HomeMy WebLinkAboutResolution 93-03
RESOLUTION NO. 93-03
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A RESOLUTION AUTHORIZING THE NEGOTIATED SALE
OF $8,555,000 CITY OF OCOEE, FLORIDA, WATER
AND SEWER SYSTEM REFUNDING AND IMPROVEMENT
REVENUE BONDS, SERIES 1993; AWARDING THE SALE
THEREOF TO WILLIAM R. HOUGH & CO., SUBJECT TO
THE TERMS AND CONDITIONS OF A PURCHASE
CONTRACT; AUTHORIZING THE DISTRIBUTION OF A
FINAL OFFICIAL STATEMENT IN CONNECTION WITH
THE DELIVERY OF THE BONDS; AUTHORIZING THE
PURCHASE OF MUNICIPAL BOND INSURANCE;
APPOINTING A REGISTRAR AND PAYING AGENT;
AMENDING SECTION 1.02 AND 5.02(B) OF THE
RESOLUTION AUTHORIZING THE BONDS; ADDING
ADDITIONAL COVENANTS FOR THE BENEFIT OF THE
BONDHOLDERS AND MUNICIPAL BOND INVESTORS
ASSURANCE CORPORATION; PROVIDING CERTAIN OTHER
MATTERS IN CONNECTION THEREWITH; AND PROVIDING
AN EFFECTIVE DATE.
WHEREAS, the City of Ocoee, Florida (the "Issuer"), has by a
resolution adopted on February 2, 1993 (the "ReSOlution"),
authorized the issuance of not to exceed $15,000,000 City of Ocoee,
Florida, Water and Sewer System Refunding and Improvement Revenue
Bonds, Series 1993, to refund certain outstanding obligations and
to finance the Initial Project (as defined in the Resolution); and
WHEREAS, Municipal Bond Investors Assurance Corporation
("MBIA") has issued a Commitment to insure the paYment of principal
of and interest on the Series 1993 Bonds and has requested certain
amendments to the Resolution and certain additional covenants; and
WHEREAS, due to the present instability in the market for
revenue obligations the interest on which is excluded from federal
gross income, the critical importance of the timing of the sale of
. the Bonds, and due to the willingness of William R. Hough & Co.
(the "Underwriter") to purchase the city of Ocoee, Florida, Water
and Sewer System Refunding and Improvement Revenue Bonds, Series
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1993 (the "Series 1993 Bonds"), at interest rates favorable to the
Issuer, it is hereby determined that it is in the best interest of
the public and the Issuer to sell the Series 1993 Bonds at a
negotiated sale; and
WHEREAS, the Underwriter proposes to submit an offer to
purchase $8,555,000 of the Series 1993 Bonds, subject to the terms
and conditions set forth in the Purchase Contract, a copy of which
is attached hereto as Exhibit A (the "Purchase Contract"); and
WHEREAS, the Issuer now desires to sell its Bonds pursuant to
the Purchase Contract and in furtherance thereof to appoint a
Registrar and Paying Agent and to approve the form of and authorize
distribution of a final Official Statement in connection with the
issuance of the Series 1993 Bonds; and
WHEREAS, the Issuer has been provided all applicable
disclosure information required by section 218.385, Florida
Statutes, a copy of which is attached to the Purchase Contract; and
WHEREAS, this Resolution shall constitute a Supplemental
Resolution under the terms of the Resolution and all capitalized
undefined terms shall have the meaning set forth in the Resolution;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF OCOEE, FLORIDA:
SECTION 1. The negotiated sale of the Series 1993 Bonds to
the Underwriter is hereby approved. The Mayor and the Clerk are
hereby authorized to execute the Purchase Contract in SUbstantially
the form attached as Exhibit A, with such additional changes,
insertions and omissions therein as may be approved by the said
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officers of the Issuer executing the same, such execution to be
conclusive evidence of such approval.
SECTION 2. The Series 1993 Bonds shall be dated February 1,
1993, shall be in the denomination of $5,000 or any integral
multiple thereof and shall bear interest on the dates and at the
rates and shall mature on the dates, in the years and amounts as
shall be set forth in the Purchase Contract. The Series 1993 Bonds
shall be subject to redemption prior to maturity at the time and in
the manner set forth in the Purchase Contract.
SECTION 3. The Series 1993 Bonds shall be issued under and
secured by the Resolution and shall be executed by manual or
facsimile signature of the Mayor and the city Clerk of the Issuer
in substantially the form set forth in the Resolution, with such
additional changes and insertions therein as shall be approved by
the officers of the Issuer executing the same, and such execution
and delivery shall be conclusive evidence of the approval thereof
by such officers.
SECTION 4. The distribution by the Underwriter of the
preliminary Official Statement in the form of Exhibit B hereto is
hereby approved. The preliminary Official Statement is deemed
final as of its date for purposes of Rule 15c2-12 (the "Rule) of
the Securities and Exchange Commission, except for "permitted
omissions," as defined in such Rule.
SECTION 5. The distribution by the Underwriter of a final
Official Statement of the Issuer relating to the Series 1993 Bonds
is hereby approved in substantially the form of Exhibit B hereto,
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together with such changes thereto as may be authorized by the
Mayor. The Official statement will be executed by the Mayor and
the City Manager of the Issuer, such execution to be conclusive
4It evidence of approval of the Official statement in its final form.
SECTION 6.
First Union National Bank of Florida,
Jacksonville, Florida, is hereby appointed as Registrar and Paying
Agent for the Series 1993 Bonds.
SECTION 7. Insurance to insure the holder of any Series 1993
Bonds the scheduled paYment of principal and interest on behalf of
the Issuer is hereby authorized to be purchased from Municipal Bond
Investors Assurance Corporation ("MBIA") and paYment for such
insurance is hereby authorized from proceeds of the Series 1993
Bonds in accordance with the Commitment for Municipal Bond
Insurance attached hereto as Exhibit C. A statement of insurance
is hereby authorized to be printed on or attached to the Series
1993 Bonds for the benefit and information of the holders of the
Series 1993 Bonds.
SECTION 8. Notwithstanding the definition of "Amortization
Installments" contained in the Resolution, Amortization Install-
ments shall be established in the following years and amounts for
the Series 1993 Bonds maturing in the years 2010, 2014 and 2017:
Bonds Maturinq October 1. 2010
Year
Principal Amount
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2007
2008
2009
2010
$350,000
370,000
390,000
415,000
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Bonds Maturinq October 1. 1014
Year Principal Amount
2011 $440,000
2012 465,000
2013 490,000
2014 520,000
Bonds Maturinq October 1. 2017
Year
Principal Amount
2015
2016
2017
$545,000
580,000
610,000
SECTION 9. The definition of "Pledged Funds" in section 1.02
of the Resolution is hereby amended to read as follows:
"Pledged Funds" shall mean (1) the Net Revenues of
the System, (2) the Sewer System Development Charges but
only to the extent of the Sewer System Development
Charges Bond Service Component, (3) the Water System
Development Charges but only to the extent of the Water
System Development Charges Bond Service Component, and
(4) until applied in accordance with the provisions of
this Resolution, all moneys, including investments
thereof, in the funds and accounts established hereunder
(except the Rebate Fund and except to the extent
otherwise provided in sections 4.06 and 4.07 hereof).
SECTION 10.
section 5.02 (B) of the Resolution is hereby
amended to read as follows:
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(B) Upon recommendation of the Consulting Engineers,
the Pledged Funds certified in (A) above may be adjusted
by including (i) 100% of the additional Net Revenues
which in the opinion of the Consulting Engineer would
have been derived from rate increases adopted before the
Additional Bonds are issued, if such rate increases had
been implemented before the commencement of the period
for which such Pledged Funds are being certified, and
(ii) 100% of the additional Net Revenues estimated by the
Consulting Engineer to be derived during the first full
twelve month period after the date of placing in service
the Additional Project financed with the proceeds of the
Additional Bonds.
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SECTION 11. In addition to the provisions set forth in
section 2.02, the Issuer agrees that at the written request and
expense of a Holder of $1,000,000 or more of Series 1993 Bonds, the
interest due on a Series 1993 Bond may be paid by wire transfer or
other medium acceptable to the Issuer and the Holder.
SECTION 12. In addition to the covenants and agreements of the
Issuer set forth in the Resolution for the benefit of MBIA and the
Holders of the Bonds, the Issuer hereby makes the following
covenants and agreements for the benefit of MBIA and the Holders of
the Bonds:
(A) As long as the Series 1993 Bonds shall be Outstanding,
the Issuer will not supplement the Resolution pursuant to section
7.02 thereof without the consent of MBIA.
(B) As long as the Series 1993 Bonds shall be Outstanding,
the Issuer will not issue any Variable Rate Bonds without the
consent of MBIA.
SECTION 13. The Mayor, the City Manager, the City Clerk, the
Finance Manager, and the City Attorney of the Issuer or any other
appropriate officers of the Issuer are hereby authorized and
directed to execute any and all certifications or other instruments
or documents required by the Resolution, the Purchase Contract,
this Resolution or any other document referred to above as a
prerequisite or precondition to the issuance of the Series 1993
Bonds and any such representation made therein by officers or
representatives of the Issuer shall be deemed to be made on behalf
of the Issuer. All action taken to date by the officers of the
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Issuer in furtherance of the issuance of the Series 1993 Bonds is
hereby approved, confirmed and ratified.
SECTION 14. All prior resolutions or other actions of the
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Issuer inconsistent with the provisions of this Resolution are
hereby modified, supplemented and amended to conform with the
provisions herein contained and except as otherwise modified,
supplemented and amended hereby shall remain in full force and
effect.
SECTION 15. This Resolution shall take effect immediately
upon its passing.
PASSED AND ADOPTED by the City Commission of the city of
16th
Florida,
on
this
day
of
February,
1993.
