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HomeMy WebLinkAboutCity of Tamarac Resolution R-2005-219Temp Reso #10853 - November 17, 2005 page 1 CITY OF TAMARAC, FLORIDA�u1,5G��b ► II�Z"z(o� RESOLUTION NO. R-2005 A RESOLUTION OF THE CITY COMMISSON OF THE CITY OF TAMARAC, FLORIDA SUPPLEMENTING RESOLUTION NO. R- 2005-�; AUTHORIZING AND APPROVING THE NEGOTIATED SALE OF NOT TO EXCEED $15,000,000 CITY OF TAMARAC, FLORIDA CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 2005; AUTHORIZING THE SALE THEREOF TO RBC DAIN RAUSCHER INC. SUBJECT TO THE TERMS AND CONDITIONS CONTAINED HEREIN; APPOINTING THE PAYING AGENT AND REGISTRAR; APPOINTING THE INSURER AND APPROVING THE INSURANCE POLICY COMMITMENT; PROVIDING CERTAIN OTHER MATTERS RELATING TO THE SERIES 2005 BONDS; PROVIDING FOR CONFLICTS; PROVIDING FOR SEVERABILITY AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Commission (the "City Commission") of the City of Tamarac, Florida (the "Issuer") adopted Resolution No. R-2005- Z/ :- - on November 23, 2005, as amended and supplemented from time to time, and as particularly supplemented hereby (collectively, the "Resolution"); and WHEREAS, all capitalized undefined terms used herein shall have the meanings ascribed thereto in the Resolution; and WHEREAS, by the Resolution, the Issuer authorized the issuance of not to exceed $15,000,000 City of Tamarac, Florida Capital Improvement Revenue Bonds, Series 2005 (the "Series 2005 Bonds") to finance the acquisition, construction and equipping of the Project, to fund the Reserve Account (including by purchase of a Reserve Account Policy), and pay certain expenses relating to the issuance of the Series 2005 Bonds including the cost of an Insurance Policy relating to the Series 2005 Bonds; and WHEREAS, the Issuer now desires to supplement the Resolution to authorize the sale of the Series 2005 Bonds on a negotiated basis to RBC Dain Rauscher Inc., d/b/a RBC Capital. Markets, (the "Underwriter") based on satisfaction of the terms and conditions contained herein; and WHEREAS, due to the willingness of the Underwriter to purchase the Series 2005 Bonds at interest rates favorable to the Issuer and the critical importance of timing of the sale of the Series 2005 Bonds, it is hereby determined that it is in the best interest of the public and the Issuer to sell the Series 2005 Bonds at a negotiated sale upon meeting the terms and conditions contained herein and in the Purchase Contract attached hereto as Exhibit "A" (the 'Bond Purchase Agreement"); and Temp Reso #10853 - November 17, 2005 Page 2 WHEREAS, the Issuer has received an offer from the Underwriter to purchase the Series 2005 Bonds, subject to the terms and conditions contained in the Resolution, herein and set forth in the Bond Purchase Agreement; and I WHEREAS, the Issuer desires to sell its Series 2005 Bonds subject to the terms and conditions contained in the Resolution, herein and set forth in the Bond Purchase Agreement, and authorize execution and distribution of the Official Statement in connection with the issuance of the Series 2005 Bonds; and WHEREAS, prior to the execution of the Bond Purchase Agreement the Issuer will be provided all applicable disclosure information required by Section 218.385, Florida Statutes, a copy of which is attached to or otherwise included as part of the Bond Purchase Agreement; and WHEREAS, this Resolution shall constitute a Supplemental Resolution under the terms of the Resolution. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF CITY OF TAMARAC, FLORIDA AS FOLLOWS: SECTION 1. Due to the willingness of the Underwriter to purchase not to exceed $15,000,000 in aggregate principal amount of the Series 2005 Bonds at interest costs favorable to the Issuer and the critical. importance of timing of the sale of the Series 2005 Bonds, it is hereby determined that it is in the best interest of the public and the Issuer to sell the Series 2005 Bonds at a negotiated sale (rather than through a competitive bid) and such sale to the Underwriter (pursuant to the terms and conditions contained in the Resolution, herein and in the Bond Purchase Agreement) is hereby authorized and approved. SECTION 2. Subject to the terms and conditions of Section 3 hereof, the Series 2005 Bonds may be sold in a negotiated sale to the Underwriter upon the terms and conditions set forth in the Resolution, herein and in the Bond Purchase Agreement which is attached hereto as Exhibit "A" and incorporated by reference. The form of the Bond Purchase Agreement is hereby approved by the Issuer (such approval indicating the recognition of the Issuer that the conditions precedent in the Bond Purchase Agreement and Section 3 hereof have been met or will be met prior to the delivery of the Series 2005 Bonds). Upon satisfaction of the conditions contained in the Resolution, Section 3 hereof and the Bond Purchase Agreement, the Issuer hereby authorizes the Mayor or Vice Mayor and the City Manager or assistant or deputy City Manager to execute and deliver the Bond Purchase Agreement in substantially the form attached hereto as Exhibit "A" (with such changes and filling of blanks as shall be approved by the Mayor or Vice Mayor and the City Manager or assistant or deputy City Manager) in the name of and on behalf of the Issuer, such signatures to be attested by the City Clerk or assistant or deputy City Clerk, and form of which Bond Purchase Agreement to be approved by the City Attorney or the Assistant City Attorney. All of the provisions of the Bond Purchase Agreement, when executed and delivered by the Issuer as authorized herein shall be deemed to be part of K Temp Reso #10853 - November 17, 2005 Page 3 this instrument as fully and to the same extent as if incorporated verbatim herein. The execution and delivery of the Bond Purchase Agreement to be conclusive evidence of the approval thereof. SECTION 3. (1) The Issuer hereby delegates to the Mayor of the Issuer or his designee the authority (a) to determine (i) the dated date, (h) the maturity dates and amounts, (iii) the interest rates and payment dates, (iv) the redemption features, (v) the Amortization Installments for the Term Bonds, if any, (vi) the delivery date, and (vii) all other details of the Series 2005 Bonds, and (b) to take such further action as shall be required for carrying out the purposes of the Resolution and this Resolution all with respect to the Series 2005 Bonds; and (c) to execute and deliver, on behalf of the Issuer, the Bond Purchase Agreement as provided in Section 2 above; provided, however, that the Mayor or his designee shall not take any action pursuant to this Section 3 unless the Mayor or his designee shall have received from the Underwriter such information as the Mayor or his designee shall deem necessary in order to demonstrate that (i) the par amount of the Series 2005 Bonds is not in excess of $15,000,000, (ii) the true interest cost rate of the Series 2005 Bonds is not more than 5.50%, (iii) the final maturity of the Series 2005 Bonds is not later than October 1, 2032, and (iv) the underwriting discount is not greater than 0.550% of the original principal amount of the Series 2005 Bonds. (11) All actions of the Mayor or his designee taken pursuant to the authority contained in this Section 3 shall be evidenced by a certificate to be executed by the Mayor or his designee (the "Certificate of Mayor") and filed with the City Clerk . The execution of the Certificate of Mayor or his designee shall constitute complete evidence of the actions of the Mayor or his designee in accordance with this Section and shall constitute official action of the Issuer. SECTION 4. The Series 2005 Bonds shall be issued under and secured by the Resolution and shall be executed and delivered in the manner as set forth in the Resolution, with such additional changes and insertions therein as conform to the provisions of the Bond Purchase Agreement, and such execution and delivery shall be conclusive evidence of the approval thereof by such officers. SECTION 5. The members of the City Commission and the Issuer's officers, attorneys and other agents and employees are hereby authorized and directed to execute any and all certifications or other instruments or documents required by the Resolution, the Bond Purchase Agreement or any other document referred to above as a prerequisite or precondition to the issuance of the Series 2005 Bonds and any such representation made therein shall be deemed to be made on behalf of the Issuer. All action taken to date by the officers of the Issuer in furtherance of the issuance of the Series 2005 Bonds is hereby approved, confirmed and ratified. SECTION 6. A policy of municipal bond insurance (the "Financial Guaranty Insurance Policy") to insure the holder of any Series 2005 Bond of receiving the scheduled payment of principal and interest on behalf of the Issuer is hereby authorized to be purchased from MBIA Insurance Corporation (the "Insurer") in accordance with the commitment for insurance 43 Temp Reso #10853 - November 17, 2005 Page 4 attached hereto as Exhibit "B" (the "Bond Insurance Commitment"), and payment for such Financial Guaranty Insurance Policy is hereby authorized from Series 2005 Bond proceeds. The City Manager or assistant or deputy City Manager is hereby authorized to execute such Bond Insurance Commitment. The provisions of the Bond Insurance Commitment are hereby incorporated by reference. To the extent of any inconsistency between the provisions of the Bond Insurance Commitment and provisions otherwise contained in the Resolution, the provisions of the Resolution shall prevail. A statement of insurance is hereby authorized to be printed on or attached to the Series 2005 Bonds for the benefit and information of the Series 2005 Bondholders. SECTION 7. A Reserve Account Surety Bond to be deposited in the Reserve Account to satisfy all or a portion of the Reserve Account Requirement (the "Reserve Policy") is hereby authorized to be purchased from the Insurer in accordance with the commitment for surety bond attached hereto as Exhibit "C" (the "Surety Commitment"), and payment for such Reserve Account Surety Bond is hereby authorized from the Series 2005 Bond proceeds. The City Manager or assistant or deputy City Manager is hereby authorized to execute such Surety Commitment. The provisions of the Surety Commitment are hereby incorporated by reference. To the extent of any inconsistency between the provision of the Surety Commitment and the provisions otherwise provided in the Resolution, the provisions of the Resolution shall prevail. The Issuer hereby authorizes the Mayor or Vice Mayor and the City Manager or assistant or deputy City Manager to execute and deliver the Guaranty Agreement substantially in the form attached to the Surety Commitment (with such changes and filling of blanks as shall be approved by the Mayor or Vice Mayor and the City Manager or assistant or deputy City Manager) in the name of and on behalf of the Issuer, such signatures to be attested by the City Clerk or assistant or deputy City Clerk and the form of which Guaranty Agreement to be approved by the City Attorney or the Assistant City Attorney. Upon execution and delivery of such Guaranty Agreement, all the provisions thereof shall be deemed to be part hereof and of the Resolution as fully and to the extent as if incorporated verbatim herein. The execution and delivery of the Guaranty Agreement shall constitute conclusive evidence of the approval thereof. SECTION 8. J.P. Morgan Trust Company, N.A. is hereby appointed as Paying Agent and Registrar with respect to the Series 2005 Bonds. The Mayor or Vice Mayor and the City Manager or are hereby authorized to execute an agreement with J.P. Morgan Trust Company, N.A. to act as Paying Agent and Registrar, the form of which shall be approved by the City Attorney or the Assistant City Attorney. SECTION 9. The Issuer hereby covenants and agrees that, in order to assist the Underwriter in complying with the continuing disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission with respect to the Series 2005 Bonds, 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 2005 Bonds to the Underwriter, as it may be amended from time to time in accordance with the terms thereof, The form of the 4 Temp Reso #10853 - November 17, 2005 Page 5 Continuing Disclosure Certificate, attached hereto as Exhibit "D", is hereby approved and ratified, and the Issuer hereby authorizes the Mayor or Vice Mayor and the City Manager or assistant or deputy City Manager to execute and deliver said Continuing Disclosure Certificate in the name of and on behalf of the Issuer, the form of which Continuing Disclosure Certificate shall be approved by the City Attorney or the Assistant City Attorney. 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 -under the Resolution. However, the Continuing Disclosure Certificate shall be enforceable by the Series 2005 Bondholders in the event that the Issuer fails to cure a breach thereunder within a reasonable time after written notice from a Series 2005 Bondholder to the Issuer that a breach exists. Any rights of the Series 2005 Bondholders to enforce the provisions of the covenant shall be on behalf of all Series 2005 Bondholders and shall be limited to a right to obtain specific performance of the Issuer's obligations thereunder. SECTION 10. The Issuer hereby ratifies and approves the form of the Preliminary Official Statement attached hereto as Exhibit "E". The Issuer hereby authorizes execution by the Mayor and City Manager of the Issuer, and the delivery of, a final Official Statement which incorporates the terms and provisions set forth in the Bond Purchase Agreement. SECTION 11. All prior resolutions of the Issuer inconsistent with the provisions of this Resolution are hereby amended and supplemented to conform with the provisions herein contained and, except as may otherwise amended and supplemented hereby, the Resolution shall remain in full force and effect. SECTION 12. If any one or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Series 2005 Bonds issued hereunder. SECTION 13. Except as may be expressly described herein or in the Resolution, nothing in the Resolution, this Resolution or in the Series 2005 Bonds, expressed or implied, is intended or shall be construed to confer upon anyone of another entity other than the Issuer, the Series 2005 Insurer and the Series 2005 Bondholders any right, remedy or claim, legal or equitable, under and by reason of the Resolution or any provision thereof, or of the Series 2005 Bonds, all provisions hereof and thereof being intended ' to be and being for the sole and exclusive benefit of the Issuer, the Series 2005 Insurer and the Series 2005 Bondholders from time to time. SECTION 14. Neither the members of the City Commission nor any person executing the Series 2005 Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. 61 Temp Reso #10853 - November 17, 2005 Page 6 SECTION 15. This Resolution shall take effect immediately upon its adoption.PASSED AND ADOPTED this 23rd day of November, 2005. CITY OF TAMARAC, FLORIDA oe Schreiber, Mayor ATTEST: Marion Swenson, City Clerk I HEREBY CERTIFY that I have approved this Resolution as to form. Samuel S. Clorefi, V y Attorney I I (4415/02/00035245.DOCv3j 6 I E BOND PURCHASE AGREEMENT EXHisiti- L City of Tamarac, Florida Capital linprovement Revenue Bonds, Series 2005 December_, 2005 City of Tamarac, Florida City Hall, 7525 N.W. 88h Avenue Tamarac, Florida Ladies and Gentlemen: . The undersigned, RBC Dain Rauscher Inc., doing business under the trade name RBC Capital Markets (the "Underwriter"), offers to enter into the following agreement (this "Agreement") with the City of Tamarac, Florida (the "Issuer") which, upon the Issuer's written acceptance of this offer, will be binding upon the Issuer and upon the Underwriter. This offer is made subject to the Issuer's written acceptance hereof on or before 10 p.m., Eastern Standard time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Issuer at any time prior to the acceptance hereof by the Issuer. Terms not otherwise defined in this Agreement shall have the same meanings set forth in the Bond Resolution (as defined herein) or in the Official Statement (as defined herein). 1. Purchase and Sale of the Bonds. Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the Issuer, and the Issuer hereby agrees to sell and deliver to the Underwriter, all, but not less than all, of the Issuer's Capital Improvement Revenue Bonds, Series 2005 (the "Bonds"). Inasmuch as this purchase and sale represents a negotiated transaction, the Issuer understands, and hereby confirms, that the Underwriter are not acting as a fiduciary of the Issuer, but rather are acting solely in their capacity as Underwriter for their own account. The Underwriter has been duly authorized to execute this Agreement and to act hereunder. The principal amount of the Bonds to be issued, the dated date therefor, the maturities, sinking fund and optional redemption provisions and interest rates per annum are set forth in Exhibit A hereto. The Bonds shall be as described in, and shall be issued and secured under and pursuant to the provisions of Issuer Resolution No. R-2005-_, as supplemented by Resolution No. R-2005--, both adopted on -� 2005 (collectively, the "Bond Resolution"). The purchase price for the Bonds shall be $ [plus interest accrued on the Bonds from the dated date of the Bonds to the Closing Date (as hereinafter defined).] The discount of $ represents an underwriting discount of $ and an original issue discount of $ (OR95174811) The Underwriter has delivered to the Issuer, as a good faith deposit, a wire transfer in the amount of $150,000.00 through the Federal Reserve System in clearing house funds (the "Good Faith Deposit"). (a) If the Issuer does not accept this offer, then the Good Faith Deposit shall be immediately returned to the Underwriter by wire transfer through the Federal Reserve System in clearing house funds. (b) If the Issuer accepts this offer, then at Closing, the Good Faith Deposit shall be credited against the purchase price for the Bonds. There will be no interest due the Underwriter for the time during which the Issuer holds the Good Faith Deposit. (c) If the Issuer shall fall to deliver the Bonds on the Closing Date, or if the Issuer shall be unable at or prior to the Closing Date to satisfy the conditions to the obligations of the Underwriter contained herein, or if the obligations of the Underwriter shall be terminated for any reason permitted hereby, then the Good Faith Deposit shall be returned by the Issuer to the Underwriter by wire transfer through the Federal Reserve System in clearing house funds on or prior to the Closing Date, and the delivery of the Good Faith Deposit shall constitute a full release and discharge by the Underwriter of any and all claims and damages for such failure and for any and all defaults of the Issuer under this Bond Purchase Agreement, and this Bond Purchase Agreement shall become null and void, and of no further force or effect without any other action by the parties hereto. (d) If the Underwriter shall fall (other than for a reason permitted hereby) to accept and pay for the Bonds upon tender thereof by the Issuer as provided herein, then the Good Faith Deposit shall be retained by the Issuer as and for full liquidated damages for such failure and for any and all defaults on the part of the Underwriter, and the retention of the proceeds thereof shall constitute a full release and discharge of any and all claims and damages for such failure and for any and all such defaults and this Bond Purchase Agreement shall become null and void, and of no further force or effect without an other action by the parties hereto. 2. Public Offering. The Underwriter agrees to make a bona fide public offering of all of the Bonds at prices not to exceed or yields not less than the public offering prices and/or yields set forth on the cover of the Official Statement and may subsequently change such offering prices and/or Yields without any requirement of prior notice. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than or Yields higher than the public offering prices and/or yields stated on the cover of the Official Statement. In connection with the public offering of the Bonds, the Underwriter has delivered to the City a letter containing the information required by Section 218.385(6), Florida Statutes, which letter is attached hereto as Exhibit B hereto. 3, ne Official Statement. (a) Attached hereto as Exhibit C is a copy of the Preliminary Official Statement dated , 2005 (the "Preliminary Official (OR95174811 � 2 Statement"), including the cover page and Appendices thereto, of the Issuer relating to the Bonds. Such copy of the Preliminary Official Statement, as amended to reflect the changes indicated on Exhibit A hereto, is hereinafter called the "Official Statement." (b) The Preliminary Official Statement has been prepared for use by the Underwriter in connection with the public offening, sale and distribution of the Bonds. The Issuer hereby represents and warrants that the Preliminary Official Statement was deemed final by the Issuer as of its date, except for the omission of such information which is dependent upon the final pricing of the Bonds for completion, all as permitted to be excluded by Section (b)(1) of Rule l5c2-12 under the Securities Exchange Act of 1934 (the "Rule "). (c) The Issuer hereby authorizes the Official Statement and the information therein contained to be used by the Underwriter in connection with the public offering and the sale of the Bonds. The Issuer consents to the use by the Underwriter prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Bonds. The Issuer shall provide, or cause to be provided, to the Underwriter as soon as practicable after the date of the Issuer's acceptance of this Agreement (but, in any event, not later than seven business days after the Issuer's acceptance of this Agreement and in sufficient time to accompany any confirmation that requests payment from any customer) copies of the Official Statement which is complete as of the date of its delivery to the Underwriter in such quantity as the Underwriter shall request in order for the Underwriter to comply with Section (b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board. (d) If, after the date of this Agreement to and 'including the date the Underwriter is no longer required to provide an Official Statement to potential customers who request the same pursuant to the Rule (the earlier of (1) 90 days from the "end of the underwriting period" (as defined in the Rule) and (11) the time when the Official Statement is available to any person from a nationally recognized municipal securities repository, but in no case less than 25 days after the "end of the underwriting period" for the Bonds), the Issuer becomes aware of any fact or event which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or if it is necessary to amend or supplement the Official Statement to comply with law, the Issuer will notify the Underwriter (and for the purposes of this clause provide the Under -writer with such information as it may from time to time request), and if, in the opinion of the Issuer or the Underwriter, such fact or event requires preparation and publication of a supplement or amendment to the Official Statement, the Issuer will forthwith prepare and furnish, at the Issuer's own expense (in a form and manner approved by the Underwriter), a reasonable number of copies of either amendments or supplements to the Official Statement so that the statements in the Official Statement as so amended and supplemented will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or so that the Official Statement will comply with law. if such notification shall be subsequent to the Closing, the Issuer shall furnish such legal opinions, certificates, instruments and other documents as the tOR95174811 � 3 Underwriter may deem necessary to evidence the truth and accuracy of such supplement or amendment to the Official Statement. (e) The Underwriter hereby agrees to file the Official Statement with a nationally recognized municipal securities information repository. Unless otherwise notified in writing by the Under -writer, the Issuer can assume that the "end of the underwriting period" for purposes of the Rule is the date of the Closing. 4. Representations, Warranties, and Covenants of the Issuer. The Issuer hereby represents and warrants to and covenants with the Underwriter that: (a) The Issuer is a municipal corporation of the State of Florida (the "State") duly created, organized and existing under the laws of the State, specifically the Constitution of the State, Chapter 166, Florida Statutes, as amended, the municipal charter of the Issuer and other applicable provisions of law, as amended and supplemented (the "Act"), and has full legal right, power and authority under the Act, and on the Closing Date will have full legal right, power and authority under the Act and the Bond Resolution (i) to enter into, execute and deliver this Agreement, the Bond Resolution and the Continuing Disclosure Undertaking (the "Undertaking") as defined in Section 60)(3) hereof and all documents required hereunder and thereunder to be executed and delivered by the Issuer (this Agreement, the Bond Resolution, the Undertaking and the other documents referred to in this clause are hereinafter referred to as the "Issuer Documents"), (11) to sell, issue and deliver the Bonds to the Underwriter as provided herein, and (iii) to carry out and consummate the transactions contemplated by the Issuer Documents and the Official Statement, and the Issuer has complied, and will at the Closing be in compliance in all respects, with the terms of the Act and the Issuer Documents as they pertain to such transactions; (b) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized all necessary action to be taken by it for (1) the adoption of the Bond Resolution and the issuance and sale of the Bonds, (ii) the app i roval, execution and delivery of, and the performance by the Issuer of the obligations on its part, contained in the Bonds and the Issuer Documents and (iii) the consummation by it of all other transactions contemplated by the Official Statement, and the Issuer Documents and any and all such other agreements and documents as may be required to be executed, delivered and/or received by the Issuer in order to carry out, give effect to, and consummate the transactions contemplated herein and in the Official Statement, (c) The Issuer Documents constitute legal, valid and binding limited obligations of the Issuer, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; the Bonds, when issued, delivered and paid for, in accordance with the Bond Resolution and this Agreement, will constitute legal, valid and binding limited obligations of the Issuer entitled to the benefits of the Bond Resolution and enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; upon the issuance, �OR951748;11 4 authentication and delivery of the Bonds as aforesaid, the Bond Resolution will provide, for the benefit of the holders, from time to time, of the Bonds, the legally valid and binding pledge of and lien it purports to create as set forth in the Bond Resolution; (d) The Issuer is not in breach of or default in any material respect under any applicable constitutional provision, law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer is or any of its property or assets are otherwise subject, which breach or default would materially adversely affect the financial condition of the Issuer or its ability to perform its obligations under the Bond Resolution, and no event has occurred and is continuing which constitutes or with the passage of time or the giving of notice, or both, would constitute such a default or event of default by the Issuer under any of the foregoing; and the execution and delivery of the Bonds, the Issuer Documents and the adoption of the Bond Resolution and compliance with the provisions on the Issuer's part contained therein, will not conflict with or constitute a material breach of or default under any constitutional provision, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer is or to which any of its property or assets are otherwise subject nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Issuer to be pledged to secure the Bonds or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Bond Resolution (e) All authorizations, approvals, licenses, permits, consents and orders of any govenu-nental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the Issuer of its obligations under the Issuer Documents, and the Bonds or with respect to the Project have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any jurisdiction in connection with the offering and sale of the Bonds; (0 The Bonds conform to the descriptions thereof contained in the Official Statement under the caption "DESCRIPTION OF THE SERIES 2005 BONDS"; the Bond Resolution conforms to the description thereof contained in the Official Statement under the caption SECURITY FOR THE SERIES 2005 BONDS; the proceeds of the sale of the Bonds will be applied generally as described in the Official Statement under the caption "ESTIMATED SOURCES AND USES OF FUNDS" and the Undertaking conforms to the description thereof contained in the Official Statement under the caption VICONTINUING DISCLOSURE." (g) There is no legislation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of the Issuer after due inquiry, threatened against the Issuer, affecting the existence of the Issuer or the titles of its officers to their respective offices, (OR951748� 11 5 or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the receipt, levying or collection of the Pledgable Non -Ad Valorem Revenues (as defined in the Bond Resolution) or the construction or operation of the Project pursuant to the Bond Resolution or in any way contesting or affecting the validity or enforceability of the Bonds, the Issuer Documents, or contesting the exclusion from gross income of interest on the Bonds for federal income tax purposes or state tax purposes, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the Is ' suer or any authority for the issuance of the Bonds, the adoption of the Bond Resolution or the execution and delivery of the Issuer Documents, nor, to the best knowledge of the Issuer, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds or the Issuer Documents; (h) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (1) At the time of the Issuer's acceptance hereof and (unless the Official Statement is amended or supplemented pursuant to paragraph (d) of Section 3 of this Agreement) at all times subsequent thereto during the period up to and including the Closing Date, the Official Statement (excepting the subcaption "DESCRIPTION OF THE SERIES 2005 BONDS — Book -Entry Only System" and any information describing the Insurer, the Financial Guaranty Insurance Policy and the Reserve Account Policy as to which no representation is made) does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 0) If the Official Statement is supplemented or amended pursuant to paragraph (d) of Section 3 of this Agreement, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up to and including the Closing Date the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which made, not misleading; (k) The Issuer will apply, or cause to be applied, the proceeds from the sale of the Bonds as provided in and subject to all of the terms and provisions of the Bond Resolution and not to take or omit to take any action which action or omission will adversely affect the exclusion from gross income for federal income tax purposes or state tax purposes of the interest on the Bonds; (1) The Issuer will furnish such information and execute such instruments and take such action in cooperation with the Underwriter as it may reasonably request (A) to �OR951748111 6 (y) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions in the United States as the Underwriter may designate and (z) determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions and (B) to continue such qualifications in effect so long as required for the distribution of the Bonds (provided, however, that the Issuer will not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any jurisdiction) and will advise the Underwriter immediately of receipt by the Issuer of any notification with respect to the suspension of the qualification of the Bonds for sale in any Jurisdiction or the initiation or threat of any proceeding for that purpose; (in) The financial statements of, and other financial information regarding the Issuer, in the Official Statement fairly present the financial position and results of the Issuer as of the dates and for the periods therein set forth. Prior to the Closing, there will be no adverse change of a material nature in such financial position, results of operations or condition, financial or otherwise, of the Issuer. The Issuer is not a party to any litigation or other proceeding pending or, to its knowledge, threatened which, if decided adversely to the Issuer, would have a materially adverse effect on the financial condition of the Issuer-, (n) Prior to the Closing the Issuer will not offer or issue any bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by any of the revenues or assets which will secure the Bonds without the prior approval of the Underwriter; (o) Any certificate, signed by any official of the Issuer authorized to do so in connection with the transactions contemplated by this Agreement, shall be deemed a representation and warranty by the Issuer to the Underwriter as to the statements made therein; 5. Closing. (a) At I I a.m. Eastern Standard Time, on December 3 20053 or at such other time and date as shall have been mutually agreed upon by the Issuer and the Underwriter (the "Closing" and/or the "Closing Date'), the Issuer will, subject to the terms and conditions hereof, deliver the Bonds to the Underwriter duly executed and authenticated, together with the other documents hereinafter mentioned, and the Underwriter will, subject to the ternis and conditions hereof, accept such delivery and pay the purchase price of the Bonds as set forth in Section I of this Agreement by wire transfer payable in immediately available funds to the order of the Issuer. Payment for the Bonds as aforesaid shall be made at the offices of the Issuer, or such other place as shall have been mutually agreed upon by the Issuer and the Underwriter. (b) Delivery of the Bonds shall be made to The Depository Trust Company, New York, New York. Delivery of the Bonds to the Registrar pursuant to the Fast Automated Securities Transfer System shall be deemed delivery to DTC. The Bonds shall be delivered in definitive fully registered form, bearing CUSIP numbers without coupons, (OR951748;1 1 7 with one Bond for each maturity of the Bonds, registered in the name of Cede & Co., all as provided in the Bond Resolution, and sball be made available to the Underwriter at least one business day before the Closing for purposes of inspection. 