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HomeMy WebLinkAboutResolution 639 Revenue Bonds RESOLUTION NO. 639 A RESOLUTION AUTHORIZING THE NEGOTIATED SALE OF $12,300,000 CITY OF WINTER SPRINGS, FLORIDA WATER AND SEWER REVENUE BONDS, SERIES 1990; AWARDING THE SALE THEREOF TO DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION SUBJECT TO THE TERMS AND CONDITIONS OF A CONTRACT OF PURCHASE; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE DELIVERY OF THE BONDS; APPOINTING A TRUSTEE, REGISTRAR AND PAYING AGENT; AUTHORIZING THE PURCHASE OF BOND INSURANCE TO BE ISSUED BY MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION; AUTHORIZING THE FUNDING OF THE RESERVE FUND BY PURCHASE OF A SURETY BOND AND AUTHORIZING EXECUTION OF A FINANCIAL GUARANTY AGREEMENT IN CONNECTION THEREWITH; DEFINING THE BOND YEAR; AND PROVIDING AND EFFECTIVE DATE. WHEREAS, The City of Winter Springs, Florida (the "Issuer") has by resolution adopted on April 23, 1990, (the "Resolution"), authorized the issuance of its not exceeding $12,300,000 City of Winter Springs, Florida Water and Sewer Revenue Bonds, Series 1990 (the "Bonds"), to (a) finance the acquisition of the existing water and sewer assets of Seminole Utility Company within the jurisdic- tion of the Issuer; (b) fund the Reserve Fund for the Bonds; and (c) pay certain costs of issuing and delivering the Bonds; 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 Donaldson, Lufkin & Jenrette Securities Corporation (the "Underwriter"), to purchase $12, 300,000 in aggregate principal amount of the Bonds, it is hereby determined that it is in the best interest of the public and the Issuer to sell the Bonds at a negotiated sale; and WHEREAS, the Issuer has received an offer from the Under- writer to purchase the Bonds, subject to the terms and conditions set forth in the Contract of Purchase (the "Contract of Purchase"), a copy of which is attached hereto as Exhibit "A"; and WHEREAS, the Issuer now desires to sell its Bonds pursuant to the Contract of Purchase and in furtherance thereof to appoint a Trustee, Registrar and Paying Agent, to authorize distribution of a Preliminary Official Statement and an Official Statement in connection with the issuance of the Bonds, to authorize the purchase of bond insurance, to authorize the purchase of a surety bond for deposit in the Reserve Account, and the execution of a financial guaranty agreement in connection therewith and to make certain other determinations concerning the Bonds; and WHEREAS, the Issuer has been provided all applicable dis- closure information required by Section 218.385, Florida Statutes, a copy of which is attached as an Exhibit hereto; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA, AS FOLLOWS: SECTION 1. The negotiated sale of $12,300, 000 City of Winter Springs, Florida Water and Sewer Revenue Bonds, Series 1990, is hereby authorized and approved. SECTION 2. The Bonds are hereby sold to the Underwriter upon the terms and conditions set forth in the Contract of Purchase attached hereto as Exhibit "A" and incorporated by reference. The City Manager is hereby authorized to execute such Contract of Purchase in substantially the form attached as Exhibit "A", with 2 such additional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said officer of the Issuer executing the same, such execution to be conclusive evidence of such approval. SECTION 3. The Bonds shall be dated April 1, 1990, shall bear interest at the rates, be subject to redemption prior to their stated dates of maturity, mature on April 1 in the years and amounts, and be subject to certain other terms as set forth as an Exhibit hereto. Interest on those Bonds shall be payable on April I and October 1 of each year commencing October I, 1990. SECTION 4. The Bonds shall be issued under and secured by the Resolution and shall be executed and delivered by the Mayor and attested by the Clerk or other appropriate official of the Issuer in substantially the form set forth in the Resolution, with such additional changes and insertions therein as conform to the provisions of the Contract of Purchase, and such execution and delivery shall be conclusive evidence of the approval thereof by such officers. SECTION 5. The distribution of the Preliminary Official Statement relating to the Bonds by the Underwriter attached hereto as an Exhibit is hereby approved, confirmed and ratified, and the distribution of an Official Statement, of the Issuer relating to the Bonds is hereby approved, such Official Statement to be in substantially the form of the Preliminary Official Statement attached hereto, with such additional changes, insertions and omissions as do not change the substance thereof except in confor- 3 mity with the Contract of Purchase and as may be made and approved by officers of the Issuer executing the same, such execution to be conclusive evidence of any such approval. SECTION 6. Sun Bank, National Association, Orlando, Florida, is hereby appointed to serve as Trustee under the Resolu- tion and as Registrar and Paying Agent for the Bonds. SECTION 7. Insurance to insure the holder of any Bond the scheduled payment of principal and interest on behalf of the Issuer is hereby authorized to be purchased from Municipal Bond Investors Assurance Corporation (UMBIAU) and payment for such insurance is hereby authorized from Bond proceeds in accordance with the Commitment for Municipal Bond Insurance is hereby authorized to be printed on or attached to the Bonds for the benefit and information of the Bondholders. The appropriate officials of the Issuer are authorized to execute the commitment for Municipal Bond Insurance attached hereto. SECTION 8. The Issuer shall fund the Reserve Fund with a surety bond purchased from MBIA. The Mayor and City Manger are authorized to execute a Financial Guaranty Agreement in substan- tially the form attached hereto, with such changes insertions and omissions as may be approved by such officers. SECTION 9. The Bond Year shall mean the 12 month period commencing on April 1 and ending on the next succeeding March 31. SECTION IO. The Mayor of the Issuer and the Clerk, the City Manager, or other appropriate officers of the Issuer are hereby authorized and directed to execute any and all certifications or 4 other instruments or documents required by the Resolution, the Contract of Purchase, this Resolution or any other document referred to above as a prerequisite or precondition to the issuance of the Bonds and any such representation made therein shall be deemed to be made on behalf of the Issuer. All action taken to date by the officers of the Issuer in furtherance of the issuance of the Bonds is hereby approved, confirmed and ratified. SECTION 11. All prior resolutions of the Issuer inconsis- tent 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 12. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED by the City Commission of the City of Winter Springs, Florida this 23rd day of April, 1990. (SEAL) Yn. CITY OF WINTER SPRINGS, Mayor Attest: ln~/-~ City C erk Form and Legal 5 CITY OF WINTER SPRINGS, FLORIDA $12,300,000 Water and Sewer Revenue Bonds, Series 1990 CONTRACT OF PURCHASE April 23, 1990 City of Winter Springs, Florida 1128 East State Road 434 winter Springs, Florida 32708 Gentlemen: The undersigned, (the "Underwriter") offers to enter into this agreement with the City of Winter Springs, Florida (the "city") which, upon your acceptance of this offer, will be binding upon you and upon us. This offer is made subject to agreement on or before 11:00 P.M., Standard Time on April 23, 1990. your acceptance Eastern Daylight of this Savings 1. Purchase Price. Upon the terms and conditions and upon the basis of the respective representations, warranties and covenants set forth herein, 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 $12,300,000 aggregate principal amount of Water and Sewer Revenue Bonds, Series 1990, of the City (the "Series 1990 Bonds"). The purchase price is equal to the par amount of the Series 1990 Bonds, namely, $12,300,000, plus accrued interest from April 1, 1990 to the date of delivery and shall be paid in accordance with Section 6 hereof. The Series 1990 Bonds are to be issued under and pursuant to the ci ty' s "Resolution of the City Commission of the city of winter Springs, Florida, Authorizing the Issuance of Not Exceeding $12,300,000 Water and Sewer Revenue Bonds Series 1990 of the City to be Applied To Acquire The Existing Water and Sewer Assets of Seminole utilities Company; Providing For the Payment of the Series 1990 Bonds From the Net Revenues of Such System; Making Other Covenants and Agreements in Connection Therewith; and Providing and Effective Date" adopted April 23, 1990, as supplemented (the "Resolution"). The Series 1990 Bonds shall mature on the dates and shall bear interest at the rates all as set forth in the Resolution and described in the Official statement referred to in Section 2 hereof. Terms initially capitalized herein and not otherwise defined herein shall have the meanings set forth in the Official Statement referred to below. 