Ocoee,
ATTEST:
APPROVED:
CITY OF OCOEE,
-- . C--"\
, ,. ~:-(./
-Mayor
S. Scott Vandergrift
FOR USE AND RELIANCE ONLY
BY THE CITY OF OCOEE,
APPROVED AS TO FORM AND
LEGALITY, this 16th
day of February, 1993
APPROVED BY THE OCOEE CITY
COMMISSION AT A MEETING HELD
ON FEBRUARY 16 , 1993
UNDER AGENDA ITEM NO. V A ,
FOLEY t7LARDNRR ...
By: rrruJ ~ ~)
City Attorney
Paul E. Rosenthal
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EXHibIT "/)"
$8,555,000
CITY OF OCOEE, FLORIDA
WATER AND SEWER SYSTEK REFUNDING AND IMPROVEMENT REVENUE BONDS
SERIES 1993
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PURCHASE CONTRACT
February 16, 1993
City commission
City Of Ocoee
150 North Lakeshore Drive
Ocoee, Florida 34761
Gentlemen:
william R. Hough & Co. (the "Underwriter") hereby offers to
enter into this Purchase Contract (the "Purchase Contract") with
the city of Ocoee (the "City") for the purchase by the Underwriter
and sale by the City of $8,555,000 aggregate principal amount of
the City of Ocoee Water and Sewer System Refunding and Improvement
Revenue Bonds, Series 1993 (the "Series 1993 Bonds"). This offer
is made subject to acceptance thereof by the city, prior to 11:00
p.m. Eastern Standard time, on the date hereof, and upon such
acceptance, as evidenced by the signatures in the spaces provided
therefor below, and the approval as to form and legality of the
City Attorney (as hereinafter defined), this Purchase Contract
shall be in full force and effect in accordance with its terms and
shall be binding upon the city and the Underwriter. If this offer
is not so accepted, it is subject to withdrawal by the Underwriter
upon written notice delivered to the City at any time prior to such
acceptance.
.
1. Upon the terms and conditions and in reliance upon the
representations, warranties and covenants hereinafter set forth,
the Underwriter hereby agrees to purchase from the City, and the
city hereby agrees to sell to the Underwriter all (but not less
than all) of the Series 1993 Bonds at an aggregate purchase price
of $8,395,952.35 (such amount representing the aggregate principal
amount of the Series 1993 Bonds of $8,555,000 less underwriter
discount of 1.619% of the principal amount of the Series 1993 Bonds
and less original issue discount of ~o, 542.20) plus accrued
interest from February 1, 1993 to the date of Closing (as hereinaf-
ter defined). The Series 1993 Bonds shall mature and shall bear
interest at the rates and in the amounts and shall be subject to
redemption as set forth on Exhibit A attached hereto. The
Underwriter agrees to make a public offering of the Series 1993
Bonds at the initial offering prices set forth in the Official
Statement relating to the Series 1993 Bonds (the "Official
Statement"); however, the Underwriter reserves the right to make
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concessions to dealers and to change the initial offering prices of
the Series 1993 Bonds as the Underwriter shall deem necessary in
connection with the marketing of the Series 1993 Bonds. Terms not
otherwise defined herein shall have the same meanings as set forth
in the Resolution as defined below.
2. The Series 1993 Bonds shall be in the form set forth in,
and shall be issued and secured under and pursuant to, Resolution
No. 93-01 adopted by the City Commission of the City on February 2,
1993, as amended and supplemented by a resolution of the City
commission of the City adopted the date hereof (collectively the
"Resolution"). The Series 1993 Bonds are secured by a prior lien
upon and pledge of the Pledged Funds (as defined in the Resolu-
tion). The Pledged Funds include the Net Revenues of the City's
water system and sewer system (collectively, the "system"), the
Sewer System Development Charges but only to the extent of the
Sewer System Development Charges Bond Service Component, the Water
System Development Charges but only to the extent of the Water
System Development Charges Bond Service Component and until applied
in accordance with the provisions of the Resolution, all moneys,
including investment thereof, in certain of the funds and accounts
established by the Resolution. The Net Revenues, the Sewer System
Development Charges and the Water System Development Charges are
imposed and collected pursuant to the city Code and various
ordinances of the City. The City Code and such ordinances are
collectively referred to herein as the "Ordinances". The Series
1993 Bonds are being issued to provide funds to retire the City's
Water and Sewer System Revenue Bonds, Series 1989A and the City's
Water and Sewer System Revenue Bonds, Series 1989B (collectively
the "Refunded Bonds"); to expand the capacity of the City's
wastewater treatment facilities and construct and acquire other
improvements to the City's water system and sewer system (the
"Project"); to deposit to the account in the Reserve Fund estab-
lished for the benefit of the Series 1993 Bond an amount equal to
the Reserve Requirement for the Series 1993 Bonds; and to finance
certain costs of issuance of the Series 1993 Bonds, including the
municipal bond insurance premium.
3. The City agrees to deliver to the Underwriter, at such
address as the Underwriter shall specify, such number of copies of
the Official Statement as necessary to comply with paragraph (b) (4)
of Rule 15c2-12 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (the "Rule") and with Rule G-32 and
all other applicable rules of the Municipal Securities Rulemaking
Board. The City agrees to deliver such Official Statements within
seven (7) business days after the execution thereof. Pursuant to
section 8.06 of the Resolution, the City authorized the City
Manager to deem final within the meaning of the Rule and, to
thereafter make the preliminary official statement available for
use by the Underwriter and the City hereby authorizes the use of
the preliminary official statement dated February 5, 1993 (the
"Preliminary Official Statement") the Official Statement, as the
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same may be modified, amended or supplemented upon mutual agreement
of the City and the Underwriter and the information therein
contained, by the Underwriter in connection with the offering, sale
and distribution of the Series 1993 Bonds by the Underwriter. The
City agrees to make no amendments to the Official statement without
prior written notice of the Underwriter.
4. We herewith deliver to the City a corporate check (the
"Good Faith Deposit") payable to the city in the amount of one
percent (1%) of the principal amount of the Series 1993 Bonds, as
security for the performance by the Underwriter of its obligations
to accept and pay for the Series 1993 Bonds at the Closing
(described below) in accordance with the provisions of this
Purchase Contract. If the City does not execute and deliver this
Purchase Contract as provided herein, the Good Faith Check shall be
immediately returned to the undersigned. If the City executes and
delivers this Purchase Contract as provided herein, the City shall
hold the Good Faith Check uncashed and except as otherwise provided
herein return the same to the Underwriters at the Closing. In the
event of the City'S failure to deliver the Series 1993 Bonds at
Closing, or if the City shall be unable at the Closing to satisfy
the conditions to the obligations of the Underwriter contained
herein, or if the obligations of the Underwriter shall be terminat-
ed for any reason permitted by this Purchase Contract, the Good
Faith Check shall be immediately returned to the undersigned. In
the event that the Underwriter fails (other than for a reason
permitted under this Purchase Contract) to accept and pay for the
Series 1993 Bonds at Closing, the Good Faith Check shall be
retained by the City as and for full liquidated damages for such
failure and for any and all defaults hereunder on the part of the
Underwriter and not as a penalty to the City for such failure and
default, and the retention of such proceeds shall constitute a full
release and discharge of all claims and rights hereunder against
the Underwriter.
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5. At 11:00 a.m., Eastern Standard Time, on February 25,
1993, or on such other date and time as shall be agreed upon by the
ci ty and the Underwriter (the "Closing"), the city will deliver, or
cause to be delivered to the Underwriter the Series 1993 Bonds for
the account of the Underwriter in definitive form, duly executed
and authenticated by the authorized officers of the City, at such
location in New York, New York as the Underwriter shall request and
shall deliver to the Underwriter at the offices of William R. Hough
& Co. in st. Petersburg, Florida or such other location as shall
have been mutually agreed to by the City and the Underwriter the
certificates, opinions and other documents described in section
8(b) hereof. Subject to the terms and conditions of this Purchase
Contract, the Underwriter will accept such delivery and pay the
purchase price of the Series 1993 Bonds set forth in section 1
hereof, by delivery of a wire transfer of federal funds, payable to
the order of the City. The Series 1993 Bonds shall be delivered as
fully registered bonds in authorized denominations and registered
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in such names as the Underwriter may request four (4) business days
prior to the closing. The definitive series 1993 Bonds will be
made available to the Underwriter at New York, New York,
twenty-four (24) hours before the closing for purposes of inspec-
tion and packaging.
