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R04-052CITY OF BOYNTON BEACH, FLORIDA PUBLIC SERVICE TAX REVENUE BONDS BOND RESOLUTION ADOPTED APRIL 7, 2004 TABLE OF CONTENTS (This Table of Contents is not part of the Resolution and is for convenience of reference only.) PAGE ARTICLE I GENERAL ....................................................... 1 SECTION 1.01. SECTION 1.02. SECTION 1.03. Definitions ........................................... 1 Authority for This Resolution ............................ 9 Resolution to Constitute Contract ........................ 10 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS .................................. 10 SECTION 2.01. SECTION 2.02. SECTION 2.03. SECTION 2.04. SECTION 2.05. SECTION 2.06. SECTION 2.07. SECTION 2.08. SECTION 2.09. SECTION 2.10. SECTION 2.11. SECTION 2.12. SECTION 2.13. SECTION 2.14. SECTION 2.15. SECTION 2.16. SECTION 2.17. SECTION 2.18. Authorization of Bonds ................................ 10 Authorization, Description and Terms of Series 2004 Bonds ... 11 Paying Agent and Registrar for Series 2004 Bonds ........... 11 Award of the Series 2004 Bonds ......................... 12 Official Statement for Series 2004 Bonds .................. 12 Book Entry System for Series 2004 Bonds ................. 12 Application of Series 2004 Bond Proceeds ................. 13 Municipal Bond.Insurance Provisions ..................... 13 Reserve Surety Provisions .............................. 15 Execution and Delivery of the Series 2004 Bonds ............ 16 Insurance Commitments ............................... 16 The Refunded Bonds and the Escrow Deposit Agreement ..... 16 Execution of Bonds ................................... 17 Authentication ....................................... 17 Temporary Bonds ..................................... 17 Bonds Mutilated, Destroyed, Stolen or Lost ................ 18 Negotiability, Interchangeability and Transfer ............... 18 Form of Bonds ....................................... 19 ARTICLE III REDEMPTION OF BONDS ........................................ 26 SECTION 3.01. SECTION 3.02. SECTION 3.03. SECTION 3.04. SECTION 3.05. Privilege of Redemption ............................... 26 Selection of Bonds to be Redeemed ...................... 26 Notice of Redemption ................................. 26 Redemption of Portions of Bonds ........................ 27 Payment of Redeemed Bonds ........................... 27 -i- ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF ......................................... 28 SECTION 4.01. SECTION 4.02. SECTION 4.03. SECTION 4.04. SECTION 4.05. SECTION 4.06. SECTION 4.07. SECTION 4.08. Bonds Not to be Indebtedness of Issuer .................... 28 Security for Bonds .................................... 28 Funds and Accounts ................................... 28 Construction Fund .................................... 29 Debt Service Fund; Reserve Fund ........................ 29 Rebate Fund ......................................... 31 Investments ......................................... 32 Separate Accounts .................................... 32 ARTICLE V SUBORDINATED INDEBTEDNESS ADDITIONAL BONDS, AND COVENANTS OF ISSUER ............... 33 SECTION 5.01. SECTION 5.02. SECTION 5.03. SECTION 5.04. SECTION 5.05. SECTION 5.06. SECTION 5.07. SECTION 5.08. SECTION 5.09. SECTION 5.10. SECTION 5.11. SECTION 5.12. SECTION 5.13. SECTION 5.14. SECTION 5.15. Subordinated Indebtedness ............................. 33 Issuance of Additional Bonds ........................... 33 Bond Anticipation Notes ............................... 34 Accession of Subordinated Indebtedness to Parity Status with Bonds .................................... 34 Annual Budget ....................................... 35 Public Service Tax and Discretionary Communications Services Tax ........................... 35 Books and Records ................................... 35 Annual Audit ........................................ 35 No Impairment ....................................... 36 Special Covenants Relating to Reserve Fund Insurance Policy or Reserve Fund Letter of Credit ....... 36 Covenants with Credit Banks and Insurers ................. 36 Federal Income Tax Covenants; Taxable Bonds ............. 36 Nonpresentment of Bonds; Disposition of Unclaimed Money .. 37 Enforcement of Public Service Tax and Discretionary Communications Services Tax ........... 38 Continuing Disclosure Compliance ....................... 38 ARTICLE VI DEFAULTS AND REMEDIES ...................................... 40 SECTION 6.01. SECTION 6.02. SECTION 6.03. SECTION 6.04. SECTION 6.05. SECTION 6.06. SECTION 6.07. Events of Default ..................................... 40 Remedies ........................................... 40 Directions to Trustee as to Remedial Proceedings ............ 41 Remedies Cumulative ................................. 41 Waiver of Default ..................................... 41 Application of Moneys After Default ..................... 41 Control by Insurer or Credit Bank ........................ 42 -ii- ARTICLE VII SUPPLEMENTAL RESOLUTIONS ............................ 43 SECTION 7.01. SECTION 7.02. SECTION 7.03. SECTION 7.04. Supplemental Resolution Without Bondholders' Consent ...... 43 Supplemental Resolution With Bondholders', Insurer's and Credit Bank's Consent ....................... 44 Amendment with Consent of Insurer and/or Credit Bank Only.. 45 Required Opinion of Bond Counsel ....................... 46 ARTICLE VIII MISCELLANEOUS ........................................ 47 SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION 8.01. 8.02. 8.03. 8.04. 8.05. 8.06. 8.07. 8.08. 8.09. 8.10. 8.11. Defeasance .......................................... 47 Capital Appreciation Bonds ............................. 48 General Authority .................................... 48 No Personal Liability .................................. 48 No Third Party Beneficiaries ............................ 49 Sale of Bonds ........................................ 49 Severability of Invalid Provisions ........................ 49 Repeal of Inconsistent Resolutions ....................... 49 Table of Contents and Headings not Part Hereof ............. 49 Holidays; Time ....................................... 49 Effective Date ....................................... 49 -iii- RESOLUTION NO. R04-052 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOYNTON BEACH, FLORIDA, AUTHORIZING THE ISSUANCE BY THE CITY OF NOT EXCEEDING $19,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF PUBLIC SERVICE TAX REVENUE BONDS, SERIES 2004, TO FINANCE VARIOUS CAPITAL EXPENDITURES OF THE CITY AND TO REFINANCE THE CITY'S PUBLIC SERVICE TAX REFUNDING REVENUE BONDS, SERIES 1993; AUTHORIZING ADDITIONAL BONDS; PLEDGING TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH BONDS CERTAIN PLEDGED FUNDS, INCLUDING THE PUBLIC SERVICE TAX REVENUES AND THE DISCRETIONARY COMMUNICATIONS TAX REVENUES OF THE CITY AND MONEYS ON DEPOSIT IN AND INVESTMENTS HELD FOR THE CREDIT OF CERTAIN FUNDS CREATED HEREUNDER; SETTING FORTH A METHOD TO ESTABLISH THE PRINCIPAL AMOUNT, INTEREST RATES, MATURITY SCHEDULE AND REDEMPTION PROVISIONS FOR SUCH SERIES 2004 BONDS; AUTHORIZING CITY OFFICIALS TO AWARD THE SALE OF THE SERIES 2004 BONDS AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH; APPOINTING A PAYING AGENT AND REGISTRAR FOR THE BONDS; PROVIDING A METHOD TO APPROVE THE FORM AND USE OF A PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING THE EXECUTION AND DELIVERY OF A FINAL OFFICIAL STATEMENT; AUTHORIZING THE PURCHASE OF A MUNICIPAL BOND INSURANCE POLICY AND RESERVE ACCOUNT SURETY BOND FOR THE SERIES 2004 BONDS AND MAKING CERTAIN COVENANTS IN CONNECTION THEREWITH; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE OWNERS OF SUCH BONDS; PROVIDING FOR THE CREATION OF FUNDS AND ACCOUNTS; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF BOYNTON 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. "Annual Audit" shall mean the annual audit prepared pursuant to the requirements of Section 5.08 hereof. "Annual Budget" shall mean the annual budget prepared pursuant to the requirements of Section 5.05 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) Defeasance Obligations. (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; (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; (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 Defeasance Obligations and to repurchase agreements fully collateralized by such Defeasance Obligations 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; or (7) Any other investment approved in writing by each Insurer of Bonds secured by the funds being invested. "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 City 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. "Balloon Indebtedness" shall mean indebtedness 25% or more of the principal payments of which are due in a Fiscal Year and which indebtedness is not required to be paid over its term on a substantially level debt service basis on a Fiscal Year basis, and indebtedness 25% or more of the principal of which may, at the option of the holder or registered owner thereof, be redeemed in a Fiscal Year. "Beneficial Owner" means any person which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2004 Bonds (including persons holding Series 2004 Bonds through nominees, depositories or other intermediaries) or (ii) is treated as the owner of the Series 2004 Bonds for federal income tax purposes. "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 2004 Bonds, any Additional Bonds and any Subordinated Indebtedness which accedes to the status of Bonds pursuant to Section 5.04 hereof. "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 3 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. "Clerk" shall mean the City 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. "Cost" when used in connection with a Project, shall mean all amounts permitted to be paid by State law, including costs of issuance of Bonds. "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 or long-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 Fund Insurance Policies or Reserve Fund Letters of Credit), as approved in the Supplemental Resolution providing for the issuance of such Bonds. "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 off (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 Section 5.02 of 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. 4 In determining the amount of principal and interest becoming due on Bonds in any Fiscal Year, the folloMng rule shall apply: With respect to Balloon Indebtedness, the principal and interest becoming due on the Bonds shall be calculated based upon the assumption that the amount of principal and interest which will be payable in a given period is equal to the amount which would be payable on such Balloon Indebtedness if such Balloon Indebtedness were amortized (i) from the date of such calculation over a period equal to twenty (20) years, if such Balloon Indebtedness matures twenty (20) years or more from the date of such calculation, or (ii) if the period from the date of such calculation to the final maturity of such Balloon Indebtedness is less than twenty (20) years, then the actual number of years to maturity shall be used, on a level annual debt service basis calculated on a Fiscal Year basis, at an interest rate, if such Balloon Indebtedness bears interest at a fixed interest rate for its entire term, equal to the actual interest rate on such Balloon Indebtedness, and if such Balloon Indebtedness does not bear interest at a fixed rate for its entire term, bearing interest at a rate calculated in accordance with the methodology established above for Variable Rate Bonds. "Defeasance Obligations" shall mean: (i) direct obligations of, or obligations the timely payment of the principal of and interest on which are unconditionally guaranteed by, the United States of America and which are not redeemable or subject to prepayment prior to the stated maturity thereof by or at the direction of the obligor thereon, and including Separately Trading of Registered Interests and Principal U.S. Treasury of Securities ("Strips") and the interest component of obligations of the Resolution Funding Corporation which have been stripped by the Federal Reserve Bank of New York, to the extent such instruments are backed by the full and credit of the United States of America; (ii) to the extent not subject to redemption prior to their maturity at the option of the obligor thereon and to the extent rated at the time of investment in one of the two the highest rating categories, without regard to any refinement or gradation of such rating, by S&P, Moody's or Fitch, an obligation of any state of the United States of America or any political subdivision thereof or any agency, instrumentality or local government unit of any such state or political subdivision; (iii) investment agreements (A) with any bank, insurance company or other financial institution organized under the laws of the United States or any State (a "Qualified Bank"), (I) having capital and surplus in excess of $5.0 billion and whose unsecured, unenhanced long term debt is rated at least "AA-" or "Aa3" by at least two Rating Agencies; or (II) whose obligations under the investment agreement are guaranteed by an entity which has capital and surplus in excess of $5 billion and whose unsecured, unenhanced long term debt is rated at least "AA-" or "Aa3" by at least two Rating Agencies; and (B) which provides that in the event the provider's or the guarantor's unsecured and unenhanced long term debt is downgraded below "Aa3" or "AA-" by two of such Rating Agencies (if three Rating Agencies rate such debt) or by one of two Rating Agencies (if only one or only two Rating Agencies rate the debt), then, within 14 business days from the date of the last applicable downgrade, the provider or guarantor will do one of the following: (i) collateralize the investment agreement with securities described in clauses (i) or (ii) of this definition, such that the value of the collateral pledged is not less than 105% of the principal balance, marked to market not less frequently than weekly, and the collateral is required to be held, free and clear of any lien, by the Issuer or an independent third party acting solely as agent for the Issuer; (ii) obtain a guaranty from an entity whose long term unsecured debt is rated at least "AA-" or "Aa3" by one or more Rating Agencies, or (iii) assign the investment agreement to a Qualified Bank which has capital and surplus in excess of $5.0 billion and whose unsecured, unenhanced long term debt is rated at least "AA-" or "Aa3" by one or more Rating Agencies. "Discretionary Communications Services Tax Revenues" means all amounts received by the Issuer from the tax (the "Discretionary Communications Services Tax") levied by the Issuer pursuant to the authority of Section 202.19, Florida Statutes, or any successor provision of law; on communications services. "Escrow Agent" means Wachovia Bank, National Association. "Escrow Deposit Agreement" means the Escrow Deposit Agreement, dated the date of delivery of the Series 2004 Bonds, between the Issuer and the Escrow Agent, in the form attached hereto as Exhibit F, with such changes as authorized hereby. "Event of Default" shall mean the occurrence of any event designated as such pursuant to Section 6.01 hereof. "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing through the next succeeding September 30, or such other period as may be prescribed by law as the fiscal year of the Issuer. "Fitch" means Fitch Ratings, 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. "Governing Body" shall mean the City Commission of the Issuer or its successor in function. "Insurer" shall mean such Person as shall be in the business of insuring or guaranteeing the payment of principal of and interest on municipal securities and with respect to any Series of Bonds, which shall have insured or guaranteed payment of the principal of or interest on such Bonds, and as to the Series 2004 Bonds, means MBIA Insurance Corporation. "Interest Payment Date" shall be such date or dates for the payment of interest on a Series of Bonds as shall be provided by Section 2.02 hereof or by Supplemental Resolution. "Issuer" shall mean the City of Boynton Beach, Florida. "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. 6 "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 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. "Outstanding" shall mean all Bonds which have been authenticated and delivered under this Resolution except, (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 2.15, 2.16 or 2.17 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 in any account of the Rebate Fund, and (ii) to the extent moneys on deposit in a subaccount of the Reserve Fund 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 Public Service Tax Revenues, the Discretionary Communications Services Tax Revenues and the Pledged Accounts. "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. "Public Service Tax Revenues" shall mean all amounts received by the Issuer pursuant to the tax (the "Public Service Tax") levied on the purchase within the geographic jurisdiction of the Issuer of electricity, metered natural gas, liquified petroleum gas either metered or bottled, manufactured gas either metered or bottled, water service and services competitive with the foregoing, pursuant to Section 166.231, Florida Statutes or any successor provision thereof. "Rating Agency" means any of Fitch, Moody's and S&P. "Rebate Fund" shall mean the Rebate Fund established pursuant to Section 4.06 hereof. "Refunded Bonds" means the Issuer's Public Service Tax Refunding Revenue Bonds, Series 1993 as shall be outstanding on the date of issuance of the Series 2004 Bonds. "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. "Reserve Fund" shall mean the fund of that name established pursuant to Section 4.03 hereof. "Reserve Fund Insurance Policy" shall mean an insurance policy deposited in the Reserve Fund in lieu of or in partial substitution for cash on deposit therein pursuant to Section 4.05(B). "Reserve Fund Letter of Credit" shall mean a Credit Facility (other than a Reserve Fund Insurance Policy) issued by any bank or national banking association, insurance company or other financial institution and then on deposit in the Reserve Fund in lieu of or in partial substitution for cash on deposit therein pursuant to Section 4.05(B) hereof. "Reserve Fund Requirement" shall mean, for a subaccount in the Reserve Fund, 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 all Series of Bonds to which such subaccount relates, (2) 125% of the average annual Debt Service Requirement for all Series of Bonds to which such subaccount relates calculated on a Fiscal Year basis as of the date of issuance of the most recently issued Series secured by such subaccount, or (3) the sum of 10% of the aggregate initial principal amount of each Series of Bonds to which such subaccount relates (unless the Code requires issue price to be used instead of initial principal amount, in which case, issue price shall be used). In computing the Reserve Fund 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. "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 or other provisions. "Series 2004 Bonds" shall mean the Issuer's Public Service Tax Revenue Bonds, Series 2004, authorized pursuant to Section 2.02 hereof. "Series 2004 Project" means various capital projects of the City described in the capital improvement plan of the City as may be approved by the Governing Body from time to time. "S&P" shall mean Standard and Poor's Ratings Services, 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 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 2004 Bonds or in accordance with the terms of Article VII hereof. "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. "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. [End of Article I] 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 "City of Boynton Beach, Florida, Public Service Tax 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. 10 SECTION 2.02. Authorization, Description and Terms of Series 2004 Bonds. A Series of Bonds entitled to the benefit, protection and security of this Resolution is hereby authorized in an aggregate principal amount not to exceed $19,000,000 for the principal purpose of paying the cost of the Series 2004 Project and refinancing the Refunded Bonds. Such Series shall be designated as, and shall be distinguished from the Bonds of all other Series by the title "City of Boynton Beach, Florida, Public Service Tax Revenue Bonds, Series 2004." The Series 2004 Bonds shall be issued as fully registered Bonds; shall be numbered consecutively from one upward in order of maturity preceded by the letter R; shall be in denominations of $5,000 and integral multiples thereof shall be dated, 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, payable semi-annually on the 1 st day of May and November of each year (the "Interest Payment Dates"), commencing November 1, 2004, shall have such redemption provisions and shall mature on November 1 of the years and in the amounts, as set forth in a certificate in the form attached hereto as Exhibit A signed by the Mayor or Vice-Mayor, and in the absence of the Mayor or Vice-Mayor, any other member of the City Commission or the City Manager, provided, however, that the arbitrage yield on the Series 2004 Bonds, as calculated for purposes of the Code, shall not exceed 5.00%. The Mayor or the Vice- Mayor and in the absence of the Mayor or Vice-Mayor, any other member of the City Commission or the City Manager are jointly and severally authorized to determine the details of the Series 2004 Bonds within the parameters set forth above, and upon such determination to execute a certificate it the form attached hereto as Exhibit A completed with the details of the Series 2004 Bonds, thereby establishing such details. The principal of and premium, if applicable, on the Series 2004 Bonds are payable when due upon presentation and surrender of the Series 2004 Bonds at the office of the Paying Agent. Interest payable on any Series 2004 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 15th 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 ~witten request and expense of any Holder of at least $500,000 in principal amount of Series 2004 Bonds (or of all Series 2004 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 2004 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, premium, if any, and interest on the Series 2004 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. Paying Agent and Registrar for Series 2004 Bonds. The Issuer hereby appoints Wachovia Bank, National Association as the Paying Agent and Registrar with respect to 11 the Series 2004 Bonds, and authorizes the Mayor or Vice-Mayor to execute a paying agent and registrar agreement between Wachovia Bank, National Association and the Issuer. SECTION 2.04. Award of the Series 2004 Bonds. The Issuer hereby determines that a negotiated sale of the Series 2004 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. Attached hereto as Exhibit B is a draft form of Bond Purchase Contract (the "Bond Purchase Contract") between the Issuer and Raymond James & Associates, Inc. (the "Original Purchaser"). Prior to execution of the Bond Purchase Contract, the Original Purchaser shall file with the Issuer the disclosures required by Section 218.385, Florida Statutes and competitive bidding for the Series 2004 Bonds is hereby waived pursuant to the authority of Section 218.385, Florida Statutes. Upon establishment of the terms of the Series 2004 Bonds, as described in Section 2.02 hereof, the Mayor or the Vice-Mayor, or in the absence of the Mayor or Vice-Mayor, any other member of the City Commission or the City Manager, are, jointly and severally, authorized to award the Series 2004 Bonds to the Original Purchaser, provided that the underwriting discount shall not exceed 0.311% of the principal amount of the Series 2004 Bonds. The Issuer approves the form of the Bond Purchase Contract and upon award of the Series 2004 Bonds, the Mayor or Vice-Mayor or in the absence of the Mayor or Vice-Mayor, any other member of the City Commission or the City Manager, are hereby jointly and severally authorized and directed for and in the name of the Issuer to execute and deliver the Bond Purchase Contract with such changes, alterations or corrections thereto as shall be approved by the Mayor or Vice-Mayor or in the absence of the Mayor or Vice- Mayor, any other member of the City Commission or the City Manager, executing the same, such execution to constitute conclusive evidence of such