies 57 Section 6 . 03 Directions to Trustee as to Remedial Proceedings 58 Section 6 04 Remedies Cumulative 58 -ii- • 7624M/73 Section 6. 05 Waiver of Default 58 Section 6 . 06 Application of Moneys After Default 59 Section 6 . 07 Control by Insurer or Credit Bank 60 ARTICLE VII SUPPLEMENTAL RESOLUTIONS Section 7 . 01 Supplemental Resolution Without Bondholders ' Consent 61 Section 7 . 02 Supplemental Resolution With Bondholders ' , Insurer ' s and Credit Bank' s Consent 62 Section 7 .03 Amendment With Consent of Insurer and/or Credit Bank Only 63 Section 7 . 04 Required Opinion of Bond Counsel 64 ARTICLE VIII MISCELLANEOUS Section 8. 01 Defeasance 65 Section 8. 02 Capital Appreciation Bonds 67 Section 8.03 General Authority 67 Section 8 . 04 No Personal Liability 67 Section 8 . 05 No Third Party Beneficiaries 67 Section 8 . 06 Sale of Bonds 67 Section 8 . 07 Severability of Invalid Provisions 68 Section 8 . 08 Repeal of Inconsistent Resolutions 68 Section 8 . 09 Table of Contents and Headings not Part Hereof 68 Section 8 . 10 Issuer Reserved Rights 68 Section 8 . 11 Holidays; Time 68 Section 8. 12 Authorization to Deem Final and to Accept Insurance Commitment 68 Section 8 . 13 Section 265 Designation 68 Section 8 . 14 Effective Date 69 -iii- RESOLUTION NO. 677 A RESOLUTION OF THE TOWN COMMISSION OF THE TOWN OF HIGHLAND BEACH, FLORIDA, AUTHORIZING THE ISSUANCE BY THE TOWN OF NOT EXCEEDING $5,500, 000 IN AGGREGATE PRINCIPAL AMOUNT OF WATER AND SEWER REVENUE BONDS, SERIES 1995, TO PROVIDE FOR THE REPAYMENT OF THE TOWN'S PROMISSORY NOTE DATED JUNE 9, 1995 IN THE AMOUNT OF $3 , 000, 000, TO PAY A PORTION OF THE COSTS OF A FIRE TRUCK, TO REIMBURSE CERTAIN PRIOR EXPENDITURES OF THE TOWN, TO FUND A DEBT SERVICE RESERVE AND TO PAY THE COSTS OF ISSUANCE OF SUCH BONDS; PLEDGING TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH BONDS CERTAIN PLEDGED FUNDS, INCLUDING THE GROSS REVENUES OF THE TOWN ' S WATER AND SEWER SYSTEM, CERTAIN STATE REVENUE SHARING FUNDS AND MONEYS ON DEPOSIT IN AND INVESTMENTS HELD FOR THE CREDIT OF CERTAIN FUNDS CREATED HEREUNDER; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE OWNERS OF SUCH BONDS; PROVIDING FOR THE APPOINTMENT OF A PAYING AGENT AND REGISTRAR; PROVIDING FOR THE CREATION OF FUNDS AND ACCOUNTS; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE TOWN COMMISSION OF THE TOWN OF HIGHLAND BEACH, FLORIDA: 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 Payment Date next preceding the date of computation or the date of computation if an Interest Payment Date, plus , if such date of computation shall not be an Interest Payment Date, a portion of the difference between the Accreted Value as of the immediately preceding Interest Payment Date and the Accreted Value as of the immediately succeeding Interest Payment Date, calculated based on the assumption that Accreted Value accrues during any semiannual period in equal daily amounts . "Act" shall mean Part II , Chapter 166, Florida Statutes , Article VIII , Section 2(b) , Constitution of the State of Florida , the Charter of the Issuer and other applicable provisions of law. "Additional Bonds" shall mean the obligations issued at any time under the provisions of Section 5 . 02 hereof . "Amortization Installment" shall mean a mandatory redemption amount (not including any amount due at maturity as opposed to redemption prior to maturity) designated as such by Supplemental Resolution and established with respect to any Term Bonds . "Annual Audit" shall mean the annual audit prepared pursuant to the requirements of Section 5 . 09 hereof . "Annual Budget" shall mean the annual budget prepared pursuant to the requirements of Section 5 . 06 hereof . "Authorized Depository" shall mean a qualified public depository, as defined in Chapter 280, Florida Statutes , or any successor provision thereof . "Authorized Investments" shall mean any of the following which shall be authorized from time to time by applicable laws of the State for deposit or purchase by the Issuer for the investment of its funds: (1) Federal Securities and obligations the principal of and interest on which are unconditionally guaranteed by the United States of America . (2) Interest-bearing time deposits or savings accounts in banks organized under the laws of the State, in national banks organized under the laws of the United States and doing business and situated in the State, in savings and loan associations which are under State supervision, or in federal savings and loan associations located in the State and organized under federal law and federal supervision, provided that any such deposits are secured by collateral as may be prescribed by law; (3) Obligations of the federal farm credit banks; the Federal Home Loan Mortgage Corporation, including Federal Home Loan Mortgage Corporation participation certificates; or the Federal Home Loan Bank or its district banks or obligations guaranteed by the Government National Mortgage Association; -2- 7624M (4) Obligations of the Federal National Mortgage Association, including Federal National Mortgage Association participation certificates and mortgage pass-through certificates guaranteed by the Federal National Mortgage Association; or (5) Securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered under the investment Company Act of 1940, 15 U.S.C. ss. 80a-1 et seq . , as amended from time to time, provided the portfolio of such investment company or investment trust is limited to Federal Securities and to repurchase agreements fully collateralized by such Federal Securities and provided such investment company or investment trust takes delivery of such collateral either directly or through an authorized custodian. (6) The Local Government Surplus Funds Trust Fund established pursuant to Part IV, Chapter 218, Florida Statutes . "Authorized Issuer Officer" for the performance on the behalf of the Issuer of any act of the Issuer or the execution of any instrument on behalf of the Issuer shall mean the Town Manager or any other person authorized by resolution of the Issuer or appointed by certificate of the Mayor to perform such act or sign such document . "Bond Amortization Account" shall mean the separate account of that name in the Debt Service Fund established pursuant to Section 4 . 03 hereof . "Bond Counsel" shall mean any attorney at law or firm of attorneys , of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America . "Bond Insurance Policy" shall mean a municipal bond new issue insurance policy or policies issued by an Insurer guaranteeing the payment of the principal of and interest on any portion of the Bonds . "Bondholder" or "Holder" or "holder" shall mean any Person who shall be the registered owner of any Outstanding Bond or Bonds according to the registration books of the Issuer . "Bonds" shall mean the Series 1995 Bonds, any Additional Bonds and any Subordinated Indebtedness which accedes to the status of Bonds pursuant to Section 5 . 04 hereof . -3- 7624M "Business Day" shall mean, as to any Series of Bonds , any day on which any Paying Agent for such Series is open for business . "Capital Appreciation Bonds" shall mean those Bonds so designated by Supplemental Resolution, 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 prior to redemption of such Bonds , such Bonds shall be considered Capital Appreciation Bonds only during the period of time prior to such conversion. "Cigarette Tax Revenues" means the amount of funds received by the Issuer from the State pursuant to Section 200 . 132 , Florida Statutes from the Municipal Financial Assistance Trust Fund . "Clerk" shall mean the Town Clerk of the Issuer or such other person as may be duly authorized by the Clerk to act on his or her behalf . "Code" shall mean the United States Internal Revenue Code of 1986 , as amended, and the regulations thereunder , whether proposed, temporary or final , promulgated by the Department of the Treasury, Internal Revenue Service . "Construction Fund" shall mean the Construction Fund established pursuant to Section 4 . 03 hereof . "Consultants" shall mean the firm of water and sewer utility system consulting engineers retained by the Issuer to perform the duties of the Consultants under the provisions of this Resolution. "Cost" when used in connection with a Project , shall mean all amounts permitted to be paid by State law. "Coupon Bonds" shall mean any Bonds the interest payable on which shall be represented by bearer coupons attached thereto, and the interest on which Bonds shall be payable only upon the presentation and surrender of such coupons to the Paying Agent as they severally fall due . "Credit Bank" shall mean as to any particular Series of Bonds , the Person providing a Credit Facility as designated in the Supplemental Resolution providing for the issuance of such Bonds . Any Credit Bank must be rated in the highest short-term rating category assigned by Moody ' s and S&P. "Credit Facility" shall mean as to any particular Series of Bonds , a letter of credit , a line of credit or another credit or liquidity enhancement facility (other than insurance policies issued by an Insurer , Reserve Account Insurance Policies or Reserve Account Letters of Credit) , as approved in the Supplemental Resolution providing for the issuance of such Bonds . -4- 762411 "Debt Service Fund" shall mean the Debt Service Fund established pursuant to Section 4 . 03 hereof . "Debt Service Requirement" for any Fiscal Year shall mean the sum of : ( 1) The aggregate amount of interest becoming due on the Bonds, other than Capital Appreciation Bonds , during such Fiscal Year . Except as otherwise specified in this Resolution, for purposes of this definition, the interest due on any Variable Rate Bonds shall be assumed to be the greater of ( a) 110% of the daily average interest rate on such Variable Rate Bonds during the 12 months ending with the month preceding the date of calculation , or such shorter period that such Bonds shall have been outstanding , or (b) the actual rate of interest borne by such Variable Rate Bonds on the date of calculation . (2) The aggregate amount of principal becoming due on the Bonds , other than Capital Appreciation Bonds , for such Fiscal Year, whether by reason of maturity or mandatory redemption . (3) The aggregate amount of Accreted Value due on any Capital Appreciation Bonds maturing in such Fiscal Year . "Event of Default" shall mean the occurrence of any event designated as such pursuant to Section 6 . 01 hereof . "Expansion Facilities" shall mean improvements , extensions and additions to the System, together with all lands or interest therein, including plants, buildings , machinery, franchises , pipes , mains , fixtures , equipment and all property, real or personal , tangible or intangible, heretofore or hereafter constructed or acquired in order to meet the increased demand upon the System, whether actual or anticipated, created by new users connecting to the System. "Expansion Percentage" as applied to each Series of Bonds , shall mean a fraction having a numerator equal to that portion of the total original principal amount of all Bonds of such Series that are attributable to Expansion Facilities , if any, as shall be determined by the Consultants and set forth in the Project Certificate relating to such Series , and a denominator equal to the total original principal amount of all Bonds of such Series . The Expansion Percentage as to any Series of Bonds issued to refund other Bonds shall be the same fraction as applicable to the refunded bonds . "Federal Securities" shall mean negotiable direct obligations of the United States of America . "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing through the next succeeding September 30, -5- 7624M or such other period as may be prescribed by law as the fiscal year of the Issuer . "Governing Body" shall mean the Town Commission of the Issuer or its successor in function. "Gross Revenues" shall mean all income and moneys received by the Issuer from the Rates or otherwise received by the Issuer or accruing to the Issuer in the management and operation of the System, but excluding Impact Fees . "Guaranteed Entitlement Revenues" means the amount of funds received by the Issuer from the State pursuant to the Florida Revenue Sharing Act of 1972 and constituting the "Guaranteed Entitlement" as defined in Section 218.21(6) , Florida Statutes . "Half Cent Sales Tax" shall mean the amount of funds received by the Issuer from the State pursuant to Part VI , Chapter 218 , Florida Statutes from the local government half-cent sales tax clearing trust fund created by Section 218 . 61(3) , Florida Statutes . "Impact Fees" shall mean all charges separately imposed by the Issuer upon new customers of the System as a non-user capacity charge for a proportionate share of the cost of the acquisition or construction of Expansion Facilities, which are imposed by the Issuer for the purpose of allocating to each such customer a proportionate share of the cost of the additional System capacity made necessary by the inclusion or expected inclusion of such new customers of the System, excluding those charges imposed by the Issuer on persons connecting to the System for the cost of physically connecting thereto, but only to the extent that any such fee or charge has been lawfully levied and collected by the Issuer and may under applicable law be used for the acquisition or construction of the Expansion Facilities or for Impact Fee Debt Service Components , and including any income from the investment of moneys on deposit in the Impact Fee Fund or any other moneys transferred to the Impact Fee Fund pursuant to the provisions of this Resolution. "Impact Fee Debt Service Component" for any Fiscal Year, as applied to the Bonds of any Series, shall mean the component of the Debt Service Requirement for such Series of Bonds , initially set forth in the Project Certificate and thereafter, from time to time as necessary, as determined by the Issuer, which shall be determined by multiplying the Debt Service Requirement for such Series of Bonds by the Expansion Percentage. "Impact Fee Fund" shall mean the Impact Fee Fund established pursuant to Section 4 .03 hereof . "Insurer" shall mean such Person as shall be in the business of insuring or guaranteeing the payment of principal of and -6- 7624M interest on municipal securities and with respect to any Series of Bonds , which shall have insured or guaranteed payment of the principal of or interest on such Bonds . " Interest Account" shall mean the separate account of that name in the Debt Service Fund established pursuant to Section 4 . 03 hereof . "Interest Payment Date" shall be such date or dates for the payment of interest on a Series of Bonds as shall be provided by Supplemental Resolution . " Issuer" shall mean the Town of Highland Beach, Florida . "MBIA" means MBIA Insurance Corporation, a corporation organized under the laws of the State of New York, or any successor thereto . "Maximum Debt Service Requirement" shall mean, as of any particular date of calculation, the greatest annual Debt Service Requirement for the Bonds for the then current or any future Fiscal Year . "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 delineating the details of such Bonds , that shall be the maximum rate of interest such Bonds may at any time bear in the future ( including during such times as such Bonds shall be owned by a Credit Bank) in accordance with the terms of such Supplemental Resolution . "Mayor" shall mean the Mayor of the Issuer or such other person as may be duly authorized by the Issuer to act on his or her behalf . "Moody' s" shall mean Moody' s Investors Service, Inc . , a Delaware corporation, the nationally recognized securities rating firm, and any successor or successors thereto; and if such corporation shall be dissolved or liquidated or shall no longer perform securities rating functions , shall mean any other nationally recognized securities rating firm designated by the Issuer and approved by the Insurer and/or the Credit Bank, as applicable . "Net Revenues" shall mean Gross Revenues less Operating Expenses . "Non-Ad Valorem Debt" shall mean any indebtedness of the Issuer payable from or secured by, in whole or in part , the Non-Ad Valorem Revenues . -7- 7624M FULL BOOKLET IN FILE CABINET PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 28, 1996 NEW ISSUE RATING& (See"Ratings"herein) In the opinion of Bond Counsel,under existing but and assuming continuing compliance with the tax cotenants described herein, • o interest on the 1995 Bonds is err•bidnh&from gross income for*feral income tax purposes and is not an item of tax preference for Tspurposes of the federal alternative minimum tax imposed on individuals and corporations.See,however,`TAX EXEMPTiON"herein for 0 0.6 a description of certain taxes on corporations and for a discussion of certain other tax consequences to Holders of the 1995 Bonds. In =— addition,in the opinion ofar Bond Counsel,the 1995 Bonds e exempt from all present intangible personal property taxes of the State of o rts Florida.The 1995 Bonds are"qualified tax-exempt obligations"as such term is defined in Section 266(6X31 of the Internal Revenue Code m z of 1986,as amended(the"Cade). a«" $4,250,000 (� * lbwn of Highland Beach,Florida E E Water and Sewer Revenue Bonds,Series 1995 cp mm BANE QUALIFIED) _' `" Dated:November 1, 1995 Due:July 1(as shown below) U A Q $u = The captioned Water and Sewer Revenue Bonds, Series 1995 (the"1995 Bonds") of the Tbwn of Highland Beach, Florida (the $r 2 "Ibwn")will be issued as fully registered bonds in the principal denomination of$6,000 or any integral multiple thereof Principal of z = the 1995 Bonds will be payable on July 1 of each year shown below.Interest on the 1995 Bonds will be payable by check or draft mailed o=o on the Interest Payment Date by NationsBank of Florida,N.A,with its designated corporate trust office located in Tkmpa,Florida,as E " Paying Agent,to the registered holders at the addreeeee appearing on the registration books of Tbwn maintained by NationsBank of Florida,N.A.,as Registrar at the close of business on the 15th day(whether or not a Business Day)of the calendar month preceding o each interest payment date or at the request and expense of the bondholder of at least$500,000 in principal amount of 1995 Bonds(or .=1E t all 1996 Bonds if less than$500,000 are outstanding),by bank wire bander for the account of such bondholder,on January 1 and July 1 u transfer = r of each year,oommenmug July 1, 1996. Principal of,and premium,if any on the 1995 Bonds will be payable to the registered holders upon presentation when due at the designated corporate trust office of the Paying Agent. iEiThe 1996 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein. e The 1995 Bonds are being issued(i)to repay a pramiseary tote of the Town incurred in connection with the partial settlement of g litigation involving the Resolution Trust Corporation(See"RTC SETTLEMENT'herein),(ii)to pay a portion of the costs of a foe truck, ▪ fto pay certain capital expenditure'with respect to a new fire station and to reimburse the Tbwn for certain prior expenditures,(iii)to • = fund a debt service resent and(iv)to pey coats and expenses incurred in connection with the issuance and sale of the 1995 Bonds. o == The 1996 Bonds are limited obligations of the Tbwn payable solely from and secured by a pledge of and first priority lien upon the .m T, Pledged Fluids in the manner and to the extent provided in the herein referred to Resolution(which Pledged Punts include the Net e A Revenues and certain Non-Ad Valorem Revenues,as such terms are defined and described herein and in the Resolution).The 1996 moa Bonds shall not constitute a general obligation or an indebtedness of the Tbwn, the State of Florida (the "state"), or any political g d subdivision thereof within the meaning of any constitutional,statutory,charter or other limitation of indebtedness,and neither the full m faith and credit nor the taxing powers of the Tbwn,the State or any political subdivision thereof are pledged as security for the payment E 7e• " 8 of the principal . No owner of any 1995 Bond shall ever have the right to cannel exercise cse redemption of any ad valorem remium, if any,ar interest on 1996 on taxing power to paysuch 1995 Bond or be entitled to payment of such 1995 Bond from any moneys to` R o or property of the Tbwn except from the Pledged Funds. 5" The payment of principal of and interest of the 1995 Bonds is guaranteed by a municipal bond insurance policy to be issued by the o=o MBIA Insurance Corporation simultaneously with the issuance of the 1995 Bonds.See"MUNICIPAL BOND INSURANCE"herein. MBIAb!^ L�jj C e. A U ' This cover page contains certain information for quick reference only.It is not a summary of the issue. Investors must read the — iO entire Official Statement to obtain information essential to the making of an informed investment decision. wma "' mVI AMOUNTS, MATURITIES, INTEREST RATES, PRICES AND YIELDS eEX •Serial Bands Er FInterest a o » Amount Maturity Rab Price Yield �£ c5 _ £ c5• -£ • m o E mooo = V m m U • — $--. —%farm Bonds,due July 1. --Pace = $- ---- ,• ___%TbnnBonds,due July 1,--Price % (rued interest to be added) c 2-a o o The 1995 Bonds are offered when,as and if issued and accepted by the Underwriter,subject to the approving legal opinion of Moyle, E n m g Flanigan, Katz, FitzGerald &Sheehan, PA, lliaet Palm Beach, Florida,Bond Counsel, and certain other conditions. Certain legal vo£'` matters will be passed upon for the lbwn by Caldwell&Pacetti,Palm Beach,Florida,special counsel to the Tbwn.Certain legal matters i o„ will be passed upon for the Underwriter by its mussel,Greenberg'haurig Hoffman lapoff Rosen&Quentel,PA,West Palm Beach, "^x m $o Florida. It is expected that the 1995 Bonds will be available for delivery in New York,New York on or about November 29, 1995. • " ` Stsf(el,Nicolaus& Company Incorporated 1995 "Preliminary;subject to change. FULL BOOKLET IN FILE CABINET • NEW ISSUE RATINGS: (See"Ratings"herein) In the opinion of Bond Counsel, under existing law and assuming continuing compliance with the tax cotenants described herein, interest on the 1995 Bends is excludable(rum gross incovne for federal income as purposes and is not an item of tax preference for purposes of the federal alt naive minimum 62X imposed on individuals and corporations.See,howeter,'MX EXEMPTION'herein for a description of certain taxes on corporations and for a discussion of certain other tax consequences to Holders of the 1995 Bonds. In addition,in the opinion of Bond Counsel,the 1995 Bonds are amp(from all present intangible personal lrtperty Anes of the State of Florida. The 1995 Bands are'qualified tax-exempt obligations"as such teen is defined in Section 265(10(31c the Internal Revenue Code of 1986,as amended(the"Codes). $4s485s000 lbwn of Highland Beach,Florida Water and Sewer Revenue Bonds,Series 1995 (BANK QUALIFTED) Writ) Dated:November 1. 1995 Due July 1(as shown below) The captioned Water and Sewer Revenue Bonds, Series 1995 (the"1995 Bonds") of the Highland Beach. � "Ibwn")will be issued as fully registered bonds in the principal denomination of 85,000 or integralmultiplethereof of the 1995 Bonds will be payable on July 1.of each year shown below Interest on the 1995 Bonds will be payable by Brock or draft mailed on the Interest Payment Date by NatiorsBank of Florida,NA,with its designated corporate trust office located in Tampa,Florida.as Paying Agent,to the registered holders at the addresses appearing on the registration books of lbwn maintained by NationsBank of Florida,NA.,as Registrar at the close of business on the 15th day(whether or not a Business Day)of the calendar month preceding each interest payment date or at the request and expense of the bondholder of at least$500,000 in principal amount of 1996 Bonds(or all 1995 Bonds if less than 8500,000 are outstanding).by bank wire treat for the account of such bondholder,on January 1 andJuly 1 of each er,commencing July the 1996.PPiro ipalat d of,and orttivst office of the Paying Agent. Seeum,if any,on the 1995 Bonds will�"SALE OF CORPORATE TRUST payable to the registered holders upon presentation when due at the designated corpora BUSINESS OF NATIONSBANK OF FLORIDA,NA"herein. The 1995 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein. The 1995 Bonds are being issued(i)to repay a promissory note of the Town incurred in connection with the partial settlement of litigation involving the Resolution Trust Corporation(See"RTC SETTLEMENT'herein),(ii)to pay a portion of the costs of a fire truck, to pay certain capital expenditures with respect to a new fire station and to reimburse the lbws fir certain prior expenditures.(iii)to fund a debt service reserve and(iv)to pay costs and expenses incurred in connection with the issuance and sale of the 1995 Bonds. The 1995 Bonds are limited obligations of the Town payable solely from and secured by a pledge of and first priority lien upon the Pledged Funds in the manner and to the extent provided in the herein referred to Resolution(which Pledged Funds include the Net Revenues and certain Non-Ad Valorem Revenues,as such terms are defined and deathbed herein and in the Resolution).The 1995 Bonds shall not constitute a general obligation or an indebtedness of the lbwn, the State of Florida (the "State"), or any political subdivision thereof within the meaning of any constitutional,statutory,charter or other limitation of indebtedness,and neither the full faith and aedit nor the taxing powers of the lbwn,the State or any political subdivision thereof are pledged as security for the payment of the principal of, redemption premium,if any,or interest on 1995 Bonds No owner of any 1995 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such 1995 Bond or be entitled to payment of such 1995 Bond from any moneys or property of the Town except from the Pledged Finder The payment of principal of and interest on the 1995 Bonds is guaranteed by a municipal bond insurance policy to be issued by the MBIA Insurance Corporation simultaneously with the issuance of the 1995 Bonds.See"MUNICIPAL BOND INSURANCE"herein. MBIA This corer page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. AMOUNTS. MATURITIES, INTEREST RATES, PRICES AND YIELDS $2,715,000 Serial Bonds Interest Interest Amount Maturity Rate Price Yield Amount Maturity Bate Price Yield $ 90,000 2001 4.30% 99505% 4.40% 8315,000 2007 4.95% 99.126% 505% 95,000 2002 4.40 99.431 4.50 330,000 2008 5.10 99.079 5.20 95,000 2003 4.50 99.361 4.60 350,000 2009 5.20 99.035 5.30 100,000 2004 4.60 99.296 4.70 365,000 2010 5.30 98.994 5.40 290,000 2005 4.70 99.234 4.80 385,000 2011 5.40 98.956 5.50 300,000 2006 4.80 99.177 4.90 $1,770,000. 5.25%Term Bonds,due July 1,2015—Price 95.863% (accrued interest to be added) The 1995 Bonds are offered when,as and if issued and accepted by the Underwrten subject to the approving legal opinion of Moyle, matters other conditions. Certain legal asn. Katz,l bepassed upon & Sheehan, PA, West Palm Beach, Florida,Bond Counsel, and n far the Town by Caldwell Pacetti,Palm Beach.Florida,special counsel certain the lbwn.Certain legal matters ewill dp upon f r the be passed for the Underwriter by its wunsel.Greenberg liaurig Hoffman Lipoff Rosen &Quentel,PA.West Palm Beach. Florida.It is expected that the 1995 Bonds will be available for delivery in New York,New York on or about November 29. 1995. Stifel,Nicolaus 8c Company hworponzted November 7,1995 "Non-Ad Valorem Revenues" means the Cigarette Tax Revenues , the Guaranteed Entitlement Revenues , the Half-Cent Sales Tax and the Occupational License Revenue Sharing Funds . "Occupational License Revenue Sharing Funds" shall mean the amount of funds received by the Issuer from Palm Beach County, Florida as a portion of revenues derived by Palm Beach County, Florida from occupational license taxes and required to be paid to the Issuer pursuant to Chapter 205 , Florida Statutes . "Operation and Maintenance Fund" shall mean the Operation and Maintenance Fund created pursuant to Section 4 . 03 hereof . "Operating Expenses" shall mean the Issuer ' s expenses for operation, maintenance, repairs and replacements with respect to the System and including , without limiting the generality of the foregoing , administration expenses, insurance and surety bond premiums , the fees to the provider of a Reserve Account Insurance Policy or Reserve Account Letter of Credit (but excluding any expenses or reimbursement obligations for draws made thereunder) , the fees of any rebate compliance service or of Bond Counsel relating to compliance with the provisions of Section 148 of the Code, legal and engineering expenses , payments in lieu of taxes , ordinary and current rentals of equipment or other property, payments by the Issuer for the purchase of bulk potable water , refunds of moneys lawfully due to others , 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 respect of activities such as those involved in the operation of municipal water and sewer systems similar to the System, as the case may be, and disbursements for the expenses , liabilities and compensation of any Paying Agent or Registrar under this Resolution, but not including 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 the Gross Revenues or minor capital expenditures necessary for the proper and economical operation or maintenance of the System, and further excluding any provision for interest , depreciation, amortization or similar charges . "Original Expenditures" means amounts previously paid by the Issuer towards the purchase of a new fire truck for the Issuer , towards repairs to a raw water supply well for the System and in partial settlement of Resolution Trust Corporation, et . al . v Town of Highland Beach, Case No . 87-8483 CIV-ZLOCH in the United States District Court for the Southern District of Florida . "Outstanding" shall mean all Bonds which have been authenticated and delivered under this Resolution except , -8- 7624M (1) Bonds for which irrevocable (including revocable notice which shall have become irrevocable) notice of redemption has been given and for which moneys have been deposited with any Paying Agent (s) solely for the payment of such Bonds, (2) any Bond surrendered by the Holder thereof in exchange for another Bond or other Bonds under Sections 2 . 06, 2 . 07 or 2 . 08 hereof , (3) Bonds deemed to have been paid pursuant to Section 8 . 01 hereof, and (4) Bonds cancelled after purchase in the open market or because of payment at or redemption prior to maturity. "Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant to resolution of the Governing Body, and its successors or assigns, and any other Person which may at any time be substituted in its place pursuant to resolution of the Governing Body. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust , any unincorporated organization or governmental entity. "Pledged Accounts" shall mean, until applied in accordance with the provisions of this Resolution, all moneys, including investments thereof , in the funds and accounts established hereunder, except ( i) moneys, including investments thereof, in any Rebate Fund and the Impact Fee Fund, and ( ii) to the extent moneys on deposit in a subaccount of the Reserve Account and/or an account of the Construction Fund are pledged solely for the payment of the Series of Bonds for which such account was established in accordance with the provisions hereof . "Pledged Funds" shall mean the Net Revenues , to the extent allowed in Section 4 . 06 hereof the Impact Fees, the Pledged Accounts, and to the extent specified in Section 4 . 10 hereof the Non-Ad Valorem Revenues . "Principal Account" shall mean the separate account of that name in the Debt Service Fund established pursuant to Section 4 . 03 hereof . "Project" shall mean any undertaking of the Issuer the cost of which is to be paid, in whole or in part, from amounts in the Construction Fund. "Project Certificate" shall mean that certificate of the Consultants filed with the Issuer at or prior to delivery of any Series of Bonds setting forth the estimated total cost of the Project to be financed with such Bonds, the estimated cost of the Expansion Facilities portion of the Project, the Expansion Percentage and the Impact Fee Debt Service Component . "Promissory Note" means that certain Promissory -Note of the Issuer , in the original principal amount of $3 , 000, 000, dated June 9 , 1995 . -9- 7624M "Rates" shall mean the charges imposed by the Issuer for the use of the services of the System, other than any Impact Fees . "Rebate Fund" shall mean any Rebate Fund established pursuant to Section 4 . 07 hereof . "Redemption Price" shall mean, with respect to any Bond or portion thereof, the principal amount or portion thereof, plus the applicable premium, if any, payable upon redemption thereof . "Registrar" shall mean any registrar for the Bonds appointed by or pursuant to resolution of the Governing Body and its successors and assigns , and any other Person which may at any time be substituted in its place pursuant to resolution of the Governing Body. "Renewal and Replacement Fund" shall mean the Renewal and Replacement Fund established pursuant to Section 4 . 03 hereof . "Renewal and Replacement Fund Requirement" shall mean, as of any date of calculation, an amount of money equal to 5% of the Gross Revenues of the System for the preceding Fiscal Year or such other greater or lesser sum as shall be recommended to the Issuer by the Consultants and approved by the Governing Body as a sum appropriate for the Renewal and Replacement Fund considering the purposes therefor as prescribed by this Resolution, the past performance and existing condition of the System and the probable future requirements of the Issuer, in keeping with sound water and sewer system management practices . "Reserve Account" shall mean the separate account of that name in the Debt Service Fund established pursuant to Section 4 . 03 hereof . "Reserve Account Insurance Policy" shall mean an insurance policy deposited in the Reserve Account in lieu of or in partial substitution for cash on deposit therein pursuant to Section 4 . 05(B) (4) . "Reserve Account Letter of Credit" shall mean a Credit Facility (other than a Reserve Account Insurance Policy) issued by any bank or national banking association, insurance company or other financial institution and then on deposit in the Reserve Account in lieu of or in partial substitution for cash on deposit therein pursuant to Section 4 . 05(B) (4) hereof . "Reserve Account Requirement" shall mean, for a subaccount in the Reserve Account , unless otherwise provided with respect to a Series of Bonds by Supplemental Resolution adopted prior to issuance of such Series, as of any date of calculation, an amount of money equal to the lesser of (1) the Maximum Debt Service Requirement for the Series of Bonds to which such subaccount -10- 7624M relates , (2) 125% of the average annual Debt Service Requirement for the Series of Bonds to which such subaccount relates calculated as of the date of issuance of such Series , or (3) 10% of the aggregate initial principal amount of the Series of Bonds to which such subaccount relates . In computing the Reserve Account Requirement , the interest rate on Variable Rate Bonds shall be assumed to be the lesser of (a) the 30-year Revenue Bond Index most recently published by The Bond Buyer but in no event published more than two weeks prior to the date of issuance of such Variable Rate Bonds or (b) the Maximum Interest Rate . "Resolution" and "this Resolution" shall mean this instrument , as the same may from time to time be amended, modified or supplemented by any and all Supplemental Resolutions . "Revenue Fund" shall mean the Revenue Fund established pursuant to Section 4 . 03 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 or 2 . 02 hereof or in a Supplemental Resolution authorizing the issuance by the Issuer of such Bonds as a separate Series , regardless of variations in maturity, interest rate, Amortization Installments or other provisions . "Series 1995 Bonds" shall mean the Issuer ' s Water and Sewer Revenue Bonds , Series 1995 , authorized pursuant to Section 2 . 02 hereof . "Series 1995 Project" means the payment of a portion (other than the portion included in the meaning of Original Expenditures) of the cost of acquiring a new fire truck for the Issuer and of a portion of the costs of certain capital expenditures with respect to a new fire station for the Issuer . "S&P" shall mean Standard and Poor ' s Ratings Group, a division of The McGraw Hill Companies , Inc . , the nationally recognized securities rating firm, and any successor or successors thereto; and if such corporation shall be dissolved or liquidated or shall no longer perform securities rating functions , shall mean any other nationally recognized securities rating firm designated by the Issuer and approved by the Insurer and/or the Credit Bank, as applicable . "State" shall mean the State of Florida . "Subordinated Indebtedness" shall mean any indebtedness of the Issuer , subordinate and junior to the Bonds , issued in accordance with the provisions of Section 5 . 01 hereof , and any Variable Rate _11- 7624M Bonds which become Subordinated Indebtedness in accordance with Section 5 . 02 (F) hereof . "Supplemental Resolution" shall mean any resolution of the Issuer amending or supplementing this Resolution, adopted and becoming effective prior to the issuance of the Series 1995 Bonds or in accordance with the terms of Article VII hereof . "System" shall mean the water supply, treatment and distribution system and the sewage collection, transmission and disposal system owned and operated by the Issuer . "Taxable Bond" shall mean any Bond which states , in the body thereof , that the interest income thereon is includable in the gross income of the Holder thereof for federal income taxation purposes or that such interest is subject to federal income taxation. "Term Bonds" shall mean those Bonds which shall be designated as Term Bonds hereby or by Supplemental Resolution and which are subject to mandatory redemption by Amortization Installments . "Variable Rate Bonds" shall mean Bonds issued with a variable, adjustable, convertible or other interest rate which at the date of issue is not fixed as one or more stated percentages for the entire term of such Bonds . The terms herein, "hereunder , " "hereby, " "hereto , " "hereof , " and any similar terms , shall refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution . Words importing the singular number include the plural number , and vice versa . SECTION 1 . 02 . Authority for This Resolution . This Resolution is adopted pursuant to the provisions of the Act . SECTION 1 . 03 . Resolution to Constitute Contract. In consideration of the purchase and acceptance of any or all of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be deemed to be and shall constitute a contract between the Issuer and the Holders from time to time of the Bonds and shall be a part of the contract of the Issuer with any Credit Bank and any Insurer . The pledge made in this Resolution and the provisions , covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit , protection and security of the Holders of any and all of the Bonds and for the benefit , protection and security of any Credit Bank and any Insurer . All of the Bonds , regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in or pursuant to this Resolution . -12- 7624t1 SECTION 1 . 04 . Findings . It is hereby ascertained , determined and declared as follows : (A) The Issuer deems it necessary, desirable and in the best interest of the Issuer that the Promissory Note be paid, that the Series 1995 Project be undertaken and that the Original Expenditures be reimbursed to the Issuer . (B) The estimated Gross Revenues and Non-Ad Valorem Revenues to be derived in each year hereafter will be sufficient to pay Operating Expenses , the principal of and interest on the Bonds , as the same become due, and all other payments provided for in this Resolution . (C) No Bondholder , Credit Bank or Insurer shall ever be entitled to compel the payment of the principal of and interest on the Bonds or any other payments provided for in this Resolution from any funds or revenues of the Issuer other than the sources herein provided in accordance with the terms hereof . [End of Article I ] -13- 7624M ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS SECTION 2 . 01. Authorization of Bonds . The Issuer hereby authorizes the issuance of Bonds of the Issuer to be designated as "Town of Highland Beach, Florida, 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 may hereafter be provided by Supplemental Resolution or as limited by the Act or by other applicable law. The Bonds may, if and when authorized by the Issuer pursuant to this Resolution or Supplemental 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 this Resolution and by Supplemental Resolution. The Bonds shall be issued in such denomination or denominations and such form, whether coupon or registered; shall be dated such date or dates; shall bear such numbers; shall be payable at such place or places; shall contain such redemption provisions; shall have such Paying Agent(s) and Registrar(s) ; shall mature on such date or dates in such years and amounts; and the proceeds shall be used in such manner all as determined by this Resolution and by Supplemental Resolution. The issuer may issue Bonds which may be secured by a Credit Facility or by a Bond Insurance Policy all as shall be determined by this Resolution or by Supplemental Resolution. SECTION 2 . 02 . Authorization and Description of Series 1995 Bonds . A Series of Bonds entitled to the benefit, protection and of this Resolution is hereby security authorized in an aggregate principal amount not to exceed $5, 500, 000 for the principal purposes of paying the Promissory Note, paying the cost of the Series 1995 Project and reimbursing the Original Expenditures . Such Series shall be designated as, and shall be distinguished from the Bonds of all other Series by the title "Town of Highland Beach, Florida, Water and Sewer Revenue Bonds , Series 1995 . " The Series 1995 Bonds shall be dated such date as may be set forth by Supplemental Resolution of the Issuer; shall be issued as fully registered Bonds; and shall be numbered consecutively from one upward in order of maturity preceded by the letter R; shall _14_ 7624M be in denominations of $5 , 000 and integral multiples thereof and shall bear interest at a rate or rates not exceeding the maximum rate permitted by law (calculated on the basis of a 360-day year of twelve 30-day months) , payable in such manner and on such dates in such years ; shall consist of such amounts of Serial Bonds , Term Bonds , Variable Rate Bonds and Capital Appreciation Bonds, maturing in such amounts and on such dates in such years ; shall be payable in such place or places ; shall have such Paying Agent (s) and Registrar (s) ; and shall contain such redemption provisions ; all as the Issuer shall hereafter provide by Supplemental Resolution . The principal of or Redemption Price, if applicable, on the Series 1995 Bonds is payable when due upon presentation and surrender of the Series 1995 Bonds at the office of the Paying Agent . Interest payable on any Series 1995 Bond on any Interest Payment Date will be paid by check or draft of the Paying Agent mailed on the Interest Payment Date to the Holder in whose name such Bond shall be registered at the close of business on the fifteenth day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date, or , unless otherwise provided by Supplemental Resolution, at the written request and expense of any Holder of at least $500 , 000 in principal amount of Series 1995 Bonds (or of all Series 1995 Bonds if less than $500 , 000 shall be unpaid) , by bank wire transfer for the account of such Holder . In the event the interest payable on any Series 1995 Bond is not punctually paid or duly provided for by the Issuer on such Interest Payment Date , such defaulted interest will be paid to the Holder in whose name such Bond shall be registered at the close of business on a special record date for the payment of such defaulted interest as established by notice sent by the Issuer to such Holder not less than ten ( 10) days preceding such special record date . All payments of principal of or Redemption Price, if applicable, and interest on the Series 1995 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 1995 Bond Proceeds . The proceeds derived from the sale of the Series 1995 Bonds , including accrued interest and premium, if any, shall be applied by the Issuer as directed by Supplemental Resolution adopted prior to the issuance of the Series 1995 Bonds . 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 Mayor and the official seal (or a facsimile thereof ) of the Issuer shall be impressed or 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 -15- 7624M 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 . 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 same provisions, limitations and conditions as the definitive Bonds , except as to the denominations thereof , one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations authorized by the Issuer by resolution of the Governing Body, and with such omissions, insertions and variations as may be appropriate to temporary Bonds . The Issuer , at its own expense, shall prepare and execute definitive Bonds , which shall be authenticated by the Registrar . Upon the surrender of such temporary Bonds for exchange, the Registrar , without charge to the Holder thereof , shall deliver in exchange therefor definitive Bonds , of the same aggregate principal amount and 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 -16- 7624M 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 such Holder ' s 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 may incur . All Bonds so surrendered or otherwise substituted shall be cancelled by the Registrar . If any of the Bonds shall have matured or been called for redemption 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 Bond 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 and shall be entitled to the same benefits and security as the Bond so lost , stolen or destroyed . SECTION 2 . 08 . Neootia}2ility, Interchangeability and Transfer . The Bonds issued under this Resolution shall be and have all the qualities and incidents of negotiable instruments under the laws 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 Registrar shall keep on behalf of the Issuer books for the registration and transfer of the 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 such Holder ' s attorney-in-fact duly authorized in writing , Bonds 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 . 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 such Holder ' s attorney-in-fact 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 such Holder ' s duly authorized attorney-in-fact . Upon the transfer of any such Bond, the Issuer -17- 7624M 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 shall 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 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 such Holder ' s 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 , shall forthwith ( a) following the fifteenth day of the calendar month next preceding 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 . In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Issuer shall execute and the Registrar shall authenticate and deliver such Bonds in accordance with the provisions of this Resolution . Execution of Bonds by the Mayor and the 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 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 any Bonds which shall have been selected for redemption or , in the case of any proposed redemption of Bonds , during the fifteen ( 15) days next preceding the date of selection of Bonds to be redeemed . SECTION 2 . 09 . cau2QI:Lj3nad,q. The Issuer , at its discretion, may by Supplemental Resolution authorize the issuance of Coupon Bonds, registrable as to principal only or as to both principal and interest . Such Supplemental Resolution shall provide for the negotiability, transfer , interchangeability, denominations and -18- 7624M form of such Bonds and coupons appertaining thereto. Coupon Bonds (other than Taxable Bonds) shall only be issued if an opinion of Bond Counsel is received to the effect that issuance of such Coupon Bonds will not adversely affect the exclusion of the interest payable on such Bonds from gross income for federal income tax purposes . SECTION 2 . 10 . Form of Bond . 