. 6. The city represents and warrants to the Underwr iter,
which representations and warranties shall survive the purchase and
offering of the Bonds, that:
(a) The city is a body corporate and politic duly
created and existing having been chartered as a municipal corpora-
tion in 1969, and has, and at the date of the Closing will have,
full legal right, power and authority (i) to enter into this
Purchase Contract, (ii) to adopt the Resolution and the Ordinances,
(iii) to issue, sell and deliver the series 1993 Bonds to the
Underwriter as provided herein, (iv) to approve the Preliminary
Official statement and the Official statement and to authorize the
distribution thereof by the Underwriter, and (v) to carry out and
to consummate all the transactions contemplated by this Purchase
Contract and the Resolution and to perform its obligations
hereunder and thereunder;
(b) The Preliminary Official statement and the Official
statement (other than the information set forth under the heading
"Municipal Bond Insurance" as to which no representation or
warranty is made) are correct and complete in all material respects
for the purposes and under the circumstances in which they were
prepared and do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which
they were made, not misleading;
(c) The city has complied in all respects with the
Constitution and laws of the state of Florida, including its
Charter and Code, in connection with the authorization, issuance
and sale of the Series 1993 Bonds, the adoption of the Resolution,
the execution and delivery of this Purchase Contract, and the
performance of the transactions contemplated hereby and thereby;
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(d) By official action of the City prior to or concur-
rently with the acceptance hereof, the City has duly adopted the
Resolution and authorized the issuance of the Series 1993 Bonds and
the execution and delivery of the Official statement. This Purchase
Contract has been duly authorized, executed and delivered by the
City and constitutes the legal, valid and binding obligation of the
City, enforceable in accordance with its terms, subject to any
applicable bankruptcy, insolvency, reorganization or similar law
affecting the enforcement of creditors' rights generally;
(e) The City is not in breach of or default under any
applicable law or administrative regulation of the state of Florida
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or the United states, or any instrument to which the City is a
party or is subject, default under which would materially adversely
affect the ability of the City to perform its obligations in
connection with the transactions contemplated by this Purchase
Contract; the issuance of the Series 1993 Bonds, the adoption of
the Resolution and the Ordinances and the execution and delivery of
this Purchase Contract, the consummation of the transactions
contemplated by the Resolution, this Purchase Contract and the
series 1993 Bonds, and compliance with the provisions of each
thereof, do not and will not conflict with or constitute on the
part of the city a breach of or default under its Charter or Code
or the City's by-laws or any applicable constitutional provision,
law, administrative regulation, judgment, decree, loan agreement,
note, resolution, agreement or other instrument to which the City
is a party or to which the City or any of its properties is
otherwise subject;
(f) As of the Closing, all approvals, consents and
orders of any governmental authority, board, agency or commission
having jurisdiction which would constitute a condition precedent to
the performance by the City of its obligations hereunder and under
the Resolution and the Series 1993 Bonds, other than any such
approvals, consents and orders relating to the Project all of which
the City expects to be able to obtain as needed, will have been
obtained and will be in full force and effect; and provided that no
representation is made with respect to compliance with the
securities or "blue sky" laws of the various states of the United
States;
(g) The Series 1993 Bonds, when issued, authenticated,
delivered and sold to the Underwriter as provided herein, will have
been duly authorized and executed and will constitute validly
issued and legally binding special obligations of the City in
conformity with, and entitled to the benefit and security of, the
Resolution;
(h) The Resolution and the Ordinances comply in all
respects with the requirements of law and constitutes the valid,
legal and binding obligations of the city, enforceable against the
City in accordance with their terms, subject to any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
the enforcement of creditors' rights generally;
(i) To the knowledge of the City there is no action,
suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, public board or body, pending or, threat-
ened against the City: (i) in any way affecting the existence of
the City or in any way challenging the respective offices or the
titles of its officers to their respective offices or (ii) seeking
to prohibit, restrain or enjoin or in any way affecting the sale,
issuance or delivery of the Series 1993 Bonds or the collection of
revenues or assets of the City pledged to pay the principal of,
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redemption premium, if any, and interest on the Series 1993 Bonds
or the pledge thereof, or in any way contesting or affecting the
validity or enforceability of the Series 1993 Bonds, the Resolution
and the transactions contemplated hereby or thereby, or (iii)
contesting in any way the completeness or accuracy of the Prelimi-
nary Official statement or the Official Statement, or (iv)
contesting the power or authority of the City to issue the Series
1993 Bonds or to adopt the Resolution or the Ordinances or (v)
wherein an unfavorable decision, ruling or finding would materially
adversely affect the financial condition, results of operations,
business, prospects or property of the City; nor, to the knowledge
of the City, is there any meritorious basis therefor;
(j) The City has not been notified of any listing or
proposed listing by the Internal Revenue service to the effect that
it is a bond issuer whose arbitrage certificates may not be relied
upon; and
(k) Except as disclosed in the Official statement the
City has not been in default at any time after December 31, 1975,
as to principal or interest with respect to any obligations issued
or guaranteed by the city to which city revenues are pledged.
7. (a) The City covenants with the Underwriter that if
between the date of this Purchase Contract and the Closing, an
event occurs affecting the City or the transactions contemplated
hereby which could cause the Official statement to contain an
untrue statement of a material fact or to omit to state a material
fact necessary in order to make the statement therein, in light of
the circumstances under which they were made, not misleading, the
City shall notify the Underwriter promptly and if in the opinion of
the City, the Underwriter or Bond Counsel, such event requires an
amendment or supplement to the Official Statement, in order to
ensure that the Official statement does not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statement therein, in light of the
circumstances under which they were made, not misleading, the City
will so amend or supplement the Official statement in a form and in
a manner jointly approved by Bond Counsel, the city and the
Underwriter, and the City will bear the cost of making and printing
such amendment or supplement to the Official statement and
distributing such amendment or supplement to owners of the Series
1993 Bonds.
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(b) The City will furnish such information, execute such
instruments and take such other action in cooperation with the
Underwriter as it may deem necessary in order to qualify the Series
1993 Bonds for offer and sale under the "blue sky" or securities
laws and regulations of such states and other jurisdictions of the
united states as the Underwriter may designate; provided, however,
that the city shall not be required to consent to service of
process or to qualify to do business in any jurisdiction where it
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is not now so subject or qualified; and provided further, however,
that the City shall not be responsible for compliance with or the
consequences of failure to comply with applicable "blue sky" or
state securities laws or regulations.
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8. The Underwriter has entered into this Purchase Contract
in reliance upon the representations, warranties and agreements of
the City contained herein and upon the accuracy of the statements
to be contained in the documents, opinions, and instruments to be
delivered at the Closing. Accordingly, the Underwriter's
obligation under this Purchase Contract to purchase, accept
delivery of, and pay for the Series 1993 Bonds is subject to the
performance by the City of its obligations hereunder at or prior to
the Closing and to the following additional conditions precedent:
(a) At the time of closing, (i) the representations and
warranties of the City contained herein shall be true and correct
in all material respects; (ii) the Resolution and the Ordinances
shall have been duly adopted and shall be in full force and effect;
(iii) the City shall not be in default of any of its covenants
hereunder; (iv) the City shall have duly adopted and there shall be
in full force and effect such additional resolutions of the City as
shall, in the opinion of Bryant, Miller and Olive, P.A., Bond
Counsel to the City, and Honigman Miller Schwartz and Cohn,
Underwriter's Counsel, be necessary and appropriate in connection
with the transactions contemplated hereby; and (v) at the time of
Closing, the Bonds shall have been duly authorized, executed,
issued and delivered to the Underwriter in accordance with the
Resolution and this Purchase Contract; and
(b) At or prior to the Closing, the Underwriter shall
receive the following:
(1) The approving opinion of Bryant, Miller and
Olive, P.A., Bond Counsel, substantially in the form of Appendix D
to the Official Statement and, if such approving opinion is not
addressed to the Underwriter a letter to the effect that the
approving opinion of Bond Counsel addressed to the City may be
relied upon by the Underwriter as if such opinion were addressed to
it;
(2) An opinion of the Foley & Lardner, City
Attorney, substantially in the form of Exhibit B hereto;
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(3) A letter from McDirmit, Davis, Lauteria &
Company, P.A., certified public accountants to the City consenting
to the use of their audit letter in Appendix B to the Official
Statement and to the references to them in the Official Statement;
(4) A certificate of the City dated the date of
Closing and executed by the Mayor and City Clerk to the effect that
to the best of their knowledge: (i) the representations, warranties
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and covenants of the City contained herein are true and correct in
all material respects on and as of the date of Closing with the
same effect as if made on the date of closing; (ii) as of the date
of the Closing, the Official statement (including the statistical
and financial information contained therein but excluding any
information relating to MBIA (as hereinafter defined) and excluding
the information set forth under the heading "Tax Exemption"
therein) does not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; (iii) no event affecting the City has
occurred since the date of the Official statement in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading; (iv) the City has complied with all
the agreements and satisfied all of the conditions on its part
contained herein and in the Resolution to be performed or satisfied
at or prior to the closing; (v) the city has not been in default as
to principal or interest on any bond or other debt obligation
issued or guaranteed by the city since December 31, 1975 to which
City revenues are pledged; (vi) except as disclosed in the Official
statement, no litigation or other proceedings are pending or, to
their knowledge, threatened against the city in any court or other
tribunal or competent jurisdiction, state or Federal, in any way
(a) restraining or enjoining the issuance, sale or delivery of any
of the Series 1993 Bonds, or (b) questioning or affecting the
validity of this Purchase Contract, the Series 1993 Bonds, the
Resolution, the Ordinance, or the pledge by the City to the
Bondholders of any moneys or other security provided under the
Resolution, or (c) questioning or affecting the validity of any of
the proceedings for the authorization, sale, execution, issuance or
delivery of the Series 1993 Bonds or (d) questioning or affecting
(1) the organization or existence of the City or the title to
office of the officers thereof or (2) the power or authority of the
City to own and operate the System, including the power and
authority of the City to establish, revise, levy and collect rates,
fees or other charges for the use and services of the System; (vi)
the information concerning the City set forth in Appendix A of the
Official Statement is accurate in all material respects; (vii) all
payments required to be made as of such date into the funds and
accounts established in the Resolution have been made in full;
(viii) except as disclosed in the Official Statement, any and all
permits, licenses and approvals with material respect to the
operation of the System as of the date of Closing have been
obtained and are in full force and effect;
(5) A certificate of the City dated the date of
Closing sufficient in form and substance to show to the satisfac-
tion of Bond Counsel that the Series 1993 Bonds will not be
arbitrage bonds under section 148 of the Internal Revenue Code of
1986, as amended (the "Cade") and the regulations thereunder;
8
(6) written confirmation from Moody's Investors
Service and Standard & Poor's corporation that the Series 1993
Bonds have been rated "Aaa" and "AAA", respectively;
.
(7) An opinion of Honigman Miller Schwartz and
Cohn, Orlando, Florida, Counsel to the Underwriter, in a form
acceptable to the Underwriter;
(8) Such counterparts of the documents referred to
in the Official Statement and the Resolution, as the Underwriter or
Bond Counsel may reasonably request to evidence compliance by the
City with this Purchase Contract, the truth and accuracy, as of the
time of Closing, of the representations of the city herein
contained and in the Official Statement and the performance or
satisfaction by the City at or prior to such time of all agreements
then to be performed and all conditions then to be satisfied by the
City;
(9) A counterpart of an executed and effective Bond
Insurance Policy of Municipal Bond Investors Assurance Corporation
("MBIA") insuring timely payment of principal and interest on the
Series 1993 Bonds, such policy to be substantially in the form
attached to the Official Statement as Appendix E; and
.
