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Item Q07 BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY Meeting Date: December 18, 2002 Division: County Administrator Bulk Item: Yes No X Department: County Administrator AGENDA ITEM WORDING: Approval of two Resolutions: 1) Resolution accepting the proposal of to provide the County with a Loan in an aggregate principal amount of $ in order to refund all of the outstanding Monroe County Municipal Service District Refunding Improvement Bonds, Series 1991. 2) Resolution supplementing Resolution No. 170-1993 entitled: "A Resolution of the BOCC of Monroe County, Florida, providing for the Advance Refunding of the Outstanding Improvement Revenue Bonds, Series 1988A and Series 1988B, of the County; authorizing the issuance of not exceeding $ Refunding Revenue Bonds, Series 1993, of the County to finance the cost thereof. ITEM BACKGROUND: Resolution 1 - Monroe County, Florida Solid Waste Disposal System Refunding Revenue Note, Series 2002 - In 1991, the Monroe County Municipal Service District Refunding Improvement Bonds, Series 1991 (the "1991 Bonds") were issued to refinance certain outstanding Bonds of the County. Due to the favorable interest rate environment, it is possible at this time to refinance the 1991 Bonds and achieve debt service savings for the County. The resolution approves of a loan from the Bank identified in the resolution and authorizes the issuance of the Monroe County, Florida Solid Waste Disposal System Refunding Revenue Note, Series 2002 (the "2002 Note") to evidence such loan. The 2002 Note will be secured by and payable from the Net Revenues of the County's Solid Waste Disposal System. Proceeds of the 2002 Note will be applied to payoff the 1991 Bonds. The resolution also sets forth the terms and provisions for the loan. If the resolution is adopted, the closing for the 2002 Note will occur on December 19. The County's Bond Counsel and Financial Advisor will be at the meeting to explain any of the specifics of the transaction. Resolution 2 - Monroe County, Florida Guaranteed Entitlement Refunding Revenue Note, Series 2002 - In 1993, the Monroe County, Florida Refunding Revenue Bonds, Series 1993 (the "1993 Bonds") were issued to refinance certain outstanding Bonds of the County. Due to the favorable interest rate environment, it is possible at this time to refinance the 1993 Bonds and achieve debt service savings for the County. The resolution approves of a loan from the Bank identified in the resolution and authorizes the issuance of the Monroe County, Florida Guaranteed Entitlement Refunding Revenue Note, Series 2002 (the "2002 Note") to evidence such loan. The 2002 Note will be secured by and payable from the County's First Guaranteed Entitlement Funds and Second Guaranteed Entitlement Funds. Proceeds of the 2002 Note will be applied to payoff the 1993 Bonds. The resolution also sets forth the terms and provisions for the loan. If the resolution is adopted, the closing for the 2002 Note will occur on December 19. The County's Bond Counsel and Financial Advisor will be at the meeting to explain any of the specifics of the transaction. PREVIOUS RELEVANT BOCC ACTION: CONTRACT/AGREEMENT CHANGES: N/A ST AFF RECOMMENDATIONS: Approval. Q'l TOTAL COST: COST TO COUNTY: BUDGETED: Yes No REVENUE PRODUCING: Yes No AMOUNTPERMONTH_ Year APPROVED BY: County Atty _ OMBlPurchasing _ Risk Management _ DIVISION DIRECTOR APPROVAL: -s~~~ James L. Roberts DOCUMENTATION: Included To Follow X Not Required_ DISPOSITION: AGENDA ITEM # Revised 2/27/01 AGENDA ITEM WITH LATE DOCUMENTATION DIVISION COUNTY ADMINISTRATOR DEPARTMENT COUNTY ADMINISTRATOR SUBJECT Approval of two Resolutions: I) Resolution accepting the proposal of to provide the County with a Loan in an aggregate principal amount of $ in order to refund all of the outstanding Monroe County Municipal Service District Refunding Improvement Bonds, Series 1991. 2) Resolution supplementing Resolution No. 170-1993 entitled: "A Resolution of the BOCC of Monroe County, Florida, providing for the Advance Refunding of the Outstanding Improvement Revenue Bonds, Series 1988A and Series 1988B, of the Countv: authorizing the issuance of not exceeding $ Refunding Revenue Bonds, Series 1993, of the County to finance the cost DATE ITEM WILL BE AVAILABLE: DECEMBER 17. 2002 CFM Public Financial Management Financial and Investment Advisors Suites 201 & 202 10100 Deer Run Farm Road Fort Myers. Fl 33912-1045 239 939-3009 239 939-1220 fax vwvw.pfm.com December 10, 2002 MEMORANDUM TO: Jim Roberts Monroe County, Florida FROM: Hal Canary Kyrle L. Turton Public Financial Management, Inc. RE: Analysis of Proposals - Guaranteed Entitlement & Municipal Service District Refunding Notes Monroe County, Florida ("County") issued a Request for Commitment ("RFC") for two tax- exempt term loans to 1) refund maturities 2003 through 2011 of the outstanding $5,660,000 Municipal Service District ("District") Refunding Improvement Bonds, Series 1991 ("Solid Waste Note") and 2) refund maturities 2003 through 2008 of the outstanding $3,405,000 Guaranteed Entitlement Refunding Revenue Bonds, Series 1993 ("Guaranteed Entitlement Note"). Responses were due from proposers on December 5,2002. The Solid Waste Note is secured by lien upon the payments received from franchisee solid waste collectors with respect to commercial property within the area of the District; all other non ad- valorem funds received by the District with respect to the furnishing of the services of the Facilities to the residents of the District, excluding any state or federal funds received from time to time by the District; and any income derived from the investment of funds and accounts created and established by the Bond Resolution. The Guaranteed Entitlement Note is secured by a lien upon the guaranteed entitlement and second guaranteed entitlement portion of the revenue sharing trust funds of the State of Florida, as defined in and as distributable to the County, under the provisions of Chapter 218, Part II, and the Florida Statutes. The RFC was distributed to seven financial institutions and advertised in a local newspaper. The County received responses from the following three banks: . Bank of America . Wachovia Bank ("Wachovia") . SunTrust Bank ("SunTrust") PFM has attached a summary of each bank's proposal. The firms were asked to bid a fixed interest rate for bank-qualified and non-bank qualified Notes with a no-prepayment penalty option. The following table summarizes each bank's proposed rates as of December 4,2002 and the level of present value ("PV") savings associated with these bids. SunTrust did not include non-bank qualified bids for either Note. Refunding of Municipal Service District Bonds Wachovia Bank of SunTrust Bank America BQ Rate 2.99% 3.38% 3.69% PV Savings 897,591 784,778 697,109 ($) PV Savings 16% 14% 12% (%) Wachovia Bank of SunTrust Bank America Non-BQ Rate 3.59% 4.86% N/A PV Savings 725,204 381,081 N/A ($) PV Savings 13% 6.73% N/A (%) Refunding of Guaranteed Entitlement Bonds Wachovia Bank of SunTrust Bank America BQ Rate 2.73% 3.08% 3.29% PV Savings 155,281 114,522 90,396 ($) PV Savings 5.35% 3.94% 3.11% (%) Overview of Proposals Wachovia Bank Wachovia Bank of SunTrust Bank America Non-BQ Rate 3.300.10 4.54% N/A PV Savings 89,253 -48,287 N/A ($) PV Savings 3.1% -1.67 N/A (%) As shown by the above analysis, Wachovia's bank-qualified cover bid for December 4, 2002 results in total PV savings of $1,052,872 on refunded debt. This amount is greater than the total PV savings generated by Bank of America's bank qualified cover bids by $153,572, and SunTrust's bank- qualified bids by $265,367. While Wachovia Bank's cover bids for both the Guaranteed Entitlement and Solid Waste Note are the most aggressive and result in the greatest level of PV savings for the County, there are several reasons why their proposal should not be accepted. P...onq"A.-I h." Pnhli,.. J;'inqn...jql 'l\;fQn4JlnArn........ The RFC specifically requests that the proposers respond with a no-prepayment penalty option. Wachovia includes a prepayment penalty formula that is likely to result in a payment so large that it is never desirable to refund both Notes. Additionally, the County's Notes will not be accompanied by the comprehensive disclosure documents included in a bond issuance. As such, the County will have to negotiate with Wachovia an amendment to its commitment letter that guarantees that the Notes are transferred only to sophisticated investors (i.e. minimum denominations of $100,000 on any transfers of the Note). While SunTrust and Bank: of America do not explicitly state in their proposals that the Notes will be transferred only to sophisticated investors, they are prepared to amend their commitment letters to include this language at no charge. Another PFM client had similar negotiations with Wachovia on a recent loan transaction. For Wachovia's consideration of the client's request, it received a 25 basis point upfront payment at closing (an amount that would total of approximately $21,400 on the Solid Waste and Guaranteed Entitlement Notes). More importantly, the negotiations between the client and Wachovia lasted for nearly 3 weeks until an agreement was reached. Assuming the same timeframe for similar negotiations between Monroe County and Wachovia, the County would not be able to close the transaction before the 2003 calendar year and would incur higher interest rate costs associated with the non-bank qualified status on the two Notes. Bank of America Bank: of America's cover bids for December 4,2002 result in total PV savings of $899,300. This amountis less than Wachovia's cover bid by approximately $153,572 and greater than SunTrust's bid by $111,795. There are several reasons why their bids should not be accepted. Like Wachovia, Bank: of America also includes breakage fee language in its proposal. Bank: of America's proposal includes prepayment penalty language that is likely to result in a payment so large that prepayment is never a viable option. Bank: of America's proposal also includes a Covenant to Budget and Appropriate as security for both Notes. The RFC clearly outlines the security for both Notes, and does not mention a pledge of all legally available non-ad valorem revenues. Since the other proposers provided bids that achieve a significant level of PV savings on refunded debt without the requirement of a legally available non-ad valorem revenue pledge, PFM recommends that Bank: of America's proposal not be pursued. SunTrust Bank SunTrust's cover bid for December 4, 2002 results in total PV savings of approximately $787,505. This amount is less than Wachovia's cover bid by approximately $265,367, and less than Bank: of America's bid by $111,795. However, SunTrust was the only proposer that complied with all specified terms and conditions in the RFC. Most notably, SunTrust is willing to grant the County's preference for a no-prepayment penalty option without the requirement of a Covenant to Budget and Appropriate. P..on....o.d h" P..hli,. Vin'1l"I'ifJIl l\JI QnqnOrnAn't 3 RECOMMENDA nON Based upon our analysis of the proposals, PFM recommends that the County select SunTrust to provide both Notes. Although SunTrust provided the highest bank-qualified and non bank- qualified cover bids for both Notes, the other proposers' lower rates are in a large part due to the special provisions included in their proposals. If SunTrust Bank required a prepayment penalty and a Covenant to Budget and Appropriate in its proposal, it is likely that its bank-qualified and non-bank qualified rates would have been significantly lower. Since SunTrust's proposal still provides the County will a significant level of PV savings on refunded debt while satisfying all of the terms set forth in the RFC, PFM believes that SunTrust is best suited to provide the Notes and ensure a timely and successful closing. SunTrust has already informed us that if selected as loan provider, the County will be able to lock-in the interest rate on the loan immediately following Board approval on December 18, 2002 and fund the proceeds of the Notes on December 19, 2002. Upon review, please call to discuss. 