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, the Bonds shall be in substantially the following form with such omissions, insertions and variations as may be necessary and/or desirable and approved by the Mayor or the Clerk prior to the issuance thereof (which necessity and/or desirability and approval shall be evidenced conclusively by the Issuer ' s delivery of the Bonds to the purchaser or purchasers thereof) : [This space intentionally blank. ] • _19_ 7624M No. R UNITED STATES OF AMERICA STATE OF FLORIDA TOWN OF HIGHLAND BEACH, FLORIDA 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, that the Town of Highland Beach (the "Issuer") , a municipal corporation and political subdivision created and existing under and by virtue of the laws of the State of Florida , for value received, hereby promises to pay, solely from the sources of payment hereinafter described, to the Registered Holder identified above, or registered assigns as hereinafter provided, the Principal Amount identified above on the Maturity Date identified above, subject to prior redemption as hereinafter provided, together with 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 (calculated on the basis of a 360-day year of twelve 30-day months) identified above on 1 and 1 of each year commencing until such Principal Amount shall have been paid or provided for . 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 payment of public and private debts . Such Principal Amount and the premium, if any, on this bond, are payable when due upon presentation and surrender hereof at the principal office of , , as paying agent , or such other paying agent as the Issuer shall hereafter duly appoint (the "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 , or such other registrar as the Issuer shall hereafter duly appoint (the "Registrar") , at the close of business on the date which shall be -20- 7624M the fifteenth day (whether or not a Business Day) ofthe calendar month next preceding each interest payment date and shall be paid by a check or draft of the Paying Agent mailed to such Registered Holder at the address appearing on such registration books or , in the case of a Holder of at least $500, 000 principal amount of Bonds (or of all Bonds if less than $500, 000 shall be unpaid) , and at the written request and expense of such Registered Holder , by bank wire transfer for the account of such Holder . In the event interest payable on this bond is not punctually paid or duly provided for by the Issuer on such interest payment date, payment of each installment of such defaulted interest shall be made to the person in whose name this bond shall be registered at the close of business on a special record date for the payment of such defaulted interest as established by notice sent by the Issuer to such Registered Holder not less than ten ( 10) days preceding such special record date. 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 IN THIS PLACE. This bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Registrar . IN WITNESS WHEREOF, the Town of Highland Beach, Florida, has issued this bond and has caused the same to be executed by the manual or facsimile signature of its Mayor and attested and countersigned by the manual or facsimile signature of its Clerk and its official seal or a facsimile thereof to be affixed or reproduced hereon, all as of the day of , 19_ TOWN OF HIGHLAND BEACH, FLORIDA (SEAL) By Mayor ATTESTED AND COUNTERSIGNED: Clerk -21- 7624M 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 (Provisions on Reverse Side of Bond) This bond is one of an authorized issue of bonds of the Issuer 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 under the authority of and in full compliance with the Constitution and laws of the State of Florida, particularly Chapter 166, Part II , Florida Statutes, Article VIII , Section 2 of the Constitution of the State of Florida , the Charter of the Issuer, and other applicable provisions of law (the "Act" ) , and a resolution duly adopted by the Town Commission of the Issuer on , 19_, as amended and supplemented (the "Resolution") , and is subject to all the terms and conditions of the Resolution. The principal of or Redemption Price, if applicable, of and interest on this bond are payable solely from and secured by a pledge of the Pledged Funds, as defined in and in the manner and to the extent described in the Resolution. It is expressly agreed by the registered Holder of this bond that the full faith and credit of the Issuer is not pledged to the payment of the principal of or Redemption Price, if applicable, of and interest on this bond and that the registered Holder shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer to the payment of such principal , Redemption Price, if applicable, and interest. This bond and the obligation evidenced hereby shall not constitute a lien upon any property of the Issuer, except the Pledged Funds, and shall be payable solely from the Pledged Funds in accordance with the terms of the Resolution. -22- 7624M (INSERT REDEMPTION PROVISIONS) Notice of redemption, unless waived, is to be given by the Registrar by mailing an official redemption notice by first class mail , postage prepaid , at least 30 days and not more than 60 days prior to the date fixed for redemption to the registered holders of the Bonds to be redeemed at such holders ' addresses shown on the registration books maintained by the Registrar or at such other addresses as shall be furnished in writing by such registered holders to the Registrar ; provided , however , that no defect in any such notice to any registered holder of Bonds to be redeemed nor failure to give such notice to any such registered holder shall in any manner defeat the effectiveness of a call for redemption as to all other registered holders of Bonds to be redeemed. Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds 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 . Any notice of redemption prepared and mailed as provided in the Resolution shall be conclusively presumed to have been duly given, whether or not the registered Holder receives the notice. 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 office of the Registrar upon the surrender of this bond together with a written instrument of transfer satisfactory to the Registrar duly executed by the Registered Holder or such Holder ' s 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, prescribed in the Resolution . The Issuer , the Registrar and any Paying Agent shall 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 and the Registrar shall not be obligated to make any exchange or transfer of Bonds during the fifteen ( 15) days next preceding the date of selection of Bonds to be redeemed, or to make any exchange or transfer of Bonds selected for redemption . It is hereby certified and recited that all acts , conditions and prerequisites required to exist , to happen and to be performed precedent to and in connection with the issuance of this bond, exist , have happened and have been performed, in regular and due form and time as required by the Constitution and laws of the State of Florida applicable thereto, and that the issuance of the Bonds does not violate any constitutional or statutory limitations or provisions . -23- 7624M LEGAL OPINION [Insert appropriate approving opinion of bond counsel . The following abbreviations, when used in the inscription on the face of the within bond, shall be construed as though they were written out in full according to applicable laws or regulations : TEN COM -- as tenants in common TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF TRANS MIN ACT -- (Cust . ) Custodian for under Uniform Transfers to Minors Act of (State) Additional abbreviations may also be used though not in list above. -24- 7624M 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 attorneys 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. 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. [End of Article II] -25- 7624M ARTICLE III REDEMPTION OF BONDS SECTION 3 . 01 . privilege of Redemption. Any Series of Bonds may be subject to redemption prior to maturity in the manner and on such date or dates as specified by a Supplemental Resolution adopted prior to the issuance of such Series of Bonds . 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 . For purposes of any optional redemption of less than all of the Outstanding Bonds of a Series , the amounts of the particular maturity or maturities to be redeemed shall be selected by the Issuer . 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 by the Registrar by such method as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Bonds or portions of Bonds in principal amounts of $5 , 000 and integral multiples thereof . If less than all of the Outstanding Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the Issuer and Paying Agent ( if the Registrar is not the Paying Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed . SECTION 3 . 03 . Notice of Redemption. Unless waived by any Holder of Bonds to be redeemed, notice of any redemption of Bonds shall be given by the Registrar on behalf of the Issuer by mailing a copy of an official redemption notice by first class mail , postage prepaid, at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to each Holder of Bonds to be redeemed at the address of such Holder shown on the registration books maintained by the Registrar . Every official notice of redemption shall be filed by the Registrar with the Paying Agent and shall be dated and shall state : ( 1) the redemption date, (2 ) the Redemption Price, (3) if less than all outstanding Bonds for a maturity are to be redeemed, the number (and, in the case of a partial redemption -26- 7624M of any Bond, the principal amount) of each Bond of such maturity to be redeemed, (4) that on the redemption date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (5) that such Bonds to be redeemed, whether as a whole or in part, are to be surrendered for payment of the Redemption Price plus accrued interest at the office of the Paying Agent . A notice of redemption may be conditioned upon the availability of funds to pay the Redemption Price of the Bonds to be redeemed on the redemption date, and in such event , the notice of redemption shall expressly state that it is subject to such condition. In the event that a conditional notice of redemption is given and in the event that funds are not available to pay the Redemption Price of the Bonds so called for redemption, such Bonds shall continue to be Outstanding as if such notice had not been given. Provided, however, that in such event the Registrar shall on behalf of the Issuer mail a notice to the Holders of the Bonds subject to such conditional notice stating that the condition to the call was not satisfied and that the Bonds shall remain outstanding . Prior to any redemption date, the Issuer shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of and accrued interest on all the Bonds or portions of Bonds which are to be redeemed on that date . The failure to give any notice of redemption, or any defect therein, shall not affect the validity of any proceedings for the redemption of any Bond with respect to which no such failure or defect has occurred. Any notice prepared and mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. 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 such Holder ' s attorney-in-fact duly authorized in writing) and the Issuer shall execute and the Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds, of the same interest rate and maturity, and of any authorized denomination as requested by such Holder , in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bonds so surrendered . SECTION 3 . 05 . payment of Redeemed Bonds . Official notice of redemption having been given substantially as aforesaid, the Bonds -27- 7624M or portions of Bonds 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 . Each check or other transfer of funds issued by the Registrar and/or Paying Agent for the purpose of the payment of the Redemption Price of Bonds being redeemed shall bear the CUSIP number identifying , by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer . Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest . All Bonds which have been redeemed shall be cancelled by the Registrar and shall not be reissued . [End of Article III ] _28_ 7624M ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 4 . 01 . ponds Not to be Indebtedness of Issuer . The Bonds shall not be or constitute general obligations or indebtedness of the Issuer within the meaning of any constitutional or statutory provision, but shall be special obligations of the Issuer, payable solely from and secured by a pledge of the Pledged Funds in accordance with the terms of this Resolution. The Issuer may cause any Series of Bonds to be payable from and secured by a Credit Facility or a Bond Insurance Policy not applicable to any one or more other Series of Bonds . No Holder of any Bond or any Credit Bank or any Insurer shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer to pay such Bond or be entitled to payment of such Bond from any moneys of the Issuer except the Pledged Funds, in the manner provided herein. 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 the Pledged Funds; provided, however, a Series of Bonds may be further secured by a Credit Facility or any Bond Insurance Policy not applicable to any one or more other Series of Bonds, as shall be provided by Supplemental Resolution, in addition to the security provided herein. The Issuer does hereby irrevocably pledge the Pledged Funds in the manner provided in this Resolution to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds . SECTION 4 . 03 . Funds and Accounts . The Issuer covenants and agrees to establish with one or more Authorized Depositories the following separate funds: (1) "Water and Sewer Construction Fund" (the "Construction Fund" ) , (2) "Water and Sewer Revenue Fund" (the "Revenue Fund" ) , (3) "Water and Sewer Operation and Maintenance Fund" (the "Operation and Maintenance Fund") , (4) "Water and Sewer Debt Service Fund" (the "Debt Service Fund") , (5) "Water and Sewer Renewal and Replacement Fund" (the "Renewal and Replacement Fund" ) , (6) "Water and Sewer Impact Fee Fund" (the "Impact Fee Fund") . -29- 7624M The Issuer shall maintain in the Debt Service Fund four accounts : ( 1) the "Interest Account, " (2) the "Principal Account, " (3) the "Bond Amortization Account, " and (4) the "Reserve Account, " and therein, a subaccount for each Series of Bonds to be secured by the Reserve Account, unless under the provisions of the Supplemental Resolution (s) authorizing more than one Series of Bonds, more than one Series of Bonds are to be jointly secured by a single subaccount in the Reserve Account, in which case a single subaccount in the Reserve Account may secure more than one Series of Bonds . The Issuer shall at any time and from time to time appoint one or more Authorized Depositaries to hold, for the benefit of the Issuer and/or the Bondholders, any one or more of the funds and accounts established hereby. Such depositary or depositaries shall perform at the direction of the Issuer the duties of the Issuer in depositing, transferring and disbursing moneys to and from each of such funds and accounts as herein set forth, and all records of such depositary in performing such duties shall be open at all reasonable times to inspection by the Issuer and its agents and employees . SECTION 4 . 04 . Construction Fund. The Issuer shall establish within the Construction Fund a separate account for each Series of Bonds the proceeds of which are to be deposited in whole or in part in the Construction Fund. Moneys in each account of the Construction Fund, until applied in payment of any item of the Cost of a Project, shall be held in trust by the Issuer and shall be subject to a lien and charge in favor of the Holders of the Series of Bonds the proceeds of which were deposited in such account and held 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 or Supplemental Resolution, and there may be paid into the Construction Fund, at the option of the Issuer, any moneys received for or in connection with a Project by the Issuer from any other source. The Issuer may make disbursements or payments from the Construction Fund to pay the Cost of a Project . Promptly after the date of the completion of a Project , and after paying or making provisions 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 applicable account of the Construction Fund in (1) another account of the -30- 7624M Construction Fund established in connection with another Series of Bonds for which the Authorized Issuer Officer has 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, and (3) ( i ) the Debt Service Fund or (ii ) such other fund or account of the Issuer , including those established hereunder , as shall be determined by the Governing Body, provided the Issuer has received an opinion of Bond Counsel to the effect that such transfer to such other fund or account shall not adversely affect the exclusion, if any, of interest on the Bonds from gross income for federal income tax purposes . SECTION 4 . 05 . Flow of Funds . (A) Revenue Fund . The Issuer shall deposit all Gross Revenues into the Revenue Fund promptly upon the receipt thereof . If required by Section 4 . 10 hereof , the Issuer shall also deposit Non-Ad Valorem Revenues to the Revenue Fund . On or before the last Business Day of each month, the moneys in the Revenue Fund shall be deposited or credited in the following manner and in the following order of priority: ( 1) Operation and Maintenance Fund . The Issuer shall deposit into or credit to the Operation and Maintenance Fund such sum as shall be necessary to cause the moneys in the Operation and Maintenance Fund to be sufficient to pay Operating Expenses for the next succeeding month; provided, however , that subject always to the provisions of Section 5 . 06 hereof , the Issuer shall transfer moneys from the Revenue Fund to the Operation and Maintenance Fund at any time to pay Operating Expenses to the extent there shall be a deficiency in the moneys in the Operation and Maintenance Fund for such purpose . Moneys in the Operation and Maintenance Fund shall be paid out from time to time by the Issuer to pay reasonable and necessary Operating Expenses as and when the same shall be incurred . (2) Debt Service Fund . Next , the Issuer shall deposit into or credit to the Debt Service Fund such sums as shall be required for all of the deposits , transfers and payments described in Section 4 . 05 (B) hereof . (3) Rebate Fund . Next , the Issuer may, at its option, deposit into or credit to any Rebate Fund the amount described in Section 4 . 07 ( 1) hereof . (4 ) Subordinated Indebtedness . Next , the Issuer shall apply available moneys in the Revenue Fund to the payment of the debt service for any Subordinated Indebtedness . ( 5) Renewal and Replacement Fund . Next , whenever the balance on deposit in the Renewal and Replacement Fund shall be less than the Renewal and Replacement Fund Requirement , the Issuer shall -31- 7624M (i) if the amount on deposit in the Renewal and Replacement Fund is less than 50% of the Renewal and Replacement Fund Requirement , deposit into or credit to the Renewal and Replacement Fund the lesser of the balance of all moneys remaining in the Revenue Fund or 5% of the deposits to the Revenue Fund during the current month, to the extent necessary to cause the moneys in the Renewal and Replacement Fund to equal 50% of the Renewal and Replacement Fund Requirement, and (ii) if the amount on deposit in the Renewal and Replacement Fund is equal to or greater than 50% but less than 100% of the Renewal and Replacement Fund Requirement, deposit into or credit to the Renewal and Replacement Fund the lesser of the balance of all moneys remaining in the Revenue Fund or 2% of the deposits to the Revenue Fund during the current month, to the extent necessary to cause the moneys in the Renewal and Replacement Fund to equal 100% of the Renewal and Replacement Fund Requirement. If at any time the balance on deposit in the Renewal and Replacement Fund shall exceed the Renewal and Replacement Fund Requirement, such excess may be withdrawn by the Issuer from the Renewal and Replacement Fund and deposited into the Revenue Fund . The moneys in the Renewal and Replacement Fund shall be applied by the Issuer to the payment of the cost of extensions, improvements and additions to, or renewals and replacements of the capital assets of, or extraordinary repairs of the System; provided, however, that whenever moneys in the Debt Service Fund and Impact Fee Fund shall be insufficient to pay all or any part of the principal of, Redemption Price or interest on any of the Bonds , moneys in the Renewal and Replacement Fund shall first be used to supplement the Debt Service Fund to the extent necessary to prevent a default on the Bonds . (6) Excess Revenues . All funds remaining in the Revenue Fund shall be retained therein, provided, that at the end of each Fiscal Year of the Issuer , if all payments required to have been made hereunder as of such date shall have been made, the Issuer may withdraw the balance of all moneys remaining on deposit to the credit of the Revenue Fund and apply the same in any manner permitted by the laws of the State. (B) Debt Service. The moneys on deposit in the Debt Service Fund shall be applied by the Issuer in the manner provided herein solely for the payment of the principal of or Redemption Price, if applicable, of and interest on the Bonds and for the reimbursement to any Credit Bank of any payments made by it for such purpose, or for the purchase of , and reinstatement of the maximum limits of, any Reserve Account Insurance Policy and/or Reserve Account Letter of Credit, and shall not be available for any other purpose. The moneys transferred from the Revenue Fund to the Debt Service Fund shall be deposited or credited in the following manner and in the following order of priority (except that payments pursuant to (2) and (3) below shall be on a parity) : ( 1) Interest Account . The Issuer shall deposit into or credit to the Interest Account one-sixth (1/6) of the amount of -32- 7624M interest becoming due on all Outstanding Bonds through the next succeeding Interest Payment Date, provided that no payment or only a partial payment need be made at any time to the extent that the amount on deposit in the Interest Account is, or together with such partial payment shall be, an amount sufficient to pay all interest becoming due on all Outstanding Bonds on the next succeeding Interest Payment Date, and, provided, that such monthly payments may be decreased proportionately by a Supplemental Resolution to take into account any deposit made to the Interest Account as capitalized interest upon the issuance of a Series of Bonds, and provided further in each month intervening between the date of delivery of a Series of Bonds (beginning with the month following the month in which such delivery takes place) and the next succeeding Interest Payment Date, the amount specified in this subsection shall be that amount which when multiplied by the number of deposits to the Interest Account required to be made during such period will equal the amount required for such next succeeding interest payment . Moneys in the Interest Account shall be applied by the Issuer to pay interest on the Bonds as and when the same become due, whether by redemption or otherwise, or to reimburse a Credit Bank for amounts drawn for such purpose, and for no other purpose. The Issuer shall adjust the amount of the deposit into the Interest Account not later than the month immediately preceding any Interest Payment Date so as to provide sufficient moneys in the Interest Account to pay the interest on the Bonds coming due on such Interest Payment Date. (2) Principal Account . Next, beginning in the month which is twelve (12) months prior to the month in which the first principal payment date occurs, one-twelfth (1/12) of the principal of the Bonds other than Term Bonds scheduled to become due on the next succeeding principal payment date, provided, however, that no payment or only a partial payment need be made in any month to the extent the amount on deposit in the Principal Account is , or together with such partial payment shall be, sufficient to pay the principal of the Bonds (other than Amortization Installments of Term Bonds) scheduled to become due on the next succeeding principal payment date and provided further than in each month intervening between the date of delivery of the Series of Bonds (beginning with the month following the month in which such delivery takes place) and the next succeeding principal payment date (if less than 12 months) the amount specified in this subsection shall be that amount that when multiplied by the number of deposits to the principal account required to be made during such period will equal the amount required for the next succeeding principal payment . Moneys in the Principal Account shall be applied by the Issuer to pay the principal of the Bonds (other than Amortization Installments of Term Bonds) as and when the same shall mature, or to reimburse a Credit Bank for amounts drawn for such purpose, and for no other purpose. The Issuer shall adjust the amount of the deposit into the Principal Account no later than the month immediately preceding any principal payment date so as -33- 7624M to provide sufficient moneys in the Principal Account to pay the principal on the Bonds becoming due on such principal payment date. (3) pond Amortization Account . Commencing in the month which is twelve months prior to the month in which occurs the due date of each Amortization Installment , the Issuer shall deposit into or credit to the Bond Amortization Account , one-twelfth (1/12) of such Amortization Installment, provided, however, that no payment or only a partial payment need be made to the Bond Amortization Account in any month to the extent that the amount on deposit in the Bond Amortization Account is, or together with such partial payment shall be, sufficient to pay such Amortization Installment . Moneys in the Bond Amortization Account shall be applied by the Issuer to purchase or redeem Term Bonds in the manner herein provided, or to reimburse a Credit Bank for amounts drawn for such purpose, and for no other purpose. The Issuer shall adjust the amount of the deposit into the Bond Amortization Account not later than the month immediately preceding any due date of an Amortization Installment so as to provide sufficient moneys in the Bond Amortization Account to pay the Amortization Installment due on such date . Amounts accumulated in the Bond Amortization Account with respect to any Amortization Installment shall be applied by the Issuer, (i) on or prior to the sixtieth (60th) day preceding the due date of such Amortization Installment to the purchase of Term Bonds of the Series and maturity for which such Amortization Installment was established, at a price not greater than the Redemption Price at which such Term Bonds may be redeemed on the first date thereafter on which such Term Bonds shall be subject to redemption, or (ii ) to the redemption at the applicable Redemption Price of such Term Bonds . The amount of the applicable Redemption Price of any Term Bonds so purchased or redeemed shall be deemed to be on deposit in the Bond Amortization Account until such Amortization Installment date for the purposes of calculating the amount on deposit in such Account . As soon as practicable after the sixtieth (60th) day preceding the due date of any such Amortization 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 Amortization Installment was established in such amount as shall be necessary to complete the retirement of the unsatisfied balance of such Amortization Installment . The Issuer shall pay out of the Bond Amortization Account and the Interest Account to the respective Paying Agents, on or before the day preceding such redemption date, the amount required for the redemption, and such amount shall be applied by such Paying Agents to such redemption. (4) Reserve Account. Next , the Issuer shall deposit into or credit to each subaccount of the Reserve Account such sum, if any, as will be sufficient to restore in not more than 12 equal monthly -34- 7624M payments the funds on deposit therein to an amount equal to the Reserve Account Requirement therefor including the reinstatement of any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit therein or the cash replacement thereof . In the event the amounts available for such purpose shall be insufficient to make all payments required by the preceding sentence, the available amount shall be prorated among the various subaccounts in the Reserve Account in the same proportion that the Reserve Account Requirement for each subaccount bears to the total Reserve Account Requirement for all such subaccounts . On or prior to each principal payment date and Interest Payment Date for the Bonds, moneys in each subaccount of the Reserve Account shall be applied by the Issuer to the payment of the principal of or Redemption Price, if applicable, and interest on the Series of Bonds to which such subaccount relates to the extent moneys in the Interest Account, the Principal Account and the Bond Amortization Account shall be insufficient for such purpose. Whenever upon valuation of any subaccount of the Reserve Account there shall be moneys in any subaccount of the Reserve Account in excess of the Reserve Account Requirement, therefor such excess moneys shall be deposited by the Issuer into the Revenue Fund. Upon the issuance of any Series of Bonds, under the terms , limitations and conditions as herein provided, the Issuer shall provide for the funding of a subaccount in the Reserve Account in an amount equal to the Reserve Account Requirement, if any, for such Series . Whenever moneys on deposit in a subaccount of the Reserve Account, together with the other available amounts in the Debt Service Fund, are sufficient to fully pay all Outstanding Bonds (including principal and interest thereon) of the Series secured by such subaccount in accordance with their terms, the funds on deposit in such subaccount may be applied to the payment of such Series of Bonds . Notwithstanding the foregoing provisions, with the written consent of each Insurer, in lieu of the required deposits into the Reserve Account , and/or in substitution for money on deposit in the Reserve Account , the Issuer may, at its sole option and discretion, cause to be deposited a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit in an amount equal to the difference between the Reserve Account Requirement applicable thereto and the sums then on deposit in the Reserve Account, if any, and, in the case of a substitution of a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit for money on deposit in the Reserve Account, the Issuer may withdraw money from the Reserve Account in excess of the Reserve Account Requirement and may use such money for any lawful purpose provided the Issuer first obtains an opinion of Bond Counsel that such use is permitted and will not, in and of itself, adversely affect the exclusion from gross income of interest on any Bonds other than any Taxable Bonds . Such Reserve Account Insurance -35- 7624M Policy and/or Reserve Account Letter of Credit shall be payable to the Paying Agent for such Series (upon the giving of notice as required thereunder) on any interest payment or redemption 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. . If fifteen (15) days prior to an interest payment or mandatory redemption date, the Issuer shall determine that a deficiency exists in the amount of moneys available to pay in accordance with the terms hereof interest and/or principal due on Bonds on such date, the Issuer shall immediately notify (a) the issuer of the applicable Reserve Account Insurance Policy and/or the issuer of the Reserve Account Letter of Credit , and (b) the Insurer, if any, of the amount of such deficiency and the date on which such payment is due, and shall take all action to cause such issuer or Insurer to provide moneys sufficient to pay all amounts due on such interest payment or redemption date. If a disbursement is made from a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit provided pursuant to this Section 4 . 05(B) (4) , the Issuer shall reinstate the maximum limits of such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit following such disbursement from moneys becoming available in the applicable subaccount of the Reserve Account in accordance with the provisions of the first paragraph of this Section 4 .05(B) (4) , by depositing funds in the amount of the disbursement made under such instrument, with the issuer thereof . In addition, after the amount on deposit in the applicable subaccount of the Reserve Account equals the Reserve Account Requirement therefor, the Issuer shall reimburse the issuer of the Reserve Account Insurance Policy and/or the issuer of the Reserve Account Letter of Credit for interest and all reasonable expenses incurred by such issuer in connection with the draw on such Reserve Account Insurance Policy or the Reserve Account Letter of Credit , as the case may be, if the Issuer is so obligated under the terms of the Reserve Account Insurance Policy, or Reserve Account Letter of Credit . The Issuer may evidence its obligation to reimburse the issuer of any Reserve Account Letter of Credit or Reserve Account Insurance Policy by executing and delivering to such issuer a promissory note therefor, provided, however, any such note (a) shall not be a general obligation of the Issuer the payment of which is secured by the full faith and credit or taxing power of the Issuer, and (b) shall be payable solely from moneys available in the applicable subaccount of the Reserve Account in accordance with the provisions of the first paragraph of this Section 4 . 05(B) (4) . To the extent the Issuer causes to be deposited into the Reserve Account a Reserve Account Insurance Policy and/or a -36- 7624M Reserve Account Letter of Credit for a term of years shorter than the life of the Series of Bonds so insured or secured, then the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit shall provide, among other things, that the issuer thereof shall provide the Issuer with notice as of each anniversary of the date of the issuance of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit of the intention of the issuer thereof to either (a) extend the term of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit beyond the expiration dates thereof , or (b) terminate the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit on the initial expiration dates thereof or such other future date as the issuer thereof shall have established. If the issuer of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit notifies the Issuer pursuant to clause (b) of * the immediately preceding sentence, then the Issuer shall deposit into the applicable subaccount of the Reserve Account pursuant to the first sentence of this Section 4 . 05(8) (4) , during the first full calendar month following the date on which such notice of intent to terminate is received by the Issuer and in each succeeding month, such sums as shall be sufficient to pay each month an amount equal to a fraction, the numerator of which is one (1) and the denominator of which is equal to the number of months remaining in the term of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit, of the portion of the Reserve Account Requirement covered by the Reserve Account Letter of Credit and/or the Reserve Account Insurance Policy on the date such notice was received, until the sum on deposit in the applicable subaccount of the Reserve Account , and no later than the expiration of such Reserve Account Insurance Policy and/or such Reserve Account Letter of Credit, shall be equal to the Reserve Account Requirement . If any Reserve Account Letter of Credit or Reserve Account Insurance Policy shall terminate prior to the stated expiration date thereof, the Issuer agrees that it shall fund the applicable subaccount of the Reserve Account pursuant to the first sentence of this Section 4 .05(B) (4) , over a period of not to exceed twelve (12) months during which it shall make consecutive equal monthly payments in order that the amount on deposit in such account at the end of such period shall be equal to the Reserve Account Requirement; provided, the Issuer may at its sole option and discretion, with the prior written consent of the Insurer, if any, obtain a new Reserve Account Letter of Credit or a new Reserve Account Insurance Policy in lieu of making the payments required by this paragraph. (C) The Issuer, in its discretion, may use moneys in the Principal Account and the Interest Account to purchase or redeem Bonds coming due on the next principal payment date, provided such purchase or redemption does not adversely affect the Issuer ' s -37- 7624M ability to pay the principal or interest coming due on the Bonds not so purchased or redeemed. (D) At least one (1) Business Day prior to the date established for payment of any principal of or Redemption Price, if applicable, or interest on the Bonds, the Issuer shall withdraw from the Debt Service Fund sufficient moneys to pay such principal or Redemption Price, if applicable, or interest and deposit such moneys with the Paying Agent for the Bonds to be paid. (E) In the case of Bonds secured by a Credit Facility, amounts on deposit in the Debt Service Fund or any accounts therein established for such Bonds may be applied as provided in the applicable Supplemental Resolution to reimburse the Credit Bank for amounts drawn under such Credit Facility to pay the principal of or Redemption Price, if applicable, and interest on such Bonds or to pay the purchase price of any such Bonds which are tendered by the Holders thereof for payment . SECTION 4 . 06 . Impact Fee Fund . The Issuer shall deposit all Impact Fees received in each Fiscal Year into the Impact Fee Fund. On or before the last Business Day of each month all or any portion of the moneys in the Impact Fee Fund may, at the option of the Issuer, be deposited or credited to the subaccounts in the Debt Service Fund in the manner described in Section 4 . 05(B) hereof; provided, however, that such moneys shall be deposited or credited to the subaccounts in the Debt Service Fund in the manner described in Section 4 . 05(8) hereof in the event that moneys in the Revenue Fund are insufficient or unavailable to make all of the deposits into the subaccounts in the Debt Service Fund required by Section 4 . 05(B) hereof . Notwithstanding anything to the contrary contained herein, the aggregate amount of Impact Fees applied and allocated to the aggregate Debt Service Requirements for the Bonds shall never exceed the aggregate Impact Fee Debt Service Components for the Bonds, unless the Issuer shall receive an opinion of legal counsel to the effect that a greater amount of Impact Fees could lawfully be applied to the Debt Service Requirements for the Bonds . SECTION 4 . 07 . Rebate Fund. If so provided by Supplemental Resolution with respect to any Series of Bonds, the Issuer may establish with a Authorized Depository a fund to be known as the "Water and Sewer Rebate Fund" (the "Rebate Fund") . Amounts on deposit in the Rebate Fund shall be held in trust by the Issuer and used solely to make required payments to the United States Treasury (except to the extent the same may be transferred to the Revenue Fund) and the Bondholders shall have no right to have the same applied for debt service on the Bonds . The Issuer agrees to undertake all actions required of it pursuant to Section 5 . 15 hereof, including, but not limited to: -38- 7624M • ( 1) making a determination in accordance with the Code of the amount necessary to be deposited in the Rebate Fund; (2) depositing into the Rebate Fund from moneys in the Revenue Fund or from other moneys of the Issuer legally available for such purpose the amount determined in clause ( 1) above; (3) paying on the dates and in the manner required by the Code to the United States Treasury from the Rebate Fund and any other legally available moneys of the Issuer such amounts as shall be required by the Code to be rebated to the United States Treasury; and (4 ) keeping such records of the determinations made pursuant to this Section 4 . 07 as shall be required by the Code, as well as evidence of the fair market value of any investments purchased with proceeds of the Bonds of the Series of which such accounts were created . If at any time the Issuer shall determine that the amount on deposit in the Rebate Fund exceeds the amount necessary to be on deposit therein to satisfy the foregoing covenants of the Issuer , the Issuer may transfer all or a portion of the amount on deposit in the Rebate Fund to the Revenue Fund to be applied in the same manner as other funds on deposit in the Revenue Fund. SECTION 4 . 08 . Investments . All funds and accounts hereunder shall be continuously secured in the manner by which the deposit of public funds are authorized and required to be secured by the laws of the State . Moneys on deposit in the Construction Fund , the Revenue Fund, the Operation and Maintenance Fund, the Rebate Fund, the Renewal and Replacement Fund, the Impact Fee Fund and the Debt Service Fund, other than the Reserve Account , may be invested and reinvested in Authorized Investments maturing not later than the date on which the moneys therein will be needed . Moneys on deposit in the Reserve Account may be invested or reinvested in Authorized Investments which shall mature no later than five ( 5) years from the date of acquisition thereof . Any and all income received by the Issuer from the investment of moneys in the funds and accounts established pursuant to this Resolution shall be retained in such respective fund or account unless otherwise required by applicable law, provided that income received by the Issuer from the investment of moneys in any subaccount of the Reserve Account to the extent the amount therein is greater than the Reserve Account Requirement shall be deposited in the Revenue Fund . Nothing contained in this Resolution shall prevent any Authorized Investments acquired as investments of or security for funds held under this Resolution from being issued or held in book-entry form on the books of the Department of the Treasury of the United States . -39- 7624M All investments shall be valued at their fair market values . Amounts in the Reserve Account shall be valued on each Interest Payment Date after the payments due on the Bonds on such date shall have been made. SECTION 4 . 09 . 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. SECTION 4 . 10 . Non-Ad Valorem Revenues. (A) In the event Pledged Funds other than Non-Ad Valorem Revenues are projected to be sufficient in any given Fiscal Year to permit the Issuer to make the deposits required by Section 4 . 05(A) hereof for such Fiscal Year when due and to satisfy the requirements of Section 5 . 07 hereof , as shown on the Annual Budget of the Issuer with respect to such Pledged Funds, the Issuer shall not be required to budget in its Annual Budget with respect to the Non-Ad Valorem Revenues any Non-Ad Valorem Revenues for the payment of principal of or interest on the Bonds . (B) In the event Pledged Funds other than Non-Ad Valorem Revenues are projected to be insufficient in any given Fiscal Year to permit the Issuer to make the deposits required by Section 4 . 05(A) hereof for such Fiscal Year when due and to satisfy the requirements of Section 5 . 07 hereof (the "Required Deposits" ) , as shown on the Annual Budget for such Pledged Funds, the Issuer shall budget in its Annual Budget with respect to the Non-Ad Valorem Revenues, as a first priority item, Non-Ad Valorem Revenues in an amount equal to 100% of the Required Deposits less the Pledged Funds other than Non-Ad Valorem Revenues projected to be available for deposit pursuant to Section 4 . 05(A) hereof during such Fiscal Year as shown in the Annual Budget . If necessary, upon receipt by the Issuer of the Non-Ad Valorem Revenues in any Fiscal Year, the Issuer shall cause such Non-Ad Valorem Revenues to be deposited to the accounts as required by Section 4 . 05(A) hereof, at the times and in amounts sufficient so that the -40- 7624M requirements of Section 5 . 10 hereof are satisfied and so that the amounts deposited to such accounts will equal the amounts required by Section 4 . 05(A) . (C) Notwithstanding Section 4 . 05(A) hereof, in the event that during any Fiscal Year Pledged Funds are insufficient to make the Required Deposits, the Issuer covenants to take whatever steps as are necessary to amend its Annual Budget with respect to (i) the Pledged Funds other than Non-Ad Valorem Revenues in an amount equal to the reduction in the projected receipt of such Pledged Funds for the remaining months of the Fiscal Year and (ii) the Non-Ad Valorem Revenues, as a first priority item, Non-Ad Valorem Revenues in an amount equal to (a) the Required Deposits for the remainder of the Fiscal Year less (b) an amount equal to the amounts, if any, already on deposit and available to make the payments required by Section 4 . 05(A) and the amount projected to be received pursuant to the revised budget amount of Pledged Funds other than Non-Ad Valorem Revenues set forth in Clause (i) of this subparagraph (C) . If required by the budget amendment mentioned herein, the Issuer shall apply the additional amounts of Non-Ad Valorem Revenues for the purpose of making the deposits required by Section 4 . 05(A) . (D) Nothing herein shall prohibit the Issuer from appropriating Non-Ad Valorem Revenues in excess of the amounts required to be budgeted in the Annual Budget pursuant to Subparagraphs (B) and (C) for any lawful purpose of the Issuer . Except for Non-Ad Valorem Debt permitted to be issued pursuant to Section 5 . 02 hereof , the Issuer shall not incur any indebtedness payable in whole or in part from Non-Ad Valorem Revenues and the Issuer will not pledge Non-Ad Valorem Revenues to the repayment of any indebtedness of the Issuer whether on a parity with or subordinate to the provisions of this Section 4 . 10 . Any pledge of Non-Ad Valorem Revenues to the repayment of Non-Ad Valorem Debt shall be subordinate to the provisions of this Section 4 . 10 and such Non-Ad Valorem Debt shall contain a statement expressly so stating. (E) The Issuer covenants that it will take all lawful actions permitted or required for the collection of the Non-Ad Valorem Revenues . [End of Article IV] -41- 7624M ARTICLE V SUBORDINATED INDEBTEDNESS ADDITIONAL BONDS, AND COVENANTS OF ISSUER SECTION 5 . 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 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 that are not Additional Bonds and that are payable in whole or in part out of the Pledged Funds and which may be secured by a pledge of the 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 shall have the right to covenant with the holders from time to time of any Subordinated Indebtedness to add to the conditions, limitations and restrictions under which any Additional Bonds may be issued pursuant to Section 5 . 02 hereof . SECTION 5 . 02 . Issuance of Additional Bonds and Non-Ad Valorem Debt. No Additional Bonds, payable from the Pledged Funds on a parity 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 the following purposes : financing the Cost of any Project, or the completion thereof, or refunding any or all Outstanding Bonds or any Subordinated Indebtedness of the Issuer, or for any other purpose permitted by law. No Additional Bonds and no Non-Ad Valorem Debt shall be issued or incurred unless the following conditions are complied with: (A) 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 has complied with the covenants and agreements of this Resolution. (B) There shall have been obtained and filed with the Issuer a certificate of an independent certified public accountant : (1) stating that such accountant has examined the books and records of the Issuer relating to the collection and receipt of Pledged Funds; (2) stating the amount of (i ) Net Revenues adjusted as provided in Section 5 . 02(E) hereof and (ii ) Non-Ad Valorem Revenues, in each case for the immediately preceding Fiscal Year or any twelve (12) consecutive months selected by the Issuer of -42- 7624M the eighteen ( 18) months immediately preceding the issuance of such Additional Bonds or the incurrence of such Non-Ad Valorem Debt , as the case may be; (3) stating that the amount of such Net Revenues and Non-Ad Valorem Revenues equals at least 1 . 25 times the Maximum Debt Service Requirement for all Outstanding Bonds and Non-Ad Valorem Debt and such Additional Bonds or Non-Ad Valorem Debt then proposed to be issued plus 1 . 