(10) A supplemental opinion of Bond Counsel to the
effect that (i) it is not necessary to register the Series 1993
Bonds under the Securities Act of 1933, as amended, or to qualify
the Resolution under the Trust Indenture Act of 1939, as amended,
(ii) while they have not been retained to and are not passing on or
assuming any responsibility for the accuracy, completeness or
fairness of the statements contained in the Official Statement,
except as expressly provided in their opinion, the statements
contained in the Official Statement under the headings "Security
and Sources of Payment for the Series 1993 Bonds", "The Series 1993
Bonds", and "Tax Exemption", insofar as they constitute descrip-
tions of the Series 1993 Bonds or the Resolution, fairly represent
the information purported to be described therein and the informa-
tion contained under the heading "Tax Exemption" is correct and
that the information set forth in "Appendix C - Summary of certain
provisions of the Resolution" is a fair and accurate summary of the
Resolution. Except as expressly provided in this opinion they have
necessarily assumed the fairness, correctness and completeness of
the materials set forth in the Official Statement (including, but
not limited to financial or statistical data relating to the
County) and have not undertaken to verify the accuracy or complete-
ness of any of the statements or representations contained therein,
and (iii) the pledge of and lien on the Pledged Funds in favor of
the holders of the Refunded Bonds is no longer in effect.
(11) Evidence that the Refunded Bonds have been re-
tired.
9
.
.
(12) A certificate of an officer of MBIA or opinion
of Counsel to MBIA, dated the date of closing, addressed to the
Underwriter, in form and substance satisfactory to the Underwriter,
to the effect that (A) MBIA is duly qualified to do business in the
state of Florida, (B) MBIA has full corporate power and authority
to execute and deliver the insurance policy for the Series 1993
Bonds (the "Policy") and the Policy has been duly authorized,
executed and delivered by MBIA and constitutes a legal, valid and
binding obligation of MBIA enforceable in accordance with its
terms, (C) the statements contained in the Official statement under
the headings "Municipal Bond Insurance", insofar as such statements
constitute summaries of the matters referred to therein, accurately
reflect and fairly present the information purported to be shown
and, insofar as such statements purport to describe MBIA fairly and
accurately describe MBIA, and (D) MBIA has not been in default
after December 31, 1975, as to principal or interest with respect
to any obligations insured by MBIA.
(13) At the time of Closing, the Underwriter shall
receive such additional certificates and other evidence as the
Underwriter may deem necessary to evidence the truth and accuracy
as of the time of the Closing of the representations and warranties
of the city herein contained and the due performance and satisfac-
tion by the City at or prior to such time of all agreements then to
be performed and all conditions then to be satisfied by them.
(c) Subsequent to the respective dates as of which
information is given in the Official Statement up to and including
the date hereof, there has not been and, as of the Closing, there
shall not have been, any material adverse change in the financial
position, results of operations or condition, financial or
otherwise, of the City and the Underwriter shall receive at Closing
a certificate of the Mayor and the City Manager of the City to that
effect.
All certificates, instruments, opinions and documents
referred to above and any resolutions shall be in form and
substance satisfactory to both Bond Counsel and Counsel to the
Underwriter.
If the City shall be unable to satisfy the conditions to
the obligations of the Underwriter contained in this Purchase
Contract, or if the obligations of the Underwriter shall be
terminated for any reason permitted by this Purchase Contract, this
Purchase Contract shall terminate and neither the Underwriter nor
the City shall have any further obligations hereunder, except as
provided in section 10 hereof. However, the Underwriter may in its
discretion waive one or more of the conditions imposed by this
Purchase Contract for the protection of the Underwriter and proceed
with the Closing.
10
.
.
9. The Underwriter shall have the right to terminate this
Purchase Contract if between the date hereof and the closing (i)
the House of Representatives or the Senate of the Congress of the
United states, or a committee of either, shall have pending before
it, or shall have passed or recommended favorably, legislation,
which legislation, if enacted in its form as introduced or as
amended, would have the purpose or effect of imposing federal
income taxation upon revenues or other income of the general
character of the Pledged Funds or of causing interest on obliga-
tions of the general character of the Series 1993 Bonds, or the
Series 1993 Bonds, to be includible in gross income for purposes of
federal income taxation, and such legislation, in the Underwriter's
opinion, materially adversely affects the market price of the
Series 1993 Bonds; (ii) a tentative decision with respect to
legislation shall be reached by a committee of the House of
Representatives or the Senate of the Congress of the united States,
or legislation shall be reported by such a committee or be
introduced, by amendment or otherwise, in or be passed by the House
of Representatives or the Senate, or recommended to the Congress of
the United States for passage by the President of the United
States, or be enacted or a decision by a federal court of the
United States or the united States Tax Court shall have been
rendered; or a ruling, release, order, regulation or official
statement by or on behalf of the United States Treasury Department,
the Internal Revenue Service or other governmental agency shall
have been made or proposed to be made having the purpose or effect,
or any other action or event shall have occurred which has the
purpose or effect, directly or indirectly, of adversely affecting
the federal income tax consequences of owning the Series 1993 Bonds
or of any of the transactions contemplated in connection herewith,
including causing interest on the Series 1993 Bonds to be included
in gross income for purposes of federal income taxation, or
imposing federal income taxation upon revenues or other income of
the general character of the Pledged Funds upon interest received
on obligations of the general character of the Series 1993 Bonds,
or the Series 1993 Bonds which, in the opinion of the Underwriters,
materially adversely affects the market price of or market for the
Series 1993 Bonds; or (iii) legislation shall have been enacted, or
actively considered for enactment with an effective date prior to
the Closing, or a decision by a court of the United States shall
have been rendered, the effect of which is that the Series 1993
Bonds, including any underlying obligations, or the Resolution, as
the case may be, is not exempt from the registration, qualification
or other requirements of the Securities Act of 1933, as amended and
as then in effect, the Securities Exchange Act 1934, as amended and
as then in effect, or the Trust Indenture Act of 1939, as amended
and as then in effect; or (iv) a stop order, ruling, regulation or
official statement by the Securities and Exchange Commission or any
other governmental agency having jurisdiction of the subject matter
shall have been issued or made or any other event occurs, the
effect of which is that the issuance, offering or sale of the
Series 1993 Bonds, or the execution and delivery of the Resolution
11
.
.
as contemplated hereby or by the Official statement, is or would be
in violation of any provision of the federal securities laws,
including the Securities Act of 1933, as amended and as then in
effect, the Securities Exchange Act of 1934, as amended and as then
in effect, or the Trust Indenture Act of 1939, as amended and as
then in effect; or (v) any event shall have occurred or any
information shall have become known to the Underwriter which causes
the Underwriter to reasonably believe that the Official statement
as then amended or supplemented includes an untrue statement of a
material fact, or omits to state any material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading; or (vi) there shall have
occurred any outbreak of world war or any total national or
international calamity or crisis, including a total financial
collapse, it being agreed by the parties hereto that as of the date
of the Purchase Contract no such crisis exists, the effect of which
on the financial markets of the unites states is such as, in the
reasonable judgment of the Underwriter, would substantially
eliminate the market for or the market price of the Series 1993
Bonds; or (vii) there shall be in force a general suspension of
trading on the New York Stock Exchange, the effect of which on the
financial markets of the United States is such as, in the reason-
able judgment of the Underwriter, would materially adversely affect
the market for or the market price of the Series 1993 Bonds; or
(viii) a general banking moratorium shall have been declared by
federal, New York or State of Florida authorities; or (ix) any
proceeding shall be pending or threatened by the Securities and
Exchange Commission against the City or MBIA; or (x) additional
material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any federal or
state governmental authority or by any national securities
exchange; or (xi) the New York Stock Exchange or other national
securities exchange, or any federal or state governmental authori-
ty, shall impose, as to the Series 1993 Bonds or obligations of the
general character of the Series 1993 Bonds, any material restric-
tions not now in force, or increase materially those now in force,
with respect to the extension of credit by, or the charge to the
net capital requirements of underwriters.
10. The Underwriter shall be under no obligation to pay, and
the City shall pay from the proceeds of the Series 1993 Bonds or
otherwise, certain expenses set forth in this section 10 which are
incident to the performance of the City's obligations hereunder,
including but not limited to: (i) all expenses in connection with
the printing of the Preliminary Official Statement, the Official
Statement, and any amendment or supplement thereto; (ii) all
expenses in connection with the printing, issuance and delivery of
the Series 1993 Bonds; (iii) the fees and disbursements of Bond
Counsel and the City Attorney and the City's financial advisor;
(i v) the fees and disbursements of the Paying Agent and the
Registrar including but not limited to, counsel fees, and traveling
and other expenses; (v) fees for the rating of the Series 1993
12
.
.
Bonds; (vi) the cost of insurance for the Series 1993 Bonds; and
(vii) all other expenses and costs of the City incident to its
respective obligations in connection with the authorization,
issuance, sale and distribution of the Series 1993 Bonds. The
Underwriter shall pay all expenses incurred by it in connection
with the public offering and distribution of the Series 1993 Bonds,
including the fees and disbursements of Counsel to the Underwriter.
11. Any notice or other communication to be given to the City
under this Purchase Contract may be given by delivering the same in
writing to the attention of: Ellis Shapiro, City of Ocoee, 150 Lake
Shore Drive, Ocoee, Florida, 32761. Any such notice or communica-
tion to be given to the Underwriter may be given by delivering the
same in writing to william R. Hough & Co., 100 Second Avenue,
South, suite 800, st. Petersburg, Florida 33701, Attention: Craig
M. Hunter.
12. This Purchase Contract shall be governed by the laws of
the State of Florida.
13. This Purchase Contract is made solely for the benefit of
the signatories hereto (including the successors or assigns of the
underwriter) and no other person shall acquire or have any right
hereunder or by virtue hereof. The term "successor" shall not
include any owner of any Series 1993 Bonds merely by virtue of such
ownership. All representations, warranties and agreements in this
Purchase Contract shall remain operative and in full force and
effect, regardless of delivery of and payment for the Series 1993
Bonds.
14. This Purchase Contract shall become effective upon the
acceptance hereof by the City and approval as to form and legality
by the city Attorney of the City and shall be valid and enforceable
as of the time of such acceptance.
