Loading...
HomeMy WebLinkAbout2003 06 09 Regular E 1993 Bond Refinancing COMMISSION AGENDA ITEM E CONSENT INFORMATIONAL PUBLIC HEARING REGULAR XX .Tune 9, 200~ Meeting MGR ~EPT'----/-:J A lIthori7.Minn REQUEST: The City Manager requesting the Commission to Approve the 1993 Bond Refinancing Documents. PURPOSE: The purpose of this Agenda Item is to approve the 1993 bond refinancing documents in order to take advantage of lower interest rates. CONSIDERATIONS: Currently the net PV savings are $783,000 or 9.3% of the refunded bonds. The annual debt service savings are about $60,000 a year. ATTACHMENTS: Preliminary Official Statement Resolution 2003-28 Insurance Commitments PFM Calculations - Various RECOMMENDATION: Approve the 1993 bond refinancing documents. COMMISSION ACTION: /-. .~ "fi.,g - :l- fi~.5 8u-: u........ -.c ~ ~~~ 11';;; .~ <.> 0 '" lE'~'E 0'00 .s'~ ~ " ';::'g ,g rJ" " C Q. ..c'- c - = 'co :~g ,g 8. '" Q.. >.~ "",rJo. ~ >. u Q..c <.> ~ ~ ~ gg=ca "/Xl C .c t::; >,t'l"'l:- .s8c N " :.~ ~ '" " J9 ~rnCl) o ~ ra >...- .... co~E e " '";ao g rI) ;>-. "'" >, 01 '0 rJ.:: ~.8J! ~~J: g.s .~ >,= -5 S ~-g '" '" e ""'0" 5 ~~ ~,g] ~ :.e "'~u .~ 0 Q) ~rJ~ tJ~ ci t: s.g E'~~ u....._ E.~ 3 -g~2 ~ a g 01_ '" 5~ S C 0 ell 0-'- .... .... 0 t) ~ U) C.o~ grJ-; CJ u.~ g;,~ '~ lij - <.> .t: g ~ () CJ G) . BE-:3g 1i e .g :~ :g~3e tI) en s 5 ~3'~~ '~ES ~ i;0]1l ..c ~ c:r ~ "g c 5 UJ 'f~ g] = - '';:: tI) o ~ <<I U U 0... t;:= s.!!? '60 ~ .~ oS e ~ e'a B~ c.S~6fJ .5 ~.~~ .s~~] "C en ~ ctI lij~.!3.2! <.> C :l - .... ::::I 8 5'0 Q) e eo.co UC"'ON 1Stg--;- CI'J-g?;~ "'C3::lu"'" ~g~:!! 0<25~ ~- C '- ell 0 0 c t.S '= c 'S.5'~ .g :.::"O:.:~ J:~@~e tI) ;> .... ~ ~~~8 ;'. PRELIMINARY OFFICIAL STATEMENT DATED NEW ISSUE - BOOK-ENTRY ONLY ,2003 (Ambac Insured) (See "Ratings" and "Municipal Bond Insurance" herein) In the opinion of Bond Counsel, assuming compliance with existing statlltes, reglllations, published rulings and court decisions, and assuming continlling compliance by the City with certain tax covenants, interest on the Series 2003 Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternalive minimum tax imposed on individuals and corporations, However, see "TAX MA TTERS" herein for a description of the federal allernative minimum lax on corporations and certain other federal tax consequences of ownership of the Series 2003 Bonds, Bond COllnsel is further of the opinion that the Series 2003 Bonds are exempt from all present intangible personal property taxes imposed pursuanlto Chapler 199, Florida Slalules, (See "TAX MATTERS" herein), Dated: July 1, 2003 $ * CITY OF WINTER SPRINGS, FLORIDA Improvement Refunding Revenue Bonds, Series 2003 Due: October 1, as indicated on the inside cover The City of Winter Springs, Florida (the "City") is issuing its Improvement Refunding Revenue Bonds, Series 2003 (the "Series 2003 Bonds") only in the form of fully registered bonds in the denomination of $5,000 principal amount or any integral multiple thereof, The Series 2003 Bonds will bear interest at the fixed rates set forth on the inside cover payable semi-annually on each April I and October I, commencing October I, 2003, The Series 2003 Bonds, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC") which will act as securities depository for the Series 2003 Bonds, Purchases of beneficial interests in the Series 2003 Bonds will be made in book-entry form, Purchasers of the Series 2003 Bonds ("Beneficial Owners") will not receive physical delivery of Series 2003 Bonds, Accordingly, principal of and interest on the Series 2003 Bonds will be paid by .. Florida, as paying agent directly to DTC as the registered owner thereof, Disbursements of such payments to the Direct Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of Direct Participants and Indirect Participants, as more fully described herein, See "DESCRIPTION OF THE SERIES 2003 BONDS - Book-Entry Only System" herein, Certain of the Series 2003 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein. The Series 2003 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No, 615 of the City adopted by the City Commission on May I, 1989 as amended and supplemented and particularly as amended and supplemented by Resolution No, _ of the City adopted by the City Commission on .2003 as supplemented (collectively the "Resolution") to, together with other legally available moneys, (i) currently refund all of the City's outstanding Improvement Refunding Revenue Bonds, Series 1993 (the "Refunded Bonds"), and (ii) finance the costs of issuance of the Series 2003 Bonds including the financial guaranty insurance premium and Reserve Policy premium. The Series 2003 Bonds are payable from and secured by a first lien upon and pledge of the franchise fees levied and collected by the City from Florida Power Corporation for a period of thirty years from April I, 1984 (the "Franchise Fees"), the public service tax levied and collected by the City on purchases of electricity, metered or bottled gas and water service within the corporate limits of the City pursuant to Section 166,231, Florida Statutes and an ordinance duly enacted by the City Commission on March 27, 1989, as amended and supplemented (the "Public Service Tax") and the tax imposed by the City on communication services pursuant to Section 202,19, Florida Statutes (the "Local Communication Services Tax", collectively with the Franchise Fees and the Public Service Tax, tile "Excise Taxes"), The current franchise with Florida Power Corporation expires prior to the final maturity of the Series 2003 Bonds. The lien of the Series 2003 Bonds on the Excise Taxes is on a parity with the lien thereon of the City's outstanding Improvement Refunding Revenue Bonds, Series 1999 (the "Parity Bonds"), The Series 2003 Bonds shall not be or constitute general obligations or indebtedness of the City as "bonds" within the meaning of the Florida Constitution, but shall be special obligations of the City, payable solely from the Excise Taxes in accordance with the terms of the Resolution. No Holder of any Series 2003 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2003 Bonds, or be entitled to payment of such Series 2003 Bonds from any moneys of the City except as provided in the Resolution. Payment of the principal of and interest on the Series 2003 Bonds, when due will be insured by a financial guaranty insurance policy to be issued by Ambac Assurance Corporation simultaneously with the delivery of the Series 2003 Bonds, [LOGO] For discussion of the terms and provisions of such policy, including the limitations thereof, see "MUNICIPAL BOND INSURANCE" herein and Appendix D hereto, This cover page contains certain information for quick reference only, It is not a summary of tile Series 2003 Bonds, Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision, The Series 2003 Bonds are offered when, as and if issued by the City and accepted by the Underwriters subject to the approving legal opinion of Akerman Senterfitt, Orlando, Florida, Bond Counsel. Certain legal matters will be passed on for the City by its counsel, Anthony A. Garganese of Brown, Salzman, Weiss & Garganese, P,A" Orlando, Florida and by Akerman Senterfitt, Disclosure Counsel. Public Financial Management, Inc" Orlando, Florida is acting as Financial Advisor to the City in connection with the issuance of the Series 2003 Bonds. The Underwriters are being represented by Shutts & Bowen LLP, Orlando, Florida, The Series 2003 Bonds are expected to be delivered through the facilities of The Depository Trust Company in New York, New York on or about July ----J 2003, [UNDERWRITERS] Dated -,2003 .Preliminary, subject to change, {OR6I3127;4} {OR613127;4} $ Serial Bonds MATURITIES, AMOUNTS, INTEREST RATES, AND PRICES OR YIELDS Maturities Amounts $ Interest Rates % $ % Term Bonds, due October 1, _, Price_% $ _% Term Bonds, due October 1, _, Yield_% (plus accrued interest from July 1,2003) Prices or Yields % CITY OF WINTER SPRINGS, FLORIDA OFFICIALS CITY COMMISSION John F. Bush Robert S. Miller Sally McGinnis Michael S. Blake Edward Martinez, Ir. David McLeod Mayor Deputy Mayor/Commissioner Commissioner Commissioner Commissioner Commissioner CITY MANAGER Ronald McLemore CITY ATTORNEY Anthony A. Garganese Brown, Ward, Salzman & Weiss, P,A. Orlando, Florida FINANCE DIRECTOR Louise Frangoul, C.P.A. CITY CLERK Andrea Lorenzo- Luaces FINANCIAL ADVISOR Public Financial Management, Inc, Orlando, Florida BOND COUNSEL Akerman Senterfitt Orlando, Florida AUDITORS McDirmit Davis Puckett & Co., LLC Orlando, Florida {OR613127;4} No dealer, broker, salesman or other person has been authorized by the City, the Insurer or the Underwriters to give any information or to make any representation with respect to the Series 2003 Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2003 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale, The information set forth herein has been obtained from the City, DTC, the Insurer, and other sources which are believed to be reliable, The Underwriters have reviewed the information in this Official Statement in accordance with, and as a part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information herein is subject to change without notice and neither the delivery hereof nor any sale hereunder at any time implies that the information herein is correct as of any time subsequent to its date. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not so expressly stated, are intended as such and not as representations of fact. IN CONNECTION WITH THE OFFERING OF THE SERIES 2003 BONDS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2003 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME, NO REGISTRATION STATEMENT RELATING TO THE SERIES 2003 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2003 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY, THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not pUlport to be comprehensive or defmitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein, Where full texts have not been included as appendices to this Official Statement, they may be obtained from the City of Winter Springs, Florida, City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2799, (407) 327-1800, Attention: City Clerk, upon prepayment of reproduction costs, postage and handling expenses. (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] {OR613127;4} 11 TABLE OF CONTENTS SUMMARY STA TEMENT ..,........................,.,......,.............,........,....,.",..........,.,.,...,...................,........".,..........,.,.... v The City ..,.. ,.............,............,......................,...............,......,.,.,....,.........................,.......................................,..,....... v The Series 2003 Bonds...,.,.....,.,..............,.,...............,.,....,.,.. .....'.,.,.,,'........,...,.,.,.,............,...,....,.........................,.. v Purpose of the Series 2003 Bonds .........,...............,.............,......",...................'............................,...........,.....,.,...... v Security for the Series 2003 Bonds.......",.,.,...........,.,........,......,..,.,...,...................................,......,...,...................... vi Redenlption,.......,................................",.".......,.......",.,.,.".,.".,.",..,..".,.,...,................ ,...,'.,....,.............,.,."..,.",..... vi Financial Guaranty Insurance.....,.,.,...,....,.,.,.........,.,.,....,........,....,. '....,......................,...............,.,.........,.,..,..,....,.... vi Pro fessionals .......,........,...................,.,.,...............,..,.'..."...,.,............".,.,.,..,...,.,...,...,............,.,. ,."......".,................ vi Delivery of the Series 2003 Bonds ...........,.............,.,....,...,..,.,......",:,.,....,.,.................,.,.......,'....,.,....,.................. vii Additional Bonds...................... ................,...........,........,....'..'........,...,.,.,...... ........,...,.......,'.,.'.,....,....,...........,.."... vii Authorizing Resolution and Definitions .........,.,..................................,...............................,.............................,.... vii Continuing Disclosure.......,...,......................... .......,...,.... .........,........,.,.... ..."........................."'....',,,.................,.., vii Miscellaneous........,.,..."............,..........,.,......,.,.,..,..........,..................,...,....,...,.,.,.,.,.,..... .................,...,.,............... vii INTRODUCTION .......,..',.,.,.................,.,...,..,.,....",..................,....,.,.,.,.,.,.,....,.,.,................,.,.,.,...,.'.,........,.,.....,..,..., 1 PURPOSE OF THE SERIES 2003 BONDS .......,..,.,."...,..............,...,..........................,........,...,......,.,.,.."...,.......,..,... 2 PLAN OF REFUNDING ............'.,.....................,...........,..,...............,......,.,..........,......................,'..."""....,.,.....,., ",'.. 2 DEBT SERVICE REQUIREMENTS......"..................,....,............................,............................................,............,.,., 3 ESTIMATED SOURCES AND USES OF FUNDS .......................................,.................................,.......................... 4 THE SERIES 2003 BONDS ............,.,.......,......,....,....,.,.............,..,..................................,.,.,......,.............,.......,......,... 4 General Description..................,.......,.,...,....,.,....,.....,.......,.. .............,.....,................,..........,.,......,.............,............,. 4 Redemption..,....,.,...,. ,..,....................,......,...........,.... ...........,....,....,.....,........ ,.....,............,.............. ,..,. ,.., ............,.... 5 Redemption Notice and Effect of Redemption ,..,..........,.,..................,.....................,.,..........,............,......,'............. 5 Book- Entry Only System..............,.,. ,......................,.,........,....,..,.,.,...,..............,...,............,..........,...........,...,...,...... 6 SECURITY FOR THE SERIES 2003 BONDS..........,.,.,....,....,......,.,............,.,...............,.......".,.,....",...............,....,., 8 GeneraL....,.,..,.,......,....,.........,.....,.,.,.,.".........,.,...,..."""..........,....,......,..."""..,.,...,.,. ,.,..........,....."",'..,....,.....,........ 8 Flow of Funds.............................,.,.....,....,.,...........,.,......,....,......,............,.......................,..........,....,.,.,..................,. 8 Reserve Account..............................,.,.,.,.,................,.,.,....,.,....,..,...,.,.....,..............,........,.,.,.,......,.,....,............,..,.... 8 Reserve Policy......,....,.,...,...,...,.,.."..........,........,....,.....,..................... ...................'......... .................,...',.......,....,..... 9 Additional Bonds.............,...,.,....."..,.,.,............,......,...",.... ,......,......,.......,........ ,...........,.........".,....."....""".....,...... 9 Investnlents .............,.,....",.....,..............,.,.,.','........,........,...,.... ,...........................,.,...,.,.,...................,................,... 10 Other Covenants,............................, ................,..........................................,...,.......,........... .............................,.,.,.. 10 PUBLIC SERVICE TAX .,...,.........,.....................................,...,.,............,.........................,.,............,..............,......".. 1 0 LOCAL COMMUNICATION SERVICES TAX ..........,..........................................................,................................ 11 FRANCHISE FEES .............,.................,........,..................,..........,.,.,.....,....................................,......',.,.........,..,....,., 12 MUNICIPAL BOND INSURANCE ..,.........................,.....,..............................,.....,......................................,.........,. 14 Payment Pursuant to Financial Guaranty Insurance Policy ..................................................................................., 14 Ambac Assurance Corporation ............................................'.,................,. '.. ...............................,......,....,............... 15 Available Infol'lnation.............,.................,....................,......,.,.,.....,.......,.....................,.,.,......,.............,...,.........,.. 16 Incorporation of Certain Documents by Reference .................................,..............................,......,.............,..,....... 16 THE CITY ..,....................................'....,.,......,...,.,......,........,.,..........,.......,..........,..............................,.,....,.,.............. 17 LITIGATION.......,.,.",...,...,...,...........,.,.................,...............,. .........,.....,....,.,...................,...............,.....,....'..,..,..,... 17 {OR613127;4} 111 LEGAL MA TIERS.....,.,.,.,.,.....................,..,.,......,......,.,....,.,.,.,......,.."....,.....,..............................,....,...........,....,..... 17 TAX MA TIERS ......,'.,..,...,...,...'.,...,..",'.,.,...".,......................................,...................,.,.,.,.,....,.,....,.,....,.'.,.......,....,. 17 GeneraL..........,.............................................,.,....,..,.,.,......,........,........,.,.",..,.,.,.,........................., ....,....,............,.,. 17 Tax Treatment of Original Issue Discount.,........,..............................,...,......................,................."....,.,.............,. 18 TAX lREATMENT OF ORIGINAL ISSUE PREMIUM ..,....'......,....,................,.....,..........................................,... 19 UNDER WRlTING ....,.'................,.,.,........................................,...............,.....,.................,.,......,....,.'.,....,................. 19 FINANCIAL ADVISOR ............................,...,......,.............,....,...................,.",...........,...,...,.............,....,.........",...,., 19 INVESTMENT POLICY .,............,......................,.,.............,....,.,,'...........,.,...,.,.................................,........,..".",..... 19 RATINGS ............,.......................",'........,....,......................,.,..,...................,.,.,.........",.......,....................,.....,.,..'...., 24 VERIFICATION OF MA THEMA TICAL COMPUTATIONS '..........,..........,..,.......................................,.........,..... 25 FINANCIAL STATEMENTS ........,........,....,.,....................,.,..,......,............,.................................., ....................,..,.. 25 CONTINUING DISCLOSURE....."".,......................................,.,........,....'.'..,.'.,.,..................................,.,."",."".".. 25 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS.......................................,................,.... 25 ENFORCEABILITY OF REMEDIES .......,........,..,....,......,.,....,."...,........,......................................,.,.....".......,........ 26 FORWARD-LOOKING STATEMENTS .,."...,....,."........,......,....,............,........,.,.....'.......................,.................,.,.' 26 CONTINGENT FEES ......................,...,...,.'.'....,.......,........,.,...............,....,.,......................,.........,.,....,.,....,....,..,.,...., 26 MISCELLANEOUS ....................,...,.,...,.,....,.,..................,.,....,......,............,................,......,......,.,.,....,...............,..,., 26 CERTIFICA TE AS TO OFFICIAL STATEMENT ......................,..,..............,..,....................................................... 27 APPENDIX A APPENDIX B APPENDIX C City of Winter Springs, Florida General Information Form of the Resolution General Purpose Financial Statements and Independent Auditors' Report for the Fiscal Year Ended September 30, 2002 Specimen Financial Guaranty Insurance Policy Form of Opinion of Bond Counsel Form of Continuing Disclosure Certificate APPENDIX D APPENDIX E APPENDIX F {OR613127;4} IV SUMMARY STATEMENT This Summary Statement, being part of the Official Statement, is subject to the more complete information contained herein and should not be considered to be a complete statement of the facts material to making an investment decision. The offering by the City of Winter Springs, Florida, of its $ * Improvement Refunding Revenue Bonds, Series 2003 (the "Series 2003 Bonds"), to potential investors is made only by means of the entire Official Statement. No person is authorized to detach this Summary Statement from the Official Statement or otherwise use it without the entire Official Statement. Capitalized terms used but not defined in this Summary Statement shall have the same meaning as in the Resolution (as hereinafter defined), unless the context would clearly indicate otherwise. See "Form of the Resolution" - Appendix B hereto, The City The City of Winter Springs, Florida (the "City") was originally incorporated in 1959 under the name of the Village of North Orlando and became the City of Winter Springs in 1972. The City is located in southern Seminole County in central Florida, Adjacent municipalities are Longwood, Casselberry and Oviedo, The City's estimated 2002 population was 32,000. The City is served by a City Commission - City Manager form of government consisting of a Mayor, five commissioners and a City Manager. The Mayor and City Commissioners are elected for four-year terms. The Mayor votes on matters coming before the City Commission only if needed to break a tie vote among the other City Commissioners. The City Manager is appointed by the City Commission. For additional information concerning the City, see Appendices A and C hereto. The Series 2003 Bonds The City is issuing the Series 2003 Bonds only in the form of fully registered bonds in the denomination of $5,000 or any integral multiple thereof. Interest on the Series 2003 Bonds is payable semi-annually on each April 1 and October 1, commencing October 1,2003. The Series 2003 Bonds will be initially issued to and registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository for the Series 2003 Bonds, The Series 2003 Bonds will be available to purchasers under the book-entry system maintained by DTC through brokers and dealers who are or act through Direct Participants. Purchasers of beneficial interests in the Series 2003 Bonds will not receive physical delivery of the Series 2003 Bonds, but will be Beneficial Owners (and not registered owners) of the Series 2003 Bonds. For so long as any purchaser is the Beneficial Owner of a Series 2003 Bond, such purchaser must maintain an account with a broker or dealer who is, or acts through, a Direct Participant in order to receive payment of principal of, premium, if any, and interest on such Series 2003 Bonds. The principal and interest on the Series 2003 Bonds will be paid by , as paying agent directly to DTC as the registered owner thereof. Disbursements of such payments to the Direct Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of Direct Participants and Indirect Participants, as more fully described herein. Certain of the Series 2003 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein. See "THE SERIES 2003 BONDS-Redemption" herein. Purpose of the Series 2003 Bonds The Series 2003 Bonds are being issued pursuant to Chapter 166, Part IT, Florida Statutes, the City Charter and Resolution No. 615 of the City adopted by the City Commission on May 1, 1989 as amended and supplemented and particularly as amended and supplemented by Resolution No. _ of the City adopted by the City Commission on , 2003 as supplemented (collectively the "Resolution") to, together with other legally available moneys, (i) currently refund all of the City's outstanding Improvement Refunding Revenue Bonds, Series 1993 (the "Refunded Bonds"), and (ii) finance the costs of issuance of the Series 2003 Bonds including the financial guaranty insurance premium and Reserve Policy premium. *Preliminary, Subject to Change {OR613127;4 } v Security for the Series 2003 Bonds The Series 2003 Bonds are payable from and secured by a first lien upon and pledge of the franchise fees levied and collected by the City from Florida Power Corporation for a period of thirty years from April 1, 1984 (the "Franchise Fees"), the public service tax levied and collected by the City on purchases of electricity, metered or bottled gas and water service within the corporate limits of the City pursuant to Section 166.231, Florida Statutes and an ordinance duly enacted by the City Commission on March 27, 1989, as amended and supplemented (the "Public Service Tax") and the tax imposed by the City on communication services pursuant to Section 202.19, Florida Statutes (the "Local Communication Services Tax", collectively with the Franchise Fees and the Public Service Tax, the "Excise Taxes"), The current franchise with Florida Power Corporation expires prior to the final maturity of the Series 2003 Bonds. The lien of the Series 2003 Bonds on the Excise Taxes is on a parity with the lien thereon of the City's outstanding Improvement Refunding Revenue Bonds, Series 1999 (the "Parity Bonds"). The Series 2003 Bonds shall not be or constitute general obligations or indebtedness of the City as "bonds" within the meaning of the Florida Constitution, but shall be special obligations of the City, payable solely from the Excise Taxes in accordance with the terms of the Resolution. No Holder of any Series 2003 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2003 Bonds, or be entitled to payment of such Series 2003 Bonds from any moneys of the City except as provided in the Resolution. The Resolution provides that a sum equal to the Reserve Requirement shall be deposited in the subaccount in the Reserve Account created for the benefit of the Series 2003 Bonds at the time of delivery of the Series 2003 Bonds and shall be used only for the purposes provided in the Resolution, The "Reserve Requirement" is defined as the lesser of (i) the Maximum Bond Service Requirement for the Series 2003 Bond, (ii) 125% of the Average Annual Bond Service Requirement for the Series 2003 Bond or (iii) 10% of the proceeds of the Series 2003 Bonds. The City will, in connection with the issuance of the Series 2003 Bonds, purchase from Ambac Assurance Corporation ("Ambac") for deposit to such subaccount in the Reserve Account a surety bond (the "Reserve Policy"), in a face amount equal to the Reserve Requirement for the Series 2003 Bonds, See "SECURITY FOR THE SERIES 2003 BONDS - Reserve Policy. Redemption The Series 2003 Bonds maturing on or after October 1, _ are subject to optional redemption on or after October 1, _ at the redemption prices described herein. The Series 2003 Bonds maturing on October 1, _ are subject to mandatory sinking fund redemption beginning October 1, _' The Series 2003 Bonds maturing on October 1, _ are subject to mandatory sinking fund redemption beginning October 1, _' See "THE SERIES 2003 BONDS - Redemption" herein, Financial Guaranty Insurance Payment of the principal of and interest on the Series 2003 Bonds, when due, will be insured by a financial guaranty insurance policy to be issued by Ambac simultaneously with the delivery of the Series 2003 Bonds. See "MUNICIPAL BOND INSURANCE" herein and Appendix D hereto. Professionals , Florida will serve as Registrar and Paying Agent pursuant to the Resolution and as Escrow Holder pursuant to the Escrow Deposit Agreement. Akerman Senterfitt, Orlando, Florida, is serving as Bond Counsel and Disclosure Counsel. Anthony A, Garganese of Brown, Salzman, Weiss & Garganese, P,A., Orlando, Florida, is the City Attorney. Shutts & Bowen LLP, Orlando, Florida is representing the Underwriters. McDirmit Davis Puckett and Co" LLC, Orlando, Florida, is the City's auditor. Public Financial Management, Inc., Orlando, Florida is the City's fmancial advisor. {OR613127;4} VI Some of the professionals will be compensated from a portion of the proceeds of the Series 2003 Bonds, identified as "Costs of Issuance" under the heading "ESTIMATED SOURCES AND USES OF FUNDS" herein. Such compensation in some instances, but not in regard to the City's auditor, is contingent upon the issuance of the Series 2003 Bonds and the receipt of the proceeds thereof. Delivery of the Series 2003 Bonds It is anticipated that the Series 2003 Bonds in fully registered form will be available for delivery through the facilities of The Depository Trust Company on or about July _,2003. Additional Bonds Subject to certain conditions set forth in the Resolution, the City may from time to time issue Additional Parity Obligations, (as hereinafter defmed) that are payable from and secured by a first lien on and pledge of the Excise Taxes on a parity with the Series 2003 Bonds and the Parity Bonds then Outstanding. See "SECURITY FOR THE SERIES 2003 BONDS - Additional Bonds" herein. Authorizing Resolution and Definitions A copy of the form of the Resolution is set forth in Appendix B hereto. Defmitions of certain capitalized words used in this Official Statement and not otherwise defmed herein have the meaning ascribed to such terms in the Resolution. Continuing Disclosure The City has agreed and undertaken for the benefit of the Holders of Series 2003 Bonds, to provide certain fmancial information and operating data relating to the City and the Series 2003 Bonds and notice of certain enumerated events pursuant to Rule 15c2-12 of the Securities Exchange Act of 1934. See "CONTINUING DISCLOSURE" herein. Additional Information This Official Statement speaks only as of its date and the information contained herein is subject to change. Descriptions of the Series 2003 Bonds, and other agreements and documents contained herein constitute summaries of certain provisions thereof and do not purport to be complete. Reference is made to the Resolution, and such other agreements and documents for a more complete description of such provisions. Investors should contact the City Clerk (407) 327-1800 at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2789, to obtain copies of the Resolution or basic documentation or with questions concerning this Official Statement of the Series 2003 Bonds, Except to the extent otherwise indicated, information contained in this Official Statement was compiled by the City. Miscellaneous The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is directed to all such documents for full and complete statements of all matters of fact relating to the Series 2003 Bonds, the security for the payment of the Series 2003 Bonds, and the rights and obligations of holders thereof. The information contained in the Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the holders of the Series 2003 Bonds. [END OF SUMMARY STATEMENT] {OR613127;4} Vll OFFICIAL STATEMENT $ * CITY OF WINTER SPRINGS, FLORIDA IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 2003 INTRODUCTION The purpose of this Official Statement, including the cover page, Summary Statement and all appendices, is to set forth certain information in connection with the issuance and sale by the City of Winter Springs, Florida (the City") of its $ * aggregate principal amount of Improvement Refunding Revenue Bonds, Series 2003 (the "Series 2003 Bonds"). The Series 2003 Bonds are issued under and pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and other applicable provisions of law, and Resolution No. 615 of the City adopted by the City Commission on May 1, 1989 as amended and supplemented and particularly as amended and supplemented by Resolution No. _ of the City adopted by the City Commission on , 2003, as supplemented (collectively, the "Resolution"). See Appendix B, "Form of the Resolution", The Series 2003 Bonds are payable from and secured by a first lien upon and pledge of the franchise fees levied and collected by the City from Florida Power Corporation for a period of thirty years from April 1, 1984 (the "Franchise Fees"), the public service tax levied and collected by the City on purchases of electricity, metered or bottled gas and water service within the corporate limits of the City pursuant to Section 166.231, Florida Statutes and an ordinance duly enacted by the City Commission on March 27, 1989, as amended and supplemented (the "Public Service Tax") and the tax imposed by the City or communication services pursuant to Section 202.19, Florida Statutes (the "Local Communication Services Tax", collectively with the Franchise Fees and the Public Service Tax, the "Excise Taxes"), The current franchise with Florida Power Corporation expires prior to the final maturity of the Series 2003 Bonds. The lien of the Series 2003 Bonds on the Excise Taxes is on a parity with the lien thereon of the City's outstanding Improvement Refunding Revenue Bonds, Series 1999 (the "Parity Bonds"), The Parity Bonds are currently outstanding in the principal amount of $8,590,000. See "SECURITY FOR THE SERIES 2003 BONDS" herein. The Series 2003 Bonds shall not be or constitute general obligations or indebtedness of the City as "bonds" within the meaning of the Florida Constitution, but shall be special obligations of the City, payable solely from the Excise Taxes in accordance with the terms of the Resolution. No Holder of any Series 2003 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2003 Bonds, or be entitled to payment of such Series 2003 Bonds from any moneys of the City except as provided in the Resolution. The Series 2003 Bonds are issuable only in the form of fully registered bonds in the denomination of $5,000 or any integral multiple thereof. Interest on the Series 2003 Bonds is payable semi-annually on each April I and October 1, commencing October 1, 2003. The Series 2003 Bonds will be initially issued to and registered in the name of Cede & Co" as nominee for The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository for the Series 2003 Bonds. The Series 2003 Bonds will be available to purchasers under the book-entry system maintained by DTC through brokers and dealers who are or act through Direct Participants. Purchasers of beneficial interests in the Series 2003 Bonds will not receive physical delivery of the Series 2003 Bonds, but will be Beneficial Owners (and not registered owners) of the Series 2003 Bonds. For so long as any purchaser is the Beneficial Owner of a Series 2003 Bond, such purchaser must maintain an account with a broker or dealer who is, or acts through, a Direct Participant. The principal and interest on the Series 2003 Bonds will be paid by , as paying agent directly to Cede & Co. as the registered owner thereof. Disbursements of such payments to the Direct Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of Direct Participants and Indirect Participants, as more fully described herein. See "THE SERIES 2003 BONDS - Book-Entry Only System" herein, This Official Statement speaks only as of its date and the information contained herein is subject to change. *Preliminary, Subject to Change {OR613127;4} 1 Capitalized terms used but not defined herein have the same meanings as when used in the Resolution unless the context clearly indicates otherwise. Complete descriptions of the terms and conditions of the Series 2003 Bonds are set forth in the Resolution, the form of which is attached to this Official Statement as Appendix B. The description of the Series 2003 Bonds, the documents authorizing and securing the same, and the information from various reports and statements contained herein are not comprehensive or defmitive. All references herein to such documents, reports and statements are qualified by the entire, actual content of such documents, reports and statements. Copies of such documents, reports and statements referred to herein that are not included in their entirety in this Official Statement may be obtained, after payment of applicable copying and mailing costs, from the City of Winter Springs, at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2797, Attention: City Clerk, (407) 327-1800. PURPOSE OF THE SERIES 2003 BONDS The Series 2003 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. 615 of the City adopted by the City Conunission on May 1, 1989 as amended and supplemented and particularly as amended and supplemented by Resolution No. _ of the City adopted by the City Commission on , 2003 as supplemented (collectively, the "Resolution") to, together with other legally available moneys, (i) currently refund all of the City's outstanding Improvement Refunding Revenue Bonds, Series 1993 (the "Refunded Bonds"), and (ii) finance the costs of issuance of the Series 2003 Bonds including the fmancial guaranty insurance premium and Reserve Policy premium, See "THE PROJECT," "PLAN OF REFUNDING" and "ESTIMATED SOURCES AND USES OF FUNDS" herein. PLAN OF REFUNDING The Refunded Bonds, as of the date of delivery of the Series 2003 Bonds, will be outstanding in the aggregate principal amount of$8,350,000. To effect the refunding of the Refunded Bonds, the City will enter into an escrow deposit agreement (the "Escrow Agreement") with , Florida, as escrow trustee (the "Escrow Holder"). Pursuant to the terms of the Escrow Agreement, the City will deposit with the Escrow Holder a portion of the proceeds of the Series 2003 Bonds, as well as other available moneys of the City. Such moneys, other than beginning cash balances, will be applied on the date of delivery of the Series 2003 Bonds to the purchase of direct obligations of the United States of America (the "Federal Securities"). The Federal Securities shall mature at such times and in such amounts as shall be sufficient to pay the principal of redemption, premium, and interest on such Refunded Bonds on the redemption date of October 1, 2003. The Refunded Bonds maturing after October 1, 2003 are subject to redemption on October 1, 2003 at a redemption price of 102% of the principal amount thereof, plus accrued interest to the redemption date. Upon the deposit of such moneys into the escrow deposit account (the "Escrow Account") as provided in the Escrow Agreement, in the opinion of Bond Counsel, in reliance on the report of Public Financial Management, Inc., see "VERIFICATION OF MA THEMA TICAL COMPUTATIONS" herein, the lien of the holders of the Refunded Bonds on the Excise Taxes and other sources pledged to such holders will no longer be in effect with respect to said Refunded Bonds. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] {OR613127;4} 2 DEBT SERVICE REQUIREMENTS The following table shows the scheduled annual principal and interest requirements on the Series 2003 Bonds, total annual debt service on the Series 2003 Bonds, total debt service for the Parity Bonds and combined debt service for all such Bonds. Year Ending (October 1) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total Series 2003 Bonds Aggregate Series 2003 Bonds Debt Service Principal $ Interest * $ $ $ * Includes accrued interest of $ {OR613127;4} 3 Parity Bonds Debt Service $565,390.00 573,815.00 580,762.50 591,182.50 369,797.50 142,377.50 159,792.50 176,192.50 191,537,50 205,672.50 213;787.50 230,912,50 241,725.00 246,487.50 260,462.50 263,125.00 1,275,000,00 1,275,000.00 1,275,000.00 1,275,000,00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1.275.000,00 $19.038.020.00 Total Series 2003 Bond and Parity Bonds Debt Service $ ESTIMATED SOURCES AND USES OF FUNDS Sources of Funds: Principal Amount of Series 2003 Bonds Less Original Issue Discount Accrued Interest City Contribution(1) $ ( ) Total Estimated Sources of Funds $ Uses of Funds: Deposit of Accrued Interest to Interest Account Deposit to Escrow Account for Refunded Bonds Cost of Issuance(2) $ Total Estimated Uses of Funds $ (1) Consists of amounts in the Debt Service Fund for the Refunded Bonds. (2) Includes underwriter's discount, costs of issuance, and other fees and expenses including the financial guaranty insurance and Reserve Policy premiums associated with the issuance of the Series 2003 Bonds. THE SERIES 2003 BONDS General Description The Series 2003 Bonds will be issued as fully registered bonds in the denomination of $5,000 each or integral multiples thereof and will be initially registered in the name of Cede & Co., as nominee of DTC, New York, New York, which will act as securities depository for the Series 2003 Bonds. Unless the book-entry system is discontinued as described herein, individual purchases of the Series 2003 Bonds will be made in book-entry form only, and the purchasers will not receive physical delivery of the Series 2003 Bonds or any certificate representing their beneficial ownership interests in the Series 2003 Bonds. See "Book-Entry Only System" below. Interest on the Series 2003 Bonds is payable on October 1, 2003 and on each April 1 and October 1 thereafter until maturity or redemption. Amounts due on the Series 2003 Bonds will be paid to Cede & Co" as nominee for DTC, as registered owner of the Series 2003 Bonds, to be subsequently disbursed to Direct Participants and Indirect Participants and thereafter to the Beneficial Owners of the Series 2003 Bonds, [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] {OR6J3127;4} 4 Redemption Optional Redemption The Series 2003 Bonds maturing on or after October 1, _, are subject to optional redemption prior to their maturities on or after October 1, _, at the option of the City in whole or in part at any time, 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 to be redeemed) as set forth in the following table, together with accrued interest to the redemption date. Period During Which Redeemed (Both Dates Inclusive) October 1, _ through September 30, _ October 1, _ and thereafter Redemption Price 101% 100% Mandatory Redemption The Series 2003 Bonds maturing on October 1, _ are subject to mandatory redemption prior to maturity in part by lot on October 1, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: Year Amortization Installment $ . The Series 2003 Bonds maturing on October 1, _ are subject to mandatory redemption prior to maturity. in part by lot on October 1, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: Year Amortization Installment $ Redemption Notice and Effect of Redemption Notice of redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Holders of Series 2003 Bonds to be redeemed at their addresses as they appear on the registration books, but failure to mail such notice to one or more Holders of Series 2003 Bonds shall not affect the validity of the proceedings for such redemption with respect to Holders of Series 2003 Bonds to which notice was duly mailed. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, if less than all of the Series 2003 Bonds of one maturity are to be called, the distinctive numbers of such Series 2003 Bonds to be redeemed and in the case of Series 2003 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. As long as the book-entry only system is used for determining beneficial ownership of the Series 2003 Bonds, notice of redemption will only be sent to Cede & Co. Cede & Co. will be responsible for notifying the DTC Participants, who will in turn be responsible for notifying the Beneficial Owners. Any failure of Cede & Co. to notify any DTC Participant, or of any DTC Participant to notify the Beneficial Owner of any such notice, will not affect the validity of the redemption of the Series 2003 Bonds, {OR613127;4} 5 Any notice of optional redemption, other than with respect to an advance refunding, shall be circulated only if sufficient funds have been deposited in the Debt Service Fund to pay the redemption price of the Series 2003 Bonds to be redeemed. Official notice of redemption having been given, the Series 2003 Bonds or portions of Series 2003 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specked, and from and after such date (unless the City shall default in the payment of the redemption price) such Series 2003 Bonds or portions of Series 2003 Bonds shall cease to bear interest. Book-Entry Only System The information set forth under this caption concerning DTC and DTC's book-entry system has been obtained from sources the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. The Series 2003 Bonds will be issued as fully registered bonds without coupons. DTC, New York, New York, will act as securities depository for the Series 2003 Bonds. The Series 2003 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Series 2003 Bond will be issued for each maturity of the Series 2003 Bonds. Individual purchases of beneficial ownership interests will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof. Beneficial owners of the Series 2003 Bonds will not receive physical delivery of Series 2003 Bonds. DTC, the world's largest depository, is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over two (2) million issues of V.S, and non-V.S, equity issues, corporate and municipal debt issues and money market investments from over eighty-five (85) countries that Participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book- entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both V.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants ofDTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S, securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Series 2003 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2003 Bonds on DTC's records, The ownership interest of each actual purchaser of each Series 2003 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participant's records. Beneficial Owners will not receive written confirmation from DTC of their transaction, but Beneficial Owners are expected to receive written confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2003 Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in Series 2003 Bonds, except in the event that use of the book-entry system for the Series 2003 Bonds is discontinued. To facilitate subsequent transfers, all Series 2003 Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Series 2003 Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the {OR613127;4} 6 actual Beneficial Owners of the Series 2003 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2003 Bonds are credited, which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2003 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2003 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2003 Bonds may wish to ascertain that the nominee holding the Series 2003 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2003 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co, (nor any other DTC nominee) will consent or vote with respect to Series 2003 Bonds. Under its usual procedures, DTC will mail an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & CO.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2003 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2003 Bonds will be made to Cede & Co, or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or the Paying Agent on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, DTC's nominee, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time, Payment of principal, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2003 Bonds at any time by giving reasonable notice to City or paying agent. Under such circumstances, in the event that a successor depository is not obtained, Series 2003 Bonds certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event Series 2003 Bonds certificates will be printed and delivered. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2003 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDER OF THE SERIES 2003 BOND OR REGISTERED OWNERS OF THE SERIES 2003 BONDS SHALL MEAN DTC AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2003 BONDS. The City can make no assurances that DTC will distribute payments of principal of, redemption price, if any, or interest on the Series 2003 Bonds to the Direct Participants, or that Direct and Indirect Participants will distribute payments of principal of, redemption price, if any, or interest on the Series 2003 Bonds or redemption notices to the Beneficial Owners of such Series 2003 Bonds or that they will do so on a timely basis, or that DTC or any of its Participants will act in a manner described in this Official Statement. The City is not responsible or liable for the failure of DTC to make any payment to any Direct Participant or failure of any Direct or Indirect Participant {OR613127;4} 7 to give any notice or make any payment to a Beneficial Owner in respect to the Series 2003 Bonds or any error or delay relating thereto. The rights of holders of beneficial interests in the Series 2003 Bonds and the manner of transferring or pledging those interests is subject to applicable state law. Holders of beneficial interests in the Series 2003 Bonds may want to discuss the manner of transferring or pledging their interest in the Series 2003 Bonds with their legal advisors. In the event the book-entry system is terminated, the transfer and exchange of Series 2003 Bonds shall be accomplished as described in Appendix B "Form of the Resolution." SECURITY FOR THE SERIES 2003 BONDS General The Series 2003 Bonds are special obligations of the City and are payable solely from and secured by a first lien upon and pledge of, (i) the proceeds of the public service tax imposed by the City on the purchase of certain utilities services within the corporate limits of the City, under the authority of Section 166.231, Florida Statutes and pursuant to Ordinance No. 454 enacted by the City on March 27, 1989 (the "Public Service Tax"), (ii) the tax imposed by the City or communication services pursuant to Section 202.19, Florida Statutes (the "Local Communication Services Tax"), and (iii) the proceeds of franchise fees to be paid for a period of thirty (30) years commencing April 1, 1984, by Florida Power Corporation, pursuant to an ordinance enacted by the City on March 27, 1984 as amended and supplemented (the "Franchise Fees") (such Public Service Tax, Local Communication Services Tax, and Franchise Fees are herein collectively referred to as "Excise Taxes"). The lien of the Series 2003 Bonds on the Excise Taxes is on a parity with the lien thereon of the Parity Bonds. See "PUBLIC SERVICE TAX", "LOCAL COMMUNICATION SERVICES TAX", and "FRANCHISE FEES" herein. The current franchise agreement in favor of Florida Power Corporation pursuant to which the Franchise Fees are paid to the City expires on March 31, 2014 prior to the final maturity of the Series 2003 Bonds. The Series 2003 Bonds do not constitute a general indebtedness of the City within the meaning of any Constitutional, statutory or charter provision or limitations, but will be payable solely from and secured by a lien upon and pledge of the Excise Taxes, The Resolution provides that no holder or holders of any of the Series 2003 Bonds will ever have the right to require or compel the exercise of the ad valorem taxing power of the City for the payment of the principal of and interest on the Series 2003 Bonds or to make any sinking fund, or reserve or other payment provided for in the Resolution. The obligation evidenced by the Series 2003 Bonds shall not constitute a lien upon any property of or in the City but shall constitute a lien only upon the Excise Taxes in the manner provided in the Resolution. Flow of Funds The Resolution creates an Excise Taxes Fund and requires that all Excise Taxes upon receipt by the City be deposited therein. The Resolution provides that the Excise Taxes received by the City are immediately subject to the lien and pledge in favor of the Series 2003 Bonds and the Parity Bonds without any physical delivery or further act. Excise Taxes in the Excise Taxes Fund are to be deposited monthly to the Debt Service Fund and the accounts therein in amounts sufficient to provide for the payment of debt services when due on the Series 2003 Bonds and the Parity Bonds. The Debt Service Fund includes the Reserve Account. All such funds to be held under the Resolution will be held by the City and no independent trustee has been appointed to hold the moneys in such funds for the benefit of the Bondholders. All such funds are required to be continuously secured in the same manner as municipal deposits are authorized to be secured by the laws of the State of Florida. Pursuant to the Resolution, any money remaining in the Excise Taxes Fund after making provision for the payment into the Debt Service Fund may, so long as there is no deficiency in the Debt Service Fund, be used for any lawful purpose. For additional information concerning the flow of funds, see Appendix B hereto. Reserve Account The City shall, on the date of delivery of the Series 2003 Bonds deposit to the subaccount in the Reserve Account created for the benefit of the Series 2003 Bonds a surety bond issued by Ambac Assurance Corporation {OR613127;4} 8 (the "Reserve Policy") in a face amount equal to the Reserve Requirement for the Series 2003 Bonds, See "Reserve Policy" below. The Paying Agent on behalf of the City will draw on the Reserve Policy, up to an amount not exceeding the Surety Bond Coverage, for the purpose of the payment of maturing principal of, or interest on the Series 2003 Bonds when moneys in the other accounts of the Debt Service Fund are insufficient therefor, and for no other purpose. Therefore, such Reserve Policy may not be drawn to pay debt service on the Parity Bonds or any subsequently issued Additional Parity Obligations, Reserve Policy The Series 2003 Bonds will only be delivered upon the issuance of the Reserve Policy. The premium on the Reserve Policy is to be fully paid at or oprior to the issuance and delivery of the Series 2003 Bonds. [The Reserve Policy provides that upon the later of (i) one (1) day after receipt by Ambac Assurance Corporation of a demand for payment executed by the Paying Agent certifying that provision for the payment of principal of or interest on the Series 2003 Bonds when due has not been made or (ii) the interest payment date specified in the Demand for Payment submitted to Ambac Assurance Corporation. Ambac Assurance Corporation will promptly deposit funds with the Paying Agent sufficient to enable the Paying Agent to make such payments due on the Series 2003 Bonds, but in no event exceeding the Surety Bond Coverage, as 'defined in the Reserve Policy. Pursuant to the terms of the Reserve Policy, the Surety Bond Coverage is automatically reduced to the extent of each payment made by Ambac Assurance Corporation under the terms of the Reserve Policy and the City is required to reimburse Ambac Assurance Corporation for any draws under the Reserve Policy with interest [at a market rate]. Upon such reimbursement, the Reserve Policy is reinstated to the extent of each principal reimbursement up to but not exceeding the Surety Bond Coverage. This reimbursement obligation of the City is subordinate to the City's obligation with respect to the Series 2003 Bonds. The Surety Bond does not insure against nonpayment caused by the insolvency or negligence of the Paying Agent. The insurance provided by the Surety Bond is not covered by the Florida Insurance Guaranty Association. For information concerning Ambac Assurance Corporation, see "MUNICIPAL BOND INSURANCE" herein. Additional Bonds The City may issue Additional Parity Obligations, payable on a parity from the proceeds of the Excise Taxes with the Series 2003 Bonds and the Parity Bonds subject to the following conditions as provided in the Resolution. (a) There shall have been obtained and filed with the City a certificate of an independent certified public accountant of suitable experience and responsibility stating: (a) that the books and records of the City relating to the collection and receipt of Excise Taxes have been audited by him; (b) the amount of Excise Taxes received for any twelve (12) months out of the immediately preceding eighteen (18) months preceding the date of issuance of the proposed Additional Parity Obligations with respect to which such certificate is made; (c) that the aggregate amount of such Excise Taxes for such period is equal to not less than one hundred twenty-five percent (125%) of the Maximum Bond Service Requirement on all obligations issued under the Resolution, if any, then Outstanding, and the Additional Parity Obligations with respect to which such certificate is made. (b) The Excise Taxes for the preceding Fiscal Year may be adjusted to include the estimated Excise Taxes as certified by an independent certified public accountant, that the City would have received from areas that the City has annexed prior to the issuance of the Additional Parity Obligations and not fully reflected in such Fiscal Year. (c) The Excise Taxes for the preceding Fiscal Year may also be adjusted to include the estimated Excise Taxes, as certified by an independent certified public accountant, that the City would have received during such Fiscal Year due to increase in the rate or rates of such Excise Taxes during such Fiscal Year and not fully