6. Closing Conditions, The Underwriter has entered into this Agreement in reliance upon the representations, warranties and agreements of the Issuer contained herein, and in reliance upon the representations, warranties and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the perfon-nance by the Issuer of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriter's obligations under this Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Issuer of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions, including the delivery by the Issuer of such documents as are enumerated herein, in form and substance reasonably satisfactory to the Underwriter: (a) The representations and warranties of the Issuer contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) The Issuer shall have performed and complied with all agreements and conditions required by this Agreement to be perforined or complied with by it prior to or at the Closing; (c) At the time of the Closing, (i) the Issuer Documents and the Bonds shall be in fall force and effect in the form heretofore approved by the Underwriter and shall not have been amended, modified or supplemented, and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriter; and (ii) all actions of the Issuer required to be taken by the Issuer shall be performed in order for Bond Counsel, Issuer's Counsel and Disclosure Counsel to deliver their respective opinions referred to hereafter; (d) At or prior to the Closing, the Bond Resolution shall have been duly executed and delivered by the Issuer and the Issuer shall have duly executed and delivered and the registrar shall have duly authenticated the Bonds; (e) At or prior to the Closing, the Financial Guaranty Insurance Policy shall have been duly executed, issued and delivered by the Insurer; (f) At the time of the Closing, there shall not have occurred any change or any development involving a prospective change in the condition, financial or otherwise, or in the revenues or operations of the Issuer, from that set forth in the Official Statement that in the judgment of the Underwriter, is material and adverse and that makes it, in the judgment of the Underwriter, impracticable to market the Bonds on the terms and in the manner contemplated in the Official Statement; (g) The Issuer shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; I JOR951748;1 1 8 N All steps to be taken and all instruments and other documents to be executed, and all other legal matters in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in legal forin and effect to the Underwriter; (1) At or prior to the Closing, the Underwriter shall have received copies of each of the following documents: (1) The Official Statement, and each supplement or amendment thereto, if any, executed on behalf of the Issuer by its Mayor and City Manager, or such other officials as may have been agreed to by the Underwriter, and the reports and audits referred to or appearing in the Official Statement; (2) The Bond Resolution with such supplements or amendments as may have been agreed to by the Underwriter; (3) The Undertaking of the Issuer which satisfies the requirements of section (b)(5)(i) of the Rule; (4) the approving opinion of Bond Counsel with respect to the Bonds, in substantially the form attached to the Official Statement; (5) a supplemental opinion of Bond Counsel addressed to the Underwriter, substantially to the effect that: (1) the Bond Resolution has been duly adopted and is in fall force and effect; (11) the Bonds are exempted securities under the Securities Act of 1933, as amended (the "1933 Act"), and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and it is not necessary, in connection with the offering and sale of the Bonds, to register the Bonds under the 1933 Act or to qualify the Bond Resolution under the Trust Indenture Act; and Gii) the statements and information contained in the Official Statement under the captions "DESCRIPTION OF THE SERIES 2005 BONDS" (excepting the subcaption entitled "Book -Entry System" as to which no opinion need be expressed), "SECURITY FOR THE SERIES 2005 BONDS" (excepting the subcaption "Reserve Policy as to which no opinion need be expressed) to the extent such information purports to be a description or summaries of the Bond Resolution and the Bonds, constitute fair and accurate statements of the matters set forth in such documents and the information under the heading "TAX MATTERS" is accurate. (6) An opinion, dated the date of the Closing of Akerman Senterfitt ("Disclosure Counsel") addressed to the Issuer with a reliance letter addressed to the Under -writer substantially to the effect that: (OR951748;1) 9 (i) the Bonds are exempt securities under the 1933 Act and the Trust Indenture Act and it is not necessary, in connection with the offering and sale of the Bonds, to register the Bonds under the 1933 Act and the Bond Resolution need not be qualified under the Trust Indenture Act; and (11) based upon their participation in the preparation of the Official Statement as Disclosure Counsel and their participation at conferences at which the Official Statement was discussed, but without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, such counsel has no reason to believe that the Official Statement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except for any financial, forecast, technical and statistical statements and data included in the Official Statement and the information regarding The Depository Trust Company and its book -entry system and information regarding the Insurer, in each case as to which no view need be expressed), (7) An opinion of Goren, Cherof, Doody & Ezrol, P.A., ("Issuer's Counsel") addressed to the Underwriter, to the effect that: (1) The Issuer is a municipal corporation of the State of Florida (the "State") duly created, organized and existing under the laws of the State, specifically the Constitution of the State, Chapter 166, Florida Statutes and the municipal charter of the Issuer, as amended and supplemented (the "Act "), and has full legal right, power and authority under the Act and the Bond Resolution (A) to enter into, execute and deliver the Issuer Documents and all documents required hereunder and thereunder to be executed and delivered by the Issuer, (B) to sell, issue and deliver the Bonds to the Underwriter as provided herein, and (C) to carry out and consummate the transactions contemplated by the Issuer Documents, and the Official Statement, and the Issuer has complied, and will at the Closing be in compliance in all respects, with the terms of the Act and the Issuer Documents as they pertain to such transactions; 00 By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized all necessary action to be taken by it for (A) the adoption 'of the Bond Resolu ' tion and the issuance and sale of the Bonds, (B) the approval, execution and delivery of, and the performance by the Issuer of the obligations on its part, contained in the Bonds, the Issuer Documents, and (C) the consummation by it of all other transactions contemplated by the Official Statement, the Issuer Docurnents and any and all such other agreements and documents as may be required to be executed, delivered and/or received by the Issuer in order to carry out, give effect to, and (OR95174811) 10 consummate the transactions contemplated herein and in the Official Statement; (ill) The Bond Resolution was duly and validly adopted by the Issuer and is in full force and effect; the Bond Resolution and all other proceedings pertinent to the validity and enforceability of the Bonds and the collection, levying and receipt of the Pledgable Non -Ad Valorem Revenues have been duly and validly adopted or undertaken in compliance with all applicable procedural requirements of the Issuer and in compliance with the Constitution and laws of the State, including the Act; (iv) The Issuer Documents have been duly authorized, executed and delivered by the Issuer, and constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their respective terms, except to the extent limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws and equitable principles of general application relating to or affecting the enforcement of creditors' rights; and the Bonds, when issued, delivered and paid for, in accordance with the Bond Resolution and this Agreement, will constitute legal, valid and binding obligations of the Issuer entitled to the benefits of the Bond Resolution and enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; upon the issuance, authentication and delivery of the Bonds as aforesaid, the Bond Resolution will provide, for the benefit of the holders, from time to time, of the Bonds, the legally valid and binding pledge of and lien it purports to create as set forth in the Bond Resolution; (v) The distribution of the Preliminary Official Statement and the Official Statement has been duly autborized by the Issuer, (vi) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the Issuer of its obligations under the Issuer Documents and the Bonds have been obtained; (vii) There is no legislation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of the Issuer, after due inquiry threatened against the Issuer, affecting the corporate existence of the Issuer or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the levying, receipt and collection of the Pledgable Non -Ad Valorem Revenues (as defined in the (OR95174811) I I Bond Resolution) pursuant to the Bond Resolution or in any way contesting or affecting the validity or enforceability of the Bonds, the Issuer Documents, or contesting the exclusion from gross income of interest on the Bonds for federal income tax purposes or state tax purposes, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the Issuer or any authority for the issuance of the Bonds, the adoption of the Bond Resolution or the execution and delivery of the Issuer Documents, nor, to the best knowledge of the Issuer, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds, or the Issuer Documents; (viii) The execution and delivery of the Issuer Documents and compliance by the Issuer with the provisions hereof and thereof, under the circumstances contemplated herein and therein, will not conflict with or constitute on the part of the Issuer a material breach of or a default under any agreement or instrument to which the Issuer is a party, or violate any existing law, administrative regulation, court order, or consent decree to which the Issuer is subject; and (ix) Based on the examination which such counsel has caused to be made and its participation at conferences at which the Preliminary Official Statement and the Official Statement were discussed, nothing has come to his attention to lead him to believe that the information contained in the Official Statement relating to the City (except financial and statistical information thereof as to which no opinion is expressed), as to legal matters only, contains any untrue statement of material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of circumstances under which they were made, not misleading; (8) A certificate, dated the date of Closing, of the Issuer to the effect that (i) the representations and warranties of the Issuer contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) no litigation or proceeding against it is pending or, to its knowledge, threatened in any court or administrative body nor is there a basis for litigation which would (a) contest the right of the commissioners or other officials of the Issuer to hold and exercise their respective positions, (b) contest the due organization and valid existence of the Issuer, (c) contest the validity, due authorization and execution of the Bonds or the Issuer Documents or (d) attempt to limit, enjoin or otherwise restrict or prevent the Issuer ftom fimctioning and collecting revenues, including payments on the Bonds, pursuant to the Bond Resolution, and other income or the anticipated receipt of the Pledgable Non -Ad Valorem Revenues or the pledge under the Bond Resolution; (iii) the resolutions of the Issuer authorizing the execution, delivery and/or performance of the Official Statement, the Bonds and Issuer Documents have been duly adopted by �OR951748;1) 12 I the Issuer, are in full force and effect and have not been modified, amended or repealed, and (iv) to the best of its knowledge, no event affecting the Issuer has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein, in light of the circumstances under which made, not misleading in any respect as of the time of Closing, and the information contained in the Official Statement is correct in all material respects and, as of the date of the Official Statement did not, and as of the date of the Closing does not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (9) A certificate of the Issuer in form and substance satisfactory to Bond Counsel (a) setting forth the facts, estimates and circumstances in existence on the date of the Closing, which establish that it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code "), and any applicable regulations (whether final, temporary or proposed), issued pursuant to the Code, and (b) certifying that to the best of the knowledge and belief of the Issuer there are no other facts, estimates or circumstances that would materially change the conclusions, representations and expectations contained in such certificate; (10) Any other certificates and opinions required by the Bond Resolution for the issuance thereunder of the Bonds; (11) [A consent letter from the Issuer's Auditor with respect to the performance of certain agreed upon procedures requested by the Underwriterj (12) Evidence satisfactory to the Underwriter that the Bonds have been rated by the rating agencies, all as described in the Official Statement, and that all such ratings are in effect as of the date of Closing; and (13) Such additional legal opinions, certificates, instruments and other documents as the Under -writer may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the Issuer's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Issuer on or prior to the date of the Closing of all the respective agreements then to be performed and conditions then to be satisfied by the Issuer. (14) A copy of the Financial Guaranty Insurance Policy and Reserve Account Policy together with an opinion of counsel to the Insurer in form and substance satisfactory to the Underwriter; JOR95174811) 13 (15) A certificate of the Insurer with respect to the accuracy of statements contained in the Official Statement regarding the Financial Guaranty Insurance Policy and Reserve Account Policy and the Insurer and the due authorization execution issuance and delivery of the Financial Guaranty Insurance Policy and Reserve Account Policy; I All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Underwriter. If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Agreement, this Agreement shall tenninate and neither the Underwriter nor the Issuer shall be under any further obligation hereunder, except that the respective obligations of the Issuer and the Underwriter set forth in Sections 4 and 8(c) hereof shall continue in full force and effect. 7. Termination. The Underwriter shall have the right to cancel their obligation to purchase the Bonds if, between the date of this Agreement and the Closing, the market price or marketability of the Bonds shall be materially adversely affected, in the sole judgment of the Underwriter, by the occurrence of any of the following - (a) legislation shall be enacted by or introduced in the Congress of the United States or recommended to the Congress for passage by the President of the United States, or the Treasury Department of the United States or the Internal Revenue Service or any member of the Congress or the State legislature or favorably reported for passage to either House of the Congress by any committee of such House to which such legislation has been referred for consideration, a decision by a court of the United States or of the State or the United States Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press release, statement or other form of notice by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made or proposed, the effect of any or all of which would be to impose, directly or indirectly, federal income taxation or state taxation, upon revenues or other income of the general character to be derived by the Issuer pursuant to the Bond Resolution, or upon interest received on obligations of the general character of the Bonds or, with respect to state taxation, of the interest on the Bonds as described in the Official Statement, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences or state tax consequences of any of the transactions contemplated herein; (b) legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other �OR951748� 11 14 governmental agency having jurisdiction of the subject matter, to the effect that obl"gations of the general character of the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the 1933 Act, or that the Bond Resolution is not exempt from qualification under or other requirements of the Trust Indenture Act, or that the issuance, offering, or sale of obligations of the general character of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect; (c) any state blue sky or securities commission or other governmental agency or body shall have withheld registration, exemption or clearance of the offering of the Bonds as described herein, or issued a stop order or similar ruling relating thereto; (d) a general suspension of trading in securities on the New York Stock Exchange or the American Stock Exchange, the establishment of minimum prices on either such exchange, the establishment of material restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange, a general banking moratorium declared by federal, State of New York, or State officials authorized to do so; (e) the New York Stock Exchange or other national securities exchange or any govenu-nental authority, shall impose, as to the Bonds or as to obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge -to the net capital requirements of, Under -writer; (f) any amendment to the federal or state Constitution or action by any federal or state court, legislative body, regulatory body, or other authority materially adversely affecting the tax status of the Issuer, its property, income securities (or interest thereon), or the validity or enforceability of the Issuer covenants under the Bond Resolution; (g) any event occurring, or information becoming known which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (h) there shall have occurred since the date of this Agreement any materially adverse change in the affairs or financial condition of the Issuer, except for changes which the Official Statement discloses are expected to occur; (i) the United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency or there shall have occurred any other outbreak or escalation of hostilities or a national or international calamity or crisis, financial or otherwise; IOR951748;1) 15 any fact or event shall exist or have existed that, in the Underwriter's judgment, requires or has required an amendment of or supplement to the Official Statement, (k) there shall have occurred any ratings downgrading of the City or the Bonds, or any notice shall have been given of any such intended or potential ratings downgrading; and (1) the purchase of and payment for the Bonds by the Underwriter, or the resale of the Bonds by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency Or commission. S. Expenses. (a) The Underwriter shall be under no obligation to pay, and the Issuer shall pay, any expenses incident to the performance of the Issuer's obligations hereunder, including, but not limited to (i) the cost of preparation and printing of the Bonds, (ii) the fees and disbursements of Bond Counsel, Issuer's Counsel and Disclosure Counsel; (iii) the fees and disbursements of the Financial Advisor to the Issuer; (iv) the fees and disbursements of any other engineers, accountants, and other experts, consultants or advisers retained by the Issuer; and (v) the fees for bond ratings and Financial Guaranty Insurance Policy and Reserve Account Policy. (b) The Underwriter shall pay (1) the cost of preparation and printing of this Agreement, the Blue Sky Survey and Legal Investment Memorandum; (ii) all advertising expenses in connection with the public offering of the Bonds-, and (iii) all other expenses incurred by them in connection with the public offering of the Bonds. (c) If this Agreement shall be terminated by the Underwriter because of any failure or refusal on the part of the Issuer to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Issuer shall be unable to perform its obligations under this Agreement, the Issuer will reimburse the Underwriter for all out-of-pocket expenses reasonably incurred by the Underwriter in connection with this Agreement or the offering contemplated hereunder, 9. Notices. Any notice or other communication to be given to the City under this Agreement may be given by delivering the same to the City Manager of the City of Tamarac, Florida at City Hall, 7525 N.W. 88t" Avenue, Tamarac, Florida 33321, and any such notice or other communication to be given to the Underwriter may be mailed to RBC Dain Rauscher, Inc., 1002 d Avenue South, Suite 800, St. Petersburg, Florida 33701, Attention: Kevin Conitz. 10. Parties in Interest. This Agreement as heretofore specified shall constitute the entire agreement between us and is made solely for the benefit of the Issuer and the Underwriter (including successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof This Agreement may not be assigned by the Issuer. All of the Issuer's representations, warranties and agreements contained in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of any of the Underwriter; (11) delivery of and payment for the Bonds pursuant to this Agreement; and (111) any termination of this Agreement. 11. Effectiveness. This Agreement shall become effective upon the acceptance hereof by the Issuer and shall be valid and enforceable at the time of such acceptance. JOR951748-11) 16 I 11 Choice of Law. This Agreement shall be governed by and construed in accordance with the law of he State. 13, Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any Constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever. 14, Business Day. For purposes of this Agreement, "business day"means any day on which the New York Stock Exchange is open for trading. 15, Truth -In -Bonding Statement. The Bonds are being issued for the purpose of wn it e financing a portion of the construction of certain City o ed cap' al improvements (th 'Project"), and to pay certain costs of issuance of the Bonds including the Financial Guaranty Insurance Policy and Reserve Account Policy premiums, and are expected to be repaid over a period of approximately _ years. At a true interest cost rate of %, total interest paid over the life of the Bonds will be $ As more fully described in the Bond Resolution, the source of repayment or security for the Bonds are the Pledged Funds which I c an consist of (1) Non Ad Valorem Revenues budgeted and appropriated by the City in a cord ce with the Bond Resolution and deposited into the Debt Service Fund, and (2) until applied in in in accordance with the provisions of the Bond Resolution, all moneys, including the i vest ents thereof, in the funds and accounts established under the Bond Resolution, with the exception of the Rebate Fund. Authorizing the Bonds will result in a maximum of $ of such Pledged Funds not being available to finance other services of the City each year over the approximately _ year period. 16. Section Headings. Section headings have been inserted in this Agreement as a matter of convenience of reference only, and it is agreed that such section headings are not a part of this Agreement and will not be used in the interpretation of any provisions of this Agreement. 17. Counterparts. This Agreement may be executed in several counterparts each of which shall be regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same document) and all of which shall constitute one and the same document. [SIGNATURES ON FOLLOWING PAGESI �OR951749-111 17 SIGNATURE PAGE OF BOND PURCHASE AGREEMENT City Of Tamarac, Florida Capital Improvement Revenue Bonds, Series 2005 If you agree with the foregoing, please sign the enclosed counterpart of this Agreement and return it to the Underwriter. This Agreement shall become a binding agreement between you and the Under -writer when at least the counterpart of this letter shall have been signed by or on behalf of each of the parties hereto. Respectfully submitted, RBC Capital Markets By Name Kevin Conitz Title Managing Director Date December 2005 I I OR951748; I � 18 1 SIGNATURE PAGE OF BOND PURCHASE AGREEMENT City Of Tamarac, Florida Capital Improvement Revenue Bonds, Series 2005 ACCEPTANCE ACCEPTED this . day of December, 2005. (SEAL) THE CITY OF TAMARAC, FLORIDA ATTEST: By: oe Schreiber, Mayor By: Marion Swenson, CMC, City Clerk Approved as to form: City )ttom—ey {OR951748;1 1 19 By: Jeffre filler, City Manager EXHIBIT A City of Tamarac, Florida Capital Improvement Revenue Bond, Series 2005 Dated .2005 Maturity Prime Coupon (OR95174s;1 y A-1 1 1 r- � Redemption Provisions Optional Redemption The Series 2005 Bonds maturing on or prior to October 1, _, shall not be subject to redemption prior to maturity. The Series 2005 Bonds maturing on October 1, _, or thereafter may be redeemed.prior to maturity at the option of the City, as a whole or in part on October 1, —, or on any date thereafter, if in part, ftom such maturity or maturities as the City shall designate and by lot within a maturity at the redemption price of one hundred percent (100%) of the principal amount of the Series 2005 Bonds to be redeemed, plus accrued interest to the redemption date. Mandatory Redemption The Series 2005 Bonds maturing in the year _ are subject to mandatory redemption in part by the City on October I in the years and in the principal amounts, plus accrued interest to the redemption date, as set forth below. Year Amount E3 *maturity JOR951748-111 A-2 EXHIBIT B Disclosure Letter pursuant to Section 218.385, Florida Statutes December—, 2005 Members of the City Commission of the City of Tamarac, Florida Tamarac, Florida Re: $ City of Tamarac, Florida Capital Improvement Revenue Bonds, Series 2005 Ladies and Gentlemen: In connection with the proposed issuance by the City of Tamarac, Florida (the "City"), of $ in aggregate principal amount of its Capital Improvement Revenue Bonds, Series 2005, referred to above (the "Series 2005 Bonds"), RBC Dain Rauscher Inc., d/b/a RBC Capital Markets (the "Underwriter") is preparing to underwrite a public offering of the Series 2005 Bonds. Arrangements for under -writing the Series 2005 Bonds will include a Bond Purchase Agreement (the "Agreement") between the City and the Underwriter that will embody the negotiations in respect thereof The purpose of this letter is to have the Underwriter furnish to the City, pursuant to the provisions of Section 218.385(6), Florida Statutes, certain information in respect of the arrangements contemplated for the underwriting of the Series 2005 Bonds as follows: (a) The nature and estimated amounts of expenses to be incurred by the Underwriter in connection with the purchase and offering of the Series 2005 Bonds are set forth in Schedule I attached hereto. (b) The Underwriter has employed no "finders", as defined in Section 218,386, Florida Statutes, as amended, connected with the issuance of the Series 2005 Bonds. (c) The underwriting spread (i.e., the difference between the price at which the Series 2005 Bonds will be initially offered to the public by the Underwriter and the price to be paid to the City for the Series 2005 Bonds exclusive of original issue discount and accrued interest in both cases) will be approximately $_ per $1000 par value of the principal amount of the Series 2005 Bonds, I OR951748� I I B-1 I I I (d) Based on and as part of the estimated underwriting spread set forth in paragraph (c) above, the Underwriter will charge a management fee of $ per $ 1000 par value of the principal amount of the Series 2005 Bonds. (e) There is no other fee, bonus or other compensation to be paid by the Underwriter in connection with the issuance of the Series 2005 Bonds to any person not regularly employed or retained by the Underwriter, except as specifically enumerated as expenses referred to in paragraph (a) above to be incurred by the Underwriter as set forth in Schedule I attached hereto. (f) The name and corporate headquarters address of the Underwriter is: RBC Dain Rauscher Inc. tOO 2nd Avenue South, Suite 800 St. Petersburg, Florida 33701 We understand that you do not require any further disclosure from the Underwriter pursuant to Section 218.385, Florida Statutes, as amended. Very truly yours, RBC Capital Markets itz Kevin Conitz, Managing Director JOR95174811) B-2 Schedule I ESTIMATED EXPENSES -Fo;-41-) c awi r5 { OR951748 j ) is i 1 1 (OR95174811 } Exhibit C [attach Preliminary Official Statement] EXHIBMf- T#2 10 015 3 COMMITMENT TO ISSUE A FINANCIAL GUARANTY INSURANCE POLICY ApplicationNo,: 2005-010399-001 Sale,Date: November, 2005 (T) ProgramType: Negotiated DP Re: $15,000,000 (Est,) City of Tarnarac, Florida, Capital Improvement Revenue Bonds, Series 2005 (the "Obligations") This commitment to issue a financial guaranty insurance policy (the "Commitment") dated November 17, 2005, constitutes an agreement between CITY OF TAMARAC, FLORIDA (the "Applicant") and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under the laws of the State of New York. Based on an approved application dated November 16, 2005, the Insurer agrees, upon satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date or (ii) on the date of delivery of and payment for the Obligations, a financial guaranty insurance policy (the "Policy") for the Obligations, insuring the payment of principal of and interest on the Obligations when due. The issuance of the Policy shall be subject to the following terms and conditions: I . Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of .435% of total debt service, premium rounded to the nearest thousand. The premium set out in this paragraph shall be the total premiurn required. to be paid on the Policy issued pursuant to this Commitment. 2- The Obligations shall have received the unqualified opinion of bond counsel with respect to the tax-exempt status of interest on the Obligations. 3. There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the Obligations or in the final official statement or other similar document, including the financial statements included therein. 4. There shall have been no material adverse change in any information submitted to the Insurer as a part of the application or subsequently submitted to be a part of the application to the Insurer. 5. No event shall have occurred which would allow any underwriter or any other purchaser of the Obligations not to be required to purchase the Obligations at closing, 6. A Statement of Insurance satisfactory to the Insurer shall be printed on the Obligations, T Prior to the delivery of and payment for the Obligations, none of the information or documents submitted as a part of the application to the Insurer shall be determined to contain any untrue or misleading statement of a material fact or fall to state a material fact required to be stated therein or necessary in order to make the statements contained therein not misleading. Kd I 8. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. 9. The Insurer's "Payments Under the Policy/Other Required Provisions" (see attached) shall be included in the authorizing document. 