15. The Underwriter is delivering herewith a disclosure
statement as required by section 218.385(b) of Florida statutes and
attached hereto as Exhibit C. Attached to Exhibit C is the
information required by section 218.385(2) and (3) of the Florida
Statutes.
16. The Underwriter is delivering herewith or has previously
delivered to the City a sworn statement under section 287.133(3) (a)
Florida Statutes on public entity crimes.
17. If any provision of this Purchase Contract shall be held
or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any jurisdiction
or jurisdictions, or in all jurisdictions because it conflicts with
any provisions of any constitution, statute, rule of public policy,
or any other reason, such circumstances shall not have the effect
of rendering the provision in question invalid, inoperative or
13
.
.
unenforceable in any other case or circumstance, or of rendering
any other provision or provisions of this Purchase Contract
invalid, inoperative or unenforceable to any extent whatever_
18. This Purchase Contract may be executed in several
counterparts each of which shall be regarded as an original (with
the same effect as if the signatures thereto and hereto were upon
the same document) and all of which shall constitute one and the
same document.
Very truly yours,
WILLIAM R. HOUGH , co.
By:
Title: vice President
ACCEPTED:
CITY OF OCOEE
( SEAL)
ATTEST:
By:
Mayor or vice Mayor
By:
city Clerk
FOR USE AND RELIANCE ONLY BY THE CITY
OF OCOEE, APPROVED AS TO FORM AND
LEGALITY, THIS 16TH DAY OF FEBRUARY, 1993
FOLEY , LARDNER
25315.BPA
02/15/93
14
EXHIBIT A
$3,380,000 Serial Bonds
.
Maturity
(October 1)
Principal
Amount
Interest
Rate
Price
or Yield
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
$105,000
195,000
200,000
205,000
215,000
225,000
235,000
245,000
255,000
270,000
285,000
300,000
315,000
330,000
2.600
3.200
3.600
4.000
4.250
4.500
4.625
4.800
5.000
5.100
5.200
5.300
5.400
5.500
100.000
100.000
3.700
4.150
4.350
4.600
4.750
4.900
5.100
5.200
5.300
5.450
5.550
5.650
$1,525,000 5.75% Term Bonds Due October 1, 2010 Yield 5.85%
$1,915,000 5.75% Term Bonds Due October 1, 2014, Price 98.25%
$1,735,000 5.75% Term Bonds Due October 1, 2017 Yield 5.95%
Optional Redemption
The Series 1993 Bonds maturing on or prior to October 1, 2003, are not
subject to redemption prior to their respective maturities. The Series 1993
Bonds maturing after October 1, 2003 are subject to redemption prior to maturity
on or after October 1, 2003, at the option of the City, in whole at any time or
in part on any interest payment date in such manner as shall be determined by the
City and by lot within a maturity if less than a full maturity from any legally
available moneys at a redemption price (expressed as a percentage of the
principal amount) as set forth in the following table, plus accrued interest to
the redemption date.
Period During Which Redeemed
(Both Dates Inclusive)
Redemption Price
October 1, 2003 through September 30, 2004
October 1, 2004 through September 30, 2005
October 1, 2005 and thereafter
102%
101
100
Mandatory Redemption
The Series 1993 Bonds which mature October 1, 2010, are subject to
mandatory redemption in part prior to maturity by lot, at redemption prices equal
to 100% of the principal amount thereof plus interest accrued to the redemption
date, beginning on October 1, 2007, and on each October 1 thereafter in the
following principal amounts in the years specified:
Year
Principal Amount
.
2007
2008
2009
2010 (Maturity)
$350,000
370,000
390,000
415,000
.
.
The Series 1993 Bonds which mature October 1, 2014, are subject to
mandatory redemption in part prior to maturity by lot, at redemption prices equal
to 100% of the principal amount thereof plus interest accrued to the redemption
date, beginning on October 1, 2011, and on each October 1 thereafter in the
following principal amounts in the years specified:
Year
Principal Amount
2011
2012
2013
2014 (Maturity)
$440,000
465,000
490,000
520,000
The Series 1993 Bonds which mature October 1, 2017, are subject to
mandatory redemption in part prior to maturity by lot, at redemption prices equal
to 100% of the principal amount thereof plus interest accrued to the redemption
date, beginning on October 1, 2015, and on each October 1 thereafter in the
following principal amounts in the years specified:
Year
Principal Amount
2015
2016
2017 (Maturity)
$545,000
580,000
610,000
25315BPA.EXA
02116/93
SENr BY:TAMPA CITY CENTER
2-16-93 ;10:47AM
FOLEY & LARDNER-l
407 648 1155;# 21 6
EXHIBIT B TO PURCHASE CONTRACT
.
February ___, 1993
City Commission
Qaoee, Florida
william R. Hough & Co.
st. Petersburg, Florida
Bryant, Miller and Olive, P.A.
Tallahassee, Florida
Re: $8,55',000 city of 000.., Florida, Water and Sewer
aefunding' A:IlIS :IlIlprovement Revenue Bonds, series
1113 (~h. "Bond.")
Ladies and Gentlemen:
.
We have acted as oounsel to the City of Ocoee, Florida
(the "City"), in connection with the authorization, sale and
delivery of the above-referenced Bonds, secured by Resolution No.
93- and Resolution No. 93- of the City, adopted on February
2, 1993 and February 16, 199J;-respectively (collectively, the
"Resolution"). All capitalized undefined terms used herein shall
have. the meanings set forth in the Resolution.
In rendering the opinions set forth below, we have
examined and have relied upon the Resolution, and all other
proceedinqs ot the city relating to the issuance of the Bonds,
the sections of Chapter 173 of the Code of Ordinances of the City
rel.ating to the Net Revenues of the System (the "COde sections")
and such aqreements, certificates, documents and opinions,
includinq certificates and representations of public officials
and other oft ices or representatives ot the various parties
participatinq in this transaction, as we have deemed relevant and
necessary. In our examination of the foreqoing, we have assumed
the genuineness of signatures on all documents and instruments,
the authenticity of documents submitted as oriqinals, and the
conformity to originals of documents submitted as copies.
SENr BY:TAMPA CITY CENTER
2-16-93 ;10:47AM
FOlEY & LARDNER...
407 648 1155:# 3/ 6
February , 1993
paeJe 2 -
.
Based upon and subject to the foregoing, we are of the
opinion that:
(1) The City is a municipal corporation of the State
of Florida, duly organized and validly existing and has full
legal right, power and authority to adopt and perform its
obligations under the Resolution and the Code sections and to
authorize and issue the Bonds.
(2) To the best of our knowledge after due inquiry,
except as to the matters set forth on Sohedule I attached hereto,
the City is not in material breach of or material default under
any applicable constitutional provisions, law or administrative
regulations or the State of Florida or the united states or any
applicable judgment or decree or any loan agreement, indenture,
bond, note, material resolution, material agreement or other
material instrument to which the City is a party or to whiCh the
City or any of its property or assets is otherwise subject, and
to the best of our knowledge, after due inquiry, except as to the
m~tters set forth on SOhedule I attached hereto, no event has
occurred and is continuing which with the passage of time or the
giving of notice, or both, would constitute a material default or
material event of default under any such instrument; and to the
best of our knowledge, after due inquiry, the delivery of the
Bonds and the adoption of the Resolution and the Code Sections
and compliance with the provisions on the City's part contained
therein, will not conflict with or constitute a material breach
of or material default under any constitutional provision, law,
administrative requlation, judgment, decree, loan agreement,
indenture, bond, note, material resolution, material agreement or
other material instrument to which the city is a party or to
which the City or any of its property or assets is otherwise
SUbject, nor will any SUCh execution, delivery, adoption or
compliance result in the creation or imposition of any lien,
charge or other security interest or encumbrance of any nature
whatsoever upon any of the property or assets of the City or
under the terms of any such law, regulation or instrument, except
as expressly provided by the Bond~ the Resolution and the Code
Sections.
.
(3) The City has the right and power under the Act to
adopt the Resolution, and the ReSOlution has been duly and
lawfully adopted by the City, is in full force and effect and
constitutes a legal, valid and binding limited obligation of the
City, enforceable in accordance with its terms.
(4) The Bon~s have been duly executed and are valid
and bindinq limited obliqations of the City, enforceable in
SENT BY:TAMPA CITY CENTER
2-16-93 :10:48AM
FOLEY & LARDNER-l
407 648 1155;# 4/ 6
February ,1993
Page 3 -
.
accordanoe with their terms and the terms of the Resolution and
are entitled to the benefits of the Resolution.
.
(5) To the best of our knowledge after due inquiry,
there is no action, suit, proceeding, inquiry or investiqation at
law or in equity before or by any court, qovernment agency,
public board or body, pendinq or threatened aqainst the city
affecting or seeking to prohibit, restrict or enjoin the sale,
issuance or delivery of the Bonds or the colleotion of the
Pledged Funds (as defined in the Resolution) or contesting or
affecting as to the City the validity or enforoeability of the
Act in any respect relating to the authorization or issuance of
the Bonds, the authorization and adoption Of the ReSOlution, or
contesting the exclusion from gross income of interest on the
Bonds for federal income tax purposes, or contesting the power or
authority of the City to adopt the Resolution and the Code
Sections or to issue the Bonds.
(6) While we have not verified and are not passing
upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statement~ contained in the
Official statement, we have participated in the preparation of
the Official statement and have had general discussions with
representatives of the city and the Underwriter with respect to
the matters set forth therein. In the course of such activities,
no facts came to our attention that would lead us to believe that
the Ofticial statement (apart from the information contained in
the appendices, the financial, enqineerinq, statistical data or
projections included in the Otticial Statement, and except for
the matters set forth therein under the captione. "Municipal Bond
Insurance", "Scheduled Debt service for the Series 1993 Bondgll,
"Estimated Sources and Uses of Funds", IIRating's", and "Tax
Exemption") as of its date or as of the date ot the Closing
contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleadinq.