approval. SECTION 2.05. Official Statement for Series 2004 Bonds. The Issuer hereby approves the form and content of the draft Preliminary Official Statement relating to the Series 2004 Bonds attached hereto as Exhibit C, with such alterations as may be approved by the Mayor, the Vice- Mayor or the City Manager, and authorizes its use in connection with the sale of the Series 2004 Bonds. The Mayor, the Vice-Mayor or the City Manager are authorized to "deem final" the Preliminary Official Statement for purposes of Securities and Exchange Commission Rule 15c2-12. The preparation of a final Official Statement for the Series 2004 Bonds, which shall be in substantially the form of the Preliminary Official Statement, changed to reflect the terms of the Series 2004 Bonds and with such other changes, alterations and corrections therein as may be approved by the Mayor or Vice-Mayor, such approval to be conclusively established by such execution, is hereby authorized, and upon preparation thereof the Mayor, the Vice-Mayor or City Manager are jointly and severally authorized and directed for and in the name of the Issuer to execute and deliver the Official Statement, as hereby approved. SECTION 2.06. Book Entry System for Series 2004 Bonds. The Series 2004 Bonds shall be initially registered in the name of Cede & Co. ("Cede"), as nominee of The Depository Trust Company ("DTC"). Beneficial owners of the Series 2004 Bonds will not receive physical delivery of Series 2004 Bond certificates nor will they have a right to receive a certificate during the period that the Series 2004 Bonds are immobilized in the custody of DTC. 12 SECTION 2.07. Application of Series 2004 Bond Proceeds. Proceeds from the sale of the Series 2004 Bonds, including accrued interest, but excluding the cost of the Bond Insurance Policy and Reserve Fund Insurance Policy for the Series 2004 Bonds, which shall be paid by the Original Purchaser directly to the Insurer, shall be applied as follows: (a) An amount sufficient, together with other funds available for such purpose, to provide for the refinancing of the Refunded Bonds shall be deposited into the escrow deposit trust fund under the Escrow Agreement; and (b) The remaining amount received upon the sale of the Series 2004 Bonds shall be deposited in the Series 2004 Account of the Construction Fund. SECTION 2.08. Municipal Bond Insurance Provisions. Notwithstanding any provision to the contrary contained herein, the following provisions shall apply with respect to the Series 2004 Bonds: (a) In the event that, on the second Business Day prior to any Interest Payment Date on the Series 2004 Bonds, and again on the Business Day prior to any Interest Payment Date on the Series 2004 Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Series 2004 Bonds due on the second following or the following, as the case may be, Business Day, the Paying Agent shall promptly notify the Insurer or its designee (designated in writing to the Paying Agent) 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 the Insurer or its designee. (c) In addition, if the Paying Agent has written notice that any Holder has been required to disgorge any payment of principal or interest on any Series 2004 Bond pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Holder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify the Insurer or its designee (designated in writing to the Paying Agent) 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 Holders of the Series 2004 Bonds as follows: 1. If and to the extent there is a deficiency in amounts required to pay interest on the Series 2004 Bonds, the Paying Agent shall (a) execute and deliver to U.S. Bank Trust National Association, or its successors under the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment from the Insurance Paying 13 Agent with respect to the claims for interest so assigned and (c) disburse the same to such respective Holders; and 2. If and to the extent of a deficiency in amounts required to pay principal of the Series 2004 Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to the Insurer of any Series 2004 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 Holders (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 Holders. (e) Payments with respect to claims for interest on and principal of Series 2004 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 2004 Bonds, and the Insurer shall become the holder of such unpaid Series 2004 Bonds 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 the Insurer that: 1. they recognize that to the extent the Insurer makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Series 2004 Bonds, the Insurer will be subrogated to the rights of the Holders of such Series 2004 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 2004 Bonds, and 2. they will accordingly pay to the Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) 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 2004 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 2004 Bonds to the Holders, and will otherwise treat the Insurer as the holder of such rights to the amount of such principal and interest. (g) The Issuer shall notify the Insurer of the resignation or removal of the Paying Agent and the appointment of a successor thereto. 14 (h) The Issuer shall provide the Insurer with copies of all notices required to be delivered to Holders of the Series 2004 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 a copy of any amendment to this Resolution which amendment has been consented to by the Insurer. (j) Any notice that is required to be given to an Holder or to the Paying Agent pursuant to this Resolution shall also be provided to the Insurer. All notices required to be given to the Insurer pursuant to this Resolution shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504, Attention: Surveillance. (k) The Issuer agrees to reimburse the Insurer immediately and unconditionally upon demand, to the extent permitted by law, and only from Pledged Funds available for such purpose, for all reasonable expenses, including attorneys' fees and expenses, incurred by the Insurer in connection with (i) the enforcement by the Insurer of the Issuer's obligations, or the preservation or defense of any rights of the Insurer, under this Resolution and any other document executed in connection with the issuance of the Series 2004 Bonds, and (ii) any consent, amendment, waiver or other action with respect to the Resolution or any related document, whether or not granted or approved, together with interest on all such expenses from and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is less. In addition, the Insurer reserves the right to charge a fee in connection with its review of any such consent, amendment or waiver, whether or not granted or approved. (1) The Issuer agrees not to use the Insurer's name in any public document, other than this Resolution and the closing documents for the Series 2004 Bonds, including, without limitation, a press release or presentation, announcement or forum without the Insurer's prior consent. In the event the Issuer is advised by counsel that it has a legal obligation to disclose the Insurer's name in any press release, public announcement or other public document, the Issuer shall provide the Insurer with at least three (3) Business Days' prior written notice of its intent to use the Insurer's name together with a copy of the proposed use 0fthe Insurer's name and of any description of a transaction with the Insurer and shall obtain the Insurer's prior consent as to the form and substance of the proposed use of the Insurer's name and any such description. (m) The Issuer shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to which Series 2004 Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of the Series 2004 Bonds without the prior written consent of the Insurer. SECTION 2.09. Reserve Surety Provisions. Notwithstanding any provision to the contrary contained herein, the following provisions shall apply while MBIA Insurance Corporation has issued a Reserve Fund Insurance Policy in order to fund all or a portion of the Reserve Account Requirement for the Series 2004 Bonds: 15 (a) In the event that any subaccount of the Reserve Fund contains cash and one or more Reserve Account Insurance Policy(les) and/or Letter(s) of Credit, and the Issuer is required to mgke a transfer from such subaccount of the Reserve Fund to the Debt Service Fund, the Issuer shall first use such cash before making a drawing upon a Reserve Account Insurance Policy and/or Letter of Credit. (b) In the event a subaccount of the Reserve Fund contains more than one Reserve Account Insurance Policy and/or Letter of Credit, and the Issuer is required to make a drawing upon such Reserve Account Insurance Policy and/or Letter of Credit, the Issuer shall draw upon all Reserve Account Insurance Policies and/or Letters of Credit pro-rata, based upon the amount available under each Reserve Account Insurance Policy and/or Letter of Credit. (c) The Paying Agent shall deliver a demand for payment on any debt service reserve surety bond issued by MBIA Insurance Corporation at least three days (3) the date on which funds are to be provided to the Issuer. (d) Any Reserve Account Insurance Policy or Reserve Account Letter of Credit may only be issued by an insurance company or financial institution rated in the highest rating category by S&P and Moody's and, if rated, by A.M. Best and Company, in the highest rating category by A.M. Best and Company. (e) If at any time any amount is owing to MBIA Insurance Corporation as issuer of a Reserve Account Insurance Policy, there may be no optional redemption of Bonds. SECTION 2.10. Execution and Delivery_ of the Series 2004 Bonds. The Mayor and Clerk are hereby authorized and directed on behalf of the Issuer to execute the Series 2004 Bonds as provided herein, and such officials are hereby authorized and directed upon the execution of the Series 2004 Bonds in the form and manner set forth herein to deliver the Series 2004 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 2.11. Insurance Commitments. The Issuer accepts the Commitment for Municipal Bond Insurance and the COmmitment for Surety Bond, both dated April 5, 2004, of MBIA Insurance Corporation ("MBIA") attached hereto as Exhibits D and E, respectively. The Mayor, the Vice-Mayor and City Manager are jointly and severally authorized to execute, on behalf of the Issuer, the Guaranty Agreement attached to the Commitment for Surety Bond. SECTION 2.12. The Refunded Bonds and the Escrow Deposit Agreement. The Mayor, the Vice-Mayor and City Manager are jointly and severally authorized and directed for and in the name of the Issuer to execute and deliver the Escrow Deposit Agreement, in such form as shall be approved by the official executing the same consistent with this Resolution, such execution to constitute conclusive evidence of such approval. The Issuer hereby irrevocably elects, effective upon and only upon the issuance of the Series 2004 Bonds, that the Refunded Bonds shall be called for redemption on June 3, 2004, or such other 16 date as provided in the Escrow Deposit Agreement, at a price of 102% of par, plus accrued interest to the redemption date. The Issuer hereby appoints Causey Demgen & Moore as the independent certified public accountant to verify the calculations of the sufficiency of amounts to be deposited pursuant to the Escrow Deposit Agreement to pay the principal, premium and interest on the Refunded Bonds and to verify the calculations of the yield on the amounts invested pursuant to the Escrow Deposit Agreement, on the Refunded Bonds and on the Series 2004 Bonds SECTION 2.13. 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 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 2.14. 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 2.18 hereof. SECTION 2.15. Temporary Bonds. Until the definitive Bonds of any Series are prepared, the Issuer may execute, in the same manner as is provided in Section 2.13, and deliver, upon authentication by the Registrar pursuant to Section 2.14 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. 17 SECTION 2.16. Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and deliver, and the Registrar shall authenticate, a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of 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 2.16 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 2.17. Negotiabili _ty, 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 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, premium, if any, 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 18 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 15th day of the calendar month next preceding an Interest Payment Date for such Series, (b) following the 15th 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 or after 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 2.18. Form of Bonds. 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 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 UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF BOYNTON BEACH, FLORIDA PUBLIC SERVICE TAX REVENUE BOND, SERIES No. R Date of Interest Rate Maturity Date Original Issue CUSIP Registered Holder: Principal Amount: KNOW ALL MEN BY THESE PRESENTS, that the City of Boynton Beach, Florida (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 and 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 the 15th day (whether or not a Business Day) of the calendar month next preceding each interest payment date and shall be paid by a check or draft of 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 20 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 City of Boynton 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 ,20_ CITY OF BOYNTON BEACH, FLORIDA (SEAL) By. Mayor ATTESTED AND COUNTERSIGNED: Clerk 21 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 City Commission of the Issuer on __, 2004, as amended and supplemented (the "Resolution"), and is subject to all the terms and conditions of the Resolution. The principal of, a premium, if any, 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, premium, if any, 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 pow.er of the Issuer to the payment of such principal, premium or 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 (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; 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 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 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 STAMP, SEMP or MSP signature guaranty medallion program. NOTICE: The signature to this assigmnent 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 III 25 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 hereby or by a Supplemental Resolution adopted prior to the issuance of such Series of Bonds. The terms of this Article III shall apply to the redemption of Bonds to the extent not modified as to such Bonds 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 of a Series or maturity thereof are to be redeemed, the number (and, in the case of a partial redemption of any Bond, the principal amount) of each Bond of such Series or 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 26 (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 principal of, premium, if any, and 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 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] 27 ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 4.01. Bonds Not to be Indebtedness of Issuer. The Bonds shall not be or constitute general obligations or indebtedness of the Issuer 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. The Issuer may, as further provided herein, cause one or more Series of Bonds to be payable from one or more subaccounts in the Reserve Fund, or to not be secured by any subaccount in the Reserve Fund. 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. Securi _ty for Bonds. The payment of the principal of 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, premium, if any, and interest on the Bonds. Provided that if the Issuer is not in default in the performance of its obligations hereunder, the Issuer may use any Public Service Tax Revenues or Discretionary Communications Services Tax Revenues in excess of the amount necessary to be used to satisfy the Issuer's obligations hereunder for any lawful purpose of the Issuer. SECTION 4.03. Funds and Accounts. The Issuer covenants and agrees to establish with one or more Authorized Depositories the following separate funds: (1) "Construction Fund" (the "Construction Fund"), (2) "Debt Service Fund" (the "Debt Service Fund"), and (3) "Reserve Fund" (the "Reserve Fund"), and therein, a "2004 Subaccount" which shall jointly secure all Series of Bonds, unless under the provisions of the Supplemental Resolution(s) authorizing one or more Series of Bonds, such Series of Bonds is or are not to be secured by a subaccount in the Reserve Fund or is or are to be separately secured by a separate subaccount in the Reserve Fund, in which case a separate subaccount in the Reserve Fund may secure only such Series of Bonds. The Issuer shall at any time and from time to time appoint one or more Authorized Depositories to hold, for the benefit of the Issuer and/or the Bondholders, any one or more of the funds and accounts established hereby. Such depository or depositories shall perform at the direction of the Issuer the duties of the Issuer in depositing, transferring and disbursing moneys to and from 28 each of such funds and accounts as herein set forth, and all records of such depository 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 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) one or more subaccounts in the Reserve Fund, 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. Debt Service Fund; Reserve Fund. (A) Subject to Sections 4.01 and 4.02 hereof, the Issuer shall deposit into or credit to the Debt Service Fund amounts sufficient to provide for the payment of principal and interest due on the Bonds as the same shall become due and payable. Moneys in the Debt Service Fund shall be applied by the Issuer to pay the principal of and interest on the Bonds as and when the same shall become due and payable, or to reimburse a Credit Bank for amounts drawn for such purpose, and for no other purpose. Subject to Sections 4.01 and 4.02 hereof, the Issuer shall adjust the amount on deposit in the Debt Service Fund no later than the fifth (5th) day preceding any Interest Payment Date or principal payment date so as to provide sufficient moneys in the Debt Service Fund to pay the debt service on the Bonds becoming due on such Interest Payment Date or principal payment date. (B) If for any reason there shall be a deficiency in any subaccount of the Reserve Fund, subject to Section 4.01, 4.02 and 4.05(A) hereof, the Issuer shall deposit into or credit to each subaccount of the Reserve Fund such sum, if any, as will be sufficient to restore in not more than 12 months the funds on deposit therein to an amount equal to the Reserve Fund Requirement therefor, including the reinstatement of any Reserve Fund Insurance Policy or Reserve Fund Letter of Credit on deposit therein or the cash replacement thereof. In the event the amounts available for such 29 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 Fund in the same proportion that the Reserve Fund Requirement for each subaccount bears to the total Reserve Fund 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 Fund shall be applied by the Issuer to the payment of the principal of and interest on the Series of Bonds to which such subaccount relates to the extent moneys in the Debt Service Fund shall be insufficient for such purpose. Whenever upon valuation (see Section 4.07) of any subaccount of the Reserve Fund there shall be moneys in any subaccount of the Reserve Fund in excess of the Reserve Fund Requirement therefor, such excess moneys shall be deposited by the Issuer into the Debt Service Fund. Upon the issuance of any Series of Bonds, under the terms, limitations and conditions as herein provided, the Issuer may provide for the funding of a subaccount in the Reserve Fund in an amount equal to the Reserve Fund Requirement, if any, for such Series. Whenever moneys on deposit in a subaccount of the Reserve Fund, together with the 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, if any, of the Series of Bonds secured thereby, in lieu of the required deposits into a subaccount of the Reserve Fund, and/or in substitution for money on deposit in a subaccount of the Reserve Fund, the Issuer may, at its sole option and discretion, cause to be deposited a Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit in an amount equal to the difference between the Reserve Fund Requirement applicable thereto and the sums then on deposit in such subaccount of the Reserve Fund, if any, and, in the case of a substitution of a Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit for money on deposit in such subaccount of the Reserve Fund, the Issuer may withdraw money from such subaccount of the Reserve Fund in excess of the Reserve Fund 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 Fund Insurance Policy and/or Reserve Fund 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 five (5) days prior to any date on which principal or interest is due to be paid on the Bonds, 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 Fund Insurance Policy and/or the issuer of the Reserve Fund 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 of principal and interest due on such date. 30 Ifa disbursement is made from a Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit provided pursuant to this Section 4.05(B), the Issuer shall reinstate the maximum limits Of such Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit following such disbursement from moneys becoming available in the applicable subaccount of the Reserve Fund, 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 Fund equals the Reserve Fund Requirement therefor, the Issuer shall reimburse the issuer of the Reserve Fund Insurance Policy and/or the issuer of the Reserve Fund Letter of Credit for interest and all reasonable expenses incurred by such issuer in connection with the draw on such Reserve Fund Insurance Policy or the Reserve Fund Letter of Credit, as the case may be, if the Issuer is so obligated under the terms of the Reserve Fund Insurance Policy, or Reserve Fund Letter of Credit. The Issuer may evidence its obligation to reimburse the issuer of any Reserve Fund Letter of Credit or Reserve Fund Insurance Policy by executing and delivering to such issuer a promissory note or other written evidence thereof, provided, however, any such note or written evidence (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 Fund in accordance with the provisions of this Section 4.05(B). SECTION 4.06. Rebate Fund. There is hereby ordered established with an authorized depository a fund to be known as the "Rebate Fund" and therein an account to be known as the "Series 2004 Account." If so provided by Supplemental Resolution with respect to any Series of Bonds, the Issuer may establish a separate account in the Rebate Fund. Amounts on deposit in any account 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 Debt Service 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 5.12 hereof, including, but not limited to: (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 Pledged Funds 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 4.06 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 31 Issuer, the Issuer may use all or a portion of the amount on deposit in the Rebate Fund for any lawful purpose of the Issuer. SECTION 4.07. 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 Reserve Fund, Construction Fund, the Rebate Fund and the Debt Service Fund may be invested and reinvested in Authorized Investments maturing not later than the date on which the moneys therein will be needed. 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 Fund to the extent the amount therein is greater than the Reserve Fund Requirement shall be deposited in the Debt Service 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. All investments shall be valued at their fair market values. Amounts in the Reserve Fund shall be valued on each Interest Payment Date after the payments due on the Bonds on such date shall have been made. SECTION 4.08. Separate Accounts. The moneys required to be accounted for in each of the foregoing funds and accounts established herein may be deposited in a single bank account, and funds allocated to the various funds and accounts established herein may be invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein and such investments for the various purposes of such funds and accounts as herein provided. The designation and establishment of the various funds and accounts in and by this Resolution shall not be construed to require the establishment of any completely independent, self- balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to establish certain priorities for application of such revenues as herein provided. [End of Article IV] 32 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. 