10. The Applicant agrees not to use the Insurer's name in any public document including, without limitation, a press release or presentation, announcement or forum without the Insurer's prior consent; provided however, such prohibition on the use of the Insurer's name shall not relate to the use of the Insurer's standard approved forin of disclosure in public documents issued in cormection with the current Obligations to be issued in accordance with the terms of the Commitment; and provided further such prohibition shall not apply to the use of the Insurer's narne in order to comply with public notice, public meeting or public reporting requirements, 11. This Commitment may be signed in counterpart by the parties hereto. 12. Compliance with the Insurer's General Document Provisions (see attached), 13. Compliance with the Insurer's List of Permissible Investments for Indentured Funds (see attached). 14. Acceptable anti -dilution test. Dated this 17th day of November, 2005. CITY OF TAMARAC, FLORIDA By: A111144.7, Title: mirz..] GE NERAL DOCUMENT PROVISIONS A, Notice to the Insurer The basic legal docurnents must provide that any notices required to be given by any party should also be given to the Insurer, Attn: Insured Portfolio Management. B. Ainendirients. In the basic legal document, there are usually two methods of arneridnient. "I'lie first, which typically does not require the consent of tile bondholders, is for amendments which Will CUre arnbiguities, correct formal defects or add to the security offlie financing. I -lie second, in which bondholder consent is a prerequisite, covers the inore substantive types of amendments. For all financings, the Insurer must be given notice of any amendments that are of the first type and the 0 CP Insurer's consent rriust be required for all arnendirients of the second type. All documents must contain a provision which requires copies of any amendments to such documents which are consented to by the Insurer to be sent to Standard & Poor's. C. Supipjernental Legal Document, If the basic, legal docurnent provides for a supplernental legal document to be issued for reasons other than (1) a refunding to obtain savings; or (2) the issuance of additional bonds pursuant to an additional bonds test, there must be a requirement that the Insurer's consent also be obtained prior to the issuance of any additional bonds and/or execution of such supplemental legal document. D. Events of Default and Remedies. All documents normally contain provisions which defille tile events of default and which prescribe the rernedies that may be exercised upon the occurrence of an event of default. At a minirnurn, events of default will be defined as follows: 1. the issuer/obligor fails to pay principal when due; 2. tile issuer/obligor fails to pay interest when due; C, 3, the issuerlobligor fails to observe any othercovenant or condition of tile docurnent and such failure Continues for 30 days and I 4. the issuer/obligor declares bankruptcy, The Insurer, acting alone, shall have the right to direct all remedies in the event of a defau It. The Insurer shall be recognized as the registered owner of each bond which it insures for the purposes of exercising all rights and privileges available to bondholders. For bonds which it insures, the Insurer shall have tile right to institute any suit, action, or proceeding at law or in equity under the sarne terms as a bondholder in accordance with applicable provisions of the governing documents. Other than the usual redemption provisions, any acceleration of principal payments must be subject to the Insurer's prior written consent. E. Defeasance requires the deposit of; I . Cash 2, U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series -- " SLGs") 3. Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities 4, Resolution Funding Corp. (REFCORP) Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. 5. Pre -refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If however, tile issue is only rated by S&P (i.e., there is no Moody's rating), then the pre-reftinded bonds Must have been pre -refunded with cash, direct U.S. 01- U.S. guaranteed obligations, or AAA rated pre -refunded municipals to satisfy this condition. 6. Obligations issued by tile following agencies which are backed by the full faith and credit of I tile U�S. a. U.S. Export-Impoil Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership b. Farmers Horne Administration (FrnHA) Certificates of beneficial ownership c. Federal Financing Bank d. General Services Administration Participation certificates e. U.S. Maritime Administration Guaranteed Title XI financing f, U.S. Department Of HOUSinLy and Urban Developmen (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housina Notes and Bonds - U.S. government guaranteed public housing notes and bonds The Insurer shall be provided with an opinion of counsel acceptable to the Insurer that the Obligations have been legally defeased and that the escrow agreement establishing such defeasanoe operates to legally 1 0 defease the Obligations within the meaning of the Indenture and the Supplemental Indenture relating to ZD the Obligations. In addition, the Insurer will be entitled to receive (i) 15 business days notice of any advance refunding of the Obligations and (ii) an accountant's report with respect to the sufficiency of the amounts deposited in escrow to defease the Obligations. F. Agents: I In transactions where Mere is an agent/enhancer (other than the InSLIFer), the ti-LiStCe, tender agent (if any), and paying agent (if any) twist be commercial banks with trust power 0 s� The remarketing agent must have trust powers if they are responsible for holding moneys or receiving bonds. As an alternative, the documents may provide that if the remarketing agent is removed, resigns or is Unable to perform its duties, the trustee must aSSUrne tile responsibilities of remarketing agent unti I a substitute acceptable to the InSI-Irer is appointed, F"7TCJV,21 LIST OF PERMISSIBLE INVESTMENTS FOR INDENTURED FUNDS A. Direct obligations of the United States of America (including obligations issued or held in book -entry form on the books of the Department of the Treasury, and CATS and TIG16) or obligations the principal of and interest on which are unconditionally -Llaranteed by the United States of Arnerica. 0 B. Bonds, debentures, notes or other evidence of indebtedness iSSLIed or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the 0 United States of America (stripped securities are only permitted if they have been stripped by the agency itself): 1. U.S. Export-Irripgit Ban (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership 2. Farmers Horne Administration (FmHA) Certificates of beneficial ownership 3. Federal Financing Bank 4, Federal Housing Administration Debentures (FYIA) 5. General Services Administration Participation certificates 6, Government National Mortgage Association (GNMA or "Ginnie Mae") GNMA - guaranteed mortgage -backed bonds GNMA - guaranteed pass -through obligations (not acceptable for certain cash -flow sensitive issues.) 7, U.S. Maritime Administration Guaranteed Title X1 financing 8. U.S. Department of Housing and Urban Develol2ment (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the In following non -full faith and credit U,S, government agencies (stripped securities are only permitted if they have been stripped by the agency itself): I . Federal Home Loan Bank System Senior debt obligations 2, Federal Home Loan MoijgMe Corporation (Fl-rLMC or "Freddie Mac") Participation Certificates Senior debt obligations 3. Federal National Mortgage Ass ociation (FNMA or "Fannie Mae") Mortgage -backed Securities and senior debt obligations 4. Resolution Funding Corp. (REFCORP) obligations N F _j FA .,. I 5. farm Credit Systern I Consolidated systemwide bonds and notes D. Money market funds registered under the Federal Investment Company Act of 1940, whose shares are reuistered under the Federal Securities Act of 1933, and havincy, a rating by S&P of AAArn-G; 0 0 AAA-m; or AA-m and if rated by Moody's rated Aaa, Aa I or Aa2. E. Certificates of deposit secured at all times by collateral described in (A) and/or (B) above. Such certificates must be issued by commercial banks, savings and loan associations or inutua.) savings banks. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. F. Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDTC, including BIF and SAIF. V G. Investment Agreements, including GIC's, Forward Purchase Agreements and Reserve Fund Put Agreements acceptable to MBIA (Investment Agreement criteria. is available upon request). .1-1. Commercial paper rated, at the tinle Of purchase, "Prime - I " by Moody's and "A- I" or better by S&P. 1. Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two highest rating categories assigned by such agencies. J. Federal funds or bankers acceptances with a maximum term of one year of any bank which has an un,ecurod, uninsured and unguaranteel obligation rating of "Prime - I" or "Al" or better by Moody's and "A- I " or "A" or better by S&P. K. Repurchase Agreements for 30 days or less must follow the following criteria. Repurchase 0 Agi-eernents which exceed 30 days must be acceptable to MBIA (criteria available upon request) Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (sel ler/borrower) to a municipal entity (buyer/lender), and the transfer of cash frorn a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date. Repos must be between the municipal entity and a dealer bank or securities Firm a.. Primary dealers on the Federal Reserve reporting dealer list which are rated A or better by Standard & Poor's Corporation and Moody's Investor Services, or b. Banks rated "A" or above by Standard & Poor's Corporation and Moody's Investor Services. 2. The written repo contract must include the following: a. Securities which are acceptable for transfer are: (I)Direct U.S. governments. or (2) Federal agencies backed by the full faith and credit of the U.S. government (and FNMA & I-HLMC) b, The term of the repo may be up to 30 days c. The collateral must be delivered to the municipal entity, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is supplying the collateral) before/sirriultaneous with payment (perfection by possession of certificated securities). d� Valuation of Collateral AHBIA (1) The securities must be valued weekIv. marked -to -market at current market price p] is accrUed interest (a) The value of collateral must be equal to 104% of' the aMOL111t of cash transferred by the municipal entity to the dealer bank or Security firin under the repo plus accrued interest. If the value of securities held as col lateral slips below 104% of the ValLie of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 105%, 3. Legal opinion which must be delivered to the municipal entity: a. Repo rneets guidelines under state law for legal investment of public funds. Additional Notes (i) There is no list of permitted investments for non -indentured funds. Your own credit judgment and the relevant circumstanCeS (e.g., al-DOUDt of investment and timing of investment) should dictate what is permissible, (i i) Any state administered pool investment fund in which the issuer is statutorily permitted or required to invest will be deemed a permitted investment. (iii) DSR-F investments should be valued at fair market value and marked to market at least once per year. DSRF investments may not have maturities extending beyond S years, except for Investment Agreements approved by the Insurer. I F .)(HIBIT A0181A -re-1 0 ?53 ICOMMITMENT TO ISSUE A DEBT SERVICE RESERVE SURETY BOND ApplicationNo.: 2005-010399-002 Sale Date. November, 2005 (T) Program Type: Negotiated DP RE: $1,500,000 (Est.) Debt Service Reserve Fund for the $15,000,000 (Est.) City of Tarnarac, Florida, Capital Improvement Revenue Bonds, Series 2005 (the "Obligations") This commitment to issue a debt service reserve surety bond (the "Commitment") constitutes an agreement between CITY OF TAMARAC, FLORIDA (the "Applicant"), and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under the laws of the State of New York. Based on an approved application dated November 16, 2005, the Insurer agrees, upon satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date or (11) on the date of delivery of and payment for the Obligations, a debt service reserve surety bond (the "Surety Bond"), for the Obligations, guaranteeing the payment to tile issuer of up to $1,500,000 (Est.) on the Obligations, The issuance of the Surety Bond shall be subject to the following terms and conditions: I I , Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of 2,0% of total Surety Bond amount, premium rounded to the nearest thousand. The premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 2. The Obligations shall have received the unqualified opinion of bond counsel with respect to the tax-exempt status of interest on the Obligations. 3. There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance C, of the Obligations or in the final official statement or other similar document, including tile financial statements included therein, 4. There shall have been no material adverse change in any information submitted to the Insurer as a part of the Application or subsequently submitted to be a part of the Application to the Insurer. 5. No event shall have occurred which would allow any underwriter or ally other purchaser of the Obligations not to be required to purchase the Obligations at closing. 6. Prior to the delivery of and payment for the Obligations, none of the information or documents submitled as a part of the Application to the Insurer shall be determined to contain ally untrue or misleading statement of a material fact or fail to state a material fact. required to be stated therein or necessary in order to make the statements contained therein not misleading. 1. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations- 8. This Commitment may be signed in counterpart by the parties hereto. FA-11-M112- 9. Compliance with the Insurer's Term Sheet for Debt Service Reserve Fund Program (see Attachment A). I Dated this 17th day of November, 2005. MBIA Insu C r or ion I Ir By Assisian't' retary CITY OF TAMARAC, FLORIDA By: Title: z MBIA (Attachment A) TERM SHEET FOR DEBT SERVICE RESERVE FUND PROGRAM Introduction The Insurer can, under certain circumstances, issue a debt service reserve fund surety bond (the "Surety Bond"), to be used as a replacement for a cash funded reserve, in any amount up to the full amount of the debt service reserve fund requirement. The Insurer requires that the issuer and/or the underlying obligor of the bonds enter into a Financial Guaranty Agreement with the Insurer providing for, among other things, the reimbursement to the Insurer of amounts drawn under the Surety Bond. A sample draft of such an agreement is attached, The Insurer will undertake its standard credit analysis of the issuer and/or obligor which may result in requests for modifications of the structure or certain provisions of the bond documents. These changes would be in addition to the specific changes required in all 'financings where a Surety Bond will be issued (see RequiredTerins below). The Surety Bond may be structured to provide debt service reserve fund replacement for the current issue of bonds and. any other debt issued on a parity therewith. However, in all cases, the Surety Bond will expire on the final maturity date of the current ]issue. The program criteria are subject to change by the Insurer. General Terms Provision should be made in the bond documents for the creation of a debt service reserve fund and there should be a requirement to maintain that fund at a certain level. It sbould also be provided. that thiS Tequirernent may be satisfied by cash or a qualified surety bond or a Combination of these two (Note: A_��ualified surety bond" means a surety bond issued by an insurance cornpany rated in the highest rating category by Standard & Poor's and Moody's and, if rated by A.M. Best & Company, must also be rated in the highest ratiLig category by A.M Best & Company). In those instances where the issuance of parity debt will cause the debt service reserve fund requirement to increase, the Insurer requires that at the time of issuance of such parity debt, either cash or a qualified surety bond be provided so that the increased requirement will be satisfied. In ally event where the debt service reserve fund contains both an the Insurer Surety Bond and cash, the Insurer requires that the cash be drawn down completely before ally demand is made on the Surety Bond. In any event where the debt service reserve fund contains a surety bond from another entity AlLd an INSURER Surety Bond, the documents should provide for a pro-rata draw on each of the surety bonds, With regard to replenishment, any available monies, as defined in the Indenture or Resolution, should be used first to reimburse the Insurer, thereby reinstating the Surety Bond, and second to replenish the cash in the debt service reserve fund. The rate covenant should be expanded so that, in addition to all other coverage requirements, there are sufficient monies available to pay all amounts owed to the Insurer under the terms of the Financial Guaranty Agreement. If the documents provide for the issuance of additional bonds that do not share a common reserve fund with the current issue, the Insurer can -issue a surety bond that is, by its terms, F��= - WIA.- available only as a reserve for the current issue. In such cases, the Insurer would require a covenant that any revenues available for debt service must be distributed between tile current issue and any additional bonds on a pro rata basis without regard to the existence of a funded debt service reserve or a surety bond. The bond documents should require the Trustee to deliver a Demand For Payment (see attached form) at least three days prior to the date on which funds are required. Required Terms With respect to any security interest in collateral granted to the bondholders, the Insurer should be granted that same interest subject only to that of the bondholders. This would apply to existing security, if any, as well as any to be granted in the future. The Insurer should receive an opinion -from counsel to the issuer/obligor that the Financial Guaranty Agreement is a legal, valid and binding obligation of the issuer/obligor and is enforceable against the issuer/obligor in accordance with its terms. In general terms, the "flow of funds" would be structured as follows: All. gross revenues should be paid in the following order with the priority indicated: (1) expenses of operation and maintenance; (2) debt service on the bonds; (3) reimbursement of amounts advanced by the Insurer tinder the Surety Bond; (4) reimbursement of cash amounts, if any, drawn from the reserve fund; (5) replenishment of Renewal and Replacement Fund; (6) payment to the Insurer of interest on arnounts advanced under the Surety Bond; (7) all other lawful uses, including the debt service payment on any subordinate bonds. Provision must be made for the Insurer to be paid all amounts owed to it under the terms of the Financial Guaranty Agreement or any other documents before the bond documents may be terminated. It will be the responsibility of the trustee/paying agent to maintain adequate records, verified with the Insurer, as to the amount available to be drawn at any given time under the Surety Bond and as to the amounts paid and owing to the Insurer under the terms of the Financial Guaranty Agreement. There may be no optional redemption of bonds or distribution of funds to the issuer and/or the underlying obligor unless all amounts owed to the Insurer under the terms of the Financial Guaranty Agreement or any other documents have been paid in full. 9/12/93 I PAYMENTS UNDER TBE POLICY/OTIIER REQUIRED PROVISIONS A� In the event that� on the second Business Day, and again on the Busitims, Day, prior to the payment date on the Obligations, the Paying Agent/Tmstee has not received sufficient money,-, to pay all principal of and interest on the Obligations due on the second following or following, as die case may be, Business Day, the Paying Aggent/Trustee sliall immediately notify the Insurer or its desigrice on the same Business Day by telephone or telegraph, confirmed in writirig by registered or certified mail, of the amount of die deficiency. B. If die deficiency is made up in whole or in part prior to or on the payinent date, the Paying Agent(Trustee shall so notify the Insurer or its designee. C. In addition, if the Paying Agent/Thistee has notice that any Bondholder hits been required to disgorge payments of principal or interest. on the Obligations to a trustee in banlo-uptcy or creditors or others pursuant to a final judgment by a court of competcrit jurisdiction that such payment constitutes an a -voidable preference to such BondliolderAithin the meaning of anyapplicable bankniptcy laws, then die Paying Agent/Trustee shall notify die hist= or its designee of such fact by telephone or telegraphic notice, confirmed. in voiting by registered or certified mail. D. The Paying AgentiTnistee is hereby in-evocably designated, appointed, directed and authoTi7ed to act as attoniey�in-fact for Holders of the Obligations as follows: L If and to the extent them is a deficiency in amounts, required to pay interest on die Obligations, the Paying Agent/Trustee slim (a) execute and deliver to U.S. Bank Trust National Association, or its successors under the Policy (die "jnsurance Paying Agent/Trustee'), in form satisfactory to die Insurance Paying Agent(Trustee, an instrument appointing die Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assigriment to the Insurer of die clairris for interest to which sucb deficiency relates and which arepaid by the Insurer, (b) receive as designee of die respective Holder-, (and not as Paying Agent/Trustee) in accordance with the tenor of die Policy payment from the Insurance Paying AgentfTrustee with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and 2� If and to die extent of a deficiency in amount,% required to pay principal of the Obligations, the Paying AgentiTrustee shall (a) execute and deliver to the Insurance Paying Agent/Trustee in forin satisfactory to the Insurance Paying Agent/Tnastce an instrument appointing the hisurer as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to die Insurer of any of the Obligation surrendered to the Insurance Paying Agent/Trustee of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent/Trustee and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying AgenvTmstee is received), (b) receive as designee of the respective Holders (and not as Paying Agent/Trustee) in accordance with the tenor of die Policy payment therefor from die Insurance Paying Agent/Tnistee, and (c) disburse the same to such Holders. E. Payments with mpect to claims for interest on and principal of Obligations disbursed by the Paying Agent/Trustee from proceeds of the Policy shall not be considered to discharge die obligation of die Issuer with respect to such Obbgations, and die Insurer shall become the owner ofsuch unpaid Obligation and claim for die interest in accordance with the tenor of die assignment made to it tinder the provisions of this subsection or otherwise, F. Irrespective of whether any such assignment is executed and delivered, die Issuor and the Paying Agent/Trustee hereby agree for the benefit of the Insurer that: I - They recognize that to die extent the Insu= makes payments, directly or indirectly (as by paying through the Paying Agentrrrustee), on account of principal of or interest on die Obli ions, the Insurer wiH be subrogated to the rights of such Holders to receive the gat] amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in Us Indenture and the Obligations; and 2� They will accordingly pay to die Insua-er die amount of such principal and interest (including principal and interest recovered under subparaWph (ii) of the first paragraph of the Policy which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Indenture mid the Obligation, but only from the sources and in the mariner provided herein for die payment of principal of and interest on the Obligations to Holders, and will otherwise treat the Insurer as the owner of such rights to the amount of such principal and interest G. In connection vith the issuance of additional Obligations, die Issuer shall deliver to the Insurer a copy of the disclosure document, if any, circulatedxAith respect to such additional Obligatioris. H, Copies of any amendments made to die documents executed in connectionMth the issuance of the Obligations which are consented to by the Insurer sliall be sent to Standard & Poors Corporation. L The Insurer shall receive notice of the. resignation or removal of the Paying Agent/Trustee and the appointment of a.%-ucC4=Or thereto. J. The Insurer shall receive copies of all notices ruquired. to be delivered to Bondholders and, on an annual basis, copies of the Issuer's audited financial statements and Amival BudgCL Notices: Any notice that is required to be -iven to a holder of the Obligation or to the Paying Agentrrrustee pursuant to the Indentuire shall also be provided to the Irisurer. All notices required to be given to the Insurer under die Indenture shall be in writing and shall be spent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance, K The Issuer/Obligor agrees to reimburse the Insurer immediately and unconditionally upon demand, to the extent perniitted by law. for all reasonable expenses, including- attorneys' fees and expenses, incLirred by the Insurer in conriection. %Ajal (J) the enforcement by the Insurer of die I'ssuefs /Obbgor�s obligations, or die preservation or defense of any rights of the Insurer, under this Resolution/IndenkWe and any other document executed in connection Aith die issuance of the Obligatlions, and (ii) any consent, aniendment waiver or other action with respect to die Resolution/Indenture or any related document, whether or not granted or approved, together with interest on aU such expenses from and including the date incurred to the d.ate ofpayment at Citibank's Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is Iess. In addifion� the Insurer reserves the right to charge a fee in connection -80th its review of any such consent, amendment or waiver, whether or not granted or approved . L The Issuer/Obligor agrees not to use the Insurer's name in ally pubbc document including, without limitation, a press release or presentation, announcement or forurn without the Insurer's prior consent; provided however, such probibition on the use of the Insurer's name shall not. relate to the iim- of the. bisurer's standard approved form of disclosure in public documents issued in connection v6di the current Obligations to be issued in accordance with the terms of the Commitment; and provided fiu-ther such prohibition shall not apply to the use of the Insurers name in order to comply wth public notice, public meeting or public reporting requirements, M. 'n)e Issuer /Obligor shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to which Bonds are tenclacd or purchased for any purpose other than the redemption and cancellation or legal defeaswice of such Bonds without the prior written consent of MBIA. Revised 4/04 I I Fi INANCIAL GUARANTY AGREEMENT FINANCIAL GUARANTY AGREEMENT made as of [CLOSING DATE], by and between [ISSUER] (the "Issuer") and MBIA Insurance Corporation (the "Insurer"), organized under the laws of the state of New York. WITNESSETH: WHEREAS, the Issuer has or will issue the Obligations; and WHEREAS, pursuant to the terms of the Document the Issuer agrees to make certain payments on the Obligations; and WHEREAS, the Insurer will issue its Surety Bond, substantially in the forni set forth in Amex A to dus Agreement, guaranteeing certain payrnents by the Issuer subject to the terms and limitations of the Surety Bond; and WHEREAS, to induce the Insurer to issue the Surety Bond, the Issuer has agreed to pay the premium for the Surety Bond and to reimburse the Insurer for all payments made by the Insurer under the Surety Bond, all as more fully set forth in this Agreement; and WHEREAS, the Issuer understands that the Insurer expressly requires the delivery of this Agreement as part of the consideration for the execution by the Insurer of die Surety Bond; and NOW, THEREFORE, in consideration of the prernises and of the agreements herein contained and of the execution of die Surety Bond, the Issuer and die Insurer agree as follows: ARTICLE I DEFINITIONS; SURETY BOND Section 1.01. Definitions. The terms which are capitalized herein shall have the meanings specified in Annex B hereto. Section 1 �01 Simpty Bond. (a) The Insurer will issue the Surety Bond in accordance and subject to the terins and conditions of the Commitment. (b) The maximum liability of the Insurer under die Surety Bond and the coverage and ten-n thereof shall be subject to and limited by the terms and conditions of die Surety Bond, Section 1.03. Premium. In consideration of the Insurer agreeing to issue the Surety Bond hereunder, the Issuer hereby agrees to pay or cause to be paid the Prernium set forth in Annex B hereto. The Premium. on the Surety Bond is not refimdable for any reason. Section 1.04. Certain Other Expens . The Issuer will pay all reasonable fees and disbursements of the Insures special counsel related to any modification of this Agreement or the Surety Bond. ARTICLE 11. REIMBURSEMENT AND INDEMNIFICATION OBLIGATIONS OF ISSUER AND SECURITY THEREF OR Section2.01. Reimbursement for PMents Under die Surety Bond and ExmLses, Indemnification. (a) The Issuer will reirnburse the Insurer, within the Reimbursement Period, without demand or notice by die Insurer to the Issuer or any other person, to the extent of each Surety Bond Payment with interest on each Surety Bond Payment from and including the date made to the date of the reimbursement at the lesser of the Reimbursement Rate or the maximurn rate of interest perrnitted by then applicable law, (b) The Issuer also agrees to reimburse the Insurer immediately and unconditionally upon dernand, to the extent permitted by state law, for all reasonable expenses incurred by flie Insurer in connecfion with the Surety Bond and the enforcei-nent by the Insurer of the Issuer's obligations under this Agreement, the Document, and any other document executed in connection with the issuance of the Obligations, together with interest on 0 such expenses from and including the date incurred to the date of payment at the rate set forth in subsection (a) of this Section 2.01. (c) The Issuer agrees to indenarffy the Insurer, to the extent pennitted. by state law, against any and all liability, clairns, loss, costs, darnages, fees of attorneys and other expenses which the Insurer may sustain or incur by reason of or in consequence of (i) the failure of the Issuer to perforin or comply with the covenants or conditions of this Agreement or (ii) reliance by the Insurer upon representations made by flie Issuer or (ill) a default by the Issuer under the terms of the Document or any other documents executed, in connection with the issuance of the Obligafions. (d) The Issuer agrees that all amounts owing to the Insurer pursuant to Section 1.03 hereof and this Section 2.01 must be paid in full prior to any optional redemption or refunding of the Obligations. (e) All payments made to the Insurer -under diis Agreement shall be paid iii lawful currency of the United States in immediately available funds at the Inswer's office at 1. 