(7) The Official statement dated February ,1993,
has been duly authorized, executed and delivered by the City, and
the city has consented to the use thereof by the Underwriter.
The opinions contained herein are qualified to the
extent that the enforceability of the Resolution, the Code
Sections, and the Bonds may be limited by bankruptcy,
reorganization, insolvency or other similar laws relating to or
affecting the enforcement of creditors' riqhts generally, to
moratorium laws from time to time in effect, and by applicable
SENT BY: TAMPA CITY CENTER
2-16-93 :10:4aAM
FOlEY & LARDNER....
407 648 1155:# 5/ 6
February , 1993
Page 4 -
.
law or equitable principles that may affeot remedies or
injunctive or equitable relief. In addition, we express no
opinion with respect to the exclusion from gross income for
Federal income tax purposes of interest on the Bonds.
We have not passed upon any matters relating to the
business affairs or condition (financial or otherwise) of the
City of Oc08e, Florida, and no inference shOUld be drawn that we
have expressed any opinion on matters relating to the ability of
the City to perform its obliqations under the instruments
described herein. This opinion shall not be deemed or treated as
an offering circular. prospectus or official statement, and is
not intended in any way to be a disclosure document used in
connection with the sale or delivery of the Bonds.
Our opinions expressed herein are predicated upon
present laws, facts and circumstances, and we assume no
affirmative obliqation to update the opinions expressed herein if
such laws, facts or circumstances chanqe after the date hereof.
Very truly yours,
FOLEY & LARDNER
By:
Paul E. Rosenthal
.
SENf BY:TAMFA C IlY CENTER
2-16-93 ;10:49AM
FOlEY & URDNER-l
Salledule t
[to come]
.
.
c.",",J~BINICl)IM69)\'f?Ml.IGrJD;Io
407 648 1155;# 6/ 6
EXHIBIT C
.
February 16, 1992
City commission
City of Ocoee
150 Lake Shore
Ocoee, Florida
Drive
32761
Re: $8,555,000 City of Ocoee, Florida Water and Sewer System
Refunding and Improvement Revenue Bonds, Series 1993
Gentlemen:
In connection with the proposed issuance by City of Ocoee,
Florida (the "City") of $8,555,000 city of Ocoee, Florida Water and
Sewer System Refunding and Improvement Revenue Bonds, Series 1993
referred to above (the "Bonds"), William R. Hough & Co., (the
"Underwriter") has agreed to underwrite a public offering of the
Bonds. Arrangements for underwriting the Bonds include a Purchase
Contract between the City and the Underwriter which will embody the
negotiations in respect thereof.
The purpose of this letter is to furnish, pursuant to the
provisions of section 218.385(6), Florida Statutes, certain
information in respect of the arrangements contemplated for the
underwriting of the Bonds as follows:
(a) The nature and estimated amounts of expenses to be
incurred by the Underwriter, in connection with the
issuance of the Bonds, are set forth in Schedule I
attached hereto.
.
(b) No person has entered into an understanding with the
Underwriter, or to the knowledge of the Underwriter, with
the City for any paid or promised compensation or
valuable consideration, directly or indirectly, expressly
or implied, to act solely as an intermediary between the
City and the Underwriter or to exercise or attempt to
exercise any influence to effect any transaction in the
purchase of the Bonds.
C-1
.
.
(c)
The amount of underwriting spread expected to be realized
is $16.19 per $1,000 of Bonds issued as follows and
includes a management fee of $2.50 per $1,000 of Bonds
issued.
Per $1,000 of Bond Issued
Takedown
Management Fee
Underwriters' Risk
Underwriters' Expenses
$7.00
2.50
.50
6.19
Total Underwriting Spread
$16.19
(d) No other fee, bonus or other compensation is estimated to
be paid by the Underwriter in connection with the issue
of the Bonds, to any person not regularly employed or
retained by the Underwriter, (including any, "finder" as
defined in section 218.386(1) (a), Florida Statutes, as
amended), except as specifically enumerated as expenses
to be incurred and paid by the Underwriter, as set forth
in Schedule I attached hereto.
We understand that you do not require any further disclosure
from the Underwriter, pursuant to section 218.385(6), Florida
statutes, as amended.
WILLIAM R. HOUGH , CO.
100 Second Avenue South, suite 800
st. Petersburg, Florida 33701
By:
Vice President
C-2
.
.
SCHEDULE I
CITY OF OCOEE, FLORIDA
WATER AND SEWER SYSTEM REFUNDING AND IKPROVEKENT REVENUE BONDS
SERIES 1993
Underwriter's Ex~enses
Total
Underwriter's Counsel/Expense
Clearance
Federal Funds/Day Loan
structuring/Analysis Fee
Cusip, MSRB, PSA
Dalnet/Dalcomp
Expenses/Closing Costs
$15,000.00
4,277.50
1,967.65
8,555.00
769.95
1,026.60
21. 358.75
$52,955.45
TOTAL:
C-3
'.
.
SCHEDULE II
CITY OF OCOEE, FLORIDA
WATER AND SEWER SYSTEK REFUNDING AND IMPROVEKENT REVENUE BONDS
SERIES 1993
In accordance with section 218.385(2) and (3) the City of
Ocoee, Florida (the "Issuer") hereby determines that:
The Issuer is proposing to issue $8,555,000 principal amount
of Water and Sewer System Refunding and Improvement Revenue Bonds,
series 1993 (the "Bonds") for the purpose of (a) retiring the
Refunded Bonds (as defined in the resolution authorizing the
issuance of the Bonds (the "Resolution")); (b) acquiring and
constructing the Initial Project (as defined in the Resolution);
(c) depositing to the account in the Reserve Fund created for the
benefit of the Bonds an amount equal to the Reserve Requirement;
and (d) paying certain costs of issuing and delivering the Bonds.
This debt or obligation is expected to be repaid over a period of
approximately 24.5 years. At the interest rates specified in the
Purchase Contract, total interest paid over the life of the debt or
obligation will be $7,391,621.67.
The source of repayment of security for this proposal are the
Pledged Funds as defined in the Resolution. Authorizing the Bonds
will result in a maximum amount of $649,875.00 of Pledged Funds not
being available to finance the other services of the Issuer each
year for approximately 24.5 years.
25315PC.EXC
02/16/93
C-4
EXHIBIT C
COMMITMENT FOR INSURANCE
.
.
MBIA
REVISED AS OF FEBRUARY 18, 1993
COMMITMENT TO ISSUE A
FINANCIAL GUARANTY INSURANCE POLICY
Application No.: 93-01-0476
Sale Date: February 16, 1993
Program Type: Negotiated DP
.
RE:
$8,555,000 City of Ocoee, Florida, Water and Sewer System Refunding and
Improvement Revenue Bonds, Series 1993
(the "Obligations")
This commitment to issue a financial guaranty insurance policy (the
"Commitment") constitutes an agreement between the CITY OF OCOEE, FLORIDA (the
"Applicant") , and MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION (the
"Insurer"), a stock insurance company incorporated under the laws of the State
of New York.
Based on an approved application dated January 28, 1993, the Insurer
agrees, upon satisfaction of the conditions herein, to issue on the earlier of
(i) 120 days of said approval date or (ii) on the date of delivery of and
payment for the Obligations, a financial guaranty insurance policy (the "Bond
Insurance Policy"), for the Obligations, insuring the payment of principal of
and interest on the Obligations when due. The issuance of the Bond Insurance
Policy shall be subject to the following terms and conditions:
1. Payment by the Applicant, or by the Trustee on behalf of the
Applicant, on the date of delivery of and payment for the Obligations, the
following payments:
a. a nonrefundable premium in the amount of $117,000 [.736~ of
$15,946,621.67 (total debt service), premium rounded to the
nearest thousand]. The premium set out in this paragraph shall
be the total premium required to be paid on the Bond Insurance
Policy issued pursuant to this Commitment; and
b. Standard & Poor's Corporation rating agency fees in an amount to
be billed directly by Standard & Poor's Corporation, based on
the final par and other factors as determined by Standard &
Poor's Corporation; and
c. Moody's Investors Service rating agency fees in an amount to be
billed directly by Moody's Investors Service, based on the final
par and other factors as determined by Moody's Investors Service.
2. The Obligations shall have received the unqualified opinion of bond
counsel with respect to the tax-exempt status of interest on the Obligations.
.
3. There shall have been no material adverse rchnncwin the Obligations
or the Resolution, Bond Ordinance, Trust 1l1clelltllr''' "I ,d"hL'l "rricial document
authorizing the issuance of the Obligations or ill the tinnl official statement
or other similar document, including the financial statements included therein.
4. There shall have been no material
submitted to the Insurer as a part of
submitted to be a part of the application to
adverse change in any information
the application or subsequently
the Insurer.
-2-
MElIA
5. No event shall have occurred
other purchaser of the Obligations
Obligations at closing.
which would allow any underwriter or any
not to be required to purchase the
.
6. All documents executed in connection with the issuance of the
Obligations shall contain a provision which requires copies of any amendments
to such documents consented to by the Insurer to be sent to Standard & Poor's.
7. A Statement of Insurance satisfactory to the Insurer shall be printed
on the obligations.
8. Prior to the delivery of and payment for the Obligations, none of the
information or documents submitted as a part of the application to the Insurer
shall be determined to contain any untrue or misleading statement of a
material fact or fail to state a material fact required to be stated therein
or necessary in order to make the statements contained therein not misleading.
9. No material adverse change affecting any security for the Obligations
shall have occurred prior to the delivery of and payment for the Obligations.
10. This Commitment may be signed in counterpart by the parties hereto.
11. The period between closing on the refunding bonds and redemption of
the refunded bonds shall not exceed 60 days.
12. The proceeds of the refunding issue shall be sufficient to redeem the
refunded bonds without reinvestment income (i.e. gross funded).
13. Should the proceeds be invested, such investment(s) must mature in an
amount and at such time so that sufficient cash will be available to effect
the redemption. The Trustee must verify and confirm this in writing to MBIA.