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A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA ACCEPTING THE PROPOSAL OF [A] SUNTRUST BANK TO PROVIDE THE COUNTY WITH A LOAN IN AN AGGREGA TE PRINCIPAL AMOUNT OF [A] $4.143.945.49 IN ORDER TO REFUND ALL OF THE OUTSTANDING MONROE COUNTY MUNICIPAL SERVICE DISTRICT REFUNDING IMPROVEMENT BONDS, SERIES 1991; AUTHORIZING THE ISSUANCE OF THE MONROE COUNTY SOLID WASTE DISPOSAL SYSTEM REFUNDING REVENUE NOTE, SERIES 2002 TO EVIDENCE SUCH LOAN; PLEDGING THE [A] GROSS REVENUES OF THE COUNTY'S SOLID WASTE DISPOSAL SYSTEM AND CERTAIN OTHER FUNDS TO PAY THE SERIES 2002 NOTE; PROVIDING CERTAIN TERMS AND DETAILS OF THE SERIES 2002 NOTE; MAKING CERTAIN COVENANTS AND PROVIDING CERTAIN RIGHTS TO THE HOLDER OF THE SERIES 2002 NOTE; AUTHORIZING THE DELIVERY AND EXECUTION OF AN ESCROW DEPOSIT AGREEMENT AND THE APPOINTMENT OF AN ESCROW AGENT THERETO; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA: ARTICLE I GENERAL SECTION 1.01. DEFINITIONS. When used in this Resolution, all capitalized terms shall have the meaning set forth below: "Authorized Investments" shall mean any investments that are lawful and valid pursuant to State law for government entities such as the Issuer. Q1 "Bid Proposal" shall mean the Bid Proposal submitted by [^] SunTrust Bank in response to the Request for Commitment, a copy of which Bid Proposal is attached hereto as Exhibit C. "Board" shall mean the Board of County Commissioners of the Issuer. "Bond Counsel" shall mean Nabors, Giblin & Nickerson, P.A. or any other attorney at law or firm of attorneys, of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules thereunder in effect or imposed. "Clerk" shall mean the Clerk of the Circuit Court for Monroe County, Florida, and Ex-officio Clerk of the Board of County Commissioners of the Issuer, or such other person as may be duly authorized to act on his or her behalf. "Consulting Engineers" shall mean any engineering firm of reputation for skill and experience with respect to the construction and operation of facilities similar to those that comprise the System, which is duly licensed under the laws of the State of Florida and designated by the Issuer to perform the duties of the Consulting Engineers under the provisions hereof. "County Administrator" shall mean the County Administrator of the Issuer, and such other person as may be authorized to act on his or her behalf. "County Attorney" shall mean the County Attorney of the Issuer, and such other person as may be authorized to act on his or her behalf. "Determination of Taxability" shall mean the circumstance of interest paid or payable on the Series 2002 Note becoming includable for federal income tax purposes in the gross income of the Holder of the Series 2002 Note [^] for any reason whatsoever and regardless of whether the same was within or beyond the control of the Issuer. A Determination of Taxability [^] shall be evidenced bv either (a) the receipt by the Issuer or Holder of the Series 2002 Note of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency which holds that any interest payable on the Series 2002 Note is includable in the gross income of such Holder of the Series 2002 Note; (b) the issuance of any public or private ruling of the Internal Revenue 2 Service that any interest payable on the Series 2002 Note is includable in the gross income of the Holder of the Series 2002 Note; or (c) receipt by the Issuer or the Holder of the Series 2002 Note of an opinion of Bond Counsel that any interest on the Series 2002 Note has become includable in the gross income of the Holder of the Series 2002 Note for federal . income tax purposes. For all purposes of this definition, a Determination of Taxability will be deemed to occur on the first date as of which the interest on the Series 2002 Note is deemed includable in the gross income of the Holder of the Series 2002 Note. A Determination of Taxability shall not occur solely from the fact that such interest is taken into account in determining adjusted current earnings for the purpose of the alternative minimum income tax imposed on corporations. "Escrow Deposit Agreement" shall mean the agreement authorized pursuant to Section 4.14 hereof. "Federal Securities" shall have the meaning ascribed thereto in the Refunded Bonds Resolution. "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. "Gross Revenues" shall mean all income and moneys received by the Issuer from the rates, fees, rentals, charges, assessments and other income to be made and collected by the Issuer for the use of the products, services and facilities to be provided by the System or otherwise received by the Issuer or accruing to the Issuer in the management and operation of the System calculated in accordance with generally accepted accounting principles applicable to solid waste collection, disposal and management systems similarto the System, including, without limiting the generality of the foregoing, any investment of moneys under the provisions of this Resolution. Gross Revenues shall not include any federal or state grant moneys received by the Issuer. "Holder" or "Series 2002 Noteholder" or "Registered Owner" shall mean the owner of the Series 2002 Note as set forth on the registration books of the Issuer. The original Holder ofthe Series 2002 Note shall be [^] SunTrust Bank. "Interest Rate" shall mean the annual fixed interest rate equal to [^] 3.41% per annum. The Interest Rate shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. 3 "Issuer" or "County" shall mean Monroe County, Florida, a political subdivision of the State. "Maximum Annual Debt Service" shall mean the maximum annual debt service to come due during any subsequent Fiscal Year of the Issuer on the Series 2002 Note and all other outstanding debt of the Issuer issued subsequently to the Series 2002 Note which is secured by or payable from the Pledged Revenues on a parity basis as to the Series 2002 Note. With respect to any variable rate debt, the interest rate used to determine Maximum Annual Debt Service shall be the greater of (a) 6.00% Der annum. or (b) the average actual interest rate in effect during the applicable Test Period. "Mayor" shall mean the Chairperson or Mayor of the Board of County Commissioners of Monroe County, Florida and such other person as may be duly authorized to act on his or her behalf. "Net Revenues" shall mean Gross Revenues less Operating Expenses. "Operating Expenses" shall mean the Issuer's expenses for operation, maintenance, repairs and replacements with respect to the System and shall include, without limiting the generality of the foregoing, administration expenses, insurance and surety bond fees, accounting, legal, financial advisory, consulting and engineering expenses, fees for the management ofthe System or any portion thereof, payments made in regard to the purchase of materials or services essential to or to be used in the operation of the System, ordinary and current rentals of equipment or other property, refunds of moneys lawfully due to others, payments to others for disposal or recycling of solid wastes, payments to pension, retirement, health and hospitalization funds, and any other expenses required to be paid for or with respect to proper operation or maintenance of the System, including appropriate reserves therefor, all to the extent properly attributable to the System in accordance with generally accepted accounting principles applicable to public solid waste collection, disposal and management systems similar to the System, but does not include (1) any costs or expenses in respect of original construction or improvement other than expenditures necessary to prevent an interruption or continuance of an interruption of service or of Gross Revenues, (2) minor capital expenditures necessary for the proper and economical operation or maintenance of the System, or (3) any provision for interest, depreciation, amortization or similar charges. "Outstanding," when used with reference to the Series 2002 Note and as of any particular date, shall describe that portion of the Series 2002 Note theretofore and thereupon being delivered and which remains unpaid except any Series 2002 Note in lieu of which 4 another Series 2002 Note or .Notes has been issued under agreement to replace a lost, mutilated or destroyed Series 1999 Bonds pursuant to Section 2.04 hereof. "Pledged Revenues" shall mean (1) the [A] ~ Revenues, and (2) until applied in accordance with the provisions of this Resolution, all moneys, including investments thereof, in the funds and accounts established hereunder. "Refunded Bonds" shall mean all of the outstanding Monroe County Municipal Service District Refunding Improvement Bonds, Series 1991, dated as of April 1, 1991, issued in the aggregate principal amount of$9,570,000, and $5,660,000 of which currently remains outstanding. "Refunded Bonds Resolution" shall mean the Issuer's Resolution No. 061-1991, adopted by the Board on March 12, 1991, as amended and supplemented. "Req uest for Commitment" shall mean the Request for Commitment distributed by the Issuer's Financial Advisor, Public Financial Management Inc., on behalf of the Issuer with respect to the Series 2002 Note, a copy of which Request for Commitment is attached hereto as Exhibit C. "Redemption Price" shall mean, with respect to the Series 2002 Note or portion thereof, the principal amount or portion thereof payable upon redemption thereof pursuant to the Series 2002 Note or this Resolution. "Series 2002 Note" shall mean the Issuer's Monroe County, Florida Solid Waste Disposal System Refunding Revenue Note, Series 2002, authorized pursuant to Section 2.01 hereof. "State" shall mean the State of Florida. "Supplemental Resolution" shall mean any resolution of the Issuer amending or supplementing this Resolution adopted and becoming effective in accordance with the terms of Section 6.01 hereof. "System" shall mean any and all solid waste collection, disposal and management facilities (including landfills, construction demolition debris disposal sites, collection facilities and transfer stations and recycling facilities) now owned or hereafter owned by the Issuer, which System shall also include any and all improvements, extensions and additions thereto hereafter constructed or acquired either from the proceeds of any indebtedness issued by the Issuer or from any other sources, together with all property, real or personal, tangible 5 or intangible, now or hereafter owned or used in connection therewith, including all contractual rights and rights to capacity associated therewith. "Test Period" shall mean, as of the date of determination thereof, the immediately preceding twelve (12) month period. The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar terms, shall refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. Words importing the masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa. SECTION 1.02. AUTHORITY FOR RESOLUTION. This Resolution is adopted pursuant to the provisions of Chapter 125, Florida Statutes, the Monroe County Code and other applicable provisions of law. SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of the Series 2002 Note by those who shall ho ld the same from time to time, the provisions of this Resolution shall be a part of the contract of the Issuer with the Holder of the Series 2002 Note and shall be deemed to be and shall constitute a contract between the Issuer and the Holder from time to time of the Series 2002 Note. 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 Holder of the Series 2002 Note. SECTION 1.04. FINDINGS. It is hereby ascertained, determined and declared that: (A) The Issuer now owns, operates and maintains the System for the collection, disposal and management of solid waste for the protection, health and well-being of its residents. (B) There has previously been issued the Refunded Bonds of which $5,660,000 currently remains outstanding. (C) The Issuer can achieve debt service savings through the issuance of the Series 2002 Note and the refunding of the Refunded Bonds. 