reflected in such Fiscal Year. {OR613127;4} 9 (d) Each resolution authorizing the issuance of Additional Parity Obligations will recite that all of the covenants contained in the Resolution will be applicable to such Additional Parity Obligations. (e) The City shall not be in default in performing any of the covenants and obligations assumed under the Resolution, and all payments required in the Resolution to have been made into the funds and accounts, as provided thereunder, shall have been made to the full extent required. (f) In the event any Additional Parity Obligations are issued for the purpose of refunding any Bonds then Outstanding, the conditions in (a) above do not apply, provided that the issuance of such Additional Parity Obligations shall not result in an increase in the aggregate amount of principal of and interest on the Outstanding Bonds becoming due in the current Fiscal Year and all subsequent Fiscal Years. The conditions above shall apply to Additional Parity Obligations issued for refunding purposes which cannot meet the conditions of this section, Investments Moneys on deposit in the Debt Service Fund excluding the Reserve Account may be invested and reinvested in Investment Securities which mature not later than the dates on which the moneys on deposit therein will be needed for the purpose of such fund. All income on such investments, except as otherwise provided, in the Resolution shall be deposited in the respective funds and accounts from which such investments were made and be used for the purposes thereof unless and until the maximum required amount is on deposit therein, and thereafter shall be deposited in the Excise Taxes Fund. Other Covenants Pursuant to the Resolution the City has covenanted to diligently enforce and collect all Excise Taxes and take all steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become delinquent to the full extent permitted or authorized by law. The City has also covenanted not to repeal the ordinances levying the Public Service Tax and Local Communication Services Tax and not to amend or modify said ordinances in any manner so as to impair or adversely affect the power and obligation of the City to levy and collect the Public Service Tax and Local Communication Services Tax, or impair or adversely affect in any manner the pledge of the Public Service Tax made pursuant to the Resolution, or the rights of the holders of the Bonds, or the rate or amount of the Public Service Tax and Local Communication Services Tax. Concerning the Franchise Fees the City has covenanted that in the event it acquires the electric power and distribution facilities of Florida Power Corporation, or in the event it shall acquire, construct or operate an electric power and distribution system and the Franchise Fees are not available to the City to make the payments therefrom required pursuant to the provisions of the Resolution, the City will make payment from the net revenues first available to it from the operation of any such electric power and distribution system so owned, acquired, constructed or operated by it of the amounts required to be paid from the Franchise Fees pursuant to the provisions of the Resolution. The City has also covenanted, as long as any Bonds remain outstanding, it will levy Franchise Fees when added to the amount of all taxes, license and other impositions levied by the City of at least six percent (6%) on any provider of electricity within the jurisdiction of the City. The City further covenants that as long as any of the principal of or interest on any Bonds shall be outstanding and unpaid, or payment thereof not duly provided for, it will levy and collect the Public Service Tax and Local Communication Services Tax to the extent necessary up to the maximum rates provided by law as will always, together with the Franchise Fees available therefor, provide funds sufficient to pay, as the same shall become due, the principal of or interest on the Bonds and to make all other payments, as the same shall become due, as provided in the Resolution and all other obligations and indebtedness payable out of said Public Service Tax, PUBLIC SERVICE TAX The Public Service Tax pledged as security for the Bonds is levied and collected by the City pursuant to Section 166.231, Florida Statutes (the "Public Service Tax Statute"), and Ordinance No. 454 of the City enacted on March 27, 1989, as amended and supplemented (the "Public Service Tax Ordinance"). Pursuant to Section 166,231, {OR613127;4} 10 Florida Statutes, a municipality may levy a tax on the purchase of electricity, metered natural gas, liquefied petroleum gas either metered or bottled, manufactured gas either metered or bottled, and water service and services competitive with such services as determined by City ordinance, The tax shall be generally levied only upon purchases within the municipality and shall not exceed 10 percent of the payments (or at the option of the municipality the applicable physical unit) received by the seller of the taxable item from the purchaser for the purchase of such service. Purchase of electricity means the purchase of electric power by a person who will consume it within the municipality. The City levies the Public Service Tax on each and every purchase of electricity, metered or bottled gas, and water service within the corporate limits of the City in the amount of 8% of the total amount billed. Pursuant to the Public Service Tax Ordinance, the Public Service Tax as imposed by the City does not apply to purchases of bottled water. The Public Service Tax is not imposed against any fuel adjustment charge which is defmed as all increases in the cost of utility services to the ultimate consumer resulting from an increase in the cost of fuel to the utility subsequent to October 1,1973. Also exempt are purchases by the United States Government, State of Florida and all counties, school districts, and municipalities of the state, and by public bodies exempted by law or court order. The Public Service Tax Statutes provides for certain other exemptions. A municipality to also provide for other exemptions. The Public Service Tax is to be collected by the seller of the taxable item from the purchaser at the time of the payment for such service. The seller shall remit the taxes collected to the City in the manner prescribed by the Public Service Tax Ordinance. The seller is required to remit to the City on or before the fifteenth day of each month the taxes levied and collected during the preceding month. Except as otherwise provided under Florida law, the seller shall be liable for taxes that are due and not remitted to the municipality. The Public Service Tax Ordinance provides that it is unlawful for any seller to collect the price of any sale of the above described services without, at the same time, collecting the tax levied with respect to said sale or sales unless the seller shall elect to, assume and pay said tax without collecting the same from the purchaser. Any seller failing to collect said tax at the time of collecting the price of any sale where the seller has not elected to assume and pay said tax is liable to the City for the amount of said tax as if the same had actually been paid to the seller and the Mayor of the City is authorized to bring any necessary suit or action for the recovery of said tax; provided, that the seller is not liable for the payment of said tax upon uncollected bills, The Public Service Tax Ordinance also provides that if any purchaser shall fail, neglect or refuse to pay to the seller the seller's charge and the tax imposed thereon, the seller has the right, power and authority to immediately discontinue further service to the purchaser until the tax and the seller's bill shall have been paid in full. The City covenants in the Resolution that, as long as any of the principal of and interest on any Bonds are outstanding and unpaid, or payment thereof not provided for, it will not repeal the Public Service Tax Ordinance and will not amend or modify said ordinance in any manner so as to impair or adversely affect the power and obligation of the City to levy and collect the Public Service Tax or impair or affect adversely in any manner the pledge of the Public Service Tax, or the rights of the holders of any Bonds or the rate or amount of the Public Service Tax. LOCAL COMMUNICATION SERVICES TAX Florida Statutes Section 202.19 (1) (the "Local Communication Services Tax Statute") provides that for bills rendered on or after October 1, 2001 counties and municipalities may levy a discretionary communication services tax (the "local communication services tax") on communication services. The revenues raised by such tax may be pledged for the repayment of current or future bonded indebtedness. The City levies a local communication services tax pursuant to its Ordinance No. 2001-42. Prior to the effective date of the Local Communication Services Tax Statute the City in accordance with Florida law levied a tax on telecommunication services, pursuant to authorization granted in the Public Service Tax Statute, at the rate of seven percent (7%). An effect of the Local Communication Services Tax Statute was to replace the former public service tax on telecommunication services and franchise fees on cable and telecommunication service providers with the local communication services tax. This change in law is intended to be revenue neutral to the counties and municipalities. The local communication services tax is applied to a broader base of telecommunication services than the former public service tax on telecommunication services and the franchise fee on cable and telecommunication services providers. Effective October 1, 2001, the City imposed a tax, except as otherwise provided by law, on communications services which originate or terminate in the State of Florida and are charged to a service address in {OR61J127;4} 11 the City at the rate of 6.20%. The rate of the local communications services tax applicable to the City was reduced to 5.80% on October 1,2002. For its fiscal year 2002, the City received the local communications services tax for only eleven (11) months; beginning October 1,2002, the tax will be received for all twelve (12) months of the fiscal year. The local communication services tax statute provides that, to the extent that a provider of communications. services is required to pay a tax, charge, or other fee under any franchise agreement or ordinance with respect to the services or revenues that are also subject to the tax, such provider is entitled to a credit against the amount of such tax payable to the state in the amount of such tax, charge, or fee with respect to such service or revenues. "Communications services" are defmed as the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals, including cable services, to a point, or between or among points, by or through any electronic, radio, satellite, cable, optical; microwave, or other medium or method now in existence or hereafter devised, regardless of the protocol used for such transmission or conveyance. The term does not include: (a) Information services. (b) Installation or maintenance of wiring or equipment on a customer's premises, (c) The sale or rental of tangible personal property. (d) The sale of advertising, including, but not limited to, directory advertising. (e) Bad check charges. (f) Late payment charges. (g) Billing and collection services. (h) Internet access service, electronic mail service, electronic bulletin board service, or similar on-line servIces. The proceeds of said local communication services tax less the Florida Department of Revenue's cost of administration is deposited in the local communication services tax clearing trust fund and dIstributed monthly to tile appropriate jurisdictions. FRANCHISE FEES The Franchise Fees constitute the payments to be received by the City from Florida Power Corporation pursuant to ordinance No. 290 enacted by the City on March 27, 1984 as amended (the "Franchise Fee Ordinance") whereby the City granted an electric franchise for thirty (30) years to Florida Power Corporation ("FPC") and its legal representative, successor and assigns. Under the aforementioned ordinance, FPC is required to pay to the City for a period of thirty (30) years from April 1, 1984, an amount, when added to the amount of all taxes, licenses and other impositions levied by the City on FPC, equal to six percent (6%) of FPC's revenues derived from the sale of electrical energy to residential and commercial customers within the corporate limits of the City for the twelve (12) months preceding the applicable anniversary date. Section 4 of such ordinance provides: Within thirty (30) days after the first anniversary of the effective date of the grant, and within thirty (30) days after each succeeding anniversary of the effective date of this grant, Florida Power Corporation, its successors and assigns, shall make the required payment to the City. The Franchise Fee Ordinance provides that at and after the expiration of such franchise, the City has the right to purchase the electric plant and facilities of FPC located within the corporate limits of the City which are used under or in connection Witll the franchise or right, at a valuation of the property desired, real and personal, which valuation shall be fixed by arbitration as may be provided by law. Excepted from this reservation are power plants and high tension transmission lines owned by FPC and connected with its general system of distribution and used for the purposes of serving communities other than the City. The City covenants in the Resolution that, so long as any Bonds are outstanding and unpaid, or payment thereof not provided for, it will not repeal the Franchise Fee Ordinance and will not amend or modify said ordinance in any manner as to impair or adversely affect the obligation of FPC, or of its legal representatives, successors or assigns, to pay, or the power or obligation of the City to levy and collect the Franchise Fees, or impair or adversely affect in any manner the pledge of the Franchise Fees, or the rights of the holders of any Bonds, The City further expressly represents in the Resolution that it has legal and valid power to levy and continue to levy and collect said Franchise Fees in the manner provided in said Franchise Fee Ordinance, and the City further represents that the covenants entered into between the City and the holders of the Bonds with respect to {OR613127;4} 12 the pledge of the Franchise Fees constitute a valid and legally binding contract between the City and such Bondholders and are not subject to repeal, impairment or modification by the City. {OR613127;4} 13 HISTORICAL PUBLIC SERVICE TAX RECEIPTS AND FRANCHISE FEES REVENUES AND COVERAGE OF MAXIMUM ANNUAL DEBT SERVICE ON THE SERIES 2003 BONDS AND THE PARITY BONDS The Public Service Tax receipts (which for fiscal year 2002 includes the Local Communication Services Tax receipts) and Franchise Fees revenues of the City for Fiscal Years ended September 30, 1999 through September 30, 2002 and their coverage of maximum annual debt service on the Series 2003 Bonds and the Parity Bonds are set forth in the following table: Combined Maximum Fiscal Annual Debt Coverage Of Years Service On the Maximum Ended Series 2003 Annual Debt September Public Service Franchise Bonds and The Service 30 Tax (I) Fees (I) Total(l) Parity Bonds Requirement 2002 $3,403,200 $1,533,200 $4,936,400 $ 2001 2,492,900 1,587,500 4,080,400 2000 2,074,800 1,401,800 3,476,600 1999 1,732,700 1,312,000 3,044,700 (l)Derived from audited financial statements of the City. The following table indicates the different components of the Public Service Tax (and for fiscal year 2002 the Local Communication Services Tax) for each of the City's fiscal years 1999 through 2002. Fiscal Years Ended September 30 FY 1999(1) FY 2000(1) FY 2001(1) FY 2002(1) WATER UTILITY TAXES $199,200 $217,400 $210,700 $197,900 ELECTRIC UTILITY TAXES 1,213,500 1,404,300 1,555,700 1,810,900 TELEPHONE TAXES 282,900 409,300 675,900 1,348,300 GAS UTILITY TAXES 27,200 30,700 33,000 30,000 PROPANE UTILITY TAXES 9,900 13,100 17,600 16,100 TOTAL UTILITY TAXES $1,732,700 $2,074,800 $2,492,900 $3,403,200 (1)Source: City Finance Department. MUNICIPAL BOND INSURANCE Payment Pursuant to Financial Guaranty Insurance Policy Ambac Assurance Corporation ("Ambac" or "Ambac Assurance") has made a commitment to issue a [mancial guaranty insurance policy (the "Financial Guaranty Insurance Policy") relating to the Series 2003 Bonds effective as of the date of issuance of the Bonds. Under the terms of the Financial Guaranty Insurance Policy, Ambac Assurance will pay to The Bank of New York, New York, New York or any successor thereto (the "Insurance Trustee") that portion of the principal of and interest on the Series 2003 Bonds which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Obligor (as such terms are defined in the Financial Guaranty Insurance Policy). Ambac Assurance will make such payments to the Insurance Trustee on the later of the date on which such principal and interest becomes Due for Payment or within one business day following the date {OR613127;4} 14 on which Ambac Assurance shall have received notice of Nonpayment from the Paying Agent. The insurance will extend for the term of the Series 2003 Bonds and, once issued, cannot be cancelled by Ambac Assurance. The Financial Guaranty Insurance Policy will insure payment only on stated maturity dates and on mandatory sinking fund installment dates, in the case of principal, and on stated dates for payment, in the case of interest. If the Series 2003 Bonds become subject to mandatory redemption and insufficient funds are available for redemption of all outstanding Series 2003 Bonds, Ambac Assurance will remain obligated to pay principal of and interest on outstanding Series 2003 Bonds on the originally scheduled interest and principal payment dates including mandatory sinking fund redemption dates. In the event of any acceleration of the principal of the Series 2003 Bonds, the insured payments will be made at such times and in such amounts as would have been made had there not been an acceleration. In the event the Paying Agent has notice that any payment of principal of or interest on a Series 2003 Bond which has become Due for Payment and which is made to a Holder by or on behalf of the Obligor has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code in accordance, with a fmal nonappealable order of a court of competent jurisdiction, such registered owner will be entitled to payment from Ambac Assurance to the extent of such recovery if sufficient funds are not otherwise available. The Financial Guaranty Insurance Policy does not insure any risk other than Nonpayment, as defmed in the Policy. Specifically, the Financial Guaranty Insurance Policy does not cover: 1 payment on acceleration, as a result of a call for redemption (other than mandatory sinking fund redemption) or as a result of any other advancement of maturity. 2. payment of any redemption, prepayment or acceleration premium. 3. nonpayment of principal or interest caused by the insolvency or negligence of any Trustee, Paying Agent or Bond Registrar, if any. If it becomes necessary to call upon the Financial Guaranty Insurance Policy, payment of principal requires surrender of Series 2003 Bonds to the Insurance Trustee together with an appropriate instrument of assignment so as to permit ownership of such Series 2003 Bonds to be registered in the name of Ambac Assurance to the extent of the payment under the Financial Guaranty Insurance Policy. Payment of interest pursuant to the Financial Guaranty Insurance Policy requires proof of Holder entitlement to interest payments and an appropriate assignment of the Holder's right to payment to Ambac Assurance. Upon payment of the insurance benefits, Ambac Assurance will become the owner of the Series 2003 Bonds, appurtenant coupon, if any, or right to payment of principal or interest on such Series 2003 Bonds and will be fully subrogated to the surrendering Holder's rights to payment. The insurance provided by the Financial Guaranty Insurance Policy is not covered by the Florida Insurance Guaranty Association. Ambac Assurance Corporation Ambac Assurance Corporation ("Ambac Assurance") is a Wisconsin-domiciled stock insurance corporation regulated by the Office of the Commissioner of Insurance of the State of Wisconsin and licensed to do business in 50 states, the District of Columbia, the Territory of Guam and the Commonwealth of Puerto Rico, with admitted assets of approximately $6,362,000,000 (unaudited) and statutory capital of $3,945,000,000 (unaudited) as of March 31, 2003. Statutory capital consists of Ambac Assurance's policyholders' surplus and statutory contingency reserve. Standard & Poor's Credit Markets Services, a Division of The McGraw-Hill Companies, Moody's Investors Service and Fitch, Inc. have each assigned triple-A financial strength rating to Ambac Assurance. Ambac Assurance has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an obligation by Ambac Assurance will not affect the treatment for federal income tax purposes of interest on such obligation and that insurance proceeds representing maturing interest paid by Ambac Assurance under policy {OR613127;4} 15 provisions substantially identical to those contained in its Financial Guaranty insurance policy shall be treated for federal income tax purposes in the same manner as if such payments were made by the City. Ambac Assurance makes no representation regarding the Series 2003 Bonds or the advisability of investing in the Series 2003 Bonds and makes no representation regarding, nor has it participated in the preparation of, the Official Statement other than the information supplied by Ambac Assurance and presented under the heading "MUNICIPAL BOND INSURANCE." Available Information The parent company of Ambac Assurance, Ambac Financial Group, Inc. (the "Company"), is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). These reports, proxy statements and other information can be read and copied at the SEC's public reference room at 450 Fifth Street, N.W" Washington, D.C. 20549, Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC maintains an internet site at http://.www.sec.gov that contains reports, proxy and information statements and other information regarding companies that file electronically with the SEC, including the Company. These reports, proxy statements and other information can also be read at the offices of the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street, New York, New York 10005. Copies of Ambac Assurance's financial statements prepared in accordance with statutory accounting standards are available from Ambac Assurance. The address of Ambac Assurance's administrative offices and its telephone number are One State Street Plaza, 19th Floor, New York, New York 10004 and (212) 668-0340, Incorporation of Certain Documents by Reference The following documents filed by the Company with the SEC (File No. 1-10777) are incorporated by reference in this Official Statement: 1) The Company's Current Report on Form 8-K dated January 23, 2003 and filed on January 24, 2003; 2) The Company's Current Report on Form 8-K dated February 25, 2003 and filed on February 28, 2003; 3) The Company's Current Report on Form 8-K dated February 25, 2003 and filed on March 4, 2003; 4) The Company's Current Report on Form 8-K dated March 18, 2003 and filed on March 20, 2003; 5) The Company's Current Report on Form 8-K dated March 19,2003 and filed on March 26, 2003; 6) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and filed on March 28, 2003; 7) The Company's Current Report on Form 8-K dated March 25, 2003 and filed on March 31, 2003; 8) The Company's Current Report on Form 8-K dated April 17, 2003 and filed on April 21, 2003; and 9) The Company's Quarterly Report on Form 10-Q for the fiscal quarterly period ended March 31, 2003 and filed on May 15,2003. All documents subsequently filed by the Company pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in the same manner as described above in "Available Information." {OR613127;4} 16 THE CITY The City was incorporated in 1959 under the name of the Village of North Orlando and became the City of Winter Springs in 1976. The City is located in Seminole County, which is a part of the greater Orlando metropolitan area in east central Florida, The City is primarily a retail, office and residential area with a small amount of light industry and commercial. The City's 2002 population was approximately 32,000, The City operates according to a CommissionlManager form of government, with an appointed City Manager, five elected City Commissioners and a separately elected Mayor. The Mayor votes on matters coming before the City Commission only if a vote by the other Commissioners results in a tie. LITIGATION There is not now pending any litigation restraining or enjoining the issuance or delivery of the Series 2003 Bonds or questioning or affecting the validity of the Series 2003 Bonds or the proceedings and authority under which they are to be issued. Neither the creation, organization or existence of the City, nor the title of the present City Commission members or other officials of the City to their respective offices is being contested, There is no litigation pending which in any manner questions the right of the City to issue the Series 2003 Bonds in accordance with the provisions of the Resolution and the laws of the State of Florida. The City experiences routine litigation and claims incidental to the conduct of its affairs. The City carries substantial insurance for these exposures, and pending claims are defended by and, if necessary, are anticipated to be paid by the insurance carriers, LEGAL MATTERS Certain legal matters incident to the validity of the Series 2003 Bonds and the issuance thereof by the City are subject to the approving opinion of Akerman Senterfitt, Orlando, Florida, Bond Counsel. The proposed legal opinion of Bond Counsel is set forth as Appendix E. The actual legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery. The opinion will speak only as of its date, and subsequent distribution of it by recirculation of the Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinions subsequent to their respective rates. Bond Counsel has not been engaged by the City to confirm or verify, and, except as may be set forth in an opinion of Bond Counsel delivered to the Underwriter, expresses and will express no opinion as to the accuracy, completeness or fairness of any statements in this Official Statement. Certain legal matters will be passed upon for the City by Anthony A. Garganese of Brown, Salzman, Weiss & Garganese, P.A" City Attorney, Orlando, Florida and by Akerman Senterfitt, Disclosure Counsel. The Underwriters are being represented by Shutts & Bowen LLP, Orlando, Florida, TAX MATTERS General The Internal Revenue Code of 1986, as amended (the "Code") establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 2003 Bonds for interest thereon to be and remain excluded from gross income for federal income tax purposes, Noncompliance with such requirements could cause the interest on the Series 2003 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issue of the Series 2003 Bonds. Those requirements include, but are limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2003 Bonds and other amounts are to be invested and require, under certain circumstances, that certain excess investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the Resolution to comply with each such requirement. In the opinion of Bond Counsel, assuming continuous compliance by the City with the Code and the tax covenants of the City contained in the Resolution, under existing statutes, regulations, published rulings, and judicial decisions, and subject to the conditions described below, interest on the Series 2003 Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative {OR6J3127;4} 17 minimum tax imposed on individuals and corporations, although such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax on corporations. The opinion on federal tax matters will be based on and will assume the accuracy of certain representations and certifications and compliance with certain covenants of the City to be contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 2003 Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the certifications and representations made by the City. Prospective purchases or the Series 2003 Bonds should be aware that ownership of the Series 2003 Bonds may result in other federal tax consequences to certain taxpayers, Bond Counsel's opinions are based on existing law, which is subject to change. Moreover, Bond Counsel's opinions are not a guarantee of a particular result, and are not binding on the IRS or the courts; rather, such opinions represent Bond Counsel's professional judgment based on its review of existing law, and in reliance on the representations and covenants that it deems relevant to such opinions. Failure by the City to comply subsequent to the issuance of the Series 2003 Bonds with certain requirements of the Code regarding the use, expenditure and investment of Series 2003 Bond proceeds and the timely payment of certain investment earnings to the Treasury of the United States may cause interest on the Series 2003 Bonds to become included in gross income for federal income tax purposes retroactive to their date of issue. The City has covenanted in the Resolution to comply with all provisions of the Code necessary to, among other things, maintain the exclusion from gross income of interest on the Series 2003 Bonds for purposes of federal income taxation. In rendering its opinion, Bond Counsel has assumed continuing compliance with such covenants. In the opinion of Bond Counsel, the interest on the Series 2003 Bonds is exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. Interest on the Series 2003 Bonds may be subject to state or local income taxation under applicable state or local laws in other jurisdictions. Purchasers of the Series 2003 Bonds should consult their tax advisors as to the income tax status of interest on the Series 2003 Bonds, in their particular state or local jurisdictions. During recent years, legislative proposals have been introduced in Congress, and in some cases, enacted, that altered certain federal tax consequences resulting froni the ownership of obligations that are similar to the Series 2003 Bonds, In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar in nature to the Series 2003 Bonds. From time to time, legislative proposals may be introduced which could have an effect on both the federal tax consequences resulting from the ownership of the Series 2003 Bonds and their market value, No assurance can be given that any such legislative proposals, if enacted, would not apply to, or would not have an adverse effect upon, the Series 2003 Bonds. Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Series 2003 Bonds may affect the tax status of interest on the Series 2003 Bonds. Moreover, except as stated above, Bond Counsel expresses no opinion regarding federal or state tax consequences arising with respect to the Series 2003 Bonds. Prospective purchasers of the Series 2003 Bonds are advised to consult their own tax advisors as to the applicability of other federal or state tax consequences. Tax Treatment of Original Issue Discount Under the Code, the difference between the stated redemption price at maturity of the Series 2003 Bonds maturing in the years 20_ through 20_, inclusive (collectively, the "Discount Bonds") and the initial offering price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers, at which a substantial amount of the Discount Bonds of the same maturity was sold is "original issue discount." Under Section 1288 of the Internal Revenue Code of 1986, as amended, original issue discount on tax-exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to an owner of a Discount Bond during any accrual period generally equals (i) the issue price of such Discount Bonds plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity of {OR613127;4 } 18 such Discount Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), minus (iii) any interest payable on such Discount Bond during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner's tax basis in such Discount Bond. The federal income tax consequences of the purchase, ownership and sale or other disposition of the Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from above. Owners of such Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, redemption or other disposition of Discount Bonds and with respect to the state and local tax consequences of owning and disposing of such Discount Bonds. TAX TREATMENT OF ORIGINAL ISSUE PREMIUM The Series 2003 Bonds maturing in the year _ through _ and in _ ("Premium Bonds") are being offered and sold to the public at a price in excess of their stated redemption price (the principal amount) at maturity. That excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity of a Premium Bond, based on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior to its stated maturity, the amortization period and yield must be determined on the basis of the earliest call date that results in the lowest yield on that Premium Bond), compounded semiannually. No portion of that bond premium is deductible by the owner of a Premium Bond. For purposes of determining the owner's gain or loss on the sale, redemption (including redemption at maturity) or other disposition of a Premium Bond, the owner's tax basis in the Premium Bond is reduced by the amount of bond premium that accrues during the period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes upon the sale or other disposition of a Premium Bond for an amount equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Premium Bond at its issue price in the initial offering who holds that Premium Bond to maturity (or, in the case of a callable Premium Bond, the earliest call that results in the lowest yield on that Premium Bond) will realize no gain or loss upon the retirement of that Premium Bond. Owners of Premium bonds (or book entry interests in them) should consult their own tax advisers as to the determination for federal income tax purposes of the amount of bond premium properly accruable in any period with respect to the Premium Bonds and as to other federal tax consequences and the treatment of bond premium for state and local tax purposes. UNDERWRITING The Underwriters shown on the cover page hereof have agreed, subject to certain conditions precedent to purchase the Series 2003 Bonds at a price of $ ($ original par amount, less underwriters' discount of $ and less net original issue discount of $ ), plus accrued interest. The Underwriters have furnished the information on the cover page of this Official Statement pertaining to the public offering prices of the Series 2003 Bonds. The public offering prices of the Series 2003 Bonds may be changed from time to time by the Underwriters, and the Underwriters may allow a concession from the public offering prices to certain dealers. None of the Series 2003 Bonds will be delivered by the City to the Underwriters unless all of the Series 2003 Bonds are so delivered. FINANCIAL ADVISOR Public Financial Management, Inc., Orlando, Florida, has served as fmancial advisor to the City III connection with the issuance of the Series 2003 Bonds. INVESTMENT POLICY The City's investment policy as adopted on January 28, 2002 limits the investment of City funds, other than debt proceeds the investment of which are govemed by the applicable City resolution or other authorization, as follows: A. The Florida Local Government Surplus Funds Trust Fund ("SBA") 1. Investment Authorization {OR613I27;4} 19 The Finance Director may invest in the SBA, 2. Portfolio Composition A maximum of 100% of available funds may be invested in the SBA. B. United States Government Securities 1. Purchase Authorization The Finance Director or management designee may invest in direct negotiable obligations, or obligations the principal and interest of which are unconditionally guaranteed by the United States Government. Such securities will include, but not be limited to the following: Cash Management Bills Treasury Securities - State and Local Government Series ("SLGS") Treasury Bills Treasury Notes Treasury Bonds Treasury Strips 2. Portfolio Composition A maximum of 100% of available funds may be invested in the United States Government Securities. 3. Maturity Limitations The maximum length to maturity of any direct investment III the United States Government Securities is five (5) years from the date of purchase. C. United States Government Agencies 1. Purchase Authorization The Finance Director or management designee may invest in bonds, debentures, notes or callable issued and guaranteed by the United States Governments agencies, provided such obligations are backed by the full faith and credit of the United States Government. Such securities will include, but not be limited to the following: Government National Mortgage Association (GNMA) -GNMA guaranteed mortgage-backed bonds -GNMA guaranteed pass-through obligations United States Export - Import Bank -Direct obligations or fully guaranteed certificates of beneficial ownership Farmer Home Administration -Certificates of beneficial ownership Federal Financing Bank -Discount notes, notes and bonds Federal Housing Administration Debentures General Services Administration United States Maritime Administration Guaranteed -Title XI Financing New Communities Debentures -United States Government guaranteed debentures United States Public Housing Notes and Bonds {OR613127;4} 20 -United States Government guaranteed public housing notes and bonds United States Department of Housing and Urban Development -Project notes and local authority bonds 2. Portfolio Composition A maximum of 75% of available funds may be invested in United States Government agencies. 3. Limits on Individual Issuers A maximum of 50% of available funds may be invested in individual United States Government agencies. 4. Maturity Limitations The maximum length to maturity for an investment in any United States Government agency security is five (5) years from the date of purchase. D. Federal Instrumentalities (United States Government sponsored agencies) 1. Purchase Authorization The Finance Director or management designee may invest in bonds, debentures or notes which may be subject to call, issued or guaranteed as to principal and interest by United States Government sponsored agencies (Federal Instrumentalities) which are non-full faith and credit agencies limited to the following: Federal Farm Credit Bank (FFCB) Federal Home Loan Bank or its district banks (FHLB) Federal National Mortgage Association (FNMA) Federal Home Loan Mortgage Corporation (Freddie-Macs) Student Loan Marketing Association (Sallie-Mae) 2, Portfolio Composition A maximum, of 80% of available funds maybe invested in Federal Instrumentalities. 3, Limits on Individual Issuers A maximum of 40% of available funds may be invested in anyone issuer. 4. Maturity Limitations The maximum length to maturity for an investment in any Federal Instrumentality security is five (5) years from the date of purchase. E, Interest Bearing Time Deposit or Saving Accounts 1. Purchase Authorization The Finance Director or management designee may invest in non-negotiable interest bearing time certificates of deposit or savings accounts in banks organized under the laws of this state and in national banks organized under the laws of the United States and doing business and situated in the State of Florida, Additionally, the bank shall not be listed with any recognized credit watch information service. {OR613127;4} 21 2. Portfolio Composition A maximum of 25% of available funds may be invested m non-negotiable interest bearing time certificates of deposit. 3. Limits on Individual Issuers A maximum of 15% of available funds may be deposited with anyone issuer. 4. The maximum maturity on any certificate shall be no greater than one (1) year from the date of purchase. F. Repurchase Agreements 1. Purchase Authorization a. The Finance Director or management designee may invest in repurchase agreements composed of only those investments based on the requirements set forth by the City's Master Repurchase Agreement. All firms are required to sign the Master Repurchase Agreement prior to the execution of a repurchase agreement transaction, b. A third party custodian with whom the City has a current custodial agreement shall hold the collateral for all repurchase agreements with a term longer than one (1) business day. A clearly marked receipt that shows evidence of ownership must be supplied to the Finance Director and retained. c. Securities authorized for collateral are negotiable direct obligations of the United States Government, Government Agencies, and Federal Instrumentalities with maturities under five (5) years and must have a market value for the principal and accrued interest of 102 percent of the value and for the term of the repurchase agreement. Immaterial short-term deviations from the 102 percent requirement are permissible only upon the approval of the Finance Director or management designee. 2. Portfolio Composition A maximum of 50% of available funds may be invested in repurchase agreements excluding one (1) business day agreements and ovemight sweep agreements. 3. Limits on Individual Issuers A maximum of 25% of available funds may be invested with anyone institution. 4, Limits on Maturities The maximum length to maturity of any repurchase agreement is 40 days from the date of purchase. G. Commercial Paper 1. Purchase Authorization The Finance Director or management designee may invest in commercial paper of any United States company that is rated, at the time or purchase, "Prime-I" by Moody's and "A-I" by Standard & Poor's (prime commercial paper), Additionally, the company shall not be listed with any recognized credit watch information service. {OR613127;4} 22 2, Portfolio Composition A maximum of 30% of available funds may be directly invested in prime commercial paper. , 3. Limits on Individual Issuers A maximum, of 10% of available funds may be invested with anyone issuer. 4. Maturity Limitations The maximum length to maturity for prime commercial paper shall be 180 days from the date of purchase_ H. Bankers' acceptances I . Purchase Authorization The Finance Director or management designee may invest in Bankers' acceptances issued by a domestic bank or a federally chartered domestic office; of a foreign bank, which are eligible for purchase by the Federal Reserve System, at the time or purchase, the short- term paper is rated, at a minimum, "P-I" by Moody's Investors Services and "A-I" Standard & Poor's. Additionally, the bank shall not be listed with any recognized credit watch information service. 2. Portfolio Composition A, maximum of 30% of available funds may be directly invested in Bankers' acceptances 3. Limits on Individual Issuers A maximum bf 10% of available funds may be invested with anyone issuer. 4. Maturity Limitations The maximum length to maturity for Bankers' acceptances shall be 180 days from the date of purchase. I. State and/or Local Government Taxable and/or Tax-Exempt Debt 1. Purchase Authorization The Finance Director or management designee may invest in state and/or local govemment taxable and/or tax-exempt debt, general obligation and/or revenue bonds, rated at least "Aa" by Moody's and "AA" by Standard & Poor's for long-term debt, or rated at least "MIG-2" by Moody's and "SP-2" by Standard & Poor's for short-term debt. 2, Portfolio Composition A maximum of 20% of available funds may be invested in taxable and tax-exempt debts. 3. Maturity Limitations A maximum length to maturity for an investment in any state or local government debt security is three (3) years from the date of purchase. {OR613127;4} 23 J. Registered Investment Companies (Money Market Mutual Funds) 1. Investment Authorization The Finance Director or management designee may invest in shares in open-end and no-load fixed-income securities money market mutual funds provided such funds are registered under the Federal Investment Company Act of 1940 and invest in securities permitted by this policy. 2. Portfolio Composition A maximum of 100% of available funds may be invested in money market mutual funds excluding one (1) business day overnight sweep agreements. 3. Limits ofIndividual Issuers A maximum of 25% of available funds may be invested with anyone money market mutual fund, 4. Rating Requirements The money market mutual funds shall be rated "AAm" or "AAm-G" or better by Standard & Poor's, or the equivalent by another national rating agency. 5. Due Diligence Requirements A thorough investigation of any money market mutual market fund is required prior to investing, and on a continual basis. There shall be a questionnaire developed by the Finance Director or management designee that will contain a list of due diligence considerations that deal with the major aspects of any investment pool/fund, A current prospectus must be obtained, K, Intergovernmental Investment Pool 1. Investment Authorization The Finance Director or management designee may invest in intergovernmental investment pools that are authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Section 163,01, Florida Statutes and provided that said funds contain no derivatives, 2. Portfolio Composition A maximum of 25% of available funds may be invested in intergovernmental investment pools, Investment in any derivative products or the use of reverse repurchase agreements is specifically prohibited by the investment policy, The City's investment policy may be amended from time to time. RATINGS The Series 2003 Bonds are expected to be rated AAA by Standard & Poor's Credit Market Services, a Diisionof the McGraw-Hill Companies ("S&P") and by Fitch, Inc, ("Fitch") with the understanding that, upon delivery of the Series 2003 Bonds a financial guaranty insurance policy will be issued by the Insurer. has issued an underlying rating of_ for the Series 2003 Bonds. Such ratings reflect only the views of such organization and any desired explanation of the significance of such ratings should be obtained from at the following addresses: S&P, 55 Water Street, New York, New York 10041; and Fitch, One State Street Plaza, New York, New York 10004, Generally, a rating agency bases its rating on the information and materials furnished {OR613127;4 } 24 to it and on investigations, studies and assumptions. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Series 2003 Bonds. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of the arithmetic computations showing the adequacy of the maturing principal and interest on the securities to be acquired with a portion of the proceeds of the Series 2003 Bonds, together with other funds available described under "PLAN OF REFUNDING," have been verified by Public Financial Management, Inc., the City's financial advisor. FINANCIAL STATEMENTS The City's general purpose financial statements for its fiscal year ended September 30, 2002 appearing in Appendix "B" hereto have been audited by McDirmit Davis Puckett & Co" LLC, independent auditors, as stated in their report appearing therein. The auditors have consented to the inclusion of their report in Appendix B. CONTINUING DISCLOSURE The City has agreed and undertaken for the benefit of Series 2003 Bondholders and in order to assist the Underwriters in complying with the continuing disclosure requirements of Securities and Exchange Commission Rule 15c2-12 (the "Rule"), to provide certain financial information and operating data relating to the City and the Series 2003 Bonds in each year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if material. Such undertaking shall only apply so long as the Series 2003 Bonds remain outstanding under the Resolution. The Annual Report and audited fmancial statements will be filed annually by the City pursuant to the undertaking with each Nationally Recognized Municipal Securities Information Repository ("NRMSIRs") described in the Continuing Disclosure Certificate (Appendix E hereto), as well as any state information repository that is subsequently established in the State of Florida (the "SID"). The notices of material events will be filed by the City with the Municipal Securities Rulemaking board or the NRMSIRs and with the SID. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in the Appendix E. With respect to the Series 2003 Bonds, no party other than the City is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the aforementioned Rule. The City failed to timely provide its Annual Report due March 31, 2000 which it had agreed to provide in connection with the issuance of its Improvement Refunding Revenue Bonds, Series 2003. The City has now provided such Annual Report to the NRMSIRs, and has implemented procedures regarding the timely filing of annual reports. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULA nONS Section 517.051, Florida Statutes, and the regulations promulgated thereunder (the "Disclosure Act") required that the City make a full and fair disclosure of any bonds or other debt obligations that it has issued or guaranteed that are or have been in default as to principal or interest at any time after December 31, 1975 (including bonds or other debt obligations for which it has served only as a conduit issuer such as industrial development or private activity bonds issued on behalf of private businesses). The City is not and has not since December 31, 1975 been in default as to principal and interest on its bonds or other debt obligations. Although the City is not aware of any defaults with respect to bonds or other debt obligations as to which it has served only as a conduit issuer, it has not undertaken an independent review or investigation of such bonds or other obligations. The City does not believe that any information about any default would be considered material be a reasonable investor in the Series 2003 Bonds because the City was not liable to pay the principal of or interest on any such bonds except from payments made to it by the private companies on whose behalf such bonds were issued and no funds of the City were used to pay such bonds or the interest thereon, {OR613127;4} 25 ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2003 Bonds upon an event of default under the Resolution and any policy of insurance referred to herein are in many respects dependent upon judicial actions which are often subject to discretion and delay, Under existing constitutional and statutory law and judicial decisions, the remedies specified by the federal bankruptcy code, the Resolution, the Series 2003 Bonds and any policy of insurance referred to herein may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2003 Bonds (including Bond Counsel's approving opinion) will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. FORWARD-LOOKING STATEMENTS This Official Statement contains certain "forward-looking statements" concerning the City's operations, performance and financial condition, including its future economic performance, plans and objectives and the likelihood of success in developing and expanding. These statements are based upon a number of assumptions and estimates which are subject to significant uncertainties, many of which are beyond the control of the City. The words "may," "would," "could," "will," "expect," "anticipate," "believe," "intend," "plan," "estimate" and similar expressions are meant to identify these forward-looking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements. CONTINGENT FEES The City has retained Bond Counsel, the Financial Advisor and Disclosure Counsel with respect to authorization, sale, execution and delivery of the Series 2003 Bonds. Payment of certain of the fees of such professionals is contingent upon issuance of the Series 2003 Bonds. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the owners of the Series 2003 Bonds. The information contained above is neither guaranteed as to accuracy or completeness nor to be construed as a representation by the City or the Underwriters. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder is to create, under any circumstances, any implication that there has been no change in the affairs of the City from the date hereof. This Official Statement is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, as a whole or in part, for any other purpose. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. [REMAINDER OF BANK INTENTIONALLY LEFT BLANK] {OR613127;4} 26 CERTIFICATE AS TO OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized by the City Commission of the City, At the time of delivery of the Series 2003 Bonds to the Underwriters, the City will provide to the Underwriters a certificate (which may be included in a consolidated closing certificate of the City), signed by those City officials who signed this Official Statement, relating to the accuracy and completeness of certain materials in this Official Statement and to its being a [mal official statement in the judgment of the undersigned for the purposes ofSEC Rule 15c2-12(b)(3), CITY OF WINTER SPRINGS, FLORIDA By: Mayor By: City Manager {OR613127;4 } 27 APPENDIX A City of Winter Springs, Florida General Information {OR613127;4 } 28 APPENDIX B Form of the Resolution {OR613127;4} 29 APPENDIX C General Purpose Financial Statements and Independent Auditor's Report For the Fiscal Year Ended September 30,2002 {OR613127;4} 30 APPENDIX D Specimen Financial Guaranty Insurance Policy {OR613127;4} 31 APPENDIX E Form of Opinion of Bond Counsel {OR613127;4} 32 APPENDIX F Form of Continuing Disclosure Certificate {OR6I3127;4} 33 RESOLUTION NO. 2003-28 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA AMENDING AND SUPPLEMENTING RESOLUTION NO. 615 AS HERETOFORE AMENDED AND SUPPLEMENTED; FOR THE PURPOSE OF PROVIDING FOR THE REFUNDING OF ALL THE CITytS OUTSTANDING IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 1993; AUTHORIZING THE ISSUANCE BY THE CITY OF NOT EXCEEDING $9,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 2003, TO FINANCE A PART OF THE COST OF SUCH REFUNDING, TO FUND A DEPOSIT TO THE SUBACCOUNT IN THE RESERVE ACCOUNT AND PAY THE COSTS OF ISSUANCE OF THE SERIES 2003 BONDS; ACCEPTING THE INSURER'S COMMITMENT RELATING TO A FINANCIAL GUARANTY INSURANCE POLICY AND SURETY BOND WITH RESPECT TO THE SERIES 2003 BONDS; PLEDGING TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE SERIES 2003 BONDS, ON A PARITY WITH THE CITY'S OUTSTANDING IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 1999, THE FRANCHISE FEES RECEIVED BY THE CITY FROM FLORIDA POWER CORPORATION, THE PUBLIC SERVICE TAXES LEVIED BY THE CITY PURSUANT TO SECTION 166.231, FLORIDA STATUTES AND THE DISCRETIONARY COMMUNICATIONS SERVICES TAX LEVIED BY THE CITY PURSUANT TO SECTION 202.19, FLORIDA STATUTES; AMENDING THE DEFINITION OF EXCISE TAXES IN CITY RESOLUTION NO. 615 TO INCLUDE THE LOCAL COMMUNICATION SERVICES TAX; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS OF THE SERIES 2003 BONDS; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to Chapter 166, Part II, Florida Statutes Chapter 72-718, Laws of Florida, Special Acts of 1972 as amended and supplemented, being the Charter of the City of Winter Springs, Florida, the Original Instrument (as hereinafter defined) and other applicable provisions of law. SECTION 2. DEFINITIONS. When used in this Resolution, the terms defined in the Original Instrument shall have the respective meanings assigned thereto by the Original {OR6I0453;3 } Instrument and the following terms shall have the following meanings, unless the context clearly otherwise requires: "Act" shall mean Chapter 166, Part II, Florida Statutes, as amended and supplemented, Chapter 72-718, Laws of Florida, Special Act of 1972 as amended and supplemented, and other applicable provisions of law. "Agreement" or "Escrow Deposit Agreement" shall mean that certain agreement by and between the Issuer and a bank or trust company to be selected and named by the Issuer prior to the sale of the Series 2003 Bonds (as hereinafter defined) for the purpose of providing for the payment ofthe Prior Bonds (as hereinafter defined). "Ambac Assurance" shall mean Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance company. "Continuing Disclosure Certificate" shall mean that certain certificate related to the Series 2003 Bonds to be executed by the Issuer prior to the time the Issuer delivers the Series 2003 Bonds to the participating underwriter or. underwriters, as it may be amended from time to time in accordance with the terms thereof, whereby the Issuer undertakes to comply with the secondary disclosure requirements of the Rule. "Excise Taxes" shall have the meaning ascribed to such term pursuant to Section 26 hereof. "Financial Guaranty Insurance Policy" shall mean the financial guaranty insurance policy issued by Ambac Assurance insuring the payment when due of the principal of and interest on the Series 2003 Bonds as provided therein. "Investment Securities" shall mean in regard to investments pursuant to this Resolution, any investment permitted under applicable State and federal law including units of participation in the Local Government Surplus Funds Trust Fund established pursuant to Part IV, Chapter 218, -Florida Statutes and A. (1) Cash (insured at all times by the Federal Deposit Insurance Corporation), (2) Direct obligations of (including obligations issued or held in book entry form on the books ofthe Department ofthe Treasury ofthe United States of America) or (3) Senior debt obligations of other Government Sponsored Agencies approved by Ambac Assurance. The above also constitute "Federal Securities" in regard to any defeasance of the Series 2003 Bonds. B. (1) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: {OR610453;3 } 2 - Export-Import Bank - Rural Economic Community Development Administration - U.S. Maritime Administration - Small Business Administration - U.S. Department of Housing & Urban Development (PHAs) - Federal Housing Administration - Federal Financing Bank (2) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: - Senior debt obligation issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC). - Obligations of the Resolution Funding Corporation (REFCORP) - Senior debt obligations of the Federal Home Loan Bank System - Senior debt obligations of other Government Sponsored Agencies approved by Ambac Assurance. (3) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P-l" by Moody's and "A-I" or "A-l+" by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (4) Commercial paper which is rated at the time of purchase in the single highest classification, "P-l" by Moody's and "A-l+" by S&P and which matures not more than 270 calendar days after the date of purchase; (5) better by S&P; Investments in a money market fund rated "AAAm" or "AAAm-G" or (6) Pre-refunded Municipal Obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (A) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's or S&P or any successors thereto; or (B) (i) which are fully secured as to principal and a interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph A(2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable {OR610453;3 } 3 instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate. (7) Municipal obligations rated "AaaJAAA" or general obligations of State with a rating of "A2/ A" or higher by both Moody's and S&P. (8) Investment agreements approved III writing by Ambac Assurance (supported by appropriate opinions of counsel); and (9) Other forms of investments (including repurchase agreements) approved in writing by Ambac Assurance. C. The value ofthe above investments shall be determined as follows: a) For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued at fair market value. The Registrar shall determine the fair market value based on accepted industry standards and from accepted industry providers. Accepted industry providers shall include but tare not limited to pricing services provided by Financial Times Interactive Data Corporation, Merrill Lynch, Salomon Smith Barney, Bear Stearns, or Lehman Brothers. b) As to certificates of deposit and bankers' acceptances: the face amount thereof, plus accrued interest thereon; and c) As to any investment not specified above: the value thereof established by prior agreement among the Issuer, the Registrar, and Ambac Assurance. "Original Instrument" shall mean Resolution No. 615 adopted by the City Commission of the City on May 1, 1989, as heretofore amended and supplemented. "Parity Obligations" shall mean the Issuer's outstanding Improvement Refunding Revenue Bonds, Series 1999. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. "Prior Bonds" shall mean the Outstanding bonds of the City of Winter Springs, Florida, Improvement Refunding Revenue Bonds, Series 1993. "Resolution" shall mean the Original Instrument as amended and supplemented including the amendments and supplements made by the Resolution and any resolution supplementing or amending the Resolution. "this Resolution" shall mean this instrument, as the same may from time to time be amended, modified or supplemented. {OR610453;3 } 4 "Rule" shall mean Rule 15c2-12 of the United States Securities and Exchange Commission, as amended. "Series 2003 Bonds" shall mean the City of Winter Springs, Florida Improvement Refunding Revenue Bonds, Series 2003 authorized to be issued pursuant to Section 7 of this Resolution. "State" shall mean the State of Florida. "Surety Bond" shall mean the surety bond issued by Ambac Assurance guaranteeing certain payments into the subaccount within the Reserve Account created with respect to the Series 2003 Bonds as provided therein and subject to the limitations set forth therein. "Local Communication Services Tax" shall mean the discretionary communication services tax levied by the City pursuant to Section 202.19, Florida Statutes and City Ordinance No. 2001-42 as amended and supplemented from time to time. The terms "herein," "hereunder," "hereby," "hereto," "hereof and any similar terms shall refer to this Resolution; the term heretofore shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. Words importing the masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa. SECTION 3. FINDINGS. It is hereby ascertained, determined and declared that: (A) The Issuer has previously issued the Refunded Bonds of which the sum of ) $8,405,000 principal amount is currently outstanding and unpaid. (B) The Issuer has heretofore issued and has presently outstanding and unpaid the Prior Bonds. The Issuer deems it necessary, desirable and in the best financial interest of the Issuer that the Prior Bonds be refunded in order to effectuate interest cost savings and a reduction in the debt service secured by the Excise Taxes. Simultaneously with the issuance of the Series 2003 Bonds, a sufficient portion of the proceeds of the Series 2003 Bonds and other available funds will be paid by the Issuer to the Escrow Holder for deposit by the Escrow Holder (as defined in the Agreement) into the Escrow Account established pursuant to the Escrow Deposit Agreement, to effectuate the refunding and defeasance of the Prior Bonds by providing for the payment of the principal of, premium, if any, and interest on the Prior Bonds as provided in the Escrow Deposit Agreement. (C) The Issuer deems it necessary, desirable and in the best interest of the Issuer that the Excise Taxes be pledged to the payment of the principal of and interest on the Series 2003 Bonds. Following the issuance of the Series 2003 Bonds, no part of the Excise Taxes are pledged or encumbered in any manner except as security for the Series 2003 Bonds and the Parity Obligations and the Original Instrument, in Section 18(H) thereof as amended, provides for the issuance of Additional Parity Obligations payable from the Excise Taxes on a parity with the Parity Obligations under the terms, limitations and conditions provided therein. The Issuer will issue the Series 2003 Bonds as Additional Parity Obligations within the authorization contained in Section 18(H) ofthe Original Instrument as amended. The Series 2003 Bonds shall be payable {OR610453;3} 5 on a parity and rank equally as to lien on and source and security for payment from the Excise Taxes, and in all other respects, with the Parity Obligations. (D) The principal of and interest and redemption premium on the Series 2003 Bonds and all reserve and other payments shall be payable solely from the Excise Taxes. The Issuer shall never be required to levy ad valorem taxes on any real or personal property therein to pay the principal of and interest on the Series 2003 Bonds herein authorized or to make any other payments provided for herein. The Series 2003 Bonds shall not constitute a lien upon any properties owned by or located within the boundaries of the Issuer or upon any property other than the Excise Taxes. (E) The Issuer has received from Ambac Assurance commitments to provide the Financial Guaranty Insurance Policy and Surety Bond with respect to the Series 2003 Bonds, a copy of such are attached hereto as Exhibit A; and it is in the best financial interest of the Issuer that the Issuer accept said commitments. SECTION4. AUTHORIZATION OF REFUNDING OF PRIOR BONDS. There is hereby authorized the refunding of the Prior Bonds as provided in the Resolution. SECTION 5. THIS RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of any or all of the Series 2003 Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be deemed to be and shall constitute a contract between the Issuer and the Owners from time to time of the Series 2003 Bonds and shall be a part of any contract of bond insurance that pertains to the Series 2003 Bonds. The pledge made in this Resolution and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Owners of any and all of the Series 2003 Bonds and for the benefit, protection and security of any insurer insuring the Series 2003 Bonds. All of the Series 2003 Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Series 2003 Bonds over any other thereof except as expressly provided in or pursuant to this Resolution. SECTION 6. ACCEPTANCE OF INSURER'S COMMITMENTS. The Issuer hereby accepts the Insurer's commitments to provide the Financial Guaranty Insurance Policy and the Surety Bond with respect to the Series 2003 Bonds; and the Mayor, the Clerk and/or the City Manager of the Issuer are hereby authorized to execute and deliver on behalf of the Issuer appropriate evidence of such acceptance. SECTION 7. AUTHORIZATION OF SERIES 2003 BONDS. Subject and pursuant to the provisions hereof, obligations of the Issuer to be known as "Improvement Refunding Revenue Bonds, Series 2003," are authorized to be issued in the aggregate principal amount of not exceeding $9,000,000, which may mature at higher Accreted Values to include the maturity amount of Capital Appreciation Bonds. SECTION 8. DESCRIPTION OF SERIES 2003 BONDS. The Series 2003 Bonds shall be issued in fully registered form; may be Capital Appreciation Bonds or Current Interest Bonds; shall be dated; shall be numbered consecutively from one upward in order of Maturity {OR61 0453;3} 6 preceded by the letter "R" or such other lettering as the Issuer shall approve; shall be in the denomination of $5,000 each, or integral multiples thereof for Current Interest Bonds or in $5,000 maturity amounts for the Capital Appreciation Bonds or in $5,000 multiples thereof, or such other denominations as shall be approved by the Issuer in a supplemental resolution prior to the delivery of the Series 2003 Bonds; shall bear interest at such rate or rates not exceeding the maximum rate allowed by State law, the actual rate or rates to be approved by the governing body of the Issuer prior to or upon the sale of the Series 2003 Bonds; such interest to be payable semiannually at such times as are fixed by supplemental resolution of the Issuer if Current Interest Bonds and shall mature annually on such date in such years (not exceeding 30 years from the date of issuance) and in such amounts as will be fixed by supplemental resolution of the Issuer prior to or upon the sale of the Series 2003 Bonds; and may be issued with variable, adjustable, convertible or other rates and with original issue discounts; all as the Issuer shall provide herein or hereafter by supplemental resolution. Each Current Interest Bond shall bear interest from the interest date next preceding the date on which it is authenticated, unless authenticated on an interest payment date, in which case it shall bear interest from such interest payment date, or, unless authenticated prior to the first interest payment date, in which case it shall bear interest from its date; provided, however, that if at the time of authentication payment of any interest which is due and payable has not been made, such Current Interest Bond shall bear interest from the date to which interest shall have been paid. The Capital Appreciation Bonds shall bear interest only at maturity or upon redemption prior to maturity in the amount determined by reference to the Accreted Value. The principal of, the Accreted Value, the interest and redemption premium, if any, on the Series 2003 Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The interest on the Current Interest Bonds shall be payable by the Paying Agent on each interest payment date to the person appearing on the registration books of the Issuer hereinafter provided for as the registered Owner thereof on the 15th day of the calendar month immediately preceding the applicable interest payment date, by check or draft mailed to such registered Owner at his address as it appears on such registration books or by wire transfer to Owners of $1,000,000 or more in principal amount of the Series 2003 Bonds. Payment of the principal of all Current Interest Bonds and the Accreted Value with respect to the Capital Appreciation Bonds shall be made upon the presentation and surrender of such Series 2003 Bonds as the same shall become due and payable. Notwithstanding any other provisions of this section, the Issuer may, at its option, prior to the date of issuance of the Series 2003 Bonds, elect to use an immobilization system or book- entry system with respect to issuance of such Series 2003 Bonds. As long as any Series 2003 Bonds are outstanding in book-entry form the provisions of this Resolution inconsistent with such system of book-entry registration shall not be applicable to such Series 2003 Bonds. SECTION 9. EXECUTION OF SERIES 2003 BONDS. The Series 2003 Bonds shall be signed by, or bear the facsimile signature of the Mayor or Deputy Mayor of the Issuer, and {OR610453;3} 7 shall be attested by, or bear the facsimile signature of, the Clerk or any deputy or assistant clerk, and a facsimile of the official seal of the Issuer shall be imprinted on the Series 2003 Bonds. In case any officer whose signature or a facsimile of whose signature shall appear on any Series 2003 Bonds shall cease to be such officer before the delivery of such Series 2003 Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he has remained in office until such delivery. Any Series 2003 Bond may bear the facsimile signature of or may be signed by such persons who, at the actual time of the execution of such Series 2003 Bond, shall be the proper officers to sign such Series 2003 Bonds although, at the date of such Series 2003 Bond, such persons may not have been such officers. SECTION 10. AUTHENTICATION OF SERIES 2003 BONDS. Only such of the Series 2003 Bonds as shall have endorsed thereon a certificate of authentication substantially in the form hereinbelow set forth, duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Resolution. No Series 2003 Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Registrar, and such certificate of the Registrar upon any such Series 2003 Bond shall be conclusive evidence that such Series 2003 Bond has been duly authenticated and delivered under this Resolution. The Registrar's certificate of authentication on any Series 2003 Bond shall be deemed to have been duly executed if signed by an authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Series 2003 Bonds that may be issued hereunder at anyone time. SECTION 11. EXCHANGE OF SERIES 2003 BONDS. Any Series 2003 Bonds, upon surrender thereof at the principal corporate trust office of the Registrar, together with an assignment duly executed by the Bondholder or his attorney or legal representative in such form as shall be satisfactory to the Registrar, may, at the option of the Owner, be exchanged for an aggregate principal amount or Accreted Value of Series 2003 Bonds equal to the principal amount or Accreted Value of the Series 2003 Bond or Series 2003 Bonds so surrendered. The Registrar shall make provision for the exchange of Series 2003 Bonds at the principal corporate trust office of the Registrar. The Issuer and Registrar shall not be obligated to make any exchange of Series 2003 Bonds during the fifteen (15). days next preceding an interest payment date or in the case of any proposed redemption of Series 2003 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2003 Bonds. SECTION 12. NEGOTIABILITY, REGISTRATION AND TRANSFER OF SERIES 2003 BONDS. The Registrar shall keep books for the registration of and for the registration of transfers of Series 2003 Bonds as provided in this Resolution. The transfer of any Series 2003 Bonds may be registered only upon such books and only upon surrender thereof to the Registrar together with an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be satisfactory to the Registrar. Upon any such registration of transfer, the Issuer shall execute and the Registrar shall authenticate and deliver in exchange for such Series 2003 Bond, a new Series 2003 Bond or Series 2003 Bonds registered in the name of the transferee, and in an aggregate principal amount equal to the principal amount of such Series 2003 Bond or Series 2003 Bonds so surrendered. The Issuer and Registrar shall not be obligated to make any transfer of Series 2003 Bonds during the fifteen (15) days next preceding an interest {OR610453;3} 8 payment date or in the case of any proposed redemption of Series 2003 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2003 Bonds. In all cases in which Series 2003 Bonds shall be exchanged, the Issuer shall execute and the Registrar shall authenticate and deliver, at the earliest practicable time, a new Series 2003 Bond or Series 2003 Bonds of the same type (e.g., Current Interest Bonds will be exchanged for Current Interest Bonds and Capital Appreciation Bonds will be exchanged for Capital Appreciation Bonds) in accordance with the provisions oftms Resolution. All Series 2003 Bonds surrendered in any such exchange or registration of transfer shall forthwith be canceled by the Registrar. The Issuer or the Registrar may make a charge for every such exchange or registration of transfer of Series 2003 Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to any Owner for the privilege of exchanging or registering the transfer of Series 2003 Bonds under the provisions of this Resolution. SECTION 13. OWNERSHIP OF SERIES 2003 BONDS. The person in whose name any Series 2003 Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal or redemption price of any such Series 2003 Bond, and the interest on any such Series 2003 Bonds shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid .and effectual to satisfy and discharge the liability upon such Series 2003 Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. SECTION 14. SERIES 2003 BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Series 2003 Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion cause to be executed, and the Registrar shall authenticate and deliver, a new Series 2003 Bond of like date and tenor as the Series 2003 Bond so mutilated, destroyed, stolen or lost (e.g., Current Interest Bonds shall be issued in exchange for Current Interest Bonds and Capital Appreciation Bonds shall be issued in exchange for Capital Appreciation Bonds) in exchange and substitution for such mutilated Series 2003 Bond upon surrender and cancellation of such mutilated Series 2003 Bond or in lieu of and substitution for the Series 2003 Bond destroyed, stolen or lost, and upon the Owner furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with, such other reasonable regulations and conditions as the Issuer and the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Series 2003 Bonds so surrendered shall be canceled by the Issuer. If any of the Series 2003 Bonds shall have matured or be about to mature, instead of issuing a substitute Series 2003 Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Series 2003 Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Series 2003 Bonds issued pursuant to this Section shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Series 2003 Bonds be at any time found by anyone, and such duplicate Series 2003 Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Series 2003 Bonds issued hereunder. {OR610453;3 } 9 SECTION 15. PROVISIONS FOR REDEMPTION. The Series 2003 Bonds shall be subject to redemption prior to their maturity, at such times and in such manner as shall be fixed by supplemental resolution of the Issuer prior to or at the time of sale of the Series 2003 Bonds. Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Owners of Series 2003 Bonds to be redeemed at their addresses as they appear on the registration books hereinbefore provided for, but failure to mail such notice to one or more Owners of Series 2003 Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 2003 Bonds to which notice was duly mailed hereunder. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, if less than all of the Series 2003 Bonds of one maturity are to be called, the distinctive numbers of such Series 2003 Bonds to be redeemed and in the case of Series 2003 Bonds to be redeemed in part only, the portion of the principal amount or Accreted Value thereof to be redeemed. Any notice of optional redemption, other than with respect to an advance refunding, shall be circulated only if sufficient funds have been deposited in the Debt Service Fund to pay the redemption price of the Series 2003 Bonds to be redeemed. Official notice of redemption having been given as aforesaid, the Series 2003 Bonds or portions of Series 2003 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Series 2003 Bonds or portions of Series 2003 Bonds shall cease to bear interest. Upon surrender of such Series 2003 Bonds for redemption in accordance with said notice, such Series 2003 Bonds shall be paid by the Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Series 2003 Bond, there shall be prepared for the Owner a new Series 2003 Bond or Series 2003 Bonds of the same maturity in the amount of the unpaid principal of such partially redeemed Series 2003 Bond. All Series 2003 Bonds which have been redeemed shall be canceled and shall not be reissued. In addition to the foregoing notice, further notice shall be given by the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. (A) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Series 2003 Bonds being redeemed; (ii) the date of issue of the Series 2003 Bonds as originally issued; (iii) the rate of interest borne by each Series 2003 Bond being redeemed: (iv) the maturity date of each Series 2003 Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Series 2003 Bonds being redeemed. (B) Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types {OR610453;3} 10 similar to the type of which the Series 2003 Bonds consist and to one or more national information services that disseminates notices of redemption of obligations such as the Series 2003 Bonds. SECTION 16. FORM OF SERIES 2003 BONDS. The text of the Series 2003 Bonds, together with the certificate of authentication to be endorsed therein, shall be in substantially the following form, with such omissions, insertions and variations as may be necessary, desirable, authorized or permitted by this Resolution, or as may be necessary if the Series 2003 Bonds or a portion thereof are issued as Capital Appreciation Bonds, or as may be necessary to comply with applicable laws, rules and regulations of the United States and of the State in effect upon the issuance thereof. {OR610453;3 } 11 [FORM OF SERIES 2003 BOND] Financial Guaranty Insurance Policy No. _ (the "Policy") with respect to payments due for principal of and interest on this Bond has been issued by Ambac Assurance Corporation ("Ambac Assurance"). The Policy has been delivered to The Bank of New York, New York, New York, as the Insurance Trustee under said Policy and will be held by such Insurance Trustee or any successor insurance trustee. The Policy is on file and available for inspection at the principal office of the Insurance Trustee and a copy thereof may be secured from Ambac Assurance or the Insurance Trustee. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this Bond acknowledges and consents to the subrogation rights of Ambac Assurance as more fully set forth in the Policy. No.R- $ UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF SEMINOLE CITY OF WINTER SPRINGS IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 2003 CUSIP: MATURITY DATE: INTEREST RATE: DATED DATE: % Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS that the City of Winter Springs, Florida (hereinafter called the "Issuer") for value received, hereby promises to pay to the order of the Registered Owner identified above or registered assigns, as herein provided, on the Maturity Date . identified above, upon the presentation and surrender hereof at the office of , Florida, solely from the revenues hereinafter mentioned, the Principal Amount identified above in any coin or currency of the United States of America which on the date of payment thereof is legal tender for the payment of public and private debts, and to pay, solely from said sources, to the Registered Owner hereof by wire transfer or check transmitted to the Registered Owner at his address as it appears on the Bond registration books of the Issuer as it appears on the 15th day of the calendar month preceding the applicable interest payment date, interest on said Principal Amount at the Interest Rate per annum identified above on each April 1 and October 1 commencing October I, 2003 from the interest payment date next preceding the date of registration and authentication of this Bond, unless this Bond is registered and authenticated as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless this Bond is registered and authenticated prior to October 1, 2003, in which event this Bond shall bear interest from ,2003. {OR610453;3} 12 The Bonds of this issue [shall not be) (shall be) subject to redemption prior to their maturity at the option of the Issuer. (Insert Optional or Mandatory Redemption Provisions) Notice of such redemption shall be given in the manner required by the Resolution described below. This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $ of like date, tenor and effect, except as to number, principal amount, maturity, redemption provisions and interest rate, issued to refund certain outstanding debt of the Issuer all in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, the Charter of the Issuer, and Resolution No. 615 duly adopted by the Issuer on May 1, 1989, as amended supplemented and particularly as supplemented by Resolution No. _ duly adopted by the Issuer on , 2003 as supplemented (hereinafter collectively called the "Resolution") and is subject to all the terms and conditions of such Resolution. All capitalized undefined terms used herein shall have the meaning set forth in the Resolution. This Bond and the interest hereon are payable solely from and secured by a lien upon and a pledge of the proceeds of the Public Service Tax imposed by the Issuer on the purchase of certain utilities services within the corporate limits of the Issuer, under the authority of Section 166.231, Florida Statutes, and pursuant to ordinances of the City and the proceeds of the Franchise Fees to be paid for a period of thirty (30) years from April I, 1984, by the Florida Power Corporation, pursuant to an ordinance enacted by the Issuer on March 27, 1984 (such tax and fees, above described, are herein collectively referred to as "Excise Taxes") in the manner provided in the Resolution. It is provided in the Resolution that the lien of this Bond on the Excise Taxes is on a parity with the lien thereon of the Issuer's outstanding Improvement Refunding Revenue Bonds, Series 1999. This Bond does not constitute a general indebtedness of the Issuer within the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the Owner of this Bond that such Bondowner shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer or taxation of any real or personal property therein for the payment of the principal of and interest on this Bond or the making of any debt service fund, reserve or other payments provided for in the Resolution. It is further agreed between the Issuer and the Owner of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien or on any property of or in the Issuer, but shall constitute a lien only on the Excise Taxes all in the manner provided in the Resolution. Neither the members of the City Commission of the Issuer nor any person executing this bond shall be liable personally hereon or be subject liability or accountability by reason of the issuance hereof. {OR61 0453;3} 13 It is certified that this Bond is authorized by and is issued in conformity with the requirements of the Constitution and Statutes of the State of Florida. This Bond is and has all the qualities and incidents of a negotiable instrument under Article 8 of the Uniform Commercial Code, the State of Florida, Chapter 678, Florida Statutes but may be transferred by the Bondowner hereof in person or by his attorney or legal representative at the principal corporate trust office of the Registrar but only in the manner and subject to the conditions provided in the Resolution and upon surrender and cancellation of this Bond. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Resolution until it shall have been authenticated by the execution by the Registrar of the certificate of authentication endorsed hereon. IN WITNESS WHEREOF, the City of Winter Springs, Florida, has issued this Bond and has caused the same to be signed by its Mayor, and countersigned and attested to by its Clerk (the signatures of the Mayor, and the Clerk being authorized to be facsimiles of such officers' signatures), and its seal or facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the day of ,2003. CITY OF WINTER SPRINGS, FLORIDA (SEAL) ATTESTED AND COUNTERSIGNED: Mayor Clerk {OR610453;3} 14 CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds issued under the provisions of the within mentioned Resolution. , Registrar, as Authenticating Agent Date of Authentication: By: Authorized Officer {OR610453;3 } 15 ASSIGNMENT AND TRANSFER For value received the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or other identifying number of transferee) the attached bond of the City of Winter Springs, Florida, and does hereby constitute and appoint , attorney, to transfer the said Bond on the books kept for Registration thereof, with full power of substitution in the premises. Date Signature Guaranteed by (member firm of the New York Stock Exchange or a commercial bank or a trust company.) NOTICE: No transfer will be registered and no new Bonds will be issued in the name of the Transferee, unless the signature to this assignment corresponds with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. By: Title: (END OF FORM OF SERIES 2003 Bond] {OR610453;3} 16 SECTION 17. APPLICATION OF SERIES 2003 Bond PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of the Series 2003 Bonds shall be applied by the Issuer simultaneously with the delivery of such Series 2003 Bonds to the purchaser thereof, as follows: (A) The accrued interest shall be deposited in the Interest Account and shall be used only for the purpose of paying interest becoming due on the Series 2003 Bonds on October 1, 2003. (B) The Issuer shall next deposit the Surety Bond in an amount equal to the Reserve Requirement for the Series 2003 Bonds into the subaccount in the Reserve Account hereby created for the benefit of the Series 2003 Bonds. (C) A sufficient amount of the Series 2003 Bond proceeds shall be applied to the payment of the premiums of the Financial Guaranty Insurance Policy and Security Bond and Surety Bond applicable to the Series 2003 Bonds and to the payment of costs and expenses relating to the issuance of the Series 2003 Bonds. (D) Such sum which, together with the other funds described in the Agreement as will be sufficient to pay, as of any date of calculation, principal and interest and any redemption premium on the Prior Bonds at the time and in the manner provided in the Agreement, including expenses incurred by the Issuer in connection with the payment of such Prior Bonds shall be deposited to the escrow fund created pursuant to the Agreement. Such funds shall be kept separate and apart from all other funds of the Issuer and the moneys on deposit therein shall be withdrawn, used and applied by the Escrow Holder solely for the purposes set forth herein and in the Agreement. Simultaneously with the delivery of the Series 2003 Bonds to the original purchasers thereof, the Issuer shall enter into the Agreement, the form of which will be approved by the Issuer in a supplemental Resolution adopted prior to the issuance of the Series 2003 Bonds. At the time of execution of the Agreement, the Issuer shall furnish to the Escrow Holder appropriate documentation to demonstrate that the sums being deposited and the investments to be made will be sufficient to defease the Prior Bonds. (E) The balance of any proceeds of the Series 2003 Bonds shall be applied to any lawful purpose of the Issuer SECTION 18. SPECIAL OBLIGATIONS OF ISSUER. The Series 2003 Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of the Constitution of Florida, but shall be payable solely from and secured by a lien upon and a pledge of the Excise Taxes on a parity with the lien thereon of the Parity Obligations as herein provided and as provided in the Original Investment. No Holder or Holders of any Series 2003 Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form of any real or personal property therein, or to compel the Issuer to pay such principal and interest from any other funds of the Issuer. SECTION 19. SECURITY FOR SERIES 2003 BONDS. The payment of the principal of or redemption price, if applicable, and interest on the Series 2003 Bonds shall be secured {OR610453;3} 17 forthwith equally and ratably by a pledge of and prior lien upon the Excise Taxes. The Excise Taxes shall be subject to the lien of this pledge immediately upon the issuance and delivery of the Series 2003 Bonds, without any physical delivery by the Issuer of the Excise Taxes or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind against the Issuer, in tort, contract or otherwise. The Issuer does hereby irrevocably pledge the Excise Taxes to the payment of the principal of or redemption price, if applicable, and interest on the Series 2003 Bonds in the manner provided in this Resolution and the Original Instrument. The Series 2003 Bonds are payable from the Excise Taxes on a parity, equally and ratably, with the Parity Obligations. SECTION 20. ADDITIONAL SECURITY. Anything herein to the contrary notwithstanding, however, the Issuer may cause the Series 2003 Bonds to be payable from and secured by a the Financial Guaranty Insurance Policy and/or the Surety Bond not applicable to anyone or more other Series of Bonds, as shall be provided by resolution of the City Commission of the Issuer, in addition to the security of the Excise Taxes provided herein. SECTION 21. APPLICATION OF PROVISIONS OF ORIGINAL INSTRUMENT. The Series 2003 Bonds shall for all purposes be considered to be Additional Parity Obligations issued under the authority of Section 18(H) of the Original Instrument as amended and shall be . entitled to all the protection and security provided in and by the Original Instrument for Additional Parity Obligations, and the Series 2003 Bonds shall be in all respects entitled to the same security, rights and privileges enjoyed by the Parity Obligations. The debt service on the Series 2003 Bonds shall be payable from the Debt Service Fund established by the Original Instrument on a parity with the Parity Obligations, and deposits shall be made into the Debt service Fund by the Issuer in amounts fully sufficient to pay the debt service on the Series 2003 Bonds and on the Parity Obligations as such debt service become due. Notwithstanding the immediately preceding sentence, the Surety Bond shall secure only the Series 2003 Bonds. . SECTION 22. FINANCIAL GUARANTY INSURANCE POLICY AND SURETY BOND. Notwithstanding any provision to he contrary contained herein, the following provisions shall apply so long as the Financial Guaranty Insurance Policy and/or Surety Bond with respect to the Series 2003 Bonds shall be in full force and effect: A. Consent of Ambac Assurance Any provision of this Resolution expressly recognizing or granting rights in or to Ambac Assurance may not be amended in any manner which affects the rights of Ambac Assurance hereunder without the prior written consent of Ambac Assurance. Ambac Assurance reserves the right to charge the Issuer a fee for any consent or amendment to the Resolution while the Financial Guaranty Insurance Policy is outstanding. B. Consent of Ambac Assurance in Addition to Holder Consent Unless otherwise provided in the Resolution, Ambac Assurance' consent shall be required in addition to Holder consent, when required, for the following purposes: (i) execution and delivery of any supplemental Resolution or any amendment, supplement or change to {OR610453;3} 18 or modification of the Resolution; (ii) removal of the Registrar or Paying Agent and selection and appointment of any successor registrar or paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires Holder consent. C. Consent of Ambac Assurance in the Event of Insolvency Any reorganization or liquidation plan with respect to the Issuer must be acceptable to Ambac Assurance. In the event of any reorganization or liquidation, Ambac Assurance shall have the right to vote on behalf of all Holders who hold Ambac Assurance-insured Series 2003 Bonds absent a default by Ambac Assurance under the Financial Guaranty Insurance Policy insuring such Series 2003 Bonds. D. Consent of Ambac Assurance Upon Default Anything in this Resolution to the contrary notwithstanding, upon the occurrence and continuance of an event of default as defined in the Resolution, Ambac Assurance shall be entitled to control and direct the enforcement of all rights and remedies granted to the Holders under the Resolution, including, without limitation: (i) the right to accelerate the principal of the Series 2003 Bonds, and (ii) the right to annul any declaration of acceleration, and Ambac Assurance shall also be entitled to approve all waivers of events of default. E. Acceleration Rights Upon the occurrence of an event of default, the Registrar may, with the consent of Ambac Assurance, and shall, at the direction of Ambac Assurance or 25% of the Holders with the consent of Ambac Assurance, by written notice to the Issuer and Ambac Assurance, declare the principal of the Series 2003 Bonds to be immediately due and payable, whereupon that portion of the principal of the Series 2003 Bonds thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in this Resolution or in the Series 2003 Bonds to the contrary notwithstanding. F. Notices and Information ot be Given to Ambac Assurance (1) While the Financial Guaranty Insurance Policy is in effect, the Issuer shall furnish to Ambac Assurance, upon request, the following: (a) a copy of any financial statement, audit and/or annual report of the Issuer. (b) such additional information it may reasonably request. Upon request, such information shall be delivered at the Issuer's expense to the attention of the Surveillance Department, unless otherwise indicated. (2) a copy of any notice to be given to the registered owners of the Series 2003 Bonds, including, without limitation, notice of any redemption of or defeasance of {OR610453;3} 19 Series 2003 Bonds, and any certificate rendered pursuant to this Resolution relating to the security for the Series 2003 Bonds. (3) To the extent that the Issuer has entered into a continuing disclosure agreement with respect to the Series 2003 Bonds, Ambac Assurance shall be included as party to be notified. The following information shall be provided to the attention of the General Counsel office and Ambac Assurance: . 1. The Issuer shall notify Ambac Assurance of any failure of the Issuer to provide relevant notices, certificates, etc. 2. Notwithstanding any other proVISIOn of this Resolution, the Issuer shall immediately notify Ambac Assurance if at any time there are insufficient moneys to make any payments of principal and/or interest as required and immediately upon the occurrence of any event of default hereunder. The Issuer will permit Ambac Assurance to discuss the affairs, finances and accounts of the Issuer or any information Ambac Assurance may reasonably request regarding the security for the Series 2003 Bonds with appropriate officers of the Issuer. The Issuer will permit Ambac Assurance to have access to and to make copies of all books and records relating to the Series 2003 Bonds at any reasonable time. Ambac Assurance shall have the right to direct an accounting at the Issuer's expense, and the Issuer's failure to comply with such direction within thirty (30) days after receipt of written notice of the direction from Ambac Assurance shall be deemed a default hereunder; provided, however, that if compliance cannot occur within such period, then such period will be extended so long as compliance is begun within such period and diligently pursued, but only if such extension would not materially adversely affect the interests of any registered owner of the Series 2003 Bonds. G. Payment Procedure Pursuant to the Financial Guaranty Insurance Policy As long as the Financial Guaranty Insurance Policy shall be in full force and effect, the Issuer and any Paying Agent agree to comply with the following provisions: (a) At least one (1) day prior to all interest payment dates the Paying Agent, will determine whether there will be sufficient funds in the funds and accounts to pay the principal of or interest on the Series 2003 Bonds on such interest payment date. If the Paying Agent, determines that there will be insufficient funds in such funds or accounts, the Paying Agent, shall so notify Ambac Assurance. Such notice shall specify the amount of the anticipated deficiency, the Series 2003 Bonds to which such deficiency is applicable and whether such Series 2003 Bonds will be deficient as to principal or interest, or both. If the Paying Agent has not so notified Ambac Assurance at least one (1) day prior to an interest payment date, Ambac Assurance will make payments of principal or interest due on the Series 2003 Bonds on or before the first (151) day next following the date on which Ambac Assurance shall have received notice of nonpayment from the Paying Agent. {OR610453;3} 20 (b) The Paying Agent, shall, after giving notice to Ambac Assurance as provided in (a) above, make available to Ambac Assurance and, at Ambac Assurance's direction, to The Bank of New York, in New York, New York, as insurance trustee for Ambac Assurance or any successor insurance trustee (the "Insurance Trustee"), the registration books of the Issuer maintained by the Paying Agent, and all records relating to the funds and accounts maintained under the Resolution. (c) The Paying Agent, shall provide Ambac Assurance and the Insurance Trustee with a list of registered owners of Series 2003 Bonds entitled to receive principal or interest payments from Ambac Assurance under the terms of the Financial Guaranty Insurance Policy, and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the registered owners of Series 2003 Bonds entitled to receive full or partial interest payments from Ambac Assurance and (ii) to pay principal upon Series 2003 Bonds surrendered to the Insurance Trustee by the registered owners of Series 2003 Bonds entitled to receive full or partial principal payments from Ambac Assurance. (d) The Paying Agent, shall, at the time it provides notice to Ambac Assurance pursuant to (a) above, notify registered owners of Series 2003 Bonds entitled to receive the payment of principal or interest thereon from Ambac Assurance (i) as to the fact of such entitlement, (ii) that Ambac Assurance will remit to them all or a part of the interest payments next coming due upon proof of Holder entitlement to interest payments and delivery to the Insurance Trustee, in form satisfactory to the Insurance Trustee, of an appropriate assignment of the registered owner's right to payment, (iii) that should they be entitled to receive full payment of principal from Ambac Assurance, they must surrender their Series 2003 Bonds (along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee to permit ownership of such Series 2003 Bonds to be registered in the name of Ambac Assurance) for payment to the Insurance Trustee, and to the Paying Agent, and (iv) that should they be entitled to receive partial payment of principal from Ambac Assurance, they must surrender their Series 2003 Bonds for payment thereon first to the Paying Agent, who shall note on such Series 2003 Bonds the portion of the principal paid by the Paying Agent, and then, along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal. (e) In the event that the Paying Agent, has notice that any payment of principal of or interest on a Series 2003 Bond which has become Due for Payment and which is made to a Holder by or on behalf of the Issuer has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance wit the final, nonappealable order of a court having competent jurisdiction, the Paying Agent, shall at the time Ambac Assurance is notified pursuant to (a) above, notify all registered owners that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from Ambac Assurance to the extent of such recovery if sufficient funds are not otherwise available, and the Paying Agent, shall furnish to Ambac Assurance its records evidencing the payment of principal of and interest on the Series 2003 Bonds which have been made by the Paying Agent, and subsequently recovered from registered owners and the dates on which such payments were made. {OR610453;3} 21 (f) In addition to those rights granted Ambac Assurance under this Resolution, Ambac Assurance shall, to the extent it makes payment of principal of or interest on Series 2003 Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Financial Guaranty Insurance Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Paying Agent shall note Ambac Assurance's rights as subrogee on the registration books of the Issuer maintained by the Paying Agent upon receipt from Ambac Assurance of proof of the payment of interest thereon to the registered owners of the Series 2003 Bond, and (ii) in the case of subrogation as to claims for past due principal, the Paying Agent, shall note Ambac Assurance's rights as subrogee on the registration books of the Issuer, upon surrender of the Series 2003 Bonds by the registered owners thereof together with proof of the payment of principal thereof. H. Paying Agent - Related Provision 1. The Paying Agent may be removed at any time, at the request of Ambac Assurance, for any breach of the trust set forth herein. 2. Ambac Assurance shall receive prior written notice of any Paying Agent resignation. 3. Every successor Paying Agent appointed pursuant to this Resolution shall be a trust company or bank in good standing located in or incorporated under the laws of the State of Florida, duly authorized to exercise trust powers and subject to examination by federal or state authority, having a reported capital and surplus of not less than $75,000,000 and acceptable to Ambac Assurance. Any successor Paying Agent, if applicable, shall not be appointed unless Ambac approves such successor in writing. 4. Notwithstanding any other provision of this Resolution, in determining whether the rights of the Holders will be adversely affected by any action taken pursuant to the terms and provisions of this Resolution, the Paying Agent shall consider the effect on the Holders as if there were no Financial Guaranty Insurance Policy. 5. Notwithstanding any other provision of this Resolution, no removal, resignation to termination of the Paying Agent shall take effect until a successor, acceptable to Ambac Assurance, shall be appointed. I. Ambac As Third Party Beneficiary To the extent that this Resolution confers upon or gives or grants to Ambac Assurance any right, remedy or claim under or by reason of this Resolution, Ambac Assurance is herby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right remedy or claim conferred, given or granted hereunder. J. Parties Interested Herein Nothing in this Resolution expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Issuer, Ambac Assurance, the Paying Agent, and the registered owners of the Series 2003 Bonds, any right, remedy or {OR610453;3} 22 claim under or by reason of this Resolution or any covenant, condition or stipulation hereof, and all covenants stipulations, promises and agreements in this Resolution contained by and on behalf of the Issuer shall be for the sole and exclusive benefit of the Issuer, Ambac Assurance, the Paying Agent, and the registered owners of the Series 2003 Bonds. K. Covenants re Article 9 Collateral At the date of issue of the Series 2003 Bonds the Issuer will have filed any required financing statements describing, and transferring possession or control over, the Excise Taxes (and for so long as any Series 2003 Bond is outstanding the Issuer will file, continue, and amend all such financing statements and transfer such possession and control) as may be necessary to establish and maintain such priority in each jurisdiction in which the Issuer is organized or such collateral may be located or that may otherwise be applicable pursuant to Uniform Commercial Code 999.301-9.306 of such jurisdiction. SECTION 23. FEDERAL INCOME TAX COVENANTS. (A) The Issuer covenants with the Holders of the Series 2003 Bonds that it shall not use the proceeds of such Series of Bonds in any manner which would cause the interest on such Series of Bonds to be or become includable in the gross income of the Holder thereof for federal income tax purposes. (B) The Issuer covenants with the Holders of the Series 2003 Bonds that neither the Issuer nor any Person under its control or direction will make any use of the proceeds of such Series 2003 Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such Series 2003 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code, and neither the Issuer nor any other Person shall do any act or fail to do any act which would cause the interest on such Series 2003 Bonds to become includable in the gross income of the Holder thereof for federal income tax purposes. (C) The Issuer hereby covenants with the Holders of the Series 2003 Bonds that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on such Series 2003 Bonds from the gross income of the Holder thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the United States Treasury pursuant to the Code. SECTION 24. DEFEASANCE. The covenants and obligations of the Issuer shall be defeased and discharged tmder terms of this Resolution as follows: (A) If the Issuer shall payor cause to be paid, or there shall otherwise be paid, to the Holders of all Series 2003 Bonds the principal and/or Accreted Value, redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein and in the Series 2003 Bonds, then the covenants, agreements and other obligations of the Issuer to the Bondholders, shall thereupon cease, terminate and become void and be discharged and satisfied. If the Issuer shall payor cause to be paid, or there shall otherwise be paid, to the Holders of any Outstanding Series 2003 Bonds the principal and/or Accreted Value, redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein, such Series 2003 Bonds shall cease to be entitled to any benefit under this {OR610453;3 } 23 Resolution, and all covenants, agreements and obligations of the Issuer to the Holders of such Series 2003 Bonds shall thereupon cease, terminate and become void and be discharged and satisfied. (B) The Series 2003 Bonds, redemption premium, if any, and interest due or to become due for the payment or redemption of which moneys shall have been set aside and shall be held in trust (through deposit by the Issuer of funds for such payment or redemption or otherwise) at the maturity or redemption date thereof shall be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section 24. Any Outstanding Series 2003 Bonds shall prior to the maturity or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section if (i) in case of said Series 2003 Bonds are to be redeemed on any date prior to their maturity, the Issuer shall have given to the escrow agent instructions accepted in writing by the escrow agent to notify Holders of Outstanding Series 2003 Bonds in the manner required herein of the redemption of such Series 2003 Bonds on said date and (ii) there shall have been deposited with the escrow agent either moneys in an amount which shall be sufficient, or Federal Securities (including any Federal Securities issued or held in book-entry form on the books of the Department of the Treasury of the United States) the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with the escrow agent at the same time, shall be sufficient, to pay when due the principal of and/or Accreted Value, or premium, if any, and interest due and to become due on said Series 2003 Bonds on or prior to the redemption date or maturity date thereof, as the case may be. Notwithstanding anything herein to the contrary, in the event that the principal and/or Accreted Value and/or interest due on the Series 2003 Bonds shall be paid by Ambac Assurance pursuant to the Financial Guaranty Insurance Policy and Security Bond, the Series 2003 Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, and the assignment and pledge of the Excise Taxes and all covenants, agreements and other obligations of the Issuer to the registered owners shall continue to exist and shall run to the benefit of Ambac Assurance, and Ambac Assurance shall be subrogated to the rights of such registered owners. SECTION 25. CONTINUING DISCLOSURE. The Issuer hereby covenants and agrees that, in order to provide for compliance with the secondary market disclosure requirements of the Rule, that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be executed by the Issuer prior to the time the Issuer delivers the Series 2003 Bonds to the participating underwriter or underwriters, as it may be amended from time to time in accordance with the terms thereof. Notwithstanding any other provision of this Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an Event of Default hereunder. However, the Continuing Disclosure Certificate shall be enforceable by the Series 2003 Bond owners in the event that the Issuer fails to cure a breach thereunder within a reasonable time after written notice from a Series 2003 Bond owner to the Issuer that a breach exists. Any rights of the Series 2003 Bond owners to enforce the provisions of the covenant shall be on behalf of all Series 2003 Bond owners and shall be limited to a right to obtain specific performance of the Issuer's obligations thereunder. {OR610453;3} 24 SECTION 26. CHANGE IN LAW. Due to a change in law which change was intended to be revenue neutral, the Local Communication Services Tax is levied by the City and the City no longer levies the Public Service Taxes or telecommunication services. In order to cure any ambiguity in the Original Instrument resulting from such change in law, the City hereby determines to amend the definition of Excise Taxes set forth in the Original Instrument as follows: "Excise Taxes" shall mean the Franchise Fees, the Public Service Taxes and the Local Communication Services Tax. SECTION 27. SEVERABILITY. If anyone or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid or shall in any manner be held to adversely affect the validity of the Series 2003 Bonds, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Resolution or of the Series 2003 Bonds issued hereunder. SECTION 28. SALE OF BONDS. The Series 2003 Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the requirements of this Resolution and other applicable provisions of law. SECTION 29. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution of a preliminary official statement in essentially the form attached hereto for the purpose of marketing the Series 2003 Bonds and delegates to the City Manager the authority to deem such Preliminary Official Statement "final" except for "permitted omissions" within the contemplation of the Rule. SECTION 30. GENERAL AUTHORITY. The members of the City Commission ofthe Issuer and the Issuer's officers, attorneys and other agents and employees are hereby authorized to perform all acts and things required of them by this Resolution or desirable or consistent with the requirements hereof for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Series 2003 Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents which shall be required by bond counsel or the initial purchasers of the Series 2003 Bonds to effectuate the sale of the Series 2003 Bonds to said initial purchasers. SECTION 31. NO PERSONAL LIABILITY. Neither the members of the City Commission of the Issuer nor any person executing the Series 2003 Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. SECTION 32. REPEAL OF INCONSISTENT INSTRUMENTS. Any Resolutions, or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. {OR610453;3 } 25 SECTION 33. EFFECTIVE DATE. The provisions of this Resolution shall take effect immediately upon its passage. ADOPTED this 9th day of June, 2003. (SEAL) CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA ATTEST: Mayor City Clerk Approved as to form: City Attorney {OR610453;3} 26 JUN-D3-ZDD3 13:38 FROM- T-756 P.DDI/DD8 F-364 ATTORNEYS AT LAW Boca Rsron Fort ullderdalc JacJo:;,on\iille MiamI Orlando TllUllhas,;ec Tlmp.1 West Pnlm Beach CitT'US Cenler. 17th Floor 255 South Onnsc Avenue Orlando. ['Ioridu 32801.3483 POSt Office Bo.'\. 231 mail Orlundo. Florida 32802.Q231 \~u,w.uke~n.com 4078437860 lei 407843 66 JOfar FAX COVER SHEET From: Michael D. Williams Date: June 3, 2003 PLEASE DELIVER PAGE(S) (including cover sheet) TO: Name: Company: Louis~ Frangoul F:lX Number: 407-327-4753 Phone Number: 407-327-5960 Please call (407) 843-7860 Ext. 2216 if you do not receive all the pages. Comments/Special Instructions Please find attached documents from Arnbac Assurance Corporation. The information contained in this transmission may be a confidential anomey-cliem communication Or may otherwise be privileged and confidential, intended only for the use of the individual or entity named above. If the reader of this rransmirral is not the intended recipient or the employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by telephone and rerum the original transmirral to llS by mail. Thank you. ClienuMarr.er No: 137050 Equirrac ID: 1221 JUN-03-2003 13:38 FROM- T-756 P.OOZ/008 F-364 Ambac Assurance Corpontion One State:: Strcet Plaza New York, N'Y 10004 212.668.0340 A member of Ambac Financial Group. Inc. COMMITMENT FOR FINANCIAl. GUARANTY INSURANCE Obligor: CITY OF WINTER SPRINGS, FLORIDA, Conunitment Number: 24847 Commitment Date: May 16,2003 Expiration Date: August 15,2003 Obligations: $8,755,000' Improvement Refunding Revenue Bonds, Series 2003, dated July I, 2003 maruring on October 1 st in the years 2004 through 2018, both inclusive. Insurance premium: 0.439% of the total principal and interest due on the Obligations (Fitch, Inc., Moody's Investors Service and Standard & Poor's Credit Markets Services assess sep:lr:lte rating fees which are payable directly to them. Each rating agency will bill. separately and all questions regarding the payment of such fees must be addressed to tbe applicable agency.) Ambac Assurance Corporation ("Ambac''), a Wisconsin Stock Insurance Corporation, hereby commits to issue a Financial Guaranty Insurance Policy (the "Policy") relating to the above- described debt obligations (the "Obligations"), substantially in. the form imprinted in this Commitment, subject to the terms and conditions contained herein or added hereto (see conditions set forth herein). To keep this Commitment in ~ffect after the expiration datc set foIth above, a request for renewal must be submitted to Arnbac prior to such expiration date. Ambac reserves the right to refuse wholly or in pan to grant a rentwal. The Financial Guaranty Insurance Policy shall be issued if the following conditions are satisfied: 1. Tht documents to be executed and delivered in connection with the issuance and sale of the Obligations shall not contain any untrue or misleading statement of a material fact and shall not fail to state a material fact necessary in order to make the information contained therein not misleading. 2. No event shall occur which-would permit any purchaser of the Obligations, otherv.ri".se required, not to be required to purchase the Obligations on the date scheduled for the issuance and delivery thereof. 3. There shall be no material change in or affecting the Obligations (including, without limitation, the security for the Obligations or the proposed debt service structure for the Obligations) or the fmancing documents or the official statement (or any similar disclosure document) to be executed and delivered in cOMection with the issuance and sale of the Obligations from the descriptions or schcdules thereof heretofore pro....ided to Ambac. 4. The Obligations shall contain no reference to Arnbac, the Policy or the: financial guaranty insurance: evidenced thereby except as may be approved by Ambac. . Subject [0 change, with .o.mb'-C's ~ppro"ill. JUN-03-2003 13:38 FROM- T-756 P.003/008 F-364 5. Ambac shall be provided \Vith: (a) Executed copies of all financing documents, the official statement (or any similar disclosure document) and the variol.lS legal opinions delivered in connection with the issuanc~ and sale of the Obligations, including, without limitation, the unqualified approving opinion of bond counsel rendered by a law firm acceptable to Ambac. The form of Bond Counsel's approving opmion shall also indicate, if applicable, that the Obligations are exempt from federal income taxation, that the Obligor must comply with certain covenants under and pursuant to the new taX law and that the Obligor has the legal power to comply with such covenants. Such opinion of bond counsel shall be addressed to Ambac or, in lieu thereof, a lener shall be provided to Ambac to the effect that Ambac may rely on such opinion as if it were addressed to Ambac. (b) Evidence of a wire transfer in an amount equal to the insurance premium at the time of the: issuance and delivery of the Obligations. 6. Unless expressly waived in whole or in pan by Ambac, the fmancing documents and the Ofticial Statement shall contain (a) the terms and provisions provided in Arnbac's STAND.'\RD PACKAGE rransmined herewith, and (b) any additional orl1 or wrinen provisions or comments submitted by Ambac. 7. Ambac shall receive a copy of any insurance policy, surety bond, guaranty or indemnification or any other policy, contract Or agreement which provides for payment of all or any portion of the debt, the costs of reconstruction, the loss of business income or in any way secures, ensures or enhances the income stream anticipated to pay the Obligations. 8. Any provisions or requirements of the Purchase Contract or Bond Purchase Agreeml:l1t referencin~ Ambac must be sent to the attention of Daniell\'!: Brackett not less than five (5) business days prior to closing. If such provisions or requirements are not received within that time, compliance may not be possible. 9. RevIew and approval by Ambac at least 5 days prior to the closing of the Escrow Agreement for the defeasance of the applicable Obligations (the "Prior Obligations'"). 10. Prior to closing, Ambac must receive certification by an accounting firm acceptable to Ambac that the securities invested are sufficient to pay the Prior Obligarions. Upon receipt of this conuninncnt Ambac should be norifit=d which finn will be providing certification. 11. Receipt of an acceptable opinion of counsel addressed to Ambac that the Prior Obligations have been legally defeased. 12. Receipt of an acceptable opinion of counsel addressed to Ambac with regard to the validity and enforceability of the Escrow Agreement. 13. If a forward supply contract is used: (a) Securities delivered to the escrow agreement muSt be non-callable U.S. Government obligations, which do not rnarure later than the date needed to pay dt=bt service on the refunded Obligations. (b) The CPA verification must be in form and substance satisfactory to Ambac and must opine: that the escrow is sufficient to defease the refunded Obligations whether or not the forward supply contract provider delivc:rs securities to the escrow. ec) The forward supply contract must specify that (i) the purchase price of the securities delivered to the escrow must not exceed the amount of cash received from maturing securities in the escrow, as specified in the verification, and (ii) the maturity value of the securities delivered to the eSCroW must not be less than the purchase price paid for such securities. JUN-03-2003 13:38 FROM- T-756 P.004/00B F-364 (d) The forward supply contract provider shall have no recourse to the escrow upon any failure of the Obligor or ~SCTOW agent to perform its obligations under the forward supply contract. Other than the payment of the purchase price for the securities to b~ delivered pursuant to the forward supply contract, no payments of any other kind may be made from the escrow in respect of the forward supply contract. (e) The forward supply contract provider must be rated at least A by a nationally recognized raring agency. (f) The forward supply contract shall be: in form and substance satisfactory to Ambac. ~~AI\ Cf2~{~~ Authorized Officer JUN-03-2003 13:39 FRDM- T-756 P.005/00a F-364 Ambac Assurance Corporation One State Street Plaza New York. N'f 10004 212.668.0340 A memb?T of Ambiu Financial Group. Inc. COMMrrTMffiNTFORSURETYBOND Obligor: CITY OF WINTER SPRINGS, FLORIDA Commitment Number: SB24848 Comminnent Date: May 16, 2003 Expiration Date: August 15,2003 Obligations: $8,755,000 Improvement Refunding Revenue Bonds, Series 2003, dated July 1, 2003 maturing on October 1,2018 Surety Amount: $875,000. Insurance premium: 2.0% of the surel)' amount. Ambac Assurance Corporation (Ambac) A Wisconsin Stock Insurance Corporation hereby commits to issue a Surety Bond (the "Commitment") relating to the Debt Service Reserve Fund for the above-descnbed debt obligations (the "Obligations"), subStantially in the fonn anached hereto, subject to the terms and conditions contained herein or added hereto (see conditions set forth httein). To extend this Conuninnent after the expiration date set forth above, an oral (subsequently confinned in writing) or ~Titten request for renewal must be submitted to Ambac at least one business day prior to such expiration date. Ambac reserves the right to refuse to grant a renewal or may renew this Commitment subject to additional terms and conditions. The Surety Bond (the "Surety") shall be issued if the following conditions are satisfied: 1. Ambac shall rec~ve an opinion of counselor a certificate of an officer of the Obligor or ultimate obligor staring that the information supplied to Ambac in order to obtain the Surety and the documents to be executed and delivered in connection with the issuance and sale of the Obligations do not contain any untnJe or misleading statement of a material fact and do not fail to state a material fact required to be Stated therein or necessary in order to make the infonnarion co.ntained therein not misleading. 2. No event shall occur which would permit any purchaser of the Obligations. otherwise required, not to be required to purchase the Obligations on the date scheduled for the issuance and delivery thereo[ . Subjcct co clunsc, Ililth Am~c's approv~l. JUN-03-2003 13:39 FROM- T-756 P.006/00B F-364 3. There shall be no material change in or affecting the Obligations, the Obligor or ultimate obligor (including, but not limited to, the security for the Obligations or the proposed debt service strUctUre for the Obligations), the Ofticial Statemenr, if any (or any similar disclosure document), including any financial statements therein contained, the financing documents or any legal opinions to be executed and delivered in connection with the issuance and sale of the Obligations, or any other information submitted to Ambac in order to obtain the Surety, from the descriptions or schedules thereof heretofore provided to Ambac at any time prior to the issuance of the Obligations and there shall not have OCC\lI""red or come to the attention of the Obligor or purchaser any material change of fact or law adverse to the interests of Ambac, unless approved by Ambac in writing. 4. Unless expressly waived in whok or in pan by Ambac, the financing documents shall contain a) the tenns and provisions provided in the: Ambac STANDARD PACKAGE transmitted herevvith, and b) any provisions or comments given orally by Ambac. 5. Ambac will prepare, and the Obligor will execute, a Guaranty Agreement in the fonn (with such revisions of Arnbac and the Obligor agree to) contained in the Standard Package. 6. NO LATER THAN FlVF. (5) BUSlNESS DAYS PRIOR TO CLOSIN"G, Ambac sh3.11 be: provided with: a) the final debt service schedule; and b) proposed copies of all fmancing documentS; and c) the proposed official statement (or any similar disclosure document); and d) the proposed various legal opinions delivered in connection 'Wirh the issuance and sal~ of rhe Obligations, including, without limitation, the unqualified approving opinion of bond counsel rendered by a law fInn acceptable to Arnbac. The form of bond counsel's approving opinion mus[ be acceptable ro Arnbac. The form of bond counsel's approving opinion shall indicate that the Obligor must comply with certain covenantS under and pursuant to the Internal Revenue Code of 1986, as amended and that the Obligor has the legal power to comply with such covenants. Ambac shall also be pro\-ided with executed copies of all financing documents, including but not limited to th~ Official Statement (or any similar disclosure document) and the: various legal opinions rendered. The executed opinion of bond counsel shall be addressed to Ambac or in lieu thereof, a letter shall be provided to Ambac to the effect rhat Ambac may rely on such opinion as if it were addressed to Ambac and such letter shall be delivered with an ~xecuted opinion; and e) any provisions of the Purchase Contract or Bond Purchase Agreement referencing Ambac or the Obligor of the Surety in general. If such provisions are not received in a timely roaMer or if provisions are insened in the Purchase Contract or Bond Purchase Agreement 'Without Arnbac's knowledge, compliance 'With such provisions may not be: possible; and 1) a letter from bond counselor counsel to the purchaser or otherwise from another counsel acceptable to Ambac to the effect that the fInancing documents, the Official Statement (or any similar disclosure document) and the various legal opinions executed and delivered in connection with the issuance and sale of the: Obligations, are substantia.lIy in the fonns previously submitted to Arnbac for review, with only such amendments, modifications or deletions as may be approved by Ambac; and JUN-03-Z003 13:39 FROM- T-756 P 007/008 F-364 g) a copy of any insurance policy, surety bond, guaranty or indenmitication or any other policy, contract or agreement which provides for payment of all or any portion of the debt, the costs of reconstruction, the loss of business income or in any way secures, ensures or ~ces the income stream anticipated to pay the Obligations. 7. Evidence of wire tranSfer of an amount equal to the payman for the Surety at the time of the issuance and delivery of the Obligations. 8. An opinion addressed to Ambac by counsel acceptable to Ambac that the Guaranty Agreement is a legal. valid and binding obligation of the Obligor thereot: enforceable in accordance with its tenns. 9. The escrow agreement, in form andsubsrance acceptable to Arnbac, for the complete defeasance of the. applicable Obligations (the "Prior Obligations"). 10. Certification by a nationally recognized accounting firm. pre-approved by Ambac, that the securities invested are: sufficient to pay the Prior Obligations. 11. Ambac must receive an opinion of Counsel acceptable to Ambac that the Prior Obligations have been legally defeased. 12. A dmft opinion of bond counselor special taX counsel acceptable to Ambac, addressed to Ambac, a telecopy of the: executed opinion on the day of closing (212-208-3404, to the attention of your closing coordinator) and an executed original following closing, to the e:ffect that the refunding and escrow are in full compliance with all applicable Fe:deral arbitrage regulations. 13. Funds held by the: Escrow Trustee for the payments of the refunded Obligations must be held as cash fully insured by or the Federal Deposit Insurance Corporation or invested in direct obligations of th~ United States of America. 14. Arnbac must recdve, at least five (5) business days prior to closing, draft opinions of Obligor's counsel and escrow agent's counsel and a telecopy of the executed opinion On the day of closing (212-208-3404 to the anention of your closing coordinator) regarding the validity, binding nature and enforceability of the escrow agr~~nt. 15. 1F A FORWARD SUPPLY CONTRACT IS USED: a) Securities delivered to the escrow agreement mUSt be non-calIable U.S. Government obligations, which do not mature later than the date: on which needed to pay debt service on the refunded Obligations. . b) The CPA verification must be in a form and substance satisfactory to Arnbac and must opine that the escrow is sufficient to be defease the refunded Obligations whether or not the forward supply contract provider delivers securities to the escrow. c) The forward supply contract must specify that (a) the purchase price of the securities delivered to the escrow must not exceed the amount of cash received from maturing securities in the escrow, as specified in the verification, and (b) the maturity value of the securities in the escrow must not be less than the purchaSe: price: paid for such securities. d) The forward supply contract provider shall have no recourse to the escrow upon any failure of the Obligor or escrow agent to perform its obligations under the forward supply contract. Other than th~ payment of the purchase price for the securities to be delivered pw-suant to the forward supply contract, no payments of any other kind may be made from the escrow in respect to the forward supply contract. JUN-03-Z003 13:39 FROM- T-756 P.008/008 F-364 e) The forward supply conn-act provider must be at least A by a nationally recognized rating agency. f) The forward sLlpply contract shall be in form and substance sarisfactory to Ambac. ~alQfi'.. a ~~~_ Authorized Officer SOURCES AND USES OF FUNDS City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Sources: Bond Proceeds: Par Amount Accrued Interest Premium 8,770,000.00 6,606.56 87,612.60 8,864,219.16 Other Sources of Funds: 1993 _Interest_SF 110,036.88 8,974,256.04 Uses: Refunding Escrow Deposits: Cash Deposit SLG Purchases 0.77 8,770,248.00 8,770,248.77 Other Fund Deposits: Accrued Interest 6,606.56 Delivery Date Expenses: Cost ofIssuance Underwriter's Discount Ambac Bond Insurance @ 43.9 bps Ambac Surety Policy @ 2.0% 70,000.00 52,620.00 52.317.38 17,540.00 192,477.38 Other Uses of Funds: Rounding Amount 4,923.33 8,974,256.04 Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc. (Finance 4.432 Winter Springs:1MPRVMNT-03REF93C,03REF93C) Page I BOND SUMMARY STATISTICS City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Dated Date Delivery Date Last Maturity Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In TIC Average Coupon Average Life (years) Duration of Issue (years) Par Amount Bond Proceeds Total Interest Net Interest Total Debt Service Maximum Annual Debt Service Average Annual Debt Service Undef\Vriter's Fees (per $1000) Average Takedown Other Fee Total Underwriter's Discount Bid Price Bond Component Par Value 9.907 Serial Bonds 8,770,000.00 9.907 8,770,000.00 07/01/2003 07/01/2003 10/01/2018 3.564479% 3.540462% 3.574294% 3.737130% 3.614480% 9.907 8.322 8,770,000.00 8,864,219.16 3,147,398.75 3,112,406.15 11,917,398.75 903,332.50 781,035.55 6.000000 6.000000 100.399003 Price Average Coupon Average Life TIC Par Value + Accrued Interest + Premium (Discount) - Underwriter's Discount - Cost ofIssuance Expense - Other Amounts 8,770,000.00 6,606.56 87,612.60 -52,620.00 Target Value 8,811,599.16 Target Date Yield 07/01/2003 3.540462% 100.999 3.614% Arbitrage Yield -69,857.38 -69,857.38 07/01/2003 3.564479% All-In TIC 8,770,000.00 6,606.56 87,612.60 -52,620.00 -70,000.00 -69,857.38 8,671,741.78 07/01/2003 3.737130% Jun 3,2003 2:04 pm Prepared by Public Financial Management, Inc. (Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 2 SUMMARY OF REFUNDING RESULTS City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Dated Date Delivery Date Arbitrage yield Escrow yield Bond Par Amount True Interest Cost Net Interest Cost Average Coupon Average Life Par amount of refunded bonds Average coupon of refunded bonds Average life ofrefunded bonds PV of prior debt to 01/01/2003 @ 3.564479% Net PV Savings Percentage savings of refunded bonds Percentage savings of refunding bonds 07/01/2003 07/01/2003 3.564479% 0.996648% 8,770,000.00 3.540462% 3.574294% 3.614480% 9.907 8,405,000.00 5.214828% 10.296 9.513,379.71 783,062.93 9.316632% 8.928882% Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc. (Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 3 BOND DEBT SERVICE City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Period Annual Ending Principal Coupon Interest Debt Service Debt Service 10/01/2003 74,323.75 74,323.75 74,323.75 04/01/2004 148,647.50 148,647.50 10/01/2004 135,000 2.000% 148,647.50 283,647.50 432,295.00 04/01/2005 147,297.50 147,297.50 10/01/2005 140,000 2.000% 147,297.50 287,297.50 434,595.00 04/01/2006 145,897.50 145,897.50 1 % 1/2006 140,000 2.000% 145,897.50 285,897.50 431,795.00 04/01/2007 144,497.50 144,497.50 10/01/2007 370,000 2.250% 144,497.50 514,497.50 658,995.00 04/01/2008 140,335.00 140,335.00 10/0 1/2008 615,000 2.500% 140,335.00 755,335.00 895,670.00 04/0 1/2009 132,647.50 132,647.50 I % I /2009 635,000 2.750% 132,647.50 767,647.50 900,295.00 04/01/2010 123,916.25 123,916.25 10/01/2010 650,000 3.000% 123,916.25 773,916.25 897,832.50 04/01/2011 114,166.25 114,166.25 10/01/2011 675,000 3.250% 114,166.25 789,166.25 903,332.50 04/01/2012 103,197.50 103,197.50 10/01/20 I 2 690,000 3.500% 103,197.50 793,197.50 896,395.00 04/01/2013 91,122.50 91,122.50 10/01/2013 715,000 3.600% 91,122.50 806,122.50 897,245.00 04/01/2014 78,252.50 78,252.50 10/01/2014 740,000 3.700% 78,252.50 818,252.50 896,505.00 04/01/2015 64,562.50 64,562.50 10/01/2015 770,000 3.800% 64,562.50 834,562.50 899,125.00 04/01/2016 49,932.50 49,932.50 10/01/2016 800,000 3.900% 49,932.50 849,932.50 899,865.00 04/01/2017 34,332.50 34,332.50 10/01/2017 830,000 4.000% 34,332.50 864,332.50 898,665.00 04/01/2018 17,732.50 17,732.50 10/01/2018 865,000 4.100% 17,732.50 882,732.50 900,465.00 8,770,000 3,147,398.75 11,917,398.75 11,917,398.75 Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc. (Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 4 AGGREGATE DEBT SERVICE City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Improvement Series 2003 Refunding Period Refunding of Revenue Bonds, Aggregate Ending Series 1993 Series 1999 Debt Service 10/01/2003 74,323.75 565,390.00 639,713.75 10/01/2004 432,295.00 573,815.00 1,006,110.00 10/01/2005 434,595.00 580,762.50 1,015,357.50 10/0 I /2006 431,795.00 591,182.50 1,022,977 .50 10/01/2007 658,995.00 369,797.50 1,028,792.50 10/01/2008 895,670.00 142,377.50 1,038,047.50 10/0 I /2009 900,295.00 159,792.50 1,060,087.50 10/01/2010 897,832.50 176,192.50 1,074,025.00 10/01/201 I 903,332.50 191,537.50 1,094,870.00 10/01/2012 896,395.00 205,672.50 1,102,067.50 10/01/2013 897,245.00 213,787.50 1,111,032.50 10/01/2014 896,505.00 230,912.50 1,127,417.50 10/01/2015 899,125.00 241,725.00 1,140,850.00 10/01/2016 899,865.00 246,487.50 1,146,352.50 10/01/2017 898,665.00 260,462.50 1,159,127.50 10/01/2018 900,465.00 263,125.00 1,163,590.00 10/01/2019 1,275,000.00 1,275,000.00 10/01/2020 1,275,000.00 1,275,000.00 10/01/2021 1,275,000.00 1,275,000.00 10/01/2022 1,275,000.00 1,275,000.00 10/01/2023 1,275,000.00 1,275,000.00 10/01/2024 1,275,000.00 1,275,000.00 10/01/2025 1,275,000.00 1,275,000.00 10/01/2026 1,275,000.00 1,275,000.00 10/01/2027 1,275,000.00 1,275,000.00 1 % 1/2028 1,275,000.00 1,275,000.00 10/01/2029 1,275,000.00 1,275,000.00 11,917,398.75 19,038,020.00 30,955,418.75 Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc. (Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 5 SA VINGS City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Present Value Prior Refunding Refunding Refunding to 01/01/2003 Date Debt Service Debt Service Receipts Net Cash Flow Savings @ 3.5644791% 1 % 1/2003 275,073.75 74,323.75 6,606.56 67,717.19 207,356.56 20 I ,991.23 1 % 1 /2004 492,342.50 432,295.00 432,295.00 60,047.50 57,620.43 10/01/2005 494,537.50 434,595.00 434,595.00 59,942.50 55,524.07 10/01/2006 491,387.50 431,795.00 431,795.00 59,592.50 53,287.30 10/01/2007 718,237.50 658,995.00 658,995.00 59,242.50 51,138.92 1 % 1/2008 958,012.50 895,670.00 895,670.00 62,342.50 51,843.58 10/01/2009 959,400.00 900,295.00 900,295.00 59,105.00 47,400.37 10/01/2010 959,212.50 897,832.50 897,832.50 61,380.00 47,398.76 10/01/2011 962,450.00 903,332.50 903,332.50 59,117.50 44,012.30 10/0 1/20 12 958,850.00 896,395.00 896,395.00 62,455.00 44,775.74 10/01/2013 958,675.00 897,245.00 897,245.00 61,430.00 42,453.10 10/01/2014 959,900.00 896,505.00 896,505.00 63,395.00 42,200.08 10/01/2015 958,925.00 899,125.00 899,125.00 59,800.00 38,366.73 10/01/2016 960,750.00 899,865.00 899,865.00 60,885.00 37,626.08 10/01/2017 959,250.00 898,665.00 898,665.00 60,585.00 36,087.27 10/01/2018 960,750.00 900,465.00 900,465.00 60,285.00 34,609.95 13,027,753.75 11,917,398.75 6,606.56 11,910,792.19 1,116,961.56 886,335.91 Savings SummarY Deliv Date Less: Prior Refunding Funds on Hand Funds on Hand Total Present Value to 01/01/2003 @ 3.5644791% 07/01/2003 -110,036.88 4,923.33 -105,113.55 -103,272.98 -103,272.98 PV of savings from cash flow Adjustments 886,335.91 -103,272.98 Net PV Savings 783,062.93 Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc. (Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 6 SUMMARY OF BONDS REFUNDED City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Bond Maturity Date Interest Rate Call Price Improvement Refunding Revenue Bonds, Series 1993, 1993: TERM04 10/01/2004 5.100% TERM06 10/01/2006 5.250% TERM10 10/01/2010 5.250% TERMI2 ] 0/01/2012 5.250% TERMI5 10/01/2015 5.500% TERM I 8 10/01/2018 5.000% Par Amount ] 10,000.00 120,000.00 2,015,000.00 1,3 I 0,000.00 2,235,000.00 2,615,000.00 Call Date 10/01/2003 10/0]/2003 I % I /2003 10/0 1/2003 10/01/2003 10/01/2003 102.000 102.000 102.000 102.000 102.000 102.000 8,405,000.00 Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc. (Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 7 PRIOR BOND DEBT SERVICE City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Period Annual Ending Principal Coupon Interest Debt Service Debt Service 07/01/2003 10/01/2003 55,000 5.100% 220,073.75 275,073.75 275,073.75 04/01/2004 218,671.25 218,671.25 1 % 1/2004 55,000 5.100% 218,671.25 273,671.25 492,342.50 04/01/2005 217,268.75 217,268.75 10/0 1/2005 60,000 5.250% 217,268.75 277,268.75 494,537.50 04/01/2006 215,693.75 215,693.75 10/01/2006 60,000 5.250% 215,693.75 275,693.75 491,387.50 04/01/2007 214,118.75 214,118.75 10/01/2007 290,000 5.250% 214,118.75 504,118.75 718,237.50 04/01/2008 206,506.25 206,506.25 10/01/2008 545,000 5.250% 206,506.25 751,506.25 958,012.50 04/01/2009 192,200.00 192,200.00 10/0 1/2009 575,000 5.250% 192,200.00 767,200.00 959,400.00 04/01/2010 177,106.25 177,106.25 10/01/2010 605,000 5.250% 177,106.25 782,106.25 959,212.50 04/01/2011 161,225.00 161,225.00 10/01/2011 640,000 5.250% 161,225.00 801,225.00 962,450.00 04/01/2012 144,425.00 144,425.00 10/01/2012 670,000 5.250% 144,425.00 814,425.00 958,850.00 04/01/2013 126,837.50 126,837.50 10/01/2013 705,000 5.500% 126,837.50 831,837.50 958,675.00 04/0112014 107,450.00 107,450.00 10/01/2014 745,000 5.500% 107,450.00 852,450.00 959,900.00 04/01/2015 86,962.50 86,962.50 10/0112015 785,000 5.500% 86,962.50 871,962.50 958,925.00 04/01/2016 65,375.00 65,375.00 10/01/2016 830,000 5.000% 65,375.00 895,375.00 960,750.00 04/01/2017 44,625.00 44,625.00 10/01/2017 870,000 5.000% 44,625.00 914,625.00 959,250.00 04/01/2018 22,875.00 22,875.00 10/01/2018 915,000 5.000% 22,875.00 937,875.00 960,750.00 8,405,000 4.622,753.75 13,027,753.75 13,027,753.75 Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc. (Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 8 Period Ending Principal 167,000.00 8,792,073.75 10/01/2003 55,000.00 167,000.00 8,792,073.75 55,000.00 ESCROW REQUIREMENTS City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Principal Interest Redeemed Redemption Premium Total 220,073.75 8,350,000.00 220,073.75 8,350,000.00 Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc. (Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 9 ESCROW CASH FLOW City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Date Principal Present Value Net Escrow to 07/01/2003 Interest Receipts @ 0.9966485% 21,824.98 8,792,072.98 8,770,248.00 21,824.98 8,792,072.98 8,770,248.00 10/01/2003 8,770,248.00 8,770,248.00 Escrow Cost Summary Purchase date Purchase cost of securities 07/01/2003 8,770,248.00 Target for yield calculation 8,770,248.00 Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc(Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 10 ESCROW STATISTICS City of Winter Springs, FL Series 2003 Refunding of Series 1993 Current Refunding in July 2003 Modified Yield to Yield to Total Duration Receipt Disbursement Escrow Cost (years) Date Date 8,770,248.77 0.249 0.996648% 0.996648% 8,770,248.77 Perfect Escrow Cost Value of Negative Arbitrage Cost of Dead Time 8,714,757.79 55,490.97 om 8,714,757.79 55,490.97 0.01 Delivery date Arbitrage yield 07/01/2003 3.564479% Jun 3, 2003 2:04 pm Prepared by Public Financial Management, Inc(Finance 4.432 Winter Springs:IMPRVMNT-03REF93C,03REF93C) Page 11 RESOLUTION NO. 2003-28 . A RESOLUTION OF THE CITY OF WINTER SPRINGS, . FLORIDA AMENDING AND SUPPLEMENTING RESOLUTION NO. 615 AS HERETOFORE AMENDED AND. SUPPLEMENTED;. FOR . THE. . PURPOSE OF PROVIDING FOR THE REFUNDING OF ALL THE CITY'S OUTSTANDING IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 1993; AUTHORIZING THE ISSUANCE BY THE. CITY OF NOT EXCEEDING $9,000,000 IN . AGGREGATE PRINCIPAL AMOUNT OF IMPROVEMENT REFUNDING REVENUE BONDS, .SERlES. 2003, TO FINANCE A PART OF THE COST OF SUCH REFUNDING, TO FUND. A DEPOSIT TO THE SUBACCOUNT. IN THE RESERVE. ACCOUNT AND PAY THE COSTS OF "ISSUANCE OF THE. SERIES 2003 BONDS; ACCEPTING THE INSURER'S COMMITMENT RELATING TO A. FINANCIAL GUARANTY INSURANCE POLICY AND SURETY BOND. WITH RESPECT TO THE SERIES 2003 . . BONDS; . PLEDGING TO SECURE PAYMENT. OF . THE PRINCIPAL .OF AND INTEREST ON- THE SERIES 2003 BONDS, . ON A PARITY WITH THE . CITY'S OUTSTANDING IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 1999, THE FRANCmSE FEES RECEIVED BY THE CITY FROM FLORIDA POWER CORPORATION, THE PUBLIC SERVICE TAXES LEVIED BY THE CITY PURSUANT TO SECTION 166.231, FLORIDA STATUTES AND THE LOCAL COMMUNICATIONS SERVICES TAX LEVIED BY'THE CITY PURSUANT TO SECTION 202.19, FLORIDA STATUTES; AMENDING THE DEFINITION OF EXCISE TAXES IN CITY RESOLUTION NO. 615 TO INCLUDE THE LOCAL. COMMUNICATION SERVICES TAX; MAKING . CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS OF THE SERIES 2003 BONDS; AND .PROVIDING AN EFFECTIVE DATE.. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA: . SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to Chapter 166, Part II, Florida Statutes Chapter 72-718, Laws of Florida, Special Acts of 1972 as amended and supplemented, being the Charter of the City of Winter Springs, Florida, the Original Instrument-(as hereinafter defined) and other applicable provisions of law. SECTION 2. DEFINITIONS. When used in this Resolution, the terms. defmed in the Original Instrument shall have the respective meanings assigned thereto by the Original {OR6l0453;4} Instrument and the following terms shall have the following meanings, unless the context clearly otherwise requires: "Act" shall mean Chapter 166, Part II, Florida Statutes, as amended and supplemented, .Chapter 72-718, Laws of Florida, Special Act of 1972 as amended and supplemented, and other applicable provisions of law. "Agreement" or "Escrow Deposit Agreement" shall mean that certain agreement by and between the Issuer and a bank or trust company to be selected and named by the Issuer prior to the sale of the Series 2003 Bonds (as hereinafter defmed) for the purpose of providing for the payment of the Prior Bonds (as hereinafter defmed). "Ambac AssUrance" shall mean Ambac Assurance Corporation, a Wisconsin-domiciled. stock insurance company. . "Continuing Disclosure Certificate" shall mean that certain certificate r,elated to the Series 2003 Bonds to be executed by the. Issuer prior to the. time the Issuer delivers the Series 2003 . Bonds to the participating underwriter or underWriters, as it may be amended from time to time in .accordance with the tenns. thereof, whereby. the Issuer undertakes to comply with the secondary discl,osure requirements of the Rule. "Financial Guaranty.lnsurance Policy" shall mean the financial guaranty insurance policy issued by Ambac Assurance insuring the payment when due of the principal of and interest on the Series 2003 Bonds.as provided therein. . "Investment Securities" shall mean in regai'd to investments pursuant to this Resolution, any investment permitted under applicable State and federal law including units of participation in the Local Government Surplus Funds Trust Fund established pursuant to Part N, Chapter 218, Florida Statutes and. A. (1) Cash (insured at all times by the Feder~l Deposit Insurance Corporation), (2) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury ofthe United States of America) or (3) Senior debt obligations of other Government Sponsored Agencies approved by Ambac Assurance. The above also constitute "Federal Securities" in regard to any defeasance of the Series 2003 B.onds. . B. (1) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: . {OR610453;4} 2 - Export-Import Bank - Rural Economic Community Development Administration - U.S. Maritime Administration - Small Business Administration . ~ U.S. Department of Housing & Urban Development (pHAs) - Federal Housing Administration . - Federal Financing Bank (2) Direct. obligations of any of. the following federal agencies which obligations are not fully.guanirtteed by the full faith and. credit ofthe United States of America: - Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC). - Obligations of the Resolution Funding Corporation (REFCORP) - Senior debt obligations of the Federal Home Loan Bank System . - Senior debt obligations of other Government Sponsored Agencies approved by Ambac Assurance. .. . (3) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P-I" by Moodys and "A-I" or "A-l+" by S&P and maturing. not more than 360 calendar days ci..fter tbe date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (4) Commercial paper which is rated at the time of purchase in the single highest classification, "P-l" by Moodys and "A-l+" by S&P and which matures not more than 270 calendar days after the date of purchase; (5) better by S&P; Investments in a money market fund rated "AAAm" or "AAAm-G" or (6) .. Pre.:.refunded Municipal Obligations defined as follows: any bonds or other obligations of any state of the Vnited States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and . (A) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's or S&P or any successors thereto; or (B) (i) which are fully secured as to principal and a interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph A(2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable {OR6l0453;4} 3 instructions, as appropriate, and (ii) which escrow is. sufficient, as verified by a. nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium if any, on the bonds or other obligations described in this paragraph on the maturity date or dates or redemption date or dates specified in the irrevocable instructions . referred to above, as appropriate. . . (7) Municipal obligations rated "AaaJAAA" or general obl~gations of State . . with a rating of "All A" or higher by both Moody's and S&P. . (8) Investment agreements approved In writing by Ambac Assurance (supported by appropriate opinions of counsel); and (9) Other forms of investments (including repurchase agreements) approved in writing by Ambac Assurance.' . C. :The value of the above investments shall be determined as follows:. a) For the purpose of determining the amotmt in any fund, all Investment . Securities credited to such fund shall be valued at fair market. value. The Registrar shall determine the fair market value based on accepted industry standards and from accepted industry providers. Accepted industry. providers shall inClude but are not limited to pricing services provided by Financial TiInes Interactive Data Corporation, Merrill Lyrlch, Salomon Smith Barney, Bear Stearns, or Lehman Brothers. . b) As to certificates of deposit and bankers' acceptances: the face amount . thereof, plus accrued interest thereon; and c) . As to any mvestment not specified above:. the value. thereof established by prior agreement among the Issuer, the Registrar, and Ambac Assurance. . "Local CoIiununication Services Tax" shall mean the discretionary communication services tax levied by the City pursuant to Section 202.19, Florida Statutes and City Ordinance No. 2001-42 as amended and supplemented from time to time. "Original Instrument" shall mean Resolution No. 615 adopted by the City Commission of the City on May 1, 1989, as heretofore amended and supplemented. . "Parity Obligations" shall .mean the Issuer's. outstanding Improvement Refunding Revenue Bonds, Series 1999. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock conip~y, a trust, any unincorporated organization or governmental entity. "Prior Bonds". shall mean the Outstanding bonds. of the City of Winter Springs, Florida, Improvement Refunding Revenue Bonds, Series 1993. {OR610453;4} 4 "Resolution" shall mean the Original Instrument as amended and supplemented including the amendments and supplements made by this Resolution and any resolution supplementing or amending the Resolution. . "this Resolution" shall mean this instrument, as the same may from. time to time be amended, modified or supplemented. "Rule". shall. mean. Rule 15c2-12 of the United States Securities and Exchange. Commission, as amended. "Series 2003 Bonds" shall mean the City of. Winter Springs, Florida hnprovement Refunding Revenue Bonds, Series 2003 authorized to be issued pursuant to Section 7 of this Resolution. "State" shall mean the State of Florida. "SuretY Bond" shall mean the surety bond issued by Ambac Assurance guaranteeing certain payments into the subaccount within the Reserve Account created with respect to the Series 2003 Bonds as provided therein and subject to the limitations set.forth therein. The terms "herein,.". "hereunder," . "hereby," ithereto," "hereof and any similar terms shall refer to this Resolution; the term heretofore shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. Words importing the masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa. SECTION 3. FINDINGS. It is hereby ascertained, determined and deClared that: (A) The Issuer has previously issued the Prior Bonds of which the sum of $8,405,000 principal amount is currently outstanding and unpaid. (B) The Issuer deems it necessary, desirable and in the best financial interest of the Issuer that the Prior Bonds be refunded in order to effectuate interest cost savings and a reduction in the debt service secured by the Excise Taxes. Simultaneously with the issuance of the Series 2003 Bonds, a sufficient portion of the proceeds of the Series 2003 Bonds and other available funds will be paid by the Issuer to the Escrow Holder (as defmed in the Agreement) for deposit by the Escrow Holder into the Escrow Account established pursuant to the Escrow Deposit Agreement, to effectuate the refunding and defeasance of the Prior Bonds by providing for the payment of the principal of, premiUm, If any, and interest on the Prior Bonds as provided in the Escrow Deposit Agreement. . (C) The Issuer deems it nece~sary, desirable and in the best interest of the Issuer that the Excise Taxes be pledged to the payment of the principal of and interest on the Series 2003 Bonds. Following the issuance of the Series 2003 Bonds, no part of the Excise Taxes are pledged or encumbered in any manner except as security for the Series 2003 Bonds and the Parity Obligations and the Original Instrument, in Section 18(H) thereof as amended, provides for the. issuance of Additional Parity Obligations payable from the Excise Taxes on a parity with the Parity Obligations under the terms, limitations and conditions provided therein. The Issuer will {OR610453;4} 5 issue the Series 2003 Bonds as Additional Parity Obligations within the authorization contained in Section 18(H) of the Original Instrument as amended. The Series 2003 Bonds shall be payable on a parity and rank equally as to lien on arid source and security for payment from the Excise Taxes, and in all other respects except as otherwise provided herein, with the Parity Obligations. . (D) The principal of and interest and redemption premium on the Series 2003 Bonds and .all reserve .and oth~r payments shall be. payable solely from the Excise Taxes. The Issuer shall never be required to levy ad valorem taxies on any real or personal property therein to pay . the principal of and. interest on the Series .2003 .Bo~ds herein authorized or to makeariy other . payments provided for herein. The Series 2003 Bonds shall not constitute a lien upon any properties owned by or located within the boundaries of the Issuer or upon any property other than the Excise Taxes. .. (E) The Issuer. has received from Ambac Assurance commitments to provide the Financial Gu~anty Insurance Policy and Surety Bond with respect to.the Series 2003 Bonds, copies of such are attached hereto as Exhibit A; and it is in the best financial interest of the Issuer that the Issuer accept said commitments. . SECTION 4. AUTHORIZATION OF REFUNDING OF PRIOR BONDS.. There is hereby authorized the refunding ofthe Prior Bonds as provided in the Resolution. SECTION 5. THIS RESOLUTION TO CONSTITUTE. CONTRACT. In consideration of the purchase and acceptance of any or all of the Series 2003 Bonds by those . who shall hold the same from time to time, the provisions of this Resolution shall be deemed to . be and shall constitute a contract between the Issuer and the Owners from time to time of the Series 2003 Bonds and shall be a part of any contract of bond insurance that pertains to the Series 2003 Bonds. The pledge made in this Resolution arid the provisions,. covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Owners of any and all of the Series 2003 Bonds and for the benefit, protection and security of any insurer insuring the Series 2003 Bonds. All ofthe Series 2003 Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Series 2003 Bonds over any other thereof except as expressly provided in or pursuant to thi$ Resolution. SECTION 6. ACCEPTANCE OF INSURER'S COMMITMENTS. The Issuer hereby accepts the Insurer's commitments to provide the Financial Guaranty Insurance Policy and the Surety Bond with respect to the Series 200J Bonds; and the Mayor, the . Clerk and/or the City Manager of the Issuer are hereby authorized to execute and deliver on behalf of the. Issuer appropriate evidence of such acceptance. SECTION 7. AUTHORIZATION OF SERIES 2003 BONDS. Subject and pursuant to the. provisions hereof, obligations of the Issuer to be known as "Improvement Refunding Revenue Bonds, Series 2003," are authorized to be issued in the aggregate principal amount of not exceeding $9,000,000, which may mature at higher Accreted Values to include the maturity amount of Capital Appreciation Bonds. {OR610453;4} 6 SECTION 8. DESCRIPTION OF SERIES 2003 BONDS. The Series 2003 Bonds shall be issued in fully..registered form; may be Capital Appreciation Bonds or Current Interest Bonds;. shall be dated; shall be numbered consecutively from one upward in order of Maturity preceded by the letter "R" or such other lettering as the Issuer shall approve; shall be in the denomination of $5,000 each, or. integral multiples thereof for Current Interest Bonds or in $5,000 maturity amounts for the Capital Appreciation Bonds or in $5,000 multiples thereof, or such other denominations as shall be approved by the Issuer in a supplemental resolution prior to the delivery of the. Series 2003 Bonds; shall. bear interest at such rate or rates not exceeding the maximum rate allowed by State law, the actual rate or rates to be approved by the governing body of the Issuer .prior to or upon the sale of the Series 2003 Bonds; such interest to be payable semiannually at such times as are fixed by supplemental resolution of the Issuer if Current Interest Bonds and shall mature annually on such date in such. years (not exceedmg 30 years from the date of issuance) and in such amounts as will be fixed by supplemental resolution of the Issuer prior to or upon the sale of the Series 2003 Bonds; and may be issued with variable, . adjustable, convertible or other. rates and with original issue discounts; all as the Issuer shall provide herein or hereafter by supplemental.resolution. . Each Current Interest Bond shall bear interest from the interest date next preceding the date on .which it is authenticated, unless authenticated on an interest payment date, in which case it shall bear interest from such interest payment date, or, unless authenticated prior to the first . interest payment date, in which case it shall bear interest from its date; provided, however, that if at the time of authentication payment of any interest which is due and .payable has not been . .made, such Current Interest Bond shall bear interest from the date to which interest shall have been paid.. .. The Capital Appreciation Bonds shall bear interest only at m~turity or upon redemption prior to maturity in th~ amount detennined by reference ~o the Accreted Value. . The principal of, the Accreted Value, the interest and redemption premium, if any, on the Series 2003 Bonds shall be payable in any coin or currency of the United States of America which on the respective. dates of payment thereof is legal tender for the payment of public and private debts. The interest on the Current Ii1terest Bonds shall be payable by the Paying Agent on each iriterest payment date to the .person appearing on the registration books of the Issuer hereina.fter provided for as the registered Owner thereof on the 15th day of the calendar month immediately preceding the applicable interest payment date, by check or draft mailed .to such registered Owner at his address as it appears on such registration books or by wire transfer to Owners of $1,000,000 .or more in principal amount of the Series 2003 Bonds. Payment of the principal of all Current Interest Bonds and the Accreted Value with respect. to the Capital Appreciation Bonds shall be made upon the presentation and surrender of such Series 2003 Bonds as the same shall beGome due and payable. .. Notwithstancling any other provisions of this section, the Issuer may, at its option, prior to the date of issuance of the Series 2003 Bonds, elect to use an immobilization system or book- entry system with respect to issuance of such Series 2003 Bonds. As long as any Series 2003 Bonds are outstanding in book-entry form the provisions of this Resolution inconsistent with such system of book-entry registration shall not be applicable to such Series 2003 Bonds. {OR610453;4} 7 SECTION 9. EXECUTION OF SERIES 2003 BONDS. The Series 2003 Bonds shall be signed by, or bear the facsimile signature of the Mayor or Deputy Mayor of the Issuer, and shall be attested by, or bear the facsimile signature of, the Clerk or any deputy or assistant clerk, and a facsimile of the official seal of the Issuer shall be imprinted on the Series 2003 Bonds. . . In case any officer whose signature or a: .facsimile of whose signature shall appear on any Series 2003 Bonds shall cease to be such officer before the delivery of such Series 2003 Bonds, such signature or such facsimile. shall nevertheless. be valid .and sufficient for all purposes the. same as "if he has remained in office until such delivery. Any Series 2003 Bond may bear. the facsimile signature of or may be signed by such persons who, at the .actual time of the execution of such. Series 2003 Bond, shall be the proper officers to sign such Series 2003 Bonds although, at the date of such Series 2003 Bond, such persons may not have been such officers. . SECTION 10. AU'rHENtICATION OF SERIES 2003 BONDS. Only such of the . Series 2003 Bonds as shall have endorsed thereon a ~ertificate of authentication substantially in the form hereinbelow set forth, duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Resolution. No Series 2003 Bond shali be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Registrar, and such certificate of the Registrar upon .any such Series 2003 Bond shall be conclusive evidence that such Series 2003 Bond has been duly authenticated and delivered under this Resolution. The Registrar's certificate of authentication on any Series 2003 Bond" shall be deemed to have been duly executed if signed by. an authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Series 2003 Bonds that may be issued 'hereunder at anyone time. . SECTION 11. EXCHANGE OF SERIES 2003 BONDS. Any Series 2003 Bonds, upon surrender thereof at the designated office of the Registrar, .together with an assignment.duly . executed by the Bondholder or his attorney or legal representative in such form as s~all be satisfactory to the Registrar, may, at the. option of the Owner, be exchanged for an aggregate principal amount or Accreted Value of Series 2003 Bonds equal to the principal amount or Accreted Value of the Series 2003 Bond or Series 2003 Bonds so surrendered. The Registrar shall make provision for the exchange of Series 2003 Bonds at the principal corporate trust office of the Registrar. The Issuer and Registrar shall not be obligated to make any exchange of Series 2003 Bonds during the fifteen (15) days next preceding an interest payment date or in the case of any proposed redemption of Series. 2003 Bonds during the fifteen (15).days next preceding the redemption date established for such Series 2003 Bonds. SECTION 12. NEGOTIABILITY, . REGISTRATION AND. TRANSFER OF SERIES 2003 BONDS. The Registrar shall keep books for. the registration of and for the registration of transfers of Series 2003 Bonds as provided in this Resolution. The transfer of any Series 2003 Bonds .may be registered only upon such books and only upon surrender thereof to . the Registrar together with an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be satisfactory to the Registrar. Upon any such registration of transfer, the..Issuer shall execute and the Registrar.shall authenticate and deliver in exchange for such Series 2003 Bond, a new Series 2003 Bond or Series 2003 Bonds registered in the name of the transferee, and in an aggregate principal amount equal to the principal amount of such Series {OR610453;4} 8 2003 Bond or Series 2003 Bonds so surrendered. The Issuer and Registrar shall not be obligated to .make any transfer of Series 2003 Bonds during the fifteen (15) days next preceding an interest payment date or in the case of any proposed redemption of Series 2003 Bonds. during the fifteen (15) days next preceding the redemption date established for such Series 2003 Bonds. In all cases in which Series 2003130nds shall be exchanged, the Issuer shall execute and the Registrar shall authenticate and deliver, at the earliest practicable time, a new Series 2003 Bond or Series 2003 Bonds of the same type (e.g., Current Interest Bonds will be exchanged for Current Interest Bonds .and. Capital Appreciation Bonds will be exchanged for Capital Appreciation Bonds) in accordance with the provisions of this Resolution. All Series 2003 Bonds . surrendered in any such exchange or registration of transfer shall forthwith be canceled by the Registrar. The Issuer or the Registrar may make a charge for every such exchange or registration . . of transfer .of Series 2003 Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid. with respect to such .exchange or registration of transfer, but no other charge shall be made to any Owner for the privilege of exchanging or registering the transfer of Series 2003 Bonds under. the provisions of this Resolution. SECTION 13. OWNERSHIP OF SERIES 2003 BONDS. The person in whose name. any Series 2003 Bond shall be registered shall be deemed and regarded as the absolute owner thereoffor allpurposes, and payment of or on accoUnt of the principal or redemptiori price of any. such Series 2003 Bond, and the interest on any such Series 2003 Bon~s shall be made only to or upon the order of the registered owner thereof or his legal representative. All 'such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 2003 Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. SECTION 14. ~Ell!ES. 2003 BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Series 20"03 Bond shall become mutilated, or be. destroyed, stolen or lost, the Issuer may in its discretion cause to be executed, and .the Registrar shall authenticate. and deliver, a new Series 2003 Bond of like date and tenor as the Series 2003 Bond so mutilated, destroyed, stolen or lost (e.g., Current Interest Bonds shall be issued in exchange for Current Interest Bonds and Capital Appreciation Bonds shall be issued in exchange for Capital Appreciation Bonds) in exchange and substitution for such mutilated Series 2003 Bond upon surrender and cancellation of such mutilated Series 2003 Bond or in lieu of and substitution for the Series 2003 Bond destroyed, stolen or lost, and upon the Owner furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable . . regulations and conditions as the Issuer and the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Series 2003 Bonds so surrendered shall . be canceled by the Issuer. If any of the Series 2003 Bonds shall have matured or be about to mature, instead of issuing a substitute Series 2003 Bond, the Issuer may pay the .same, upon being indemnified as aforesaid, and if such Series 2003 Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate. Series 2003 Bonds issued pursuant to this Section shall constitute .original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Series 2003 Bonds be at any time found by anyone, and such duplicate Series 2003 Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and {OR610453;4} 9 security for payment from the funds, as hereinafter pledged, to the same extent as all other Series 2003 Bonds issued hereunder. SECTION 15. PROVISIONS FOR REDEMPTION. The Series 2003 Bonds shall be . subject to redemption prior to their maturity,. at .such times and in such manner as shall be fixed by supplemental resolution of the Issuer prior to or at the time of sale of the Series 2003 Bonds.. Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the .Registrar, and mailed, first class mail, postage prepaid, to .all Owners of Series 2003 Bonds to be redeemed at their addresses as they appear on the registration books . hereinbefore provided for, but failure t~ mail such notice to one or more Owners of Series 20"0.3 Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 20.03 Bonds to which notice was duly mailed hereunder. Each such notice. shall set . forth the date fixed for redemption, the redemption pri<;e to..be paid and,. if less than all of the Series 2003 Bonds of one maturity are to be called, the distinctive numbers of stich Series 2003 Bonds to be redeemed and in the case of Series 2003 Bonds to be redeemed in part only, the portion of the. principal amount or Accreted Value thereof to be redeemed. . Any notice of optional redemption, other than with respect to ail. adv.ance refunding, shall be circulated only if sufficient funds h~ve been deposited in the Debt Service Fund to pay the redemption price of the Series 2003 Bonds to be redeemed. . Official notice of redemption having been given as aforesaid, the Series 2003 Bonds or . portions of Series 2003 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Series 2003 Bonds or portions of . Series 20.03 Bonds shall cease to. bear interest. Upon surrender of such Series 2003 Bonds for redemption in accordance with said notice, such Series 2003 Bonds shall be paid by the. Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Series 2003 Bond, there shall be prepared for the Owner a new Series 2003 Bond or Series 2003 Bonds of the same maturity in the amount of the unpaid principal of. such partially redeemed Series 2003 Bond. All Series 2003 Bonds which have been redeemed shall be canceled arid shall not be reissued. In addition to the foregoing notice, further notice shall be given by the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner. defeat the effectiveness of a call for redemption if. notice thereof is given as above prescribed. . (A) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Series 2003 Bonds being redeemed; (ii) the date of issu.e of the Series 2003 Bonds as originally issued; (iii) the rate of interest borne by each Series 2003 Bond being redeemed: (iv) the maturity date of each Series 2003 Bond being redeemed;. and (v) any other descriptive information. needed to identify accurately the Series 2003 Bonds being redeemed. . {OR610453;4} 10. . (B) Each further notice of redemption shall be sent. at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered . securities depositories then in the business of holding substantial amounts of obligations cif types similar to the type of which the Series 2003 Bonds consist and to one or mote national information services that disseminates. notices of redemption of obligations such as the Series . 2003 Bonds. . SECTION 16. FORM OF SERIES 2003 BONDS. The text of the Series 2003 Bonds, . together with the certificate of authentication to be endorsed therein,. shall be in substantially the following form, with such omissions, insertions and variations as. may be necessary, desirable, authorized or permitted by this Resolution, or as may be necessary if the Series 2003 Bonds or a portion thereof are issued as Capital Appreciation Bonds, or as may be necessary to comply with . applicable laws, rules 3Q.d regulations of the United States and of the State in effect upon .the. . issuance thereof. . . {OR610453;4} 11 [FORM OF SERIES 2003 BOND] Financial GuaraIity insurance Policy No. _. (the "Policy") with respect to. payments due for principal of and interest on this Bond has been issued by Ambac Assurance .Corporation ("Ambac Assurance"). The I>olicy has been delivered to The Bank of New York, New York, . . New York, as the Insurance Trustee under said Policy and will be held by such Insurance Trustee. or any successor insurance trustee. The Policy is on file and available for inspection at the principal office of the Insurance Trustee and a copy thereof may be secured from Ambac Assurance or the Insurance Trustee. All payments required to be made under the Policy shall be made in. accordance with the provisions thereof. The owner of this Bond acknowledges and . consentsto.the subrogation rights of Ambac Assurance as more fully set forth in the Policy. No.R- $ UNITED STATES OFAMERICA . STATE OF FLORIDA COl)NTYDF SEMINOLE . . CITY OF WINTER SPRINGS IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 2003 . MATURITY DATE: INTEREST RATE: DATED DATE: .. CUSIP: % July 1, 2003 Registered Owner: Principal AmOUl1t: KNOW ALL MEN BY THESE PRESENTS that the City of Winter Springs, Florida (hereinafter called the "Issuer") for value received, hereby promises to pay to the order of the . Registered Owner identified aboye or registered assigns, as herein provided, on the Maturity Date id.entified above, upon the presentation and surrender hereof at the office of Wachovia Bank? National Association, Charlotte, North Carolina, solely from the revenues hereinafter mentioned: the Principal Amount identified above in.any coin or currency of the United States of America which on the date of payment thereof is legal tender for the payment of public and . private. debts, and to pay, solely from said sources, to the Registered Owner hereof by wire transfer or check transmitted to the Registered Owner at his address as it appears on the Bond registration books of the Issuer as it appears on the 15th day of the calendar month preceding the applicable interest payment date, interest on said Principal Amount at the Interest Rat~ per annum identified above on each April 1 and October 1 commencing October I, 2003 from the interest payment date next preceding the dat(;: of registration and authentication of this Bond, unless this Bond is registered and all;thent~cated as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless this. Bond is registered and authenticated prior to October 1, 2003, in which event this Borid shall beadnterest from July 1, 2003. . . {OR610453;4} 12 The Bonds of this issue shall be subject to redemption prior to their maturity at the option .ofthe Issuer. . . (Insert Optional or Mandatory Redemption Provisions) Notice of such redemption shall be given in the manner required by the. Resolution described below. . . This Bond is one of an. authorized issue of Bonds in the aggregate principal amount of $ of like date, tenor and effect, except as to number, principal amount, maturity, . redemption provisions and interest rate, issued to refund certain outstariding debt of the Issuer all in. full. compliance with the Constitution and Statutes of the. State. of Florida, including . particularly Chapter 166, Part IT, Florida Sta~t~s, the Charter of the Issuer, and ResolutiOIi No. 615 duly adopted by the Issuer on May 1, 1989, as amended supplemented and particularly as supplemented by Resolution No. 2003-28 duly adopted by the Issuer on June 9, 2003 as supplemented (hereinafter collectively called the "Resolution") and is subject to all the terms and conditions of such Resolution. All. capitalized undefined terms used herein shall have the meaning set forth in the Resolution. . . This Bond and the interest hereon are payable solely from and secured by a lien upon and a pledge of the proceeds of the Public Service Taxes imposed by.the Issuer on the purchase of certa~n utilities services within. the corporate limits of the Issuer, under the authority of Section . 166.231, Florida Statutes, and pursuant to ordinances .of the City, the Local Communication Services Tax levied by the City pursuant to Section 202.19, Florida Statutes and ordinances of the City and the proceeds of the Franchise Fees to be paid for a period of thirty (30) years from April I, 1984, by the Florida Power Corporation, pursuant to an ordinance enacted by the Issuer on March 27, 1984 (such tax and fees, above described, are herein collectively referred to as "Excise Taxes") in the manner provided in the Resolution. . It is provided in the Resolution that the lien of this Bond on the Excise Taxes is on a parity with the lien thereon of the Issuer's outstanding Improvement Refunding Revenue Bonds, Series 1999. This Bond does not constitute a general indebtedness of the. Issuer withiIi the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the Owner of this Bond that such Bondowner shall never have the right. to require or compel the exercise of the ad valorem taxing power of the Issuer or taxation of any real or personal property therein for the payment of the principal of and interest on t1;ris Bond or the making of any debt service fund, reserve or other payments provided for in the Resolution. . It is further agreed between the Issuer and the Owner of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien or on any property of or in the Issuer, but shall constitute a lien only on the Excise Taxes all in the manner provided in the Resolution. Neither the members of the City Commission of the Issuer nor any person executing this bond shall be liable personally hereon or be subject liability or accountability by reason of the issuance hereof. {OR610453;4} 13 It.is certified that this Bond is authorized by and is issued in confomiity with the requirements of the Constitution and Statutes of the State of Florida. This Bond is and has all the qualities and incidents of a negotiable instrument under Article 8 of the Uniform Commercial Code, the State of Florida, Chapter 678, Florida Statutes. ~but may .be transferred by the Bondowner hereof in person or by his attorney or legal representative at the principal corporate trust office of the Registrar but only in the. marmer and subject to the conditions provided in the Resolution and upon surrender and cancellation of this . Bond. . . This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Resolution until it shall have been authenticat~d by the execution. by the Registrar of the certificate of authentication endorsed hereon. . . IN WITNESS WHEREOF, the City of Winter Springs, Florida, has issued this Bond and has caused the. same to be $igned by its Mayor, and countersigned and attested to by its Clerk (the signatures of the Mayor, and the Clerk being authorized to be facsimiles of such officers' $ignatures), and its seal or facsimile thereof to be affixed, impressed, imprinted, lithographed or repI'Od~.ced hereon, all as ofthe 1st day of July, 2003. . ' CITY OF WINTER SPRINGS; FLORIDA (SEAL) . .~~ f3w;4 Mayor . . . {OR610453;4} 14 CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds issued under the provisions of the within mentioned Resolution. Date Of Authentication: W ACHOVIA BANK, NATIONAL ASSOCIATION,.Registrar, as Authenticating Agent By: Authorized Officer (OR610453;4} 15 ASSIGNMENT AND TRANSFER. . . . . For value received the undersigned hereby sells, assigns and transfers unto (please insert Social Security or other identifying number of transferee) the. attached bond of the City .of Winter Springs, Florida, and does hereby constitute and appoint , attorney, to transfer the said Bond on the books kept for Registration thereof, with full power of substitution in the premises. Date . . Signature Guaranteed by . (member fIrm of the New York Stock . . Exchange or a commercial bank. or a trust company.) .. NOTICE:. No transfer will be registered and no new Bonds will be issued in the name of the Transferee, . unless the signature to this assignment corresponds with the name as it appears upon the face of the within Bond in . every particular, without. alteration or enlargement" or any change whatever and the Social Security or.. Federal Employer Identification Number of the Transferee is supplied. By: Title: (END OF FORM OF SERIES 2003 Bond] {OR610453;4} 16 SECTION 17. APPLICATION OF SERIES 2003 Bond PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of the Series 2003 Bonds shall be applied by the Issuer simultaneously with the delivery of such Series 2003 Bonds to. the purchaser thereof, as follows: . . (A) The accrued interest shall be depo~ited in the Interest Account and shall be used only for the purpose ()f paying interest becoming due on the Series 2003 Bonds on October 1, 2003. .. .. . . (B). The Issuer shall next deposit the Surety Bond in an amount equal to the Reserve Requirement for the Series 2003 Bonds into the subaccount in the Reserve Account hereby . created for the benefit of the Series 2003 Bonds. . . .. . (C).. A sufficient amount of the Series 2003 Bonds proceeds shall be applied to the payment of the premiums of the Financial Guaranty Insurance Policy and Security Bond and to the payment of costs and expenses relating to the issuance of the Series 2003 Bonds. . (D) . . Such sUm which, together with the other funds described in the Agreement as will be sufficient. to pay, as of any date of calculation, principal and interest and ariy redemption premium on the Prior Bonds at the time and in the manner provided in the Agreement, including expenses incurred by the Issuer in connection with the payment of such Prior Bonds shall be deposited to the .escrow fund created pursuant to the Agreement. Such funds shall be kept - separate and apart from all other funds of the Issuer and the moneys on deposit therein shall be . withdrawn, used and applied by the Escrow Holder solely for the purposes set forth herein and in the Agreement. Simultaneol,lsly with the delivery of the Series 2003 Bonds to the original purchasers thereof, the Issuer shall enter into the Agreement, the form of which will be approved by the Issuer in a supplemental Resolution adopted prior to the issuance of .the Series 2003 . Bonds. At the time of execution of the Agreement, the Issuer shall furnish to the Escrow Holder appropriate documentation to demonstrate that the sUms being deposited and the investments to . be made will be sufficient to defease the Prior Bonds. . (E) The balance .of any proceeds of the Series 2003 Bonds shall be applied to any lawful purpose of the Issuer SECTION 18. SPECIAL OBLIGATIONS OF ISSUER. The Series 2003 Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the . meaning of the Constitution of Florida, but shall be payable solely. from and secured by a lien upon and a pledge of the Excise Taxes on a parity. with the lien thereon of the Parity Obligations as herein provided and as provided in the Original Investment. No. Holder or. Holders of any . Series 2003 Bonds issued hereunder ~hall ever have the right to compel the exercise of the ad . . valorem taxing power of the Issuer or taxation in any form of any real or personal property therein, or to compel the Issuer to pay such. principal and interest from any other funds of the Issuer. SECTION 19. SECURITY FOR SERIES 2003 BONDS. The. payment of the principal of or redemption price, if applicable, and interest on the Series 2003 Bonds shall be secured forthwith equally and ratably by a pl,edge of and prior lienupon the Excise Taxes. The Excise {OR6l0453;4} 17 Taxes shall be subject to the lien of this pledge immediately upon the issuance and delivery of the Series 2003 Bonds, without any physical delivery by the Issuer of the Excise Taxes or further act, and the lien of this pledge shall be'valid and binding as against all parties having claims of any kind against the Issuer, in tort, contract or otherwise. The Issuer does hereby irrevocably . pledge the Excise Taxes to the. payffient" of the principal of or redemption price, if applicable, and interest on the Series 2003 Bonds in the manner provided in this Resolution and the Original Instrument. The Series 2003 Bonds are payable from the Excise Taxes on a parity, equally and ratably, with the Parity Obligations. : SECTION 20. ADDITIONAL SECURITY. Anything herein to the contrary notwithstanding, however, the Issuer may cause the Series 2003 Bonds to be payable from and secured by the Financial Guaranty Insurance Policy and/or the Surety Bond not applicable to any . one or more other Series of Bonds, as shall be provided by resplution of the City Commission of . the Issuer, in addition to the security of the Excise Taxes provided herein.. . . SECTION 21. APPLICATION OF PROVISIONS OF ORIGINAL INSTRUMENT. The Series 2003 Bonds shall for all.purposes be considered to be Additional Parity Obligations issued under the authority of Section 18(H) of the Original Instrument as amended and shall be entitled to all the protection and security provided in and by the Original Instrument for Additional Parity Obligations, and the Series 2003 Bonds shall be in all respects .entitled to the same security; rights and privileges enjoyed by the Parity Obligations. The debt service on the Series 2003 Bonds shall be payable from the Debt "Service Fund established by the Original Instrument on a parity with the Parity Obligations, and deposits shall be made into the Debt Service Fund by the Issuer in amounts fully sufficient to pay the debt service on the Series 2003 Bonds and on the Parity Obligations as such debt service becomes due. Notwithstanding the immediately preceding sentence, the Surety Bond shall secure only the Series 2003 Bonds. SECTION 22. FINANCIAL GUARANTY INSURANCE POLICY AND SURETY BOND. Notwithstanding any provision to he contrary contained herein, the following provisions shall apply so long as the Financial Guaranty Insurance Policy and/or Surety Bond with respect . to the Series 2003 Bonds shall be in full force and, effect: . A. Consent of Ambac Assurance . Any provision of this Resolution expressly recognizing or granting rights in or to Ambac Assurance may not be amended in any manner which affects the rights of Ambac Assurance hereunder without the prior written consent of Ambac Assurance. Ambac Assurance reserves the right to charge the Issuer a fee for any consent or amendment to the Resolution while the Financial Guaranty li1surance Policy is outstanding. B. Consent of Ambac Assurance in Addition to Holder Consent Unless otherwise provided in the Resolution, Ambac Assurance' consent shall be required in addition to Holder consent, when required, for the following purposes: . (i) execution. . and delivery of any supplemental Resolution or any amendment, supplement or change to or modification of the Resolution; (ii) removal of the Registrar or Paying Agent and {OR610453;4} 18 selection and appointment of any successor registrar or paying agent; and (iii) initiation or approval of any action not described. in (i)or (ii) above which requires Holder consent. C. Consent of Ambac Assurance in the Event of Insolvency Any reorganization or liquidation plan with respect to the Issuer must be acceptable to Ambac Assurance. In the event of.any reorganization or liquidation, Ambac Assurance: shall have the right to vote on behalft()f all Holders who hold Ambac Assurance-insured Series 2003 Bonds absent a default by" Ambac . Assprance under the Financial Guaranty .lnsurance Policy insuring such Series 2003 Bonds. D. Consent of Ambac Assurance Upon Default Anything. in this Resolution to the contrary. notwithstanding, upon the occurrence and continuance of an event of default as defined in the Resolution, . Ambac Assurance shall be entitled to control. and direct the enforcemen~ of all rights and remedies granted to the . Holders under the Resolution, including, withoutlirnitation: (i) the right to accelerate the principal of the. Series 2003 Bonds, and. (ii) the right to annul any . declaration of acceleration, and Ambac Assurance shall.also be entitled to approve all waivers of events of default. E. Acceleration Rights. Upon the. occurrence of an event of default, the Registrar may, with the consent of Ambac Assurance, and shall, at the direction of Ambac Assurance or 25% of the Holders with the consent of Ambac Assurance, by. written notice to the Issuer and Ambac Assurance, declare the principal. of the Series 2003 Bonds to be iinmediately due and payable, whereupon that portion of the principal of the Series 2003 B"onds thereby coming due and the interest thereon .accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in this Resolution or in .the . Series 2003 Bonds to the contrary notwithstanding. F. Notices andJIiformation ot be Given to Ambac Assurance (1) While the Financial Guaranty Insurance Policy is in effect, the Issuer shall furnish. to Ambac Assurance, upon request, the following: (a) a copy of any financial statement; audit and/or annual report of the Issuer. (b) such additional information it may reasonably request. Upon request, such information shall be delivered at the Issuer's expense to the attention of the SUJ.'Veillance Department, unless otherwise indicated. . (2) a copy of any notice to be given to the registered owners of the Series 2003. Bonds, including, without limitation, notice of any redemption of or defeasance of Series 2003 Bonds, and any certificate rendered pursuant to this Resolution relating to the . security for the Series 2003 Bonds. (OR610453;4} 19 . . (3) To the extent that the Issuer has entered into a continuing disclosure agreement" with respect to the Series 2003 Bonds, Ambac Assurance shall be included as party to be notified. The following information shall be provided to. the attention of the General Counsel office of Ambac Assurance: 1. The Issuer shall notify Ambac Assurance of any failure of the Issuer to provide relevant notices, certificates, etc. 2. Notwithstanding any other proVIsIOn of this Resolution, the Issuer . shall . !mmediately notify Ambac Assurance if at any time there are insufficient moneys to make any . payments of principal and/or interest as required and immediately upon the occurrence of any event Df default hereunder. . . . The Issuer will permit Ambac Assurance to discuss the affairs, finances and accounts of the Issuer or any information Ambac Assurance may reasonably request regarding the security. . for the Series 2003 Bonds with appropriate officers. of the Issuer. The Issuer will permit Ambac Assurance to have access to and. to make copies of all books and records relating to the Series2003 Bonds at any reasonable time. Ambac Assurance shall have the right to direct an accounting at the Issuer's expense, and the Issuer's failure to comply with such direction within thirty (30) days after receipt of written notice of the direction from Ambac Assurance shall be deemed a default hereunder; provided, however, that if compliance cannot occur within such period, then such period will be extended so long as compliance is begun within such period and diligently pursued, but only if such extension would not materially .adversely affect the interests. of any registered owner of the Series 2003 Bonds. G. Payment Procedure Pursuant to the Financial GU;1ranty Insurance Policy As long as the Financial Guaranty Insurance Policy shall be in full force anci" effect, the Issuer and any Paying Agent agree to comply with the following provisions: (a) At least one (1) day prior to all interest payment dates the Paying Agent, will . determine whether there will be sufficient funds in the funds and accounts to pay the principal of or interest on the Series 2003 Bonds on such interest payment date. If the Paying Agent, determines that there will be insufficient funds in such funds or accounts, the Paying Agent, shall so notify Ambac Assurance. Such notice. shall specify the amount of the anticipated deficiency,. . the Series 2003 Bonds to which such deficiency is applicable .and whether such Series 2003 Bonds will be deficient as to principal or interest, or both. . If the" Paying Agent has not so .notified Ambac Assurance at least one (1) day prior to an interest payment" date, Ambac Assurance will make payments of principal or interest due on the Series 2003 Bonds on or before the first (1 st) day next following the date on which Ambac Assurance shall have received notice of nonpayment from the Paying Agent. (b) The Paying Agent, shall, after giving notice to Ambac Assurance as provided in (a) above, make available to Ambac Assurance and, at Ambac Assurance's direction, to The {OR6l0453;4} 20 Bank of New York, in New York, New York, as insurance trustee for Ambac Assurance or any successor insurance trustee (the "Insurance Tnistee"), the registration books of the Issuer maintained by the Paying Agent, and all records relating to the funds and accounts maintained . Under the Resolution. ( c) The Paying Agent, ~hall provide Ambac Assurance and the Insurance Trustee with a list of registered owners of Series 2003 Bonds entitled to receive principal or interest .payments from Ambac Assurance under the terms of the Financial Guaranty Insurance Policy, and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the . registered owners of Series 2003 Bonds entitled to receive full or partial interest payments from Ambac Assurance and (ii) to pay principal upon. Series 2003 Bonds surrendered to the Insurance Trustee by the registered owners of Series 2003 Bonds entitled to receive full or partial principal payments from Ambac Assurance~ (d) - The Paying Agent, shall,. at . the time. it provides notice to Ambac Assurance pursuant to (a) above, notify registered owners of Series 2003 Bonds entitled to receive the payment of principal or interest thereon from Ambac Assurance (i) as to the fact of such entitlement, (ii) that Ambac Assurance will remit to them all or a part of the. interest. payments . next coming due upon proof of Holder entitlement to interest payments and delivery to the Insurance Trustee, in fOf!ll satisfactory to the Insurance Trustee, of an appropriate al?signment of the registered owner's right to payment, (iii) that should they be.entitled to receive full payment of principal from Ambac Assurance, they must surrender their Series 2003 Bonds (along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee to perinit oWnership of such Series 2003 Bonds to be registered.in the name of Ambac Assurance) for payment to the Insurance Trustee, and to the Paying Agent,. and (iv) that should they be entitled to receive partial payment of principal from Ambac Assurance, they must surrender their Series 2003. Bonds for payment thereon first to. the Paying Agent, who shall note on such Series 2003 Bonds the portion of the principal paid by the. Paying Agent, and then, along with an . . . . appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the Insurance Trustee; which will then pay the unpaid portion of principal. ( e) In the event that the Paying Agent, has notiCe that any payment of principal of or interest on a Series 2003 Bond which has become Due forPaymep.t and which is made to a Bolder by or on behalf of the Issuer has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance wit the final, nonappealable order of a court having competent . jurisdiction, the Paying Agent, shall at the. time Ambac Assurance is notified pursuant to (a) above, notify all registered owners that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment. from Ambac Assurance to the extent of such recovery if sufficient funds are not otherwise available, and the Paying Agent, shail furnish to Ambac Assurance its records evidencing the payment of pnncipal of and interest on the Series 2003 Bonds which have been made by the Paying Agent, and subsequently recovered from registered owners and the dates on which such payments were made. (f) In addition to those rights granted Ambac Assurance under this Resolution, Ambac.Assurance shall, to the extent it makes payment of principal of or interest on Series 2003 . Bonds, become subrogated to the rights of the recipients of such payments in accordance with {OR610453;4} 21 the terms .of the Financia1 Guaranty Insurance Policy, and to evidence such subrogation (i) in the case of. subrogation as to claims for past due interest, the Paying Agent shall note Ambac Assurance's rights as subrogee on the registration books of the Issuer maintained by the Paying Agent. upon receipt from Ambac Assurance of proof of the payment of interest thereon to the. registered owners of the Series 2003 .Bond, and (ii) in. the case of subrogation as to claims for.. past due principal, the Paying Agent, shall note Ambac Assurance's rights as subrogee on the regis.tration books. of the Issuer, upon surrender of the Series.2003 Bonds by the registered. owners thereof together with proof of the payment of principal thereof. . H. Paying Agent - Related Provision . . 1. The Paying Agent may be removed at any tiine,at the request of Ambac . Assurance, for any breach of the trust set forth herein. 2. Ambac Assurance shall receive prior Written notice of any Paying Agent .. .. resignation. 3. Every successor Paying Agent appointed pursuant to this Resolution shall be a trUst company or bank in good standing located in or incorporated under the laws of the State of Florida, duly authorized to exercise trust powers .and subject to examination by federal . or state authority, having a reported capital and surplus of not less than $75,000,000 and acceptable to Ambac Assurance. Any successor Paying Agent, if applicable, shall not be appointed unless Ambac ASsurance approves such successor in writing. .4. Notwithstanding any other provision of this. Resolution, in determining. whether the rights of the Holders will be adversely affected by any action taken pursuant to the terms and. provisions of this Resoiution, the Paying Agent shall. consider the effect on' the Holders as if there were no Financial Guaranty Insurance Policy. 5.. Notwithstanding any other provision of this Resolution, no removal, resignation to termination of the Paying Agent shall take effect until a successor, acceptable to Ambac Assurance, shall be appointed. . I. Ambac As Third Party Beneficiary To the extent that this Resolution confers upon or gives or grants to Ambac Assurance any right, remedy or claim under or by reason of this Resolution, Ambac Assurance is herby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right remedy or clairn conferred, given or granted hereunder. J. Parties Interested Herein Nothing in this Resolution expressed or implied is intended or shall be construed to confer upon, or to .give or grant to, any Person, other than the Issuer, Ambac Assurance, the Paying Agent, and the registered owners of the Series 2003 Bonds, any right, remedy or claim under or by reason of this Resolution or any covenant, condition or stipulation hereof, and all covenants stipulations, promises and agreements in this Resolution contained by and on behalf of (OR610453;4} 22 the Issuer shall be for the sole and exclusive benefit of the Issuer, Ambac Assurance, the Paying Agent, and the registered owners of the Series 2003 Bonds. K. Covenants fe Article 9 Collaternl . . At the date of issue of the Series 2003. Bonds the Issuer will have filed any required financing statements describing, and transferring possession or control over, the Excise Taxes (and -for so long as any Series 2003 Bond is outstanding the Issuer will file, continue, and amend all such. fmancing statements and transfer such possession and control) as may be necessary to establish and niaintain such priority in each jurisdiction in which the Issuer is organized or such . collateral may be located or that may otherwise be applicabie pursuant to Unifoim Coinmercial Code ~~9.301-9.306 of such jurisdiction. . . . SECTION 23. FEDERAL INCOME TAX COVENANTS. . (A) The Issuer covenants with the Holders of the Series 2003 Bond$ that it shall not use the proceeds of such Series of Bonds in any manner which would cause the intere.st on such .. Series of Bonds to be or become includable in the gross inco~e of the Holder thereof for federal. income tax purposes. (B) The Issuer covenants with. the Holders of the Series 2003 Bonds that neither the Issuer nor any Person under its control or direction will make any use of the proceeds of such Series 2003 Bonds (or amounts deemed to be proceeds under the Code) in any manner which. .. would cause such Series 2003 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Gode, and neither the Issuer nor any other Person shall do any act or fail to do any act which would .cause the interest on such Series 2003 Bonds to become includable in the gross . income of the Holder thereof for federal income tax purposes: . (C) . The Issuer hereby covenants with the Holders of the Series 2003 Bonds that it will . comply with all provisions of the Code necessary to maintain the exclusion of interest on such Series 2003 Bonds from the gross income of the Holder thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the United States Treasury pursuant to the Code. . SECTION 24. DEFEASANCE. The covenants arid obligations of the Issuer shall be defeased and discharged under terms of this Resolution as follows: (A) If the Issuer shall payor cause to be paid, or there shall otherwise be paid, to the Holders of all Series 2003 Bonds .the principal and/or Accreted Value, redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein and in .the Series 2003 Bonds, then the covenahts, agreements and other obligations of the Issuer to the Bondholders, shall thereupon cease, terminate and become void and be discharged and satisfied. If the Issuer shall payor cause to be paid, or there shall otherwise be paid, to the Holders of any Outstanding Series 2003 Bonds the principal and/or Accreted Value, redemption premium, if any, and interest due or to become due thereon, at the times and in the manner . stipulated herein, such Series 2003 Bonds shall cease to be entit1e~ to any benefit under this Resolution, and all covenants, agreements and obligations of the. Issuer to the Holders of such {OR610453;4} 23 Series 2003 Bonds shall thereupon cease, terminate and become void and be discharged and satisfied. . . . (B). The Series 2003 Bonds, redemption premium, if any, and interest due or to become due for the payment or redemption of which moneys shall have been set aside and shall be held in trust (through deposit by the Issuer of funds for such payment or redemption or . otherwise). at the maturity or redemption date thereof shall be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section 24. Any Outstanding . Series 2003 :aonds shall prior to the maturity or redemption date thereof be deemed to have been paid. within. the meaning .and with the effect expressed in paragraph (A) of this Section if (i) in case of said Series 2003 Bonds to be redeemed on ~y date prior to their maturity, the Issuer shall have given to the escrow agent instructions accepted in writing by the escrow agent to notify Holders of Outstanding Series 2003 Bonds in the manner required herein of the redemption of such Series 2003 Bonds. on said date and (ii) there shall have been deposited :with the escrow agent either moneys in an amount which shall be sufficient, or Federal Securities (including any Federal "Securities issued or held in book-entry form on the books of the Department of the Treasury of the United States) the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with. the escrow agent at the same tiine, shall be sufficient, to pay when due tht:: principal of and/or Accreted . Value, or premium, if any, and interest due and to become due on said Series 2003 Bonds on or prior to the redemption date or maturity date thereof, as the case may be. Notwithstanding anything herein to the contrary, in the event that the principal and/or . Accreted Value and/or interest due on the Series 2003 Bonds shall be paid by Ambac Assurance pursuant to the Financial Guaranty Insurance Policy and Security Bond,. the Series 2003 Bonds shall remain Outstanding for all purposes, not be defe~ed or otherwise satisfied and not be considered paid by the Issuer, .and the assignment and pledge of the Excise Taxes and all covenants, agreements and other obligations of the Issuer to the registered owners shall continue to exist and shall run to the benefit of Ambac Assurance, and Ambac Assurance. shall be subrogated to the rights of such registered owners. . .. 1 . SECTION 25. CONTINUING DISCLOSURE. The Issuer hereby covenants and agrees that, in order to provide for compliance with the secondary market disclosure requirements of the Rule, that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be. executed by the Issuer prior to the time the Issuer delivers the Series 2003 Bonds to the participating underwriter or underwriters, as it may be amended from time to time in ~ccordancewith the terms thereof. Notwithstanding any other provision of this Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an Event of Default hereunder. However, the Continuing Disclosure Certificate shall be enforceable by the Series 2003 Bond owners in the event that the Issuer fails to cure a breach thereUnder within a reasonable time after written notice from a Series. 2003 Bond owner to the Issuer that a breach .exists. Any rights of the Series 2003 Bond owners to enforce the provisioris of the covenant shall be on behalf of all Series 2003 Bond owners and shall be limited to.a right to obtain specific performance of the Issuer's obligations thereunder. SECTION 26. CHANGE IN LAW. Due to a change in law which change was intended to be revenue. neutral, the Local Communication Services TaX is levied. by the City and the City {OR610453;4} 24 . . no longer levies. the Public Service Taxes or telecommunication services. In order to cure any ambiguity in the Original Instrument resulting from such change in law, the City hereby determines to amend the defInition of Excise Taxes set forth in the Original Instrument as follows: "Excise Taxes" shall mean the Franchise Fees, the Public Service Taxes and the Local Communication Services Tax. SECTION 27. SEVERABILITY. If anyone or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid or shall in any manner be held to adversely affect the validity of the Series 2003 Bonds, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Resolution or of the Series 2003 Bonds issued hereunder. SECTION 28. SALE OF BONDS. The Series 2003 Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the requirements of this Resolution and other applicable provisions of law. SECTION 29. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution of a preliminary offIcial statement in substantially the form attached hereto for the purpose of marketing the Series 2003 Bonds and delegates to the City Manager the authority to deem such Preliminary Official Statement "final" except for "permitted omissions" within the contemplation of the Rule. SECTION 30. GENERAL AUTHORITY. The members of the City Commission of the Issuer and the Issuer's officers, attorneys and other agents and employees are hereby authorized to perform all acts and things required of them by this Resolution or desirable or consistent with the requirements hereof for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Series 2003 Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents which shall be required by bond counselor the initial purchasers of the Series 2003 Bonds to effectuate the sale of the Series 2003 Bonds to said initial purchasers. SECTION 31. NO PERSONAL LIABILITY. Neither the members of the City Commission of the Issuer nor any person executing the Series 2003 Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. SECTION 32. REPEAL OF INCONSISTENT INSTRUMENTS. Any Resolutions, or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. {OR610453;4} 25 . . . . . . . SECTION 33. EFFECTIVE DATE. The provisions of this Resolution shall take effect immediately upon its passage. ADOPTED this 9th day of June, 2003. (SEAL) . ATTEST: .... . atOform:. City Att~rney {OR610453;4} 26 CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA Ma~~~ EXHIBIT A . Ambac Assurance Corporation . One State Stre.et Plaza New York, NY 10004 212.6~8.0340 A member of Ambac FinanCial Group, Inc. . . COMMITMENT FOR FINANCIAL GUARANTY INSURANCE Obligor: CITY OF \v:rNrnR SPRINGS, FLOJW>A, . Commitment Number: .24847 Commitment Date: May 16, 2003 Expiration Date: August 15,2.003 Obligations: $8,755,000. Improvement Refunding Revenue B~~ds, Series 2003, dated July 1, .2003 maturing on October 1st in the years 2004 through 2018, both inclusive. . Insurance premium: 0.439% of the. total principal and interest due on the Obligations (Fitch, Inc., Moody's Investors Service and Standard & Poor's Credit Markets Services assess separate rating fees which are payable directly to them. . Each rating agency will bill..separately and all questions regarding the payment of such fees must be addressed to the applicable agency.) . Ambac Assurance Corporation ("~mbac"), a Wisconsin Stock Insurance' COJ:poration, . hereby commits to issue a Financial Guaranty Insurance Policy (the "Policy") relating to the above- described debt o.bligations (the "Obligations"), substantially in the form imprinted in this COI1UI).itment, . .. subject to the terms and conditions contained herein or added hereto (see conditions set forth herein). . To keep this Commitment in effect after the. expiration date set forth above, a request for renewal must be submitted to Ambac prior to such expiration date. Ambac reserves the right to refuse wholly or iti .part to . grant a renewal. ..... . ... The Financial.Guaranty Insurance Policy shall be issued if the following conditions are satisfied: 1. The documents to be executed ;1nd delivered i~ connection with the issuance and sale ~ftheObligations .. shaH not contain liny untrue or misleading statement of a material fact and shaH not fail to state a material fact necessary in order to make the information contained therein not misleading. . . . 2. No event shall occur. which-would permit any purchaser of the Obligations, otherwise required, .not to be required to purchase the Obligations on the date scheduled for the issuance and delivery thereof. 3. There shaH be no material change in or affecting the Obligations (including, without limitation, the. . security for.the Obligations or the proposed debt service structure for the Obligations) or the financing documentS or the official statement (or any similar disclosure document) to be executed and delivered in , connection with the issuance and sale of the Obligations from the descriptions or schedules thereof heretofore provided to Ambac.. . 4. The Obligations shall contain no reference to Ambac, the Policy or the financial guaranty insurance . evidenced thereby except as may be approved by Ambac. · Subject to change, with Ambac's approval. A-I 5. Ambac shall be pravided with: (a:) Executed capiesaf all financing dacuments, the afficial statement (ar any similar disclosure . dacument) and the variaus legal apinians delivered in cannectian with the issuance and sale af the Obligatio.ns, including, without iimitation, the .unquallfied appro.ving o.pinio.n of bond co.unsel rendered by. a law firm acceptable to. Amba.c. The form of Bond Caunsel's appraving o.pinio.n shall also. indicate; if applicable, that the Obligatians are exempt fram federal incame taxatioI?, that the .obligar must camply"with certain co.venants under and pursuant to. the new. tax law and that the Obligor has the legal power to. co.mply with such cavenants. Such apinian of band caunsel shalllJe. - . addressed to. Ambac ar, in lieu thereaf, a letter shall be. provided to. Ambac to. the effect that Ambac. .. may rely an such apinian as if it were addressed to. Ambac. . . (b) Evidence o.f a wire transfer in an amaunt equal to. the insurance premium at the time of the, issuance . and delivery afthe Obligatians. ... .,. . . . . 6. Unless expressly.waived in whole ar in part by Ambac, the financing dacuments and the Official Statement shall cantain (a) the terms and pravisians pravided in Ambac'sSTANDARD PACKAGE transmitted herewith, and (b) any additianal oral or written pravisians ar camments submitted by Ambac. 7. Ambac shall receive a capy af any insUrance palicy, surety barid, gUaranty arindernnificatian ar any ather palicy, cantract ar agreement which pravides far payment af all ar any partian af the debt, the costs of recanstruction, the lass af business incame ar in any way secures,. ensures ar enhances the income stream anticipated .to pay the Obligations. 8. Any provisians ar requirements af the Purchase Contract or Band Purchase Agreement referencing . Ambac must be sent to. .the attentian af Danielle Brackett not iess than five (5) .business days priar to. clasing. If such pravisians or requirements are nat received within that time, campliance may nat be . . possible. .. . .9.. Review and approval by Ambac at least 5 days priar to. the closing af the Escraw Agreement far the .. defeas~nce ofthl;: applicable Obligations(the "Priar Obligati<;>TIs"). . . . . ... . 10. Priar to. clasing, Ambac must receive certifi~atian by an accounting firm acceptable to. Ambac that the . securities invested are sufficient to. pay the Priar Obligations. Upan receipt" of this cammitment Ambac . shauld be natified which firm 'Yill be praviding certificatian. 1.1. Receipt af an acceptable o.pinian af co.unsel addressed to. Ambac that the Priar Obligatianshave been .legally defeased. . . ... . . 12. Receipt of an acceptable apinio.n af .caunsel addressed to. Ambac with regard to. the validity and enforceability af the Escraw Agreement 13. If a forward supply cantract is used: (a) Securities delivered to. the escrow.agreement must be non-ca:tlable U.S. Gavernment abltgatians, which do. nat mature later than the date needed to pay debt service an the refunded Obligatians.. (b) The CPA verificatian ~ust be in fann and substance satisfactary to. Ambac and mustapine that the .escraw is sufficient to. defease the refunded Obligatians whether ar nat the farward supply contract pravider delivers securities to. the escraw:. . (c) The farward supply cantract must specify that (i) the purchase price afthe securities delivered to. . the escraw must nat exceed the amaunt af cash received fram maturing securities in the escraw, as specified in the verificatian, and (ii) the maturity value af the securities delivered to. the escraw must nat be less than the purchase price paid far such securities. A-2 (d) The forward supply contract provider shall have no recourse to the escrow upon any failure of the Obligor or .escrow agent.to perform its obligations under the forward supply contract. Other than . the. payment of the purchase price for the securities to be delivered pursuant to. the forward supply contract, no payments of any other kind may be made from the escrow in respect of the forward . supply contract. (e) The forward supply contract provider must be rated at l.eastA by a nationally recognized rating agency. (f) The forw3!d supply contract shall be in form and substance satisfactory to Ambac. ~~Y\ CJ2 ~iJrLt Authorized Officer . . .. A-3 '. Ambac Assurance Corporation One"State Street Plaza New York, NY 10004 212.668.0340 A member of Ambac Fillancial Group, Inc. CO~TMENTFORSURETYBOND Obligor: CITY OF WINTER SPRINGS, FLORIDA. Commitment Number: SB24848. . Commitment Date: May 16,2003. Expiration Date: : Augu.st 15,2003 Obligations: . .$8,755,000 Improvement Refunding Revenue Bonds, Series 2003, dated July 1, 2003 . maturing on October 1,.2018 . Surety Amount:. $875,000. Insurance premium: 2.0% of the surety amount. Ambac Assurance Corporation (Ambac) A Wisconsin Stock Insurance Corporation hereby commits to . issue a Surety Bond (the "Commitment") relating to the Debt Service ReServe Fund for the above-described: . debt obligations (the. "Obligations"),. substantially. in the form attached hereto, subject to. the terms and conditions contained herein or.added hereto (see conditions set forth herein). . To extend this Commitm~nt after the expiration date set forth above, an oral (subsequently confmned in .~ writing) .or written request for renewal must be submitted. to Ambac at least one business day prior to such . expiration date. Ambac reserves the right to refuse to grant a renewal or may renew this Commitment subject to adcijtional terms and conditions.. . The Surety Bond (the "Surety';) shall be issued if the following conditions ~e satisfied: 1. . Arnbacshall r~ceive an opinion of co"tmsel or a certificate of an officer of the Obligor or ultimate obligor stating that the information supplied to Ambac in orderto obtain the Surety arid the documents to be executed and delivereo in connectio.n with the issuance and sale of the Obligations.do not contain any untrue or misleading statement of a material fact and do not fail to state a material fact required to be stated therein or necessary in order to make the information coptained therein not misleading. 2.. No even~ shall occur which would permit any purchaser of the Obligations, otherwise requireq., not to be required to purchase the Obligations on the date scheduled for the issuance and delivery thereof. . Subject to change, with Ambac's approval. A-4 . . 3. There shall be no material change. in. or affecting the Obligations,. the Obligor or ultimate obligor (including, but not limited to, .the security for the Obligations or the proposed debt service structure for the Obligations), the Official Statement,. ifany (or any .similar disclosure document), including any fmancial statements therein contained, the fmancing documents or any legal opinions to be .executedand . delivered in. connection. with the issuance and sale of the Obligations, or my other information submitted to Ambac in order to obtain the Surety, from the descriptions or schedules thereof heretofore provided to Ambac at any time prior to the isSuance of the Obligations and there shall not have occurred . . . or come to the attention of the Obligor or purchaser any material change of fact or law adverse to the .. interests of Ambac; .lUlless approved by Ambac ill writing. .. . 4. Unless expressly waived in. whole or in part by Ambac, the fmancing. documents shall contain a) the terms and provisions provided in the Ambac STANDARD PACKAGE transmitted hereWith, and b ) any .. provisions or corriments given orally by Ambac. . 5. Ambac will prepare, and 'the Obligor will execute, a Guaranty Agreement in the form (with stich. . . . revisions of Ambac and the Obligor agree to) contained in the Standard .Paokage. 6. NO LATER THAN;FIVE (5) BUSINESS DAYS PRIORTO CLOSING, Ainbac shall be provided with: .a) b) c) d) . the.final debt service schedule; and. . proposed copies of all fmancing documents; and the propOsed officiiU statement (or any similar diSclosure document); and the proposed various legal opinions delivered in connection with the issuance and sale of the Obligations, including, without ..limitation, the lUlqualified approving opinion of bond coUnsel rendered by a law firm acceptable to Ambac. The. form of bond counsei's approving opinion must be acceptable to Ambac.. the form of bond counsel's approving opinion shall- indicate that the. Obligor must comply with certain covenarits under and pursuant to the Intemal. Revenue Code of 1986, as amended and that .the. Obligor has the legal power to comply with such covenants. Ambac shall also be provided with executed copies of all fmancing documents,. including but not limited to the Official Statement (or any similar disclosure document) and the various legal opinions .rendered~ The executed opinion of bond COlUlSel shall be addressed. to Ambac or in lieu thereof, a letter shall be provided to Ambac to the effect that Ambac may rely on . such opinion as if it were addr~ssed to Ambac and such letter shall be delivered "'.'ith an executed . opinion; and. . any provisions of the Purchase Contract or Bond Purchase Agreement referencing Ambac or the Obligor of the Surety in general. If such provisions are not received in a timely manner or if. provisions are inserted in the Purchase Contract or Bond Purchase Agreement without Ambac's knowledge, compliance with such provisions may not be possible; .and a letter from bond counselor counsel to the purchaser or otherwise from another counsel acceptable to Ambac to the. effect that the financing documents, the Official Statement (or any similar disclosure document) and the various legal opinions executed and delivered in connection with the issuance and sale of the Obligations, are substantially in the forms previously submitted to Ambac for review, with only such amendments, modifications or deletions as may be approved by Ambac; and . e). f) A-5 . g) a copy of any insurance policy, surety bond; guaranty or indemnification or any other policy, . . contract or agreement which provides for payment of all or any portion of the debt, the costs of. reconstruction, the loss of business income or in any way secures,. ensures or enhances the income stream anticipated to pay the Obligations. 7. Evidence '.of wire transfer of an amount equal to the payment for the Surety at the time of the issuance and delivery of the Obligations. . 8.. An. opinion addressed to Ambac by counsel acceptable to Ambac that. the Guaranty Agreement is a legal; valid and binding obligation of the Obligor.thereof, enforceable in accordance with its terms. . . . . . 9. The escrow agreement, in form ~nd.substance acceptable to Ambac, for the. complete defeasance of the. applicable Obligations (the "Prior Obligations"). . 10. Certification by a nationally recognized .accounting firm, pre-approved by Ambac, that the securiti~s . . . invested are sufficient to pay the Prior Obligations. . . . . . . . . 11. Ambac. must receive an opinion of Counsel acceptable to Ambac that the Prior Obligations have been . legally defeased.. .. . . .12. A draft opmion of bond counselor special tax counSel acceptable to Ambac, addressed to Ambac, a teIecopy of the executed opinion on the day of closing (212-208-3404, to the attention of yoUr closing coordinator) and an executed oJ;iginal following closing, to the effect that the refimding and escrow are .in full compliance with all applicable F:ederal arbitrage regulations. 13. . Funds held by.the Escrow Trustee for the paymentS of. the refunded Obligations must be held as cash fully insured by or the Federal Deposit Insurance Corporation or invested in direct obligations of the . United States of America. . 14. Alnbac must receive, at least five (5) business days prior to closing,. draft opinions of Obligor's cO).Jnsel and escrow agenCs counsel and a telecopy of the executed opinion on the day of closing (212-208-3404 to the attention of your closing coordinator) regarding the validity, binding nature and enforceability of the escrow agreement. . . - 15. IF A FORW AM SUPPLY CONTRACT IS USED: a) . . Securities delivered to the escrow agreement must be non-callable U.S, Government obligations, which do. not mature later than the date on which needed to pay debt service on the refunded Obligations. . . b) The CPA verification must be in a form and substance satiSfactory to. Ambac and must opine that the escrow is sufficient to be defe~e the refunded Obligations whether or not the forward supply contract provider delivers securities to the escrow. . , . c) The forward supply contract must specify that (a) the purchase price of the securities delivered to the escrow must not exceed the amount of cash received from maturing securities in the escrow, as specified in the verification, and (b) the maturitY value of the securities in the escrow must not be less than the pUJ:chase price paid for such securities. d) The forward supply contract provider shall have no recourse to the escrow upon any failure of the. . Obligor or escrow agent to perfonn its obligations under the forward supply contract. Other than the payment of the purchase price for the securities to be delivered pursuant to the forward ~upply contract, no payments of any other kind may be made from the escrow in respect to the fOiWard supply contract. A-6 e) The forward supply contract provider must be at least A by a nationally recognized rating agency. . f). The forward supply contract.shall be in form and substance satisfactory to Ambat. ~~'D)A a~~h . ufuorized Officer. -. (- . A-7 .rJ1~ !~~ 8 :a .~ s ~ 19 ~.S 0 .a C:S'~ 1t3.~.~ c5:ao oJ'~ i .=..~ .1 ~ 8- J.l.~ .S So~ g," .. " .8 .. i~~ ~G~ ..i~ JldlJ ~~. .15....10 8.~ ~ !~~ ~J:l:ii @'Cllfl .....so 8 ::I ~ ." ~!! '0 co.~ ".8:= .8eJ: 8 oJ.1!l >.= oS' g~l "88.8 ~j .a ~ ~.~ ~u .~ 0 j! ""j:; .."co 'Cl c t! c=.,8 o " ll'~:';; ll'~'l!! 'S ~ .;, IIi.., l:l Z !l ..- .. Z '& ~ ..s" .B .. '0 .Jl~ ~ Ir~.s 8 .. !'l !l .S;: or s'c 2l"S;: " JlJ!l~ 08,8 810- .. ~ .. *J!l] ;: t!l a e -'S;: ...e ~ .S IE S I:!o- Jl ~! 119" .S II ~ t:= .g acCll ...!!l'Q ..8 oS e ~ == s e Jl .. lBl J.la:e '8~~ .. ip3 S'u ~ 88." sll;; ""'8~ :i::>,!! ~J~ i:-- .. aJ.g .~ .s.~ ~l1g .,dg i=~o PRELIMINARY OFFICIAL STATEMENT DATED NEW ISSUE - BOOK-ENTRY ONLY .2003 (Ambac Insured) (See "Ratings" and "Financial Guaranty Insurance" herein) In the opinion of Bond Counsel, assuming compliance with existing statutes, regulations, published rulings and court decisions, and assuming continuing compliance by the City with certain tax covenants, interest on the Series 2003 Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However. see "TAX MA 1TERS" herein for a description of the federal aItemative minimum tax on corporations and certain other federal tax consequences of ownership of the Series 2003 Bonds. Bond Counsel is further of the opinion that the Series 2003 Bonds are exemptfrom all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. (See "TAX MA 1TERS" herein). Dated: July 1, 2003 $ * CITY OF WINTER SPRINGS, FLORIDA Improvement Refunding Revenue Bonds, Series 2003 Due: October 1, as Indicated on the Inside cover The City of Winter Springs, Florida (the "City") is issuing its Improvement Refunding Revenue Bonds, Series 2003 (the "Series 2003 Bonds") only in the form of fully registered bonds in the denomination of $5,000 principal amount or any integral multiple thereof. The Series 2003 Bonds will bear interest at the fixed rates set forth on the inside cover payable semi-annually on each April I and October I, commencing October I, 2003. The Series 2003 Bonds, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC") which will act as securities depository for the Series 2oolBonds. Purchases of beneficial interests in the Series 2003 Bonds will be made in book-entry form. Purchasers of the Series 2003 Bonds ("Beneficial Owners") will not receive physical delivery of Series 2003 Bonds. Accordingly, principal of and interest on the Series 2003 Bonds will be paid by ,. Florida, as paying agent directly to DTC as the registered owner thereof. Disbursements of such payments to the Direct Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of Direct Participants and Indirect Participants, as more fully described herein. See "DESCRIPTION OF THE SERIES 2003 BONDS - Book-Entry Only System" herein. Certain of the Series 2003 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein. The Series 2003 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. 