14. Investments, to be held in a fiduciary account, must be limited to:
a. Cash
b. Direct obligations of the U.S. Treasury.
c. Money market funds registered under the Federal Investment
Company Act of 1940, whose shares are registered under the
Federal Securities Act of 1933, and have a rating by S&P of
AAAm-G or AAAm. If the money market fund has been rated by
Moody's, it must be rated Aaa as well. Investments in money
market funds are limited to 10 days.
15. Modify the rate covenant to require the following 2 tiered test:
1. Net revenues less capacity charges must equal 1.Ox annual debt
service; and
2. Net revenues must equal 1.10x annual deh~ ~pruice.
.
16. Modify the Additional Bonds Test to require the following 2 tiered
tests:
1. Net revenues less capacity charges for the 12 out of 24 months
prior to issuance must equal 1.0x pro forma MADS; and
2. Net revenues for the same period must equal 1. lOx pro forma
MADS. The same 2 tiered test shall apply for the 12 months
following issuance. The adjustments should be modified to
include 100% of additional net revenues estimated to be derived
during the first 12 month period after placing the additional
project in service.
-3-
MBIA
17. Compliance with General Criteria (See Exhibit A Attached).
18. Compliance with conditions for variable rate debt to be issued on a
parity with MBIA-Insured Bonds (See Exhibit B Attached).
.
19. Compliance with Standard Surety/LOC replacement provisions (See
Exhibit C Attached).
20. Compliance with Permitted Investments (See Exhibit D Attached).
Dated this 18th day of Februray, 1993.
MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION
By ~ If .)If t<.. r2t.-'- -
Assistant Secretary
CITY OF OCOEE,
By
Title:
.
.MBIA
EXHIBIT A
GENERAL CRITERIA
.
I. Notice to MBIA Corp. The basic legal documents should provide that
any notices required to be given by any party should also be given to MBIA
Corp.
II. Amendments. In the basic legal document there are usually two
methods of amendment. The first, which typically does not require the consent
of the bondholders, is for amendments which will cure ambiguities, correct
formal defects or add to the security of the financing. The second, in which
bondholder consent is a prerequisite, covers the more substantive types of
amendments. For all financings, MBIA Corp. should be given notice of any
amendments that are of the first type and MBIA Corp. consent should be
required for all cases of the second type. All documents should also contain
a provision which requires copies of any amendments to such documents which
are consented to by the Insurer to be sent to Standard & Poor's.
III. Supplemental Legal Document. As a corollary to item II, if the basic
legal document provides for a supplemental legal document to be issued, for
reasons other than those stated in the amendment section (e.g., the issuance
of addi tional bonds), there should be a requirement that MBIA Corp. consent
also be obtained prior to the issuance of any supplemental legal document.
IV. Events of Default and Remedies. All financings normally contain
provisions which define what the events of default are and which prescribe the
remedies that may be exercised upon the occurrence of any event of default.
Most typically, the events of default will be stated as follows:
A. the issuer fails to pay principal when due;
B. the issuer fails to pay interest when due;
C. the issuer fails to observe any other covenant or condition of
the document and such failure continues for a certain period
(e.g., 30 days); or
D. the issuer goes into bankruptcy.
The typical remedies that are exercisable by the trustee/bondholders
upon the occurrence of any event of default are (i) the right to accelerate the
debt and (ii) the right to pursue any other available legal remedy. Our
requirement is that for any debt MBIA Corp. has insured we should have the
right to consent to any action under (i) or (ii) before the trustee/bondholders
are permitted to take such action.
.
It is important to mention here that the events of default and the
available remedies may in certain types of issues also appear in a much more
straightforward, contract law type of st;}tement (i. "?, "the failure by the
issuer to observe any covenant to be performed by it under this document" and
"the other party (trustee/bondholder) shall have rights at law or in equity to
enforce any of the provisions of this document".) For this purpose, failure to
pay when due, failure to maintain a rate covenant, etc. all would constitute
breaches of the legal document (events of default) and would allow the trustee
to pursue any available remedy that the law allows, including asking a court to
compel the issuer to do what it contracted to do under the legal document.
Again, the MBIA Corp. requirement would be that we have the same rights as the
trustee or bondholders to pursue legal remedies.
MBIA
V. Defeasance should require the deposit of:
A. Cash
.
B. U.S. Treasury Certificates, Notes and Bonds (including State and Local
Goverrunent Series -- "SLGS")
C. Direct obligations of the Treasury which have been stripped by the
Treasury itself, CATS, TIGRS and similar securities
D. Resolution Funding Corp. (REFCORP) Only the interest component of
REFCORP strips which have been stripped by request to the Federal
Reserve Bank of New York in book entry form are acceptable.
E. Pre-refunded municipal bonds rated "Aaa" by Moody's and "1..1..1.." by S&P.
If however, the issue is only rated by S&P (i.e., there is no Moody's
rating), then the pre-refunded bonds must have been pre-refunded with
cash, direct U.S. or U.S. guaranteed obligations, or 1..1..1.. rated
pre-refunded municipals to satisfy this condition.
F. Obligations issued by the following agencies which are backed by the
full faith and credit of the U.S.:
1. ~.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial
ownership
2. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
3. Federal Financing Bank
4. ~ral Services Administration
Participation certificates
5. U.S. Maritime Administration
Guaranteed Title XI financing
6. U.S. Department of Housina and Urban Development (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.S. goverrunent guaranteed debentures
U. S. Public Housing Notes and Bonds - U. S. goverrunent guaranteed
public housing notes and bonds
.
VI. Acceleration: Other than the usual ~edemptiun provlslons, any
acceleration of principal payments must require MBIA Corp. approval.
MBIA
VII. Agents:
.
A. In transactions where there is an agent/enhancer (other than MBIA),
the trustee, tender agent (if any), paying agent (if any) must
commercial banks with trust powers.
B. The remarketing agent must have trust powers if they are responsible
for holding monies or receiving bonds. Alternately, the documents may
provide that if the remarketing agent is removed, resigns or is unable
to perform its duties, the trustee must assume the responsibilities of
remarketing agent until a substitute acceptable to MBIA is found.
.
EXHIBIT B
GENERAL DOCUMENT PROVISIONS FOR VARIABLE RATE DEBT
TO BE ISSUED ON A PARITY WITH MBIA-INSURED BONDS
M~ in unusual
insurable for:
circumstances
approved by MBIA, variable rate debt is not
.
A. General obligation bonds of states, counties, municipalities and
special districts:
B. Lease transactions: and,
C. Most issues secured by a fixed revenue source such as tax allocation
bonds or sales tax revenue bonds (where the issuer has no control
over the tax rate) unless the issuer is able to demonstrate
satisfactory coverage at the cap interest rate and is willing to
calculate variable rate debt service at the cap for purposes of its
additional bonds test.
In general, for the above-referenced issue types (with the exception of GO's),
parity bond provisions should preclude variable rate debt direct or
derivative.
For all other security types, MBIA's general document provisions for variable
rate parity debt as listed below apply.
1. Debt Service Reserve Fund should be funded to maximum permitted amount
with interest calculated at the lesser of the 30-year Revenue Bond
Index (published by The Bond Buyer no more than two weeks prior to
date of sale) or the maximum allowable.
2. Rate Covenant for Rate Setting Purposes: interest should be
calculated at the lesser of the maximum short-term rate prevailing in
the preceding 12 months or the cap rate.
3. Additional Bonds Test: interest should be the calculated at the
30-year Revenue Bond Index (published by The Bond Buyer no more than
two weeks prior to date of sale).
4. A cap on the bond rate and the bank rate (liquidity provider) must be
specified at the time of issuance of variable rate debt.
5. Any accelerated principal payments due to the bank or any interest due
in excess of the bond interest rate to the bank must be subordinate to
the payment of debt service on all parity bonds. (See G. below)
6. The liquidity provider must be rated in the highest short term rating
category assigned by Standard & Poor's and Moody's.
.
7. If the Additional Bonds Test is calculated assuming interest at the
cap bank rate and assuming the accelerated principal repayment
schedule due to the bank, then the acceleration of principal payments
and excess interest due to the bank referrpd to in paragraph E above
may be on a parity with the payul'?nt of del": SO'"";;;_<'e on all parity
bonds.
8. In transactions where there is an agent/enhancer (other than MBIA),
the trustee, tender agent (if any), paying agent (if any) must
commercial banks with trust powers.
The remarketing agent must have trust powers if they are responsible for
holding monies or receiving bonds. Alternately, the documents may provide
that if the remarketing agent is removed, resigns or is unable to perform
its duties, the trustee must assume the responsibilities of remarketing
agent until a substitute acceptable to MBIA is found.
EXHIBIT C
MElIA
.
.
GENERAL DOCUMENT PROVISIONS FOR SURETY
BONDS AND LOCS IN PLACE OF DSRFS
I. If the documents provide for the replacement of an existing funded DSRF in
the future with either a surety bond or a letter of credit or provide for the
use of a surety bond or letter of credit to fund the DSRF on parity issues, then
a provision should be added to the documents that no such surety bond or letter
of credit may be used without the written consent of MBIA both as to the
provider of such security and to its structure.
II. As an alternative to I and in all cases where a surety bond or letter of
credit is replacing a DSRF in an MBlA-insured issue, the following requirements
apply:
1. The surety bond must be from an insurance company that is rated in the
highest rating category by Standard & Poor's and Moody's, or the letter
of credit must be from a bank approved by MBIA.
2. MBIA reserves the right to periodically review the LOC bank and if found
unacceptable, require that:
a. another LOC must be found within 45 days, or
b. the issuer must draw upon the LOC to fund the DSR with cash, or
c. the issuer must fund the DSR with cash over an acceptable
period of time (to be negotiated on a deal-by-deal basis).
3. The surety bond or LOC !DJMit be unconditional and irrevocable. If the
surety bond or LOC can expire earlier than the final maturity of the
bonds, the provisions for funding a reserve should be examined for
acceptability.
4. After the surety bond has been drawn down, any monies available to repay
the surety bond or LOC provider must.f.ll:.s..t. be used to reinstate the
surety bond or LOC to its original amount. Any interest or fees due to
the surety or LOC provider, other than reinstatement, must be subordinate
to any amounts required to be paid for the benefit of the bondholders.