6 (D) That pursuant to the Request for Commitment the Issuer requested proposals from financial institutions to provide the Issuer with a loan in an amount not to exceed $6,000,000, the proceeds of which would be applied for the principal purpose of current refunding the Refunded Bonds in order to achieve certain debt savings. (E) That the Bid Proposal submitted by [^] Sun Trust Bank was the most beneficial proposal to provide such loan. (F) The principal of and interest on the Series 2002 Note will be payable solely from the Pledged Revenues as provided herein and the estimated Pledged Revenues will be sufficient to pay the principal of and interest on the Series 2002 Note, as the same becomes due and all other payments provided for in the Resolution. (G) The Issuer shall never use or be required to use any ad valorem taxes for the payment of the Series 2002 Note. The Series 2002 Note shall not constitute a direct obligation of the Issuer or a pledge of its faith and credit, nor shall the Series 2002 Noteholder have any lien or encumbrance on any property in the Issuer, other than the Pledged Revenues. (H) Due to the potential volatility of the market for tax-exempt obligations such as the Series 2002 Note and the complexity of the transactions relating to such Series 2002 Note, it is in the best interest of the Issuer to issue the Series 2002 Note pursuant to Section 218.385 (l), Florida Statutes. The Issuer acknowledges receipt of the information required by Section 218.385, Florida Statutes, in connection with such sale of the Series 2002 Note, including a "Truth-In-Bonding" statement. The aforementioned information is set forth in the copy of the letter of [^] SunTrust Bank attached hereto as Exhibit A. (I) It is not reasonably anticipated that more than $10,000,000 of tax-exempt obligations as defined under Section 265(b )(3) of the Code will be issued by the Issuer in calendar year 2002. SECTION 1.05. ACCEPT ANCE OF BID PROPOSAL. The Issuer hereby accepts the Bid Proposal of [^] SunTrust Bank to provide financing for the refunding of the Refunded Bonds. SECTION 1.06. AUTHORIZA TION OF REFUNDING OF REFUNDED BONDS. The Issuer hereby authorizes the refunding, on a current basis, of the Refunded Bonds. 7 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRA TION OF THE SERIES 2002 NOTE SECTION 2.01. AUTHORIZATION OF THE SERIES 2002 NOTE. This Resolution creates an obligation of the Issuer in the aggregate principal amount of [^] $4.143.945.49 to be designated as "Monroe County, Florida Solid Waste Disposal System Refunding Revenue Note, Series 2002." The Series 2002 Note shall be issued in the aggregate principal amount of[ ^] $4.143.945.49, shall be dated as of December 19, 2002 and shall mature on October 1, 2011, subject to optional and mandatory prepayment prior to maturity as described herein. The Series 2002 Note shall be issued as one fully registered Series 2002 Note in the denomination of [^] $.4.143.945.49 and shall bear interest from December 19,2002, at the Interest Rate (calculated on the basis ofa 360-day year consisting of twelve 30-day months), payable semi-annually on April 1 and October 1 of each year, commencing April 1,2003. The Interest Rate may be adjusted pursuant to Section 2.07 herein. Such Interest Rate complies with and shall comply in all respects with the maximum interest rate provisions of Section 215.84, Florida Statutes. The Series 2002 Note shall be priced at 100% of its aggregate principal amount. The Series 2002 Note shall be payable as to principal, Redemption Price, if applicable, and interest by check or draft of the Issuer mailed to the Registered Owner of the Series 2002 Note as evidenced on the registration books maintained by the Issuer as of the close of business on the fifth business day next preceding an interest payment date; provided, that payments on the Series 2002 Note may be payable by bank wire transfer upon the request of the registered owner thereof[ ^ ]. In the event that such pavrnents are received bv the Rel!istered Owner more than ten (10) davs after the scheduled pavment. a late navment fee eaual to five percent (5%) of the past due amount shall be due and navable from the Issuer to the Ree:istered Owner. Promptly followinl! the final payment of the principal of the Series 2002 Note the Rel!istered Owner shall nrovide the Issuer with evidence of cancellation of the Series 2002 Note. Principal of and interest on the Series 2002 Note shall be payable in any coin or currency of the United States of America which, on the date of maturity of the Series 2002 Note, are legal tender for the payment of public and private debts. SECTION 2.02. APPLICATION OF SERIES 2002 NOTE PROCEEDS; TRANSFER OF CERT AIN MONEYS. The proceeds derived from the sale of the Series 2002 Note and premium, if any, and certain other legally available moneys of the Issuer, shall, simultaneously with the delivery of the Series 2002 Note to the purchaser thereof, be applied by the Issuer as follows: 8 (A) A sufficient amount of the Series 2002 Note proceeds shall be deposited to an escrow deposit trust fund established under the terms and provisions of the Escrow Deposit Agreement and shall be invested in Federal Securities in the manner set forth in such Escrow Deposit Agreement, which investments shall mature at such times and in such amounts as shall be sufficient to pay the principal of, premium, if any, and interest on the Refunded Bonds as the same mature or are redeemed. (B) A sufficient amount of the Series 2002 Note proceeds shall be applied to the payment of costs and expenses relating to the issuance of the Series 2002 Note. (C) The balance, if any, of the Series 2002 Note proceeds shall be deposited in the Sinking Fund and shall be applied to the payment of interest on the Series 2002 Note. (D) Any excess moneys on deposit in the funds and accounts established for the Refunded Bonds under the Refunded Bonds Resolution shall be transferred to the escrow deposit trust fund established pursuant to the Escrow Deposit Agreement. SECTION 2.03. EXECUTION OF THE SERIES 2002 NOTE. The Series 2002 Note shall be executed in the name of the Issuer with the manual signature of the Mayor and the official seal of the Issuer shall be imprinted thereon, attested and countersigned with the manual signature of the Clerk. In case anyone or more of the officers who shall have signed or sealed the Series 2002 Note shall cease to be such officer of the Issuer before the Series 2002 Note so signed and sealed has been actually sold and delivered, the Series 2002 Note may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed the Series 2002 Note had not ceased to hold such office. The Series 2002 Note may be signed and sealed on behalf of the Issuerby such person who at the actual time of the execution ofthe Series 2002 Note shall hold the proper office of the Issuer, although at the date of the Series 2002 Note such person may not have held such office or may not have been so authorized. SECTION 2.04. SERIES 2002 NOTE MUTILATED, DESTROYED, STOLEN OR LOST. In case the Series 2002 Note shall become mutilated, or be destroyed, stolen or lost, the Issuer shall issue and deliver a new Series 2002 Note of like tenor as the Series 2002 Note so mutilated, destroyed, stolen or lost, in exchange and substitution for the mutilated Series 2002 Note upon surrender and cancellation of such mutilated Series 2002 Note or in lieu of and substitution for the Series 2002 Note destroyed, stolen or lost, and upon the Holder furnishing the Issuer proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer may prescribe and paying such expenses as the Issuer may incur. The Series 2002 Note so surrendered or otherwise substituted shall be cancelled by the Issuer. If the Series 2002 Note 9 shall have matured or be about to mature, instead of issuing a substitute Series 2002 Note, the Issuer may pay the same or cause the Series 2002 Note to be paid, upon being indemnified as aforesaid, and if the Series 2002 Note is lost, stolen or destroyed, without surrender thereof. SECTION 2.05. REGISTRATION OF SERIES 2002 NOTE. So long as the Series 2002 Note remains outstanding, the Issuer shall maintain and keep the address of the Registered Owner of the Note. The Issuer may deem and treat the person in whose name the Series 2002 Note shall be registered as the absolute owner of the Series 2002 Note, whether the Series 2002 Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Series 2002 Note and for all other purposes, and all such payments so made to any such Registered Owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon the Series 2002 Note to the extent of the sum or sums so paid, and the Issuer shall not be affected by any notice to the contrary. The transfer of the Series 2002 Note shall be registrable only upon the books of the Issuer, at the office of the Clerk, under such reasonable regulations as the Issuer may prescribe, by the Registered Owner thereof in person or by his attorney duly authorized in writing upon surrender thereof together with a written instrument of transfer satisfactory to the Clerk duly executed and guaranteed by the Registered Owner or his duly authorized attorney. Upon the registration of transfer of the Series 2002 Note, the Issuer shall issue in the name of the transferee a new Note of the same principal amount and maturity as the surrendered Series 2002 Note. For every such registration of transfer, the Issuermay charge the registered owner a reasonable amount to reimburse it for any tax, fee, expense or other governmental charge (other than a charge imposed by the Issuer) required to be paid with respect to such transfer. SECTION 2.06. DESIGNA TION OF THE SERIES 2002 NOTE AS A QUALIFIED TAX-EXEMPT OBLIGATION. The Issuer hereby designates the Series 2002 Note as a "qualified tax-exempt obligation" under Section 265 (b )(3) of the C ode. This designation is based upon the findings of the Issuer set forth in Section 1.04(1) hereof and the Mayor or the Clerk is authorized to certify such finding upon the issuance ofthe Series 2002 Note. SECTION 2.07. ADJUSTMENTS TO INTEREST RATE. (A) If for any reason it shall be determined that the Series 2002 Note [^] is not a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, then the Interest Rate thereon shall be adjusted to such rate as shall provide the Series 2002 Noteholder with the 10 same rate of return that the Series 2002 Noteholder would have otherwise received on the Series 2002 Note taking into account the diminished deductibility of interest expense of the Series 2002 Noteholder under Section 265 of the Code as a result of the non "qualified tax -exempt obligation" status of the Note; provided, however, such increased rate shall never exceed the maximum rate allowable by law. The Series 2002 Noteholder shall provide the Issuer with sufficient evidence supporting any such increase. (B) In the event of a Determination of Taxability, the Interest Rate on the Series 2002 Note shall be [^] increased to a rate per annum equal to the Interest Rate times 1.54 (the "Taxable Rate ") effective retroactively to the date on which such Determination ofTaxability was made. Immediately upon a Determination of Taxability, the Issuer agrees to pay to the Holder of the Series 2002 Note subject to such Determination of Taxability the Additional Amount (as defined herein). "Additional Amount" means (i) the difference between (a) interest on the Series 2002 Note for the period commencing on the date on which the interest on such Series 2002 Note (or portion thereof) loses its tax-exempt status and ending on the earlier of the date such Series 2002 Note ceased to be outstanding or such adjustment is no longer applicable to such Series 2002 Note (the "Taxable Period") at a rate per annum equal to the Taxable Rate, and (b) the aggregate amount of interest payable on such Series 2002 Note for the Taxable Period under the provisions of such Series 2002 Note without considering the Determination of Taxability, plus (ii) any penalties and interest paid or payable by such Series 2002 Noteholder to the Internal Revenue Service by reason of such Determination of Taxability. (C) The Series 2002 Noteholder shall promptly notify the Issuer in writing of any adjustments pursuant to this Section 2.07. Such adjustments shall become effective as of the effective date of the event causing such adjustment. Adjustments pursuant to this Section 2.07 may be retroactive. The Series 2002 Noteholder shall certify to the Issuer in writing the additional amount, if any, due to the Series 2002 Noteholder as a result of an adjustment pursuant to this Section 2.07. Notwithstanding any provision of this Section 2.07 to the contrary, in no event shall the Interest Rate on the Series 2002 Note exceed the maximum rate permitted by law. (D) The provisions set forth in this Section 2.07 shall survive paymentofthe Series 2002 Note until such time as the federal statute of limitations under which the interest on the Series 2002 Note could be declared taxable under the Code shall have expired. SECTION 2.08. FORM OF THE SERIES 2002 NOTE. The text