00 times the sum of any required deposits to the Renewal and Replacement Fund during such twelve consecutive months plus the maximum annual debt service for all Subordinated Indebtedness then outstanding ; and (4 ) stating that no Event of Default was disclosed in the report of the most recent Annual Audit , or if an Event of Default was so disclosed , that it shall have been cured . (C) In computing the Maximum Debt Service Requirement for purposes of this Section 5 . 02 , the interest rate on outstanding Variable Rate Bonds , and on any additional parity Variable Rate Bonds then proposed to be issued, shall be deemed to be the Maximum Interest Rate applicable thereto . In addition, in connection with the issuance of any Variable. Rate Bonds , at the time of issuance of such Variable Rate Bonds , the Maximum Interest Rate applicable thereto shall be established. (D) For the purposes of this Section 5 . 02 , the phrase "immediately preceding Fiscal Year or any twelve ( 12) consecutive months selected by the Issuer of the eighteen ( 18) months immediately preceding the issuance of such Additional Bonds" shall be sometimes referred to as "twelve consecutive months . " (E) The Net Revenues may be adjusted by the independent certified public accountant , at the option of the Issuer , as follows : (1) If the Issuer , prior to the issuance of the proposed Additional Bonds or Non-Ad Valorem Debt but not prior to the beginning of such twelve consecutive months, shall have increased the Rates , and/or shall have begun to derive revenues from newly acquired facilities of the System, the Net Revenues for the twelve consecutive months shall be adjusted to show the Net Revenues which would have been derived in such twelve consecutive months if such increased Rates had been in effect , and/or such new facilities had produced revenues , during all of such twelve consecutive months . (2 ) In the event the Issuer shall have completed additions, extensions or improvements to the System prior to the issuance of the proposed Additional Bonds or Non-Ad ' Valorem Debt but not prior to the beginning of such twelve consecutive months and/or shall be constructing or acquiring additions , extensions or improvements to the System to be financed wholly or in part from the proceeds of such Additional Bonds or Non-Ad Valorem Debt or from any other source, from which Project or Projects the Issuer expects to derive revenues within three (3) years after issuance of such -43- 7624M Additional Bonds or Non-Ad Valorem Debt , such Net Revenues may be adjusted by adding thereto the additional net revenues estimated by the Consultants to be derived (based upon the then current Rates or such Rates as shall have been adopted by the Issuer to become effective during the period in which completion of such improvements is anticipated to occur ) during the first twelve ( 12) months of operation of such Project after completion of the construction or acquisition thereof . (F) Except as otherwise provided herein, 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; provided, however , any Supplemental Resolution authorizing the issuance of Additional Bonds may provide that any of the covenants herein contained will not be applicable to such Additional Bonds , provided that such provision shall not , in the opinion of Bond Counsel , adversely affect the rights of any Bonds which shall then be Outstanding . Except as expressly provided herein or in a Supplemental 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 ; provided, however , that the Issuer shall include a provision in any Supplemental Resolution authorizing the issuance of Variable Rate Bonds pursuant to this Section 5 . 02 that in the event the principal thereof is accelerated due to such Bonds being held by the issuer of a Credit Facility, the lien of such Bonds on the Pledged Funds shall be subordinate in all respects to the pledge of the Pledged Funds created by this Resolution . (G) In the event any Additional Bonds are issued for the purpose of refunding any Bonds then Outstanding, the conditions of Section 5 . 02 (B) 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 Fiscal Year and/or all or any subsequent Fiscal Years . The conditions of Section 5 . 02 (B) hereof shall apply to Additional Bonds issued to refund Subordinated Indebtedness and to Additional Bonds issued for refunding purposes which cannot meet the conditions of this paragraph . SECTION 5 . 03 . pond 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 resolution of the Issuer . SECTION 5 . 04 . Accession of Subordinated Indebtedness to Parity Status with Bonds . The Issuer may provide for the -44- 7624M accession of Subordinated Indebtedness to the status of complete parity with the Bonds , if the Issuer shall meet all the requirements imposed upon the issuance of Additional Bonds by Section 5 . 02 hereof , assuming, for purposes of said requirements , that such Subordinated Indebtedness shall be Additional Bonds . If the aforementioned conditions are satisfied, the Subordinated Indebtedness shall be deemed to have been issued pursuant to this Resolution the same as the Outstanding Bonds, and such Subordinated Indebtedness shall be considered Bonds for all purposes provided in this Resolution. SECTION 5 . 05 . 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 . The Issuer will obtain and renew to the full extent required by applicable law all permits for acquisition, construction, operation of the System. SECTION 5 . 06 . Annual Budget . The Issuer shall annually prepare and adopt , prior to the beginning of each Fiscal Year , an Annual Budget with respect to at least the System ( including the Gross Revenues) and the Non-Ad Valorem Revenues in accordance with applicable law . No expenditure 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 . 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 Fiscal Year shall be deemed to be in effect for such Fiscal Year until the Annual Budget for such Fiscal Year shall be adopted; and if the preliminary budget shall not have been prepared, the Annual Budget for the preceding Fiscal Year shall be deemed to continue in effect . The Issuer shall mail copies of such Annual Budgets and amended Annual Budgets and all resolutions authorizing increased expenditures to any Holder who shall file an address with the Clerk and request in writing that copies of all such Annual Budgets and resolutions be furnished to such Holder and shall make available all such Annual Budgets and resolutions authorizing increased expenditures at all reasonable times to any Holder or to anyone acting for or on behalf of any Holder . The Issuer shall be permitted to make a reasonable charge for furnishing to any Holder such Annual Budgets and resolutions . -45- 7624M SECTION 5 . 07 . Rates . The Issuer shall fix, establish, maintain and collect such Rates , and revise the same to the extent necessary, so that the Rates will always provide in each Fiscal Year Net Revenues together with such Non-Ad Valorem Revenues budgeted for deposit to the Revenue Fund pursuant to Section 4 . 10 hereof which are at least equal one hundred twenty-five percent ( 125%) of the Debt Service Requirement for such Fiscal Year plus one hundred percent ( 100%) of any amounts required by the terms hereof to be deposited in the Renewal and Replacement Fund and in the Reserve Account or with any issuer of a Reserve Account Letter of Credit or Reserve Account Insurance Policy in such Fiscal Year , plus one hundred percent ( 100%) of all payments required to be made with respect to any Subordinated Indebtedness during such Fiscal Year . Such Rates shall not be so reduced so as to be insufficient to provide Net Revenues and Non-Ad Valorem Revenues in each Fiscal Year fully adequate for the purposes provided therefor by this Resolution. The Issuer covenants and agrees that prior to the beginning of each Fiscal Year , whenever the Net Revenues and Non-Ad Valorem Revenues which shall be projected by the Annual Budget proposed for such Fiscal Year shall be insufficient for the coverages required by the first paragraph of this section, the Issuer shall revise the Rates by adopting a schedule thereof by resolution or ordinance in the manner provided by applicable law of the State . For purposes of calculating the Debt Service Requirement for purposes of this Section 5 . 07 , the interest rate on outstanding Variable Rate Bonds shall be deemed to be the lesser of the Maximum Interest Rate applicable thereto or the maximum interest rate borne by such Variable Rate Bonds at any time during the preceding twelve ( 12 ) months . Notwithstanding any other provision hereof to the contrary, for purposes of this Section 5 . 07 , to the extent that in any Fiscal Year the Issuer budgets for deposit to the Revenue Fund and actually deposits to the Revenue Fund lawfully available funds of the Issuer not otherwise constituting Gross Revenues or Non-Ad Valorem Revenues , such revenues shall be deemed to be Rates for purposes of determining compliance with this Section 5 . 07 . SECTION 5 . 08 . Books and Records . The Issuer will keep books , records and accounts of the receipt of the Non-Ad Valorem Revenues and the Pledged Funds in accordance with generally accepted accounting principles , and any Credit Bank, Insurer , or Holder of any 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 . The Issuer covenants that within one hundred eighty ( 180) days of the close of each Fiscal Year it will cause to be prepared and -46- 7624M filed with the Clerk and mailed to all Credit Banks , Insurers and Holders who shall have filed their names and addresses with the Clerk for such purpose a statement setting forth in respect of the preceding Fiscal Year : (A) the amount of the Non-Ad Valorem Revenues and the Pledged Funds received in the preceding Fiscal Year ; (B) the total amounts deposited to the credit of each fund and account created under the provisions of this Resolution; (C) the principal amount of all Bonds issued, paid, purchased or redeemed; and (D) the amounts on deposit at the end of such Fiscal Year to the credit of each such fund or account . SECTION 5 . 09 . Annual Avjljt . The Issuer shall , immediately after the close of each Fiscal Year, cause the financial statements of the Issuer 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, a statement of change in retained earnings , 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 Credit Bank, to any Insurer and to any Holder who shall have furnished an address to the Clerk and requested in writing that the same be furnished to such Holder . The Issuer shall be permitted to make a reasonable charge for furnishing to any Holder such Annual Audit . SECTION 5 . 10 . Mortgage. Sale or Closing of Facilities . The Issuer irrevocably covenants , binds and obligates itself not to sell , lease, encumber or in any manner dispose of any portion of the System except as provided in this section, 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 8 . 01 hereof . The Issuer shall have and hereby reserves the right to sell , lease or otherwise dispose of any site, facilities or property comprising a part of the System in the manner provided in this Section 5 . 10, if in the judgment of the Issuer such disposition will not adversely affect the security for the Bondholders and any one of the following conditions exist : (A) such site, facilities or property is not necessary for the operation of the System, (B) such site, facilities or property is not useful in the operation of the System, (C) such site, facilities or property is not profitable in the operation of the System, or (D) in the case of a lease of such site, facilities or property, such lease will be advantageous to the System. The proceeds from any such sale, lease or other disposition shall be deposited into the Revenue Fund. -47- 7624M 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 Consultants , 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 . 11 . Insurance . So long as the Net Revenues are pledged hereunder , the Issuer will carry, with a reputable insurance carrier or carriers, such insurance as is ordinarily carried by private or public corporations owning and operating water and sewer systems similar to the System, including public liability insurance, in such amounts as the Issuer shall determine to be sufficient . The property loss or damage insurance shall at all times be in an amount or amounts equal to the fair appraisal value of the buildings , furniture, fixtures and equipment of the System. 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. SECTION 5 . 12 . No Impairment . The pledging of the Pledged Funds in the manner provided herein shall not be subject to repeal , modification or impairment by any subsequent ordinance , resolution or other proceedings of the Governing Body. This provision shall not , however , be deemed to prohibit the reduction or elimination of the Rates if such reduction or elimination will not result in a violation of Section 5 . 07 hereof . SECTION 5 . 13 . Special Covenants Relating to Reserve Account Insurance Policy or Reserve Account Letter of Credit , (A) The Issuer shall annually submit to the issuer of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit , records of withdrawals on such Reserve Account Insurance Policy or such Reserve Account Letter of Credit , as the case may be, received by the Paying Agent and remaining unpaid, the respective dates of such withdrawals , the interest accrued on such withdrawals and the aggregate amount of interest due by the Issuer to the issuer of such Reserve Account Insurance policy or such Reserve Account Letter of Credit , as the case may be . (B) The Issuer hereby acknowledges that the issuer of the Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit shall be deemed a third-party beneficiary of this -48- 7624M Resolution, but not on a parity with the Bondholders , for the purpose of enforcing the terms , conditions and obligations of the Resolution which benefit the issuer of such Reserve Account Insurance Policy or such Reserve Account Letter of Credit, as the case may be . SECTION 5 . 14 . Covenants with Credit Banks and Insurers . The Issuer may make such covenants as it may in its sole discretion, determine to be appropriate with any Insurer , Credit Bank or other financial institution that shall agree to insure or to provide for Bonds of any one or more Series credit or liquidity support that shall enhance the security or the value of such Bonds . Such covenants may be set forth in the applicable Supplemental Resolution and shall be binding on the Issuer , the Registrar , the Paying Agent and all the Holders of Bonds the same as if such covenants were set forth in full in this Resolution . SECTION 5 . 15 . Federal Income Tax Covenants; Taxable Bonds . (A) The Issuer covenants with the Holders of each Series of Bonds (other than Taxable Bonds) , that it shall not use the proceeds of such Series of Bonds in any manner which would cause the interest on such Series of Bonds to be or become includable in the gross income of the Holder thereof for federal income tax purposes . (B) The Issuer covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that neither the Issuer nor any Person under its control or direction will knowingly make any use of the proceeds of such Series of Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such Series of Bonds to be arbitrage bonds within the meaning of Section 148 of the Code, and neither the Issuer nor any such other Person shall knowingly do any act or fail to do any act which would cause the interest on such Series of Bonds to become includable in the gross income of the Holder thereof for federal income tax purposes . Specifically, without intending to limit in any way the generality of the foregoing , the Issuer covenants and agrees : ( 1) to pay to the United States of America from amounts in the Rebate Fund and from any other legally available funds , at the times required pursuant to Section 148( f) of the Code, the excess of the amount earned on all non-purpose investments (as defined in Section 148 ( f) ( 6) of . the Code) (other than investments attributed to an excess described in this sentence) over the amount which would have been earned if such non-purpose investments were invested at a rate equal to the yield on the Bonds , plus any income attributable to such excess (the "Rebate Amount" ) ; -49- 7624M (2 ) to maintain and retain all records pertaining to and to be responsible for making or causing to be made all determinations and calculations of the Rebate Amount and required payments of the Rebate Amount as shall be necessary to comply with the Code; (3) to refrain from using proceeds from the Bonds in a manner that would cause the Bonds or any of them, to be classified as private activity bonds under Section 141 ( a) of the Code; and (4 ) to take or refrain from taking any action that would cause the Bonds, or any of them, to become arbitrage bonds under Section 103 (b) and Section 148 of the Code. The Issuer understands that the foregoing covenants impose continuing obligations on the Issuer to comply with the requirements of Section 103 and Part IV of Subchapter B of Chapter 1 of the Code so long as such requirements are applicable . Unless otherwise specified in a Supplemental Resolution, the Issuer shall designate a certified public accountant , Bond Counsel , or other professional consultant having the skill and expertise necessary (the "Rebate Analyst" ) to make any and all calculations required pursuant to this Section regarding the Rebate Amount . Such calculation shall be made in the manner and at such times as specified in the Code. The Issuer shall engage and shall be responsible for paying the fees and expenses of the Rebate Analyst . (C) The Issuer may, if it so elects , issue one or more Series of Taxable Bonds the interest on which is includible in the gross income of the Holder thereof for federal income taxation purposes , so long as each Bond of such Series states in the body thereof that interest payable thereon is subject to federal income taxation and provided that the issuance thereof will not cause the interest on any other Bonds theretofore issued hereunder to be or become includable in the gross income of the Holder thereof for federal income tax purposes . The covenants set forth in subsections (A) and (B) of this Section 5 . 15 shall not apply to any Taxable Bonds . SECTION 5 . 16 . Nonpresentment of Bonds ; Disposition of Unclaimed Money . In the event any Bond shall not be presented for payment when the principal thereof becomes due, either at maturity, or otherwise, if funds sufficient to pay any such Bond shall have been made available to any Paying Agent for the benefit of the Holder thereof , all liability of the Issuer to the Holder thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be -50- 7624M • the duty of such Paying Agent to hold such funds , without liability for interest thereon, for the benefit of the Holder of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on the part of such Holder under this Resolution or on, or with respect to, such Bond . Any moneys so deposited with and held by such Paying Agent for the payment of Bonds not so claimed within seven years after the date the payment of such Bonds shall have become due, whether at maturity or otherwise, shall be presumed abandoned and shall be returned to the Issuer, and the Issuer shall comply with the provisions of Chapter 717 , Florida Statutes , or any successor thereof , in respect of such moneys . Section 5 . 17 . No Free Service; Enforcement of Charges . The Issuer will not render , or cause to be rendered, any free services of any nature by the System or any part thereof , nor will any preferential rates be established for any particular user as opposed to other users of the System of the same class , nor , to the extent permitted by law, shall the Issuer permit the operation of any water and sewer utility competitive with the System. The Issuer shall compel the prompt payment of Rates , fees and other charges imposed for the service rendered by the System and will vigorously enforce all of the provisions of any ordinance or resolution of the Issuer relating to service provided by the System. The Issuer shall take all steps required to lawfully impose the Impact Fees and shall diligently proceed to collect all Impact Fees and shall exercise all legally available remedies to enforce the same . SECTION 5 . 18 . Continuing Disclosure Compliance . The Issuer hereby covenants and agrees that , so long as any of the Series 1995 Bonds remain outstanding , it will provide, in a manner consistent with Rule 15c2-12 of the Securities and Exchange Commission (the "Rule" ) (a) to each nationally recognized securities information repository ( "NRMSIR" ) and to the appropriate depository designated by the State of Florida ( "SID" ) if any, ( i ) on or before one hundred eighty days after each fiscal year financial information and operating data of the Issuer for the preceding fiscal year of the type included in the Official Statement , including, but not necessarily limited to the operating data contained under the caption "The Water and Sewer System" and ( ii ) if not submitted as part of the annual financial information pursuant to ( i ) , then, when and if available, audited financial statements of the Issuer prepared in accordance with generally accepted accounting principles ; (b) in a timely manner , to each NRMSIR or the Municipal Securities Rulemaking Board ( "MSRB" ) , and to the appropriate SID, if any, written notice of the occurrence of any of the following events with respect to the Series 1995 Bonds : (i) delinquencies in the payment of principal or interest on the Series 1995 Bonds ; ( ii ) non-payment related defaults under any of the resolutions authorizing the issuance of the Series 1995 Bonds ; (iii ) unscheduled draws on the Reserve Fund reflecting -51- 7624M financial difficulties ; (iv) unscheduled draws on any Credit Facility, bond insurance policy or other credit enhancements, if any, reflecting financial difficulties ; (v) adverse tax opinions, or events affecting the tax-exempt status of the Series 1995 Bonds; (vi) modifications to rights of holders of the Series 1995 Bonds; (vii) any call of the Series 1995 Bonds for redemption other than mandatory sinking fund redemptions of Term Bonds or any acceleration of the maturity thereof; (viii) defeasances in whole or in part of the Series 1995 Bonds; (ix) release, substitution, or sale of property securing the repayment of the Series 1995 Bonds; (x) substitution of credit or liquidity providers, or their failure to perform; (xi) rating changes of the Series 1995 Bonds; (xii) any change in the fiscal year of the Issuer ; (c) in a timely manner, to each NRMSIR or the MSRB, and to the appropriate SID, if any, written notice of a failure of the Issuer to provide the financial information described in (a) (i) above, on or before the date specified above, and (d) any other information required to be disclosed to any person to whom it is required to be disclosed by the Rule. The Issuer also covenants to promptly provide a copy of the above information to the Paying Agent, each Insurer and the underwriter of the Series 1995 Bonds . The Paying Agent shall provide such information to any requesting Bondholder of the Series 1995 Bonds and any requesting beneficial owner of the Series 1995 Bonds held in street-name or in a nominee capacity, including under the Book-Entry System (the "Beneficial Owners") , provided that the Paying Agent shall be entitled to charge such requesting Bondholder or Beneficial Owner an amount sufficient to reimburse the itself for costs incurred for copying and shipping • such information. The foregoing covenants shall run to the benefit of the Series 1995 Bondholders and the Beneficial Owners . However, failure to meet the covenants set forth in this Section 5 . 18 shall not be deemed to constitute an event of default or a breach of any other covenant under the resolutions authorizing the Series 1995 Bonds, and the sole remedy for such a default or breach shall be as described in the next paragraph. The Bondholder of any Series 1995 Bond or any Beneficial Owner may either at law or in equity, by suit, action, mandamus or other proceeding in any court or competent jurisdiction, protect and enforce any and all rights granted or contained in this Section 5. 18 and may enforce any compel the performance of all duties required hereby to be performed by the Issuer or by any officers thereof . Notwithstanding the foregoing, the enforcement of the covenants contemplated hereby shall not affect the validity or enforceability of the Series 1995 bonds . Notwithstanding any other provision of this Resolution, this Section 5 . 18 may be amended only as follows : (a) the amendment -52- 7624M may only be made in connection with a change in circumstances that arises from a change in legal requirements , change in law, or change in the identity, nature or status of the Issuer or the type of business conducted by the Issuer ; (b) the provisions of this Section 5 . 18 , as amended, would have complied with the requirements of Rule 15c2-12 of the Securities and Exchange Commission as in effect as of the date of issuance of the Series 1995 Bonds , after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances ; and (c) the amendment does not materially impair the interest of the Series 1995 Bondholders and/or Beneficial Owners as determined by an opinion of nationally recognized bond counsel delivered to the Issuer, or by approving vote of the Beneficial Owners of the Series 1995 Bonds at the time of the amendment . In the event of any amendment hereto, the annual financial information provided subsequent to such amendment shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided by the Issuer . If the amendment affects the accounting principles to be followed in preparing financial statements of the Issuer , the annual financial information for the year in which the change is made must present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles . The comparison must include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the Issuer to meet its obligations . To the extent reasonably feasible, the comparison should also be quantitative . A notice of the change in the accounting principles must be sent to each NRMSIR or the MSRB and the appropriate SID, if any. SECTION 5 . 19 . Insurance Provisions . (a) In the event that , on the second Business Day prior to any Interest Payment Date on the Series 1995 Bonds , and again on the Business Day prior to any Interest Payment Date on the Series 1995 Bonds , the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Series 1995 Bonds due on the second following or the following , as the case may be, Business Day, the Paying Agent shall immediately notify MBIA or its designee on the same Business Day by telephone or telegraph , confirmed in writing by registered or certified mail , of the amount of the deficiency. (b) If the deficiency is made up in whole or in part prior to or on the Interest Payment Date, the Paying Agent shall promptly so notify MBIA or its designee . (c) In addition, if the Paying Agent has notice that any Bondholder has been required to disgorge any payment of principal -53- 7624M or interest on any Bond pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify MBIA or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail . (d) The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Bondholders of the Series 1995 Bonds as follows : 1 . If and to the extent there is a deficiency in amounts required to pay interest on the Series 1995 Bonds, the Paying Agent shall (a) no later than the scheduled date for payment of such interest to the Bondholders execute and deliver to State Street Bank and Trust Company, N.A. , or its successors under the financial guaranty insurance policy for the Series 1995 Bonds (the "Policy") (the "Insurance Paying Agent") , in form satisfactory to the Insurance Paying Agent , an instrument appointing MBIA as agent for such Bondholders in any legal proceeding related to the payment of such interest and an assignment to MBIA of the claims for interest to which such deficiency relates and which are paid by MBIA, (b) receive as designee of the respective Bondholders (and not as Paying Agent) in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned and (c) disburse the same to such respective Bondholders : and 2 . If and to the extent of a deficiency in amounts required to pay principal of the Series 1995 Bonds, the Paying Agent shall (a) no later than the scheduled date for payment of such principal to the Bondholders execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing MBIA as agent for such Bondholder in any legal proceeding relating to the payment of such principal and an assignment to MBIA of any Bond surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received) , (b) receive as designee of the respective Bondholders (and not as Paying Agent) in accordance with the tenor of the Policy payment therefor from the Insurance Paying Agent and (c) disburse the same to such Bondholders . (e) Payments with respect to claims for interest on and principal of Series 1995 Bonds disbursed by the Paying Agent from proceeds of the Policy shall not be considered to discharge the obligation of the Issuer with respect to such Series 1995 Bonds, and MBIA shall become the owner of such unpaid Series 1995 Bonds -54- 7624M 1 and claims for the interest in accordance with the tenor of the assignment made by it under the provisions of this subsection or otherwise . ( f) Irrespective of whether any such assignment is executed and delivered, the Issuer agrees , and the Paying Agent by acceptance of the duties of Paying Agent hereunder agrees , for the benefit of MBIA that : 1 . they recognize that to the extent MBIA makes payments , directly or indirectly (as by paying through the Paying Agent) , on account of principal of or interest on the Series 1995 Bonds , MBIA will be subrogated to the rights of the Bondholders of such Series 1995 Bonds to receive the amount of such principal and interest from the Issuer , with interest thereon as provided and solely from the sources stated in this Resolution and the Series 1995 Bonds , and 2 . they will accordingly pay to MBIA the amount of such principal and interest ( including principal and interest recovered under subparagraph ( ii ) of the first paragraph of the Policy, which principal and interest shall be deemed past due and not to have been paid) , with interest thereon as provided in this Resolution and the Series 1995 Bonds, but only from the sources and in the manner provided herein and therein for the payment of principal of and interest on the Series 1995 Bonds to the Bondholders , and will otherwise treat MBIA as the owner of such rights to the amount of such principal and interest . (g) The Issuer shall notify MBIA of the resignation or removal of the Paying Agent and the appointment of a successor thereto . (h) The Issuer shall provide MBIA with copies of all notices required to be delivered to Bondholders of the Series 1995 Bonds and, on an annual basis , copies of the Issuer ' s audited financial statements and annual budget . ( i ) The Issuer shall deliver to Standard & Poor ' s Corporation a copy of any amendment to this Resolution which amendment has been consented to by MBIA. (j ) Any notice that is required to be given to a Bondholder or to the Paying Agent pursuant to this Resolution shall also be provided to MBIA. All notices required to be given to MBIA pursuant to the Bond Resolution shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street , Armonk, New York 10504 , Attention : Surveillance . (k) For so long as MBIA shall be duly performing its obligations under the Policy, then with respect to the provisions -55- 7624M • of Articles VI and VII hereof , insofar as the same relate to the exercise by Bondholders of discretionary rights and powers , MBIA shall be deemed to be the Bondholder of all Series 1995 Bonds . (End of Article V) -56- 7624M ARTICLE VI DEFAULTS AND REMEDIES SECTION 6 . 01. Events of Default . The following events shall each constitute an Event of Default hereunder : (A) Default shall be made in the payment of the principal of, Amortization Installment , Redemption Price or interest on any Bond 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 appointment of a receiver for the Issuer, or the entry by the Issuer into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Issuer in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy 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, other than Section 5 . 18 hereof, and such default shall continue for a period of thirty (30) days after written notice of such default shall have been received from any Insurer or the Holders of not less than twenty-five percent (25%) of the aggregate principal amount of Bonds Outstanding or any Credit Bank. Notwithstanding the foregoing, the Issuer shall not be deemed in default hereunder if such default cannot be cured within such thirty (30) days, but can be cured within a reasonable period of time, if the Issuer in good faith institutes curative action and diligently pursues such action until the default has been corrected. SECTION 6 . 02 . Remedies . Except as provided in Section 5 . 18 hereof , 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, 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 . This paragraph shall not be deemed to be a waiver by the Issuer of its venue rights . Upon the occurrence of an Event of Default, the Holders of Bonds in an aggregate principal amount of not less than -57- 7624M twenty-five percent (25%) of the Bonds then Outstanding may by written notice to the Issuer declare the principal of the Bonds to be immediately due and payable, whereupon that portion of the principal of the Bonds thereby coming due and the interest thereon accrued to the date of payment shall , without further action, become and be immediately due and payable . The Holder or Holders of Bonds in an aggregate principal amount of not less than twenty-five percent (25%) of the Bonds then Outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to this Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and protection of the rights of such Bondholders and such certificate shall be executed by such Bondholders or their duly authorized attorneys or representatives, and shall be filed in the office of the Clerk. Notice of such appointment, together with evidence of the requisite signatures of the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Bonds Outstanding and the trust instrument under which the trustee shall have agreed to serve shall be filed with the Issuer and the trustee and notice of appointment shall be given to all Holders of Bonds in the same manner as notices of redemption are given hereunder . After the appointment of the first trustee hereunder , no further trustees may be appointed; however , the Holders of a majority in aggregate principal amount of all the Bonds then Outstanding may remove the trustee initially appointed and appoint a successor and subsequent successors at any time . SECTION 6 . 03 . Directions to Trustee as to Remedial. proceedings . The Holders of a majority in principal amount of the Bonds then Outstanding (or any Insurer insuring , or any Credit Bank providing a Credit Facility for , any then Outstanding Bonds) have the right , by an instrument or concurrent instruments in writing executed and delivered to any trustee appointed pursuant to Section 6 . 02 hereof , to direct the method and place of conducting all remedial proceedings to be taken by any trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions hereof , and that such trustee shall have the right to decline to follow any such direction which in the opinion of such trustee would be unjustly prejudicial to Holders of Bonds not parties to such direction. SECTION 6 . 04 . Remedies Cumulative . No remedy herein conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy or remedies , and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute . SECTION 6 . 05 . waiver of Default . No delay or omission of any Bondholder to exercise any right or power accruing upon any -58- 7624M default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by Section 6. 02 of this Resolution to the Bondholders may be exercised from time to time, and as often as may be deemed expedient . SECTION 6.06 . Application of Moneys After Default . If an Event of Default described in Section 6 . 01(A) or (B) shall happen and shall not have been remedied, the Issuer or a court-appointed trustee or receiver 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, Registrar and Paying Agent hereunder; and (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 Consultants; and (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 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 8 . 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 -59- 7624M 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. SECTION 6 . 07 . • • O 0r • - • • : - 1 . Upon the occurrence and continuance of an Event of Default, each Insurer or Credit Bank, if such Insurer or Credit Bank shall have honored all of its commitments under its Bond Insurance Policy or its Credit Facility, as the case may be, shall be entitled to direct and control the enforcement of all rights and remedies with respect to the Bonds it shall insure or for which such Credit Facility is provided. [End of Article VI] • -60- 7624M ARTICLE VII SUPPLEMENTAL RESOLUTIONS SECTION 7 . 01 . supplemental Resolution Without Bondholders ' Consent . Except as provided herein or in Sections 5 . 18 or 7 . 02 , subsequent to the issuance of Bonds , no amendment , revision or revocation of this Resolution shall be enacted by the Issuer . 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 at any time prior to the first delivery of any Series of Bonds 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 . (F) To authorize Projects or to change or modify the description of any Project . (G) To specify and determine matters necessary or desirable for the issuance of Capital Appreciation Bonds or Variable Rate Bonds . (H) To authorize Additional Bonds or Subordinated Indebtedness . ( I ) To maintain or obtain a rating on any Bonds , to implement or discontinue, if necessary, a book-entry system of registration ' Bonds or to preserve the tax-exempt status of Bonds . -61- 7624M (J) To make amendments permitted by Section 5 . 18 hereof . (K) To make any other change that , in the opinion of Bond Counsel , would not materially adversely affect the security for the Bonds . In making such determination, Bond Counsel shall not take into consideration any Bond Insurance Policy . Except Supplemental Resolutions described in subsections (E) , (F) , (H) and (J) of this Section 7 . 01 and Supplemental Resolutions adopted for the purpose of authorizing Additional Bonds in compliance with all applicable provisions hereof , no Supplemental Resolution adopted pursuant to this Article VII shall become effective unless approved by every Insurer ; and the Issuer covenants and agrees to furnish to each Insurer an executed original transcript of the Issuer ' s proceedings with respect to the adoption of each Supplemental Resolution. SECTION 7 . 02 . Supplemental Resolution With Bondholders ' . Insurer ' s and Credit Bank ' s Consent . Except as otherwise provided in Section 7 . 03 hereof , subject only to the terms and provisions contained in Section 5 . 18 hereof and in this Section 7 . 02 , 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, 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 if 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 7 . 02 . Any Supplemental Resolution which is adopted in accordance with the provisions of this Section 7 . 02 shall also require the written consent of the Insurer of , or any Credit Bank providing a Credit Facility for , 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 the Pledged Funds which adversely affects the rights granted by the Bonds or this Resolution in favor of 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. If at any time the Issuer shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursuant to this -62- 7624M Section 7 . 02 , the Clerk shall cause the Registrar to give notice of the proposed adoption of such Supplemental Resolution and the form of consent to such adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they appear on the registration books and to all Insurers of, and Credit Banks providing a Credit Facility for, Bonds Outstanding . Such notice shall briefly set forth the nature of the proposed Supplemental Resolution and shall state that copies thereof are on file at the offices of the Clerk and the Registrar for inspection by all Bondholders . The Issuer shall not , however, be subject to any liability to any Bondholder by reason of its failure to cause the notice required by this Section 7 . 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 7. 02 . Whenever the Issuer shall deliver to the Clerk an instrument or instruments in writing purporting to be executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed Supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the Issuer may adopt such Supplemental Resolution in substantially such form, without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. If the Holders of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of the adoption of such Supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no Holder of any Bond shall have any right to object to the adoption of such Supplemental Resolution, or to object to any of the terms and provisions contained therein or the operation thereof , or in any manner to question the propriety of the adoption thereof , or to enjoin or restrain the Issuer from adopting the same or from taking any action pursuant to the provisions thereof . Upon the adoption of any Supplemental Resolution pursuant to the provisions of this Section 7 .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 7 . 03 . 8nendment with Consent of Insurer and/or Credit Dank Only. If all of a Series of Bonds Outstanding hereunder are insured or secured as to payment of principal and interest by an Insurer or Insurers and/or by a Credit Facility provided by a Credit Bank or Credit Banks, and the Insurer or Insurers and/or -63- 7624M • the Credit Bank or Credit Banks , as applicable , are not in default , and such Bonds , at the time of the hereinafter described amendment , shall be rated by the rating agencies which shall have rated the Bonds at the time such Bonds were insured or such Credit Facility was provided no lower than the ratings assigned thereto by such rating agencies on the date such Bonds were insured or such Credit Facility was provided, the Issuer may enact one or more Supplemental Resolutions amending all or any part of Articles I , IV, V, VI and VIII hereof with the written consent of said Insurer or Insurers and/or said Credit Bank or Credit Banks , as applicable, and the acknowledgment by said Insurer or Insurers and/or said Credit Bank or Credit Banks that its Bond Insurance Polity or its Credit Facility, as the case may be, 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 . 15 hereof with respect to the exclusion, if applicable , of interest on said Bonds from the gross income of the Holders thereof for federal income tax purposes 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 and any additional security pledged hereunder . Upon filing with the Clerk of evidence of such consent of the Insurer or Insurers and/or the Credit Bank or Credit Banks 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 7 . 02 hereof . SECTION 7 . 04 . Required Opinion of Bond Counsel . The Issuer shall not adopt a Supplemental Resolution unless the Issuer shall have received an opinion of Bond Counsel to the effect that such action is permitted hereunder and will not impair the exclusion of the interest on any Bonds (other than Taxable Bonds) from gross income for federal income tax purposes . [End of Article VII] -64- 7624M ARTICLE VIII MISCELLANEOUS SECTION 8 . 01 . Pe easanc- . 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 any additional security pledged hereunder , 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 8 . 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 irrevocably call such Bonds for redemption and notice of such redemption shall have been duly given or irrevocable 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 noncallable Federal 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 . Neither the Federal 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 Federal Securities shall be withdrawn or used for any purpose other than, and all such moneys shall be held in trust for and be applied to, the payment , when due, of the principal of or Redemption Price , if applicable, of the Bonds for the payment or redemption of which they were deposited and the interest accruing thereon to the date of maturity or redemption thereof ; provided , however , the Issuer may substitute new Federal Securities and moneys for the deposited Federal Securities and moneys if the new Federal Securities and moneys are sufficient to pay the principal of or Redemption Price , if applicable, and interest on such Bonds, and any trust agreement governing the deposit of such Federal Securities and moneys may provide for the investment of moneys unclaimed by Bondholders and for the payment to the Issuer of such unclaimed moneys and the investment earnings thereon . _65_ 7624M For purposes of determining whether Variable Rate Bonds shall be deemed to have been paid prior to the maturity or the redemption date thereof , as the case may be, by the deposit of moneys , or specified Federal Securities and moneys , if any, in accordance with this Section 8 . 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 Federal 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 in order to satisfy this Section 8 . 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 8 . 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 8 . 01 of moneys or Federal Securities has been made and said Bonds are deemed to be paid in accordance with the provisions of this Section 8 . 01 and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal 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, but the Issuer may waive these rights by Supplemental Resolution. In the event that the principal of or Redemption Price, if applicable, and interest due on the Bonds or any portion thereof shall be paid by an Insurer or Insurers , a Credit Bank or Credit Banks and/or the issuer of a Reserve Account Letter of Credit or Reserve Account Insurance Policy and such Insurer , Credit Bank and/or issuer shall not have been reimbursed by the Issuer , such Bonds or any portion thereof shall remain Outstanding , shall not be defeased and shall not be considered paid by the Issuer , and the pledge of the Pledged Funds and any additional security pledged hereunder , and all covenants , agreements and other obligations of the Issuer to the Bondholders shall continue to exist and such Insurer or Insurers , such Credit Bank or Credit Banks and such issuer shall be subrogated to the rights of such Bondholders . -66- 7624M SECTION 8 . 02 . Capital Appreciation Honda. 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 Issuer 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 8 . 03 . General Authority. The members of the Governing Body and the Issuer ' s officers , attorneys and other agents and employees are hereby authorized to do all acts and things required of them by this Resolution or desirable or consistent with the requirements hereof for the full , punctual and complete performance of all of the terms , covenants and agreements contained in the Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents which shall be required by Bond Counsel or the initial purchasers of the Bonds to effectuate the sale of the Bonds to said initial purchasers . SECTION 8 . 04 . No Personal Liability. No representation , statement , covenant , warranty, stipulation, obligation or agreement herein contained, or contained in the Bonds , or in any certificate or other instrument to be executed on behalf of the Issuer in connection with the issuance of the Bonds , shall be deemed to be a representation, statement , covenant , warranty, stipulation, obligation or agreement of any member of the Governing Body, officer , employee or agent of the Issuer in his or her individual capacity, and none of the foregoing persons nor any officer of the Issuer executing the Bonds or any certificate or other instrument to be executed in connection with the issuance of the Bonds , shall be liable personally thereon or be subject to any personal liability or accountability by reason of the execution or delivery thereof . SECTION 8 . 