2. Official Statement. At the time of your acceptance hereof, the City will make available to the Underwriter an official statement of the City, dated the date hereof, relating to the Series 1990 Bonds, in substantially the form approved by the City in the Resolution (which, together with the cover page, and all exhibits, appendices, and statements included therein or attached thereto and any amendments and supplements that may be authorized for use with respect to the Series 1990 Bonds is herein called the "Official Statement"), executed on behalf of the City by a duly authorized officer of the City. The City agrees that within one business day after its acceptance hereof, it shall make the Official Statement available to the Underwriter in quantities sufficient to allow compliance with any applicable rules of the Securities and Exchange Commission (the "SEC") and the Municipal Securities Rulemaking Board. The City agrees to amend or supplement the Official statement whenever requested by the Underwriter within 90 days after the Closing (as defined in Section 6 hereof), when in the reasonable judgment of the Underwriter such amendment or supplementation is required. A draft copy of the Official Statement which, based upon representations of the Underwriter, has been deemed final by the City within the meaning of Rule 15c2-12 of the SEC and was delivered to the Underwriter by the City two business days prior to the date hereof. By your acceptance hereof, you hereby authorize and approve the Official Statement and the form of the Resolution and other pertinent documents referred to in Section 7 hereof to be lawfully used by the Underwriter in connection with the offering and sale of the Series 1990 Bonds. 3. Public Offerinq. The Underwriter intends to make a public offering of all of the Series 1990 Bonds at not in excess of the public offering price set forth on the cover of the Official Statement but may subsequently change such offering price without any requirement of prior notice. The Underwriter may offer and sell Series 1990 Bonds to certain dealers (inClUding dealers depositing bonds into investment trusts) and others at prices lower than the public offering price stated on the cover of the Official statement. The Underwriter shall, at or prior to Closing, certify the price of more than ten percent of each -2- maturity of the Series 1990 Bonds as offered and sold to the pUblic (excluding bond houses and brokers) as being not less than the offering prices set forth on the cover of the Official Statement. 4. Representations and Warranties. The City hereby represents and warrants to the Underwriter that: (a) The City has duly authorized the Resolution under the Constitution of the State of Florida, Chapter 166, Part II, Florida Statutes, Chapter 72-718, Laws of Florida, Special Act of 1972, as amended and supplemented, being the Charter of the City of Winter Springs, and other applicable provisions of laws (the "Act"). The City is a municipal corporation of the state of Florida, is validly existing under the Constitution and laws of the state of Florida, and is authorized and empowered under the Act and the other laws of the State of Florida (i) to finance, acquire and operate the water and sewer system to be acquired from Seminole utilities Company with the proceeds of the Series 1990 Bonds (the "Project"), (ii) to issue and sell the Series 1990 Bonds for the purpose of financing and acquiring the Project, and (iii) to secure the Series 1990 Bonds as provided in the Resolution; (b) The City has duly authorized all necessary action to be taken by it for: (i) the issuance and sale of the Series 1990 Bonds upon the terms set forth herein and in the Resolution; (ii) the approval of the Official Statement and the execution of the Official Statement by a duly authorized officer; (iii) the application of the proceeds of the Series 1990 Bonds upon the terms set forth in the Resolution; and (iv) the execution, delivery and receipt of this Contract of Purchase, the Series 1990 Bonds, the Resolution, and any and all such other agreements and documents as may be required to be executed, delivered and received by the City in order to carry out, give effect to, and consummate the transactions contemplated hereby, by the Series 1990 Bonds and by the Resolution; (c) The information contained in the Official Statement is and, as of the date of Closing, will be correct in all material respects and such information does not contain and will not contain any untrue statement of a material fact and does not omit and will not omit to state a material fact required to be stated therein or necessary to make the statements in such Official Statement, in light of the circumstances under which they were made, not misleading; (d) The series 1990 Bonds, when issued, delivered and paid for as provided herein and in the Resolution, will have been duly authorized, executed and issued and will constitute -3- legal, valid and binding limited obligations of the City entitled to the benefits of the Resolution. The Series 1990 Bonds will be payable as provided in the Resolution; (e) The City will apply the proceeds from the sale of the Series 1990 Bonds as specified in the Resolution and as more fully described in certificates delivered at the Closing; (f) There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending against or affecting the City or threatened against or affecting the City contesting the due organization and valid existence of the City or the validity of the Act or wherein an unfavorable decision, ruling or finding would adversely affect (i) the transactions contemplated hereby or by the Resolution or (ii) the validity or due adoption of the Resolution or the validity, due authorization and execution of the Series 1990 Bonds, the Resolution, this Contract of Purchase, or any agreement or instrument to which the city is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Resolution or (iii) the condition or operations of the City or the billing and collection of rates and charges from the City's existing water and sewer system or the Project; (g) The authorization, execution and delivery by the City of the Official Statement, this Contract of Purchase, the Series 1990 Bonds, the Resolution and the other documents contemplated hereby and by the Official Statement, and compliance by the City with the provisions of such instruments, do not and will not conflict with or constitute on the part of the City a breach of or a default under any provision of the Constitution of the State of Florida or any existing law, court or administrative regulation, decree or order or any agreement, resolution, mortgage, lease or other instrument by which the City or its properties are or, on the date of Closing will be, bound; and (h) The City agrees to cooperate with the Underwriter and its counsel in any endeavor to qualify the Series 1990 Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriter may request, however, the City shall not be required to subject itself to service of process in the jurisdiction of any state other than Florida, and the City hereby consents to the lawful use of the Official statement by the Underwriter in obtaining such qualifications. 