of the Series 2002 Note shall be in substantially the following form with such omissions, insertions and variations as may be necessary ordesirable and approved by the Mayor, the County Attorney, the County Administrator or the Clerk prior to the issuance thereof (which necessity or 11 desirability and approval shall be presumed by such officer's execution of the Series 2002 Note and the Issuer's delivery of the Series 2002 Note to the purchaser thereof): rRemainder of page intentionally left blank] 12 $4.143.945.49 [A] UNITED STATES OF AMERICA ST A TE OF FLORIDA MONROE COUNTY, FLORIDA SOLID WASTE DISPOSAL SYSTEM REFUNDING REVENUE NOTE, SERIES 2002 Interest Rate Maturity Date Date of Original Issue [A] 3.41 % October 1, 2011 December 19,2002 Registered Holder: SUNTRUST BANK Princioal Amount: FOUR MILLION ONE HUNDRED FORTY-THREE THOUSAND NINE HUNDRED FORTY-FIVE AND 49/100 [A] DOLLARS Monroe County, Florida, a political subdivision of the State of Florida (the "Issuer"), for value received, hereby promises to pay, solely from the funds hereinafter described, to the Registered Holder identified above, or registered assigns as hereinafter provided, on the Maturity Date identified above, subject to prior mandatory redemption as provided herein, the Principal Amount identified above and to pay interest on such Principal Amount from the Date of Original Issue identified above or from the most recent payment date to which interest has been paid at the Interest Rate per annum set forth and described in the hereinafter defined Resolution on April I and October I of each year commencing April!, 2003, until such Principal Amount shall have been paid, except as the provisions hereinafter set forth with respect to redemption prior to maturity may be or become applicable hereto. Such Principal Amount and interest on this Series 2002 Note 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. Payment of each installment of principal and interest shall be made to the person in whose name this Series 2002 Note shall be registered on the registration books of the Issuer, at the close of business on the date which shall be the fifth business day next preceding each payment date and shall be paid by a check or draft of the Issuer mailed to such Registered Holder at the address appearing on such registration books or, at the request and expense of such Registered Holder, by bank wire transfer for the account of such Holder[ ^]. In the event that such 13 oavments are received bv the Rel!istered Holder more than ten (10) days after the scheduled oavment. a late oavment fee eaual to five oercent (5%) of the oast due amount shall be due and oavable from the Issuer to the Rel!istered Holder. Promotlv followinl! the final payment ofthe principal of the Series 2002 Note the Rel!istered Holder shall orovide the Issuer with evidence of cancellation of the Series 2002 Note. All oavments must be made to the Rel!istered Holder in immediate Iv available funds. free and clear of any defenses. set offs. counterclaims. or withholdinl!s or deductions for taxes. The interest rate on this Series 2002 Note may be adiusted as orovided in the hereinafter described Resolution. This Series 2002 Note is issued for the principal purpose of (A) refunding, on a current basis, the Monroe County Municipal Service District Refunding Improvement Bonds, Series 1991, as more particularly described in the hereinafter defmed Resolution, and (B) paying costs and expenses of issuing the Series 2002 Note. The Series 2002 Note is being issued under the authority of and in full compliance with the Constitution and laws of the State of Florida, particularly Chapter 125, Florida Statutes, and other applicable provisions of law (collectively, the" Act"), and a resolution duly adopted by the County Commission of the Issuer on December 18, 2002 (the "Resolution"), and is subject to all the terms and conditions of the Resolution. The Series 2002 Note and the interest hereon are payable from and secured by a lien upon and a pledge of(1) the [^]~Revenues (as defmed in the Resolution) to be derived from the operation of the Issuer's solid waste disposal, collection and management system [^], and (2) until applied in accordance with the provisions of this Resolution, all moneys, including investments thereof, in the funds and accounts established under the Resolution (collectively, the "Pledged Revenues"). IT IS EXPRESSLY AGREED BY THE REGISTERED HOLDER OF THIS SERIES 2002 NOTE THAT THE FULL FAITH AND CREDIT OF THE ISSUER, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, ARE NOT PLEDGED TO THE PA YMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THIS SERIES 2002 NOTE AND THAT SUCH HOLDER SHALL NEVER HA VE THE RIGHT TO REQUIRE OR COMPEL THE EXERCISE OF ANY TAXING POWER OF THE ISSUER, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF, TO THE PAYMENT OF SUCH PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. THIS SERIES 2002 NOTE AND THE OBLIGA TION EVIDENCED HEREBY SHALL NOT CONSTITUTE A LIEN UPON ANY 14 PROPERTY OF THE ISSUER, BUT SHALL CONSTITUTE A LIEN ONLY ON, AND SHALL BE PAYABLE SOLELY FROM, THE PLEDGED REVENUES TO THE EXTENT PROVIDED IN THE RESOLUTION. THE ISSUER MAY ISSUE ADDITIONAL OBLIGA TIONS ON PARITY WITH THE SERIES 2002 NOTE IN ACCORDANCE WITH THE TERMS OF THE RESOLUTION. The Series 2002 Note may be prepaid at the option of the Issuer, from any moneys legally available therefor, upon notice as provided in the Resolution and described below, in whole or in part at any time or from time to time, without penalty or premium, by paying to the Registered Holder hereof all or part of the principal amount of the Series 2002 Note to be prepaid, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. In the event any portion ofthe Series 2002 Note is optionally prepaid, the amount so prepaid shall be applied as a credit against the latest scheduled amortization installment as set forth below. The Series 2002 Note is subject to mandatory prepayment prior to maturity at a Redemption Price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for prepayment, on October I of each year, without premium, as follows: Amortization Date October I, 2003 October 1, 2004 October 1,2005 October 1,2006 October 1, 2007 October 1, 2008 October 1, 2009 October 1, 2010 October 1,2011 * Principal Amount $ 323.086.79 423.468.48 437.908.75 452.841.44 468.283.34 484.251.80 500.764.79 517.840.86 535.499.24 *Final maturity. Optional prepayment of the Series 2002 Note shall be made as provided in the Resolution upon notice given by first class mail sent at least ten (10) days prior to the prepayment date. In the event that less than the full principal amount hereof shall have been called for optional prepayment, the Registered Holder hereof shall make a notation on the Series 2002 Note indicating the amount and date of such prepayment and shall promptly transmit an acknowledgment to the Issuer indicating the amount and date of such prepayment and the amount and date of the next scheduled payment. 15 Reference to the Resolution and any and all resolutions supplemental thereto, and modifications and amendments thereof, and to the Act is made for a description of the pledge securing the Series 2002 Note, the nature, manner and extent of enforcement of such pledge, and the rights, duties, immunities and obligations of the Issuer. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of the Series 2002 Note, exist, have happened and have been performed, in regular and due form and time as required by the laws and Constitution of the State of Florida applicable thereto, and that the issuance of the Series 2002 Note does not violate any constitutional or statutory limitations or prOVISIOns. Neither the members of the Board of County Commissioners of the Issuer nor the Mayor nor the Clerk nor any person executing the Series 2002 Note shall be liable personally hereon or be subject to any personal liability or accountability by reason of the issuance hereof. IN WITNESS WHEREOF, Monroe County, Florida has issued this Series 2002 Note and has caused the same to be executed by the manual signature of the Mayor of its Board of County Commissioners and countersigned and attested to by the manual signature of the Clerk of such Board, and its official seal to be affixed hereon, all as of the Date of Original Issue. MONROE COUNTY, FLORIDA (SEAL) Mayor, Board of County Commissioners A TTESTED AND COUNTERSIGNED: Clerk, Board of County Commissioners APPROVED AS TO FORM AND LEGAL SUFFICIENCY: County Attorney's Office 16 AR TICLE III PREP A YMENT OF THE SERIES 2002 NOTE SECTION 3.01. OPTIONAL PREPAYMENT. The Series 2002 Note may be prepaid at the option of the Issuer, from any moneys legally available therefor, upon notice as provided herein, in whole or in part at any time or from time to time, without penalty or premium, by paying to the Holder all or part of the principal amount of the Series 2002 Note to be prepaid, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. In the event any portion of the Series 2002 Note is optionally prepaid pursuant to this Section 3.01, the amount so prepaid shall be applied as a credit against the latest scheduled amortization installment as set forth in Section 3.02 hereof. The Holder shall make a notation on the Series 2002 Note indicating the amount and date of such prepayment and shall promptly transmit an acknowledgment to the Issuer indicating the amount and date of such prepayment and the amount and date of the next scheduled payment. Notice of such optional prepayment, which shall specify the principal amount to be prepaid and the date for prepayment, shall be given by the Issuer, and shall be mailed first class, postage prepaid, at least ten (10) days prior to the prepayment date to the Holder of Series 2002 Note at its address as it appears on the registration books kept by the Issuer as of the date of mailing of such notice. [Remainder of page intentionally left blank] 17 SECTION 3.02. MANDATORY PREPAYMENT. The Series 2002 Note is subject to mandatory sinking fund prepayment prior to maturity at a Redemption Price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for prepayment, on October 1, 2003, and thereafter on each October 1, without premium, as follows: Amortization Date October 1, 2003 October 1, 2004 October 1, 2005 October 1, 2006 October 1, 2007 October 1, 2008 October 1, 2009 October 1, 2010 October 1,2011 * Principal Amount $ 323.086.79 423.468.48 437.908.75 452.841.44 468.283.34 484.251. 80 500.764.79 517.840.86 535.499.24 *Final maturity. SECTION 3.03. PAYMENT OF PREPAID SERIES 2002 NOTE. Notice of optional prepayment having been given as provided in Section 3.01 hereof, the Series 2002 Note or a portion of the Series 2002 Note so to be prepaid shall, on the prepayment date, become due and payable at the Redemption Price therein specified, and from and after such date as the Holder actually receives such prepayment, the Series 2002 Note or portion thereof shall cease to bear interest. [Remainder of page intentionally left blank] 18 ARTICLE IV SECURITY; DEBT SERVICE FUND; COVENANTS OF THE ISSUER SECTION 4.01. SERIES 2002 NOTE NOT TO BE INDEBTEDNESS OF ISSUER. The Series 2002 Note shall not be or constitute a general obligation or indebtedness of the Issuer as a "bond" within the meaning of any constitutional or statutory provision, but shall be a special obligation of the Issuer, payable from and secured by a lien upon and pledge of the Pledged Revenues in accordance with the terms of this Resolution. No Holder of the Series 2002 Note shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2002 Note, or be entitled to payment of the Series 2002 Note from any moneys of the Issuer, except from the Pledged Revenues, in the manner provided herein. SECTION 4.02. SECURITY FOR THE SERIES 2002 NOTE. The payment of the principal of or Redemption Price, if applicable, and interest on the Series 2002 Note shall be secured forthwith equally and ratably by a pledge of and lien upon the Pledged Revenues. The Issuer does hereby irrevocably pledge the Pledged Revenues to the payment of the principal of or Redem ption Price, if applicable, and interest on the Series 2002 Note in accordance with the provisions hereof. Except as otherwise provided herein, the Pledged Revenues shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer. SECTION 4.03. CREA TION OF FUNDS AND ACCOUNTS. The Issuer covenants and agrees to establish the following funds and accounts: (A) the "Monroe County, Florida Solid Waste Disposal System Revenue Fund," (B) the "Monroe County, Florida Solid Waste Disposal System Operation and Maintenance Fund," (C) the "Monroe County, Florida Solid Waste Disposal System Sinking Fund." 19 Moneys in the aforementioned Sinking Fund, until applied in accordance with the provisions hereof, shall be held in trust for and be subject to a lien and charge in favor of the Holder of the Series 2002 Note and for the further security of such Holders. The Issuer may at any time and from time to time appoint one or more depositories to hold, for the benefit of the Holder of the Series 2002 Note, anyone or more of the funds and accounts established hereunder. Such depositary or depositories shall perform at the direction of the Issuer the duties of the Issuer in depositing, transferring and disbursing moneys to and from such fund as herein set forth, and all records of such depositary in performing such duties shall be open at all reasonable times to inspection by the Issuer and its agent and employees. Any such depositary shall be a bank or trust company duly authorized to perform such responsibilities pursuant to applicable law. SECTION 4.04. DISPOSITION OF REVENUES. (A) Except as otherwise provided by Section 4.08 hereofwith respect to investment income, the Issuer shall deposit promptly into the Revenue Fund, as received, all Gross Reven ues. [^](B) Moneys [A] in the Revenue [A] Fund shall be disposed of by the Issuer on or before the twenty-fifth (25th) day of each month, commencing in the month immediately following the delivery of the Series 2002 Note to the Holder thereof, or such later date as hereinafter provided, in the following manner and in the following order of priority: (1) Sinking Fund - Interest. The Issuer shall deposit or credit to the Sinking Fund the sum which, together with the balance allocated to pay interest in said Fund, shall equal the interest on the Series 2002 Note accrued and unpaid and to accrue to the end of the then current calendar month. No further deposit need be made to the Sinking Fund for interest when the moneys therein allocated to pay interest are equal to the interest coming due on the Series 2002 Note on the next succeeding [^] interest oavment date. (2) Sinking Fund - Principal. Commencing in the month [^] following the issuance of the Series 2002 Note, the Issuer shall next deposit into the Sinking Fund the sum which, together with the balance allocated to pay the principal or mandatory sinking fund prepayment amount in said Fund, shall equal the principal amount or mandatory sinking fund prepayment amount of the Series 2002 Note due and unpaid and that portion of the principal or mandatory sinking fund prepayment amount next due which would have accrued on such Bonds [A] through the end of the then current 20 calendar month if such principal amounts or mandatory sinking fund prepayment amounts were deemed to accrue monthly (assuming that a year consists of twelve (12) equivalent calendar months having thirty (30) days each) in equal amounts from the next preceding payment due date (or issue date), or, if there be no such preceding payment due date, from a date one year preceding the due date of such principal amount or mandatory sinking fund prepayment amount. No further deposit need be made to the Sinking Fund for principal or mandatory sinking fund prepayment amount when the moneys therein are equal to the principal or mandatory sinking fund prepayment amount coming due on the Outstanding Bonds on the next succeeding payment date. (3) Doeration and Maintenance Fund. Monevs in the Revenue Fund shall next be used each month to deoosit in the Doeration and Maintenance Fund such sums as are necessary to Day Doeratine: Exoenses for the ensuine: month. Amounts in the Doeration and Maintenance Fund shall be oaid out from time to time bv the Issuer for Ooeratine: Exoenses. (4) SUl:plus Funds. The balance of any Gross Revenues remaining in said Revenue Fund may be applied for any lawful purpose, including, but not limited to, purchase or redemption of the Series 2002 Note, payment of subordinated indebtedness and improvements, renewals and replacements to the System; provided, however, that none of such revenues shall ever be used for the purposes provided herein unless all payments required in Sections 4.04(B)(1) [^] throue:h 4.04(B)(3) hereof, including any deficiencies for prior payments, have been made in full to the date of such use. (C) Whenever moneys on deposit in the Sinking Fund are sufficient to fully pay the Series 2002 Note in accordance with its terms (including principal or applicable Redemption Price and interest thereon), no further deposits to the Sinking Fund need be made. If on any payment date the Gross Revenues are insufficient to deposit the required amount in any of the funds or accounts or for any of the purposes provided above, the deficiency shall be made up on the subsequent payment dates. The Issuer, in its discretion, may use moneys in the Sinking Fund to purchase or redeem the portion of the Series 2002 Note coming due on the next payment date, provided such purchase orredemption does not adversely affect the Issuer's ability to pay the principal or interest coming due on such payment date on the Bonds not so purchased or redeemed. SECTION 4.05. PAYMENT OF THE SERIES 2002 NOTE. [^] Exceot as otherwise orovided in Section 4.11 hereof. the Issuer hereby agrees to pay, solely from 21 Pledged Revenues, on the dates designated for payment of any principal of or Redemption Price, if applicable, or interest on the Series 2002 Note, sufficient monies to pay such principal or Redemption Price, if applicable, or interest. The Issuer shall utilize such monies for payment of the principal of or Redemption Price and interest on the Series 2002 Note when due. SECTION 4.06. REBATE ACCOUNT. The Issuer covenants and agrees to establish a special rebate account if it is determined that the Issuer has any rebate obligations under the Code. Amounts on deposit in such account, if any, shall be held in trust by the Issuer and used solely to make required rebates to the United States (except to the extent the same may be transferred to the Issuer) and the Series 2002 Noteholder shall have no right to have the same applied for debt service on the Series 2002 Note. The Issuer agrees to undertake all actions required of it in its arbitrage certificate related to the Series 2002 Note, including, but not limited to: (A) making a determination in accordance with the Code of the amount required to be deposited in the rebate account; (B) depositing the amount determined in clause (A) above into the rebate account; (C) paying on the dates and in the manner required by the Code to the United States Treasury from the rebate account and any other legally available moneys of the Issuer such amounts as shall be required by the Code to be rebated to the United States Treasury; and (D) keeping such records of the determinations made pursuant to this Section 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 Series 2002 Note. The provisions of the above-described arbitrage certificate may be amended without the consent of any Holder from time to time as shall be necessary, in the opinion of Bond Counsel, to comply with the provisions of the Code. SECTION 4.07. SEPARATE ACCOUNTS. The moneys required to be accounted for in each of the foregoing funds, accounts and subaccounts established herein may be deposited in a single, non- exclusive bank account, and funds allocated to the various funds, accounts and subaccounts established herein may be invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein and such investments for the various purposes of such funds, accounts and subaccounts as herein provided. 22 The designation and establishment of the various funds, accounts and subaccounts 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. The Issuer shall be authorized to establish any separate accounts within any of the Funds created herein or subaccounts within any such accounts that the Issuer may determine is beneficial or desirable in administering the moneys on deposit herein. SECTION 4.08. INVESTMENTS. Moneys on deposit in the Sinking Fund, the Operation and Maintenance Fund and the Revenue Fund shall be continuously secured in the manner by which the deposit of public funds are authorized to be secured by the laws of the State. Moneys on deposit in the Sinking Fund, the Operation and Maintenance Fund and the Revenue Fund may be invested and reinvested in Authorized Investments maturing not later than the date on which the moneys therein will be needed for the purposes of such fund. All investments shall be valued at cost. All such investments shall be valued at their fair market value. Any and all income received by thelssuerfrom the investment of moneys in any Fund shall be retained in such Fund. Nothing in this Resolution shall prevent any Authorized Investments acquired as investments of or security for funds held under their Resolution from being issued or held in book-entry form on the books of the Department of Treasury of the United States. SECTION 4.09. FEDERAL INCOME TAX COVENANTS. The Issuer covenants with the Holder of the Series 2002 Note that it shall not use the proceeds of the Series 2002 Note in any manner which would cause the interest on the Series 2002 Note to be included in gross income for purposes of federal income taxation. The Issuer covenants with the Series 2002 Noteholder that neither the Issuer nor any person under its control or direction will make any use of the proceeds of the Series 2002 Note (or amounts deemed to be proceeds under the Code) in any manner which would cause the Series 2002 Note to be an "arbitrage bond" within the meaning of Section 148 of the Code and neither the Issuer nor any other person shall do any act or fail to do any act which would cause the interest on the Series 2002 Note to be included in gross income for purposes of federal income taxation. 23 The Issuer hereby covenants with the Series 2002 Noteholder that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Series 2002 Note from gross income for purposes of federal income taxation, including, in particular, the payment of any amount required to be rebated to the U. S. Treasury pursuant to the Code. SECTION 4.10. ANNUAL AUDIT AND BUDGET. The Issuer shall, immediately after the close of each Fiscal Year, cause the financial statements of the Issuer to be properly audited by a recognized independent certified public accountant or recognized independent firm of certified public accountants, and shall require such accountants to complete their report on the annual financial statements in accordance with applicable law. The annual fmancial statements shall be prepared in conformity with generally accepted accounting principles consistently applied. A copy of the audited financial statements for each Fiscal Year shall be furnished to the Series 2002 N oteholder within 210 days after the end of each Fiscal Year. The Issuer shall also provide the Series 2002 Noteholder each Fiscal Year with a copy of its annual budget within [^] 60 days after the final adoption of such budget. SECTION 4.11. OTHER MONEYS. The Issuer may, in its sole discretion, utilize other legally available moneys, in addition to the Pledged Revenues, to pay the principal of and interest on the Series 2002 Note. SECTION 4.12. ADDITIONAL DEBT. So long as the Series 2002 Note is outstanding under this Resolution, the Issuer covenants and agrees that it shall not issue any debt obligations on parity with the Series 2002 Note and payable from the Pledged Revenues or any portion thereof unless the Net Revenues received by the Issuer during any twelve consecutive months withip the eighteen months immediately preceding the date of sale of such debt obligations were equal to at least [^] ~ ofthe Maximum Annual Debt Service taking into account the proposed debt obligations. The Issuer shall provide the Series 2002 N oteholder with a certification executed by the Clerk or the County Administrator evidencing compliance with this Section 4.12 prior to the issuance of any such debt obligations. SECTION 4.13. SYSTEM RATES. The Issuer shall fix, establish and maintain such rates and collect such fees, rates, assessments or other charges for the product, services and facilities of its System, and revise the same from time to time, whenever necessary, as will always provide in each Fiscal Year, Net Revenues adequate at all times to pay in each Fiscal Year at least one hundred [^] thirty-five percent [^ ](135%) of the principal (including any mandatory sinking fund prepayment amounts) and interest on the Series 2002 Note which is due in such Fiscal Year. Such rates, fees and other charges shall not be so reduced so as to be insufficient to provide adequate Net Revenues for the purposes provided therefor by this Resolution. 