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 purpose permitted by law. No Additional Bonds 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) The Issuer shall certify that the amount of Public Service Tax Revenues and Discretionary Communications Services Tax Revenues adjusted as provided in Section 5.02(E) hereof for the 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, as the case may be, equals at least 1.25 times the Maximum Debt Service Requirement for all Outstanding Bonds and such Additional Bonds then proposed to be issued, and that no Event of Default has occurred, or if an Event of Default has occurred, 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 greater of (i) the actual rate of interest borne by such Variable Rate Bonds on the date of calculation and (ii) the lesser of (a) the Maximum Interest Rate applicable thereto and (b) the average of The Bond Buyer 20 Revenue Bond Index for a period of 52 consecutive weeks selected by the Issuer ending not more than sixty days prior to the date of issuance of such Variable Rate Bonds. In addition, in connection with the 33 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) If the Issuer, prior to the issuance of the proposed Additional Bonds but not prior to the beginning of such twelve consecutive months, shall have increased the rate at which the Public Service Tax and/or Discretionary Communications Services Tax shall be imposed, shall have expanded the geographic boundaries of the Issuer or shall have expanded the scope of purchases subject to the tax, the Public Service Tax Revenues and Discretionary Communications Services Tax, as applicable, for the twelve consecutive months shall be adjusted to show the Public Service Tax Revenues and Discretionary Communications Services Tax which would have been derived in such twelve consecutive months if such increased rate, expanded boundary or expanded scope had been in effect during all of such twelve consecutive months. (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 in whole or in part 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 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. Bond Anticipation Notes. The Issuer may issue notes in anticipation of the issuance of Bonds which shall have such terms and details and be secured in such manner, not inconsistent with this Resolution, as shall be provided by resolution of the Issuer. 34 SECTION 5.04. Accession of Subordinated Indebtedness to Pari _ty Status with Bonds. The Issuer may provide for the 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. Annual Budget. The Issuer shall annually prepare and adopt an Annual Budget in accordance with applicable law. The Issuer shall mail copies of such Annual Budgets and amended Annual Budgets to any Holder who shall file an address with the Clerk and request in writing that copies of all such Annual Budgets be furnished to such Holder. The Issuer shall be permitted to make a reasonable charge for furnishing to any Holder such Annual Budgets. SECTION 5.06. Public Service Tax and Discretionary_ Communications Services Tax. The Issuer covenants to continue to impose the Public Service Tax and Discretionary Communications Services Tax while any of the Bonds shall be Outstanding and that it will not take any action or fail to take any action that might result in a suspension or termination of the receipt of the Public Service Tax Revenues or Discretionary Communications Services Tax; that it will take all appropriate action to keep and maintain the Public Service Tax Revenues and Discretionary Communications Services Tax Revenues at levels sufficient to enable it to perform its obligations hereunder and, to the extent necessary, to levy and impose a Public Service Tax and Discretionary Communications Services Tax at a rate, up to the maximum lawful rate, on all or such purchases as shall be permitted by law, in order to enable the Issuer to fulfill its obligations hereunder. SECTION 5.07. Books and Records. The Issuer will keep books, records and accounts of the receipt of 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 year after the close of each Fiscal Year it will cause to be prepared and 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 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 5.08. Annual Audit. The Issuer shall, within one year 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. 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 35 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 5.09. 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 revision of the Public Service Tax and/or Discretionary Communications Services Tax if such reduction or revision will not result in a violation of Section 5.06 hereof. SECTION 5.10. Special Covenants Relating to Reserve Fund Insurance Policy or Reserve Fund Letter of Credit. (A) The Issuer shall annually submit to the issuer of the Reserve Fund Insurance Policy and/or the Reserve Fund Letter of Credit, records of withdrawals on such Reserve Fund Insurance Policy or such Reserve Fund Letter of Credit, as the case may be, received by the Paying Agent and remaining unreimbursed, 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 Fund Insurance Policy or such Reserve Fund Letter of Credit, as the case may be. (B) The Issuer hereby acknowledges that the issuer of the Reserve Fund Insurance Policy and/or the Reserve Fund Letter of Credit shall be deemed a third-party beneficiary of this 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 Fund Insurance Policy or such Reserve Fund Letter of Credit, as the case may be. SECTION 5.11. 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 5.12. 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 36 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(0(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"); (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 any action that would prevent, and to 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 5.12 shall not apply to any Taxable Bonds. SECTION 5.13. 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 37 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 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 retumed 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 5.14. Enfomement of Public Service Tax and Discretionary Communications Services Tax. The Issuer shall compel the prompt payment of the Public Service Tax and Discretionary Communications Services Tax and will vigorously enforce all of the provisions of any ordinance or resolution of the Issuer relating to the Public Service Tax and Discretionary Communications Services Tax. SECTION 5.15. Continuing Disclosure Compliance. The Issuer hereby covenants and agrees that, so long as any of the Series 2004 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 municipal securities information repository ("NRMSIR") and to the appropriate depository designated by the State of Florida ("SID") if any, (i) on or before one year after each fiscal year end, financial information and operating data of the Issuer for such fiscal year of the type included in the Official Statement for the Series 2004 Bonds, including, but not necessarily limited to the operating data contained under the caption "SECURITY AND SOURCES OF PAYMENT-The Public Service Tax and The Discretionary Communications Services Tax" 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 2004 Bonds, if material: (i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) adverse tax opinions, or events affecting the tax-exempt status of the security; (vi) modifications to rights of security holders; (vii) any call of the Series 2004 Bonds for redemption other than mandatory sinking fund redemptions of Term Bonds; (viii) defeasances; (ix) release, substitution, or sale of property securing the repayment of the securities; (x) substitution of credit or liquidity providers, or their failure to perform; (xi) rating changes; (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 Original Purchaser of the Series 2004 Bonds. The Paying Agent shall 38 provide such information to any requesting Bondholder of the Series 2004 Bonds and any requesting 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 2004 Bondholders and the Beneficial Owners. However, failure to meet the covenants set forth in this Section 5.15 shall not be deemed to constitute an Event of Default or a breach of any other covenant under this Resolution or any Supplemental Resolution and the sole remedy for such a default or breach shall be as described in the next paragraph. The Bondholder of any Series 2004 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 5.15 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 2004 bonds. Notwithstanding any other provision of this Resolution, this Section 5.15 may be amended only as follows: (a) the amendment 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 5.15, 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 2004 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 2004 Bondholders and/or Beneficial Owners as determined by an opinion of Bond Counsel delivered to the Issuer, or by approving vote of the Beneficial Owners of the Series 2004 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. [End of Article V] 39 ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01. Events of Default. The following events shall each constitute an Event of Default hereunder: due. (A) Default shall be made in the payment of the principal of or interest on any Bond when (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 5.15 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. 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. Subject to Section 6.07 hereof, upon the occurrence of an Event of Default, the Holders of not less than a majority in aggregate principal amount 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 not less than a majority in aggregate principal amount 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 40 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 a mai ority 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. The Holders of not less than 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 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 (if not the Issuer) hereunder; and (B) To the payment of the principal of, premium, if any, and interest 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: 41 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 THIRD: to the payment of the principal of and premium, if any, 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. Control by Insurer or Credit Bank. 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] 42 ARTICLE VII SUPPLEMENTAL RESOLUTIONS SECTION 7.01. Supplemental Resolution Without Bondholders' Consent. Except as provided herein, 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 any matters and things relative to such Bonds which are not contrary to or inconsistent with this Resolution as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination. (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 of Bonds or to preserve the tax-exempt status of Bonds. (J) To make amendments permitted by Section 5.15 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. 43 Except Supplemental Resolutions described in subsections (E), (F), (H) and (J) of this Section 7.01 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 5.15 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. Except with the consent of the Holders of all Bonds Outstanding so affected by such Supplemental Resolution, 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 any redemption premium or the rate of interest thereon, (C) the creation ora 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 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 the required percentage 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 44 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 the required percentage 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. Amendment with Consent of Insurer and/or Credit Bank 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 the Credit Bank or Credit Banks, as applicable, are not in default, 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 Policy 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 5.12 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. 45 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] 46 ARTICLE VIII MISCELLANEOUS SECTION 8.01. Defeasance. If the Issuer shall pay or cause to be paid or there shall otherwise be paid to the Holders of all Bonds the principal, premium, if any, 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 non-callable Defeasance Obligations 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, premium, if any, 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 Defeasance Obligations 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, premium, if any, or interest on said Defeasance Obligations 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 and, premium, if any, 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 Defeasance Obligations and moneys for the deposited Defeasance Obligations and moneys if the new Defeasance Obligations and moneys are sufficient to pay the principal of, premium, if any, and interest on such Bonds, and any trust agreement governing the deposit of such Defeasance Obligations 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. 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 Defeasance Obligations 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 Defeasance Obligations 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, 47 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 Defeasance Obligations 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, premium, if any, and interest on said Bonds, provided, however, that a failure to mail such notice shall not prevent the defeasance of such 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, premium, if any, 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 Fund Letter of Credit or Reserve Fund 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. SECTION 8.02. Capital Appreciation Bonds. For the purposes of (A) receiving payment of the redemption price if a Capital Appreciation Bond is redeemed prior to maturity, or (B) receiving payment of a Capital Appreciation Bond upon an Event of Default, or (C) computing the amount of Bonds held by the Holder ora Capital Appreciation Bond for purposes of 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, 48 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 Beneficiaries. 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 Bonds. The Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the Act, the requirements of this Resolution and other applicable provisions of law. SECTION 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 Headings 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. 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 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 8.11. upon its passage. Effective Date. This Resolution shall become effective immediately 49 PASSED AND ADOPTED THIS 7th DAY OF APRIL, 2004. (SEAL) ATTEST: CITY OF BOYNTON BEACH, FLORIDA Commissioner APPROVED AS/,T-~ FORM AND Lff/~. tL ILIF//I]ICIENC Y: By: ~ 50 EXHIBIT A Terms of the Series 2004 Bonds (a) Dated Date: (b) Amounts, Maturities and Interest Rates: Maturity Amount ( 1) Interest Rate $ % (c) Optional Redemption. The Series 2004 Bonds maturing prior to 1, __ are not subject to optional redemption prior to maturity. The Series 2004 Bonds maturing on or after 1, are subject to redemption prior to maturity, at the option of the City, from any funds legally available for such purpose, on or after 1, __, in whole or in part on any date, and if in part in any order of maturity selected by the City, and by lot within a maturity if less than an entire maturity is to be redeemed, at the redemption prices (expressed as percentages of the principal amount of the Series 2004 Bonds to be redeemed) set forth in the table below, plus accrued interest to the redemption date: Redemption Dates (Inclusive) 1, __ through , __ 1, __ through , __ , __ and thereafter Prices Redemption % % % (d) Mandatory_ Redemption. The Series 2004 Bonds maturing on 1, __ (the "__ Term Bonds") are subject to mandatory redemption in part, on 1, __, and on each __ thereafter in the years and in the amounts set forth below (except for the final amount due at maturity, which shall not be a redemption), at a price equal to 100% of the principal amount of the Series 2004 Bonds being redeemed, plus accrued interest to the redemption date: A-1 TERM BONDS Year Amount (Maturity) The Series 2004 Bonds maturing on 1, ~ (the "__ Term Bonds") are subject to mandatory redemption in part, on 1, ~, and on each October__ thereafter in the years and in the amounts set forth below (except for the final amount due at maturity, which shall not be a redemption), at a price equal to 100% of the principal amount of the Series 2004 Bonds being redeemed, plus accrued interest to the redemption date: TERM BONDS Year Amount (Maturity) If prior to any 1 the City shall purchase for cancellation or redeem __ Term Bonds or__ Terms Bonds in excess of the aggregate mandatory redemption requirement for such ~ Term Bonds or __ Terms Bonds to but not including such __, such excess of Term Bonds so purchased or redeemed and not previously applied as a credit pursuant to this paragraph 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 or Terms 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 or Terms Bonds subject to mandatory redemption on a particular 1 after the selection of__ Term Bonds or Terms Bonds to be redeemed on such date has been made. A-2 The above-terms of the City of Boynton Beach Public Service Tax Revenue Refunding Bonds, Series 2004 are hereby approved pursuant to Resolution No. of the City Commission. City of Boynton Beach, Florida By: Its Date: A-3 EXHIBIT B BOND PURCHASE CONTRACT B-1 CITY OF BOYNTON BEACH, FLORIDA $ City of Boynton Beach, Florida Public Service Tax Revenue Bonds, Series 2004 BOND PURCHASE CONTRACT On April __, 2004 Raymond James & Associates, Inc. (hereinafter referred to as the "Underwriter"), offers to enter into this Bond Purchase Contract, dated April__, 2004 (the "Purchase Contract") with the City of Boynton Beach, Florida (the "Issuer"). This offer of the Underwriter shall, unless accepted by the Issuer, expire at 11:59 P.M., prevailing time within the jurisdiction of the Issuer on the date hereof, unless previously withdrawn or extended in writing by the Underwriter. Upon execution and delivery of this Purchase Contract, it shall be binding upon the Issuer and the Underwriter. Any word not conventionally capitalized and not defined herein shall have the meaning indicated in the Official Statement (hereinafter defined). 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the Issuer and the Issuer hereby agrees to sell and deliver to the Underwriter, all (but not less than all) of the Issuer's $ aggregate principal amount of Public Service Tax Revenue Bonds, Series 2004 (the "Bonds"). The Bonds shall be dated the date of the payment for and delivery of the Bonds pursuant to Section 6 hereof (the "Closing Date") (such payment and delivery and the other actions contemplated hereby to take place at the time of such payment and delivery being hereinafter referred to as the "Closing"), and shall have the maturities, shall bear interest at the rates, payable on such dates, and shall be subject to redemption as provided in Exhibit A, attached hereto. The purchase price for the Bonds shall be $ (representing $ in aggregate principal amount, less $ as Underwriter's discount and less $ as net original issue discount). The Preliminary Official Statement of the Issuer relating to the Bonds, dated April __, 2004, including the cover page and Appendices thereto (the "Preliminary Official Statement"), as amended to conform to the terms of this Purchase Contract and with such changes and amendments made by the Issuer as shall be approved by the Underwriter, and as finally printed, is hereinafter referred to as the "Official Statement." The Issuer is proposing to issue $ of debt for the purpose of refunding all of the Issuer's outstanding Public Service Tax Refunding Revenue Bonds, Series 1993 and financing certain capital expenditures of the Issuer. This debt is expected to be repaid over a period of approximately __ years. At a true interest cost of % per annum, total interest paid over the life of the debt will be $ The source of repayment or security for this proposal is the Pledged Funds. Authorizing this debt will result in an average of approximately $ of the Issuer's Pledged Funds that would currently be available not being available to finance the other services of the Issuer each year for __ years. 2. The Bonds. The Bonds shall be as described in Exhibit A, and shall be issued and secured under the provisions of, Resolution No. __ duly adopted by the City Commission of the Issuer (the "Resolution"). 3. Offering. It shall be a condition to the Issuer's obligations to sell and to deliver the Bonds to the Underwriter, and to the Underwriter's obligation to purchase, accept delivery of and pay for the Bonds, that the entire $ principal amount of the Bonds be issued, sold and delivered by the Issuer and purchased, accepted and paid for by the Underwriter at the Closing. 4. Use of Documents. The Issuer hereby authorizes the use by the Underwriter of the Resolution, the Official Statement (including any supplements or amendments thereto), and any other documents related to the transactions contemplated in the Official Statement, in connection with the offering and sale of the Bonds. The Issuer ratifies and approves the use by the Underwriter prior to the date hereof of the Preliminary Official Statement in connection with the offering of the Bonds. 