5. Good Faith Deposit. The Underwriter has delivered to the City, and the City hereby acknowledges receipt of, a check in the -4- amount of $123,000 being 1% of the aggregate principal amount of the Series 1990 Bonds. The City shall, as security for the faithful performance by the Underwriter of its obligations hereunder, hold such check as follows: (a) at the Closing, such check shall be returned to the Underwriter uncashed, upon delivery of the Series 1990 Bonds; (b) if the city fails to deliver the Series 1990 Bonds at the Closing, or if the city shall be unable at or prior to the closing to satisfy the conditions to the obligations of the Underwriter contained herein, or if the obligations of the Underwriter shall be terminated for any reason permitted hereby, such amount shall be returned forthwith to the Underwriter for the account of the Underwriter; or (c) if the Underwriter fails (other than for a reason permitted hereby) to accept and pay for the Series 1990 Bonds upon tender thereof by the City as provided herein, such moneys shall be retained by the City as and for full liquidated damages for such failure and for any and all defaults on the part of the Underwriter, and the delivery of such check shall constitute satisfaction of, and shall result in full release and discharge of, all claims and damages for such failure and for any and all such defaults and neither the City nor any other person shall have any further action for damages, specific performance or any other legal or equitable relief against the Underwriter. 6. Reqistration of, and Payment for, the Series 1990 Bonds. At 10:00 a.m. on or about April 26, 1990, or at such other time or date as shall have been mutually agreed upon by the City and the Underwriter, the city will deliver, or cause to be delivered, to The Depository Trust Company, New York, New York ("DTC") the Series 1990 Bonds and deliver, or cause to be delivered, to the Underwriter, all documents hereinafter mentioned (the "Closing"). The Series 1990 Bonds shall be issued as one fully registered bond for each maturity, shall bear proper CUSIP numbers and shall be registered in the name of Cede & Co. as nominee of DTC, which will act as securities depository for the Series 1990 Bonds. Subject to the conditions contained herein, the Underwriter will accept such delivery and pay the purchase price of the Series 1990 Bonds including accrued interest to the Trustee to the account of the City, by wire transfer in immediately available funds on April 26, 1990'ImmediatelY upon receipt of the purchase ~O'OOO and credit to the Acquisition Fund under the Resolution, the Trustee shall make payment to the Underwriter of $147,600 representing the Underwriter's compensation and shall pay Municipal Bond Insurance corporation the premium for its policy of bond insurance, both by wire transfer in immediately available -5- Municipal Bond Insurance Corporation the premium for its policy of bond insurance, both by wire transfer in immediately available funds as instructed by the payees. The Trustee shall also make such payments in such form as it shall be directed by a closing certificate prepared by Bond Counsel including disbursement to Seminole utilities Company of the balance remaining and credited to the Acquisition Fund after the foregoing payments have been made. All such payments shall be deemed simultaneous, and the obligation of the Underwriter to pay the purchase price is expressly made conditional on the payment of the amounts referred to in this paragraph by the Trustee. Payment for and delivery of the documents as aforesaid shall be made at the offices of Parker, Owen, McGuire, Michaud, Lang and Kruppenbacher, P. A., Orlando, Florida (" Bond Counsel"), or such other place as may be agreed upon by the Underwriter and the City. Such payment and delivery is herein called the "Closing." The Series 1990 Bonds will be made available to the Underwriter for checking not less than 24 hours prior to the Closing. 7. Certain Conditions to Underwriter's Obliqations. The obligations of the Underwriter hereunder shall be subject to (i) the performance by the City of its obligations to be performed hereunder, (ii) the accuracy in all material respects of the representations and warranties of the City herein as of the date hereof and as of the time of the Closing, and (iii) the following conditions: (a) At t!1e time of Closing, (i) the Resolution shall have been adopted and delivered in the form approved by the Underwriter and shall be in full force and effect and shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter, (ii) the proceeds of the sale of the Series 1990 Bonds shall be applied as described in the Official Statement, and (iii) the City shall have duly adopted and there shall be in full force and effect such resolutions as, in the opinion of Bond Counsel, shall be necessary in connection wi th the transactions contemplated hereby; (b) At the time of the Closing, there shall have been a closing in escrow on the acquisition by the City of the Project such that payment by the City of the acquisition price of the Project from the proceeds of the Series 1990 Bonds will be sufficient to release all documents from escrow; (c) At or prior to the Closing, the Underwriter shall have received two executed copies of each of the following documents: -6- things, the validity of the Series 1990 Bonds and the exclusion of the interest on the Series 1990 Bonds from Federal gross income for Federal and state income tax purposes, in substantially the form set forth as Appendix C to the Official statement; (2) a supplemental opinion, dated the date of the Closing, of Bond Counsel addressed to the City and the Underwriter stating that the information in the Official statement under the captions "Description of the 1990 Bonds," "Tax Exemption" and "Security for the 1990 Bonds," insofar as such statements purport to summarize certain portions of the Resolution and the sections of law purported to be summarized therein, present a fair and accurate summary of the Resolution and the sections of law purported to be summarized therein; (3) an opinion, dated the date of the Closing, of Parker, Johnson, Owen, McGuire, Michaud, Lang & Kruppenbacher, P.A., Orlando, Florida, as counsel to the ci ty, addressed to the ci ty and the Underwri ter substantially in the form of the draft copy previously submitted by such counsel to the Underwriter; (4) an opinion, dated the date of the Closing, of Rose, Sundstrom & Bentley, Tallahassee, Florida, as special utility counsel to the City, addressed to the Underwriter stating that the opinion delivered by such firm in connection with the closing on the acquisition by the City of the 1990 System may be relied on by the Underwriter as though the same were addressed to it; (5) an opinion, dated the date of the Closing, of Broad and Cassel, Maitland, Florida, as special counsel to the Seller of the Project, addressed to the City and the Underwriter stating that the opinion delivered by such firm in connection with the closing on the acquisition by the City of the 1990 System may be relied on by the Underwriter as though the same were addressed to it; (6) an op1n10n, dated the date of the Closing, of Webster & Sheffield, New York, New York, counsel for the Underwriter, addressed to the Underwriter as to exemption from registration with the SEC and certain "due diligence" procedures; (7) a letter of Rachlin & Cohen, special utility accountants to the City, addressed to the Underwriter stating that the fairness opinion delivered by such firm .in connection with the closing on the acquisition by the -7- City of the 1990 System may be relied on