13 King Street, Armonk, New York 10504, Attention: Accounting and Insured Porffollo Management Departments, or at such other place as shall be designated by the Insurer. Section 2.02. Allocation of PMen . The Insurer and the Issuer hereby agree that each payment received by the Insurer from or on behalf of the Issuer as a reimbursement to the Insurer as required by Section 2.01 hereof shall be applied by the Insurer firs� toward payment of any unpaid prernium; second, toward repayment of the aggregate Surety Bond Payrnents made by the Insurer and not yet repaid, payment of which will reinstate all or a portion of the Surety Bond Coverage to the extent of such repayment (but not to exceed the Surety Bond Limit); and third, upon full reinstatement of the Surety Bond Coverage to the Surety Bond Limit, toward other amounts, including, without Ifinitation, any interest payable with respect to any Surety Bond Payi-nents then due to the Insurer. Section 2.03. Security for PMents-, Instruments of Further Assurance. To the extent, but only to the extent, that fl-le Document, or any related indenture, trust agreement, ordinance, resolution, mortgage, security agreement or similar instrument, if any, pledges to the Owners or any trustee therefor, or grants a security interest or lien in or on any collateral, property, revenue or other payrrients ("Collateral and Revenues") in order to secure the Obligations or provide a source of payment for the Obligations, the Issuer hereby grants to the Insurer a security interest in or lien on, as the case may be, and pledges to the Insurer all such Collateral and Revenues as security for pay�-nent of all amounts due hereunder and under the Document or any other docurnent executed in connection with the issuance of the Obligations, which security interest, lien and/or pledge created or granted under this Section 2.03 shall be subordinate only to the interests of the Owners and any trustee therefor in such Collateral and Revenues, except as otherwise pro\,ided. The Issuer agrees that it will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all financing statements, if applicable, and all other firrtber instruments as may be required by law or as shall reasonably be requested by the Insurer for the perfection of the security interest if any, granted under this Section 2.03 and for the preservation and protection of all lights of the Insurer under this Section 2.03. Section 2.04. Unconditional . The obligations hereunder are absolute and unconditional and will be paid or perforl-ned strictly in accordance with this Agreement, subject to the limitations of the Document, irrespective of (a) any lack of validity or enforceability of, or any amendment or other modification of, or waiver with respect to the Obligations, the Document or any other document executed in connection with the issuance of the Obligations; or (b) any exchange, release or nonperfection of any security interest in property securing the Obligations or this Agreement or any obligations hereunder, or (c) any circumstances that ii-iight otherwise constitute a defense available to, or discharge of, die Issuer with respect to the Obligations, the Document or any other document executed in connection with the issuance of the Obligations; or (d) whether or not such obligations are contingent or matured, disputed or undisputed, liquidated Or unliquidatod. Section 2.05. Insurer's Rigbts. The Issuer shall repay the Insurer to the extent of payments made and expenses incurred by the Insurer in connection with the Obligations and this Agreement. The obligation of the Issuer to repay such arnounts shall be subordinate only to die rights of the Owners to receive regularly scheduled principal and interest on the Obligations. Section 2.06. Oil -Going Informa6on Oblip-ations of Issuer. (a) Quarterly Reports, '17he Issuer will provide to the Insurer wid-iin 45 days of the close of each quarter interim financial statements covering all fLind balances under the Document, a statement of operations (income staternent), balance sheet and changes in fund balances. These statements need not be audited by an independent certified public accountant, but if any audited statements are produced, they must be provided to the Insurer; (b) Annual Reppits. The Issuer will. provide to die Insurer annual financial statements audited by an independent certifi ed public accountant within 90 days of the end of each fiscal year; (c) Access to Facilities, Books and Records. The IssueTArill grant the Insurer reasonable access to die project financed by the Obligations and vvill make available to the Insurer, at reasonable times and upon reasonable notice all books and records relative to the project financed by the Obligations-, and (d) Compliance Certificate. On an annual basis the Issuer will provide to die Insurer a certificate confirming compliance with all covenants and obligations hereunder and -wider die Revenue Agreement, the Document or any other documm, executed in cunnection with flie issuance of the Obligations. ARTICLEM AMENDMENTS TO DOCUMENT So long as this Agreement is in effect� the Issuer agrees that it will not agree to amend the Docui-nent or any other document executed in connection with the issuance of die Obligations, without the prior written consent of the Insurer. ARTICLE IV EVENTS OF DEFAULT; REMEDIES Section 4.01. Events of Default. The following events shall constitute Events of Default hereunder: (a) The Issuer shall fail to pay to the Insurer when due any amount payable under Sections 1.03; 01' (b) The Issuer shall fail to pay to the Insurer any arnount payable under Sections 1.04 and 2.01 hereof and such fOure shall have continued for a period in excess of the Reimbursement Period; or (c) Any material representation or warranty made by the Issuer under the Document or hereunder or any statement in the application for the Surety Bond or any repoM certificate, financial statement, document or other instruinerit provided in connection with die Cornmitment the Surety Bond, the Obligations, or herewith shall have been materially false at the time when made; or (d) Except as otherwise provided in this Section 4.01, the Issuer shall fail to perforrn any of its other obligations under the Document, or any other document executed in connection with the issuance of the Obligations, or hereunder, provided that such failure continues for more than 30 days after receipt by the Issuer of written notice of such failure to perform; or (e) The Issuer shall (i) voluntarily commence any proceeding or file any petition seeking,relief under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law, (31) consent to the institution of, or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for such party or for a, substantial pail of its property, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assiLn, u-nent for the benefit of creditors, (vi) becorne unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take action for the purpose of efFecting any of the foregoing; or (f) An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Issuer, or of a substantial part of its property, under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or sirnilar law or (ii) die appoittrient of a receiver, trustee, custodian, sequestrator or similar official for the Issuer or for a substantial part of its property; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for 30 days. Section 4.02. Remedies. If an Event of Default shall occur and be continuing, then the hisurer may take whatever action at law or in equity may appearriecessary or desir-able to collect the arnounts then due and thereafter to become due under this Agreement or to enforce performance of any obligation of the Issuer to the Insurer under the Document or any related instrtirrient, and any obligation, agreement or covenant of the Issuer under this Agreement; provided, however� that the Insurer may not take any action to direct or require acceleration or other early redemption of the Obligatioris or adversely affect the rights of the Owners. In addition, if an Event of Default shall or -cur due to the failure to pay to the Insurer the amounts due under Section 1.03 hereot the Insurer shall have the right to cancel the Surety Bond in accordance with its terms. All rights and remedies of the Itisurer under this Section 4.02 are cumulative and the exercise of any one remedy does not preclude the exercise of one or more of the other available remedies. ARTICLE V SETTLEMENT The Insurer shall have the exclusive right to decide and detemiine whether any claim, liability, suit or judgment made or brought against the Insurer, the Issuer or any other party on die Surety Bond shall or shaH not be paid, compromised, resisted, defended, tried or appealed, and the Insures decision thereon, if made in good faith, shall be final and binding upon the Insurer, die Issuer and any other party on the Surety Bond. An iteinized statement of payments made by the Insurer, certified by an officer of die Insurer, or the voucher or vouchers for such payments, shall be prima facie evidence of the liability of the Issuer, and if the Issuer fails to iminediately reimburse the Insurer upon the receipt of such statement of payments, interest shall be computed on such amount frorn the date of any payment made by die Insurer at the rate set forth in subsection (a) of Section 2.01 hereof ARTICLE VI MISCELLANEOUS Section.6.01. Interest Computations. All computations of interest due hereunder shall be made on the basis of die actual nuiriber of days elapsed over a year of 360 days. Section 6.02. Exercise of Right . No failure or delay on the part of the Insurer to exercise any right power or privilege under this Agreement and no course of deahng between the Insurer and die Issuer or any other party shall operate as a waiver of any such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any other or farther exercise thereof or the exercise of any other right� power or privilege. The rights and remedies herein expressly provided are cumulative and not exclusive of any tights or remedies which the Insurer would otherwise have pursuant to law or equity. No notice to or demand on any party in any case shall entitle such party to any other or fluther notice or demand in sirnilar or other circumstances, or constitute a waiver of the right of the other party to any other or fiather action in any circumstances without notice or dernand. j I Section 6.03. Amendment and Waiver. Any provision of thi's Agreement may be amended, waived, supplemented, discharged or terminated only with the Pilor written consent of the Issuer and the Insurer. The Issuer hereby agrees that upon tho written request of die Paying Agent the Insurer may make or consent to issue any substitute for the Surety Bond to cure any ambiguity or formal defect or omission in the Surety Bond which does not materially change the terrns of the Surety Bond nor adversely affect the rights of the Owners, and this Agreement shall apply to such substituted surety bond. The Insurer agrees to deliver to the Issuer and to the company or companies, if any, rating the Obligations, a copy of such substituted surety bond. Section 6.04, Successors and Assigns: Descriptive Headin , (a) This Agreement shall bind, and the benefits thereof shall inure to, the Issuer and the Insurer and their respective successors and assigns-, provided, that the Issuer may not transfer or assign any or all of rights and obligations hereunder without die prior written consent of die Insurer. (b) The descriptive headings of the various provisions of this Agreement are inserted for convenience of reference only and shah not be deemed to affect die mearuing or construction of any of the provisions hereof Section 6,05. Other Sureties. If the Insurer shall procure any other surety to reinsure the Surety Bond, this Agreement shall inure to the benefit of such other surety, its successors and assigns, so as to give to it a direct right of action against the Issuer to enforce this Agreenient� and "the Insurer," wherever used herein, shall be deemed to include such reinsuring surety, as its respective interests may appear. Section 6,06. SiMature on Bond. The Issuers liability shall not be affected by its failure to sign the Surety Bond nor by any claim that other indemnity or security was to have been obtained nor by the release of any indernrifty, nor the return or exchange of any collateral that may have been obtained. Section 6.07. Waiver. The Issuer waives any defense that this Agreement was executed subsequent to the date of the Surety Bond, admitting and covenanting that such Surety Bond was executed pursuant to the Issuer's request and 'in reliance on the Issuer's promise to execute this Agreement. Section 6.08. Notices, Rmuests, Demands. Except as otheilAise expressly provided herein, all written notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been given or made when actuafly received, or in the case of telex or telecopier notice sent over a telex or a telecopier machine owned or operated by a party hereto, when sent, addressed as specified below or at such other address as apy of the parties may hereafter specify in writing to the others: If to the Issuer: [ISSUER] [STREET ADDRESS] [CITY, STATE ZIP] Attention: [PERSON AT ISSUER] If to the Paying Agent: [PAYING AGENT] Attention: Corporate Trust Officer If to the Insurer: MBIA hisui mice Corporation 113 Mng Street Armonk, New York 10504 Attention: Insured Portfolio Management Group Section 6.09. Survival of R�presentations and Warranties. All representations, warranties and obligations containQ herein shall survive the execution and delivery of this Agreement and Ole Surety Bond. Section 6.10. Govenling Law. This Agreement and the rights and obligations of the parties under fis Agreement shall be governed by and construed and interpreted in accordance with the laws of the State. Section 6,11. Countgparts. This Agreement may be executed in any number of copies and by the different parties hereto on the same or separate counterparts, each of which shall be deerned to be an original instruillent. Complete counterparts of Oil's Agreement shall be lodged with the Issuer and the Insurer. Section 6.12. Severability. In the event any provision of this Agreement shall be held invalid or Unenforceable by any court of competent juiisdiction, such holding shall not invalidate or render -unenforceable any other provision hereof Section 6.13. Survival of Oblipations. Notwithstanding anything to the contrary contained in this Agreement, the obligation of the Issuer to pay all amounts due hereunder and the rights of the Insurer to pursue all remedies shall survive the expiration, termination or substitution, of the Surety Bond and this Agreement. IN WTINESS WHEREOF, each of the parties hereto bas caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written. Attest: [ISSUER] M- Title: MBIA Insurance Corporation President Assistant Secretary I -Tg IDISCLOSURE DISSEMINATION AGENT AGREEMENT This Disclosure Dissemination Agent Agreement (the "Disclosure Agreement"), dated as of December _, 2005, is executed and delivered by City of Tamarac, Florida (the "Issuer") and Digital Assurance Certification, L.L.C., as exclusive Disclosure Dissemination Agent (the "Disclosure Dissemination Agent" or "DAC") for the benefit of the Holders (hereinafter defined) of the Bonds (hereinafter defined) and in order to provide certain continuing disclosure with respect to the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rule"). SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the following meanings: "Annual Report" means an Annual Report described in and consistent with Section 3 of this Disclosure Agreement. "Annual Filing Date" means the date, set in Sections 2(a) and 2(f), by which the Annual Report is to be filed with the Repositories. "Annual Financial Information" means annual financial information as such term is used in paragraph (b)(5)(1) of the Rule and specified in Section 3(a) of this Disclosure Agreement. "Audited Financial Statements" means the financial statements (if any) of the Issuer for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure Agreement. "Bonds" means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto. "Certification" means any written certification provided by the Disclosure Representative hereunder. "Disclosure Representative" means the Director of Financial Services of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent. "Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C, acting in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Dissemination Agent designated in writing by the Issuer pursuant to Section 9 hereof I "Holder" means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes. I "Inforination" means the Annual Financial Information, the Audited Financial Statements (if any) the Notice Event notices, and the Voluntary Reports, "MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 1513(b)(1) of the Securities Exchange Act of 1934. "National Repository" means any Nationally Recognized Municipal Securities Inforination Repository for purposes of the Rule. The list of National Repositories maintained by the United States Securities and Exchange Commission shall be conclusive for purposes of determining National Repositories and may currently be obtained by visiting the SEC's web site at: "http://www.sec-gov/info/municipal/nrmsir.htm." In lieu of separate filings made to all National Repositories and any State Repositories, the Securities and Exchange Commission has designated the Municipal Advisory Council of Texas (the "MAC") as a central filing location that satisfies the Rule for any filing or notice, whether by electronic or other means, in accordance with a continuing disclosure undertaking. If filing is made to MAC in lieu of the NRMSIRs, it should be sent to www.diselosureusa.org. "Notice Event" means an event listed in Sections 4(a) of this Disclosure Agreement. "Official Statement" means that Official Statement prepared by the Issuer in connection with the Bonds, as listed on Exhibit A. "Repository" means the MSRB, each National Repository and the State Depository (if any). "State Depository" means any public or private depository or entity designated by the State of Florida as a state information depository (if any) for the purpose of the Rule. The list of state information depositories maintained by the United States Securities and Exchange Commission shall be conclusive as to the existence of a State Depository. "Voluntary Report" means the information provided to the Disclosure Dissemination Agent by the Issuer pursuant to Section 7. SECTION 2. Provision of Annual Roorts. (a) The Issuer shall provide, annually, an electronic copy of the Annual Report to the Disclosure Dissemination Agent, not later than five (5) days prior to the Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Report, the Disclosure Dissemination Agent shall provide an Annual Report to each National Repository and the State Depository (if any) not later than seven.(7) months after the end of each fiscal year of the Issuer, commencing K with the fiscal year ending September 30, 2005. Such date and each anniversary thereof is the Annual Filing Date. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 3 of this Disclosure Agreement. (b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent has not received a copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and the Certification no later than five (5) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the Issuer will not be able to file the Annual Report within the time required under this Disclosure Agreement, state the date by which the Annual Report for such year will be provided and instruct the Disclosure Dissemination Agent that a Notice Event as described in Section 4(a)(12) has occurred and to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. (C) If the Disclosure Dissemination Agent has not received an Annual Report and Certification by 12:00 noon on the first business day following the Annual Filing Date for the Annual Report, a Notice Event described in Section 4(a)(12) shall have occurred and the Issuer directs the Disclosure Dissemination Agent to immediately send a notice to each National P �epository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. (d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certificate for filing with each National Repository and the State Depository (if any). The Disclosure Dissemination Agent shall: determine the name and address of each Repository each year prior to the Annual Filing Date; upon receipt, promptly file each Annual Report with each National Repository, and the State Depository, (if any), - upon receipt, promptly file each Audited Financial Statement with each National Repository, and the State Depository (if any); (iv) upon receipt, promptly file the text of each disclosure to be made with each National Repository or the MSRB and the State Depository (if any) together with a completed copy of the MSRB Material Event Notice Cover Sheet in the form attached as Exhibit C, describing the event by checking the appropriate box on Exhibit C. 3 (V) provide the Issuer evidence of the filings of each of the above when made, which shall be by means of the DAC system, for so long as DAC is the Disclosure Dissemination Agent under this Disclosure Agreement. (f) The Issuer may adjust the Annual Filing Date by providing written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent, and the Repositories, provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year. SECTION 3. Content of Annual Reports. (a) Each Annual Report shall contain Annual Financial Information consisting of for the most recent fiscal year of Issuer financial information and operating data provided in the Official Statement under the headings: "OTHER OBLIGATIONS PAYABLE FROM NON -AD VALOREM FUNDS" and "GENERAL INFORMATION REGARDING NON -AD VALOREM REVENUES". (b) Audited Financial Statements will be included in the Annual Report but may be provided in accordance with Section 2(d). Any or all of the items listed above may be included by specific reference from other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been previously filed with each of the National Repositories or the Securities and Exchange Commission, If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Issuer will clearly identify each such document so incorporated by reference. I SECTION 4. Reporting of Notice Events, (a) The occurrence of any of the following events, if material, with respect to the Bonds constitutes a Notice Event: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perfonn; 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of Bond holders; 8. Bond calls; 4 I 9. Defeasances; 10, Release, substitution, or sale of property securing repayment of the Bonds; 11, Rating changes on the Bonds; and 12. Failure to provide Annual Financial Information as required. The Issuer shall promptly notify the Disclosure Dissemination Agent in writing upon the occurrence of a Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection (c). Such notice shall be accompanied with the text of the disclosure that the Issuer desires to make, the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information. (b) The Disclosure Dissemination Agent is under no obligation to notify the Issuer or the Disclosure Representative of an event that may constitute a Notice Event. In the event the Disclosure Dissemination Agent so notifies the Disclosure Representative, the Disclosure Representative will within five business days of receipt of such notice, instruct the Disclosure Dissemination Agent as to whether a Notice Event has occurred and if such has occurred the Disclosure Representative shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection (c), together with the text of the disclosure that the Issuer desires to make, the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the infori-nation. (C) If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in subsection (a) or (b) of this Section 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such occurrence with the State Depository (if any) and (1) each National Repository, or (ii) the MSRB. SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure Dissemination Agent, including but not limited to Annual Reports, documents incorporated by reference to the Annual Reports, Audited Financial Statements, notices of Notice Events, and Voluntary Reports filed pursuant to Section 7(a), the Issuer shall indicate the full name of the Bonds and the 9-digit CUSIP numbers for the Bonds as to which the provided information relates. SECTION 6. Additional Disclosure Obli&ations. The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule I Ob-5 promulgated under the Securities Exchange Act of 1934, may apply to the Issuer, and that the failure of the Disclosure Dissemination Agent to so advise the Issuer shall not constitute a breach by the Disclosure Dissemination Agent of any of its duties and responsibilities under this Disclosure Agreement. The Issuer acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as described in this Disclosure Agreement. SECTION 7. Voluntary RW�jrts. (a) The Issuer may instruct the Disclosure Dissemination Agent to file additional information with the Repositories, from time to time pursuant to a Certification of the Disclosure Representative accompanying such information (a "Voluntary Report"). I (b) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure Agreement or including any other information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice, in addition to that required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice. SECTION 8. Tennination of Reporting Obligation. The obligations of the Issuer and the Disclosure Dissemination Agent under this Disclosure Agreement shall terminate with respect to the Bonds upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the Issuer is no longer an obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative to the Disclosure Dissemination Agent of an opinion of nationally recognized bond counsel to the effect that continuing disclosure is no longer required. -SECTION 9. Disclosure Dissemination Agent. The Issuer has appointed Digital Assurance Certification, L.L.C. as exclusive Disclosure Dissemination Agent under this Disclosure Agreement. Either party hereto may, upon thirty days written notice to the other terminate this Disclosure Agreement. Upon termination of DAC's services as Disclosure Dissemination Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Holders of the Bonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall remain liable until payment in full for any and all sums owed and payable to the Disclosure Dissemination Agent. SECTION 10. Remedies in Event of Default. In the event of a failure of the Issuer or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders' rights to enforce the provisions of this Agreement shall be limited solely to a night, by action in mandamus or for specific performance, to compel perforinance of the parties' obligation under this Disclosure Agreement. Any failure by a party to perform in accordance with this Disclosure Agreement shall not constitute a default on the Bonds or under any other document relating to the Bonds, and all rights and remedies shall be limited to those expressly stated herein. SECTION 11. Duties, Immunities.and Liabilities of Disclosure Dissemination Agent. (a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent's M obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issue, has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any Information or any other 'information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for the Issuer's failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Issuer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon certifications of the Issuer at all times. The obligations of the Issuer under this Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds. (b) The Disclosure Dissemination Agent may, from time to time with prior notice to the Issuer, consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and neither of them shall incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The fees and expenses of such counsel shall be payable by the Issuer. SECTION 12. Amendment, Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to both the Issuer and the Disclosure Dissemination Agent to the effect that such amendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule; provided neither the Issuer or the Disclosure Dissemination Agent shall be obligated to agree to any amendment modifying their respective duties or obligations without their consent thereto. Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time by giving not less than 20 days written notice of the intent to do so together with a copy of the proposed amendment to the Issuer. No such amendment shall become effective if the Issuer shall, within 10 days following the giving of such notice, send a notice to the Disclosure Dissemination Agent in writing that it objects to such amendment. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Disclosure Dissemination Agent, the underwriter, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity. 7 SECTION 14. No Personal Liabilit . No covenant, stipulation, obligation or agreement of the Issuer contained in this Disclosure Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future officer, agent or employee of the Issuer in other than that person's official capacity. I SECTION 15. Severabilit . In case any section or provision of the Disclosure Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into, or taken thereunder or any application thereof, is for any reasons held to be illegal or invalid, such illegality or invalidity shall not affect the remainder thereof or any other section or provision thereof or any other covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into, or taken thereunder (except to the extent that such remainder or section or provision or other covenant, stipulation, obligation, agreement, act or action, or part thereof is wholly independent for its operation on the provision determined to be invalid), which shall be construed and enforced as if such illegal or invalid portion were not contained therein, nor shall such illegality or invalidity of any application thereof affect any legal and valid application thereof, and each such section, provision, covenant, stipulation, obligation, agreement, act or action, or part thereof shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. SECTION 16. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of Florida. SECTION 17. CounteTarts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [SIGNATURES ON FOLLOWING PAGE] I M SIGNATURE PAGE FOR DISCLOSURE DISSEMINATION AGENT AGREEMENT City of Tamarac, Florida The Disclosure Dissemination Agent and the Issuer have caused this Disclosure Dissemination Agent Agreement to be executed, on the date first written above, by their respective officers duly authorized. [SEAL] ATTEST ­ Title: Marion Swendon, City Clerk APPROVED AS TO FORM - I DIGITAL ASSURANCE CERTIFICATION, L.L.c., as Disclosure Dissemination Agent RA Name: Title: CITY OF TAMARAC, FLORIDA as Issuer By: Titl 4-e Sc5hWreZiber, Mayor By: Title: Jeff�e(y L.%4iller, City Manager WE NAME AND CUSIP NUMBERS OF BONDS Name of Issuer City of Tamarac, Florida Obligated Person(s) Issuer Name of Bond Issue: Capital Improvement Revenue Bonds, Series 2005 Date of Issuance: December 32005 Date of Official Statement December _, 2005 CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number. CUSIP Number. CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number. CUSIP Number: CUSIP Number: CUSIP Number: CUSEP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: CUSIP Number: (OR957212;1 I A-i j I NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Issuer City of Tamarac, Florida Obligated Person: Issuer Name of Bond Issue: Capital Improvement Revenue Bonds, Series 2005 Date of Issuance: December _, 2005 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above -named Bonds as required by the Disclosure Agreement, dated as of December _, 2005, between the Issuer and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The Issuer has notified the Disclosure Dissemination Agent that it anticipates that the Annual Reportwill be filed by Dated: Digital Assurance Certification, L,L.C., as Disclosure Dissemination Agent, on behalf of the Issuer cc: Issuer Obligated Person (OR957212;1) B-1 EXHIBIT C MATERIAL EVENT NOTICE COVER SHEET This cover sheet and material event notice should be sent to the Municipal Securities Rulemaking Board or to all Nationally Recognized Municipal Securities Information Repositories, and the State Information Depository, if applicable, pursuant to Securities and Exchange Commission Rule l5c2-12(b)(5)(i)(C) and (D). Issuer's and/or Other Obligated Person's Name: Citv of Tamarac, Florida Issuer's Six -Digit CUSIP Number: or Nine -Digit CUSIP Number(s) of the bonds to which this material event notice relates: Number of pages of attached material event notice: Description of Material Events Notice (Check One): I - 2. I 4- 5. 6. 7- 8. 9. 10, 11. 