05 . No Third Party Beneficiariea. Except such other Persons as may be expressly described herein or in the Bonds , nothing in this Resolution, or in the Bonds , expressed or implied, is intended or shall be construed to confer upon any Person other than the Issuer , any Insurer , any Credit Bank and the Holders any right , remedy or claim, legal or equitable, under and by reason of this Resolution or any provision hereof , or of the Bonds , all provision hereof and thereof being intended to be and being for the sole and exclusive benefit of the Issuer , any Insurer , any Credit Bank and the Persons who shall from time to time be the Holders . SECTION 8 . 06 . Sale of BonS&_s.. The Bonds shall be issued and sold at public and/or private sale at one time or in installments _67_ 7624M 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 8 . 07 . 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 8 . 08 . Repeal of Inconsistent Resolutions . All resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict . SECTION 8 . 09 . Table of Contents and Headines not Part Hereof . The Table of Contents preceding the body of this Resolution and the headings preceding the several articles and sections hereof shall be solely for convenience of reference and shall not constitute a part of this Resolution or affect its meaning , construction or effect . SECTION 8 . 10 . Issuer Reserved Rights . The Issuer reserves the right not to issue any Bonds for any reason. No Bonds shall be issued except pursuant to a Supplemental Resolution . SECTION 8 . 11 . Holidays ;Time . In any case where the date of maturity of interest on or principal of the Bonds or the date fixed for redemption of any Bonds is not a Business Day, then 1 payment of principal , premium, if any, or interest need not be made on such date but may be made on the next succeeding Business Day, with the same force and effect as if made on the date of maturity or the date fixed for redemption . All references to specified times of day shall be deemed to refer to the then prevailing time within the jurisdiction of the Issuer . SECTION 8 . 12 . Authorization to Deem Final and to Accept Insurance Commitment . The Mayor or Town Manager are severally authorized to "deem final" the Preliminary Official Statement for the Series 1995 Bonds for purposes of Securities and Exchange Commission Rule 15c2-12 and to accept the "Commitment to Issue a Financial Guaranty Insurance Policy" dated September 1 , 1995 , issued by MBIA Insurance Corporation . SECTION 8 . 13 Section 265 PesiQnatiQll. The reasonably anticipated amount of tax-exempt obligations which will be issued by the Issuer during 1995 does not exceed $10 , 000 , 000 . The Issuer -68- 7624M designates the Series 1995 Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b) (3) of the Internal Revenue Code of 1986 . SECTION 8 . 14 . Effective Date. This Resolution shall become effective immediately upon its passage. PASSED AND ADOPTED THIS 3rd DAY OF OCTOBER, 1995. ATTEST: TOWN OF HIGHLAND BEACH, FLORIDA r /Sat TO N CLERK J ARLIN G. VORESS, MAYOR W E. PA)L, VIC MAYOR ARTHUR EYP CO ISSIONE r. 0007rRAND, COMMISSION R • ( ui " cu \ ZI DAVID AUGENSTEI , COMMISSIONER -69- 7624M 3 . CERTIFICATE OF TRUE COPY I , the undersigned Town Clerk of Town of Highland Beach, Florida, DO HEREBY CERTIFY that attached hereto is a true and correct copy of Resolution No. 678 duly adopted by the Town Commission November 7, 1995, and that said resolution remains in force and has not been amended. IN WITNESS WHEREOF, I have hereunto set my hand as of the 29th day of November, 1995 . By: � C�/`J�/J�/�J To n Clerk /��/ V 7794M/3 RESOLUTION NO. 678 A RESOLUTION OF THE TOWN COMMISSION OF THE TOWN OF HIGHLAND BEACH, FLORIDA AUTHORIZING THE ISSUANCE OF THE TOWN' S $4 ,485, 000 AGGREGATE PRINCIPAL AMOUNT WATER AND SEWER REVENUE BONDS, SERIES 1995; SETTING FORTH INTEREST RATES, A MATURITY SCHEDULE AND REDEMPTION PROVISIONS FOR SUCH BONDS; AWARDING THE SALE OF THE BONDS TO STIFEL, NICOLAUS & COMPANY INCORPORATED AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH; APPOINTING NATIONSBANK OF FLORIDA, N .A. AS PAYING AGENT AND REGISTRAR FOR THE BONDS; APPROVING THE FORM AND RATIFYING THE PRIOR USE OF A PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING THE PREPARATION, EXECUTION AND DELIVERY OF A FINAL OFFICIAL STATEMENT; SUPPLEMENTING CERTAIN PROVISIONS OF RESOLUTION NO. 677 OF THE TOWN ADOPTED OCTOBER 3, 1995; AUTHORIZING AND DIRECTING CERTAIN OFFICIALS OF THE TOWN TO TAKE ALL ACTION REQUIRED IN CONNECTION WITH THE ISSUANCE OF THE BONDS; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION WITH THE ISSUANCE OF THE BONDS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on October 3 , 1995, the Town Commission (the "Governing Body" ) of the Town of Highland Beach, Florida (the " Issuer" ) adopted Resolution No. 677 (the "Bond Resolution" ) authorizing the issuance of not to exceed $5, 500, 000 aggregate principal amount of Water and Sewer Revenue Bonds, Series 1995 of the Issuer for the purpose of financing the Series 1995 Project and providing for the reimbursement of the Original Expenditures (as defined in the Bond Resolution) ; and WHEREAS, pursuant to the Bond Resolution, prior to the issuance of bonds thereunder there is to be adopted by the Issuer a Supplemental Resolution or Resolutions authorizing the issuance of the bonds and fixing the details thereof ; and WHEREAS, the Issuer has determined to issue bonds under Section 2 . 02 of the Bond Resolution in the principal . amount of $4 ,485, 000 (the "Bonds" ) as further provided herein; and WHEREAS, the Issuer has received an offer (the "Bond Purchase Agreement") dated November 7, 1995 from Stifel, Nicolaus & Company Incorporated (the "Original Purchaser" ) to purchase the Bonds on the basis of the terms and provisions therein; and WHEREAS, the Issuer desires to sell the Bonds to the Original Purchaser pursuant to the terms and provisions of the Bond Purchase Agreement ; and WHEREAS, it is necessary and desirable to approve the form of and ratify the prior use of a Preliminary Official Statement and to authorize the preparation, execution and delivery of an Official Statement in connection with the issuance of the Bonds; and WHEREAS, it is necessary and desirable to specify the date, the interest rates, maturity dates, and redemption provisions for the Bonds, to appoint NationsBank of Florida, N.A. as Paying Agent and Registrar for the Bonds, and to approve the form of and authorize the execution of a Paying Agent and Registrar Agreement ; and WHEREAS, the issuance of the Bonds and the sale thereof to the Original Purchaser will, in the judgment of the Issuer, serve a public purpose and in all respects conform to the provisions and requirements of the Act; NOW, THEREFORE, BE IT RESOLVED by the Town Commission of the Town of Highland Beach, Florida : Section 1 . Authority for this Resolution; Definitions . This resolution is adopted pursuant to the provisions of the Act (as defined in the Bond Resolution) and the Bond Resolution. Terms used herein in capitalized form shall have the meaning ascribed thereto by the Bond Resolution. Section 2 . Authorization of Bonds . Obligations of the Issuer known as "Water and Sewer Revenue Bonds , Series 1995" are hereby authorized to be issued under and pursuant to the Bond Resolution in the aggregate principal amount of $4 , 485, 000 . Section 3 . Terms of the Bonds . (a) Amounts, Maturities. Interest Rates . The Bonds shall be dated November 1 , 1995, and shall bear interest from such date, payable semi-annually on the first day of January and July of each year (the "interest Payment Dates" ) , commencing July 1, 1996 . The Bonds shall be issued in the aggregate principal amounts, shall bear interest at the rates per annum computed on the basis of a 360-day year consisting of twelve thirty (30) day months, and shall mature on July 1 of the years, as set forth in the following table: -2- 7789M Amount Maturity Interest Rate $ 90, 000 2001 4 . 3 % 95 , 000 2002 4 . 4 95, 000 2003 4 . 5 100, 000 2004 4 . 6 290, 000 2005 4 . 7 300, 000 2006 4 . 8 315, 000 2007 4 . 95 330, 000 2008 5 . 10 350, 000 2009 5. 20 365, 000 2010 5 . 30 385, 000 2011 5 .40 1, 770 , 000 2015 5 .25 (b) Optional Redemption. The Bonds maturing on and prior to July 1, 2005, are not subject to optional redemption prior to maturity. The Bonds maturing on and. after July 1, 2006, are subject to redemption at the option of the Issuer, on or after July 1 , 2005 , in whole or in part on any date, by lot within a maturity in such selection of maturities as the Issuer shall deem appropriate, at the redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed) as set forth below, plus accrued and unpaid interest thereon to the date of redemption. REDEMPTION DATES REDEMPTION PRICE (Both Inclusive) July 1, 2005 through June 30, 2006 101 % July 1, 2006 through June 30 , 2007 100 . 5 July 1, 2007 and thereafter 100 (c) Mandatory Redemption of Term Bonds . The Bonds maturing in the year 2015 (the "Term Bonds" ) shall be subject to mandatory redemption in part by the Issuer at a redemption price equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date, on July 1 in such years and in the principal amounts as set forth below (except for the final installment due at maturity which shall not be a redemption) : TERM BONDS Year Amount 2012 $405 , 000 2013 430 , 000 2014 455 , 000 2015 (maturity) 480, 000 If prior to any July 1 the Issuer shall purchase for cancellation or redeem Term Bonds in excess of the aggregate -3- 7789M mandatory redemption requirement for such Term Bonds to but not including such July 1, such excess of Term Bonds so purchased or redeemed and not previously applied as a credit pursuant to this Section 3 shall be credited over such of the remaining mandatory redemption dates for such Term Bonds as the Issuer shall determine, and shall reduce the amount of Term Bonds otherwise subject to redemption and due, respectively, on such date(s) . Provided, however, that no such excess shall be credited to the amount of Term Bonds subject to mandatory redemption on a particular July 1 after the selection of Term Bonds to be redeemed on such date has been made. Section 4 . paving Agent and Registrar . The Issuer hereby appoints NationsBank of Florida, N.A. (the "Bank" ) as the Paying Agent and Registrar with respect to the Bonds . The form of Paying Agent and Registrar Agreement (the "Agreement" ) attached hereto as Exhibit A is hereby approved and the Mayor is hereby authorized and directed for and in the name of the Issuer to execute, and the Town Clerk is authorized to attest and apply the seal of the Issuer to the Agreement , with such changes, alterations or corrections thereto as shall be approved by the officials executing the same, such execution to constitute conclusive evidence of such approval . Section 5 . Award of the Bonds . The Issuer hereby determines that a negotiated sale of the Bonds is in the best interest of the Issuer and the citizens and inhabitants of the Issuer by reason of the volatility of the market for tax-exempt bonds . The Bonds are hereby awarded to the Original Purchaser at a price of $4 , 315, 415 . 59 ( representing the par amount of the Bonds , $4 ,485, 000 , less underwriter ' s discount of $72 , 510 .81 and less original issue discount of $97, 073 . 60) , plus accrued interest from November 1, 1995 to the date of delivery, with the date of delivery to follow in the manner and at the time and subject to the conditions set forth in the Bond Purchase Agreement . The Original Purchaser has filed with the Issuer the disclosure statement required by Section 218 . 385(6) , Florida Statutes, and the competitive bidding for the Bonds is hereby waived pursuant to the authority of Section 218 . 385(1) , Florida Statutes . The Original Purchaser has filed with the Issuer the truth-in-bonding statement required by Section 218 .385, Florida Statutes . Attached hereto as Exhibit B is a form of Bond Purchase Agreement (the "Bond Purchase Agreement" ) . The Issuer approves the Bond Purchase Agreement and the Mayor is hereby authorized and directed for and in the name of the Issuer to execute, and the Town Clerk is authorized to attest to and affix the seal of the Issuer to and deliver the Bond Purchase Agreement with such changes, alterations or corrections thereto as shall be approved by the official(s) executing the same consistent with this Resolution and the terms of the Act , such execution to constitute conclusive evidence of such approval . -4- 7789M Section 6 . Official Statement . The Issuer hereby approves the form and content of the Preliminary Official Statement dated October 26, 1995 relating to the Bonds attached hereto as Exhibit C and ratifies its use in connection with the sale of the Bonds . The Issuer hereby authorizes the preparation of a Final Official Statement which shall be in the form of the Preliminary Official Statement with such changes, alterations and corrections therein as may be necessary to conform to the terms of the Bonds and as may be approved by the Mayor and Town Manager , such approval to be conclusively established by such execution, and the Mayor and Town Manager are authorized and directed for and in the name of the Issuer to execute and deliver the Official Statement, as hereby approved. Section 7 . Application of Proceeds . Proceeds from the sale of the Bonds shall be applied to the purposes identified in the Bond Resolution pursuant to a written certificate signed on behalf of the Issuer by the Mayor and Finance Director at the time of issuance of the Bonds . Section 8 . Amendments to Bond Resolution. (a) The definition "Reserve Account Requirement" contained in Section 1 . 01 of the Bond Resolution is hereby amended in its entirety to provide as follows : "Reserve Account Requirement" shall mean, for a subaccount in the Reserve Account, unless otherwise provided with respect to a Series of Bonds by Supplemental Resolution adopted prior to issuance of such Series, as of any date of calculation, an amount of money equal to the lesser of ( 1) the Maximum Debt Service Requirement for the Series of Bonds to which such subaccount relates, (2) 125% of the average annual Debt Service Requirement for the Series of Bonds to which such subaccount relates calculated as of the date of issuance of such Series, or (3) 10% of the aggregate initial principal amount of the Series of Bonds to which such subaccount relates, less any original issue discount attributable to the sale of such Series . In computing the Reserve Account Requirement, the interest rate on Variable Rate Bonds shall be assumed to be the lesser of (a) the 30-year Revenue Bond Index most recently published by The Bond Buver but in no event published more than two weeks prior to the date of issuance of such Variable Rate Bonds or (b) the Maximum Interest Rate. -5- 7789M (b) The final sentence of Section 5 . 16 of the Bond Resolution is amended in its entirety to provide as follows : Any moneys so deposited with and held by the Paying Agent for the payment of Bonds not so claimed by the earlier of (i) the date six months prior to the date on which such funds would escheat to the State of Florida pursuant to the unclaimed or abandoned property laws of the State or (ii) seven years after the date the payment of such Bond shall have become due, whether at maturity or otherwise, shall be presumed to be abandoned and shall be returned to the Issuer, and the Issuer shall comply with the provisions of Chapter of 717, Florida Statutes , or any successor thereof, in respect of such moneys . Section 9 . Execution and Delivery of the Bonds. The Mayor and Town Clerk are hereby authorized and directed on behalf of the Issuer to execute the Bonds as provided in the Bond Resolution and herein, and such officials are hereby authorized and directed upon the execution of the Bonds in the form and manner set forth herein and in the Bond Resolution to deliver the Bonds in the amount authorized to be issued hereunder to the Registrar for authentication and delivery to or upon the order of the Original Purchaser upon payment of the purchase price set forth herein. Section 10 . Authorizations . The members of the Governing Body are hereby jointly and severally authorized to do all acts and things required of them by this resolution, the Bond Resolution, the Bond Purchase Agreement, or desirable or consistent with the requirements hereof or thereof , for the full , punctual and complete performance of all terms, covenants and agreements contained in the Bonds, the Bond Resolution, this resolution, and the Bond Purchase Agreement . Any and all members of the Governing Body are hereby authorized to execute, publish, file and record such other documents, instruments, notices, and records and to take such other actions as shall be necessary or desirable to accomplish the purposes of this resolution and the Bond Resolution. Section 11 . Resolution to Constitute a Contract . In consideration of the purchase and acceptance of the Bonds authorized to be issued hereunder by those who shall be the Holders thereof from time to time, this resolution shall constitute a contract between the Issuer and such Holders , and all covenants and agreements herein set forth to be performed by the Issuer shall be for the equal benefit and security of all of the Holders . Section 12 . No Implied Beneficiarv. With the exception of any rights herein expressly conferred, nothing expressed or -6- 7789M mentioned in or to be implied from this resolution, the Bond Resolution or the Bonds is intended or shall be construed to give any person other than the Issuer, MBIA, the Bank and the Holders, any legal or equitable right , remedy or claim under or with respect to this resolution or the Bond Resolution, or any covenants, conditions and provisions herein or therein contained; this resolution and the Bond Resolution and all of the covenants , conditions and provisions hereof and thereof being intended to be and being for the sole and exclusive benefit of the Issuer, MBIA, the Bank and the Holders . Section 13 . Severability. If any provision of this resolution shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable in any context , the same shall not affect any other provision herein or render any other provision (or such provision in any other context) invalid, inoperative or unenforceable to any extent whatsoever . Section 14 . Repealer . All resolutions or parts thereof of the Issuer in conflict with the provisions herein contained are, to the extent of any such conflict, hereby superseded and repealed . Section 15 . Qualified Tax-Exempt Obligations . The reasonably anticipated amount of tax-exempt obligations which will be issued by the Issuer during calendar year 1995 does not exceed $10,000, 000 . The Issuer designates the Bonds as "Qualified Tax-exempt Obligations" for purposes of Section 265(b) (3) of the Internal Revenue Code of 1986 . Section 16 . Effective Date. This resolution shall take effect immediately upon its adoption. PASSED AND APPROVED this 7th day of November, 1995 . ATTES ' TOWN OF HIGHLAND BEACH, FLORIDA /At• c/ , 4 OWN CL RK 1 ARLIN G. VORESS, MAYOR 2 — —P Ii ' MAYOR A• •HU EYP L, .i!, IS IONER C55— F � � RAN CO ISSIONE • àCeAAk V11 Q Its D AUGENSS�rT__E 1�N, OMMI SS I ONER -7- 7789M $4, 485, 000 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS, SERIES 1995 BOND PURCHASE AGREEMENT November 7, 1995 Honorable Mayor and Members of the Town Commission of the Town of Highland Beach, Florida 3614 South Ocean Boulevard Highland Beach, Florida 33487 Gentlemen : The undersigned, Stifel , Nicolaus & Company Incorporated (the "Underwriter" ) offers to enter into this Bond Purchase Agreement with the Town of Highland Beach, Florida (the "Town" ) , which, upon the acceptance of this offer and the execution of this Bond Purchase Agreement by the Town, shall be in full force and effect in accordance with its terms and shall be binding upon the Town and the Underwriter. This offer is made subject to your acceptance and execution of this Bond Purchase Agreement on or before 11 : 59 p.m. , prevailing local time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon oral or written notice delivered by the Underwriter to the Town at any time prior to the acceptance hereof by the Town. 1 . Purchase of Series 1995 Bonds . Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the Town for offering to the public $4 , 485, 000 in aggregate principal amount of the above-referenced bonds (herein, the "Series 1995 Bonds" ) , and the Town hereby agrees to sell to the Underwriter all of the Series 1995 Bonds at a purchase price of $4 , 315, 415 . 59 (representing the $4 , 485, 000 aggregate principal amount of the Series 1995 Bonds, less an original issue discount of $97, 073 . 60 and less an Underwriter' s discount of $72 , 510 . 81) (the "Purchase Price" ) , plus accrued interest on the Series 1995 Bonds from November 1, 1995 to the day of Closing (hereinafter defined) , payable to the order of the Town in immediately available funds . w6'.SMfXODS‘61129.4k15376 010M11/07/95 The Series 1995 Bonds shall be secured by a municipal bond insurance policy (the "Policy" ) to be issued by the MBIA Insurance Corporation (the "Insurer" ) . The Underwriter agrees to make a bona fide public offering of substantially all of the Series 1995 Bonds to the public at initial public offering prices not greater than (or yields not less than) the initial public offering prices (or yields) set forth in the Official Statement (hereinafter defined) ; provided, however, that the Underwriter reserves the right to make concessions to certain dealers, certain dealer banks and banks acting as agents and to change such initial public offering prices as the Underwriter shall deem necessary in connection with the marketing of the Series 1995 Bonds . 2 . Good Faith Deposit . Delivered to the Town herewith, as a good faith deposit, is a corporate check of the Underwriter payable to the order of the Town in the amount of $45, 000 , as security for the performance by the Underwriter of its obligation to accept and pay for the Series 1995 Bonds at Closing in accordance with the provisions hereof . In the event that the Town accepts this offer, said check will be held uncashed by the Town as a good faith deposit . At the Closing, the check will be returned to the Underwriter. In the event the Town does not accept this offer, the check shall be immediately returned to the Underwriter. If the Underwriter fails (other than for a reason permitted hereunder) to accept and pay for the Series 1995 Bonds at the Closing as provided herein, the check may be cashed by the Town and the proceeds retained by the Town as and for full liquidated damages for such failure by the Underwriter and for .any and all defaults hereunder on the part of the Underwriter, and the retention of such amounts shall constitute a full release and discharge of all claims and damages for such failure and for any and all such defaults hereunder on the part of the Underwriter. In the event that the Town fails to deliver the Series 1995 Bonds at the Closing, or if the Town is unable at or prior to the Closing date to satisfy or cause to be satisfied the conditions to the obligations of the Underwriter contained in this Bond Purchase Agreement, or if the obligations of the Underwriter contained herein shall be canceled or terminated for any reason permitted by this Bond Purchase Agreement, the Town shall be obligated to immediately return the check to the Underwriter and such return of the check shall constitute a full release and discharge of all claims and damages for such failure by the Town and for any and all such defaults hereunder on the part of the Town. 3 . The Series 1995 Bonds . The Series 1995 Bonds shall be as described in, and shall be issued and secured under and pursuant to, the Constitution of the State of Florida, Part II , Chapter 166 , Florida Statutes, as amended, the Town Charter, as amended, and other applicable provisions of law (collectively, the "Act" ) , Ordinance No. 651, enacted by the Town on September 5, 1995 - 2 - 1,8,.5M100$167729.4115776.919299\Ill9W% (herein, the "Ordinance") and Resolution No. 677 relating to the Series 1995 Bonds, adopted by the Town on October 3 , 1995, as amended and supplemented, and as particularly supplemented by a Resolution awarding and determining certain details of the Series 1995 Bonds adopted by the Town on November 7, 1995 (collectively, the "Bond Resolution" ) . The Series 1995 Bonds shall mature on such dates, shall bear interest at such rates, and shall be subject to redemption as set forth in the Bond Resolution. Payment of principal of, and interest on, the Series 1995 Bonds shall be insured by the Insurer. In connection with the public offering of the Series 1995 Bonds, the Underwriter has delivered to the Town a letter containing the information required by Chapter 218 . 385 of the Florida Statutes which letter is in the form attached hereto as Exhibit A. It shall be a condition to the obligation of the Town to sell and deliver the Series 1995 Bonds to the Underwriter, and the obligation of the Underwriter to purchase and accept delivery of the Series 1995 Bonds, that the entire aggregate principal amount of the Series 1995 Bonds shall be sold and delivered by the Town and paid for by the Underwriter at the Closing. Any capitalized term used in this Bond Purchase Agreement and not otherwise defined shall have the meaning ascribed to such term in the Bond Resolution. The Town is proposing to issue the Series 1995 Bonds in the aggregate initial principal amount of $4 , 485, 000 for the purpose of (i) repaying the Promissory Note, (ii) paying a portion of the costs of a firetruck and capital expenditures with respect to the Town' s new firestation, (iii) reimbursing the Town . for certain prior capital expenditures, (iv) funding a debt service reserve subaccount in the Reserve Account equal to the Reserve Account Requirement for the Series 1995 Bonds and (v) paying costs of issuance of the Series 1995 Bonds . 4 . Official Statement . As soon as practicable after the date hereof , and, in any event, within seven business days from the date hereof (or within such shorter period as may be reasonably requested by the Underwriter in order to accompany any confirmation that requests payment from any customer to comply with Rule G-32 and G-36 of the Municipal Securities Rulemaking Board ( "MSRB" ) ) , the Town shall, so as to enable the Underwriter to comply with the provisions of Rule 15c2-12 of the Securities and Exchange Commission ( "SEC" ) promulgated under the Securities and Exchange Act of 1934 , as amended ( "Rule 15c2-12" ) , deliver to the Underwriter a sufficient number of printed copies of the final Official Statement with respect to the Series 1995 Bonds dated the date hereof in the form executed by the Mayor and Town Manager of the Town on the date hereof (including the cover page and any appendices contained therein, the "Official Statement" ) . The Underwriter agrees to file the Official Statement with at least one Nationally Recognized Municipal Securities Information Repository ( "NRMSIR" ) which has been so designated by the SEC pursuant to Rule 15c2-12 not later than two (2) business days after the Closing, and will furnish a list of the names and addresses of each such NRMSIR receiving a copy to the Town. The Underwriter we�vavmSsne9.��IS7)6.el mmte>/95 - 3 — also agrees to file two copies of the Official Statement and two copies of completed form G-36 , including the CUSIP number or numbers for the issue, with the MSRB not later than one business day after receipt of the Official Statement from the Town or its designated agent but no later than 10 business days after the execution hereof . The Town authorizes the use and distribution of the Official Statement in connection with the public offering and sale of the Series 1995 Bonds . The Underwriter agrees that they will not confirm the sale of any Series 1995 Bonds unless the confirmation of sale requesting payment is accompanied or preceded by the delivery of a copy of the Official Statement . The Underwriter shall notify the Town of the occurrence of the "end of the underwriting period" , as such term is defined in Rule 15c2-12, on the date which is one day thereafter and of the passage of the date after which the Underwriter no longer remains obligated to deliver Official Statements pursuant to paragraph (b) (4) of Rule 15c2-12 on the date which is one day thereafter. 5 . Use of Documents . The Town hereby authorizes and ratifies the use by the Underwriter of the Preliminary Official Statement , dated October 26, 1995 (which, together with the cover page and all appendices included therein is herein called the "Preliminary Official Statement" ) , prior to the date hereof, and authorizes the use by the Underwriter of (a) the Official Statement, as the same may be modified, amended or supplemented upon mutual agreement of the Town and the Underwriter (including any supplements or amendments thereto to be used in connection with the public offering and sale of the Series 1995 Bonds) , and (b) any other documents related to the transactions contemplated in the Official Statement in connection with the public offering, sale and distribution of the Series 1995 Bonds . 6 . Conditions Precedent to Execution of this Agreement by the Underwriter . On or before the acceptance by the Town of this Agreement, the Town shall deliver to the Underwriter, together with such reasonable number of copies thereof as the Underwriter may request , certified copies of the Bond Resolution and the Ordinance . 7 . Representations and Warranties of the Town . The Town represents and warrants to the Underwriter as follows : (a) As of their respective dates, at the time of acceptance hereof and at the time of Closing, the statements and information contained in the Preliminary Official Statement, the Official Statement , and this Bond Purchase Agreement are and will be accurate in all material respects for the purposes for which their use is authorized, and do not and will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under ..Msysamswm:%1w4.owxoavm/ss - 4 - which they were made, not misleading (except with respect to information contained in the Preliminary Official Statement and the Official Statement supplied by the Insurer as to which the Town makes no representation and/or warranty) . In addition, any amendments to the Official Statement prepared and furnished by the Town pursuant hereto will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except with respect to information contained in the Preliminary Official Statement and the Official Statement supplied by the Insurer as to which the Town makes no representation and/or warranty) . (b) As of its date, the Preliminary Official Statement was deemed "final" by the Town for purposes of SEC Rule 15c2- 12 (b) (1) . (c) When executed and delivered by the Town in accordance with the provisions of this Bond Purchase Agreement, the Series 1995 Bonds will have been duly authorized by the Town, in the manner required under applicable law, executed, issued and delivered and will constitute valid and binding obligations of the Town, enforceable against the Town in accordance with their terms, in conformance with the Act, the Ordinance and the Bond Resolution, such enforceability being subject to bankruptcy, insolvency, reorganization, moratorium or similar laws, relating to or affecting the enforcement of creditors' rights generally and to the exercise of judicial discretion in accordance with general principles of equity. (d) The enactment by the Town of the Ordinance, the adoption by the Town of the Bond Resolution and the execution and delivery by the Town of this Bond Purchase Agreement, the Series 1995 Bonds, and all other documents executed and delivered by the Town in connection with the issuance of the Series 1995 Bonds and the compliance by the Town with the provisions thereof will not in any material respect conflict with or result in a material breach or violation of any of the terms or provisions of , or constitute a material default under, any agreement or other instrument to which the Town is a party or by which the Town is bound, or any existing law, administrative regulation, court order or consent decree to which the Town or its property is subject . (e) The Town will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request, to (i) qualify the Series 1995 Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the - 5 - 5wroe6A6M9 alnie.ai n/m�s5 w United States of America as the Underwriter may designate and (ii) determine the eligibility of the Series 1995 Bonds for investment under the laws of such states and other jurisdictions and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Series 1995 Bonds, provided that, in connection therewith, the Town shall not be required to file a general consent to service of process or qualify to do business in any jurisdiction or become subject to service of process in any jurisdiction in which the Town is not now subject to such service . (f) Between the date of this Bond Purchase Agreement and the time of Closing, the Town will not, without giving prior written notice thereof to the Underwriter, execute any bonds, notes or other obligations for borrowed money secured by the Pledged Funds . (g) The Town is, and will be at the date of Closing, duly organized and validly existing as a municipal corporation under the Constitution and laws of the State of Florida with the power and authority set forth in the Act . (h) The Town (i) has full legal power and authority to adopt the Bond Resolution and enact the Ordinance; to execute and deliver this Bond Purchase Agreement ; to issue, sell and deliver the Series 1995 Bonds; and to carry out and consummate the transactions contemplated by this Bond Purchase Agreement, the Bond Resolution and the Official Statement; (ii) has in full force and effect all consents, approvals, permits or other actions by or filings with any governmental authority required for the execution and delivery by the Town of this Bond Purchase Agreement, the Ordinance, the Preliminary Official Statement, the Official Statement, and the Bond Resolution, and for the performance by the Town of the transactions contemplated thereby; (iii) represents that from the time of acceptance by the Town hereof through the date of the Closing, except as contemplated by the Official Statement, the Town will not incur any material liabilities, direct or contingent, or enter into any transaction that could adversely affect the transactions contemplated hereby or by the Bond Resolution, and there shall not have been any material adverse change in the condition, financial or physical , of the Town other than changes in the ordinary course of business or in the normal operation of the facilities operated by the Town that could adversely affect the transactions contemplated hereby; (iv) represents that the execution and delivery by the Town of this Bond Purchase Agreement, the Ordinance, the Preliminary Official Statement , the Official Statement, the Series 1995 Bonds and the Bond Resolution, the compliance by the Town with the provisions thereof, and the carrying out and consummation by the Town of its obligations under such - 6 Immoim9.mumommi U0NA MIP documents and instruments will not conflict with or constitute a material breach of or default under any law, administrative regulation, court decree, instrument or agreement to which the Town is subject or by which the Town is or any of its properties are bound. (i) If between the date the Official Statement is available until the earlier of (i) the date which is ninety days from the end of the underwriting period (as defined in SEC Rule 15c2-12) , or (ii) the time when the Official Statement is available to any person from a NRMSIR (but in no case less than twenty-five days following the end of the underwriting period) , any event shall occur which, in the opinion of the Town, would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Town shall notify the Underwriter and if in the reasonable opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Town will promptly prepare an appropriate amendment or supplement thereto and file, or cause to be filed, the same with each NRMSIR having the Official Statement on file, file with the MSRB if the MSRB is requiring or permitting the filing of continuing disclosure information, and mail such amendment or supplement to each registered owner of Bonds so that the statements in the Official Statement, as so amended or supplemented, will not, in light of the circumstances under which they were made, be misleading, in a form and in a manner approved by the Underwriter. (j ) Except as disclosed in the Official Statement, to the best knowledge of the Town, as of the date hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or threatened against the Town, affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Series 1995 Bonds, or contesting the validity or enforceability of the Act or the Ordinance in any respect relating to authorization for the issuance of the Series 1995 Bonds or the adoption of the Bond Resolution, or contesting the exclusion from gross income for federal income tax purposes of interest on the Series 1995 Bonds, or contesting the completeness or accuracy of the Official Statement or any supplement or amendment thereto, or contesting the powers of the Town or its authority for the issuance of the Series 1995 Bonds, the enactment of the Ordinance, the adoption of the Bond Resolution, or the exe- cution and delivery by the Town of this Bond Purchase Agree- ment, the Preliminary Official Statement or the Official Statement . - 7 101SSIMOW5‘61729.4%15376.620200%11/M9S (k) The Town covenants to comply with the requirements of the Internal Revenue Code of 1986 , as amended (the "Code" ) in order to maintain the exclusion from gross income for purposes of federal income taxation of the interest on the Series 1995 Bonds . (1) The Town has not, since December 31, 1975, been in default in the payment of principal of, premium, if any, or interest on, or otherwise been in default with respect to, any bonds, notes or other obligations which it has issued, assumed or guaranteed as to payment or principal, premium, if any, or interest . 8 . Closing. On the terms and conditions set forth in this Bond Purchase Agreement, the Underwriter shall purchase all (and not less than all) of the Series 1995 Bonds, and pay the Purchase Price of the Series 1995 Bonds as set forth in Section 1 hereof, and the Town shall deliver the aggregate principal amount of the Series 1995 Bonds in accordance with the instructions provided to the Town by the Underwriter. The closing for the Series 1995 Bonds (the "Closing" ) will be at the offices of Moyle, Flanigan, Katz, FitzGerald & Sheehan, P.A. , 625 North Flagler Drive, West Palm Beach, Florida 33401 on or before November 29, 1995 at 10 : 00 a .m. , prevailing local time, or at such other place or other date or time as may be agreed upon by the parties hereto. The Series 1995 Bonds will be printed, lithographed or engraved and shall be prepared and delivered in such names as the Underwriter shall instruct . 9 . Conditions of Closing. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the Town herein contained and the performance by the Town of its obligations hereunder, both as of the date hereof and as of the time of Closing. The obligations of the Underwriter hereunder are subject to the following conditions : (a) At the time of the Closing, (i) the Ordinance and the Bond Resolution and any other documents deemed necessary in connection with the issuance of the Series 1995 Bonds shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect prior to the Closing, except as may have been agreed to in writing by the Town and the Underwriter, and the Town shall have duly adopted and there shall be in full force and effect the Bond Resolution and such additional resolutions, or ordinances or agreements as shall, in the opinion of Caldwell & Pacetti , special counsel to the Town, - _ . ( - • - - c the "Town •Attorneys" ) , Moyle, Flanigan, Katz, FitzGerald & Sheehan, P.A. , Bond Counsel U ( "Bond Counsel" ) and Greenberg Traurig Hoffman Lipoff Rosen & Quentel , P.A. , Counsel to the Underwriter ( "Counsel to the Underwriter" ) , be necessary in connection with the issuance of -r.�,v�oaas>rr.�_srs 8 ...�. the Series 1995 Bonds, (ii) the representations and warranties of the Town herein shall be true and accurate in all material respects and (iii) the Town shall perform or have performed all obligations required under or specified in this Bond Purchase Agreement to be performed at or prior to the Closing. (b) At or prior to the Closing, the Underwriter shall have received the following documents : (i) The unqualified approving opinion of Bond Counsel, dated the date of Closing, substantially in the form appended to the Official Statement as Appendix D and a letter of such Bond Counsel , dated the date of Closing and addressed to the Underwriter, to the effect that the foregoing opinion addressed to the Town may be relied upon by the Underwriter to the same extent as if such opinion were addressed to them. (ii) A supplemental opinion of Bond Counsel , dated the date of the Closing and addressed to the Underwriter to the effect that : (A) the Series 1995 Bonds are not subject to the registration requirements of the Securities Act of 1933 , as amended, and the Bond Resolution is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (B) the information contained in the Official Statement under the captions "INTRODUCTION" , "PURPOSE OF THE 1995 BONDS" , "DESCRIPTION OF THE 1995 BONDS" , "SECURITY FOR THE 1995 BONDS" , "TAX EXEMPTION" , and "ENFORCEABILITY OF REMEDIES" to the extent such information purports to summarize portions of the Bond Resolution, the Series 1995 Bonds, or the law referred to therein, constitutes a fair summary of the portions of such documents and the law purported to be summarized therein; (C) without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement , nothing has come to its attention which would lead it to believe that the Official Statement (other than the financial and statistical data and information provided by the Insurer) contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; - 9 WM40 05\677296‘153>6.010t0041/0I/95 (D) the Ordinance has been duly enacted by the Town, is in full force and effect and the enactment thereof was the only action required by the Town to amend the Town Charter as contemplated by the Ordinance; (E) the Resolution has been duly adopted by the Town and is in full force and effect and constitutes the legal, valid and binding obligation of the Town enforceable in accordance with its terms; (F) pursuant to the terms and provisions of the Bond Resolution, the Town is permitted under Florida law to pay debt service on the Series 1995 Bonds; and (G) the Town is authorized under Florida law to issue the Series 1995 Bonds for the purposes described in the Bond Resolution. (iii) A certificate or certificates, dated the date of Closing, signed by the Mayor, the Town Manager and the Director of Finance, in form and substance satisfactory to Bond Counsel , the Underwriter and Counsel to the Underwriter, in which such officials state : (A) that the representations and warranties of the Town herein contained are true and correct in all material respects as of the Closing, that the Town has satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing, and that the information and statements contained in the Official Statement (other than information provided by Insurer) are true, correct and complete in all material respects for the purposes for which such Official Statement is to be used, and nothing has come to their attention that would lead them to believe that such information in the Official Statement includes any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that such certification shall not include the information concerning the Insurer and the Policy contained in the Official Statement; (B) that no event affecting the Town has occurred since the date of the Official Statement mnwpcS6)n AlsA6.O10IJ0�ll 17 m - 10 which should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect ; (C) that the financial statements and the other financial and statistical data relating to the Town included in the Preliminary Official Statement and the Official Statement were true and correct as of the respective dates of the Preliminary Official Statement and Official Statement and are true and correct as of the date of such certificate; (D) that since the date of the financial statements included in the Official Statement, (i) no material and adverse change has occurred in the financial condition of the Town and (ii) the Town has not incurred any material liabilities other than in the ordinary course of business, except as set forth in or contemplated by the Official Statement; and (E) that upon payment of the Promissory Note with a portion of the proceeds of the Series 1995 Bonds, all liabilities owed to the Resolution Trust Corporation arising out of Resolution Trust Corporation, et . al . v. Town of Highland Beach will be satisfied. (iv) An opinion, dated the date of Closing, of the Town Attorneys, addressed to the Town and to the Underwriter, in form and substance satisfactory to the Underwriter and Counsel to the Underwriter to the effect that : (A) the Town is a duly existing municipal corporation of the State of Florida (the "State" ) and had and has good right and lawful authority under the Constitution and laws of the State to adopt the Bond Resolution and enact the Ordinance and to authorize and issue the Series 1995 Bonds; the Ordinance has been duly enacted by the Town and the Bond Resolution has been duly adopted by the Town, each is in full force and effect and constitutes the valid, legal and binding obligation of the Town enforceable in accordance with their respective terms ; and under the laws of the State, the holders of the Series 1995 Bonds are not precluded pursuant to any sovereign immunity laws or similar laws from bringing .v5,YnrpR�5,6"I4<.SJ': i:OT::'.::::',c - 11 proceedings to enforce the obligations imposed by the Bond Resolution; (B) as of the Closing date, the Town has duly performed all obligations to be performed by it pursuant to the Bond Resolution; (C) the Bond Purchase Agreement has been duly authorized, executed and delivered by the Town and constitutes a valid and binding agreement of the Town enforceable in accordance with its terms; (D) the adoption of the Bond Resolution, the enactment of the Ordinance and the execution and delivery of the Bond Purchase Agreement and the Series 1995 Bonds and compliance with the provisions thereof, will not conflict with or constitute a material breach of or default under any existing law, administrative regulation, court decree, resolution or agreement to which the Town is subject and the Town has the power and authority under the laws of the State to pledge the Net Revenues and Non-Ad Valorem Revenues pledged under the Bond Resolution to pay the Series 1995 Bonds and interest thereon in accordance with the terms thereof ; (E) except as disclosed in the Official Statement, no litigation or other proceedings are pending or, to the best knowledge of the Town Attorneys after due inquiry, threatened in any court or other tribunal of competent jurisdiction, State or Federal, in any way (A) restraining or enjoining the issuance, sale or delivery of any of the Series 1995 Bonds, or (B) questioning or affecting the validity of the Bond Purchase Agreement, the Series 1995 Bonds, the Bond Resolution, the Ordinance, or the pledge by the Town of the Pledged Funds so pledged under the Bond Resolution, or (C) questioning or affecting the validity of any of the proceedings for the authorization, sale, execution, registration, issuance or delivery of the Series 1995 Bonds and the security therefor; or (D) questioning or affecting (1) the organization or existence of the Town or the Town Commission or the title to office of the officers thereof, or (2) the power or authority of the Town to fix, establish, maintain and collect fees, rentals and other charges in connection with the operation of, and services provided by, the Town; or (E) which could - 12 - WIWOCOM67729.4 l53 6 OI0000\11ro1n6 materially adversely affect the operations of the Town or the financial condition of the Town; (F) the Official Statement has been duly authorized, executed and delivered for use in connection with the sale of the Series 1995 Bonds; (0) with respect to the information in the Official Statement contained under the headings " INTRODUCTION" , "SECURITY FOR THE 1995 BONDS" , "THE WATER AND SEWER SYSTEM" , "THE TOWN" , "LITIGATION" and "RTC SETTLEMENT" , and based upon participation in the preparation of the Official Statement , as of the date of such document and at all subsequent times up to and including the date of Closing, such information did not and does not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make such information not misleading; provided, however, that no opinion is given with respect to the financial and statistical information or the information concerning the Insurer contained in the Official Statement; and (H) all approvals, consents, authorizations and orders of any governmental authority or agency having jurisdiction in any matter .which would constitute a condition precedent to the performance by the Town of its obligations hereunder and under the Bond Resolution have been obtained and are in full force and effect . All of the above opinions of the Town Attorneys as to enforceability of the legal obligations of the Town may be subject to and limited by bankruptcy, insolvency, reorganization, moratorium and similar laws, in each case relating to or affecting the enforcement of creditors rights generally, and other general principles of equity. (v) An opinion of Counsel to the Underwriter, dated the date of the Closing and addressed to the Underwriter, concerning the Official Statement , in form and substance satisfactory to the Underwriter. (vi) The written approval of Haas, Diaz & Co, certified public accountants, of the use of their report in the Preliminary Official Statement and the Official Statement in "Appendix B, Town of Highland Beach, Florida, Comprehensive Annual Financial Report for the Year Ended September 30, 1994 " , and the use of their - 13 - 1MNSMf0SO6N67729.4%15376 otozolni 0>fss name therein. (vii) The Policy issued by the Insurer. (viii) An opinion of general counsel to the Insurer and a certificate of an officer of the Insurer dated the date of the Closing and addressed to the Underwriter, concerning no defaults, the Insurer, the Policy and the information relating to the Insurer and the Policy contained in the Official Statement, in form and substance satisfactory to the Underwriter and Counsel to the Underwriter. (ix) Letters from Moody' s Investors Service and Standard & Poor' s Ratings Services confirming that such rating agencies have issued ratings of "Aaa" and "AAA" , respectively, for the Series 1995 Bonds . (x) A certificate of Montgomery Watson, the Town' s engineer, consenting to the use of the Engineer' s Report regarding the Town' s water and sewer system attached as Appendix "F" to the Preliminary Official Statement and Official Statement and certifying that the information set forth in such report is true, correct and complete . (xi) Such additional certificates, instruments or opinions as the Town Attorneys, Bond Counsel or the Underwriter and Counsel to the Underwriter may deem necessary or desirable . 