615 of the City adopted by the City Commission on May I, 1989 as amended and supplemented and particularly as amended and supplemented by Resolution No. _ of the City adopted by the City Commission on ,2003 as supplemented (collectively the "Resolution") to, together with other legally available moneys, (i) currently refund all of the City's outstanding Improvement Refunding Revenue Bonds, Series 1993 (the "Refunded Bonds"), and (ii) finance the costs of issuance of the Series 2003 Bonds including the financial guaranty insurance premium and Reserve Policy premium. The Series 2003 Bonds are payable from and secured by a first lien upon and pledge of the franchise fees levied and collected by the City from Florida Power Corporation for a period of thirty years from April I, 1984 (the "Franchise Fees"), the public service tax levied and collected by the City on purchases of electricity, metered or bottled gas and water service within the corporate limits of the City pursuant to Section 166.231, Florida Statutes and an ordinance duly enacted by the City Commission on March 27, 1989, as amended and supplemented (the "Public Service Tax") and the tax imposed by the City on communication services pursuant to Section 202.19, Florida Statutes (the "Local Conununication Services Tax", collectively with the Franchise Fees and the Public Service Tax, the "Excise Taxes"). The current franchise with florida Power Corporation expires prior to the final maturity of the Series 2003 Bonds. The lien of the Series 2003 Bonds on the Excise Taxes is on a parity with the lien thereon of the City's outstanding Improvement Refunding Revenue Bonds, Series 1999 (the "Parity Bonds"). The Series 2003 Bonds shall not be or constitute general obligations or Indebtedness of the City as "bonds" within the meaning of the Florida Constitution, but shall be special obligations of the City, payable solely from the Excise Taxes in accordance with the terms of the Resolution. No Holder of any Series 2003 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2003 Bonds, or be entitled to payment of such Series 2003 Bonds from any moneys of the City except as provided in the Resolution. Payment of the principal of and interest on the Series 2003 Bonds, when due will be insured by a financial guaranty insurance policy to be issued by Ambac Assurance Corporation simultaneously with the delivery of the Series 2003 Bonds. [LOGO] For discussion of the tenns and provisions of such policy, including the limitations thereof, see "FINANCIAL GUARANTY INSURANCE" herein and Appendix D hereto. This cover page contains certain infonnation for quick reference only. It is not a summary of the Series 2003 Bonds. Investors must read the entire Official Statement to obtain infonnation essential to the making of an informed investment decision. The Series 2003 Bonds are offered when, as and if issued by the City and accepted by the Underwriters subject to the approving legal opinion of Akerman Senterfitt, Orlando, Florida, Bond Counsel. Certain legal matters will be passed on for the City by its counsel, Anthony A. Garganese of Brown, Salzman, Weiss & Garganese, P.A., Orlando, Florida and by Akennan Senterfitt, Disclosure Counsel. Public Financial Management, Inc., Orlando, Florida is acting as Financial Advisor to the City in connection with the issuance of the Series 2003 Bonds. The Underwriters are being represented by Shutts & Bowen LLP, Orlando, Florida. The Series 2003 Bonds are expected to be delivered through the facilities of The Depository Trust Company in New York, New York on or about July --' 2003. [UNDERWRITERS] Dated ,2003 .Preliminary, subject to change. {OR613I27;5} {OR6l3127;5} $ Serial Bonds MATURITIES, AMOUNTS, INTEREST RATES, AND PRICES OR YIELDS Maturities Amounts $ Interest Rates % $ _% Term Bonds, due October 1, --' Price_% $ % Term Bonds, due October 1, --' Yield_% (plus accrued interest from July 1,2003) Prices or Yields % CITY OF WINTER SPRINGS, FLORIDA OFFICIALS CITY COMMISSION JohnF. Bush Robert S. Miller Sally McGinnis Michael S. Blake Edward Martinez, Jr. David McLeod Mayor Deputy Mayor/Commissioner Commissioner Commissioner Commissioner Commissioner CITY MANAGER Ronald McLemore CITY ATTORNEY Anthony A. Garganese Brown, Ward, Salzman & Weiss, P.A. Orlando, Florida FINANCE DIRECTOR Louise Frangoul, C.P.A. CITY CLERK Andrea Lorenzo-Luaces FINANCIAL ADVISOR Public Financial Management, Inc. Orlando, Florida BOND COUNSEL Akennan Senterfitt Orlando, Florida AUDITORS McDirmit Davis Puckett & Co., LLC Orlando, Florida {OR613127;5} 1 No dealer, broker, salesman or other person has been authorized by. the City, the Insurer or the Underwriters to give any information or to make any representation with respect to the Series 2003 Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2003 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City, DTC, the Insurer, and other sources which are believed to be reliable. The Underwriters have reviewed the information in this Official Statement in accordance with, and as a part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information herein is subject to change without notice and neither the delivery hereof nor any sale hereunder at any time implies that the information herein is correct as of any time subsequent to its date. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not so expressly stated, are intended as such and not as representations of fact. IN CONNECTION WITH THE OFFERING OF THE SERIES 2003 BONDS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2003 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. NO REGISTRATION STATEMENT RELATING TO THE SERIES 2003 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANOE COMMISSION (THE "COMMISSION") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2003 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to this Official Statement, they may be obtained from the City of Winter Springs, Florida, City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2799, (407) 327-1800, Attention: City Clerk, upon prepayment of reproduction costs, postage and handling expenses. [REMAINDER OFP AGE INTENTIONALLY LEFT BLANK] {OR6l3127;5} 11 TABLE OF CONTENTS SUMMARY STATEMENT ...........................................................................................................................................v The City.......................................................................................................................................... ........................... v The Series 2003 Bonds ..... ..... .... ......... .......... .............. ...... ......... ................. ...... ...... ...... ..... .... .... .......... ... ............ ....... v Purpose of the Series 2003 Bonds .............................................................................................................................v Security for the Series 2003 Bonds....................................................................................................;..................... vi RedeIDption.......................................................................................................................... .................................... vi Financial Guaranty Insurance .. ......... ......... ................ ........... .......... .......... ..... ..... .... ........... ......... ......... ........... ......... vi Professionals............................................................................................................................. ............................... vi Delivery of the Series 2003 Bonds ......................................................................................................................... vii Additional Bonds................................................................................................................................. ................... vii Authorizing Resolution and Definitions ................................................................................................................. vii Continuing Disclosure............................................................................................................................ ................ vii Miscellaneous......................................................................................................................... ................................ vii INTRODUCTION ........................................................................................................................................................ 1 PURPOSE OF THE SERIES 2003 BONDS ................................................................................................................ 2 PLAN OF REFUNDING .............................................................................................................................................. 2 DEBT SERVICE REQUIREMENTS........................................................................................................................... 3 ESTIMATED SOURCES AND USES OF FUNDS .................................................................................................... 4 THE SERIES 2003 BONDS ......................................................................................................................................... 4 General Description........................................................................................................................... ....................... 4 RedeIDption..................................................................................................................................... .......................... 5 Redemption Notice and Effect ofRedeIDption..........................................................................................................5 Book-Entry Only System............. ...... ................... ........ .... ...... .... ......... .................. ... .... ..... ... ........ ....... ........ ........ ..... 6 SECURITY FOR THE SERIES 2003 BONDS............................................................................................................ 8 General.................................................................................................................................. .................................... 8 Flow of Funds ............ ..... ................. ........................................... ........... .................. ..... ..... ........ ... ......... ...... ............. 8 Reserve Account........................................................................................................................................... ............ 8 Reserve Policy.......................................................................................................................................... ................ 9 Additional Bonds ....................... ............... ........ ...... ........ ............ .... ..... .......... ... ................. .... ... ..... ........................ ... 9 Investments ........................................................................................................................................ ..................... 10 Other Covenants ....................................................................................................................................... .............. 10 PUBLIC SERVICE TAX ......... ..................... ................. .............. ........... ........ ...... ............... ...... ............. ................... 10 LOCAL COMMUNICATION SERVICES TAX ...................................................................................................... 11 FRANCHISE FEES............ .......... .......................... ................................... .......... ................. ............................... ....... 12 FINANCIAL GUARANTY INSURANCE................................................................................................................ 14 Payment Pursuant to Financial Guaranty Insurance Policy.................................................................................... 14 Arnbac Assurance Corporation...... .......... ....... ................................................. .......................... ........... ............ ...... 15 Available Infonnation ........... ... ............ ....... ... ...... ...... ....... .... ...... ......... ...... .... ...... '" .... .... ...... ..... .... ..... .... ... ... ...... .... 16 Incorporation of Certain Documents by Reference ................................................................................................ 16 THE CITy......... ..................................... ....... ....................... .......... .................................... ........................................ 17 LITIGATION.................... ........... ..................... ............... ............. ........... ............. ............ ....... ............... ................... 17 LEGAL MA TIERS.......;............................................................................................................................................ 17 {OR613127;5} III TAX MA TIERS ....................................... .......... ...................,................................. ...... ............... ..... ............. .... ....... 17 General.............................................:............................................................................................... ....................... 17 Tax Treatment of Original Issue Discount.............................................................................................................. 18 TAX TREA1MENT OF ORIGINAL ISSUE PREMIUM ................................................................................:......... 19 UNDERWRITING. ...... ..... ........... ............. ......... .... ....... .... ...... ...... ... ........................... ...... ..... ... .............. .... ...... ......... 19 FINANCIAL ADVISOR ............................................................................................................................................ 19 INVES1MENT POLICY ........................................................................................................................................... 19 RATINGS .......................................:........................................................................................................................... 24 VERIFICATION OF MATHEMATICAL COMPUTATIONS .................................................................................25 FINANCIAL STATEMENTS ........... .............. ....... ............... ............. ........... ........ .......... .......... ................................. 25 CONTINUING DISCLOSURE................................................................................................................................... 25 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS .............................................................25 ENFORCEABILITY OF REMEDIES ....................................................................................................................... 26 FORWARD-LOOKING STATEMENTS .................................................................................................................. 26 CONTINGENT FEES ...................... ......... ..... .......... ................ ................. .................... ................. ............. ............... 26 MISCELLANEOUS ...........................................................,....................................................................................... 26 CERTIFICATE AS TO OFFICIAL STATEMENT...................................................................................................27 APPENDIX A APPENDIX B APPENDIX C City of Winter Springs, Florida General Infonnation Form of the Resolution General Purpose Financial Statements and Independent Auditors' Report for the Fiscal Year Ended September 30, 2002 Specimen Financial Guaranty Insurance Policy Form of Opinion of Bond Counsel Form of Continuing Disclosure Certificate APPENDIX D APPENDIX E APPENDIX F {OR613127;5} IV SUMMARY STATEMENT This Summary Statement, being part of the Official Statement, is subject to the more complete information contained herein and should not be considered to be a complete statement of the facts material to making an investment decision. The offering by the City of Winter Springs, Florida, of its $ ... Improvement Refunding Revenue Bonds, Series 2003 (the "Series 2003 Bonds"), to potential investors is made only by means of the entire Official Statement. No person is authorized to detach this Summary Statement from the Official Statement or otherwise use it without the entire Official Statement. Capitalized terms used but not defined in this Summary Statement shall have the same meaning as in the Resolution (as hereinafter defined), unless the context would clearly indicate otherwise. See "Form of the Resolution" - Appendix B hereto. The City The City of Winter Springs, Florida (the "City") was originally incorporated in 1959 under the name of the Village of North Orlando and became the City of Winter Springs in 1972. The City is located in southern Seminole County in central Florida. Adjacent municipalities are Longwood, Casselberry and Oviedo. The City's estimated 2002 population was 32,000. The City is served by a City Commission - City Manager form of govenunent consisting of a Mayor, five commissioners and a City Manager. The Mayor and. City Commissioners are elected for four-year terms. The Mayor votes on matters coming before the City Commission only if needed to break a tie vote among the other City Commissioners. The City Manager is appointed by the City Commission. For additional information concerning the City, see Appendices A and C hereto. The Series 2003 Bonds The City is issuing the Series 2003 Bonds only in the form of fully registered bonds in the denomination of $5,000 or any integral multiple thereof. Interest on the Series 2003 Bonds is payable semi-annually on each April 1 and October 1, conunencing October 1, 2003. The Series 2003 Bonds will be initially issued to and registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository for the Series 2003 Bonds. The Series 2003 Bonds will be available to purchasers under the book-entry system maintained by DTC through brokers and dealers who are or act through Direct Participants. Purchasers of beneficial interests in the Series 2003 Bonds will not receive physical delivery of the Series 2003 Bonds, but will be Beneficial Owners (and not registered owners) of the Series 2003 Bonds. For so long as any purchaser is the Beneficial Owner of a Series 2003 Bond, such purchaser must maintain an account with a broker or dealer who is, or acts through, a Direct Participant in order to receive payment of principal of, premium, if any, and interest on such Series 2003 Bonds. The principal and interest on the Series 2003 Bonds will be paid by , as paying agent directly to DTC as the registered owner thereof. Disbursements of such payments to the Direct Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of Direct Participants and Indirect Participants, as more fully described herein. Certain of the Series 2003 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein. See "THE SERIES 2003 BONDS-Redemption" herein. Purpose of the Series 2003 Bonds The Series 2003 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. 615 of the City adopted by the City Commission on May 1, 1989 as amended and supplemented and particularly as amended and supplemented by Resolution No. _ of the City adopted by the City Commission on , 2003 as supplemented (collectively the "Resolution") to, together with other legally available moneys, (i) currently refund all of the City's outstanding Improvement Refunding Revenue Bonds, Series 1993 (the "Refunded Bonds"), and (ii) finance the costs of issuance of the Series 2003 Bonds including the financial guaranty insurance premium. and Reserve Policy premium. "'Preliminary, Subject to Change {OR613l27;5} v Security for the Series 2003 Bonds The Series 2003 Bonds are payable from and secured by a fIrst lien upon and pledge of the franchise fees levied and collected by the City from Florida Power Corporation for a period of thirty years from April 1, 1984 (the "Franchise Fees"), the public service tax levied and collected by the City on purchases of electricity, metered or bottled gas and water service within the corporate limits of the City pursuant to Section 166.231, Florida Statutes and an ordinance duly enacted by the City Commission on March 27, 1989, as amended and supplemented (the '.'Public Service Tax") and the tax imposed by the City on communication services pursuant to Section 202.19, Florida Statutes (the "Local Communication Services Tax", collectively with the Franchise Fees and the Public Service Tax, the "Excise Taxes"). The current franchise with Florida Power Corporation expires prior to the final maturity of the Series 2003 Bonds. The lien of the Series 2003 Bonds on the Excise Taxes is on a parity with the lien thereon of the City's outstanding Improvement Refunding Revenue Bonds, Series 1999 (the "Parity Bonds"). The Series 2003 Bonds shall not be or constitute general obligations or indebtedness of the City as "bonds" within the meaning of the Florida Constitution, but shall be special obligations of the City, payable solely from the Excise Taxes in accordance with the terms of the Resolution. No Holder of any Series 2003 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2003 Bonds, or be entitled to payment of such Series 2003 Bonds from any moneys of the City except as provided in the Resolution. The Resolution provides that a sum equal to the Reserve Requirement shall be deposited in the subaccount in the Reserve Account created for the benefIt of the Series 2003 Bonds at the time of delivery of the Series 2003 Bonds and shall be used only for the purposes provided in the Resolution. The "Reserve Requirement" is defmed as the lesser of (i) the Maximum Bond Service Requirement for the Series 2003 Bond, (ii) 125% of the Average Annual Bond Service Requirement for the Series 2003 Bond or (iii) 10% of the proceeds of the Series 2003 Bonds. The City will, in connection with the issuance of the Series 2003 Bonds, purchase from Ambac Assurance Corporation ("Ambac") for deposit to such subaccount in the Reserve Account a surety bond (the "Reserve Policy"), in a face amount equal to the Reserve Requirement for the Series 2003 Bonds. See "SECURITY FOR THE SERIES 2003 BONDS - Reserve Policy. Redemption The Series 2003 Bonds maturing on or after October 1, _ are subject to optional redemption on or after October 1, _ at the redemption prices described herein. The Series 2003 Bonds maturing on October 1, _ are subject to mandatory sinking fund redemption beginning October 1, _' The Series 2003 Bonds maturing on October 1, _ are subject to mandatory sinking fund redemption beginning October 1, _' See "THE SERIES 2003 BONDS - Redemption" herein. Financial Guaranty Insurance Payment of the principal of and interest on the Series 2003 Bonds, when due, will be insured by a fmanciaI guaranty insurance policy to be issued by Ambac simultaneously with the delivery of the Series 2003 Bonds. See "FINANCIAL GUARANTY INSURANCE" herein and Appendix D hereto. Professionals , , Florida will serve as Registrar and Paying Agent pursuant to the Resolution and as Escrow Holder pursuant to the Escrow Deposit Agreement. Akerman Senterfitt, Orlando, Florida, is serving as Bond Counsel and Disclosure Counsel. Anthony A. Garganese of Brown, Salzman, Weiss & Garganese, P.A., Orlando, Florida, is the City Attorney. Shutts & Bowen LLP, Orlando, Florida is representing the Underwriters. McDinnit Davis Puckett and Co., LLC, Orlando, Florida, is the City's auditor. Public Financial Management, Inc., Orlando, Florida is the City's fInancial advisor. {OR613127;5} VI Some of the professionals will be compensated from a portion of the proceeds of the Series 2003 Bonds, identified as "Costs of Issuance" under the heading "ESTIMATED SOURCES AND USES OF FUNDS" herein. Such compensation in some instances, but not in regard to the City's auditor, is contingent upon the issuance of the Series 2003 Bonds and the receipt of the proceeds thereof. Delivery of the Series 2003 Bonds It is anticipated that the Series 2003 Bonds in fully registered form will be available for delivery through the facilities of The Depository Trust Company on or about July _,2003. Additional Bonds Subject to certain conditions set forth in the Resolution, the City may from time to time issue Additional Parity Obligations, (as hereinafter defmed) that are payable from and secured by a first lien on and pledge of the Excise Taxes on a parity with the Series 2003 Bonds and the Parity Bonds then Outstanding. See "SECURITY FOR THE SERIES 2003 BONDS - Additional Bonds" herein. Authorizing Resolution and Definitions A copy of the form of the Resolution is set forth in Appendix B hereto. Definitions of certain capitalized words used in this Official Statement and not otherwise defmed herein have the meaning ascribed to such terms in the Resolution. Continuing Disclosure The City has agreed and undertaken for the benefit of the Holders of Series 2003 Bonds, to provide certain financial information and operating data relating to the City and the Series 2003 Bonds and notice of certain enumerated events pursuant to Rule 15c2-12 of the Securities Exchange Act of 1934. See "CONTINUING DISCLOSURE" herein. Additional Information This Official Statement speaks only as of its date and the information contained herein is subject to change. Descriptions of the Series 2003 Bonds, and other agreements and documents contained herein constitute summaries of certain provisions thereof and do not purport to be complete. Reference is made to the Resolution, and such other agreements and documents for a more complete description of such provisions. Investors should contact the City Clerk (407) 327-1800 at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2789, to obtain copies of the Resolution or basic documentation or with questions concerning this Official Statement of the Series 2003 Bonds. Except to the extent otherwise indicated, information contained in this Official Statement was compiled by the City. Miscellaneous The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is directed to all such documents for full and complete statements of all matters of fact relating to the Series 2003 Bonds, the security for the payment of the Series 2003 Bonds, and the rights ~nd obligations of holders thereof. The information contained in the Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the holders of the Series 2003 Bonds. [END OF SUMMARY STATEMENT] {OR613127;5} Vll OFFICIAL STATEMENT $ * CITY OF WINTER SPRINGS, FLORIDA IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 2003 INTRODUCTION The purpose of tliis Official Statement, including the cover page, Summary Statement and all appendices, is to set forth certain information in connection with the issuance and sale by the City of Winter Springs, Florida (the City") of its $ * aggregate principal amount of Improvement Refunding Revenue Bonds, Series 2003 (the "Series 2003 Bonds"). The Series 2003 Bonds are issued under and pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and other applicable provisions of law, and Resolution No. 615 of the City adopted by the City Commission on May 1, 1989 as amended and. supplemented and particularly as amended and supplemented by Resolution No. _ of the City adopted by the City Commission on , 2003, as supplemented (collectively, the "Resolution"). See Appendix B, "Form of the Resolution". The Series 2003 Bonds are payable from and secured by a first lien upon and pledge of the franchise fees levied and collected by the City from Florida Power Corporation for a period of thirty years from April 1, 1984 (the "Franchise Fees"), the public service tax levied and collected by the City on purchases of electricity, metered or bottled gas and water service within the corporate limits of the City pursuant to Section 166.231, Florida Statutes and an ordinance duly enacted by the City Commission on March 27, 1989, as amended and supplemented (the' "Public Service Tax") and the tax. imposed by the City or communication services pursuant to Section 202.19, Florida Statutes (the "Local Communication Services Tax", collectively with the Franchise Fees and the Public Service Tax, the "Excise Taxes"). The current franchise with Florida Power Corporation expires prior to the final maturity of the Series 2003 Bonds. The lien of the Series 2003 Bonds on the Excise Taxes is on a parity with the lien thereon of the City's outstanding Improvement Refunding Revenue Bonds, Series 1999 (the "Parity Bonds"). The Parity Bonds are currently outstanding in the principal amount of $8,590,000. See "SECURITY FOR THE SERIES 2003 BONDS" herein. The Series 2003 Bonds shall not be or constitute general obligations or indebtedness of the City as "bonds" within the meaning of the Florida Constitution, but shall be special obligations of the City, payable solely from the Excise Taxes in accordance with the tenus of the Resolution. No Holder of any Series 2003 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2003 Bonds, or be entitled to payment of such Series 2003 Bonds from any moneys of the City except as provided in the Resolution. The Series 2003 Bonds are issuable only in the form of fully registered bonds in the denomination of $5,000 or any integral multiple thereof. Interest on the Series 2003 Bonds is payable semi-annually on each April! and October 1, commencing October 1, 2003. The Series 2003 Bonds will be initially issued to and registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository for the Series 2003 Bonds. The Series 2003 Bonds will be available to purchasers under the book-entry system maintained by DTC through brokers and dealers who are or act through Direct Participants. Purchasers of beneficial interests in the Series 2003 Bonds will not receive physical delivery of the Series 2003 Bonds, but will be Beneficial Owners (and not registered owners) of the Series 2003 Bonds. For so long as any purchaser is the Beneficial Owner of a Series 2003 Bond, such purchaser must maintain an account with a broker or dealer who is, or acts through, a Direct Participant. The principal and interest on the Series 2003 Bonds will be paid by , as paying agent directly to Cede & Co. as the registered owner thereof. Disbursements of such payments to the Direct Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of Direct Participants and Indirect Participants, as more fully described herein. See "THE SERIES 2003 BONDS - Book-Entry Only System" herein. This OffIcial Statement speaks only as of its date and the information contained herein is subject to change. .Preliminary, Subject to Change {OR613127;S} 1 Capitalized terms used but not defined herein have the same meanings as when used in the Resolution unless the context clearly indicates otherwise. Complete descriptions of the terms and conditions of the Series 2003 Bonds are set forth in the Resolution, the form of which is attached to this Official Statement as Appendix B. The description of the Series 2003 Bonds, the documents authorizing and securing the same, and the information from various reports and statements contained herein are not comprehensive or definitive. All references herein to such documents, reports and statements are qualified by the entire, actual content of such documentS, reports and statements. Copies of such documents, reports and statements referred to herein that are not included in their entirety in this Official Statement may be obtained, after payment of applicable copying and mailing costs, from the City of Winter Springs, at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2797, Attention: City Clerk, (407) 327-1800. PURPOSE OF THE SERIES 2003 BONDS The Series 2003 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. 615 of the City adopted by the City Commission on May I, 1989 as amended and supplemented and particularly as amended and supplemented by Resolution No. _ of. the City adopted by the City Commission on , 2003 as supplemented (collectively, the "Resolution") to, together with other legally available moneys, (i) currently refund all of the City's outstanding Improvement Refunding Revenue Bonds, Series 1993 (the "Refunded Bonds"), and (ii) finance the costs of issuance of the Series 2003 Bonds including the financial guaranty insurance premium and Reserve Policy premium. See "THE PROJECT," "PLAN OF REFUNDING" and "ESTIMATED SOURCES AND USES OF FUNDS" herein. PLAN OF REFUNDING The Refunded Bonds, as of the date of delivery of the Series 2003 Bonds, will be outstanding in the aggregate principal amount of$8,350,000. To effect the refunding of the Refunded Bonds, the City will enter into an escrow deposit agreement (the "Escrow Agreement") with " Florida, as escrow trustee (the "Escrow Holder"). PurSuant to the terms of the Escrow Agreement, the City will deposit with the Escrow Holder a portion of the proceeds of the Series 2003 Bonds, as well as other available moneys of the City. Such moneys, other than beginning cash balances, will be applied on the date of delivery of the Series 2003 Bonds to the purchase of direct obligations of the United States of America (the "Federal Securities"). The Federal Securities shall mature at such times and in such amounts as shall be sufficient to pay the principal of redemption, premium, and interest on such Refunded Bonds on the redemption date of October 1,2003. The Refunded Bonds maturing after October 1,2003 are subject to redemption on October 1, 2003 at a redemption price of 102% of the principal amount thereof, plus accrued interest to the redemption date. Upon the deposit of such moneys into the escrow deposit account (the "Escrow Account") as provided in the Escrow Agreement, in the opinion of Bond Counsel, in reliance on the report of Public Financial Management, Inc., see "VERIFICATION OF MATHEMATICAL COMPUTATIONS" herein, the lien of the holders of the Refunded Bonds on the Excise Taxes and other sources pledged to such holders will no longer be in effect with respect to said Refunded Bonds. [REMAINDER OF P AGE INTENTIONALLY LEFT BLANK] {OR613127;5} 2 DEBT SERVICE REQUIREMENTS The following table shows the scheduled annual principal and interest requirements on the Series 2003 Bonds, total annual debt service on the Series 2003 Bonds, total debt service for the Parity Bonds and combined debt service for all such Bonds. Year Ending (October 1) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total Series 2003 Bonds Aggregate Series 2003 Bonds Debt Service Principal $ Interest . $ $ $ · Includes accrued interest of $ {OR6l3127;5} 3 Parity Bonds Debt Service $565,390.00 573,815.00 580,762.50 591,182.50 369,797.50 142,377.50 159,792.50 176,192.50 191,537.50 205,672.50 213;787.50 230,912.50 241,725.00 246,487.50 260,462.50 263,125.00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1,275,000.00 1.275.000.00 $19.038.020.00 Total Series 2003 Bond and Parity Bonds Debt Service $ ESTIMATED SOURCES AND USES OF FUNDS Sources of Funds: Principal Amount of Series 2003 Bonds Less Original Issue Discount Accrued Interest City Contribution(1) $ ( ) Total Estimated Sources of Funds $ Uses of Funds: t>eposit of Accrued Interest to Interest Account Deposit to Escrow Account for Refunded Bonds Cost ofIssuance(2) $ Total Estimated Uses of Funds $ (1) Consists of amounts in the Debt Service Fund for the Refunded Bonds. (2) Includes underwriter's discount, costs of issuance, and other fees and expenses including the fmancial guaranty insurance and Reserve Policy premiums associated with the issuance of the Series 2003 Bonds. THE SERIES 2003 BONDS General Description The Series 2003 Bonds will be issued as fully registered bonds in the denomination of $5,000 each or integral multiples thereof and will be initially registered in the name of Cede & Co., as nominee ofDTC, New York, New York, which will act as securities depository for the Series 2003 Bonds. Unless the book-entry system is discontinued as described herein, individual purchases of the Series 2003 Bonds will be made in book-entry form only, and the purchasers will not receive physical delivery of the Series 2003 Bonds or any certificate representing their beneficial ownership interests in the Series 2003 Bonds. See "Book-Entry Only System" below. Interest on the Series 2003 Bonds is payable on October I, 2003 and on each April 1 and October 1 thereafter until maturity or redemption. Amounts due on the Series 2003 Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 2003 Bonds, to be subsequently disbursed to Direct Participants and Indirect Participants and thereafter to the Beneficial Owners of the Series 2003 Bonds. [REMAINDER OF P AGE INTENTIONALLY LEFT BLANK] {OR613l27;5} 4 Redemption Optional Redemption The Series 2003 Bonds maturing on or after October 1, -' are subject to optional redemption prior to .their maturities on or after October 1, -' at the option of the City in whole or in part at any time, 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 to be redeemed) as set forth in the following table, together with accrued interest to the redemption date. Period During Which Redeemed (Both Dates Inclusive) October 1, _ through September 30,_ October 1, _ and thereafter Redemption Price 101% 100% Mandatory Redemption The Series 2003 Bonds maturing on October 1, _ are subject to mandatory redemption prior to maturity in part by lot on October 1, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: Year Amortization Installment $ · The Series 2003 Bonds maturing on October 1, _ are subject to mandatory redemption prior to maturity. in part by lot on October 1, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for .redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: . Year Amortization Installment $ Redemption Notice and Effect of Redemption Notice of redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Holders of Series 2003 Bonds to be redeemed at their addresses as they appear on the registration books, but failure to mail such notice to one or more Holders of Series 2003 Bonds shall not ,affect the validity of the proceedings for such redemption with respect to Holders of Series 2003 Bonds to which notice was duly mailed. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, if less than all of the Series 2003 Bonds of one maturity are to be called, the distinctive numbers of such Series 2003 Bonds to be redeemed and in the case of Series 2003 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. As long as the book-entry only system is used for determining beneficial ownership of the Series 2003 Bonds, notice of redemption will only be sent to Cede & Co. Cede & Co. will be responsible for notifying the DTC Participants, who will in turn be responsible for notifying the Beneficial Owners. Any failure of Cede & Co. to notify any DTC Participant, or of any DTC Participant to notify the Beneficial Owner of any such notice, will not affect the validity of the redemption of the Series 2003 Bonds. {OR613l27;5} 5 Any notice of optional redemption, other than with respect to an advance refunding, shall be circulated only if sufficient funds have been deposited in the Debt Service Fund to pay the redemption price of the Series 2003 Bonds to be redeemed. Official notice of redemption having been given, the Series 2003 Bonds or portions of Series 2003 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specked, and from and after such date (unless the City shall default in the payment of the redemption price) such Series 2003 Bonds or portions of Series 2003 Bonds shall cease to bear interest. Book-Entry Only System The information set forth under this caption concerning DTC and DTC's book-entry system has been obtained from sources the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. The Series 2003 Bonds will be issued as fully registered bonds without coupons. DTC, New York, New York, will act as securities depository for the Series 2003 Bonds. The Series 2003 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Series 2003 Bond will be issued for each maturity of the Series 2003 Bonds. Individual purchases of beneficial ownership interests will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof. Beneficial owners of the Series 2003 Bonds will not receive physical delivery of Series 2003 Bonds. DTC, the world's largest depository, is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over two (2) million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues and money market investments from over eighty-five (85) countries that Participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book- entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants ofDTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries ofDTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Connnission. More information about DTC can be found at www.dtcc.com. Purchases of Series 2003 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2003 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2003 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participant's records. Beneficial Owners will not receive written confirmation from DTC of their transaction, but Beneficial Owners are expected to receive written confmnation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2003 Bonds are to be accomplished by entries made on the books of Partic:ipants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in Series 2003 Bonds, except in the event that use of the book-entry system for the Series 2003 Bonds is discontinued. To facilitate subsequent transfers, all Series 2003 Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Series 2003 Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the {OR6I3127;5} 6 actual Beneficial Owners of the Series 2003 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2003 Bonds are credited, which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. B.eneficial Owners of Series 2003 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2003 Bonds, such as redemptions; tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2003 Bonds may wish to ascertain that the nominee holding the Series 2003 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them Redemption notices shall be sent to DTC. If less than all of the Series 2003 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2003 Bonds. Under its usual procedures, DTC will mail an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2003 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2003 Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or the Paying Agent on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, DTC's nominee, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2003 Bonds at any time by giving reasonable notice to City or paying agent. Under such circumstances, in the event that a successor depository is not obtained, Series 2003 Bonds certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event Series 2003 Bonds certificates will be printed and delivered. SO LONG AS CEDE & Co'. IS THE REGISTERED OWNER OF THE SERIES 2003 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDER OF THE SERIES 2003 BOND OR REGISTERED OWNERS OF THE SERIES 2003 BONDS SHALL MEAN DTC AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2003 BONDS. The City can make no assurances that DTC will distribute payments of principal of, redemption price, if any, or interest on the Series 2003 Bonds to the Direct Participants, or that Direct and Indirect Participants will distribute payments of principal of, redemption price, if any, or interest on the Series 2003 Bonds or redemption notices to the Beneficial Owners of such Series 2003 Bonds or that they will do so on a timely basis, or that DTC or any of its Participants will act in a manner described in this Official Statement. The City is not responsible or liable for the failure ofDTC to make any payment to any Direct Participant or failure of any Direct or Indirect Participant {OR613127;5} 7 to give any notice or make any payment to a Beneficial Owner in respect to the Series 2003 Bonds or any error or delay relating thereto. The rights of holders of beneficial interests in the Series 2003 Bonds and the manner of transferring or pledging those interests is subject to applicable state law. Holders of beneficial interests in the Series 2003 Bonds may want to discuss the manner of transferring or pledging their interest in the Series 2003 Bonds with their legal advisors. In the event the book-entry system is terminated, the transfer and exchange of Series 2003 Bonds shall be accomplished as described in Appendix B "Form of the Resolution." SECURITY FOR THE SERIES 2003 BONDS General The Series 2003 Bonds are special obligations of the City and are payable solely from and secured by a first lien upon and pledge of, (i) the proceeds of the public service tax imposed by the City on the purchase of certain utilities services within the corporate limits of the City, under the authority of Section 166.231, Florida Statutes and pursuant to Ordinance No. 454 enacted by the City on March 27, 1989 (the "Public Service Tax"), (ii) the tax imposed by the City or conununication services pursuant to Section 202.19, Florida Statutes (the "Local Conununication Services Tax"), and (iii) the proceeds of franchise fees to be paid for a period of thirty (30) years conunencing April 1, 1984, by Florida Power Corporation, pursuant to an ordinance enacted by the City on March' 27, 1984 as amended and supplemented (the "Franchise Fees") (such Public Service Tax, Local Conununication Services Tax, and Franchise Fees are herein collectively referred to as "Excise Taxes"). The lien of the Series 2003 Bonds on the Excise Taxes is on a parity with the lien thereon of the Parity Bonds. See "PUBLIC SERVICE TAX", "LOCAL COMMUNICATION SERVICES TAX", and "FRANCHISE FEES" herein. The current franchise agreement in favor of Florida Power Corporation pursuant to which the Franchise Fees are paid to the City expires on March 31, 2014 prior to the final maturity of the Series 2003 Bonds. The Series 2003 Bonds do not constitute a general indebtedness of the City within the meaning of any Constitutional, statutory or charter provision or limitations, but will be payable solely from and secured by a lien upon and pledge of the Excise Taxes. The Resolution provides that no holder or holders of any of the Series 2003 Bonds will ever have the right to require or compel the exercise of the ad valorem taxing power of the City for the payment of the principal of and interest on the Series 2003 Bonds or to make any sinking fund, or reserve or other payment provided for in the Resolution. The obligation evidenced by the Series 2003 Bonds shall not constitute a lien upon any property of or in the City but shall constitute a lien only upon the Excise Taxes in the manner provided in the Resolution. Flow of Funds The Resolution creates an Excise Taxes Fund and requires that all Excise Taxes upon receipt by the City be deposited therein. The Resolution provides that the Excise Taxes received by the City are immediately subject to the lien and pledge in favor of the Series 2003 Bonds and the Parity Bonds without any physical delivery or further act. Excise Taxes in the Excise Taxes Fund are to be deposited monthly to the Debt Service Fund and the accounts therein in amounts sufficient to provide for the payment of debt services when due on the Series 2003 Bonds and the Parity Bonds. The Debt Service Fund includes the Reserve Account. All such funds to be held under the Resolution will be held by the City and no independent trustee has been appointed to hold the moneys in such funds for the benefit of the Bondholders. All such funds are required to be continuously secured in the same manner as municipal deposits are authorized to be secured by the laws of the State of Florida. Pursuant to the Resolution, any money remaining in the Excise Taxes Fund after making provision for the payment into the Debt Service Fund may, so long as there is no deficiency in the Debt Service Fund, be used for any lawful purpose. For additional infonnation concerning the flow of funds, see Appendix B hereto. Reserve Account The City shall, on the date of delivery of the Series 2003 Bonds deposit to the subaccount in the Reserve Account created for the benefit of the Series 2003 Bonds a surety bond issued by Ambac Assurance Corporation {OR613I27;5} 8 / / (the "Reserve Policy") in a face amount equal to the Reserve Requirement for the Series 2003 Bonds. See "Reserve Policy" below. The Paying Agent on behalf of the City will draw on the Reserve Policy, up to an amount not exceeding the Surety Bond Coverage, for the purpose of the payment of maturing principal of, or interest on the Series 2003 Bonds when moneys in the other accounts of the Debt Service Fund are insufficient therefor, and for no other purpose. Therefore, such Reserve Policy may not be drawn to pay debt service on the Parity Bonds or any subsequently issued Additional Parity Obligations. . Reserve Policy The Series 2003 Bonds Will only be delivered upon .the issuance of the Reserve Policy. The premium on the Reserve Policy is to be fully paid at or oprior to the issuance and delivery of the Series 2003 Bonds. [The Reserve Policy provides that upon the later of (i) one (1) day after receipt by Ambac Assurance Corporation of a demand for payment executed by the Paying Agent certifying that provision for the payment of principal of or interest on the Series 2003 Bonds when due has not been made or (ii) the interest payment date specified in the Demand for Payment. submitted to Ambac Assurance Corporation. Ambac Assurance Corporation will promptly deposit funds with the Paying Agent sufficient to enable the Paying Agent to make such payments due on the Series 2003 Bonds, but in no event exceeding the Surety Bond Coverage, as defined in the Reserve Policy. Pursuant to the terms of the Reserve Policy, the Surety Bond Coverage is automatically reduced to the extent of each payment made by Ambac Assurance Corporation under the terms of the Reserve Policy and the City is required to reimburse Ambac Assurance Corporation for any draws under the Reserve Policy with interest [at a market rate]. Upon such reimbursement, the Reserve Policy is reinstated to the extent of each principal reimbursement up to but not exceeding the Surety Bond Coverage. This reimbursement obligation of the City is subordinate to the City's obligation with respect to the Series 2003 Bonds. Agent. The Surety Bond does not insure against nonpayment caused by the insolvency or negligence of the Paying The insurance provided by the Surety Bond is not covered by the Florida Insurance Guaranty Association. For information concerning Ambac Assurance Corporation, see "FINANCIAL GUARANTY INSURANCE" herein. Additional Bonds The City may issue Additional Parity Obligations, payable on a parity from the proceeds of the Excise Taxes with the Series 2003 Bonds and the Parity Bonds subject to the following conditions as provided in the Resolution. (a) There shall have been obtained and filed with the City a certificate of an independent certified . public accountant of suitable experience and responsibility stating: (a) that the books and records of the City relating to the collection and receipt of Excise Taxes have been audited by him; (b) the amount of Excise Taxes received for any twelve (12) months out of the immediately preceding eighteen (18) months preceding the date ofissuance of the proposed Additional Parity Obligations with respect to which such certificate is made; (c) that the aggregate amount of such Excise Taxes for such period is equal to not less than one hundred twenty-five percent (125%) of the Maximum Bond Service Requirement on all obligations issued under the Resolution, if any, then Outstanding, and the Additional Parity Obligations with respect to which such certificate is made. (b) The Excise Taxes for the preceding Fiscal Year may be adjusted to include the estimated Excise Taxes as certified by an independent certified public accountant, that the City would have received from areas that the City has annexed prior to the issuance of the Additional Parity Obligations and not fully reflected in such Fiscal Year. (c) The Excise Taxes for the preceding Fiscal Year may also be adjusted to include the estimated Excise Taxes, as certified by an independent certified public accountant, that the City would have received during such Fiscal Year due to increase in the rate or rates of such Excise Taxes during such Fiscal Year and not fully reflected in such Fiscal Year. {OR6I3I27;5} 9 (d) Each resolution authorizing the issuance of Additional Parity Obligations will recite that all of the covenants contained in the Resolution will be applicable to such Additional Parity Obligations. (e) The City shall not be in default in performing any of the covenants and obligations assumed under the Resolution, and all payments required in the Resolution to have been made into the funds and accounts, as provided thereunder, shall have been made to the full extent required. (f) In the event any Additional Parity Obligations are issued for the purpose of refunding any Bonds then Outstanding, the conditions in (a) above do not apply, provided that the issuance of such Additional Parity Obligations shall not result in an increase in the aggregate amount of principal of and interest on the Outstanding Bonds becoming due in the current Fiscal Year and all subsequent Fiscal Years. The conditions above shall apply to Additional Parity Obligations issued for refunding purposes which cannot meet the conditions of this section. Investments Moneys on deposit in the Debt Service Fund excluding the Reserve Account may be invested and reinvested in Investment Securities which mature not later than the dates on which the moneys on deposit therein will be needed for the purpose of such fund. All income on such investments, except as otherwise provided, in the Resolution shall be deposited in the respective funds and accounts from which such investments were made and be used for the purposes thereof unless and until the maximum required amount is on deposit therein, and thereafter shall be deposited in the Excise Taxes Fund. . Other Covenants Pursuant to the Resolution the City has covenanted to diligently enforce and collect all Excise Taxes and take all steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become delinquent to the full extent permitted or authorized by law. The City has also covenanted not to repeal the ordinances levying the Public Service Tax and Local Conununication Services Tax and not to amend or modify said ordinances in any manner so as to impair or adversely affect the power and obligation of the City to levy and collect the Public Service Tax and Local Conununication Services Tax, or impair or adversely affect in any manner the pledge of the Public Service Tax made pursuant to the Resolution, or the rights of the holders of the Bonds, or the rate or amount of the Public Service Tax and Local Conununication Services Tax. Concerning the Franchise Fees the City has covenanted that in the event it acquires the electric power and distribution facilities of Florida Power Corporation, or in the event it shall acquire, construct or operate an electric power and distribution system and the Franchise Fees are not available to the City to make the payments therefrom required pursuant to the provisions of the Resolution, the City will make payment from the net revenues fIrst available to it from the operation of any such electric power and distribution system so owned, acquired, constructed or operated by it of the amounts required to be paid from the Franchise Fees pursuant to the provisions of the Resolution. The City has also covenanted, as long as any Bonds remain outstanding, it will levy Franchise Fees when added to the amount of all taxes, license and other impositions levied by the City of at least six percent (6%) on any provider of electricity within the jurisdiction of the City. The City further covenants that as long as any of the principal of or interest on any Bonds shall be outstanding and unpaid, or payment thereof not duly provided for, it will levy and collect the Public Service Tax and Loc!ll Conununication Services Tax to the extent necessary up to the maximum rates provided by law as will always, together with the Franchise Fees available therefor, provide funds suffIcient to pay, as the same shall become due, the principal of or interest on the Bonds and to make all other payments, as the same shall become due, as provided in the Resolution and all other obligations and indebtedness payable out of said Public Service Tax. PUBLIC SERVICE TAX The Public Service Tax pledged as security for the Bonds is levied and collected by the City pursuant to Section 166.231, Florida Statutes (the "Public Service Tax Statute"), and Ordinance No. 454 of the City enacted on March 27, 1989, as amended and supplemented (the "Public Service Tax Ordinance"). Pursuant to