EXHIBIT D
MElIA
LIST OF PERMISSIBLE INVESTMENTS
FOR INDENTURED FUNDS
.
A. Direct obligations of the United States of America (including obligations
issued or held in book-entry form on the books of the Department of the
Treasury, and CATS and TGRS) or obligations the principal of and interest
on which are unconditionally guaranteed by the United States of America.
B. Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such
obligations are backed by the full faith and credit of the United States
of America (stripped securities are only permitted if they have been
stripped by the agency itself):
1. U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial
ownership
2. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
3. Federal Financing Bank
4. Federal Housing Administration Debentures (FHA)
5. General Services Administration
Participation certificates
6. Government National Mortgage Association (GNMA or "Ginnie Mae")
GNMA - guaranteed mortgage-backed bonds
GNMA - guaranteed pass-through obligations
(not acceptable for certain cash-flow sensitive issues.)
7. U.S. Maritime Administration
Guaranteed Title XI financing
8. U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds U.S. government guaranteed
public housing notes and bonds
C.
Bonds, debentures,
guaranteed by any
government agencies
been stripped by the
notes or other evidence of indebtedness issued or
of the following non-full faith and credit U.S.
(stripped securitiD:~ ar", 0)).1",- l:,onnj tted if they have
agency itself):
.
1. Federal Home Loan Bank System
Senior debt obligations
2. Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac")
Participation Certificates
Senior debt obligations
3. Federal National Mortgage Association (FNMA or "Fannie Mae")
Mortgage-backed securities and senior debt obligations
4.
Student Loan Marketing Association (SLMA or "Sallie Mae")
Senior debt obligations
MBIA
.
.
Resolution Funding Corp. (REFCORP) obligations
6.
Farm Credit System
Consolidated systemwide bonds and notes
D.
market funds registered under the Federal Investment Company Act
whose shares are registered under the Federal Securities Act
and having a rating by S&P of AAAm-G; AAAm; or AAm.
of
of
Money
1940,
1933,
E.
Certificates of
(A) and/or (B)
banks, savings
collateral must
perfected first
deposit secured at all times by collateral described in
above. Such certificates must be issued by commercial
and loan associations or mutual savings banks. The
be held by a third party and the bondholders must have a
security interest in the collateral.
F. Certificates of deposit, savings accounts, deposit accounts or money
market deposits which are fully insured by FDIC or FSLIC.
G. Investment Agreements, including GIC's, acceptable to MBIA.
H. Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's
and "A-I" or better by S&P.
1.
Bonds or notes
Moody's and S&P
such agencies.
issued by any state or municipality which are rated by
in one of the two highest rating categories assigned by
J. Federal funds or bankers acceptances with a maximwn term of one year of
any bank which has an unsecured, uninsured and unguaranteed obligation
rating of "Prime - 1" or "A3" or better by Moody's and "A-I" or "A" or
better by S&P.
K. Repurchase agreements provide for the transfer of securities from a dealer
bank or securities firm (seller/borrower) to a municipal entity
(buyer/lender), and the transfer of cash from a municipal entity to the
dealer bank or securities firm with an agreement that the dealer bank or
securities firm will repay the cash plus a yield to the municipal entity
in exchange for the securities at a specified date.
Repurchase Agreements must satisfy the following criteria or be approved
by MBIA.
1. Repos must be between the municipal entity and a dealer bank or
securities firm
a. Primary dealers on the Federal Reserve reporting dealer list which
are rated A or better by Standard & Poor's Corporation and Moody's
Investor Services, or
b. ~ rated "A" or above by Standard & Poor's Corporation and
Moody's Investor Services.
MBIA
The written repo contract must include the following:
a. Securities which are acceptable for transfer are:
(1) Direct U.S. governments, or
(2) Federal agencies backed by the full faith and credit of the
. U.S. government (and FNMA & FHLMC)
b. The term of the repo may be up to 30 days
c. The collateral must be delivered to the municipal entity, trustee
(if trustee is not supplying the collateral) or third party acting
as agent for the trustee (if the trustee is supplying the
collateral) before/simultaneous with payment (perfection by
possession of certificated securities).
d. Valuation of Collateral
(1) The securities must be valued weekly, marked-to-market at
current market price ~ accrued interest
(a) The value of collateral must be equal to 104~ of the
amount of cash transferred by the municipal entity to the
dealer bank or security firm under the repo plus accrued
interest. If the value of securities held as collateral
slips below 104~ of the value of the cash transferred by
municipali ty, then additional cash and/or acceptable
securities must be transferred. If, however, the
securities used as collateral are FNMA or FHLMC, then the
value of collateral must equal 105~.
3. Legal opinion which must be delivered to the municipal entity:
a. Repo meets guidelines under state law for legal investment of
public funds.
Additional Notes
(i) Any state administered pool investment fund in which the issuer is
statutorily permitted or required to invest will be deemed a
permitted investment.
(ii) DSRF investments should be valued at fair market value and marked
to market at least once per year. DSRF investments may not have
maturities extending beyond 5 years.
.
Payments under the Policy
.
A. In the event that, on the second Business Day, and again on the
Business Day, prior to the payment date on the Obligations, the Paying Agent
has not received sufficient moneys to pay 911 principal of and interest on the
Obligations due on the second following or following, as the case may be,
Business Day, the Paying Agent shall inunediately notify the Insurer or its
designee on the same Business Day by telephone or telegraph, confirmed in
writing by registered or certified mail, of the amount of the deficiency.
B. If the deficiency is made up in whole or in part prior to or on
the payment date, the Paying Agent shall so notify the Insurer or its designee.
C. In addition, if the Paying Agent has notice that any Bondholder
has been required to disgorge payments of principal or interest on the
Obligation to a trustee in Bankruptcy or creditors or others pursuant to a
final judgment by a court of competent jurisdiction that such payment
constitutes a voidable preference to such Bondholder within the meaning of any
applicable bankruptcy laws, then the Paying Agent shall notify the Insurer or
its designee of such fact by telephone Or telegraphic notice, confirmed in
writing by registered or certified mail.
D. The Paying Agent is
directed and authorized to act
Obligations as follows:
hereby irrevocably designated, appointed,
as attorney-in-fact for Holders of the
1. If and to the extent there is a deficiency in amounts
required to pay interest on the Obligations, the Paying Agent shall
(a) execute and deliver to Citibank, N.A., or its successors under the
Policy (the "Insurance Paying Agent"), in form satisfactory to the
Insurance Paying Agent, an instrument appointing the Insurer as agent
for such Holders in any legal proceeding related to the payment of
such interest and an assignment to the Insurer of the claims for
interest to which such deficiency relates and which are paid by the
Insurer, (b) receive as designee of the respective Holders (and not as
Paying Agent) in accordance with the tenor of the Policy payment from
the Insurance Paying Agent with respect to the claims for interest so
assigned, and (c) disburse the same to such respective Holders; and
.
2. If and to the extent of a deficiency in amounts required to
pay principal of the Obligations, the Paying Agent shall (a) execute
and deliver to the Insurance Paying Agent in form satisfactory to the
Insurance Paying Agent an instrument appointing the Insurer as agent
for such Holder in any legal proceeding relating to the payment of
such principal and an assignment to the Insurer of any of the
Obligation surrendered to the Insurance Paying agent of so much of the
principal amount thereof as has not previously been paid or for which
moneys are not held by the Paying Agent and available for such payment
(but such assignment shall be delivered only if payment from the
Insurance Paying Agent is received), (b) receive as designee of the
respective Holders (and ,not as Paying Agent) in accordance _with the
tenor of the Policy payment therefor from the Insurance Paying Agent,
and (c) disburse the same to such Holders.
E. Payments with respect to claims for interest on and principal of
Obligations disbursed by the Paying Agent from proceeds of the Policy shall
not be considered to discharge the obligation of the Issuer with respect to
such Obligations, and the Insurer shall become the owner of such unpaid
.Obligation and claims for the interest in accordance with the tenor of the
assignment made to it under the provisions of this. subsection or otherwise.
.
F. Irrespective
delivered, the Issuer and
Insurer that,
of whether any such assignment is executed and
the Paying Agent hereby agree for the benefit of the
1. They recognize that to the extent the Insurer makes payments,
directly or indirectly (as by paying through the Paying Agent), on
account of principal of or interest on the Obligations, the Insurer
will be subrogated to the rights of such Holders to receive the amount
of such principal and interest from the Issuer, with interest thereon
as provided and solely from the sources stated in this Indenture and
the Obligations; and
2. They will accordingly pay to the Insurer the amount of such
principal and interest (including principal and interest recovered
under subparagraph (ii) of the first paragraph of the Policy, which
principal and interest shall be deemed past due and not to have been
paid), with interest thereon as provided in this Indenture and the
Obligation, but only from the sources and in the manner provided
herein for the payment of principal of and interest on the Obligations
to Holders, and will otherwise treat the Insurer as the owner of such
rights to the amount of such principal and interest.
G. In connection with the issuance of additional Obligations, the
Issuer shall deliver to the Insurer a copy of the disclosure document, if any,
circulated with respect to such additional Obligations.
H. Copies of any amendments made to the
connection with the issuance of the Obligations which
Insurer shall be sent to Standard & Poor's Corporation.
documents executed in
are conse?ted to by the
I. The Insurer shall receive notice of the resignation or removal of
the Paying Agent and the appointment of a successor thereto.
J. The Insurer shall receive copies of all
delivered to Bondholders and, on an annual basis,
audited financial statements and Annual Budget.
notices required to be
copies of the Issuer' s
.
Notices: Any notice that is required to be given to a holder of the
Obligation or to the Paying Agent pursuant to the Indenture shall also be
.,provided to the Insurer. All notices required to be given to the Insurer
under the Indenture shall be in writing and shall be sent by registered or
certified mail addressed to Municipal Bond Investors Assurance Corporation,
113 King Street, Armonk, New York 10504 Attention: Surveillance.
3065a