24 If, in any Fiscal Year, the Issuer shall fail to comply with the requirements contained in this Section 4.13, it shall enlZalZe the ConsultinlZ EnlZineers and cause the Consulting Engineers to review its rates, fees, charges, income, Gross Revenue, Operating Expenses and methods of operation and to make written recommendations as to the methods by which the Issuer may promptly seek to comply with the requirements set forth in this Section 4.13. The Issuer shall forthwith commence to implement such recommendations to the extent required so as to cause it to thereafter comply with said requirements. So long as the Issuer implements such recommendations and the Net Revenues are adeauate to Dav the orincioal (includinlZ mandatory sinkinlZ fund oavments) and interest on the Series 2002 Note it shall not constitute a Default hereunder. SECTION 4.14. AUTHORIZA TION TO EXECUTE ESCROW DEPOSIT AGREEMENT. The Issuer hereby authorizes the Mayor to execute and the Clerk to attest an Escrow Deposit Agreement (the "Escrow Deposit Agreement") and to deliver the Escrow Deposit Agreement to [^] The Bank of N ew York Trust Comoanv of Florida. N .A.. Jacksonville. Florida, which is hereby appointed as escrow agent thereunder (the "Escrow Agent"). All of the provisions of the Escrow Deposit Agreement when executed and delivered by the Issuer as authorized herein and when duly authorized, executed and delivered by the Escrow Agent, shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated verbatim herein, and the Escrow Deposit Agreement shall be in substantially the form attached hereto as Exhibit D, with such changes, amendments, modifications, omissions and additions, including the date of such Escrow Deposit Agreement, as may be approved by the Mayor. Execution by the Mayor of the Escrow Deposit Agreement shall be deemed to be conclusive evidence of approval of such changes. SECTION 4.15. CONSTRUCTION, OPERATION AND MAINTENANCE. The Issuer will maintain or cause to be maintained the System and all portions thereof in good condition and will operate or cause to be operated the same in an efficient and economical manner, making or causing to be made such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. The Issuer may contract with a responsible person which has experience in the operation of solid waste disposal systems similar to the System for the operation and maintenance of the System. SECTION 4.16. ENFORCEMENT OF CHARGES. The Issuer shall compel the prompt payment of rates, fees, assessments and charges imposed for the use of the services and facilities of the System, and to that end will vigorously enforce all of the provisions of any ordinance or resolution of the Issuer having to do with charges and control of the solid waste stream in the Issuer, and all of the rights and remedies permitted the Issuer 25 under law, including the securing of injunction against the disposition of solid waste into the System by any premises delinquent in the payment of such charges. The Issuer shall cause all solid waste soecial assessments to be olaced on the tax roll of the Monroe County Tax Collector. 26 ARTICLE V DEFAULTS AND REMEDIES SECTION 5.01. DEFAULTS DEFINED. The following shall be "Defaults" under this Resolution and the term "Default" shall mean, whenever it is used in this Resolution, anyone or more of the following events: (a) Failure by the Issuerto pay the principal of, Redemption Price, if applicable, and interest on the Series 2002 Note as the same shall become due and payable. (b) Failure by the Issuer to observe and perform any covenant, condition or agreement on its part to be observed or perfonned, other than as referred to in Section 5.01(a), for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied shall have been given to the Issuer by the Series 2002 Noteholder. Notwithstanding the foregoing, the Issuer shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the Issuer in good faith institutes curative action and diligently pursues such action until the default has been corrected, provided such period shall not exceed [^] 60 days without the written consent of the Series 2002 N oteholder. (c) The dissolution or liquidation of the Issuer, or the initiation by or against the Issuer of any proceeding under any federal or state law relating to bankruptcy, insolvency, arrangement, reorganization, readjustment of debt or any other form of debtor relief. SECTION 5.02. REMEDIES ON DEFAULT. The Holder of the Series 2002 Note issued under the provisions of this Resolution may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights under the Laws of the State of Florida, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution or by any applicable statutes to be performed by the Issuer or by any officer thereof; provided, however, that the Series 2002 Noteholder shall not have the right to declare the Series 2002 Note immediately due and payable. SECTION 5.03. REMEDIES CUMULATIVE. No remedy herein conferred upon or reserved to the Series 2002 Noteholder is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in 27 addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. SECTION 5.04. WAIVER OF DEFAULT. No delay or omission of the Series 2002 N oteholder to exercise any right or power accruing upon any Default shall impair any such right or power or shall be construed to be a waiver of any such Default, or an acquiescence therein; and every power and remedy given by this Section 5.04 hereof to the Series 2002 N oteholder may be exercised from time to time, and as often as may be deemed expedient. [Remainder of page intention~lly left blank] 28 ARTICLE VI SUPPLEMENT AL RESOLUTIONS SECTION 6.01. SUPPLEMENTAL RESOLUTIONS WITH THE SERIES 2002 NOTEHOLDER CONSENT. The Issuer, from time to time and at any time, may adopt resolutions amendatory or supplemental hereto (which resolutions shall thereafter form a part hereof) for any purpose; provided, however, the Issuermust obtain the written consent of the Series 2002 Noteholder prior to the adoption thereof if any of the rights of the Series 2002 Noteholder will be adversely affected. [Remainder of page intentionally left blank] 29 ARTICLE VII MISCELLANEOUS SECTION 7.01. SERIES 2002 NOTE EVIDENCES A LOAN. The Series 2002 Note issued hereunder evidences a loan made by [^] SunTrust Bank to the Issuer. Through its acceptance of the Series 2002 Note hereunder, [^] SunTrust Bank acknowledges that it [^] has no oresent intent to sell. assign or otherwise transfer the Series 2002 Note [^]~ orovided. however. that SunTrust Bank mav. in its sole discretion. sell. assign or otherwise transfer the Series 2002 Note prior to its maturity[ ^ ]. In the event of such sale. assignment or other transfer of the Series 2002 Note. SunTrust Bank shall comply in all respects with all applicable securities laws, rules and regulations and blue sky laws and any other applicable laws, rules or regulations regarding disclosure and registration [^ t, [^] SECTION 7.02. WAIVER OF JURY TRIAL. Ifanv legal action is taken with resoect to the Series 2002 Note or the Issuer's obligations hereunder. or SunTrust's commitment thereto. or anv other transaction related to the Series 2002 Note. the Issuer and Sun Trust Bank herebv waive their rights to iury trial. SECTION 7.03. GENERAL AUTHORITY. The members of the Board of County Commissioners of the Issuer and the officers, attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by this Resolution, or desirable or consistent with the requirements hereof for the full punctual and complete performance of all the terms, covenants and agreements contained herein or in the Series 2002 Note, and each member, employee, attorney and officer of the Issuer, the Mayor, the County Administrator, the County Attorney and the Clerk are hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. SECTION [A] 7.04. SEVERABILITY OF INVALID PROVISIONS. Ifany one or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision oflaw 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 Series 2002 Note issued hereunder. 30 SECTION [^] ~. REPEAL OF INCONSISTENT RESOLUTIONS. All resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict. SECTION [^]~. EFFECTIVE DA TE. This Resolution shall take effect immediately upon its adoption. Passed and adopted by the Board of County Commissioners of Monroe County, Florida, at a regular meeting of the Board, on this 18th day of December, 2002. MONROE COUNTY, FLORIDA (SEAL) Mayor, Board of County Commissioners ATTEST: Clerk, Board of County Commissioners APPROVED AS TO FORM AND LEGAL SUFFICIENCY: County Attorney's Office 31 EXHIBIT A DISCLOSURE LETTER AND TRUTH-IN-BONDING STATEMENT EXHIBIT B REQUEST FOR COMMITMENT EXHIBIT C BID PROPOSAL EXHIBIT D FORM OF ESCROW DEPOSIT AGREEMENT DRAFT #[^] 3: 12/16/02 083-[ ^] 00012.B3 RESOLUTION NO. A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA, AMENDING AND SUPPLEMENTING RESOLUTION NO. 170-1993 ENTITLED: "A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA, PROVIDING FOR THEADV ANCE REFUNDING OF THE OUTSTANDING IMPROVEMENT REVENUE BONDS, SERIES 1988A AND SERIES 1988B, OF THE COUNTY; AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $7,500,000 REFUNDING REVENUE BONDS, SERIES 1993, OF THE COUNTY TO FINANCE THE COST THEREOF; PROVIDING FOR THE PAYMENT OF SUCH BONDS FROM THE FIRST AND SECOND GUARANTEED ENTITLEMENTS OF THE COUNTY TO STATE REVENUE SHARING TRUST FUNDS; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE"; ACCEPTING THE PROPOSAL OF [^] SUNTRUST BANK TO PROVIDE THE COUNTY WITH A LOAN IN AN AGGREGA TE PRINCIPAL AMOUNT OF [^] $3.495.143.63 TO REFUND ALL OF THE COUNTY'S OUTSTANDING MONROE COUNTY, FLORIDA REFUNDING REVENUE BONDS, SERIES 1993;AUTHORIZINGTHE ISSUANCE OF THE MONROE COUNTY, FLORIDA GUARANTEED ENTITLEMENT REFUNDING REVENUE NOTE, SERIES 2002 IN ORDER TO SECURE SUCH LOAN; PLEDGING THE COUNTY'S FIRST AND SECOND GUARANTEED ENTITLEMENT FUNDS AND CERTAIN OTHER FUNDS TO PAY THE SERIES 2002 NOTE; PROVIDING CERTAIN TERMS AND DETAILS OF THE SERIES 2002 NOTE; MAKING CERTAIN COVENANTS AND PROVIDING CERT AIN RIGHTS TO THE REGISTERED OWNER OF THE SERIES 2002 NOTE; AUTHORIZING THE DELIVERY AND EXECUTION OF AN ESCROW DEPOSIT AGREEMENT AND THE APPOINTMENT OF AN ESCROW AGENT THERETO; MAKING CERTAIN AMENDMENTS TO RESOLUTION NO. 170-1993: AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This supplemental resolution is adopted pursuant to the provisions of Chapter 125, Florida Statutes, Chapter 218, Part II, Florida Statutes, the Monroe County Code and other applicable provisions of law. SECTION 2. FINDINGS. It is hereby found and determined that: (A) On April 15, 1993, the Board of County Commissioners (the "Board") of Monroe County, Florida (the "Issuer") duly adopted Resolution No. 170-1993 (as previously amended and supplemented and as supplemented hereby, the "Resolution") for the purposes stated therein, authorizing, among other things, the issuance of the Issuer's Monroe County, Florida Refunding Revenue Bonds, Series 1993 (the "Refunded Bonds"). (B) The Issuer can achieve debt service savings through the issuance of the hereinafter defined Series 2002 Note and the refunding of the Refunded Bonds. (C) That pursuant to a Request for Commitment (a copy of which is attached as Exhibit B) distributed by the Issuer's Financial Advisor, Public Financial Management, Inc., the Issuer requested proposals from financial institutions to provide the Issuer with a loan, the proceeds of which would be applied for the principal purpose of current refunding the Refunded Bonds in order to achieve certain debt savings. (D) That the Bid Proposal submitted by [^ ] SunTrust Bank was the most beneficial proposal to provide such loan; a copy of such Bid Proposal is attached as Exhibit C. (E) The principal of and interest on the Series 2002 Note will be payable solely from the Pledged Funds (as defined in the Resolution) as provided herein and in the Resolution and the estimated Pledged Funds will be sufficient to pay the principal of and