Section 166.231, {OR613l27;5} 10 Florida Statutes, a municipality may levy a tax on the purchase of electricity, metered natural gas, liquefied petroleum gas either metered or bottled, manufactured gas either metered or bottled, and water service and services competitive with such services as determined by City ordinance. The tax shall be generally levied only upon purchases within the municipality and shall not exceed 10 percent of the payments (or at the option of the municipality the applicable physical unit) received by the seller of the taxable item from the purchaser for. the purchase of such service. Purchase of electricity means the purchase of electric power by a person who will consume it within the municipality. The City levies the Public Service Tax on each and every purchase of electricity, metered or bottled gas, and water service within the corporate limits of the City in the amount of 8% of the total amount billed. Pursuant to the Public Service Tax Ordinance, the Public Service Tax as imposed by the City does not apply to purchases of bottled water. The Public Service Tax is not imposed against any fuel adjustment charge which is defmed as all increases in the cost of utility services to the ultimate consumer resulting from an increase in the cost of fuel to the utility .subsequent to October 1, 1973. Also exempt are purchases by the United States Government, State of Florida and all counties, school districts, and municipalities of the state, and by public bodies exempted by law or court order. The Public Service Tax Statutes provides for certain other. exemptions. A municipality to also provide for other exemptions. The Public Service Tax is to be collected by the seller of the taxable item from the purchaser at the time of the payment for such service. The seller shall remit the taxes collected to the City in the manner prescribed by the Public Service Tax Ordinance. The seller is required to remit to the City on or before the fifteenth day of each month the taxes levied and collected during the preceding month. Except as otherwise provided under Florida law, the seller shall be liable for taxes that are due and not remitted to the municipality. The Public Service Tax Ordinance provides that it is unlawful for any seller to collect the price of any sale of the above descn'bed services without, at the same time, collecting the tax levied with respect to said sale or sales unless the seller shall elect to, assume and pay said tax without collecting the same from the purchaser. Any seller failing to collect said tax at the time of collecting the price of any sale where the seller has not elected to assume and pay said tax is liable to the City for the amount of said tax as if the same had actually been paid to the seller and the Mayor of the City is authorized to bring any necessary suit or action for the recovery of said tax; provided, that the seller is not liable for the payment of said tax upon uncollected bills. The Public Service Tax Ordinance also provides that if any purchaser shall fail, neglect or refuse to pay to the seller the seller's charge and the tax imposed.thereon, the seller has the right, power and authority to immediately discontinue further service to the purchaser until the tax and the seller's bill shall have been paid in full. The City covenants in the Resolution that, as long as any of the principal of and interest on any Bonds are outstanding and unpaid, or payment thereof not provided for, it will no.t repeal the Public Service Tax Ordinance and will not amend or modify said ordinance in any manner so as to impair or adversely affect the power and obligation of the City to levy and collect the Public Service Tax or impair or affect adversely in any manner the pledge of the Public Service Tax, or the rights of the holders of any Bonds or the rate or amount of the Public Service Tax. LOCAL COMMUNICATION SERVICES TAX Florida Statutes Section 202.19 (1) (the "Local Communication Services Tax Statute") provides that for bills rendered on or after October 1, 200 I counties and municipalities may levy a discretionary communication services tax (the "local communication services tax") on communication services. The revenues raised by such tax may be pledged for the repayment of current or future bonded indebtedness. The City levies a local communication services tax pursuant to its Ordinance No. 2001-42. Prior to the effective date of the Local Communication Services Tax Statute the City in accordance with Florida law levied a tax on telecommunication services, pursuant to authorization granted in the Public Service Tax Statute, at the rate of seven percent (7%). An effect of the Local Communication Services Tax Statute was to replace the former public service tax on telecommunication services and franchise fees on cable and telecommunication service providers with the local communication services tax. This change in law is intended to be revenue neutral to the cOWlties and municipalities. The local communication services tax is applied to a broader base of telecommunication services than the former public service tax on telecommunication services and the franchise fee on cable and telecommunication services providers. Effective October 1, 2001, the City imposed a tax, except as otherwise provided by law, on communications services which originate or terminate in the State of Florida and are charged to a service address in {OR613127;5} 11 the City at the rate of 6.20%. The rate of the local communications services tax applicable to the City was reduced to 5.80% on October 1,2002. For its fIscal year 2002, the City received the local communications services tax for only eleven (11) months; beginning October 1,2002, the tax will be received for all twelve (12) months of the fIscal year. The local communication services tax statute provides that, to the extent that a provider of communications. services is required to pay a tax, charge, or other fee under any franchise agreement or ordinance with respect to the services or revenues that are also subject to the tax, such provider is entitled to a credit against the amount of such tax payable to the state in the amount of such tax, charge, or fee with respect to such service or revenues. "Communications services" are defined as the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals, including cable services, to a point, or between or among points, by or through any electronic, radio, satellite, cable, optical; microwave, or other medium or method now in existence or hereafter devised, regardless of the protocol used for such transmission or conveyance. The term does not include: (a) Information services. (b) Installation or maintenance of wiring or equipment on a customer's premises. (c) The sale or rental of tangible personal property. (d) The sale of advertismg, including, but not limited to, directory advertising. (e) Bad check charges. (f) Late payment charges. (g) Billing and collection services. (h) Internet access service, electronic mail service, electronic bulletin board service, or similar on-line services. The proceeds of said local communication services tax less the Florida Department of Revenue's cost of administration is deposited in the local communication services tax clearing trust fund and distributed monthly to the appropriate jurisdictions. FRANcmSE FEES The Franchise Fees constitute the payments to be received by the City from Florida Power Corporation pursuant to ordinance No. 290 enacted by the City on March 27, 1984 as amended (the "Franchise Fee Ordinance") whereby the City granted an electric franchise for thirty (30) years to Florida Power Corporation ("FPC") and its legal representative, successor and assigns. Under the aforementioned ordinance, FPC is required to pay to the City for a period of thirty (30) years from April 1, 1984, an amount, when added to the amount of all taxes, licenses and other impositions levied by the City on FPC, equal to six percent (6%) of FPC's revenues derived from the sale of electrical energy to residential and commercial customers within the corporate limitS of the City for the twelve (12) months preceding the applicable anniversary date. Section 4 of such ordinance provides: Within thirty (30) days after the fIrst anniversary of the effective date of the grant, and within thirty (30) days after each succeeding anniversary of the effective date of this grant, Florida Power Corporation, its successors and assigns, shall make the required payment to the City. The Franchise Fee Ordinance provides that at and after the expiration of such franchise, the City has the right to purchase the. electric plant and facilities of FPC located within the corporate limits of the City which are used under or in connection with the franchise or right, at a valuation of the property desired, real and personal, which valuation shall be fIxed by arbitration as may be provided by law. Excepted from this reservation are power plants and high tension transmission lines owned by FPC and connected with its general system of distribution and used for the purposes of serving communities other than the City. The City covenants in the Resolution that, so long as any Bonds are outstanding and unpaid, or p~yment thereof not provided for, it will not repeal the Franchise Fee Ordinance and will not amend or modify said ordinance in any manner as to impair or adversely affect the obligation of FPC, or of its legal representatives, successors or assigns, to pay, or the power or obligation of the City to levy and collect the Franchise Fees, or impair or adversely affect in any manner the pledge of the Franchise Fees, or the rights of the holders of any Bonds. The City further expressly represents in the Resolution that it has legal and valid power to levy and continue to levy and collect said Franchise Fees in the manner provided in said Franchise Fee Ordinance, and the City further represents that the covenants entered into between the City and the holders of the Bonds with respect to {OR6I3I27;5} 12 the pledge of the Franchise Fees constitute a valid and . legally binding contract between the City and such Bondholders and are not subject to repeal, impairment or modification by the City. {OR613127;5} 13 mSTORICAL PUBLIC SERVICE TAX RECEIPTS AND FRANCHISE FEES REVENUES AND COVERAGE OF MAXIMUM ANNUAL DEBT SERVICE ON THE SERIES 2003 BONDS AND THE PARITY BONDS The Public Service Tax receipts (which for fiscal year 2002 includes the Local Communication Services Tax receipts) and Franchise Fees revenues of the City for Fiscal Years ended September 30, 1999 through September 30, 2002 and their coverage of maximum annual debt service on the Series 2003 Bonds and the Parity Bonds are set forth in the following table: Combined Maximum Fiscal Annual Debt Coverage Of Years Service On the Maximum Ended Series 2003 Annual Debt September Public Service Franchise Bonds and The Service 30 Tax (I) Fees (I) Total(l) Parity Bonds Requirement 2002 $3,403,200 $1,533,200 $4,936,400 $ 2001 2,492,900 1,587,500 4,080,400 2000 2,074,800 1,401,800 3,476,600 1999 1,732,700 1,312,000 3,044,700 (I)Derived from audited financial statements of the City. The following table indicates the different components of the Public Service Tax (and for fiscal year 2002 the Local Communication Services Tax) for each of the City's fiscal years 1999 through 2002. Fiscal Years Ended September 30 FY 1999(1) FY 2000(1) FY 2001(1) FY 2002(1) WATER UTILITY TAXES $199,200 $217,400 $210,700 $197,900 ! ELECTRIC UTILITY TAXES 1,213,500 1,404,300 1,555,700 1,810,900 TELEPHONE TAXES 282,900 409,300 675,900 1,348,300 GAS UTILITY TAXES 27,200 30,700 33,000 30,000 PROPANE UTILITY TAXES 9,900 13,100 17,600 16,100 TOTAL UTILITY TAXES $1,732,700 $2,074,800 $2,492,900 $3,403,200 (I)Source: City Finance Department. FINANCIAL GUARANTY INSURANCE Payment Pursuant to Financial Guaranty Insurance Policy Ambac Assurance Corporation ("Ambac" or "Ambac Assurance") has made a commitment to issue a financial guaranty insurance policy (the "Financial Guaranty Insurance Policy") relating to the Series 2003 Bonds effective as of the date of issuance of the Bonds. Under the terms of the Financial Guaranty Insurance Policy, Ambac Assurance will pay to The Bank of New York, New York, New York or any successor thereto (the "Insurance Trustee") that portion of the principal of and interest on the Series 2003 Bonds which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Obligor (as such terms are defmed in the Financial Guaranty Insurance Policy). Amhac Assurance will make such payments to the Insurance Trustee on the later of the date on which such principal and interest becomes Due for Payment or within one business day following the date {OR613I27;5} 14 on which Ambac Assurance shall have received notice of Nonpayment from the Paying Agent. The insurance will extend for the term of the Series 2003 Bonds and, once issued, cannot be cancelled by Ambac Assurance. The Financial Guaranty Insurance Policy will insure payment only on stated maturity dates and on mandatory sinking fund installment dates, in the case of principal, and on stated dates for payment, in the case of interest. If the Series 2003 Bonds become subject to mandatory redemption and insufficient funds are available for redemption of all outstanding Series 2003 Bonds, Ambac Assurance will remain obligated to .pay principal of and interest on outstanding Series 2003 Bonds on the originally scheduled interest and principal payment dates including mandatory sinking fund redemption dates. In the event of any acceleration of the principal of the Series 2003 Bonds, the insured payments will be made at such times and in such amounts as would have been made had there not been an acceleration. . In the event the Paying Agent has notice that any payment of principal of or interest on a Series 2003 Bond which has become Due for Payment and which is made to a Holder by or on behalf of the Obligor has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code in accordance with a final nonappealable order of a court of competent jurisdiction, such registered owner will be entitled to payment from Ambac Assurance to the extent of such recovery if sufficient funds are not otherwise available. The Financial Guaranty Insurance Policy does not insure any risk other than Nonpayment, as defined in the Policy. Specifically, the Financial Guaranty Insurance Policy does not cover: . I payment on acceleration, as a result of a call for redemption (other than mandatory sinking fund redemption) or as a result of any other advancement of maturity. 2. payment of any redemption, prepayment or acceleration premium. 3. nonpayment of principal or interest caused by the insolvency or negligence of any Trustee, Paying Agent or Bond Registrar, if any. If it becomes necessary to call upon the Financial Guaranty Insurance Policy, payment of principal requires surrender of Series 2003 Bonds to the Insurance Trustee together with an appropriate instrument of assignment so as to permit ownership of such Series 2003 Bonds to be registered in the name of Ambac Assurance to the extent of the payment under the Financial Guaranty Insurance Policy. Payment of interest pursuant to the Financial Guaranty Insurance Policy requires proof of Holder entitlement to interest payments and an appropriate assignment of the Holder's right to payment to Ambac Assurance. Upon payment of the insurance benefits, Ambac Assurance will become the owner of the Series 2003 Bonds, appurtenant coupon, if any, or right to payment of principal or interest on such Series 2003 Bonds and will be fully subrogated to the surrendering Holder's rights to payment. The insurance provided by the Financial Guaranty Insurance Policy is not covered by the Florida Insurance Guaranty Association. Ambac Assurance Corporation Ambac Assurance Corporation ("Ambac Assurance") is a Wisconsin-domiciled stock insurance corporation regulated by the Office of the Commissioner of Insurance of the State of Wisconsin and licensed to do business in 50 states, the District of Columbia, the Territory of Guam and the Commonwealth of Puerto Rico, with admitted assets of approximately $6,362,000,000 (unaudited) and statutory capital of $3,945,000,000 (unaudited) as of March 31,2003. Statutory capital consists of Ambac Assurance's policyholders' surplus and statutory contingency reserve. Standard & Poor's Credit Markets Services, a Division of The McGraw-Hill Companies, Moody's Investors Service and Fitch, Inc. have each assigned triple-A financial strength rating to Ambac Assurance. Ambac Assurance has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an obligation by Ambac Assurance will not affect the treatment for federal income tax purposes of interest on such obligation and that insurance proceeds representing maturing interest paid by Ambac Assurance under policy {OR613127;5} 15 provisions substantially identical to those contained in its Financial Guaranty insurance policy shall be treated for federal income tax purposes in the same manner as if such payments were made by the City. Ambac Assurance makes no representation regarding the Series 2003 Bonds or the advisability of investing in the Series 2003 Bonds and makes no representation regarding, nor has it participated in the preparation of, the Official Statement other than the information supplied by Ambac Assurance and presented under the heading "FINANCIAL GUARANTY INSURANCE." . Available Information The parent company of Ambac Assurance, Ambac Financial Group, Inc. (the "Company"), is subject to the informational requirements .of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). These reports, proxy statements and other information can be read and copied at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room The SEC maintains an internet site at http://.www.sec.gov that contains reports, proxy and information statements and other information regardmg companies that file electronically with the SEC, including the Company. These reports, proxy statements and other information can also be read at the offices of the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street, New York, New York 10005. Copies of Ambac Assurance's financial statements prepared in accordance with statutory accounting standards are available from Ambac Assurance. The address of Ambac Assurance's administrative offices and its telephone number are One State Street Plaza, 19th Floor, New York, New York 10004 and (212) 668-0340. Incorporation of Certain Documents by Reference The following documents ftled by the Company with the SEC (File No. 1-10777) are incorporated by reference in this Official Statement: 1) The Company's Current Report on Form 8-K dated January 23, 2003 and fUed on January 24, 2003; 2) The Company's Current Report on Form 8-K.dated February 25,2003 and filed on February 28, 2003; 3) The Company's Current Report on Form 8-K dated February 25,2003 and ftled on March 4,2003; 4) The Company's Current Report on Form 8-K dated March 18, 2003 and filed on March 20,2003; 5) The Company's Current Report on Form 8-K dated March 19,2003 and fUed on March 26,2003; 6) The Company's Annual Report on Form 10-K for the fiscal year ended December 31,2002 and fUed .on March 28, 2003; 7) The Company's Current Report on Form 8-K dated March 25,2003 and filed on March 31, 2003; 8) The Company's Current Report on Form 8-K dated April 17,2003 and ftled on April 21, 2003; and 9) The Company's Quarterly Report on Form 10-0 for the fiscal quarterly period ended March 31, 2003 and filed on May 15,2003. All documents subsequently filed by the Company pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in the same manner as described above in "Available Information." {OR613I27;5} 16 THE CITY The City was incorporated in 1959 under the name of the Village of North Orlando and became the City of Winter Springs in 1976. The City is located in Seminole County, which is a part of the greater Orlando metropolitan area in east central Florida. The City is primarily a retail, office and residential area with a small amount of light industry and commercial. The City's 2002 population was approximately 32,000. The City operates according to a CommissionIManager form of government, with an appointed City Manager, five elected City Commissioners and a separately elected Mayor. The Mayor votes on matters coming before the City Commission only if a vote by the other Commissioners results in a tie. . LITIGATION There is not now pending any litigation restraining or enjoining the issuance or delivery of the Series 2003 Bonds or questioning or affecting the validity of the Series 2003 Bonds or the proceedings and authority under which they are to be issued. Neither the creation, organization or existence of the City, nor the title of the present City Commission members or other officials of the City to their respective offices is being contested. There is no litigation pending which in any manner questions the right of the City to issue the Series 2003 Bonds in accordance with the provisions of the Resolution and the laws of the State of Florida. The City experiences routine litigation and claims incidental to the conduct of its affairs. The City carries substantial insurance for these exposures, and pending claims are defended by and, if necessary, are anticipated to be paid by the insurance carriers. LEGAL MATTERS Certain legal matters incident to the validity of the Series 2003 Bonds and the issuance thereof by the City are subject to the approving opinion of Akerman Senterfitt, Orlando, Florida, Bond Counsel. The proposed legal opinion of Bond Counsel is set forth as Appendix E. The actual legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery. The opinion will speak only as of its date, and subsequent distribution of it by recirculation of the Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinions subsequent to their respective rates. Bond Counsel has not been engaged by the City to confirm or verify, and, except as may be set forth in an opinion of Bond Counsel delivered to the Underwriter, expresses and will express no opinion as to the accuracy, completeness or fairness of any statements in this Official Statement. Certain legal matters will be passed upon for the City by Anthony A. Garganese of Brown, Salzman, Weiss & Garganese, P .A., City Attorney, Orlando, Florida and by Akerman Senterfitt, Disclosure Counsel. The Underwriters are being represented by Shutts & Bowen LLP, Orlando, Florida. TAX MATTERS General The Internal Revenue Code of 1986, as amended (the "Code ") establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 2003 Bonds for interest thereon to be and remain excluded from gross income for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Series 2003 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issue of the Series 2003 Bonds. Those requirements include, but are limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2003 Bonds and other amounts are to be invested and require, under certain circumstances, that certain excess investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the Resolution to comply with each such requirement. In the opinion of Bond Counsel, assuming continuous compliance by the City with the Code and the tax covenants of the City contained in the Resolution, under existing statutes, regulations, published rulings, and judicial decisions, and subject to the conditions described below, interest on the Series 2003 Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative {OR613127;5} 17 minimum tax imposed on individuals and corporations, although such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax on corporations. The opinion on federal tax matters will be based on and will assume the accuracy of certain representations and certifications and compliance with certain covenants of the City to be contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 2003 Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the certifications and representations made by the City. Prospective purchases or the Series 2003 Bonds should be aware that ownership of the Series 2003 Bonds may result in other federal tax consequences to certain taxpayers. Bond Counsel's opinions are based on existing law, which is subject to change. Moreover, Bond Counsel's opinions are not a guarantee of a particular result, and are not binding on the IRS or the courts; rather, such opinions represent Bond Counsel's professional judgment based on its review of existing law, and in reliance on the representations and covenants that it deems relevant to such opinions. Failure by the City to comply subsequent to the issuance of the Series 2003 Bonds with certain requirements of the Code regarding the use, expenditure and investment of Series 2003 Bond proceeds and the timely payment of certain investment earnings to the Treasury of the United States may cause interest on the Series 2003 Bonds to become included in gross income for federal income tax purposes retroactive to their date of issue. The City has covenanted in the Resolution to comply with all provisions of the Code necessary to, among other things, maintain the exclusion from gross income of interest on the Series 2003 Bonds for purposes of federal income taxation. In rendering its opinion, Bond Counsel has assumed continuing compliance with such covenants. In the opinion of Bond Counsel, the interest on the Series 2003 Bonds is exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. Interest on the Series 2003 Bonds may be subject to state or local income taxation under applicable state or local laws in other jurisdictions. Purchasers of the Series 2003 Bonds should consult their tax advisors as to the income tax status of interest on the Series 2003 Bonds, in their particular state or local jurisdictions. During recent years, legislative proposals have been introduced in Congress, and in some cases, enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2003 Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar in nature to the Series 2003 Bonds. From time to time, legislative proposals may be introduced which could have an effect on both the federal tax consequences resulting from the ownership of the Series 2003 Bonds and their market value. No assurance can be given that any such legislative proposals, if enacted, would not apply to, or would not have an adverse effect upon, the Series 2003 Bonds. Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Series 2003 Bonds may affect the tax status of interest on the Series 2003 Bonds. Moreover, except as st~ted above, Bond Counsel expresses no opinion regarding federal or state tax consequences arising with respect to the Series 2003 Bonds. Prospective purchasers of the Series 2003 Bonds are advised to consult their own tax advisors as to the applicability of other federal or state tax consequences. Tax Treatment of Original Issue Discount Under the Code, the difference between the stated redemption price at maturity of the Series 2003 Bonds maturing in the years 20_ through 20-, inclusive (collectively, the "Discount Bonds") and the initial offering price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers, at which a substantial amount of the Discount Bonds of the same maturity was sold is "original issue discount." Under Section 1288 of the Internal Revenue Code of 1986, as amended, original issue discount on tax-exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to an owner of a Discount Bond during any accrual period generally equals (i) the issue price of such Discount Bonds plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity of {OR613127;5} 18 such Discount Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), minus (iii) any interest payable on such Discount Bond during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner's tax basis in such Discount Bond. The federal income tax consequences of the purchase, ownership and sale or other disposition of the Discount Bonds which are not purchased in the initial offering at the .initial offering price may be determined according to rules which differ from above. Owners of such Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, redemption or other disposition of Discount Bonds and with respect to the state and local tax consequences of owning and disposing of such Discount BondS. TAX TREATMENT OF ORIGINAL ISSUE PREMIUM The Series 2003 Bonds maturing in the year _ through _ and in _ ("Premium Bonds") are being offered and sold to the public at a price in excess of their stated redemption price (the principal amount) at maturity. That excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity of a Premium Bond, based on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior to its stated maturity, the amortization period and yield must be determined on the basis of the earliest call date that results in the lowest yield on that Premium Bond), compounded semiannually. No portion of that bond premium is deductible by the owner of a Premium Bond. For purposes of determining the owner's gain or loss on the sale, redemption (including redemption at maturity) or other disposition of a Premium Bond, the owner's tax basis in the Premium Bond is reduced by the amount of bond premium that accrues during the period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes upon the sale or other disposition of a Premium Bond for an amount equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Premium Bond at its issue price in the initial offering who holds that Premium Bond to maturity (or, in the case of a callable Premium Bond, the earliest call that results in the lowest yield on that Premium Bond) will realize no gain or loss upon the retirement of that Premium Bond. Owners of Premium bonds (or book entry interests in them) should consult their own tax advisers as to the determination for federal income tax purposes of the amount of bond premium properly accruable in any period with respect to the Premium Bonds and as to other federal tax consequences and the treatment of bond premium for state and local tax purposes. UNDERWRITING The Underwriters shown on the cover page hereof have agreed, subject to certain conditions precedent to purchase the Series 2003 Bonds at a price of $ ($ original par amount, less underwriters' discount of $ and less net original issue discount of $ ), plus accrued interest. The Underwriters have furnished the information on the cover page of this Official Statement pertaining to the public offering prices of the Series 2003 Bonds. The public offering prices of the Series 2003 Bonds may be changed from time to time by the Underwriters, and the Underwriters may allow a concession from the public offering prices to certain dealers. None of the Series 2003 Bonds will be delivered by the City to the Underwriters unless all of the Series 2003 Bonds are so delivered. FINANCIAL ADVISOR Public Financial Management, Inc., Orlando, Florida, has served as fmancial advisor to the City in connection With the issuance of the Series 2003 Bonds. INVESTMENT POLICY The City's investment policy as adopted on January 28, 2002 limits the investment of City funds, other than debt proceeds the investment of which are governed by the applicable City resolution or other authorization, as follows: A. The Florida Local Government Surplus Funds Trust Fund ("SBA") l. Investment Authorization {OR613I27;5} 19 The Finance Director may invest in the SBA. 2. Portfolio Composition A maximum of 100% of available funds may be invested in the SBA. B. United States Government Securities 1. Purchase Authorization The Finance Director or management designee may invest in direct negotiable obligations, or obligations the principal and interest of which are unconditionally guaranteed by the United States Government. Such securities will include, but not be limited to the following: Cash Management Bills Treasury Securities ~ State and Local Government Series (ltSLGSIt) Treasury Bills Treasury Notes Treasury Bonds Treasury Strips 2. Portfolio Composition A maximum of 100% of available funds may be invested in the United States Government Securities. 3. Maturity Limitations The maximum length to maturity of any direct investment ill the United States Government Securities is five (5) years from the date of purchase. C. United States Government Agencies 1. Purchase Authorization The Finance Director or management designee may invest in bonds, debentures, notes or callable issued and guaranteed by the United States Governments agencies, provided such obligations are backed by the full faith and credit of the United States Government. Such securities will include, but not be limited to the following: Government National Mortgage Association (GNMA) -GNMA guaranteed mortgage-backed bonds -GNMA guaranteed pass-through obligations United States Export - Import Bank -Direct obligations or fully guaranteed certificates of beneficial ownership . Fanner Home Administration -Certificates of beneficial ownership Federal Financing Bank -Discount notes, notes and bonds. Federal Housing Administration Debentures General Services Administration United States Maritime Administration Guaranteed -Title XI Financing New Communities Debentures -United States Government guaranteed debentures United States Public Housing Notes and Bonds {OR613127;5} 20 -United States Government guaranteed public housing notes and bonds United States Department of Housing and Urban Development -Project notes and local authority bonds 2. Portfolio Composition A maximum of 75% of available funds may be invested in United States Government agencies. 3. Limits on Individual Issuers A maximum of 50% of available funds may be invested in individual United States Government agencies. 4. Maturity Limitations The maximum length to maturity for an investment in any United States Governme~t agency security is five (5) years from the date of purchase. D. Federal Instrumentalities (United States Government sponsored agencies) I. Purchase Authorization The Finance Director or management designee may invest in bonds, debentures or notes which may be subject to call, issued or guaranteed as to principal and interest by United States Government sponsored agencies (Federal Instrumentalities) which are non-full faith and credit agencies limited t() the following: Federal Farm Credit Bank (FFCB) Federal Home Loan Bank or its district banks (FHLB) Federal National Mortgage Association (FNMA) Federal Home Loan Mortgage Corporation (Freddie-Macs) Student Loan Marketing Association (Sallie-Mae) 2. Portfolio Composition A maximum, of 80% of available funds maybe invested in Federal Instrumentalities. 3. Limits on Individual Issuers A maximum of 40% of available funds may be invested in anyone issuer. 4. Maturity Limitations The maximum length to maturity for an investment in any Federal Instrumentality security is five (5) years from the date of purchase. E. Interest Bearing Time Deposit or Saving Accounts 1. Purchase Authorization The Finance Director or management designee may invest in non-negotiable interest bearing time certificates of deposit or savings accounts in banks organized under the laws of this state and in national banks organized under the laws of the United States and doing business and situated in the State of Florida. Additionally, the bank shall not be listed with any recognized credit watch information service. {OR613127;5} 21 2. Portfolio Composition A maximum of 25% of available funds may be invested in non-negotiable interest bearing time certificates of deposit. 3. Limits on Individual Issuers A maximum of 15% of available funds may be deposited with anyone issuer. 4. The maximum maturity on any certificate shall be no greater than one (1) year from the date of purchase. F. Repurchase Agreements I. Purchase Authorization a. The Finance Director or management designee may invest in repurchase agreements composed of only those investments based on the requirements set forth by the City's Master Repurchase Agreement. All firms are required to sign the Master Repurchase Agreement prior to the execution of a repurchase agreement transaction. b. A third party custodian with whom the City has a current custodial agreement shall hold the collateral for all repurchase agreements with a tenn longer than one (I) business day. A clearly marked receipt that shows evidence of ownership must be supplied to the Finance Director and retained. c. Securities authorized for collateral are negotiable direct obligations of the United States Government, Government Agencies, and Federal Instrumentalities with maturities under five (5) years and must have a market value for the principal and accrued interest of 102 percent of the value and for the term of the repurchase agreement. Immaterial short-tenn deviations from the 102 percent requirement are permissible only upon the approval of the Finance Director or management designee. 2. Portfolio Composition A maximum of 50% of available funds may be invested in repurchase agreements excluding one (1) business day agreements and overnight sweep agreements. 3. Limits on Individual Issuers A maximum of 25% of available funds may be invested with anyone institution. 4. Limits on Maturities The maximum length to maturity of any repurchase agreement is 40 days from the date of purchase. G. Commercial Paper 1. Purchase Authorization The Finance Director or management designee may invest in commercial paper of any United States company that is rated, at the time or purchase, ItPrime-1 It by Moody's and ItA_I It by Standard & Poor's (prime commercial paper). Additionally, the company shall not be listed with any recognized credit watch information service.U {OR613127;5} 22 2. Portfolio ~mposition A maximum of 30% of available funds may be directly invested in prime commercial paper. , 3. Limits on Individual Issuers A maximum, of 10% of available funds may be invested with anyone issuer. 4. Maturity Limitations The maximum length to maturity for prime commercial paper shall be 180 days from the date of purchase_ H. Bankers' acceptances I . Purchase Authorization The Finance Director or management designee may invest in Bankers' acceptances issued by a domestic bank or a federally chartered domestic office; of a foreign bank, which are eligible for purchase by the Federal Reserve System, at the time or purchase, the short- term paper is rated, at a minimum, ItP_l It by Moody's Investors Services and ItA_l It Standard & Poor's. Additionally, the bank shall not be listed with any recognized credit watch information service. 2. Portfolio Composition A, maximum of 30% of available funds may be directly invested in Bankers' acceptances 3. Limits on Individual Issuers A maximum bf 10% of available funds may be invested with anyone issuer. 4. Maturity Limitations The maximum length to maturity for Bankers' acceptances shall be 180 days from the date of purchase. I. State and/or Local Government Taxable and/or Tax-Exempt Debt 1. Purchase Authorization The Finance Director or management designee may invest in state and/or local government taxable and/or tax-exempt debt, general obligation and/or revenue bonds, rated at least ItAalt by Moody's and ItAAIt by Standard & Poor's for long-tenn debt, or rated at least ItMIG_21t by Moody's and ItSP_21t by Standard & Poor's for short-term debt. 2. Portfolio Composition A maximum of 20% of available funds may be invested in taxable and tax-exempt debts. 3. Maturity Limitations A maximum length to maturity for an investment in any state or local government debt security is three (3) years from the date of purchase. {OR613127;5} 23 J. Registered Investment Companies (Money Market Mutual Funds) I. Investment Authorization The Finance Director or management designee may invest in shares in open-end and no-load fixed-income securities money market mutual funds provided such funds are registered under the Federal Investment Company Act of 1940 and invest in securities permitted by this policy. 2. Portfolio Composition A maximum of 100% of available funds may be invested in money market mutual funds excluding one (I) business day overnight sweep agreements. 3. Limits of Individual Issuers A maximum of 25% of available funds may be invested with anyone money market mutual fund. 4. Rating Requirements The money market mutual funds shall be rated ItAAmlt or ItAAm_GIt or better by Standard & Poor's, or the equivalent by another national rating agency. 5. Due Diligence Requirements A thorough investigation of any money market mutual market fund is required prior to investing, and on a continual basis. There shall be a questionnaire developed by the Finance Director or management designee that will contain a list of due diligence considerations that deal with the major aspects of any investment pool/fund. A current prospectus must be obtained. K. Intergovernmental Investment Pool I. Investment Authorization The Finance Director or management designee may invest in intergovernmental investment pools that are authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Section 163.Q1, Florida Statutes and provided that said funds contain no derivatives, 2. Portfolio Composition A maximum of 25% of available funds may be invested in intergovernmental investment pools. Investment in any derivative products or the use of reverse repurchase agreements is specifically prohibited by the investment policy. The City's investment policy may be amended from time to time. RATINGS The Series 2003 Bonds are expected to be rated AAA by Standard & Poor's Credit Markets Services, a Division of the McGraw-Hill Companies (ltS&pIt) and by Fitch, Inc. (ltFitchlt) with the understanding that, upon delivery of the Series 2003 Bonds a financial guaranty insurance policy will be issued by the Insurer. has issued an underlying rating of_ for the Series 2003 Bonds. Such ratings reflect only the views of such organization and any desired explanation of the significance of such ratings should be obtained from at the following addresses: S&P, 55 Water Street, New York, New York 10041; and Fitch, One State Street Plaza, New York, New York 10004. Generally, a rating agency bases its rating on the information and materials furnished {OR613127;5} 24 to it and on investigations, studies and assumptions. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the j~dgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Series 2003 Bonds. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of the arithmetic computations showing the adequacy of the maturing principal and interest on the securities to be acquired with a portion of the proceeds of the Series 2003 Bonds, together with other funds available described under "PLAN OF REFUNDING," have been verified by Public Financial Management, Inc., the City's financial advisor. FINANCIAL STATEMENTS The City's general purpose fmancial statements for its fiscal year ended September 30, 2002 appearing in Appendix "B" hereto have been audited by McDirmit Davis Puckett & Co., LLC, independent auditors, as stated in their report appearing therein. The auditors have consented to the inclusion of their report in Appendix B. CONTINUING DISCLOSURE The City has agreed and undertaken for the benefit of Series 2003 Bondholders and in order to assist the Underwriters in complying with the continuing disclosure requirements of Securities and Exchange Commission Rule 15c2-12 (the "Rwelt), to provide certain fmancial information and operating data relating to the City and the Series 2003 Bonds in each year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if material. Such undertaking shall only apply so long as the Series 2003 Bonds remain outstanding under the Resolution. The Annual Report and audited financial statements will be filed annually by the City pursuant to the undertaking with each Nationally Recognized Municipal Securities Information Repository ("NRMSIRs") described in the Continuing Disclosure Certificate (Appendix E hereto), as well as any state information repository that is subsequently established in the State of Florida (the "SIDIt). The notices of material events will be filed by the City with the Municipal Securities Rulemaking board or the NRMSIRs and with the SID. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in the Appendix E. With respect to the Series 2003 Bonds, no party other than the City is obligated to provide, nor is expected . to provide, any continuing disclosure information with respect to the aforementioned Rwe. The City failed to timely provide its Annual Report due March 31, 2000 which it had agreed to provide in connection with the issuance of its Improvement Refunding Revenue Bonds, Series 2003. The City has now provided such Annual Report to the NRMSIRs, and has implemented procedures regarding the timely filing of annual reports. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Section 517.051, Florida Statutes, and the regulations promulgated thereunder (the ItDisclosure Actlt) required that the City make a full and fair disclosure of any bonds or other debt obligations that it has issued or guaranteed that are or have been in default as to principal or interest at any time after December 31, 1975 (including bonds or other debt obligations for which it has served only as a conduit issuer such as industrial development or private activity bonds issued on behalf of private businesses). The City is not and has not since December 31, 1975 been in default as to principal and interest on its bonds or other debt obligations. Although the City is not aware of any defaults with respect to bonds or other debt obligations as to which it has served only as a conduit issuer, it has not undertaken an independent review or investigation of such bonds or other obligations. The City does not believe that any information about any default would be considered material be a reasonable investor in the Series 2003 Bonds because the City was not liable to pay the principal of or interest on any such bonds except from payments made to it by the private companies on whose behalf such bonds were issued and no funds of the City were used to pay such bonds or the interest thereon. {OR613127;5} 25 ENFORCEABILITY OF REMEDIES The remedies available to the owners .of the Series 2003 Bonds up.on an event of default under the Res.olution and any policy of insurance referred to herein are in many respects dependent UPOll judicial actions which are often subject t.o discreti.on and delay. Under existing constitutional and statutory law and judiCial decisions, the remedies specified by the federal bankruptcy code, the Resolution, the Series 2003 Bonds and any policy of insurance referred to herein may not be readily available or may be limited. The various legal opinions to be delivered c.oncurrently with the delivery of the Series 2003 Bonds (including Bond Counsel's approving opinion) will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. FORWARD-LOOKING STATEMENTS This Official Statement contains certain "forward-looking statements" c.oncerning the City's operations, performance and financial condition, including its future economic performance, plans and objectives and the likelihood of success in developing and expanding. These statements are based upon a number of assumptions and estimates which are subject to significant uncertainties, many of which are beyond the control of the City. The wards "may," "would," "could," "will," "expect," "anticipate," "believe," "intend," "plan," "estimate" and similar expressions are meant to identify these forward-l.ooking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements. CONTINGENT FEES The City has retained Bond Counsel, the Financial Advisor and Disclosure Counsel with respect to authorization, sale, execution and delivery of the Series 2003 Bonds. Payment of certain of the fees of such professionals is contingent upon issuance of the Series 2003 Bonds. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the owners of the Series 2003 Bonds. The informati.on contained above is neither guaranteed as to accuracy or completeness nor to be construed as a representation by the City .or the Underwriters. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder is to create, under any circumstances, any implication that there has been no change in the affairs of the City from the date hereof. This Official Statement is submitted in c.onnection with the sale of the securities referred to herein and may not be reproduced or used, as a whole or in part, for any other purp.ose. Any statements in this Official Statement inv.olving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. [REMAINDER OF BANK INTENTIONALLY LEFT BLANK] {OR613127;5} 26 CERTIFICATE AS TO OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized by the City Commission of the City. At the time of delivery of the Series 2003 Bonds to the Underwriters, the City will provide to the Underwriters a certificate (which may be included in a consolidated closing certificate of the City), .signed by those City officials who signed this Official Statement, relating to the accuracy and completeness of certain inaterials in this Official Statement and to its being a fillal official statement in the judgment of the undersigned for the purposes. ofSEC Rule 15c2-12(b)(3). . , By; CITYOF WINTER SPRINGS, FLORWA ~*'4.;.~ ~ MayoI /~~.. City Manager /' By: {OR613127;5} 27 APPENDIX A City of Winter Springs, Florida General Information {OR613127;5} 28 APPENDIX B Form of the Resolution {OR613127;5} 29 APPENDIX C General Purpose Financial Statements and Independent Auditor's Report For the Fiscal Year Ended September 30, 2002 {OR613127;5} 30 APPENDIX D Specimen Financial Guaranty Insurance Policy {OR613127;5} 31 APPENDIX E Form of Opinion of Bond Counsel {OR613127;5} 32 APPENDIX F 'Form of Continuing Disclosure Certificate {OR613127;5} 33 - , \ ' .\. RESOLUTION NO. 2003-28 - . A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA AMENDING AND. SUPPLEMENTING RESOLUTION NO. 615. AS HERETOFORE AMENDED AND . SUPPLEMENTED; FOR THE PURPOSE OF. PROVIDING FOR THE REFUNDING OF ALL THE CITY'S OUTSTANDING IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 1993; AUTHORIZING THE ISSUANCE BY THE CITY. OF NOT. EXCEEDING $9,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF IMPROVEMENT .REFUNDING -REVENUE BONDS, SERIES 2003, 1'0. FINANCE A PART OF THE COST OF SUCH REFUNDING, TO FUND A DEPOSIT TO THE SUBACCOUNT IN THE RESERVE ACCOUNT AND- PAY THE COSTS OF. . ISSl.i~CE OF .THE SERIES 2003 BONDS; .ACCEPTING THE INSURER'S. COMMITMENT RELATING TO A FINANCIAL GUARANTY INSURANCE POLICY AND. SURETY BOND WITH RESPECT TO THE SERIES 2003 BONDS; PLEDGING TO SECURE PAYMENT OF THE PRINCIPAL OF AND. INTEREST ON THE SERIES 2003 BONDS,. ON A PARITY WITH THE. CITY'S OU'rSTANDING IMPROVEMENT REFUNDING REVENUE . BONDS, SKRIES 1999, TIlE FRANCmSE FEES RECEIVED BY THE CITY FROM FLORIDA POWER CORPORATION, THE PUBLIC SERVICE TAXES. LEVIED BY THE CITY PURSUANT TO SECTION 166.231, FLORIDA STATUTES -AND THE LOCAL COMMUNICATIONS. SERVICES TAX LEVIED BY THE CITY PURSUANT TO SECTION 202.19, FLORIDA STATUTES; AMENDING THE DEFINITION OF EXCISE TAXES IN CITY RESOLUTION NO. 615 TO INCLUDE THE LOCAL COMMuNICATION SERVICES TAX; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS O,F THE SERIES -2003 .BONDS; AND PROVIDING AN EFFECTIVE DATE. .BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA: SECTION 1. AUTHORITY FOR tHIS RESOLUTION. This Resolution is adopted pursuant to Chapter 166, Part II, Florida Statutes Chapter 72-718, Laws of Florida, Special Acts. of 1972 as amended and supplemented, being the Charter of the City of Winter Springs,. Florida, the Original Instrument (as hereinafter defined) and other applicable provisions of law. . SECTION 2. DEFINITIONS. When used in this Resolution, the terms de.fined in the . Original Instrument shall have the respective meanings assigned thereto by the Original {OR610453;4} " InstruIrient and the following terms shall have the following meanings, unless the context clearly otherwise requires: . . . "Act". shall mean Chapter 166, Part II, Florida Statutes, as amended and supplemented, . Chapter 72-718, Laws of Florida, Special Act of 1972 as amended and supplemented, and other applicable provisions of law. "Agreement" or "Escrow Deposit Agreement" shall mean that certain agreement by and between the Issuer and a bank or trust company to be selected and named by the Issuer prior to the sale of the Series 2003 Bonds (as hereinafter defmed) for the purpose of providing for the payment of the Prior Bonds (as hereinafter defined). "Ambac Assurance" shall mean Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance company. . . "Contmuing Disclosure Certificate" shall mean that certain certificate related. to the Series 2003 Bonds to be executed by the Issuer prior to the time the Issuer delivers the Series 2003 Bo~ds to the participating underwriter or underwriters, as it mai be amended from time to time in accordance with the terms thereof, whereby the Issuer undertakes to comply with the secondary disclosure requirements of the Rule. . . "Excise Taxes" shall have the meaning ascribed to such term pursuant to Section 26 hereof. "Financial Guaranty Insurance Policy" shall mean the financial guaranty insurance policy issued by Ambac Assurance insuring the payment when due of the principal of and interest on the Series 2003 Bonds as provided therein. "Investment Securities" shall mean in regard to investments pursuant to this Resolution, . any investment permitted under applicable State and federal law including units of participation in the Local Government Surplus Funds Trust Fund established pursuant to Part IV, Chapter 218, Florida Statutes and A. (1) Cash (insured at all times by the Federal Deposit Insurarice Corporation), (2) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America) or (3) . Senior debt obligations of other Government. Sponsored Agencies approved by Ambac Assurance. The above also constitute "Federal Securities" in regard to any defeasance of the Series 2003 Bonds. B. (1) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: {OR610453;4} 2 , . - Export-Import Bank - Rural Economic Community Development Admiriistration - U.S. Maritime Administration - Small Business Administration . - U.S. Department of Housing & Urban Development (pHAs) -Federal Housing Administration - Federal Financing Bank (2)Direct obligations .of . any of the following federal. agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: - . Senior debt obligations issued by the Federal National Mortgage Association . (FNMA) or Federal Home LOan Mortgage Corporation (FHLMC). . . - Obligations of the Resolution Funding Corporation (REFCORP) - Senior debt obligations ofthe Federal Home Loan Bank System . . - Senior .debt obligations of other Government Sponsored Agencies approved by .Ambac Assurance. (3) U.S. dollar. denominated deposit accounts, federal funds and bankers' acceptanc~s with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P-l" by Moody's and "A-I" or "A.l+" byS&P and . maturing not more than 360 calendar days after the date of purchase. (Ratings on holding. companies are not considered as the rating of the bank); . . . . (4) . Commercial paper which is rated. at the thneof purchaSe in the single highest classification, "P-l" by Moody's and "A-l +" by S&P and which matUres not more than 270 calendar days after the date of purchase; (5). Investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P; . . (6) Pre-refunded Municipal Obli.gations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; arid (A) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's or. S&P or any successors thereto; or (B) (i) which are fully secured as to principal and a interest and redemption preD;1ium, if any, by an escrow consisting only. of cash or obligations described iri paragraph A(2) above, which escrow may be. applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates. thereof or the specified redemption date or. dates pursuant to. such irrevocable {OR610453;4} . 