10 . Termination. The Underwriter may terminate this Agreement by notification to the Town, if at the time of or prior to the Closing (a) legislation shall be enacted by the Congress of the United States or adopted by either the United States Senate or House of Representatives or recommended by the President of the United States to the Congress for passage or favorably reported for passage to either House of Congress by any committee of the House and Senate or a decision by a Court of the United States, including the United States Tax Court shall be rendered or a ruling, regulation or official statement by or on behalf of the Treasury Department of the United States, the Internal Revenue Service, or other governmental agency shall be made, with respect to federal taxation upon interest on the Series 1995 Bonds or other action or events shall have occurred which have the purpose or effect, directly or indirectly, of materially adversely affecting the federal income tax consequences of any of the transactions contemplated in connection herewith, which in the reasonable opinion of the Underwriter, materially adversely affects the market for the Series 1995 Bonds or the sale by the Underwriter of the Series 1995 Bonds; or (b) legislation shall be enacted or any action shall be taken by the SEC which, in the reasonable opinion - 14 - we.SM'3r. L$�rt.,4 IS3-4 az:: ,v,?= of the Underwriter and Counsel to the Underwriter, has the effect of requiring the contemplated distribution of the Series 1995 Bonds to be registered under the Securities Act of 1933 , as amended, or the Bond Resolution to be qualified under the Trust Indenture Act of 1939, as amended, or there shall exist a stop order, ruling or regulation by the Securities and Exchange Commission the effect of which is that the issuance, offering or sale of the Series 1995 Bonds, as contemplated hereby or by the Official Statement , is in violation of any provision of the Securities Act of 1933 , as amended and as then in effect, or of the Securities Exchange Act of 1934 , as amended and as then in effect, or that the Bond Resolution is not exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended and as then in effect ; or (c) there shall exist any event which in the reasonable judgment of the Underwriter either (i) makes untrue or incorrect in any material respect any statement or information contained in the Official Statement or (ii) is not reflected in the Official Statement but should be reflected therein or in an attachment thereto in order to make any material statements and information contained therein not misleading in any material respect; or (d) the Town fails to deliver the final Official Statement to the Underwriter within the time period provided in Section 4 hereof if such failure affects the Underwriter' s marketing and sale of the Series 1995 Bonds or subjects the Underwriter to possible compliance infractions under SEC or MSRB delivery requirements; or (e) there shall have occurred any outbreak of hostilities or other national or international calamity or crisis, the effect of such outbreak, calamity or crisis on the financial markets or the United States being such as to materially adversely affect the marketability of the Series 1995 Bonds; or (f) there shall be in force a general suspension of trading on the New York Stock Exchange or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange whether by virtue of a determination by the New York Stock Exchange or by order of the Securities and Exchange Commission or any other governmental authority having jurisdiction; or (g) a general banking moratorium shall have been declared by either federal , Florida or New York authorities having jurisdiction and then in force the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriter, would materially adversely affect the market for the Series 1995 Bonds or the sale by the Underwriter of the Series 1995 Bonds; or (h) any litigation shall be instituted or be pending at Closing, to restrain or enjoin the issuance, sale or delivery of the Series 1995 Bonds, or that in any way contests or affects any authority for the validity of the Series 1995 Bonds or the Bond Resolution, the pledge or application of any moneys or securities provided for the payment of the Series 1995 Bonds, or the existence or powers of the Town; or (i) the Town has, without prior written consent of the Underwriter, offered or issued any bonds, notes or other obligations for borrowed money, or incurred any material liability for borrowed money, or incurred any h•MINtl05\677294l5376.DI02O0111/07/55 - 15 - 1 1 material liability direct or indirect, in each case secured by the Pledged Funds, or there has been an adverse change of a material nature in the financial position, results of operation or condition, financial or otherwise, of the Town in all cases other than in the ordinary course of its business, or other than as contemplated in the Official Statement, which change could adversely affect the transactions contemplated hereby. If the Town shall be unable to satisfy the conditions to the obligation of the Underwriter to purchase, to accept delivery of and to pay for the Series 1995 Bonds contained in this Bond Purchase Agreement and the Underwriter does not waive such inability in writing, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Bond Purchase Agreement , this Agreement shall be terminated and neither the Underwriter nor the Town shall have any further obligations hereunder, except as provided in Sections 11 and 12 hereof and except that the Town shall immediately return the good faith deposit described in Section 2 of this Bond Purchase Agreement . However, the Underwriter may, in its discretion, waive, by written notice provided by the Underwriter, one or more of the conditions imposed by this Agreement and proceed with the Closing. 11 . Expenses . (a) The Underwriter shall be under no obligation to pay, and the Town shall pay, all expenses incident to the performance of the Town' s obligations under this Agreement, including, without limitation, (i) the cost of preparation, printing and shipping of the Preliminary Official Statement and the Official Statement (including amendments or supplements thereto) , (ii) the cost of the preparation, printing and execution of the Series 1995 Bonds, (iii) the fees and disbursements of Bond Counsel and the Town Attorneys, (iv) the fees and disbursements of the bond registrar, the paying agent, the Town' s independent certified public accountants, the Town' s engineer, and of any other experts, advisors or consultants retained to assist the Town, (v) fees for bond ratings, (vi) the cost of reproducing all necessary copies of the Bond Resolution, (vii) all travel and other out- of-pocket expenses of the Town' s staff and officials as incurred in connection with the Closing and (viii) the premium for the Policy; all such expenses to be paid by the Town as issuance costs . (b) The Underwriter shall pay (i) all underwriting and advertising expenses in connection with the public offering and distribution of the Series 1995 Bonds, (ii) the fees and disbursements of Counsel to the Underwriter, (iii) the cost of preparation and printing of blue sky memorandum and legal investment survey, (iv) the cost of the preparation of this Bond Purchase Agreement, and (v) all travel and out-of-pocket wtliwaos'h6ni91%1SM 010290‘11/07/55 - 16 - expenses of the Underwriter. 12 . Survival of Contract . The respective agreements, representations and warranties and other statements of the Town, the Underwriter and their respective officials, officers and partners set forth in, or made pursuant to, this Bond Purchase Agreement will remain in full force and effect regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Town, the Underwriter or any of their respective officials, officers, partners or directors or any controlling person, and will survive delivery and payment of the Series 1995 Bonds . 13 . Benefit . This Bond Purchase Agreement is made for the benefit of the parties hereto (including the successors or assigns of the Underwriter) . No other person shall acquire or have any right hereunder or by virtue hereof . 14 . Execution in Counterparts . This Bond Purchase Agreement may be executed in any number of counterparts, all of which taken together shall be one and the same instrument, and any parties hereto may execute this Bond Purchase Agreement by signing any such counterpart . The execution of this Bond Purchase Agreement has been duly authorized by the Town Commission of the Town. 15 . Notices . Any notices or other communications to be given to the Town under this Bond Purchase Agreement may be given by mailing the same to the Town Manager of the Town. of Highland Beach, Florida at 3614 South Ocean Boulevard, Highland Beach, Florida 33487, and any such notice or other communication to be given to the Underwriter may be mailed to Stifel , Nicolaus & Co. , Inc . , 1177 George Bush Boulevard, Suite 308 , Delray Beach, Florida 33483, Attention: Kevin McCarty. 16 . Severability. The invalidity or enforceability of any provision of this Bond Purchase Agreement as to any one or more jurisdictions shall not affect the validity or enforceability of the balance of this Bond Purchase Agreement as to such jurisdiction or jurisdictions, or affect in any way such validity or enforceability as to any other jurisdiction. 17 . Waiver or Modification. No waiver or modification of any one or more of the terms and conditions of this Bond Purchase Agreement shall be valid unless in writing and signed by the party or parties making such waiver or agreeing to such modification. wuwxau»�sniu>coiommmewn - 17 — 18 . Governina Law. This Bond Purchase Agreement shall be governed by and construed in accordance with the laws of the State of Florida. Very truly yours, STIFEL, NICOLAUS & COMPANY INCORPORATED By: a A.17C. /L & F' st Vice resident TOWN OF HIGHLAND BEACH, FLORIDA By: Title : R 'Or • rnswtaros‘bnt9 n15376 016200%11/07/95 - 18 - EXHIBIT "A" Form of Letter Pursuant to Section 218 . 385, Florida Statutes November 7, 1995 Honorable Mayor and Members of the Town Commission of the Town of Highland Beach, Florida Highland Beach, Florida Re : Town of Highland Beach, Florida, Water and Sewer Revenue Bonds, Series 1995 Gentlemen : In connection with the proposed issuance by the Town of Highland Beach, Florida (the " Issuer" ) , of $4 , 485, 000 in aggregate principal amount of the Water and Sewer Revenue Bonds, Series 1995, referred to above (the "Series 1995 Bonds" ) , Stifel, Nicolaus & Company Incorporated (the "Underwriter" ) is preparing to underwrite a public offering of the Series 1995 Bonds . Arrangements for underwriting the Series 1995 Bonds will include a Bond Purchase Agreement between the Issuer and the Underwriter that. will embody the negotiations in respect thereof . The purpose of this letter is to furnish, pursuant to the provisions of Section 218 . 385, Florida Statutes, as amended, certain information in respect of the arrangements contemplated for the underwriting of the Series 1995 Bonds as follows : (a) The nature and estimated amounts of expenses to be incurred by the Underwriter in connection with the purchase and reoffering of the Series 1995 Bonds are set forth in Schedule I attached hereto. (b) There are no "finders" , as defined in Section 218 . 386 , Florida Statutes, as amended, connected with the issuance of the Series 1995 Bonds . (c) The underwriting spread (i .e . , the difference between the price at which the Series 1995 Bonds will be initially offered to the public by the Underwriter and the price to be paid to the Issuer for the Series 1995 Bonds) will be $16 . 17 per $1, 000 in bonds . (d) The Management Fee being charged by the Underwriter is equal to $22 , 425 . - 1 W15w/043167729.4U5076.010t00111/07/9S Honorable Mayor and Members of the Town Commission November 7, 1995 Page 2 (e) There is no other fee, bonus or other compensation to be paid by the Underwriter in connection with the issuance of the Series 1995 Bonds to any person not regularly employed or retained by the Underwriter, except as specifically enumerated as expenses referred to in paragraph (a) above to be incurred by the Underwriter as set forth in Schedule I attached hereto . (f) The name and address of the Underwriter is : Stifel , Nicolaus & Company Incorporated 1177 George Bush Boulevard Suite 38 Delray Beach, Florida 33483 The Series 1995 Bonds are expected to be repaid over a period of approximately twenty (20) years . At a true interest cost of approximately 5 .4426% per annum, total interest paid over the life of the Series 1995 Bonds will be approximately $3, 355, 757 . 50 . The Series 1995 Bonds are payable solely from and secured solely by the Pledged Funds (as defined in the Bond Resolution) . Authorizing the Series 1995 Bonds will result in approximately $7, 840, 757 . 50 (representing the principal of and interest on the Series 1995 Bonds) of Town' s moneys not being available to finance the other services of the Town over the next twenty (20) years . We understand that you do not require any further disclosure from the Underwriter pursuant to Section 218 . 385, Florida Statutes, as amended. Very truly yours, STIFEL, NICOLAUS & COMPANY INCORPORA D / / '/w• ]///f/ i///p� A By: - - s F rst Vice Pre den SCHEDULE I ESTIMATED EXPENSES ITEM TOTAL Underwriter' s Counsel Fees 16, 500 . 00 Underwriter' s Counsel Expenses 500 . 00 CUSIP Registration 175 . 00 Day Loan 120 . 22 Overnight Funds 1, 021 . 85 Clearance 2 , 500 . 00 TOTAL $20 , 817 . 07 4A9W01D561)fl 6115106.010!00111/01/% REGISTRAR AND PAVING AGENT AGREEMENT THIS REGISTRAR AND PAYING AGENT AGREEMENT is made and entered into as of the 1st day of November, 1995 , by and between Town of Highland Beach, Florida (the " Issuer" ) and NationsBank of Florida , N.A. , a national banking association (the "Bank") . WHEREAS, the Issuer has designated the Bank as Registrar and Paying Agent for its $4 ,485, 000 Water and Sewer Revenue Bonds, Series 1995 (the "Bonds") ; and WHEREAS, the Issuer and the Bank desire to set forth the Bank' s duties as Registrar and Paying Agent and the compensation to be paid the Bank for its services . NOW, THEREFORE, it is agreed by the parties hereto as follows : 1 . Duties . The Bank agrees to serve as Registrar and Paying Agent for the Bonds and to perform the duties of Registrar and Paying Agent under the Resolution of the Issuer, adopted October 3 , 1995 , as amended and supplemented by the Resolution adopted November 7, 1995 (the "Resolution" ) . 2 . peposit of Funds . The Issuer shall deposit or cause to be deposited with the Bank sufficient funds to pay when due and payable the principal of, premium, if any, and interest on the Bonds . 3 . Use of Funds; Cancelled Bonds . The Bank shall use the funds received from or on behalf of the Issuer pursuant to paragraph 2 hereof to pay the principal of , premium, if any, and interest on the Bonds in accordance with the Resolution. The Bank shall destroy cancelled Bonds and transmit to the Issuer a certificate of destruction therefor . 4 . Statements . The Bank shall prepare and shall send to the Issuer upon written request statements of account relating to all transactions effected by the Bank pursuant to this Agreement . 5 . Obligation to Act . The Bank shall be obligated to act only in accordance with the Resolution and any written instructions received in accordance therewith; provided, however , that the Bank is authorized hereby to comply with any orders, judgments, or decrees of any court with or without jurisdiction and shall not be liable as a result of its compliance with the same. 6 . Reliance by Bank. The Bank may rely absolutely upon the genuineness and authorization of the signature and purported signature of any party upon any instruction, notice, release, request , affidavit , or other document delivered to it pursuant to the Resolution. 7 . Indemnity. To the extent allowed by Florida law, the Issuer hereby agrees to indemnify the Bank and hold it harmless from any and all claims , liabilities, losses , actions, suits, or proceedings at law or in equity, or any other expenses, fees, or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Paying Agent or Registrar under the Resolution, unless caused by the Bank' s willful misconduct or negligence; and in connection therewith, to indemnify the Bank against any and all expenses, including attorneys ' fees and the costs of defending any action, suit, or proceeding, or resisting any claim, whether or not such claim is actually filed. The Issuer ' s obligations hereunder shall survive any termination of this Agreement . 8 . Counsel ; Limited Liability. The Bank may consult with counsel of its own choice and shall have sole and complete authorization and protection for any action taken or suffered by it under the Resolution in good faith and in accordance with the opinion of such counsel . The Bank shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by the Bank' s willful misconduct or negligence. 9 . Fees and Expenses . In consideration of the services rendered by the Bank as Registrar and Paying Agent, the Issuer agrees to and shall pay to the Bank an annual fee during the term of this Agreement of $500 .00, and all expenses, charges, attorneys ' fees, and other disbursements incurred by it or its attorneys, agents, and employees in and about the acceptance and performance of its powers and duties as Registrar and Paying Agent . The Bank shall not be obligated to allow and credit interest upon any unclaimed monies in respect of principal, interest, or premium, if any, due in respect of the Bonds, which it shall at any time receive under any of the provisions of the Resolution or this Agreement . 10 . 7urnishina Information; Authorization. The Bank shall , at all times, when requested to do so by the Issuer, furnish full and complete information pertaining to its functions as the Registrar and Paying Agent with regard to the Bonds, and shall without further authorization, execute all necessary and proper deposit slips, checks, certificates and other documents with reference thereto . 11 . Cancellation: Termination. Either of the parties hereto, at its option, may cancel this Agreement after giving thirty (30) days written notice to the other party of its intention to cancel, and this Agreement may be cancelled at any time by mutual consent of the parties hereto . This Agreement shall terminate without further action upon final payment of the Bonds and the interest appertaining thereto . If this Agreement terminates while Bonds remain outstanding the Issuer will prior to the effective date of such termination appoint a new Paying Agent and Registrar . -2- 7416M 12 . Surrender of Funds . Registration Records; Notification of Bondholders. In the event of a cancellation of this Agreement, the Issuer shall deliver any proper and necessary releases to the Bank (in a form acceptable to the Bank) upon demand and the Bank shall thereafter upon demand pay over the funds on deposit with the Bank as Registrar and Paying Agent in connection with the Bonds and surrender all registration books and related records , and the Issuer may appoint and name a successor to act as Registrar and Paying Agent for the Bonds. The Issuer shall, in such event , notify all holders of the Bonds of the appointment and name of the successor, by providing notice in the manner required by the Resolution for the redemption of the Bonds . 13 . Non-assignabilitv. This Agreement shall not be assigned by either party without written consent of the other party. 14 . Modification. No modification of this Agreement shall be valid unless made by a written agreement , executed and approved by the parties hereto . 15 . Severability. Should any section or part of any section of this Agreement be declared void, invalid, or unenforceable by any court of law for any reason, such determination shall not render void, invalid, or unenforceable any other section or other part of any section of this Agreement . 16 . Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Florida . 17 . Merger or Consolidation of the Bank. Any corporation or national banking association into which the Bank may be merged or with which it may be consolidated, or to which it may transfer all or substantially all of its corporate trust business, or any corporation resulting from any merger or consolidation to which the Bank is a party, shall be the successor Registrar and Paying Agent under this Agreement, without the execution or filing of any paper or further act on the part of the parties hereto . IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written. TOWN OF HIGHLAND BEACH, FLORIDA By: _ Its Mayor NATIONSBANK OF FLORIDA, N.A. By: Q, � Its sistant Vice resident -3- 7416M 7795M 8 . $4 ,485, 000 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS SERIES 1995 GENERAL CERTIFICATE OF THE ISSUER We, the undersigned Mayor (the "Mayor" ) , Town Clerk (the "Clerk" ) , Director of Finance and Town Manager (the "Town Manager") of the Town of Highland Beach, Florida (the "Issuer") , DO HEREBY CERTIFY as follows : 1 . We are the qualified and acting Mayor, Clerk and Town Manager of the Issuer . 2 . The following is a correct listing of the names of the members of the Town Commission of the Issuer (the "Governing Body" ) , and the dates of expiration of their respective terms of office: Expiration Name and Position of Term (March) Arlin G. Voress, Mayor 1997 Willian E. Paul, Vice-Mayor 1996 Arthur Eypel 1997 John F . Rand 1996 David Augenstein 1997 3 . All of the above members of the Governing Body have duly filed their oaths of office and such of them as are required by law to file bonds or undertakings have duly filed such bonds or undertakings in the amount and manner required by law. 4 . Caldwell & Pacetti is the duly appointed Special Counsel for the Issuer and accordingly is entitled to sign opinions and other documents pertaining to the Governing Body, the Issuer and the Issuer ' s $4 , 485 , 000 Water and Sewer Revenue Bonds , Series 1995 dated November 1, 1995 (the "Bonds" ) . The law firm of Moyle, Flanigan, Katz, FitzGerald & Sheehan, P.A. is bond counsel for the Issuer, and accordingly is entitled to sign opinions and other documents as bond counsel . 5 . The Mayor has signed the Bonds by his facsimile signature, and the facsimile signature appearing on the Bonds and the manual signature at the end of this certificate are each the true and lawful signature of the Mayor . 6 . A facsimile of the seal of the Issuer was impressed upon the Bonds, and attested by the facsimile signature of the Clerk. Such seal and signature appearing on the Bonds and the manual signature of the Clerk and the impression of the seal of the Issuer at the end of this certificate constitute the true and lawful seal of the Issuer and the signature of the Clerk, respectively. 7 . Resolutions No . 677 and 678 (collectively the "Resolutions" ) of the Governing Body, all as certified by the Clerk as of the date hereof , have not been modified, amended, altered or repealed in any way (other than by the Resolutions) after their respective dates of adoption, and are now in full force and effect . 8 . The Issuer has authorized by all necessary action the adoption and due performance of the Resolutions and the execution, delivery and due performance of the Bonds and any and all such other agreements and documents as may be required to be executed, delivered and received by the Issuer to carry out, give effect to and consummate the transactions contemplated by the Resolutions, the Official Statement and the Bond Purchase Agreement (as those terms are defined in the Resolutions) . 9 . Except as described in the Official Statement, no action, suit, proceeding, inquiry, investigation, litigation (at law or in equity) or administrative action is pending or, to our knowledge after due inquiry, threatened, in, by or before any court, government agency, or public board or body to (i) restrain or enjoin the issuance, delivery or validity of the Bonds, (ii) in any way contesting or affecting the validity or enforceability in any respect of the Bonds , the Bond Purchase Agreement , or the Resolutions or the application of the proceeds of the Bonds, the Issuer ' s covenants with respect to the Pledged Funds contained in the Resolutions, or the collection or distribution of the amounts pledged to repayment of the Bonds , or the pledge thereof as security for the Bonds , or contesting the power or corporate existence of the Issuer or the powers of the several offices of the officials of the Issuer or the titles of the officials holding their respective offices or any authority for the issuance of the Bonds or the adoption of the Resolutions or the approval , execution, validity, or enforceability of any agreements ( including the Bond Purchase Agreement) with respect thereto, ( iii) contesting the tax-exempt status of interest on the Bonds, (iv) asserting that the Official Statement contains or contained at any time any untrue statement of a material fact or omits or omitted at any time a material fact, or otherwise contesting the completeness or accuracy of the Official Statement or any supplement or amendment thereto, or (v) otherwise materially -2- 7795M affecting the Issuer ' s ability to perform its obligations to the holders of the Bonds or materially and adversely affecting the financial condition of the Issuer . 10 . Attached hereto as Exhibit "A" is a specimen of the Bonds , which specimen is identical to the Bonds in all respects . 11 . The undersigned have not, and to the best of their knowledge no members of the Governing Body have, while meeting together with any other member or members of the Governing Body other than at public meetings of the Governing Body, reached any conclusion as to the actions taken by the Governing Body with respect to the Bonds , the security therefor, or the application of the proceeds therefrom, or any other material matters with respect to the Bonds . 12 . The undersigned do not, and to the best of their knowledge and belief no member of the Governing Body does, have or hold any employment or contractual relationship with any business entity which is participating in the issuance, marketing, or purchase of the Bonds except as fully and fairly disclosed in compliance with the provisions of the Florida Statutes. 13 . The Issuer has performed all obligations on its part to be performed under the Bond Purchase Agreement , each of the representations , warranties and agreements of the Issuer contained therein are true and correct and complied with as of the date hereof as if made on this date and the Issuer has satisfied all conditions on its part to be performed or satisfied thereunder prior to the issuance and delivery of the Bonds . 14 . The undersigned have reviewed the Official Statement and the information and statements contained therein are true, correct and complete in all material respects and do not omit any statement or information which should be included therein for the purposes for which the Official Statement is to be used, no event affecting the Issuer has occurred since the date of the Official Statement which should be disclosed therein in order to make the Official Statement complete and not misleading, and nothing has come to our attention which would lead us to believe that the information in the Official Statement (other than the information therein describing the Insurer as to which no opinion is expressed) as of its date, and as of the date hereof , contained or contains any untrue statement of material fact or omitted or omits to state a material fact which should have been or should be included therein for the purpose for which the Official Statement is intended to be used, or which was or is necessary to be stated therein to make the statements contained therein, in the light of the circumstances under which they were made, not misleading . 15 . The Issuer has not since December 31, 1975 been in default as to principal or interest on any obligation issued or guaranteed by it . -3- 7795M 16 . No event affecting the Issuer has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material repsect . 17 . The financial statements and the other financial and statistical data relating to the Issuer included in the Preliminary Official Statement and the Official Statement were true and correct as of the respective dates of the Preliminary Official Statement and Official Statement and are true and correct as of the date hereof . 18 . Since the date of the financial statements included in the Official Statement, no material and adverse change has occurred in the financial condition of the Town and the Town has not incurred any material liabilities other than in the ordinary course of business , except as set forth in or contemplated by the Official Statement . 19 . Upon payment of the Promissory Note (as defined in the Resolutions) with a portion of the proceeds of the Bonds, all liabilities owed to the Resolution Trust Corporation arising out of Resolution Trust Corporation. et al v. Town of Highland Beach Case No . 87-8483 CIV-ZLOCH in the United States District Court for the Southern District of Florida will have been satisfied. IN WITNESS WHEREOF, we have hereunto set our hands and the official seal of the Issuer, and have indicated our respective official titles, all as of the 29th day of November, 1995 . Signature Official Title Mayor 444---i-HE//zent-ey Town Clerk Lk/..2f1e_ k4. / Town Manager ` ` A/ _ .. Director of Finance (Official Seal ) -4- 7795M J s " a 1 Wk 1441. -141 , .146. : . C, �` Y✓ J II I j n a 14 Li StsetA40,- __ T51= �lj 5 *at ' :.. K NtL 41%49E i / Y YZi z= - kis a s<y 38e G it PLui E 1 _g G- /E` ._'. Fi O, i. 65.1 0,1 "`a - a •`V E o Iiii4 ti 054,4 IIx Fn / t..;;2;1:4f .: sins;1. k :1 1::;:xx:I j.----; '''' it A.,_ tr.,- 3;- • cu �/ g r WM fn Q - ;,/,,, // " -3 n W Z r `omaE.%`- /- 1--gig- = is--a2 yy W C� Ogg f' g t E.: arC O tJ C) CII Q C Y2 l:"c673•9 c o'S8 O <2 a �, xa=a_�< 3----it • ill cc CO / 431 £18-9a a$ _...4--z- it � LLE M tu= O / 1., ./`; yYeg-AE ,,OBS"_ ',Sr, l LLI W Z W iSEEc { ` 15J- i . 3 b3 ' O 2Q J W W €2 St -, fSe IrEEi n I Vis= ' 4/ 4'a Wh W < e � ma ,y g � = c5i se z.: i �r D 4e •zd=l 3 1 F+, x •i�m� i. Wm ' -a E.icm 'C_ - ix� Y U - 1n ib' �- FAV W Q Sr � 'ee. iL`�s . 1�--1 s %,il„.o D_ ifs.' ' Or- = Gf -,E .'e��¢¢�at Jl 4 •s rE 7 F a c t a E y., W i j.i%�% E 1. . .E31....i s.„ r _ i� I� W a Gi /G' r • E z,.C � ! JOu1llIll1 4 - RuM LAW OFFICES MOYLE, FLANIGAN, KATZ, FITZGERALD & SHEEHAN,P.A. 625 NORTH FLAGLER DRIVE•9T"FLOOR WEST PALM BEACH.FLORIDA 00401 POST OFFICE BOX 3666 P ETER L.BRETON WEST PALM BEACH.FLORIDA 33402 MICHAEL K.MILLER GREGORY D.COOK ONE(407)659.7500 JON C.MOYLE JOHN R.CUSANKS.JR. FACSIMILE (407)659-1789 JON C.MOYLE.JR. C.COLE FITZGERALD.B JODY H.OLIVER JOHN F.FLANIGAN TAU.AKAYLC OIIICE MARK C.RAYMOND MYNA 0 H FANNLL ISOAIMIJ!!S THOMAS A.SHEEHAN.6 LYNN O..HAWKINS FACSIMILE IgAl N11)M MARTA M.SUARLS-MVRIAS MARTIN V.KATZ WILTON L.WHITE WILLIAM S,KING STUART OFFICE RONALD K.KOLINS TOfPKOHL IpT111511•A OF COUNSEL: PAUL A.KRASKCR FACSIMILE(40)1!S►4M •ITHOMAS A.HICKEY S TEVEN A.MAYANS 'PAW SEACH GARDEN OFFICE WILLIAM J.PAYNE LINDA R.MOCANN TttOINONE I4O)18!844.0 DONNA M.STINSON FACSIMILE IAO))0!R{P)Y 'ADMRTEO IN NEW YORK ONLY November 9, 1995 CERTIFIED MAI.I1 Division of Bond Finance Z I - State Board of Administration P.O. Drawer 5318 Tallahassee, Florida 32314 RE: Town of Highland Beach, Florida $4 , 485, 000 Water and Sewer Revenue Bonds, Series 1995 Ladies and Gentlemen: This firm is serving as bond counsel for the above-referenced bond issue. This notice is provided to you in accordance with the requirements of Section 218 . 38(1) (a) , Florida Statutes . Notice is hereby given of the impending sale by the Town of Highland Beach (the "Issuer") of the above-referenced Bonds (the "Bonds" ) in the estimated principal amount set forth above. The Issuer expects to deliver the Bonds on or about November 29 , 1995 . Copies of Forms BF-2003 and BF-2004-B and a copy of the final Official Statement relating to the issuance of the above- referenced Bonds will be forwarded to you as soon as they are available. Sincerely, MOYLE, FLANIGAN, KATZ, FIT GERALD & SHEEHAN, P.A. e. Mark E. Raymond MER/wp 7792M 7800M 10 . $4 , 485 , 000 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS SERIES 1995 ORDER TO AUTHENTICATE AND DELIVER BONDS NationsBank of Florida, N.A. Tampa, Florida Ladies and Gentlemen: We have heretofore delivered to you as Registrar, $4 ,485, 000 duly executed Town of Highland Beach, Florida Water and Sewer Revenue Bonds, Series 1995 (the "Bonds") . You have completed the Bonds as to maturity, CUSIP suffix, date of authentication and interest rate in accordance with Exhibit "A" attached hereto. The Bonds were also completed as to registered owner and denomination in accordance with instructions received from Stifel, Nicolaus & Company Incorporated (the "Original Purchaser" ) . You are hereby ordered to authenticate and deliver the Bonds to or upon the order of the Original Purchaser, provided that the aggregate principal amount of Bonds completed by you shall not exceed $4 , 485, 000 . Dated the 29th day of November , 1995 . TOWN OF HIGHLAND BEACH, FLORIDA Mayor 780OM/2 EXHIBIT A CUSIP Maturity Interest (Prefix is Date of Amount (July 1) Rate 429893) Authentication $ 90, 000 2001 4 .3 % AA8 95, 000 2002 4 .4 AB6 95, 000 2003 4 . 5 AC4 All Bonds 100, 000 2004 4 . 6 AD2 November 29 , 1995 290, 000 2005 4 . 7 AEO 300 , 000 2006 4 . 8 AF7 315, 000 2007 4 . 95 AGS 330, 000 2008 5 . 10 AH3 350, 000 2009 5 . 20 AJ9 365, 000 2010 5 . 30 AK6 385,000 2011 5 . 40 AL4 1 , 770, 000 2015 5 . 25 AM2 7801M $4 , 485, 000 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS SERIES 1995 CERTIFICATE OF REGISTRAR AND PAYING AGENT The undersigned Assistant Vice President of NationsBank of Florida, N.A. (the "Bank" ) , does hereby certify on behalf of the Bank that : 1 . The Bank has entered into a Registrar and Paying Agent Agreement with Town of Highland Beach, Florida (the "Issuer") dated November 1, 1995 (the "Agreement" ) relating to the Issuer ' s above-referenced bonds (the "Bonds") . Terms used herein shall have the same meanings as in the Agreement . 2 . The Bank is a national banking association with trust powers, duly organized and validly existing under the laws of the United States of America, and the Bank is qualified to do business in the State of Florida . 3 . The Bank has the corporate power and authority to execute, deliver and carry out the duties and obligations of the Registrar and Paying Agent under the Agreement . 4 . The execution, delivery and performance by the Bank of the Agreement has been duly authorized by all necessary corporate action on the part of the Bank. 5 . The Agreement has been duly executed and delivered by the Bank, and assuming that the Agreement constitutes the legal, valid and binding obligation of the Issuer, the Agreement constitutes the legal , valid and binding obligation of the Bank enforceable against the Bank in accordance with its terms . 6 . To the best knowledge of the undersigned, the Bank' s performance of the Agreement will not result in any violation of any law, governmental rule, regulation, consent decree, or any agreement or other instrument binding on the Bank, or any provision of the Articles of Association or Bylaws of the Bank. 7 . To the best knowledge of the undersigned, no governmental authorization or approval is required in connection with the execution, delivery and performance by the Bank of the Agreement . 8 . To the best knowledge of the undersigned, there is no action, suit or proceeding pending or threatened against the Bank before any court, administrative agency or governmental body that will materially adversely affect the ability of the Bank to perform its obligations under the Agreements . 9 . The document of the Bank attached as Exhibit "A" hereto, authorizing certain officers designated to execute, on behalf of the Bank, various types of documents, including the Agreement, is in full force and effect as of the date hereof . 10 . The Bank has received from Northern Bank Note Company the Bonds, complete as to registered owner, denomination, maturity date, interest rate, CUSIP suffix and date of authentication. All such Bonds were duly executed by the Issuer . 11 . we hereby acknowledge receipt of 2000 pieces of blank unauthenticated Bonds executed in facsimile by the Issuer . The Bank has authenticated the Bonds numbered R-1 through R-12 , inclusive. The aggregate principal amount of Bonds thus completed is $4 , 485, 000 . We agree to keep in safekeeping all such remaining Bonds and to authenticate and deliver such Bonds only in accordance with the Agreement . 12 . Pursuant to your instructions we have authenticated and delivered to or upon the order of Stifel, Nicolaus & Company Incorporated (the "Originial Purchaser") , Bonds in the aggregate principal amounts , dated November 1, 1995 and maturing and bearing interest as set forth in Exhibit "B" attached hereto . 13 . The Bonds were duly authenticated by the Registrar and each person who authenticated such Bonds on behalf of the Registrar was a duly appointed and authorized officer thereof and was duly empowered to act at the time of such execution, delivery and authentication, and the signatures of such persons appearing on such Bonds are their genuine signatures . IN WITNESS WHEREOF, the Bank has caused this Certificate to be executed as of the 29th day of November , 1995 . NATIONSBANK OF FLORIDA, N.A. By: 0 ti�jr/ Its As tant vice President -2- 7801M Exhibit A EXCERPT FROM ARTICLE VI OF THE BY-LAWS OF NATIONSBANK OF FLORIDA, N.A. I HEREBY CERTIFY that the following is a true and complete excerpt from the Bylaws of NationsBank of Florida, N.A., a national banking association; that the following persons have been duly appointed and now hold the office designated: and that the signature set opposite their names are their genuine signatures. Section 6.2 Execution of Instruments. All agreements, indentures, mortgages, deeds, conveyances, transfers, contracts, checks, notes , drafts, loan documents, letters of credit, master agreements, swap agreements, guarantees of signatures, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, attested, delivered, or accepted on behalf of the Association by the Chairman of Board, any Vice Chairman of the Board, the President, any Vice President, any Assistant Vice President, or any individual who is listed on the Association's Officer's payroll file in a position equal to any of the aforementioned officer positions, or such other officers, employees or agents as the Board of Directors or any of such designated officers or individuals may direct, or, if in connection with the exercise of fiduciary powers of the Association, by any of those officers or by any Trust Officer. The provisions of this Section 6.2 are supplementary to any other provision of these Bylaws and shall not be construed to authorize execution of instruments otherwise dictated by law. Any person authorized to execute instruments in accordance with Section 6.2 shall have the authority to affix the corporate seal to any document requiring such seal and to attest the same. NAME TITLE SIGNATURE Jill A. Billings Assistant Vice President IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of the said Association this 29th day of November, 1995. SEAL Authorize' Signatory 7801M/3 BXHIBIT B Maturity Interest Amount (July 1) Rate $ 90, 000 2001 4 . 3 % 95 , 000 2002 4 . 4 95 , 000 2003 4 . 5 100, 000 2004 4 . 6 290, 000 2005 4 . 7 300, 000 2006 4 . 8 315 , 000 2007 4 . 95 330, 000 2008 5 . 10 350, 000 2009 5 . 20 365, 000 2010 5 . 30 385 , 000 2011 5 . 40 1 , 770, 000 2015 5 . 25 12 . $4 , 485, 000 Town of Highland Beach, Florida water and Sewer Revenue Bonds Series 1995 DIRECTION OF MAYOR AND FINANCE DIRECTOR CONCERNING APPLICATION OF PROCEEDS The undersigned Mayor and Finance Director of the Town of Highland Beach, Florida (the "Issuer" ) , pursuant to the provisions of Section 7 of Resolution No . 678 , adopted by the Town Commission of the Issuer on November 7, 1995 (the "Resolution" ) hereby provide this Certificate in connection with the issuance of the above-referenced bonds (the "Bonds" ) : 1 . Terms used herein in capitalized form and not otherwise defined herein shall have the meaning ascribed thereto by the Resolution. 2 . Stifel , Nicolaus & Company Incorporated, as original purchaser of the Bonds, shall pay to or for the account of the Issuer the aggregate amount of $4 , 333 , 198 . 51, of which $34 , 000 . 00 shall be paid to MBIA Insurance Corporation, and the balance of which shall be paid to the Issuer . 3 . Amounts received pursuant to Paragraph 2 above shall be applied by the Issuer as follows : (a) The amount of $17, 782 . 92 shall be deposited in the Interest Account; (b) The amount of $438, 792 . 64 shall be deposited in the Reserve Account; and (c) The amount of $3 , 842 , 622 . 95 shall be deposited in the Construction Fund, and $3 , 000, 000 .00 shall be paid to the Resolution Trust Corporation to satisfy the Promissory Note (as defined in the Resolution) , $630, 000 shall be disbursed to the Issuer in reimbursement of the Original Expenditures (as defined in the Resolution) and the balance shall be applied to pay the costs of issuance of the Bonds and the remaining costs of the Series 1995 Project ( as defined in the Resolution) . IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed by its Mayor and Finance Director as of the 29th day of November , 1995 . TOWN OF HIGHLAND BEACH, FLORIDA By: /t 4.00ar ts Mayor /� By:%�-Ge-��.._I/ Its Finance irector 7796M 1 7804M 13 . $4 ,485, 000 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS SERIES 1995 RECEIPT FOR BONDS Stifel , Nicolaus & Company Incorporated DOES HEREBY ACKNOWLEDGE receipt from Town of Highland Beach, Florida of the Town ' s Water and Sewer Revenue Bonds, Series 1995, dated November 1, 1995 , in the aggregate principal amount of $4 , 485, 000, bearing interest from that date (payable semiannually on January 1 and July 1 of each year , commencing on July 1, 1996) at the rates and maturing on July 1 of such years and in such amounts as set forth in Exhibit "A" attached hereto. DATED the 29th day of November, 1995 . STIFEL, NI OLAUS & COMPANY INCORPO' •TED ByAl // s/I I . Authorized Rep - -entative 7804M/2 EXHIBIT A Maturity Interest Amount _(July 1) Rate $ 90, 000 2001 4 .3 % 95, 000 2002 4 .4 95 , 000 2003 4 . 5 100, 000 2004 4 . 6 290, 000 2005 4 . 7 300, 000 2006 4 . 8 315, 000 2007 4 . 95 330, 000 2008 5 . 10 350 , 000 2009 5 . 20 365 , 000 2010 5 . 30 385 , 000 2011 5 . 40 1 , 770, 000 2015 5 .25 11-29-95 01 :5UFM FROM MBIA DAC TO 914076591789 11U2/UUJ -11 71Om 11.29.10f6 11130 P. 1 Moody& Investors Service 99 Church Mint New Yerk,NY 10001 November 29, 1995 MBIA Insurance Corporation 113 King Street Armonk, New York 10504 Dear MBIA: Moody' s Investor Service has assigned the rating of Aga (MBIA Insured - Policy 19838) to the $4,486, 000. 00 Town of Highland Beach, Florida, Water and Sewer Revenue Bonds, Series 1995, dated October 1, 1995, which sold through negotiation on November 7, 1995 . The rating is based upon an insurance policy provided by MBIA Insurance Corporation. should you have any questions regarding the above, please do not hesitate to contact the assigned analyst, Margaret Kessler at (212) 553-7884 . Sincerely yours, Daniel N. Haimowita Executive Vice President Director Public Finance Department DHlgm R-G7% . .-2 d-GS 29AM Y_D: 1f:6 11-29-95 01 :50PM FROM MBIA DAC TO 914076591789 P003/003 , /401)-29-1995 11157 S&P BOND INSURANCE ADMIN. 212 208 Fl2S2 P.001/002 O Standard & Poor's Ratings Services, A Division of The McGraw•Hltt Companies, Inc. Bond Insurance Administration 15 Broadway New York, New York 10004-1064 Telephone 2121208-1740 FAX 21212058262 November 29, 1995 Municipal Bond Investors Assurance Corporation 113 IGng Street Armonk, Now York 10504 Re: $4,485,000 DMA of Highland Beach, Florida, Water and Sawn Revenue Bonds, Seder 1995, dated: October I, 1995, due:July 1, 2001.2015, (POLICY 1119838) Ladies and Derttlemen: Pursuant to your request for a Standard & Poor's rating on the subject obligations, we have reviewed the information submitted and have assigned a rating of 'AAA'. This reflects our assessment of the likelihood of repayment of principal and interest based on the bond insurance policy your company is providing. Rating adjustments may result from changes in the financial position of your company or from alterations in documents governing the issue. With respect to the latter, please notify us of any changes or amendments over the term of the issue. When using this Standard &Poor's rating, include S&P's definition of the rating together with a statement that this may be changed, suspended or withdrawn as a result of changes in, or unavailability of, information. This rating is not a "market rating', because it is not a recommendation to buy, hold or sell the obligations. Please remember that complete documentation relating to this issue must be submitted no later than 90 days after the date of this letter. If you have any questions, please contact us. • very truly yours, iz ■:Il ■ 1-91x . 21Q see 8262 11-29-05 11 :04AM Foo, 013 15 . LAW OFFICES MOYLE, FLANIGAN, KATZ, FITZGERALD & SHEEHAN, P.A. 625 NORTH FLAGLER DRIVE•9TH FLOOR WEST PALM BEACH.FLORIDA 03401 POST OFFICE BOX 3888 L.