5. Representations, Warranties and Agreements. The Issuer hereby represents, warrants and agrees as follows: (a) The Issuer is and will be at the date of Closing duly organized and validly existing as a municipality pursuant to the laws of the State of Florida; (b) The Issuer has full legal right, power and authority to: (i) enter into this Purchase Contract and the Escrow Deposit Agreement (ii) adopt the Resolution, (iii) sell, issue and deliver the Bonds to the Underwriter as provided herein, and (iv) carry out and consummate the transactions contemplated by this Purchase Contract, the Escrow Deposit Agreement, the Resolution and the Official Statement, and the Issuer has complied, and at the Closing will be in compliance, in all respects with the terms of the Act and with its obligations in connection with the issuance of the Bonds contained in the Resolution, the Bonds, the Escrow Deposit Agreement and this Purchase Contract; (c) By all necessary official action, the Issuer has duly adopted the Resolution, has duly ratified and approved the prior distribution of the Preliminary Official Statement, has duly authorized and approved the execution and delivery of the Official Statement, has duly authorized and approved the execution and delivery of, and the performance by the Issuer of the obligations on its part in connection with the issuance of the Bonds contained in the Bonds, the Resolution, the Escrow Deposit Agreement and this Purchase Contract and the consummation by it of all other transactions contemplated by this Purchase Contract and the Official Statement in connection with the issuance of the Bonds; the Resolution constitutes a legal, valid and binding obligation of the Issuer, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, and similar laws affecting creditors' rights and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law); and the Bonds, when issued, authenticated and delivered to the Underwriter in accordance with the Resolution and this Purchase Contract, xyill constitute legal, valid and binding special obligations (as described in the Resolution) of the Issuer, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law); 2 (d) The Issuer is not in material breach of or material default under any applicable provision of the Act or administrative regulation of the State of Florida (the "State") or any constitutional provision, statute or administrative regulation of the United States of America, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, or material resolution, agreement, or other instrument to which the Issuer is a party or to which the Issuer or any of its property or assets is otherwise subject, and to the best of its knowledge no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and the execution and delivery of the Bonds, the Escrow Deposit Agreement and this Purchase Contract, and the adoption of the Resolution, and compliance with the provisions on the Issuer's part contained herein or therein, will not conflict with or constitute a breach of or default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement, or other instrument to which the Issuer is a party or to which the Issuer or any of its property or assets is otherwise subject, nor will any such execution, delivery, adoption, or compliance result in the creation or imposition of any lien, charge, or other security interest or encumbrance of any nature whatsoever upon any of its property or assets or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Resolution; (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the Issuer, of its obligations in connection with the issuance of the Bonds under the Resolution have been duly obtained, except for such approvals, consents and orders as may be required under the legal investment laws or Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; (f) The descriptions of the Bonds, the Escrow Deposit Agreement and the Resolution in the Official Statement conform in all material respects to the Bonds, the Escrow Deposit Agreement and the Resolution; (g) The Bonds, when issued, executed and delivered in accordance with the Resolution and sold to the Underwxiter as provided herein, will be validly issued and outstanding obligations of the Issuer payable in accordance with the Resolution, entitled to the benefits of the Resolution; and upon such issuance, execution and delivery of the Bonds, the Resolution will provide, for the benefit of the Bondholders, a legally valid and binding pledge of the Pledged Funds (to the extent described in the Official Statement) subject only to the provisions of the Resolution permitting the application of the Pledged Funds on the terms and conditions set forth in the Resolution; (h) Except as may be described in the Official Statement, 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, to the best knowledge of the officials of the Issuer executing this Purchase Contract, threatened against the Issuer, (A) affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the collection of Public Service Tax Revenues or Discretionary Communications Services Tax Revenues or the pledge of Pledged Funds pursuant to the Resolution, or 03) contesting or affecting as to the Issuer the validity or enforceability of the Act or any action of the Issuer in any respect relating to authorization for the issuance of the Bonds, the Resolution, the Escrow Deposit Agreement or this Purchase Contract or (C) contesting the federal or State tax status of the Bonds (as described in the Official Statement), the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, the powers of the Issuer or any authority for the issuance of the Bonds, the adoption of the Resolution, the execution and delivery of the Issuer of this Purchase Contract or the completion of the Series 2004 Project or (D) which may result in a material adverse change in the financial condition of the Issuer; (i) The Issuer will furnish such normal information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order to (i) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and (ii) determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and the Issuer will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the Issuer shall not be required to execute a general or special consent to service of process or to qualify to do business in connection with any such qualification or determination in any jurisdiction; (j) At the time of preparation of the Official Statement and (unless an event occurs of the nature described in paragraph (1) of this Section 6) at all times subsequent thereto up to and including the Closing Date, the Official Statement will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (k) If the Official Statement is supplemented or amended pursuant to subsection (1) of this Section 5, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the Closing Date, the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or 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; and (1) If between the date of this Purchase Contract and the earlier of(i) ninety (90) days from the end of the "Underwriting Period" as defined in Securities Exchange Commission Rule 15c2-12 (17 CFR 240.15c2-12) ("Rule 15c2-12") or (ii) the time when the Official Statement is available to any person from a nationally recognized municipal securities information repository (but in no event less than twenty-five (25) days following the end of the Underwriting Period), any event shall occur, of which the Issuer has actual knowledge, which in the Issuer's judgment might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit 4 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 Issuer shall notify the Underwriter thereof, and, if in the opinion of the Underwriter or the Issuer such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Issuer will at its expense (unless such event is a result of information provided in writing by the Underwriter in which case it shall be at the expense of the Underwriter, or unless another party shall agree or be required to bear the expense of such supplement or amendment) supplement or amend the Official Statement in a form and in a manner approved by the Underwriter. The end of the Underwriting Period shall be deemed to be the Closing Date unless on or before the Closing Date the Underwriter otherwise notify the Issuer in writing, and in such event, the Underwriter will notify the Issuer in writing when the end of the Underwriting Period occurs, (m) The Issuer has previously delivered to the Underwriter for review copies of the Preliminary Official Statement. As of its date, the Preliminary Official Statement was deemed final by the Issuer for purposes of Rule 15c2-12. The Issuer shall provide to the Underwriter, within a sufficient time period for the final Official Statements to accompany confirmations delivered by the Underwriter to potential investors in accordance with the rules of the Municipal Securities Rulemaking Board ("MSRB"), but in no event later than seven (7) business days following the date hereof, a quantity of Official Statements adequate to enable the Underwriter to meet the continuing obligations imposed on it by Rule 15c2-12 and the rules of the MSRB. This covenant shall survive the Closing. (n) Since September 30, 2003, no material and adverse change has occurred in the financial position or results of operations of the Issuer as reported in the Issuer's Financial Statements for the year ended September 30, 2003 included in the Preliminary Official Statement as Appendix B, except as set forth in or contemplated by the Official Statement. (o) The Issuer has not, since December 31, 1975, been in default as to principal or interest with respect to any obligation, issued or guaranteed by the Issuer except as disclosed in the Official Statement. (p) The Issuer is lawfully empowered to pledge and grant a lien upon the Pledged Funds for payment of the principal of and interest on the Bonds. (q) The Issuer will not take or omit to take any action, which action or omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner contrary to that provided for in the Resolution and as described in the Official Statement. (r) The Preliminary Official Statement was, as of its date, deemed "final" for purposes of the Rule, except for "permitted omissions" as therein defined by an official or officials of the Issuer who was or were theretofore authorized to make such certification. (t) The representations, warranties and agreements of the Issuer contained herein shall be true and correct and complied with as of the date hereof, as of the date of the Closing, and as if made on the date of Closing. 5 (u) Other than as disclosed in the Preliminary Official Statement and Official Statement, the Issuer has never failed to comply Mth any agreement to provide continuing disclosure information pursuant to the Rule. 6. Closing. At 10:00 a.m. prevailing time within the jurisdiction of the Issuer, on April 29, 2004, or at such earlier or later time as may be mutually agreed upon by the Issuer and the Underwriter, the Issuer will, subject to the terms and conditions hereof, deliver to the Underwriter the Bonds together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section I hereof, in immediately available funds to the order of the Issuer. Delivery shall be made through the book-entry system maintained by The Depository Trust Company and described in the Official Statement. The Bonds will be delivered no later than 24 hours prior to the Closing to the offices of The Depository Trust Company in New York, New York, or the Paying Agent under the "FAST" procedure, in typewritten fully registered form, bearing CUSIP numbers and with one certificate for each maturity of each series of the Bonds in the entire principal amount of such maturity, registered in the name of Cede & Co. 7. Closing Conditions. The Underwriter has entered into this Purchase Contract in reliance upon the representations and warranties of the Issuer contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Issuer of its obligations hereunder, both as of the date hereof and as of the Closing Date. Accordingly, the Underwriter's obligation under this Purchase Contract to purchase, to accept delivery of and to pay for the Bonds are conditioned upon the performance by the Issuer of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and are also subject to the following additional conditions: (a) The representations and warranties of the Issuer contained herein shall be true, complete and correct on the date hereof and on and as of the Closing Date, as if made on the Closing Date; (b) At the time of the Closing, the Resolution shall be in full force and effect in accordance with its terms and shall not have been amended, modified or supplemented, and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriter; (c) At the time of the Closing, all necessary official action of the Issuer and the other parties thereto relating to this Purchase Contract, the Escrow Deposit Agreement and the Bonds shall be in full force and effect in accordance with their respective terms and shall not have been amended, modified or supplemented in any material respect, except in each case as may have been agreed to by the Underwriter; and (d) At or prior to the Closing, the Underwriter shall have received copies of each of the following documents: (1) The Official Statement and each supplement or amendment, if any, thereto, executed on behalf of the Issuer; 6 (2) The Resolution certified by the City Clerk under seal as having been duly adopted by the Board and as being in effect; (3) The opinion, dated the date of the Closing and addressed to the Issuer, of Moyle, Flanigan, Katz, Raymond & Sheehan, P.A., bond counsel to the Issuer ("Bond Counsel"), in substantially the form included in the Official Statement as Appendix D, together with a letter of such counsel, dated the Closing Date and addressed to the Underwriter, to the effect that the foregoing opinion addressed to the Issuer may be relied upon by the Underwriter to the same extent as if such opinions were addressed to them; (4) The opinion(s), dated the date of the Closing and addressed to the Underwriter, of Bond Counsel to the effect that (i) the 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; and (ii) it has reviewed the portions of the Official Statement captioned "The Series 2004 Bonds" and "Security and Sources of Payment" (excluding the portions thereof describing the Reserve Account Surety Bond) and believes that, insofar as such statements constitutes summaries of the Resolution, such statements constitute fair and accurate summaries of the portions of the Resolution purported to be summarized, and (iii) the statements made in the Official Statement under the caption "TAX EXEMPTION" are accurate, and (iv) any the lien on Pledged Funds securing payment of the Refunded Bonds has terminated. (5) The opinion, dated the Closing Date and addressed to the Underwriter and Bond Counsel of the City Attorney to the Issuer, in form and substance acceptable to Bond Counsel and the Underwriter. (6) An opinion, dated the date of the Closing and addressed to the Issuer and the Underwriter ofMoyle, Flanigan, Katz, Raymond & Sheehan, P.A., disclosure counsel for the Issuer, in form and substance satisfactory to the Issuer and the Underwriter; (7) A certificate, dated the date of Closing, signed by the Mayor, to the effect that, to the best of the signer's knowledge: (i) the representations of the Issuer herein are true and correct in all material respects as if made on the date of Closing; and (ii) the Issuer has performed all obligations to be performed hereunder as of the date of Closing; (8) A policy of municipal bond insurance (the "Policy") and a debt service reserve surety bond issued by MBIA Insurance Corporation insuring the payment of debt service on the Bonds; (9) Letters from Standard and Poor's Ratings Services and Moody's Investors Service indicating that the Bonds have been rated AAA and Aaa, respectively based upon the Policy, and A and A2, respectively without regard to the Policy; and (10) The executed Escrow Deposit Agreement; and (11) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the Issuer's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Issuer on or prior to the date of the Closing of all the agreements then to be performed and conditions then to be satisfied by it. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Underwriter, such satisfaction to be evidenced by the Underwriter's purchase of the Bonds. If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Contract (unless waived by the Underwriter), or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter nor the Issuer shall be under any further obligation hereunder, except that the respective obligations of the Issuer and the Underwriter set forth in Section 9 hereof shall continue in full force and effect. 8. Termination. The Underwriter shall have the right to terminate the Underwriter's obligations under this Purchase Contract to purchase, to accept delivery of and to pay for the Bonds by notifying the Issuer of its election to do so if, after the execution hereof and prior to the Closing; (i) legislation shall have been introduced in or enacted by Congress of the United States or enacted by the State of Florida, or legislation pending in the Congress of the United States shall have been amended, or legislation shall have been recommended to the Congress of the United States or otherw'ise endorsed for passage (by press release, other form of notice or otherwise) by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation shall have been proposed for consideration by either such Committee, by any member thereof or presented as an option for consideration by either such Committee, by the staff of such Committee or by the staff of the Joint Committee on Taxation of the Congress of the United States, or legislation shall have been favorably reported for passage to either House of Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or a decision shall have been rendered by a court' of the United States or the State of Florida, including the Tax Court of the United States, or a ruling shall have been made or a regulation shall have been proposed or made or a press release or other form of notice shall have been issued by the Treasury Department of the United States, or the Internal Revenue Service or other Federal or State of Florida authority, with respect to Federal or State of Florida taxation upon gross revenues derived by the Issuer from the System, or upon interest on obligations of the general character of the Bonds, which (a) may have the purpose or effect, directly or indirectly, of affecting the tax status of the Issuer, its securities (including the Bonds) or the interest thereon, or any applicable tax exemption granted or authorized by the State of Florida and, which in the reasonable opinion of the Underwriter, materially affects adversely the market for the Bonds, or the market price generally of obligations of the general character of the Bonds or (b) which in the reasonable opinion of the Underwriter, materially affects adversely the market for the Bonds, or the market price generally of obligations of the general character of the Bonds; or (ii) the United States shall have become engaged in hostilities, or such hostilities have accelerated or changed in nature, or a national emergency or other national or international calamity shall have occurred or accelerated, to such an extent as, in the reasonable opinion of the Underwriter, materially affects adversely the market for the Bonds, or the market price generally of obligations of the general character of the Bonds; or (iii) there shall have occurred a general suspension of trading on the New York Stock Exchange or the declaration of a general banking moratorium by United States, New York State or State of Florida authorities; or (iv) an event described in paragraph (1) of Section 5 hereof shall have occurred which in the reasonable opinion of the Underwriter requires the preparation and publication of a supplement or amendment to the Official Statement provided, however, that this clause (iv) shall not apply if the Bonds are to be insured and, after having been furnished a copy of such amendment, the insurer shall confirm its commitment to insure the Bonds, unless, in the opinion of the Underwriter, the matters disclosed in such supplement or amendment adversely affect the marketability of the Bonds or the market price thereof; (v) any rating of the Issuer's bonds shall have been downgraded or withdrawn and such action, in the reasonable opinion of the Underwriter, will materially adversely affect the marketability of the Bonds or the market price thereof, or (vi) there has been an adverse change in the financial position, results of operations or condition, financial or otherwise, of the Issuer since the date of the Official Statement and is not disclosed in the Official Statement, other than in the ordinary course of its business, provided, however, that this clause (vi) shall not apply if the Bonds are to be insured and, after having been furnished with the information in appropriate form to describe such adverse change, the insurer shall confirm its commitment to insure the Bonds, unless, notwithstanding such commitment, such change shall in the opinion of the Underwriter materially adversely affect the marketability of the Bonds or the market price thereof. 9. Expenses. (a) The Underwriter shall be under no obligation to pay any expense incident to the performance of the Issuer's obligations hereunder including, but not limited to: (i) the cost of preparation, printing and delivery of the Resolution, the Escrow Deposit Agreement, the Preliminary Official Statement and the Official Statement in reasonable quantities (but in no event less than as may be required by Section 5(n) hereof); (ii) the cost of preparation, printing and delivery of any supplements and amendments (unless such supplement or amendment is necessitated by information previously provided by the Underwriter in writing, in which case it shall be at the expense of the Underwriter) to the Official Statement; (iii) the cost of preparation and printing of the Bonds; (iv) the fees and disbursements of bond counsel, disclosure counsel and counsel to the Issuer; (v) the fees and disbursements of any other engineers, accountants, verification agents, and other experts, consultants or advisors, 9 including the financial advisor, retained by the Issuer; (vi) any fees for bond ratings and bond insurance; and (vii) the fees and expenses of the Escrow Agent, Paying Agent and the Registrar, and of their respective counsel, if any. (b) The Underwriter shall pay: (i) the cost of preparation and printing of this Purchase Contract; and (ii) all other expenses incurred by it in connection with the public offering of the Bonds, including the fees and disbursements of counsel retained by them and any blue sky filing fees. 10. Notices. Any notice or other communication to be given to the Issuer under this Purchase Contract may be given by delivering the same in writing to City Manager, City of Boynton Beach, Florida, 100 East Boynton Beach Boulevard, Boynton Beach, Florida 33435, and any notice or other communication to be given to the Underwriter under this Purchase Contract may be given by delivering the same in writing to Raymond James & Associates, Inc.880 Carillon Parkway, 3rd Floor, St. Petersburg, Florida 33733. 11. Parties In Interest. This Purchase Contract is made solely for the benefit of the Issuer and the Underwriter and no other person shall acquire or have any right hereunder or by virtue hereof. All of the Issuer's representations, warranties and agreements contained in this Purchase Contract shall remain operative and in full force and effect, regardless of: (i) any investigations made by or on behalf of the Underwriter and (ii) delivery of and payment for the Bonds pursuant to this Purchase Contract. 12. Effectiveness: This Purchase Contract shall become effective upon the execution by the undersigned officials of the Issuer and shall be valid and enforceable at the time of such acceptance. To the extent of any conflict between the provisions of this Purchase Contract and any prior contract between the parties hereto, the provisions of this Purchase Contract shall govern. 13. Headings: The headings of the sections of this Purchase Contract are inserted for convenience only and shall not be deemed to be a part hereof. RAYMOND JAMES & ASSOCIATES, INC. By: Its Authorized Signatory City of BOYNTON BEACH, FLORIDA By: Its Mayor 10 EXHIBIT A Terms of Bonds A-1 EXHIBIT C PRELIMINARY OFFICIAL STATEMENT C-1 CITY OF BOYNTON BEACH, FLORIDA 100 East Boynton Beach Boulevard Boynton Beach, Florida 33425 Telephone: 561-375-6000 CITY COMMISSION Gerald Taylor, Mayor Bob Ensler, Vice Mayor Muir C. Ferguson, Commissioner Mack McCray, Commissioner Carl McKoy, Commissioner CITY OFFICIALS Kurt Bressner, City Manager Diane Reese, Finance Director Janet Prainito, City Clerk CITY ATTORNEY James Cherof Goren, Cherof, Doody & Ezrol, P.A. Fort Lauderdale, Florida BOND AND DISCLOSURE COUNSEL Moyle, Flanigan, Katz, Raymond & Sheehan, P.A. West Palm Beach, Florida NO BROKER, DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED BY THE CITY OR THE UNDERWRITER TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ANY OF THE FOREGOING. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE SERIES 2004 BONDS AND THERE SHALL BE NO OFFER, SOLICITATION, OR SALE OF THE SERIES 2004 BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION. THE INFORMATION SET FORTH HEREIN HAS BEEN OBTAINED FROM PUBLIC DOCUMENTS AND RECORDS, MBIA INSURANCE CORPORATION (THE "INSURER"), THE DEPOSITORY TRUST COMPANY ("DTC") AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS BY AND IS NOT TO BE CONSTRUED AS A REPRESENTATION OF (i) THE CITY, WITH RESPECT TO THE INFORMATION HEREIN UNDER THE CAPTION "MUNICIPAL BOND INSURANCE" WHICH WAS PROVIDED BY THE INSURER OR UNDER THE CAPTION" BOOK-ENTRY ONLY SYSTEM" WHICH WAS PROVIDED BY DTC, OR (ii) THE UNDERWRITER. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN CONTAINED ARE SUBJECT TO CHANGE WlTHOUTNOTICE AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE DATE HEREOF. THE SERIES 2004 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR HAS THE RESOLUTION BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2004 BONDS UNDER THE SECURITIES LAWS OF THE JURISDICTIONS IN WHICH THEY HAVE BEEN REGISTERED OR QUALIFIED, IF ANY, SHALL NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE JURISDICTIONS NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE SERIES 2004 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. THIS PRELIMINARY OFFICIAL STATEMENT HAS BEEN "DEEMED FINAL," EXCEPT FOR PERMITTED OMISSIONS, BY THE CITY FOR PURPOSES OF SECURITIES AND EXCHANGE COMMISSION RULE 15c2-12. TABLE OF CONTENTS The Table of Contents for this Official Statement is for convenience of reference only and is not intended to define, limit or describe the scope or content of any provisions of this Official Statement. Page INTRODUCTION ................................................................... 