interest on the Series 2002 Note, as the same becomes due and all other payments provided for in the Resolution. (F) The Issuer shall never use or be required to use any ad valorem taxes for the payment of the Series 2002 Note. The Series 2002 Note shall not constitute a direct 2 obligation of the Issuer or a pledge of its faith and credit, nor shall the Registered Owner (as defined in the Resolution) of the Series 2002 Note have any lien or encumbrance on any property in the Issuer, other than the Pledged Funds. (G) The Resolution provides for the issuance of Additional Parity Bonds (as defined in the Resolution), upon meeting certain requirements set forth in the Resolution. (H) All of the covenants, pledges and conditions in the Resolution shall be applicable to the Series 2002 Note, except as modified or otherwise provided herein, and the Series 2002 Note shall constitute a "Bond" within the meaning of the Resolution. (I) The Issuer is not in breach of any of the covenants and obligations assumed by it under the Resolution, and all payments required to have been made pursuant to the Resolution into the funds and accounts established thereby have been made to the full extent required. (1) Due to the potential volatility of the market for tax-exempt obligations such as the Series 2002 Note and the complexity of the transactions relating to such Series 2002 Note, it is in the best interest of the Issuer to issue the Series 2002 Note pursuant to Section 218.385(1), Florida Statutes. The Issuer acknowledges receipt of the information required by Section 218.385, Florida Statutes, in connection with such sale of the Series 2002 Note, including a "Truth-In-Bonding" statement. The aforementioned information is set forth in the copy of the letter of [^] SunTrust Bank attached hereto as Exhibit A. (K) It is necessary and desirable to make certain amendments to the Resolution in connection with the issuance of the Series 2002 Note. (L) It is not reasonably anticipated that more than $10,000,000 of tax-exempt obligations as defined under Section 265(b )(3) of the Code will be issued by the Issuer in calendar year 2002. SECTION 3. DEFINITIONS. When used in this supplemental resolution, terms defined in the Resolution shall have the meanings therein stated, except as such definitions shall be hereinafter amended and defined. SECTION 4. ACCEPT ANCE OF BID PROPOSAL. The Issuer hereby accepts the Bid Proposal of [^] SunTrust Bank to provide fmancing for the refunding of the Refunded Bonds. 3 SECTION 5. AUTHORIZATION OF REFUNDING OF REFUNDED BONDS. The Issuer hereby authorizes the refunding, on a current basis, of the Refunded Bonds. SECTION 6. AUTHORIZATION OF THE SERIES 2002 NOTE. This supplemental resolution creates an obligation of the Issuerin the aggregate principal amount of [^] $3.495.143.63 to be designated as "Monroe County, Florida Guaranteed Entitlement Refunding Revenue Note, Series 2002" (the "Series 2002 Note"). The Series 2002 Note shall be issued in the aggregate principal amount of [^] $3.495.143.63, shall be dated as of December 19, 2002 and shall mature on December 1, 2008, subject to optional and mandatory prepayment prior to maturity as described herein. The Series 2002 Note shall be issued as one fully registered Series 2002 Note in the denomination of[ ^] $3.495.143.63 and shall bear interest from December 19, 2002, at an annual fixed interest rate of [^] 2.96% (the "Interest Rate"), calculated on the basis of a 360-day year consisting of twelve 30-day months, payable semi-annually on June 1 and December 1 of each year, commencing June 1,2003. The Interest Rate may be adjusted pursuant to Section 9 herein. Such Interest Rate complies with and shall comply in all respects with the maximum interest rate provisions of Section 215.84, Florida Statutes. The Series 2002 Note shall be priced at 100% of its aggregate principal amount. The Series 2002 Note shall be payable as to principal, redemption price, if applicable, and interest by check or draft of the Issuer mailed to the Registered Owner of the Series 2002 Note as evidenced on the registration books maintained by the Issuer as of the close of business on the fifth business day next preceding an interest payment date; provided, that payments on the Series 2002 Note may be payable by bank wire transfer upon the request of the Registered Owner thereofl ^ ]. In the event that such pavments are received bv the Registered Owner [^] more than ten (10) days after the scheduled payment. a late payment eaual to five percent (5%) of the past due amount shall be due and payable from the Issuer to the Registered Owner. Promptly following the final payment of the principal of the Series 2002 Note the Registered Owner shall provide the Issuer with evidence of cancellation of the Series 2002 Note. Principal of and interest on the Series 2002 Note shall be payable in any coin or currency of the United States of America which, on the date of maturity of the Series 2002 Note, are legal tender for the payment of public and private debts. The Issuer, through its County Administrator, shall act as the Bond Registrar and Paying Agent for the Series 2002 Note. SECTION 7. APPLICATION OF SERIES 2002 NOTE PROCEEDS; TRANSFER OF CERTAIN MONIES. The proceeds derived from the sale of the Series 2002 Note and premium, if any, and certain other legally available moneys of the Issuer shall, simultaneously with the delivery of the Series 2002 Note to the purchaser thereof, be applied by the Issuer as follows: 4 (A) A sufficient amount of the Series 2002 Note proceeds shall be deposited to an escrow deposit trust fund established under the terms and provisions of the Escrow Deposit Agreement authorized pursuant to Section [^] II herein and shall be invested in Federal Securities in the manner set forth in such Escrow Deposit Agreement, which investments shall mature at such times and in such amounts as shall be sufficient to pay the principal of, premium, if any, and interest on the Refunded Bonds as the same mature or are redeemed. (B) A sufficient amount of the Series 2002 Note proceeds shall be applied to the payment of costs and expenses relating to the issuance of the Series 2002 Note. (C) The balance of the Series 2002 Note proceeds shall be deposited in the Sinking Fund and shall be applied to the payment of interest on the Series 2002 Note. (D) Any excess moneys on deposit in the funds and accounts established for the Refunded Bonds under the Resolution shall be transferred to the escrow deposit trust fund established pursuant to the Escrow Deposit Agreement. SECTION 8. DESIGNA TION OF THE SERIES 2002 NOTE AS A QUALIFIED TAX-EXEMPT OBLIGATION. The Issuer hereby designates the Series 2002 Note as a "qualified tax-exempt obligation" under Section 265(b)(3) of the Code. This designation is based upon the findings of the Issuer set forth in Section [^] 2(L) and the Mayor or Chairperson of the Board (the "Mayor") or the Clerk of the Circuit Court for Monroe County, Florida, and Ex-officio Clerk of the Board (the "Clerk") is authorized to certify such finding upon the issuance of the Series 2002 Note. SECTION 9. ADJUSTMENTS TO INTEREST RATE. (A) If for any reason it shall be determined that the Series 2002 Note in not a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, then the Interest Rate thereon shall be adjusted to such rate as shall provide the Registered Owner of the Series 2002 Note with the same rate of return that such Registered Owner would have otherwise received on the Series 2002 Note taking into account the diminished deductibility of interest expense of the Registered Owner of the Series 2002 Note under Section 265 of the Code as a result of the non "qualified tax-exempt obligation" status of the Note; provided, however, such increased rate shall never exceed the maximum rate allowable by law. The Registered Owner of the Series 2002 Note shall provide the Issuer with sufficient evidence supporting any such increase. (B) In the event of a Determination ofTaxability (as defmed below), the Interest Rate on the Series 2002 Note shall be [^] increased to a rate per annum equal to the Interest Rate times 1.54 (the "Taxable Rate") effective retroactively to the date on which such 5 Determination of Taxability [^] is deemed to have occurred. Immediately upon a Determination of Taxability, the Issuer agrees to pay to the Registered Owner of the Series 2002 Note subject to such Determination of Taxability the Additional Amount (as defined herein). "Additional Amount" means (i) the difference between (a) interest on the Series 2002 Note for the period commencing on the date on which the interest on such Series 2002 Note (or portion thereot) loses its tax-exempt status and ending on the earlier of the date such Series 2002 Note ceased to be outstanding or such adjustment is no longer applicable to such Series 2002 Note (the "Taxable Period") at a rate per annum equal to the Taxable Rate, and (b) the aggregate amount of interest payable on such Series 2002 Note for the Taxable Period under the provisions of such Series 2002 Note without considering the Determination of Taxability, plus (ii) any penalties and interest paid or payable by such Registered Owner to the Internal Revenue Service by reason of such Determination of Taxability. For purposes of this Section 9(B), "Determination of Taxability" shall mean the circumstance of interest paid or payable on the Series 2002 Note becoming includable for federal income tax purposes in the gross income of the Registered Owner of the Series 2002 Note [^] for any reason whatsoever and regardless of whether the same was within or beyond the control of the Issuer[ ^ ]. and shall be evidenced bv either (a) the receipt by the Issuer or the Registered Owner of the Series 2002 Note of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency which holds that any interest payable on the Series 2002 Note is includable in the gross income of such Registered Owner of the Series 2002 Note; (b) the issuance of any public or private ruling of the Internal Revenue Service that any interest payable on the Series 2002 Note is includable in the gross income of the Registered Owner of the Series 2002 Note; or (c) receipt by the Issuer or the Registered Owner of the Series 2002 Note of an opinion of Bond Counsel that any interest on the Series 2002 Note has become includable in the gross income of the Registered Owner of the Series 2002 Note for federal income tax purposes. For all purposes ofthis definition, a Determination ofTaxability will be deemed to occur on the first date as of which the interest on the Series 2002 Note is deemed includable in the gross income of the Registered Owner of the Series 2002 Note. A Determination of Taxability shall not occur solely from the fact that such interest is taken into account in determining adjusted current earnings for the purpose of the alternative minimum income tax imposed on corporations. (C) The Registered Owner of the Series 2002 Note shall promptly notify the Issuer in writing of any adjustments pursuant to this Section 9. [^] Adjustments pursuant to this Section 9 may be retroactive. The Registered Owner of the Series 2002 Note shall certify to the Issuer in writing the additional amount, if any, due to such Registered Owner as a result of an adjustment pursuant to this Section 9. Notwithstanding any provision of this 6 Section 9 to the contrary, in no event shall the Interest Rate on the Series 2002 Note exceed the maximum rate permitted by law. (D) The provisions set forth in this Section 9 shall survive payment of the Series 2002 Note until such time as the federal statute of limitations under which the interest on the Series 2002 Note could be declared taxable under the Code shall have expired. SECTION 10. OPTIONAL PREPAYMENT. The Series 2002 Note may be prepaid at the option of the Issuer, from any moneys legally available therefor, upon notice as provided herein, in whole or in part at any time or from time to time, without penalty or premium, by paying to the Registered Owner all or part of the principal amount of the Series 2002 Note to be prepaid, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. In the event any portion of the Series 2002 Note is optionally prepaid pursuant to this Section 10, the amount so prepaid shall be applied as a credit against the latest scheduled amortization installment as set forth in Section 11 hereof. The Registered Owner shall make a notation on the