•BETON WEST PALM BEACH.FLORIDA 33402 MICHAEL K.MILLER GREGORY D.COOK TELEPHONE(407)659-7500 JON C.MOYLE JOHN R.EUBANKS.JR. FACSIMILE (407)6594789 JON C.MOYLE.JR. C.COLO FITLGERALD.m JODY H.OLIVER JOHN F.FLANIGAN TALLAHASSEE OFFICE MARK E.RAYMOND MYRA OCNDCL 7DDHONE I60!)Walla THOMAS A.SHEEHAN.m LYNN O.HAWKINS FACSIMILE WHO 5614756 MARTA M.SUARELMURIAS MARTIN V.KATZ WILTON L.WHITE STUART OFFICE RKING T[lER•CHE IAp7)Ass.'AA OF COUNSEL: RONALD K K.KOUNS FACSIMILE won 16►145* STELA. M "THOMAS A.HICKCY A STEVEN A..MAYANS YAW SUCH GARDENS GIME 'WILLIAM J.PAYNE LINDA R.MCCANN ThVHONC(4071 SEMASO DONNA H.STINSON FACSIMILE M07161 14979 ^ADMITTED IN NEW YORK ONLY • November 29, 1995 CERTIFIED MAIL RETURN RECEIPT REOUESTED Division of Bond Finance State Board of Administration P.O. Drawer 5318 Tallahassee, Florida 32314 RE: Town of Highland Beach, Florida $4 , 485, 000 Water and Sewer Revenue Bonds, Series 1995 Ladies and Gentlemen: Enclosed herewith please find Forms BF-2003 , BF-2004-B, and a final Official Statement for the above-referenced financing . If you would like any further information in regard to this matter , please do not hesitate to call . Very truly yours, OWI Mark E. Raymond MER/ash 7797M STATE OF FLORIDA DIVISION OF BOND FINANCE LOCAL BOND MONITORING SECTION BOND INFORMATION FORM Part I. Issuer Information 1. Name of Governmental Unit Town of Highland Beach, Florida 2. Mailing Address 3614 South Ocean Boulevard 3. City $ighland Beach 4. County Palm Beach 5. Zip Code 33487 6. Type of Issuer: County Dependent Special District __X_ City Independent Special District Authority Other Part II. Bond Issue Information 1. Name of Issue Water and Sewer Revenue Bonds, Series 1995 2. Amount Issued $4,485,000 3. Amount Authorized $4,485,000 4. Dated Date 11/1/95 5. Sale Date 11/17/95 6. Delivery Date 11/29/95 7. Legal Authority for Issuance Florida Statutes Chapter 166 Special Act Other _ 8.A. Type of Issue General Obligation X Revenue Special Assessment Special Obligation 8.B. Is this a private activity bond (FAB)? _ Yes X No If yes, did this issue receive an allocation of volume cap? _ Yes _ No If yes, amount of allocation: $ 9. Specific Revenue(s) Pledged (1) Primary Water and Sewer Revenues; Guaranteed Entitlement; (2) Secondary Half-cent Sales Tax: Cigarette Tax: Occupational (3) Tertiary License Revenues (4) Other BF2003 10. Purpose(s) of the Issue (1) Satisfaction of a judgment against the Towp (2) Water and Sewer System Improvements (3) _Acquire Fire Truck (4) Improvements to Fire Station _. 10a. If purpose is refunding, complete the following: (1) For each issue refunded, list name of issue, dated date, original par value of issue, and amount of par value refunded. (a) Alone (b) (c) (2) Refunded debt has been: retired, or defeased 11. Type of Sale Competitive Bid Private Placement X Negotiated 12. Basis of Interest Rate Calculation Rate X Net Interest Cost (NIC) 5, 308% True Interest Cost (TIC) Canadian Interest Cost (CIC) Other 13. Insurance: MBIA 14. Rating(s) AJMoody's AAA Standard & Poor's Fitch Other None Duff & Phelps 15. Financial Advisor or Consultant None 16. Bond Counsel Moyle, Flanigan, Katz, FitzGersa.I51bIL Sheehan, P.A. 17. Lead Managing Underwriter(s) Stifel, Nicolaus & Company_Incorporated 18. Paying Agent NationsBank of Florida, N.A. 19. Registrar NationsBank of Florida, NLA. 2_ 7798M 20. Debt Service Schedule (Attach a copy of the debt service schedule showing, the following annual amounts for bond years. ) Annual Principal Maturity Interest Interest (Par Value) Mandatory Date Rate Payment Payment Term Amortization 21. Optional Redemption Provisions See Exhibit B 22. Comments None Part III. Respondent Information: 1. Name Mark E. Raymond Title Bond Counsel Phone (407) - 822-0380 Date Report Submitted 11/29/95 Part IV. 2. Please return completed form along with Final Official Statement, if any, to: Division of Bond Finance State Board of Administration Mailing Address: P.O. Box 13300 Tallahassee, Florida 32317-3300 Courier Deliveries: 1801 Hermitage Boulevard, Suite 200 Tallahassee, Florida 32308 Phone: 904-413-1304 Fax: 904-413-1315 or 904-413-1333 3_ 7798M EXHIBIT A Val 01 IICILAID SUM T[61IDi. ETU 11a E Sm 0a SEM 1995 I1501 Diti 11/01/95 831TLDIW DM 11/29195 In tR prig 7/011% DM ? niriPIL um Warr DO! SE. 0.000 152,425.00 152,425.00 7/01/96 0 0.000 228,637.50 228,617.50 7101/97 0 0.000 228,637.50 228,637.50 7/01/99 ° 7/01/99 0 0.000 228,631.50 228,637.50 p 0.000 228,637.50 318,637.•0 7/01/00228,637.50 000 4.300 228,637.50 7/01/011 90 4.400 2224,767.50 319,167.50 7/01/03 15,000 4.503 7.50 6�S51.50 116,712.50 7/01/04 100,000 4.600 7/01/05 290,000 4.700 211,712.`0 {9b�712.50 12.50 701/06 300,000 4.600 1911062.50 3,082.50 498 682.50 7/01/07 315,000 4.950 090.00 448,62.50 7/01/08 330,000 5.100 7/01/01 350,000 5.200 1",x.00 501,260.000 7/01/10 365,000 5.300 113 .00 133,.00 498,0615 0.00 00 7/01/11 385,000 5.400 497,725.00 7/01/12 405,020 5.250 91,915.00 7/01/13 430,000 5.250 19,082.50 047.50 50 501,662.50 7/01/14 445840, 5.250 25,20000 S05,200.00 7/01/15 751.50 . 7,840,751.50 V LLS 4,465,000 3,355, &00M 11M 2011/29/95 • 17,782.92 6Ton5,045 E Trost trust 3,155,757.50 El Wrirr W� 5,308373% AOL LIP! • 14.50 TUBS DISCOUlt 197.836 • 97,073.60 nil LC: IBLA UD SY Snit, 1ICOLWCS 11/06/95 EXHIBIT B Optional Redemption. The Bonds maturing on and prior to July 1, 2005 , are not subject to optional redemption prior to maturity. The Bonds maturing on and after July 1, 2006, are subject to redemption at the option of the Issuer, on or after July 1, 2005, in whole or in part on any date, by lot within a maturity in such selection of maturities as the Issuer shall deem appropriate, at the redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed) as set forth below, plus accrued and unpaid interest thereon to the date of redemption . REDEMPTION DATES REDEMPTION PRICE (Both Inclusive) July 1, 2005 through June 30 , 2006 101 % July 1, 2006 through June 30 , 2007 100 . 5 July 1, 2007 and thereafter 100 7038Z STATE OF FLORIDA DIVISION OF BOND FINANCE LOCAL BOND MONITORING SECTION BOND DISCLOSURE FORM - NEGOTIATED SALE Disclosure form for units of local government for bonds sold by negotiated sale, as required by Section 218.38(1)(c)(1), Florida Statutes, as amended in 1982. This form must be completed and returned to the Division within 120 days after the delivery of the bonds. 1. Title of unit of local government: Town of H1g(Lland Beach Florida 2. Mailing Address: 1614 South Ocean Boulevard Highland Beach Florida 3. Name of bond issue: Water and Sewer Revenue Bonds, Series 1995 4. Amount issued: $4,485.000 5. Dated date: November 1. 1995 6. Delivery Date: November 29. 1995__ 7. Name and address of the managing underwriters connected with bond issue: Stifel, Nicolaus & Company Incorporated 1177 George Bush Boulevard Suite 308 Delray Beach. FL 8. Name and address of any attorney or financial consultant who advised the unit of local government with respect to the bond issue: (1) Moyle. Flanigan. Katz, FitzGerald & Sheehan. P.A. Post Office Box 3888 West Palm Beach. Florida 33402 (2) Caldwell & Pacetti 324 Royal Palm W=y Palm Beach, Florida 33480 (3) (4) BF2004-B (3/90) q. Management fee charged by underwriter: $22,425.00 10. Underwriter's expected gross spread: $72, 510.81 11. Any fee, bonus, or gratuity paid in connection with the bond issue, by any underwriter or financial consultant to any person not regularly employed or engaged by such underwriter or consultant: (1) Name Greenberg Travrig Hoffman et al Amount $.17,0.0.00 (2) Name Amount $ (3) Name _ Amount $ (If additional space is needed, continue on separate sheet. ) 12. Any other fee paid by the unit of local government with respect to the bond issue, including any fee paid to attorneys or financial consultants: (1) Name Moyle. Flanigan, Katz, et al. Amount $20,000.00 (2) Name Caldwell & Pacetti Amount $17,990.00 (3) Name __ Amount $ (4) Name _ Amount $ (5) Name ___ _Amount $ (If additional space is needed, continue on separate sheet. ) 13. The signature of either the chief executive officer of the governing body of the Unit of Local Government or the governmental officer primarily responsible for coordinating the issuance of the bonds must be affixed hereto. Signature Title Mayor Date November 29, 1995 14. For further information regarding this form, the Division should contact: Name Mark . Raymond _ Phone No. (407) 822-4380 15. Completed form should be returned to: Department of General Services Division of Bond Finance State Board of Administration P.O. Drawer 5138 Tallahassee, Florida 32314 (904) 488- 4782 2_ 7799M 7803M 16 . $4 , 485, 000 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS SERIES 1995 CERTIFICATE OF ORIGINAL PURCHASER November 29, 1995 Town of Highland Beach, Florida Palm Beach County, FL Moyle, Flanigan, Katz, FitzGerald & Sheehan, P.A. 9th Floor 625 North Flagler Drive West Palm Beach, FL 33401 Gentlemen: Stifel Nicolaus & Company Incorporated (the "Underwriter") has served as the underwriter in connection with the issuance by Town of Highland Beach, Florida (the "Issuer") of its $4 , 485, 000 Water and Sewer Revenue Bonds, Series 1995 (the "Bonds" ) . On November 7 , 1995 the Underwriter reasonably expected that all of the Bonds would be, and all of the Bonds have been, the subject of a bona fide public offering to the general public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers) , made pursuant to the Bond Purchase Agreement dated November 7, 1995, between the Issuer and the Underwriter for cash and at the prices shown on the cover of the Official Statement relating to the Bonds dated November 7 , 1995 (the "Official Statement") , including interest accrued on the Bonds from the date of the Bonds . On November 7 , 1995 the Underwriter reasonably expected that at least 10% of each maturity of the Bonds would be sold to the general public at the prices shown on the cover of the Official Statement . The prices of the Bonds shown on the cover of the Official Statement did not exceed the fair market value of the Bonds on November 7, 1995 . The amount of $438, 792 . 64 established by the Issuer as the Reserve Account Requirement for the Bonds is based upon ( i) market considerations current during the sale of the Bonds , and (ii) the sufficiency, liquidity, and collectibility of the amounts pledged to secure the Bonds . Based on these considerations, it is our opinion that the amount to be deposited in the Reserve Fund established for the Bonds is a reasonable amount . We have prepared certain schedules relating to the Bonds, true and correct copies of which are attached hereto as Exhibit A. We have calculated the present value of the expected interest savings on the Bonds as a result of the issuance by MBIA Insurance Corporation of a Municipal Bond Insurance Policy in connection with the issuance of the Bonds . For this purpose, present value was computed using the yield on the Bonds as the discount rate, and we have calculated that the present value of the fee paid for the insurance policy is less than the present value of the expected interest savings on the Bonds as a result of the policy. In addition, we believe that the fee paid for the insurance policy does not exceed a reasonable arm' s-length charge for the transfer of credit risk. STIFEL, NI ' OLAUS & COMPANY INCORPO' •TED ailiBy. Ala i c orized 'epre - ' tative -2- 7803M 604 P03 NOV 30 '95 14:56 EXHIBIT A Town of Highland Beach Florida Water and Sewer Revenue Bonds, Series 1995 Dated: November 1, 1995 Closed: November 29, 1995 Sources Bond Proceeds Par Value 4,485,000.00 Original Issue Discount ' (97,073.60) 4,387,926.40 Uses Promissory Note 3,000,000.00 Fire Truck 420,000.00 Reimbursement to Town 210,000.00 Fire Station Renovation 150,000.00 Bond Insurance Premium 0.430% 34,000.00 Debt Service Reserve 438,792.64 Underwriter's Discount 1.617% 72,510.81 Costs Bond Counsel 24,500.00 Town Special Counsel 17,990.00 Paying Agent 500.00 Printing 5,000.00 Moody's Rating Fee 6,700.00 S 6 P Rating Fee 6,500.00 61,190.00 Miscellaneous 1,432.95 4,387,926.40 ➢➢➢ZEE EIE����� 894 P94 Na..) 30 '95 14:56 Underwriter's Discount 22,425.00 0.500% Management Fee Sales Credits 29,268.75 0.653% Expenses Underwriter's Counsel 16,500.00 CUSIP l's 175.00 Overnight Funds 1,021.85 Day Loan . 120.22 DALCOMP Info. Service n/a Clearance 2,500.00 Miscellaneous 500.00 20,817.06 0.464% ------------- 72,510.81 1.617% Cr.:Ci:C===--zuzz:t -- 2 804 P05 NOV 30 '95 14:5? Tom of Highland Beach Florida Water and Sewer Revenue Bonds, Series 1995 Gross Debt Service Dated: November 1, 1995 Closed: November 29, 1995 Accrued Interest: 17,782.92 Sales Credits Payment Date Principal Rate Yield - Price Interest Total Annually % $ 7/01/96152,425.00 152,425.00 152,425.00 1/01/97 114,318.75 114,318.75 7/01/97 114,318.75 114,318.75 228,637.50 1/01/98 114,318.75 114,318.75 7/01/98 114,318.75 114,318.75 228,637.50 1/01/99 114,318.75 114,318.75 7/01/99 114,318.75 114,318.75 228,637.50 1/01/00 114,318.75 114,318.75 7/01/00 114,318.75 114,318.75 228,637.50 1/01/01 114,318.75 114,318.75 7/01/01 90,000 4.30E 4.40% 99.505 114,318.75 204,318.75 318,637.50 0.500E 450.00 1/01/02 112,383.75 112,383.75 7/01/02 95,000 4.40% 4.50% 99.431 112,383.75 207,383.75 319,767.50 0.500E 475.00 1/01/03 110,293.75 110,293.75 7/01/03 95,000 4.50% 4.60% 99.361 110,293.75 205,293.75 315,587.50 0.500% 475.00 1/01/04 108,156.25 108,156.25 7/01/04 100,000 4.60% 4.70% 99.296 108,156.25 208,156.25 316,312.50 0.500% 500.00 1/01/05 105,856.25 105,856.25 7/01/05 290,000 4.70% 4.80% 99.234 105,856.25 395,856.25 501,712.50 0.500% 1,450.00 1/01/06 99,041.25 99,041.25 7/01/06 300,000 4.80% 4.90% 99.177 99,041.25 399,041.25 498,082.50 0.750% 2,250.00 1/01/07 91,841.25 91,841.25 7/01/07 315,000 4.95% 5.05E 99.126 91,841.25 406,841.25 498,682.50 0.750E 2,362.50 1/01/08 84,045.00 84,045.00 7/01/08 330,000 5.10% 5.20E 99.079 84,045.00 414,045.00 498,090.00 0.750% 2,475.00 1/01/09 75,630.00 75,630.00 7/01/09 350,000 5.20% 5.30% 99.035 75,630.00 425,630.00 501,260.00 0.750% 2,625.00 1/01/10 66,530.00 66,530.00 7/01/10 365,000 5.30% 5.40% 98.994 66,530.00 431,530.00 498,060.00 0.750E 2,737.50 1/01/11 56,857.50 56,857.50 7/01/11 385,000 5.40% 5.50% 98.956 56,857.50 441,857.50 498,715.00 0.625% 2,406.25 1/01/12 46,462.50 46,462.50 7/01/12 405,000 5.25E 5.60% 95.863 46,462.50 451,462.50 497,925.00 0.625% 2,531.25 1/01/13 35,831.25 35,831.25 7/01/13 430,000 5.25E 5.60% 95.863 35,831.25 465,831.25 501,662.50 0.6251 2,687.50 1/01/14 24,543.75 24,543.75 7/01/14 455,000 5.25% 5.60% 95.863 24,543.75 479,543.75 504,087.50 0.625% 2,843.75 1/01/15 12,600.00 12,600.00 7/01/15 480,000 5.25% 5.60% 95.863 12,600.00 492,600.00 5055200.00 0.625% 3,000.00 4,485,000 3,355,757.50 7,840,757.50 7,840,757.50 29,269 c-____,_____-______.--___caasaaa= Avg 0.653% 3. Ten Maturity (7/1/15): 1,770,000 Callable: 7/1/05 @ 101.0E 7/1/06 @ 100.5E 7/1/07 6 thereafter @ 100E 804 P06 NOV 30 '95 14:58 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS, SERIES 1995 , DEBT SERVICE SCHEDULE ISSUE DATE 11/01/95 1 SETTLEMENT'' DATE 11/29/95 1ST INT DATE 7/01/96 DATE PRINCIPAL RATE INTEREST DEBT SITZ. 7/01/96 0 0.000 152,425.00 152,425.00 7/01/97 0 0.000 228,637.50 228,637.50 7/01/98 0 0.000 228,637.50 228,637.50 7/01/99 0 0.000 228,637.50 228,637.50 7/01/00 0 0.000 228,637.50 228,637.50 7/01/01 90,000 4.300 228,637.50 318,637.50 7/01/02 95,000 4.400 224,767.50 319,767.50 7/01/03 95,000 4.500 220,587.50 315,587.50 7/01/04 100,000 4.600 216,312.50 316,312.50 7/01/05 290,000 4.700 211,712.50 501,712.50 7/01/06 300,000 4.800 198,082.50 498,082.50 7/01/07 315,000 4.950 183,682.50 498,682.50 7/01/08 330,000 5.100 168,090.00 498,090.00 7/01/09 350,000 5.200 151,260.00 501,260.00 7/01/10 365,000 5.300 133,060.00 498,060.00 7/01/11 385,000 5.400 113,715.00 498,715.00 7/01/12 405,000 5.250 92,925.00 497,925.00 7/01/13 430,000 5.250 71,662.50 501,662.50 7/01/14 455,000 5.250 49,087.50 504,087.50 7/01/15 480,000 5.250 25,200.00 505,200.00 TOTALS 4,485,000 3,355,757.50 7,840,757.50 ACCRUED INTEREST TO 11/29/95 = 17,782.92 TOTAL BOND YEARS = 65,045 GROSS INTEREST COST 3,355,757.50 NET INTEREST RATE • 5.308373% AVERAGE LIFE • 14.50 YEARS DISCOUNT' @ 97.836 = 97,073.60 FILE NAME: BEACH PREPARED BY STIPEL, NICOLAUS 11/06/95 4 804 P07 NOV 30 '95 14:56 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS, SERIES 1995 PROOF OF YIELD PAR AHIXIHT OF BONDS $ 4,485,000.00 PLUS: ACCRUED INTEREST TO 11/29/95 17,782.92 LESS: DISCOUNT C 97.8355942029% -97,073.60 • LESS: ISSUANCE COSTS TREATED AS DISCOUNT -34,000.00 NET PRICE OF BONDS FOR PURPOSES OF YIELD VERIFICATION $ 4,371,709.32 ncoreoa7.r.17z PRESENT VALUE CALCULATED AT 5.4426065547% OF ALL FUTURE PAYMENTS OF PRINCIPAL AND INTEREST ON THE BONDS $ 4,371,709.32 SINCE THE PRESENT VALUE CALCULATED AT 5.4426065547% OF ALL FUTURE PAYMENTS OF PRINCIPAL AND INTEREST ON THE BONDS IS EQUAL TO THE NET PRICE PAID FOR PURPOSES OF YIELD VERIFICATION, THE YIELD ON THE BONDS IS 5.4426065547%. FILE READ: .:EACH PREPARED BY STIFEL, NICOLAUS & COMPANY, INC. 11/06/95 5 804 pO8 NOV 30 '95 14:59 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS, SERIES 1995 • COMPUTATION OF ACTUARIAL YIELD VALUATION DATE 11/29/95 5.4426065547% PRESENT VALUE DATE PNT VALUED P.V. FACTOR (PRP + FACTOR) 7/01/96 152,425.00 0.9688722063 147,680.35 1/01/97 114,318.75 0.9432047447 107,825.99 7/01/97 114,318.75 0.9182172681 104,969.45 1/01/98 114,318.75 0.8938917623 102,188.59 7/01/98 114,318.75 0.8702106902 99,481.40 1/01/99 114,318.75 0.8471569796 96,845.93 7/01/99 114,318.75 0.8247140102 94,280.27 1/01/00 114,318.75 0.8028656022 91,782.59 7/01/00 114,318.75 0.7815960045 89,351.08 1/01/01 114,318.75 0.7608898832 86,983.98 7/01/01 204,318.75 0.7407323106 151,345.50 1/01/02 112,383.75 0.7211087544 81,040.91 7/01/02 207,383.75 0.7020050675 145,584.44 1/01/03 110,293.75 0.6834074774 75,375.57 7/01/03 205,293.75 0.6653025766 136,582.46 1/01/04 108,156.25 0.6476773127 70,050.35 7/01/04 208,156.25 0.6305189790 131,246.47 1/01/05 105,856.25 0.6138152057 64,976.18 7/01/05 395,856.25 0.5975539505 236,545.47 1/01/06 99,041.25 0.5817234901 57,614.62 7/01/06 399,041.25 0.5663124118 225,982.01 1/01/07 91,841.25 0.5513096055 50,632.96 7/01/07 406,841.25 0.5367042550 218,353.43 1/01/08 84,045.00 0.5224858310 43,912.32 7/01/08 414,045.00 0.5086440829 210,601.54 1/01/09 75,630.00 0.4951690318 37,449.63 7/01/09 425,630.00 0.4820509631 205,175.35 1/01/10 66,530.00 0.4692804197 31,221.23 7/01/10 431,530.00 0.4568481948 197,143.70 1/01/11 56,857.50 0.4447453257 25,287.11 7/01/11 441,857.50 0.4329630870 191,307.99 1/01/12 46,462.50 0.4214929846 19,583.62 7/01/12 451,462.50 0.4103267493 185,247.14 1/01/13 35,831.25 0.3994563311 14,313.02 7/01/13 465,831.25 0.3888738931 181,149.61 1/01/14 24,543.75 0.3785718061 9,291.57 7/01/14 479,543.75 0.3685426431 176,732.32 1/01/15 12,600.00 0.3587791737 4,520.62 7/01/15 492,600.00 0.3492743591 172,052.55 TOTALS 7,840,757.50 4,371,709.32 TOTAL PAYMENTS VALUED • 7,840,757.50 PRESENT VALUE OP PAYMENTS = 4,371,709.32 6 QUOTED PRICE • 4,353,926.40 804 P09 NOV 30 '95 15:00 Town of Highland Beach Florida Water and Sewer Revenue Bonds, Series 1995 Net Debt Service Dated: November 1, 1995 Closed: November 29, 1995 Payment Gross Reserve Net Date Debt Service * Receipts ** Debt Service Annually 7/01/96 134,642 14,064 120,578 120,578 1/01/97 114,319 11,941 102,378 7/01/97 114,319 11,941 102,378 204,756 1/01/98 114,319 11,941 102,378 7/01/98 114,319 11,941 102,378 204,756 1/01/99 114,319 11,941 102,378 7/01/99 114,319 11,941 102,378 204,756 1/01/00 114,319 11,941 102,378 7/01/00 114,319 11,941 102,378 204,756 1/01/01 114,319 11,941 102,378 7/01/01 204,319 11,941 192,378 294,756 1/01/02 112,384 11,941 100,443 7/01/02 207,384 11,941 195,443 295,886 1/01/03 110,294 11,941 98,353 7/01/03 205,294 11,941 193,353 291,706 1/01/04 108,156 11,941 96,215 7/01/04 208,156 11,941 196,215 292,431 1/01/05 105,856 11,941 93,915 7/01/05 395,856 11,941 383,915 477,831 1/01/06 99,041 11,941 87,100 7/01/06 399,041 11,941 387,100 474,201 1/01/07 91,841 11,941 79,900 7/01/07 406,841 11,941 394,900 474,801 1/01/08 84,045 11,941 72,104 7/01/08 414,045 11,941 402,104 474,208 1/01/09 75,630 11,941 63,689 7/01/09 425,630 11,941 413,689 477,378 1/01/10 66,530 11,941 54,589 7/01/10 431,530 11,941 419,589 474,178 1/01/11 56,858 11,941 44,917 7/01/11 441,858 11,941 429,917 474,833 1/01/12 46,463 11,941 34,522 7/01/12 451,463 11,941 439,522 474,043 1/01/13 35,831 11,941 23,890 7/01/13 465,831 11,941 453,890 477,781 1/01/14 24,544 11,941 12,603 7/01/14 479,544 11,941 467,603 480,206 1/01/15 12,600 11,941 659 7/01/15 492,600 450,734 41,866 42,526 7,822,975 906,609 w 6,916,365 6,916,365 3 a __z==ova_:-a==..L * Net of Accrued Interest 7 ** At Bond Yield 804 P10 140) 30 '95 15:00 Town of Highland Beach Florida Coabined Debt Service Net Series 1972 Series 1993 Series 1995 For Year General Obligation General Obligation Water & Sewer Rev Total Ending Debt Service Debt Service Debt Service * Debt Service 1996 76,300 107,648 120,578 304,526 1997 73,150 115,723 204,756 393,629 1998 188,253 204,756 393,009 1999 187,653 204,756 392,409 2000 181,563 204,756 386,319 2001 185,255 294,756 480,011 2002 178,358 295,886 474,244 2003 186,305 291,706 478,011 2004 183,400 292,431 475,831 2005 477,831 477,831 2006 474,201 474,201 2007 474,801 474,801 2008 474,208 474,208 2009 477,378 477,378 2010 474,178 474,178 2011 474,833 474,833 2012 474,043 474,043 2013 477,781 477,781 2014 480,206 480,206 2015 42,526 42,526 149,450 1,514,158 6,916,365 8,579,973 ■n= _' - * Net of Accrued Interest 8 MBIA FINANCIAL GUARANTY INSURANCE POLICY MBIA Insurance Corporation Armonk,New York 10504 Policy No. 19838 MBIA Insurance Corporation (the "Insurer), in consideration of the payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocrioly guarantees to any owner,as hereinafter defined,of the following described obligations,the full and complete payment nequitedrobemadebyoronbehalftithe Issuer to the principal corporate trust office of NationsBank of Florida, N.A. Tampa, Florida advarcennent � maturntw or its successor(the"Paying Agent")of an amount equal to(I)the pal of(either at the stated maturity or by any pursuant to a mandatory sinking fund payment)and interest on,the Obligations(as that term is defined below)as such payments shall become due but of such Papal by reason of mandatory or optional redemption or shall not be so paid fro that in the event of any acceleration any advan cement cmen maturity pursuant to a mandatory sinking fund payment, the acceleration resultinged from sial or otherwise. othen than would have been due had there not been payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal t to a final judgmentany such acceleration): and(ii)the reimbt rsement of any such payment which is subsequently recovered from any owner pursuant tem constitutes an avoidable preference to such owner within the meaning of any applicable baa cam competentTherefionerred dthat such l payment sentence shall be referred to herein collectively as the "Insured bankruptcy law. The amounts referred to in clauses(i)and(ii)of the preceding Amounts." Obligations"shall mean: 54,485,000 Town of Highland Beach, Florida Water and Sewer Revenue Bonds Series 1995 Uconfirmed in writing b y regnered or certified mail,or upon receipt of written receipt b telephonic d or telegraphic notice, such notice i o the subsequently or owner of an Obligtion the payment of an Insured Antaurt for suchcerefui mail,by tnIasfromthee,t Insurerthe geany for which is then due,that required payment has not been made,the on the due date of such payment or within one business day after receipt of notice ofsuch nonpayment,whichever is later,will make a deposit of finds,in an account with State Street Bank and Trust Company.N.A. Upon presentment and in New York, New York, or its successor, sufficient for the payment of any such Insured Amann vwf»ch are � e instruments of surrender of such Obligations or presentment of such other prod of ownership of the Obligations, together mems to effect asci rent to evidence the assignment ofthe Insured Amounts due on the Cbligtions as are paid by the Insurer,and appropriate gutrelated to payment of Insured Amounts on the the appoins nuc i the instruments i agent for such owners of the Cbligationsrin any usproceeding N.A,State Street Bank and Trust Company.N.A Obligation,such irtstrtrnrnerntsbeing in a form satisfactory to State Street Bank and Trust Company. shall disburse to such owners,or the Paying Agent payment tithe Insured Amounts due on such Obligation,less any amount held by the Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure against lass of any prepayment premium which may at any time be payable with respect to any Obligation_ Asused herein,the term"owner"shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent,the Issuer,or any designee of the Issuer fix such purpose. The term owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the underlying security for the Obligation. Any service ofprocess on the Insurer may be made to the Insurer at its offices located at 113 King Street,Armonk,New York 10504 and such service dprocess shall be valid and binding This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason including the payment prior to maturity of the Obligations. The insurance provided by this policy is not covered by the Florida Insurance Guaranty Association created under chapter 631,Florida Statutes. IN WITNESS WHEREOF,the Insurer has caused this policy to be executed in facsimile on its behalf by its duly authorized officers,this2 9th day of November, 1995. COUNTERSIGNED: MIIIIA In. rance Corpora on card LV "9acil Resident Licensed Agent F'residen Tampa, Florida 33601 Amaa C Assistant Secretary, City,State STD-RCS-FL-6 4195 MITA CERTIFICATE OF MBIA INSURANCE CORPORATION I, Ann D. McKenna, Assistant Secretary of MBIA Insurance Corporation, do hereby certify that the information concerning MBIA Insurance Corporation and its policies as set forth in the Official Statement, dated November 7, 1995 under the caption "Municipal Bond Insurance", regarding $4,485,000 Town of Highland Beach, Florida, Water and Sewer Revenue Bonds, Series 1995, is accurate. IN WITNESS WHEREOF, I hereunto set my hand and deliver this Certificate on this 29th day of November, 1995. Assistant Secretary MBIA NO DEFAULT CERTIFICATE OF MBIA Insurance Corporation Re: $4,485,000 Town of Highland Beach, Florida, Water and Sewer Revenue Bonds, Series 1995 The undersigned, an authorized officer of MBIA Insurance Corporation ("Insurer"), in connection with the above-captioned financing, hereby certifies that the Insurer is not now in default nor has it been in default as to payment of principal or interest with respect to an obligation insured by the Insurer. IN WITNESS WHEREOF, I hereunto set my hand and deliver this Certificate on this 28th day of November, 1995. MBIA Insurance Corporation Assistant Secretary AIWA MBIA Insurance Corporation 113 King Street Armonk,NY 10504 914 273 4545 TAX CERTIFICATE Town of Highland Beach 3614 South Ocean Blvd. Highland Beach, Florida 33487 RE: $4,485,000 Town of Highland Beach, Florida, Water and Sewer Revenue Bonds, Series 1995. (the "Obligations") Ladies and Gentlemen: In connection with the issuance of the above-referenced obligations (the "Obligations"), MBIA Insurance Corporation (the "Insurer") is issuing a financial guaranty insurance policy (the "Policy") securing the payment of principal and interest on the.Obligations. This is to advise you that: 1. The Policy is an unconditional obligation of the Insurer to pay scheduled payments of principal and interest on the Obligations in the event of a failure to do so by the Town of Highland Beach (the "Issuer"); 2. The insurance premium in the amount of $34,000 represents the charge for a transfer of credit risk and was determined in arm's length negotiations and is required to be paid as a condition to the issuance of the Policy; 3. No portion of such premium represents an indirect payment of costs related to the issuance of the Obligations other than the transfer of credit risk; 4. The Insurer does not reasonably expect that it will be called upon to make any payment under the Policy; and 5. To the extent the Insurer is called upon to make any payment under the Policy, the Insurer reasonably expects to pursue all available legal remedies to secure reimbursement for such payment. Dated: November 29, 1995 MBIA Insurance Corporation Assistant Secretary 7805M 19 . $4 , 485 , 000 TOWN OF HIGHLAND BEACH, FLORIDA WATER AND SEWER REVENUE BONDS SERIES 1995 CERTIFICATE AS TO ARBITRAGE AND OTHER TAX MATTERS Mary Ann Mariano, the undersigned Town Manager, and Michael Seaman, the undersigned Director of Finance of the Town of Highland Beach, Florida (the "Issuer") , being duly authorized and delegated, with others , to perform such requirements as are necessary and proper for the issuance and sale of the Issuer ' s above-referenced bonds (the "Bonds") , do hereby certify and declare as follows : I . IN GENERAL. 1 . 1 . The Bonds are being issued pursuant to and in accordance with a Resolution No . 677 adopted by the Issuer on October 3 , 1995, as amended and supplemented (the "Bond Resolution" ) , in order to provide funds to pay the Promissory Note, to pay the costs of the Series 1995 Project and to reimburse the Original Expenditures (as all such terms are defined in the Bond Resolution) . 1 .2 . On November 29 , 1995 (the "Issue Date" ) the Issuer will issue and deliver ( i .e. , physical delivery of the Bonds in exchange for the purchase price) the Bonds , dated November 1, 1995 . The first day on which there was a binding contract in writing for the sale of the Bonds on specific terms that were not later modified or adjusted in any material respect was November 7, 1995 (hereinafter , the "Sale Date") . 1 . 3 . We are each anofficer of the Issuer who is duly charged, with others, with the responsibility of issuing the Bonds . 1 .4 . No obligations other than the Bonds are being issued at substantially the same time (within 15 days of the Bonds) and sold pursuant to the same plan of financing and which are reasonably expected to be paid out of substantially the same source of funds as the Bonds . 1 . 5 . This Certificate as to Arbitrage and Other Tax Matters (this "Certificate") , which is made on behalf of the Issuer, is executed for, among other things , the purposes of establishing the reasonable expectations of the Issuer as to future events relating to the amount and use of the proceeds of the Bonds and establishing limitations upon the investment of such proceeds . This Certificate is being executed and delivered pursuant to Sections 148 and 149 of the Code and Sections 1. 148-0 through 1 . 148-11, 1. 149 (d)-1, 1. 149 (g)-1, 1 . 150-1 and 1 . 150-2 of the Income Tax Regulations (hereinafter "Treas . Reg . " ) (collectively, the "Arbitrage Regulations" ) . 1 . 6 . The facts, estimates, and circumstances set forth herein are based upon representations made by the Issuer , and to the best knowledge, information and belief of the undersigned, such facts, estimates, and circumstances are true, correct and complete as of the date hereof , and the Issuer is not aware of any facts or circumstances that would cause it to question the -2- 7805M accuracy of the representations made herein; the expectations as to future events, which are based thereon, are in all respects reasonable; and there are no other facts, estimates, or circumstances that would materially change such expectations . On the basis of such facts, estimates, and circumstances, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds under Section 148 of the Code and the Arbitrage Regulations . II . SOURCE AND DISTRIBUTION OF FUNDS. 2 . 1 . The Bonds are being sold to the Original Purchaser at a purchase price of $4 , 405,709 . 32 representing the par amount of the Bonds, $4 , 485, 000, plus accrued interest of $17, 782 . 92 and less original issue discount of $97, 073 . 60 . 2 . 2 . The sale proceeds of the Bonds will be applied as follows : Pay Promissory Note $3 , 000,000 . 00 Reimburse Original Expenditures 630, 000 . 00 Deposit to Interest Account 17,782 . 92 Deposit to Construction Fund 212 , 622 . 95 Deposit to Reserve Fund 438, 792 . 64 Underwriters ' Discount 72 , 510 . 81 Bond Insurance Premium 34 , 000 . 00 Total $4 ,405, 709 . 32 III . FUNDS AND ACCOUNTS. 3 . 1 . The Bond Resolution establishes the following accounts : A Construction Fund; A Revenue Fund; An Operation and Maintenance Fund; -3- 7805M A Debt Service Fund, and therein an Interest Account, a Principal Account , a Bond Amortization Account and a Reserve Account; A Renewal and Replacement Fund; and • An Impact Fee Fund. Other than amounts in certain of the foregoing funds and accounts, there are no amounts that are expected to be used directly or indirectly to pay debt service on the Bonds, or which will be directly or indirectly pledged to pay debt service on the Bonds and for which there is a reasonable assurance that such amounts will be available to pay debt service on the Bonds , even in the event the Issuer encounters financial difficulties . The Issuer expects as of this date that the term of the Bonds is not longer than is reasonably necessary for the purpose of the issue. The issuance of the Bonds was necessitated by among other things the entry of a judgment against the Issuer and repayment of the Bonds any sooner than scheduled would subject the Issuer to long-term financial distress . 3 . 2 . The amount of $3 , 000, 000 of proceeds of the Bonds being used to pay the Promissory Note will be spent on the date hereof , and $630, 000 of proceeds of the Bonds are being used to reimburse the Original Expenditures pursuant to Resolution No. 672, adopted by the Issuer August 5, 1995 , and such amounts will be treated as spent on the date hereof for purposes of the Arbitrage Regulations . The amount of $212 , 622 . 95 of proceeds of the Bonds being deposited in the Construction Fund will be used to -4- 7805M pay the costs of issuance of the Bonds and the remaining costs of the Series 1995 Project . The Issuer expects that it will within six months spend all amounts in the Construction Fund. The Issuer expects that expenditures towards the Series 1995 Project will commence and will proceed with due diligence to completion and that the allocation of net sale proceeds of the Bonds to the Series 1995 Project will proceed with due diligence. Proceeds of the Bonds deposited in the Construction Fund may be invested at an unrestricted yield for a period not to exceed three (3) years from the date of this Certificate. Investment proceeds of the Bonds on deposit in the Construction Fund may also be invested at an unrestricted yield for a period ending on the later of the date that is three years from the date hereof or the date that is one year after original receipt of such earnings . Any amounts in the Project Fund which cannot be invested at an unrestricted yield pursuant to this Section 3 . 2 shall be invested, if at all, in obligations that bear a yield not higher than the yield on the Bonds plus one-eighth of one percentage point . 3 .3 . The amount of $17, 782 .92 deposited in the Interest Account represents accrued interest on the Bonds from their dated date to the date hereof and such amount will be invested and applied to the payment of interest due on the Bonds on July 1, 1996 . Proceeds of the Bonds in the Interest Account may be invested at an unrestricted yield. 3 . 4 Pledged Funds that are expected to be used to pay debt service on the Bonds, including amounts in the Revenue Fund -5- 7805M and Debt Service Fund (other than the Reserve Account) allocated to the Bonds (other than amounts described in Section 3 . 3 hereof) , are referred to herein as the "Sinking Fund Proceeds . " The Sinking Fund Proceeds constitute a fund that will be used primarily to achieve a proper matching of revenues and debt service on the Bonds within each Bond Year . The Sinking Fund Proceeds will be depleted at least once each Bond Year except for a reasonable carryover amount which will not exceed the greater of (A) the earnings on the Sinking Fund Proceeds for the immediately preceding Bond Year or (B) one-twelfth of the debt service on the Bonds for the immediately preceding Bond Year . The Sinking Fund Proceeds may be invested without regard to any yield restrictions for a period ending not later than thirteen (13) months from the date of receipt of such amounts . Any Sinking Fund Proceeds which cannot be invested at an unrestricted Yield pursuant to this Section 3 . 4 shall be invested, if at all , in obligations that bear a yield not higher than the yield on the Bonds plus one-thousandth of one percentage point . 3 . 5 . The Resolution creates the Reserve Account which is required to be funded and maintained at a market value equal to the Reserve Account Requirement . Moneys in the Reserve Account shall be used only for the purpose of paying debt service on the Bonds to the extent the amounts otherwise available therefor are insufficient for such purpose . On the date of issuance of the Bonds, the amount on deposit in the Reserve Account will be $438, 792 . 64 , consisting of proceeds of the Bonds . -6- 7805M The Issuer believes that the establishment of the Reserve Account is necessary to provide adequate security for the payment of principal and interest on the Bonds and is a vital and necessary factor in marketing the Bonds . The amount on deposit in the Reserve Fund should at no time exceed the lesser of the maximum annual debt service on the Bonds, 125% of the average annual debt service on the Bonds and 10% of the par amount of the Bonds less the original issue discount attributable to the Bonds . Based upon the foregoing , the Issuer has concluded that the Reserve Account is a "reasonably required reserve or replacement fund. " Accordingly, amounts on deposit in the Reserve Fund may be invested at an unrestricted yield. 3 . 6 . Any amounts in the Revenue Fund, Interest Account, Principal Account and Bond Amortization Account that do not constitute Sinking Fund Proceeds, and any amounts in the Operation and Maintenance Fund, Renewal and Replacement Fund and Impact Fee Fund which are not reasonably expected to be used to pay debt service on the Bonds may be invested without regard to any yield restrictions . 3 . 7 . Notwithstanding any provision of this Article III to the contrary, to the extent permitted by the Bond Resolution, amounts may be invested in obligations ("tax-exempt bonds" ) the interest on which is excluded from gross income pursuant to Section 103(a) of the Code, and which are not specified private activity bonds (as defined in Section 57(a) (5) (c) of the Code) , and/or in investments that constitute "tax-exempt bonds" pursuant to Treas . Reg . §1 . 150-1(b) without regard to any yield -restriction. -7- 7805M IV. YIELDS. 4 . 1 . For purposes of calculating the Yield on the Bonds, the issue price of the Bonds has been calculated to be the initial offering price to the public of $4 , 405 , 709 .32 . The scheduled payment of principal of and interest on the Bonds when due is insured by a financial guaranty insurance policy issued by MBIA Insurance Corporation. The Original Purchaser has certified that the premium paid for the insurance policy covering the Bonds is a reasonable charge for the transfer of credit risk. The Original Purchaser has also advised the Issuer that the present value (calculated using the yield on the Bonds as the discount rate) debt service savings expected to be realized by the Issuer as a result of the insurance policy is greater than the premium paid for such insurance policy. Accordingly, the premium paid for such insurance policy ($34 , 000 . 00) is treated as an issue payment paid on the Bonds on the date hereof for purposes of determining the yield on the Bonds . The yield on the Bonds has thus been determined to be not less than 5 . 442606%. V. ARBITRAGE REBATE. 5 . 1 . The Issuer has the power to impose taxes of general applicability which, when collected, may be used for the general purposes of the Issuer . The exercise by the Issuer of its taxing power is not contingent upon approval by another governmental unit . None of the Bonds are private activity bonds and 95% or more of the net proceeds of the Bonds are to be used -8- 7805M for local governmental activities of the Issuer . The aggregate face amount of all tax-exempt bonds (other than private activity bonds) reasonably expected to be issued during 1995 is not more than $5, 000, 000 . 00 . There are no entities that issue bonds on behalf of the Issuer, and there are no entities subordinate to the Issuer. Therefore, the Bonds are exempt from the arbitrage rebate provisions of Section 148(f) of the Code pursuant to Section 148(f) (4) (D) of the Code. VI . HEDGE BONDS. 6 . 1 . The Issuer reasonably expects that at least 85% of the spendable proceeds of the Bonds will be spent for the governmental purposes of the Bonds within the three-year period beginning on the date hereof , and not more than 50% of the proceeds of the Bonds are being invested in non-purpose investments having a substantially guaranteed yield for four years or more. VII . MISCELLANEOUS. 7 . 1 . Terms used herein in capitalized form and not otherwise defined herein shall have the same meaning as ascribed thereto in the Bond Resolution and in the Arbitrage Regulations . 7 . 2 . Anything in this Certificate to the contrary notwithstanding, if the Code or Arbitrage Regulations should be modified or interpreted by the Treasury Department or by a court of competent jurisdiction or held invalid by a court of competent jurisdiction and the affect of the modification, interpretation, or invalidation is to make unnecessary to any extent the -9- 7805M limitations on yield on acquired obligations stipulated in this Certificate as a requirement of the exclusion of the interest on the Bonds from gross income of the Owners thereof for Federal income tax purposes , then to that extent such stipulation shall be ineffective. The Issuer, however, shall not take any action pursuant to this paragraph without a prior written opinion of Bond Counsel that such action would not adversely affect the tax-exempt status of interest on the Bonds . IN WITNESS WHEREOF, the undersigned, being the Town Manager and Director of Finance of the Issuer and being thereunto authorized, have executed and delivered this Certificate as to Arbitrage and Other Tax Matters on behalf of the Issuer this 29th day of November, 1995 . TOWN OF HIGHLAND BEACH, FLORIDA By.' I A. Town Ma iv ger By: /�'!/c - Director of F' nance -10- 7805M 20 . LAW OFFICES MOYLE, FLANIOAN, KATZ, FITZGERALD SC SHEEHAN, P.A. 625 NORTH FLAGLER DRIVE•9T•I FLOOR WEST PALM BEACH.FLORIDA 03401 POST OFFICE BOX 3888 PETER L.BRETON WEST PALM BEACH.FLORIDA 0040E MICHAEL K.MILLER GREGORY D.COOK TCLCPMONE(4071659-7500 JON C.MOYLE JOHN R.CUBANKS.JR. JON C.MOYLE.JR. FACSIMILE (4071 659-1789 C.COLE FITZGERALD.m JODY N.OLIVER JOHN F.FLANIGAN TALLAHAS$CC OFFICE MARK C.RAYMOND MYRA GENDEL TD.EMOKE MOM SSI.19t9 THOMAS A.SHEEHAN.= LYNN G.HAWKINS FACSIMILE(9041 N141H MARTA M.BUARELMURIAS MARTIN V.KATZ WILTON L.WHITE WILLIAM S.KING STUART OFFICE RONALD K.KOLINB t[tth1ONC ROTI S►IIM OF COUNSEL: FACSIMILE 14071 9NI4114 ..THOMAS A.HICKEY PAUL A.KRASKER STEVEN A.MAYANS 'PALM BEACH SARDWS OFFICE 'WILLIAM J.PAYNE LINDA R.McCANN TtKRgnC1407,S194490 DONNA H.STINSON FACSIMILE 14071920.8►T9 ....OMITTED IN NEW YORK ONLY November 29 , 1995 Internal Revenue Service Center CERTIFIED MAIL Philadelphia , PA 19255 iN 'E • • • D RE: $4 , 485, 000 Town of Highland Beach, Florida Water and Sewer Revenue Bonds, Series 1995 Dear Sir/Madam: Enclosed please find Form 8038-G which relates to the above- referenced bonds . Please acknowledge your receipt of the enclosed by stamping the copy of the form included herewith, and return the stamped copy to us in the enclosed envelope. MOYLE, FLANIGAN, KATZ, FITZGERALD & SHEEHAN, P.A. By: MER/wp Enclosure 7806M Farm 8038.6 Information Return for Tax-Exempt Governmental Obligations ► Under Internal Revenue Code section 140(e) OM8 No. 15x5.0720 (Rev.May 1995) P. sea separate Instructions. o,oeen+nt a ire n.r.n (Nota:Use Fenn 8038-CC If the mum pnce is under 5100.000.) Menti Arena sena In Reporting Authority If Amended Return, check here ► Q 1 Issuer's name 2 Issuer's employer identification number Town of Highland Beach, Florida 59 10951822 3 Number and street(or P.O.box if mail is not dohvwed to street sddrsss) Room/surto 4 Report nunter 3614 South Ocean Boulevard c1995 - 1 6 City.town.or post office,state,and ZIP code 6 Date of issue Highland Beach, FL 33487 11/29/95 7 Name of Issue 8 CUSP number Water and Sewer Revenue Bonds, Series 1995 429893AM2 Ern Type of Issue (check applicable box(es) and enter the issue price) 9 0 Education(attach schedule-see instructions) 9 S 10 0 Health and hospital (attach schedule-see instructions) 10 11 0 Transportation 11 12 ® Public safety 12 Ff,1 f'71 44 13 0 Environment (including sewage bonds) 13 14 0 Housing 10 15 ® Utilities15 127,690.98 18 ® Other. Describe (see Instructions) ► Satisfy Judgment- 1,8/,3598 563.98 17 If obligations are tax or otherrevenue anticipation bonds, chock box P.- ❑ j/ jj 18 If obligations are In the form of a lease or installment sale,check box I, ❑ Part III Descri tion of Obligations 04 Stated rNO oddampaon We9^ta0 (6 NN interest (1 0 Mstvnnt dale lntresst rate tawri price Vies pee et maleay mat con 19 Final maturity, /1(2015 5.25% 960,192.40 480,000 %/// % //�� // 20 Entire Issue �/r//%�//,z��//////////ice 387,926.90 9,485,000 14.50yea's 5.94 %5.308 % Vail Uses of Proceeds of Bond Issue (including underwriters' discount) 21 Proceeds used for accrued Interest 21 1 7.782 92 22 22 Issue price of entire Issue(enter amount from line 20, column (c)) 4.387.926.40 23 Proceeds used for bond issuance costs(including underwriters'discount) , 23 135,133.76 24 Proceeds used for credit enhancement 24 34,000.00 25 Proceeds allocated to reasonably required reserve or replacement fund . , 25 438.797.64 28 Proceeds used to currently refund prior Issues 28 --- 27 Proceeds used to advance refund prior issues 27 A926.40 28 Total (add lines 23 through 27) 28 607, 29 Nonrefundmg proceeds of the issue(subtract line 28 from line 22 end enter amount here). . 29 3, 180,000.00 Irrn , 180,U00.00 7 Description of Refunded Bonds (Complete this part only for refunding bonds.) 30 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . ► years 31 Enter the remaining weighted average maturity of the bonds to be advance refunded . . , ► years 32 Enter the last date on which the refunded bonds will be called 1,- 33 33 Enter the date(s) the refunded bonds were issued ► Part VI Miscellaneous 34 Enter the amount of the state volume cap allocated to the Issue under section 141(b)(5) . . . 34 35 Enter the amount of the bonds designated by the issuer under section 265(b)(3)(B)17Plr Wren Issuer 4 485 exception) 35 , ,UOU 38a Enter the amount of gross proceeds invested or to be Invested Inc guaranteed Investment contract(see instructions) 369 3�� �///�% b Enter the final maturity date of the guaranteed investment contract . I. 37 Pooled financings: a Proceeds of this issue that are to be used to make bans to other governmental units 37a b If this issue Is a loan made from the proceeds of another tax-exempt issue, check box ► 0 and enter the name of the Issuer ► and the date of the issue ► 38 8 the Issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . ► 0 39 If the Issuer has identified a hedge,check box ► 0 Under penaNes M oeriwy.I declare that I have canned Mas return and eceeman Irl acr,.dWn end statements.end to the beat of my tnneecape and betel.they ere sue.Correct.end complete. Please Sign �e.