by the Underwriter as though the same were addressed to it; (8) a certificate of the City, dated the date of the Closing and signed by a duly authorized officer of the ci ty and in form and substance reasonably satisfactory to the Underwriter, to the effect that (i) no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which is necessary to be disclosed therein in order to make the statements and information therein not misleading as of the date of Closing; (ii) the representations and warranties of the City herein are true and correct in all material respects as of the date of the Closing and all obligations to be performed by the City hereunder on or prior to the date of the Closing have been performed; and (iii) no litigation or other proceedings are pending or, to the knowledge of the City, threatened in or before any agency, court or tribunal, state or federal, (A) restraining or enjoining or seeking to restrain or enj oin the issuance, sale, execution or delivery of any of the Series 1990 Bonds or the billing or collection of rates and charges pledged to the payment of the principal of and premium, if any, and interest on the Series 1990 Bonds, (B) questioning or affecting the validity of any provision of the Series 1990 Bonds, the Resolution, this Contract of Purchase or any agreement or instrument to which the City is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Resolution, (C) questioning or affecting the validity of any of the proceedings or the authority for the authorization, sale, execution or delivery of the Series 1990 Bonds, (D) questioning or affecting the organization or existence of the City or the title of any of its officers to their respective offices or any powers of the City under the laws of the State of Florida, (E) contesting or affecting the exclusion of interest on the Series 1990 Bonds from Federal gross income for Federal or from State intangible personal property taxes, (F) contesting or affecting the billing and collection of rates and charges for water and sewer service by the City or (G) contesting the accuracy or completeness of the Official Statement or any amendment or supplement thereto; provided, however, that in lieu of such certificate the Underwriter may, in its discretion, accept the opinion of Parker, Johnson, Owen, McGuire, Michaud, Lang & Kruppenbacher, P. A., as Bond Counsel, stating that the issues raised by any such pending or threatened litigation or proceeding are -8- pending or threatened litigation or proceeding are without substance or that the contentions of all plaintiffs therein are without merit; (9) the Official statement executed on behalf of the City by a duly authorized officer thereof; (10) the Resolution and specimens of the Series 1990 Bonds; (11) a certified copy of the rate ordinance of the City providing for billing and collection of rates and charges by the City for water and sewer service in the Project; (12) a copy of all resolutions of the City authorizing the execution of the Official statement and the execution and delivery of the Resolution, the Series 1990 Bonds and this Contract of Purchase, certified as having been duly adopted and being in full force and effect and as constituting all resolutions of the City enacted with respect to the Series 1990 Bonds; (13) a certificate of a duly authorized officer of the City, satisfactory to the Underwriter, dated the date of Closing, stating that such officer is charged, either alone or with others, with the responsibility for issuing the Series 1990 Bonds; setting forth, in the manner permitted by Section 1.103-13(a)(2)(ii) of the Treasury Regulations, the reasonable expectations of the city as of such date as to the use of proceeds of the Series 1990 Bonds and of any other funds of the City expected to be used to pay principal or interest on the Series 1990 Bonds and the facts and estimates on which such expectations are based; and stating that, to the best of the knowledge and belief of the certifying officer, the city's expectations are reasonable; (14) Evidence satisfactory to the Underwriter and Bond Counsel that the Bond Insurance policy and the Surety Bond described in the Official Statement are in effect; (15) other certificates of the City listed on a Closing Memorandum to be approved by counsel to the City, Bond Counsel and counsel to the Underwriter; and such additional legal opinions, certificates, proceedings, instruments, letters of rating agencies, if any, and other documents as the counsel to the Underwriter or Bond Counsel may reasonably request to evidence compliance by the City with legal requirements, the truth and accuracy, as of the time of Closing, of -9- herein and t?e due performance or satisfaction by the City at or pr10r to such time of all agreements then to be performed and all conditions then to be satisfied by the City. All such opinions, certificates, letters, agreements and documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to the Underwriter and counsel to the Underwriter. The City will furnish the Underwriter with such conformed copies or photocopies of such opinions, certificates, letters, agreements and documents as the Underwriter may reasonably request. 8. Termination. The Underwriter shall have the right to cancel its obligation to purchase the Series 1990 Bonds if (i) between the date hereof and the Closing, legislation shall be enacted or recommended to the Congress or otherwise endorsed for passage (by press release, other form of notice or otherwise) by the President of the united states, the Treasury Department of the Uni ted states, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives or favorably reported for passage to either House of the Congress by any committee of such House to which such legislation has been referred for consideration, or a bill to amend the Internal Revenue Code (which, if enacted, would take effect in whole or in part as of a date prior to the Closing) shall be filed in either house, or recommended for passage by the Congress by any j oint or conference committee thereof, or a decision by a court of the united States or the United States Tax Court shall be rendered, or a ruling, regulation or statement by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made or proposed to be made, with respect to the Federal taxation upon revenues or other income of the general character to be derived by the City or by any similar body, or upon interest on obligations of the general character of the Series 1990 Bonds, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the Federal income tax consequences of any of the transactions contemplated in connection herewith and, in the opinion of the Underwriter, materially adversely affects the market price of the Series 1990 Bonds, or the market price generally of obligations of the general character of the Series 1990 Bonds, or (ii) there shall exist any event which in the Underwriter's judgment either (a) makes untrue or incorrect in any material respect any statement or information contained in the Official Statement or (b) is not reflected in the Official Statement, but should be reflected therein in order to make the statements and information contained therein not misleading in any material respect, or (iii) there shall have occurred any outbreak of hostilities or any national or international calamity or crisis including a financial crisis, or -10- a financial crisis or a default with respect to the debt obligations of, or the institution of proceedings under the federal or the state bankruptcy laws by or against the state of Florida or any subdivision, agency or instrumentality of such state, the effect of which on the financial markets of the united states being such as, in the reasonable judgment of the Underwri ter, would make it impracticable for the Underwriter to market the Series 1990 Bonds or to enforce contracts for the sale of the Series 1990 Bonds, or (iv) there shall be in force a general suspension of trading on the New York stock