Series 2002 Note indicating the amount and date of such prepayment and shall promptly transmit an acknowledgment to the Issuer indicating the amount and date of such prepayment and the amount and date of the next scheduled payment. Notwithstanding the provisions of Section 2.09 of the Resolution, notice of such optional prepayment, which shall specify the principal amount to be prepaid and the date for prepayment, shall be given by the Issuer, and shall be mailed first class, postage prepaid, at least ten (10) days prior to the prepayment date to the Registered Owner of the Series 2002 Note at its address as it appears on the registration books kept by the Issuer as of the date of mailing of such notice. SECTION 11. MANDATORY PREPAYMENT. The Series 2002 Note is subject to mandatory sinking fund prepayment prior to maturity at a redemption price equal to the principal amount thereof, plus accrued interest thereon to the date fixed for rRemainder of page intentionally left blankl 7 prepayment, on December 1, 2003, and thereafter on each December 1, without premium, as follows: Amortization Date December 1, 2003 December 1, 2004 December 1, 2005 December I, 2006 December I, 2007 December 1,2008* Principal Amount $ 541.359.14 556.044.70 571.253.63 590.662.73 609.146.35 626.677.08 *Final maturity. SECTION 12. PAYMENT OF PREPAID SERIES 2002 NOTE. Notice of optional prepayment having been given substantially as provided in Section [^] lQ, the Series 2002 Note or a portion of the Series 2002 Note so to be prepaid shall, on the prepayment date, become due and payable at the redemption price therein specified, and from and after such date as the Registered Owner actually receives such prepayment, the Series 2002 Note or portion thereof shall cease to bear interest. SECTION 13. SERIES 2002 NOTE NOT TO BE INDEBTEDNESS OF ISSUER. The Series 2002 Note shall not be or constitute a general obligation or indebtedness of the Issuer as a "bond" within the meaning of any constitutional or statutory provision, but shall be a special obligation of the Issuer, payable from and secured by a lien upon and pledge of the Pledged Funds in accordance with the terms hereof and of the Resolution. No Registered Owner or holder of the Series 2002 Note shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2002 Note, or be entitled to payment of the Series 2002 Note from any moneys of the Issuer, except from the Pledged Funds, in the manner provided herein and in the Resolution. SECTION 14. SECURITY FOR THE SERIES 2002 NOTE. Payment of the Series 2002 Note shall be secured by a pledge of and lien on the Pledged Funds in the manner and to the extent provided in the Resolution, particularly Section 4.0 I thereof. Notwithstanding the foregoing, however, the Reserve Account Requirement for the Series 2002 Note shall be Zero Dollars ($0.00) and the Series 2002 Note shall not be secured by or be payable from any amounts currently or hereafter on deposit in the Reserve Account or any subaccount established therein. 8 SECTION 15. REBA TE ACCOUNT. The Issuer covenants and agrees to establish a special rebate account if it is determined that the Issuer has any rebate obligations under the Code. Amounts on deposit in such account, if any, shall be held in trust by the Issuer and used solely to make required rebates to the United States (except to the extent the same may be transferred to the Issuer) and the Registered Owner of the Series 2002 Note shall have no right to have the same applied for debt service on the Series 2002 Note. The Issuer agrees to undertake all actions required of it in its arbitrage certificate related to the Series 2002 Note, including, but not limited to: (A) making a determination in accordance with the Code of the amount required to be deposited in the rebate account; (B) depositing the amount determined in clause (A) above into the rebate account; (C) paying on the dates and in the manner required by the Code to the United States Treasury from the rebate account and any other legally available moneys of the Issuer such amounts as shall be required by the Code to be rebated to the United States Treasury; and (D) keeping such records of the determinations made pursuant to this Section 15 as shall be required by the Code, as well as evidence of the fair market value of any investments purchased with proceeds ofthe Series 2002 Note. The provisions of the above-described arbitrage certificate may be amended without the consent of any Registered Owner from time to time as shall be necessary, in the opinion of Bond Counsel, to comply with the provisions of the Code. SECTION 16. FEDERAL INCOME TAX COVENANTS. The Issuer covenants with the Registered Owner of the Series 2002 Note that it shall not use the proceeds ofthe Series 2002 Note in any manner which would cause the interest on the Series 2002 Note to be included in gross income for purposes of federal income taxation. The Issuer covenants with the Registered Owner that neither the Issuernor any person under its control or direction will make any use of the proceeds of the Series 2002 Note (or amounts deemed to be proceeds under the Code) in any manner which would cause the Series 2002 Note to be an "arbitrage bond" within the meaning of Section 148 of the Code and neither the Issuer nor any other person shall do any act or fail to do any act which would cause the interest on the Series 2002 Note to be included in gross income for purposes of federal income taxation. 9 The Issuer hereby covenants with the Registered Owner of the Series 2002 Note that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Series 2002 Note from gross income for purposes of federal income taxation, including, in particular, the payment of any amount required to be rebated to the U. S. Treasury pursuant to the Code. SECTION 17. ANNUAL AUDIT AND BUDGET. The Issuer shall, immediately after the close of each Fiscal Year, cause the financial statements of the Issuer to be properly audited by a recognized independent certified public accountant or recognized independent firm of certified public accountants, and shall require such accountants to complete their report on the annual financial statements in accordance with applicable law. The annual fmancial statements shall be prepared in conformity with generally accepted accounting principles consistently applied. A copy of the audited financial statements for each Fiscal Year shall be furnished to the Registered Owner of the Series 2002 Note within 210 days after the end of each Fiscal Year. The Issuer shall also provide such Registered Owner each Fiscal Year with a copy of its annual budget within [^] 60 days after the final adoption of such budget. SECTION 18. COVERAGE RATIO. So lone as the Series 2002 Note is outstandine under the Resolution. the Pledeed Funds received bv the Issuer in anv Bond Year must equal no less than 105% of the Debt Service Requirement for such Bond Year. SECTION 19. AMENDMENTS TO SECTION 5.06 OF THE RESOLUTION. (A) Section 5.06(A) of the Resolution is herebv amended bv chaneinl! each reference to "1.25" therein to "1.05." (B) Section 5.06 (D) ofthe Resolution is herebv amended in its entiretv to read as follows: "(D) The Issuer shall not be required to comolv with the requirements of oaral!raoh A above with resoect to anv Additional Paritv Bonds issued for the sole ouroose of refundine all or a oortion of the outstandine Bonds: orovided. however. such refundine does not result in an increase in the Debt Service Requirement for the Bonds in anv subsequent Bond Year." (C) Section 5.06 of the Resolution is hereby amended bv addine a new subsection 5.06 (G) thereto. which shall read as follows: "(G) For the ouroose of determinine the new Maximum Service Requirement for anv Bonds that bear interest at a variable rate. the interest rate 10 shall be assumed to be the e:reater of (j) 6.00% oer annum. or (ij) the averae:e actual interest rate in effect durine: the immediatelv orecedine: twelve (12) month oeriod." SunTrust Bank. as the sold holder of the Series 2002 Note shall be deemed to have consented to such amendment. Such Amendment shall become effective simultaneouslv with the issuance of the Series 2002 Note and the lee:al defeasance of the Refunded Bonds. SECTION 20. OTHER MONEYS. The Issuer may, in its sole discretion, utilize other legally available moneys, in addition to the Pledged Funds, to pay the principal of and interest on the Series 2002 Note. SECTION [^] 21. AUTHORIZATION TO EXECUTE ESCROW DEPOSIT AGREEMENT. The Issuer hereby authorizes the Mayor to execute and the Clerk to attest an Escrow Deposit Agreement (the "Escrow Deposit Agreement") and to deliver the Escrow Deposit Agreement to [^] The Bank of New York Trust Comoanv of Florida. N.A.. Jacksonville. Florida, which is hereby appointed as escrow agent thereunder (the "Escrow Agent"). All of the provisions of the Escrow Deposit Agreement when executed and delivered by the Issuer as authorized herein and when duly authorized, executed and delivered by the Escrow Agent, shall be deemed to be a part of this Resolution as fully and to the same extent as if incorporated verbatim herein, and the Escrow Deposit Agreement shall be in substantially the form attached hereto as Exhibit D, with such changes, amendments, modifications, omissions and additions, including the date of such Escrow Deposit Agreement, as may be approved by the Mayor. Execution by the Mayor of the Escrow Deposit Agreement shall be deemed to be conclusive evidence of approval of such changes. SECTION [^] 22. SERIES2002NOTE EVIDENCES A LOAN. The Series 2002 Note issued hereunder evidences a loan made by [^] SunTrust Bank to the Issuer. Through its acceptance of the Series 2002 Note hereunder, [^] SunTrust Bank acknowledges that it [^] has no oresent intent to sell. assie:n. or otherwise transfer the Series 2002 Note [^]! orovided. however. that SunTrust Bank mav. in its sole discretion. sell. assie:n or otherwise transfer the Series 2002 Note prior to its maturity[^]. In the event of such sale. assie:nment or other transfer. SunTrust Bank shall comply in all respects with all applicable securities laws, rules and regulations and blue sky laws and any other applicable laws, rules or regulations regarding disclosure and registration [^ l.. [^] SECTION 23. WAIVER OF TRIAL BY JURY. Ifanvlee:al action is taken with resoect to the Series 2002 Note or the Issuer's oblie:ations hereunder. or SunTrust's 11 commitment thereto. or anv other transaction related to the Series 2002 Note. the Issuer and Sun Trust Bank herebv waive their rie:hts to iury trial. SECTION 24. GENERAL AUTHORITY. The members of the Board of County Commissioners of the Issuer and the officers, attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by this supplemental resolution and the Resolution, or desirable or consistent with the requirements hereof for the full punctual and complete performance of all the terms, covenants and agreements contained herein or in the Series 2002 Note, and each member, employee, attorney and officer of the Issuer, the Mayor, the County Administrator, the County Attorney and the Clerk are hereby authorized and directed to execute and deliver any and all papers and instruments and to be and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereunder. SECTION [^] 25. SEVERABILITY OF INVALID PROVISIONS. Ifanyone or more of the covenants, agreements or provisions of this supplemental 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 supplemental resolution and shall in no way affect the validity of any ofthe other covenants, agreements or provisions hereof or of the Series 2002 Note issued hereunder. SECTION [^]~. REPEAL OF INCONSISTENT RESOLUTIONS. All resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict. Except as expressly provided otherwise herein, all ofthe provisions of the Resolution shall remain in full force and effect. SECTION [^] 27. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption. 12 Passed and adopted by the Board of County Commissioners of Monroe County, Florida, at a regular meeting of the Board on this 18th day of December 2002. MONROE COUNTY, FLORIDA (SEAL) Mayor, Board of County Commissioners ATTEST: Clerk, Board of County Commissioners APPROVED AS TO FORM AND LEGAL SUFFICIENCY: County Attorney's Office 13 EXHIBIT A DISCLOSURE LETTER AND TRUTH-IN-BONDING STATEMENT EXHIBIT B REQUEST FOR COMMITMENT EXHIBIT C BID PROPOSAL EXHIBIT D FORM OF THE ESCROW DEPOSIT AGREEMENT