12, 13- - Principal and inteTest payment delinquencies —Non-Payment related defaults —Unscheduled draws On debt service reserves reflecting financial difficulties —Unscheduled draws on credit enhancements reflecting financial difficulties —Substitution of credit or liquidity providers, or their failure to perform Adverse tax opinions or events affecting the tax-exempt status of the security — Modifications to rights of securities holders —Bond calls Defeasances —Release, substitution, Or sale of property securing repayment of the securities —Rating changes —Failure to provide annual financial information as required —Other material event notice (specify) I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly: Signature: Name: Employer: Digital Assurance Certification, LL.C. Address: City, State, Zip Code: Voice Telephone Number: Title: Please print the material event notice attached to this cover sheet in 10-point type or larger, The cover sheet and notice may be faxed to the MSRB at (703) 683-1930 or sent to CDINet, Municipal Securities Rulemaking Board, 1900 Duke Street, Suite 600, Alexandria, VA 22314. Contact the MSRB at (703) 797-6600 with questions regarding this form or the dissemination of this notice. (OR957212;1) C-1 I I PRELIMINAR)'OTPICIAL ST47EAdENTI)AIT'D A'01:EAYBER 2005 4; �4 NEW ISSUE — BOOK -ENTRY ONLY RATINGS: See "BOND INSUR-ANCE" and "RATINGS" herein 141 In the opinion of Bond Counsel, assuming continuing compliance by the City with various covenants in the Resolution, under existing c- 5 statutes, regulations, and judicial decisions, the interest on the Series 2005 Bonds will be excluded from gross income for federal income tax purposes of the holders thereof and is not an item of tax preferencefor purposes of the federal alternative minimum tax imposed on individuals and corporations. The Series 2005 Bonds are, under existing laws and regulations, also exempt from intangible taxes imposed pursuant to Chapter 199, Florida Statutes. See "TAXMAITERS" hereinfor a description of alternative minimum tax treatment and certain other tax consequences to holders of the Series 2005 Bonds. [CITY LOGO] $15,000,000* [DAC Logo] CITY OF TAMARAC, FLORIDA CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 2005 �3 0 f 9 Dated: Due: October 1, as shown below E8 - The City of Tamarac, Florida (the "City") is issuing its Capital Improvement Revenue Bonds, Series 2005 (the "Series 2005 Bonds") only in the form of fully registered bonds in the denomination of $5,000 principal amount or any integral multiple thereof, The Series 2005 Bonds will bear interest at the fixed rates set forth below payable semi-annually on each April I and October 1, cornmencing April 1, 2006, Ile Series 2005 Bonds, when issued, will o 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 a , -ies 2005 Bonds. Purchases of beneficial interests in the Series 2005 Bonds will be made in book -entry form. Purchasers of the e es 0 X_ depository for the Set S ri 2005 Bonds ("Beneficial Owners") will not receive physical delivery of Series 2005 Bonds. Accordingly, principal and interest on the Series 2005 Bonds will be paid by J.P. Morgan Trust Company, N.A., Jacksonville, 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 2005 BONDS — Book -Entry Only System" herein. Certain of the Series 2005 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein - The Series 2005 Bonds are being issued pursuant to Chapter 166, Florida Statutes, the municipal charter of the City, and other applicable provisions of law, and, pursuant to City Resolutions No. R-2005- and No. R-2005" (collectively, the "Resolution"). The Series 2005 Bonds are being issued to finance a portion of the construction of certain City owned capital improvements for parks, recreation and public safety purposes (the Project"), and to pay certain costs of issuance of the Series 2005 Bonds including the municipal bond insurance and Reserve Policy premiums. The Series 2005 Bonds and the interest thereon are secured by and payable solely from (1) Non -Ad Valorem Revenues budgeted and �E 2 9 %� appropriated by the City in accordance with the Resolution and deposited into the Debt Service Fund, and (2) until applied in accordance with the provisions of the Resolution, all moneys, including die investments thereof, in the funds and accounts established under the Resolution, with the exception ofthe Rebate Fund (collectively, the "Pledged Funds"). The City has outstanding other indebtedness as to which the City has covenanted to budget and appropriate Non -Ad Valorem Revenues sufficient to pay debt service thereon. The City also has outstanding indebtedness which is secured by pledges of specific u -a - Z3 portions of die Non -Ad Valorem Revenues which pledges have priority over the covenant to budget and appropriate for payment of the Series 2005 Bonds, See "SECURITY FOR THE SERIES 2005 BONDS" and "DEBT SERVICE REQUIREMENTS" herein. r- R 0 b4 The Series 2005 Bonds do not constitute general obligations of the City. The City is not obligated to pay the principal of, redemption E -r, -emium, if any, or interest on the Series 2005 Bonds, except frorn the Pledged Funds. No holder of any Series 2005 Bond shall ever have the right pi to compel the exercise of any ad valorem taxing power to pay such Series 2005 Bond, or in order to maintain any services or programs that i;� in generate non -ad valorem revenues, or be entitled to payment of such Series 2005 Bond from any moneys of the City except from the Pledged Fundsl 3 in the manner provided in the Resolution. Payment of the principal of and interest on the Series 2005 Bonds, when due will be insured by a financial guaranty insurance policy to '57 be issued by simultaneously with the delivery of the Series 2005 Bonds. [INSURER'S LOGO] For discussion of the terms and Provisions of such policy, including the limitations thereof, see "BOND INSURANCE" herein and Appendix D hereto. This cover page contains certain information for quick reference only. It is not a summary of the Series 2005 Bonds. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. MATURITIES, AMOUNTS, INTEREST RATES, AND PRICES OR YIELDS AND INITIAL CUSIP NUMBERS -5 $ SERIAL BONDS �J 0 .5 Price, Price Principal Interest 01' INITIAL Principal Interest or INITIAL 10 7 N laturities* Amount Bate Yield CUSIP NO-** Maturities* Amount* Rate XkW CLJSIP NO.** $ % Term Bonds, due October 1, Pi ice INITIAL CUSIP NO. E 2 'Z .2 Ae Series 2005 Bonds are offered when, as and ifWued and accepted by the Underwriter subject to the approval oflegalify by Bryant Miller & _5� Olive P.A., Orlando, Florida, Bond Counsel. Certain other legal matters will be passed onfor the City by its counsel, Goren, Cherof Doody & Ezrol, P.A, z k Fort Lauderdale, Florida, City Attorney and by Akerman Senterfitt, Orlando, Florida. Disclosure Counsel. Kirkpatrick, Pettis, a Division ofD,A. Davidson V >,. - & Co. Fixed Income Capital Markets, Orlando, Florida is serving as financial advisor to the City in connection with the issuance of1he Series 2005 Bonds. ne Series 2005 Bonds are expected to be delivered through thefacilities ofDTC in New York, New York on or about December 2005. IRBC DAIN RAUSCHER LOGO] Dated — 2005 E *Preliminary, subject to change C ** The City shall not be responsible for the use of CUSIP numbers, nor is any representation made as to their correctness- They are included solely for the convenience ofthe readers ofthis Official Statement. 1 1 1 (OR946273;3 ) CITY OF TAMARAC, FLORIDA OFFICIALS CITY COMMISSION Joe Schreiber — Mayor Beth Flansbaum-Talabisco - Vice -Mayor Mark L. Sultanof Edward C. Portner Karen L. Roberts CITY MANAGER Jeffrey L. Miller CITY ATTORNEY Goren, Cherof, Doody & Ezrol, P.A. Fort Lauderdale, Florida DEPUTY CITY MANAGER Michael C. Cernech DIRECTOR OF FINANCIAL SERVICES Steven G. Chapman II CITY AUDITORS Grau & Company, P.A. Miami, Florida BOND COUNSEL Bryant Miller & Olive P.A. Orlando, Florida FINANCIAL ADVISOR Kirkpatrick, Pettis, A Division of D.A. Davidson & Co. Fixed Income Capital Markets Orlando, Florida DISCLOSURE COUNSEL. Akerman Senterfitt Orlando, Florida No dealer, broker, salesman or other person has been authorized by the City, the Insurer or the Underwriter to give any information or to make any representation with respect to the Series 2005 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 2005 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 Underwriter has provided the following sentence for inclusion in this Official Statement, The Underwriter has reviewed the inforination in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does 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 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 2005 BONDS, THE UNDERWRITER MAY OVER -ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2005 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 2005 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 2005 BONDS HAVE NOT 13EEN 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 fall texts have not been included as appendices to this Official Statement, they may be obtained from the City of Tamarac, Florida, City Hall, 7525 N.W. 88th Avenue, Tamarac, Florida 33321, (954) 724-13 10, Attention: Director of Financial Services, upon prepayment of reproduction costs, postage and handling expenses. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] I (OR946273;3) ii TABLE OF CONTENTS Page SUMMARY STATEMENT ............... _,_ ................ ............................................ �v TheCity ....... ____ ...... ...................................................... .................... ................................. ..................... v The Series 2005 Bonds ...................................... ___ .......................... v Purpose of the Series 2005 Bonds ................... .................................... .......................... __ ............................ v Security for the Series 2005 Bonds ...................................................................... ...................... ....... ..... V Redemption Provisions ........................... ....... ................. _ .................................... ................................... _ vi Future Debt Payable from Non -Ad Valorem Revenues ....................... ................................................... .... vi Municipal Bond Insurance ......................................... ....................... ... _ .................... _ ............................. vii Professionals............. ............................. .......... ............................................. _ ...... ............................ ...... vii Delivery of the Series 2005 Bonds ...................................................................................... _ ...................... vii Continuing Disclosure ...... .................................. ............................. ...................... ... _ ................. __._ vii Additional Information ... ...... ........................................... ......................... ...... ................................. vii Miscellaneous........... ....... .......................................................... ................ .................... vii INTRODUCTION........ ...................................... ....... _ ............ I PURPOSE OF THE SERIES 2005 BONDS .................... ............................ 2 THE PROJECT .............................. 2 DESCRIPTION OF THE SERIES 2005 BONDS ............................................................ 2 GeneralDescription. ................................. ___ ....... ................... ................ __ ............. ........ .................. 2 Book -Entry Only System... .......................................................................... ........ .............. ......................... 2 Redemption Provisions .......... ­­ ........................... ................... ................ .................. __ ................... 4 SECURITY FOR THE SERIES 2005 BONDS ................. ........................ 5 General...... ......................................... ................. 5 Pledged Funds, Covenant to Budget and Appropriate .................. _ ...... ..................................... .................. 5 Anti -Dilution .................... __ .............................. 6 Paymentof Bonds ..................... ................................................... ................ ............................. ......... 7 Reserve Account ........... ... ___ ........................ 7 ReservePolicy ....... ................................. _ ....... ......... ..................... __ ........ ....................... ................. 7 NoImpairment ........................ _ ............................................... ............... ......... ......... __ ............................. 8 Investments... ................................... __ ....................... 8 BONDINSURANCE.. .................................. .................. 8 OTHER OBLIGATIONS PAYABLE FROM NON -AD VALOREM REVENUES ................ .............. ........... 10 FUTURE FINANCING PLANS .............. _ ....... ............................................ ................ __ ...................................... 10 ESTIMATED SOURCES AND USES OF FUNDS ................................. _ ........ THE CITY .... _,_ ........... ....................... __ ...... ........... _ 11 GENERAL INFORMATION REGARDING NON -AD VALOREM REVENUES ................ _ ............ General..................... ............... ................ FLORIDA CONSTITUTIONAL AMENDMENTS ............... ** .............................. * ................ ­ .......... **'***'* .............. 14 General........................ ........................... ............. _ .................. .................. ............................. __ .............. 14 SaveOur Homes Amendment ............................................................................... _ ..................................... 14 fOR946273;31 iii Limitation on State Revenues Amendment.. .................................. ........................................ .................... 14 Effectof Hurricanes ......... ......... ............................................................ ....... .................................. 15 LITIGATION........... ..................................................... ....... ................ ......... Is LEGALMATTERS .............. ___ ................. ....................................................... ....... 15 TAXMATTERS_ ........ ...... .......... .................................. ...................... ...... _ ...... ........................................... 15 General... .... _._ ....... ............................................. ......................... ......................... .......................... 15 Tax Treatment of Original Issue Discount ............. _._ .... ............................. _ .................. _ ............ ......... 16 Tax Treatment of Bond Premium ......................... .............................. ....................... _ .......................... 17 UNDERWRITING...................................................... ........................... ........... ................. _ ..................... 17 INVESTMENTPOLICY .... _ ................ ................................ .................... ..................... ...... ............................ 17 RATINGS... _ ...... ............... ..................................... _ ........................ ........... ............. _ ............. ... 18 FINANCIAL STATEMENTS ..................... ............ ........................... 18 CONTINUING DISCLOSURE. � ......... __ ....................... _._ .... .... ................. ................................................. 19 DISCLOSURE REQUIRED BY FLORIDA 13LUE SKY REGULATIONS ............ ................................................ 19 ENFORCEABILITY OF REMEDIES ................................................................. ............ .... _ ..... ................... __ ..... 19 FINANCIAL ADVISOR .............. .............. ............................. ................ __ .................. _._ ....................... 19 CONTINGENT FEES ................ .................................. .................. ...... .................... _._ ................ __ ...... _ 19 FORWARD -LOOKING STATEMENTS ......... .................................... .................................................. ................ 20 MISCELLANEOUS............................... .......................... ......................... __ .................... _ .......................... 20 CERTIFICATE AS TO OFFICIAL STATEMENT ...... ......................................... ... __ ................... ...................... 20 APPENDIX A City of Tamarac, Florida General Information. APPENDIX B The Resolution APPENDIX C Excerpts from the Comprehensive Annual Financial Report of the City for the Fiscal Year Ended September 30, 2004 APPENDIX D Specimen Financial Guaranty Insurance Policy APPENDIX E Form of Opinion of Bond Counsel APPENDIX F Form of Continuing Disclosure Agreement I fOR946273;31 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 Tamarac, Florida, of its $15,000,000* Capital Improvement Revenue Bonds, Series 2005 (the "Series 2005 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 "The Resolution" - Appendix B hereto. The City The City of Tamarac, Florida (the "City") located in Broward County, Florida, had an estimated 2004 population of 57,726. The City was incorporated in 1963 and operates under its own charter. The governing body of the City consists of a five member commission of which four members are elected by district, and a mayor is elected at large. The City provides a full range of municipal services, including police and fire protection, highways and streets, planning, zoning, parks, recreation, water, sewer, sanitation and general administrative services. The Series 2005 Bonds The City is issuing the Series 2005 Bonds only in the form of fully registered bonds in the denomination of $5,000 principal amount or any integral multiple thereof. The Series 2005 Bonds will bear interest at the fixed rates set forth on the cover page hereof payable serni-annually on each April I and October 1, commencing April 1, 2006. The Series 2005 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 2005 Bonds. Purchases of beneficial interests in the Series 2005 Bonds will be made in book -entry form. Purchasers of the Series 2005 Bonds ("Beneficial Owners") will not receive physical delivery of Series 2005 Bonds. Accordingly, principal and interest on the Series 2005 Bonds will be paid by J.P. Morgan Trust Company, N.A., Jacksonville, 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 2005 BONDS - Book -Entry -Only System" herein. Certain of the Series 2005 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein. See "DESCRIPTION OF THE SERIES 2005 BONDS - Redemption Provisions" herein. Purpose of the Series 2005 Bonds The Series 2005 Bonds are being issued pursuant to Chapter 166, Florida Statutes, the municipal charter of the City, and other applicable provisions of law, and City Resolutions No. R-2005- and No. R-2005- (collectively the "Resolution"). The Series 2005 Bonds are being issued to finance the ac—quisition, construction and equipping of certain City owned capital improvements for parks, recreation and public safety purposes (the "Project") and to pay certain costs of issuance of the Series 2005 Bonds including the municipal bond insurance and Reserve Policy (hereinafter defined) premiums. Security for the Series 2005 Bonds The Series 2005 Bonds and the interest thereon are secured by and payable solely from (1) Non -Ad Valorem Revenues budgeted and appropriated by the City in accordance with the Resolution and deposited into the Debt Service Fund, and (2) until applied in accordance with the provisions of the Resolution, all moneys, including the investments thereof, in the funds and accounts established under the Resolution, with the exception of the Rebate Fund (collectively the "Pledged Funds"), Pursuant to the Resolution, the City covenants and agrees to appropriate in *Preliminary, Subject to Change (OR94627313) v its annual budget, by amendment if necessary, for each Fiscal Year sufficient amounts of Non -Ad Valorem Revenues for the payment of principal of and interest on the Series 2005 Bonds and to make certain other payments required under the Resolution in each such Fiscal Year. Such covenant to budget and appropriate does not create any lien upon or pledge of such Non -Ad Valorem Revenues until such funds are deposited in the Debt Service Fund, nor does it preclude the City from pledging in the future or covenanting to budget and appropriate in the future its Non -Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non -Ad Valorem Revenues, nor does it give the Holders of the Series 2005 Bonds a prior claim on the Non -Ad Valorem Revenues as opposed to claims of general creditors of the City. The City does not covenant to maintain any services or programs now maintained or provided by the City including those which generate Non -Ad Valorem Revenues. The Resolution defines Non -Ad Valorem Revenues as all legally available non -ad valorem revenues of the City (excluding revenues of any enterprise fund of the City), which are legally available to make the payments required by the Resolution, but only after provision has been made by the City for payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law. The City has outstanding its Capital Improvement Revenue Bonds, Series 2004 as to which the City has covenanted to budget and appropriate Non -Ad Valorem Revenues sufficient to pay debt service thereon. The City also has outstanding indebtedness which is secured by pledges of specific portions of the Non -Ad Valorem Revenues which pledges have priority over the covenant to budget and appropriate for payment of the Series 2005 Bonds. See "SECURITY FOR THE SERIES 2005 BONDS" and "DEBT SERVICE REQUIREMENTS" herein. The Series 2005 Bonds do not constitute general obligations of the City. The City is not obligated to pay the principal of, redemption premium, if any, or interest on the 2004 Bonds, except from the Pledged Funds. No holder of any Series 2005 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2005 Bond, or in order to maintain any services or programs that generate Don -ad valorem revenues, or be entitled to payment of such Series 2005 Bond from any moneys of the City except from the Pledged Funds in the manner provided in the Resolution. The City will, in connection with the issuanc.e of the Series 2005 Bonds, deposit to the Reserve Account the surety bond (the "Reserve Policy") of (11 "), in an amount equal to the Reserve Account Requirement for the Series 2005 Bonds. Amounts in the Reserve Account shall be used only for the purpose of making payments of maturing principal or interest or Amortization Installments when the other moneys in the Debt Service Fund are insufficient therefor. The "Reserve Account Requirement" is the lesser of (i) the Maximum Annual Debt Service for all Outstanding Series 2005 Bonds, (ii) one hundred twenty-five percent (125%) of average annual debt service for all Outstanding Series 2005 Bonds, or (iii) the maximum amount allowed under the Code to be funded with proceeds of the Series 2005 Bonds without adversely affecting the exclusion of interest on the Outstanding Series 2005 Bonds, and without yield restriction. See "SECURITY FOR THE SERIES 2005 BONDS - Funds and Accounts" and "SECURITY FOR THE SERIES 2005 BONDS - Reserve Policy" herein. Redemption Provisions The Series 2005 Bonds maturing on or after October 1, - are subject to optional redemption on or after October 1, at the redemption price(s) described herein. Certain of the Series 2005 Bonds are subject to mandatory sinking fund redemption as described herein. See "DESCRIPTION OF THE SERIES 2005 BONDS - Redemption Provisions" herein. Future Debt Payable from Non -Ad Valorem Revenues The City may issue additional obligations in the future payable from specific Non -Ad Valorem Revenues of the City or the City's covenant to budget and appropriate legally available Non -Ad Valorem Revenues subject to certain restrictive covenants set forth in the Resolution. See "FUTURE DEBT PAYABLE FROM NON -AD VALOREM REVENUES" and "SECURITY FOR THE SERIES 2005 BONDS - Anti -Dilution" herein. I fOR946273-13) vi Municipal Bond Insurance Payment of the principal of and interest on the Series 2005 Bonds, when due will be insured by a financial guaranty insurance policy to be issued by simultaneously with the delivery of the Series 2005 Bonds. See "BOND INSURANCE" herein and Appendix D hereto. Professionals J.P. Morgan Trust Company, N,A- will serve as Registrar and Paying Agent pursuant to the Resolution. Bryant Miller & Olive P.A., Orlando, Florida, is serving as Bond Counsel, Goren, Cherof, Doody & Ezrol, P.A., Fort Lauderdale, Florida, is the City Attorney, and Akerman Senterfitt, Orlando, Florida, is serving as Disclosure Counsel. Kirkpatrick Pettis, a Division of D.A. Davidson & Co. Fixed Income Capital Markets, Orlando, Florida, is the City's Financial Advisor. Delivery of the Series 2005 Bonds It is anticipated that the Series 2005 Bonds in fully registered form will be available for delivery through the facilities of DTC on oi- about December —, 2005. Continuing Disclosure The City has agreed and undertaken for the benefit of the Holders and beneficial owners of Series 2005 Bonds, to provide certain financial information and operating data relating to the City and the Series 2005 Bonds and notice of certain enumerated events pursuant to Rule 15c2-12 of the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934. See "CONTINUING DISCLOSURE" herein and Appendix F hffetO� Additional Inform3floo This Official Statement speaks only as of its date and the information contained herein is subject to change. Descriptions of the Series 2005 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 Director of Financial Services (954) 724-1310 at City Hall, 7525 N.W. 88th Avenue, Tamarac, Florida 33321, to obtain copies of basic documentation referred to herein or with questions concerning this Official Statement or the Series 2005 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 2005 Bonds, the security for the payment of the Series 2005 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 or beneficial owners of the Series 2005 Bonds. I[END OF SUMMARY STATEMENT] �OR94627313) vii OFFICIAL STATEMENT $15,000,000* CITY OF TAMARAC, FLORIDA CAPITAL IMPROVEMENT REVENUE -BONDS, SERIES 2005 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 sale by the City of Tamarac, Florida (the City") of its $15,000,000* aggregate principal amount of Capital Improvement Revenue Bonds, Series 2005 (the "Series 2005 Bonds"). The Series 2005 Bonds are issued under and pursuant to Chapter 166 Florida Statutes, the municipal charter of the City and other applicable provisions of law, and Resolutions No. R-2005-_ and R-2005-_ (collectively, the Resolution"). See Appendix B, "The Resolution." The Series 2005 Bonds and the interest thereon are secured by and payable solely from (1) Non -Ad Valorem Revenues budgeted and appropriated by the City in accordance with the Resolution and deposited into the Debt Service Fund, and (2) until applied in accordance with the provisions of the Resolution, all moneys, including the investments thereof, in the funds and accounts established under the Resolution, with the exception of the Rebate Fund (collectively, the "Pledged Funds"). See "SECURITY FOR THE SERIES 2005 BONDS" and "DEBT SERVICE REQUIREMENTS" herein. The Series 2005 Bonds do not constitute general obligations of the City. The City is not obligated to pay the principal of, redemption premium, if any, or interest on the 2005 Bonds, except from the Pledged Funds. No holder of any Series 2005 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2005 Bond, or in order to maintain any services or programs 'that generate non -ad valorem revenues, or be entitled to payment of such Series 2005 Bond from any moneys of the City except from the Pledged Funds in the manner provided in the Resolution. The Series 2005 Bonds are issuable only in the form of fully registered bonds in denominations of $5,000 principal amount or any integral multiple thereof. The Series 2005 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 2005 Bonds. Purchases of beneficial interests in the Series 2005 Bonds will be inade in book -entry form, Purchasers of the Series 2005 Bonds ("Beneficial Owners") will not receive physical delivery of Series 2005 Bonds. Accordingly, principal and interest on the Series 2005 Bonds will be paid by J.P. Morgan Trust Company, N.A., Jacksonville, 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 2005 BONDS - Book -Entry -Only System" herein. Certain of the Series 2005 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as set forth herein. See "DESCRIPTION OF THE SERIES 2005 BONDS - Redemption Provisions" herein. This Official Statement speaks only as of its date and the information contained herein is subject to change. Capitalized terms used herein 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 2005 Bonds are set forth in the Resolution, which is attached to this Official Statement as Appendix B. *Preliminary, Subject to Change I fOR946273,31 The description of the Series 2005 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 and handling costs, from the City of Tamarac, at City Hall, 7525 N.W. 88th Avenue, Tamarac, Florida 33321, Attention: Director of Financial Services (954) 724-13 10. PURPOSE OF THE SERIES 2005 BONDS The Series 2005 Bonds are being issued to finance the acquisition, constraction and equipping of certain City owned capital improvements for parks, recreation and public safety purposes (the "Project") and to pay certain costs of issuance of the Series 2005 Bonds including the municipal bond insurance and Reserve Policy (hereinafter defined) premiums. THE PROJECT The City currently intends to expend the proceeds of the Series 2005 Bonds deposited in the Construction Fund to construct the following: Sports Complex Expansion Community Center Expansion Recreation Center Demolition./Reconstruction Parks Maintenance Compound Relocation Aquatic Center Annex Southgate Linear Park Phase 1 B and 2 Dog Park Waters Edge Park Bikeway System Fire Station Renovations The City may from time to time amend the Project list. DESCRIPTION OF THE SERIES 2005 BONDS General Description The Series 2005 Bonds will be issued as fully registered bonds in the denominations of $5,000 principal amount or integral multiples thereof and will be initially registered in the name of Cede & Co., as nominee of DTC, which will act as securities depository for the Series 2005 Bonds. Unless the book -entry system is discontinued as described herein, individual purchases of the Series 2005 Bonds will be made in book -entry form only, and the purchasers will not receive physical delivery of the Series 2005 Bonds or any certificate representing their beneficial ownership interests in the Series 2005 Bonds. See "Book -Entry Only System" below. Interest on the Series 2005 Bonds is payable on April 1, 2006 and on each October I and April I thereafter until maturity or redemption. Amounts due on the Series 2005 Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 2005 Bonds, to be subsequently disbursed to Direct Participants and Indirect Participants and thereafter to the Beneficial Owners of the Series 2005 Bonds. Book -Entry Only System The information set forth under this caption concerning DTC and DTC's book -entry system has been obtained from DTC, and the City takes no responsibility for the accuracy thereof. The Series 2005 Bonds will be issued as fully registered bonds without coupons. DTC will act as securities depository for the Series 2005 Bonds. The Series 2005 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Bond will be issued for each (OR946273;31 2 maturity of the Series 2005 Bonds. Beneficial owners of the Series 2005 Bonds will not receive physical delivery of Series 2005 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 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues and money market investments from over one hundred (100) 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, batiks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in tum, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, FICC, and EMCC, also subsidiaries of DTCQ, 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 Cominission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Series 2005 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2005 Bonds on DTC's records. The ownership interest of each actual purchaser of each 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 2005 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 2005 Bonds, except in the event that use of the book -entry system for the Series 2005 Bonds is discontinued. To facilitate subsequent transfers, all Series 2005 Bonds deposited by Participants with DTC are registered in the name of DTC's partnership norninee, Cede & Co. The deposit of Series 2005 Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership, DTC has no knowledge of the actual Beneficial Owners of the Series 2005 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2005 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among thern, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2005 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2005 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Bon Series 2005 Bonds may wish to ascertain that the nominee holding the Series 2005 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 2005 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant it, such issue to be redeemed. I IOR946273;3) Neither DTC nor Cede & Co, (nor any other DTC nominee) will consent or vote with respect to the Series 2005 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the 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 —, 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 DTQ is the responsibility of the 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 2005 Bonds at any time by giving reasonable notice to City or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Bonds certificates are required to be printed and delivered. To the extent permitted by its agreement with DTC (or a successor securities depository), the City may seek to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository), subject to the requirements of such agreement. In that event, Bond certificates will be printed and delivered. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2005 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDER OF THE BOND OR REGISTERED OWNERS OF THE Bonds SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE Bonds. The City can make no assurances that DTC will distribute payments of principal of, redemption price, if any, or interest on the 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 Bonds or redemption notices to the Beneficial Owners of such Series 2005 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 Limited Offering Memorandum, 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 to give any notice or make any payment to a Beneficial Owner in respect to the Bonds or any error or delay relating thereto. The rights of holders of beneficial interests in the Series 2005 Bonds and the manner of transferring or pledging those interests is subject to applicable state law. Holders of beneficial interests in the Series 2005 Bonds may want to discuss the manner of transferring or pledging their interest in the Bonds with their legal advisors. In the event the book -entry system is tenninated, the transfer and exchange of Series 2005 Bonds shall be accomplished as described in Appendix B "The Resolution." Redemption Provisions Optional Redemption The Series 2005 Bonds maturing on or prior to October 1, _, shall not be subject to redemption prior to maturity. The Series 2005 Bonds maturing on October 1, _, or thereafter may be redeemed prior to maturity at the option of the City, as a whole or in part on October 1, _, or on any date thereafter, if in part, from such maturity or maturities as the City shall designate and by lot within a maturity at the redemption price of one hundred percent (100%), of the principal amount of the Series 2005 Bonds to be redeemed, plus accrued interest to the redemption date. JOR94627313) 4 Mandatory Redemption The Series 2005 Bonds maturing in the year - are subject to mandatory redemption in part by the City on October 1 in the years and in the principal amounts, plus accrued interest to the redemption date, as set forth below. I Year Amount *maturity Notice and Effect of Redemptio Notice of redemption, unless waived, is to be given by the Registrar by mailing an official redemption notice by registered or certified mail at least 30 days and not more than 60 days prior to the date fixed for redemption to the Registered Owners of the Series 2005 Bonds to be redeemed at such Owners' addresses shown on the registration books maintained by the Registrar or at such other addresses as shall be furnished in writing by such Registered Owners to the Registrar; provided, however, that no defect in any such notice to any Registered Holder of Series 2005 Bonds to be redeemed nor failure to give such notice to any such Registered Holder nor failure of any such Registered Holder to receive such notice shall in any manner defeat the effectiveness of a call for redemption as to all other Registered Owners of Series 2005 Bonds to be redeemed. Notice of redemption having been given substantially as aforesaid, the Series 2005 Bonds or portions of Series 2005 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 City shall default in the payment of the redemption price), such Series 2005 Bonds or portions of Series 2005 Bonds shall cease to bear interest. SECURITY FOR THE SERIES 2005 BONDS General The Series 2005 Bonds and the interest thereon are secured by and payable solely from (1) Non -Ad Valorem Revenues budgeted and appropriated by the City in accordance with the Resolution and deposited into the Debt Service Fund, and (2) until applied in accordance with the provisions of the Resolution, all moneys, including the investments thereof, in the funds and accounts established under the Resolution, with the exception of the Rebate Fund (collectively, the "Pledged Funds"). The Series 2005 Bonds do not constitute general obligations of the City, but shall be special obligations of the City, payable solely from and secured by a lien upon and pledge of the Pledged Funds. The City is not obligated to pay the principal of, redemption premium, if any, or interest on the 2005 Bonds, except from the Pledged Funds. No holder of any Series 2005 Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Series 2005 Bond, for payment of any amount payable under the Resolution, or in order to maintain any services or programs that generate non -ad valorem revenues, or be entitled to payment of such Series 2005 Bond from any moneys of the City except from the Pledged Funds in the manner provided in the Resolution. Pledged Funds, Covenant to Budget and Appropriate The City covenants and agrees to appropriate in its annual budget, by amendment if necessary, for each Fiscal Year in which the Series 2005 Bonds remain outstanding, sufficient amounts of Non -Ad Valorem Revenues for the payment of principal of and interest on the Series 2005 Bonds and to make certain other payments required under the Resolution in each such Fiscal Year. Such covenant and agreement on the part of the City is cumulative and shall continue until all payments of principal of and interest on the Series 2005 Bonds shall have been budgeted, appropriated and actually paid. The City agrees in the Resolution that this covenant and agreement shall be deemed to be entered into for the benefit of the holders of the Series 2005 Bonds and the Insurer and that this obligation may be enforced in a court of competent jurisdiction. Notwithstanding any provision of the Resolution to the contrary, the City does not covenant to maintain any services or programs now maintained or provided by the City, including �OR946273131 those programs and services which generate Non -Ad Valorem Revenues. This covenant and agreement shall not be construed as a limitation on the ability of the City to pledge all or a portion of such Non -Ad Valorem Revenues or to covenant to budget and appropriate Non -Ad Valorem Revenues for other legally permissible purposes. Nothing in the Resolution shall be deemed to pledge ad valorem tax revenues or to permit or constitute a mortgage or lien upon any assets owned by the City and no Holder of Series 2005 Bonds or other person may compel the levy of ad valorem taxes on real or personal property within the boundaries of the City for the payment of the City's obligations under the Resolution or in order to maintain any services or programs that generate Non -Ad Valorem Revenues. The City has outstanding its Capital Improvement Revenue Bonds, Series 2004 (the "2004 Bonds") as to which the City has covenanted to budget and appropriate Non -Ad Valorem Revenues sufficient to pay debt service thereon. The City also has outstanding indebtedness which is secured by pledges of specific portions of the Non -Ad Valorem Revenues which pledges have priority over the covenant to budget and appropriate for payment of the Series 2005 Bonds, However, this covenant to budget and appropriate in its annual budget for the purposes and in the manner stated in the Resolution has the effect of making available for the payment of the Series 2005 Bonds the Non -Ad Valorem Revenues of the City in the manner provided in the Resolution and placing on the City a positive duty to appropriate and budget, by amendment if necessary, amounts sufficient to meet its obligations under the Resolution; subject, however, in all respects to the restrictions of Section 166.241, Florida Statutes, which make it unlawful for any municipality to expend moneys not appropriated and in excess of such municipality's current budgeted revenues. The obligation of the City to make such payments from its Non -Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non -Ad Valorem Revenues or a covenant to budget and appropriate Non -Ad Valorem Revenues heretofore or hereafter entered into (including the payment of debt service on bonds and other debt instruments), and ftinding requirements for essential public purposes affecting health, welfare and safety of the inhabitants of the City; however, such obligation is cumulative and would carry over from Fiscal Year to Fiscal Year. The Resolution provides that such covenant to budget and appropriate does not create any lien upon or pledge of such Non -Ad Valorem Revenues until such funds are deposited in the Debt Service Fund, not does it preclude the City from pledging in the future or covenanting to budget and appropriate in the future its Non -Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non -Ad Valorem Revenues, nor does it give the Holders of the Series 2005 Bonds a prior claim on the Non -Ad Valorem Revenues as opposed to claims of general creditors of the City. The City does pursuant to the Resolution irrevocably pledge the Pledged Funds to the payment of the principal of and interest on the Series 2005 Bonds, and the City irrevocably agrees to the deposit of Non -Ad Valorem Revenues into the Debt Service Fund at the times provided of the sums required to secure to the Holders of the Series 2005 Bonds, and the payment of the principal of and interest thereon when due. The Resolution further provides that Pledged Funds shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the City. Until applied in accordance with the Resolution, the Non -Ad Valorem Revenues deposited by the City in the Debt Service Fund, plus any earnings thereon, shall be pledged to the repayment of the Series 2005 Bonds. Anti -Dilution Pursuant to the Resolution the City agrees as a condition precedent to the issuance of any debt or the incurrence of any other obligations which are secured by and/or payable solely from Pledgable Non -Ad Valorem Revenues, to deliver to the Insurer a certificate setting forth the calculations of the financial ratios provided below and certifying that it is in compliance with the following: (i) the average of the Pledgable Non -Ad Valorem Revenues for the two most recent Fiscal Years for which audited financial statements of the City are available is equal to or greater than 2.Ox the projected maximum annual debt service on the proposed debt or obligations and the other debt and obligations secured by and/or payable solely from all or a portion of such Pledgable Non -Ad Valorem Revenue to be outstanding following the issuance of the proposed debt or obligations; and (ii) the remainder of (A) the Pledgable Non -Ad Valorem Revenues for the most recent Fiscal Year for which audited financial statements of the City are available, less (B) the Product of (1) the quotient of such JOR94627313) Pledgable Non -Ad Valorem Revenues divided by the Non-EnteTprise Fund Revenues for such Fiscal Year, multiplied by (11) the Costs of Essential Services for such Fiscal Year, and less (C) the maximum annual debt service on debt and obligations secured by an express lien on all or a portion of the Pledgable Non -Ad Valorem Revenues to be outstanding following the issuance of the proposed debt or obligations is equal to or greater than 1. lx the Maximum Annual Covenant Debt Service with respect to debt and obligations to be outstanding following the issuance of the proposed debt or obligations. [Pledgable Non -Ad Valorem Revenues — ((Pledgable Non -Ad Valorem Revenues — Non -Enterprise Fund Revenues) x (Costs of Essential Services)) — maximum annual debt service secured by lien on Pledgable Non -Ad Valorem Revenues > 1. lx Maximum Annual Covenant Debt Service). For purposes of such covenants, "maximum annual debt service" (including, without limitation, as used in the definition of "Maximum Annual Covenant Debt Service") shall mean the lesser of the actual maximum annual debt service on such debt and obligations, or 15% of the original par amount thereof For the purpose of calculating maximum annual non -ad valorem debt service on any indebtedness which bears interest at a variable rate, such indebtedness shall be deemed to bear interest at the greater of (i) 1.25 times the most recently published Bond Buyer Revenue Bond 30 Year Index or (ii) 1 .25 times actual average interest rate during the prior Fiscal Year of the City. [Notwithstanding anything in the Resolution to the contrary, the foregoing provisions may be amended, supplemented, or waived from time to time only with the prior written consent of the Insurer, but without the consent of the Series 2005 Bondholders if all the Series 2005 Bonds Outstanding are insured by the Insurer.] Pledgable Non -Ad Valorem Revenues are defined as all legally available non -ad valorem revenues of the City (excluding revenues of any enterprise fund of the City), which are legally available to make the payments required the Resolution. Non -Enterprise Fund Revenues means all available revenues and receipts of the City (excluding revenues of any enterprise fund of the City), which are legally available for the payment of Costs of Essential Services. Costs of Essential Services means the cost of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law. Maximum Annual Covenant Debt Service is defined as the maximum annual debt service on debt and obligations secured by a covenant to budget and appropriate Pledgable Non -Ad Valorem Revenues for the payment thereof, or that are unsecured and expected by the City to be paid from Pledgable Non -Ad Valorem Revenues. Payment of Bonds Pursuant to the Resolution, the City has covenanted that Non -Ad Valorem Revenues shall be deposited or credited to the Interest Account, Prepayment Account and Bond Amortization Account at least five (5) business days prior to the applicable due date in amounts sufficient to pay the interest, principal and Amortization Installments next coming due. Reserve Account The Resolution creates a Reserve Account within the Debt Service Fund and provides that, on the date of delivery of the Series 2005 Bonds, the City will fund it in an amount equal to the Reserve Account Requirement. The City will at the time of delivery of the Series 2005 Bonds deposit the Reserve Policy (hereinafter defined) to the Reserve Account. Amounts in the Reserve Account shall be used only for the purpose of the payment of amortization installments, principal of and interest on the Series 2005 Bonds when the amounts in the other accounts in the Debt Service Fund are insufficient therefor. Reserve Policy The Resolution establishes the Reserve Account and requires that it be maintained in an amount equal to the Reserve Account Requirement. The Resolution authorizes the City to obtain a Reserve Account Surety Bond in place of fully funding the Reserve Account. Accordingly, application has been made to - (it ") for the issuance of a surety bond (the "Reserve Policy") for the purpose of funding the Reserve Account in an amount equal to the Reserve Account Requirement for the f OR946273;3) 7 I Series 2005 Bonds. The Series 2005 Bonds will only be delivered upon the issuance of such Reserve Policy. The premium on the Reserve Policy is to be fully paid at or prior to the issuance and delivery of the Series 2005 Bonds. [BALANCE TO BE PROVIDED.] For information regarding , please refer to "BOND INSURANCE" below. No Impairment The City has covenanted in the Resolution that the pledging of the Pledged Funds in the manner provided therein shall not be subject to repeal, modification or impairment by any subsequent ordinance, resolution or other proceedings of the City Commission of the City. Investments The Construction Fund and the Debt Service Fund shall be continuously secured in the manner by which the deposit of public funds are authorized to be secured by the laws of the State. Moneys on deposit in the Construction Fund and the Debt Service Fund may be invested and reinvested in Permitted Investments maturing not later than the date on which the moneys therein will be needed. Any and all income received by the City from the investment of moneys in each account of the Construction Fund, the Interest Account, the Principal Account, the Bond Amortization Account, and the Reserve Account (but only to the extent that the amount therein is less than the Reserve Account Requirement) shall be retained in such respective Fund or Account unless otherwise required by applicable law, To the extent that the amount in the Reserve Account is equal to or greater than the Reserve Account Requirement, any and all income received by the City from the investment of moneys therein shall be transferred, upon receipt, and deposited into the Interest Account. Nothing contained in the Resolution shall prevent any Pennitted Investments acquired as investments of or security for funds held under the Resolution from being issued or held in book -entry form on the books of the Department of the Treasury of the United States. JOP,946273;3) BOND INSURANCE ITO BE PROVIDED) DEBT SERVICE REQUIREMENTS The following table shows the annual principal (including Amortization Installments) and interest requirements for the Series 2005 Bonds, total annual debt service on the Series 2005 Bonds, total aggregate debt service on the 2004 Bonds, and aggregate debt service on all such debt. Series 2005 Bonds Aggregate Total Non -Ad Valorem Year Ending Total Debt Service Revenues (Q�Lo�berl Principal* Interest Debt Service 2004 Bonds Debt Service 2005 2006 $ 694,695.00 2007 690,070.00 2008 692,082-50 2009 692,957.00 2010 692,645.00 2011 692,795-00 2012 689,595.00 2013 691,065.00 2014 691,190.00 2015 694,910�00 2016 692,430.00 2017 693,430.00 2018 693,630.00 2019 692,515.00 2020 695,045.00 2021 691,245.00 2022 690,725.00 2023 693,500,00 2024 694,925.00 2025 2026 2027 2028 2029 2030 Total The above total does not include the debt service on capital leases the City has entered into which also are secured by Non -Ad Valorem Revenues budgeted and appropriated by the City. See "OTHER OBLIGATIONS PAYABLE FROM NON -AD VALOREM REVENUES." fOR946273;3) 9 I]- OTHER OBLIGATIONS PAYABLE FROM NON -AD VALOREM REVENUES The City has debt issues outstanding which are secured by and payable from specific Non -Ad Valorem Revenues. In addition to the 2004 Bonds, the City also has entered into certain capital leases which are secured by a covenant to budget and appropriate Non -Ad Valorem Revenues, which is the same source of security as for the Series 2005 Bonds. The City's outstanding indebtedness secured by specific Non -Ad Valorem Revenues or a covenant to budget and appropriate from Non -Ad Valorem Revenue is summarized below: Principal Amount Maximum Outstanding Final Annual Descriptio Source of Securit as of 9/30/05 Maturit Debt Service Sales Tax Revenue Local Goverrinient Half Cent Sales Tax $6,875,000 4/1/19 $697,793 Bonds, Series 1999 Sales Tax Revenue Local Government Half Cent Sales Tax $12,070,000 4/11/22 $1,055,340 Bonds, Series 2002 Capital Leases Covenant to Budget and Appropriate $1,327,638 (1/30/081 $194,898 from Non -Ad Valorem Funds Source: City Finance Department The City also has two (2) series of outstanding general obligation debt maturing in 2007 and 2017, respectively, secured by ad valorem taxes and outstanding in the aggregate principal amount of [$4,352,901 as of September 30, 20041, and two (2) series of water and sewer bonds with the last maturity in 2011 outstanding in the aggregate principal amount of [$12,585,0001 as of September 30, 2005 payable from water and sewer revenues. For additional information regarding the outstanding debt of the City, please refer to Appendix C hereto, FUTURE FINANCING PLANS The City currently has no plans to issue long term debt secured by the City's covenant to budget and appropriate Non -Ad Valorem Revenues other than the Series 2005 Bonds. The City may undertake additional financings in the future secured by Non -Ad Valorem Revenues budgeted and appropriated by the City or secured by a pledge of specific Non -Ad Valorem Revenues. The City intends to incur approximately $ 10 million of debt to finance improvements to the City's water and sewer system in the first half of 2006. This debt will be payable from and secured by a lien on water and sewer revenues. Any future obligations which are secured by a pledge of specific Non -Ad Valorem Revenues will, as to the pledged Non -Ad Valorem Revenues, have priority over the City's covenant to budget and appropriate Non -Ad Valorem Revenues for the payment of debt service on the Series 2005 Bonds. Any such additional debt or obligation secured by or payable solely from Pledgable Non -Ad Valorem Revenues must, as a condition precedent to issuance, comply with the provisions of the Resolution, see "SECURITY FOR THE SERIES 2005 BONDS — Anti -Dilution" herein and Appendix B hereto. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] �OR946273-13) 10 ESTIMATED SOURCES AND USES OF FUNDS Sources of Funds: Principal Amount of Series 2005 Bonds Less/Plus Net Original Issue Discount/Prernium Total Estimated Sources of Funds Uses of Funds: Deposit to Construction Fund for Project Costs of Issuance(]) Total Estimated Uses of Funds Includes costs of issuance including underwriter's discount, legal fees and expenses, and other fees and expenses including the municipal bond insurance and Reserve Policy premiums associated with the issuance of the Series 2005 Bonds. THE CITY The City of Tamarac, Florida (the "City") located in BToward County, Florida, had an estimated 2004 population of 57,726. The City was incorporated in 1963 and operates under its own charter. The governing body of the City consists of a five member commission of which four members are elected by district, and a mayor is elected at large. The City provides a full range of municipal services, including police and fire protection, highways and streets, planning, zoning, parks, recreation, water, sewer, sanitation and general administrative services. For additional information concerning the City see Appendices A and C hereto. GENERAL INFORMATION REGARDING NON -AD VALOREM REVENUES General The City generally receives two primary sources of revenue. These are ad valorem tax revenues and non -ad valorem revenues. The Resolution excludes from the Non -Ad Valorem Revenues the revenues of any enterprise fund of the City. Ad valorem tax revenues may not be pledged for the payment of debt obligations of the City without approval of the electorate of the City. The City is permitted by the Constitution of the State of Florida to levy ad valorem taxes at a rate of up to $10 per $1,000 of assessed valuation for general governmental services (other than the payment of principal and interest on general obligation long-term debt). The general fund tax rate to finance general governmental services (other than the payment of principal and interest on general obligation long-term debt) for the year ended September 30, 2005 was $5.999 per $1,000. Such rate for the period ending September 30, 2006 is $6.2499 per $1,000. The table below, which has been prepared by the City and derived from the City audit for each of the indicated years, lists historical revenues and expenditures of the City within the City's General Fund and changes in the General Fund balance for each of the indicated years. Certain of the listed revenues are not legally available to pay debt services on the Series 2005 Bonds. The City may not be compelled to apply ad valorem tax revenues to pay debt service on the Series 2005 Bonds. In addition to the General Fund, the City maintains several proprietary funds, which proprietary funds are at least in part supported by fees and charges. Some of the proprietary funds are legally available to pay debt service on the Series 2005 Bonds, Certain of the legally available non -ad valorem revenues have heretofore or may hereinafter be specifically pledged to secure revenue bonds issued by the City, Such bonds are and/or will be payable from such specific non -ad valorem revenue source prior to payment by the City of any debt service on the Series 2005 Bonds. See "OTHER OBLIGATIONS PAYABLE FROM NON -AD VALOREM REVENUES," Amounts in particular categories of legally available non -ad valorem revenues may increase or decrease in the future, or certain categories may cease to exist altogether, and new sources may occur JOR946273;31 11 from time to time. The Resolution defines Non -Ad Valorem Revenues as only being available after provision has been made by the City for payment of the Cost of Essential Services. For additional information regarding the City's financial situation, please refer to APPENDIX C hereto. STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN GENERAL FUND BALANCE GOVERNMENTALFUNDS FOR FISCAL YEARS ENDED SEPTEMBER 30,2002 THROUGH 2005 2002 2003 2004 Revenues: Taxes and franchise fees $18,630,825 $20,050,315 $22,174,431 Charges for services 1,304,794 1,579,033 1,809,983 Payment in lieu of taxes 550,230 561,207 572,979 Intergovernmental 4,737,572 4,950,911 5,398,434 Licenses and permits 1,792,720 1,862,250 1,974,976 Fines and forfeitures 500,849 526,531 563,373 Investment income 358,812 240,443 243,603 Donations from private resources - - - Miscellaneous 3,772,308 3,974,237 5,143,791 Special assessments - - - Total revenues 31,648,110 33,744,927 37,881,570 Expenditures: Current: General government 7,369,950 8,880,895 8,974,900 Public safety 8,759,892 9,412,111 10,206,373 Transportation 1,167,905 1,137,935 1,299,004 Culturehecreation 2,945,961 3,097,931 3,438,061 Physical environment 1,619,105 1,815,299 1,994,404 Economic environment 286,512 145,621 145,970 Human services 243,726 222,214 228,392 Debt service: Principal retirement 21,231 - 249,096 Interest and fiscal charges 1,004 - 44,299 Capital outlay: General government - - 335,871 Public safety - - Transportation - - 2363574 Culture and recreation - - 151-276 Total expenditures 22,415,286 24,712,006 27,304,220 Excess (deficiency) of revenues over (under) expenditures 9,232,824 9.,032,921 10,577,350 Other financing sources (uses): Transfers in 242,156 244,410 1,677,780 Transfers out (6_01 7,5 8 5) (8,532,801) fS 7-69,15 1) Proceeds from bond issuance - Total other financing sources (uses) (5,775,429) (8,288,391) (7,091,371) Net change in fund balances 3,457,395 744,530 3,485,979 Fund balances - beginning 6,023,455. 9,480,850 10,225,380 Fund balances - ending $-I-Q,225,380 $13,711,352 JOR946273;3) 12 Pursuant to the Resolution the City has covenanted not to issue Or incur debt or obligations which are secured by and/or payable solely from Pledgable Non -Ad Valorem Revenues unless the City prior to such issuance or incurrence delivers a certificate to the Insurer certifying that ceilain financial ratios have been complied with. See "SECURITY FOR THE SERIES 2005 BONDS — Anti -Dilution" herein. The information in the following table indicates the coverage provided by Non -Ad Valorem Revenues (average of actual receipts for the City 's Fiscal Years 2003 and 2004) of maximum annual debt service on the debt of the City secured by a payable from such Pledgable Non -Ad Valorem Revenues. Average Pledgable Non -Ad Valorem Revenues $22,468,689 Maximum Annual Debt Service on Non -Ad Valorem Revenue Deb0)* $4,236,897 Coverage 5.30x Cl) City's Sales Tax Revenue Bonds, Series 1999 and Sales Tax Revenue Bonds, Series 2002, City Outstanding Capital Leases, 2004 Bonds and Series 2005 Bonds. Maximum Annual Debt Service on the Series 2005 Bonds has been estimated at $1,529,496. The information in the following table indicates how the City would have complied with, for its fiscal year ended September 30, 2004, the second financial ratio that the City inust comply with prior to the issuance or incurrence of debt or obligations secured by or payable solely from Pledgable Non -Ad Valorem Revenues. Pledgable Non -Ad Valorem Revenues $23,925,509 Non -Enterprise Fund Revenues $37,881,570 Costs of Essential Services $19,181,273 Maximum Annual Debt Service Secured by a lien on Pledgable $1,753,403 Non -Ad Valorem Revenues Maximum Annual Covenant Debt Service $2,483,494* *Estimated Maximum Annual Debt Service on Series 2005 Bonds is $1,529,496 [$23,925,509 — (($23,925,509 , $37,881,570) x $19,181,273)) - $1,753,403 = $10,057,462 $10,057A 4,05 2,483,494 The ability of the City to appropriate Non -Ad Valorem Revenues in sufficient amounts to pay the principal of and the interest on the Series 2005 Bonds is subject to a variety of factors, including the responsibility to provide essential governmental services, and the obligation of the City to have a balanced budget. No representation is being made by the City that any particular Non -Ad Valorem Revenue sources will be available for future years, or if available, will be budgeted to pay debt service on the Series 2005 Bonds. For further information regarding Non -Ad Valorem Revenues and liabilities and expenditures of the City, reference is made to Appendix C attached hereto. Continued consistent receipt of Non -Ad Valorem Revenues is dependent upon a variety of factors, including formulas specified under Florida law for the distribution of certain of such funds which take into consideration the ratio of residents in the City to total County residents. More rapid population growth in the unincorporated areas of Broward County or in other incorporated areas in Broward County as compared to population growth within the City limits could have an adverse effect on certain Non -Ad Valorem Revenues of the City. The amounts and availability of any of the Non -Ad Valorem Revenues to the City are also subject to change, including reduction or elimination by change of State law or changes in the facts or circumstances according to which certain of the Non -Ad Valorem Revenues are allocated. In addition, the amount of certain of the Non -Ad Valorem Revenues collected by the City is directly related to the general economy of the City, Accordingly, adverse economic conditions could have a material adverse effect on the amount of Non -Ad Valorem Revenues collected by fOR946273;31 13 the City. The City may also pledge certain of the Non -Ad Valorem Revenues to future obligations that it issues. Such Non -Ad Valorem Revenues would be required to be applied to such obligations prior to paying the principal of and interest on the Series 2005 Bonds. I FLORIDA CONSTITUTIONAL AMENDMENTS General The Series 2005 Bonds are secured by the City's covenant to budget and appropriate Non -Ad Valorem Revenues as described herein, and are not payable from ad valorem taxation, However, the ability of the City to pay the Series 2005 Bonds is subject to a variety of factors, including the obligations of the City to provide governmental services and the provisions of Florida law which require the City to have a balanced budget. Although the Series 2005 Bonds are not payable from ad valorem taxation, approximately 37% of general fund revenues for the City's fiscal year ended September 30, 2004 come from ad valorem taxes. To the extent that the future collection of ad valorem tax revenues or Non -Ad Valorem Revenues is adversely affected, a larger portion of Non -Ad Valorem Revenues would be required to balance the budget and provide governmental services. Save Our Homes Amendment In 1992, the voters of the State of Florida amended Article VII, Section 4 of the Florida Constitution to modify the manner in which homesteads are assessed for purposes of ad valorem taxation. The amendment provides that, in each year, the change in assessments will not exceed the lower of (i) three percent (3 %) of the assessment for the prior year, or (ii) the percentage change in the Consumer Price Index. Such amendment also provides that after any change in ownership, as provided by general law, homestead property shall be assessed at just value as of January I of the following year and that new homestead property shall be assessed at just value as of January I of the year following the establishment of the homestead. I The effective date of the Save Our Homes Amendment was January 15, 1993, and the base year for determining compliance with the restrictions is 1994. The 1995 tax roll year was the first year such limitations were effective. Limitation on State Revenues Amendment As part of the November 8, 1994 general election, Florida voters approved an amendment to Article VII, Section I(e) of the Florida Constitution, which is commonly referred to as the "Limitation on State Revenues Amendment." This amendment provides that state revenues collected for any fiscal year shall be limited to state revenues allowed under the amendment for the prior fiscal year plus an adjustment for growth. Growth is defined as an amount equal to the average annual rate of growth in Florida personal income over the most recent twenty quarters times the state revenues allowed under the amendment for the piior fiscal year. State revenues collected for any fiscal year in excess of this limitation are required to be transferred to the budget stabilization fund until the fund reaches ten percent (10%) of the General Revenue Fund, and thereafter is required to be refunded to taxpayers as provided by general law. The limitation on state revenues imposed by the amendment may be increased by the Legislature by a two-thirds vote in each house, The term "state revenues", as used in the amendment, means tayes, fees, licenses, and charges for services imposed by the Legislature on individuals, businesses, or agencies outside state government. However, the term 11state revenues" does not include: (1) revenues that are necessary to meet the requirements set forth in documents authorizing the issuance of bonds by the State; (2) revenues that are used to provide matching funds for the federal Medicaid program with the exception of the revenues used to support the Public Medical Assistance Trust Fund or its successor program and with the exception of State matching funds used to fund elective expansion made after July 1, 1994; (3) proceeds from the State lottery return as prizes; (4) receipts of the Florida Hurricane Catastrophe Fund; (5) balances carried forward from prior fiscal years; (6) taxes, licenses, fees and charges for services imposed by local, regional, or school district governing bodies, or (7) revenue from taxes, licenses, fees and charges for services required to be imposed by any amendment or revision to the Florida Constitution after July 1, 1994. The amendment took effect on January 1, 1995, and was to first be applicable to State fiscal year 1995-1996. JOR94627313) 14 To the extent that Non -Ad Valorem Revenues include revenues from the State which are subject to, and limited by, the amendment, the future distribution of increases in such State revenues to the City may be adversely affected by the amendment. Effect of Hurricanes On October 24, 2005, the City was impacted by Hurricane Wilma. The City is unaware of any significant damage to City owned assets as a result of such hurricane that is not covered by insurance. The City believes there will be no adverse effect on the amount or timing of its receipt of non -ad valorem revenues due to such hurricane. LITIGATION There is no pending litigation restraining or enjoining the issuance or delivery of the Series 2005 Bonds or questioning or affecting the validity of the Series 2005 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 Conunission 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 2005 Bonds in accordance with the provisions of the Resolution and the laws of the State of Florida or to receive and pledge the Non -Ad Valorem Revenues as provided in the Resolution. On March 1, 2005, the City received an order from the Circuit Court of Broward County to refund to the residents of the City a special assessment levied by the City for the years 1997 through 1999 for emergency medial transport in the amount of $3,717,360 and to pay the costs of the plaintiffs attorney. The City has recorded as a special itern a loss contingency accrual for the total amount of the refund. The City has appealed this order. For additional information concerning this litigation please refer to Note 13 in APPENDIX C hereto. LEGAL MATTERS Certain legal matters incident to the validity of the Series 2005 Bonds and the issuance thereof by the City are subject to the approval of Bryant Miller & Olive P.A., Orlando, Florida, Bond Counsel, whose approving opinion will be available at the time of delivery of the Series 2005 Bonds. Certain legal matters will be passed upon for the City by Goren, Cherof, Doody & Ezrol, P.A., City Attorney, and by Akerman, Senterfitt, Orlando, Florida, Disclosure Counsel. The proposed text of the opinion of Bond Counsel is set forth as "APPENDIX E - Form of Opinion of Bond Counsel" attached hereto. 