1 THE SERIES 2004 BONDS ........................................................... 2 General Description ........................................................... 2 Redemption Provisions ......................................................... 2 Registration and Transfer ....................................................... 3 BOOK-ENTRY ONLY SYSTEM ....................................................... 4 SECURITY AND SOURCES OF PAYMENT ............................................. 6 In General ................................................................... 6 Pledged Funds ................................................................ 6 The Public Service Tax and The Discretionary Communications Services Tax ............. 7 2004 Subaccount of Reserve Fund ................................................ 9 The Reserve Fund Surety Bond ................................................. 10 Additional Bonds ............................................................ 11 Rights of Bond Insurer ........................................................ 11 MUNICIPAL BOND INSURANCE .................................................... 11 General .................................................................... 11 Municipal Bond Insurance ..................................................... 11 THE PLAN OF FINANCING ......................................................... 14 Purpose of the Series 2004 Bonds ............................................... 14 The Refunding .............................................................. 14 The Series 2004 Project ....................................................... 14 Estimated Sources and Uses of Funds ............................................ 15 THE CITY ........................................................................ 15 DEBT SERVICE REQUIREMENTS ................................................... 16 FLOW OF FUNDS ................................................................. 16 VERIFICATION OF MATHEMATICAL COMPUTATIONS ............................... 16 LITIGATION ...................................................................... 17 LEGAL MATTERS ................................................................. 17 TAX EXEMPTION ................................................................. 17 RATINGS ........................................................................ 19 UNDERWRITING .................................................................. 19 FINANCIAL STATEMENTS ......................................................... 19 CONTINUING DISCLOSURE ........................................................ 19 MISCELLANEOUS ................................................................ 21 AUTHORIZATION OF OFFICIAL STATEMENT ........................................ 21 APPENDIX A -- APPENDIX B -- APPENDIX C -- APPENDIX D -- APPENDIX E -- Form of the Resolution General Purpose Financial Statements for the Fiscal Year ended September 30, 2003 Statistical and Other General Information Concerning the City Form of Opinion of Bond Counsel Form of Financial Guaranty Insurance Policy -i- OFFICIAL STATEMENT Relating To City of Boynton Beach, Florida $17,685,000' Public Service Tax Revenue Bonds, Series 2004 INTRODUCTION The purpose of this Official Statement, including the cover page and the appendices hereto, is to furnish certain information with respect to the City of Boynton Beach, Florida (the "City") and the original issuance and sale of the City's $17,685,000* aggregate principal amount Public Service Tax Revenue Bonds, Series 2004 (the "Series 2004 Bonds"). The Series 2004 Bonds are issued pursuant to the authority of the Florida Constitution and Charter of the City, Chapter 166, Florida Statutes, as amended, and other applicable provisions of law, and pursuant to Resolution No. R04-052 adopted by the City Commission of the City (the "City Commission") on April 7, 2004 (the "Resolution"). The Series 2004 Bonds are being issued for the purpose of providing funds, which, together with other funds available for such purpose, will be sufficient to (1) refund all of the City's outstanding Public Service Tax Refunding Revenue Bonds, Series 1993 (the "Refunded Bonds"), (2) pay the cost of various capital improvements as may be approved by the City Commission from time to time (the "Series 2004 Project"), (3) purchase a surety bond to fund the 2004 Subaccount of the Reserve Fund in an amount equal to the Reserve Fund Requirement (hereinafter defined) for the Series 2004 Bonds and (4) pay costs and expenses related to the issuance of the Series 2004 Bonds. The Series 2004 Bonds shall not constitute a general obligation of the City but shall be payable solely from the Pledged Funds, as provided in the Resolution. No Holder of any Series 2004 Bonds shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or taxation in any form of any real property therein to pay the Series 2004 Bonds or the interest thereon. The Series 2004 Bonds are not obligations of the State of Florida or any political subdivision thereof other than the City and are payable only as aforesaid. See "SECURITY AND SOURCES OF PAYMENT" herein for further information. Payment of the principal of and interest on the Series 2004 Bonds when due will be insured by a financial guaranty insurance policy to be issued by MBIA Insurance Corporation simultaneously with the delivery of the Series 2004 Bonds. There follow in this Official Statement descriptions of the Series 2004 Bonds, the City, the Series 2004 Project and certain other matters. The descriptions and information contained herein do not purport to be complete, comprehensive, or definitive, and all references herein to documents or reports are qualified in their entirety by reference to the complete text of such documents or reports. Copies of documents and reports referred to herein that are not included in their entirety herein may be obtained from the City Clerk upon payment of any required fee. Unless otherwise defined herein, terms used in capitalized form in this *Preliminary, subject to change Official Statement shall have the same meanings as ascribed thereto in the Resolution. See "APPENDIX A -Form of the Resolution" for definitions of terms used in the Resolution. THE SERIES 2004 BONDS General Description The Series 2004 Bonds are being issued as fully registered bonds without coupons in principal denominations of $5,000 each or any integral multiple thereof. The Series 2004 Bonds will be dated the date of their initial issuance and delivery and will bear interest from that date at the rates per annum and will mature on the dates (subject to the redemption provisions set forth below) and in the amounts set forth on the cover page of this Official Statement. Interest on the Series 2004 Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months. Interest on the Series 2004 Bonds will be payable on November 1,2004 and semi-annually thereafter on each May 1 and November 1 (each, an "Interest Payment Date"). The principal of and premium, if any, on the Series 2004 Bonds shall be payable when due by check or draft, upon presentation and surrender of the Series 2004 Bonds at the designated office (initially, Charlotte, North Carolina) of Wachovia Bank, National Association, or its successor, as Paying Agent (the "Paying Agent"), and interest will be payable by check or draft mailed by the Paying Agent on each Interest Payment Date to the Holders of the Series 2004 Bonds appearing as such on the registration books of the City kept by Wachovia Bank, National Association, or its successor, as Registrar (the "Registrar"), as of the Record Date, provided, however, that at the written request and expense of any Holder of at least $500,000 in an aggregate principal amount of Series 2004 Bonds (or the Holder of all Series 2004 Bonds if less than $500,000 shall be Outstanding) payment of interest will be transmitted by wire transfer to the Holder, and further provided, that for so long as the book-entry system of ownership of the Series 2004 Bonds continues, principal of, premium, if any, and interest on the Series 2004 Bonds will be paid as described herein under "BOOK-ENTRY ONLY SYSTEM." The "Record Date" is the fifteenth (15th) day of the month preceding the Interest Payment Date, whether or not such day is a Business Day. All payments of principal of and interest on the Series 2004 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. Redemption Provisions Optional Redemption. The Series 2004 Bonds maturing prior to November 1,20__ are not subject to optional redemption prior to maturity. The Series 2004 Bonds maturing on or after November 1, 20__ are subject to redemption prior to maturity, at the option of the City, from any funds legally available for such purpose, on or after November 1, 20__, in whole or in part on any date, and if in part in any order of maturity selected by the City, and by lot within a maturity if less than an entire maturity is to be redeemed, at the redemption prices (expressed as percentages of the principal amount of the Series 2004 Bonds to be redeemed) set forth in the table below, plus accrued interest to the redemption date: Redemption Dates Redemption (Inclusive) Prices Mandatory Redemption. The Series 2004 Bonds maturing on November 1,20__ (the "Term Bonds") are subject to mandatory redemption in part, on November 1, 20____, and on each November 1 thereafter in the years and in the amounts set forth below (except for the final amount due at maturity, which shall not be a redemption), at a price equal to 100% of the principal amount of the Series 2004 Bonds being redeemed, plus accrued interest to the redemption date: TERM BONDS Year Amount Notice of Redemption. Notice of redemption of the Series 2004 Bonds shall be mailed by first class mail, postage prepaid, by the Registrar not less than thirty (30) days nor more than sixty (60) days before the date fixed for redemption to the registered owners of any Series 2004 Bonds or portions thereof which are to be redeemed, at their addresses as they appear upon the registration books maintained by the Registrar. Failure to give any notice of redemption, or any defect therein, shall not affect the validity of any proceedings for the redemption of any Series 2004 Bond with respect to which no such failure or defect as occurred. Any notice prepared and mailed as described herein shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Each notice shall set forth, among other information, the date fixed for redemption, the redemption price to be paid and, if less than all of the Series 2004 Bonds shall be called for redemption information identifying the Series 2004 Bonds to be redeemed. A notice of redemption may be conditioned upon the availability of funds to pay the redemption price of the Series 2004 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 Series 2004 Bonds so called for redemption, such Series 2004 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 City mail a notice to the Holders of the Series 2004 Bonds subject to such conditional notice stating that the condition to the call was not satisfied and that the Series 2004 Bonds shall remain Outstanding. Effect of Calling for Redemption. On the date designated for redemption, notice having been mailed in the manner and under the conditions hereinabove described, the Series 2004 Bonds so called for redemption shall become and be due and payable and, if payment of the redemption price has been duly provided for, interest on the Series 2004 Bonds so called for redemption shall cease to accrue, such Series 2004 Bonds shall cease to be entitled to any lien, benefit or security under the Resolution, and the Holders of such Series 2004 Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. Registration and Transfer The Series 2004 Bonds are transferable only upon the registration books of the City maintained by the Registrar. For so long as the book-entry only system of ownership is being maintained for the Series 2004 Bonds, transfers of beneficial ownership interests in the Series 2004 Bonds will be accomplished as described herein under "BOOK-ENTRY ONLY SYSTEM," and Cede & Co. shall be the sole Bondholder of the Series 2004 Bonds. In the event such book-entry system of ownership is discontinued, transfers of the Series 2004 Bonds shall be accomplished as described below. Series 2004 Bonds may be presented for transfer or exchange at the office of the Registrar, initially in Charlotte, North Carolina. In each case, the City or the Registrar may require payment of a sum sufficient to cover any tax, fee, expense or other governmental charge that may be imposed in relation to such exchange or transfer. Neither the City nor the Registrar shall be required to transfer or exchange any Series 2004 Bonds for a period beginning fifteen (15) days next preceding any selection of Series 2004 Bonds to be redeemed or thereafter until the mailing of any notice of redemption, or to transfer or exchange any Series 2004 Bond that has been called for redemption. BOOK-ENTRY ONLY SYSTEM The information provided immediately below concerning DTC and the Book-Entry Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, the Underwriter, the City or the Paying Agent. Unless the book-entry system described herein is terminated, as hereinafter described, The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2004 Bonds. The Series 2004 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Bond certificate will be issued for each maturity of the Series 2004 Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC or with the Paying Agent on behalf of DTC. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S, equity issues, corporate and municipal debt issues and money market instruments from over 85 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participant's accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U. S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation CDTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange, LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S, securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard and Poor's highest rating: AAA. The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of the Series 2004 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2004 Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (a "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2004 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2004 Bonds, except in the event that use of the book-entry system for the Series 2004 Bonds is discontinued. To facilitate subsequent transfers, all Series 2004 Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Series 2004 Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2004 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2004 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Series 2004 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2004 Bonds, such as redemptions, defaults and proposed amendments to Bond documents. Beneficial Owners of the Series 2004 Bonds may wish to ascertain that the nominee holding the Series 2004 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. Redemption notices shall be sent only to Cede & Co. for so long as it is the registered owner of the Series 2004 Bonds. If less than all of the Series 2004 Bonds of a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2004 Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2004 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of principal, premium, if any, and interest on the Series 2004 Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative ofDTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the City or Paying Agent, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name" and will be the responsibility of such Participant and not of DTC (nor its nominee), the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by another authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. NEITHER THE CITY NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO THE DTC PARTICIPANTS OR THE PERSON FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO THE PAYMENTS TO OR THE PROVIDING OF NOTICE FOR THE DTC PARTICIPANTS, THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS OF THE BONDS. THE CITY CANNOT AND DOES NOT GIVE ANY ASSURANCES THAT DTC, DIRECT PARTICIPANTS OR OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS PAID TO DTC OR ITS NOMINEE, AS THE REGISTERED OWNER, OR ANY NOTICES TO THE BENEFICIAL OWNERS OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. The City has entered into a letter of representations (the "Book-Entry Agreement") with DTC providing for such book-entry only system. However, the book-entry only system may be terminated upon the happening of either of the following: (a) DTC discontinues providing its services as securities depository by giving reasonable notice to the City or Paying Agent, or (b) the City, elects to discontinue the book-entry only system of transfers through DTC (or a successor securities depository) by notice to DTC. If the City does not replace DTC, the Paying Agent shall notify DTC of the availability of definitive or temporary Bond certificates (the "Replacement Series 2004 Bonds") to Beneficial Owners requesting the same in an aggregate outstanding amount representing the interest of each such Beneficial Owner, making such adjustments and allowances as the Paying Agent may find necessary or appropriate as to accrued interest and previous payments of principal. Definitive Replacement Series 2004 Bonds shall be issued only upon surrender to the Paying Agent of the Series 2004 Bonds of each maturity by DTC, accompanied by registration instructions for the definitive Replacement Series 2004 Bonds for such maturity from DTC. Neither the City nor the Paying Agent shall be liable for any delay in delivery of such instructions and conclusively may rely on and shall be protected in relying on such instructions of DTC. SECURITY AND SOURCES OF PAYMENT In General The Series 2004 Bonds shall not constitute a general obligation of the City, but shall be payable solely from the Pledged Funds, as provided in the Resolution. No Holder of any Series 2004 Bonds shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or taxation in any form of any real property therein to pay the Series 2004 Bonds or the interest thereon. The Series 2004 Bonds are not obligations of the State of Florida or any political subdivision thereof other than the City and are payable only as aforesaid. Pledged Funds "Pledged Funds" shall mean the Public Service Tax Revenues, the Discretionary Communications Services Tax Revenues and the Pledged Accounts. "Public Service Tax Revenues" shall mean all amounts received by the City pursuant to the tax (the "Public Service Tax") levied on the purchase within the geographic jurisdiction of the City of electricity, metered natural gas, liquified petroleum gas either metered or bottled, manufactured gas either metered or bottled, water service and services competitive with the foregoing, pursuant to Section 166.231, Florida Statutes or any successor provision thereof. See "Public Service Tax" below for further information. "Discretionary Communications Services Tax Revenues" means all amounts received by the City from the tax (the "Discretionary Communications Services Tax") levied by the City pursuant to the authority of Section 202.19, Florida Statutes, or any successor provision of law, on communications services. See "Discretionary Communications Services Tax" below for further information. "Pledged Accounts" shall mean, until applied in accordance with the provisions of the Resolution, all monies, including investments thereof, in the funds and accounts established under the Resolution, except (i) monies in any account of the Rebate Fund and (ii) to the extent monies on deposit in a Subaccount of the Reserve Fund 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 of the Resolution. The Public Service Tax and The Discretionary Communications Services Tax Public Service Tax. Section 166.231, Florida Statutes, authorizes each Florida municipality to levy a tax on the purchase within such municipality of electricity, metered natural gas, liquified petroleum gas either metered or bottled, manufactured gas either metered or bottled, and water service, as well as services competitive with the foregoing, including fuel oil. Under present law, the tax may not exceed ten percent of the payments received by the seller of the taxable item, except that fuel oil may be taxed at a rate of not to exceed four cents per gallon. A municipality may exempt from the tax any amount up to and including the first five hundred kilowatt hours of electricity purchased per month for residential use. The purchase of natural gas or fuel oil by a public or private utility, and the purchase of fuel oil or kerosene for use as an aircraft engine fuel or as propellant or for use in internal combustion engines is also exempt from taxation. A municipality may also exempt from the tax the purchase of metered or bottled gas or fuel oil for agricultural purposes. Purchases by the United States government, the State of Florida, and all counties, school districts and municipalities of the State of Florida, purchases by recognized'churches and purchases by public bodies exempted by law or court order are also exempt from the tax. The Florida Statutes also authorize municipalities to exempt certain other categories of purchasers from the tax. Public Service Taxes are collected by the seller of the taxable item of service and remitted to the taxing municipality. Each seller of services or items subject to the Public Service Tax is entitled to retain one percent of the amount of the tax collected in a form of a deduction from the amount collected as compensation for collecting and remitting the tax. The City has imposed some form of the Public Service Tax for over 20 years. The City currently imposes a tax on the purchase of electricity and metered or bottled gas (natural, liquified, petroleum gas, or manufactured), in the amount of 10% of the sale price, except for any fuel adjustment charge (a separately stated charge on some electric bills), and at the rate of four cents per gallon on fuel oil. The City does not exempt any sales except those required to be exempt by State statute. Discretionary_ Communications Services Tax. Prior to October 1, 2001, municipalities in Florida were authorized to levy a public service tax, similar to the tax described above, on communications services. However, effective October 1, 2001, the Communications Services Tax Simplification Law, Chapter 202, Florida Statutes (the "CSTA") was enacted. One effect of the CSTA was to repeal the authorization of municipalities to levy the public service tax on telecommunications services and to replace that tax, as well as any revenues from franchise fees on cable and telecommunication service providers and permit fees relating to placing or maintaining facilities in rights-of-way collected from providers of certain telecommunications services, with the Discretionary Communications Services Tax. The Discretionary Communications Services Tax is applied to a broader base of communications services than the former public service tax on telecommunications, and includes communications and cable services which originate or terminate in the State of Florida and are charged to a service address within the City, but does not include certain other services such as direct-to-home satellite service. "Communications services" is defined in the CSTA to mean the transmission, conveyance or routing of voice, data, audio, video, or any other information or signals, including cable services, to a point, or between points, by or through any electronic, radio, satellite, cable, optical, microwave, or other medium or method now in existence of hereafter devised, regardless of the protocol used for such transmission or conveyance. However, the term "communications services" does not include "information services," installation or maintenance of wiring or equipment on a customer's premises, the sale or rental of tangible personal property, the sale of advertising, including, but not limited to directory advertising, bad check 7 charges, late payment charges, billing and collection services or internet access service, electronic mail service, electronic bulletin board service or similar on-line computer services. "Information service" means, in general, the offering ora capability for generating, acquiring, storing, transforming, processing, retrieving, using, or making available information via communications services, including