--af/yr�+�� 11/29/95 Arlin G. Voress, Mayor Here Stop the or Auer/sus aued rapeeenOW . Cate 'Type or punt name and Ude For Paperwork Reduction Act Notice,see page 1 of the Instructions. cert.tie.637735 Fon 8038-0 (Wer.5.95) © Printed on recycled sax.. 6/26/95 Published by Tax Management Inc.,a Subsidiary of The Bureau of National Affairs, Inc. 8038-G.) LAW OFFICES CALDWELL & PACETTI MANLEY P. CALDWELL.JR. 324 ROYAL PALM WAY RETIRED ARTHUR E. BARROW KENNETH W. EDWARDS PALM BEACH, FLORIDA 33480-4352 CHARLES F. SCHOECHTELEPHONE(407)655-0620 MADISON F. PACETTI MARY M. VIATOR 1914-1984 TELECOPIER(407)655-3775 BETSY S. BURDEN PLEASE REPLY TO WILLIAM E. CORLEY.DI POST OFFICE BOX 2775 JOHN A. WEIG PALM BEACH. FL 33480-2775 November 29, 1995 Town of Highland Beach Highland Beach, Florida 33487 Stifle,Nicolaus& Company, Incorporated Delray Beach, Florida Moyle, Flanigan, Katz, FitzGerald & Sheehan, P.A. West Palm Beach, Florida 33402 Re: $4.485.000 Town of Highland Beach.Florida.Water and Sewer Revenue Bonds.Series 1995 Ladies and Gentlemen: We have served as Issuer counsel to The Town of Highland Beach, Florida, (the "Town") in connection with the issuance by the Town of its$4,485,000 Town of Highland Beach, Florida, Water and Sewer Revenue Bonds, Series 1995 (the "Bonds") and as such counsel, we have participated in various proceedings in connection therewith. All terms used herein in capitalized form and not otherwise defined herein shall have the meanings ascribed thereto in that certain Bond Purchase Agreement dated November 7, 1995 by and between the Town of Highland Beach and the above referenced underwriters (the "Bond Purchase Agreement"). As Issuer counsel to the Town,we have not been engaged to or undertaken, and therefore express no opinion on or as to the impact,effect or compliance by the Town or the above named Underwriter with the Internal Revenue Code of 1986,as amended; Securities Act of 1933,as amended; Securities Exchange Act of 1934,as amended;the Trust Indenture Act of 1939,as amended; or any federal or any state's security laws, including Blue Sky laws,as may pertain to the Bonds or documents related thereto. Further,no person or entity shall be entitled to rely upon this opinion unless hereinabove named as any addressee. Based upon and subject to the foregoing, we are of the opinion, as of the date hereof and under existing law and judicial opinions thereon and our interpretation of them,as follows: A. The Town is a duly existing municipal corporation of the State of Florida(the "State")and had and has good right and lawful authority under the Constitution and laws of the State to adopt the Bond Resolution and enact Ordinance No.651,enacted by the Town on September 5, 1995 (the "Ordinance") and to authorize and issue the Bonds. The Ordinance has been duly enacted by the Town and the Bond Resolution has been duly adopted by the Town,each is in full force and effect and constitutes the valid,legal and binding obligation of the Town enforceable in accordance with their respective terms, and under the laws of the State,the holders of the Series 1995 Bonds are not precluded pursuant to any sovereign immunity laws or similar laws from bringing proceedings to enforce the obligations imposed by the Bond Resolution; except that the enforceability thereof may be subject to: (i) the exercise of judicial discretion in accordance with general principles of equity; and (ii) bankruptcy, insolvency, reorganization, moratorium, receivership and other similar laws affecting creditors'rights heretofore or hereafter enacted to the extent constitutionally applicable; B. As of the Closing date,the Town has duly performed all obligations to be performed by it pursuant to the Bond Resolution; C. The Bond Purchase Agreement has been duly authorized, executed and delivered by the Town and constitutes a valid and binding agreement of the Town enforceable in accordance with its terms, except that the enforceability thereof may be subject to: (i)the exercise of judicial discretion in accordance with general principles of equity; and (ii) bankruptcy, insolvency, reorganization, moratorium, receivership and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable; D. The adoption of the Bond Resolution,the enactment of the Ordinance and the execution and delivery of the Bond Purchase Agreement and the Bonds and compliance with the provisions thereof,will not conflict with or constitute a material breach of or default under any existing law,administrative regulation,court decree, resolution or agreement to which the Town is subject and the Town has the power and authority under the laws of the state to pledge the net Revenues and Non-Ad Valorem Revenues pledged under the Bond Resolution to pay the Bonds and interest thereon in accordance with the terms thereof; E. Except as disclosed in the Official Statement,no litigation or other proceedings are pending or,to the best knowledge of the Issuer counsel after due inquiry,threatened in any court or other tribunal of competent jurisdiction, State or Federal, in any way (a) restraining or enjoining the issuance, sale or delivery of any of the Bonds,or(b)questioning or affecting the validity of the Bond Purchase Agreement, the Bonds, and the Bond Resolution, the Ordinance, or the pledge by the Town of the Pledged Funds so pledged under the Bond Resolution, or (c) questioning or affecting the validity of any of the proceedings for the authorization,sale,execution,registration,issuance or delivery of the Bonds and the security therefor;or(d)questioning or affecting(i)the organization or existence of the Town or the Town Commission or the title to office of the officers thereof,or(ii)the power or authority of the Town to fix, establish, maintain and collect fees, rentals and other charges in 2 of 3 CALDWELL & PACETTI connection with the operation of, and services provided by the Town; or(e) which could materially adversely affect the operations of the Town or the financial condition of the Town; F. The Official Statement has been duly authorized, executed and delivered for use in connection with the sale of the Bonds; G. With respect to the information in the Official Statement contained under the headings "INTRODUCTION", "SECURITY FOR THE 1995 BONDS", "THE WATER AND SEWER SYSTEM","THE TOWN","LITIGATION"and"RTC SETTLEMENT",and based upon our participation in the preparation of the Official Statement, as of the date of such document and at all subsequent times up to and including the date hereof, such information did not and does not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make such information not misleading;provided, however,that no opinion is given with respect to the financial and statistical information or the information concerning the Insurer contained in the Official Statement; and H. All approvals,consents,authorizations and orders of any governmental authority or agency having jurisdiction in any matter which would constitute a condition precedent to the performance by the Town of its obligations under the Bond Purchase Agreement and under the Bond Resolution have been obtained and are in full force and effect. Subject to the foregoing, all actions taken by the Town in connection with the Bond Resolution, Bond Purchase Agreement, Registrar and Paying Agent Agreement, and the Bonds are legal and valid in all respects and none of the proceedings or actions taken with respect to any of the foregoing have been repealed,revoked or rescinded. Sincerely, CALDWELL&PACETTI CFS:emc U:ICFSU IGHB\BOND-OP.LTR 3of3 CALDWELL & PACETTI MBIA insurance Corporation 113 King Street Armonk,NY 10504 914 273 4545 November 28, 1995 Town of Highland Beach 3614 South Ocean Boulevard Highland Beach, Florida 33487 Stifel, Nicolaus & Company, Incorporated 1177 George Bush Blvd., Suite 308 Defray Beach, Florida 33483 $4,485,000 Town of Highland Beach, Florida Water and Sewer Revenue Bonds Series 1995 Ladies and Gentlemen: • I am Assistant General Counsel of the MBIA Insurance Corporation, a New York corporation (the "Corporation"), and have acted as counsel to the Corporation in connection with the issuance of Financial Guaranty Insurance Policy No. 19838 (the "Policy") relating to $4,485,000 Town of Highland Beach, Florida, Water and Sewer Revenue Bonds, Series 1995. In so acting, I have examined a copy of the Policy and such other relevant documents as I have deemed necessary. Based upon the foregoing, I am of the following opinion: 1. The Corporation is a stock insurance corporation, duly incorporated and validly existing under the laws of the State of New York and is licensed and authorized to issue the Policy under the laws of the State of New York and the State of Florida. 2. The Policy has been duly executed and is a valid and binding obligation of the Corporation enforceable in accordance with its terms except that the enforcement of the Policy may be limited by laws relating to bankruptcy, insolvency, reorganization, moratorium, receivership and other similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Verruy yours, ,4h Assistant eneral Counsel GBEENBEBG % T T " N V E 1 c % r I. / II IflflUBIG November 29, 1995 Stifel, Nicolaus & Company Incorporated Delray Beach, Florida Re: $4,485,000 Town of Highland Beach, Florida Water and Sewer Revenue Bonds. Series 1995 Ladies and Gentlemen: We have acted as underwriter's counsel in connection with the purchase by you (the "Underwriter") from the Town of Highland Beach, Florida (the 'Town") of its Water and Sewer Revenue Bonds, Series 1995, in the principal amount of$4,485,000 (the "Series 1995 Bonds") pursuant to the Bond Purchase Agreement, dated November 7, 1995, which the Underwriter entered into with the Town (the"Purchase Agreement"). Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Purchase Agreement. We have, as such counsel, examined the following: (a) Ordinance No. 651, adopted by the Town on September 5, 1995 and Resolution No. 677, adopted by the Town on October 3, 1995, as amended and supple- mented by Resolution No. 678, adopted by the Town on November 7, 1995 (collectively, the "Resolution"); (b) The Official Statement of the Town relating to the Series 1995 Bonds, dated November 7, 1995 (the "Official Statement"); (c) The Purchase Agreement; and (d) Such other documents and related matters of law as we have deemed necessary in order to render this opinion. CREENBERGTRAURIG HOFFMAN LIPOFF ROSEN&QUENTEL.P.A. P.O. BOX 20629 WEST PALM BEACH.FLORIDA 33416.0629 407.650.7900 FAX 407-655.6222 777 SOUTH FLAGLER DRIVE SUITE 310 EAST WEST PALM BEACH.FLORIDA 33401 MIAMI FORT LAUDERDALE WEST PALM BEACH TALLAHASSEE NEW YORK WASHINGTON.D.C. Stifel, Nicolaus & Company Incorporated November 29, 1995 Page 2 On the basis of such review, we are of the opinion that: 1. The Series 1993 Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Resolution is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended. 2. Based upon the information made available to us in the course of our participation in the preparation of the Official Statement as counsel for the Underwriter, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, as of the date hereof nothing has come to our attention which would cause us to believe that the Official Statement, as of its date and as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. In rendering this opinion, we are expressing no opinion with respect to (i) the information concerning MBIA Insurance Corporation and its municipal bond insurance policy, or (ii) the financial statements and other financial and statistical information contained in the Official Statement. 3. Based upon our review of Section 5.18 of the Resolution, the Town is in compliance with section (b)(5) of Rule 15c2-12 of the Securities and Exchange Commission with respect to providing an undertaking regarding secondary market disclosure concerning the Series 1995 Bonds as required thereunder. This opinion is rendered solely to you and may not be relied upon by any other person without our prior written consent. Respectfully submitted, yzs -15.4)_t,,.. 4- C st , .9, R. GREENBERG TRAURIG 24 . LAW OFFICES MOYLE, FLANIGAN, KATZ, FITZGERALD 8e SHEEHAN, P.A. 625 NORTH FLAGLER DRIVE•9TH FLOOR WEST PALM BEACH,FLORIDA 83401 POST OFFICE BOX 3888 PETER L.BRETON WEST PALM BEACH.FLORIDA 33409 MICHAEL K.MILLER GREGORY D.COOK TELEPHONE(4077659-7500 JON C.MOYLE JOHN R.[VSANKS,JR. FACSIMILE (407)659-1789 JON C.MOYIE,JR. E.COLE FITZGERALD.m JODY H.OLIVER JOHN F.FLANIGAN TAULANAMEC OFFICE MARK C.RAYMOND MYRA GENDEL TELEPHONE 1.04)00I.7•2S THOMAS A.SHEEHAN.m LYNN G.HAWKINS FACSIMILE 1004)••147•• MARTA M.SUARELMURu9 MARTIN V.KATZ WILTON L.WHITE WILLIAM S.KING noun'OFMCE RONALD K.KOLINS TCLVMONC Ip711121Ia4 OF COUNSEL: PAULA.KRASKER FACSIMILE 1407/ ••'1400 "THOMAS A.HICKEY STEVEN A.MAYANS 'PALM OUCH GARDENS OFFICE 'WILLIAM J.PAYNE LINDA R.McCANN TELEPHONE(2071•254400 DONNA H.STINSON FACSIMILE(4071 SAS S•7• "ADMITTED IN NEW YORK ONLY November 29, 1995 Town of Highland Beach, Florida RE: $4 , 485, 000 Town of Highland Beach, Florida Water and Sewer Revenue Bonds , Series 1995 Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance and sale by Town of Highland Beach, Florida (the "Issuer" ) of its $4 , 485, 000 aggregate principal amount Water and Sewer Revenue Bonds, Series 1995 (the "Bonds") . The Bonds are issued pursuant to the Constitution and Laws of the State of Florida, particularly Part II , Chapter 166, Florida Statutes, Article VIII , Section 2(b) , Constitution of the State of Florida, the Charter of the Issuer and other applicable provisions of law, and a Bond Resolution adopted by the Issuer October 3 , 1995, as amended and supplemented (the "Resolution") . All terms used herein in capitalized form and not otherwise defined herein shall have the meanings ascribed thereto in the Resolution. In rendering the opinions set forth herein, we have examined a certified copy of the Resolution and are relying on the representations, covenants and agreements of the Issuer contained therein, including, without limitation, the covenant of the Issuer contained in the Resolution to comply with the applicable requirements contained in Section 103 and Part IV of Subchapter B of Chapter 1 of the Internal Revenue Code of 1986, as amended, and all temporary, proposed or permanent implementing regulations promulgated thereunder or applicable thereto (the "Code" ) to the extent necessary to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes . Town of Highland Beach, Florida November 29, 1995 Page 2 As to questions of fact material to our opinion we have relied upon representations of the Issuer contained in the Resolution and upon other certifications, agreements, documents , and opinions of public officials and other officers and representatives of the various parties participating in this transaction, furnished to us, without undertaking to verify the same by independent investigation. In addition to the foregoing we have examined and relied upon the opinion of Caldwell & Pacetti , Special Counsel to the Issuer . We have assumed the genuineness of all signatures on all documents and instruments, the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies . We have not been engaged to or undertaken to review the accuracy, completeness or sufficiency of any offering materials relating to the Bonds, and we express no opinion relating thereto herein. This opinion shall not be deemed or treated as an offering circular, prospectus or official statement , and is not intended in any way to be a disclosure document used in connection with the sale or delivery of the Bonds . We have not been engaged to and therefore express no opinion as to the compliance by the Issuer or the underwriter with any federal or state statute, regulation or ruling with respect to the sale or distribution of the Bonds . The opinions set forth below are expressly limited to, and we opine only with respect to, the laws of the State of Florida and the federal income tax laws of the United States of America . Based upon and subject to the foregoing, we are of the opinion as of the date hereof and under existing law, as follows : 1 . The Resolution, including the lien on and pledge of Pledged Funds therein, constitutes a valid and binding obligation of the Issuer, enforceable in accordance with its terms . 2 . The Bonds have been duly authorized, executed and delivered by the Issuer and are valid and binding special obligations of the Issuer , payable solely from the sources provided therefor in the Resolution. 3 . The interest on the Bonds is excludable from gross income of the Holders thereof for federal income tax purposes and is not an item of tax preference described in Section 57 of the Code for purposes of the federal alternative minimum tax imposed on individuals and corporations. It is to be noted that with respect to certain corporations such interest may be required to be taken Town of Highland Beach, Florida November 29, 1995 Page 3 into account in determining adjusted current earnings for purposes of calculating the alternative minimum taxable income of such corporations . The opinions expressed in the first sentence of this paragraph are conditioned upon continuing compliance by the Issuer with various covenants contained in the Resolution, including, without limitation, its covenant to comply with applicable requirements of the Code necessary in order to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes . Failure by the Issuer to comply with such requirements could cause the interest on the Bonds to be includable in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds . Other provisions of the Code may give rise to collateral federal income tax consequences (which may be adverse) to particular Holders . This opinion is limited to matters expressly addressed above and no opinion is expressed herein regarding other federal tax consequences that may arise due to ownership of the Bonds . 4 . The Bonds are exempt from all present intangible personal property taxes imposed by the State of Florida . 5 . The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b) (3) of the Code. Our opinions expressed herein are predicated upon present laws and interpretations thereof . We assume no affirmative obligation with respect to any change of circumstances or law ( including laws that may result from legislation pending before Congress) that may adversely affect the tax-exempt status of interest on the Bonds after the date hereof . It is to be understood that the rights of Holders of the Bonds and the enforceability of the Bonds and the Resolution may be subject to the provisions of the bankruptcy laws of the United States of America and to other applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors ' rights, heretofore or hereinafter enacted, to the extent constitutionally applicable, and that their enforcement may also be subject to equitable principles that may affect remedies or other equitable relief , or to the exercise of judicial discretion in appropriate cases . Very truly yours, 14zieft--"-eL . 7786M 25 . LAW OFFICES MOYLE, FLANIGAN, KATZ, FITZGERALD & SHEEHAN, P.A. 625 NORTH FLAGLER DRIVE•9TH FLOOR WEST PALM BEACH.FLORIDA 33401 POST OFFICE BOX 3888 PETER L.BRETON WEST PALM BEACH,FLORIDA 33402 MICHAEL K.MILLER GREGORY D.COOK TELEPHONE(407)669-7600 JON C.MOYLE JOHN R.CUBANKS.JR. FACSIMILE (407)669-1789 JON G.MOYLE.JR. E.COLE FITZGERALD.IS JODY H.OLIVER JOHN F.FLANIGAN TALLAHASSEE OFFICE MARK C.RAYMOND MYRA BENDEL TELEPHONE 16041 NbOSE6 THOMAS A.SHEEHAN.IE LYNN O.HAWKINS FACSIMILE(00416/1147106 MARTA M.SUARaMURIAS MARTIN V.KATZ WILTON L.WHITE WILLIAM S.KING STUART OFFICE RONALD K./COLONS Of 1407)16►I uA OI COUNSEL: PAUL A.KRASNER FACSIMILE(407)26644•15 "THOMAS A.MICKEY STEVEN A.MAYANS 'PALM BEACH GARDENS OFFICE •WILLIAM J.PAYNE LINDA R.MCCANN TELEPHONE 1407)6ES-4S0 DONNA H.STINSON FACSIMILE I4071 6565576 "ADMITTED IN NEW YORK ONLY November 29 , 1995 Stifel , Nicolaus & Company Incorporated Delray Beach, Florida RE: $4 , 485, 000 Town of Highland Beach, Florida Water and Sewer Revenue Bonds , Series 1995 Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance and sale by Town of Highland Beach, Florida (the "Issuer" ) of the above-referenced bonds (the "Bonds") . All terms used herein in capitalized form and not otherwise defined herein shall have the meaning ascribed thereto pursuant to the Resolution No . 677 adopted by the Issuer on October 3, 1995, as amended and supplemented (the "Bond Resolution" ) . The opinions expressed herein are supplemental to and are subject to all qualifications and limitations contained in our bond counsel opinion pertaining to the Bonds rendered to the Issuer as of the date hereof, the form of which is printed on the reverse side thereof (the "Bond Counsel Opinion" ) . Although the Bond Counsel Opinion was addressed only to the Issuer, you are hereby authorized to rely on the Bond Counsel Opinion to the same extent as if it were addressed to each of you. Because the primary purpose of our professional engagement was not to establish factual matters and because of the wholly or partially non-legal character of many determinations involving the preparation of the Preliminary Official Statement dated October 26, 1995 and the Official Statement dated November 7, 1995 Stifel , Nicolaus & Company Incorporated November 29 , 1995 Page 2 (collectively, the "Official Statement") , except as stated herein we are not passing upon and do not assume any responsibility for the accuracy, completeness, or fairness of any of the statements contained in the Official Statement and we make no representations that we have independently verified the accuracy, completeness or fairness of any of the statements contained in the Official Statement . However, in our capacity as Bond Counsel we have participated in the preparation of the Official Statement . In that regard, we further advise you that nothing has come to our attention which leads us to believe that the Official Statement as of its date or as of the date hereof contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading . The Bonds are exempt from registration pursuant to the Securities Act of 1933 , as amended, and the Resolution is exempt from qualification pursuant to the Trust Indenture Act of 1939 , as amended. The information contained in the Official Statement under the captions "Introduction, " "Purpose of the 1995 Bonds, " "Description of the 1995 Bonds, " "Security for the 1995 Bonds, " "Tax Exemption, " and "Enforceability of Remedies" to the extent such information purports to summarize provisions of the Bond Resolution, the Bonds , or the law referred to therein, constitutes a fair summary of the portions of such documents and the law purported to be summarized therein. Ordinance No . 651, enacted by the Issuer on September 5, 1995 (the "Ordinance" ) has been duly enacted by the Issuer, is in full force and effect , and the enactment thereof by the Issuer was the only action required by the Issuer to amend the "Town Charter" as contemplated by the Ordinance. The Bond Resolution has been duly adopted by the Issuer and is in full force and effect and constitutes the legal , valid and binding obligation of the Issuer enforceable in accordance with its terms . Pursuant to the terms and provisions of the Bond Resolution, the Town is permitted under applicable law to pay debt service on the Bonds . Finally, the Issuer is authorized under applicable law to issue the Bonds for the purposes described in the Bond Resolution . 7807M Stifel , Nicolaus & Company Incorporated November 29 , 1995 Page 3 This letter is furnished by us solely for your benefit in connection with the provisions of the Bond Purchase Agreement and may not be relied upon by any other person. Very truly yours, 744.Q t tde c 0 • alit!: P. ck 7807M gDVCDVCD D D X Efn efnk uf[tr g S atAl—mt ARC M�f(�R� rAf4 vtliz nzn.: nzn �rn.�n �an� ��c ilk NVC til" Ciiota f nR Dec r Q - t _ to _ _ 4iaa tn:"± -7 d ;-in� o,5-tek Ma _ rims nts Department of Mute �DC C Division of Elections am:: Sc �y 'nt 'WC DC DC Mn nC I , SANDRA B. MORTHAM, Secretary of State of the State of nC DVC Florida, do hereby certify that the attached are true and DV 7 DVC correct copies of the facsimile signature for Arlin G. D C FICIti DVC Voress, as Mayor , of the Town of Highland Beach, Florida,rgrzi Dn JVL' filed November 15, 1995, as shown by the records of this 51-VP �n 1C office . D- DVC D- 7 ,Vv DVC dnt DC DV DVC ief lciti 7 'vV✓ D°c� Dr tA1r yVy DVC ?-C IInt zkvP- Jar= nt �tuen unber mg hanb anb the IV AVL (Great Seal of the State of Flortba, C dnt Al�sti ,. in cZallahassee. the (Capital, this the V =1V - , ,^ E '•• 16th bug of November DAC :�r{` .'YD.t�E A.D. , 1995 j1;: : 4 ZVC / l fin! '��_C_ �ro ,i ...,>./ C inR coo w4.•• Sandra ?11.,, urtliam •QVC nsur 1107(143) rcretnrg,,of trite �n DEPARTMENT OF STAT. CERTIFICATE FOR COMPLIANCE WITH UNIFORM FACSIMILE SIGNATURES OF N Q v i 5 1995 PUBLIC OFFICIALS ACT I , Arlin G . Voress , Mayor of the Town of Highland Beach, Florida , do hereby file with the Secretary of the State of Florida , my official signature, for the purpose of complying with Section 116 . 34 , Florida Statutes , and do hereby certify that the below signature is true, correct and manually subscribed by me . Arlin STATE OF FLORIDA ) COUNTY OF PALM BEACH ) 41171-t The foregoing instrument was acknowledged before me this / day of November , 1995 , by Arlin G . Voress , who is personally known to me and who did not take an oath . 'Notary Name : Notary Publi,o- oyp' ;,„'�: o a o Serial Number (1� 333�+� Y,)•F itis :STAMP ., ., { i:�0I )..: �r— 6811Z n �Vc an' Cif M nntnV PVC P 'C Drc mrs Department of *tate Vy QVC $tutsion of Elections V WP n tlnc C Atp Mt", Mt,: nCI , SANDRA B. MORTHAM, Secretary of State of the State Jn DgC of Florida, do hereby certify that the attached is a true AUC j z\V DC and correct copy of the facsimile signature for Doris M. ' C JVP Trinley as Town Clerk of the Town of Highland Beach, Z C R ;VC Florida, filed November 15, 1995, as shown by the records of AVP DAC an ern�V DVC this office . 7n ani., ,�� pncn _DjC chnIZt =1VP 'VC W 4)4- V =1V% Rig D- rPfilti AVP DC 4tuen unser ma Rana anti the slAz. jVC &eat Seal of the State of 'Meth, tin n F THE_ "sty.,, at Xallahassee. the (Capital. this the FiVP s E"":,, 16th Bad of November ' C syr$- . . A.D. , 1995i.V1s °C ;raiJ) F aithrzi3. nrthnm Gln (7 ?rrrriaru of SStntr DEPARTMENT OF STATE CERTIFICATE FOR COMPLIANCE WITH UNIFORM PUBLICFACSIMILE OFFICIALS ACT SIGNATURES OF NOV 151995 I , Doris M. Trinley, Town Clerk of the Town of Highland Beach, Florida, do hereby file with the Secretary of the State of Florida, my official signature, for the purpose of complying with Section 116 . 34 , Florida Statutes, and do hereby certify that the below signature is true, correct and manually subscribed by me . D ris M. Trinley STATE OF FLORIDA ) COUNTY OF PALM BEACH ) 91t4- The foregoing instrument was acknowledged before me this day of November, 1995, by Doris M. Trinley, who is personally known to me and who did not take an oath. fra -,.. . N to y N es <. • Notary Pu449A MANY ANN GAC ANO � � �,'h GOY4,SYiOw 0, Serial Nudib ti ("if genr4cc 10lF (NORARY STAMP) ) o,c:O JM* c;,tr9s I 6811Z HaWIS,DiIZ&[u. „do Certificate of Haas, Diaz & Co. Haas, Din & Co. serves as Independent Certified Public Accountants for the Town of Highland Beach, Florida. We hereby consent to the use of our report dated November 16, 1994, relating to the general-purpose financial statements of the Town of Highland Beach, Florida(the "Town") at September 30, 1994, and for the year then ended included in the Town's Preliminary Official Statement dated October 26, 1995 (the "POS") and the Town's Official Statement dated November 7, 1995 (the "OS"), both relating to the Town's offering of its $4,485,000 Water and Sewer Revenue Bonds, Series 1995. We also content to the reference to us in the POS and OS under the heading "INDEPENDENT ACCOUNTANTS." We are not aware of any change in the financial condition of the Town since the date of our report, which would cause the financial information regarding the Town and contained in our report materially misleading. HAAS,S,��DIAZ & CO. By: gala Tide:M ( ny A4'X" Date: November 29. 1995 lig)1 Iklvc(krc Ri ud Suite 200, Fast Wcu Palm Icach, PI, 33406-1595 1407) 686-1551 Fax: (407) 471-1210 27 Certificate of Montgomery Watson Montgomery Watson saves as independent engineer for the Town of Highland Beach, Florida (the "Town") with respect to the Town's Water and Sewer Utility System (the 'System"). In connection with the Town's offering of its 34,485,000 Water and Sewer Revenue Bonds, Series 1995 (the "Bonds"), we prepared a report dated August 15, 1995, concerning the current status sad condition of the System (the 'Report"). We have also reviewed and participated in the preparatioo of the information contained utter the heading 'THE WATER AND SEWER SYSTEM" contained in the Town's Preliminary Official Statement dated October 26, 1995 (the "POS'), and the Town's Official Statement dated November 7, 1995 (the 'OS'), both relating to the sale of the Bonds. We hereby consent to the use of our report in the Town's POS and OS. We hereby certify that as of the daze of the POS and OS and as of the date hereof, the information contained under the heading 'THE WATER AND SEWER SYSTEM' in the POS and OS and set forth in our report was and is tate, correct and complete. MONTGOMERY WATSON BY: 14freS4 Title: 144— tie.s44 Date: November 29, 1995 GBEENBEBG x i i . R V E Y % AT LA TBRURIG $4,485, 000 Town of Highland Beach, Florida Water and Sewer Revenue Bonds, Series 1995 FINAL BLUE SKY MEMORANDUM November 29, 1995 STIFEL, NICOLAUS & COMPANY INCORPORATED 500 N. Broadway St. Louis, Missouri 63102 Ladies and Gentlemen: This Memorandum supplements and completes our Preliminary Blue Sky Survey dated October 26, 1995 (the "Preliminary Survey") pre- pared in connection with the issuance of the captioned Bonds. This is written to inform you that the Bonds remain exempt in each of the jurisdictions listed in Part I of the Preliminary Survey and that the Bonds may be sold in such jurisdictions in any amount. In addition, we remind you that no action has been taken to qualify the Bonds for offers and sales in New Hampshire, as stated in Part II of the Preliminary Survey. Therefore, offers and sales of the Bonds may not be made to the public in New Hampshire. Very truly yours, GREENBERG TRAURIG HOFFMAN LIPOFF ROSEN & QUENTEL, P.A. GREENBERG TRAURIG HOFFMAN LIPOFF ROSEN&QUENTEL.P.A. P.O. Box 20629 WEST PALM BEACH.FLORIDA 33416.0629 407-650.7900 FAx 407.655.6222 777 SOUTH FLAGLER DRIVE SUITE 310 EAST WEST PALM BEACH.FLORIDA 33401 MIAMI FORT LAUDERDALE WEST PALM BEACH TALLAHASSEE NEO YORK WASHINGTON.D.C. GBEENBEBG 1T I \ TBBUBIG $4, 250, 000* Town of Highland Beach, Florida Water and Sewer Revenue Bonds, Series 1995 PRELIMINARY BLUE SKY SURVEY October 26, 1995 STIFEL, NICOLAUS & COMPANY INCORPORATED 500 N. Broadway St . Louis, Missouri 63102 Ladies and Gentlemen: This Preliminary Survey summarizes our comments relating to the requirements of the securities or "blue sky" laws of the juris- dictions listed herein with respect to the proposed offering and sale to the public of the captioned Bonds (the "Bonds" ) . It is based upon an examination of the statutes and the related rules and regulations, if any, of the various jurisdictions as reported in standard compilations customarily relied upon in this connection, upon interpretive advice obtained from representatives of certain securities commissions and upon statements contained in the Preliminary Official Statement prepared in connection with the issuance of the Bonds . In preparing this Preliminary Survey, we have obtained neither opinions from members of the Bar of any jurisdiction nor formal rulings from regulatory commissions or other administrative bodies or officials thereof . The statements made or conclusions expressed herein are subject to change upon the exercise of broad discretionary powers vested in securities commissioners or other authorized officials, enabling them, among other things, to with- * Preliminary, subject to change. GREENBERG TRAU RIC.HOFFMAN LIPOFF ROSEN&QUENTEL.P.A. P.O. Box 20629 WEST PAI.M BEACH.FLORIDA 33416-0629 407-650-7900 FAX 407-655.6222 777 SOUTH FLAGLER DRIVE SUITE 310 EAST WEST PALM BEACH.FLORIDA 33401 MIAMI FORT LAUDERDALE WEST PALM BEACH TALLAHASSEE NEW YORK WASHINGTON.D.G. draw or deny the exempt status accorded by statute to particular classes of securities, to impose additional requirements, to refuse registrations, to issue stop orders or to revoke or suspend permits where they have been granted. This Preliminary Survey does not purport to cover the re- quirements of the laws of the various jurisdictions with respect to the registration or licensing of dealers, brokers or salesmen, or the restrictions, if any, pertaining to the form or substance of advertising. In addition, any statement made herein concerning sales to banks, savings institutions, trust companies, insurance companies or any other institutional investor refers only to the requirements of the securities laws relating to such sales and does not purport to address the question of whether the Bonds will be legal for investment by such institution. Very truly yours, GREENBERG TRAURIG HOFFMAN LIPOFF ROSEN & QUENTEL, P.A. GRFANREICC Trsnunic I JURISDICTIONS IN WHICH SALES TO THE PUBLIC MAY BE MADE Offers and sales of the Bonds may be made to the public in any amount in the following jurisdictions without registration of the Bonds or any filings being made, subject to the specific re- quirement that the sellers must be dealers or brokers registered or licensed in the respective jurisdictions : Alabama Idaho Missouri Puerto Rico Alaska Illinois Montana Rhode Island Arizona Indiana Nebraska South Carolina Arkansas Iowa Nevada South Dakota California Kansas New Jersey(3) Tennessee Colorado Kentucky New Mexico Texas Connecticut Louisiana New York Utah Delaware Maine North Carolina Vermont District of Maryland North Dakota Virginia Columbia Massachusetts Ohio Washington Florida (1) Michigan Oklahoma West Virginia Georgia Minnesota Oregon Wisconsin Guam Mississippi Pennsylvania (4) Wyoming Hawaii (2) (1) An offering circular containing a "full and fair disclosure" as prescribed by rule of the Florida Department of Banking and Finance (the "Department") is required "if the issuer or guarantor is in default or has been in default anytime after December 31, 1975, as to principal or interest : (a) with respect to an obligation issued by the issuer or successor of the issuer; or (b) with respect to an obligation guaranteed by the guarantor or successor to the guarantor" . The Department does not distinguish nominal and primary obligors . (2) All offering material must clearly indicate the name of the person issuing, circulating, publishing or making it and the fact that such person is issuing, circulating, publishing or making the same. (3) Provided that the issuer or guarantor is not in default as to principal or interest with respect to an obligation issued by the issuer or a successor of the issuer or, an obligation guaranteed by the guarantor or a successor to the guarantor. (4) All offering material and advertisements, including the Pre- liminary Official Statement must indicate in bold print on the front cover that the Bonds are less than general obligations of the issuer. - 3 - GREENRERG THAI RIG. II JURISDICTION IN WHICH SALES TO THE PUBLIC MAY NOT BE MADE New Hampshire III SALES TO DEALERS In addition to the offers and sales of the Bonds which may be made as indicated in Part I herein, offers and sales of the Bonds may be made in any amount to dealers or brokers registered or licensed in the following jurisdictions, subject to the quali- fications indicated in the Bonds, without registration of the Bonds or any filings being made to qualify the Bonds in the respective jurisdictions. Subject to the qualifications indicated below, such offers and sales may be made by dealers or brokers registered or licensed in the respective jurisdictions and by persons not so registered or licensed. Alabama Idaho Montana Rhode Island(13) Alaska (1) Illinois Nebraska South Carolina (1) Arizona Indiana (5) Nevada (9) South Dakota (14) Arkansas (2) Iowa (7) New Hampshire (5) Tennessee (15) California (3) Kansas New Jersey(2) Texas (16) Colorado (4) Kentucky New Mexico (10) Utah(17) Connecticut (5) Louisiana New York Vermont Delaware (5) Maine (8) North Carolina (11) Virginia District of Maryland(2) North Dakota Washington(18) Columbia (5) Massachusetts (2) Ohio West Virginia (2) Florida Michigan(2) Oklahoma (1) Wisconsin (19) Georgia Minnesota (5) Oregon Wyoming (2) Guam(2) Mississippi (2) Pennsylvania (12) Hawaii (2) (6) Missouri (2) Puerto Rico (1) (1) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transac- tions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institu- tions enumerated with respect to this jurisdiction in Part IV, or (iii) has no place of business in this jurisdiction and during any consecutive twelve-month period does not direct more than fifteen offers to sell or buy into this jurisdiction to persons other than broker-dealers and - 4 - GRI:F:NBEHG TRAURIG institutions enumerated with respect to this jurisdiction in Part IV. (2) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transac- tions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institu- tions enumerated with respect to this jurisdiction in Part IV, or (iii) has no place of business in this jurisdiction and during any consecutive twelve-month period does not direct more than fifteen offers to sell or buy into this jurisdiction to persons other than broker-dealers and institutions enumerated with respect to this jurisdiction in Part IV, whether or not the offerors or offerees are then present in this jurisdiction. (3) Provided the offeror or seller (i) is registered as a broker- dealer in this jurisdiction or (ii) is a broker-dealer registered under the Securities Exchange Act of 1934 who has not previously had any certificate denied or revoked under the California Corporate Securities Law of 1968 or any predecessor statute, has no place of business in this jurisdiction and does not direct offers to sell or buy into this jurisdiction in any manner (a) to persons other than registered broker-dealers or institutions enumerated with respect to this jurisdiction in Part IV or (b) to more than fifteen customers (whether or not self-employed individual retirement plans) having an existing account with such broker-dealer prior to any offer made to them in this jurisdiction, during any twelve consecutive months, whether or not the offeror or any of the offerees is then present in the jurisdiction. (4) Provided the offeror or seller (i) is registered as a broker or dealer in this jurisdiction, or (ii) is a broker or dealer registered pursuant to the Securities Exchange Act of 1934 , has no place of business in this jurisdiction and the business transacted in this jurisdiction is exclusively with broker-dealers licensed or exempt from license requirements, financial or institutional investors, existing customers of the broker-dealer whose principal place of residence is not in the jurisdiction and during any twelve consecutive months, not more than five persons in this jurisdiction excluding persons otherwise described herein. (5) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transac- tions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institu- - 5 - GREENBERG TRAURIG tions enumerated with respect to this jurisdiction in Part IV. (6) All offering material must clearly indicate the name of the person issuing, circulating, publishing or making it and the fact that such person is issuing, circulating, publishing or making the same. (7) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transac- tions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institu- tions enumerated with respect to this jurisdiction in Part IV, or (iii) during any period of twelve consecutive months, the broker-dealer does not effect transactions in this jurisdiction in any manner with more than three persons other than broker-dealers and institutions enumerated with respect to this jurisdiction in Part IV, whether or not the offeror or any of the offerees is then present in this jurisdiction. (8) Provided the offeror or seller (i) is licensed as a broker dealer in this jurisdiction, (ii) is a broker dealer regis- tered under the Securities Exchange Act of 1934 and effects transactions in this jurisdiction exclusively with other broker dealers licensed in this jurisdiction or exempt from licensing (except when the broker dealer is acting as a clearing broker dealer for such other broker dealers) or with institutions enumerated with respect to this jurisdiction in Part IV, (iii) is a broker dealer registered under the Secur- ities Exchange Act of 1934 and licensed under the securities act of the state in which the broker dealer maintains its principal place of business and has no place of business in this jurisdiction, if the broker dealer offers and sells in this jurisdiction to persons who are existing customers of the broker-dealer and who represent that they have no prin- cipal place of residence in this jurisdiction. (9) Provided the offeror or seller (i) is licensed as a broker dealer in this jurisdiction, (ii) is a broker dealer regis- tered or, exempt from registration under the Securities Exchange Act of 1934 , has no place of business in this jurisdiction and (a) effects transactions in this jurisdiction exclusively with other broker-dealers licensed or exempt from licensing in this jurisdiction or with institutions enumerated with respect to this jurisdiction in Part IV, (b) is licensed under the securities laws of a state in which the broker dealer maintains a place of business and such broker dealer offers and sells in this jurisdiction to a person who is an existing customer and whose principal place of residence is not in this jurisdiction, or (c) is licensed under the securities laws of a state in which the - 6 - CRE.E\RF:RO TR%I Rif. broker dealer maintains a place of business and during any twelve consecutive months does not effect transactions with more than five persons in this jurisdiction, in addition to the transactions with institutions enumerated with respect to this jurisdiction in Part IV or other broker-dealers, whether or not the offeror or offeree is then present in this jurisdiction. (10) Provided the offeror or seller (i) is licensed as a broker dealer in this jurisdiction, (ii) is a broker-dealer regis- tered under the Securities Exchange Act of 1934 , has no place of business in this jurisdiction and effects transactions in this jurisdiction exclusively with other broker dealers licensed in this jurisdiction or exempt from licensing or with institutions enumerated with respect to this jurisdic- tion in Part IV, (iii) is a broker-dealer registered under the Securities Exchange Act of 1934, has no place of business in this jurisdiction and is licensed under the securities act of the state in which the broker dealer maintains a place of business, if the broker-dealer offers and sells in this jur- isdiction to persons who are existing customers of the broker-dealer and whose principal place of residence is not in this jurisdiction, or (iv) is a depository institution (as defined in Part IV) engaged in its regular course of busi- ness. (11) Provided that the offeror or seller (i) is registered or licensed in the jurisdiction, or (ii) has no place of business in the jurisdiction and (a) effects transactions in this jurisdiction exclusively through other broker-dealers registered or licensed in the jurisdiction or with institutions enumerated with respect to this jurisdiction in Part IV or (b) is registered as a dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and in one or more states and during any period of twelve consecutive months does not effect more than fifteen purchases or sales in this jurisdiction in any manner with persons other than those specified with respect to this jurisdiction in Part IV hereof, whether or not the dealer or any of the purchasers or sellers is then present in the jurisdiction. (12) Provided the offeror or seller (i) is registered as a broker dealer in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transactions in this juris- diction exclusively with or through registered broker dealers or with institutions enumerated with respect to this juris- diction in Part IV, or (iii) is a broker-dealer registered under the Securities Exchange Act of 1934, who has not previ- ously had any certificate denied or revoked under the Pennsylvania Securities Act of 1972 or any predecessor statute, has no place of business in this jurisdiction and, - 7 - GRF:ENIIP:RG TR NIRIG during any period of twelve consecutive months, does not direct offers to sell or buy into this jurisdiction in any manner to persons other than registered broker-dealers or institutions enumerated with respect to this jurisdiction in Part IV, or to more than five other customers in this jurisdiction, whether or not the offeror or any of the offerees is then present in this jurisdiction. (13) Provided the offeror or seller (i) is licensed as a dealer or broker in this jurisdiction, (ii) is a broker-dealer registered, or, exempt from registration under the Securities Exchange Act of 1934, has no place of business in this jurisdiction and (a) effects transactions in this jurisdiction exclusively with other broker-dealers licensed or exempt from licensing in this jurisdiction or with institutions enumerated with respect to this jurisdiction in Part IV, or (b) is licensed under the securities laws of a state in which the broker-dealer maintains a place of business and such broker-dealer offers and sells in this jurisdiction to a person who is an existing customer of such broker dealer and whose principal place of residence is not in this jurisdiction. (14) Provided the offeror or seller (i) is registered in this jurisdiction or (ii) has no place of business in this jurisdiction and (a) effects transactions in this jurisdiction exclusively with or through other broker-dealers registered or licensed in this jurisdiction or with institutions enumerated with respect to this jurisdiction in Part IV or (b) is licensed under the securities laws of the state in which the broker-dealer maintains a place of business if the broker-dealer offers and sells in this jurisdiction to persons who are existing customers of such broker-dealer and who represent that they have no principal place of residence in this jurisdiction. (15) Provided the offeror or seller (i) is registered or licensed as a broker dealer in this jurisdiction, or (ii) has no place of business in this jurisdiction and is registered as a broker dealer with the Securities and Exchange Commission or the National Association of Securities Dealers, Inc. who effects transactions in this jurisdiction exclusively with or through registered or licensed broker dealers or with institutions enumerated with respect to this jurisdiction in Part IV and during any period of twelve consecutive months does not effect more than fifteen transactions is securities from, in, or into this jurisdiction other than to persons described herein. (16) Provided the offeree or purchaser is a dealer or broker actu- ally engaged in buying and selling securities as a business. - 8 - CRHF:VRERc Titnt uir, (17) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects trans- actions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institu- tions enumerated with respect to this jurisdiction in Part IV, or (iii) during any period of twelve consecutive months does not direct more than fifteen offers to sell or buy into this jurisdiction in any manner to persons other than those specified in Part IV, whether or not the offeror or any of the offerees is then present in this jurisdiction. (18) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transactions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institutions enumerated with respect to this jurisdiction in Part IV, or (iii) has no place of business in this jurisdiction, and during any period of twelve consecutive months, does not direct more than fifteen offers to sell or to buy in this jurisdiction in any manner to persons other than those specified in Part IV. (19) Provided the offeror or seller (i) is registered as a broker dealer in this jurisdiction, or (ii) effects transactions in this jurisdiction exclusively for the account of registered broker dealers or with institutions enumerated with respect to this jurisdiction in Part IV. IV SALES TO CERTAIN INSTITUTIONS In addition to the offers and sales of the Bonds which may be made as indicated in Part I herein, offers and sales of the Bonds may be made in any amount to the specified institutions in the following jurisdictions, subject to the qualifications indicated in the Bonds, without registration of the Bonds or any filings being made to qualify the Bonds in the respective jurisdictions. Subject to the qualifications indicated in the Bonds, such offers and sales may be made by dealers or brokers registered or licensed in the respective jurisdictions and by persons not so registered or licensed. The status of the Bonds with respect to eligibility for investment by the institutions mentioned herein is not covered in this Preliminary Survey. Alabama Any bank, savings institution, credit union, trust company, insurance company, investment company as defined in the In- vestment Company Act of 1940, pension or - 9 - GREF:NUERG TRU RIS: profit-sharing trust, or other financial institution or institutional buyer. Alaska (1) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer. Arizona Any bank, savings institution, insurance company, agency or instrumentality of the United States or of a state, or any person, a principal part of whose business consists of buying securities. Arkansas (2) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer. California (3) (4) . . Any bank, savings and loan association, trust company, insurance company, investment company registered under the Investment Company Act of 1940, pension or profit-sharing trust (other than a pension or profit-sharing trust of the issuer, a self-employed individual retirement plan, or individual retirement account) , or such other institutional investor or governmental agency or instrumentality designated by rule of the California Commissioner of Corporations, whether the purchaser is acting for itself or as trustee or to any corporation with outstanding securities registered under Section 12 of the Securities Exchange Act of 1934, or any wholly owned subsidiary of such a corporation which after the offer and sale will own directly or indirectly 100 percent of the outstanding capital stock of the issuer; provided the purchaser represents that it is purchasing for its own account (or for such trust account) for investment and not with a view to or for sale in connection with any distribution of the security. - 10 - G KE.E.V KEKG TR A1. RIC Colorado(5) (6) . . . Any financial institution or institu- tional investor. Connecticut (7) . . . Any state bank and trust company, natio- nal banking association, savings bank, • savings and loan association, federal savings and loan association, credit union, federal credit union, trust com- pany, insurance company, investment com- pany as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Delaware (7) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer. District of Columbia (7) . . . . Any bank, savings institution, trust company, insurance company, or investment company as defined in the Investment Company Act of 1940, pension or profit-sharing trust, or other financial institution or institutional buyer, whether acting for themselves or in some fiduciary capacity. Florida Any bank or trust company, savings institution, insurance company, invest- ment company as defined by the Investment Company Act of 1940, or pen- sion or profit-sharing trust, or qualified institutional buyer as defined by rule of the Florida Department of Banking and Finance in accordance with Securities and Exchange Commission Rule 144A, whether any of such entities is acting in its individual or fiduciary capacity, provided that such offer or sale of the securities is not for the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading any provision of the Florida Securities and Investor Protection Act . - 11 - GREEVRERC MAL RIG Georgia Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940 as now or hereafter amended, real estate investment trust, small business investment corporation, pension or profit-sharing plan or trust, or other financial institution, whether the purchaser is acting for itself or in some fiduciary capacity. Guam(2) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer whether, the purchaser is acting for itself or in some fiduciary capacity. Hawaii (2) (8) . . . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Idaho Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Illinois (9) Any corporation, bank, savings bank, sa- vings institution, trust company, insur- ance company, building and loan asso- ciation, pension fund or pension trust, employees' profit-sharing trust, other financial institution or institutional investor, government or political sub- division or instrumentality thereof, whether the purchaser is acting for itself or in some fiduciary capacity; any partnership or other association engaged as a substantial part of its business or operations in purchasing or holding securities; any trust in respect - 12 - GREF:NBEKG THAI RI'; of which a bank or trust company is trustee or co-trustee; any entity in which at least 90% of the equity is owned by persons described under subsection C, D, H, or S of Section 4 of the Illinois Securities Law of 1953 (the "Act" ) ; or any employee benefit plan within the meaning of Title I of the Federal ERISA Act if (i) the investment decision is made by a plan fiduciary as defined in Section 3 (21) of the Federal ERISA Act and such plan fiduciary is either a bank, insurance company, registered investment adviser or an investment adviser registered under the Federal 1940 Investment Advisers Act, or (ii) the plan has total assets in excess of $5, 000, 000, or (iii) in the case of a self-directed plan, investment decisions are made solely by persons that are described under subsection C, D, H or S of Section 4 of the Illinois Securities Law, or to any plan established and maintained by, and for the benefit of the employees of any state or political subdivision or agency or instrumentality thereof if such plan has total assets in excess of $5, 000, 000, or to any organization described in Section 501 (c) (3) of the Internal Revenue Code of 1986, any Massachusetts or similar business trust, or any partnership, if such organization, trust, or partnership has total assets in excess of $5, 000, 000 . Indiana (7) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in a fiduciary capacity. Iowa (10) Any bank, savings and loan association, credit union, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit-sharing trust, or other financial institution or institutional buyer, whether the - 13 GREENBERG TR;URIC purchaser is acting for itself or in a fiduciary capacity. However, the Iowa Administrator, by rule or order, may grant this exemption to a person or class of persons based upon the factors of financial sophistication, net worth, and the amount of assets under investment. Kansas Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer. Kentucky Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial • institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Louisiana Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, as now or hereafter amended, real estate investment trust, small business investment corporation, pension or profit-sharing plan or trust, or other financial institution, whether the purchaser is acting for itself or in some fiduciary capacity. Maine (11) (12) . . . . Any financial and institutional investor. Maryland(2) Any investment company as defined in the Investment Company Act of 1940; an investment advisor with assets under management of not less than $1, 000, 000; a bank; trust company; savings and loan association; insurance company; employee benefit plan with assets of not less than $1, 000, 000; governmental agency or instrumentality, whether acting for itself or as a trustee or as a fiduciary with investment control or other institutional investor as designated by - 14 - GREENBERG TRAURIG rule or order of the Maryland Securities Commissioner. Massachusetts (2) (13) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Michigan(2) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940; the Federal National Mortgage Association, the Federal Home Loan Mortgage Association or the Government National Mortgage Association; pension or profit-sharing trust, the assets of which are managed by an institutional manager; the Treasurer of the State of Michigan, other financial institution, whether the purchaser is acting for itself or in some fiduciary capacity, or a lender approved by the Federal Housing Adminis- tration and who has satisfied any addi- tional requirements established by the Michigan Securities administrator by rule or order. Minnesota (7) (14) . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Mississippi (2) . . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Missouri (2) (15) . . . Any bank, savings institution, trust company, insurance company, investment - 15 - (;HEENBERG THAI'HII: company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Montana Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Nebraska (16) . . . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. Nevada (17) (18) . . . Any financial or institutional investor. New Hampshire (7) . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial insti- tution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. New Jersey(2) . . . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. New Mexico (19) (20) Any financial or institutional investor. New York Any state or national bank, trust company or savings institution incorporated under the laws and subject to the examination, supervision and control of any state or of the United - 16 - GREENBERG TRAURIG States or of any insular possession thereof, corporation, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit sharing trust or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. North Carolina (21) . Any corporation which has a net worth in excess of $1, 000, 000 as determined by generally accepted accounting principles; bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit-sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. North Dakota . . . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust or other financial institution or institutional buyer. Ohio Any corporation, bank, insurance company, pension fund or pension fund trust, employees' profit-sharing fund or employees' profit-sharing trust, or any association engaged, as a substantial part of its business or operations, in purchasing or holding securities, or any trust in respect of which a bank is trustee or co-trustee, whether the purchaser is acting for itself or in some fiduciary capacity. Oklahoma (1) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer, whether the purchaser is acting for itself or in some fiduciary capacity. - 17 - GREENBERG TRAUNIG Oregon Any bank, savings institution, trust company, insurance company, investment company, pension or profit-sharing trust, or other financial institution or institutional buyer (including but not limited to (i) the Federal National Mortgage Association; (ii) the Federal Home Loan Mortgage Corporation; (iii) the Federal Housing Administration; (iv) the United States Veterans Administration; (v) the Government National Mortgage Association or (iv) a mortgage broker or mortgage banker) , whether the purchaser is acting for itself or in a fiduciary capacity when the purchaser has discretionary authority to make investment decisions . Pennsylvania (22) (23) Any institutional investor, whether the buyer is acting for itself or in some fiduciary capacity. Puerto Rico (1) . . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of Puerto Rico, pension or profit-sharing trust, or other financial institution or institutional purchaser whether the purchaser is acting for itself or in some fiduciary capacity. Rhode Island (24) . . Any financial or institutional investor. South Carolina (1) . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer whether the purchaser is acting for itself or in some fiduciary capacity. South Dakota(25) . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial in- stitution or institutional buyer whether the purchaser is acting for itself or in some fiduciary capacity. - 18 - GREENBERG THAURIC Tennessee (26) . . . . Any bank, trust company, insurance com- pany, investment company registered under the Investment Company Act of 1940, as amended, or a holding company which controls any of the foregoing, a trust or fund over which any of the foregoing has or shares investment discretion, or any other person engaged as a substantial part of its business in investing in securities, provided such purchaser has a net worth in excess of $1, 000, 000 . Texas (27) (28) . . . Any bank, trust company, building and loan association, insurance company surety or guaranty company, savings institution, investment company as defined in the Investment Company Act of 1940, or small business investment com- pany as defined in the Small Business Investment Act of 1958, as amended. Utah(29) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial institution or institutional buyer whether the purchaser is acting for itself or in some fiduciary capacity. Vermont (30) . . . . Any financial or institutional investor whether acting for itself or others in a fiduciary capacity. Virginia Any corporation, investment company or pension or profit-sharing trust . Washington (31) . . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial insti- tution or institutional buyer whether the purchaser is acting for itself or in some fiduciary capacity. West Virginia (2) . . Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit- sharing trust, or other financial - 19 - (;REF:NBF:RI; TRU RIC institution or institutional buyer whether the purchaser is acting for itself or in some fiduciary capacity. Wisconsin(32) . . . . Any bank, savings institution, credit union, trust company, insurer, invest- ment advisor or savings and loan asso- ciation, if the purchaser is acting for itself or as trustee with investment control; investment company as defined in the Investment Company Act of 1940; pension or profit sharing trust; an individual retirement plan, including a self-employed individual retirement plan if administered by one of the foregoing; the State of Wisconsin or any agency or political subdivision thereof; the Federal government or any of its agen- cies or instrumentalities; any other financial institution or institutional investor designated by rule or order of the Wisconsin Securities Commissioner. Wyoming (2) Any bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940; pension or profit- sharing trust, or other financial institution or institutional buyer. (1) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects trans- actions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institu- tions enumerated with respect to this jurisdiction in this Part, or (iii) has no place of business in this jurisdiction and during any consecutive twelve-month period does not direct more than fifteen offers to sell or buy into this jurisdiction to persons other than broker-dealers and institutions enumerated with respect to this jurisdiction in this Part . (2) Provided the offeror or seller (i) is registered as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transactions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institutions enumerated with respect to this jurisdiction in this Part, or (iii) has no place of business in this jurisdiction and during any - 20 - GREENBERG TRAURIC consecutive twelve-month period does not direct more than fifteen offers to sell or buy into this jurisdiction to persons other than broker-dealers and institutions enumerated with respect to this jurisdiction in this Part, whether or not the offerors or offerees are then present in this jurisdiction. (3) Provided the offeror or seller (i) is registered as a broker- dealer in this jurisdiction or (ii) is a broker-dealer registered under the Securities Exchange Act of 1934 who has not previously had any certificate denied or revoked under the California Corporate Securities Law of 1968 or any prede- cessor statute, has no place of business in this jurisdiction and does not direct offers to sell or buy into this jurisdiction in any manner to (a) persons other than registered broker-dealers or institutions enumerated with respect to this jurisdiction in this Part or (b) to more than fifteen customers (whether or not self-employed individual retirement plans) having an existing account with such broker-dealer prior to any offer made to them in this jurisdiction, during any twelve consecutive months, whether or not the offeror or any of the offerees is then present in this jurisdiction. (4) The institutional investors, governmental agencies and instrumentalities designated by rule of the Commissioner of Corporations are : (a) any organization described in Section 501 (c) (3) of the Internal Revenue Code, as amended December 29, 1981, which has total assets, (including endowment, annuity and life income funds) of not less than $5, 000, 000 according to its most recent audited financial statement; (b) any corporation which has a net worth on a consolidated basis according to its most recent audited financial state- ment of not less than $14 , 000, 000; (c) any wholly-owned subsidiary of any institutional investor designated by the institutions enumerated with respect to this jurisdiction in this Part . (5) Provided the offeror or seller (i) is registered as a broker or dealer in this jurisdiction, or (ii) is a broker or dealer registered pursuant to the Securities Exchange Act of 1934 , has no place of business in this jurisdiction and the business transacted in this jurisdiction is exclusively with broker-dealers licensed or exempt from license requirements, financial or institutional investors, existing customers of the broker-dealer whose principal place of residence is not in the jurisdiction and during any twelve consecutive months, not more than five persons in this jurisdiction excluding persons otherwise described herein. (6) The Colorado Department of Regulatory Agencies Division of Securities has defined "financial or institutional investor" - 21 - CRhF:\RERC Tit%I RIC. to mean any of the following, whether acting for itself or others in a fiduciary capacity: (a) a depository institu- tion; (b) an insurance company; (c) a separate account of an insurance company; (d) an investment company registered under the federal Investment Company Act of 1940; (e) a business development company as defined in the federal Investment Company Act of 1940; (f) any private business development company as defined in the federal Investment Advisers Act of 1940; (g) an employee pension, profit-sharing, or benefit plan if the plan has total assets in excess of five million dollars or its investment decisions are made by a named fiduciary, as defined in the federal Employee Retirement Income Security Act of 1974 , that is a broker-dealer registered under the federal Securities Exchange Act of 1934 , an investment adviser registered or exempt from registration under the federal Investment Advisers Act of 1940, a depository institution, or an insurance company; (h) an entity, but not an individual, a substantial part of whose business activities consist of investing, purchasing, sell- ing, or trading in securities of more than one issuer and not of its own issue and that has total assets in excess of five million dollars as of the end of its latest fiscal year; (i) a small business investment company licensed by the Federal small business administration under the federal Small Business Investment Act of 1958; and (j ) any other institu- tional buyer. (7) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transactions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institutions enumerated with respect to this jurisdiction in this Part . (8) The term "institutional buyer" includes any organization within the scope of Section 501 (c) (3) of the Internal Revenue Code of 1954, as amended. In addition, all offering materials must clearly indicate the name of the person issuing, circulating, publishing or making it and the fact that such person is issuing, circulating, publishing or making the same . (9) The Illinois Securities Department has, by regulation, defined "institutional investor" to include, but not be limited to: (i) investment companies, universities, and other organizations whose primary purpose is to invest its own assets or those held in trust by it for others; (ii) trust accounts and individual or group retirement accounts in which a bank, trust company, insurance company or savings and loan institution acts in a fiduciary capacity; and (iii) founda- tions and endowment funds exempt from taxation under the - 22 - GRF:F:NRERG THAI.RIG Internal Revenue Code, a principal business function of which is to invest funds to produce income in order to carry out the purpose of the foundation or fund. The Illinois Secur- ities Department has also defined "financial institution" to include, but not be limited to, a manager of investment accounts on behalf of other than natural persons who, with affiliates, exercises sole investment discretion with respect to such accounts, provided such accounts exceed ten (10) in number and have a fair market value of not less than $10, 000, 000 at the end of the calendar month preceding the month during which the transaction occurred for which the exemption is utilized. (10) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transactions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institutions enumerated with respect to this jurisdiction in this Part, or (iii) during any period of twelve consecutive months, the broker-dealer does not effect transactions in this jurisdiction in any manner with more than three persons other than broker-dealers and institutions enumerated with respect to this jurisdiction in this Part, whether or not the offeror or any of the offerees is then present in this jurisdiction. (11) Provided the offeror or seller (i) is licensed as a broker- dealer in this jurisdiction, (ii) is a broker-dealer regis- tered under the Securities Exchange Act of 1934 and effects transactions in this jurisdiction exclusively with other broker-dealers licensed in this jurisdiction or exempt from licensing (except when the broker-dealer is acting as a clearing broker-dealer for such other broker-dealers) or with institutions enumerated with respect to this jurisdiction in this Part, (iii) is a broker-dealer registered under the Securities Exchange Act of 1934 and licensed under the secur- ities act of the state in which the broker-dealer maintains its principal place of business and has no place of business in this jurisdiction, if the broker dealer offers and sells in this jurisdiction to persons who are existing customers of the broker-dealer and represent that they have no principal place of residence in this jurisdiction, or (iv) is a depository institution engaged in its regular course of business. The term "depository institution" means : (1) a person, other than an insurance company or other organization primarily engaged in the insurance business, which is: (a) organized, chartered or holding an authorization certificate under the laws of any state or of the United States which authorizes the person to receive deposits, including a savings, share, certificate or deposit account, and (b) supervised and examined for the protection of depositors by - 23 - GREENBERG TRAURIG an official or agency of any state or the United States; or (2) any trust company or other institution which is author- ized by state law to exercise fiduciary powers similar to those permitted to national banks under the authority of the United States Comptroller of the Currency, but does not include any industrial bank, Morris Plan Bank or industrial loan bank. (12) The term "financial and institutional investor" means, but is not limited to: (i) a depository institution or a depository institution holding company; (ii) an insurance company or a separate account of an insurance company; (iii) an investment company or a business development company, as such terms are defined in the Investment Company Act of 1940; (iv) an entity, other than a natural person, a substantial part of whose business activities consists of investing, purchasing, selling or trading in securities of more than one issuer and not one of its own issue and that has gross assets in excess of $1, 000, 000 at the end of its latest fiscal year; (v) an employee pension and profit sharing or benefit plan other than an employee pension and profit sharing or benefit plan of the issuer, a self-employed individual retirement plan or individual retirement account (if the investment decision is made by a plan fiduciary, as defined in Section 3, subsection 21 of the Employee Retirement Income Security Act of 1974, which is either a depository institution, an insurance company or an investment adviser registered under the secur- ities act of this jurisdiction; or the plan has total assets in excess of $5, 000, 000) ; (vi) a small business investment company licensed by the United States Small Business Administration under the United States Small Business Investment Act of 1958, Section 301 (c) or (d) ; or (vii) an entity organized and operated not for private profit, as described in the United States Internal Revenue Code, Section 501 (c) (3) with total assets in excess of $5, 000, 000. A person may be a financial and institutional investor whether acting for itself or others in a fiduciary capacity. (13) The term "institutional buyer" includes, but is not limited to, (i) any Small Business Investment Company licensed by the U.S. Small Business Administration under the Small Business Administration Act of 1958, as amended; (ii) any private business development company as defined in Section 202 (a) (22) of the Investment Advisors' s Act of 1940, as amended (the "Act" ) ; (iii) any Business Development Company as defined in Section 2 (a) (48) of the Act ; (iv) any entity with total assets in excess of $5, 000, 000 and which is either (a) a company (whether a corporation, a Massachusetts or similar business trust or partnership) not formed for the specific purpose of acquiring the securities offered, a substantial part of whose business activities consists of investing, purchasing, selling or trading in securities issued by others - 24 - G,REENBERG TRUING and with investment decisions made by persons who are reasonably believed by the seller to have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of investment or (b) an organization described in Section 501 (c) (3) of the Internal Revenue Code and (v) a Qualified Institutional Buyer as defined in 17 CFR 230 . 144A (a) . (14) The term "financial institution or institutional buyer" includes but is not limited to (i) a corporation with a class of equity securities registered under Section 12 (b) or Sec- tion 12 (g) of the Securities and Exchange Act of 1934, as amended, and (ii) a person who is an "accredited investor" within the meaning of rule 501 (a) of Regulation D, adopted by the Securities and Exchange Commission. (15) The Missouri Office of the Secretary of State has, by regu- lation, defined "financial institution or institutional buyer" to include (i) an endowment or trust fund of a char- itable organization specified in section 170 (b) (1) (A) of the Internal Revenue Code; (ii) an issuer which has any class of securities registered under section 12 of the Securities Exchange Act of 1934, and any wholly owned subsidiary there- of; and (iii) any other corporation, partnership or associa- tion which has been in existence for ten (10) years or whose net assets exceed five hundred thousand dollars ($500, 000) , and whose principal purpose, as stated in its articles, by- laws or other organizational instrument, is investing in securities, and has, by regulation, defined "pension or profit-sharing trust" to mean a trust, the assets of which are managed by a bank or trust company or other institutional manager. (16) The Nebraska Department of Banking and Finance, Bureau of Securities has, by interpretative opinion, defined "financial institution or institutional buyer" to include: (i) any bank as defined in Section 3 (a) (2) of the Securities Act of 1933, whether acting in its individual or fiduciary capacity; (ii) any insurance company as defined in Section 2 (13) of the Securities Act of 1933; (iii) any business development com- pany as defined in Section 2 (a) (48) of the Investment Company Act of 1940; and (iv) any small business investment company licensed by the United States Small Business Administration pursuant to Section 301 (c) or (d) of the Small Business Investment Company Act of 1958 . "Pension or profit-sharing trust" has been defined by the Nebraska Department of Banking and Finance, Bureau of Securities to mean: (i) an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 , if the investment decisions are made by a "plan fiduciary" (as defined in Section 3 (21) of the Employee Retirement Income Security Act of 1974) which is either a bank, insurance company, or - 25 - GREENBERG TRAURIG registered investment advisor; or (ii) an employee benefit plan that has total assets in excess of $5, 000, 000 . (17) Provided the offeror or seller (i) is licensed as a broker- dealer in this jurisdiction; (ii) is a broker-dealer regis- tered or, except with respect to subsection (b) hereof, exempt from registration under the Securities Exchange Act of 1934, has no place of business in this jurisdiction and (a) effects transactions in this jurisdiction exclusively with other broker-dealers licensed or exempt from licensing in this jurisdiction or with institutions enumerated with respect to this jurisdiction in this Part, (b) is licensed under the securities laws of a state in which the broker- dealer maintains a place of business and such broker-dealer offers and sells in this jurisdiction to a person who is an existing customer and whose principal place of residence is not in this jurisdiction, or (c) is licensed under the securities laws of a state in which the broker-dealer maintains a place of business and during any twelve consecutive months does not effect more than transactions with more than five persons in this jurisdiction, in addition to the transactions with institutions enumerated with respect to this jurisdiction in this Part or other broker-dealers; or (iii) is a depository institution. The term "depository institution" means: (i) a person, other than an insurance company or other organization primarily engaged in the insurance business, or a Morris plan bank, industrial loan company or a similar bank or company, unless its deposits are insured by a Federal agency, which is : (a) organized, chartered or holding an authorization certificate under the laws of a state or of the United States which authorizes the person to receive deposits, and (b) supervised and examined for the protection of depositors by an official or agency of a state or the United States; or (ii) any trust company or other institution which is authorized by Federal or state law to exercise fiduciary powers of the type a national bank is permitted to exercise under the authority of the United States Comptroller of the Currency, and is supervised and examined by an official or agency of a state or the United States. (18) The term "financial institution or institutional buyer" means : (i) a depository institution; (ii) an insurance company; (iii) a separate account of an insurance company; (iv) an investment company as defined in the Investment Company Act of 1940; (v) an employee pension, profit-sharing or benefit plan if : (a) its investment decisions are made by a named fiduciary, as defined in the Employee Retirement Income Security Act of 1974 , which is either a broker-dealer registered under the Securities Exchange Act of 1934, an investment adviser registered or exempt from registration under the Investment Advisors Act of 1940, a depository - 26 - GREENBERG TRAURIG institution or an insurance company, or (b) the plan has total assets in excess of five million dollars ($5, 000, 000) ; and (vi) any other institutional buyer. (19) Provided the offeror or seller (i) is licensed as a broker- dealer in this jurisdiction, (ii) is a broker-dealer regis- tered under the Securities Exchange Act of 1934, has no place of business in this jurisdiction and effects transactions in this jurisdiction exclusively with other broker-dealers licensed in this jurisdiction or exempt from licensing or with institutions enumerated with respect to this jurisdiction in this Part, (iii) is a broker-dealer registered under the Securities Exchange Act of 1934, has no place of business in this jurisdiction and is licensed under the securities act of the state in which the broker-dealer maintains a place of business, if the broker-dealer offers and sells in this jurisdiction to persons who are existing customers of the broker-dealer and whose principal place of residence is not in this jurisdiction, or (iv) is a depository institution engaged in its regular course of business . The term "depository institution" means : (i) a person, other than an insurance company or other organization primarily engaged in the insurance business, or a Morris plan bank, industrial loan company or a similar bank or company, which is : (a) organized, chartered or holding an authoriza- tion certificate under the laws of a state or of the United States which authorizes the person to receive deposits including a savings, share certificate or deposit account, and (b) regulated, supervised and examined for the protection of depositors by an official or agency of a state or the United States and is insured by the Federal depository insurance corporation, the Federal savings and loan insurance corporation or the national credit union share insurance fund; or (ii) any trust company or other institution which is authorized by Federal or state law to exercise fiduciary powers of the type a national bank is permitted to exercise under the authority of the United States Comptroller of the Currency, and is regulated, supervised and examined by an official or agency of a state or the United States . (20) The term "financial or institutional investor" means, but is not limited to: (i) a depository institution; (ii) an insurance company; (iii) a separate account of an insurance company; (iv) an investment company as defined in the Investment Company Act of 1940; (v) an employee pension, profit sharing or benefit plan: (a) if the plan has total assets in excess of five million dollars ($5, 000, 000) or (b) if investment decisions are made by a plan fiduciary as defined in the Employee Retirement Income Security Act of 1974, which is either a broker-dealer registered under the Securities Exchange Act of 1934, an investment adviser - 27 - CR EESNF:RC TR%I RIC registered or exempt from registration under the Investment Advisors Act of 1940, a depository institution or an insurance company; (vi) a business development company as defined by the Investment Company Act of 1940; (vii) a small business investment company licensed by the United States small business administration under section 301 (c) or (d) of the Small Business Development Act of 1958 ; (viii) an entity, other than a natural person, which is directly engaged in the business of and derives at least eighty percent of its annual gross income from investing, purchasing, selling or trading in securities of more than one issuer, and not of its own issue, and which has gross assets in excess of five million dollars ($5, 000, 000) at the end of its latest fiscal year; (ix) an entity organized and operated not for private profit as described in Section 501 (c) (3) of the Internal Revenue Code with total assets in excess of five million dollars ($5, 000, 000) ; (x) a state, political subdivision of a state or an agency, corporate or other instrumentality of a state or political subdivision of a state; (xi) any other financial or institutional investor as the New Mexico Director of the Securities Division by rule or order designates. (21) Provided that the offeror or seller (i) is registered or licensed in this jurisdiction, or (ii) has no place of business in this jurisdiction and (a) effects transactions in this jurisdiction exclusively through other broker-dealers registered or licensed in the jurisdiction or with institutions enumerated with respect to this jurisdiction in this Part or (b) is registered as a dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and in one or more states and during any period of twelve consecutive months does not effect more than fifteen purchases or sales in this jurisdiction in any manner with persons other than those specified with respect to this jurisdiction in this Part, whether or not the dealer or any of the purchasers or sellers is then present in the jurisdiction. (22) Provided the offeror or seller (i) is registered as a broker- dealer in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transactions in this juris- diction exclusively with or through registered broker-dealers or with institutions enumerated with respect to this jurisdiction in this Part, or (iii) is a broker-dealer regis- tered under the Securities Exchange Act of 1934, who has not previously had any certificate denied or revoked under the Pennsylvania Securities Act of 1972 or any predecessor statute, has no place of business in this jurisdiction and, during any period of twelve consecutive months, does not direct offers to sell or buy into this jurisdiction in any manner to persons other than registered broker-dealers or institutions enumerated with respect to this jurisdiction in - 28 - LGREENBERG TRAURIG this Part or to more than five other customers in this jurisdiction, whether the offeror or any of the offerees is then present in this jurisdiction. (23) The Pennsylvania Securities Commission has, by regulation, defined "institutional investor" to include : (a) a corpor- ation or business trust or a wholly-owned subsidiary of such person which has been in existence for eighteen (18) months and which has a tangible net worth on a consolidated basis, as reflected in its most recent audited financial statements, of $10, 000, 000 or more; (b) a college, university or other public or private institution which has received exempt status under §501 (c) (3) of the Internal Revenue Code of 1954 and which has a total endowment or trust funds (including annuity and life income funds) of $5, 000, 000 or more accord- ing to its most recent audited financial statements provided that the aggregate dollar amount of securities being sold to the person under the exemption contained in Section 203 (c) of the Pennsylvania Securities Act of 1972 and Title 64 of the Pennsylvania Code, as amended; (c) a wholly-owned subsidiary of a bank (as defined in the Pennsylvania Securities Act of 1972) ; (d) a person, except an individual or an entity whose security holders consist entirely of one individual or group of individuals who are related, which is organized primarily for the purpose of purchasing, in non-public offerings, securities of corporations or issuers engaged in research and development activities in conjunction with a corporation and which complies with one of the following: (i) has purchased $5, 000, 000 or more of the securities excluding both of the following: (A) a purchase of securities of a corporation in which the person directly or beneficially owns more than 50% of the corporation' s voting securities, but securities purchased under a leveraged buy-out financing in which the person does not intend to provide direct management to the issuer, is not excluded and (B) a dollar amount of purchase of securities of a corporation which investment represents more than 20% of the person' s net worth; (ii) is capitalized at $2, 500, 000 or more and is controlled by an individual controlling a person which meets the criteria contained in subparagraph (i) ; (iii) is capitalized at $10, 000, 000 or more and has purchased $500, 000 or more of the securities, excluding a purchase of securities of a corporation in which the person directly or beneficially owns more than 50% of the corporation' s voting securities; or (iv) is capitalized at $250, 000 or more and is a side by side fund as defined in the Pennsylvania Code, as amended; (e) a Small Business Investment Company as defined in the Small Business Invest- ment Act of 1958, which either has a total capital of $1, 000, 000 or more, or is controlled by institutional invest- ors (as defined in the Pennsylvania Securities Act of 1972) ; (f) a Seed Capital Fund as defined and authorized in the Small Business Incubators Act; (g) a Business Development - 29 - ILGREENBERG TR,%I'RIC Credit Corporation, as authorized by the Business Development Credit Corporation Law; (h) a person whose security holders consist solely of institutional investors or broker-dealers; or (i) a person as to which the issuer believed qualified as an institutional investor under Section 102 . 111 of the Pennsylvania Code at the time of the offer or sale of the securities on the basis of written representations made to the issuer by the purchaser. (24) Provided the offeror or seller (i) is licensed as a dealer or broker in this jurisdiction, (ii) is a broker-dealer registered, or, exempt from registration under the Securities Exchange Act of 1934 , has no place of business in this jurisdiction and (a) effects transactions in this jurisdiction exclusively with other broker-dealers licensed or exempt from licensing in this jurisdiction or with institutions enumerated with respect to this jurisdiction in this Part, or (b) is licensed under the securities laws of a state in which the broker-dealer maintains a place of business and such broker-dealer offers and sells in this jurisdiction to a person who is an existing customer of such broker dealer and whose principal place of residence is not in this jurisdiction. The General Laws of Rhode Island, 1956, as amended defines the term "financial or institutional investor" to include: (a) a depository institution; (b) an insurance company; (c) a separate account of an insurance company; (d) an investment company as defined in the Investment Company Act of 1940; (e) an employee pension, profit sharing or benefit plan if the plan has total assets in excess of five million dollars ($5, 000, 000) , or if investment decisions are made by a plan fiduciary, as defined in the Employee Retirement Income Security Act of 1974, which is either a broker-dealer registered under the Securities Exchange Act of 1934 , an investment adviser registered or exempt from registration under the Investment Advisers Act of 1940, a depository institution or an insurance company; and (f) any other institutional buyer, whether acting for itself or another in a fiduciary capacity. (25) Provided the offeror or seller (i) is registered in this jurisdiction or (ii) has no place of business in this jurisdiction and (a) effects transactions in this jurisdiction exclusively with or through other broker-dealers registered or licensed in this jurisdiction or with institutions enumerated with respect to this jurisdiction in this Part or (b) is licensed under the securities laws of the state in which the broker-dealer maintains a place of business if the broker-dealer offers and sells in this jurisdiction to persons who are existing customers of such broker-dealer and who represent that they have no principal place of residence in this jurisdiction. The term "financial institution or institutional buyer" includes : (i) an - 30 - JIL GREESISHRG TIM IM endowment or trust fund of a charitable organization specified in Section 170 (b) (1) (A) of the Internal Revenue Code; (ii) an issuer which has a class of securities registered under Section 12 of the Securities Exchange Act of 1934 and any wholly owned subsidiary of such an issuer; and (iii) any other corporation, partnership, or association which has been in existence for 10 years or whose net assets exceed $500, 000 and whose principal purpose, as stated in its articles, by-laws, or other organizational instrument, is investing in securities. Nothing in this rule shall be construed to exempt any offer or sale to a natural person or the individual retirement account or self-directed Keogh plan of a natural person. (26) Provided the offeror or seller (i) is registered or licensed as a broker-dealer in this jurisdiction, or (ii) has no place of business in this jurisdiction and is registered as a broker-dealer with the Securities and Exchange Commission or the National Association of Securities Dealers, Inc . who effects transactions in this jurisdiction exclusively with or through registered or licensed broker-dealers or with institutions enumerated with respect to this jurisdiction in this Part and during any period of twelve consecutive months does not effect more than fifteen transactions in securities from, in, or into this jurisdiction other than to persons described herein. (27) Provided that the offeree or purchaser is a dealer or broker actually engaged in buying and selling securities as a business. (28) The term "savings institution" includes any federally char- tered credit union or savings and loan association, and any credit union or savings and loan association chartered under the laws of any state of the United States . (29) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business . in this jurisdiction and effects transactions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institutions enumerated with respect to this jurisdiction in this Part, or (iii) during any period of twelve consecutive months does not direct more than fifteen offers to sell or buy into this jurisdiction in any manner to persons other than those specified in this Part, whether or not the offeror or any of the offerees is then present in this jurisdiction. (30) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects trans- actions in this jurisdiction exclusively with or through - 31 - (;REENBERG TRtt RIC registered or licensed dealers or brokers or with institu- tions enumerated with respect to this jurisdiction in this Part or (iii) during any period of twelve consecutive months does not direct more than fifteen offers to sell or buy into this jurisdiction in any manner to persons other than those specified in this Part, whether or not the offeror or any of the offerees is then present in this jurisdiction. The term "financial or institutional investor" means any of the following: (a) a depository institution; (b) an insurance company; (c) a separate account of an insurance company; (d) an investment company as defined in the Investment Company Act of 1940; (e) an employee pension, profit sharing or benefit plan if the plan has total assets in excess of $5, 000, 000 or its investment decisions are made by a named fiduciary, as defined in the Employee Retirement Income Act of 1974, that is either a broker-dealer registered under the Securities Exchange Act of 1934 , an investment advisor registered or exempt from registration under the Investment Advisors Act of 1940, a depository institution or an insurance company; or (f) any other financial institutional buyer which qualifies as an accredited investor by the Securities and Exchange Commission under the Securities Act of 1933, as such provision may be amended from time to time and such other institutional buyers as the Vermont Commissioner of Banking, Insurance and Securities may add by rule or order. (31) Provided the offeror or seller (i) is registered or licensed as a dealer or broker in this jurisdiction, or (ii) has no place of business in this jurisdiction and effects transactions in this jurisdiction exclusively with or through registered or licensed dealers or brokers or with institutions enumerated with respect to this jurisdiction in this Part, or (iii) has no place of business in this jurisdiction, and during any period of twelve consecutive months, does not direct more than fifteen offers to sell or to buy in this jurisdiction in any manner to persons other than those specified in this Part . (32) Provided the offeror or seller (i) is registered as a broker- dealer in this jurisdiction, or (ii) effects transactions in this jurisdiction exclusively for the account of registered broker-dealers or with institutions enumerated with respect to this jurisdiction in this Part. The Commissioner of Securities has, by rule, defined financial institutions and institutional investors to include : (a) any endowment or trust fund of a charitable organization specified in Section 170 (b) (1) (A) of the Internal Revenue Code; (b) any issuer which has any class of securities registered under section 12 of the Securities Exchange Act of 1934 and any wholly owned subsidiary thereof; and (c) a venture capital company as a result of 1 . operating a small business investment company licensed under the Small Business Investment Act of 1958, as - 32 - GREENIUMG TR%I'RIG e. amended or 2 . being a corporation, partnership or association which has been in existence for five years or whose net assets exceed $250, 000, and either: a. whose principal pur- pose as stated in its articles, by-laws, or other organiza- tional instruments is investing in securities; or b. whose primary business is investing in developmental state companies or eligible small business companies as defined in the regulations of the Small Business Administration; (d) any of the following "qualified institutional buyer" entities, whether acting for their own account or the accounts of other qualified institutional buyers listed in Section 230 . 144A under the Securities Act of 1933, that in the aggregate owns and invests on a discretionary basis at least $100, 000, 000 in securities of issuers that are not affiliated with the entity: (i) any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees; (ii) any employee benefit plan within the meaning of Title I of the Employment Retirement Income Security Act of 1974 ; (iii) any business development company as defined in Section 202 (1) (22) of the Investment Advisers Act of 1940 or in Section 2 (a) (48) of the Investment Company Act of 1940; (iv) any organization described in Section 501 (c) (3) of the Internal Revenue Code, or any corporation (other than a bank as defined in Section 3 (a) (2) of the Securities Act of 1933 or a savings and loan association or other institution referenced in Section 3 (a) (5) (A) of the Securities Act of 1933, or a foreign bank or savings and loan association or equivalent institution) ; (v) any partnership or Massachusetts or similar business trust; or (e) any entity, all of the equity owners of which are persons designated in Section 551 . 23 (8) of the rules of the Wisconsin Commissioner of Securities. - 33 - GREENBERG TRtlRIG