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 opinion subsequerit to its date. Bond Counsel has not been engaged to, nor has it undertaken to, review (1) the accuracy, completeness or sufficiency of this Official Statement or any other offering material relating to the Series 2005 Bonds; provided, however, that Bond Counsel will render an opinion to the underwriter of the Series 2005 Bonds relating to the accuracy of certain statements contained herein and under the heading "TAX MATTERS" and certain statements which summarize provisions of the Resolution and the Series 2005 Bonds, Or (2) the compliance with any federal or state securities law with regard to the sale or distribution of the Series 2005 Bonds. Regarding this Official Statement, the City Attorney will render an opinion only as to the accuracy and sufficiency of the information set forth herein regarding legal matters relating to the City. 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 2005 Bonds in order that interest on the Series 2005 Bonds will be and remain excluded from gross income for purposes of federal income taxation. Non-compliance may cause interest on the Series 2005 Bonds to be included in federal gross income retroactive to the date of JOR94627313) 15 issuance of the Series 2005 Bonds, regardless of the date on which such non-compliance occurs or is ascertained. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2005 Bonds and the other amounts are to be invested and require that certain 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 such requirements in order to maintain the exclusion from gross income for purposes of federal income taxation of the interest on the Series 2005 Bonds. In the opinion of Bond Counsel, assuming compliance with the aforementioned covenants, under existing statutes, regulations and judicial decisions, interest on the Series 2005 Bonds is excluded from gross income for purposes of federal income taxation and interest on the Series 2005 Bonds is not an itern of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, interest on the Series 2005 Bonds may be subject to the alternative minimum tax when any Series 2005 Bond is held by a corporation. The alternative rninimum taxable income of a corporation must be increased by 75% of the excess of such corporation's adjusted current earnings over its alternative minimum taxable income (before this adjustment and the alternative tax net operating loss deduction). "Adjusted current earnings" will include interest on the Series 2005 Bonds, In the opinion of Bond Counsel, the Series 2005 Bonds are, under existing laws and regulations, also exempt from intangible taxes imposed pursuant to Chapter 199, Florida Statutes. Except as described above, Bond Counsel expresses no opinion regarding other federal tax consequences resulting from ownership of, receipt or accrual of interest on, or disposition of the Series 2005 Bonds. Prospective purchasers of the Series 2005 Bonds should be aware that (i) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, Section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15% of the sum of certain items, including interest on the Series 2005 Bonds; (ii) interest on the Series 2005 Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code; (iii ) passive investments income, including interest on the Series 2005 Bonds, may be subject to federal income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter S corporations is passive investment income; and (iv) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in de . termining the taxability of such benefits, receipts or accruals of interest on the Series 2005 Bonds. Other provisions of the Code may give rise to adverse federal income tax consequences to particular Series 2005 Bondholders. Holders of the Series 2005 Bonds should consult their own tax advisors with respect to the tax consequences to them of owning the Series 2005 Bonds. 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 2005 Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alterations of federal tax consequences may have affected the market value of obligations similar to the Series 2005 Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of the Series 2005 Bonds and their market value, No assurance can be given that additional legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Series 2005 Bonds. Tax Treatment of Original Issue Discount Under the Code, the difference between the maturity amounts of the Series 2005 Bonds maturing on October I in the years _, - and, - (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 price a substantial amount of the Series 2005 Bonds of the same maturity was sold is "original issue discount." Original issue discount will accrue over the term of such Discount Bonds at a constant interest rate compounded periodically. A purchaser who acquires such Discount Bonds in the initial offering at a price equal to the initial offering price thereof to the public will be treated as receiving an amount of interest excludable from gross income for Federal income tax purposes equal to the original issue discount accruing during the period he or she holds such Discount Bonds, and will increase his or her adjusted basis in such Discount Bonds by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or other disposition of such Discount Bonds. The Federal income tax consequences of the purchase, ownership and redemption, sale or other disposition of the Discount Bonds which are not purchased in the initial offering at the (OR94627313 � 16 initial offering price may be determined according to rules which differ from those 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 the Discount Bonds and with respect to the state and local tax consequences of owning and disposing of such Discount Bonds. Tax Treatment of Bond Premium The difference between the principal amount of the Series 2005 Bonds maturing in years through (collectively, the "Pren-durn 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 price a substantial amount of such Premium Bonds of the same maturity was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for Federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each of the Premium Bonds which term ends on the earlier of the maturity or call date for each of the Premium Bonds which minimizes the yield on said Premium Bonds to the purchaser. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering to the public at the initial offering price is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds. UNDERWRITING The under,,witer of the Series 2005 Bonds is RBC Dain Rauscher Inc. doing business under the trade name RBC Capital Markets, (the "Underwriter") has agreed, subject to certain conditions, to purchase the Series 2005 Bonds from the City at a purchase price of $ ($ original par amount, less Underwriter's discount of $ and less net original issue discount of ). The Underwriter's obligation is subject to certain conditions precedent, and it will be obligated to purchase all of the Series 2005 Bonds if any Series 2005 Bonds are purchased. The Series 2005 Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2005 Bonds into investment trusts) at prices lower than the public offering price, and such public offering prices may be changed from time to time by the Underwriter. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. INVESTMENT POLICY The City investment policy applies to all the funds held by the City, with the exception of Pension Fund assets and Funds whose uses are restricted by debt covenants, prior contracts, legal, regulatory or other constraints. The authority to manage the City's investment program is granted to the City Manager, responsibility for operation is delegated to the Director of Financial Services. Permitted investments of the City funds pursuant to the City investment policy include the following: The Florida Local Government Surplus Trust Fund (administered by the State Board of Administration and commonly referred to as the "SBA"). 2. Direct obligations of the U.S. Government which include but are not limited to Treasury Bills, Treasury Notes, Treasury Bonds and Treasury Strips. Obligations guaranteed by the U.S. Government as to principal and interest which include, but are not limited to, Government National Mortgage Association (GNMA), Farmers Home Administration (FmHA), Small Business Administration (SBA), General Services Administration (OR94627313) 17 (GSA), Federal Housing Administration (FHA), Housing and Urban Development (HUD), Tennessee Valley Authority (TVA). 4. Time deposits and savings accounts in banks and savings and loan associations, under the laws of Florida and the United States, doing business in and situated in -state and collateralized as provided for by Florida Statutes Chapter 280. 5. Securities issued and guaranteed by a federally sponsored corporation which are backed by, or the entity is capable of borrowing from, the U.S. Treasury. These securities carry the "implied guarantee" of the U.S. Government and include the Federal Farm Credit Banks (FFCB), Federal Home Loan Bank Mortgage Corporation (FHLMC) (participation certificates), Federal National Mortgage Association (FNMA), Federal Home Loan Bank (FHLB) or its banks. 6. Commercial Paper of any United States corporation provided such notes have a rating of A I/P I by at least two of the five rating agencies. 7. Bankers Acceptance eligible for purchase by the Federal Reserve System issued by banks having a Moody's or Standard and Poor's commercial paper rating of at least A UP I � S. Securities and Exchange Comrriission registered money market funds shares that are open-ended, no-load funds registered under the Federal Investment Company Act of 1940 Rule 2a-7 - Money Markeffunds, The City may revise the aforementioned investment policy from time to time. The City is currently reviewing a revision to the investment policy that would permit capital project funds, debt service and debt service reserve funds to be invested in repurchase agreements or forward delivery agreements with any financial institution or entity, government securities dealer, insurance company, financial corporation or similar organization (a "Provider") whose unsecured debt is rated, or with a wholly -owned subsidiary Provider whose obligations are guaranteed, not less than "A- 1 " by S&P and "P- I " by Moody's and investment agreements with a Provider, which has an unsecured, uninsured and unguaranteed credit rating/or claims -paying ability rating or whose obligations are guaranteed by a parent corporation or holding company which has an unsecured, uninsured and unguaranteed credit rating of "AA" or better by S&P or "Aa3" by Moody's. Amounts on deposit in the various funds and accounts created pursuant to the Resolution will be invested as provided in the Resolution; see Appendix B hereto and "SECURITY FOR THE SERIES 2005 BONDS Investments" herein. RATINGS Moody's Investors Service, Inc. ("Moody's"), Fitch, Inc. ("Fitch") and Standard and Poor's, a division of the McGraw Hill Companies, Inc. ("S&P") are expected to assign ratings of "Aaa" "AAA" and "AAA", respectively, to the Series 2005 Bonds, with the understanding that, upon delivery of the Series 2005 Bonds a municipal bond new issue insurance policy will be issued by . Moody's has assigned an underlying rating of A2 and Fitch has assigned an underlying rating of A+ and S&P has assigned an underlying rating of A+ to the Series 2005 Bonds if the Series 2005 Bonds were to be issued without credit enhancement. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. 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 2005 Bonds. FINANCIAL STATEMENTS Excerpts from the City's Comprehensive Annual Financial Report for its fiscal year ended September 30, 2004 appear in APPENDIX C hereto. Certain of the information contained in APPENDIX C has been audited by Grau & Co., P.A., Miami, Florida (the "Independent Auditor") as stated in their report included as part of JOR94627313) 18 APPENDIX C hereto. Such financial statements are being included as a publicly available document and consent of the auditors to their inclusion herein was not obtained. CONTINUING DISCLOSURE The City has agreed and undertaken for the benefit of Series 2005 Bondholders and in order to assist the Underwriter in complying with the continuing disclosure requirements of Securities and Exchange Commission ("S.E.C.") Rule l5c2-12 (the "Rule"), to provide certain financial information and operating data relating to the City, the Acquired System and the Series 2005 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 2005 Bonds remain outstanding under the Resolution, In order to provide continuing disclosure with respect to the Series 2005 Bonds in accordance with the Rule, the City will enter into a Disclosure Dissemination Agent Agreement ("Continuing Disclosure Agreement") for the benefit of the Holders of the Series 2005 Bonds with Digital Assurance Certification, L.L.C. ("DAC"), under which the City will designate DAC as Disclosure Dissemination Agent. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in APPENDIX F hereto. With respect to the Series 2005 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 has never failed to timely comply with an undertaking pursuant to the provisions of the Rule. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Pursuant to Section 5 17.05 1, Florida Statutes, no person may directly or indirectly offer or sell securities of the City except by an offering circular containing full and fair disclosure of all defaults as to principal or interest on its obligations since December 31, 1975, as provided by rule of the Florida Department of Banking and Finance (the "Department"). Pursuant to Rule 3E-4003, Florida Administrative Code, the Department has required the disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee or receiver has been appointed over the assets of the City, and certain additional financial information, unless the City believes in good faith that such information would not be considered material by a reasonable investor. The City is not and has not been in default on any bond issued since December 31, 1975 which would be considered material by a reasonable investor in the Series 2005 Bonds. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2005 Bonds upon an event of default under the Resolution and any policy of bond 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 2005 Bonds and any policy of bond 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 2005 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 imp`6"sed by banknip'tcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. FINANCIAL ADVISOR Kirkpatrick, Pettis', a Division'of D.A. Davidson & Co. Fixed Income Capital Markets, Orlando, Florida, is serving as Financial Advisor to the City with respect to the issuance and sale of the Series 2005 Bonds. 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 2005 Bonds. Payment of certain of the fees of such professionals and a discount to the Underwriter are each contingent upon the issuance of the Series 2005 Bonds. I (OR94627313) 19 FORWARD -LOOKING STATEMENTS This Official Statement contains certain "forward -looking statements" concerning the City's operations, performance and financial condition, including 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. 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. The information contained above is neither guaranteed as to accuracy or completeness nor to be construed as a representation by the City or the Underwriter. 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. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or the Holders of any of the Series 2005 Bonds. CERTIFICATE AS TO OFFICIAL STATEMENT Concurrently with the delivery of the Series 2005 Bonds, the City will furnish a certificate of authorized officers of the City substantially to the effect that, to the best of their knowledge, this Official Statement (subject to normal exceptions) as of its date and as of the date of the delivery of the Series 2005 Bonds, does not contain an untrue statement of a material fact and does not omit any material fact which should be included therein for the purpose for which the Official Statement is to be used, or which is necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, CITY OF TAMARAC, FLORIDA By: Miber, Mayor Je Schreiber, Mayor By: ( . /;7e,11,,, Jefft4t Miffer, City Manager fOR946273;3) 20 APPENDIX A City of Tamarac, Florida General Information. {OR94627313 ) fl 1 1 1 n 1 (OR946273;3 ) APPENDIX B The Resolution APPENDIX C Basic Financial Statements and Independent Auditors' Report for the Fiscal Year Ended September 30, 2004 QR946273;3 ) 1 1 C L f OR946273;3 ) APPENDIX D Specimen Financial Guaranty Insurance Policy APPENDIX E Form of Opinion of Bond Counsel { OR946273;3 } I E L 1 1 {OR94627313 } APPENDIX F Form of Continuing Disclosure Agreement CERTIFICATE AS TO PUBLIC MEETINGS AND NO CONFLICT OF INTEREST STATE OF FLORIDA: COUNTY OF BROWARD: Each of the undersigned members of the Commission of the City of Tamarac, Florida (the "Issuer"), recognizing that the purchasers of the not to exceed $15,000,000 City of Tamarac, Florida Capital Improvement Revenue Bonds, Series 2005 will have purchased said Bonds in reliance upon fl-ds Certificate, DOES HEREBY CERTIFY: (1) that he or she has no personal knowledge that any two or more members of the Commission meeting together, reached any prior conclusion as to whether the actions taken by the Commission with respect to said Bonds, the security therefor and the application of the proceeds thereof, should or should not be taken by the Commission or should or should not be recommended as an action to be taken or not to be taken by the Commission, except at public meetings of the Commission held after due notice to the public was given in the ordinary manner required by law and custom of the Commission, and (2) that he or she does not have or hold any employment or contractual relationship with any business entity which is purchasing the Bonds from the Issuer. IN WITNESS WHEREOF, we have hereunto affixed our official signatures this 23rd day of November, 2005. Avg ---A�AML [441N2ZfflM%V,D0CvU A481A COMMITMENT TO ISSUE A FINANCIAL GUARANTY INSURANCE POLICY Application No.: 2005-010399-001 Sale Date: November, 2005 (T) Program Type: Negotiated DP Re: $15,000,000 (Est.) City of Tamarac, Florida, Capital Improvement Revenue Bonds, Series 2005 (the "Obligations") This commitment to issue a financial guaranty insurance policy (the "Commitment") dated November 17, 2005, constitutes an agreement between CITY OF TAMARAC, FLORIDA (the "Applicant") and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under the laws of the State of New York. Based on an approved application dated November 16, 2005, the Insurer agrees, upon satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date or (ii) on the date of delivery of and payment for the Obligations, a financial guaranty insurance policy (the "Policy") for the Obligations, insuring the payment of principal of and interest on the Obligations when due. The issuance of the Policy shall be subject to the following terms and conditions: I - Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of .435% of total debt service, premium rounded to the nearest thousand. The premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 2. The Obligations shall have received the unqualified opinion of bond counsel with respect to the tax-exempt status of interest on the Obligations. 3. There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the Obligations or in the final official statement or other similar document, including the financial statements included therein. 4. There shall have been no material adverse change in any information submitted to the Insurer as a part of the application or subsequently submitted to be a part of the application to the Insurer. 5. No event shall have occurred which would allow any underwriter or any other purchaser of the Obligations not to be required to purchase the Obligations at closing, 6. A Statement of Insurance satisfactory to the Insurer shall be printed on the Obligations. 7. Prior to the delivery of and payment for the Obligations, none of the information or documents submitted as a part of the application to the Insurer shall be determined to contain any untrue or misleading statement of a material fact or fail to state a material fact required to be stated therein or necessary in order to make the statements contained therein not misleading. A0181A 8. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. 9. The Insurer's "Payments Under the Policy/Other Required Provisions" (see attached) shall be included in the authorizing document. 10. The Applicant agrees not to use the Insurer's name in any public document including, without limitation, a press release or presentation, announcement or forum without the Insurer's prior consent; provided however, such prohibition on the use of the Insurer's name shall not relate to the use of the Insurer's standard approved form of disclosure in public documents issued in connection with the current Obligations to be issued in accordance with the terms of the Commitment; and provided further such prohibition shall not apply to the use of the Insurer's name in order to comply with public notice, public meeting or public reporting requirements. 11. This Commitment may be signed in counterpart by the parties hereto. 12. Compliance with the Insurer's General Document Provisions (see attached), 13. Compliance with the Insurer's List of Permissible Investments for Indentured Funds (see attached). 14. Acceptable anti -dilution test. Dated this 17th day of November, 2005. MBIA Ins Corpor4iio' B y Assistant Secretary CITY OF TAMARAC, FLORIDA By: Title: A0181A GENERAL DOCUMENT PROVISIONS A. Notice to the Insure The basic legal documents must provide that any notices required to be given by any party should also be given to the Insurer, Attn: Insured Portfolio Management. B. Amendment - s, In the basic legal document, there are usually two methods of amendment. The first, which typically does not require the consent of the bondholders, is for amendments which Will CUre ambiguities, correct formal defects or add to the security of the financing. The second, in which bondholder consent is a prerequisite, covers the rnore substantive types of amendments. For all financings, the Insurer must be given notice of any amendments that are of the first type and the Insurer's consent must be required for all amendments of the second type. All documents illust contain a provision which requires copies of any amendments to such documents which are consented to by the Insurer to be sent to Standard & Poor's. C, Supplemental Legal Qocument, If the basic legal document provides for a Supplemental legal document to be issued for reasons other than (1) a refunding to obtain savings; or (2) the issuance of additional bonds pursuant to an additional bonds test, there must be a requirement that the Insurer's consent also be obtained prior to the issuance of any additional bonds and/or execution of such Supplemental legal document. D. Events of Default and Remedies. All documents normally contain provisions which define the events of default and which prescribe the remedies that may be exercised upon the occurrence of an event of default. At a minimum, events of default will be defined as follows: I - the issuer/obligor fails to pay principal when due; 2. the issuer/obligor fails to pay interest when due; 3. the iSSUer/obligor fails to observe any other covenant or condition of the document and such failure continues for 30 days and 4. the iSSLier/obligor declares bankruptcy. The Insurer, acting alone, shall have the right to direct all rernedies in the event of a default. The 111SUrer shall be recognized as the registered owner of each bond which it insures for the purposes of exercising all rights and privileges available to bondholders. For bonds which it insures, the Insurer shall have the right to institute any suit, action, or proceeding at law or in equity under the sarne terms as a bondholder in accordance with applicable provisions of the governing documents, Other than the usual redemption provisions, any acceleration of principal payments must be subject to the Insurer's prior written consent, E. Defeasance requires the deposit of: I - Cash 2. U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series -- " SLGs") 3. Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities 4. Resolution Funding Corp. (REFCORP) Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. 5. Pre -refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. if however, tile issue is only rated by S&P (i.e., there is no Moody's rating), then the pre -refunded bonds must have been pre -refunded with cash, direct U.S. or U.S, guaranteed obligations, or AAA rated pre -refunded municipals to satisfy this condition. A01BIA Obligations issued by the following agencies which are backed by the full faith and credit of the U.S. a. —U.S. Export-import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership b. Farmers Home Administration (FmHA) Certificates of beneficial ownership c. Federal Financing Bank d. general Services Administration Participation certificates e. U.S. laritime Administration Guaranteed Title XI financing f' e n t (H U D) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U-S. Public Housing Notes and Bonds - US. government guaranteed public housing notes and bonds The Insurer shall be provided with an opinion of counsel acceptable to the Insurer that the Obligations have been legally defeased and that the escrow agreement establishing such defeasance operates to legally defease the Obligations within the meaning of the Indenture and the Supplemental Indenture relating to the Obligations, In addition, the Insurer will be entitled to receive (i) 15 business days notice of any advance refunding of the Obligations and 00 an accountant's report with respect to the sufficiency of the amounts deposited in escrow to defease the Obligations. F. Aqents.- I - In transactions where there is an agent/enhancer (other than the Insurer), the trustee, tender agent (if any), and paying agent (if any) must be commercial banks with trust powers. 2. The remarketing agent must have trust powers if they are responsible for holding moneys or receiving bonds. As an alternative, the docurnents may provide that if the remarketing agent is removed, resigns or is unable to perform its duties, the trustee must assume the responsibilities of remarketing agent until a substitute acceptable to the InSUrer is appointed, A1481A LIST OF PERMISSIBLE INVESTMENTS FOR INDENTURED FUNDS A. Direct obligations of the United States of America (including obligations issued or held in book -entry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, B. Bonds, debentures, notes or other evidence of indebtedness issued Or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself). I . ort-1 V�- . �Ex 0 �Im !®rtBanA (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership 2. Farmers Home Administrat . (FmHA) ion Certificates of beneficial ownership 3. Federal Financing Bank 4. Federal Housi__ Administrati n Debentures (FHA) 5- General Services Administration Participation certificates 6. LGio_vernment National M0119499��� (GNMA or "Ginnie Mae") GNMA - guaranteed mortgage -backed bonds GNMA - guaranteed pass -through obligations (not aog�blq_far certain cash -flow se�iLsitLve issues.) 7. U�S. Maritime AdministratiAn Guaranteed Title X1 financing 8. U , ' Department of Housing and Urban Developrnent (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non -full faith and credit U.S. government agencies (stripped securities are only permitted if they have been stripped by the agency itself); Fede Ll Home Loan Bank System Senior debt obligations 2. Federal Home --- 1kA___ e Co (FHLMC or "Freddie Mae") Participation Certificates Senior debt obligations Federal National NiO_��� (FNMA or "Fannie Mae") ge Mortgage -backed securities and senior debt obligations R� �Iution �Fund�inCorp. (REFCORP) obligations A0181A Farm :rqdit_System Consolidated systemwide bonds and notes D. Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAArn-G; AAA-m; or AA-m and if rated by Moody's rated Aaa, Aa I or Aa2. E. Certificates of deposit secured at all times by collateral described in (A) and/or (B) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. F. Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC, including BIF and SAIF. G- Investment Agreements, including GIC's, Forward Purchase Agreements and Reserve Fund Put Agreements acceptable to MBIA (Investment Agreement criteria is available upon request). H. Commercial paper rated, at the time of purchase, "Prime - I" by Moody's and "A- I" or better by S&P. 1. Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two highest rating categories assigned by such agencies, J. Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - V or "AY or better by Moody's and "A- 1 11 or "A" or better by S&P. K. Repurchase Agreements for 30 days or less must follow the following criteria. Repurchase Agreements which exceed 30 days must be acceptable to MBIA (criteria available upon request) Repurchase agreements provide for the transfer of securities from a dealer bank or securities firin (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date. Repos must be between or securities firm a. PrimaU dealers on the Federal Reserve reporting dealer list which are rated A or better by Standard & Poor's Corporation and Moody's Investor Services, or b. RaRh rated "A" or above by Standard & Poor's Corporation and Moody's Investor Services. a. Securities which are acceptLble for transfer are., (])Direct U.S. governments, or (2) Federal agencies backed by the full faith and credit of the U.S. government (and FNMA & FHLMQ b. The t c. The collateral must be delivered to the municipal entity, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is Supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities). d. Valuation of Collateral AOIBIA (1) The securities must be valued weeklY,_D��� at current market price plus accrued interest (a) The value of collateral must be equal to 104% of the arnount of cash transferred by the municipal entity to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral slips below 104% of the value of the cash transferred by municipality, then additional cash and/or acceptable Securities must be transferred, If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal 105%, 3. Legal a. Repo meets guidelines under state law for legal investment of public funds, Additional Note 0) There is no list of permitted investments for non -indentured funds, Your own credit judgment and the relevant circumstances (e.g., amount of investment and timing of investment) should dictate what is permissible. (ii) Any state administered pool investment fund in which the issuer is statutorily permitted or required to invest will be deemed a permitted investment, (iii) DSRF investments should be valued at fair market value and marked to market at least once per year. DSRF investments may not have maturities extending beyond 5 years, except for Investment Agreements approved by the Insurer, FA I I =1 K� I COMMITMENT TO ISSUE A DEBT SERVICE RESERVE SURETY BOND ApplicationNo.: 2005-010399-002 Sale Date: November, 2005 (T) Program Type: Negotiated DP RE: $1,500,000 (Est.) Debt Service Reserve Fund for the $15,000,000 (Est,) City of Tamarac, Florida, Capital Improvement Revenue Bonds, Series 2005 (the "Obligations") This commitment to issue a debt service reserve surety bond (the "Commitment") constitutes an agreement between CITY OF TAMARAC, FLORIDA (the "Applicant"), and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under the laws of the State of New York. Based on an approved application dated November 16, 2005, the Insurer agrees, upon satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date or (ii) on the date of delivery of and payment for the Obligations, a debt service reserve surety bond (the "Surety Bond"), for the Obligations, guaranteeing the payment to the issuer of up to $1,500,000 (Est.) on the Obligations. The issuance of the Surety Bond shall be subject to the following terms and conditions: 1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of 2.0% of total Surety Bond amount, premium rounded to the nearest thousand. 