3 instructions, as. appropriate, . and (ii) which escrow. is sufficient, as verified by a nationally recognized independent certified public accountant,. to pay principal of and interest and redemptioQ premium if any, on the bonds or other obligations described in this paragraph on the maturity date or dates or redemption date or dates specified in the irrevocable instructions . referred to. above, as appropriate: (7) Municipal obligations rated. "AaaJAAA" or general obligations of State with a rating of "A2/A" or higher by both Moody's and S&P. (8) Investment agreements approved m writing by Ambac Assurance (supported by appropriate opinions of counsel); and (9) Other forms of investments (including repurchase agreements) approved in writing by Ambac Assurance. C. The value of the above investments shall be determined as follows:. a) . For the purpose of determining the amount. in any fund, all Investment Securities credited to. such fund shall be valued at fair market. value. The Registrar shall determine the fair market value based on accept.ed industry standards and from accepted industry providers. Accepted industry providers shall Include but are not limited to pricing services provided by Financial. Times Interactive Data Corporation, Merrill Lynch, Salomon Smith Barney, Bear Stearns, or LehmaIJ..Brothers. b) As to certificates of deposit and bankers' acceptances: the face amount thereof, plus accrued interest thereon; and . . c) As to any inve~tment not specified above: the value thereof established by prior agreement among the Issuer, the Registrar, and Ambac Assurance. "Local Communication Services. Tax" shall mean the discretionary communication services tax levied by the City pursuant to Section 202.19, Florida Statutes and City Ordinance No. 2001-42 as amended and supplemented from time to time. "Original Instrument"shall mean Resolution No. 615 adopted by.the City Commission of the City on May 1, 1989, as heretofore amended and supplemented. "Parity Obligations" shall mean the Issuer's outstanding Improvement Refunding Revenue Bonds, Series 1999. . "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or goveminental entity. "Prior Bonds" shall mean the Outstanding bonds of the City of Winter Springs, Florida, Improvement Refunding Revenue Bonds, Series 1993. {OR610453;4} 4 ..... "Resolution" shall mean the Original Instrument as amended and supplemented including the amendments and supplements made by this Resolution and any resolution supplementing or amending the Resolution. . "this Resolution" shall mean this in~trument, as the same may from time to time be amended, modified or supplemented. . . . "Rule" shall mean Rule l5c2-l2 of the United States Securities and. Exchange Commission, as amended. . "Series 2003 Bonds" shall mean the City of Winter. Springs, Florida Improvement . Refunding Revenue Bonds, Series 2003 authorized to be issued pUrsuant to Section 7 of this Resolution. . . "State" shall mean the State of Florida. "Surety Bond;' shall mean the surety. bond issued by Ambac Assurance guaranteeing certain payments into the subaccount within .the Reserve Account created with respect to the . Series 2003 Bonds as provided therein and subject to the limitatiors set forth therein~ The terms "herein," "hereunder," "hereby," "hereto," "hereof' and any similar terms shall refer -to this Resolution; the. term heretofore s4all mean before the date. of adoption. of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution.. Words importing the masculine gender include every other gender. Words importing the singular . number include the plural number, and vice versa. SECTION 3. FINDINGS. It is hereby ascertained, determined and declared that: (A) The Issuer has previously issued the Prior Bonds of which the SUlP of $8,405,000 principal amount is currently outstanding and unpaid. (B) The Issuer deems it necessary, desirable and in the best financial interest of the Issuer that the Prior Bonds be refunded in order to effectuate interest cost savings and a reduction .in the debt service secured.by the Excise Taxes. Simultaneously with the issuance of the Series .. 2003 Bonds, a sufficient portion of the proceeds of the Series 2003 Bonds and other available funds will be paid by the Issuer to the Escrow Holder (as defined in the Agreement) for deposit by the Escrow Holder into the Escrow Account established pursuant to. the Escrow Deposit Agreement, to effectuate the refunding and defeasance of the Prior Bonds by providing for the payment of the principal of, premium, if any, and interest on. the Prior Bonds as provided in the Escrow Deposit Agreement. (C) The Issuer deems it necessary, desirable and in the best interest {)f the Issuer that the Excise Taxes be pledged to the payment of the principal of and interest on the Series 2003 Bonds. Following the issuance of the Series 2003 Bonds, no part of the Excise Taxes are pledged or encumbered in any manner except as security for the Series 2003 Bonds arid the Parity Obligations and the Original Instrument, in Section l8(H) thereof as amended, provides for the issuance of Additional Parity Obligations payable from the Excise Taxes on a parity with the. Parity Obligations under the terms, limitations and conditions provided therein. The Issuer will {OR610453;4} 5 . issue the Series 2003 Bonds as Additional Parity Obligations within the authorization contained in Section l8(H) of the Original Instrument as amended. The Series 2003 Bonds shall be payable. on a parity and rank equally as to lien on and source and secuiity fof payment from the Excise Taxes, and in all other respects except as otherwise provided herein, with the Parity Obligatiqns~ (D) The principal of and interest and redemption premium on the Series 2003 Bonds . and all reserve and other payments shall be payable solely from. the Excise Taxes. The Issuer shall never be required to levy ad valorem taxes on any real or personal property therein to pay . the principal of and interest on the S~ries 2003 Bonds herein authorized or to make any other payments. provided for herein. The Series 2003 Bonds shall not constitute a lien upon any . properties owned by or located within the boundaries. of the Issuer or upon any property other than the Excise Taxes. . . (E) The Issuer has received from Ambac Assurance .commitments to provide the Financial Guaranty Insurance Policy and Surety Bond with respect to the Series 2003 Bonds, copies of such are attached hereto as Exhibit A; and it is in the best financial interest of the Issuer . that the Issuer accept said ~ommitmerits. . SECTION 4. AUTHORIZATION OF REFUNDING OF PRIOR BONDS. There is hereby authorized the refunding ofthe Prior Bonds as provided in the Resolution. SECTION s. THIS RESOLUTION TO .CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of any or all of the Series 2003 Bonds by those who shall.hold the same from time to time, the provisions of this Resolution shall be deemed to be and shall constitute a contract between the Issuer and the .Owners from time to time of the Series. 2003 Bonds and shall be a part of any contract of bond insurance that pert~ns to the Series 2003 Bonds.. The pledge made in this Resolution and the provisions, covenants and . agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Owners of any and all of the Series 2003 Bonds and for the benefit," protection and security.ofany insurer insuring the Series 2003 Bonds. All of the Series 2003 Bonds, regardless of the time or times of their issuance or maturity, shall be .of equal rank without preference, priority or distinction of any of the Series 2003 Bonds over any other thereof except as expressly provided in or pursuant to this Resolution. SECTION 6. ACCEPTANCE OF INSURER'S COMMITMENTS. The Issuer hereby. accepts the Insurer's commitments to provide the Financial Guaranty Insurance Policy and the Surety Bond with respect to the Series 2003 Bonds; and the Mayor, the Clerk .and/or the City Manager of the Issuer are hereby authoriied to execute and deliver on behalf of the Issuer appropriate evidence of such acceptance. SECTION 7. AUTHORIZATION OF SERIES 2003 BONDS. Subject and pursuant to the provisions hereof, obligations of the Issuer to be known as: "Improvement Refunding Revenue Bonds,. Series 2003," are authorized to be issued in the aggregate principal amount of not exceeding $9,000,000, which may mature at higher Accreted Values to include the maturity amount of Capital Appreciation Bonds. {OR610453;4} 6. SECTION 8. DESCRIPTION OF SERIES. 2003 BONDS. the. Series 2003 Bonds . shall be issued in fully registered form; may be Capital Appreciation Bonds or Current Interest Bonds; shall be dated; shall be numbered consecutively from one upward in order of Maturity preceded by the letter "R" or such other lettering as the. Issuer shall approve; shall be in the denomination of $5,000 each, or integral multiples thereof for Current Interest Bonds or in . . $5,000 maturity amounts for the Capital Appreciation Bonds or in $5,000 multiples thereof, or such other denominations as shall be approved by the Issuer in a supplemental resolution prior to the delivery of the Series 2003 Bonds; shall bear interest at such rate or rates not exceeding the . maximum rate allowed by State law, the actual rate or rates to be . approved by the governing. . body of the Issuer prior to or upon the sale of the. Series 2003 Bonds; such interest to be payable sermannually at such times as are fixed by supplemental resolution of the Issuer if Current Interest BondS and shall mature annually on such date. in such years. (not exceeding 30 years . from the date of issuance) and in such amounts as will be fixed by supplemental resolution of the Issuer prior to or upon the sale of the Series 2003 Bonds;. and may .be issued with variable, adjustable, convertible or other rates and with original issue discounts; all as the Issuer shall provide herein or hereafter by supplemental resolution. . . Each. Current. Interest Bond shall bear interest from the interest date next preceding the date on which it is authenticated, unless authenticated on an interest .payment date, in which case . it shall bear interest from such interest payment date, or, unless authenticated prior to the first interest paymen,t date, in which case it shall bear interest from its date; provided, however, that if at the time of authentication payment of any interest which is due and payable has not been . made; such Current Interest Bond shall bear interest from the date to which interest shall have been paid. The Capital Appreciation Bonds shall bear interest only at maturity or upon redemption prior to maturity in the amoUnt determined by reference to the Accreted Value. . . The principal of, the Accreted Value, the interest and redemption premium, if any, on the. Series 2003 Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and . private debts. The interest on the Current Interest Bonds shall be payable by the Paying Agent on each interest payment date to the person appearing on. the registration books of the Issuer. hereinafter provided for as the registered Owner thereof on the 15th day of the calendar month immediately preceding the applicable interest payment date, by check or. draft mailed to such. . registered Owner at his address as. it appears on such registration books or by wire transfer to Owners of $1,000,000 or more in principal amount of the Series 2003 Bonds. Payment of the . principal of all Current Interest Bonds and the Accreted Value with respect to the Capital Appreciation Bonds shall be made upon the presentation and surrender of such Series 2003 Bonds as the same shall become due and payable. Notwithstanding ani other provisions ofthis section, the Issuer may, at its option, prior to the date of issuance of the Series 2003 Bonds, elect to use an immobilization system or book- entry system with respect to issuance of such Series 2003 Bonds. As long as any Series 2003 Bonds are outstanding .in book-entry form. the provisions of this Resolution inconsistent with such system of book-entry registration shall not be applicable to such Series 2003 Bonds. {OR610453;4} 7 SECTION 9. EXECUTION OF SERIES 2003 BONDS. The Series 2003 Bonds shall be signed by, or bear the facsimile signature of the Mayor or Deputy Mayor of the Issuer, and shall be attested by, or bear the facsimile signature of, the Clerk or any deputy or assistant clerk,. and a facsimile of theofficiar seal of the Issuer shall be imprinted on the Series 2003 Bonds. . " In case any officer whose signature or a facsimile of whose signature shall appear on any Series 2003 Bonds shall cease to be such officer before the delivery of such Series 2003 Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he has remained in office until such delivery. Any Series 2003 Bond may bear the facsimile signature of or may be signed by such persons who, at the actual tinle of the execution .of such Series 2003 Bond, shall be the proper officers to sign such Series 2003 Bonds although, . at the date of such Series 2003 Bond~ such persons may not have been such officers. SECTION 10. AUTHENTICATION OF SERIES 2003 BONDS. Only such of the Series 2003 Bonds asshall have endorsed thereon a certificate of authentication substantially in. " the form hereinbelow set forth, duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Resolution. No Series 2003 Bond shall be valid or. obligatory for any purpose unless and until such certificate of authentication shall have been duly "" executed by the Registrar, and such certificate of the Registrar upon any such Series 2003 Bond " " shall be conclusive evidence that such Series 2003 Bond has been duly authenticated and delivered under this Resolution. :The Registrar's certificate of authentication on any Series 2003 Bond shall be deemed to have been duly executed if signed by an authorized. officer of the . Registrar, but it shall not be necessary that the same officer sign the certificate of authentication "of all of the Series 2003 Bonds that may be issued hereunder at anyone time. SECTION 11. EXCHANGE OF SERIES 2003 BONDS~ Any Series 2003 Bonds, upon surrender thereof at the designated office of the Registrar, together with an assignment duly executed by the Bondholder or. his attorney. or legal representative in such form as shall be satisfactory to the Registrar, may, at the option of the Owner, be exchanged "for an aggregate principal amount or Accreted Value. of Series 2003 Bonds equal to the principal amount or " Accreted Value of the Series 2003 Bond or Series 2003 Bonds so surrendered: The Registrar shall make provision for the exchange of Series 2003 Bonds at the principal corporate trust office of the Registrar. The Issuer and Registrar shall not be obligated to make any exchange of Series 2003 Bonds during the fifteen (15) days next preceding an interest . payment date or in the case of any proposed redemption of Series 2003 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2003 Bonds. SECTION 12. NEGOTIABILITY, REGISTRATION AND TRANSFER OF SERIES 2003 BONDS. The Registrar shall keep books for the registration of and for the . registration of transfers of Series 2003 Bonds as provided in this Resolution. The transfer of any . Series 2003 Bonds may be registered only upon such books and only upon surrender thereof to the Registrar together with an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be satisfactory to the Registrar. Upon any such registration of . transfer, the Issuer shall execute and the Registrar shall authenticate and deliver in exchange Jor such Series 2003 Bond, a new Series 2003 Bond or Series 2003 Bonds registered in the name of the transferee, and in an aggregate principal amount equal to the principal amount of such Series {OR610453;4} 8 , . 2003 Bond or Series 2003 Bonds so surrendered. The Issuer and Registrar shall not be obligated to make any transfer of Series 2003 Bonds during the fifteen (15) days next preceding an interest. , .payment date or in the case .of any proposed redemption of Series 2003 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2003 Bonds. In all cases in which Series 2003 Bonds shall be exchanged, the Issuer shall execute and the Registrar shall authenticate and deliver, at the earliest practicable time, a new Series 2003 Bond or Series 2003 Bonds of the same type (e.g., Current Interest Bonds will be exchanged for . Current Interest Bonds . and Capital Appreciation Bonds. will be exchanged for Capital Appreciation Bonds) i:i1 accordance with the provisions ofthis Resolution. All Series 2003 Bonds surrendered in any such exchange or registration of transfer shall forthwith be canceled by the Registrar. The Issuer or the Regi.strar may make a charge for every such exchange or registration . of transfer of Series 2003 Bonds sufficient to reimburse it for any tax .or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other.. charge shall be made to any Owner for the privilege of exchanging or registering the transfer of . , Series 2003 Bonds under the provisions of this Resolution. . SECTION 13. OWNERSHIP OF SERIES 2003 BONDS. The person in whose name any Series 2003 Bond shall be registered shall .be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal or redemption price of any such Series 2003 Bond, and the interest on any such Series 2003 Bonds shall be made only to or upon the. order of the registered owner thereof or his legal representative. All such payments shall be. valid and effectual to satisfy and discharge the liability upon such Series 2003 'Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. . SECTION 14. SERIES, 2003 BONDS MUTILATED, DESTROYED, STOLEN OR . LOST. In case any Series 2003 Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion cause to be executed, and the Registrar shall authenticate and deliver, a new Series 2003 Bond of like date and tenor as the Series 2003 Bond so mutilated, destroyed, stolen or lost (e.g., Current Interest Bonds shall be issued in exchange for Current Interest Bonds and Capital Appreciation Bonds shall be issued in exchange for Capital Appreciation Bonds) in exchange and substifutionfor such mutilated Series 2003 Bond upon surrender and cancellation of such mutilated Series 2003 Bond or in lieu of and substitution for the Series 2003 Bond destroyed, stolen or lost, and upon the Owner furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and, complying with such other. reasonable . regulations and conditions as the Issuer and the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Series 2003 Bonds so surrendered shall . be canceled by the Issuer. If any of the Series 2003 Bonds shall have matured or be. about to mature, instead of issuing a substitute Series 2003 Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Series 2003 Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Series 2003 Bonds issued pursuant to this Section shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Series 2003 Bonds be at any time found by anyone, and such duplicate Series 2003 . Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and {OR610453;4} 9 security for payment from the funds, as hereinafter pledged, to the same extent as all other Series 2003 Bonds issued hereunder. SECTION 15. PROVISIONS FOR REDEMPTION. The Series 2003 Bonds shall be subject to redemption prior to their maturity, at such times and in such manner as shall be fIxed by supplemental resolution of the Issuer prior to or at the time of sale of the Series 2003 Bonds. Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registra,r, and mailed, first class mail, postage prepaid, to all Owners of Series 2003 Bonds to be redeemed at their addresses as they. appear on the registration books hereinbefore provided for, but failure to mail such notice to one or more OWners of Series 2003 Bonds shall not affect the validity.ofthe. proceedings for such redemption With respect to .owners of Series 2003 Bonds to which notice was duly mailed hereunder. Each. such notice shall. set forth the date fixed for redemption, the redemption. price to be paid and,. if less than all of the Series 2003 Bonds of one maturity are to .be called, the distinctive numbers of such Series 2003 Bonds to be redeemed and in the case of Series 2003 Bonds to be redeemed in part only, the portion of the principal amount or Accreted Value thereof to be redeemed. . . . Any notice of optional redemption, other than with respect to an advance refunding, shall be circulatyd only if suffIcient funds have been deposited in the Debt Service Fund to pay the redemption price of the Series 2003 Bonds to be redeemed. Official notice of redemption having been given as aforesaid, the Series 2003 Bonds or portions of Series 2003 Bonds to be redeemed shall; on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Series 2003 Bonds or portions of Series 2003. Bonds shall cease to bear interest. Upon surrender of such Series 2003. Bonds for . redemption in accordance with said notice, such Series 2003 Bonds shall be paid by the . Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall J:>e payable as herein provided for payment of interest. Upon surrender for any partial redemption of. any Series 2003 Bond, there shall be prepared for the Owner a new Series 2003 Bond or Series 2003 Bonds of the same maturity in the amount of the unpaid principal of such partially redeemed Series 2003 Bond. All Series 2003 Bonds which have been redeemed shall be canceled and shall not be reissued. . In addition to the foregoing notice, further notice shall be given by the Issuer as set out below, but no defect. in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice : thereof is given as above prescribed. . (A) Each. further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers .of all Series 2003 Bonds being redeemed; (ii) the date of issue of the Series 2003 Bonds 'as originally issued; (iii) the rate of mterest borne by each .Series. 2003 Bond being redeemed: (iv) the maturity date of each Series 2003 Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Series 2003- Bonds being redeemed. . {OR610453;4} 10 . (B) Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types similar to the type. of which the Series 2003 Bonds consist and to one or more. national information services that disseminates notices of redemption of obligations such as the Series 2003 Bonds. . SECTION 16. FORM OF SERIES 2003 BONDS~ The text of the Series 2003 Bonds, together with the certificate of authentication to be endorsed therein, shall be in substantially the . following form, with such omissions, insertions and variations as may be necessary, desirable, . authorized or permitted by this Resolution, .or as may be necessary if the Series 2003 Bonds or a portion thereof are issued as Capital Appreciation Bonds, or as may be necessary to comply with applicable laws, rules and regulations of the United States and. of the State in effect upon the issuance thereof. . {0R.610453;4} 11 . [FORM OF.SERIES 2003 BOND] Financial Guaranty Insurance Policy No. _ (the "Policy") with respect to payments due for . principal of and interest on. this Bond has been issued by Ambac Assurance Corporation {"Ambac Assurance"). The Policy has been delivered to The Bank of New York, New York, New York, as the Insurance Trustee under said Policy and will be held by such Insurance Trustee. or. any successor msurance trustee. .ThePolicy is on file and available for inspection at the principal. office ~f the Insurance Trustee and a copy thereof may be secured. from Ambac. Assurance or the Insurance Trustee. AU payments required to be made under the Policy shall be made in accordance with the provisions thereof. . The owner .of this Bond acknowledges and consents to the subrogation rights of Ambac Assurance as more fully set forth in the Policy. No.R~ $ UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF SEMINOLE CITY OF WINTER SPRINGS IMPROVEMENT REFUNDING REVENUE BONDS, SERIES 2003 . MATURITY DATE: INTEREST RATE: DATED DATE: CUSIP: % July l~ 2003 Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS that the City of Winter Springs, Florida (hereinafter called the "Issuer") for value received, hereby promises to pay to the order of the Registered Owner identified above or registered assigns, as herein provided, on the Maturity Date identified above, upon the presentation and surrender hereof at the office of Wachovia Bank, National Association, Charlotte, North Carolina, solely from the revenues hereinafter mentioned, the Principal Amount identified above in any.coin or currency of the United ~tates of America which on the date of payment thereof is legal tender for the payment of public. and private debts,. and to pay, solely from said sources; to the Registered Owner hereof by wire transfer or check transmitted to the Registered Owner at his address as it appears on the Bond registration books of the Issuer as it appears on the 15th day of the calendar month preceding the applicable interest payment date, interest on said Principal Amount at the Interest Rate per annum identified above on each April 1 and October 1 commencing October 1, 2003 rrom the interest payment date next preceding the date of registration and authentication of this Bond, unless this Bond is registered and authenticated as of an interest payment date, in which case it shall bear interest . from. said interest payment date, or unless this Bond is registered and authenticated prior to October 1, 2003, in which event this Bond shall bear interest from July 1, 2003. (OR610453;4} 12 The Bonds ofthis issue shall be subject to redemption prior to their maturity at the option of the Issuer. (Insert Optional or Mandatory Redemption Provisions) . Notice of such redemption shall be given in the manner required by the Resolution described below. ... This Bond is one of an authorized issue .of Bonds in the aggregate principal amount of $ of like date~ tenor and effect; except as to number, principal amount,' maturity, redemption provisions and interest rate, issued to refund certain outstanding debt of the .Issuer all . in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes,. the Charter of the Issuer, and Resolution No: 615 duly adopted by the Issuer on May 1, 1989, as amended supplemented and particularly as supplemented by Resolution No. 2003-28 duly adopted by the Issuer on June 9, 2003 as supplemented (hereinafter collectively called the "Resoiution~l) and is subject to all the terms and conditions of such Resolution. All capitalized undefined terms used herein' shall have the meaning set forth in the Resolution. . This Bond and. the interest hereon are payable solely from and secured by a lien uponand a pledge of the proceeds of the Public Service Taxes imposed by the Issuer on the purchase of certain utilities serVices within the corporate limits of the Issuer, under the authority of Section 166.231, Florida Statutes,. and pursuant. to ordinances of the City, the Local Commumcation Services Tax levied by the City pursuant to Section 202.19,. Florida Statutes and ordinances or the City and the proceeds of the Franchise Fees to be paid. for a period of thirty (30)' years from April 1, 1984, by the Florida Power CorPoration, pursuant to an ordinance enacted by the Issuer on March 27, 1984 (such tax and fees, above described, are 4erein collectively r~ferred to as "Excise Taxes") in the manner provided in the Resolution. It is provided in the Resolution that the lien of this Bond on the Excise Taxes is on a parity with the lien thereon of the Issuer's outstanding Improvement Refunding Revenue Bonds, Series 1999. . . This Bond does not constitute a general indebtedness of the Issuer within the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the Owner of this Bond that such Bondowner shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer or taxation of any real or personal, property therein for the payment of the principal of and interest on this Bond or the making 'of any debt service fund, reserve or other payments provided for in the Resolution. It is further agreed between .the Issuer and the Owner of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien or on any property of or in the Issuer, but shall constitute a lien only on the Excise Taxes all in the manner provided in the Resolution. Neither the members of the City Commission of the Issuer nor any person executing this. bond shall be liable personally hereon or be subject liability or accountability by reason of the issuance hereof.. . {OR610453;4} 13 It is certified that this Bond is authorized by and is issued in. conformity with the requirements of the Constitution and Statutes of the State of Florida. . This Bond is and has all the qualities and incidents of a negotiable instrwnent under Article 8 of the Uniform Commercial Code, the State of Florida, Chapter 678, Florida Statutes but. may be transferred by the Bondowner hereof in person or. by his attorney or legal representative at the principal corporate trust office of the Registrar but only in the manner and subject to the conditions provided in the Resoiution and upon surrender and cancellation of this : . Bond. . This Bond shall not be valid or become obligatory for any purpose or be entitled :to any benefit or security under the Resolution until it shall have been authenticated. by the execution by the Registrar of the certificate of authentication endorsed hereon. IN WITNESS WHEREOF, the City'ofWinter Springs, Florida, has issued this Bond and has caused the same to be signed by its Mayor, and countersigned and attested to by its Clerk (the signatures of the Mayor, and the Clerk being authorized to be facsimiles of such officers' signatures), and its seal or facsimile thereof to be affixed, impressed, imprinted, lithographed or , reproduc.ed h~reon, all as ofthe 1st day of July, 2003. CITY OF WINTER SPRINGS, FLORIDA . (SEAL) ~AM Mayor ... COUNTERSIGNED: {OR610453;4} 14 .. . CERTIFICATE OF AUTHENTICATION. . This Bond is one of the Bonds issued under the provisions of the within mentioned Resolution. . . Date of Authentication: W ACHOVIA BANK; NATIONAL ASSOCIATION, Registrar, as Authenticating Agent By: Authorized Officer {OR610453;4} 15 " ASSIGNMENT AND TRANSFER . . . For value received the undersigned hereby sells, assigns and transfers unto (please insert Social Security or other identifying number of . transferee) the attached bond of the City of Winter Springs, Florida, and does hereby constitute and appoint , attorney, to . transfer the said Bond on the books kept for Registration thereof, with full power of substitution in the premises. Date SignatUre Guaranteed by (member fIrm of the New' York Stock Exchange or a commercial bank or a trust . company.) NOTICE: No transfer will be registered and no new Bonds will be issued in the name of the Transferee, . .unlessthe' signature to this assignment .corresponds with the name as it . ~ppears upon the face of the within Bond in. every .. particular, without alteration or enlargement' or any change whatever and the Social Security. or Federal Employer. IdentifIcation. Number of the Transferee is supplied.. By: Title: (END OF FORM OF SERIES 2003 Bond] {OR610453;4} . 16 SECTION 17. APPLICATION OF SERIES 2003 Bond PROCEEDS. The .proceeds, including accrued interest and premium, if any, received from the sale of the Series 2003 Bonds shall be applied by the Issuer simultaneously with the delivery of such Series 2003 Bonds to the purchaser thereof, as follows: (A) The accrued interest shall be deposited in the Interest Account and shall be used only for the purpose of paying interest becoming due on the. Series 2003 Bonds on October 1, .2003. . . (B) The Issuer . shall next deposit the Surety Bond in an amount equal to the ReserVe . Requirement for the Series 2003 Bonds into the subaccount in the ReserVe Accounf hereby created for the benefit of the Series 2003 Bonds. (C) A sufficient amount of the Series 2003 Bonds proceeds shall be applied to the payment of the premiums of the Financial Guaranty Insurance Policy and Security Bond and to the payment .of costs and expenses relating to the issuance of the Series 2003 Bonds. . (D). Such sum which, together with .the other funds described in the Agreement as will be sufficient to pay, as of any date of calculation, principal and interest and ~any redemption . premium on the. Prior Bonds at the time and in the manner provided in the Agreement, including expenses incurred by the Issuer in connection with the paym~nt of such Prior Bonds shall be . deposited to the escrow fund created pursuant to the Agreement. Such funds shall be. kept separate and apart froni all oth~r funds of the Issuer and the moneys on deposit therein shall be withdrawn, used and applied.by the Escrow Holder solely for the purposes set forth herein and in . the Agreement. Simultaneously with the delivery of the Series 2003 Bonds to the original . . purchasers thereof, the Issuer shall enter into the Agreement, the form .of which will be approved by the Issuer in a supplemental Resolution adopted prior to the issuance of the Series 2003 Bonds. At the time of execution of the Agreement, the Issuer shall furnish to the Escrow Holder appropriate documentation. to demonstrate that the sums being deposited and the investments to be made will be sufficient to defease the Prior Bonds. (E) . The balance of any proceeds of the Series 2003 Bonds shall be applied to any lawful purpose of the Issuer . . SECTION 18. SPECIAL OBLIGATIONS OF ISSUER. The Series 2003 Bonds shall not be or constitute general obligations or indebtedness of the Issuer. as "bonds" within the meaning of the Constitution of Florida, but shall be payable solely from and secured by a lien upon and a pledge of the Excise Taxes on a parity with the lien thereon of the Parity Obligations as . herein provided and as provided in the Original Investment. No Holder or Holders of any Series 2003 Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the. Issuer or taxation. in any form of any real or personal property therein, or to compel the Issuer to pay such principal and interest from .any other funds of the Issuer. . SECTION 19. SECURITY FOR SERIES 2003 BONDS. The payment of the principal of or redemption price, if applicable, and interest on the Series 2003 Bonds shall be secured forthwith equally and ratably by a pledge of and prior lien upon the Excise Taxes. The Excise (OR610453;4} 17 Taxes shall be subject to the lien of this pledge immediately upon the issuance and delivery of the Series 2003 Bonds, with.out any physical delivery by the Issuer .of the. Excise Taxes .or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of. . any kind against the Issuer, in tort, contract .or otherwise. The Issuer does hereby irrev.ocably. pledge the Excise Taxes to the payment .of the prinCipal of or redempti.on price, if applicable, and . interest .on the Series 2003 Bonds in the manner provided in this Resolution and the Original . Instrument. . . . . The Series 2003 Bonds. are payable from the Excise. Taxes on. a . parity, equally and ratably, with the Parity Obligations. . SECTION 20. ADDITIONAL SECURITY. Anything hereih to the contrary. . notwithstanding, however, the .Issuer may cause the Series 2003 Bonds to be payable fr.om and . secured by the Financial Guaranty Insurance P.olicy and/or the Surety Bond not applicable to any one or more. .other Series of Bonds~ as shall be provided by resolution of the City Commission of the Issuer, in additi.on to the security .of the Excise Taxes pr.ovided herein. SECTION 21. APPLICATION OF PROVISIONS OF ORIGINAL INSTRUMENT. . The Series 2003 Bonds shall for all purposes be considered t.o be Additional Parity Obligations issued under the authority of Section l8(H) .of tJIe Original Instrument as amended and shall be entitled t.o all the protecti.on and. security provided in and by the Original Instrument for .. Additional Parity Obligations, and the Series 2003 Bonds shall be in all respects entitled to the same security, rights and privileges enj.oyed by the Parity Obligations. .The debt service on the Series 2003 Bonds shall be payable from the Debt Service Fund established by the Original Instrument on a parity with the Parity Obligati.ons, and dep.osits. shall be made into. the Debt Service Fund by the Issuer in am.ounts fully sufficient to pay the debt service on the Series 2003 Bands and on the Parity Obligations as such. debt service becomes due. Notwithstanding the . immediately preceding sentence, the Surety Bond shall secure .only the Series 2003 Bonds. SECTION 22. FINANCIAL GUARANTY INSURANCE POLICY AND. SURETY. BOND. Notwithstanding any provisi.on t.o he c.ontrary c.ontained herein, the following provisi.ons shall apply sa l.ong as the Financial Guaranty Insurance P.olicy and/.or Surety Band with respect to the Series 2003 Bonds shall be in full farce and effect: A. Consent of Ambac Assurance . Any provision of this Res.oluti.on expressly rec.ognizing .or granting rights in .or to Ambac Assurance may not be amended. in any manner which affects the rights of Ambac Assurance hereunder without the. prior written consent of Ambac Assurance. Ambac Assurance reserves the right'to charge the Issuer a fee for any consent or amendment to the Resolution while the Financial Guaranty Insurance Policy is outstanding. B. Consent of Ambac Assurance in Addition to Holder Consent . . Unless otherwise provided in the Resolution, Ambac Assurance' consent shall be required in addition to Holder consent, when required, for the following purposes: (i) execution and delivery of any supplemental Resoluti,on or any amendment, supplement or change to. or modification of the Resolution; (ii) removal of the Registrar or Paying Agent and {OR610453;4} 18 selection and appointment of any successor registrar or paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires Holder consent. C. Consent of Ambac Assurance in the Event of Insolvency Any reorganizatioJ.1 or liquidation plan With respect to the Issuer must be acceptable to _ . Ambac Assurance. In the event of any reorganization or liquidation, Ambac Assurance. Bhall have the right to vote on behalf of all Holders .who hold Ambac Assurance-insured -. Series 2003 Bonds absent a default by Ambac Assurance under the Fmancial Guaranty . Insurance Policy insuring such Series 2003 Bonds. D. Consent of Ambac Assurance Upon Defaul't Anything in this Resolution to the contrary notwithstanding, upon the occUrrence and continuance of an event of default as defjned in the Resolution, Ambac Assurance shall be entitled to control and direct the enforcement of all rights and remedies granted to the Holders under the Resolution, including, without liinitation: (i) the right to accelerate the principal of the - Series 2003 Bonds, and (ii) the . right to annul any declaration of acceleration, -and Ambac Assurance shall also be entitled to approve all waivers of events of default. .>. E. Acceleration Rights Upon. the. occurrence of an event of default, the Registrar. may, with th~ c~nsen{ of Ambac Assurance, and shall,.at the direction of Ambac Assurance or 25% of the Holders with the consent of Ambac Assurance, by written notice to the Issuer and Ambac > Assurance, declare the principal of the Series 2003 Bonds to be immediately due and payable, whereupon that. portion of the principal. of the Series 2003 Bonds thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in this Resolution or in the Series 2003 Bonds to the contrary I1otwithstanding. . F. - . Notices and Information ot be Given to Ambac Assurance (1) While the Financial Guaranty Insurance Policy is in effect, the Issuer shall furnish to Ambac Assurance, upon request, the following: (a) a copy of any financial statement, audit and/or annual report of the Issuer. (b) such additional information: it may reasonably request. Upon request, such information shall be delivered at the Issuer's expense to the attention of the Surveillance Department, unless otherwise indicated.. (2) a copy of any notice to be given to the registered> owners of the Series 2003 Bonds, including, without limitation, notice of any redemption of or defeasance of Series 2003 Bonds, and any certificate rendered pursuant to this Resolution relating to the security for the Series 2003 Bonds. {OR610453;4} 19 . (3) . To the extent that the Issuer has entered into a continuing disclosure. agreement with respect to the Series 2003 Bonds,. Ambac Assurance shall be included as party to be notified. . The following informatiorishall be provided to the. attention of the General Counsel office of . Ambac Assurance: 1. The Issuer shall notify Ambac Assurance of any failure of the Issuer to provide relevant notices, certificates, etc. . 2" Notwithstanding any ot~er provIsIon of this Resolution, the Issuer shall immediately notify Ambac Assurance if at any time there are insufficient moneys to make .any payments of principal and/or interest as required and immediately upon the occurrence of any event of default hereunder... Th~ Issuer will permit Ambac Assurance to discuss the affairs, finances and accounts of the Issuer or ally information Ambac Assurance may reasonably request regarding .the security for the Series 2003 Bonds with appropriate officers of the Issuer. The jssuer Will permit Ambac Assurance to have access to and to make copies of all books and records relating to. the Series 2003 Bonds at any reasonable time. Ambac Assurance shall have the right to direct an accounting at the Issuer's expense, and. the Issuer's failure to comply with such direction within thirty nO) days after receipt of written notice <;>f the direction from Ambac Assurance shall be deemed a default hereunder; provided, . however, that if compliance cannot occur within such period, then such period will be extended . so long as compliance is begun within such period and diligently pursued, but. only if such extension would not materially adversely affect the interests of any registered owner of the Series 2003 Bonds. . . . G. Payment Procedure Pursuant to the Financial Guaranty Insurance Policy As long. as the Financial Guaranty Insurance Policy shall be in full force and effect, the Issuer and any,Paying Agent agree to comply with the following provisions: . (a) At least one (1) day prior to all interest payment dates the Paying Agent, will . determine whether there will be sufficient funds in the funds and accounts to pay the principal of or interest on the Series 2003 Bonds on such interest payment date. If the Paying Agent, determines that there will be insufficient funds in such funds or accounts, the Paying Agent, shall so notify Ambac Assurance. Such notice shall specify the amount of the anticipated. deficiency, the Series 2003 Bonds to which such deficiency is applicable and whether such Series 2003 . Bonds will be deficient as to principal or interest, or both. If the Paying Agent has not so notified Ambac Assurance at least one (I) day prior to an interest payment. date, Ambac Assurance will make payments of principal or interest due on the Series 2003 Bonds on or before the first (1 st) day next following the date on which Ambac Assurance shall have received notice of nonpayment from the Paying Agent. . (b). The Paying Agent, shall, after giving notice to Ambac Ass.urance as provided in . (a) above, make available to Ambac Assurance and, at .Ambac Assurance's direction, to The {OR610453;4} 20 " Bank of New York, in New York, New York, as insurance trustee for Ambac Assurance or any successor insurance trustee (the "Insurance Trustee");:. the registration books of the Issuer maintained by the Paying Agent, and all records relating to the funds .and accounts maintained under the Resolution. , . (c) The Paying Agent, shall provide Ambac Assurance and the Insurance Trustee with a list. of registered owners of Series 2003 Bonds entitled to receive principal or interest. payments from Ambac Assurance under the terms of the Financial Guaranty Insurance Policy, and shall make, arraJ?gements with the Insurance Trustee (i) to mail checks or drafts to the registered owners of Series 2003 Bonds entitled to receive full or partial interest payments from .Ambac Assurance and (ii) to pay principafupon Series 2003 Bonds 'surrendered to the Insurance Trustee by the registered'owners of Seiies 2003 Bonds entitled .to receive full or partial principal payments from Ambac Assurance. ' . , (d) The Paying Agent, ,shall, at the time it provides notice to Ambac Assurance pUrsuant to (a) above, . notify registered owners of .Series 2003 Bonds entitled to receive the payment of principal or interest thereon. from Ambac Assurance (i) as to' the fact of such . entitlement, (ii) that Ambac Assurance will remit to them all or a part of the interest payments next coming due upon proof of Holder entitlement to interest payments and delivery to the . Insurance. Trustee, in form satisfactory to the Insurance Trustee, of an appropriate assignment of the. registered owner's right to payment, (iii) that should they be entitled to receive full payment . of principal from Ambac Ass~ance, they must surrender their Series 2003 Bonds'(along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee to permit ownership of such Series 2003 Bonds to be registered in the name of Amb~c Assurance) for payment to the Insurance Trustee, and to the Paying Agent, and (iv) that should they be entitled, to receive partial payment of principal from Ambac Assurance, they must surrender their Series'2003 Bonds fdrpayment thereon first to. the Paying Agent, who shall note on such . Series 2003 Bonds the portion of the principal paid by the Paying Agent, and then, along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the Insurance Trustee; which will then pay the unpaid portion of principal. ( e) In the event that the Paying Agent, has notice that any payment of principal of or interest on a Series 2003 Bond which has become Due for Payment and which is made to a Holder by or on behalf of the Issuer has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code bya trustee in bankruptcy in accordance wit the fmal, nonappealable order of a court having competent jurisdiction, the Paying Agent, shall at the time Ambac Assurance is notified pursuant to (a) above, notify all registered owners that in the event that any registered owner's payment is so recovered, such registered owner will. be entitled to payment from Ambac Assurance to the extent of such recovery if sufficient funds are not otherwise available, and the Paying Agent, shall furnish to Ambac Assurance its records evidencing the payment of principal of and interest on the Series 2003 Bonds which have been made by the Payillg Agent, and subsequently recovered from registered owners and the dates on which such payments were made. (f) In' addition to those rights granted Ambac Assurance under this Resolution, Ambac Assurance shall, to the extent it makes payment of principal of or interest on Series 2003 Bonds, become subrogated to the rights of the recipients. of such payments in accordance with {OR610453;4} 21 the terms of the Financial Guaranty msurance Policy, and to. evidence such subrogation (i) in the case of subrogation as to claims for past, due interest, the Paying Agent shall note Ambac . Assurance's rights as subrogee on the registration books of the Issuer maintained by the Paying Agent upon receipt from Ambac Assurance of proof of the payment of interest thereon to the registered owners of the Series 2003 Bond, and (ii) in the case of subrogation as to Claims for past due principal, the Paying Agent, shall.note Ambac Assurance's rights as subrogee on the registration books of the Issuer, upon surrender of the Series 2003. Bonds by the registered owners thereof together with proof of the payment of principal thereof. . H.. . Paying Agent - Related .Provision 1.. The Paying Agent may be removed at any time, at the request of Ambac Assurance, for any "breach of the trust set forth herein. resignation. 2. Ambac Assurance shall. receive prior written notice of any Paying Agent I. Ambac ^s Third Party.Beneficiary To the extent that this Resolution confers upon or gives or grants to Ambac Assurance any right, remedy or claim under or by reason of this Resolution, Ambac Assurance is herby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right remedy or claim conferred, given or granted hereunder. . J. Parties Interested Herein Nothing in this Resolution .expressed or implied is intended or shall be construed to confer upon, or to give. or grant to, any Person, other than the Issuer, Ambac Assurance, the Paying Agent, and the registered owners of the Series 2003 Bonds, any right, .remedy or claim under or by reason of this Resolution or any covenant, condition or stipulation hereqf, and all covenants stipuiations, promises and agreements in this Resolution contained by and on behalf of {OR61 0453;4} 22 the Issuei' shall be for the sole and exclusive benefit of the Issuer,. Ambac Assurance, the Paying Agent, and the registereq. owners of the Series 2003 Bonds. K. Covenants re Article 9 Collateral At the date of issue of the Series 2003 Bonds the Issuer will have filed any required financing statements describing, and transferring possession or control over, the Excise Taxes (and for so long as any Series 2003 Bond is outstanding the Issuer will file, continue, and amend all such financing statements and transfer such possession and control) as may be necessary to U establish and maintain such priority in each jurisdiction in which the Issuer is organized or such collateral may be located or that may otherwise be applicable pursuant to Uniform Commercial Code ~~9.30l-9.306 of such jurisdiction. . . SECTION 23. FEDERAL INCOME TAX COVENANTS: (A) The Issuer covenants with the Holders of the Series 2003 Bonds that it shall not use the proceeds of such Series of Bonds in any manner which would cause the interest on .such Series of Bonds to be or bec.ome includable in the gross income of the Holder thl;:reof for federal income tax purposes. (B) The Issuer covenants with the Holders of the Series 2003 Bonds that neither the . Issuer nor any Person under its control or direction will make any use of the proceeds of such Series 2003 Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such Series 2003 Bonds to be "arbitrage bonds" within the meaning of Section 14.8 of the Code, and neither the Issuer nor any other Person shall do any act or fail to do any act which would cause the interest on such Series .2003 Bonds to become includable in the gross income of the Holder thereof for federal income tax purposes. (C) The Issuer hereby covenants with the Holders ofthe Series 2003 Bonds that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on such Series 2003 Bonds from the gross income of the Holder thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the. United States Treasury pursuant to the Code. SECTION 24. DEFEASANCE. The covenants and obligations of the Issuer shall be defeased and discharged under terms of this Resolution as follows: " " (A) If the Issuer shall payor cause to be paid, or there shall otherwise be paid, to the Holders of all Series 2003 Bonds the princip"al and/or Accreted Value, redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein and in the Series 2003 Bonds, then the covenants, agreements and. other obligations of the Issuer to the Bondholders, shall thereupon cease, terminate and become :void and be discharged and . . satisfied. If the Issuer shall payor cause to be paid, or there shall otherwise be paid, to the Holders. of any Outstanding Series 2003 Bonds the principal and/or Accreted Value; redemption . premium, if any, and interest due or to become due thereon, at the. times and in .the manner stipulated herein, such Series 2003 Bonds shall cease to be entitled to . any benefit under this Resolution, and all covenants,. agreements and obligations of the Issuer to the Holders of such .- {OR610453;4} 23 ., Series 2003 Bonds . shall thereupon cease, .terminate and beco~e void and be discharged and satisfied. (B) The Series 2003 Bonds, redemption premium, If any, and interest due or to become due for .the payment or redemption of which moneys shall have been set aside and shall be held in trust (through deposit by the Issuer of funds for such payment or redemption or . otb,erwise) at the maturity or redemption date thereof shall be deemed to have been paid within the meaning and with the .effect expressed in paragraph (A) of this Section 24. Any Outstanding Series 2003 Bonds shall prior to the maturity or redemption date thereof be deemed to have been paid wi.thin the meaning and with the effect expressed in paragraph (A) of this .section if (i) in case of said Series 2003 Bonds to be redeemed on any date prior to their maturity, the Issuer shall have given to the escrow agent instructions accepted in writing by the. escrow agent to notify. Holders of. Outstanding Series 2003 Bonds in the. manner. required . herein of the redemption of such Series 2003 Bonds on said date and (ii) there shall have been deposited with the escrow agent either moneys in an amount which shall be. sufficient, or Federal Securities (including any. Federal Securities issued or held in book-entry form on the books of the Department of the Treasury of the United States) tlie principal of and the interE)st on which when . due will provide moneys which, together with the moneys, if any, deposited with the escrow agent at .the same time, shall be sufficient, to pay when due the principal of and/or Accreted Value, or premium, if any, and interest due arid to become due on said Serie~ 2003 Bonds on or prior to the redemption date or maturity date thereof, as the case may be.. Notwithstanding anything herein to the contrary, in the event that the principal and/or Accreted Value and/or interest due on the Series 2003 Bonds shall be paid by Ambac Assurance pursuant to the FinanCial Guaranty Insurance Policy and Security Bond, the Series 2003 Bonds. shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be . considered. paid by the Issuer, and the assignment and pledge of the Excise Taxes and all covenants, agreements and other obligations of the Issuer to th~ registered oWners shall continue to exist and shall run to the benefit of Ambac Assurance, and Ambac Assurance shall be Bubrogated to the rights of such registered owners. SECTI()N 25. CONTINUING DISCLOSURE. The. Issuer hereby covenants and agrees that, in order to provide for compliance with the secondary market disclosure requirements of the Rule, that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be executed by the Issuer prior to the time the Issuer delivers the Series .z003 Bonds to the participating underwriter or underwriters, as it may be amended from time to time in accordance with the terms thereof. Notwithstanding any other provision of this Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an Event of Default hereunder. However, the Continuing . Disclosure Certificate shall be enforceable by the Series 2003 Bond owners in the event that the Issuer fails to cure a breach thereunder within a reasonable time after written notice from a Series 2003 Bond owner to the Issuer that a breach exists. Any rights of the Series 2003 Bond owners to enforce the proviSIons of the covenant shall be on behalf of all Series 2003 Bond owners and shall be limited to a right to obtain specific performance ofthe Issuer's obligations thereunder. SECTION 26. CHANGE IN LAW. Due to a change in law which change was intended to be revenue neutral, the Local Communication Services Tax is levied by the City and the City {OR610453;4} 24 '. no longer levies the Public Service Taxes or telecommunication services. In order to cure any ambiguity in the Original Instrument resulting from such change in law, the City hereby determines to amend the definition of Excise Taxes set forth in the Original Instrument as follows: . "Excise Taxes" shall mean the Franchise Fees, the Public Service Taxes and the Local Communication Services Tax. SECTION 27. SEVERABILITY. If anyone or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid or shall in any manner be held to adversely affect the validity of the Series 2003 Bonds, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Resolution or of the Series 2003 Bonds issued hereunder. SECTION 28. SALE OF BONDS. The Series 2003 Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the requirements of this Resolution and other applicable provisions of law. SECTION 29. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution of a preliminary official statement in substantially the form attached hereto for the purpose of marketing the Series 2003 Bonds and delegates to the City Manager the authority to deem such Preliminary Official Statement "final" except for "permitted omissions" within the contemplation of the Rule. SECTION 30. GENERAL AUTHORITY. The members of the City Commission of the Issuer and the Issuer's officers, attorneys and other agents and employees are hereby authorized to perform all acts and things required of them by this Resolution or desirable or consistent with the requirements hereof for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Series 2003 Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents which shall be required by bond counselor the initial purchasers of the Series 2003 Bonds to effectuate the sale of the Series 2003 Bonds to said initial purchasers. SECTION 31. NO PERSONAL LIABILITY. Neither the members of the City Commission of the Issuer nor any person executing the Series 2003 Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. SECTION 32. REPEAL OF INCONSISTENT INSTRUMENTS. Any Resolutions, or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. {OR610453;4} 25 . ~ . . SECTION 33. EFFECTIVE DATE. The provisions of this Resolution shal1.t~eeffect . imme4iately,,~pon its passage. . .A.pO~j;ED this 9th day of June, 2003. (SEAL/" . J ATTE~r:.'. City Att()mey {OR610453;4} CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA 26