but not limited to, electronic publishing, web-hosting service and end-user 900 number service. Services provided to the federal, state or local governments are exempt from the Discretionary Communications Services Tax. Sales to certain non-profit homes for the aged, religious institutions and educational institutions are also exempt from the tax. In addition, the Discretionary Communications Services Tax does not apply to any direct-to-home satellite service. Under certain circumstances, the Discretionary Communications Services Tax may not exceed $25,000 per calendar year on communication services charges billed to a service address located in a municipality imposing the tax for interstate communications services that originate outside Florida and terminate within Florida. The maximum rate at which any municipality may impose the Discretionary Communications Services Tax is 5.22%, although certain municipalities may not levy at a rate in excess of 5.10%. The City is currently subject to the 5.22% maximum. The Discretionary Communications Services Tax is required to be paid by the purchaser of the communication service and collected from such purchaser by the dealer of the communications services. Failure to pay, collect and remit the tax as required by law may subject the offender to criminal penalties. The proceeds of the tax are required to be remitted by the dealer to the State of Florida Department of Revenue ("FDOR"). Providers of communications services may deduct 0.75% of the tax due and accounted for and remitted to the FDOR as a collection fee (or 0.25% in the case of providers who do not employ an enhanced zip code database or a database that is either supplied or certified by the FDOR). FDOR is permitted to deduct its cost of administering the tax, not to exceed 1% of the total tax collections, and then distributes the remaining proceeds to the taxing municipality on a monthly basis. Under the CSTA, local governments must work with FDOR to properly identify service addresses to each taxing authority. If the City fails to provide FDOR with accurate service address information, it risks losing tax proceeds that it should receive. The City believes it has provided FDOR with all information that the FDOR has requested as of the date hereof and that such information is accurate. Revenues raised by a municipality from the Discretionary Communications Services Tax may be used for any public purpose, including pledging such revenues to indebtedness. The City has imposed a Discretionary Communications Services Tax since October 1,2001, the first date on which the tax was authorized under Florida law. For the fiscal year ended September 30, 2002, the City imposed the tax at the rate of 5.62%. Effective October 1, 2002 the City changed the rate to the new statutory maximum of 5.22%. Historical Collection Data and Pro-Forma Coverage. The following table sets for the amount of Public Service Tax Revenues by the City for the fiscal years ended September 30, 1999 through 2003, and pro-forma coverage ofproj ected maximum annual debt service on the Series 2004 Bonds. For the fiscal years ended September 30, 1999, 2000 and 2001, information is also shown for the public service tax on telecommunication services authorized under law prior to enactment of the CSTA, and for the fiscal years ended September 30, 2002 and 2003 the amount of Discretionary Communications Services Tax Revenues are shown. Projected maximum annual debt service on the Series 2004 Bonds is subject to change based upon market conditions at the time of sale of the Series 2004 Bonds. Historical Public Service Tax Revenues and Discretionary Communication Services Tax Revenues Fiscal Years Ended September 30 and Pro-Forma Maximum Annual Debt Service Coverage 1999 2000 2001 2002 2003 Public Service Tax $3,743,888 $3,674,282 $3,805,321 $3,542,782 $4,194,280 Telecommunication Public Service Tax 1,876,165 2,541,704 2,307,841 .... Discretionary Communications Services Tax ...... 3,497~830 3~174,769 Total $5,620,053 $6,215,986 $6,113,162 $7,040,612 $7,369,049 Maximum Annual Debt Service $1,920,975 $1,920,975 $1,920,975 $1,920,975 $1,920,975 Pro-Forma Coverage 2.92x 3.23x 3.18x 3.66x 3.83x 2004 Subaccount of Reserve Fund The Resolution requires the establishment and funding of the 2004 Subaccount of the Reserve Fund in an amount equal to the lesser of ten percent (10%) of the aggregate initial principal amount of the Series 2004 Bonds and any Additional Bonds secured by the 2004 Subaccount of the Reserve Fund, the maximum amount of principal of and interest on the Series 2004 Bonds and any such Additional Bonds becoming due in the current or any succeeding Fiscal Year or one hundred twenty-five percent (125%) of the average annual amount of principal of and interest becoming due on the Series 2004 Bonds and any such Additional Bonds secured by the 2004 Subaccount of the Reserve Fund (the "Reserve Fund Requirement"). The Resolution authorizes the City to obtain a surety bond, letter or line of credit or municipal bond insurance policy (a "Reserve Fund Insurance Policy" or "Reserve Fund Letter of Credit") in lieu of funding the 2004 Subaccount of the Reserve Fund with money. The City expects to purchase a debt service reserve surety bond in the amount of $ from MBIA Insurance Corporation in order to satisfy the Reserve Fund Requirement for the Series 2004 Bonds. See "The Reserve Fund Surety Bond" for further information. Amounts on deposit in the 2004 Subaccount of the Reserve Fund shall be used only for the purpose of paying principal of and interest on the Series 2004 Bonds and any Additional Bonds secured by the 2004 Subaccount of the Reserve Fund when the amounts in the Debt Service Fund are insufficient therefor. The Resolution authorizes the City to establish by Supplemental Resolution a separate Subaccount of the Reserve Fund for any other Series of Bonds issued under the Resolution. Except as provided in the next succeeding sentence each such separately created Subaccount of the Reserve Fund shall constitute security only for the Series of Bonds to which it relates. Pursuant to the Resolution, the City may, upon the issuance of one or more Series of Additional Bonds, utilize the 2004 Subaccount as the Reserve Subaccount for such Additional Bonds as well as the Series 2004 Bonds provided the moneys on deposit in the 2004 Subaccount for the Reserve Fund equals the aggregate Reserve Fund Requirement for such Additional Bonds and for the Series 2004 Bonds. If a disbursement is made from a Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit, the City is obligated to reinstate the maximum limits of such Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit immediately following such disbursement from monies becoming available in the applicable Subaccount of the Reserve Fund 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 Fund equals the Reserve Fund Requirement therefor, the City shall reimburse the issuer of the Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit for interest and all reasonable expenses incurred by such issuer in connection with the draw on such Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit, as the case may be, if the City is so obligated under the terms of the Reserve Fund Insurance Policy and/or Reserve Fund Letter of Credit. If at any time the amount on deposit in the 2004 Subaccount of the Reserve Fund is less than the Reserve Fund Requirement, the City is obligated to deposit into the 2004 Subaccount of the Reserve Fund such sum, if any, as will be sufficient to restore, in not more than twelve months, the funds on deposit therein to the Reserve Fund Requirement. In the event the amount available for deposit into all subaccounts in the Reserve Fund is insufficient to make all payments required to be made therein, the available amount shall be prorated among the various subaccounts in the Reserve Fund in the same proportion that the Reserve Fund Requirement for each subaccount bears to the total Reserve Fund Requirement for all such subaccounts. If at any time there is on deposit in the 2004 Subaccount of the Reserve Fund an amount of cash and investments in excess of the Reserve Fund Requirement, the amount of such excess shall be withdrawn and deposited in the Debt Service Fund. The Reserve Fund Surety Bond MBIA Insurance Corporation ("MBIA") has committed to issue a debt service reserve surety bond (the "Debt Service Reserve Fund Surety Bond") in connection with the Series 2004 Bonds. The Debt Service Reserve Fund Surety Bond will provide that upon notice from the City or the Paying Agent to MBIA to the effect that insufficient amounts are on deposit in the Debt Service Fund to pay the principal of(at maturity or pursuant to mandatory redemption requirements) and interest on the Series 2004 Bonds, MBIA will promptly deposit with the City or the Paying Agent an amount sufficient to pay the principal of and interest on the Series 2004 Bonds or the available amount of the Debt Service Reserve Fund Surety Bond, whichever is less. Upon the later of(i) three (3) days after receipt by MBIA ora Demand for Payment in the form attached to the Debt Service Reserve Fund Surety Bond, duly executed by the City or the Paying Agent; or (ii) the payment date of the Series 2004 Bonds as specified in the Demand for Payment presented by the City or the Paying Agent to MBIA, MBIA will make a deposit of funds in an account with U.S. Bank Trust National Association, in New York, New York, or its successor, sufficient for the payment of amounts which are then due to the Paying Agent (as specified in the Demand for Payment), subject to the Debt Service Reserve Fund Surety Bond coverage. The available amount of the Debt Service Reserve Fund Surety Bond is the initial face amount of the Debt Service Reserve Fund Surety Bond less the amount of any previous deposits by MBIA with the Paying Agent which have not been reimbursed by the City. The City and MBIA are expected to enter into a Financial Guaranty Agreement (the "Agreement"). Pursuant to the Agreement, the City will be required to reimburse MBIA from amounts it has received, within one year of any deposit, the amount of such deposit made by MBIA with the Paying Agent under the Debt Service Reserve Fund Surety Bond. Such reimbursement shall be made only after all required deposits to the Debt Service Fund have been made. Under the terms of the Agreement, the City is required to reimburse MBIA, with interest, until the face amount of the Debt Service Reserve Fund Surety Bond is reinstated. No optional redemption of Series 2004 Bonds with respect to which a draw has been made under the Debt Service Reserve Fund Surety Bond may be made until the Debt Service Reserve Fund Surety Bond is reinstated. The Debt Service Reserve Fund Surety Bond is provided as an alternative to the City depositing funds in the 2004 Subaccount of the Reserve Fund. At the time of issuance of the Series 2004 Bonds, the face amount of the Debt Service Reserve Fund Surety Bond will be $ ., and the premium will have been paid by the City. 10 Additional Bonds Pursuant to the Resolution, the City covenants that it will not, except upon the conditions and in the manner provided in the Resolution, issue any other obligations payable in whole or in part from the Pledged Funds, nor voluntarily create or cause to be created any debt, lien, pledge, assessment, encumbrance or other charge having priority to or being on a parity with the lien of the Series 2004 Bonds and the interest thereon upon any of the Pledged Funds. Any obligations issued by the City other than the Series 2004 Bonds and any Additional Bonds issued pursuant to the Resolution are required to contain an express statement that such obligations are junior, inferior and subordinate in all respects to the pledge of the Pledged Funds created by the Resolution. The Resolution authorizes the City to issue Additional Bonds payable pari passu with the Series 2004 Bonds and other Additional Bonds issued pursuant to the Resolution out of Pledged Funds if, and only if, among other things, the Public Service Tax Revenues and the Discretionary Communications Services Tax Revenues, adjusted as provided in the Resolution, received during the immediately preceding Fiscal Year or any twelve (12) consecutive months of the eighteen (18) months immediately preceding the issuance of the Additional Bonds, equal at least 125% of the Maximum Debt Service Requirement on (1) the Series 2004 Bonds then Outstanding, (2) any Additional Bonds theretofore issued and then Outstanding, and (3) the Additional Bonds then proposed to be issued. The Series 2004 Bonds and any Additional Bonds issued by the City pursuant to the Resolution are collectively referred to herein as the "Bonds." In the event any Additional Bonds are to be issued in whole or in part for the purpose of refunding any Bonds then Outstanding, the foregoing conditions shall not apply, provided that the issuance of such Additional Bonds shall result in a reduction or shall not increase the aggregate amount of principle of and interest on the Outstanding Bonds becoming due in the current Fiscal Year and all or any subsequent Fiscal Years. The Resolution contains provisions concerning the issuance of Variable Rate Bonds and providing for certain adjustments to Net Revenues for purposes of the issuance of Additional Bonds, and for further information see "APPENDIX A - Form of the Resolution -- Issuance of Additional Bonds." Rights of Bond Insurer Pursuant to the Resolution, MBIA is deemed to be the sole holder of all Series 2004 Bonds for purposes of all provisions of the Resolution governing remedies, so long as MBIA has not failed to comply with its payment obligations under the Policy (hereinafter defined). Furthermore, certain amendments and supplements to the Resolution are subject to the prior written consent of MBIA and may be made in such case without Bondholder approval. MUNICIPAL BOND INSURANCE General Payment of the principal of and interest on the Series 2004 Bonds will be insured by a Financial Guaranty Insurance Policy (the "Policy") to be issued by MBIA Insurance Corporation simultaneously with the delivery of the Series 2004 Bonds. Municipal Bond Insurance The following information has been furnished by MBIA Insurance Corporation ("MBIA") for use in this Official Statement. Reference is made to Appendix E for a specimen of MBIA's Policy. 11 MBIA's Policy unconditionally and irrevocably guarantees the full and complete payment required to be made by or on behalf of the City to the Paying Agent or its successor of an amount equal to (i) the principal of(either at the stated maturity or by an advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Series 2004 Bonds as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by MBIA's Policy shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any Holder of the Series 2004 Bonds pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such Holder within the meaning of any applicable bankruptcy law (a "Preference"). MBIA's Policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Bond. MBIA's Policy does not, under any circumstance, insure against loss relating to: (i) optional or mandatory redemptions (other than mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (iii) payments of the purchase price of Series 2004 Bonds upon tender by a Holder thereof; or (iv) any Preference relating to clauses (i) through (iii) of this paragraph. MBIA's Policy also does not insure against nonpayment of principal of or interest on the Series 2004 Bonds resulting from the insolvency, negligence or any other act or omission of the Paying Agent or any other paying agent for the Series 2004 Bonds. Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by MBIA from the Paying Agent or any Holder of a Bond the payment of an insured amount for which is then due, that such required payment has not been made, MBIA on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with U.S. Bank Trust National Association, in New York, New York, or its successor, sufficient for the payment of any such insured amounts which are then due. Upon presentment and surrender of such Series 2004 Bonds or presentment of such other proof of ownership of the Series 2004 Bonds, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Series 2004 Bonds as are paid by MBIA, and appropriate instruments to effect the appointment of MBIA as agent for such Holders of the Series 2004 Bonds in any legal proceeding related to payment of insured amounts on the Series 2004 Bonds, such instruments being in a form satisfactory to U.S. Bank Trust National Association, U.S. Bank Trust National Association shall disburse to such Holders or the Paying Agent payment of the insured amounts due on such Series 2004 Bonds, less any amount held by the Paying Agent for the payment of such insured amounts and legally available therefor. MBIA is the principal operating subsidiary of MBIA Inc., a New York Stock Exchange listed company (the "Company"). The Company is not obligated to pay the debts or claims against MBIA. MBIA is domiciled in the State of New York and licensed to do business in and subject to regulation under the laws of all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the United States and the Territory of Guam. MBIA has three branches, one in the Republic of France, one in the Republic of Singapore and one in the Kingdom of Spain. New York has laws prescribing minimum capital requirements, limiting classes and concentrations of investments and requiring the approval of policy rates and forms. State laws also regulate the amount of both the aggregate and individual risks that may be insured, the payment of dividends by MBIA, changes in control and transactions among affiliates. Additionally, MBIA is required to maintain contingency reserves on its liabilities in certain amounts and for certain periods of time. MBIA does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the Policy and MBIA set forth under the heading "Municipal Bond 12 Insurance." Additionally, MBIA makes no representation regarding the Series 2004 Bonds or the advisability of investing in the Series 2004 Bonds. The following documents filed by the Company with the Securities and Exchange Commission (the "SEC") are incorporated herein by reference: (1) The Company's Annual Report on Form 10-K for the year ended December 31, 2003. Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934, as amended, after the date of this Official Statement and prior to the termination of the offering of the Series 2004 Bonds offered hereby shall be deemed to be incorporated by reference in this Official Statement and to be a part hereof. Any statement contained in a document incorporated or deemed to be incorporated by reference herein, or contained in this Official Statement, shall be deemed to be modified or superseded for purposes of this Official Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Official Statement. The Company files annual, quarterly and special reports, in. formation statements and other information with the SEC under File No. 1-9583. Copies of the SEC filings (including (1) the Company's Annual Report on Form 10-K for the year ended December 31, 2003, and (2) the Company's Quarterly Report on Form 10-Q for the quarters ended March 31, 2003, June 30, 2003 and September 30, 2003, are available (i) over the Internet at the SEC's web site at http://www.sec.gov; (ii) at the SEC's public reference room in Washington D.C.; (iii) over the Internet at the Company's web site at http://www.mbia.com; and (iv) at no cost, upon request to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504. The telephone number of MBIA is (914) 273-4545. As of December 31,2002, MBIA had admitted assets of $9.2 billion (audited), total liabilities of $6.0 billion (audited), and total capital and surplus of $3.2 billion (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of December 31,2003, MBIA had admitted assets of $9.9 billion (unaudited), total liabilities of $6.2 billion (unaudited), and total capital and surplus of $3.7 billion (unaudited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. Moody's Investors Service, Inc. rates the financial strength of MBIA "Aaa." Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., rates the financial strength of MBIA "AAA." Fitch Ratings rates the financial strength of MBIA "AAA." Each rating of MBIA should be evaluated independently. The ratings reflect the respective rating agency's current assessment of the creditworthiness of MBIA and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold the Series 2004 Bonds, and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of the Series 2004 Bonds. MBIA does not guaranty the market price of the Series 2004 Bonds nor does it guaranty that the ratings on the Series 2004 Bonds will not be reversed or withdrawn. 13 The insurance provided by MBIA's Policy is not covered by the Florida Insurance Guaranty Association created under Chapter 631, Florida Statutes. THE PLAN OF FINANCING Purpose of the Series 2004 Bonds The Series 2004 Bonds are being issued for the purpose of providing funds, which, together with other funds available for such purpose, will be sufficient to (1) refund all of the City's outstanding Public Service Tax Refunding Revenue Bonds, Series 1993 (the "Refunded Bonds"), (2) pay the cost of acquiring, constructing and equipping various capital improvements described in the capital improvement plan of the City as may be approved by the City Commission from time to time (the "Series 2004 Project"), (3) purchase a surety bond to fund the 2004 Subaccount of the Reserve Fund in an amount equal to the Reserve Fund Requirement for the Series 2004 Bonds and (4) pay costs and expenses related to the issuance of the Series 2004 Bonds. The Refundin~ A portion of the proceeds derived from the issuance of the Series 2004 Bonds will be used for purpose of refunding and defeasing the Refunded Bonds. A portion of the proceeds derived from the sale of the Series 2004 Bonds will be deposited into an irrevocable Escrow Deposit Trust Fund (the "Escrow Deposit Trust Fund") with Wachovia Bank, National Association (the "Escrow Agent") pursuant to an Escrow Deposit Agreement (the "Escrow Agreement") between the City and the Escrow Agent, in an amount sufficient, together with investment income thereon, to pay the principal of, redemption premium and interest on the Refunded Bonds to and including June 3, 2004 on which date the Refunded Bonds will be discharged. Pending disbursement to pay the Refunded Bonds, amounts in the Escrow Deposit Trust Fund will either be held uninvested or will be invested in direct, noncallable United States Treasury Obligations. Upon the funding and, if applicable, investment, of the Escrow Deposit Trust Fund, in the opinion of Bond Counsel, rendered in reliance upon the verification report ofCausey, Demgen & Moore, independent certified public accountants, any lien of the Refunded Bonds on the Public Service Tax Revenues or Discretionary Communications Services Tax Revenues will have been terminated. The Series 2004 Proiect A portion of the proceeds of the Series 2004 Bonds will be used to pay the costs of various capital expenditures of the City as reflected in the City's five-year capital improvement plan CCIP") or as may be approved by the City Commission from time to time. The City's five year CIP identifies capital expenditures of over $50 million to be financed from a variety of sources, including proceeds of the Series 2004 Bonds. None of the expenditures identified in the CIP is directly material to the ability of the City to impose and collect the Public Service Tax Revenues or the Discretionary Communications Services Tax Revenues. 14 Estimated Sources and Uses of Funds The following table sets forth the estimated sources and uses of funds in connection with the Series 2004 Bonds: SOURCES OF FUNDS: Par Amount .................. (Original Issue Discount) ....... Original Issue Premium ......... Other Available Funds .......... TOTAL SOURCES: ........... $ USES OF FUNDS: Deposit to Construction Fund .... Deposit to Escrow Deposit Trust Fund Costs of Issuance°) ............ Deposit to Debt Service Fund ... TOTAL USES: ............... $ (1) Includes, among other items, underwriter's discount, legal fees, municipal bond insurance and debt service reserve surety premiums and other costs of issuance. THE CITY The City is a municipal corporation with an estimated population of approximately 62,000 organized and existing under the laws of the State of Florida. The City is located in Palm Beach County approximately 13 miles south of West Palm Beach and 30 miles north of Fort Lauderdale and covers approximately 15 square miles. The City is governed by a Commission-Manager form of government and employs both a full- time city manager and a full-time director of finance, who has responsibility for all internal auditing and financial record keeping operations of the City. The major segments of the economy of the area are retail and wholesale trade, real estate, finance, tourism, agriculture, professional services and light manufacturing. Several light industries are located in the City of Boynton Beach, with manufactured products ranging from paper processing machinery to electrical switches. For additional information regarding the City, see "APPENDIX C --Statistical and Other General Information Concerning the City." 15 DEBT SERVICE REQUIREMENTS The following table sets forth the approximate scheduled annual debt service requirements for the Series 2004 Bonds. Bond Year Ending November 1 (inclusive) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total Principal Interest Total FLOW OF FUNDS The Resolution establishes the following funds and accounts in addition to the Construction Fund: (a) (b) (c) the Debt Service Fund; the Reserve Fund, and the 2004 Subaccount therein; and the Rebate Fund. Public Service Tax Revenues and Discretionary Communications Services Tax Revenues are required to be applied pursuant to the Resolution in the following order of priorities: (1) for deposit to the Debt Service Fund to provide for payment of principal of, premium, if any, and interest on the Series 2004 Bonds when due; (2) for required deposits to the 2004 Subaccount of the Reserve Fund; and (3) for any lawful purpose. See "APPENDIX A - Form of the Resolution" for further information. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of(i) the mathematical computation of the adequacy of the maturing principal amount of and interest on the investments and cash, if any, to be held by the Escrow Agent to pay, when due, the principal of, premium and interest on the Refunded Bonds to the dates of their maturities or earlier redemption and (ii) the mathematical computation of yields on the Series 2004 Bonds and the proceeds thereof will be verified by Causey, Demgen & Moore, independent certified public accountants, whose report with respect thereto will be available upon delivery of the Series 2004 Bonds. 16 LITIGATION In the opinion of the City Attorney, no legal proceedings are pending or threatened which materially affect the City's ability to perform its obligations to the holders of the Series 2004 Bonds or materially affect the financial condition of the City. There is no litigation or controversy of any nature now pending or threatened: (i) to restrain or enjoin the issuance, sale, execution or delivery of the Series 2004 Bonds, or (ii) in any way questioning or attesting the validity of the Series 2004 Bonds, the Resolution, any proceedings of the City taken with respect to the authorization, sale or issuance of the Series 2004 Bonds or the pledge or application of Pledged Funds for the payment of the Series 2004 Bonds. LEGAL MATTERS Certain legal matters in connection with the issuance of the Series 2004 Bonds are subject to the approval of Moyle, Flanigan, Katz, Raymond & Sheehan, P.A., West Palm Beach, Florida, Bond Counsel and Disclosure Counsel to the City, whose unqualified approving opinion will be available at the time of delivery of the Series 2004 Bonds. The proposed form of such opinion of Bond Counsel is attached hereto as Appendix D. Certain legal matters will be passed upon for the City by Goren, Cherof, Doody & Ezrol, P.A., City Attorneys, Fort Lauderdale, Florida, and for the Underwriter by its counsel, Squire, Sanders & Dempsey L.L.P. Counsel to the Underwriter has not been engaged to pass upon the accuracy or completeness of this Official Statement and has no responsibility to investors with respect thereto. The fees of Bond Counsel, Disclosure Counsel and the City Attorneys are contingent upon issuance of the Series 2004 Bonds. TAX EXEMPTION The Internal Revenue Code of 1986, as amended (the "Code"), provides that the interest on state and local governmental bonds, such as the Series 2004 Bonds, will not be included in the gross income for federal income tax purposes of the owner thereof only if certain requirements are met, some of which must be met on a continuing basis, subsequent to the issuance and delivery of the Series 2004 Bonds. Although the City has covenanted to comply with such requirements, non-compliance with such requirements could cause the interest on the Series 2004 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issue of the Series 2004 Bonds regardless of the date on which such non-compliance occurs or is ascertained. Those requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2004 Bonds and other amounts are to be invested and which require that certain investment earnings on the foregoing be rebated on a periodical basis to the Treasury Department of the United States. In the opinion of Moyle, Flanigan, Katz, Raymond & Sheehan, P.A., West Palm Beach, Florida, Bond Counsel, under existing law, and assuming continuing compliance with the aforementioned covenants, interest on the Series 2004 Bonds is excluded from gross income of the owners thereof for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum taxes imposed on individuals and corporations. The law upon which Bond Counsel is basing their opinion is subject to change by the Congress and the Department of the Treasury and to subsequent judicial and administrative interpretation. There can be no assurance that such law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of ownership of the Series 2004 Bonds. The Series 2004 Bonds maturing in the years , are being offered and sold in the initial public offering at an original issue discount ("OID"). OID is the difference between the stated redemption price at maturity (generally the face amount of the Series 2004 Bonds) and the "issue price" of the Series 17 2004 Bonds. The "issue price" of each maturity of the Series 2004 Bonds is the respective initial offering prices to the public at which prices a substantial amount of such maturity of the Series 2004 Bonds was sold. OID represents interest which is excluded from gross income for federal income tax purposes and which may result in the collateral federal tax consequences described below. OID will accrue over the term of such Series 2004 Bonds at a constant interest rate compounded semi-annually. The portion of OlD that accrues during the time an owner owns a Series 2003 Bond constitutes interest excludable from gross income for federal income tax purposes and will increase such purchaser's adjusted basis in such Series 2004 Bonds for purposes of determining taxable gain or loss on the sale or other disposition of such Series 2004 Bonds. The federal income tax consequences of the purchase, ownership and sale or other disposition of Series 2004 Bonds which are not purchased in the initial offering at the initial offering prices may be determined according to rules which differ from those described above. Owners of Series 2004 Bonds should consult their own tax advisors as to the precise federal income tax and state and local tax consequences of owning and disposing of Series 2004 Bonds. The Bonds maturing in the years are being offered and sold in the initial public offering at a premium (the "Premium Bonds"). Section 171 of the Code provides rules under which a bond premium may be amortized and a deduction allowed for the amount of the amortizable bond premium for a taxable year. Under Section 171 (a)(2) of the Code, however, no deduction is allowable for the amortizable bond premium in the case of the bonds, like the Premium Bonds, the interest on which is excludable from gross income. Under Section 1016(a)(5) of the Code, the purchaser's basis in a Premium Bond will be reduced by the amount of the amortizable bond premium disallowable as a deduction under Section 171 (a)(2) of the Code. Proceeds received from the sale, exchange, or other disposition including redemption of a Premium Bond in excess of the owner's adjusted basis (as reduced pursuant to Section 1016(a)(5) of the Code) will be treated as a gain from the sale or exchange of such Premium Bond and not as tax-exempt interest. The basis of an original purchaser of a Premium Bond who holds such Premium Bond to maturity will have a basis equal to the principal amount of the Premium Bond and therefore will have no loss upon receipt of such principal amount. In addition, the Premium Bonds maturing in the years __ were offered at prices in excess of the principal amount thereof to achieve a yield based upon the date on which such Bonds are subject to optional redemption by the Issuer (the "Call Date") rather than the maturity date (the "Callable Premium Bonds"). Under the Code, the excess of the cost basis of a Callable Premium Bond over the amount payable at the Call Date of the Callable Premium Bond that minimizes the yield to a purchaser of a Callable Premium Bond (the "Lowest Yield Call Date") (other than for a bondholder who holds a bond as inventory, stock in trade, or for sale to customers in the ordinary course of business) is generally characterized as "bond premium." For federal income tax purposes, bond premium is amortized over the period to the Lowest Yield Call Date of a Callable Premium Bond. A bondholder will therefore be required to decrease his basis in the Callable Premium Bond by the amount of the amortizable bond premium attributable to each taxable year he holds such Callable Premium Bond. The amount of the amortizable bond premium attributable to each taxable year is determined on an actuarial basis at a constant interest rate compounded on each interest payment date. The amortizable bond premium attributable to a taxable year is not deductible for federal income tax purposes. In addition, in the opinion of Bond Counsel, the Series 2004 Bonds are exempt from all present intangible personal property taxes presently imposed by the State of Florida. Except as stated above, Bond Counsel expresses no opinion as to any other tax consequences of acquiring, carrying, owning or disposing of the Series 2004 Bonds. Prospective purchasers of the Series 2004 Bonds should be aware that the ownership of tax-exempt obligations may result in collateral federal income tax consequences to financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, foreign corporations doing business in the United States and Subchapter S corporations with passive investment income. Prospective purchasers 18 falling within any of these categories should consult their own tax advisors as to the applicability of these consequences. RATINGS Moody's Invesors Service ("Moody's") and Standard and Poor's Ratings Services, a division of The McGraw-Hill Companies CS&P") are expected to assign to the Series 2004 Bonds their municipal bond ratings of (i) Aaa and AAA, respectively, with the understanding that upon delivery of the Series 2004 Bonds, a policy insuring the payment when due of the principal of and interest on the Series 2004 Bonds (the "Policy") will be issued by MBIA and (ii) A2 and A, respectively, without regard to the Policy. The ratings assigned to the Series 2004 Bonds by any rating agency reflect only the views of the rating agency, and an explanation of the significance of the ratings may be obtained only from the rating agency. The ratings are not a recommendation to buy, sell or hold the Series 2004 Bonds and there is no assurance that such ratings will remain in effect for any given period of time or that they will not be revised downward or withdrawn entirely if, in the judgment of the rating agency, circumstances so warrant. Any downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Series 2004 Bonds. Neither the Underwriter nor the City have undertaken responsibility to bring to the attention of the holders of the Series 2004 Bonds any proposed revision or withdrawal of the ratings of the Series 2004 Bonds, or to oppose any proposed revision or withdrawal. UNDERWRITING Raymond James & Associates, Inc. (the "Underwriter") has agreed, subject to certain customary conditions precedent, to purchase the Series 2004 Bonds from the City at a price of $ (representing the original principal amount of the Series 2004 Bonds less original issue discount of $ ., plus original issue premium of $ and less underwriter's discount of $ ), and to reoffer the Series 2004 Bonds at the prices or yields shown on the cover hereof. If obligated to purchase any of the Series 2004 Bonds, the Underwriter will be obligated to purchase all of the Series 2004 Bonds. The Series 2004 Bonds may be offered and sold to certain dealers, dealer banks, and banks acting as agent (including underwriters and other dealers depositing the Series 2004 Bonds into investment trusts) and others at prices lower than the public offering price stated on the cover hereof, and such public offering prices and other selling terms may be changed from time to time by the Underwriter. FINANCIAL STATEMENTS The audited general purpose financial statements of the City for the fiscal year ended September 30, 2003 are included in Appendix B attached hereto. Such excerpts from the City's Comprehensive Annual Financial Report, including the auditor's report, have been included in this Official Statement as public documents and consent from the auditors was not requested CONTINUING DISCLOSURE Pursuant to the Resolution, the City has covenanted and agreed that, so long as any of the Series 2004 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 municipal securities information repository ("NRMSIR") and to the appropriate depository designated by the State of Florida ("SID") if any, (i) on or before one year after each fiscal year of the City ending on or after September 30, 2003 financial information and operating data of the City for the preceding fiscal year of the type included in this Official Statement under the caption "SECURITY AND SOURCES OF PAYMENT- The Public Service Tax and 19 The Discretionary Communications Services Tax," and, (ii) if not submitted as part of the annual financial information pursuant to (i), above, then, when and if available, audited financial statements of the City 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 2004 Bonds, if material: (i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt services reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinion or events affecting the tax-exempt status of the security; (vii) modifications to rights of security holders; (viii) any call of the Series 2004 Bonds for redemption other than mandatory sinking fund redemptions of term Series 2004 Bonds; (ix) defeasances; (x) release, substitution, or sale of property securing the repayment of the securities; (xi) rating changes; and (xii) any change in the fiscal year of the City; and (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 City to provide the annual 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 City also covenanted to promptly provide a copy of the above information to the Paying Agent (if not the City), each Insurer and the Underwriter. The City shall provide such information to any requesting Holder of the Series 2004 Bonds and any requesting Beneficial Owner of the Series 2004 Bonds, provided that the City shall be entitled to charge such requesting Holder or Beneficial Owner an amount sufficient to reimburse itself for costs incurred for copying and shipping such information. For purposes of the Rule, the term "Beneficial Owner" means any person which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2004 Bonds (including persons holding Series 2004 Bonds through nominees, depositories or other intermediaries) or (ii) is treated as the owner of the Series 2004 Bonds for federal income tax purposes. The foregoing covenants run to the benefit of the Underwriter, the Holders and the Beneficial Owners. However, failure by the City to meet the covenants described herein shall not be deemed to constitute an Event of Default or a breach of any other covenant under the Resolution, and the sole remedy for such a default or breach shall be as described in the next paragraph. The Holder of any Series 2004 Bond or any Beneficial Owner may either at law or in equity, by suit, action, mandamus or other proceeding in any court of competent jurisdiction, protect and enforce any and all rights described under this caption and may enforce and compel the performance of all duties required to be performed by the City or by any officers thereof and described under this caption. Notwithstanding the foregoing, the enforcement of the covenants contemplated hereby shall not affect the validity or enforceability of the Series 2004 Bonds. Notwithstanding any other provisions of the Resolution, the provisions of the Resolution described above may be amended only as follows: (a) the amendment 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 City or the type of business conducted by the City; (b) the provisions of the Resolution, as amended, would have complied with the requirements of the Rule as in effect as of the date of issuance of the Series 2004 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 Holders and/or Beneficial Owners as determined by an opinion of nationally recognized bond counsel delivered to the City, or by approving vote of the Holders or the Beneficial Owners of at least a majority of the outstanding principal amount of the Series 2004 Bonds at the time of the amendment. In the event of any amendment to the Resolution, 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 City. If the amendment affects the accounting principles to be followed in preparing financial statements of the City, the annual financial information for 20 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 City 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. The City has complied with all of its continuing disclosure undertakings in connection with its previous bond issues. MISCELLANEOUS The summaries of and references to all documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such reference or summary is qualified in its entirety by reference to each such document, statute, report or other instrument. The information herein has been compiled from official and other sources and, while not guaranteed by the City, is believed to be correct. So far as any statements made in this Official Statement and the appendices attached hereto involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. AUTHORIZATION OF OFFICIAL STATEMENT This Official Statement has been duly authorized and approved by the City. CITY OF BOYNTON BEACH, FLORIDA By: Title: 21 APPENDIX A FORM OF THE RESOLUTION APPENDIX B GENERAL PURPOSE FINANCIAL STATEMENTS FOR THE FISCAL Y£AR ENDED SEPTEMBER 30, 2003 APPENDIX C STATISTICAL AND OTHER GENERAL INFORMATION CONCERNING THE CITY APPENDIX D FORM OF OPINION OF BOND COUNSEL APPENDIX E FORM OF MUNICIPAL BOND INSURANCE POLICY g:\02345~34\OS(1).wpd EXHIBIT D COMMITMENT FOR MUNICIPAL BOND INSURANCE D-1 MBi l COMMITMENT TO ISSUE A FINANCIAL GUARANTY INSURANCE POLICY Re~ Application No.: 2004-002186-001 Sale Date: April, 2004 (T) Program Type: Negotiated DP $16,840,000 (est.) City of Boynton Beach, Florida Public Service Tax Revenue Bonds, Series 2004 (the "Obligations") This commitment to issue a financial guaranty insurance policy (the "Commitment") dated April 5, 2004, constitutes an agreement between CITY OF BOYNTON BEACH, FLORIDA (the "Applicant") and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under the laws of the State of New York. Based on an approved application dated April 2, 2004, the Insurer agrees, upon satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date or (ii) on the date of delivery of and payment for the Obligations, a financial guaranty insurance policy (the "Policy") for the Obligations, insuring the payment of principal of and interest on the Obligations when due. The issuance of the Policy shall be subject to the following terms and conditions: 1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of .440% of total debt service, premium rounded to the nearest thousand. The premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 2. The Obligations shall have received the unqualified opinion of bond counsel with respect to the tax-exempt status of interest on the Obligations. 3. There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the Obligations or in the final official statement or other similar document, including the financial statements included therein. 4. There shall have been no material adverse change in any information submitted to the Insurer as a part of the application or subsequently submitted to be a part of the application to the Insurer. 5. No event shall have occurred which would allow any underwriter or any other purchaser of the Obligations not to be required to purchase the Obligations at closing. 6. A Statement of Insurance satisfactory to the Insurer shall be printed on the Obligations. 7. Prior to the delivery of and payment for the Obligations, none of the information or documents submitted as a part of the application to the Insurer shall be determined to contain any untrue or misleading statement of a material fact or fail to state a material fact required to be stated therein or necessary in order to make the statements contained therein not misleading. 8. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. 9. The Insurer's "Payments Under the Policy/Other Required Provisions" (see attached) shall be included in the authorizing document. 10. The Applicant agrees not to use the Insurer's name in any public document including, without limitation, a press release or presentation, announcement or forum without the Insurer's prior consent. In the event that the Applicant is advised by counsel that it has a legal obligation to disclose the Insurer's name in any press release, public announcement or other public document, the Applicant shall provide the Insurer wi¢ at least three (3) business days' prior written notice of its intent to use the Insurer's name together with a copy of the proposed use of the Insurer's name and of any description of a transaction with the Insurer and shall obtain the Insurer's prior consent as to the form and substance of the proposed use of the Insurer's name and any such description. 11. This Commitment may be signed in counterpart by the parties hereto. 12. Compliance with the Insurer's Standard Conditions for Refundings (see attached). 13. Compliance with the Insurer's General Document Provisions (see attached). 14. Compliance with the Insurer's List of Permissible Investments for Indentured Funds (see attached). Dated this 5th day of April, 2004. MBIA~~surance ~,rp~ By Assistant Secretary CITY OF BOYNTON BEACH, FLORIDA By: Title: EXHIBIT E COMMITMENT FOR SURETY BOND E-1 COMMITMENT TO ISSUE A DEBT SERVICE RESERVE SURETY BOND Application No.: 2004-002186-002 Sale Date: April, 2004 (T) Program Type: Negotiated DP $1,684,000 (est.) Debt Service Reserve Fund for the $16,840,000 (est.) City of Boynton Beach, Florida Public Service Tax Revenue Bonds, Series 2004 (the "Obligations") This commitment to issue a debt service reserve surety bond (the "Commitment") constitutes an agreement between CITY OF BOYNTON BEACH, FLORIDA (the "Applicant"), and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under the laws of the State of New York. Based on an approved application dated April 2, 2004, the Insurer agrees, upon satisfaction of the conditions herein, to issue on the earlier of(i) 120 days of said approval date or (ii) on the date of delivery of and payment for the Obligations, a debt service reserve surety bond (the "Surety Bond"), for the Obligations, guaranteeing the payment to the issuer of up to $1,684,000 (est.) on the Obligations. The issuance of the Surety Bond shall be subject to the following terms and conditions: 1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of 2.00% of the total Surety Bond amount, premium rounded to the nearest thousand. The premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 2. The Obligations shall have received the unqualified opinion of bond counsel with respect to the tax-exempt status of interest on the Obligations. 3. There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the Obligations or in the final official statement or other similar document, including the financial statements included therein. 4. There shall have been no material adverse change in any information submitted to the Insurer as a part of the Application or subsequently submitted to be a part of the Application to the Insurer. 5. No event shall have occurred which would allow any underwriter or any other purchaser of the Obligations not to be required to purchase the Obligations at closing. 