'rhe premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 2. The Obligations shall have received the unqualified opinion of bond counsel with respect to the tax-exempt status of interest on the Obligations. 3, There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the Obligations or in the final official statement or other similar document, including the financial statements included therein. 4. There shall have been no material adverse change in any information submitted to the Insurer as a part of the Application or subsequently submitted to be a part of the Application to the Insurer, 5. No event shall have occurred which would allow any underwriter or any other purchaser of the Obligations not to be required to purchase the Obligations at closing. 6. Prior to the delivery of and payment for the Obligations, none of the information or documents submitted as a part of the Application to the Insurer shall be determined to contain any untrue or misleading statement of a material fact or fail to state a material fact required to be stated therein or necessary in order to make the statements contained therein not misleading. 7. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. 8. This Commitment may be signed in counterpart by the parties hereto. A14BIA 9. Compliance with the Insurer's Term Sheet for Debt Service Reserve Fund Program (see Attachment A). Dated this 17th day of November, 2005. MBIA LOW CITY OF TAMARAC, FLORIDA By: Title: (Attachment A) TERM SHEET FOR DEBT SERVICE RESERVE FUND PROGRAM Intri-viiic-tinn The Insurer can, under certain circumstances, issue a debt service reserve fund surety bond (the "Surety Bond"), to be used as a replacement for a cash funded reserve, in any amount up to the full amount of the debt service reserve fund requirement. 'rhe Insurer requires that the issuer and/or the underlying obligor of the bonds enter into a Financial Guaranty Agreement with the Insurer providing for, among other things, the reimbursement to the Insurer of amounts drawn under the Surety Bond. A sample draft of such an agreement is attached. The Insurer will undertake its standard credit analysis of the issuer and/or obligor which may result in requests for modifications of the structure or certain provisions of the bond documents. These changes would be in addition to the specific changes required in all financings where a Surety Bond will be issued (see Required Terms below). The Surety Bond may be Structured to provide debt service reserve fund replacement for the current issue of bonds and any other debt issued on a parity therewith, However, in all cases, the Surety Bond will expire on the final maturity date of the current issue. Me program criteria are subject to change by the Insurer. General Terms Provision should be made in the bond documents for the creation of a debt service reserve fund and there should be a requirement to maintain that fund at a certain level. It should also be provided that this requirement may be satisfied by cash or a qualified surety bond or a combination of these two (Note: A "qualified surety bond" means a surety bond issued by an insurance company rated in the highest rating category by Standard & Poor's and Moody's and, if rated by A.M. Best & Company, must also be rated in the highest rating, category by A.M. Best & Company). In those instances where the issuance of parity debt will cause the debt service reserve fund requirement to increase, the Insurer requires that at the time of issuance of such parity debt, either cash or a qualified surety bond be provided so that the increased requirement will be satisfied. In any event where the debt service reserve fund contains both an the Insurer Surety Bond and cash, the Insurer requires that the cash be drawn down completely before any demand is made on the Surety Bond. In any event where the debt service reserve fund contains a surety bond from another entity qnd an INSURER Surety Bond, the documents should provide for a pro-rata draw on each of the surety bonds. With regard to replenishment, any available monies, as defined in the Indenture or Resolution, should be used first to reimburse the Insurer, thereby reinstating the Surety Bond, and second to replenish the cash in the debt service reserve fund. The rate covenant should be expanded so that, in addition to all other coverage requirements, there are sufficient monies available to pay all amounts owed to the Insurer under the terms of the Financial Guaranty Agreement. If the documents provide for the issuance of additional bonds that do not share a common reserve fund with the current issue, the Insurer can issue a surety bond that is, by its terms, AMBIA available only as a reserve for the current issue. In such cases, the Insurer would require a covenant that any revenues available for debt service must be distributed between the current issue and any additional bonds on a pro rata basis without regard to the existence of a funded debt service reserve or a surety bond. The bond documents should require the Trustee to deliver a Demand For Payment (see attached form) at least three days prior to the date on which funds are required. Required Terms With respect to any security interest in collateral granted to the bondholders, the Insurer should be granted that same interest subject only to that of the bondholders. This would apply to existing security, if any, as well as any to be granted in the future. The Insurer should receive an opinion from counsel to the issuer/obligor that the Financial Guaranty Agreement is a legal, valid and binding obligation of the issuer/obligor and is enforceable against the issuer/obligor in accordance with its terms. In general terms, the "flow of funds" would be structured as follows: All gross revenues should be paid in the following order with the priority indicated: (1) expenses of operation and maintenance; (2) debt service on the bonds; (3) reimbursement of amounts advanced by the Insurer under the Surety Bond; (4) reimbursement of cash amounts, if any, drawn from the reserve fund; (5) replenishment of Renewal and Replacement Fund; (6) payment to the Insurer of interest on amounts advanced under the Surety Bond; (7) all other lawful uses, including the debt service payment on any subordinate bonds. Provision must be made for the Insurer to be paid all amounts owed to it under the terms of the Financial Guaranty Agreement or any other documents before the bond documents may be terminated. It will be the responsibility of the trustee/paying agent to maintain adequate records, verified with the Insurer, as to the amount available to be drawn at any given time under the Surety Bond and as to the amounts paid and owing to the Insurer under the terms of the Financial Guaranty Agreement. There may be no optional redemption of bonds or distribution of funds to the issuer and/or the underlying obligor unless all amounts owed to the Insurer under the terms of the Financial Guaranty Agreement or any other documents have been paid in full. 8/12/93 PAYMENTS UNDER THE POLICY/OTHER REQUIRED PROVISIONS A. In the event that� on the second Busirims Day, and again on the Business Day, prior to the payment date on the Obligations, the Paying AgenvTrustee has not received qufficient moneys to pay all principal of and interest on the Obligations due on the second following or following, as the case may be, Business, Day, the Paying AgentTrustee shall immediately notify the Insurer or its designee on the same Bussinms Day by telephone or tele&"ph, confirmed in writing by registered or certified mail, of the amount ofthe deficiency. B. If the deficiency is made up in whole or in part prior to or on the payment date, the Paying AgenVI'rustee shall so notify the Insurer or it: designee. C� In addition, if die Paying Agetiffrustee has notice that any Bondholder has been required to disgorge payments of principal or interest on the Obligations to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payrnent constitutes an avoidable preference to such Bondholder,�Aithrn the meaning of any applicable bankruptcy laws, then die Paying Agent/Trustee shall notify the Insuru or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. D. The Paying AgenvTrustee is hereby irrevocably designated, appointed, directed and authorized to act as attomey-ni-fact for Holders of die Obligations as follows: 1. If and to the extent there is a deficiency in arnounts required to pay interest on the Obligations, the Paying Agentrrrustee shall (a) execute and deliver to U.S. Bank Trust National Association, or itssuccessors under the Policy (the "Insurance Paying AgenVTrustee"), in form satisfactory to the Irmirance Paying Agent/Trustee, an instniment appointing the Insurer as agent forsuch Holders in any legal proceeding related to the payment of such interrst and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (b) receive as designee of the respective I Iolders (and not ws Paying Agent/Trustee) in accordance with the tenor of the Policy payment fi-orn the Insurance Paying Agent/Trustee with respect to the claim for interest so assigrr4 and (c) disburse the same to such respective Holders,; and 2. If and to the extent of a deficiency in amounts required to pay principal of the Obligations, the Paying Agentrl`mstee shall (a) execute arid deliver to the Insurance Paying Agent/Tmstee in form satisfactory to the Insurance Paying AgenuTrustee an instrument appointing the Insurer as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to the lrtsi= of any of the Obligation surrendered to the Insurance Paying AgenvTrustee of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent/Trustee and available for such payment (but such assigrimentshall be delivered only if payment from the Insurance Paying Agent/Trustee is received), (b) receive as designee of the respective Holders (and not as, Paying Agent/Trustee) in accordance with the tenor ofthe Policy payment therefor from the Imsittance Paying AgenuTrustee, and (c) disburse thesame to such Holders. E. Paymentswith respect to claiins for interest on and principal of Obligations disbursed by the Paying Agent/Trustee fi-om proceeds of the Policy shall riot be considered to discharge the obligation of the Issuer with respect to such Obligations, and the Insurer sliall become the owner of such unpaid Obligation and claim for the interest in accordance,,Aidi the tenor of the assignment made to it under the provisions of thissiibsection or otherwise. F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agentfl7rustee hereby agree for the benefit of the Insurer that: I . They recognize that to the extent the Insurer makes payments, directly or indirectly (as by paying through the Paying Agentrriustec), on account of principal of or interest on the Obligations, the Irisurer will be subrogated to the right-, of such Holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in this Indenture and the Obligations; and 2. They will accordingly pay to the Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the fiml paragraph of the Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Indenture and the Obligation, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Obligations to Holders, and will od-ierwise treat the Insurer as the owner of such rights to the arnount of such principal and interest. G. In connection with die issuance of additional Obligatiow%, the Issuer shall deliver to the Tnsurff a copy of die disclosure document, if any, circulated)Nith respect to such additional Obligations. H. Copies of any amendments made to the doe-uments executed in connection with the issuance of the Obligations which are consented to by the Irisurer shall be sent to Standard & Pooes Corporation. 1. The Insurer shall receive notice of the resignation or removal of the Paying AgenvTrustee and the appointment of a successor thereto. J. The Insurer shall receive copies of all notices required to be delivered to Bondholders and, on an annual basis, copies of d-ke Issuer's audited financial statements and Annual Budget. Notice : Any notice that is required to be given to a holder ofthe Obligation or to the Paying Agent/Trustee pursuant to die Indenture shall also be provided to the Irisurer. All notices required to be given to the Insurer under the Indenture shall be in writing and shall be sent by registered or certified mail addressed to NIBIA Insurance Corporation, 113 King Street, Armor&, New York 10504 Attention: Surveillance. K. The Issuer/Obligor agrcLs to reiniburse the Insurer immediately and unconditionally upon demand, to the extent permitted by law, for all reasonable expenses, including attorneys' fees and expenses, incurred by the Insurer in connection with (i) the enforcement by the hist= of the Wsuer's /Obligor's obligations, or the preservation or defense of any rights of the Insurer, under this ResolutiorAndenture and any other document executed in connection with the issuance of the Obligatiows, arid (ii) any consent, amendment waiver or other action Arith respect to the Resolution/Indenture or any related document, whether or not granted or approved, together with interest on all such expenses from and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is less. In addition, the Insurer ruserves the right to charge a fee in connection NNidi its review ofany such consent, amendment or waiver, whether or not granted or approved. 1'. The Issuer/Obligor agrees not to use the Insur&s name in any public document including, without firrutation, a press release or presentation, announcement or forum without the In,,w&s prior consent; provided however, such prohibition on the use of the Insur&s name shall not relate to the use of the hisurees standard approved form of discloswe in public documents issued in connection with the current Obligations to be issued in accordance with the terms of the Commitment; and provided further such pmhibition shall not apply to the use of the Ir.Lsur&s name in order to comply with public notice, public meeting or public reporting requirements. A The Issuer /Obligor shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to wl-iich Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of such Bonds without the prior written consent of NIBIA. Revised 4/04 FINANCIAL GUARANTY AGREEMENT FINANCIAL GUARANFY AGREEMENT made as of [CLOSING DATE], by and between [ISSUER] (the "Issuer") and M­BIA Insurance Corporation (the "Insurer"), organized under the laws of the state of New York. WITNESSETH: WHEREAS, the Issuer has or will issue the Obligations; and WHEREAS, pursuant to the tcn-ns of the Document the Issuer agrees to make certain payments on the Obligations; and VV`HEREAS, the Insurer will issue its Surety Bond, substantially in the form set forth 'in Annex A to this Agreement, guaranteeing certain payments by the Issuer subject to the terms and limitations of the Surety Bond; and VV`HEREAS, to induce the Insurer to issue the Surety Bond, the Issuer has agreed to pay the preniium for the Surety Bond and to reimburse the Insurer for all payments, made by the Insurer under the Surety Bond, all as more fully set forth in this Agreement; and WHEREAS, the Issuer understands that the Insurer expressly requires the delivery of this A&�eement as part of the consideration for the execution by the Insurer of the Surety Bond; and NOW, THEREFORE, in consideration of the premises and of the agreements herein contained and of the execution of the Surety Bond, the Issuer and the Insurer agree as follows: ARTICLE I DEFINITIONS; SURETY BOND Section 1.01. Definitions. The terms which are capitalized herein shall have the meanings specified in Annex B hereto. Section 1.02. S"e Bond. (a) The Insurer will issue the Surety Bond in accordance with and subject to the terms and conditions of the Commitment. (b) The maximum liability of the Insurer under the Surety Bond and the coverage and term thereof shall be subject to and limited by the terms and conditions of the Surety Bond. Section 1.03. Premium. In consideration of the Insurer agreeing to issue the Surety Bond bereunder, the Issuer hereby agrees to pay or cause to be paid the Premium set forth in Annex B hereto. The Premium on the Surety Bond is not reftmdable for any reason. Section 1.04. Certain Other E 2q�ens . The Issuer will pay all reasonable fees and disbursements of the h-isurer's.special counsel related to any modification of this Agreement or the Surety Bond. ARTICLE 11 REIMBURSEMENT AND INDEMNIFICATION OBLIGATIONS OF ISSUER AND SECURITY THEREFOR Section 2.01. Reimbursement for Payments Under the Su Me Bond and Expei-ises-, Indemnification. (a) The Issuer will reimburse the Insurer, within the Reimbursement Period, without demand or notice by the Insurer to the Issuer or any other person, to the extent of each Surety Bond Payment with interest on each Surety Bond Payment from and 'including the date made to the date of the reimbursement at the lesser of the Reimbursement Rate or the maximum rate of interest permitted by then applicable law. (b) The Issuer also agrees to reimburse the Insurer immediately and unconditionally upon demand, to the extent permitted by state law, for all reasonable expenses incurred by the Insurer in coirnection with the Surety Bond and the enforcement by the Insurer of the Issuer's obligations under this Agreement, the Document, and any other docurnent executed in connection with the issuance of the Obligations, together with interest on all such expenses from and including the date incurred to the date of payment at the rate set forth in subsection (a) of this Section 2.01. (c) The Issuer agrees to indemnify the Insurer, to the extent permitted by state law, against any and all liability, claims, loss, costs, damages, fees of attorneys and other expenses which the Insurer may sustain or incur by reason of or in consequence of (i) the failure of the Issuer to perform or comply with the covenants or conditions of this Agreement or (ii) reliance by the Insurer upon representations made by the Issuer or (iii) a default by the Issuer under the terms of the Document or any other documents executed in connection with the issuance of the Obligations. (d) The Issuer agrees that all amounts owing to the Insurer pursuant to Section 1.03 hereof and this Section 2.01 must be paid in full prior to any optional redemption or refunding of the Obligations. (e) All payments made to the Insurer under this Agreement shall be paid in lawful currency of the United States in immediately available fbirds at the hisurees office at 113 King Street, Armonk, New York 10504, Attention: Accounting and Insured Portfolio Management Departments, or at such other place as shall be designated by the hisurer. Section 2.02. Allocation of PM . The hisurer and the Issuer hereby agree that each payment received by the Insurer from or on behalf of the Issuer as a reimbursement to the Insurer as required by Section 2.01 hereof shall be applied by the Insurer first, toward payment of any unpaid premium; second, toward repayment of the aggregate Surety Bond Payments made by the Insurer and not yet repaid, payment of which will reinstate all or a portion of the Surety Bond Coverage to the extent of such repayment (but not to exceed the Surety Bond Limit); and third, upon full reinstatement of the Surety Bond Coverage to the Surety Bond Limit, toward other amounts, including, without limitation, any interest payable with respect to any Surety Bond Payments then due to the bisurer. Section 2.03. Securily for Payments, Instruments of Further Assurance. To the extent� but only to the extent, that the Document or any related indenture, trust agreement, ordinance, resolution, mortgage, security agreement or similar instrument, if any, pledges to the Owners or any trustee therefor, or grants a security interest or lien in or on any collateral, property, revenue or other payments ("Collateral and Revenues") in order to secure the Obligations or provide a source of payment for the Obligations, the Issuer hereby giants to the hisurer a security interest in or lien on, as the case may be, and pledges to the Insurer all such Collateral and Revenues as security for payment of all amounts due hereunder and under the Document or any other document executed in connection with the issuance of the Obligations, which security interest, lien and/or pledge created or granted under this Section 2.03 shall be subordinate only to the interests of the Owners and any trustee therefor in such Collateral and Revenues, except as otherwise provided. The Issuer agrees that it will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all financing staternents, if applicable, and all other further insturnents as may be required by law or as shall reasonably be requested by the Insurer for the perfection of the security interest, if any, granted under this Section 2.03 and for the preservation and protection of all rights of the Insurer under this Section 2.03. Section 2.04. Unconditional Obligati . The obligations hereunder are absolute and unconditional and will be paid or perfortned strictly in accordance with this Agreement, subject to the limitations of the Document, irrespective of (a) any lack of validity or enforceability of, or any amendment or other modification of, or waiver with respect to the Obligations, the Document or any other document executed in connection with the issuance of the Obligations; or (b) any exchange, release or nonperfection of any security interest in property securing the Obligations or this Agretement or any obligations hereunder; or (c) any circumstances that might otherwise constitute a defense available to, or discharge of, the Issuer with respect to the Obligations, the Document or any other document executed in connection with the issuance of the Obligations; or (d) whether or not such obligations are contingent or matured, disputed or undisputed, liquidated or unliquidated. Section 2.05. -insurer's Riuhts. The Issuer shall repay the Insurer to the extent of payments made and expenses incurred by the Insurer in connection with the Obligations and this Agreement. The obligation of the Issuer to repay such amounts shall be subordinate only to the rights of the Owners to receive regularly scheduled principal and interest on the Obligations, Section 2.06. On-Goinp, Information Obligations of Issuer. (a) Quarterly Rq?orts. The Issuer will provide to the Insurer within 45 days of the close of each quarter interim financial statements covering all fund balances under the Document a statement of operations (income statement), balance sheet and changes in fund balances. These statements need not be audited by an independent certified public accountant, but if any audited statements are produced, they must be provided to the Insurer, (b) Annual Reports. The Issuer will provide to the Insurer annual financial statements audited by an independent certified public accountant within 90 days of the end of each fiscal year; (c) Access to Facilities, Books and Records. The Issuer will grant the Insurer reasonable access to the project financed by the Obligations and will make available to the Insurer, at reasonable times and upon reasonable notice all books and records relative to the project financed by the Obligations; and (d) Com I Insurer a certificate pliance Certificate. On an annual bas's the Issuer will provide to the confirraing compliance with all covenants and obligations hereunder and under the Revenue Agreement, the Docurrient or any other document executed in connection with the issuance of the Obligations. ARTICLE III AMENDMENTS TO DOCUMENT So long as this Agreement is in effect, the Issuer agrees that it will not agree to amend the Document or any other document executed in connection with the issuance of the Obligations, without the prior written consent of the Insurer. ARTICLE TV EVENTS OF DEFAULT; REMEDIES Section 4.0 1. Events of Default. The following events shall constitute Events of Default hereunder: (a) The Issuer shall fail to pay to the Insurer when due any amount payable under Sections 1.03; or (b) The Issuer shall fail to pay to the Insurer any amount payable under Sections 1.04 and 2.01 hereof and such failure shall have continued for a period in excess of the Reimbursement Period; or (c) Any material representation or warranty made by the Issuer under the Document or hereunder or any statement in the application for the Surety Bond or any report, certificate, financial statement, document or other instrument provided in connection with the Cominitment the Surety Bond, the Obligations, or herewith shall have been materially false at the time when made; or (d) Except as otherwise provided in this Section 4.01, the Issuer shall fail to perform any of its other obligations under the Document, or any other document executed 'in connection with the issuance of the Obligations, or hereunder, provided that such failure continues for more than 30 days after receipt by the Issuer of written notice of such failure to perform; or (e) The Issuer shall (i) voluntarily commence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law, (ii) consent to the institution of, or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition, (111) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or sitnilar official for such patty or for a substantial part of its property, (1v) file an answer admitting the material allegations of a petition filed against it 'in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its- debts as they become due or (vii) take action for the purpose of effecting any of the foregoing; or (f) An involuntary proceeding shall be commenced or an involuntary petition sball be filed in a court of competent junisdiction seeking (i) relief in respect of the Issuer, or of a substantial part of its property, under the United States Banktuptcy Code or any other Federal, state or foreign banlauptcy, insolvency or similar law or (ii) the appointment of a receiver, trustee, custodiari, sequestrator or similar official for the Issuer or for a substantial part of its property-, and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for 30 days. Section 4.02. Remedies. If an Event of Default sball occur and be continuing, then the Insurer may take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due under this Agreement or to enforce petfon-nance of any obligation of the Issuer to the Insurer under the Document or any related instrument, and any obligation, agreement or covenant of the Issuer under this Agreement; provided, however, that the Insurer may not take any action to direct or require acceleration or other early redemption of the Obligations or adversely affect the rights of the Owners. In addition, if an Event of Default shall occur due to the failure to pay to the Insurer the amounts due under Section 1.03 hereof, the Insurer shall have the night to cancel the Surety Bond in accordance with its terms. All -rights and remedies of the Insurer under this Section 4.02 are cumulative and the exercise of any one remedy does not preclude the exercise of one or more of the other available remedies. ARTICLE V SETTLENIENT The Insurer shall have the exclusive right to decide and determine whether any claim, liability, suit or judgrnent made or brought against the insurer, the Issuer or any other party on the Surety Bond shall or shall not be paid, compromised, resisted, defended, tried or appealed, and the hisurer's decision thereon, if made in good faith, shall be final and binding upon the Insurer, the Issuer and any other party on the Surety Bond. An itemized statement of payments made by the Insurer, certified by an officer of the Insurer, or the voucher or vouchers for such payments, shall be prima facie evidence of the liability of the Issuer, and if the Issuer fails to immediately reimburse the Insurer upon the receipt of such statement of payments, interest shall be computed on such amount from the date of any payment made by the Insurer at the rate set forth in subsection (a) of Section 2.01 hereof ARTICLE VI MISCELLANEOUS Section6.01. Interest Computations. All computations of interest due hereundersball be made on the basis of the actual number of days elapsed over a year of 360 days. Section 6.02, Exercise of RiQW. No failure or delay on the part of the Insurer to exercise any night power or privilege under this Agreement and no course of dealing between the Insurer and the Issuer or any other party shall operate as a waiver of any such right, power or privilege, nor shall any single or partial exercise of any such right, power or pnivilege preclude any other or filitlier exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which the Insurer would otherwise have pursuant to law or equity. No notice to or demand on any party in any case shall entitle such party to any other or further notice or demand in similar or other circumstances, or constitute a waiver of the right of the other party to any other or further action in any circumstances witbout notice or demand. Section 6.03. Amendment and Waiver. Any provision of t1ris Agreement may be amended, waived, supplemented, discharged or terminated only with the prior written consent of the Issuer and the Insurer. The Issuer hereby agrees that upon the written request of the Paying Agent the Insurer may make or consent to issue any substitute for the Surety Bond to cure any ambiguity or formal defect or omission in the Surety Bond which does not materially change the terms of the Surety Bond nor adversely affect the rights of the Owners, and this Agreement shall apply to such substituted surety bond. The Insurer agrees to deliver to the Issuer and to the company or companies, if any, rating the Obligations, a copy of such substituted surety bond. Section 6.04. Successors and Assigns; Descripifive Headin . (a) This Agreement shall bind, and the benefits thereof shall inure to, the Issuer and the Insurer and their respective successors and assigns; provided, that the Issuer may not transfer or assign any or all of its rights and obligations hereunder without the prior Written consent of the Insurer. (b) The descriptive headings of the various provisions of this Agreement are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof Section 6.05. Other Sureties. If the Insurer shall procure any other surety to reimsure the Surety Bond, this Agreement shall inure to the benefit of such other surety, its successors and assigns, so as to give to it a direct night of action against the Issuer to enforce this Agreement� and "the Insurer," wherever used herein, shall be deemed to include such reinsuring surety, as its respective interests may appear. Section 6.06. Signature on Bond. The Issuer's liability shall not be affected by its failure to sign the Surety Bond nor by any claim that other indemnity or security was to have been obtained nor by the release of any inderrinity, nor the return or exchange of any collateral that may have been obtained. Section 6.07. Waiver. The Issuer waives any defense that this Agreement was executed subsequent to the date of the Survty Bond, admitting and covenanting that such Surety Bond was executed pursuant to the Issuees request and in reliance on the Issuees promise to execute this Agreement. Section 6.08. Notices, Requests, Demands. Except as otherwise expressly provided herein, all written notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been given or made when actually received, or in the case of telex or telecopier notice sent over a telex or a telecopier machine owned or operated by a party hereto, when sent, addressed as specified below or at such other address as any of the parties may bereafter specify in writing to the others: If to the Issuer: [ISSUER] [STREETADDRESS] [CITY, STATE ZIP] Attention: [PERSON AT ISSUER] if to the Paying Agent: [PAYING AGENT] Attention: Corporate Trust Officer If to the Insurer: MBIA Insurance Corporation 113 King Street Armonk, New York 10504 Attention: Insured Portfolio Management Group Section 6.09. Survival of RMresentations and Warranties. All representations, warranties and obligations contained herein shall survive the execution and delivery of this Agreement and the Study Bond. Section 6.10. Governi . This Agreement and the rights and obligations of the parties under this Ing Agreement shall be governed by and construed and interpreted in accordanceaith the laws of the State. Section 6.11. CoqpLmai-Ls. This Agreement may be executed in any number of Copies and by the different parties hereto on the same or separate counterparts, each ofwhich shall be deemed to be an original instrument. Complete counterparts of this Agreement shall be lodged with the Issuer and the Insurer. Section 6.12. Severabilijy. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof Section 6.13. Survival of ObligpLti Notwithstanding anything to the contrary contained in this Ageement, the obligation of the Issuer to pay all amounts due hereunder and the rights of the Insurer to pursue all remedies shall survive the expiration, termination or substitution of the Surety Bond and this Agreement. IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written. Attest: [ISSUER] LO-M Title: MIBIA Insurance Corporation President A-ssistant Secretmy