Exchange, or (v) a general banking moratorium shall have been declared by ei ther Federal, Florida or New York authorities, or (vi) there shall have occurred since the date of this Contract of Purchase any material adverse change in the affairs of the City or the City is unable to consummate the closing of the acquisition of the proj ect as contemplated by this Contract of Purchase and the Official Statement, or (vii) legislation shall be enacted or any action shall be taken by the Securities and Exchange Commission which, in the opinion of counsel for the Underwriter, has the effect of requiring the contemplated distribution of the Series 1990 Bonds to be registered under the Securities Act of 1933, as amended, or the Resolution or any other document executed in connection with the transactions contemplated hereof to be qualified under the Trust Indenture Act of 1939, as amended, or (viii) a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission shall be issued or made to the effect that the issuance, offering or sale of the Series 1990 Bonds, or of obligations of the general character of the Series 1990 Bonds as contemplated hereby, or the offering of any other obligation which may be represented by the Series 1990 Bonds is in violation of any provision of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as amended, or (ix) any state blue sky or securities commission shall have withheld registration, exemption or clearance of the offering, and in the reasonable judgment of the Underwriter the market for the Series 1990 Bonds is materially affected thereby. If the City shall be unable to satisfy any of the conditions to the obligations of the Underwriter contained in this Contract of Purchase and such condition is not waived by the Underwriter, or if the obligations of the Underwriter to purchase and accept delivery of the Series 1990 Bonds shall be terminated or cancelled for any reason permitted by this Contract of Purchase, this Contract of Purchase shall terminate and neither the Underwriter nor the City shall be under further obligation hereunder and neither the Underwriter nor any other person shall have any further action for damages, specific performance or any other legal or equitable relief against the City, provided that the respective obligations to pay expenses, as provided in Section 11 hereof, shall continue in full force and effect. -11- 9. Particular Covenants. The City covenants and agrees with the Underwriter as follows: (a) The City shall furnish or cause to be furnished to the Underwriter, without charge, as many copies of the Official statement as the Underwriter may reasonably request; and (b) Before revising, amending or supplementing the Official statement, the City shall furnish a copy of the revised Official statement or such amendment or supplement to the Underwriter. If in the opinion of the City and the Underwriter a supplement or amendment to the Official statement is required, the City will supplement or amend the Official statement in a form and in a manner approved by the Underwriter and its counsel. 10. Survival of Renresentations. All representations, warranties and agreements of the City hereunder shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriter and shall survive the delivery of the Series 1990 Bonds. 11. Payment of Exnenses. The City agrees to pay, to the extent not paid by someone else, any expenses incident to the performance of its obligations hereunder, including but not limited to: (i) the cost of the preparation and distribution of the Resolution; (ii) the cost of the preparation and printing of the Official Statement and any supplements thereto, together with a number of copies which the Underwriter may request; (iii) the cost of registering the Series 1990 Bonds in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York, which will act as securities depository for such bonds; and (iv) the fees and disbursements of Counsel to the City and of Bond Counsel and any other experts or consultants retained by the City. The City shall be under no obligation to make payment for the costs otherwise provided for pursuant to Section 6 hereof or pursuant to amendment No. 1 to Agreement of Settlement of Condemnation Lawsuit dated 10/23/89. The Underwriter agrees to pay (i) all advertising expenses in connection with the public offering of the Series 1990 Bonds; (ii) the cost of preparing and printing the blue sky and legal investment memoranda, and filing fees in connection with the aforesaid blue sky and legal investment memoranda other than the costs of preparation of the Official Statement; (iii) fees and expenses of counsel to the Underwriter; and (iv) all other expenses incurred by the Underwriter in connection with its public offering and distribution of the series 1990 Bonds. 12. Notices. Any notice or other communication to be given to the City under this Contract of Purchase may be given by delivering the same in writing at its address set forth above, and -12- any notice or other communication to be given to the Underwriter under this Contract of Purchase may be given by delivering the same in writing to Donaldson, Lufkin & Jenrette Securities Corporation, 140 Broadway, New York, New York 10005, Attention: Douglas J. Sealy, Public Finance Division. 13. Parties. This Contract of Purchase is made solely for the benefit of the City and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. 14. Governinq Law. This Contract of Purchase shall be governed by and construed in accordance with the laws of the State of Florida. 15. General. This Contract of Purchase may be executed in several counterparts, each of which shall be regarded as an original and all of which will constitute one and the same instrument. The section headings of this Contract of Purchase are for convenience of reference only and shall not affect its interpretation. This Contract of Purchase shall become effective upon your acceptance hereof. Very truly yours, DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION By: Authorized Officer Accepted and agree to as of the date first above written: CITY OF WINTER SPRINGS, FLORIDA By: City Manager -13- SPECIMEN FINANCIAL GUARANTY AGREEMENT FINANCIAL GUARANTY AGREEMENT made as of (DATE OF OBLIGATIONS] by and between (ISSUER) (the "Issuer") and MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION (the "Insurer"), organized under the laws of the state of New York. WIT N E SSE T H : WHEREAS, the Issuer has Or will issue the Obligations; and WHEREAS, pursuant to the terms of the Document the Issuer agrees to make certain payments on the Obligations; and WHEREAS, the Insurer will issue its Surety Bond, substantially in the form set forth in Annez A to this Agreement, guaranteeing certain payments by the Issuer subject to the terms and limitations of the Surety Bond; and WHEREAS, to induce the Insurer to issue the Surety Bond, the Issuer has agreed to pay the premium for the Surety Bond and to reimburse the Insurer for all payments made by the Insurer under the Surety Bond, all as more fully set forth in this Agreement; and WHEREAS, the Issuer understands that the Insurer expressly requires the delivery of this Agreement as part ot the consideration for the execution by the Insurer of the Surety Bond; and NOM, THEREFORE, in consideration ot the prembe. and of the agreements herein contained and of the execution of the Surety Bond, the Issuer and the Iusurer aqree as follows: ARTICLE I DEFlNITIONS; SURETY BOND Section 1.01. Definitions. The terms which are capitalized herein shall have the meanings specified in Annex B hereto. Section 1.02. Surety Bond. (a) The Insurer will issue the Surety Bond in accordance with and Subject to the terms and conditions of the Commitment. (b) The maximum liability of the Insurer under the Surety Bond and the coverage and term thereof shall be subject to and limited by the terms and conditions of the Surety Bond. Section 1.03. Premtym. In Consideration of the Insurer agreeing to issue the Surety