6. Prior to the delivery of and payment for the Obligations, none of the information or documents submitted as a part of the Application to the Insurer shall be determined to contain any untrue or misleading statement of a material fact or fail to state a material fact required to be stated therein or necessary in order to make the statements contained therein not misleading. 7. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. 8. This Commitment may be signed in counterpart by the parties hereto. 9. Compliance with the Insurer's Term Sheet for Debt Service Reserve Fund Program (see Attachment A). Dated this 5th day of April, 2004. MBI~nce Corl~o~on By Assistant Secretary CITY OF BOYNTON BEACIt, FLORIDA By: Title: EXHIBIT F ESCROW DEPOSIT AGREEMENT G:\02345~34'xBond Res (5).wpd F- 1 ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT (this "Agreement"), is dated as of April __, 2004, and is by and between CITY OF BOYNTON BEACH, FLORIDA, a political subdivision of the State of Florida (the "Issuer") and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (the "Bank") organized and existing under the laws of the United States of America, having its designated corporate trust office in Miami, Florida, and authorized under such laws to exercise corporate trust powers, as escrow agent (the "Escrow Agent") and as Bond Registrar and Paying Agent for the Defeased Bonds (hereinafter defined) (the "1993 Bond Registrar"). WITNESSETH: WHEREAS, the Issuer has heretofore issued its Public Service Tax Refunding Revenue Bonds, Series 1993, dated May 1, 1993 (the "1993 Bonds"); and WHEREAS, the Issuer has determined to provide for the payment of the outstanding 1993 Bonds described on Exhibit A hereto (the "Defeased Bonds") by providing for the deposit of certain moneys with the Escrow Agent hereunder; and WHEREAS, a portion of the moneys deposited with the Escrow Agent for such purpose will be applied to the purchase of certain direct obligations of the United States of America ("Government Obligations"); and WHEREAS, in order to provide for the proper and timely application of the moneys deposited in the trust created herein to the payment of the Defeased Bonds, it is necessary for the Issuer to enter into this Escrow Deposit Agreement with the Escrow Agent on behalf of the holders from time to time of the Defeased Bonds; NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein set forth and in order to secure the payment of the principal of, premium, and interest on the Defeased Bonds, according to their tenor and effect, the Issuer does by these presents hereby deliver to and give, grant, assign and pledge to the Escrow Agent and to its successors in the trust hereby created, and to it and its assigns forever, all and singular the property hereinafter described, to wit: All right, title, and interest of the Issuer in and to $ behalf of the Issuer with the Escrow Agent hereunder. to be deposited by or on II. All right, title, and interest of the Issuer in and to any Government Obligations purchased from the moneys described in Clause I above. III. All right, title, and interest of the Issuer in and to all cash balances held from time to time hereunder and all income and earnings derived from or accruing to any Govermnent Obligations described in Clause II above. IV. All (i) property which is by the express provisions of this Agreement required to be subject to the pledge hereof and (ii) additional property of every kind and nature that may, from time to time hereafter, by delivery or by writing of any kind, be conveyed, pledged, assigned, or transferred as and for additional security hereunder or to be subject to the pledge hereof, by the Issuer or by anyone in its behalf, and the Escrow Agent is hereby authorized to receive the same at any time as additional security hereunder, provided that no property described in (ii) shall be accepted by the Escrow Agent unless the Escrow Agent shall receive an opinion of nationally recognized bond counsel selected by the Issuer to the effect that such acceptance will not cause the interest on the Defeased Bonds to be included in the gross income of the holders thereof for federal income tax purposes. TO HAVE AND TO HOLD, all and the same; in trust nevertheless, upon the terms herein set forth, for the equal and proportionate benefit, security and protection, as herein described, of the owners from time to time of the Defeased Bonds in the manner herein provided; but if the Defeased Bonds shall be fully and promptly paid when due or redeemed on their dates of scheduled maturity or mandatory redemption in accordance with the terms thereof and hereof, then this Agreement shall be and become void and of no further force and effect, otherwise the same shall remain in full force and effect, and subject to the covenants and conditions hereinafter set forth. ARTICLE I DEFINITIONS Section 1.01. Definitions. All terms used in capitalized form herein and not otherwise defined herein shall have the meanings ascribed to them in the Bond Resolution. In addition to words and terms elsewhere defined in this Agreement, as used herein, unless some other meaning is plainly intended, the following terms and phrases shall have the following meanings: "Bond Resolution" means, jointly, Resolution No. R93-73 and Resolution No. R93-74 of the City Commission of the Issuer, authorizing the issuance of the Defeased Bonds. "Escrow Deposit Trust Fund" means the fund so designated and established under Section 2.01 of this Agreement. "Government Obligations" means direct obligations of the United States of America that are not callable prior to maturity by the obligor thereon. Section 1.02. Uses of Phrases. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number and vice-versa. ARTICLE II ESTABLISHMENT OF FUNDS; FLOW OF FUNDS Section 2.01. Creation of Escrow Deposit Trust Fund. There is hereby created and established with the Escrow Agent a special and irrevocable trust fund designated the "Boynton Beach Public Service Tax Revenue Bonds, Series 1993/2004 Escrow Deposit Trust Fund" to be held in the custody of the Escrow Agent separate and apart from other funds of the Issuer or the Escrow Agent. Section 2.02. Deposit to Escrow Deposit Trust Fund. On April __, 2004 the Issuer shall deposit or cause to be deposited with the Escrow Agent and the Escrow Agent shall receive immediately available moneys in the amount of $ , for deposit in the Escrow Deposit Trust Fund. The funds deposited in the Escrow Deposit Trust Fund pursuant to the preceding sentence shall, except for any remaining cash balance be immediately invested by the Escrow Agent in the Government Obligations described on Exhibit B attached hereto. Section 2.03. Application of Escrow Deposit Trust Fund. The Escrow Agent shall apply the Government Obligations and other moneys deposited in the Escrow Deposit Trust Fund, together with all income and earnings thereon, in accordance with the provisions hereof. The Escrow Agent shall not invest any moneys held hereunder or make substitutions of the Government Obligations hereunder or sell, transfer, or otherwise dispose of the Government Obligations or moneys held hereunder except as provided in this Agreement. Section 2.04. Irrevocable Trust Created. Except as expressly provided herein, the deposit of (or purchase of for deposit of) the Government Obligations and moneys in the Escrow Deposit Trust Fund shall constitute an irrevocable deposit for the benefit of the owners of the Defeased Bonds and the owners of the Defeased Bonds shall have an express lien on the principal of and earnings on the Government Obligations and other moneys held in the Escrow Deposit Trust Fund hereunder until applied in accordance with this Agreement. The Government Obligations and earnings thereon and other moneys shall be held by the Escrow Agent and used only for the purposes and in the manner provided in this Agreement. Section 2.05. Use of Moneys in Escrow Deposit Trust Fund; Redemption of Defeased Bonds. On June 3, 2004 the Escrow Agent shall transfer from funds in the Escrow Deposit Trust Fund to the 1993 Bond Registrar the amount of interest, principal and redemption premium of the Defeased Bonds coming due on such date, as shown on Exhibit C. Such amount shall be applied by the 1993 Bond Registrar to the payment of all principal of, interest on, and redemption premium, if any, when due with respect to the Defeased Bonds. The Issuer hereby irrevocably elects that the Defeased Bonds maturing on and after November 1, 2004, shall be called for redemption on June 3, 2004. The Issuer hereby directs that at least 30 days before June 3, 2004, a notice of such redemption in the form attached hereto as Exhibit D shall be mailed by the 1993 Bond Registrar, first class mail, postage prepaid, to all registered owners of Defeased Bonds to be redeemed at their addresses as they appear on the registration books therefor. In addition, further notice of such redemption shall be given by the 1993 Bond Registrar as provided in Section 302 of the Bond Resolution. The Issuer agrees to pay the reasonable expenses incurred by the 1993 Bond Registrar in connection with such redemption from lawfully available funds of the Issuer. Section 2.06. Investment and Reinvestment of Trust Funds. After the initial investment of funds, if any, pursuant to Section 2.02 hereof, the Issuer may direct the Escrow Agent in writing to invest and reinvest any moneys remaining from time to time in the Escrow Deposit Trust Fund until such time as they are needed, and the Escrow Agent shall comply with such request, otherwise the Escrow Agent shall hold such moneys uninvested. Such moneys may be invested and reinvested only in Government Obligations bearing interest at such rate or rates and maturing on such date or dates and in such amounts as directed in writing by the Issuer. The Issuer shall give no such instruction to the Escrow Agent unless the Issuer shall receive and concurrently deliver to the Escrow Agent an opinion of nationally recognized bond counsel selected by the Issuer in its sole discretion to the effect that such investment of such moneys will not adversely affect the exclusion from gross income for federal income tax purposes of the interest on the Defeased Bonds or on the Issuer's Public Service Tax Revenue Bonds, Series 2004. Provided further, that no such investment instruction shall be given unless the Issuer shall have received and delivered to the Escrow Agent verification from a firm of independent certified public accountants to the effect that, taking into account such investment, the amounts held hereunder will be sufficient to pay the principal, premium, and interest on the Defeased Bonds in full as the same shall become due whether by redemption or otherwise. Section 2.07. Transfer of Funds After All Payments Required by This Agreement Are Made. On June 4, 2004 after the transfer of funds described in Section 2.05 hereof has occurred, and after all fees and expenses of the Escrow Agent (including any attorneys' fees and expenses) due hereunder have been paid in full, all remaining moneys and Government Obligations, together with any income and interest thereon, in the Escrow Deposit Trust Fund shall be transferred to the Issuer bythe Escrow Agent. The Escrow Agent shall have no responsibility for the application of amounts transferred by it to the Issuer as provided in the preceding sentence. Section 2.08. Deficiencies. If at any time it shall appear to the Escrow Agent that the available proceeds in the Escrow Deposit Trust Fund will not be sufficient to make any payment when due to the owners of any of the Defeased Bonds, the Escrow Agent shall notify the Issuer not less than fifteen (15) days prior to such payment date and the Issuer agrees that it will make available to the Escrow Agent, from legally available funds, if any, amounts sufficient to eliminate the anticipated deficit so that the Escrow Agent will have sufficient funds to make such payment on the Defeased Bonds. Section 2.09. Escrow Agent and Bond Registrar Fees. The Issuer hereby agrees to provide for the payment, from lawfully available funds of the Issuer, of the compensation due and owing the Escrow Agent and 1993 Bond Registrar, which compensation shall be paid at such times and in such amounts as agreed between the Issuer and the 1993 Bond Registrar and Escrow Agent, respectively. In no event shall the 1993 Bond Registrar or Escrow Agent have any lien, security interest or right of set-off whatsoever upon any of the moneys or investments in the Escrow Deposit Trust Fund for the payment of such compensation, or for the reimbursement of any expenses incurred by the 1993 Bond Registrar or Escrow Agent in connection with this Agreement. Section 2.10. 1993 Bond Registrar. The Escrow Agent shall cooperate with the 1993 Bond Registrar, to cause necessary arrangements to be made and thereafter continued whereby funds available from the Escrow Deposit Trust Fund shall be made available by the Escrow Agent to the 1993 Bond Registrar, for the payment of the Defeased Bonds as the same shall be come due and payable. ARTICLE III CONCERNINGTHEBANK Section 3.01. Appointment of Escrow Agent. The Issuer hereby appoints Wachovia Bank, National Association as Escrow Agent under this Agreement. Section 3.02. Acceptance by Bank. By execution of this Agreement, the Bank accepts its duties and obligations hereunder. The Bank undertakes to perform such duties and only such duties as are specifically set forth in this Agreement and no implied covenants or obligations shall be read into this Agreement against the Bank. Section 3.03. Liability of Bank. The Bank shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. The Bank shall not be liable for any loss or any resulting taxability of interest on the Defeased Bonds resulting from any investment made pursuant to the terms and provisions of this Agreement. The Bank shall not be liable for the accuracy of the calculations as to the sufficiency of moneys and of the principal amount of the Government Obligations and the earnings thereon to pay the Defeased Bonds. The Bank shall keep such books and records as shall be consistent with prudent industry practice and shall make such books and records available for inspection by the Issuer at all reasonable times. In the event of the Bank's failure to account for any of the Government Obligations or moneys received by it, said Government Obligations or moneys shall be and remain the property of the Issuer for the benefit of the holders of the Defeased Bonds, as herein provided. Section 3.04. Permitted Acts. The Bank and its affiliates may become the owner of or may deal in any obligations of the Issuer described herein as fully and with the same rights as if it were not the Escrow Agent and 1993 Bond Registrar. Section 3.05. Resignation of Escrow Agent. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from the trusts hereby created by giving not less than sixty (60) days' written notice to the Issuer specifying the date when such resignation will take effect, but no such resignation shall take effect (except as provided by Section 3.07(b) hereof) unless a successor Escrow Agent shall have been appointed by the Issuer as hereinafter provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance ora successor Escrow Agent and the transfer to such successor Escrow Agent of the funds and accounts held by the Escrow Agent hereunder. Section 3.06. Removal of Escrow Agent. (a) The Escrow Agent may be removed at any time by the Issuer, but the Escrow Agent shall remain in office (except as provided by Section 3.07(b) hereof) until the appointment and taking office of a successor Escrow Agent in accordance with the provisions of this Agreement. (b) The Escrow Agent shall be deemed to have been removed if it is dissolved, becomes incapable of exercising the powers of Escrow Agent hereunder or is taken over by any governmental action. (c) Notwithstanding the foregoing provisions of this Section 3.06, no removal of the Escrow Agent shall take effect until all fees and expenses of the Escrow Agent to be removed (including attorneys' fees and expenses) due hereunder shall have been paid. Section 3.07. Successor Escrow Agent. (a) When the position of the Escrow Agent becomes or is about to become vacant, the Issuer shall appoint a successor Escrow Agent to fill such vacancy. (b) If no appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this Section, the holder of any Defeased Bond then outstanding may, or any Escrow Agent retiring or being removed from office shall, apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Upon the deposit by the retiring Escrow Agent of all funds and securities held by it under the provisions hereof into the registry of such court, such Escrow Agent shall be relieved of all future duties hereunder. (c) Any corporation into which the Escrow Agent, or any successor to it in the trusts created by this Agreement, may be merged or converted or with which it or any successor to it may be consolidated, or any corporation resulting from any merger, conversion, consolidation or reorganization to which the Escrow Agent or any successor to it shall be a party or any corporation to which all or substantially all of the corporate trust business of the Escrow Agent or any such successor shall be transferred shall be the successor Escrow Agent under this Agreement without the execution or filing of any paper or any other act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 3.08. Receipt of Proceedings. Receipt of true and correct copies of the Bond Resolution is hereby acknowledged by the Escrow Agent. 6 Section 3.09. Indemnification. The Issuer agrees to indemnify and save the Bank, its agents and employees, harmless, to the extent allowed by law, against any liabilities, costs, expenses and disbursements of whatsoever kind or nature, which it or they may incur in the exercise and performance of its powers and duties hereunder, and which are not due to its negligence or misconduct. Indemnification provided under this Section shall survive the termination of this Agreement. Section 3.10. Miscellaneous Provisions Regarding Escrow Agent. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the Issuer. The Escrow Agent may conclusively rely, as to the correctness of statements, conclusions and opinions therein, upon any certificate, report, opinion or other document furnished to the Escrow Agent pursuant to any provision of this Agreement; the Escrow Agent shall be protected and shall not be liable for acting or proceeding, in good faith, upon such reliance; and the Escrow Agent shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. The Escrow Agent may consult with counsel, who may be counsel to the Issuer or independent counsel, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith in accordance herewith. Prior to retaining such independent counsel, the Escrow Agent shall notify the Issuer of its intention. ARTICLE IV MISCELLANEOUS Section 4.01. Amendments to this Agreement. This Agreement is made for the benefit of the Issuer, the Bank and the holders from time to time of the Defeased Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such holders, the Bank and the Issuer; provided, however, that the Issuer and the Bank may, without the consent of, or notice to, such holders, enter into such agreements supplemental to this Agreement as shall not adversely affect the exclusion from gross income for federal income tax purposes of the interest on the Defeased Bonds and on the Issuer's Public Service Tax Revenue Bonds, Series 2004 and the rights of such holders and as shall not be inconsistent with the terms and provisions of this Agreement, for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; (b) to grant to, or confer upon, the Escrow Agent for the benefit of the holders of the Defeased Bonds, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Agent; and (c) to subject to this Agreement additional funds, securities or properties. 7 The Bank shall be entitled to rely exclusively upon an unqualified opinion of Moyle, Flanigan, Katz, Raymond & Sheehan, P.A. or other nationally recognized bond counsel with respect to compliance with this Section, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the holders of the Defeased Bonds, or that any instrument executed hereunder complies with the conditions and provisions of this Section. Section 4.02. Severability. If any one or more of the covenants or agreements provided in this Agreement should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed to be separate and shall in no way affect the validity of the remaining provisions of this Agreement. Section 4.03. Agreement Binding. All the covenants, promises and agreements in this Agreement contained by or on behalf of the Issuer or by or on behalf of the Escrow Agent shall bind and inure to the benefit of their respective successors and assigns, and to the benefit of the holders of the Defeased Bonds, whether so expressed or not. Section 4.04. Termination. This Agreement (other than Section 3.09 hereof) shall terminate when all transfers and payments required to be made by the Escrow Agent under the provisions hereof shall have been made Section 4.05. Governing Law. This Agreement shall be governed by the applicable laws of the State of Florida. Section 4.06. Execution by Counterparts. This Agreement may be executed in several counterparts, each of which shall be regarded for all purposes as an original, and all of which, together, shall constitute and be but one and the same instrument. Section 4.07. Notices. Any notice, demand, direction, request or other instrument authorized or required by this Agreement to be given shall be deemed sufficiently given on the day sent by registered mail, return receipt requested, addressed as follows or to such other address furnished in writing by any of the following to all of the following: If to the Issuer: City of Boynton Beach, Florida 100 East Boynton Beach Boulevard Boynton Beach, Florida 33425 Attn: City Manager If to the Bank: Wachovia Bank, National Association Corporate Trust Department FL6065 200 South Biscayne Boulevard 14th Floor Miami, Florida 33131 IN WITNESS WHEREOF, the Issuer and the Escrow Agent have duly executed this Agreement as of the date first above written. CITY OF BOYNTON BEACH, FLORIDA By: Mayor WACHOVIA BANK, ASSOCIATION, as Escrow Agent and 1993 Bond Registrar NATIONAL By: Its Authorized Signatory EXHIBIT A DEFEASED BONDS Maturity Date (November 1) 2004 2005 2006 2007 2008 2010 Principal Amount $1,545,000 1,625,000 1,705,000 715,000 755,000 1,640,000 A-1 EXHIBIT B GOVERNMENT OBLIGATIONS TO BE DEPOSITED INTO ESCROW DEPOSIT TRUST FUND Maturity Date 6/03/2004 Principal Type 1 Interest Rate 1. U.S. Treasury Obligation - State and Local Gov't. Series B-1 EXHIBIT C DEFEASED BONDS DEBT SERVICE SCHEDULE Date 6/03/2004 Principal $7,985,000.00 Call Premium $159,700.00 Interest $ Total $ C-1 EXHIBIT D REDEMPTION NOTICE CITY OF BOYNTON BEACH, FLORIDA PUBLIC SERVICE TAX REVENUE BONDS, SERIES 1993 Maturity CUSIP Nos.* 2004 103575 BS4 2005 103575 BU9 2006 103575 BV7 2007 103575BW5 2008 103575BX3 2010 103575 BT2 Notice is hereby given that pursuant to the terms of Resolution No. R93-73, adopted May 6, 1993, as amended and supplemented, by the City Commission of the City of Boynton Beach, Florida, the bonds described above which were issued on May 27, 1993, are called for payment and redemption on June 3, 2004 (the "Redemption Date") at a redemption price of 102% of the principal amount thereof plus accrued interest thereon to the Redemption Date. The Bonds so called for redemption should be presented for payment and redemption at the office of the Bond Registrar set forth below, on or after June 3, 2004, and will cease to bear or accrue interest after that date, whether or not so presented. Wachovia Bank, National Association Corporate Trust Operations 1525 West W.T. Harris Boulevard, 3C3 Charlotte, N.C. 28262-1153 1-800-665-9343 Withholding of 30% of gross redemption proceeds of any payment made within the United States of America may be required by the Interest and Dividend Tax Compliance Act of' 1983 unless the Bond Registrar has the correct taxpayer identification number (social security or employer identification number) or exemption certificate of the payee. Please furnish a properly completed IRS Form W-9 or exemption certificate or equivalent when presenting your securities for redemption. DATED this __ day of ,2003. CITY OF BOYNTON BEACH, FLORIDA D-1 By:/s/Diane Reese Finance Director CUSIP numbers are included solely for the convenience of the owners, and no representation is made as to the correctness of the CUSIP numbers indicated in this Redemption Notice. G:\02345\34\escrow deposit(l).wpd D-2