Bond hereunder, the Issuer hereby agrees to payor cause to he paid the Premium set: forth in the Annex B hereto. The Premium on the Surety Bond is not refundable for any reason.. Section 1.04. Certain Other Expenses. The Issuer will pay all reasonable fees and disbursements of the Insurer's special counsel related to any modification of this Agreement or the Surety Bond. ARTICLE II REIMBURSEMENT AND INDEMNIFICATION OBLIGATIONS OF ISSUER AND SECURITY THEREFOR Section 2.01. Reimbursement for Payment Under the Surety Bond and Expenses: Indemnatlon. (a) The Issuer will reimburse the Insurer, within the Reimbursement Period, without demand. or notice by the Insurer to the Issuer or any other person, to tl1e extent of each Surety Bond Payment with interest on each Surety Bond Payment from and including the date made to the date of the reimbursement at the lesser of the Reimbursement Rate or the maximum rate of interest permitted by then applicable law. (b) The Issuer also a9rees to reimburse the Insurer immediately and uncondl t:1onaJ..1Y upon aemand, ~o tlle extent permitted by state law, for all reasonable expenses incurred b1 the Insurer in connection with the Surety Bond and the enforcement by the Insurer of the Issuer's obligations under this Aqreement, the Docwnent, and. any other document executed in connection with the issuance of the Ob119ations, toqether with interest on all such expenses from and including the date incurred to the date of payment at the rate set forth in subsection (a) of this Section 2.01. (c) The Issuer agrees to indemnify the Insurer, to the extent permitted by state law, against any and all liability, claims, loss, costs. damaqes, fees of attorneys and other expenses which the Insurer may sustain or incur by reason of or in consequence of (i) the failure of the Issuer to perform or comply with the covenants or conditions of this Agreement or (H) reliance by the Insurer upon representations made by the Issuer to perform or comply with the convenants or conditions of thisof the Document or any other documents ezecuted in connection with the issuance of the Obligations. (d) The Obligor and the Issuer agree that all amounts owing to the Insurer pursuant to Section 1.03 hereof and this Section 2.01 must be paid in full prior to any optional redemption or refunding of the Obligations. (e) All payments made to the Insurer under this Agreement shall be paid in lawful currency of the United States in imme<Jiately available funds at the Insurer's office at 113 King Street, Armonk, New York 10504, Attention: Accounting and Surveillance Departments, or at such other place as shall be designated by the Insurer. Section 2.02. Allocation of Payments. The Insurer and the Issuer hereby agree that each payment received by the Insurer from or on behalf of the Issuer as a reimbursement to the Insurer as requirea by Section 2.01 hereof shall be applied by the In~urer first, toward payment of any unpaid premium; second, toW'ard repayment of the aggregate Sutety Bond Payments made by the Insurer and not yet repaid, payment of which will reinstate all Or a portion of the Surety Bond Coverage to the extent of such repayment (but not to exceed the Surety Bond Limit); and third, upon full reinstatement of the Surety Bond Coverage to the Surety Bond Limit, toward other amounts, includin9, witho\lt limitation, any interest payable with respect to any Surety Bond Payments then due to the Insurer. Section 2.03. Security tor Payments; Instruments of Further Assurance. To the extent, but only to the extent, that the Document, or any related indenture, trust agreement, ordinance, resolution, mortgage, security agreement or similar instrument, it any, pledges to the owners or any trustee therefor, or grants a security interest or lien in or on any collateral, property, revenue or other payments ("Collateral and Revenues") in order to secure the Obligations or provide a sourCe of payment for the Obli9ations, the Issuer hereby grants to the Insurer a security interest in or lien on, as the case may be, and. pledqes to the Insurer all such Collateral and Revenues as securi ty for payment of all amounts due hereunder and under the Document or any other document executed in connection with the issuance of the Obli9ations, which security interest, lien and/or pledge created or granted under this Section 2.03 shall be subordinate only to the interests of the Owners and any trustee therefor in such Collateral and Revenues, except as otherwise provided. The Issuer agrees. that it will, .from time to time, execute, acknowledge and deliver, or. cause to be executed, acknowled.Cled and delivered, any and all financing statements, if applicable, and all other further statements as may be required by law or as shall reasonably be requested by the Insurer for the perfection of the security interest, if any granted under this Section 2.03 and for the preservation and protection'of all rights of tbe Insurer under this Section 2.03. Section 2.04. Unconditional Obli9ation. The Obligations hereunder are absolute and unconditional and will be paid or performed strictly in accordance with this Aqreement, subject to the limitations of the Document, irrespeotive of: (a) any lack of validity or enforceability of, or any amendment or other modification of, or waiver with respect to the Obligations, the Document or anl' other document executed. in connection with the issuance of the Obligations; or (b) any exchange, release or nonperfection of any security interest in property securing the Ol>liqations or this Agreement or any obligations hereunder; or (c) any circumstances that might otherwise constitute a defense available to, or discharge of, the Issuer with respect to the Obligations, the Document or any other document executed in connection with the issuance of the Obligations; or (d) whether or not such obligations are contingent or matured., disputed or undisputed, liquidated or unliquidated. Section 2.05. Subrogation Rlqhts. To the extent of payments made and expenses incurred by the Insurer in connection with the Obligations and this Agreement, the Insurer shall be fully subrogated to the rights of the Paying Agent and the Owners against the Issuer, - which -rights shall be subordinate to the ri9hts of the Owners to receive regularly scheduled principal and interest on the Obligations. Section 2.06. On-Going Information Obligations of Issuer (a) Ouarterly Reports. The Issuer will provide to the Insurer within 45 days of the close of each quarter interim financial statements covering all fund balances under the Dooument, a statement of operations (income statement), balance sheet and changes in fund balances. These statements need not be audited by an independent certified public accountant, but it any audited statements are produced, they must be provided to the Insurer: (b) Annual Reports: The issuer will provide to the Insurer annual financial statements audited by an independent certified public accountant within 90 days of the end of each fiscal year; (c) Access to Facilities, Books and Records. The Issuer will grant the Insurer reasonable access tu the project financed by the Obligations and will make available to the Insurer, at reasonable times and upon reasonable notice all books and records relative to the project financed by the Obligations; and (<1) Compliance Certificate. On an annual basis the issuer will provide to the Insurer a certificate confir.in9 compliance with all covenants and obligations hereunder and under the Revenue Agreement, the Document or any other document executed in connection with the issuance of the Obligations. ARTICLE III AMENDMENTS TO DOCUMENT So long as this Agreement is in effect, the Issuer &qrees that it will not agree to amend the Document or any other document executed in connectiOn with the issuance of the Obligations, without the prior written consent of the Insurer. ARTICLE IV EVENTS OF DEFAULT; REMEDIES Section 4.01. Events of Defaute. The following events shall constitute Events of Default hereunder: (a) The Issuer shall fail to pay to the Issuer when the... payable under Sections 1.03; or (b) The Issuer shall fail to pay to the Insurer any amount payable under Sections 1.04 and 2.01 hereof and such failure shall have continued for a period in excess of the Reimbursement Period: Or (c) Any material representation or warranty made by the Issuer under the Document or hereunder or any statement in the application for the Surety Bond or anl refort, certificate, financial statement, document or other instrument provided in connection with the Ciommitment. The Surety Bond, the Obligations, or herewith shall have been materially false at the time when made; or (d) Except as otherwise provided iu thh Section 4.01, the Issuer shall fail to perform auy of its other obligations under the Document, or any other documeut eKecuted in connection with the issuance of the Obligations, or hereunder, provided that such failure continues for more than 30 days after receipt by the Issuer of written notice of such failure to perform; or (e) The Issuer shall (i) voluntarily conunence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or any other Federal, state or foreign baukruptcy, insolvency or similar law, (ii) consent to the lusti tution of, or tail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee. custodian, sequestrator or similar Official for such party or for a substantial part of its property, (iv) file an answer admitting the material alle9ations of a petition filed against it in any such proceeding, (v) make a general assigment for the benefit of creditors, (vi) become unable, a&rlit in writing its inability or fail generally to pay its debts they become due or (vii) take action for the purpose of effecting any of the foregoing: or (t) An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Issuer, or of a substantial part of its property, under of the United States Bankruptcy Code or any other Federal, state or foreign baakruptcy, insolvency or similar 'law or (ii) the appoinblent of a receiver, trustee, custodi811, sequestrator or similar official for the Issuer or for a substantial part of its property; and such proceedinq or petition shall continue undismissed for 60 days or an order qr decree approviug or ordering any of the foregoing shall continue unstayed and in effect for 30 days. Section 4.02. Bemedies. If an Event of Default shall occur and be continuing, then the Insurer may take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due under this Agreement or to enforce performance of any obligation of the Issuer to the Insurer under the Document or any related instrument, and any obligation, agreement or covenant of the Issuer under this Agreement; provided. however, that the Insurer may not take eny action to direct or require acceleration or other early redemption of the Obligations or adversely affect the rights of the Owners. In addition, if an Event of Defaul shalll occur due to the failure to pay to the Insurer the amounts due under Section 1.03 hereof, the Insurer shall have the ri9ht to cancel the Surety Bond in accordance with its terms. All rights and remedies of the Insurer under this Section 4.02 are cumulative end the exercise of anyone remedy does not preclude the exercise of oue or more of the other available remedies. ARTICLE V SETTLEMENT The Insurer shall have the exclusive right to decide and determine whether any claim, liability, suit or judgement made or brought against the Insurer, the Issuer or any other party on the Surety Bond shall or shall not be paid, compromised, resisted, defended, tried or appealed, and the Insurer's decision thereon, if made in good faith, shall be final and binding u~on the Insurer, the Issuer and any other party on the Surety Bond. An itemized statement of payments mad& by the Insurer, certified by an officer of the Insurer, or the voucher or vouchers for such payments, shall be prima facie evidence of the liability of the Issuer, and if the Issuer fails to immediately reimburse the Insurer upon the receipt of such statement of payments, interest shall be computed on such amount from the date of any payment made by the Insurer at the rate set forth in subsection (a) of Section 2.01 hereof. ARTICLE VI MISCELLANEOUS Section 6.01. Interest Computations. All computations of interest dU$ hereunder ghall be made on the basis of the actual number of days elapsedov~r a year of 360 days. Section 6.02. Exercise of Rights. No failure or delay on the. part .of the Insurer to exercise any riqht, power or privilege under this agreement. and no course of dealinq between the Insurer and the Issuer or any other party shall operate as a waiver of any such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly provided are. cumulative and not exclusive of any rights or remedies which the Insurer would otherwise have pursuant to law or equity. No notice to or demand on any party in any case shall enti tIe such party to any other or further notice or demand in similar or other circumstances, or constitute a waiver of the right of the other party to any other or further action in anl circumstances without notice or demand. Section 6.03. Amendment and Waiver Any provision of this Agreement' may be amended, waived, supplemented, discharged or terminated only with the prior written consent of the Issuer and the Insurer. The Issuer hereby agrees that upon the written request of the Paying Agent, the Insurer may make or consent to issue any substitute for the Surety Bond to cure any ambiguity or formal defect or omission in the Surety Bond which does not materially change the terms of the Surety 80nd nor adversely affect the rights of the Owners, and this A.greement shall apply to such substituted. surety bond. "the Insurer agrees to deliver' to the Issuer and to the company or companies, if any, rating the Obligations, a copy of such substituted surety bond. Section 6.04. Successors and Assigns: Descriptive Headings. (a) This Agreement shall bind, and the benefits thereof shall inure to, the Issuer and the Insurer and their respective successors and assigns; provide, that the Issuer may not transfer or assign any or all of its rights and obligations hereunder without the prior written consent of the Insurer. (b) :the descriptive hea~ln96 of the various provisions of this Agreement are inserted for convenience of reference only and shall not be deemed to offset the meaning or construction of any of the provisions hereof Section 6.05. Other Sureties. If the Insurer shall procure any other surety to reinsure the Surety Bond, this agreement shall inure to the benefit of such other surety, its successors and assigns, so as to give to it a direct right of action against the Issuer to enforce this Agreement, and "the Insurer," 'Wherever used herein, "shall be deemed to include such reinsuring surety, as its respective interests may appear. Section 6.06. Signature of Bond. The Issuer's liability shall not be affected by its failure to 819n the Surety Bond nor by any claim that other indemnity or secu.I'ity we. to have been obtained nor by the release of any indemnity, nor the return or exchange of any collateral that may have been obtained. Section 6.07. Waiver. The Issuer waives any defense that this Agreement was executed subsequent to the date of the Surety Bond, admitting and covenantion that such Surety Bond wes e:xecuted pursuut to the Issuer's request and in reliance on the Issuer's promise to execute this Agreement~ Section 6.08. Notices, Requests, Demands. Except as otherwise expressly provided herein, all written notices, requests. demands or other communications to or upon\ the respective parties hereto shall be deemed to have been given or made when actUAlly reoeived, or in the case of telex or telecopier notice sent over a telex or a telecopier machine owned or operated by a party hereto, when sent, addressed as specified below or at such other address as any of the parties may hereafter specify in writing to the others: If to the Issuer: [NAME AND ADDRESS Attention: [NAME] If to the Paying Agent: [NAME] AttentIon: [NAME] If to the Insurer: Municipal Bond Investors Assurance Corporation 113 King Street Armonk, New York 10504 Attention: Surveillance Department P.19 Section 6.09. Survival of Representations and Warranties. All representations, warranties and obligations contained herein shall survive the execution and delivery of this Agreement and the Surety Bond. Section 6.10. Governing Law:. This Agreement and the rights and obligations of the parties under this Agreement shall be governed by and construed 3nd interpreted in accordance with the laws of the State. Section 6.11. Counterparts. This Agreement may be executed in any nwnber of copies and by the different patties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument. Complete counterparts of this Agreement shall be lodged with the Issuer and the Insurer. Section 6.12. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. SectiOn 6.13. Survlval of Obligations. Notwithstanding anything to the contrary contained in this Aqreement, the obligation of the Issuer to pay all amounts due hereunder and the rights of the Insurer to pursue all remedies shall 8urvlve the e:ltpiration, termination or substitution of the Surety Bond and this Agreement. IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written. . [NAME OF ISSUER] By Title MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION NAME COMMITMENT TO ISSUE A FINANCIAL GUARANTY INSURANCE POLICY Application No.: 90-03-2488 Sale Date: April 1990 Program Type: Negotiated-DP RE: $12,300,000 City of Winter Springs, Florida, Water and Sewer Revenue Bonds, Series 1990 (the "Obligations") This commitment to issue a financial guaranty insurance policy (the "Commitment") dated April 19, 1990, constitutes an agreement between the CITY OF WINTER SPRINGS, 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 April 16, 1990, 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, Applicant, on the date of delivery following payments: a. a nonrefundable premium in the amount of .3'\. of total debt service, premium rounded to the nearest thousand. The premium set out tn this paragraph loa. shall be the total premium required to be paid on the Bond Insurance Policy issued pursuant to this Commitment; b. Moody's Investors Service rating agency fees in the amount of $9,500, subject to change based on the final par and other factors as determined by Moody's Investors Service, in connection with obtaining the initial ratings on the Obligations; and c. Standard & Poor's Corporation rating agency fees in the amount of $6,500, subject to change based on the final par and other factors as determined by Standard & Poor's Corporation, in connection with obtaining the initial ratings on the Obligations. or by the Trustee on behalf of of and payment for the Obligations, the the 2. The Obligations shall have received the unqualified opinion of bond counsel with respect to the tax-exempt status of interest on the Obligations. 3. There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the Obligations or in the final official statement or other similar document, including the financial statements included therein. 4. There shall have been no material adverse change in any information submitted to the Insurer as a part of the application or subsequently submitted to be a part of the application to the Insurer. 5. No event shall have occurred which would allow any underwriter or any other purchaser of the Obligations not to be required to purchase the Obligations at closing. 6. 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 Rate Covenant as presented in DLJ letter to the Insurer of 3-30-90 is to be included in the final 1990 Resolution. 12. Modification of Section 23 of the 1990 Resolution to provide that the Insurer consent is required but cannot be substituted for the consent of bondholders. 13. Clarify Section 20 (L) of the 1990 Resolution requiring mandatory connections to both sys\:ems that this requirement would include all future development and/or annexations by the City. 14. Receipt by the Insurer, at least 5 business days prior to closing of evidence that the City is receiving clear title to the Seminole System. 15. Receipt, review and approval by the Insurer of remaining closing documents previously requested. 16. Modification of Section 23 of the 1990 Resolution to require the Insurer standard defeasance obligations as follows: Defeasance should require the deposit of cash or U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series "SLGS"), direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities and obligations issued by the following agencies which are backed by the full faith and credit of the U.S.: a. U.S. Export-Import Bank Direct obligations or fully guaranteed certificates of beneficial ownership b. Farmers Home Administration Certificates of beneficial ownership c. Federal Financing Bank d. Federal Housing Administration Debentures e. General Services Administration Participation certificates f. U.S. Maritime Administration Guaranteed Title XI financing g. New Communities Debentures U.S. government guaranteed debentures h. U.S. Public Housing Notes and Bonds U.S. government guaranteed public housing notes and bonds i. U.S. Department of Housing and Urban Development Project Notes Local Authority Bonds j. Prerefunded municipal bonds must be rated "Aaa" by Moody's or "AAA" by S&P. If the issue is only rated by S&P (Leo, there is no Moody's rating), then the prerefunded bonds must have been prerefunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA-rated prerefunded municipals that satisfy this condition. Dated this 19th day of April, 1990. MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION By Assistant Secretary CITY OF WINTER SPRINGS, FLORIDA By Title: MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES $2,250,000 SERIAL BONDS (April 1 ) Principal Interest Year Amount Rate Price 1996 $190,000 6.80% 100% 1997 200,000 6.90 100 1998 215,000 6.95 100 1999 230,000 7.00 100 2000 245,000 7.05 100 2001 265,000 7.10 100 2002 280,000 7.15 100 2003 300,000 7.20 100 2004 325,000 7.25 100 $2,515,000 7.40% TERM BONDS due April 1, 2010, Price - 100% $7,535,000 7.45% TERM BONDS due April 1, 2020, Price - 100% Optional Redemption The Bonds are subject to redemption at the option of the City on any interest payment date on or after April 1, 2000, either as a whole or as a part as directed by the City (and by lot within a maturity) at the foilowing redemption prices (expressed as a percentage of the principal amount so redeemed) plus accrued interest to the date of redemption: Period (Both Dates Inclusive) Redemption Prices April 1, 2000 through March 31, 2001 April 1, 2001 through March 31, 2002 April 1, 2002 through March 31, 2003 April 1, 2003 through March 31, 2004 April 1, 2004 and thereafter Sinking Fund Redemption The 1990 Bonds maturing April 1, 2010, are subject to mandatory redemption by the City prior to maturity in part by.lo~ at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to the date of redemption, from mandatory sinking fund installments on April 1, 2005, and on each April 1 thereafter in the years and in the principal amounts set forth below (subject to credits as provided in the Resolution): 102 % 101-1/2 101 100-1/2 100 Year Amount 2005 2006 2007 2008 2009 2010 $350,000 375,000 400,000 430,000 465,000 495,000 (Final Maturity) The 1990 Bonds maturing April 1, 2020, are subject to mandatory redemption by the City prior to maturity in part by lot at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to the date of redemption, from mandatory sinking fund installments on April 1, 2011, and on each April 1 thereafter in the years and in the principal amounts set forth below (subject to credits as provided in the Resolution): Year Amount Year Amount 2011 $535,000 2016 $765,000 2012 575,000 2017 820,000 2013 615,000 2018 885,000 2014 660,000 2019 950,000 2015 710,000 2020 1,020,000